Geranium Farm Home     Who's Who on the Farm     The Almost Daily eMo     Subscriptions     Coming Events     Links
Hodgepodge     More or Less Church     Ways of the World     Father Matthew     A Few Good Writers     Bookstore
Light a Prayer Candle     Message Board     Donations     Gifts For Life     Pennies From Heaven     Live Chat

Ways of the World

Carol Stone, business economist & active Episcopalian, brings you "Ways of the World". Exploring business & consumers & stewardship, we'll discuss everyday issues: kids & finances, gas prices, & some larger issues: what if foreigners start dumping our debt? And so on. We can provide answers & seek out sources for others. We'll talk about current events & perhaps get different perspectives from what the media says. Write to Carol. Let her know what's important to you:

Monday, August 24, 2009

Health Care: Town Halls and Diverse Populations

Hasn't this summer's clamor over health care legislation been something? We've watched with amazement the videos of the Town Halls conducted by Senators and Representatives; events that in the past have been modest, ho-hum conversations turned this time into overflow crowds filled with emotional outbursts. We weren't able to listen in last week to the online conference call with President Obama, but 140,000 other people did. Click on the link, to listen for yourself, if you like.

We've continued to read and study about health care in the U.S. since we wrote about it in late July. We have to confess, though, that we haven't read the [in-]famous bill, H.R. 3200[1]. The texts of Congressional bills just start; there isn't any "preface" or "table of contents" with page numbers. There is a list of "Titles", but that just goes on and on, so you never really know when you get into the actual heart of the matter. So we're put off just by the format and can't really give the material a good critique. Does it really include "end of life counseling" as a mandate? Does it really cut $500 billion out of Medicare? Would it really lead to fixed treatment regimens for this case or that? These are all good questions that are upsetting people, but we just can't tell, can we?

We have read a couple of opinion pieces we like, both from business leaders, who in today's scheme of things, are the chief middle-men in the health care payment stream. Interestingly, both are executives in the grocery business whose chains provide health insurance to their employees. Food retailing has a low profit margin, with expenses usually running around 98-99% of sales, so they'd probably like to find ways to reduce those expenses, and we might expect them to be stingy with employee benefits. But their two companies, Safeway and Whole Foods, have health insurance plans that cover 74% and 89%, respectively, of their labor forces.

Two weeks ago, John Mackey, a co-founder and CEO of Whole Foods, incurred the wrath of some of his liberal friends by making some strong statements in a Wall Street Journal op-ed[2] about the fact that nobody should believe they have an inherent right to health care. Unfortunately, these remarks and the consequent reaction took away from some very constructive material in his article. He suggests eight ways to restrain health costs; these include more use of health savings accounts that are partially funded by employers, equalizing the income tax treatment of health insurance costs so both employers and employees have the same tax deductibility, enactment of tort reform, mandates for price transparency from providers, facilitating the inter-state sales of health insurance, and other items. Several of these factors can help lower or at least restrain what we called before the "production cost" of health care. And other of his suggestions can encourage – or "incentivize" – people to find the most cost-effective health insurance arrangements.

Steven Burd, the CEO of Safeway, in a Wall Street Journal piece back in June[3], approaches the issue from a different perspective, but his ideas would also help the underlying situation. Safeway's plan is "contributory", that is, employees pay some of the premium, as well as deductibles and co-pays. Four years ago, the store began to charge individual employees different premiums based on their own health behaviors: non-smokers pay less, people who work at losing weight pay less, people who follow a program to lower their blood pressure and/or cholesterol pay less. These actions diminish the risks for major chronic conditions that absorb substantial fractions of health expense: cardiovascular disease, cancer, diabetes and obesity. Burd points out that such differential premiums are patterned on the same principle as auto insurance: good drivers who avoid accidents and violations of the law pay lower premiums; thus, bad drivers' outsized claims are not subsidized with good drivers' premiums.

