Health Care Reform
Price of Paradise · Hawaii Public Radio · aired 1994-08-21
Guests: Frank Abou-Sayf (Professor of Business, University of Hawaii); George Bussey (Professor, UH Medical School)
Duration: 1:01:06

[00:00:00] Randall Roth: Aloha. This is Randy Rhodes, host of the Price of Paradise radio show. Congress currently is debating the need for major reform to our national healthcare system. Governor Cayetano and President Clinton have described Hawaii as a model for the rest of the nation, but many others disagree. With me in the studio today are two local experts on healthcare who have promised to help me understand all of this.
[00:00:24] Randall Roth: Dr. George Bussey is a professor of psychiatry at the John A. Burns School of Medicine, a recent graduate of the William S. Richardson School of Law, medical director of Managed Care Management Inc, former president of the Hawaii Psychiatric Medical Association, and a private practitioner in psychiatry and chemical dependency treatment. We can only wonder what he does with his free time. My other guest, Dr. Frank Abusaid is a professor of business administration at the University of Hawaii and is in charge of Kapi'olani Community College's institutional research for the University of Hawaii.
[00:00:58] Randall Roth: Formerly, he was chief statistician for HMSA and director of research and development for Kaiser Permanente. He is a local and international consultant in healthcare financing and medical economics. George, Frank, welcome to the Price of Paradise radio show.
[00:01:14] George Bussey: Thank you.
[00:01:15] Randall Roth: Is our national healthcare system in crisis? George?
[00:01:20] George Bussey: I think that crisis might be too strong a word for how it's functioning today. But I think if you're at all concerned about how things are going to be over the next five to 10 years, then crisis is not an exaggeration.
[00:01:33] Randall Roth: Frank, you agree?
[00:01:34] Frank Abou-Sayf: I agree. I think it's going to be very soon in a crisis. I think part of it is self-inflicted because of things that we are not doing well, and some other reasons are just demographic. The population is aging. Some other reasons are even beyond our control, like technological advances and the cost that comes along with it.
[00:01:52] Randall Roth: Now you say it will be in crisis soon. How will we know if it's in crisis? What what will go wrong?
[00:01:59] Frank Abou-Sayf: I think basically the cost will skyrocket as it's been doing lately, even though in the last two years the cost increases have slowed down, I believe this is only temporary, and cost will continue to increase much faster than increasing cost in other commodities.
[00:02:12] Randall Roth: Now, costs are very, very high, and yet George, I'm under the impression that anyone who really needs healthcare services can get them. Is that wrong?
[00:02:23] George Bussey: It's it's right and it's wrong, in the sense that if if today I didn't have health insurance, and all of a sudden I develop symptoms of a heart attack, you could take me to the emergency room, and the emergency room would be obligated to provide the appropriate services, admit me to the hospital, if I needed that, and take care of me in the hospital. If on the other hand, I had an upset stomach or something else that wasn't an emergency, and I didn't have health insurance, and I tried to get care, I might be turned away from a doctor's office or from the hospital.
[00:02:59] Randall Roth: What what are the basic changes that they're talking about making back in Washington. I know this started out with the so-called Clinton proposals, and I read in the newspaper about the the Mitchell bill, and the Gephardt bill, and the Dole bill, and so there are all sorts of possibilities, but can you describe just generally what it is that in Washington, they're talking about changing?
[00:03:19] George Bussey: Yeah, and I think to first understand that, you have to understand that the rest of the country is very different from Hawaii. The rest of the country does not have employer-mandated health insurance coverage like the state of Hawaii.
[00:03:32] Randall Roth: Let's let's come back in a few minutes and talk about what's unique to Hawaii, but on a national level, what is it that's wrong, what is it that they're talking about changing in Washington?
[00:03:42] George Bussey: Well, what they're talking about changing in Washington is trying to establish some way that everybody has access to complete health insurance coverage. And they're talking about doing that through some form of mandate to employers to provide health insurance for their employees, and for the employers to pick up some portion of that coverage.
[00:04:06] Randall Roth: So, really, are we talking about changing the system of healthcare insurance as opposed to the system of healthcare, or are they the same thing?
[00:04:13] George Bussey: I think they're mainly right now talking about insurance.
[00:04:18] Randall Roth: Okay. Frank, any thoughts on what's going on in Washington?
[00:04:21] Frank Abou-Sayf: Yes, I can give you in a few minutes a rundown of what the Clinton plan is, the Gephardt plan is, and the Mitchell plan is.
[00:04:28] Randall Roth: Let's have that rundown, and then we'll take a call.
[00:04:31] Frank Abou-Sayf: Okay. Basically, the Clinton plan has been trying to control costs through four different mechanisms. The first one is what they call global caps, controlling the cost that they give to states. And [unintelligible — audio glitch] idea is we're not going to control how much you pay a physician. We're going to control how much we give you as a state and then you decide how much you're going to pay everybody. This is going to be done through what they call a national board, a board of experts in Washington DC, who will determine how much every state will get.
[00:05:01] Randall Roth: So the the market won't control, a group of of folks in Washington won't control.
[00:05:05] Frank Abou-Sayf: A group of folks in Washington who know everything about everything and who are experts in this industry.
[00:05:10] Randall Roth: And you're not the least bit critical of of that aspect, are you? Go ahead, Frank.
[00:05:15] Frank Abou-Sayf: The second mechanism is what they call managed competition, which, in my opinion, is an oxymoron. First of all, the only way competition is defined in the Clinton plan is in at the point of selecting the health plans. Otherwise, there is no competition. Then this competition is going to be managed by what they call a health alliance. The health alliance advises the groups about what plan to purchase, determines the prices and so on.
[00:05:43] Randall Roth: And and I assume from the tone you tone of your voice, you think there needs to be some level of competition in order to keep efficiency in the system?
[00:05:51] Frank Abou-Sayf: Of course there needs to be a lot of competition.
[00:05:53] Randall Roth: If I can interrupt for just a second. I think one of the things that that the Clinton plan was trying to address was a concern that physicians have that with large amounts of competition, multiple insurance players, a physician's office may have as many as 10 or 20 different forms to fill out, different addresses to send things to, different requirements before services can be provided. I think part of the idea was, well, let's have the competition, but let's get it down to three or four players so that a doctor's office isn't overwhelmed with 20 different sets of rules that it has to follow. Okay? Right?
