In a statement released Friday, January 20, Kathleen Sebelius, Secretary of Health and Human Services said, “After evaluating comments, we have decided to add an additional element to the final rule. Nonprofit employers who, based on religious beliefs, do not
currently provide contraceptive coverage in their insurance plan, will be provided an additional year, until August 1, 2013, to comply with the new law. Employers wishing to take advantage of the additional year must certify that they qualify for the delayed implementation. This additional year will allow these organizations more time and flexibility to adapt to this new rule. We intend to require employers that do not offer coverage of contraceptive services to provide notice to employees, which will also state that
contraceptive services are available at sites such as community health centers, public clinics, and hospitals with income-based support. We will continue to work closely with religious groups during this transitional period to discuss their concerns.”

The announcement stirred up some religious groups, most notably the Catholic bishops of the United States. They called the decision by the Obama Administration “literally unconscionable”. They said that this announcement means that the mandate and its very
narrow exemption will not change at all; instead there will only be a delay in enforcement against some employers.

“In effect, the president is saying we have a year to figure out how to violate our  consciences,” said Cardinal-designate Timothy M. Dolan, archbishop of New York and president of the U.S. Conference of Catholic Bishops.

“To force American citizens to choose between violating their consciences and forgoing their healthcare is literally unconscionable,” the cardinal-designate said. “It is as much an
attack on access to health care as on religious freedom. Historically, this represents a challenge and a compromise of our religious liberty.”

Sebelius said that the final rule on preventive health services will ensure that women with health insurance coverage will have access to the full range of the Institute of Medicine’s recommended preventive services, including all FDA-approved forms of contraception. “Women will not have to forego these services because of expensive co-pays or deductibles, or because an insurance plan doesn’t include contraceptive services,” she said. “This
rule is consistent with the laws in a majority of states which already require contraception coverage in health plans, and includes the exemption in the interim final rule allowing certain religious organizations not to provide contraception coverage. Beginning August
1, 2012, most new and renewed health plans will be required to cover these services without cost sharing for women across the country.”

“The government should not force Americans to act as if pregnancy is a disease to be prevented at all costs,” said Cardinal-designate Dolan.

At issue, the U.S. bishops and other religious leaders insist, is the survival of a cornerstone constitutionally protected freedom that ensures respect for the conscience of Catholics and all other Americans.

In her released statement, Sebelius said, “Scientists have abundant evidence that birth control has significant health benefits for women and their families, it is documented to significantly reduce health costs, and is the most commonly taken drug in America
by young and middle-aged women. This rule will provide women with greater access to contraception by requiring coverage and by prohibiting cost sharing.”

“This is nothing less than a direct attack on religion and First Amendment rights,” said Franciscan Sister Jane Marie Klein, chairperson of the board at Franciscan Alliance, Inc., a
system of 13 Catholic hospitals. “I have hundreds of employees who will be upset and confused by this edict. I cannot understand it at all.”

Daughter of Charity Sister Carol Keehan, president and chief executive officer of the Catholic Health Association of the United States, voiced disappointment with the decision. Catholic hospitals serve one out of six people who seek hospital care annually.

“This was a missed opportunity to be clear on appropriate conscience protection,” Sister Keehan said.

Cardinal-designate Dolan urged that the HHS mandate be overturned. “The Obama administration has now drawn an unprecedented line in the sand,” he said. “The Catholic bishops are committed to working with our fellow Americans to reform the law and change
this unjust regulation. We will continue to study all the implications of this troubling decision.”

Sebelius said, “This decision was made after very careful consideration, including the important concerns some have raised about religious liberty. I believe this proposal strikes the appropriate balance between respecting religious freedom and increasing access to important preventive services. The administration remains fully committed to its partnerships with faith-based organizations, which promote healthy communities and
serve the common good. And this final rule will have no impact on the protections that existing conscience laws and regulations give to health care providers.”

Detroit Archbishop Allen H. Vigneron said, “During the same week we commemorated
the life, ministry, and message of Dr. Martin Luther King Jr. and his advancement of civil rights in this country, the Federal Government took the unprecedented step to affirm its discrimination against Americans exercising their right of conscience. With its edict on
contraception and sterilization coverage in all health insurance plans, the Department of Health and Human Services is forcing insurers and purchasers to choose whether or not to violate their moral and religious beliefs. The inalienable rights guaranteed in our country’s founding documents are being trampled. Where is the ‘liberty’ in a decision to intrude on freedom of conscience? The Constitution speaks of ‘freedom of religion,’ not ‘freedom from
religion.’”

