The participants in our dialogue now direct their discussion to encmpass mental health issues . . .
Q-Couldn't one of the main culprits in accelerating health costs be the extension of coverage to psychological problems and addictions?
A-That's definitely true. Some companies monitor mental-health care more intensively than other types of health care and that has riled the American Psychiatric Association. They are pushing a law that would make it illegal to apply different review procedures to mental-health care.
Q-Why are there suddenly so many patients requiring this type of care?
A-There are many reasons for the increase in mental-health care, including greater cultural acceptance and broader insurance coverage. Health-insurance costs are a function of changing social norms, commercialism and law. Some people see a correlation between the major social changes of the past fifty years and the increased need for mental-health services. They see medical and mental-health services compensating for the vacuum left by the loss of family and community.
Additionally, third-party reimbursement for this type of care is not limited under the Diagnosis-Related Group schedules (DRGs) which apply throughout medicine. This market used to lay beyond the reach of the non-affluent, but half the states now mandate that health insurers cover the mind, making, as one writer put it, another burden of modern life institutional instead of the responsibility of the individual.
Q-Doesn't this additional coverage cost business a lot?
A-Insurance companies tend to pay for hospitalization for mental disorders, but not so much for outpatient services. Determining the need for mental health care is subjective. Companies are finding evidence that the prompt diagnosis and treatment of mental health problems may lower other health care costs and increase worker productivity. Nevertheless the costs are substantial.
Q-How much?
A-The per-employee cost of psychiatric and substance-abuse benefits was $163 in 1987, $207 in 1988 and $244 in 1989 or for companies with more than 5,000 employees the cost was $297 a head. According to a Foster Higgins survey, the claim is not usually made for the worker's care, but for the care of a dependent---too often an adolescent. Unfortunately many private psychiatric hospitals have become dumping grounds for adolescents whose parents cannot deal with teenagers.
Q-I bet the resistance to reimbursing outpatient therapy in the 1970s encouraged the current boom in private hospitals.
A-Probably. During the 1980s VA facilities shrank their mental patient load by 25 percent and many of these people still need help. The skyrocketing costs of mental health and addiction problems weigh heavily on public hospitals, where 29 percent of emergency hospital visits in 1988 were drug related.
My 20-year-old son, who is a paramedic, tells me that ambulance and emergency services are used on a frequent basis by non-insured lower income people. What else do you do when you don't have your own private physician to consult? It's only natural to go to the emergency room, and as long as it's not going to cost you anything, it's normal to think of calling an ambulance to get there.
Q-His observations don't exactly mesh with the alleged findings of the Health Care Policy & Research Agency as reported in Business Week in January 1990. Are you familiar with that report?
A-Vaguely. As I recall the report didn't say how, but only that Brenda Spillman "calculates that uninsured men and women had. . . two-thirds as many emergency visits as their insured counterparts." Her study involved the costs of bringing the use of health care by the uninsured up to par with use by the insured, and put that cost at $18 billion in 1987.
In view of the waste we are finding in the use of health care facilities by those insured by Medicare and private insurers, getting the uninsured "up to par" seems like a dubious goal to me. Healthcare Knowledge Systems in Michigan, found that uninsured women spend an average of 1.9 days in the hospital for routine childbirth compared to 2.3 days spent by those with traditional insurance. It may not seem like a very large difference, but when you think of all the births occurring nationwide on a daily basis, the costs add up. To provide uninsured people with access to preventive and maintenance care would be a worthy goal in itself, and saving the exorbitant costs of ambulance and emergency- room services, too often left as tabs for the taxpayer, would be an added bonus.
Q-You know what we haven't talked about? National Health Insurance.
A-John Dingell of Michigan introduced a bill to create national health insurance as the 102nd Congress began, just as he has done every other year since 1955 and as his late father did 50 years ago. That's no surprise, but the surprise is the endorsement in the spring of 1990 by The American College of Physicians of a comprehensive health-care reform which would include some form of national financing. The larger more powerful American Medical Association favors having employers provide health insurance and an expansion of medicaid coverage for the poor.
Q-Isn't Pete Stark, the congressman from the bay area in northern California, suppose to have his own solution to the nation's health care problem?
A- I didn't know whether to take the statements he made on July 18, 1990 seriously or not. You be the judge: "Through the use of a single national plan, operated by the federal government, it will be possible to bring the same kind of fiscal discipline to "mediplan" as we have already achieved in medicare hospital payments and as we expect to achieve in medicare physician benefits . . ." He's kidding, right?
