FREE Insights and Innovations

This FREE Insights introduces two innovations. 

First is the addition of a day-long excursion during our July and August seminars. The July program, “Faith, Political Economy, and Social Justice: Lessons from Butte, America” includes a day in Butte with experts on its history, decline, and renewal. The August seminar is “Faith, the Environment, and Social Policy: Stewardship Lessons from Greater Yellowstone.”

Both of these programs build on our 20 years experience offering seminars for federal judges. Detailed descriptions will follow in next week’s and subsequent FREE Insights. We designed them for seminary professors and other leaders concerned with ethics and public policy. Each is limited to 20 participants.  

The second innovation is an experimental “FREE Forum.” This introduces a reasoned, civil, intelligent response submitted in reaction to a FREE Insight column. The first is by Sara (Baden) Sousa. 

Sara is an epidemiologist and RN who works for the Duke Hospital System in North Carolina. Sara was compelled to challenge my friend John Goodman’s Insight column on what health care reformers can learn from the cell phone industry. While fathers are biased judges of their children’s work, I believe Sara’s response is illuminating. It illustrates the profound difference between how economists and others approach a social problem.

NPR’s “Morning Edition” of March 16 included a discussion of inflation. One of the individuals interviewed observed: “Economists are not like normal people.” He’s right; economists focus on how incentives affect outcomes and usually discount other considerations. They tend to ignore mushy variables such as tenderness, a quality difficult to quantify.

Note Goodman’s introduction: “As far as I can tell, access to cell phones is far more equal than access to basic primary care — not only in this country, but all over the world. The distribution of cell phones also appears to be far more egalitarian. Even panhandlers on street corners have cell phones. Cell phones have something in common with our bodies. Things can go wrong. When they do, we want someone to help fix them.”

This seems quite mechanical and insensitive to emotive variables. And there is a good reason for this; economists focus on information and incentives. Also, graduate training in economics selects against empathy.  

Consider John’s concluding sections:

“Technology. In health care we are told that technology is causing increasing costs. In the cell phone industry, the opposite is true. As Matt Ridley observes:

“An iPhone, for example, weights 1/100^th and costs 1/10^th as much as an Osborne Executive computer did in 1982, but it has 150 times the processing speed and 100,000 times the memory….

Oddly enough, despite the huge number of cell phones (and landlines), and despite the fact that every doctor’s office has multiple phone lines and every clinic employee (including the doctor) probably owns a cell phone, you cannot talk to your doctor on the phone. The reason is that — in most cases — your insurer is not willing pay for a phone consultation.”

This is the approach that precipitated Sara’s response. I’m indeed pleased to offer it as our first experiment with a FREE Forum. I’ll be pleased if this becomes a regular feature.

-John Baden, Chairman

Cell Phones vs. Health Care

By John Goodman

As far as I can tell, access to cell phones is far more equal than access to basic primary care — not only in this country, but all over the world. The distribution of cell phones also appears to be far more egalitarian. Even panhandlers on street corners have cell phones. Cell phones have something in common with our bodies. Things can go wrong. When they do, we want someone to help fix them. In my neighborhood, I can walk into almost any phone store (Verizon, Sprint, AT&T, etc.) with no appointment, and most of the time I get service immediately. The phone store has competitors. Independent phone repair companies are popping up every day. There are even tools on the Internet that help you start your phone repair business. In most places, repair companies are within ten miles of their customers; repairs are done in fifteen minutes or less; and they are usually inexpensive ($40 to $60, say). Shopping malls have phone repair kiosks. Some companies will come to your house to repair your phone.

Contrast that with the market for medical care, where almost nothing is available at the drop of a hat. Nearly one in four patients has to wait six or more days for a physician appointment. A 2009 survey of family physicians in 15 metropolitan areas found the average wait for a new patient was more than 20 days. However, this varied from a low of 2.47 days to 99.6 days. Sixty percent of patients find it difficult to get care after hours or on weekends. Four- and five-hour average waiting times at hospital emergency rooms are not uncommon.

In fact, the few places in health care where waiting is not a problem are for services that are peripheral to the orthodox health care system. Teladoc promises a physician will return your call within three hours or the telephone consultation is free. Most calls are returned in less than one hour — during which time, you are free to do other things. MinuteClinics in some CVS pharmacies give you an estimated waiting time so you can shop while you wait for your care. Both of these services developed outside the third-party payer system, however.

Consider customer education. Elderly buyers in particular often have difficulty mastering the electronic devices they buy. The market has a solution. Verizon offers its customers free two-hour classes in how to use their iPhones. Yet, I don’t know anywhere in Dallas that will give Medicare patients free counseling (or even paid counseling!) on how to manage their diabetes. That’s unfortunate. This one disease is costing the country $218 billion a year.

