Like many others in the country, I have been closely following the national debate on healthcare. It is one of the defining moments of this Presidency and my generation. The tough decisions we make now will only become increasingly important as our health gets worse and our tax brackets get higher.
In my business I believe strongly in leveraging category experts to solve big problems and I think it's highly applicable here. There are plenty of voices shouting to be heard in this debate and they come at all angles; right to left, political pundits to insurance industry mouth pieces, media savvy commentators to medical professionals. The key in gauging the best voices are finding those with the experience, honesty, intelligence, accomplishment and objectivity to provide the best path regardless of their personal convictions.
My father, Dennis Spangler, is a doctor. An amazing one actually. He put himself through medical school, was named top intern during his internship, has published over 45 original articles in professional medical journals and has grown the Atlanta Allergy & Asthma Clinic to the largest allergy and immunology practice in the Southeast serving as its Chief Medical Officer for the past 16 years. He retires next year after a highly distinguished career helping thousands of people to live happier, healthier lives.
Throughout his life he has balanced career with family and outside pursuits. He has raised two children and celebrated 37 years of marriage to his wife. He is a self-taught himself French language speaker, stained glass artist, wine expert and horticulturist with a specialty in orchid breeding.
In his early 50s he struggled with a life threatening heart illness and needed extensive medical care giving him a unique perspective on the patient side of the healthcare debate. His upcoming retirement and smart fiscal responsibility help assure his objectivity as the current healthcare reforms will have little effect on his future bottom line.
For all these reasons I felt he was a perfect expert to contribute to the debate, so I took the opportunity that every son should take, and sat down with my father to discuss this important topic. It was my hope that he could lend some clarity to the discussion.
In the name of transparency, he voted for Obama in the past election, but for George W Bush the previous 2 elections, so if anything he is a political conservative. In this case, I doubt his political ideals will get in the way but I'll let the readers be the judge of that.
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Matt: Lets begin with what you think is the single biggest problem with the current healthcare system today.
Dennis: From a medical community standpoint on a local and national level among physicians there is certainly a consensus that there are problems with the existing system, there is no doubt about that. The major concern is the continued rising costs, but also the difficulty of obtaining individual health insurance if you're not employed by a business that provides insurance. Secondly, the issue of pre-existing illness issues when seeking individual health insurance coverage. I'd agree with President Obama that some changes need to be made but where the government runs into problems is that they are choosing this opportunity to try and reinvent the wheel, and I believe strongly that they don't need to. Much of the current rhetoric that is being discussed around things like the co-op model, where a finite amount of healthcare is offered to a finite number of of individuals is actually available under the current system in the form of HMOs. You just have to look a little deeper to access it.
What we need to do is allow insurance companies to bid contracts across state lines on a national basis. What the Federal government could and should do is develop a single central government agency for oversight and allow insurance companies like Blue Choice, United, Cigna, whoever...to offer a variety of contracts on a national basis that individuals can purchase. When consumers go to this primary agency they will see a wide variety of choices. They would be on the same website and anyone across the country could decide what best meets their needs. This nationalization would bring down the cost significantly, eliminate restrictions related to pre-exising condition, allow for bulk pricing and reduce overhead for the insurance companies because you would no longer have to sustain local insurance hierarchies from inter-state policies and local agencies.
This would make it easier for smaller businesses and individuals to get substantial discounts on their insurance because they would be added to the pool of individuals from businesses with large number of employees. One of the keys to the success of this system is the need to require everyone to purchase insurance thereby eliminating exclusion due to preexisting conditions and diluting the negative impact of high users by combining them with millions of low users.
Matt: What do you mean by requiring everyone to purchase a policy? How does that manifest itself in your desired system?
Dennis: Well, for any insurance to work everyone has to participate. If the healthy individuals in the country don't participate and only the sick individuals participate then its still gonna be incredibly expensive. Its the same with life insurance. You have people in their 20s buying life insurance and contributing money through their whole lives. Its not cashed until later and they use those funds to support the people passing away. That money works for the purchaser tax free so it is there for them when they need it. To make any kind of insurance work, you have to have everybody participating.
