Economic Model Presents Flaws for Health Care Policy

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Doctors claim that charging upfront fees for the poor and sickest among us will further dismantle an ailing health care system and expose the fallacy of "cost-sharing."

Medical anthropologists reviewing studies on health policy issued warnings that a purely economic model fails to account for the optimistic predictions expressed by President Bush in his State of the Union address.

Meg Jordan, PhD, RN, medical anthropologist and President of Global Medicine Enterprises, Inc., a communications and research firm based in San Francisco, reported that studies from the University of California San Franciso and University of New Mexico concluded that both preventive health services and consumer-driven health plans are not accessible to either the sickest or underemployed segments of the population.

"Ever since our health care system was overtaken by health economists, we've had to deal with a rhetoric of consumers, law of demand and cost-sharing. But the complexities of providing health services for a widely diverse population does not fit within an exclusively economic model," cited Dr. Jordan.

In President Bush’s State of the Union address, the chief proposal to cure our ailing health care system centers on people reaching into their pockets, paying for higher deductibles, starting their own health savings accounts, and taking more responsibility for how they spend their own health care dollars.

Jordan said, "That is all fine and good for healthy individuals, making a great wage, working for enlightened companies that provide incentives like health club memberships and wellness programs. Those rare companies may also offer a new generation of “consumer-driven” health insurance plans that promise to eventually reduce premiums, if company enrollees promise to take good care of themselves and not submit many claims.:

The assumption in consumer-driven plans is simple: We won't charge you too much as long as your people remain healthy, stay out of hospitals, and work overtime at staying well.

The Realities of “Consumer-Driven”

"However," Jordan added, "that logic has nothing to do with the realities of who needs health care the most. I know -- I’ve been a spokesperson for Destiny Health, one of the fastest growing consumer-directed health plans, and while it’s exceptional for those small and mid-size companies that enroll in the high-deductible plan, it does nothing for the crushing realities of the 45 million uninsured Americans.:

According to University of Michigan researchers, the more money people have to pay out of their own pockets to get such care, the less likely they are to actually take the medicines or have the tests done. And that increases the risk of more expensive -- and preventable -- problems down the road.

"Involving consumers in making their own health care spending decisions is important and will likely save money at least in the short term," says A. Mark Fendrick, M.D., co-director of the U-M's Center for Value Based Insurance Design and a professor in the U-M Medical School and U-M School of Public Health.

"But most of the discussion regarding consumer-directed health plans fails to address the fact that increasing out-of-pocket expenditures will lead to decreased utilization of essential health care services. We need to create a system that will remove financial barriers for those clinical services where there is clear evidence of value."

Arthur Mathias, MD, preventive medicine specialist commented on Jordan's analysis: "President Bush’s plan is typical of the so-called compassionate economics his administration has shown. The emphasis remains on the individual to take charge of his “discretionary dollars” for health care, in exchange for tax breaks or other incentives. Again, a conceivable plan for the wealthy and motivated."

Public health analysts point out that the most frequent users of health care are, and have always been, the poor. The single most important determinant of health and longevity remains socioeconomic status, according to the World Health Organization.

Jordan agrees, "As the poor are told to reach into their own pockets for services, they wind up getting sicker and taxing the system even more. They don’t partake in prevention, smoking cessation, prenatal classes, or stress management. They’re too busy trying to earn a buck to now pay for their 'matching incentivized' co-payments."

According to Tony Rich, President ot the health think tank, IdeasOne, "Health care is not purely a business. It’s a hybrid of compassion with business -- and as such, needs to be tempered with the complexities and nuances of those it seeks to help."

Medical anthropologist Sarah Horton of the University of California reported that a current House bill would slash the Medicaid budget, allowing states to implement premiums for Medicaid recipients. "If they “choose” not to pay, they’re dropped from the program," said Horton.

To Jordan that means, " More people on the street with festering diabetic ulcers; more last-minute moms-to-be arriving in ERs, pushing out high-risk infants."

Jordan's recommendations for fixing health care include:

"We need government to extend a Medicare type of plan in order to provide a safety net for the misery of those trapped in a fragmented system of claim denials, disjointed care, and overburdened, understaffed hospitals.

"We should follow Japan’s example and innovate a federally-mandated patchwork of payment plans for the poor, the sickest among us, and the disabled, including the shamefully neglected disabled veterans.

"We also need federally sponsored leadership to place preventive health measures front and center. Only two percent of the federal budget addresses prevention, when an unprecedented national health crises is destined to arrive in this next decade. The rising pandemic of diabetes and obesity for people of all ages, but especially our youngest generations will put the final nail in the coffin of the current, untenable health care system."

Dr. Jordan added: "Asking the sick and growing ranks of “barely insured” to engage in a pay-upfront policy for care will simply privatize middle management organizations, siphon off reimbursement monies, and drive the health care providers further into debt and eventual collapse. What it will do for sickest among us is unthinkable."

"The law of demand -- assuming that health consumers will purchase up to the point at which the cost of goods surpasses the value to the individual -- is worse than voodoo economics. In fact, it leads to voodoo health care," said Jordan.

For more information: Contact Global Health Media 604 922-2540. info @

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Meg Jordan