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Gently Down the Stream

by Emily Friedman

First published in the July/August 2002 issue of Health Forum Journal

The latest buzzword is "consumer-driven health care." The question is whether it is going to drive consumers crazy.

Maybe we should have stopped it when they wanted us to pump our own gas. Maybe we should have drawn the line at bag-it-yourself groceries. I remember when some vendors, and definitely most charities, put a stamp on the return envelope so the buyer or donor didn't have to.

Certainly the computer and Internet revolutions offered us ample warning; they allowed the practice of making the recipient of the document print it out, rather than the originator doing so.

And now, unfortunately, it's too late. Two recent examples from my growing file involve credit cards. The first was the letter I received from a company whose card I use, "congratulating" me on being "upgraded" to a new card -- with a new number.The letter added that oh, by the way, if there are any vendors/websites/utilities or other entities that have been using your old credit card number, you (not the company) will have to notify them about the change. A P.S. at the bottom of the letter mumbled, "Sorry for any inconvenience."

Great. I was particularly touched by the honor because I had not requested it, and I still have no idea why I was so blessed -- unless, of course, the firm's computer files had been hacked, or the firm had been sold or merged, and it decided to lay all the inconvenience off onto its customers.

The second, and far more serious, event has been consumer privacy activity. Now, to boil down a long argument (one that is red-hot in health care just now, but that's for another time), there are two philosophies concerning consumer privacy. One is the "opt-in" theory, which states that commercial entities -- vendors, marketers, hospitals, whoever -- cannot sell or share private consumer information with anyone else without the consumer's written approval. The other theory is "opt-out, " in which the consumer's information can be sold, bartered, given away, and marketed unless the consumer says no.

I'll bet you need only one guess as to how this worked out in federal policy. You got it right! For every entity that has personal information about you -- including, but not limited to, your bank, your credit card firms, your mortgage holder, Internet vendors, airlines, and stores -- you must execute a separate privacy order. This is usually provided to you in four-point invisible type concealed in the middle of a folder full of gibberish, often with threatening language that suggests that if you opt out, you will miss out on great bargains and deals (as well as telemarketing calls during family dinners). You must send back the form (providing your own stamp and envelope, of course); you must make the 800 call and wait on hold; you must notify the folks who are trying to sell your most sensitive information that they may not do so.

Perhaps this would not be such a pain if it were the only do-it-yourself challenge we are facing. But it seems that every company that deals with the public is trying to shove off some part of its responsibilities onto the hapless consumer. Read your own gas meter and report in. Read your own electric meter and report in. Book your own flights online (watch that fine print). Handle your own investments (and be sure to buy your own company stock and trust those brokers who have special relationships with the firms whose stocks they are recommending).

If there's a problem, don't call us; just visit our website and stumble through page after page of useless technical support gibberish that was apparently written by the same people who brought you the opt-out privacy brochures. You do it; it's your problem.

Small wonder that Time magazine recently ran a cover story depicting a very confused infant who is being told, "You're on your own, baby."

Do-It-Yourself Health Insurance

It was inevitable that this trend would hit health care. In some ways, it hit health care a long time ago, when the self-empowerment movements involving women's and disabled people's health flowered, as well as efforts by minorities who believed they were not being treated well by the health care system (scientific evidence of which is only now coming to light).

But these were self-help movements, designed to force the healthcare system to be more responsive to people's fears and concerns.They sought more information and a greater ability to deal with providers (interestingly, not so much with insurers). They scored some major successes in terms of treatment and coverage for breast cancer and AIDS, and, especially in the cases of women and gays, changed how the system did things.

But the current craze for "consumer-driven health care"is a far different animal, and has more to do with the abrogation of responsibility than with the gaining of it. Managed care plans speak of "putting the consumer in charge." Employers speak of "employee choice in coverage." Policymakers talk about "giving the Medicare or Medicaid beneficiary a choice." One of the hot topics in Washington is the "defined contribution" proposal, whereby a Medicare beneficiary will be given a certain amount of money and told to go find health insurance from amongst a host of competing plans, at different prices, with different benefits.

After all, freedom of choice is the American way. And proponents of "consumer-driven health care" say that it would be un-American to retain the paternalistic system of employers doing the choosing, or insurers dictating the choices, or Medicare and Medicaid being one-size-fits-all.

As a matter of fact, the only people who don't seem to be clutching the consumer-driven health care model to their bosoms are the "consumers" -- the patients, potential patients, and public program beneficiaries who are supposed to be better served by this approach.

Take Medicaid. The shift to Medicaid managed care was such a big hit with the beneficiaries that almost all of them, nationwide, had to be forced to participate in it -- and many of the plans turned out to be cesspools of denied access, underpaid or unpaid providers, and illegal profiteering.

