The U.S. health system needs fixing, but how?

[pickledpepperRN]

by Mary Watters

The U.S. health system needs fixing, but how?

IHSP offers an ambitious plan to start the debate.

Do we, as a nation, have the will to see this through?

Do we have a choice?

They stare with disbelief at what their health premiums will be. They tsk-tsk TV news reports exposing deadly mistakes and care problems in hospitals far away. They retell the stories of friends who've had horrible hospital stays to co-workers who reply with similar and frightening stories. They grow, by turns, outraged, anxious and numb to a health care system they pay into and hope they never have to use.

"They" are U.S. consumers and, more and more, they are becoming disenchanted, distrustful and disgusted by the state of health care in the wealthiest nation in the world. Many of them - 44 million by the latest count, 15.2 percent of the U.S. population - don't have any health care coverage at all. Slowly, people have been coming to terms with the poor health of U.S. health care and believing that something has to change.

Plans get floated like trial balloons, mostly to keep the system operating much the same with small changes in control.

But health professionals giving direct care to patients know that band-aids will not heal the gaping holes in the care system. RNs - who've gone through downsizing, deskilling, short staffing, mandatory overtime, and seen expensive technology replace and degrade hands-on care - know that change is necessary. Agreed.

But change to what? How?

The Institute for Health and Socio-economic Policy recently issued a policy brief to acknowledge the failures of the current system and offer recommendations to correct the problem. In fact, IHSP came up with a plan to put the ailing health system in rehab: a 12-Step Program toward Health Care Recovery.

"We offer the plan as a way to start a debate," says Don DeMoro, a social scientist and executive director of the Orinda, Calif.-based IHSP. "Many people support the idea of a national health care system, but until you have a proposal before you on what that means, how it's built and financed, it's little more than an idea. This is a start toward the ultimate change we all know needs to happen."

Despite the broad scope of the IHSP policy brief, DeMoro sees it as "little more than an outline" for a rehab of the health system. "This is just the first cut," he says. "Developing a whole new system has to be approached as a program, not piecemeal. When people have tried to adjust for changes in one area, they've lost focus in another. For example, no one's watched the tech door on hospitals, and now technology - expensive technology with few practical results and some dangerous implications - is flooding the system. We need to make sweeping changes to the system, a total rehabilitation."

A Moral Imperative

But before the IHSP's 12 Steps were trod, the IHSP did a brutally honest assessment of health care in the United States. It weighed its years of data on the profits accumulated by the industry's players. It analyzed the scope of the access problem many Americans face. The IHSP then developed a list of axioms, each one building on the idea that came before it, about the way health care operates today.

The study concluded that our nation faces a moral imperative to change our health care system. The IHSP policy brief suggests that "the ultimate health care 'outcome' is social, not technical" - the quality of life that people will lead. Or not.

The first assumption the IHSP makes is that access to health care is "a basic human right." The IHSP invokes the constitutional language of humans having inalienable rights, saying that neither people, "their health nor long-term quality of life should be subject to the market as mere ... objects of economic trade." The second assumption is that there is "no health care system in the United States, but there is a market-driven health care industry concerned primarily with revenues, profits and spreadsheets rather than quality health care." The corporatization of health care vitiates the first assumption that health care is a human right.

The third assumption suggests shifting focus from "outcomes" to long-term health and quality of life issues. To make a long-term approach take precedence over short-term gains, the IHSP envisions a Single Universal Standard of Care applied equitably among the population and a set of essential criteria for its operation, including appropriate caregiver staffing levels. The fourth assumption requires a shift away from the current privately administered and financed system to one that is publicly administered and financed. The agency or organization to administer the program is left open to debate.

The rest of the IHSP's assumptions concern the business of health care. The fifth assumption proffers that the trend toward corporate "giantism" in health care has "forever altered the political possibilities of publicly financed health care through traditional budget processes." The IHSP believes that new sources of revenue are necessary to fund a public health care budget. The sixth states that operating a "health care-related business is not a right but a privilege that should be granted with caution." The seventh assumption states that health care corporations should "give back to the communities some small portion of that wealth" acquired over their years within the industry. The final assumption posits that corporations would gain in respect, employee productivity and morale by transitioning from a health care industry to a people-focused health care system.

In making these assumptions, the IHSP also invokes a moral obligation on all parties to deliver health care in the true spirit of the Hippocratic Oath - to apply medical knowledge to the benefit of the sick and to keep the ill and infirm from harm and injustice.

