Left Coasting : Open Season on Healthcare

Count the ways the medical-industrial complex is bad for everyone’s health…

by Rosalea Barker

The California Department of Managed Health Care (DMHC) is the nation’s only stand-alone state agency dedicated to regulating HMOs (Health Maintenance Organizations). According to the DMHC website:
“Californians have the strongest patient’s rights laws in the nation. The Help Center at the Department of Managed Health Care is here to explain your health care rights and help you understand how to use your health care benefits. We make sure that health plans follow the law and address member complaints on time.”

For workers in California whose employers or union offer them a choice of group health insurance plans, November is usually Open Enrollment month. (Ironically, given the likely atmosphere in Congress next year, federal employees call it Open Season.) For most of the previous year, employers and unions have been bargaining with insurance companies to try to get the lowest premium for the best deal in three key areas: out-of-pocket limit, annual deductible, and co-payments for doctor visits and prescription drugs.

As the DMHC describes it:

• An HMO is a kind of health insurance that has a list of providers, such as doctors, medical groups, hospitals, and labs. You must get all of your health care from the providers on this list. This list is called a network.
• Usually you have a main doctor, who is part of a medical group that has a contract with the HMO. Your main doctor is your primary care doctor and manages your care. If you need to see specialists, get tests, or be in the hospital, your doctor and the medical group must approve the service.
• Usually you pay a fee, called a co-pay, for each service.
• You may also have a yearly deductible. This is the amount you must pay each year before your HMO pays for any services.
• An HMO has a service area. You must live or work in one of the zip codes in the service area to join the HMO.
For people who don’t have health insurance through their employer-subsidized plan, there are individual plans and—for those who qualify, either by age or income—the federal Medicare and Medicaid systems, the state Medi-Cal system, and plans offered through city or county health departments. The federal government’s website healthcare.gov provides an excellent portal through which to explore the various options. You can look up zipcodes to use here.

Temporary fixes

In California, as in most states, insurers can charge higher premiums or limit your coverage choices based on your health status or other factors. At the heart of the healthcare reform passed by the US Congress in March this year, was a provision for the establishment of a new program to give coverage to adults currently uninsured because they have a pre-existing condition. California’s Pre-Existing Condition Insurance Plan (PCIP) started Open Enrollment on October 25, and a press release from the Governor’s Office that day stated:
“In order to expand affordable health coverage to uninsured Californians with pre-existing medical conditions and implement the PCIP, the Governor also recently signed legislation creating the Federal Temporary High Risk Health Insurance Fund to receive $761 million in federal funding. The PCIP will be supported solely through this federal funding and subscriber premiums. It is expected to provide health care coverage to cover up to 23,000 hard-to-insure Californians at any given time.”

The reason the funding is temporary is that the federal program will expire in 2014 – when new state-run insurance exchanges will begin operation. On September 30, Governor Schwarzenegger made California the first state in the nation to enact legislation creating such an exchange. The California Health Benefit Exchange will “make it easier for individuals and employees of small businesses to compare plans and buy health insurance in the private market using federal tax subsidies to make health coverage more affordable.”

Another temporary-until-2014 program the Affordable Care Act established was a reinsurance program to help companies maintain health coverage for early retirees (aged 55-64, when Medicare kicks in). Approved applicants can use the Early Retiree Reinsurance Program funds “to provide premium relief and other health care cost relief to their retirees and workers and their families, to offset increases in their own health care premiums or costs, or for a combination of these purposes.” A list of California organizations and businesses approved for funding by the federal Department of Health and Human Services includes not just struggling school districts, municipalities, and unions but huge, profitable companies like Nestle and Northrop Grumman.

Of course, all this may be moot, given that the new Republican-dominated House of Representatives has vowed to repeal the Affordable Care Act as soon as the 112th Congress convenes next year. A timeline of when the changes that were contained in that Act are supposed to take effect if they survive is here.

Driving up the costs to justify the premiums

If the word “insurance” has appeared almost as many times as the word “care” in the foregoing, it is because the two are inseparable in the United States way of thinking about health. I often wonder, if President Eisenhower had ascended to the Presidency via being a state Insurance Commissioner instead of a General, the most famous phrase from his farewell speech on January 17, 1961 might have read like this: “In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the medical-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.”

Like the military-industrial complex that Eisenhower actually referred to, the medical-industrial complex includes research universities. Carl Elliott, the author of a recent article in the Chronicle of Higher Education, wrote that “Some high-level KOL’s make more money consulting for the pharmaceutical industry than they get from their academic institutions.” A KOL is a Key Opinion Leader, which is marketing-speak for “a convincing, influential, and apparently independent expert who will deliver the text that they give him.” Health research findings are a frequent topic in news shows, raising people’s expectations that some day a cure will be found for everything that ails us.

