Our Country Comes Up Short on Life Expectancy

We need to invest in cost-effective prevention, and stop allowing insurers to make profits by denying claims
September 28, 2010 -- The United States does not appear to have the best practice outcomes on some important figures such as life expectancy at birth for males or females, health life expectancy or death rates for children under the age of 5, according to some basic statistics from the World Health Organization.
The only categories where we are greater are both the amount we spend on health per person, and the percentage we spend on health compared to our gross domestic product on a per person basis.
As we in Oregon debate how to make healthcare more affordable, if we continue to allow insurance companies to make profits on basic medical services by denying claims, continue to have very high administrative costs caused in part by providers having to bill different insurance companies who have different rules and practices, and continue to not invest in cost-effective prevention that most of the other developed countries now do --  we will not be addressing some of the basic reasons why we spend more while not covering basic healthcare prevention and access for all our residents.
Universal access to basic healthcare for all Oregonians and a 21st century Oregon health delivery system are inter-connected.
Michael Leahy is currently an associate professor of health sciences at Linfield College and a clinical instructor in family medicine at Oregon Health & Science University. He was a leading healthcare executive for over 13 years with Kaiser Permanente in Portland in the Bay area and a former public health director in Alameda County, California and Tillamook, Oregon, and the founding CEO of OCHIN in Portland.
Editor’s Note: In my previous role as the founder of Oregon Health Forum, I met Mike over 20 years ago when he was Kaiser’s VP Health Plan Manager and chair of the Oregon Health Council, which recommended the creation of the Health Services Commission and the Oregon Health Plan – Diane Lund-Muzikant


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This piece is polemical, not clinical. Does the author suppose that there is a correlation between denial of medically unnecessary payments to doctors, and increasing health? I know of no such research that would support his allegation. What I read here is just another egotistical physician believing that if insurers paid everything they asked for, their patients would magically change their unhealthy habits. Insurers, and especially CMS, *should* deny claims for unproved, ineffective, and/or inefficient services. Its my tax money, and I prefer that it go for basic, necessary services for all Americans. As to the administrative costs, the overhead at BC, where I formerly worked and "denied" payments for ineffective care, was at the most 15%, and it is lower now. Fortunately, "Obamacare" will eventually standardize insurance contracts, simplifying office billing. Your author is incorrect when he blames health deficiencies on insurers, but correct in that our life expectancy is too short. I believe that only government, society-wide interventions will reduce the incidence of chronic disease that leads to early, expensive deaths. Tax fats, for example. Tax cars more! (Full disclosure: I own 3 cars and an airplane.) PS: My preventive medicine background: In the VA, we had strong, leadership incentives to provide evidence-based preventive services. People were fired for under-achieving the *clinical!!* goals. But the physician was only part of the solution: Every effort was based on a team approach. The penetration and applicaation of prevention was, and is, the best in the world. Money, or claims, had no part in that result.

Gross generalizations like this less then nothing to help people understand how our system works. I would bet that Mike Leahy does not work for nothing. Profit is not a bad thing.

Since this is an editorial it strikes me as entirely appropriate that it also be a polemic. And while I agree that insurers are only one part of the problem I question the assertion that denial of claims have no impact on health. It all depends on whose definition of "medical necessity" you follow. In my experience, running a sub-specialty medical/mental health practice, insurers are more than willing to pay for repeated catastrophic interventions (e.g. hospitalizations) but aggressively exclude or deny preventive measures that could diminish the need for these other, far more costly interventions. As a business person I have always been puzzled why this should be so; after all, insurers have a direct interest in lowering the overall cost of care, and yet in my three years as CEO I have only ever had a single interaction with an insurer where the total cost of treatment was considered and preventive measures were allowed that had previously been denied (ODS, take a bow). The reality however is that insurers are defending a status quo of which they are a part. They have learned to live (and in some instances "thrive") with the vagaries of the present system, but make no mistake, their determination of what is "medically necessary" has a major impact not only on health but on cost of treatment. I look forward to the day when insurers consider quality and outcome before crude and simplistic calculations of utilization. Until they do, they remain part of the problem not the solution. If they will not come to their senses on their own (and they've had ample opportunity) they will have to be forced to do so. A pity, but vitally necessary.

I recently heard a story where an emergency-room doc reassured a midwife that her prompt recognition of a brain aneurism during childbirth likely saved the mother's life. He acknowledged that the mother probably would not have been as closely tended in a hospital birth, with every change monitored one-on-one by a human. The need for patient advocates has been admitted on NPR by a physician speaking about iatrogenic events. Encouraging agency in patient/consumers has the potential to improve health statistics. A part of doing that would be to give patient/consumers the choice about gatekeepers and then to encourage cooperation between a wider range of carers (a term sometimes used in Britain). The opposite of encouraging agency in individuals is to allow them to think a pill or a cut-and-sew can fix whatever trouble they get in. Moving to genetic-testing before prescribing and dosing could also help our statistics by reducing the risk of adverse medication events. Both belief and metabolism are under-considered in present practice, and the costs of increasing consideration of these factors could be impressive in outcomes and in cost savings.

Even with the clunkiness of the administrative component of insurance, overhead runs under 9% -- and "profits" are running 1-3% range, according to the report the state issues (Health insurance in Oregon 2010). If you think that's a lot, consider Wednesday's Oregonian article on state DHS overhead -- out of a $5 billion budget, more than $1.5 bill are spent on administration and "services provided by staff" -- a much higher admin cost rate than any health insurer. (see the chart in the print version, it's not in the online version, which claims admin costs are 15%, still higher than private health insurance). So, where are your savings, then?