Lecture/Rationing Health Care

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Should We Ration Health Care for Older People?s15

I. Social Issues and Rationing

In this chapter it is not necessary to agree with Callahan's proposal to ration health care in order to see the bigger debate of "access versus cost control". This debate will continue to be important as American society grows older and society's ability to fund needed programs is challenged.

The idea of rationing health care based on any criteria is unpopular with most Americans. The ultimate source of much of the health-care reform debate has been the rapid rise in the cost of medical services during the past 30-40 years.

Remember from previous lectures that the cost of health care is rising faster than the rate of inflation. In the early 1960s, total health expenditures in the U.S. accounted for approximately 5-6% of Gross National Product or GNP. By 1990, approximately 12% of the U.S. GNP was devoted to health-related expenditures. In 1997, the United States spent 14% of GNP on medical care, the highest of any country. Take a look at the chart below and the article in the New York Times "Why Health Care Costs Too Much".
http://economix.blogs.nytimes.com/2008/12/05/why-does-us-health-care-cost-so-much-part-iii-an-aging-population-isnt-the-reason/

(Percent)Spending on Health Care as a Percentage of Gross Domestic Product,
1960 to 2005
http://www.cbo.gov/ftpdocs/87xx/doc8758/MainText.3.1.shtml

Source: Congressional Budget Office based on data on spending on health services and supplies, as defined in the national health expenditure accounts, maintained by the Centers for Medicare and Medicaid Services.

This chart represents the amount Americans spend on health care compared to what our nation produces (GNP) . On a smaller scale think of it as the percentage of your income you spend on health care.

As you can see, that number rose very quickly from 1950 to 1990. As American population ages it is expected to grow even further. During most of this period the rate of medical cost inflation substantially exceeded the overall inflation rate. While the increase in medical costs is partly the result of an improvement in the quality of medical services, it has substantially reduced the ability of non-insured ,low-income individuals to acquire medical services.

There has been a slight down tern in health care costs in some areas . A report by Vox Media noted

"health care costs have grown really slowly for five years now. Some of this is likely cyclical: when the economy goes south, patients tend to use less medical care. But there are also hints that some of the slower growth is due to more structural changes in the health care sector — and could stick around for at least the next decade are so.

But its important to note where these down turns are happening. Not in Hospital, doctor or Medicaid care but in prescription drugs, nursing care and insurance premiums . Interestingly Medicare spending slightly decreased as well. http://money.cnn.com/2014/01/06/news/economy/health-care-spending/index.html. Experts are not sure as to the cause of this but is generally seen as a result of the economy. People have less money to spend on care.

Rationing:
As a society we freak at the concept of rationing health care for any age. It goes against our moral beliefs to let grandma go without medical care just because she may not live long, no matter what the costs. It's just not something many of us are willing to do. Take for example withholding food from a comatose or brain dead patient. In this country many legal debates have erupted about this subject. Withholding food is often one of the treatment options mentioned in the " right to die" debate. Should we have the right to withhold food to anyone? And if so under what circumstances?

Did you Know? In hospice care the focus of care becomes palliative care-- comfort and quality not curative? As the body shuts down, nutrition and fluid intake is no longer an essential fact of life. Withholding food and fluids can be very comforting for the dying patient and can actually reduce pain by decrease the need for bowel and bladder care and skin breakdown. Read more at this site if you are interested. http://healthfieldmedicare.suite101.com/article.cfm/withholding_food_and_fluid_in_terminal_patients

There are a variety of ways to ration health care besides age. These include :

the ability to pay
anticipated clinical effectiveness
waiting lists or first-come first-serve
benefits versus cost to society, or social worth.

We all agree that it makes little sense to spend thousand of dollars on someone who is in the last stages of life, but how do we know for sure when that time comes? Death is often a difficult thing to predict.

Consider these examples

Karen Ann Quinlan's family (check your text for details of this case) asked the court for permission to withhold or discontinue heroic measures for sustaining her life. In this case, they meant a mechanical respirator, but after it was removed she remained alive for 9 years sustained on feeding tubes. This case was the first to ask society to determine the circumstances and conditions under which certain procedures can be withheld or withdrawn. Karen's family and the medical community thought that Karen was in the final stages of her life when they asked for the court order to removed the respirator. Often it is not easy to know when death will occur.

Examples of Age-based Rationing

Although it is not labeled as such there is evident in many parts of the world of rationing health care based on a person's age. For example:

"Britain, for many years, has routinely withheld kidney dialysis from people above a certain age, usually 55." (Moody)
It is estimated that in Britain 19% of coronary care units have upper-age limits for admissions and 40% have an upper limit for clot dissolving cardiac ( heart) therapy.