[00:06:34] Frank Abou-Sayf: Okay, the third mechanism is employer mandates. Since this is a noble cause and since the federal government cannot afford to pay for it, then someone else should, and they determined it was employers. They also determined this was possible because Hawaii did it, and was successful at it.
[00:07:01] Randall Roth: Okay, and we'll talk later about whether or not Hawaii has been successful, but we have had employer mandates for 20 years, and the Clinton proposal would include employer mandates nationally.
[00:07:02] Frank Abou-Sayf: Correct.
[00:07:02] Randall Roth: Okay.
[00:07:03] Frank Abou-Sayf: The fourth and last approach is managed care. Managed care is in very brief a way to allow physicians to get together and to be able to participate in the cost of delivering healthcare in one of many forms.
[00:07:18] Randall Roth: Now George, I I know from your resume that you're the director of Managed Care Management Inc. Uh, I assume that has something to do with managed care?
[00:07:28] George Bussey: Yes, it does. Can can you tell me a little bit more what that is? And then we want to um let Frank finish up and we'll take a call.
[00:07:35] George Bussey: Um in terms of of what it is I'm doing, I'm medical director for Managed Care Management Inc. We basically operate um the uh Queens Healthcare Plan and Island Care. Two different um insurance type programs that exist in the state. Island Care is an HMO, um which is kind of like a Kaiser uh type organization. And the Queen's Healthcare Plan is what's called a preferred provider organization. That's an organization um jointly formed by Queen's Hospital and uh physicians uh in the state uh to help try to control costs and provide uh care to patients.
[00:08:18] Randall Roth: And this is the sort of thing that the Clinton proposal would more or less impose nationally?
[00:08:24] George Bussey: It those two entities represent two of the three options that would exist under the Clinton plan: an HMO, a preferred provider type organization, and then just regular fee for service medicine with no cost controls.
[00:08:37] Randall Roth: I see, and I assume the term managed care suggests that there's some attempt by individuals to oversee the quality and the costs and all that sort of thing and monitor what's going on in the marketplace. Is that right?
[00:09:00] George Bussey: Exactly.
[00:09:00] Randall Roth: Okay. Frank, any more on the Clinton proposal?
[00:09:04] Frank Abou-Sayf: What about these other bills very quickly? How do how do they differ?
[00:09:07] Frank Abou-Sayf: Okay, the other two bills are majority leader Gephart's plan and majority leader Mitchell's plan. They are the two to defeat right now, the two to beat. Gephart's plan, the basic difference is that it establishes a new program called Medicare Part C. And this would be for employed unemployed people and for workers of small companies. And the idea is, Part C is going to be so efficient and so inexpensive that all private companies, private insurance company would want to compete for it. And uh, the Mitchell plan is a little what's specific about it is that it claims that employer mandate is going to be voluntary. It's not going to be a mandate anymore. In the beginning, it's going to be voluntary. If by the year 2000, 95% or less of the people are covered, then we're going to impose some new restrictions, okay?
[00:10:10] Randall Roth: Definitely. I think it's all very much into partisan politics rather than the welfare of the country. Okay. This is the Price of Paradise Radio Show. We are live and our phone lines are open. Just call 955-8821 and we'll have you on the air in no time. We have a caller from Makiki. Bobby, you're on the air.
[00:10:28] Speaker 2: Thank you. I have an insurance question. I gave my son a kidney 21 years ago. Now he's thinking of changing jobs and is finding that his condition severely restricts his employment opportunities, due to prior condition exclusions, common, very common in medical insurance policies, and lack of insurance portability. He can't change insurance.
[00:10:56] Randall Roth: Is he here in Hawaii?
[00:10:57] Speaker 2: Uh, he's in California but uh he's back and forth. We have checked with uh three different insurance companies and with the Medicare people. Uh, it all they all have this uh two-year exemption. And he's no longer covered under Medicare. They do not cover transplant patients after two years.
[00:11:23] Randall Roth: Let me ask Dr. George Bussey um to explain a little bit more what's going on and tell me whether that would happen in Hawaii or not.
[00:11:30] George Bussey: I guess that's what I wanted to ask Bobby. Um these insurance companies you check with, they all been California-based companies or are you looking at things here in Hawaii?
[00:11:39] Speaker 2: We looked at HMSA and Kaiser. He is presently under a Kaiser program, a group policy in California.
[00:11:48] Randall Roth: Okay. Um I'm not real sure exactly how that would work out in Hawaii because from the plans I work with, my understanding is that uh when you come on as part of a a large employer group, most of those uh preexisting condition exclusions are not applicable. So I think what your uh son is experiencing is something that is uh more common on the mainland than we would find here in Hawaii.
[00:12:13] Speaker 2: It it would be here and what about of a single, if he goes out uh to do work that is does not include a group policy, he's off.
[00:12:30] Randall Roth: Wait, hang on just a second. Frank had something to stay on the line, Bobby. Frank has some.
[00:12:35] Frank Abou-Sayf: Yes, Bobby, I think that the only time when in Hawaii, he would not be covered is if he were to leave a group plan and join an individual plan, which seems to be what you're saying.
[00:12:44] Speaker 2: Correct.
[00:12:44] Randall Roth: Yeah. That's that's my understanding as well. So coverage is important, and it sounds as though it's very important. He needs to stay in a group plan. He needs to stay in a group plan. And if I may add quickly, Bobby, these two issues that you have uh mentioned are the major two issues that may be the only thing that is even common with all the plans that are talked about in Washington, and this probably transpires into scaring people away from not being not having universal coverage, but these are really the two most important problems.
[00:13:13] Speaker 2: Yes. Well, I thank you very much.
[00:13:15] Randall Roth: Thank you, Bobby. Thank you. We have another caller. David from the Big Island. David, you're on the air.
[00:13:20] Speaker 2: Yeah, good morning, Randy. Good morning. Um I'm interested to see that one of your guests is both a lawyer and a doctor.
[00:13:26] Randall Roth: I'm I'm going to ask him about that in a little bit to see whether his doctor friends have uh ostracized him yet.
[00:13:33] Speaker 2: I I in all the debate about the our medical per, you know, um problems, I I haven't heard any talk about the the major problem and that's the the legal problem. I think that our major our medical expenses are so high, simply because of [unintelligible — audio glitch] sue-happy uh nature of this country. Uh lawyers doctors have to carry tremendous amounts of of malpractice insurance, and every time they prescribe something, they they're looking not at the patient's best interest but to to protect themselves from future lawsuits.
