Cut Who's Entitlements, Who Decides?

Bill Kessler’s Article “The EntitltedGeneration” in the NY Times poses thought provoking issues regarding “entitlements.”  The root of opposition to cuts in Social Security, Medicare and Medicaid entitlements is growth of the proportion of the population that qualifies and needs such services, combined with the overall gross inequities in other entitlements in our economy.  Republicans have opposed these programs since Roosevelt and Johnson first introduced them. They voted against them in 1965 when the Social Security Act went into law.  They have said no such “entitlements” should exist, while defending their own entitlements (which is legally the correct term) in the form of extensive tax deductions, credits, deferrals and avoidance through tax shelters.  Despite the shortcomings of Kessler's article, he is correct that there are problems with the growth of these programs that must be addressed. 

A first major problem is that wealthy people generally do not need Social Security benefits, Medicare or Medicaid.  That has to stop. Where there are specific exceptions, such as people with life time severe disabling conditions, there can be exceptions but those are the exceptions not the rule.

Policy wonks like to talk in very big picture, broad stroke terms, like percent of GDP and statistical ratios, but as the 19^th century German poet Heinrich Heine, aptly noted, that, “You cannot feed the hungry on statistics.”   

The reality is that most of the solutions are not in denying sick or disabled people essential services, it is in eliminating overbilling, duplication and waste within the services delivered and eliminating services with no measurable benefit.  Policy wonks have a penchant for denying people services, while people in the trenches like me, prefer finding out what is working well and what isn’t and fixing them.  Let's have a go at that. 

Many of the problems stem from piling-on and conflict of interest by health care providers, and proliferation of ineffective “treatments” which are billed routinely to Medicare and Medicaid.

There is a very long list of so-called "treatments" that are routinely paid for by Medicare and other private health insurances that have no objectively demonstrated benefit whatsoever. None, nada.  If a person decides they wish to have such treatments, right now Medicare nearly always pays for them whether they do any good or not.  If people want magic, they should pay for it themselves. 

Secondly, the medical billing system is inherently corrupt. It designed by physicians to benefit physicians and hospitals.  Doctors have sliced and diced every conceivable medical service into ever smaller pieces, so each slice can be billed separately so the sum is far more than the original total item billed.  What used to be a single service is now five or six services, each with a price tag.  There are currently around 9,000 medical billing codes, which could easily reduced by half.  Secondly, there is an enormous conflict of interest between physicians making referrals and laboratories or specialized testing and treatment centers in which they are part owners.   There is far too much incentive to refer their patients for testing or treatments at facilities that benefit them. This has to stop.

Here are a few suggestions.

1.     Anyone not paying taxes because of use of tax shelters should be exempt from receiving Social Security, Medicare and Medicaid. Zero, none, no exceptions.  If you have money in Grand Cayman or Switzerland don't ask the American people for a hand out.  If you're not willing to pay into the system, you're on you're own. 

2.     People with annual retirement income through the date of their estimated deaths of greater than $500,000 per couple should be precluded from collecting Social Security benefits. They don't need them. 

3.     People with annual retirement income greater than $500,000 per couple should be required to pay significant graduated Medicare co-pays proportional to their annual retirement income. The more your retirement income, the more your co-pay for each service.

4.     Age for Social Security benefits should be gradually raised to 70 years over a 10-year period with the exception of people with significant medically diagnosed disabilities or disorders. Roosevelt and Johnson did not anticipate people living relatively healthy lives as long as they do today.  

5.     Medical health insurance billing is completely out of control. The notion that for profit private insurance companies can be more efficient and save money is a complete sham.  Medical health insurance billing should be managed by a private non-profit agency not connected with any insurance company contracted through the US Department of Health and Human Services.  There is an inherent conflict of interest in allowing insurance companies to control access to medical services.  Such an independent non-profit organization should be subject to monitoring and review by an oversight group consisting of health care, governmental, insurance industry and private health advocacy groups. Please don't bother me with your whining about government inefficiency.  The administrative cost of the IRS is 4 tenths of one percent and 93% accuracy,  and of Social Security administrative cost is from 0.6% to 2.3% depending on the program. Show me a private company with such low administrative cost. 

6.     The American Medical Association Current Procedure Terminology (CPT) medical insurance billing code system used to determine what medical services will be paid for by insurance of Medicare, is inherently steeped in conflict of interest.   It should be totally revamped and managed by an independent non-profit organization with representatives of medical and allied health specialities, federal health agencies and non-profit health advocacy groups.  Physicians and other health professionals directly benefitting from such billing codes should not have final say in approving or disapproving of billing codes.  The current CPT system is designed to benefit medical sub-specialities promoting the proliferation of billable procedures and precluding inclusion of other effective procedures that may not benefit their professions.

7.     Physician practice groups should be prohibited from owning a controlling a share in medical services such as pathology laboratories, radiology facilities, pharmacies, specialty health stores (e.g. rehabilitation equipment, sleep stores), or other testing facilities to which physicians may refer patients, to avoid conflict of interest.

8.     Reimbursement for interventions for which there is inadequate objective evidence of their effectiveness for any condition or illness, should be prohibited. See Special Committee on Questionable and Deceptive Health Care Practices; Federation of State Medical Boards of the United States, Inc. http://www.fsmb.org/pdf/1997_grpol_Deceptive_Health_Care_Practices.pdf  and QuackWatch , scroll to Questionable Products, Services, and Theories.

9.     Allocation of Medicaid Waiver funds by state or county agencies for services to appropriately qualified individuals, but for which objective evidence of benefit can NOT be shown, should be prohibited. These funds are used by people with chronic disabilities to supplement typical medical services, but are grossly misused by some. Your hair would stand on end of you saw some of the stuff people buy with Waiver money.  Currently Social Workers employed by county agencies decide whether requested services are eligible for Waiver reimbursement, and generally have no idea whether they have any benefit.  Decisions are idiosyncratic and often irrational.

10.  Physicians and other licensed health providers should be prohibited from owning a significant share of any medical or rehabilitative residential treatment facility (e.g. Alzherimer’s, substance abuse, psychiatric) to which those physicians or their practice partners refer patients for care and treatment, to avoid conflict of interest.

11.  Use of costly medical equipment such as MRI scanners, proton beam cancer treatment devices, etc. should be coordinated regionally by groups of referring physicians and hospitals, rather than a competitive fee-for-service model which encourages each hospital and clinic to develop it's own facilities. Once a hammer has been created, far too many patients become nails.  The current system promotes over-utilization.  Physicians making such referrals should not be permitted to own shares in the devices to which they refer patients for testing or treatment.

12.  The most costly medical procedures should be carefully evaluated by independent groups of medical specialists and treatment research evaluators to determine the relative benefits, risks and costs, as well as possible less expensive alternatives. These procedures have frequent costly complications and pose quality of life questions, especially among older patients.  In some cases they may be deemed essential and life sustaining and others a matter of choice.  Among the most costly services are heart, liver, lung, pancreas and kidney transplants.  These surgical procedures are done in critically ill patients.  The quality of life and survivability in patients nearing the end of life who undergo such procedures are not inconsequential issues.

Any discussion of entitlements will go nowhere until there is equity in what is defined as an entitlement.