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My Turn: Breaking down Paul Ryan’s health care reform marketing effort



For the Monitor
Sunday, March 19, 2017

I recently watched House Speaker Paul Ryan’s presentation on health care reform to members of Congress and the press.

This is a remarkable, and well-articulated marketing effort and should be evaluated like any other marketing campaign.

The four goals of Republican reform are positively irrefutable: lower costs, consumer choice, patient control and universal access.

Like all marketing, however, the presentation is lacking in enough detail to understand how the stated goals will be reached.

There is no argument from anyone with a stake in the health care system (all of us) that health care still needs significant reform. The debate whether the Affordable Care Act has helped or made the situation worse is irrelevant when attempting to evaluate the Republican plan.

The data presented in the presentation is not incorrect but carefully selected. It is called bias and is a staple in all marketing.

One can just as easily find good, accurate data that refutes all of Ryan’s assertions. But again, they are irrelevant if we all agree that American health care is not where it needs to be and we have a daunting task to fix it.

If there is any doubt, the latest World Health Organization ranking shows the U.S. at 38th in recognized health outcomes, at twice the cost of the average of all the countries included in the study.

We must look at the Republican plan not based on statistics or emotion, but based on its potential against the stated strategic goals. Then we must ask the hard questions of the authors.

The plan is rife with projections that are either based on conjecture or assumptions.

Lower costs

High-risk pools: The creation of high-risk pools is a very good method to compartmentalize cost into one manageable, more predictable pool. But this does not lower the disease burden, nor its inherent need for resources.

The presentation repeated that the “healthy” members of an insured population currently underwriting the high-risk pool will face much lower burden to resource the high-risk pool through lower premiums. The word “subsidy” was slickly inserted into the presentation here. The plan recognizes that somehow the “sick” have to be cared for and that the bill has to be paid.

The only interpretation one can take from the presentation: tax. The mandatory subsidization of the high-risk pool is a shift from the entire pool of members of an insurance plan to the taxpayers. Remember: Mandates as a source of revenue are eliminated. It is a zero-sum game. The cost is paid via premiums, or taxes, or premium increase on the most vulnerable – the high-risk patients. This is a cost shift, not a cost savings.

Health savings accounts: Avoiding the arguments as to whether the savings accounts will make up for current subsidies, the assumption here is that the savings accounts will actually be used to purchase insurance. This is huge. The average American family has $20,000 set aside for retirement – a track record completely ignored in the savings account scheme. Even more of an assumption is that the consumer will actually do market research. Ryan succinctly provided real-world examples of how difficult this is. Even looking at the presentation again, I didn’t see any plan for regulation making the industry provide timely and understandable cost estimates. The examples in the presentation only talked about elective procedures – not covered by the insurance plan. Making cost comparisons for insurance-covered procedures is infinitely more difficult and relies on the payer’s (insurer) network size, and whether they pay different rates to different providers in the network offering the same service.

More choices

This goal is based on a remarkable confluence of events. The high-risk pool is adequately funded in each area of service, there are enough providers in the area to even provide choice and that consumers will take on the effort to do market research. The failure of any one will mean failure to meet this goal.

It is worthwhile to note that this also results in failure of market-driven increased competition, a cornerstone of the long-range goal in decreasing costs. One can only cite the staggering deficit in primary care in the U.S., and the deficit of specialty care in rural areas as a reason to doubt success here.

Supply and demand, as in all market systems, is the largest driver of cost and choice. The presentation does not address this immutable fact of life in market dynamics at all.

Patient in control

This goal, again, is fraught with assumption. Choice requires the patients be fully engaged in their care, and understand his or her conditions, and the basic ownership and choices in the condition’s treatment. It is much more complex than comparing other consumer products.

The conflict of “need” versus “want” versus outcome is a huge conundrum in the American health care market. The only resolution of this resides with the patient being fully engaged in the condition, which relies on resources (primary care) with which to make good choices – and patient ownership of his or her responsibilities in the care plan. Only then is choice rational.

One must understand that medical care is not analogous to other consumer markets. Appropriate medical outcomes are often not in line with consumer desires in the absence of adequate understanding of disease processes and risk-benefit ratios. One only has to look at the overall outcomes of some of our semi-elective procedures in the United States versus single-payer systems where medical procedures follow protocols based on outcome balanced with consumer desire and motivation. We do not do as well, and the end result is less than optimum medical outcome for the consumer, including injury and disability in the face of known risks that should have been avoided.

The common argument is that this is “rationing.” It isn’t. Proper protocols improve outcomes and inherently significantly decrease cost (and, more importantly, suffering). Only patients highly educated and engaged in the care of their conditions will understand and benefit.

To “brand” this essential concept of quality health care as rationing is irresponsible, and a constant undercurrent in all “free market” health care arguments that doom “patient choice” to failure.

Universal access

This interesting choice of words sounds unnervingly like the terminology used 20 years ago when we were discussing a government-managed single-payer health care system.

Again, the concept of universal access makes assumptions that simply are not there in the U.S. health care system.

As mentioned above, supply and demand is not balanced in the United States. Not only is supply not there in many areas, it’s oversaturated in others. Successful universal access systems (based on WHO data) are both single-payer and primary-care based.

The acute shortage of primary care in the United States alone guarantees failure of this goal, as well as being a major player in the failure of the other goals.

Unless this shortage is addressed, any reform will face inordinate challenges.

There is no mention in Ryan’s presentation of how we will fix this (and the other supply shortages). It will require significant payment reform, which our current Medicare-based payment schedules actually provide disincentive.

Ryan’s presentation, based on its stated goals (attempting to steer clear of “numbers” and hot issues like Medicaid expansion, which will have huge impacts), falls well short of making the case. Failure is likely, with a predictable outcome for the American patient: increased cost, less access.

One has to wonder why there was haste to sell this plan before any cost estimates from the Congressional Budget Office, and why those who used the CBO data to make a case against the Affordable Care Act are now calling it unreliable in evaluating this plan.

One can only assume we are being sold something we don’t know enough about, something my grandfather called a “pig in a poke.”

Buyer beware.

(Dr. Jon Pearse is a retired Air Force family physician. He lives in Concord.)