Russia and sanctions (part 1)

Things are always more complicated than what is said in the media.  It’s often more complicated than our attention spans allow, (so I am breaking this up).  But that doesn’t change reality.  And the reality of foreign policy decisions is that it is always really complicated.  Look at Russian’s invasion of Crimea.  We would like a simple answer, but there isn’t one.  The impact of any response is complicated, with far reaching positives and negatives.  Even the impact of no response is complicated!  There are hundreds of papers out there evaluating the impact of the recent economic sanctions on Russia for that act.  There are a lot of things you might not think about beyond the tangible economic effects in the target country.  Things like economic effects in the sanctioning countries (trade goes both ways), economic effects on the people of the target country (who generally have no control over their government), and effects on public opinion, domestic and abroad.  One such paper opened by cautioning against the use of faulty logic: “We must do something.  This is something, therefore we must do this.”

The conduct of a country should mirror exactly that of an individual: lead by example with honesty and integrity.  Cooperate.  Make friends.  Treat everyone with respect.  Use empathy to guide your actions.  Work hard.  Attitude is everything.  Don’t fight unless you have to.

As a leader, you ask the same questions of yourself in searching for the best course of action, whether it is individually, as a group, domestically, or abroad.

You always ask: “What am I trying to accomplish?”  And then follow that with, “Is this going to achieve that goal, and how sure are we about that?  What are the negative side effects?  Are they worth it?”

One questions that should carry little or no weight for our leaders but seems instead a guiding principle: “How will this make me look in the local media?”  (And that is because our system mandates that the goal of all political actions is re-election… but I digress…)

Stick to: what are the options?  For each option, what are the pros and cons?  What are the risks?  Will these actions help achieve my goal?

Allow me to apply my own line of thinking to the Russia for the sake of discussion, so at least you can see my line of thinking.

When I was a kid growing up during the cold war, the USSR was our enemy.  The threat of nuclear war seemed very real, though I admit that I could never quite get my head around the idea that the people there hated and feared us so much that they would kill us all and destroy the world.  Why were these such bad people?  Because they had a communist government?  That fact never really scared me, partially because I didn’t really understand any way of life but my own.  The real fear was that someone would get tricked into thinking the other started it, and we would both blow each other up over a misunderstanding (the premise of many a movie).

When the cold war ended and the wall came down, it solidified my belief that the Russian people don’t hate us.  They don’t want to invade us, and they sure don’t want to destroy the world.  In fact, it seems they would like to be a bit more like us.  They are proud people with a diverse and complex history, but they would prefer to enjoy life with friends and family, just like us.  They are not our enemy.  So why would we treat them as such?

Because they want to be a superpower.

So what?  If they are an ally, isn’t that better?  Couldn’t we use a few strong friends?

Remember: no matter what you might hear, we remain the leaders of the world.  We are the trendsetters, the benchmark that everyone compares themselves to.  We are the kid in school that has it all: looks, grades, sports success, loved by everyone, students and teachers alike.  But wait, there are no teachers here, just us kids on the playground.  So when someone else wants to prove themselves, what do you do?  Do you punch them in the face to make sure you keep them in their place?  Or do you extend a hand and help them be the best they can be?

Where it gets complicated is when you try to separate the people of Russia from the controlling government of Russia.  Because Putin doesn’t think like us, he doesn’t have the same values, and we can’t approach him with the same logic you would use on a college professor and expect the same reactions.  We are back on the playground now, except the metaphor is even more applicable, which is not such a bad thing.  Because Putin is a bit of a bully, and bullies are if nothing else, predictable.

More to follow…. Continue reading “Russia and sanctions (part 1)”

The Problem

It’s not the people, it is the system.

I am going to say it as many different times as I can, as many different ways as I can, until I sound as if I am going on like another conspiracy theory nut.  Because if we don’t recognize the problem, we can’t fix it.  And if we do, then maybe you won’t think I am so crazy in this endeavor.  There is nothing preventing we the people from fixing the system.  We just have to want to do it.