[00:14:08] Randall Roth: David, stay stay on the line, and I just want to let you know that that you helped me win a bet. I said within 15 minutes, the whole thing would be blamed on the lawyers. And that's not to say that I disagree with you, but uh George Bussey, you're a physician and a lawyer, to what extent is is the current situation, which may or may not be in crisis, if it isn't it's certainly headed in the wrong direction, to what extent is it the fault of our legal system?
[00:14:33] George Bussey: I really don't think that we can hang all of this on the lawyers. I think that uh it does contribute to some small degree to the problems that we have. Identifying precisely how big a portion of the problem it is is difficult because a lot of what allegedly happens is the defensive medicine, the additional tests, the extra days in the hospital, and to really identify how often that happens because we're afraid of being sued versus just, oh well, I want one more piece of information. It's really hard to quantify. The flip side of it is that a recent study and I think it was done through Harvard University, indicates that in reality, far more malpractice goes undetected and uncompensated than um than we would think. Probably um a multitude more cases of malpractice are missed than are currently being brought to the attention. We might have some issues about some of the frivolous kinds of cases that get get brought, but a lot of serious malpractice is not even ever addressed.
[00:15:43] Frank Abou-Sayf: Yeah, David, I I I agree with what Joe says. I'd like to add one more thing. It's definite that the the litigation has a major impact on the increasing cost, but it's not the major one. However, many physicians use this as an excuse to increase the quantity of services, probably those that are unneeded, and really it's because they have a financial stake at it. So that's another side of it.
[00:16:10] Randall Roth: David, what do you think?
[00:16:11] Speaker 2: Well, it's interesting because I I thought it was more of a major problem than your guest seems to think it is. But um
[00:16:17] Frank Abou-Sayf: Uh there are more major problems that probably are so simplistic that you may not have thought of them and we may get the opportunity to talk about them in this show.
[00:16:25] Randall Roth: I think the one exception where um David may be correct, there are certain specialties or subspecialties that really do pay a disproportionate amount in terms of malpractice uh premiums. Uh some of the surgical subspecialties and obstetrics, gynecology, both have very heavy uh burdens. Um OB GYN I think, because everyone expects a perfect baby, and if it's not, it's the doctor's fault.
[00:17:15] Randall Roth: Frank, you mentioned something about the doctors having uh a personal stake in all of this. And uh I know in a conversation we had a long time ago, you said in in some ways our system amounts to people uh holding out a stack of money in front of a physician and saying, take whatever you want to take. Can you explain a little bit more about that?
[00:17:33] Frank Abou-Sayf: Yes, uh the most common method of reimbursing physicians today in the country probably is what is known as fee for service. And it's I suppose in Hawaii it's still the most common one too. Basically this amounts to paying a physician per service. And so what happens is, because we cannot, we have been trying very hard to control the number of services, but we cannot. Physicians are really those who determine the number of services. What happens is physicians get really uh paid based on the more frequent the service, the more the more often they get paid. So what they do is, some of them tend to perhaps offer more services than are needed. And also they try to attach to the basic service uh ancillary services like maybe giving few more laboratory tests than are needed and maybe sending these uh patients to test to laboratories where they have a financial interest and sometimes using again the pretext of protecting themselves against malpractice.
[00:19:00] Speaker 1: feel that they maybe are a little more entitled to do this is the reimbursement system that they are getting today. Today with HMSA, HMSA is capping physicians' payments substantially. There are some some specialties that are getting perhaps half of what they build for.
[00:19:15] Randall Roth: Oh, so they have to provide more services since they can't charge enough per service. One our physician friend has been making notes over here frantically. I think George has something to say.
[00:19:25] George Bussey: Well, I I think Frank is raising a very good point that, um, we really are in an industry that gets paid by piecework, and that's not the way to run an efficient system. And that takes me back to one of the proposals in the Clinton, um, uh, health plan that, um, I think looked at from a slightly different perspective could be very helpful. When Frank was talking about global caps, what he's really talking about there is a concept called capitation where you give some entity, some group a fixed amount of money, and with that amount of money, they're responsible for providing for all of the health care needs of a set population.
[00:20:04] George Bussey: This is basically the way Kaiser works, and it's the way a lot of HMOs in California and Minnesota and Massachusetts work. When you do that, a physician or a group of physicians has a set amount of money. He's no, he or she is no longer rewarded for bringing the patient in for an extra office visit, or for ordering two lab tests that are not needed. In fact, it penalizes the physician for behaving in that fashion.
[00:20:32] George Bussey: Um, the primary caution that one has to use with capitation is obviously the same thing that can drive someone to order too many tests or have too many visits in a fee-for-service mechanism works in reverse for capitation, which is, I'll just take my capitation fee and not see anybody, tell them all to take two aspirin and call me next year.
[00:20:53] Randall Roth: You look just fine to me. You know, go home.
[00:20:56] George Bussey: Exactly. So when you have those kinds of of capitation systems, you also have to build in a lot of quality control mechanisms to make sure that patients are getting the care that they deserve and that your outcomes are as good or better than you'd find in a fee-for-service type system.
[00:21:14] Randall Roth: And quality control mechanisms perhaps translates into a bureaucracy. I mean, can it be done in a simple efficient way?
[00:21:21] George Bussey: Well, it you can translate it into a bureaucracy with with all kinds of of people out there, or if you can identify some very clear, uh, outcomes that you want, you can actually measure them fairly well. And I see Frank nodding his head up and down so he might have some thoughts on how that's done.
[00:21:38] Randall Roth: Go for it, Frank.
[00:21:39] Frank Abou-Sayf: Well on quality control, I think we are lucky in Hawaii that we have perhaps very high quality, and we have less problems in this respect than the rest of the nation.
[00:21:46] Randall Roth: How do we know that?
[00:21:49] Frank Abou-Sayf: That's a good question. Uh, I can tell you only from an insider perspective. I can tell you by working at both HMSA and Kaiser, how honestly both both companies try very hard to put quality as the first goal before cost savings, before anything. And you you're raising up a very good question, Randy. How can we know that? The only way to know that is to measure outcomes. Today, healthcare has probably one of the most problematic data in the world. Healthcare as an industry, it is extremely hard to measure anything in healthcare, let alone outcomes. So we cannot really measure, uh, objectively quality and how it's being provided.