Q-First, what is mediplan?
A-It's a brainchild of the Congressman's which he says would provide basic and long term health care to all Americans for only $120 billion per year. (HR 5300)
Q-Wasn't the late-Congressman Claude Pepper's plan to do the same thing, defeated because of a price tag half that size?
A-The chief criticism of the Pepper Plan was the lack of suggestions on how to finance it's $66.2 billion a year projected cost. Mr. Stark doesn't fall into that trap. Mediplan would replace medicare and be financed primarily by a four percent surtax on all income over $16,000 per person per year, plus another four percent on all corporate income, plus a hefty premium of about $1,000 a year to be shared by the employer and each employee.
Nebraska's Senator Robert Kerrey, who many think may be a presidential candidate in 1992, also has a program for national health care which he calls "Health Care USA". He discussed it before the National Newspaper Association in March, 1991 and is hoping Nebraskans will give it a trial run. It would be administered by the various states and even he admits it will cost a bundle. Another presidential hopeful, Paul Tsongas of Massachussetts, unveiled his plan in April 1991. Later in 1991 Senate Majority Leader, George Mitchell, will probably produce a health plan for the nation which he has been refining for years and which he discussed on April 12, 1991 before the American Group Practice Association
Q-Many people believe it's time to institute a system of national health care in this country like the ones that appear to be so successful in other parts of the world. What do you think?
A-Always there are those who point in admiration to the free health care provided by socialist and communist countries. How often we have heard that America is "the only industrialized society that does not..."? Don't these people ever wonder why it is people from all over the world are trying to get into this supposedly heartless, uncaring country which provides citizens, aliens and visitors the best of everything?
According to Kenneth Prager, a physician who in 1987 wrote about his experiences with the Soviet health care system, that system is far from "free"---that is if a patient desires clean linen and delivery of medications. Forget about meals---those must be brought to patients from home, an idea which many hospital patients might like to see copied in this country. (That's a joke.) Cash or other goods must change hands if a really competent physician is to be secured, and the same goes for many medications. What is not permitted on the surface goes on underground. Political systems may vary, but human nature is the same everywhere.
There is a hierarchy of medical facilities, technology and care in the Soviet Union with the best, in all cases, being imported from abroad. Modern medicine, as we have found in this country, is very expensive and the Soviets chose for years to allocate their limited resources to military and space technology. As a consequence there are shortages of everything from wheelchairs to needles and scalpels which, as they become dull through overuse, cause more pain than most Americans would endure. Syringes, catheters and intravenous tubing are reused with increased risk of infection.
"The aged", according to Dr. Prager, "are afraid of being hospitalized. In a medical system that is chronically short of the most basic supplies, the elderly are considered expendable and will be the first to feel the brunt of such shortages."
Q-But times, they are a changing---especially in the Soviet Union. I heard awhile ago that under Gorbachev's new economic policies, physicians are allowed to make a profit, set their own salaries, hire staff and obtain their own equipment and supplies.
A-I heard that too. In fact there are estimated to be approximately 80 medical cooperatives in Moscow alone where groups of physicians either obtain loans from the state or pool their resources to go into business for themselves. Citizens are more than willing to pay high prices to avoid the long lines and delays associated with the state operated clinics and to receive what they believe to be higher quality and more personalized care. Cost is secondary. After all Soviet citizens have the highest savings rate in the world because there is nothing much to buy in the Soviet Union. (Remember this next time you hear politicians lamenting the low savings rate in this country.)
In 1986 a Health Center was established in an old run-down mansion in Moscow, and it was soon swamped with paying patients. It was the first of approximately 95 medical cooperatives throughout the country emphasizing health maintenance. Much of the treatment concentrates on avoiding cigarettes and preventing obesity. Nurses at the Center are paid more than most doctors in the state system and many of the 26 resident physicians make more than double the salaries of their state-employed counterparts.
Q-Granted, Soviet health-care may leave something to be desired, but what about Canada's health-care system?
A-The Canadian health system is supposed to guarantee equal access to health care, at no direct cost to the citizen, with any practitioner the patient chooses. Private insurance doesn't exist in Canada. A recent Canadian study found no difference in death rates between Canadians and Americans who experienced low and moderate risk procedures, but death rates in the U.S. were lower when high risk procedures were considered. The joke is, the system is great as long as you don't get sick. As in all nationalized systems, access to major procedures is strictly rationed.