Why is the marketplace so much kinder to my iPhone than it is to my body? I would argue that it’s because one type of service is bought and sold in a real market, while we have gone to great lengths to ensure that the service is completely free at the time of consumption in the other.

Would you like our primary care system to work as well as the market for cell phone repair? I believe that is possible. But if I am right, everything we have been doing in health policy for the past 60 years has been completely wrong. Health policy has been designed to (a) make health care free to the patient at the time of service, (b) have third parties pay all costs and (c) tightly regulate entry into the market.

What is needed is the opposite approach. Everyone should be paying market prices for primary care, even the poor. We should abandon the idea of “free” health care completely. Third-party payers should get out of primary care entirely. (Much the same should happen for chronic care, but I’ll address that issue on another occasion.) Everyone should buy primary care using a Health Savings Account, including people on Medicare and Medicaid. And we should eliminate artificial barriers to entry in order to encourage competition and entrepreneurship.

While you ponder those thoughts, here is some additional information about the market for cell phones, courtesy of NCPA Senior Fellow Devon Herrick and Chris McGregor, the NCPA’s Director of Information Technology.

Universal Access. In the United States, there are an estimated 328 million cell phones in use — more than one for every man, woman and child in the country. An industry survey finds that 91 percent of the U.S. population uses a cell phone, including 87 percent of adults.

Americans used more than 2.2 trillion minutes in 2010 — up from 1.5 trillion just five years earlier. This is also an international phenomenon. It’s estimated that nearly 80 percent (5.6 billion) of the world’s 7 billion people have access to a cell phone.

Cost. Virtually all U.S. cell phone carriers will provide free phones to customers who sign up for a 1-year or 2-year contract. Basically, you can have the latest technology for free every couple years. Cell phones are also cheap to use: in real terms the cost of using a cell phone has been falling for years. The average monthly cell phone bill is around $47 per month — about what it was a decade ago — despite far better technology, higher usage, web access and the availability of smart phones.

(Just to keep perspective, there are concierge doctors who provide all primary care — including same day service, email, telephone, etc. — for about three times the cost of the average monthly cell phone bill.)

Subsidies for Providers. Three-quarters of households with incomes of less than $30,000 have a cell phone. One reason is that the government subsidizes cell phones for the poor. In 2011 the federal government spent $1.6 billion on subsidies for 12.5 million cell phones. The Universal Service Fee on your phone bill funds this program. The Lifeline Program provides low-income people a one-time payment of up to $30 to cover the cost of a cell phone (or landline installation) and a subsidy of $10 per month (sufficient to fund about 250 minutes on a pre-paid phone). If you qualify for Food Stamps, Medicaid or earn less than 135% of the federal poverty level you may qualify. Unlike Medicaid or CHIP, however, the cell phone program for the poor does not segregate them into a separate market with artificially low prices and inferior service. Instead, it allows low-income consumers to fully participate in the same market everyone else has access to.

Technology. In health care we are told that technology is causing increasing costs. In the cell phone industry, the opposite is true. As Matt Ridley observes:

An iPhone, for example, weights 1/100^th and costs 1/10^th as much as an Osborne Executive computer did in 1982, but it has 150 times the processing speed and 100,000 times the memory.

Cell phone technology sophistication is increasing every year. Of the 328 million cell phones, 257 million are “data-capable” of which about 50 million are smart phones (about 12 million of which are capable of download speeds of 3G or better).

Most cell phones can now fit in a small pocket. Some have cameras. Others have web access. Smart phones have the power of a mini-computer, with the ability to check your email, view Microsoft Office files and access your Microsoft Outlook calendar.

Oddly enough, despite the huge number of cell phones (and landlines), and despite the fact that every doctor’s office has multiple phone lines and every clinic employee (including the doctor) probably owns a cell phone, you cannot talk to your doctor on the phone. The reason is that — in most cases — your insurer is not willing pay for a phone consultation.

Response to Goodman

By Sara Sousa

Ahh, if only people were as simple as cell phones, the world would be quite a different place indeed. While cell phones do break, as do people, the similarities pretty much end (or are at least radically limited) there. Cell phones do not have mitochondria or DNA or livers. They don’t fall in love or have babies. They don’t hit or rape, hug or console. They don’t suffer from personality disorders (I’m sure there are some who would argue with me on that one) and they don’t get cancer when exposed to tobacco, excessive sun, or asbestos. They don’t feel pain, they don’t have families, and they don’t get hungry or suffer malnutrition (just dead batteries).

From the perspective of the consumer, the steps in cell phone maintenance and repair are simple, the consequences of failure are small, and the cause-effect relationships are logical and temporal. These characteristics sometimes hold true when people break, but often they do not. While our current medical system may be broken, it is complicated for a reason. I agree with Goodman that wait times for health care can be long – I don’t agree with all of his proposed solutions.