Then there's Medicare+Choice, the groundbreaking Medicare managed care plan, which has now foundered badly. Its original appeal -- as opposed to what the appeal should have been, which was coordinated care -- was that it offered a pharmaceutical benefit, unlike traditional Medicare. Even with this powerful attraction, most Medicare beneficiaries ignored the lure. Also, the managed care firms swore that they could provide more services at less cost (this is a common promise when one is seeking a large government contract). When their profits weren't high enough, they bailed out of the program like lemmings, blaming underpayment and stranding hundreds of thousands of former members. Those plans that remain are eliminating or severely reducing the pharmaceutical benefit, and their Medicare members are boogying out the door.

So much for the seductive charm of choice in public health insurance.

The effort to "put decision making in the consumer's hands"is being pushed just as enthusiastically in the private sector, largely by employers and insurers. Indeed, a recent announcement of a program on "Consumer-Driven Healthcare" included page after page of sessions featuring employer representatives, insurance representatives, benefits consultants, and a few provider organization representatives -- with nary one consumer representative on the bill.

Avoiding Risk

So just what is "consumer-driven health care" about? One clue comes from Bill Maloney, a principal with William M.Mercer, a benefits consulting firm, who states that "due to inflation in health care, most employers recognize consumerism as a good idea" (Healthplan, March/April 2002).

What is "consumerism" in this context? At its best, it is, as George Halvorson, former president and CEO of Health Partners in Minneapolis and the new president of Kaiser Permanente, says, "[a plan in which] a single, competent administrator offers credible choices" (Healthplan, March/April 2002). At its worst, he says, "'defined contribution' really offers no choices or options. It's old insurance wrapped in a new package, rather than real choice."

I would suggest that the new "consumer-driven" model may be worse than old insurance. Why? First, because it offers even more opportunities for insurers to achieve coverage Nirvana: getting rid of all the high risks. It is child's play for professionals in the field to design options that are extremely undesirable for those who are sick or disabled, or who are likely to become sick or disabled, or who are older, or who are genetically disadvantaged (in time). Give 'em choice -- and kick all the expensive ones into plans that cost so much they can't afford the coverage. That takes care of that. Next?

Second, telling the average person to go find insurance on her or his own is an invitation to insurance fraud, and, heaven knows, we've had enough of that in the past few years. It may be arguable that a college-educated, sophisticated consumer with a deep knowledge of how health insurance works could fend for herself or himself in the jungle of coverage options, but what about the rest of us? How about disabled retirees? How about those who are not Internet-savvy? How about those who can barely read? How on earth are they supposed to negotiate the quagmire of deceptive language, hidden clauses, trick phrases, and flat-out lies that characterize too many insurance offerings these days?

The third issue is that of liability for bad decisions. Traditionally, in the private sector, most insurance has been acquired through employers (excepting those poor souls in the individual market).And those employers, right now, are facing a very difficult situation. First, as we all know, pharmaceutical costs have risen drastically. Second, after several years lying on the floor reeling from a punch in the face, providers (especially hospitals) have come out swinging, and have regained market leverage in many urban areas, and have been able to negotiate much more favorable insurance contracts. The result is massive increases in health insurance premiums, especially for middle-sized and small employers. The managed care magic bullet didn't work. There don't seem to be any more cost containment options. The gun is empty.

So for many employers, perhaps the only reasonable thing to do is to cut employees loose, hand them a check, provide some minimal (and in some cases nonexistent) technical support, and say, "Go take care of yourselves." And that is what is beginning to happen.

The question, of course, is who is liable for bad decisions? What happens if a low-income diabetic picks a cheesy, threadbare plan that happens to be the only one that is affordable -- but won't cover many diabetic-related problems? What happens if a healthy person picks a plan that doesn't pay for much, and then comes down with cancer? What happens if someone who chose a bare-bones option needs a liver transplant?

Interesting questions, these. Will the employer be liable? Not the way most of these agreements are structured. Will the employee be liable? Probably, if he or she has any money. Who will really pay for the care that was not covered? Right again! Hospitals, clinics, and physicians. Or else they can let the patient die.

This ludicrous scenario extends to the uninsured. Indeed, James R. Tallon, Jr., president of the United Hospital Fund of New York, in a recent presentation to the Society for Healthcare Strategy and Market Development, said regarding the health insurance debate, "Rather than a discussion about 'providing comprehensive coverage, ' we've now seen new language about 'helping' or 'assisting' people to obtain coverage. 'Helping people' to obtain coverage subtly shifts responsibility, and potentially the blame, for failure. We'll provide help, perhaps adequate, perhaps not; but the problem now belongs to you, the patient. The dilemma for us -- the economic reality -- is that the real costs of uncompensated care will fall on hospitals and other community providers."

What all this amounts to is sending responsibility, accountability, and liability -- not to mention basic morality -- floating gently down the stream toward the people who will suffer the consequences -- clinical, financial, social, and moral. There's something else that is known to float downstream, which I cannot mention here, but I suspect you get the idea.

George Annas, law columnist for the New England Journal of Medicine and one of the prime proponents of patients' rights in this country, in a recent NEJM column, quoted a line from Tom Clancy's 1996 novel Executive Orders: "The Constitution is not a suicide pact." When it comes to the misuse of consumer choice in health care, no words were ever more true.

This article first appeared in the July/August 2002 issue of Health Forum Journal

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