Think of the repercussions of allowing an anything-goes election process.  It means the mud-slinging candidate has a huge advantage, and we know this.  Human nature being what it is, if you aren’t particularly concerned about an election, you won’t be particularly concerned about actually voting.  But if you are pretty sure bad things will happen if someone is elected to office, your desire to prevent that is a far stronger drive.  Fear is more likely to make you take an interest, to get you to the polls, to get you to actively gather friends and family to the cause.  It turns off logic, making you less likely to actually think about anything that is being said, and instead just focus on preventing catastrophe.  It is a much better way to gather support.  And all of this just runs rough-shod over any opposing candidate who tries to take the high road.

We do this – we allow this free-for-all – because we hold freedom of speech so dear.  However, we curb freedom of speech all the time for specific purposes.  Boardrooms, court houses, council chambers… there are times when procedure and decorum are necessary to overcome pandemonium and allow logical consideration of arguments.  Why should we forgo this concept in selecting our leaders?  Is this not one of the most important procedures in our society?  Didn’t we set up our government in a way to allow fair and just representation, rejecting systems of the past that selected rulers through violence or birthright?  Then why let it go awry when we are so close to our goal?

We know the answer, don’t we: the people embedded in the current system have adapted to where they benefit from the very flaws that threaten to destroy us.  The current politicians and their political parties have become exceptional at manipulating the system to the point that it is virtually impossible to infiltrate or circumvent their power.

To understand why, look at the environment in which they live.  What is the most important part of being a politician?  Is it ability to introduce clever, beneficial legislation?  Or is it the simple ability to campaign?  Let’s face it, rarely does a politician’s actions affect their election results.  It simply comes down to the way they are presented to the world immediately prior to an election.  This is why incumbents have a significant advantage.

How many times have you heard that you can’t tell what the truth is, because you can’t trust the source of the information?  So why not decide for ourselves exactly how we want this to go?  Why do we persist allowing it to go the way they say it should go, instead of making the rules ourselves?  We as citizens need to lay down specific requirements for what we expect from elected officials.  And that should include their behavior during the election process.

People were all up in arms when Donald Trump refused to present his tax returns.  Well suck it up buttercup, because there is nothing that says this is a requirement.  Should it be?  I kinda think so.  I feel like presidential candidates should be held to a very high standard.  In fact, I think they should be held to a REALLY high standard, as it’s a relatively important position.  I don’t think it is too much to ask that we make some requirements beyond just 35 years old and a natural born citizen.  In fact, I think we are complete fools to continue with this ludicrous plan.

I want a nice mix of presidential candidates that are mind-bendingly awesome, not a group of group of folks where I question their cleverness, not to mention their integrity and honesty.  Why should we not demand that these people have an abundance of the specific qualities that we as citizens determine to be of utmost importance to us in a leader?  Why should we continue with a system that allows candidates that near on half the country despises?

The first thing we need to do is decide what qualities we truly desire.  Before you start on things like honesty and integrity, let’s address the elephant in the room: should money be a prerequisite?  Some feel it is important the wealthy people and institutions be able to “participate” in the political process.  Personally, I feel that it prevents us from rationally addressing a few major issues.  Like energy.  But the influence of money is based on the campaign process.  Without requirements for expensive campaigns, money has no means of exerting influence.  You can’t actually pay a politician for a vote, that’s called bribery.  But you can contribute without limits to a campaign.  If elections were free, that would immediately snuff this routine unethical practice.

Free elections?  What insanity is this?  How is that even possible, holding an election that is completely funded by the government?  Um, all we would have to do is decide that this is what we want.   (Which is why I asked the questions first… some people are actually opposed to removing money from politics).  Do you honestly believe that there is anything stopping us from assembling the information about candidates that voters need to know and putting it out to the people in a way that everyone can get to it?  You realize that is all you actually need to do.  There is no NEED for all the ads and propaganda, we just allow it, because, hey, free speech.

It’s not an infringement of free speech to expect more from candidates, to demand they adhere to certain rules, to require an honest, just-the-facts presentation of positions on issues.  Debates, speeches, these are important tests and valuable demonstrations of the abilities of candidates, but those can also be administered with rules.  Violate the rules, you are out.  You want a shot at the title?  Then play by the rules!