Canada has twelve magnetic resonance imagers used for diagnoses, or one for every 2.1 million people compared to 1,375 in the U. S. or one for every 182,000 people. In Canada there are only eleven facilities doing open heart surgery compared with 793 in the USA and fourteen sites doing organ transplants compared to 319 in the USA.
There are waits for operations such as hernias, cataracts and coronary bypass grafting. Many Canadians die before their wait is up, and this of course, saves the system money.
Heartbeat Windsor is a private volunteer organization founded in 1989 whose purpose is to help Canadian heart patients obtain critically needed surgery in the U.S.
The thriving private practice of medicine in England is not an alternative for Canadians as the government forbids it. Canada has a smaller percentage of its population over age 65 than we do, and that accounts for some savings to the Canadian system, as costs increase with an aging population. Incidence of teenage pregnancy is 250 percent greater in the USA than in Canada, and the incidence of smoking, drinking and doing drugs during pregnancy is much less in Canada. Research and development account for a much higher percentage of health costs in the USA than in Canada.
Q-Do you happen to know what it would cost to institute a system like Canada's here in the United States?
A-I've heard it would cost between $200 billion and $300 billion a year.
A study by Stanford health economist, Victor Fuchs, published in 1990 and based on 1985 data, found U. S. health expenditures to be 38 percent higher per capita than in Canada. Again, the difference is most striking in fees for procedures requiring specialists. There was very little difference for routine office visits. It is estimated that general practitioners and family physicians deliver two-thirds of the routine care in Canada, but just one-third of the care in the U.S. On a per-capita basis, Americans get three-quarters of the doctors' services received by Canadians, which is contrary to the popular notion that lower costs in Canada are a result of providing fewer services. Instead it is the kind and difficulty of services that accounts for the differences in the two systems.
Q-It seems like doctors, in order to maintain their incomes, would be forced to perform more, not less, procedures when their fees are capped.
A-As I said, that's just what happens in Canada.
Q-An article in Time magazine December, 1990, gives an argument for national health care. It states that 3 out of 4 Americans favor it and big business is ready to go along because it is already providing the care for its employees and subsidizing costs for smaller businesses that don't provide coverage. Any comments?
A-I've heard most of the arguments ad nauseum: There are between 31 million and 37 million with no health insurance, so everybody claims. Twenty-eight percent of the population faces financial disaster if illness strikes. We spend millions of dollars on intensive care for those whom months before we refused basic care. We give by-pass operations to persons with Alzheimer disease and hip replacements to comatose patients. Health care costs now consume 14 percent of the elderly's income. We rank 22nd. in infant mortality and our life expectancy is no greater than that found in other industrialized countries. We pay more and get less.
Q-You mean to say you don't buy any of those arguments?
A-I know we have problems with our system, but what you call arguments, I call myths.
Q-What myths?
A-The following myths surround NHI, national health insurance.
1-National health insurance ensures access to everyone. 800,000 people are waiting for operations in Britain at any time. Waiting is not access. In England the number of people with private insurance has doubled in the last decade so that now over 12 percent of the population is privately covered. Maybe the fact that 9,000 kidney patients are denied treatment by the British NHS each year has something to do with it. In New Zealand, 33 percent of the population is covered by private health insurance, with private hospitals performing one quarter of the surgery. Canada doesn't permit a private sector alternative, so Canadians travel to the U.S.
2-National health insurance means more efficiency and lower costs. Naturally money is saved when you don't offer the expensive services.
3-National health insurance uses money efficiently. Ambulances are used in England as a free taxi service with 91% of the trips used for non-emergency purposes. Just as well, as they are not equipped with the life-saving equipment considered standard in this country. The British NHS spends $70 million a year on tranquilizers, sedatives and sleeping pills, approximately $19 million on antacids and $21 million on cough medicine, according to John Goodman of the National Center for Policy Analysis.
4-Under national health insurance, the elderly will receive at least the same benefit they now receive under medicare. The elderly have the most to lose from the adoption of NHI. In Europe 22% of patients over age 55 are not given access to dialysis and in Britain 35% were refused treatment, as were 45% of those kidney patients over age 65. Such treatment is rarely allowed for those over age 75.