Archbishop Vigneron added, “Lawmakers in Washington need to step up, step in, and protect the rights of their fellow citizens from a government mandate that is truly unconscionable. This fight against the Federal Government’s over-reaching exercise of its power is everybody’s fight. As Pope Benedict reminded us just days ago, as citizens of the United States, we Catholics serve the whole nation by our witness to our moral convictions and our defense of the liberties that will always be ours by right, not by the permission of the government.”

The Medicare Trustees are Treasury Secretary and Managing Trustee Timothy F. Geithner, Health and Human Services Secretary Kathleen Sebelius, Labor Secretary Hilda L. Solis, and Social Security Commissioner Michael J. Astrue. The two public representatives appointed by the President and confirmed by the Senate, are Charles P. Blahous III and Robert D. Reischauer began serving on September 17, 2010. CMS Administrator Berwick is designated as Secretary of the Board.

Baby-Boomers Delaying Retirement

Meanwhile, according to a new study released by the Bankers Life and Casualty Company Center for a Secure Retirement^SM (CSR), a majority (73 percent) of our country’s middle-income Baby Boomers are rethinking their retirement timing due to the recent economic crisis and of those, 79 percent are delaying their retirement by an average of five years.

The study cites several factors contributing to this shift in retirement age and timing for the middle-income Baby Boom generation. According to the study, 71 percent worry about outliving their money once they retire, 68 percent have experienced a decline in the value of their retirement accounts within the past three years and more than half (55 percent) have saved less than $100,000.

Baby-Boomers Are Living Longer

Due in part to advances in health care treatment technology, Baby-Boomers are living longer. The newly released 2011 Medco Drug Trend Report projects that expensive new cancer drugs treating increasing numbers of patients could drive cancer drug spending by as much as 15 percent a year through 2013. While the incidence of some types of cancers may be decreasing, with better detection the overall numbers of cancers reported in an aging population has increased significantly. Due to advanced treatment, the number of U.S. cancer survivors is expected to increase by more than 30 percent – from 13.8 million in 2010 to 18 million by 2020.

Oncology drugs will likely rise to the second or third largest trend-driving category by 2015, following only diabetes and central nervous system (CNS) treatments, according to the newly released 2011 Medco Drug Trend Report. With the use of many newly introduced specialty drugs reaching market in recent years, oncology drug price inflation surged to 11.5 percent during 2010. More than 90 percent of anti-cancer drugs approved since 2004 cost more than $20,000 for a 12-week course of therapy, according to the Journal of the National Cancer Institute.

Rapid advancement in the area of treatment particularly in oncology has had the effect of dampening, if not completely defeating, the opportunity for generic substitute drugs to help offset these rising costs. “New cancer drugs reaching the market are expected to double during the next several years,” said Dr. Glen Stettin, Medco’s chief medical officer. “Early diagnosis, evidence-based treatment and enhanced coordinated care have essentially turned some forms of the condition into chronic illnesses that can be managed longer-term. Continued innovation, including companion diagnostic or pharmacogenomic testing, can help ensure the right person is getting the right drug at the proper dose and reduce waste.”

Many of these newer treatments are oral medications or can be self administered, changing the dynamic of cancer care delivery toward the home, rather than in physician’s office or infusion center. This dynamic shows no signs of abating.

Factors Leading to Treatment Abandonment

Concurrently, another study based on an analysis conducted by Avalere Health LLC using pharmacy transaction data over a two-year period from 2007 to 2009, found that ten percent of cancer patients failed to fill their initial prescriptions for oral anti-cancer drugs because of high cost-sharing and higher prescription activity. “Our study shows that many cancer patients are abandoning the medicine they need,” said Lauren Barnes, vice president, Avalere Health. “With 45.5 percent of Medicare patients in our sample facing cost-sharing greater than $500 for their first anti-cancer drug, this is a Medicare quality issue of the first order.”

“Cost-sharing clearly has an impact on whether a patient initiates his or her oral anti-cancer medicine, with the abandonment rate rising as the cost-sharing increases,” said Michael Johnsrud, PhD, one of the study authors and a senior vice president at Avalere Health. “Importantly, claims for cost-sharing over $500 have more than four times higher an abandonment rate than claims of cost-sharing with less than $100. This demonstrates that patients are confronted with potential barriers in accessing anti-cancer medications.”

The number of concurrent prescriptions also had an impact on abandonment of an oncolytic. Patients with more than five claims for non-cancer medicines in the previous month had an abandonment rate of 12 percent, as compared to nine percent for patients with no claims in the previous month.