I am tired of people’s jaws hanging open at the mere suggestion that politicians be required to study certain material and take a test, like that is somehow an infringement of personal rights.  More than one person suggested that this would be exclusive, because anyone should be able to serve in public office.  Really?  I think we should be tremendously exclusive when we select our leaders.  If only we trained them as we do athletes.  Wouldn’t it be wonderful to see our political hopefuls starting as kids in public service, learning how to address issues like poverty and racism, studying the economics of taxation and trade, diplomacy, foreign relations?  How amazing would it be to have a panel of candidates that stuns us with their knowledge and abilities, instead of leaving us wanting, throwing our collective hands in the air with a cry of “350 million people, and you bring us these people???”

But of course, I don’t expect our current batch of politicians are going to step up and ask to be tested.  I fear the ability to run a successful campaign will be poor preparation for a demonstration of actual ability.  So you can bet your last post-tax dollar that they will be less than receptive, and will claim all manner of injustice at these suggestions.  “Free elections?  People can’t buy me?  And you expect me to have talent???  Heresy!!! These ideals go against basic American values!!!”  To which I say: anyone who thinks like this is part of the problem.  So let’s collectively force the solution.

It’s our country, we are supposed to be able to make the rules, so let’s take back control and bring back the democracy – for the people, by the people – that we signed up for.


Since I am going to talk about race – and I mean that I am going to go way down this bumpy road over time- the most important thing for you to understand is where I am coming from.  This is foundation stuff, and we need to be on the same page.

I deal with race everyday.  I see it, I act on it, I make decisions about people based on race in my job all the time.  So I took a picture, and even put some arrows on it:

That’s my view of race, right there.  See that brown pigment?  That’s called melanin.  That’s what determines race.  And that, my friends, should answer all of your questions, and help you to understand why race is such a s big deal.  What?  Not so much?  Weird.  I thought it would be obvious.  Then let me explain:

This is a picture of a histologic section of skin from a random case at our lab.  The slide is stained with our routine stain called hematoxylin and eosin, which a fancy way of saying blue and pink.  The purpley middle part is the growing skin layer, made of of cells called keratinocytes (because they make keratin).  They are constantly being reproduced at the bottom, and slowly migrate up to the middle where they stick together as they die to make nice water-tight seal to protect you from the outside world.  That top “basket weave”-looking part is that dead layer of skin (keratin) that you can kinda slip a needle under and it doesn’t hurt.

At the bottom, there are little cells admixed called melanocytes (because they make melanin).  They look more like dark blue dots with clear space around them (there are 3 or 4 of them).  In reality, they have these long fingers that you can’t see that reach out and touch all of the keratinocytes at the base of the skin.

The job of the melanocyte is to put melanin hats on your skin cells.  They even look like little hats, don’t they?  These hats protect the cells from the damaging rays of the sun.  So they really are like little hats…

We all have melanocytes.  And all of us make melanin (except albino people.  And I mean real albino people – people who have a defective melanin gene, not just fair-skinned people like my wife who will blind you first thing in the spring).  What determines skin color is how much melanin those cells make.  That’s it.  It’s not a different kind, it’s not a different cell, it simply comes down to how much gets made into hats.

The “how much” part is determined by a set of genes, and because these genes are inherited, the amount of production gets handed down with them.  Which is to say, you tend to look like your parents.

Because melanin is designed to protect you from the damaging rays of the sun, exposure to those rays stimulates the production of hats.  But hat production is kinda variable.  I make hats really well, and despite the current “never-seen-the-sun” look of my pale posterior, I can build up quite a tan.  Getting a tan is the colloquial way of saying “make hats.”  My wife doesn’t make hats, though she like to pretend she does.

I gave up making hats in residency, when I started seeing what UV rays do to your skin.  It’s not pretty.  Even now, I get distraught at how I am starting to look, well, old.  UV does that.  So I wear sun screen like nobody’s business, as do most people “in the business” (pathology, dermatology).

Hats protect you from this damage.  So people who have lots of really good hats don’t need sun screen.  Which is cool, actually, because sun screen is rather a pain in the arse to have to deal with all the time when you’d rather be outside having fun.  And despite being old and now somewhat wrinkly, I still like to go outside and have fun.

So to me, my view of race is actually tinged with a bit of jealousy.  Because, if I were buying a body at the dealership and going through the options list, I would be pretty interested in the hat option.  No sunscreen, greatly reduced incidence of skin cancer.  And if you take the time and look at the skin of older people with darkly pigmented skin, it looks smoother and younger.  Yes, I think I would tick the “hat” box.