What's happening today is that half of those uninsured have elected to not purchase insurance. They have the money, but they are healthy and they're young and they don't feel they need insurance and they don't see the risk. You also have those who can't afford insurance at current levels. If that person has an accident - like you did - they have no insurance and can't pay their bill. The system then has to somehow support that cost. If we say every person is required to pay for some level of insurance, everyone would at least have a high deductible plan that covers catastrophic incidences. All the rest of the healthy people in the country will have paid some small amount towards the support of that coverage so those buying insurance are no longer paying higher premiums to cover this shortfall.
Matt: I'm in that boat right now. I am on my own consulting and while I've looked at plans recently and can afford them, I am healthy and delayed signing onto a monthly insurance plan.
Dennis: There are millions more out there like you who are healthy and have the money but still don't purchase insurance. Required insurance could be subsidized by the Federal government on some sort of pro-rated basis but no one should be able to get insurance for free. Period. When you get it for free, you don't appreciate it and you abuse it. It's simply fact. You don't have to pay much. If you don't make much money it might be $10 per month. But everyone needs to pay something.
Matt: Ok, and secondly you believe strongly in some sort of nationalized healthcare system, whether or not this is called a "government run" health system, it will be a single system for every insurance company across state lines. One national entity that has oversight over all the private insurance companies.
Dennis: Well, not necessarily oversight per se. I see it more as a holding company. They would be the central collection agency that the insurance companies bid to and within that framework there would be some sort of HMO option. When the government talks about the co-op system, what they want to do is give a newly formed organization a finite amount of money and they are supposed to take care of a finite number of people. Why reinvent that system. If they want to put everybody that's on Medicare and Medicaid into a coop, lets just put them in an HMO and bid it out. Let the HMO that gives you the best price be the one that does it. That way they compete against themselves and it uses the existing system rather then creating an entirely new system that is going to take years to set up with no previous experience to guide the process.
Matt: But what you're also alluding to is that the current privatized system is ineffective?
Dennis: Its not. I've worked in it long enough to know its not perfect, but it is effective. As an example...the Federal government just announced that they found a physician in Texas that after 5 years had overcharged millions of dollars on claims for his office. Trust me, Blue Choice would have found that guy in 5 months. It took years for the government to figure it out because there is a natural inefficiency that occurs when it's not the money of a private business he is swindling, but rather government money. Even though they run Medicare, the government is not the most efficiently run organization and it is influenced by politics and lobbying.
What you're talking about is the physical expense of medical insurance and that gets to the biggest aspect of this that the government and everyone else is ignoring, except for a few of the smartest people out there and that is the United States is in a poor state of health. If you look at government records from the CDC collected 20-25 years ago, approximately 5% of the population of the US population was excessively obese. Today it is about 30-35% and that's "morbidly obese" and that does not talk about another 30% that are obese. We are seeing as physicians diseases that I have never seen before. Adult onset diabetes in children. We have never seen that. Why? Because these kids are excessively obese and obese people get all kinds of diseases, whether its high cholesterol or high blood pressure or heart attacks at younger and younger ages...the list goes on and on.
The major reason we have high insurance costs in this country is because we have hgh use. Period. That is the single biggest problem. We have patients in their 20s, 30s and 40s that have chronic diseases that have never existed before in these age groups. Chronic disease contributes to an increase in consistent doctor visits, medication usage and hospitalizations. High use is expensive. I don't care if its free or not, its expensive. Its strictly numbers. If you want to cut the cost of healthcare in this country, its not the insurance you have to address, its the lifestyle of the American population.
Matt: So what do you propose?