Insurers Under Scrutiny

The Department of Health and Human Services (HHS) issued a final rule which requires independent experts to scrutinize any proposed increase of 10-percent for most individual and small group health insurance plans. This final regulation comes at a time when health insurance companies have reported some of their highest profits in years. One cause for these profits according to the HHS release is that actual medical costs are growing more slowly than what insurance companies projected when they set their 2011 rates last year, but many of the rates consumers and small employers pay today don’t reflect these lower costs.

States will have the primary responsibility for reviewing rate increases. While most states will take on this responsibility, HHS will serve in a backup role in states that don’t have the resources or authority to review rates. HHS has awarded $44 million in Affordable Care Act grants to states to help strengthen their oversight capabilities.

It is the opinion of HHS that combined with other important protections from the Affordable Care Act, these new rules will help lower insurance costs by moderating premium hikes and provide consumers with greater value for their premium dollar.

Translating the Rhetoric

What does all this mean for the Baby-Boomer? It means that Medicare is still going to run out of funds by 2024, based on current optimistic projections. It means that Baby-Boomers will be delaying retirement which is fortunate because they are living longer. In addition, medical advancements have enabled them to live longer, thus becoming more likely to contract debilitating diseases that will result in treatment costs that are escalating at a rate far exceeding the rate of inflation. It means that to manage the increased scrutiny of rate increases, the insurers who provide medical coverage (including Medicare) are implementing cost-sharing strategies which are ultimately driving more patients to abandon treatment.

The bottom line? There is NO FREE LUNCH! You cannot increase the number of people for whom treatment costs will be covered, while at the same time lowering total costs when those people live longer and contract diseases they never would have contracted except for the fact that they are now living long enough to get them. At what point do you recognize that health care is an individual responsibility, not a birth right?

The proposal was first reported in the Washington Post. A 30-member Kidney Transplantation Committee, chaired by Kenneth Andreoni, MD an associate professor of surgery at Ohio State University, offered the proposal as part of its review of the system for the United Network for Organ Sharing (UNOS), a Richmond-based private nonprofit group contracted by the federal government to coordinate organ allocation. “It’s an effort to get the most out of a scarce resource,” Andreoni said.

The current organ allocation system, which dates to 1986, was initially based on giving kidneys to the patients who matched the organs best, but in its present form takes a first-come, first-served approach giving priority to patients who have waited the longest.

At issue in this current proposal is the dilemma that elderly recipients can get organs from much younger donors whose kidneys could have provided far more years of healthy life to younger, healthier patients. By the same token, younger patients could receive older or less-healthy organs that might be more likely to wear out sooner, forcing them back onto the transplant list in a few years.

According to some ethicists, this approach, if adopted, could have implications for other decisions about how to allocate scarce medical resources, such as expensive cancer drugs and ventilators during hurricanes and other emergencies.

The idea brings to mind the time when kidney dialysis first emerged as a treatment option for patients with kidney failure. Since, at the time, there were insufficient devices to provide the treatment for all patients; panels were organized to determine which patients would receive the new therapy. These panels became known as “death panels” as they made decisions that in effect decided who lived and who died.

Any time there is a limited resource that is insufficient to meet the demand, some form of rationing is inevitable. The ethical dilemma then becomes who decides what criteria will be employed to make the life or death determination. No matter how the system is defined, there will be those who believe the solution is unfair. The problem is as much ideological as it is ethical.

In a free market system, supply and demand determine how goods and services are rationed. A market price for the good or service is established and fluctuates based on the supply and demand variables. Those who have the ability to pay the market price, are able to acquire the good or service. When it comes to the matter of one’s health, the notion of “fairness” intercedes because ideologically, good health is often perceived as a “right” for all rather than a benefit of the wealthy.

So again, it becomes the debate over the so-called “haves” and “have-nots.” It is not a debate over whether rationing is occurring, since it most certainly is occurring. Instead, the debate is over the criteria that are proposed for deciding the allocation of the organs, and how that will impact the decisions regarding the rationing of other aspects of health care.

In the case of this particular issue, you have until April 1 to comment on the idea, which the committee said would make the kidney system more similar to those used to allocate livers, hearts and lungs. The committee will take those comments into account before formally proposing the specific changes, which will be open to public comment again before going to the UNOS board of directors. The board could approve final changes by June 2012.