[00:22:30] George Bussey: One of the one of the things that is happening, though, is that we are developing, uh, some at least nationally standardized sets of information for, uh, insurance companies and healthcare providers to collect. So at least we hope our data is measuring what we wanted to, but at least the measurements should be consistent across the country now. Okay.
[00:22:54] Randall Roth: You're listening to the Price of Paradise radio show. We are live and our phone lines are open. The number is 955-8821 and neighbor islanders are invited to call collect. The name number again, 955-8821. Let's talk about Hawaii. We all know at least generally that Hawaii's healthcare system is is somehow different from that of the rest of the nation. And I'm under the impression that we've been relatively successful. And Frank, I think healthcare either costs less per capita here or we spend a smaller percentage of our total state product here, or in some way, people have suggested that that cost wise, we've been successful in Hawaii. Is that accurate?
[00:23:40] Frank Abou-Sayf: Healthcare costs less in Hawaii than it does in the rest of the nation. Now the question is, is it the chicken or the egg? Some people claim that healthcare costs less because people's lifestyles are healthier and because we have less fewer problems with dishonest providers. Other people claim it's because we have a near comprehensive coverage, and because we have near universal coverage that healthcare costs less. This is the major issue.
[00:24:08] George Bussey: So that that camp would say because almost everyone has insurance or access to um, uh, preventive type steps that they go in and they get things taken care of because before they become a big expensive problem.
[00:24:20] Frank Abou-Sayf: That is correct.
[00:24:21] Randall Roth: George, any thoughts on that?
[00:24:23] George Bussey: Well, I think that, um, I think we do spend less money here. I think that a lot of the the non health insurance arguments, I.E., demographics and, um, ethnic groups, etc., uh, when examined really don't pan out as explanations for why we have, um, uh, lower costs here. What I find interesting about it is that when you look at the way Hawaii works, we essentially have two large insurers, HMSA and Kaiser. Uh, that sounds a lot like managed competition to me, decreased number of players. We have employer mandates, that sounds a lot like what the Clinton plan was talking about.
[00:25:07] George Bussey: Kaiser is certainly a managed care entity, HMSA is moving more and more in that direction as it tries to control costs.
[00:25:16] Randall Roth: So in a way we are the model for what Clinton has been trying to do nationally?
[00:25:21] George Bussey: Certainly that's what, uh, John Lewis tries to sell to the rest of the country.
[00:25:25] Randall Roth: You're smiling, you don't you don't buy that?
[00:25:27] George Bussey: Well, I think that I think that people overstate the, um, uh, the universality of coverage here in in Hawaii. Uh, for a long time people were claiming that because we had, uh, several percentage of, uh, of the population covered by, uh, the state health insurance program, it was as if they had the same quality of insurance coverage as an HMSA or a Kaiser, uh, plan member did. And in reality they didn't. They got three hospital days a year covered, I think six outpatient visits. It was a very minimalist kind of coverage.
[00:25:58] Randall Roth: Insurance insurance in name only.
[00:26:01] George Bussey: Well, slightly more than name only, but not much.
[00:26:03] Randall Roth: Okay. We have a number of people on the line. Let's start with Roy from Honolulu. Roy, you're on the air.
[00:26:09] Speaker 2: Yeah, hi. Uh, I would like to know Dr. Abu-Safe's opinion on the proposals that are currently being debated in Congress with respect to resolving the healthcare crisis and whether he has an idea that may be different or maybe more appealing to the public in general.
[00:26:26] Randall Roth: Okay, Frank. Frank, I know you summarized those earlier, what's what's your own prescription for solving our ills?
[00:26:33] Frank Abou-Sayf: Okay, to maybe to answer Roy's first question, which is what my opinion is of what's happening in Congress. I think Congress has things reversed. I think, uh, the idea, the main objective should not be universal coverage. My understanding is that today about 84% of the people in Hawaii are covered and the remainder, the remaining people like Randy has been mentioning, can get can get coverage. It's not an issue of dying on the street without being able to be helped medically.
[00:27:03] Frank Abou-Sayf: I think [unintelligible — audio glitch] what we should do is control, try to put our efforts in controlling costs rather than covering all people. It may be less politically appealing, but, uh, in 1989, a major survey was conducted on the mainland and employers stated, as expected, that the main reason why they are not covering more employees is because of costs. If we can control costs, we will arrive at additional coverage naturally, but if we impose additional coverage, cost will be rampant.
[00:27:38] George Bussey: Well, I guess the only disagreement I would have with Frank on that is that a lot of those high costs that employers are paying are because they're subsidizing uninsured and underinsured individuals. Um, both, uh, people with no insurance as well as people covered by Medicaid and Medicare. And I think one of the philosophic ideas, or even economic ideas, is that if everybody is required to pay their fair share, those people who are already paying for health insurance will find their share going down somewhat because they're not going to be subsidizing other people.
[00:28:13] Frank Abou-Sayf: Yeah, I do not disagree with that. In fact, I think today the the idea that we cannot pay for adequate care is a myth. We are already paying for more than adequate care.
[00:28:22] Randall Roth: Thank you, Roy. Thank you. We have another caller, James from Honolulu. James, you're on the air.
[00:28:28] Speaker 2: Uh, thank you. I would like to ask why it is that with all this discussion on healthcare plans, uh, healthcare plans, there's been such a almost a complete blackout in any discussion of the single-payer system, uh, uh, which, uh, in Canada seems maybe to have worked reasonably well despite a few uh uh bugs here and there. And uh could you address that, please?
[00:28:52] Frank Abou-Sayf: Uh, you may know that uh, the main uh uh the main supporter of this is Hawaii's own uh uh Senator
[00:29:05] Randall Roth: Inouye?
[00:29:06] Frank Abou-Sayf: No, not Senator Inouye.
[00:29:12] Frank Abou-Sayf: It's one of Hawaii senators who's been pushing it very strongly with President Clinton today. I don't believe the single-payer system has too many virtues, so maybe I should not talk too much about it. I think it probably is one of the worst systems that you can devise for a country. And we can just look at other countries, we can look at Canada and see how many how much taxes Canadian are paying. This is really a way of indirectly subsidizing healthcare, seeing how much physicians who are paid on a fee-for-service basis overdo the system and ask patients for many more visits than they need to, and see how much self-rationing is done simply because of waiting.
