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Whether or not one supports any of the candidates in the debate or the other party, they provide interesting discussion material for those who care about our health care system. What is the real problem with today’s system, if it has one? What is the solution? What is wrong with the proposals? Do any of them really address the key issues?

Most everyone seems to accept the view that there is a problem with the US health care system. The disparity starts as they try to identify the problem and/or their preferred solution. Even the debate participants had some challenges in stating their opinion and/or solution. Former Vice President Biden said his solution would cover everyone, yet it apparently doesn’t include about 10 million people. Senator Harris didn’t want to talk about the impact of her proposal on current employer-sponsored plans. Neither of these two have fully accepted Senator Sanders’ Medicare-For-All plan. Perhaps as the campaign’s advance over the coming months we will learn more about what they plan to do and what solutions they are proposing to solve the health care system problems they have identified.

I heard a variety of problems identified during the debates, but I failed to hear anything about what I believe to be the most serious problem in the current system. I am less concerned about how we structure a solution than I am at the details of what we are going to do to minimize the most important problems with the system. For example, no one talked about a solution to eliminate the medically unnecessary services that are prevalent in the system. Studies show a significant portion of care provided by today’s system has little value and is potentially avoidable and/or medically unnecessary. What are the proposals doing about that? I believe the answer is nothing. Where is the accountability in the system? What is going to be done to hold providers accountable? After all, they prescribe and manage most of what is done in the system.

Recent analysis I and members from our firm have done show as much as 45% – 50% of inpatient hospital days are avoidable without negatively impacting the quality of care.

Recent analysis I and members from our firm have done show as much as 45% – 50% of inpatient hospital days are avoidable without negatively impacting the quality of care. In fact, studies show these avoidable days actually decrease the quality of care. What solutions have been proposed to impact this serious problem? I believe the answer is none.

In addition to the potentially avoidable days in the system, the issue of how prices are set to pay for inpatient care is not discussed. A case currently in the midst of litigation suggests a health system has significantly overpriced their services causing substantial damages to policyholders in terms of what they had to pay insurance companies in their premium rates. What solution is proposed to reduce unreasonable margins charged by providers? I believe the answer is none or only limited action for publicly funded programs.

It’s a popular charge to blame greedy health plans as the problem to the system. But a closer look will show premiums are based upon a 100% pass through of fees and charges from the health care providers. They are also heavily regulated by insurance commissioners from each state. They also regularly deal with significant competition from other health plans. I am not aware of any other economic market with this much scrutiny, yet it is so easy to pass the buck to these predominantly “for profit” companies. Are they the party most guilty? I suggest there is more to the story and others need to be included in the discussion.

If we want to reduce the cost of health care in the United States, we need to take an in-depth look at what is truly going on. This requires a thorough review of the entire process. Such a review often leads to the following:

  • Individual: The individual needs to take more responsibility in leading a healthier lifestyle. A significant portion of today’s cost comes from inappropriate behavior of individuals (e.g., smoking, obesity, unhealthy eating, lack of exercise, etc.)
  • Provider: The providers need to also take responsibility in doing what is required and not provide optional services that are not expected to improve the situation. This includes doing more complex than required services with limited value for the condition, over-charging and upcoding services, and ignoring the financial value of what they are doing in light of the concerns about the high cost of today’s healthcare. Sometimes this might require alternative reimbursement systems to compensate on results rather than on busy activity. They also need to take a close look at how and what they charge to be sure they are not causing problems for the other stakeholders.
  • Health plan/payers: The health plans need to take responsibility for their part of the problem. If they are excessively profiting at the expense of others, they need to rein in some of the excess to minimize this cause of the problem. Health plans are already subject to significant oversight by regulators. Additional oversight will not be the solution, but more effective oversight might be.
  • Plan Sponsors: The cost of health care, especially from the dominating employer-sponsored sector is shared between the plan sponsors and the covered individuals. Much of the true cost of care is sheltered from the insureds. Few really understand how much health care costs. Unfortunately, many associate minor copays as the cost of care, not the total premium paid by the plan sponsor in addition to the modest premium sharing and benefits. Government plan sponsors (i.e., Medicare and Medicaid) also disguise much of the true cost of care. More needs to be done to communicate to the various publics the high cost of care.
  • Government/Regulators: Government oversight is significant within healthcare but more can be done to improve its effectiveness. States and the Federal Government seem to be in a tug of war with health care trying to out-regulate the other (e.g., insurance commissioner oversight and ACA). We need collaborative oversight at this time to maximally impact the high cost of care.

I would like to see a health policy proposal that takes on each of these issues and does something with it. We have the potential for a world class system we can all afford. Petty arguments without considering some of the real factors result in increased costs. Once we get to the bottom of the real problem, we will make real progress.

About the Author

David Axene, FSA, FCA, CERA, MAAA, is the President and Founding Partner of Axene Health Partners, LLC and is based in AHP’s Dallas, TX office.