Dennis: Education and stricter government intervention where it will make a difference such as removing all high-calorie foods from public schools. Mandated physical education programs and education on healthy eating. And beyond that, there needs to be greater incentives for achieving a healthy lifestyle. You take care of yourself and you get an insurance discount. Why did people stop smoking as much? Because cigarettes cost almost $5 a pack. Why did sales of SUVs go down and driving habits improve recently? Because gas was at an all time high. This American people have proved time and time again that the only way they can be swayed to act is through monetary incentive. We need to figure out a way to incentivise the American population to get healthier. They would save money, feel better and live longer. Either that or resign ourselves to the fact that we're going to spend a ton of money taking care of a population that wants to use medication and medical procedures to address the consequences of their poor lifestyle choices.
Matt: This is indeed the case that many have been promoting, and its getting tougher to ignore. I'll read a quote from an August 2009 article in the NY Times. "The promise of the system is undeniably alluring: whatever your ailment, a pill or a procedure will fix it. Yet the promise hasn't been kept. For all the miracles that modern medicine really does perform, it is not the primary determinant of most people's health. J. Michael McGinnis, a senior scholar at the Institute of Medicine, has estimated that only 10 percent of early deaths are the result of substandard medical care. About 20 percent stem from social and physical environments, and 30 percent from genetics. The biggest contributor, at 40 percent, is behavior. Today, the great American public-health problem is indeed obesity. The statistics have become rote, but consider that people in their 50s are about 20 pounds heavier on average than 50-somethings were in the late 1970s. As a convenient point of reference, a typical car tire weighs 20 pounds. A recent article in Health Affairs estimated its annual cost to be $147 billion and growing. That translates into $1,250 per household, mostly in taxes and insurance premiums."
Knowing all of this would you support the "fat tax" as many more progressive physicians have proposed?
Dennis: They backup my prevention argument with good statistics but I don't believe you will ever get a fat tax passed. There is too much prejudice involved in that debate. Instead I feel we should look to the discount model of other industries like auto insurance. We have mentally established this phenomenon in the American mindset. If you're a safe drive you get deep discounts, if you have alarm systems you get a discount on insurance for your house. Why don't we have a healthy discount? Its a matter of reward not penalty. Motivate people to make healthy choices by offering substantial rewards and discounts.
There are others who are starting to come forward with similar ideas. There was an article written in the Wall Street Journal by John Mackey, President of Whole Foods, where he expressed his 8 step plan for improving the system and I felt this was the most intelligent and closely aligned plan to mine that we had seen during the current debate.
Matt: Is there anywhere in Canada or the UK that you think is doing it well?
Dennis: Lining up for care in Canada is the biggest concern with an average of 23 hours of waiting for major health care. American citizens are accustomed to being seen right away and will not put up with waiting lists. Everyone needs to understand that the best care, delivered 24 hours a day / 7 days a week AND inexpensively is not possible. We have the first two, Europe has the second two. No one has all three. We will have to give up something to lower the costs.
Matt: John Stossel reported in a piece that most of the advancements in the US healthcare system come because companies are seeking a profit. Government is responsible for only 4% of the drugs created. Is this true across the board?
Dennis: There is no doubt about it. If we want cheaper new drugs, then offer longer patents and simplify the cumbersome FDA rules. The government does not have the money to sponsor the research needed.
Matt: If you're saying we should keep the private insurance companies, and saying that innovation has to happen...isn't a big argument for keeping it private - as Mr Stossel says - to drive innovation. Yet we haven't seen much innovation in the system. Something as easy as creating incentives for lower premiums to improve health outcomes has never been pushed aggressively by the insurance companies. If this is their business shouldn't they be the ones pushing that kind of innovation? While the privatization of other parts of the industry drives innovation as in the development of medical equipment, it doesn't seem to achieve the same results with insurance companies. That seems like a counter-point to Mr. Stossel's argument.
Dennis: Yes and no. The government has been in the way. Everyone has not been REQUIRED to have insurance and insurance companies are restricted from writing policies inside states etc.
Matt: What part do you think Tort reform plays in the overall success of healthcare reform?