[00:30:32] Randall Roth: There was an article in the newspaper not long ago. Dr. Richard Kelly from here in Honolulu was was also very critical of Canada's system. And I hear Frank Abu-Safe saying it's a terrible system. What are your thoughts?
[00:30:43] George Bussey: Well, I don't I don't know anymore about the Canadian system than what I read in the paper. And um, one of the things I do read is that Americans are very quick to uh either criticize or praise the Canadian system. And yet Canadians who live within the system and pay for the system, uniformly seem to rate their healthcare system better than ours. Um, we have a lot of anecdotal data about people streaming across the border from uh Windsor, Ontario to Detroit to get their coronary artery bypasses, as if, you know, for some reason, uh Canada just couldn't deliver medical services. The flip side of that is most routine care is much more accessible in Canada. People uh feel like they wait uh uh and a not unreasonable amount of time to see their doctor. Um, so I think the the thing that's missing from a single-payer system isn't the the single-payer part. It's the other part that Frank has talked about and that's how do you then control the costs if you're going to continue to pay these physicians on a fee-for-service basis. You could have a single-payer system um and somehow blend that with a capitated system so that you could reduce this overutilization that both Frank and I, uh, think drives up the costs.
[00:32:03] Randall Roth: Because I think Frank is saying as as long as as you've got the stack of money being put in front of the physician and you're saying take what what you think is appropriate, that the system is going to be more expensive than it needs to be.
[00:32:15] George Bussey: Let let me give you an example of of a, um, a live experiment that's being done in this country with a single-payer system, and that's Medicare. Medicare is a single-payer system. You have Medicare, the federal government pays for your coverage. There are two ways that that can happen now. It can be a fee-for-service Medicare system, or it can be a system where an HMO has uh taken on from the government at a fixed price, the responsibility for caring for a fixed number of patients. And it HMOs like Kaiser. And like Kaiser, and when they have done that in states like California, they have been able to, um, drastically reduce the number of inpatient days and the and the amount of overall cost for Medicare patients without any evidence that they have, uh, negatively impacted the quality of care that these people are receiving.
[00:33:07] Randall Roth: James, any other questions?
[00:33:09] Speaker 2: No, I think that's a a pretty good discussion of that. The uh uh, I I have under the only other thing I would say is that I understand that would cut out, uh, a lot most of the red tape. I I think it's horrendous that the number of plans that are now, uh, being uh considered under the Clinton and Mitchell, whatever, and that, uh, the insurance companies are going to be the big winners in all this and that that I've found even some conservative physicians are troubled by this. And and finally, is it true that the American College of Surgeons, and not the notoriously radical group, are have approved more or less a single-payer system?
[00:33:53] Frank Abou-Sayf: Okay. I'm not aware that the American colleges approved the single-payer system. I would be surprised actually.
[00:34:00] George Bussey: I'm not sure if it's the American College of Surgeons, but I know that there are several medical, um, professional associations that have, uh, come out in favor of a single-payer system.
[00:34:10] Randall Roth: Thank you, James. Thank you. We have a caller from Kailua. Anthony, you're on the air.
[00:34:15] Speaker 2: Yeah, I'd like to ask your guests about the long-term care. Um, as uh many probably know, the state of Hawaii has proposed a system of universal long-term care for old and young uh paid for out of with tax contributions and some of the national programs are including some aspects of long-term care in their proposals. I'd like your guest to comment on what they think is an appropriate way to cover the costs of long-term care and whether or not, uh, a state like Hawaii ought to have the option to develop its own system if the national plan does not include same.
[00:34:53] Frank Abou-Sayf: You are addressing one of the most uh difficult issues in in healthcare insurance today. You know, we would all love to have long-term care covered, but let us make sure that we can pay for it. You know, the main people spend hundreds of millions of dollars trying to find out why we have the healthcare crisis that we have today.
[00:35:16] Frank Abou-Sayf: My belief is that the main reason for this is the very presence of insurance. The minute you have insurance, you have consumers who pay pennies on the dollars, you have consumers who are not interested in shop in price shopping and you have excessive waste. Long-term care once covered by insurance is going to fall under this heading. It's going to cost much more than it does cost today without insurance. It's a noble cause. We need to talk about it. I really don't know how we can cover it. I am convinced that we cannot afford to cover it today.
[00:35:47] George Bussey: Well I think it's certainly a um, a monetary black hole if we define it in terms of long-term residential care. Um, because once we have a way of paying for that but not paying for home care or uh other kinds of interventions that can help people stay at home, uh, as Frank said, uh it will become a very expensive process, and with the aging of our population, there'll be no way we can, uh, we can afford that. We've got to figure out ways to take care of people uh in less costly settings than residential settings.
[00:36:23] Randall Roth: In case you joined us late, you're listening to the Price of Paradise radio show. Today's topic is healthcare reform. My guests are George Bussey, a clinical professor of psychiatry at the John A. Burns School of Medicine and medical director of managed care management, Inc., and Dr. Frank Abu-Safe, a professor of business at the University of Hawaii and formerly the chief statistician for HMSA and director of research and development for Kaiser Permanente. Your calls are welcome, phone lines are open. The number to call is 955-8821. We have a caller from Maui, Ben. You're on the air.
[00:36:57] Speaker 2: Uh yeah, um thanks for taking my call. Um I'm actually a emergency room physician and picked up the show on my ride home, and uh I think you've made a lot of good points. There's several things as I listen to this conversation I feel like I wish I could just um jump in.
[00:37:16] Randall Roth: Well, you have. Way to go, Ben.
[00:37:19] Speaker 2: Uh the first point was, uh one point is is that obviously the safety net for healthcare in the country has been the emergency room or emergency services and the federal government has made laws that require us to take care of these patients. And obviously if the patients have to be hospitalized, uh they're placed in the hospital and in cared for.
[00:37:38] Speaker 2: Um, at the same time, though, those people that don't necessarily need to be put in the hospital, it's not like they're just shoot away, follow up is given, services service are administered in the emergency room, and if worst comes to worst, these these patients come back. Uh but at at our facility they are given a physician which they they can follow up with and they have one visit there. So,
[00:38:00] Randall Roth: The the whole legal system requires that some care be given to these people, because if they fall to the roops, there's a responsibility that we have as a physician, that we have it that we haven't kept.