"That's hardly what's happening in our health care industry right now," says DeMoro. "Take one look at the profits, at the value of outstanding stock of these corporations and, of course, the executives' pay, and you can see that we don't have a 'health care system' in this country. We have a market-driven, market-concentrated industry, and it's acquired a social addiction to the accumulation of private wealth as its bottom-line objective."

Indeed, the value of all outstanding stock of the top 100 publicly traded health care-related corporations is a staggering $2.6 trillion. Yes, that's trillion.

That, of course, does not take into account privately held, non-SEC registered companies and the behemoth nonprofits, like Kaiser Permanente and the Big Blues. While their organizational goal may not be to increase the value of stock and return profits to investors, corporate health care influences the decisions and operations of nonprofits. If corporatized medicine drives down costs by reducing services, then nonprofits must reduce staff and services to stay competitive or risk losing contracts with large health plans and employer groups.

The desire to reduce costs, which is music to the ears of consumers, became the mantra of the health care industry in the 1990s. But the IHSP recalls how "market-based mechanisms" were also supposed to increase health care quality, increase access to care and increase caregiver skill levels. No one has reported these changes.

Meanwhile, the industry went about changing people to patients and patients became "covered lives." The "medical loss ratio" - the actual money spent on care relative to premiums - became the Holy Grail for the industry. The billions spent on mergers, acquisitions and executive compensation, not to mention returns to shareholders, usually are not considered health care "costs," although they deplete resources needed for patient care. Instead, industry blames patients demanding care for increased costs. All the while pharmaceutical companies market drugs to consumers, which drives demand for prescription drugs. Big Pharma spends more on advertising products than on R&D for new medicines.

The IHSP sums up the sorry state of health care this way: "Health care has lost its historical standing as an ethical and social calling to tend to the sick and maximize health in the healthy.... [H]ealth, that which animates human life itself, the most personal and vulnerable aspect of the human condition, is reduced to the status of an inanimate object by an industry grown ever more concentrated in a market pathologically indifferent to human needs."

As evidence of corporate officers' nothing-personal/strictly-business mentality, the report quotes Todd Richter, a health care analyst with Banc of America Security. Richter was responding to the HMO flight from the Medicare market in 2000. "By doing what they're doing, the managements are showing financial discipline," said Richter. "It's real nice providing prescription drug coverage and vision care coverage for grandma, but if you can't make a fair return on it, there's no reason to do it. They don't have an obligation to take care of grandma at a loss."

Unfortunately, Richter is right. Corporations' obligations are to shareholders. Under a health industry regime, the very people who need care the most - the ill and infirm - are the least desirable "customers" because they need care.

"This simple but brutish market-based fact is why we do not see health care corporations scrambling to compete for the sick or the uninsured," the report states. "Those without insurance or the gravely ill have little economic value relative to the insured and the healthy. The twisted irony is that for health care to function as an industry and provide care for humanity, it must first destroy the very notion of humanity by converting it to just another commodity whose values rise and fall with the ersatz economic 'moral values' of the market."

Consumers are left to negotiate the market on their own terms. Don't like the coverage you've got? Well, too bad, because chances are the high-end coverage is priced out of your pocketbook. The obligation of providing for grandma's medicines or Billy's DPT boosters or your father's heart surgery or your own mammogram, the IHSP believes, falls on society as a whole, not individual consumers who must fend for themselves in the marketplace.

The IHSP views the health care industry as sectors (HMOs, hospitals, drug companies and others) that are hostile to one another and are driven by economic self-interest. However, in a health care system, the IHSP believes these same sectors would be encouraged - if not forced - through public accountability to "build cooperative relationships with one common goal: the health and long-term quality of life of the nation's people."

"We're in a permanent health care war economy," says DeMoro. "The giants are all out to show their economic supremacy, and their balance sheets show a load of assets, as well as a heavy load of liabilities and debt. But even though they have individual self-interests and attempt to undercut each other in financial transactions, they must work together for their own survival in two ways - they have to work together on political issues that are mutually beneficial, and they have to maintain a public image that is trustworthy and respectable, so the public, and caregivers, will support them. None of this is likely."

DeMoro is clear-eyed about the current system: that the market, left to its own devices, has created the current crisis. Although he would willingly gloat over the possible implosion of corporations, he doesn't believe that markets should simply play out to their conclusions. The self-correcting market may create winners and losers on Wall Street, but it creates havoc with patient care and quality of life in the United States.

The final statements before launching into the 12 Steps are sobering. Basically, it charges the entire population to stand up and be counted in demanding quality health care.

