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Stigmata and Catastrophes: Confessions of a Health Industry 'Insider'

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Here's a confession for the New Year: I've been called many things in my life, and one of them is "managed care executive." Although much of my writing here has reflected my political, musical, and religious interests, I've spent over twenty years working in health-related fields: insurance, international health policy, and workers' compensation. I've run medical management (sometimes called "managed care") companies, and have been an insurance company executive.

When it comes to health care, perhaps it's time to give back a little. I feel that way, and so do many others I know in the health and insurance fields. That's why I'm entering the health care conversation with a new blog, and resolving to press hard this year for universal coverage and a more efficient system.

In the end, the broken machine that is our healthcare system isn't about numbers, charts, or graphs. It's about death, disability, and disfigurement. Tragically, we tend to respond more to public catastrophes than to the millions of private tragedies that occur each year. Here's how that translates into human lives:

A study by the National Academies' Institute of Medicine (warning: pdf) estimates that at least 18,000 people die each year from inadequate health coverage. That's the the equivalent of thirty World Trade Center bombings in the years since 9/11.

At all levels of incomes, black Americans die years earlier than whites. Call it "eugenics by attrition." Our nation rightfully looks back in shame at the days when we denied African Americans the right to vote. How can any nation, in good conscience, deny a portion of its population the right to live?

The United States has the worst infant mortality rate of any industrialized nation - except Latvia. One reason for that the disparity in care between white and black Americans. Specifically -

The infant mortality rate for African American babies is 2.5 times greater than it is for non-Hispanic whites, according to data from the National Center for Health Statistics. Ours is a nation that fights pitched political battles over a woman's right to choose, yet the causes of this disparity - which is the greatest killer of infants in our nation's history - go unaddressed even as the situation gets worse. (The difference between black and white mortality rates in 1950 was 1.6 - shameful, but far lower than it is today.)

These figures show that we're trailing the rest of the industrialized nations in a number of measures of healthcare effectiveness. We share some health-related social problems with other industrialized nations, however, and new communications technology may someday allow us to become world leaders in correcting these problems. Here's one we should tackle:

Lower-income people disproportionately bear the "stigmata" of health-related disabilities. Studies have repeatedly found that people living at or near the poverty line carry a much higher rate of disabling health conditions than people at higher income levels.

Yet even reasonably well-off middle class people suffer more disability than the wealthy. Socialized medicine systems such as that in the United Kingdom don't necessary redress the imbalance. A study of British civil servants demonstrated that the British middle class suffer greater disability rates than wealthier individuals. Additional studies (e.g. "Gradient of Disability Across the Socioeconomic Spectrum in the United States") show that the unequal distribution of disability extends through all income levels here, too. There's great room for innovation in tackling the problem of long-term disability using the vast new array of tools created by communications, IT, and medical technology.

If Ezra Klein and other commenters are right, ours is a moment in history when it may be possible to forge a system of universal healthcare coverage for all Americans. I'm not so sure, but Ezra's Los Angeles Times editorial effectively summarizes the reasons why we must try. I plan to help in whatever way I can in 2004.

I'm also hopeful that we can begin to use the American thirst for innovation to isolate some areas where we can lead, not simply catch up.

I've created a new blog in order to put in my two cents on a daily basis. It's called The Sentinel Effect, and it will focus on healthcare: policy, information systems, insurance, occupational health/workers' compensation, and many of the other issues that have occupied much of my life for the last twenty years. It will track developments in health-related commerce, legislation, economic trends, and technology (information, communication, and medical).

We will also look at trends and their possible impact on the short-term and distant future. It's wonky, inside-baseball stuff, but hey - I gotta be me. I don't know if that will help our current crisis any, but I'll give it my best shot.

I have my personal biases. Despite (or because of) my insurance background I'm troubled by initiatives like the Massachusetts health law, Sen. Ron Wyden's Healthy Americans Act, and Gov. Schwarzenegger's anticipated initiative, each of which requires individuals to purchase health insurance through our current inefficient system.

Our insurance industry can't rest on laurels it doesn't have, and shouldn't reap the benefits of government policy unless it can prove it will do a better job.

Yet there may also be promise in each of these initiatives. In my opinion, mandated-coverage programs should offer a government program as an alternative to private insurers. That would force carriers to perform at a higher level of efficiency (and patient satisfaction) in order to succeed, creating a domestic "space race" for better and more innovative ideas. That could make these programs a fair and efficient alternative.

Government can give the insurance industry the opportunity to excel, but industry must demonstrate it can meet the challenge by competing with public systems - and by providing better results, if it can.

One problem with this approach, however, is the fact that Medicare and Medicaid frequently don't cover the entire cost of medical care. As a result, doctors and hospitals often shift these expenses over to private payers and health insurance programs in the form of higher rates (and sometimes overbilling). That's a form of 'invisible taxation' on employers and individuals that must be addressed in any comprehensive health plans.

Another problem - one that was overlooked by the 1994 Clinton initiative - is the fact that the workers' compensation also provides healthcare, when a worker is inured. The workers' comp health system is considerably more generous to injured workers than private health insurance, avoiding out of pocket costs.

The positive and negative features of workers' compensation health care differ from the health insurance system. Any comprehensive reform program that fails to properly integrate workers' compensation will encounter serious problems, and runs the risk of create financial and personal hardship for working Americans who are injured on the job.

If healthcare is a battlefield as well as a policy arena, then to most readers here I've been a soldier (or an officer) in the wrong army. Yet the managed care and insurance fields are filled with people who, like me, are troubled by our unjust system and want to help create a change.

Regarding the Wyden plan, my fellow industry "insider" Joe Paduda has pointed out that many lower-income Americans can't afford the deductibles and co-pays that come with "the same health coverage that Congress gets." Yet Joe was able to use his industry experience to come up with a possible solution: means-tested copayments.

Joe and other health industry veterans offer a base of real-world experience that can and should be used to solve the U.S. healthcare crisis. So do the legions of physicians who struggle with the system and its flaws every day.

I also believe there may be ways to make employers allies, rather than adversaries, in the health reform movement - and help them become more competitive with foreign companies at the same time. Again, this may require something other than the Massachusetts/Wyden approach. But it needs to be remembered that business and the Left are not necessarily enemies in this fight.

Here's a possible twist in the coming healthcare struggle: The mandated coverage approach could someday face opposition from an unlikely coaltion of practicing physicians (especially primary care practitioners), employers (including big business), and political progressives. Employers, already frustrated with the demands of providing health insurance, may join with physicians frustrated by managed care with the shared goal of eliminating the insurance companies in favor of a single-payer solution.

Stranger things have happened.

2007 may be the year America finally addresses its healthcare problem in a systematic fashion. The only missing element is a national leader with the political will to lead the charge for something like a domestic Marshall Plan for health care. Not only can we provide universal coverage if we choose, but perhaps one day we can provide leadership and innovation where today we lag behind.

Maybe someday we will look back on this year as the turning point, the moment when America changed its unique flawed system, and banished the stigmata and catastrophes of inadequate healthcare from its shores once and for all.

The Sentinel Effect: A Health Policy, Business, and Innovation Blog

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