5-National health insurance primarily benefits the poor. NHI is a middle-class phenomenon. There have always been responses in all countries, from all governments, to the health-care needs of the poor. NHI is a way to woo the middle-class taxpayers. Numerous inexpensive services affecting millions of voters is better policy, as far as politicians are concerned, than spending large amounts of money on a handful of acute patients. It is always politically expedient to redistribute resources from the few to the many.
6-Since National Health Insurance is popular elsewhere, it will be popular here. It doesn't work as advertised anywhere. The wealthy and powerful find ways to circumvent the lines. Those pushed to the end are not aware of the technologies they are being denied. But Americans have access to information about modern medical technology and there are plenty of lawyers and advocacy groups to represent the down trodden. People may be used to being pushed around in other parts of the world and accept it as their lot. Americans won't stand for it! In a strange dichotomy Americans are the first to say "You can't push me around" and "There ought to be a law"!
7-We spend more and get less health-care than citizens of other countries. Witness higher infant mortality and similar life expectancy rates. Mortality is determined by many things that doctors and hospitals do not influence, but whenever medical care can influence the outcome, the USA is on top. For premature babies, and those with cancer, heart disease, and those requiring transplants and so forth, their outlook is best in this country. We may pay more but we get more.
Myth #7-We spend more and get less health-care than citizens of other countries. Witness higher infant mortality and similar life expectancy rates. Mortality is determined by many things that doctors and hospitals do not influence, but whenever medical care can influence the outcome, the USA is on top. For premature babies, and those with cancer, heart disease, and those requiring transplants and so forth, their outlook is best in this country. We may pay more but we get more.
Q-I don't believe that last one is a myth. What about the poor care and high mortality rate for young people in this country?
A-Vehicle accidents are the most common cause of death for young people ages 15-24 in all developed countries. Unfortunately, young American males are more than four times as likely to be murdered than their counterparts in other developed countries. American children experience divorce and life with a single parent more than other children. Less than 20 percent of children in Japan and Europe live in single parent families, whereas more than 25 percent of American children do. Twice as many American children under age 18 see their parents divorce in a given year, as compared to children in Japan, Canada and Norway. Due to living with a single parent approximately 20 percent of American children live below the poverty level, whereas only ten percent of children in Canada, West Germany and Sweden are reported to be in the same boat.
Q-None of that accounts for the high-infant mortality rate in this country.
A-It may be time to admit that America's high infant-mortality rate is a social problem, rather than a medical problem that can be cured with more dollars. A study for the Department of Agriculture's Food and Nutrition Service Department, in order to justify the WIC program (a special supplemental feeding program for women, infants and children) cost over a million dollars to prepare. It reported nothing any fifth grader couldn't have surmised; that women receiving good diets are less likely to have babies of low birth rate. What kind of claim is that? "Less likely" is far from a cause and effect.
Those that blame lack of funds for the WIC program for low birthweight babies are spouting nonsense. It is more likely that low birthweight is caused by the mother's behavior than by underfunded nutritional programs.
Q-What kind of behavior?
Q- A researcher at the American Enterprise Institute traced the cause of low birthrate and infant mortality to teen pregnancy and illegitimacy. Among all races in the USA in 1987, twenty-four percent of infants were born to unmarried women. Infant-health among Latinos, who generally receive a significant amount of extended-family support during their pregnancies, were better than the general population. He found a 1982 study which showed children of unmarried white college graduates had higher infant mortality rates than those of married white high-school dropouts. Statistics show that a child born to poor married parents has a better chance of survival than a child born to a single middle-class mother. Japanese statistics were also studied. The fact that Japanese women are four times more likely to die during child birth than are American women, attests to poorer prenatal care, yet Japan's infant mortality rate is half that of ours. Coincidentally less than one percent of Japanese mothers are either teenagers or unmarried.
Q-I still don't buy it.
A-Will you accept the word of Health and Human Services Secretary, Dr. Louis Sullivan? He claims a 1989 proposal, and a $2 billion increase in funding brought one million more women and children into the WIC program. He also claimed that 20 percent of Caucasian births, 30 percent of Hispanic births and 60 percent of black births are to single parents and that a child born to a single parent has five times the likelihood of growing up poor. He went on to say that ten percent of all infant mortality in this country is due to mother's smoking during pregnancy and that the infant mortality rate in this country is now half what it was in 1970.