Burd's employees like the financial incentives in their insurance plan, they report. This finding agrees with an independent survey by the accounting firm Deloitte & Touche. In their 2009 "Survey of Health Care Consumers", their Center for Health Solutions reports[4] that "3 in 5 say financial penalties . . . would increase their adherence to their chronic treatment regimens; 76% . . . say they would participate in a health/disease management program . . . if a financial incentive was offered." The Safeway CEO tells that his program has worked, showing notable results in just the first four years: the company's health insurance costs have held flat since 2005, in stark contrast to the substantial increases most everyone is experiencing, and the employees have become healthier. Indeed, the insurance program includes screening tests. Some employees learned they had high blood pressure. Some who score out of the range initially get retested a number of months later. If they've improved, they get a refund of the extra premium they've paid. Obesity and smoking rates among the employees have fallen to 70% of national averages. This "sounds like a plan" to us and Safeway employees seem fortunate to have it.

Two other findings of the Deloitte survey are of immediate interest. We commented last time that we see electronic medical records and other applications of Internet technology as beneficial for health-care cost-cutting. Many people responded to Deloitte that they like researching their conditions on websites, contacting their plan personnel for information and advice, and they already have a "personal health record". Thus, it looks that a good proportion of people are already getting accustomed to this practice and it could well be expanded.

We also noted last time that the U.S. population is highly diverse. But apart from ethnic diversity, the Deloitte survey found that people have differing relationships with the health care system itself. One group is "compliant" and does best with a dictatorial doctor; another group is "out and about", utilizing alternative medicines and new treatments, but distrusting of what the doctor says; a third is "online and onboard", technically attuned and open to nontraditional outlets, such as having their blood pressure checked at Wal-Mart, and knowledgeable about medications and new devices. There are six of these groups all together, six statistically distinct styles of patients who interface very differently with medical personnel and the health system as a whole.

Some who argue for the "single-payer", more centralized approach to health care in the U.S. assert that one of the current faults of the system is its fragmentation. But such fragmentation can be a strength. We can get health care in a variety of ways, through private physicians, clinics or co-ops, the same way we can make many other choices in our lives. One size doesn't fit all, the same way we don't all drive the same cars or attend the same colleges, even though cutting those from the same cloth might make them cheaper too. What we have to be sure of is that whatever we use, we make the most of it and help it run as efficiently as it can.
[1] Here is the bill.

[2] Mr. Mackey's article:

[3] Mr. Burd's article:

[4] Deloitte Center for Health Solutions, 2009 Survey of Health Care Consumers: Key Findings, Strategic Implications. Published March 2009. Accessed August 24, 2009.



Anonymous Paul said...

Back in 2008, this Whole Foods, CEO John Mackey (how old is this kid?), was caught posting negative comments (trash talk) about a competitor on Yahoo Finance message boards in an effort to push down the stock price. So now I am suppose to take this loser seriously? Please, snore, snore.

It’s funny we hear Republicans say that they do not want “faceless bureaucrats” making medical decisions but they have no problem with “private sector” “faceless bureaucrats” daily declining medical coverage and financially ruining good hard working people (honestly where can they go with a pre-condition). And who says that the “private sector” is always right, do we forget failures like Long-Term Capital, WorldCom, Global Crossing, Enron, Tyco, AIG and Lehman Brothers. Of course the federal government will destroy heathcare by getting involved, Oh but wait, Medicare and Medicaid and our military men and women and the Senate and Congress get the best heathcare in the world, and oh, that’s right, its run by our federal government. I can understand why some may think that the federal government will fail, if you look at the past eight years as a current history, with failures like the financial meltdown and Katrina but the facts is they can and if we support them they will succeed.

How does shouting down to stop the conversation of the healthcare debate at town hall meetings, endears them to anyone. Especially when the organizations that are telling them where to go and what to do and say are Republicans political operatives, not real grassroots. How does shouting someone down or chasing them out like a “lynch mob” advanced the debate, it does not. So I think the American people will see through all of this and know, like the teabagger, the birthers, these lynch mobs types AKA “screamers” are just the same, people who have to resort to these tactics because they have no leadership to articulate what they real want. It’s easy to pickup a bus load of people who hate, and that’s all I been seeing, they hate and can’t debate. Too bad.

8/24/2009 9:53 PM  
Anonymous Anonymous said...

Intriguing. HAve to think about it.

8/25/2009 8:55 AM  
Blogger Carol S. said...

Thanks to reader Paul, above, for expressing his views. What he offers is clearly one side of this very heated debate. The financial and the human consequences of the outcome make it well worthwhile to air all the opinions.

8/25/2009 3:21 PM  
Anonymous Carl Peter Klapper said...