[00:38:10] George Bussey: And George Bussi here is is nodding his agreement. I I think, George, you agree with everything Ben's just said? Absolutely.
[00:38:16] Randall Roth: And so, and so, you know, one of the problems I have is when people think that healthcare isn't available, it is available. And really, what health insurance probably does more than anything else is the same thing that your automobile insurance does, is that in the case of a problem, it protects your assets. And those people that are indigent have nothing to lose, they come into the emergency room [unintelligible — audio glitch] can rack up large bills and they don't feel the responsibility of paying them. That's one of the reasons why costs are so high at the in the hospital.
[00:38:45] Randall Roth: And I think with the Quests program what we're seeing now, we're seeing some of these people actually don't have the responsibility of even finding their way in to the physicians that they then they've they've been assigned, but that's that's another story.
[00:38:57] George Bussey: Well, Ben, Ben, let me let me ask Frank Alba say, because you know, for many years when I was going to school, and and even a few years after school, I didn't have insurance, and I didn't have any assets, and if I needed help, I went to, well I either, you know, would pay for it or if it was expensive go to the uh the emergency room. And at at this point, where I have some assets, all I really personally need is coverage for catastrophic illness of some sort. And I think your position would be that that's the type of insurance we should have?
[00:39:26] Frank Abou-Sayf: Yes. Uh Ben, you're talking about a problem that that is a serious one, and I really uh I I don't know at this point how we can cover it. I think maybe the best way to do in terms of designing health insurance is to separate insurance per se from protect from covering the poor.
[00:39:43] Frank Abou-Sayf: The poor should be covered under separate funds, but I think it will not alleviate the problem that you are creating. At the same time, for those who are non-poor, we can get the most out of our money only through a bare bone catastrophic coverage with lots of comprehensive and deductibles. This is not a popular situation, but it really is the only one that will help us all save money.
[00:40:04] Randall Roth: So people will be careful consumers, they'll they'll buy services if they really need them, but not otherwise. Exactly, they'll shop around. Yes. Ben, does that make sense to you? Yeah. Uh I agree with you [unintelligible — audio glitch] actually, you know, to follow on this, to me, there's several things that they could do that are simple. If they could have the insurance companies all line up their policies, so they had a standard policy for a 30 to 35-year-old standard policy, but instead, you have all of these policies and as you go from one employer to another, you may fall through and you may not and you may not qualify.
[00:40:35] Randall Roth: And to me, you know, somebody who who is 30 years old and has got a mortgage and has a family, and then loses their job because they have leukemia and isn't able to follow isn't able to maintain their health insurance, and then has a pre-existing conditions. They're they're subject to lose everything they have. And if the government could pick up on these people, and provide and provide care, I think [unintelligible — audio glitch] would be an asset that the country, I mean, I would think everybody would be willing to vote for something like that.
[00:41:04] George Bussey: George, do you agree with with Ben and Frank that what we ought to focus on more in terms of insurance is is catastrophic insurance? Only uh to a degree. I think what we tend to forget is the young family with three or four children, and the expenses of going into a pediatrician's office without any coverage for that kind of non-catastrophic care. Um, you walk into a pediatrician's office today, it's probably somewhere between $40 and $50 uh for the visit just seeing the doctor without any lab tests, without anything else being done.
[00:41:42] George Bussey: If uh you have several young children under the age of five or six, those of us who have lived through that know what it's like to have the uh the ear aches and the diarrheas and everything else that that a mother or a father feels is important to get checked out to make sure it's not something serious. Uh, for a young working family, uh that presents a problem. So, I think what I would add to the the catastrophic uh care side of the coin is some kind of relatively um large deductible for outpatient services after which, even though it wasn't necessarily catastrophic care, the insurance would kick in, uh maybe $500 or something like that, and after that your visits are going to be covered.
[00:42:28] Frank Abou-Sayf: Yes. Ben, I would like to answer your specific question about pre-existing conditions. I suppose this is something you were asking, right? Correct. Okay. The problem is that in Washington, pre-existing conditions and the portability of the insurance are is what in my opinion is driving all these super super coverages that everybody is trying to get.
[00:42:53] Randall Roth: Like when you say portability, you mean so when a person goes from one job to another job, their insurance coverage doesn't necessarily change? That's correct. Okay. In my opinion, you can you can remedy pre these two issues by very simple legislation, rather than trying to create a new monster instead, which is what's being done in Washington now.
[00:43:12] Randall Roth: I I I agree with that. That's the point I'm making. When the individual has the job, he has the insurance coverage and he can take his children. But if the 30-year-old were to lose his job due to a catastrophic illness, there's no there's no safety net for him until his whole until he goes broke. Yes, and on welfare, right? Right.
[00:43:33] George Bussey: Okay. Ben, thank you very much. We've got another caller who's been waiting for about 10 minutes. We really appreciate your call. Thank you very much. Uh, Graham from the Big Island, you've been waiting very patiently. You're on the air. A fascinating subject. Uh, thank you very much for taking my call. I just want to know why in in medical insurance, um, are teeth different from toes? Why is it medical and dental? Why aren't the teeth considered just a part of one's health?
[00:43:58] George Bussey: What a poetic way to put it, uh George Bussi, what do you think? I'm not a hundred percent sure, but I think it goes back to the history of how health insurance developed in this country, uh Graham. It began back in the 30s and 40s originally, uh developed by hospitals and surgeons for hospital coverage and surgical procedures. Out of that, it grew to cover um, more general medical conditions and outpatient services, but those roots were in the the uh surgical fields and not in the area of dentistry. So I think, in a sense, it's an artifact of how the insurance coverage developed in the first place.
[00:44:40] Frank Abou-Sayf: Graham, I hope I'm not going to disappoint you with the with my opinion. But uh you know, we need people could need a lot of care in in in a lot of of parts of their body. But the issue is, if healthcare was determined by needs, we would spend our entire gross domestic product many times over even today, because the potential for care is virtually unlimited. Let me give you a quick example. If someone else pays for the tab, and if we have comprehensive coverage, when we go for a medical checkup, why not ask for over 900 blood tests that can be performed today? Why not have every uh every organ that is not working properly in our body be covered also? And so uh maybe dental dental coverage is important, but it may be better for society in general, which is you and I, not always to have it covered in as insurance.