That’s my view of race.  Oversimplified?  No, sorry, it’s not at all.  For certain, this is not the same way some people see it.  But then, we used to think the world was flat.  But what I have shown here is the fundamental definition of race.  Everything else is a construct applied by society, and none of it has any basis in reality.  The reality is that skin color is due to one thing:  hats.





This is probably one of the most heated, complicated, frustrating situations.  It encompasses many different intertwined issues.  It cannot be summed up quickly, and there is no perfect solution.  Understanding what is wrong with the system requires some history and explanation.  Obamacare was a well-intentioned piece of legislature, and it’s not fair to simply say it was crap.  It did make some assumptions that were flawed, and that led to significant failures, some of which were predictable, some not.  But most importantly, it attempted to fix a variety of symptoms without addressing the root problem.

Like any other complex issue, it is imperative that you look at how we got to where we are now, paying attention to previous attempts at correcting evolving issues, and recognizing the reactions that occurred so as to better predict what might happen as you try to shape the new model.  The practice of medicine has changed dramatically in the last 40 years.  Some of these changes were unexpected, many not.  Hindsight can be a ready guide.

The one fact that needs to be nailed to the wall is this: the healthcare system in the United States is the best in the world.  Period.  I didn’t say it was the cheapest, I said it was the best, and it is, have no doubt.  Consider this: where do people come from around the world when money is no object?  The United States.  Other countries are cheaper.  Other countries have better overall public health (which includes culture, and I will come back to that).  But there is no place on the planet that has a superior medical system.  And when you read stats to the contrary, be very careful about those numbers, because most are not telling you the whole truth.  Look at neonatal care statistics: you may have heard that survival rates for neonates in the US are lower than other countries.  That’s poppycock. In the US, when a baby is born, we say that a baby was born, because, what else would you say?  Well, some countries don’t consider it a baby if it is below a certain age, like 28 weeks.  Or my favorite: it’s not a live birth until the baby goes home from the hospital.  You have to read the fine print. The reality is that we often look bad because we try to save infants that others would not, and we hold ourselves to a higher standard.

And it is imperative to keep this quality in mind, because when you get to the top of anything, the price goes up exponentially.  So before we even start reducing the cost of health care in the US – which needs to be done – remember that we want to do so without sacrificing that quality.  That’s not easy, but it is possible.

When I was interviewing for residency positions, I sat in on a lecture given by a training pathologist in Birmingham, Alabama.  He was presenting data on a new laboratory test that could detect heart attacks earlier and better than anything available at the time.  He showed statistics about how this would decrease time to treatment, minimize heart muscle damage, reduce hospital stay, and all of this would save money.  One of the attendings in the audience made a point about the economics of health care that is both disturbing and true: the most cost effective heart attack is the one that kills the patient immediately at home, so the system never spends any money on them at all.  It is a frustrating reality of medicine that when you include money, our successes only complicate the issue.

The trick is to reduce costs while improving quality.  Wait… if we are saying we are already the best, how can that be?  Because though we are the best, we are certainly not perfect.  It starts by recognizing that quality of a system is more than just your ability to throw expensive tests and medicines at a disease.  It continues as you realize that avoiding bad complications in a patient with diabetes is just as much of a success – though not as sexy – as saving a person with aggressive cancer with a new targeted therapy.  What we really need to do is look back and see what went wrong.

In the old days, physicians were married to their jobs.  The term resident came from the fact that doctors in training resided at the hospital.  My partner’s father had delivered most everyone in town when we moved here, and the lifestyle he led as the only obstetrician was very different than that experienced by the doctors of today.  Essentially on-call 24/7, it was not a schedule that was conducive to making it to ball games.  But it was the ultimate in continuity of care, as he saw his patients for year after year.  And he was beloved by everyone.  A pillar of the community, the level of respect given to him by those around him inspired a devotion to give back in any way possible.  It is always amazing to hear the list of accomplishments that physicians of his generation seemingly invariably have achieved.

These doctors were not working in the dark ages, but the panel of medical tests available was extremely limited by today’s standards, and physicians relied much more heavily on the history and physical exam.  There were no automated blood analyzers or CT scanners or MRIs.  Joint replacement surgery wasn’t an option.  Intensive care units didn’t have ventilators.  Records were hand written.

