The Problem With Healthcare–Part 1

As we approach the 50th anniversary of President Lyndon Johnson signing the Medicare bill into law (July 30th), what better time to consider the seemingly intractable problem of healthcare? FDR tried to include a federal health insurance component into the Social Security Act of 1935, but backed off. Harry Truman, his successor, took up the cause again in 1945, 1947, and 1949. JFK would pick up the banner in 1961.

During the 1965 signing, LBJ called the 81-year-old Truman “the real daddy of Medicare,” and presented him and his wife Bess with the first two Medicare cards.

With the passage of Medicare, the terms “healthcare” and “health insurance” became so increasingly related, that with the 2010 passage of Obamacare (Affordable Care Act), for many folks, the terms are now interchangeable. And, more’s the pity; because these days, quality of outcome is nowhere near as important as who pays for it. Beyond who is paying for it, and how much they are paying, we also have the definition of “it.” That is, what sorts of procedures will be covered, which will be excluded, and how are those decisions being made?

In the early 1960s, the American Medical Association led the charge against what it called “socialized medicine,” using Ronald Reagan as a key spokesman. Among other zingers, Reagan stated that such a program would “invade every area of freedom in this country” and would, in years to come, have Americans waxing wistful to future generations about “what it was like in America when men were free.” Needless to say, Reagan was widely mocked at the time by all the usual suspects, and a few years later by the execrable Pat Brown during his unsuccessful gubernatorial re-election campaign.

Jimmy Carter would invoke the same tone in his re-election campaign, calling Reagan a “traveling salesman for the American Medical Association campaign against Medicare.” Apparently, this was not an effective strategy, as Carter lost the electoral vote 489-49, and the popular vote by ten percent.

In light of provisions of Obamacare whereby everyone is forced to purchase health insurance, millions have been pushed into Medicaid, and options are limited by design, no one is mocking Reagan’s words anymore. Moreover, contrary to the assurances of the Feds, Medicare had an almost immediate effect on how all health insurance would be administered, not to mention how care itself would be delivered.

Ironically, the AMA would become a major facilitator of socialized medicine with its CPTs (Current Procedural Terminology) and RUC (Relative Value Scale Update Committee).

The CPT is a code set—copyrighted by the AMA—describing medical, surgical, and diagnostic services and is designed to communicate uniform information about medical services and procedures among physicians, coders, patients, accreditation organizations, and payers for administrative, financial, and analytical purposes.

The RUC advises Centers for Medicare and Medicaid Services (CMS) on reimbursement rates for medical procedures. Bearing in mind that virtually all third party payers follow these guidelines, the RUC sets the rates for essentially all medical procedures performed in the US. Among its many faults, the RUC massively favors procedural medicine over cognitive medicine, so that primary care physicians basically get screwed. All by itself, this distortion of the healing arts effectively guts meaningful funding for, and focus on preventive medicine.

Despite, or very likely because of the CPTs, RUC, and DRGs (Diagnosis Related Groups), there is still a staggering amount of Medicare, Medicaid, and private insurance fraud.

As if this weren’t bad enough, any number of billable procedures such as mammography and colonoscopies are viewed as “preventive” services. No one has ever explained how detecting a disease in its early stages qualifies as “preventive.” Of course, the working answer to this question is the notion of five-year survival rates.

The five-year survival rate is calculated from the time the disease is first detected. Thus, if a microscopic breast tumor is discovered in a woman, and she undergoes therapy, but dies five years and one day after it was first detected, she is a “winner.”

So, here’s where we currently stand: Health insurance equals healthcare; outcomes are far less important than having someone else pay for your healthcare; primary care providers are discriminated against; the reimbursement system encourages fraud; and preventive medicine barely exists. What could possibly go wrong?


3 responses to “The Problem With Healthcare–Part 1

  1. Michael, I would contend that the chief problem with healthcare is that it doesn’t exist. The term “healthcare” is almost oxymoronic since health doesn’t require care–illness does. In that sense the term ” healthcare” is extremely misleading because it creates a false impression of what medical practice is really all about. Medical care actually involves only the diagnosis and treatment of illness. It can’t prevent illness in any meaningful sense. The idea that there is something called preventive medicine is largely a myth that provides fodder for charlatans to exploit the vast number of people who worry excessively about their health.

    The problem with so-called healthcare insurance is that it isn’t insurance at all. Rather it is an arcane and convoluted system designed to hide the true costs and who pays them. In this sense, “health insurance” has been extremely successful as almost the entire population believes that someone else is paying for their “healthcare” and this creates an almost unlimited demand for more of it. But whenever third parties come between the suppliers and consumers of a good or service the entire market is distorted and becomes a fertile field for fraud, waste, and excessive bureaucratization. I entered the medical field 5-10 years after the start of Medicare and can attest that, although most doctors opposed any form of socialized medicine prior to 1965, after just a few years they learned to love it and were cashing in big time. There were a few wise souls who looked beyond the immediate bonanza and warned of the controls and other undesirable consequences that would inevitably follow. In this they proved to be quite prophetic.

    • @Ernest–
      As always, you make some good points, but allow me to respond.

      1.     Regarding healthcare not existing, I have written on several occasions—agreeing with you—that what people call “healthcare” these days is actually disease (or illness) care.” Unfortunately, the destruction of language and communication by our “leaders,” is so pervasive, that short of defining every key term in an essay, a writer is forced to adapt to convention. For what it’s worth, several Catholic theologians believe that such destruction of the gift of communication is a mortal sin.


      2.     As to preventive medicine, I also agree with you that this term has been perverted almost beyond redemption. Moreover, the hopes of the public are constantly being raised whereby many health enthusiasts seem to think that death is optional. And yet, I submit that even you, as a world class skeptic on risk factors, would not hold that there is nothing at all that we can do to improve our health. To cite one trivial example, 80% of those suffering from “type 2 diabetes” are overweight, and if they lost weight would improve their health.

      To be sure, taking statins hardly qualifies as “preventive medicine.”


      3.     Everything you say about health insurance is spot on. However, there are many physicians who STILL refuse to accept that Medciare destroyed the practice of medicine. And, by the way, this was not an “unintended consequence.”

  2. The cost of Obamacare is another elephant in the room. My son, who is a partner in a very small business venture of 5 individuals, saw his health insurance premiums rise from $24,000./yr to $52,000./yr last year. Private health insurance is being priced out of the market because of Obamacare mandates, and I believe that this is intentional so as to drive everyone into government health insurance. Obamacare is designed to force socialized medicine onto America.

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