[00:45:38] George Bussey: Thank you, Graham. We appreciate your call. You know, we've got some more callers on on the line, but before we go to them, George, I want to ask you, um earlier, I mentioned the Oregon plan, which I think most people realize it's a form of rationing where you make a list by priority and then depending on how much money is available, you draw a line someplace. And you made the comment that that we already have rationing everywhere. It's just that we do it irrationally. Tell me what you meant by that.
[00:46:05] Randall Roth: Well, I think Ben's call from Maui was a great example of that. Somebody who has no insurance, when they call up a doctor's office and say, I'd like to make an appointment to come in and um the doctor's office says, well, what kind of insurance do you have and they say either none or they say they have Medicaid, uh more than likely they'll be told, I'm sorry, doctor doesn't accept patients with Medicaid or with no insurance. That's rationing care. That's eliminating a particular avenue of access to care.
[00:46:35] Randall Roth: What's irrational about it is exactly what Ben said. That person will then show up in the emergency room. I haven't looked within the last six months, but I think it's about $150 to the hospital just to check in. So it's it's maybe more expensive to society and it's less convenient to the person needing care. Absolutely. And so it's irrational. So it's irrational. I see. Well let's go to our caller from Honolulu, Vernon, you're on the air.
[00:47:02] Speaker 2: Good morning. I have a question about how does this universal health plan uh uh encourage self-responsibility for personal health. For example, so much of our people's health is based upon their lifestyles like smoking, obesity, drug use, AIDS, so forth. How does this particular thing you know, help control the cost in that regard? Okay, Frank. I think what you're talking about is the issue of prevention.
[00:47:26] Frank Abou-Sayf: Is that right? Yes. How does it control cost? In other words, AIDS uh treatment, you know, could be uh a black hole for cost, right? That's correct. Uh prevention, again, is a very noble thing to do. Some approaches for prevention, like immunizations, definitely save money. Some others don't. For instance, uh let's say early early detection of the HIV virus. So far today, we have not been able to cure it. So early detection just means taking additional care of a patient who eventually is going to die. What this means is probably spending more on the patient because we have identified the disease sooner.
[00:48:04] Frank Abou-Sayf: I think this always should be done, don't get me wrong, but what I'm saying is, let us not dupe ourselves into believing that prevention in general is a cost saving device. I believe it is not. I believe it is an investment in the future. I believe it is the humane thing to do, but let us not think it saves money.
[00:48:23] Randall Roth: Well I'd like to make two comments on that specific one to the HIV example, that the benefit of early detection of the HIV virus is not the health of the individual necessarily who's positive, but the health of everybody that comes in contact with that person in terms of educating the HIV positive person as to the risks of sexual, uh contact, needle sharing, etc. So I think that's why we want early detection of HIV.
[00:48:49] Randall Roth: As to the general issue of of uh preventative medicine and health education, I think or I know that in capitated systems, health systems, where uh groups of physicians and a hospital are responsible for taking care of an entire population, they put a significant investment into health education and health prevention because they know that if they're going to have these 100,000 people for the next 10 years, it's to their benefit to make sure that the hypertensive person knows how to take his or her medication, that the diabetic patient uh knows how to manage his or her own insulin levels without calling up the doctor every day.
[00:49:34] Randall Roth: So, those kinds of health education things are very important and are cost effective. Frank? Uh George, cost effective, uh sometimes we overdo it. Uh for instance, HMSA covers some something called work site wellness programs which consists of going to the employers on location and offering maybe aerobics classes and education to employees.
[00:49:57] Frank Abou-Sayf: And trying to convince the employer that this is cost saving to the employer. I don't believe it is. One of the reasons is because of the motion of employees within different employers. Let me, let me say this with another example. Suppose that today automobile insurance decided that to prevent accident, you need to offer free rotation as part of the coverage, free tire rotation, pay for the cost of tires every two years, uh change oil, and maybe also change the windshield wipers every six months.
[00:50:26] Frank Abou-Sayf: This may save some accidents, but do you think as far as cost is concerned, we will end up paying more, don't you? I think one of the benefits of a capitated system, however, is that it behooves the individuals who are promoting the prevention and the education to demonstrate a bottom line savings.
[00:50:46] Randall Roth: A group I just came uh from visiting in California, has set up a specific clinic to deal with people who need to take a specific kind of medicine. Details not necessary. They did it because they looked at how much they were spending on doctor's visits and hospital care for this group of patients. They've subsequently learned by that by this education approach, they've reduced those costs. If they found they hadn't reduced those costs, they probably wouldn't keep the program. So I think Frank, from an economic standpoint, it's correct. You have to evaluate whether what you're doing is effective.
[00:51:17] Randall Roth: Vernon, you pushed the right button. We've got a great one going here. Frank has something to add. Yes. George, uh I agree with you. However, there is one very sticky issue here, bottom line savings. It is such a volatile concept and in my experience working for the two largest health providers in town, you can really show the savings that you want and most of the time, they are not correct.
[00:51:40] George Bussey: Woah, coming from you, Vernon. I really appreciate your call. Uh let me elaborate a little more. Let's it's got to be a quick one. I have a number of people on the line. Okay. Like smokes, for example. You know, uh is there no no penalty then for people that smoke, that you know, that have bad health because of that? Uh George, I I guess I have a different uh approach to that one that's equally unpopular in Washington, and that's that I think cigarettes, alcohol, uh specifically, and maybe other things where we know specific healthcare uh adverse outcomes should be taxed to a level appropriate to the cost on the uh society.
[00:52:17] Randall Roth: Thank you, Vernon. Uh Susie from Honolulu, you've been waiting patiently, you're on the air.
[00:52:24] Speaker 2: Really, my question was about prevention. I was going to say I'm a little dismayed to have been on the line, to have been listening to the program for 35 minutes and not heard prevention mentioned. So, uh that's taking care of my question, but I have one tiny question remaining. Go for it. I've been looking for a new physician and I have had no look at all when I try to find a physician who's interested in preventative medicine.