But the same doctor was seeing the patient regularly over years and even decades, at home or in the office, in or out of the hospital.  And those doctors utilized another precious commodity: time.  They understood the complex family and lifestyle issues, work issues and environmental issues, and integrated these far better than the physicians of today can hope to do.  The picture painted of the small town doctor in the 1991 film Doc Hollywood is more accurate than it might seem. That depth and continuity of knowledge cannot be replaced by any laboratory test, nor can the fulfilment from helping a patient or the deep sense of gratification from community appreciation be replaced by money.

The changes were slow.  The use of medical tests began to increase.  Specialized blood tests, radiology, molecular tests, these progressively allowed better diagnostic accuracy, continuously improving care.  But it also meant slowly increasing costs, and once a test or procedure becomes the standard of care, failure to utilize them appropriately opened the door for repercussions in the case of a mistake.  This led to tests being used more and more in a “CYA” manner, a practice that is now almost ubiquitous.  Once the stuff of science fiction, procedures like open heart surgery and joint replacement have become commonplace.  Knee replacement surgery now represents one of the most common procedures in operating rooms, and bypass surgery for heart disease has been nearly replaced by the use of intravenous catheterization to place stents in coronary arteries.  Laproscopic surgery, robotic surgery, we continue to revolutionize what we are capable of doing, but as each technique demonstrates it’s worth, slowly and inexorably these become the manner in which we maintain health.  And the pharmacology industry has moved in parallel, with similar breakthroughs and improvements, but steadily rising financial burden.

All of this new stuff meant increased cost, and this led to changes in billing and insurance practices.  Doctors and hospitals made money on the tests and procedures, so utilization was completely uninhibited.  Think about it: if you miss something, it’s inexcusable, and you make money doing tests, so throwing the kitchen sink at the patient becomes your modus operandi.  CMS and insurance companies began requiring specific indications before authorizing payments, a logical step to try to get doctors to think about things before doing things.  But this increased the complexity of the practice of medicine, with doctors needing to learn more and more about non-medical details like billing codes and procedure codes, topics neither taught in medical school nor of any interest to physicians.  These were people who simply wanted to take care of their patients.  New medications emerged, along with advertisements.  The old days of the family doctor making house calls and rounding on patients in the hospital was giving way to the business of medicine.  The subtleties and complexities of a careful history and physical were difficult to justify on a balance sheet, and that skill – which remains the most powerful tool in the physician’s arsenal – became a temporal liability.  Today, doctors do not have the luxury of time.  The findings on an exam have been trumped by lab tests, the integration of all of those family and environmental factors is lost.

In the earlier days, many physicians began assisting their patients financially where they felt they could.  Patients were allowed to forgo insurance copays.  Those without insurance might be billed at a lower rate, and insurance companies – who had seemingly unlimited coffers – were charged the absolute maximum.  The reaction from the payers was not unreasonable, as the government and insurance companies attempted to eliminate these cost shifting strategies, trying to prevent unfair gouging.  Practices were required to set fee levels for each procedure code, and to bill everyone the same, whether they had insurance or were paying out of pocket.  So medical offices set those fees as high as possible, to be certain to capture the maximum allowable and not leave any money on the table.  CMS and insurance companies continued to cut back on the payment schedules, which is the amount they agree to reimburse for various tests and procedures.  In response, some doctors quit taking various insurances, including Medicare or Medicaid, angered at the lower and lower payments for the same work.  In some cases, particularly Medicaid but sometimes Medicare as well, those reimbursements would not actually cover the costs of expensive procedures, and the losses needed to be offset by higher payments from other payers.  We now have a situation in which many hospital or office fees remain set very high, and when a patient lacks insurance, the very same regulations that sought to curb the gouging requires the charges be for the full amount, leading to bigger bills for the uninsured.  This helps explain the difficulties faced by both uninsured patients and the system delivering care.