Some officials have defended the policy on the grounds that, with limited resources, it made more sense to provide funding to improve quality of life. As the covert practice of withholding some treatments for older people became know, the public demanded that the practice be abandoned.

Often, these policies put the physicians in the position of serving as gatekeepers, imposing age cutoffs. This is not a decision most of us want our doctors to make. Check out this article: Elderly Denied Cancer Surgery There are many more on the net. If you are interested just type in elderly denied cancer surgery and see what comes up.

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AARP has documented differences in care for older patients. Second-Class Care. Under the Canadian system, virtually no one is deprived of health care because of inability to pay. However, for some forms of care, such as certain surgical procedures that are not deemed life-saving, it may be necessary to wait long periods of time.
In effect, the waiting list has replaced a market system for allocating some types of medical care. Infirmity or even death may occur before one gets the opportunity for health care. In Seattle during the 1960's, when kidney dialysis first became available, there were not enough kidney machines in Seattle to take care of all the patients who could benefit. For a period, hospitals set up special committees to decide who would have access to dialysis. Decisions by such committees were criticized and eventually Medicare reimbursement for kidney dialysis made it unnecessary to ration treatment.
"The Oregon State legislature in 1990 passed legislation putting into effect a computer based ranking of health care problems covered under the state's Medicaid program. Funding would be made available ,and services would be rationed ,not according to individual cases but according to consensus reached by democratic means" (Moody).
These examples are forms of rationing of health care. How do we decide where to spend precious medical dollars?

Did You Know?
Medical care in the last year of life amounts to approximately 18% of a person's total lifetime medical costs and nearly 30% of the entire Medicare budget. Some economists believe that some form of rationing is required to improve the efficiency of the system but do not necessarily favor age-based rationing. Some strategies might include means testing (usually by income qualification) , charging premiums based on income, pay for Medicare some other way besides payroll taxes, and backdoor rationing. Some critics argue that rationing of health care is already going on the U.S. but because rationing is not legal, experts use what is called " backdoor rationing".

II. Backdoor Rationing

NOTE, this was written before the Affordable Care Act was enacted. It is yet to be seen how it will affect the traditional access of care.

How Do We Know When Rationing Starts Taking Place? During World WarII all Americans knew that butter, gasoline and other commodities were being rationed. They were given coupons and without a coupon one could not buy items such as gasoline, nylon stockings, butter, or other staples. But is it possible for resources to be rationed without public knowledge or recognition ? Would you have labeled the above examples as rationing?

1.Backdoor Rationing and Managed Care-(HMO's)

HMO or Health Management Organizations, also known as "managed care", combines insurance with health care in a unified network intended to provide cost-effective services. That is, services are provided by a network of providers who work as a group. A patient must be seen by a professional within that group or be referred out of the group by the group itself. The agreements among the organization's professionals are one way HMO's can reduce the cost of health care. Today in the U.S. nearly all people who have health care through their employer's are enrolled in managed care. No doubt you have heard the negatives about managed care. However, there are some positive aspects to it also.

Positives

less paper work - the patient does not have to fill out insurance forms.

smaller co payments (amount patient pays to receive a service- remember the co-payments for Medicare?)

no deductibles

extra benefits such as low cost prescription drugs and vision care

elimination of the need for private insurance to fill in and pay for costs that Medicare does not cover or medi-gap insurance.

incentive to offer preventive health care , checkups and immunizations- if they can keep you well, they save money.

Negatives

Patients can not continue seeing their own private doctor, and choice is limited as to which specialists are covered. A patient must receive care within the circle of HMO doctors.

HMO's offer limited coverage. Not all services a doctor orders are covered. This means either the patient pays for the non-covered medical care out of their pocket or the medical care is not provided at all.

Getting approval for treatment may take several days because HMO's only pay for pre approved services. There are complaints that this process can take too long.

Many people are discouraged by the bureaucracy and do not make needed appointments. This can be considered a form of rationing. Often times when there are impediments to a service people won't use the service. You know, the "its too much hassle" syndrome.