Q-I understood that in the summer of 1990 the national Center for Disease Control claimed that single motherhood is a sign of possible health problems for the child, but came short of citing it as a direct cause.
A-For those who are still unconvinced that the attitude rather than the health of the mother accounts for America's high infant mortality, Washington DC, a city that spends $105 million on its residents health, is an example. The District of Columbia has an infant mortality rate three times the national rate---it also has the nation's highest percentage of births to unmarried mothers---also three times the national average. Coincidental?
In the nation's capital prenatal care is free to any woman whose family income is less than $20,000. Clinics, which provide childcare, are conveniently open in the evening as well as the day, and at most there is less than a two week wait for an appointment. A woman can be referred for drug treatment, see a dentist, a social worker, a WIC representative, a registered nurse and an obstetrician.
And no one can claim ignorance of the services. There is an extensive media campaign with announcements on radio and TV, posters on buses and other public places, and on top of that a van goes to the poorest neighborhoods looking for pregnant women and offering to take them to the clinics and reminding others of appointments and providing door to door transportation. What more could be done? Nevertheless 60% to 70% of the babies born at the General Hospital are born to women who used drugs and/or alcohol during their pregnancy.
Q- It sounds to me like they needed counseling.
A-Counseling is not the answer. Most of the women knew about free care but didn't care. Women (girls) who are into alcohol and drugs don't listen, and spending more dollars on prenatal care and services is not going to make any difference.
But politicians don't listen either and despite our burgeoning budget deficits, as of July 1989, states are required to provide prenatal care to households with incomes at seventy-five percent of the poverty line. The threshold was raised to a requirement of 133 percent in April of 1990 with states having the option to go to 185 percent. The mandate was to be funded by medicaid, which means states have to pick up almost half the tab.
California, with one of the largest state deficits, took the federal government up on its offer to split the care for Californians with incomes 185 percent of the poverty level, which in 1991 meant a cost of $38.7 million. In a fit of generosity the state decided to go even further and broaden eligibility on its own to include families with incomes up to and including 200 percent of the poverty level. California simply slapped on a special tax to raise the additional $18 million required.
Q-If those eligible for the programs show up and participate California should have the healthiest babies in the nation.
A-If, is the big question. Remember, getting people to use the facilities was the biggest problem in Washington, D.C.
But besides teen pregnancies, drug use and illegitimacy, there are other reasons the USA is ranked behind 21 other industrialized nations when it comes to infant mortality. We now have the technology to save babies weighing less than 14 ounces, but of course the cost is devastating. According to the Spring 1990 issue of Policy Review we spend $7 billion a year on 93 programs in an effort to keep children alive. I wonder if infants with extremely low birth rates are figured into the mortality rates of other countries. In Sweden if the prognosis for a baby is grim, no effort is made to save it. Treatment is commonly limited throughout Europe. And even in Britain, where every effort is made to save newborns, if severe brain damage or death seems likely, and the parents agree, treatment is terminated. French physicians make the decision for French families, for, as a spokesman put it, "our responsibility as doctors is not to give a family a handicapped child."
But this is the United States, not France, and Americans have a long history of valuing all life, without putting subjective values on quality.
Q-I know locally, at Stanford University hospital, the care for the smallest preemies was estimated to cost $160,000.
A-The bill for neonatal intensive care nationwide, was put at $2.6 billion by a 1990 study published in the American Journal of Disease of Children. Unhappily the technology that saves, can and does sometimes impose profound suffering in the form of neurological disorders such as cerebral palsy as well as blindness and other congenital defects. More and more people are beginning to question whether heroic and costly efforts at saving life are in the best interests of anyone.
Q-There doesn't appear to be an easy answer.
A- Before government intervened in the late sixties, health care, like everything else in America, was a matter of economics and custom. Money bought excellent treatment in the cities and in poorer and rural areas there was a network of support unique to the culture. Mid-wives still practice among the poor of Apalachia and are often preferred by the well to do who populate the Berkeley hills. Rich and poor pregnant women often fail to see doctors even when cost ceases to be a consideration. Premature births have held steady at seven percent in this country, even though we know how to prevent most occurrences.
Q-Aren't medical malpractice suits part of the problem?
A-There's no doubt the fear of suits has driven more than half the family physicians out of obstetrics, and many of the specialists that are left in the field refuse to deliver babies. In a market economy this would insure higher prices for pre and postnatal services, as more dollars would be forced to chase fewer obstetricians. I guess that doesn't apply in our non-market situation and so we can be thankful for small favors.