• Interest groups that opposed this amendment gave 3.1 times more to senators that voted NO than to senators that voted YES
• Interest groups that supported this amendment gave 50% more to senators that voted YES than to senators that voted NO
• Only nine senators, seven Democrats and two Republicans, did not vote with the money
• Two senators, Joseph Lieberman (I-Conn.) and Mark Warner (D-Va), did not vote

What should we conclude from this revelation? It should come as no surprise that our elected representatives are financially motivated. The election process has become an extremely expensive proposition. A campaign requires literally millions of dollars, and unless the candidate is independently wealthy, the funds to run their campaign must come from somewhere. There are plenty of special interest groups (a.k.a. lobbyists) with the money to help a campaign in exchange for a candidate’s commitment to “lean a certain way” once elected when a particular piece of legislation comes up for a vote. More importantly, these lobbyists are willing to provide information resources to help the elected representative become “informed” on the nuances of the legislation.

In an ideal world, shouldn’t your representative weigh all the available information and make his or her decision on what is best for the country, as well as his constituents? It would seem obvious that a significant contribution to a campaign fund might help influence that decision, especially if the candidate is then armed with the arguments professionally prepared by the lobbyists to assuage the constituency.

One must question how many of these elected representatives would vote differently if the financial pressure of campaign funding were eliminated. Tragically, mass media, today precludes such a Pollyanna-like notion. Without access to the public forum of advertising, no candidate for a national office would stand a chance of getting elected, and access to that forum is extremely burdensome except for the very wealthy, whose interests may or may not reflect the mainstream public.

What then, you might ask, motivates the lobbyists to exercise such influence on legislation. In most cases, the argument could be made that there are significant tax consequences in almost every piece of legislation. To eliminate the role lobbyists play in our political process, we would have to eliminate the whole notion of corporate taxes which is one of the primary targets of our legislators in each and every Congress. Those who support a complete overhaul of the tax structure have argued that the FairTax[2] would virtually eliminate the value of lobbyists in our legislative process. Perhaps we need to encourage our legislators to visit this idea.

[1] Contributions by interest groups established by the Center for Responsive Politics, includes reported contributions to congressional campaigns of senators voting on day of vote, from interest groups invested in the vote according to MAPLight.org, November 23, 2004-November 22, 2010. Contributions data source: OpenSecrets.org.

A link to this data can be found on MAPLight.org.

MAPLight.org is a nonpartisan, nonprofit research group that tracks money in politics.

[2] For details on this idea go to FairTax.org.

Regardless of which side of the aisle you prefer, we keep hoping that somehow, things will change and our elected representatives will actually get some sense and do what is “right.” As long as we have “career politicians” they will NEVER get it right. Why? Our elected representatives on the local, state, and national level have re-election as their primary goal once elected. To that end, they want to point to the legislation they have championed that has become law as the reason they should be re-elected. For once, I would like to see them point to the “legalese” they have eliminated!

Originally, elected representatives were individuals who had careers, professions, or businesses to run, but served as volunteers to guide the process of governing. They met briefly, then returned to their regular activities. Of course, one might argue, that was a simpler time. True, enough. However, the notion that one can now make a career of pursuing ever higher levels of governing responsibility without ever functioning in the private sector within the framework of the laws and regulations being created is far removed from what the framers of our form of government ever envisioned.

It seems to me that if they had to live with the laws they have created, they might be less inclined to create so many and make them so complicated. Of course, many admitted that they voted on legislation in some cases more than 2,000 pages in length, without reading it! How could they vote for or against any law without fully understanding the implications of it? How many of us would lose interest in a novel, no matter how interesting it might be, if it were 2,000 pages in length?

Is that why they hire Congressional “staffers?” These staffers who are hired by our representatives (using taxpayer dollars) were not elected to represent us, yet it seems that they—more than our elected representatives—are the ones who research, prepare, write and advocate the legislation for our elected representatives. Then they attempt to explain it to their bosses and help them decide how to vote on the other pieces of legislation prepared by the staffers of the other elected representatives.

Most Congressional staffers are not legal experts. Where, then, do these staffers get their knowledge and expertise to draft legislation for their bosses? In most cases, the legislation is built upon material prepared for them by the various lobbyists who frequent the offices of staffers as well as the Congressmen and women who employ them. These lobbyists prepare their drafts of legislation to be as favorable as possible for their clients, whoever they may be. The “loopholes” that are later uncovered in a piece of legislation were not there by some oversight, but rather intentionally included for the benefit of the client who employed the lobbyist. Top-level legal experts who are trained to speak “legalese” on their respective staffs help draft these pieces of legislation.