Paul made part of my point. If a major criticism of private health insurance is that "faceless bureaucrats" make medical decisions, why does he, Obama and the Democrats believe that public health insurance would be any different? In my recent article in the Johnsonville Press, , and elsewhere, I emphasize the obsession with costs over health in calling this "bean-counter medicine".

In my many articles on health care reform, I have presented an alternative, populist (oh the horrors!) solution to the health care crisis in our country, namely municipal medical departments. This solution addresses many of the explicit and implicit concerns that Carol has brought up, including diversity of treatment, personal control of health and the burden on employers of low wage labor. The sheer number of municipalities assures a diversity of treatment exceeding that provided by insurers' provider lists and, just as the presence of local fire and police departments do not preclude the use of sprinklers and security systems, so there would remain an opportunity for alternative medicine to be provided for a fee. The local medical department would be very approachable and accountable through the ballot box. That accountability, by the way, argues for an exemption of municipal staff, including doctors in the MMDs, from civil lawsuits. Such lawsuits are redundant and erratic as discipline. Moreover, they are little more than the plundering of the electorate by law firms and extortion by malpractice insurance companies. Finally, even with the current fiscal dependence on the income tax, its graduated features assures that MMDs would be less of a wage tax than the very regressive insurance premiums.

8/26/2009 9:41 AM  
Blogger Ann said...

What about the Safeway employees who don't have insurance -that is what this debate is about -- those who can't afford any insurance, those who just get sicker because they can't afford preventative or early care, those who are given just enough hours to keep them from being eligible for plans (the church is one of the worst on this). You obviously have never had to face this terrible dilemma that those without health insurance suffer. People in Italy smoke more than the US yet they live longer - not that smoking is good for you- but that should tell you something about single payer plans. Health care is not a commodity - it is one of the basic needs of a community.

8/26/2009 10:17 AM  
Blogger Carol S. said...

Dear Ann,
Thank you for writing with your questions and concerns. They hit right at the nub of the issue.

First, the Safeway plan we describe does cover almost three-quarters of its non-union employees; the union employees have a separate plan. Thus, a very large portion of their staff is covered with some kind of health insurance. But it is true that the absence of coverage for many people in that industry and others is a very big problem.

As for comparisons with Italians, the latest World Health Organization figures show that 26% of Italian adults smoke, compared with 24% of Americans; the bigger difference is in men, and Italian men do experience higher death rates from cancer than American men. There is an opposite difference in the obesity risk factor, which is at least three times more prevalent among Americans, and more Americans die of heart disease than do Italians.

Most notably, you are right that health care is not a commodity -- which is another reason standardized approaches to it seem less appropriate in our pluralistic society.

8/26/2009 10:09 PM  
Anonymous Anonymous said...

There is another factor besides cost and availability of health care. Maybe I'm more aware of it than many because
I'm old enough to remember a time when you got a diagnosis from your doctor and if he recommended a particular treatment then you either got that treatment, or got another opinion and made up your own mind about what course of action to take as well as which doctor's opinion you valued the most. It's not just a matter of cost and availability for the "consumer". As long as healthcare remains a business, it has to make a profit. Our freedom to choose was taken away. Even if we find a way to make health care available for everyone, as long as an insurance company is involved, they will be making the decisions about the treatment we receive based on weather or not it is expedient and profitable for THEM. When someone comes up with a system that gives the decisions BACK to the doctors and their patients . . . as it once was, then that's the system I will want.

8/27/2009 6:46 AM  
Anonymous Carl Peter Klapper said...

Dear Ann, Carol and others,

I could not agree more that health care is not a commodity. That is why it does not make sense to have insurance for it. One cannot determine the payouts for it. It is all pure fabrication.

What makes this all the more absurd and infuriating is that we have made health insurance a requirement to getting health care and then made being employed by a "good" employer a requirement to getting health insurance. This is nonsense! To paraphrase a line from "The Treasure of Sierra Madre":

"Health Insurance? Health Insurance? We don't need no stinking health insurance!"

And we don't. We never did. All we need is health CARE!

One question, though: why is it that no one calls it "medicine" anymore?

Love and Peace,
Carl Peter

8/27/2009 9:52 AM  

Post a Comment

<< Home

Copyright © 2003-Present Geranium Farm - All rights reserved.
Reproduction of any materials on this web site for any purpose
other than personal use without written consent is prohibited.