Unfortunately, the lower income people are the ones that get hurt most ---again.
Q-Why?
A-Because fear of liability leads physicians to avoid high risk patients who are very often socioeconomically disadvantaged. The social purpose of malpractice suits is to keep the medical profession accountable and to recompense patients. Limiting access to pregnant women and those at high-risk is another one of those unintended consequences that government does so well.
Q-Didn't I hear somewhere that a lot of the cases brought against obstetricians couldn't stand up in court?
A-That's right. Sixty percent of the cases filed against doctors in 1986 were found to have no merit, yet it cost insurers $380 million to investigate them. In 1982 the annual liability-insurance premium for an obstetrician averaged $10,946. In just five years it soared 238% to $37,015. Physicians were advised to "play it safe" and fetal-monitoring tests rose from 114,000 to 647,000.
Illinois now requires that malpractice suits be certified as meritorious by a physician of the same speciality in order to go forward. Since the law's passage in 1985, the number of malpractice suits in Illinois has declined by thirty percent.
Q-Doesn't California have similar legislation?
A- In 1975 the California legislature passed the Medical Injury Compensation Reform Act which caps compensation for pain and suffering at $250,000 and limits the amount of any award that can go to an attorney. Trial attorneys kept the Act in court for ten years so it has been in effect only about as long as the Illinois legislation. One good side effect is that insurance premiums for obstetricians and gynecologists in California are only half what their counterparts pay in Florida and New York, although steep at about $50,000.
Virginia's approach was different. As of January 1988, a fund to cover medical and other expenses for children injured at birth, was established via voluntary $5,000 contributions from obstetricians and hospitals, with a $250 assessment from every other doctor in the state. The money is paid to the injured child only as long as he or she lives, and covers medical and other expenses that resulted from the injury. The theory is that the injury is most often an act of God, as opposed to negligence by an attending physician. After age 18 the reimbursements are for living expenses, based on the state's average weekly nonfarm wages.
Q-I think the American Medical Association has come out with its own solution. Have you heard about that?
A-From what I know, the American Medical Association's answer to the problem is a system not unlike that used by the National Labor Relations Board and workers' compensation boards, except that fault needs to be documented. Every state would have a government-appointed board, made up of doctors and representatives from other professions, who would investigate malpractice complaints for merit---similar to Illinois' approach. If a case is found to have merit, agents would suggest a settlement, with pain and suffering awards limited to $200,000, which is shades of California's old legislation. All victims would have access to the system, and if successful would see their awards within one year instead of wading through the tort system, which often takes many years. Of course a dissatisfied victim would always have access to the courts as a last resort. The AMA solution is kind of a pot-pourri.
Q-Your mentioning torts made me remember something I wanted to ask you. Do you know anything about a law that absolves vaccine manufactures from liability for any problems that may arise from administering their product?
A-In 1986 Congress passed legislation creating the National Vaccine Injury Compensation Program as a no-fault alternative to tort actions against vaccine manufacturers. It was signed, reluctantly, by President Reagan. Since it would give access to the deepest pocket of all, Uncle Sam's, many critics thought it might encourage the creation of similar federal programs for persons injured by other goods and services. The federal government now spends $258 million on its vaccination program.
Q-Didn't Senator Hatch come up with a tort reform bill recently?
A- Senator Orrin Hatch introduced the Insuring Access Through Medical Liability Reform Act of 1990, which is another one of those federal mandates. This one forces states to adopt a package of tort reforms to rein in trial lawyers.
Q-Speaking of legislation, tucked away in the October 1990 budget package was a law mandating that patients be given what is being called "medical miranda warnings". What does that entail?
A- Patients must receive written information detailing their legal options for refusing or accepting treatment if they are incapacitated. The legislation also requires the Department of Health and Human Services to conduct a nationwide campaign to educate people about right-to-die legal options.
Q-Jumping to another area entirely---I heard the Germans were having trouble with their health-care system. Do you know what kind of trouble?
A-I'm not that familiar with the health-care system in West Germany but there is one universal trouble which I know they share with the rest of the world and that's run away costs.