The evolving public image and lifestyle changes are intertwined, but often overlooked.  The increasing financial pressures and complexity of the business of medicine led to growing frustrations.  Doctors were spending more and more time trying to figure out how to navigate the system than taking care of the community.  One should not underestimate the deep level of fulfilment that physicians receive when allowed to successfully treat patients.  This was the motivation for becoming physicians in the first place – not money.  And this unrecognized form of reimbursement, was, and still is, being systematically whittled away.  So, doctors who went in to medicine primarily motivated by a desire to care for people were instead becoming businessmen.  They were unable to spend the necessary time with patients, those patients were increasingly burdened by the financial impacts of care, and there was greater influence by outside information including the media.  Complex tests and procedures were not just available, they were expected to be used, and advertising meant patients would ask for them specifically.  This changed the doctor-patient relationship forever.

And doctors responded in kind.  Medical societies helped them learn to work angles with insurance companies.  Businessmen helped physicians arrange their practices using accounting as a guide.  Physician treatment plans that had been guided by the question “what is the best thing for the patient?”  were instead crafted along the lines of, “what can I bill for?”  Family doctors, no longer being paid for utilizing the most powerful tool in medicine (actually seeing a patient) began adding tests and procedures to their practice to increase reimbursement.  Competition developed between different physicians and physician groups for patients that they could do stuff to, because that is what makes money.  It is a pervasive mindset throughout medicine now, in offices, in hospitals, in the meeting rooms where policy is shaped.

Being a doctor is no longer a life-style, it is a job.  And so it should be no surprise that the latest generation of physicians treats it exactly as such.  They negotiate for pay, for benefits, hours, and time on-call.  Shift work is becoming the norm.  Physicians are disinterested in dealing with the business aspects of medicine, so they are leaving that to administrators, who are in turn treating them more and more as commodities.  Individual practices are no longer run as partnerships, they are small businesses.  Involvement in hospital governance is all but lost, as most primary care physicians don’t even see patients in the hospital anymore.  Hospital based doctors have an employer-employee relationship with administration.

Probably the biggest loss has been to the staple of community health: the family doctor.  It is no wonder that despite all of the increased knowledge and treatment options and technology, the general health of the average American is slipping backwards.  Because we have devalued and lost the most powerful tools for maintaining health: a careful history and physical, the understanding of the complete patient environment, and true continuity of care.  These things cannot be replaced with tests or technology, and there is no billing code for them.

The insurance industry has tried to curb the rising costs by requiring certain indications for services and medicines.  But this only adds to the complexity of the process, and the businessmen figure out loopholes; there is always a way to justify a treatment.

Obamacare tried to answer some of the issues, but the problems it went after were symptoms of the disease, not the underlying cause.  It tried to fight rising costs of health care by expanding the number of people paying into the system and reforming the insurance business.  Neither of those things are reasons for increasing costs, they are methods of covering those costs.

Look at the fundamental driving forces:

  • The newest and best becomes the standard of care.
  • No one is denied the standard of care.
  • Providers get paid for doing things.

No one wants to mess with the first two principles.  I am suggesting the following change:

  • The newest and best becomes the standard of care.
  • No one is denied the standard of care.
  • Providers get paid for RESULTS.

This is what a system of capitated reimbursement would do.  The system is paid to take care of patients while being required to meet a list of quality metrics.  The impact of this subtle shift is profound.

First, picture the current primary care office: rushed physicians struggle with a cumbersome electronic medical record, and are bogged down by ICD-10 and CPT codes.  A myriad of blood tests are ordered prior to the patient being seen, to be run at an inefficient in-office lab.  EKGs, X-rays, even limited procedures such as endoscopy or minor surgery can be done in the office.  What keeps the office open is doing things to patients, justifying those things with whoever is paying, and getting reimbursed.

Now imagine the same office in the new world:  Your family physician sees you and does a careful history and physical.  He asks about your lifestyle, whether you smoke, or exercise, and if you need help in these areas, he can point you in the right direction.  He asks about your mood, are you depressed? (The costs to our nation relating to unrecognized or poorly treated psychological conditions such as depression is immense).  There is time for all of this, for discussion of your diet and work, and for a careful physical exam.  Because these are the things that are critical to keeping you healthy, and that is what he gets paid for.  There is no in-office lab, no X-ray machine, no procedure rooms.  There are no CPT codes or ICD-10 codes, because he doesn’t have to justify any tests or procedures.  Because he is simply paid per capita, he is back to thinking the way the physicians used to think: what is the best for the patient?  Of course all of the same technology is available, from every imaginable automated blood test, to CT scans, to MRIs, advanced surgical procedures.  But these are done by specialists, and the name of the game is efficiency.