Each year, the legal code is increased to the point where even a lifetime legal scholar could not possibly know all the laws (combined with the courts’ rulings—which also increases the legal code by virtue of their interpretation of the law) governing our activities, the rights we really have, the taxes we pay, the entitlements we receive, etc. That is why lawyers now “specialize” in one area of the law. It would be virtually impossible to be good at all of it. Yet “all of it” is what we have to deal with everyday.

We can either accept that this is just the way it is going to be, or we can actively demand that our elected representatives change the way they serve us. After all, the government is “we the people,” and the elected representatives are just that—representatives. They are employed by us and entrusted with the responsibility to analyze the information made available to them and decide what is best for us, their constituents, and our country, regardless of whether it is best for them or some other interested party.

To that end, there have been numerous messages circulating the internet—more seemed to have surfaced over the last several years—that advocate a revolt of sorts by the electorate including calling for a Constitutional Convention to pass a new amendment to the Constitution, revising the way the Congress is allowed by their employers, the electorate, to operate. The recent emergence of the Tea Party is evidence of growing support for such a revolt.

As long as the legislative climate is influenced by political ideology (e.g. Republican vs. Democrat) and a desire to pass more legislation to demonstrate job performance rather than by what makes economic sense for the country and the electorate, we will continue to experience a slow, plodding, almost monolithic government that makes minor adjustments (akin to applying a band-aid to cancer) rather than the sweeping changes needed to streamline and improve the economics and efficiency of the institutions of government at the local, state, and national level.

Candidates that not only promise to limit their time in public office, reduce their staff budget, and review each piece of legislation thoroughly before casting a vote, while providing complete transparency to their constituents; but also deliver on those promises are the only ones who should be given the right to return to office. Is that asking too much?

It has been said that each of us will spend 80% of our total life’s health costs during the last 22 months of life. Reversing that thought would imply that unless we are less than two years from death’s door, we have yet to consume 20% of our total life health costs. Using simple mathematics you can get an estimate of what that cost might be. Start by totaling all your life’s health expenses to the present (make sure you include all the premiums you have paid on health insurance including your employers’ contributions). Then, divide by 0.2 to arrive at a number that would approximate something less than the cost of your health for your existence. Subtract the amount you have spent to determine approximately what you have yet to spend. My guess is that number would stagger you. What, if any, is the lifetime cap on your health insurance policy? Most have one. How close are you to reaching it, now? Now compare that with your total health care costs. Are your personal assets sufficient to cover the remaining costs? What would you have to sell to cover the remainder? Does it seem reasonable to consume the accumulated resources of a lifetime—not to mention potentially burdening children and grandchildren with that kind of debt—merely to prolong the inevitable? Might you, the patient, be better served with an alternate plan to provide comfort and care in a hospice setting or at home surrounded by family and friends?

Herein lies the rub. To deal with this issue, we must confront our mortality. We must accept that life is a terminal condition and that we are not getting out of it alive. The sooner we come to grips with that reality, the sooner we can begin to logically approach the management of healthcare cost.

In my many years of reporting on health care, I have encountered some interesting data and studies to illustrate this problem. Below is a recent example:

“When is enough, enough?”

Physician-researchers from the Virginia Commonwealth University Massey Cancer Center published a case study in the June 11, 2008 issue of the Journal of the American Medical Association exploring the role of chemotherapy given in the last phases of life to cancer patients in the United States. The authors, Thomas J. Smith, M.D., and Sarah E. Harrington, M.D., serve respectively as medical director and attending physician of the VCU Massey Cancer Center’s Thomas Palliative Care Program.

In the article, the authors show that chemotherapy is given near the end of life in the U.S. more than in other countries. They explore why and how medical professionals should consider administering less chemotherapy at the end of life. In addition, they provide information for patients to support their decision-making efforts.

About 15 percent to 20 percent of cancer patients nationwide with incurable cancers receive chemotherapy within 14 days of their death. At that stage, when the disease has progressed and patients are often failing, the chemotherapy has virtually no chance of helping according to the authors.

“As doctors we are taught to save lives, and much of our training and practice is geared toward that effort,” said Smith. “Patients and their families want and need more information to transition toward the best death possible. This article provides several helpful sections to identify the appropriate goals of chemotherapy, transition to palliative or hospice care, and discuss prognosis in clear and effective manners with patients.”

Taking several other factors into account, chemotherapy toward the end of life may not be the best solution for many incurable patients. For example, chemotherapy may have negative side effects, compromising the patients’ sense of well-being. People in hospice who do not receive chemotherapy live longer they said.