There is an amazing beauty to a free market approach to many societal constructs. Supply and demand are in balance, unencumbered by external regulation and influence. People pay for what they value and value what they pay for, ideally fostering responsibility and accountability at the individual level. Health insurance and benefits do remove (or at least severely cloud) the relationships between supply (health care services) and demand (people who are sick). Goodman suggests taking out the 3^rd party insurance companies, taking out free health care costs at the time of service, removing artificial barriers to entry, and letting the market work. 

I would argue that if the desired outcome is reduced morbidity and mortality across society, then when people break - mentally, physically, spiritually - many of the free market rules just don’t work anymore. Dissertations have been written on this conundrum. Intellectuals and policy analysts tend to want people to behave how they think they should behave, according to models and expectations (If you don’t want lung cancer, then don’t smoke . . . duh). When people are mentally, emotionally, and/or economically stable, they generally DO behave according to expectations – hence the developed sociopolitical/sociocultural models work. However, people who are physically and/or mentally broken just don’t behave the way we want or expect them to. Then what? When people do not behave in the desired or expected way, they often become “those people” – those poor people, those old people, those illiterate people, those irresponsible people, those people who smoke, those people who eat too much, etc. If “those people” just followed and played by “the rules,” then the models would work and the world would be a better place – right?

So, what do we do with “those people?” How do we get them to “play by the rules?” Here is what I observe in my day-to-day observations of patient care: It is easy to have sympathy for people who are broken for reasons that we can understand or that tap into our sense of compassion – the young victim of sexual assault; the 50 year old woman suffering from cancer who emerged from an abusive relationship and substance abuse to work with dedication and passion as a care giver for the elderly; the woman in her 20s with a congenital disorder who has a smile and spirit to make angels sing and who needs 24/7 care. Then there are the patients you want to strangle – the dialysis patient who goes on a cocaine binge and then shows up in the ER in fluid overload; the COPD patient who still smokes and is in the hospital every month; the heart failure patient who doesn’t take her medication and refuses to see that she is mentally ill. 

As a society, what are our obligations to each of these patients?  What rules apply? What happens when our ideals and our models of supply and demand, cost and values, accountability and responsibility are filtered and contorted through the lens of abuse, illiteracy, low-cognition, broken bodies, broken minds, and broken spirits? How do we care for the people at the fringe who do not “play by the rules” and who suffer? For me, at a personal level, I work from the heart. For me, as a clinician and an epidemiologist, I work with evidence-based models and practices shown to improve patient care. Luckily for me, these two approaches work synergistically. 

I believe that in this world where people fly airplanes into buildings and fathers rape daughters and radio talk show hosts profess hatred as fact, that the only way I can stay sane is to love as best as I can with all of my heart. I am blessed that people who are broken allow me into their homes and allow me to form a partnership with them along the path of healing. As best as I can, I leave my expectations of behavior and my desires at the door, and walk into their world.  I let them tell me what feels broken and what feels right. We go from there.

John Goodman says to treat people like cell phones. Take away 3^rd party insurance, take away free point of service care, make everybody pay, and enact models to “encourage competition and entrepreneurship.” Maybe this will work . . . sometimes . . . for many people. But what about people on the fringe, our friends and neighbors who are broken?

If I’m going to look to a libertarian approach to this problem, I actually take some heart from Ron Paul, who says, “Under a liberated health care system prices would come down and additional options would become available, thereby making health care much more affordable. Moral corruption would give way to true compassion, and many doctors would remember their implicit obligation to provide free medical care to those in need, just like they did in the past.” I don’t think that this is practical or that “those in need” should need to depend on a physician’s willingness to provide free care, but at least the spirit of compassion is present in Paul’s thinking (http://www.ronpaul.com/on-the-issues/health-care/ accessed 3/5/2012).

I do not have the answers, but I will continue to passionately support the Medicaid program which I am a part of (if the free market could come up with something comparable, then great!). Community Care of North Carolina (CCNC) is a cutting edge, robust, Medicaid funded program which has reduced barriers to care, cut health care costs, improved patient outcomes, and improved clinician satisfaction. I will look towards the medical home model like this one to support and advance basic patient care – especially for people whose health and well being suffer under more traditional models of health care delivery. Public health data consistently show that reduced barriers to care, including point-of-care cost and transportation, improve health outcomes. The patients in our program pay little to nothing for their health care – office visits, prescriptions, transportation to medical appointments, case managers, and hospitalizations are covered through Medicaid benefits. As a result, their overall health is improved and costs come down – definitely for patients at the individual level, but also for the surrounding community. I am concerned about what would happen if we treated our patients like cell phones. Goodman’s message just doesn’t speak to me.