So what about those specialists?  A large, hospital-based laboratory can capitalize on volume and perform higher quality testing with more speed at a tenth of the cost.  Capitated reimbursement solves the issues of duplication of services, and ends the discussion of certificates of need.  The impetus is on efficiency while maintaining that standard of care, and meeting those quality metrics.

Surgery centers currently advertise their advanced techniques on bill-boards, competing for patients like used car salesmen.  Are that outcomes from robotic surgery really worth the extra cost?  Sure, you will be held to some quality standard.  But the decision to do the procedure is financial.  In a capitated world, that decision is based on actual utility, not whether or not the business manager has found a way to get insurance to pay.  Right now, virtually all medical practices have shifted their work towards doing tests and procedures, because that is what we are paying for.  We need to stop paying for stuff, and start paying for results.

The Medicare Payment reform, Macra, was a huge step in this right direction, and it needs to be monitored and rolled out carefully.  The biggest issue with capitated reimbursement is the transition.  How do you move from a fee-for-service world to a results-based world without everyone going bankrupt in the interim?  And I can tell you this with 100% certainty: it will NOT happen unless it is mandated.

One hurdle will be all of the medical care centers that have been built to capitalize on the current system.  Because they won’t be cash cows anymore, and they aren’t going to go away quietly.  Politicians are going to have to look past the money and look deeper if they are going to see the real heart of the matter.

Doctors are already frustrated with regulation and bureaucracy and all of the complexity that has nothing to do with why they went to medical school or what their training entailed.  They are relatively oblivious to the coming changes.  Older physicians are simply retiring.  Younger physicians are acting as employees.  There is relatively small number of doctors who recognize that this is a time of remodeling, and that the work we do now completely redesigning the way we deliver care will pay huge dividends in the future.  We have the opportunity to improve patient outcomes and physician fulfillment, and reduce expenditures.


As a capitalistic society, we have sought to rely on competition to fix our medical system.  First, competition has no place in medicine.  And second, competition in a fee-for-service world neither reduces costs nor improves care.  In a world of capitated reimbursement, competition is replaced by cooperation.

Think of a city in our current system with multiple hospitals competing against each other.  The market will decide their fate, right?  The one with the best outcomes will draw the best doctors and staff and patients, and it those that can’t complete will close their doors.  Ideologically, this requires that you ignore the crappy care being delivered to those unfortunate enough to choose poorly.  But more importantly, the success of a hospital is not based on quality, it is based on money.  Advertising, public perception, and sound business decisions are much more important.  What brings in money is having people in the hospital, doing tests and procedures and surgeries, and administering medications.  Cooperation with other entities in the health care system – unless they are under the same corporate roof – is detrimental to the bottom line.  Refer a patient across town because they have better care in this area?  I think not.  Yes, we are trying to add value-based incentives to various types of reimbursement, but at the end of the day, you are still trying to manipulate a competitive fee-for-service environment.  It’s polishing a turd, and we just keep rubbing and rubbing.

With capitated reimbursement, cooperation becomes a key component.  Because patients are going to migrate from one provider system to another, the demand for quality metrics means there is incentive to keep everyone healthy regardless of whose patient they are, and who is actually delivering the care.  It means that an orthopedist is actually responsible for the high blood pressure he records in his office for an ankle sprain, where today he shrugs it off as not his problem.  It means that a patient entering a hospital should arrive with appropriate information from their primary care doctor regardless of the relationship between the doctor and facility, because how they do in the hospital will reflect back on the primary care doctor.  And similarly, a patient being discharged should arrive back at that office with all of the information essential to recovery, because the success of that process is again going to reflect on both the hospital and doctor.

