Another aspect that I find appalling, is that there was no attempt to distinguish increases in health care cost from that in health insurance premiums. I need not point out to these esteemed Economists that insurance premium costs have far outstripped actual costs of medical services. Similarly, no mention of tort reform is very disturbing, and points to more of the same, irrespective of which plan is implemented.

Being a solo practitioner (in Prof. Pauly’s neighborhood), I can claim to have real life experience being a physician in private practice (”provider”), a small employer with 4 employees (having to decide about employees’ health insurance plans) as well as a consumer of health care myself (and my family). It is obvious to me that while Medicare and most private insurers in the area have not increased my reimbursements for at least 5 years (even falling behind CPI), the insurance premiums have increased almost 80% in the past 5 years. I don’t need to be an Economist to figure out that this does not add up! In addition, we can claim that we are the only practice (in our specialty) in the region to offer patients the advantage of a fully electronic office; neither Medicare nor any of the private carriers have acknowledged this with even an offer of higher reimbursements for higher quality service. This would be similar to paying for a Ford but walking out of the car dealership with a Cadillac. If it sounds absurd in any conventional business, why is the norm when it comes to purchasing medical services? I must however, make it clear that current “quality standards” as proposed by CMS are similar to saying that as long as a car has a wooden trim and glitzy hub caps, it is a Cadillac. One would find it difficult to sell a car with such a line, but financial incentives are being handed out to a “favored few” by CMS using a similar rationale. I believe Ms. Wilensky was part of the process that produced this “quality standard”. I apologize if I am incorrect in assuming this.

My real issues with both proposals are as follows: Increasing employer mandates, per Mr. Obama’s plan would clearly be a major disincentive for any small business like mine to continue providing employees with health coverage (current burden of payroll taxes are already too much to bear). In fact, I would fall into the most vulnerable subgroup of small businesses, because I would not be able to pass on the extra cost of employee insurance on to my customers, since “allowable” reimbursements don’t even come up to 50% of my customary charges, and are pre-fixed by government and private payers. If Mr. Obama wants to truly reward businesses that keep jobs in the US, then this plan would clearly be counter-productive. Otherwise, it is quite possible to outsource all supportive functions if it becomes too onerous and financially impossible to operate a business using US employees.

As far as Mr. McCain’s plan is concerned, too much reliance on “cost-containment” will actually result in increase in unnecessary tests, and will turn out to produce the opposite effect to what is intended. For example, most hospitals will obtain tests to rule out problems like urinary infections, etc. on every patient that is admitted, irrespective of the reason for admission – so one might get a urinalysis even if he/she is admitted with a heart attack – lest a UTI is identified after admission. Again, involving the physician community in a positive way, is the best way to prevent “never events”. Just issuing mandates (like how its been done by CMS lately) will further alienate physicians. Unfortunately, I do not see any mention of this in either proposals. With due respect to Economists, you cannot deliver health care without physicians.

Finally, it would bear reminding that just because a plan “covers everybody” it does not automatically mean everybody covered by such a plan has real-time access to medical care (other than emergency rooms). Prof. Pauly will probably know first hand how people under Medicaid HMO plans are running around the Philadelphia-region with no participating physicians to care for them. I know this personally because I was the last specialist (in my specialty) in private practice to be on any such plans in SE PA until I opted out because they “would not negotiate”. While I agree with Prof. Pauly that “buying in bulk” is cost-effective, not everyone is privileged to work for a large institution with vast Human Resources personnel. Small businesses still provide a majority of employment in the country, and these businesses don’t have the resources of a Univ. of Pennsylvania. Personally, if I was an employee, I would prefer the option of selecting a plan that is appropriate to my family needs, is portable irrespective of where I work and insurability is guaranteed.

So in summary, everybody involved in health care planning must not only look at economic issues but must tackle the problem of lack of access to quality care, which has accelerated the utilization of costlier resources such as ERs. Paying appropriately to purchase higher quality care should not be a hurdle, but rather a requirement in any future discussion. The most critical question to answer will be the best mechanism to eliminate the “uninsurability factor” from the equation. Whoever comes up with a workable solution to these critical questions, will have my support, as an Independent (non-party-affiliated) voter. It would be very beneficial if the discussion participants are able to post their response(s) in this blog.