The authors said less chemotherapy would allow for better quality of life and easier transitions toward death for those whose illness is terminal. Chemotherapy prevents patients from going into hospice. In addition, one in three families is bankrupted by serious illness, and patients receiving chemotherapy are likely to miss opportunities for spiritual growth, quality family time, travel, financial transitions and to pass on a “life review” for future generations.

Smith and Harrington propose that medical professionals have honest communication from the beginning with patients, bring up hospice, and ask patients what they want to know, and then tell them.

Gambling with your health

Well and good, you might say, but won’t this require behavior modification? If this is not the current modus operandi, what is preventing this approach and how can we bring about change? My argument is that we must confront our own mortality at an early age. Why? As the study above illustrates, for most of us, the end-of-life is expensive and health insurance is our solution to that, that’s why.

Consider health insurance as a form of legalized gambling. You are betting (the insurance premium is the wager amount) that you will get sick enough to encounter costs higher than your monthly budget alone can afford and your insurers will have to pay. The insurers are betting you won’t. And you are happy when they win the bet! The insurance companies call it “peace of mind!”

Just as in other forms of gambling, the wager amount (“bet”) and “winnings” are determined based on the “odds” of you “winning” the bet. The more gamblers with which the insurer makes “bets,” the better the odds for the insurer to cover the losses from the “bad bets” of those who gambled and did not need to collect on their bets. The gamblers are referred to as the “risk pool.” Using this “gambling model” to understand a little bit of how health insurance works, will help you grasp the next point.

Obviously, the earlier you place your bet, the higher the likelihood that the insurer will be keeping your wagers (health insurance premiums – paid by you through payroll deductions, your employers as benefits which they treat as costs of doing business and pass along to the consumers of their products or services, and Medicare/Medicaid, which is also paid by you through payroll deductions) and not paying off for a long time. They cheer your healthfulness while collecting the monthly wagers and you are relieved you don’t have to make a claim on your bet. For the same reason that life insurance can be purchased cheaper when you are younger, health insurance premiums are cheaper when you are younger. Why? Because you are less likely to get seriously sick or die at age 20 than at age 45, they keep the bet.

Insurers hire actuaries whose sole task is to determine the “risk” of having to pay off on bad bets. Those actuaries help them determine how much the wager will need to be to help the insurer cover all the bets. They calculate how many will die at a young age, how many will contract rare and expensive diseases that are difficult to treat, how many will cancel their policies and move to another insurer—in which case, they get to keep all the collected premiums (wagers) without ever having to pay off a bet. All these factors and many others contribute to their decision as to how much to charge as a premium for providing certain benefits.

What if the “risk pool” were created at the same time you got your Social Security card? And what if your health insurance was available as a one-time decision that you carried with you for life? You decide on the coverage and benefits you want, essentially placing one bet, one time, rather than making a new bet every time you changed employers.

If you are like me, you probably got your Social Security card at about the same time you applied for your first job, since your employer needed it to properly report your income to the I.R.S. If at the same time, you make your end of life decisions (we will discuss these later in this article), you help the insurer to ascertain what their risk will be for your whole life. Because you are their beneficiary for life, they know there will come a time when you will collect on the bet—no more keeping wagers without paying off.

Their actuaries already have a pretty good idea of how much the average person will cost them in a lifetime. They also know when the catastrophic costs are most likely to occur. The larger the aggregated pool of beneficiaries and the wider the age distribution of those beneficiaries, the more evenly the insurer can distribute the payment of benefits through time. Thus, if the insurer could begin collecting your premiums (wagers) from that time when you are less likely to need health benefits and continue collecting them for a long time, then they would have money to invest and to grow, so that when the time comes when you do need to receive benefits (collect on your bet), they have more than enough to cover that bet.

However, if you start thinking about making those end of life decisions and acquiring health insurance at the time that you begin to experience the need for the coverage, the insurer knows that they will not have the opportunity to grow your money before they have to start paying it back. Their risk is already high and you are not a good bet, so you will pay dearly to make that bet. Consequently, they will demand staggering premiums right from the start. The earlier you enter the game, the less costly your premium (wager) will be for you and the less risky it will be for the insurer to be able to cover the bet.

As you can see, the gambling model provides a glimpse into health insurance which is simply one aspect of the health care delivery system, albeit an important one. Without the resources to pay for healthcare, there would be neither care provided nor any investment in improving the quality of healthcare.

Due to advancing technology, a decision made when you are young could need altering as you age. The “right” healthcare model would have to adequately deal with flexibility in the decision process to allow for these technological advancements without punishing the early decider.

Nonetheless, until we are willing to confront our mortality early and begin the end of life decision process, we are limiting the ability of healthcare delivery to meet our life needs.