HMO's are paid a flat rate by an insurance company to provide health care for each member. What this means is that after receiving a fixed amount of money, under capitation, a managed care plan then becomes responsible for each beneficiary's full health care costs. The profit motive then, may introduce incentives for backdoor rationing in unexpected ways. If an HMO does not use all the funds allocated by an insurance company to care for an individual, the unused funds are kept by the HMO as profit. For example. Lets say that HMO "A" is paid $500. per month to provide for your health care needs. If you don't see the doctor that month, the HMO has made a profit of $500. If on the other hand you utilized costly tests and procedures totaling $1000., then the HMO lost $500. that month. It is imperative then for the HMO to control costs. Costs are controlled in other ways besides waiting lists, limited services and utilizing physician groups.

Cherry picking
The most frail elderly are not allowed to enroll in some plans. Cherry picking involves choosing patients who are healthy and active. Through marketing techniques, (for example avoiding senior communities in their advertising campaigns) some HMO plans are not made available to the frail and very old populations who might need more care. Although Medicare now allows a choice in health plans (including optional HMO services) critics fear that these companies will simply drop Medicare coverage to control costs which many have already done.

HMO's can also refuse treatment on the grounds of medical necessity. If a treatment fails that test, it doesn't qualify for coverage. For example, breast reconstruction surgery, for an elderly woman, after a radical breast removal, might not be considered a medical necessity.

Once denied coverage, the process of appealing is very slow. An appeal can take up to 6 months and that is a significant time factor for someone who is 70 or 80 years old. Studies show that the majority of enrollees are not aware that they have the right to appeal a denial of coverage. When they do appeal they win about 40% of the time. This wait period serves as an impediment to obtaining services.

Rationing can also take the form of sub-standard care. Quality of care is not easy to measure. Studies show that stroke patients in HMO 's are discharged from the hospitals quicker and sicker than fee for service clients.

Denial of coverage can also be a form of rationing. Denial takes many forms. For example: in rehabilitate services, Medicare requires that steady and meaningful improvement be seen in the patient. Medical HMO's may be inclined to interpret that requirement in very stringent terms and not consider an elders slowed healing rate.

Some HMO's may limit services most often used by the elderly, such as limiting the number of home care visits, certain medications used by the elderly, or equipment needs such as commodes, beds, walkers etc.
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So rationing happens by:

Cherry picking and marketing techniques
Refusal of some procedures
Slow appeals
Substandard care
Released from rehab or hospital services to soon
Performing procedures as out-patients (do you know why this would limit care for some elderly? If you want to research it you can, e-mail me your answer for three extra credit points. Be sure to put "gero300 extra credit" in the subject line.)
Limited or denying home care services or coverage of durable medical equipment
(wheelchairs, walkers, toilet risers etc. )

Bending the Health Care Cost Curve
The Affordable Care Act also known as Obama Care is changing the landscape of traditional health care. Bending the Health Care Cost Curve (located at the electronic hand out section of the Assignment link ) notes that health care costs have been less than expected and for a short time insurance premiums have not continued to rise. It is too early yet to tell the reasons for this or how this new law will affect Cherry Picking.

Did you Know?

Different levels of managed care balance cost with choice. A full HMO network comes with lower costs but it also has lower member choice when compared to the indemnity (fee for service). Patient must use a network physician and not their own doctor to save costs.

Other programs listed such as PPO (Preferred Physician Option) cost less than an indemnity but allows more choice than a full HMO Network.

III. How Shall We Decide? Callahan believes that chronological age is the best criterion to use in decisions regarding health care rationing because the elderly have lived their natural lifespan. He proposes eliminated or reducing spending on high tech medicine for the elderly. There are some other good reasons that can be given in favor of age-based rationing:

It would be relatively easy to administer, many believe that older people are less productive in the economy and from an efficiency standpoint, the benefit derived from medical care would be less for older than for younger people (based on years of survival).

Older adults can be more susceptible to illness with advancing age, depending on their physical conditioning, genetics and other factors. But it is important to remember that not all get sick. Remember, chronology is not a good indicator of health or medical treatment outcomes. Age itself is not a good predictor of the impact of medical procedures. In other words, it is not age alone that results in more care, but disease and illness.

Once we control for other explanations such as disease and functional status, age often disappears as an explanatory variable of health care outcome (not all old people get the same diseases at the same age). Remember from previous lessons that the elderly as a group are not homogeneous, they are in fact highly heterogeneous.

Consider This:
Of all the money spent each year on health care for people over the age of 65 far less than 1/2 of 1% of that amount is reinvested in research and prevention that could lead to lower health care costs for chronic disease and disabilities.

Should society work to eliminate the afflictions of old age by attacking diseases such as Alzheimer's , dementia, stroke, osteoporosis (softening of the bones), and arthritis? Osteoporosis currently affects 90% of all women over age 75. Finding a cure could decrease the cost of long term care, hospital costs ,and prescription drug costs.

