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What the critics are saying about…
The Buck Stops Nowhere:
Why America's Healthcare is All Dollars and No Sense
By Kathleen O’Connor, MA
The following review first appeared in For The Record February 11th, 2002:
The nurses at a hospital near my hometown are on strike for higher wages and better insurance benefits. During an interview with a television reporter, one of the striking nurses indicated that the replacement nurses are ill-prepared to take care of patients. She described how patient safety is being jeopardized by the hospital’s use of inexperienced staff. The more knowledgeable nurses are marching in picket lines outside of the hospital’s front entry. This dialogue and these scenes make me wonder if healthcare isn’t more about dollars than quality patient care.
“Physicians Lobbying for Health Law Expansion,” was a headline in a recent issue of American Medical News. Several physicians groups are pushing federal lawmakers to prohibit health plans from imposing any treatment limitations or financial requirements on mental illness coverage. The insurance industry argues that such regulations would substantially raise healthcare premiums for everyone. Where’s the discussion about how people’s lives are adversely impacted by a lack of adequate mental healthcare?
Hospitals have been slow to develop chronic disease management programs. Why? Lack of direct reimbursement is usually the underlying reason. Disease management requires a financial outlay for postdischarge patient monitoring and direct interventions. Hospitals may actually experience a decline in reimbursement if disease management is successful at reducing readmissions. Managed care organizations report the same financial quandary when implementing preventive health services. On average, people stay with the same health plan for only three years—not enough time for the managed care organization to gain a financial return on the preventive care investment.
These are just a few examples of the harsh realities of our healthcare system. Personal and organizational financial gains seem to have usurped the goal of quality patient care. When and how has this happened? Who is to blame? The answers to these questions may be found in the new book, The Buck Stops Nowhere: Why America’s Healthcare is All Dollars and No Sense, by Kathleen O’Connor. According to the author, our current healthcare system is broken, proven by the following examples:
- Forty-three million Americans are uninsured and millions more are at risk of losing their healthcare coverage.
- The United States is the only industrialized nation without a national guarantee of healthcare for all.
- America spends more than $1 trillion for healthcare services and products; yet, the United States is rated 37th internationally by the World Health Organization in terms of the overall performance of its healthcare system.
O’Connor tracks the cause of today’s dilemma to the political and economic climate in the 1940s, out of which came our current system of employer- and government-based health insurance coverage. The author’s intention in writing The Buck Stops Nowhere is to demystify our healthcare system so that, as a nation, we can begin to develop a reasonable plan for change. The book is not intended to be a detailed chronological study aimed at health service administrators and policy makers. Rather, it is intended for a general audience, such as health information management specialists, who would benefit from a better understanding of how our system of care does and does not work.
Where’s the “Patient-First” Ethic?
While we expect a “patient-first” ethic in healthcare, O’Connor suggests we have a system in which financial gain appears to be the primary driving force. Competition in healthcare has become dysfunctional. It is based more on avoiding the uninsured and high-risk populations than on treating them efficiently. Our system encourages lowest costs for employers, the primary purchaser of health insurance, rather than overall system savings and improved community health. There is nothing in our system of care that encourages the development of community-based networks and providers that are focused on the needs of individuals and communities. There are no incentives for creating clinically and financially integrated systems that are accountable to individual beneficiaries.
Before 1980, healthcare providers had enormous latitude to provide a broad variety of services and were able to charge high prices for these services. Insurers paid providers without asking too many questions. If an insurance company lost money one year, it recouped it in future years by charging higher premiums to the employers who paid for the health insurance of their employees. When the annual rate of inflation in health insurance premiums neared 20% in the late 1980s, employers began to rebel. A critical mass of large employers implemented several new health insurance purchasing strategies, including channeling employees into managed care plans. For the first time, people began to realize that employers do not necessarily represent the best interests of their employees.
Pressures to purchase lower cost insurance options often translated into dissatisfied patients and unhappy employees. Our system of employment-based health insurance is not designed to take into account the needs of employees as much as the desires of the employer—the purchaser of insurance. And because more than one-half of Americans obtain health insurance through their jobs, more than one-half of the population has very little control over benefit decisions, costs, and quality. Meeting the wishes of these employers involves a whole team of middlemen. O’Connor explains the multitiered system of insurance purchasing that involves employee benefit advisors, brokers, and actuarial specialists. She points out that the salaries of these team members are included in your health premium dollar.
Have you ever wondered why small businesses pay higher premiums for their employees’ healthcare coverage than large Fortune 500 companies? One might assume it has something to do with the small population or risk pools in some companies. While that’s part of it, O’Connor enlightens the reader to the fact that companies that self-insure are regulated by federal Employee Retirement Income Security Act rules and are therefore exempt from paying state premiums taxes. Thus, their insurance coverage costs less. Small businesses and individuals who purchase insurance directly from brokers are not exempt from paying these taxes—thus, rates are higher.
States use the insurance premium taxes to partially fund Medicaid programs. Hence, the large self-insured companies are not picking up their fair share of the costs of the public healthcare programs and those less able to pay are burdened with higher premium rates. And, the individual purchaser of health insurance gets a double financial hit. In the 1950s, the IRS Tax Code was changed so that the money employers spend on employee benefits cannot be taxed. For-profit employers are paying health premiums with pretax dollars; individuals get no such advantage. If you’ve ever had the experience of purchasing COBRA insurance after leaving a job, you know how costly it can be.
Saving the System
O’Connor overlooks no group or industry when pointing out the financial disincentives that have wreaked havoc on the U.S. healthcare system. Unlike some healthcare critiques, the author does not demonize those wishing to make a profit from healthcare delivery. She notes that there is plenty of money to go around but laments the fact that it is not being spent wisely. Individuals, employers, and corporations need to share the responsibility for funding through a fair and consistently applied formula so that we can do what every other industrialized country does—offer health security to every resident.
What can individuals do to fix our healthcare system? The author suggests that if we let Congress, employers, and the healthcare industry decide what is best for us, we might not like the result. The general public must have a greater voice in the decisions. O’Connor encourages people to call legislators, voice opinions in newspapers and other media, and engage community members and civil leaders in discussions. Our goal must be to create a healthcare system in which there are clear roles and responsibilities driven by a “patient-first” vision.
In addition, O’Connor is challenging interdisciplinary teams from universities to compete to develop the best plan for a reformed healthcare system. Further information about this “For the Health of Our Nation” contest is found near the end of the book….
Many Americans are concerned that our healthcare system seems to be neither planned nor patient focused. Those of us working in the industry are acutely aware of the confusing, expensive, and sometimes unreliable delivery system that supports patient care services. The Buck Stops Nowhere provides an insight into how the healthcare industry has evolved into what we have today. While the picture the author paints is often not pretty, ignoring these issues will only guarantee us more of the same. As O’Connor puts it, “Until we have a goal for what our system of care should do and reasoned change, the buck will never stop anywhere.”
— Patrice L. Spath, BA, RHIT, is a healthcare quality specialist, author of the Patient Safety Improvement Guidebook, and a partner in Brown-Spath & Associates (www.brownspath.com). She may be reached at patrice@brownspath.com.
Click here to go to the For The Record Web site.
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