We as CMIOs are often called upon to try to use data, information, and knowledge to try to solve complex problems that are caused by specific factors within the US healthcare system. They might be tied to low health literacy, funding barriers, or the high cost of care. I’ve worked with people to try to strategize around school-based health centers, community outreach programs, healthcare for the homeless, and more.

Since I often see situations where health insurance coverage (or lack of coverage) becomes part of the care equation, I was interested to see this piece in the Journal of the American Medical Association. It asks the question: “Does Employment-Based Insurance Make the US Medical Care System Unfair and Inefficient?”

On the surface, it seems like the answer to the question is yes. I often see people trapped in jobs they don’t like or aren’t suited for because they are afraid of losing their insurance coverage. I see people staying in dysfunctional marriages or domestic partnerships because of the insurance issue. Insurance in general adds inefficiencies to our practice, as we have to hire a fleet of people to handle claims creation, management, denials, appeals, and other billing functions. The complexity of insurance rules and differences in coverage are significant and it’s nearly impossible for the average clinician to try to make sense of it without significant assistance.

The coverage offered by employers can differ in striking ways. I was privileged to grow up in a family that had excellent coverage that was tied to my father’s membership in a union, insurance that was independent of the contractor for whom he worked and which could be continued in the event of a job loss through credits that workers could bank over time. I didn’t realize until medical school how amazing it was that my parents still had a $5 co-pay and that they didn’t need a referral to go see a specialist. (Of course that was in the bad old days when you were kicked off your insurance when you finished college, so I didn’t think the coverage was that great when I had to pay out-of-pocket to have my wisdom teeth extracted after they caused issues during my first semester.)

This was during the time when HMOs were growing in the US and many patients were having to get used to the ideas of working through a primary care gatekeeper and of being restricted to certain groups of physicians or particular hospitals. Now that we’ve seen that approach wax and wane and morph into what we’re working with now in the realm of value-based care, people are still complaining about their insurance. Employers may limit the plans available to employees due to cost. Changes in coverage can lead to frequent switching of physicians that can cause fragmented care for patients with chronic conditions.

Having heard about those factors over the years, I was interested to see an academic’s impression of the situation. The author notes that in the US, “the interests of high-income individuals dominate decisions about what medical care is offered and how it is financed. The result is a less efficient and less equitable medical care system than in other high-income countries.” He offers a review of the history of employer-based insurance, which initially started as a benefit to recruit employees during World War II. Other factors fueled its growth, including group insurance and tax advantages for employer contributions to the cost of coverage.

Employer-based coverage is cited as a contributor to rising costs when it includes wide networks, fee-for-service payments, and self-referral to specialists. The author notes other cost factors, including a focus on specialty / subspecialty care, high-cost technologies, relatively low hospital occupancy rates, and better hospital amenities, including space and privacy. He goes on to note that higher-income patients might be likely to pay for those amenities, but that “many low- and middle-income households would be better off if medical care was less costly and they had more money for other public and private goods and services.” He likens the high-cost product of the US medical system compared to other high-income countries as the difference between Whole Foods and Walmart.

He agrees with rank-and-file physicians about the high cost of administering the US system and its “mix of employment-based insurance, other private insurance, numerous government programs, including Medicaid and Medicare, each with its own eligibility rules and payment schemes and out-of-pocket payments.” Because of that hodgepodge, it’s impossible to understand the true cost of care, either to the patient or to the overall healthcare system, because of financing across patients, employers, and government entities. Ultimately in the US, patients bear the cost as employers lower wages to cover insurance premium payments and as the federal government collects money for Medicare through payroll taxes.

He notes that the US could save a significant amount of money if administration were simpler or if the healthcare “products” offered could be tailored to create a lower-cost alternative. However, government regulations would need to change for this to occur. He concludes that additional exploration is needed, although it appears that the way our system is financed causes inefficiencies and unfairness.

Trying to move from this hypothetical state to one that actually has an impact on our medical system is a tall order. People aren’t going to be lining up for narrow networks, stripped-down experiences, or a return to general ward care. Hospitals are in a veritable arms race as they compete to put heads in beds by offering in-room services that rival some of the nice hotels I’ve stayed in. However, those services don’t change the rate of handwashing or operative complications regardless of how much they appeal to patients.

We’re also addicted to technology and that raises costs. I was working with a medical student last week who trained in China. He’s seeking residency training in the US and was asking for strategies and feedback to improve his chances of being offered a training slot. We had an extensive discussion about physical diagnosis skills and how in the US we often jump to technology rather than using our ears and eyes and brains when we order CT scans and echocardiograms. I suggested that his ability to manage complex patients in a low-tech environment might be appealing to residency training programs given the alignment of those skills with what is desired in value-based care. It’s not going to change the fact that patients want an MRI, CT, X-ray, or lab test because they trust it more than physician skill, but it creates interesting food for thought.

The JAMA piece only had one comment. I would be interested to hear what readers think about the role of employer-based insurance in our complex healthcare system. Is it a blessing or a curse? Leave a comment or email me.

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Email Dr. Jayne.