In West Germany the government regulated sick funds, foot the entire bill for doctor, dentist, hospital and medications. The cost came to $5.2 billion in 1960 but was a whopping $72 billion in 1988. The West German system, which covers 92 percent of the population, is funded with contributions by both employers and employees amounting to about 15 percent of salaries. As in our system, there is little incentive to practice frugality. The Germans tried to reform their system in 1988 by putting price controls on drugs. The fear now is that R&D in pharmaceuticals could move to this country now that we're speeding up our drug-approval process.
Q-I thought we had one of the slowest drug-approval systems in the world. What happened?
A-Our system still has its problems. As far as I'm concerned, the role of the Federal Drug Administration should be redefined as a monitor of safety and not a judge of the efficacy of drugs dispensed in this country. The FDA tightened its control of pharmaceuticals in the 1960s as a response to the thalidomide scare, and it never loosened up.
For instance, deprenyl, a drug used to treat Parkinson-disease patients, was in use in Europe long before it was approved here. Patients in other parts of the world pay a lower price than Americans must pay to obtain the drug. That's thanks to FDA regulations and restrictions.
Lavamisole, used in treating cancer, was discovered in Antwerp Belgium in 1966 but was not available here, except to treat animals for worms, until 1989. AZT received fast-track approval thanks to the politically savy AIDS lobby but THA, the only treatment available to Alzheimer patients was side-tracked.
As the Wall Street Journal said in a March, 1991 editorial, "...the system we have on the statute books now primarily serves bureaucracies, statisticians, researchers, drug companies and stock analysts. The victims of disease are in the line, all right, but they're in the back of it."
Q-It seems to me that the cost of drugs in this country started rising at an increased rate some twenty to thirty years after the tightened controls.
A-There's some truth to your observation. Drug prices dropped in the 1960s and rose at only half the inflation rate in the 1970s, but in the 1980s they rose twice as fast as consumer prices. Medicare programs in some states adopted lists of drugs approved for reimbursement, usually having obtained a price break from the pharmaceutical company first. If not on the list a drug is available to Medicaid patients only by special permission requiring lots of red tape. Pharmaceutical companies give hospitals deep price discounts because hospitals take delivery in bulk and discharge patients who will continue to buy the medication at full price. More insurers are making patients pay 30 percent of their drug bill if they refuse to use a generic. Medications account for 30 percent to 40 percent of employers' costs for health benefits for retirees over 65.
Q-Can you tell us something about the 1983 Orphan Drug Act?
A-Sure. The Orphan Drug Act gave companies that develop drugs for treating rare diseases a seven year monopoly on marketing rights for those drugs with no price controls. As with all laws and regulations, as I pointed out earlier, the ink was hardly dry before ways to circumvent troublesome restrictions started multiplying. Companies began to separate the various uses for a new drug, so each use could qualify for orphan status. To qualify as an orphan, the drug should treat a disease with less than 200,000 victims. The FDA reported one company tried repeatedly to gain status for a drug which was supposed to be exclusively for those who suffer left-knee pain.
Q-I can see how left-knee pain might involve fewer than 200,000 patients, but then again such a scheme could backfire. Weren't some legitimate changes in the legislation proposed recently?
A-I don't know about "legitimate" but in an attempt to curtail profits, some members of the 101st congress tried to lift the monopoly where more than one company was interested in competing in developing a drug. Of course the government-provided goodies were probably the interest generator and if they were removed we'd be back to square one. Maybe others thought that way too. At any rate the industry lobbyists prevailed and managed to render the reform bill harmless. For whatever reason, maybe signals got crossed, President Bush vetoed the toothless legislation and so the battle continues into 1991.
Q-What do you make of families appearing on TV pleading for organ donations, bone marrow or money for a costly operation generally to save a child?
A-It's tragic. It affects me, just as it does everyone who sees it. But I remember something the former governor of Colorado said a few years ago in an address to the Commonwealth Club in San Francisco. Richard Lamm said, "If there is an identified individual, we will rush to them and spend millions of dollars, and forget lots of other people. We will try artificial hearts for Barney Clark, while 31 million people go without health insurance." I know he's right when I think of the fuss and expense of trying to rescue the two whales caught under the ice a few years ago, while the world looked on.
Q-It is amazing what a little publicity will do. People really have a need to help---to reach out and do some good, don't you think?
A-Absolutely. People are optimistic and creative for the most part. I recall being touched by a couple who conceived a baby specifically in the hope that it could provide marrow to their dying teenager.