Duplication of services goes well beyond physicians or tests, and is a huge drain not just on the health care system, but on the community, particularly in poverty-stricken areas.  A competitive, fee-for-service environment exacerbates the issues.  For example, our emergency room evaluated high-cost patients and looked for solutions.  Like many other areas, the root cause in many heavy utilizers is based on social issues like transportation, communication, and education.  So a system was built with navigators and cooperation between various entities and clinics in the area to better address the needs of these patients.  The program remains a huge success.  But our current environment means those resources are only available to the ER, even though many other areas both in our hospital and in surrounding offices face the same challenges.  The power of addressing social issues is being widely recognized, so each individual silo is building its own version of this process.  With competitive offices and hospitals, no one will even consider sharing resources.  In the capitated world, it is an advantage to leverage all of the resources of the healthcare system and the community it serves collectively.  We are hoping to build a system that serves all areas, from the ER to offices, to city works and the school system.  It will only work if we move away from fee-for-service and enter a capitated world.


The primary failures of Obamacare relates to its impact on the insurance industry.  As I already stated, you can’t affect the costs of running the system by adjusting the insurance industry.  That being said, insurance is obviously essential to a health care system, whether it is private or public.  But you have to recognize that the insurance industry is a business, so you can’t expect to put restrictions on the industry that are not economically sound and expect those companies to survive.  If the goal is to put private insurance companies out of business and force the move to a single payer system, then you are on the right track.  But if you really look deeply at what is going on as I have tried to show here, it’s not going to fix the problem.  Yes, you can control costs (because you just won’t pay out the money).  But it will be at the expense of quality.

One big issue is the preexisting condition.  Ideologically it is wrong for insurance companies to want to deny you coverage because you have a disease.  Economically, an insurance company cannot be financially sound if they enroll people they know will cost them more money than they collect in premiums.  But the underlying issue has nothing to do with preexisting conditions, it is related to the fact that insurance is tied to employment.  People used to stay at single employers for a career.  Now, the average person stays at any one job some 4-5 years.  But we continue to tie insurance to work, when they have nothing to do with each other.  Having insurance as a benefit gives large companies a competitive advantage over small businesses, and makes self-employment extremely difficult.  It reduces continuity of care, often by forcing changes in treating physicians or even health care systems when changing jobs.  It makes no sense, must change, can be changed easily, will have economic benefits at almost all companies, and will have little drawbacks.

If health insurance were simply continued from a young age throughout life, the impact of preexisting conditions would be dramatically reduced.  And then the only regulation that need be applied is not allowing insurance companies to drop someone if they get sick.

Affecting the change is easy: eliminate insurance as a business expense, and instead make insurance premiums a tax deduction on individual returns.

Without the expense of paying for healthcare, businesses will have more money to pay employees.  Employees get a bigger paycheck, which they can put towards insurance premiums.  And those premiums can be deducted, meaning the increased pay is offset in terms of tax liability.  A progressive tax incentive program could be temporarily utilized to insure that people move to private insurance.  Similarly, penalties could be levied on businesses that failed to pass the savings on to employees.  Instead of subsidizing health insurance products through the exchange, the government can use individual tax deductions and rebates to assist lower income households directly, eliminating the middle man.  And temporary assistance for those pesky pre-existing conditions could be investigated to get over the “hump” of moving to the new plan.

The result is a health insurance industry that is modelled after the auto insurance industry.  There is no place for competition in the delivery of healthcare, but there is every reason to leverage its effectiveness in the insurance business.  The current system doesn’t allow competition, as the individual is simply reliant on the employer.   And that employer is motivated by the bottom line, not the health of the employee.  Now individuals can pick the insurance product that is right for them, shopping based on their own needs and the services provided.  Insurance companies can align with healthcare communities to offer capitated, community-wide, quality-based plans that would encourage cooperation and efficiency.  The cost savings comes from the reduction of utilization and duplication of services.

One final idea that needs investigation is continued involvement of the patient in their own care.  It is unreasonable to place all of the onus of health on the doctor without individual accountability.  For example, if quality metrics require regular monitoring of blood glucose or high blood pressure in patients with diabetes or hypertension, the patient bears some responsibility to actually go to see the doctor.  Obamacare did that by saying well visits had to be free, but that only reduces the hurdle (and only then for those with insurance).  If there are other costs involved in going to the doctor – missed work, transportation, child care – or if it is just an onerous task, patients won’t come.  We are looking at insurance incentives such as premium rebates for patient involvement.


  • Understand the system we have to work with
  • Demand quality, but simplify the process
  • Pay for results, not stuff
  • Separate work and insurance