"It will require concerted and sustained public action on the part of everyday citizens to bring about real health care reform in our lifetime," the report states. "Whatever reform measures are ultimately supported or devised, and whether they are large or small, local or international - and wherever and however they are implemented - they must include at minimum the following 12 steps. The exact content and mode of application of these steps is and should be open to democratic debate and tailored to the scale, location, time frame and immediate and long-term goals of any health care reform measure."

[pickledpepperRN]

12 Steps to Rehabilitating Health Care

by Mary Watters

The IHSP's 12 Steps

to Rehabilitating Health Care

STEP 1

Single, Universal Standard of Care

A single, universal standard of care must be established, and it must be uniform and equitable in its application. The standard of care would be the best available consistent with the "art and science of medical practice" as determined by the professional judgment of licensed caregivers within a publicly financed system. Tiered plans, vouchers and "boutique" health care would be discouraged.

For the single, universal standard of care to be applied fairly, the following conditions must be present:

* Overall quality of life as the ultimate health care outcome

* Appropriate staffing levels

* Monitoring use of technologies - particularly "expert

systems" making use of artificial intelligence algorithms that

impact protocols, diagnostic and prognostic decisions and

procedures

* Structuring health care work with the appropriate role and

scope of the various health care professions involved in direct

patient care

STEP 2

Uniform Benefits Package for All

A single benefits package should be available to everyone, and it must be uniform and equitable in its application. Benefits shall include but not be limited to mental health, dental, prescription drugs, long term, home-based and other forms of care in addition to appropriate "alternative" modes of care.

STEP 3

Mandated and Enforced Safe Caregiver Staffing Levels

Based on Patient Need

All caregiver-to-patient staffing levels should be based on patients' clinical needs consistent with Steps 1, 4, 5, 6, 9 and 12. Staffing levels must also fit the parameters of the total health care budget established by the program's administrators.

STEP 4

Safety Standards Placed on Caregiver Work Redesign Programs

Redesigning the work of caregivers affects patient care. As such, redesign of caregiver work must be subject to much the same kinds of safety standards as any other health care technology. The criteria for assessing the impact on care should be the long- and short-term impact on overall quality of life for hospital patients, long- and short-term impact on caregiver skills and knowledge base, and the degree to which collecting and analyzing quality of care data is enhanced or impeded.

STEP 5

Patient and Caregiver Safety Standards Placed On

Computer- Based Technologies

Just as work redesign changes care, so does automation of the caregiver work impact patient care. The same assessments of Step 4 on overall quality of life for hospital patients, on caregiver skills and knowledge base, and data collection should be applied to the impact of computer-based technologies.

However, there should be a cap on the substitution of computer-based capital to labor, based on clinical efficacy and the degree to which such computer-based capital contributes to or impedes the ability of licensed caregivers to effectively exercise their professional judgment in the long term.

STEP 6

Single and Uniformly Applied Acute Care Hospital

Acuity System

Acuity systems are necessary to determine staffing levels and, as safe staffing is vital to this 12-Step Program, a single, uniform acuity system should be developed and used in hospitals nationwide.

STEP 7

Public Regulation of Corporate Health Care

Investments and Divestments

The agency charged with administering the new program must implement "Clinical Efficacy Certification" standards. These new standards would become the litmus test for large-scale decision-making, such as mergers and acquisitions, capital investments, and divestments of assets or lines of business. All proposed decisions would be evaluated based on its clinical efficacy for patients.

STEP 8

Transition Employment Program for Displaced Health Care Industry Workers

Drawing multiple sectors into one system will displace a number of industry personnel, such as accountants, claims adjusters, communications specialists, etc. The program would include training and placement services, with income and benefits, for displaced health care industry workers. Tuition subsidies would be granted to those who wanted to extend their education. Workers not finding a similar salary would have subsidized pay differentials for a specified period. Initial funding, while open for debate, could include assessments of former employers for the monies allocated for the displaced workers' health benefits.

STEP 9

Patient-Sensitive Criteria, such as Race, Gender and

Socio-economic Status, Must Be Given Priority in Investments/ Divestment Proposals.

The "Clinical Efficacy Certification" guidelines imposed on all health care investments or divestments must also take into account the specified patient population characteristics.

STEP 10

Protection Against Patient Dumping and "Cherry Picking"

All necessary steps should be taken to make sure all providers share equitably in the care of the seriously ill, the aged and infirm and those with chronic health care conditions. Providers should not be permitted to select only healthy populations to cover. Such sharing is a necessary condition for "leveling the playing field" in the negotiations between providers and the new program administrators.