Going out in style

I have observed the deaths of my grandparents, my in-laws and my mother. They were intimate revelations, and while each case was different, they were enlightening to my understanding of the end-of-life process. Throughout my life, I have often been a participant in “death with dignity” discussions. Having chronicled the evolution of treating end-stage renal disease (more recently referred to as chronic kidney disease) and the treatment of cancer patients in the community setting, the end-of-life discussions are integral to the cost of care debates. However, the death of a loved one brings that reality much closer to home.

It is my firm conviction that most individuals do not wish their exit to be the defining moment of their life, but rather prefer to depart quietly, almost unnoticed, much as their entrance was probably a largely unheralded event. Visions of medical tubing suspended from apparatus strategically placed all around their hospital bed and inserted into natural and unnatural orifices would scare the bejabbers out of most of us. I would be amazed to find that in the description of any who thoughtfully put into words how they would envision their exodus. Sadly, that is the picture too many witness on the day of a loved one’s departure.

I firmly believe that discussions of how one would want that exodus to occur need to begin much earlier in life. To accomplish that, we must confront the reality that life is terminal and that we are not bullet proof. The sense of invincibility that is youth, must be tempered with the reality that tomorrow is not guaranteed to anyone. Life is fragile, but, in my opinion, the human spirit is not. The earlier we make plans, and understand the terminal condition we have entered, the sooner we can begin to enter into end-of-life decision-making.

For each of us, there will be many varied and differing considerations to factor into the last days, weeks, months, even years of life. But the earlier we begin to create a vision of how in an ideal plan it would work, the more control we can exert over that outcome. If we procrastinate, we leave those decisions to others, many of whom will have no knowledge of what we want. Some might even lead to dividing families and bitter, acrimonious and costly litigation.

What are those end-of-life decisions? Some of them have already been referenced in the discussion above. At what point does your quality of life impact the life-saving efforts of health professionals. Who, besides yourself do you trust to make decisions for you when you are deemed incapable of making those decisions for your self? Whoever you designate should be intimately familiar with your personal exit strategy including a full understanding of the vision you have for your ideal exit plan. How well have you defined your plan to family members? Is the plan explicitly defined in a will or trust document? Is it binding on your heirs to the extent that legal action will result in stiff penalties to those who challenge it and their lawyers? These are some of the detailed discussions that you should have long before those twenty-two months referenced at the beginning of this article.

Until these issues have been completely—and I mean, completely—addressed as a society, not just individually, there is little hope that as a society, we will ever reign in the escalating costs of healthcare at the end of life.

A Basic Budgeting and Spending Model

In a basic budgeting and spending model, you plan your household budget around the amount of income you expect to receive, and the offsetting amount you expect to spend on your living expenses. The goal is to come out ahead at the end of the year. You allocate a monthly spending allowance for all your known expenses such as food, clothing, shelter and transportation. If you are really wise, you allot a certain amount to those unexpected events and their related expenses, as well (i.e. you receive a speeding ticket, the washer breaks down, the roof starts to leak, etc.). Then, if you are being a good steward of your own household, you carefully manage your spending making sure to get the “best buy” when you shop by comparing price and quality to be confident you are getting the best value for the dollars you spend.

For example, suppose that within your transportation budget, you set aside a certain amount for your car payment and another amount for fuel and yet another amount for maintenance. After some careful planning, you realize that if you adjusted your budget to put slightly more in the car payment bucket for a vehicle that obtains much better mileage, you could reduce your monthly fuel budget sufficiently to more than offset the amount of the increase in the car payment. Furthermore, you discover that your maintenance expenses also are reduced because most of your service work is covered under the warranty. Such a decision would be fiscally responsible, right?

Federal Budget Process Escapes Logic

The whole federal budget process escapes logic, in my opinion. It was no problem for Congressional policy-makers to justify raids on the Social Security surplus (when there was one because the baby boomers were feeding it, not drawing upon it) leaving I.O.U.’s.  Was that considered fiscally responsible? Is that doing the right things, right?

Entitlements were created to spend the surplus with little regard for building incentives into the allocation process to insure that the best value would be attained for the dollar spent. There were no economic incentives to insure the quality of care that was delivered. In addition, projections of spending failed to consider the demands and needs of the baby-boomers who created the surplus when they would become the consumers. When the demand for the promised health care services began to exceed the supply of resources to pay for that promised care, who was held accountable?

