Health Care as a Public Good

By Walter Tsou, M.D., M.P.H. Walter Tsou, M.D., M.P.H., is medical director of the Montgomery County Health Department.
Published October 1997

The American health care system is in a funk. In the ten years since the founding of Physician’s News Digest, our
patchwork network of providers, payers and patients is fraying at the edges and precariously close to ripping into
pieces. Left like an anchorless ship cast out in an unfriendly sea, the crew is scrambling around trying to hold on to
driftwood and dinghies. Our system is adrift, tossed around by heavy winds from Wall Street, government and insurers.
It is a system so convoluted that experts cannot easily explain it, much less defend it. Unclear of our own direction,
the health care system has been handed over to entrepreneurs who have distorted health care from a public good to a
market commodity.

As a society, we have and will continue to pay a heavy price for this sea change. It is witnessed daily in the ERs of
hospitals straining under the burden of the uninsured. It is felt by patients in need of medical care who are afraid to
seek medical advice because of cost. It is felt by physicians who are faced daily with phone calls and paperwork to
defend providing quality medical care. Most prominently, it is felt by the incessant drive for profits wrung out of
diminishing reimbursements.

There are several perspectives on how physicians should respond to these sweeping changes. All of these perspectives
share one common theme: "United we stand, divided we will surely fall." The debate centers on what system we should
rally around. Some physicians believe that by unionizing or forming a corporation, they can use their thousand dollar
slingshot to slay a multibillion dollar Goliath. Sadly, they cannot. Equally disturbing is that unions or corporations
simply accept the market-based approach to health care, trying to fight dragons with toothpicks. However, there is one
force, big enough, strong enough to fight this dragon and return health care to a public good again.

A properly financed, universal health insurance program offers the best opportunity to provide what Americans want in
their health care system, namely high quality, affordable health care for all Americans. Not surprisingly, it is
something that most physicians also want and would benefit from.

Why would physicians, in the name of organized medicine, be willing to accept something that they have fought against
for 80 years? It is because the current market approach has created artificial divisions between health care systems
turning former colleagues into enemies. It is because physicians have been asked to practice risk aversion and
fragmentary care. It is because the cost constraints of the current bureaucratic system forces physicians to choose
between the lesser of inadequate choices. It is because the increasing loss of employment-based health insurance
threatens to destroy families and even neighborhoods. Physicians are realizing that either we unite against these
market forces or we will wither into irrelevance.

There are various versions of how people interpret national health insurance. My vision would separate the delivery of
health care from the role of financing. Our current system puts the cart before the horse. Insurers determine how much
they want to finance and then force providers to decide what can be provided on these dollars.

Let’s boldly propose something logical. Let’s come to an agreement on what we want to provide and to whom, and then
find a way to finance it.

By defining the delivery system first, we have a better opportunity to create a more user-friendly system. I contend
that given this directive, we would support an extensive range of services made available to all Americans which
reflects extensive community-based, primary and secondary levels of care. Tertiary referral centers would be designed
around academic medical centers and would also be located within reasonable geographic access for all Americans. The
transition from primary, secondary and tertiary levels of care would be logically organized to ensure a comprehensive
range of services. Transportation and communication links would be explicitly funded. We would finally recognize and
fund what we have ignored for too long: long-term, respite, and nursing home care.

The foundation for all medical care would be based on public health planning. Health policy would reflect health
education, nutrition, and regulations which support healthy lifestyles and preventive screenings. Registries would be
created where all immunizations and diseases would be reported under a common regional database. All communicable
diseases would be reported.

Paperwork would actually have value. Millions of hours have been spent collecting information for private insurers.
Unlike our current system where paperwork is based on the endless submission of financial justifications, it could
instead be used to better describe to whom and what we deliver in medical services (immunizations, hospitalizations,
etc.) We can also use this data to track more important questions such as emerging diseases in a community. New
guidelines based on clinical outcomes could be developed regionally, leading to better use of community resources.

Financing of health care would be based on the concept of public good. If all citizens receive benefits, then they all
contribute based on their own ability to pay through income taxes. Funds would pay for all medically acceptable
inpatient and outpatient services, both physical and mental. Over the lifespan of an age cohort, money saved when young
and healthy would fund care when older.