The Notch Problem

Callahan wants to guarantee the elderly, along with everyone else, access to universal health care and help everyone avoid an early, premature death. He proposes to reform the health-care system by achieving a better balance of caring and curing based one age, specifically by improving long-term care and home care.
Only after accomplishing these goals, he insists, would it be time to introduce an age -based cut-off of life extending technologies under Medicare. Callahan's goal is initially idealistic. The plan calls for an age cut off for some medical procedures. After a certain age the elderly would not qualify for life extending care. He advocates an arbitrary cut off point. Because we have not been able as a society to define when aging begins there is a problem with this approach. Currently, there are no boundaries to define old age like there are for childhood or adolescence. We do not all age at the same rate, and different parts of our bodied age at different rates. Use for example the cut off age of 65. Could a vibrant, healthy ,66 year old be denied life sustaining surgery while someone frail and ill at age 55 be allowed the treatment? Chronology is not a good indicator of life value. Quality adjusted life years (QALY's) is a commonsense view that 10 years of life with disability may not have the same value as 10 years of good health. Then again, what is considered valuable when it comes to life? Did you know that when given the option, most nursing home residents want life sustaining treatments, should they stop breathing?

IV. Estate Planning (For Calif. Residents)

What is Estate Planning?

Don't want to be part of the notch problem? Estate planning might be the answer for some. It is a lifelong process in which you evaluate your situation and plan for the future, including health care costs. One does not need to be wealthy and have amassed a large estate to do estate planning. It includes planning for:

retirement income

health care costs

the possibility of disability

death and distribution of your assets

The estate planning process requires that you consider a wide range of legal, financial, emotional and logistical issues. It can be a positive experience since it involves reviewing your situation and planning for your future. Estate planning can reduce potential distress for your family later when the stress of any family member's death can evoke a wide range of emotions.

There is no single "checklist" to follow for estate planning because every person’s situation is
unique. We will complete the planning for retirement and disability later in this course.

Some people use a combination of financial planners, accountants, lawyers, doctors and insurance agents in planning process. For others a short course like this one or one in estate planning meets their needs. No matter which method you use these are some of the issues to consider:

Where will retirement income come from? How will you supplement health care costs?

How do you want your assets distributed when you die? Who gets what?

Who will care for minor children ? If you are a grandparent raising a grandchild, or a young adult with minor children this is an important issue.

Who will speak for you in the event you are not able to make medical decisions for yourself? Will they know your wishes regarding life-sustaining treatments?

How will you avoiding probate court (this is costly for your heirs). You can set up living trusts or other legally binding situations to avoid or reduce estate taxes.

If you are interested in more information you can log onto this site for help with these items http://www.aarp.org/estate_planning/

Your Personal Checklist

It is important to periodically review your records and decide whether you need to prepare a summary of your property and debts so that others can effectively administer your estate if you are disabled or when you die. If you are disabled before you die, your family must know about your debts and insurance coverage, so they can make payments as they become due. A recent loan application, or tax return is a good starting point to identify your assets but they won’t include some important property.

Will your family know the following?

Location of vital documents (birth, death, marriage, divorce, adoption).

Location of employment records, and military records, if applicable.

List of real estate owned (including partnerships/joint ownership).

Payment information for mortgages, taxes, and insurance.

Location of deeds, loan documents, debts you owe and that others owe to you- safety deposit boxes or storage lockers.

Insurance information, (location of policies, company, policy number, amount of insurance).

Health insurance information, long-term care insurance, advance directives.

List of valuable personal property (furniture, artwork other personal property that has special value.

Consider that family members who already knows about these things may not outlive you.

List of bank and investment/security accounts

Names of advisors (accountant, attorney, insurance agent.

Bonds, stock, copyrights, patents or trademarks

Burial/Funeral plans, pre arrangements

Description of vehicles, location of title, loan and insurance info.

Other Helpful Resources:

Lastly, if you need an attorney for estate planning and can’t afford one, the Alameda County Bar Assoc. Community Services has produced a 34 page "Legal Services Directory" identifying many free and low-cost legal programs in the county. They can be reach at 510- 893-1031. Books- there are many good books at the library on estate planning. One that is often recommended is Harvey Platt’s Making a Will and Creating Estate Plans, (Longmeadow Press, 1991,$4.95).

Questions regarding lecture materials? Ask at the discussion board, email me or visit me . Sue.

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