Rocky Mountain Action Coalition - Health Care, Pension Protection, Retiree Benefits

A few days ago, while awaiting the Supreme Court ruling on the Obama health-care law, I called a few doctor friends around the country. I asked them if they could tell me about current patients whose health had been affected by a lack of insurance.

“This falls under the ‘too numerous to count’ section,” a New Jersey internist said. A vascular surgeon in Indianapolis told me about a man in his fifties who’d had a large abdominal aortic aneurysm. Doctors knew for months that it was in danger of rupturing, but, since he wasn’t insured, his local private hospital wouldn’t fix it. Finally, it indeed began to rupture. Rupture is an often fatal development, but the man—in pain, with the blood flow to his legs gone— made it to an emergency room. Then the hospital put him in an ambulance to Indiana University, arguing the patient’s condition was “too complex.” My friend got him through, but he’s very lucky to be alive.

Another friend, an oncologist in Marietta, Ohio, told me about three women in their forties and fifties he was treating for advanced cervical cancer. A pap smear would have caught their cancers far sooner. But since they didn’t have insurance, their cancers were only recognized when they caused profuse bleeding. Now they required radiation and chemotherapy if they were to have a chance of surviving.

A colleague practicing family medicine in Las Vegas told me about his clinic’s cleaning lady, who came to him in desperation about her uninsured husband. He had a painful rectal fistula—a chronically draining infection. Surgery could cure the condition, but hospitals required him to pay for the procedure in advance, and, as unskilled laborers, the couple didn’t remotely have the money. He’d lived in misery for nine months so far. The couple had nowhere to turn. Neither did the doctor.

The litany of misery was as terrible as it was routine. An internist in my Ohio home town put me on the phone with an uninsured fifty-five-year-old tanning-salon owner who’d had a heart attack. She was now unable to pay the bills either for the cardiac stent that saved her or for the medications that she needs to prevent a second heart attack. Outside Philadelphia, there was a home-care nurse who’d lost her job when she developed partial paralysis as a result of a rare autoimmune complication from the flu shot that her employers required her to get. Then she lost the insurance that paid for the medications that had been reversing the condition.

Tens of millions of Americans don’t have access to basic care for prevention and treatment of illness. For decades, there’s been wide support for universal health care. Finally, with the passage of Obamacare, two years ago, we did something about it. The law would provide coverage to people like those my friends told me about, either through its expansion of Medicaid eligibility or through subsidized private insurance. Yet the country has remained convulsed by battles over whether we should implement this plan—or any particular plan. Now that the Supreme Court has largely upheld Obamacare, it’s tempting to imagine that the battles will subside. There’s reason to think that they won’t.

In 1973, two social scientists, Horst Rittel and Melvin Webber, defined a class of problems they called “wicked problems.” Wicked problems are messy, ill-defined, more complex than we fully grasp, and open to multiple interpretations based on one’s point of view. They are problems such as poverty, obesity, where to put a new highway—or how to make sure that people have adequate health care.

They are the opposite of “tame problems,” which can be crisply defined, completely understood, and fixed through technical solutions. Tame problems are not necessarily simple—they include putting a man on the moon or devising a cure for diabetes. They are, however, solvable. Solutions to tame problems either work or they don’t.

Solutions to wicked problems, by contrast, are only better or worse. Trade-offs are unavoidable. Unanticipated complications and benefits are both common. And opportunities to learn by trial and error are limited. You can’t try a new highway over here and over there; you put it where you put it. But new issues will arise. Adjustments will be required. No solution to a wicked problem is ever permanent or wholly satisfying, which leaves every solution open to easy polemical attack.

Two decades ago, the economist Albert O. Hirschman published a historical study of the opposition to basic social advances; “the rhetoric of intransigence,” as he put it. He examined the structure of arguments—in the eighteenth century, against expansions of basic rights, such as freedom of speech, thought, and religion; in the nineteenth century, against widening the range of citizens who could vote and participate in power; and, in the twentieth century, against government-assured minimal levels of education, economic well-being, and security. In each instance, the reforms aimed to address deep, pressing, and complex societal problems—wicked problems, as we might call them. The reforms pursued straightforward goals but required inherently complicated, difficult-to-explain means of implementation. And, in each instance, Hirschman observed, reactionary argument took three basic forms: perversity, futility, and jeopardy.

The perversity thesis is that the change will not just fail but make the problem worse. The futility thesis is that the change can’t make a meaningful difference, and therefore won’t be worth the effort. We hear both of these lines of argument against the health-reform law. By providing coverage for everyone, it will drive up the system’s costs and make health care unaffordable for even more people. And, some say, people can get care in emergency rooms and through charity, so the law won’t do any real good. In fact, a slew of evidence indicates otherwise—from the many countries that have both universal coverage (whether through government or private insurers) and lower per-capita costs; from the major improvements in health that uninsured Americans experience when they qualify for Medicare or Medicaid. The reality is unavoidable for anyone who notices what it’s like to be a person who develops illness without insurance.