The debate still hinges on doing the right things, right. It is well and good to spend money to care for those who need care when there is sufficient resources to meet that need, but just as in the household budget example, when times get tough you cut out some things you were able to enjoy when times were good. In this scenario, you are the one held accountable and the incentive is the money you have left at year-end.

Incentives for Accountability

Contrast that with the federal budget process. When spending for an entitlement created during a period of surplus creates a deficit, that entitlement may need to be adjusted, or income must be increased. In the short term, reduced spending is a quicker temporary fix than increasing income. Unfortunately, no elected official is going to get re-elected if he or she is perceived as voting to take something away, even if it is because a mistake was made in estimating the long term effects of the entitlement legislation. There is no incentive built into this model to reward the elected officials for doing the right things right. So we become saddled with an untenable situation in which spending exceeds income with no simple short term or long term resolution available.

Perhaps, my mind is oversimplifying the budgeting process. If you fail to manage your household budget, you are the one that gets hurt, along with any creditors who supported your spending beyond your means. But in the end, you and your creditors should pay the consequences for those decisions and no one else. Should the burden be placed on those who acted responsibly and did the right things, right? I think not.

I believe we need to hold our elected representatives to the same standard since they work for us. We need to instruct them to create incentives to get maximum value for the tax dollars spent for health care. We should demand that they not only do the right things, but that they should be done right!

Now, we have the most sweeping reform of the health care system since the creation of Medicare. Will it fulfill the promises that were made to gain the support necessary for passage? Will it really deliver affordable health care to more than 30 million Americans that were previously uninsured and reduce the escalating costs of health care at the same time?

During the last 30 years of my life, the cost of health care has continued to escalate at an alarming rate, taking an increasingly larger share of the gross domestic product of this country. The health care sector has become one of the largest consumers of our financial resources. Yet, today a growing portion of our population still cannot afford health care insurance. We must ask, “Why?”

Society of victims

At the risk of sounding callous, I believe the crux of the dilemma is the lack of accountability. I believe we have become a society of victims. “Whatever my current problem, it is not the result of anything I might have done, but it is the other guy’s fault.” A physician friend who served in the emergency room of a major metropolitan hospital related a chilling story that illustrates my point. A colleague had pulled duty in the ER every day for a week and thought it was strange that the same woman was sitting in the ER waiting area every day. Finally, his curiosity got the best of him and he went to her and asked what was wrong and why she was there. To his inquiry she reportedly replied, “I come here every day because one day one of you will make a mistake with me, and I will be rich.”

Whether the story is true or not is less the issue than the possibility that in this day and age it might be true. Many health care professionals have related stories to me regarding the expensive diagnostic tests they feel obligated to employ as part of their regimen in the event that they may be sued for malpractice. Furthermore, malpractice insurance, which has become a necessity for most care providers, sometimes exacerbates the problem because the insurance company will determine that the legal cost of defending the client may actually be more costly than agreeing to settle out of court. Do you suppose this fact has escaped those whose careers are built on this type of litigation? Is that why tort reform was noticeably missing from the new health reform law?

A new perspective

In my opinion, the solution to the problem of the rising cost of health care, coupled with the lack of health insurance protection, requires a new perspective on accountability. If you wish to benefit from some form of health insurance (be it Medicare, Medicaid, or a private insurer), you should enter into a contract with the benefit provider through which you include a set of advanced directives, drawn up with your input and from your family and legal advisors based on what you want as your end-of-life decision. This contract would be binding on you and your heirs and would help the insurance provider calculate the risk and the resultant premium necessary for them to provide the health benefit you required.

In short, you would be ultimately responsible for the amount and quality of care you wanted to have delivered to you and would have made the cessation of life support decisions in advance. Whether the contract was with an insurer or CMS, you would have made a decision and accepted accountability for the health and life decisions from that point forward. Then providers would be obligated to follow your directives. These decisions would also bind your heirs; if they were to file any legal action against the providers and/or the insurer in violation of this contract, all monies paid as health benefits by the insurer would be due and payable by the estate and heirs of the insured. I believe this strategy would preclude the large number of legal cases taken on contingency by those lawyers who anticipate an out-of-court settlement, since the suing party would be at risk for the benefits received to date. This strategy might also provide the proper platform for building a portable health benefits plan, as long as the advance directives do not change because they would be the variables that would alter the original risk pool for the beneficiary.

I’m certain that legal experts will find flaws in this concept, and since I am not qualified in that area, I make no claims for the thoroughness of the legal arguments. However, if each of us is unwilling to accept accountability for our health and end-of life decisions, then we will be doomed to hear the same rhetoric from now until someone else makes the end-of-life decision for us.