[00:53:05] Speaker 2: This is on an individual basis as opposed to a societal basis. But uh, I'm here in Hawaii, and I'm looking for a new physician. Someone who leans toward lifestyle changes and personal healthy living as opposed to aggressive medical care. Well, well, Susie, I I'd refer you to uh uh my personal physician. Unfortunately, he just left the island two months ago, so I'm maybe in the same spot you are. Well, my family has a great one. Her name is Jennifer Frank. Give her a call. Thank you. All right. Thanks a lot, bye.
[00:53:22] George Bussey: You bet. Uh we have another caller from the Big Island. Pauline, you're on the air. My wife is giving me the stink eye for giving our doctor thing. Pauline from the Big Island, you're on the air.
[00:53:31] Speaker 2: Yeah, my son-in-law is a doctor over on the East Coast of the mainland, and he had asked me if I really thought healthcare was so much better here in Hawaii. And at least here on the Big Island, one of the things I feel, I've noticed, at least in our area is that the wages are very much lower for the average family, um so I almost have concluded that uh they can afford, the employers can afford to give better health coverage because they're making it up with lower wages.
[00:54:01] Randall Roth: In fact, some people have have asserted that wages, in part are lower here because employers are mandated to provide insurance.
[00:54:09] Speaker 2: Right, yeah. So I don't know that we're really that much better, and also I don't know that our prices are always that much better. I had to have an MRI done here in Hawaii, and it was well over a thousand dollars being charged to me after HMSA took care of their portion. And uh over on the mainland, my son-in-law said that around the Philadelphia area, it would cost about $700 to have the same procedure done.
[00:54:32] George Bussey: Okay. Let's see what George Bussi has to say about that. Um as to the MRI cost, I'm not sure what to tell you because that's uh if you share with a thousand dollars, that's pretty amazing. Um as to the um issue of employee uh wages, uh I think Frank might be surprised to know that I tend to agree with the idea that what happens when you have an employer mandate is that employee wages uh go down to reflect that. I think it's only common economic sense that if somebody has to pay for something, if they can pass that along, they will.
[00:55:03] George Bussey: The bottom line issue though is how do you get everybody paying their fair share. You can either um have no insurance whatsoever and people pay for the care that they need, or you have some kind of system that has everybody paying into an insurance pool to do that. Um and uh for employees to expect that their health insurance is free because the employer is paying for it just is not rational. It's a cost of business. It gets passed along either to the employee in lower wages or to the consumer in higher prices. That's economic reality.
[00:55:42] Frank Abou-Sayf: George, you're right. I am extremely pleased to see that you think this way. We we finally have agreement. Uh Pauline, what do you think? Um it it's a big problem. By the way, my husband just corrected me. We had to pay over $2,000, not $1,000 for the MRI. I'm amazed. I um because my understanding was that most MRIs, uh at least here on Oahu, were in for total costs were in the area of $800 to $1,200. I don't know what particular kind of MRI you had or how many parts of your body were scanned, but Yeah, it was just one small part. It was only for like 50 minutes and uh I had to go to Honolulu to have it done.
[00:56:25] Speaker 2: Yeah, I But my husband's self-employed, so we're not part of the a company. Mkay. Okay. Pauline, thank you very much for your call. Thank you. We're down to the last few minutes, and and I guess I have two things to ask. One, is healthcare a right that we're all entitled to, or is it a commodity that people who can afford to buy it should be able to buy it, and then other folks who can't afford to buy it have to fend for themselves? And I have my two guests pointing at each other. I guess this is this is kind of a tough one.
[00:56:57] Randall Roth: I I think it is the crux of the issue.
[00:57:00] George Bussey: Because if if health care is a right the way I'm getting an education through high school uh and maybe even college is sometimes considered a right these days, or it is a right the same way that free speech or uh political expression is a right, then um we are obligated to find a uh societal mechanism to make access to health care equal for all and equitably shared. Frank, is our current system premised on it being a right, do you think?
[00:57:34] Frank Abou-Sayf: I think many of the Washington uh of the Washington legislation that is trying to be passed now is based on this. I think it's a moral issue that well, it's difficult to say who is right and who is wrong in that. However, for those people who think that healthcare is a right, shouldn't we also believe that maybe shelter is a right and that uh being fed is a right? And so which one is more of a right than the other? George
[00:57:59] Randall Roth: I I guess related to that is uh something that I had uh told you about in an in an article that I had um uh written for you. And that's an old saying there ain't no such thing as a free lunch, and if we believe that healthcare is a right, and I I happen to think that we all should have access to healthcare, that doesn't mean it's free. It just means that we should have a system that allows us to access it and that we should then take responsibility for paying for it.
[00:58:26] Randall Roth: We've got just a minute or two left. Is there anything that we haven't talked about today that we really should mention before we we finish the show? Frank, anything?
[00:58:37] Frank Abou-Sayf: Um, would you like to ask me for instance, what I recommend to solve the problem?
[00:58:41] Randall Roth: Let me read this note you just wrote. It says, what do you recommend? What do you think?
[00:58:46] Frank Abou-Sayf: Okay. Uh again, [unintelligible — audio glitch] be a little unexpected. I think I think the solution to the healthcare crisis is really to do much less. And on the surface, make people think that they're going to pay much more when in fact it's going to be to the advantage of society. What I recommend is for instance, first, I don't think that anything substantial is going to be passed today in Washington because of the disagreement. If I were in the ideal world, what I would like to see passing out of Washington today would be first of all, include health insurance premiums as part of the salary of the employee and make it taxable.
[00:59:29] Frank Abou-Sayf: Then allow the employee to choose among low paying premiums which have very few, very little coverage and hard paying premiums which are comprehensive coverage. And finally, let employers choose among all plans available. This is one of the ways that will restore elasticity in the marketplace that will allow for price shopping and does not require a revolution in the healthcare industry.
[00:59:54] Randall Roth: Sounds like competition. Exactly. George, any other thoughts? Well, I just um and you have 10 seconds by the way. With that, I would say I only partially agree with Frank. I think competition is correct. I think you have to watch out for uh people who are late enter enter into the healthcare system, i.e., they buy the bargain thing, and then when they get sick, they want to move up to the full coverage program. I think that's the problem with Frank's idea.
[01:00:21] Randall Roth: Gentlemen, thank you very much. My guest this week with Dr. George Bussey and Dr. Frank Abusae. This week's show is produced by Susie Roth with technical assistance from Jeff Alarti. You've been listening to the Price of Paradise Radio Show. I'm Randy Roth. Aloha.