The jeopardy thesis is that the change will impose unacceptable costs upon society—that what we lose will be far more precious than what we gain. This is the sharpest line of attack in the health-care debate. Obamacare’s critics argue that the law will destroy our economy, undermine health care for the elderly, dampen innovation, and infringe on our liberty. Hence their efforts to persuade governors not to coöperate with the program, Congress not to provide the funds authorized under the law, and the courts to throw it out all together.

The rhetoric of intransigence favors extreme predictions, which are seldom borne out. Troubles do arise, but the reforms evolve, as they must. Adjustments are made. And when people are determined to succeed, progress generally happens. The reality of trying to solve a wicked problem is that action of any kind presents risks and uncertainties. Yet so does inaction. All that leaders can do is weigh the possibilities as best they can and find a way forward.

They must want to make the effort, however. That’s a key factor. The major social advances of the past three centuries have required widening our sphere of moral inclusion. During the nineteenth century, for instance, most American leaders believed in a right to vote—but not in extending it to women and black people. Likewise, most American leaders, regardless of their politics, believe people’s health-care needs should be met; they’ve sought to insure that soldiers, the elderly, the disabled, and children, not to mention themselves, have access to good care. But many draw their circle of concern narrowly; they continue to resist the idea that people without adequate insurance are anything like these deserving others.

And so the fate of the uninsured remains embattled—vulnerable, in particular, to the maneuvering for political control. The partisan desire to deny the President success remains powerful. Many levers of obstruction remain; many hands will be reaching for them.

For all that, the Court’s ruling keeps alive the prospect that our society will expand its circle of moral concern to include the millions who now lack insurance. Beneath the intricacies of the Affordable Care Act lies a simple truth. We are all born frail and mortal—and, over the course of our lives, we all need health care. Americans are on our way to recognizing this. If we actually do—now, that would be wicked.

KHN Staff Writer

Jun 03, 2012

Angela Wenger calls herself a self-reliant “German Midwesterner” who hates to complain. But the Wisconsin mom was dismayed when husband Dan’s employer switched to an insurance plan that increased the family’s medical expenses tenfold.

Two years ago, the company put white-collar workers on a “high-deductible” plan similar to those typically bought by small businesses and individuals. The Wengers’ out-of-pocket medical costs, mainly for treating daughter Emma’s juvenile arthritis, soared from a few hundred dollars a year to $7,000, she says.

The employer: General Electric, one of the largest companies in the world. High-deductible health plans, once deemed a last-resort, “catastrophic” alternative for those with few resources, have gone Fortune 500.

“A number of employers have looked at this over the last couple of years, and they’ve said, ‘No, this isn’t the year, no this isn’t the year,’ ” said Mark Olson, a senior actuary at benefits consultant Towers Watson. For many, he says, this is the year.

“I don’t really see it stopping at this point,” he said.

Seventy percent of large companies recently surveyed by Olson’s firm said they’ll offer high-deductible insurance by 2013 combined with accounts that let patients buy medical services with pretax dollars, often funded by the employer. Nearly a fifth of the firms responding to the survey, conducted by Towers and the National Business Group on Health, a nonprofit alliance of large companies, said high-deductible coverage would be the only option in 2013.

Half of all workers at employer-sponsored health plans — including those working for the government — could be on high-deductible insurance within a decade, according to a new paper from Rand Corp.

Supporters say the plans can contain health costs. Patients who have to pay for care up front will take better care of themselves and shop more carefully, the thinking goes, seeking lower-cost providers or asking whether tests are necessary. High-deductible plans, known as “consumer-driven” insurance, may partly account for a recent slowing in the upward spiral of medical spending, analysts say, although reluctance to buy health services in a poor economy is also a factor.

Critics say high-deductible insurance is just a way for corporations to shift costs onto workers, especially those dealing with chronic illness such as diabetes and arthritis. Further, consumers aren’t prepared to shop for treatment because reliable information on price and quality is difficult, if not impossible, to find. High deductibles, they say, boost chances that patients will delay seeking care until ailments become acute. Still, high-deductible plans, long promoted by Republicans as a way to bring market forces to medicine, are here to stay no matter how the Supreme Court rules on the 2010 health-care law, experts say.

“There’s no question that high deductibles are spreading,” said Jonathan Oberlander, a health policy professor at the University of North Carolina. “That’s a pretty significant trend, and I don’t expect it’s going to slow up anytime soon. Employers like it because they’re providing less coverage. If they can relabel it as consumer-driven then it even sounds good.”

Deductibles are expenses paid by employees and families each year before their medical insurance kicks in. In the past, they’ve typically been a few hundred dollars. Definitions vary, but deductibles for consumer-driven plans are usually at least $1,000 for individuals and $2,000 for families. This year, banking company JPMorgan Chase narrowed its choice for most employees to two medical plans, one with a $3,000 deductible and another with a $5,000 deductible, both for family coverage, plan documents show. The company declined to comment on the switch.