Dennis: I think it has to be part of the overall solution. The government chooses to not address it. Why? That result is that doctors are forced to practice defensive medicine which increases costs substantially due to many unnecessary tests and procedures. Lawyers are killing the medical profession. You can say all you want that this is spoken like a true doctor, but I have seen it my own eyes over my thirty years in this field. Unless tort reform is implemented the insurance system will never be nationalized and fixed properly.
Matt: Any other major issues?
Dennis: Immigration. We need to address the current system. We need to provide a legal framework for immigration that allows immigrants to seek employment within a framework that does not undermine the ability of US citizens to find employment. Immigrants who are here doing work should be legally recognized, be paid a fair wage, pay taxes like everyone else and contribute to the healthcare system like everyone else. Then they could qualify for insurance.
Matt: The healthcare bill is really about reforming private health insurance since doctors, hospitals etc are still private. Only a small part of the bill relates to the public. In fact, many call universal health care is moral issue. What are your thoughts about that argument and do you think if that banner was flown by Obama instead of the economic one he would have a better chance against the right?
Dennis: I don't think healthcare can be a moral issue until individuals are willing to accept personal responsibility for themselves and their health. If they refuse to care for themselves and then expect others to "fix it" after its broken, then you will never be able to contain health care costs.
Matt: Recently Press Secretary Gibbs was asked whether the president had given up on the idea of a public option, Mr. Gibbs replied: "The president believes we have to have choice and competition. In a private insurance market where people are entering, they have to have the ability to choose among insurers. That will drive down their costs and improve their quality. His preference is for a public option. If there are others that have ideas about how we can institute choice and competition, he's happy to look at those." This sounds like he effectively agrees with your plan, but it gets lost in the rhetoric from the Right pushing their agenda. Do you think the President is doing a good job in driving this process?
Dennis: No. He has been willing to sign bills that would have been too costly (at a time when deficits are already soaring) and poorly written (1000+ pages?!?!?!?)
Matt: Research shows that when people go to doctors and hospitals that are not part of their insurance network, they can expect charges that are double, triple, even quadruple the negotiated price within networks. That is effectively exploiting market power to charge prices virtually unrelated to actual cost. Is this something that needs to be fixed and part of the overall problem with insurance companies?
Dennis: National contracts would solve this issue. There should be nationwide bidding for health insurance with no preexisting limitations, and multiple insurance options (i.e. HMO, HSA, Standard, High deductible etc.)
Matt: The American Medical Association said the fundamental problem was that health insurers often paid doctors too little and made it too burdensome to get payments at all, driving doctors outside insurance networks. Do you think there is an inherent problem that the two biggest players in this game - doctors and insurance companies - have never really gotten together to try and solve this issue together?
Dennis: Maybe, but for the many reasons I stated before and from my personal experience, I think the system I propose would improve this substantially and if not we could re-evaluate in 2-4 years.
Matt: What do you think of the model of Bassett? From an article in the NY Times again, "Doctors in the United States are usually paid fees for each service they provide. The more procedures and tests they order, the more money they pocket. There is widespread agreement among health policy analysts that many of these procedures are unnecessary, raising costs in ways that often do nothing to improve patient health. By contrast, Bassett, like the Cleveland Clinic and a small number of other health systems in this country, pays salaries to all of its doctors. No matter how many tests or procedures are performed, they take home the same amount of money. Medical costs at Bassett are lower than those at 90 percent of the hospitals in New York, while the quality of care ranks among the top 10 percent in the nation, surveys show." Do you think this is a model that should be explored more aggressively and how does if fit into your plan?
Dennis: This is basically an HMO model. This is already being done and could continue to be an option. This type of thing does not have to be re-invented by the government.
Matt: Thanks for your time Dad. Any final thoughts you wanna share?
Dennis: Doctors want all patients to have good health care, to lead happy, healthy and productive lives. But to achieve this, it has to be a collaborative effort between doctors and patients with each accepting a level of responsibility. Everyone agrees that the system needs to be simplified but consideration has to be given to cost. I don't want my children and grandchildren incurring trillions of dollars in debt because we weren't able to affect modest, measured reform.