STEP 11

Expansion of Traditional Funding Sources

The IHSP's program offers a wide array of new and innovative funding options, even though not all options may be necessary. In fact, if only one option, the Value Added Tax, popularly used in Europe, was put in place, there may be little need for many of the other options. However, the IHSP is clear that traditional funding sources will simply not be satisfactory to pay for the new system. The funding dilemmas faced in Canada and Great Britain make this clear.

To adequately discuss new funding sources, the following definitions and clarifications apply:

Health Care-Related Corporations: Publicly or privately held for-profit and nonprofit entities in the health care industry are either categorized as "primary" or fundamental to health care operations or "secondary" to provide support services and products for primary operations.

Primary Health Care-Related Corporations: including but not limited to Behavioral Health, BioTech, E-Health, Home Health, Hospitals, Laboratories, Long Term Care, Managed Care, Insurers, Medical Device Manufacturers, Pharmaceuticals, Physician Medical Groups, and Rehabilitation Entities.

Secondary Health Care-Related Corporations: firms that contract with primary corporations for services and/or material goods that sustain the primary firms' day-to-day operations, such as Medical Supply Distributors, Hospital Management Groups, Pharmaceutical Distributors, etc.

Publicly Traded Health Care-Related Corporation: a primary or secondary corporation that has a least one health care-related Standard Industrial Code (SIC) reported in its Securities and Exchange Commission filings. For example, HCA is obviously a primary health care-related corporation and is filed as such with the SEC. But General Electric also has a medical device subsidiary with a health care-related SIC, making it a secondary health care-related corporation.

Assessments are fees levied on health care-related corporations under Step 11, sections a, b, and c. For primary corporations, assessments are at 100 percent of a stated fee. Secondary corporations pay only 50 percent of a stated fee. Nonprofits and privately held for-profit corporations will be assessed at the same rate as publicly traded corporations.

Outstanding stock is the market capitalization, or the "cash value" of all stock not held by the corporation.

Exemptions: individual stockowners whose health care-related stock has a yearly average market value of $5,000 or less are exempt from assessment.

STEP 11-a: Creation of a Federal Health Care Market

Access Fee (HMAF) Levied on all Health Care Related Corporations

All health care related enterprises should pay a Health Care Market Access Fee (HMAF) based on total revenues. The fee should be indexed to total gross revenues and graduated: 0.25 percent of total revenues on those entities with a 3 percent or less gross profit margin, 1 percent on those entities with a margin over 3 percent and less than 5 percent, and 1.5 percent on those with a margin of 5 percent or greater.

For example, the pharmaceutical company Merck reported total revenues in 2002 of $51.8 billion and its income before taxes was $10.2 billion, or more than 19 percent. The fee would be 1.5 percent of revenues, $777 million.

STEP 11-b: Creation of a Health Care-Related Corporation Graduated Net Income Assessment Fee (HNIF)

All health care-related enterprises should pay a Health Care Net Income Fee (HNIF) based on total profits. That fee should be indexed to total net income and margins and graduated using the same percentages as in Step 11-a. For example, the HCA hospital chain reported revenues in 2002 of $19.7 billion and pretax income of $1.6 billion, for a margin of 8 percent. The fee would be 1.5 percent of revenues, or almost $296 million.

STEP 11-c: Implementation of a Social Benefits Tax

European countries have used a valued-added tax (VAT) as a revenue generator for decades. A VAT applies to businesses and not individuals. If implemented recklessly, a VAT would raise prices disproportionately on poor and middle income earners. However, if a VAT is paired with a health services income surtax on wealthy individuals, it will dramatically lessen the effect on the rest of the population. If price escalation is a problem for the poor, the surtax can help fund a program to compensate low-income populations facing price increases.

STEP 11-d: Creation of a Health Care-Related Corporation Merger and Acquisition Fee Structure

In addition to satisfying regulations concerning fair trade practices, all health care-related entities must apply the "Clinical Efficacy Certification" (CEC) guidelines to determine whether the proposed transactions would have some demonstrable substantive health benefit to the potential patient population affected by the proposed transaction. The fee structure shall be the average absolute dollar amount fee of the financial institutions advising the corporation on the transaction, but in no event shall it fall below 1 percent of the total value of the transaction.

STEP 11-e: Creation of a Health Care-Related Corporation Investment Fee Structure

As in Step 11-d, a capital investment transaction, such as equipment, construction of new facilities, etc., must have the CEC guidelines applied to determine its possible effect on patient populations. The fee structure would be 1 percent of gross revenues attributable to the capital investment.