Unfilled demands for organs and human tissue shows that social policy has not kept pace with technology. How tissue can be procured and delivered equitably and efficiently is an issue to be resolved.
Q-Do you have any ideas?
A-So far we have failed to even consider a market orientation but what is the alternative? We want donations to be based on altruism rather than coercion or the profit motive. There has to date been a failure to specify who owns the economic value of donated tissue. In the absence of distinct property rights there is nothing to prevent the middlemen from reaping the value of donated tissue.
Another mistake we may be making is to rely on nonprofit organizations who have few structural incentives to coordinate their activities between the organ procurement agencies and the transplant surgeons. There should be more than a sense of social obligation to send tissue they cannot use on to another agency. Profit oriented entities are motivated by competition and are pushed into economies. Without these "pushes" a system of coordination and communication has not arisen naturally.
Doctor Thomas Peters of the Jacksonville, Florida Transplant Center broke the taboo. He wrote in a 1991 issue of the American Medical Association Journal that it might not be such a bad idea to for organ procurement groups to offer $1,000 for organs.
Q-Isn't commercial trading in organs against the law?
A-You're right, the purchase or sale of human organs is a felony under the National Organ Transplant Act of 1984. But the doctor's idea would skirt the law by calling the transfer of funds for organs, reimbursement rather than a sale. There has even been talk of having the government pay (reimburse) families for organ donations through a federal tax benefit or grant of some kind. It's a game of semantics, but other people are beginning to understand that a market policy might provide tissue of high quality in sufficient quantity to all who need it. After all, banning markets does not stop the play of economic forces.
Q-What about the United Network for Organ Sharing which maintains waiting lists for organs and matches organs with recipients?
A-I suppose you are asking about their success rate. All I can tell you is that there has been a forty percent increase in that waiting list in the last couple years. That organization claims that 2,206 people died while waiting for a transplant in 1990 and as of March, 1991 there were 22,483 people waiting for hearts, lungs pancreas, livers and most of all, kidneys.
Q-Does anyone know why there aren't more donors?
A-I've heard speculation that families don't want a sick relative identified as an organ donor because they fear he or she might receive less aggressive care. Others say the manner of requesting organs is at fault. One study indicated that when organ donations are asked for at the time of death, only 18 percent of those asked will agree. If the request for a donation of organs is made separately, the success rate rises to 65 percent.
Q-I'll tell you what impresses me. Donors of marrow are rendered unconscious with a general anesthetic. One hundred to two hundred holes are punched in their hips to extract the marrow through five to six skin punctures, and they may need a transfusion of one to two pints of blood. The procedure is painful and not without real risk. Nevertheless, about 75,000 donors in the U.S. have already pledged to undergo this operation should anyone need their marrow.
A-I know. People are like that.
Q-I'll throw another idea out to you. I've thought for a long time that school systems are a group that is both large and healthy enough to attract private insurers to underwrite low-cost coverage. Couldn't some program be set up to provide health coverage for otherwise uninsured children through the schools?
A-Others have had the same idea. Florida has started a school-based health insurance project enabling parents to buy a preventive health plan for their children which includes immunizations and screening for $11.46 a month per child. There is a $52.82 package option that includes office visits, hospitalization, emergency services, maternity care and other services. The Healthy Kids Corporation is run by members of public agencies together with private insurers. The state will pay part or all of premiums on a sliding scale. The HCFA (the federal Health Care Financing Association) is adding a $2.2 million grant to the Florida legislatures $1.7 million initiative.
Q-I have one last question and I'm asking it so you can use your legal background to speculate. What should be done when an insurer squanders clients' premiums to live high on the hog and refuses to pay the legitimate medical bills of those clients when submitted?
A-I've been pondering a similar situation, as a matter of fact.
Some farm workers in Watsonville were among thousands throughout California who got caught in such a trap last year. In that case I was shocked that those least able to shoulder the burden of a failed system were being asked to handle the entire burden. In my opinion the loss should be shared, by the victim's employer, the doctor who provided the services and the state who was unable to stop the criminal before his venom had spread---all of these, with a little effort, were more able to judge the integrity of the insurer than was the ultimate victim.
In fact in the case I am thinking of, the state discovered evidence of fraud in July 1988 and yet the company opened a brand new Fresno office in October which sold the insurance to the employer of the Watsonville victim who was stuck with $10,000 worth of medical bills incurred almost a year later in September of 1989.
What was the great protector government doing all that time?