Physicians would be paid on salary or through physician-negotiated capitation. The latter would be a novel concept, but
would allow physicians to adjust their capitation based on severity of illness and the success of their clinical
outcomes.

How could we fund national health insurance at a reasonable price? HR 1200, a single payer, national health insurance
bill introduced by Rep. Jim McDermott (D- WA), who is one of three physicians in Congress, funds his bill with an 8.7
percent payroll tax and a 2.2 percent of taxable income tax. A tobacco tax equal to $0.45 per cigarette pack is also
imposed. This is far cheaper than most individuals and employers pay in private insurance premiums. Already, we have
the financial resources to implement this with current dollars spent on health care, since we now spend 40 percent more
per capita than any other nation on earth.

To ensure that the system remains dynamic, clinical and scientific research would be funded through academic centers
and community-based clinical trials. As discoveries are made, they would be incorporated into the medical benefits
package. A variety of treatment options would be offered, unless one option is found to be clearly superior. Medical
education would be explicitly funded and new discoveries incorporated into the curriculum. Teaching hospitals would be
reimbursed to recognize their role in teaching medical residents and students.

Most physicians will be pleasantly surprised at how much easier it is to practice under a properly financed national
health insurance system. Most billing specialists note that Medicare, our closest analogy to a national health
insurance program, is by far the easiest to bill. One address pays all bills. In fact, under such a system we can
promise payment within 30 days and reconcile any differences in future payments. Money saved in billing costs would be
used to either reduce taxes or enhance medical benefits.

Second, physicians or hospitals should experience far less micromanagement or medical justification for their actions
as long as their services are within the global budget for all physician services. Physicians can choose any lab,
specialist or drug that they feel is appropriate for care as long as it could be paid within their own capitation.
Further, they could be rewarded with enhanced reimbursement for favorable clinical outcomes.

Third, malpractice premiums should decrease dramatically for two reasons. First, because our current system does not
assure universal coverage for all Americans, we must include future health care costs into any malpractice settlement.
However, under universal coverage, future health care costs would be assumed by the health care system. Second, because
money does not change hands between patient and physician, physicians are seen more as patient advocates. In Canada,
malpractice premiums are 80-90 percent cheaper.

Fourth, everyone who gets services, pays. Under universal coverage, charity care becomes unnecessary ensuring a more
predictable revenue stream. For inner city and rural health care institutions, leveling the playing field for
reimbursement ensures a more rational use and distribution of health resources.

What will be the steps for creating a stronger role of government financing in America? There have been several early
steps. First, the five year budget bill included the first major expansion in government financing since
Medicare/Medicaid. Recognizing the moral imperative of access to health care for children, a Republican Congress funded
a $24 billion dollar expansion of children’s health insurance. Second, some form of campaign finance reform will
diminish the influence of business interests over politicians. And third, more states will join the 20 current states
who have passed some form of managed care bill of rights.

But the next major change has to come from physicians. Already, in December 1997, a petition called the "Call To
Action," signed by thousands of doctors nationwide, will be published in JAMA. It will ask for several action steps,
including a moratorium on further for-profit conversions in medical organizations and universal coverage for all
Americans.

We have been more united on what we dislike about the health care system than on what we are in favor of. And by being
divided, we have been essentially neutralized in the debate about health care reform.

It is difficult for physicians to embrace what organized medicine has fought against for years. But the current
direction of market driven health care will ultimately destroy humane medical practice. The market commodity approach
to medicine has distorted the very essence of why we chose to go into medicine. With us or without us, the demand for
government intervention will grow. If we as physicians continue to remain opposed to government financing, we will
become mere pawns as the market auctions off our services to the lowest bidder. But if we accept a wider role for
government financing now, we have a chance to redirect health care as a public good for all Americans. Nothing better
guarantees employment for physicians than 42 million newly reenfranchised citizens who have been excluded by an unfair
system. And nothing that we as a nation can do would be fairer than to create an equitable health system where health
is not a commodity but a public good.