STEP 11-f: Creation of a Health Care-Related Corporation Capital Divestment Fee Structure

Before granting a firm permission to relocate or close, a CEC impact study must be performed to determine the possible effects on patient populations. The fee structure would be 1 percent of all assets of the closing facility and/or the newly located facility.

STEP 11-g: Creation of a Health Care-Related Corporation Service Divestment Fee Structure

If a firm plans to reduce patient services, it must apply the CEC guidelines to determine the impact on the potential patient population. Fees shall be equal to or greater than 1 percent of productivity losses incurred by area employers whose employees have reduced health levels and productive work capacity as a result of the reduction in services (as determined by Regional Input-Output methodologies) and 5 percent of the average gross hospital charges per patient for the most recent five-year period of those patients affected by the reduction in service. Calculations shall be made on the basis of publicly reported gross charge data aggregated by specific Diagnostic Related Group. These fees shall continue as long as services are reduced.

STEP 11-h: Creation of a Fair Share "Stock Option" for

Patient Care

A fee of no less than 0.5 percent and no more than 1.5 percent would be assessed on outstanding stock of all publicly traded health care-related corporations.

STEP 11-i: Creation of a Health Care Executive Community Responsibility Stock Transfer Program based on Stock-based Wealth

All executives of health care-related corporations shall be assessed an amount equal to no less than 1 percent of the average yearly value of their stock holdings and options relating to their employing corporation.

STEP 11-j: Strict Enforcement of the Bayh-Dole Act to Reduce Drug Costs and Increase Access to Medications

American taxpayers pump more than $20 billion a year into health-related R&D, which has led to the development of numerous new drugs. The Bayh-Dole provision of U.S. patent law states that new drugs invented wholly or in part with federal funds must be reasonably priced for public consumption. If the manufacturer refuses to drop costs, the government can license the drug to another manufacturer that will make it available at a reasonable cost.

STEP 12

Expansion of Clinical and Economic Reporting Requirements

Standardized data collection and reporting will be handled by a Health Care Pricing and Quality Control Commission, which will prepare data for determination of budgets, fund distribution and system evaluation. Items reported will be costs, gross charges and actual reimbursements of all medical procedures and products in all health care facilities, health care quality outcomes data to include quality of life assessments, numbers of direct caregivers by unit, and numbers of patients.

[pickledpepperRN]

The Collective Will?

The Collective Will?

The IHSP policy brief closes with exhaustive data that illustrates the current injustices within the health care industry.

Excessive CEO compensation and the spiked profits of hospitals with high procedural charges are examined.

An in-depth look at Medicare reimbursements and how hospitals inflate prices of prescription drugs dispensed within the hospital round out the report.

With the IHSP's 12-Step Program, a comprehensive new document is available for debate and dissection. So the next question is, after 12 Steps, what's the next step?

Legislation is surely the only way to bring about a systemic change in the health care industry. For now, changes are only market-induced, which is the same as profit-induced.

Three Democratic presidential candidates, Rep. Dennis Kucinich (D-Ohio), former Sen. Carol Moseley Braun and the Rev. Al Sharpton, are calling for single-payer plan, which hopefully will put an overhaul of the health system on the table.

But, as the IHSP points out, it will take participation of individual citizens to make health care rehabilitation a top priority. So the question is, are we there yet? Have the American people "hit bottom" with the health care industry and want to make a change?

Returning to the idea of recovery developed through Alcoholics Anonymous, the path to change can be examined through the Three A's - Awareness, Acceptance and Action.

Awareness of the problem means you have to face facts, to be brutally honest and gather information.

Next comes acceptance, admitting there is a problem and seeing it for what it is, with all its flaws and even its positives.

The final step is action, committing the will and facing adversity to change the situation. Millions of Americans are certainly aware of the problems with health care. How many of them truly accept this as an undeniable problem, see the terrible flaws and what pain is inflicted on patients and families?

How many of those are willing to take action to see that the health industry is put into recovery?

"If people see what we're offering - a chance to have a Single Universal Standard of Care - and that they won't have to worry about health costs, make all sorts of decisions about how they plan to live their life based on access to a doctor or hospital, realize that a healthy population can mean a healthy country and a healthy business atmosphere, I think our ideas may take root," says DeMoro. "We, who are activists, need to be the 'support person' who can give all the reasons why the 12 Steps are worth every step. We can start to pull our health system into rehab."