Eager to contain costs, Chrysler introduced a preferred-provider plan with family deductibles as high as $3,400 for salaried workers, said health-care director Kathleen Neal in an April presentation to the World Health Care Congress. The deductible falls to $1,000 for in-network care if employees receive a physical and take other steps such as completing an online health assessment.

“Chrysler really pushed us into it,” Daniel Loepp, chief executive of Blue Cross Blue Shield of Michigan, said of the insurer’s expansion of the high-deductible menu. “We had to meet the demand.”

Big companies that have shifted all or most employees to high-deductible coverage include financial firms Wells Fargo and American Express and grocer Whole Foods. All U.S. workers at building materials giant Saint-Gobain will be on a high-deductible plan starting next year, benefits manager Natasha Romulus said.

This year, General Electric moved hourly workers to high-deductible coverage after imposing it on salaried employees two years ago.

“I won’t characterize it as a change people were delighted by,” said Ginny Proestakes, GE’s director of health benefits. But, she said, “With the tough economic environment, we felt it was a wake-up call for the industry and GE to tackle health care in a different way.”

GE has aggressively promoted the plan’s free preventive care and health coaching while urging employees to comparison shop using a “treatment cost calculator,” she said.

Among high-deductible plans’ advantages: For both companies and workers, premiums are substantially lower than for traditional coverage. Employers often use money saved on premiums to fund tax-free health savings accounts and similar arrangements to help workers pay for deductibles.

Even before the Affordable Care Act required all plans to pay for preventive care, high-deductible insurance typically covered 100 percent of the cost of physicals and screenings, benefits experts say. Like many companies, GE contributes company money to the tax-free accounts — $500 for individuals, $1,000 for families — for employees to pay some of the deductible.

The idea is for people to receive the preventive care they need and seek lower-cost treatment when they get sick, knowing their money is first in line to be spent.

Republicans favoring a bigger consumer stake in medical decisions gained congressional approval in 2003 for the health savings account, an expanded way for companies to set up tax-free savings pools for patients to cover out-of-pocket costs. But only in recent years have such accounts, usually paired with high-deductible plans, taken off.

The accounts “empower workers with more freedom to make their own health decisions that best fit their families’ needs,” said Sen. Jim DeMint (R-S.C.), a longtime supporter of consumer-driven coverage. “These plans allow Americans to become savvy health-care consumers, saving money and increasing quality.”

Another Rand study, this one published last year, showed that total medical spending on families who switched to high-deductible plans was 14 percent lower than for families on conventional plans. But the high-deductible families also cut back on preventive care — perhaps because members didn’t realize the deductible didn’t apply to such visits, the study found.

“There’s big concern about how these costs are getting cut, and not just for humanitarian reasons,” said Carnegie Mellon professor Amelia Haviland, one of the study’s authors. “If they are cut in ways that decrease people’s health, that can lead to greater cost down the line.”

For severely ill patients or families coping with chronic illness, switching to high-deductible insurance can be the equivalent of a large pay cut.

“I’ve always hated the term consumer-driven health plan,” said Oberlander, the health policy professor. “If we want to describe them accurately, they should be called employer-driven health plans for less comprehensive health insurance.”

Emma Wenger, 11, was diagnosed with rheumatoid arthritis when she was 3. The disease, which can cause swollen joints, delayed growth and even blindness, requires frequent MRI scans and drug infusions costing tens of thousands of dollars.

The family, who lives in Pewaukee, Wis., has surpassed its high deductible and hit the $7,000 out-of-pocket maximum shortly after the beginning of each year, Angela Wenger said. They adjust by driving older cars, skipping vacations and skimping on retirement saving, she said.

“The thing that worries me is if we went to $7,000 from virtually nothing, where is it going?” she said. “Because there will be a high-water mark for everyone where you say, ‘We just can’t afford it anymore.’ ”

Unlike conventional plans, in which out-of-pocket limits can be vague or flexible, many high-deductible plans put strict caps on out-of-pocket spending for in-network care, including for prescription drugs. That may be better for the chronically ill than coverage with no cap in which they never know what annual costs will be, said Roy Ramthun, a benefits consultant who worked on health policy in President George W. Bush’s administration.

“What most people are forgetting is that these plans offer true catastrophic coverage on the back end,” he said. “That’s got to be the best possible option for people who have chronic conditions.”

The burden for patients in high-deductible plans is hard to measure. Out-of-pocket costs as a portion of national health spending have been declining since the 1960s, but the latest government data are from 2010. As consumer-driven insurance gains popularity among employers, however, analysts say they wouldn’t be surprised to see that five-decade trend reverse itself. In the Kaiser Family Foundation’s 2011 employer survey, 17 percent of the covered workers were enrolled in a high-deductible plan, up from 4 percent in 2006. (Kaiser Health News is an editorially independent program of the foundation.)

The Wengers see the trend firsthand. Dan Wenger got a job at another large company in mid-2010. There, too, consumer-driven health plans — their coverage has a multi-thousand dollar deductible and a $7,000 out-of-pocket cap —were the only choice.

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