Both the pharmaceutical and medical technology industries have grown exponentially in terms of both profits and reach since the Sixties, and their growth was in no small measure aided by the financial stability the health insurance industry affords them, along with federal and state funding for research. Not to mention the popularity of medical dramas on TV, and direct-to-consumer marketing. In a recent paper presented at a conference in Denmark, James Edmonson, Curator of the Dittrick Medical History Center and Museum at Case Western Reserve University in Ohio, said of a market research firm’s suggestion that “endoscopy companies could build new relationships to maximize the market potential of their products”:
“Examples of the success of this building of new customer relationships may be seen in direct-to-patient marketing of technologies and procedures, augmenting the frequency of elective surgery or more high tech forms of surgery. Two examples will illustrate this impact: gastric banding via endoscopic surgery, and robotic surgery for prostate cancer. Even for those accustomed to television and print (and web) advertising of pharmaceuticals, this new cultivation of consumer medical demand is alarming.”

The cultivation of “consumer medical demand” is also alarming to some physicians. Writing about end-of-life care in the New Yorker in August this year, surgeon and book author Atul Gawande said:
“Our medical system is excellent at trying to stave off death with eight-thousand-dollar-a-month chemotherapy, three-thousand-dollar-a-day intensive care, five-thousand-dollar-an-hour surgery. But, ultimately, death comes, and no one is good at knowing when to stop.
“The subject seems to reach national awareness mainly as a question of who should ‘win’ when the expensive decisions are made: the insurers and the taxpayers footing the bill or the patient battling for his or her life. Budget hawks urge us to face the fact that we can’t afford everything. Demagogues shout about rationing and death panels. Market purists blame the existence of insurance: if patients and families paid the bills themselves, those expensive therapies would all come down in price.
“We’ve created a multitrillion-dollar edifice for dispensing the medical equivalent of lottery tickets—and have only the rudiments of a system to prepare patients for the near-certainty that those tickets will not win.”

Managing your health care

Although the cost of health insurance and the ability of insurers to limit coverage or exclude people on the basis of pre-existing conditions are usually the main focus of any writing about health care in the United States, there are other ways in which the dependence on health insurance to provide access to health care interferes with any particular individual’s life. For example, people feel compelled to stay in relationships or jobs that they are not happy in just so they can continue to get insurance coverage. And then there’s the inconvenience of having to be tied to a particular primary care physician within a particular Health Maintenance Organization whose coverage is offered by your employer. (There are 60 PCPs per 100,000 people in California.)

If you move to a different job and that PCP isn’t in the network for the HMO your new employer offers, you have to find another doctor. Even if you stay in the same job, the medical group your PCP belongs to might disband or move dozens of miles away, as happened to me several years ago. Next year, if I want to keep seeing my usual GP, my monthly premium will double—and it’s not because of health care reform. It is because the HMO my doctor’s group contracts with “has decided to assign certain physicians and hospitals as part of a [new, cheaper] plan, and has decided NOT to include [her group and the hospital it refers patients to] in this plan,” according to the letter the medical group sent me.

Predicating the delivery of health care on decisions made by health insurance companies is just simply daft. Why HMOs aren’t called by their real name—CEO Wealth Creation Organizations—is beyond my comprehension. The outcomes are no better, and often significantly worse, than in a government-run health system like the one in place in New Zealand. In fact, there is nothing in this statement made on the District Health Boards NZ website that doesn’t apply to US health care:
“Key pressure points consist of rising public expectations, increasing health care technology, and demographic ageing of the population which will dramatically increase demand for people with chronic conditions. Impediments to change in primary health care include service fragmentation, hospital-centric health care systems, vested interests and misaligned incentives and payment systems.”
Except that “insurance-centric” replaces “hospital-centric”.

To see just how embedded insurance companies are in the US health care system, and even in the recent reform efforts, you should watch this video animation produced by the Kaiser Family Foundation—“a non-profit, private operating foundation focusing on the major health care issues facing the U.S., as well as the U.S. role in global health policy.” It is a separate entity from Kaiser Permanente, one of the biggest HMOs in the US, which grew out of the pre-paid health care premiums Henry J. Kaiser’s workers paid when they were building the Los Angeles Aqueduct in the 1930s.

The two sectors of health care that are most important—doctors and their patients—are frequently stymied by the demands placed upon them by insurance companies. And, as this public service video currently being aired in California shows, the burden placed on some patients can be financially crippling. In it, TV medical show host Dr Oz urges Californians to “get educated, get engaged, get enrolled.” It is, he says, “up to the people of California and their elected leaders to make sure that you get all you can out of the new law.”