Friday, November 21, 2008

Stakeholders


I really don't like it when policy wonks use the term "stakeholder" in the health care debate.

I mean, what do they mean? Do they mean someone holding a stake?

Or maybe it's someone holding a steak, and they just misspelled the term.

I suppose we all know what a stakeholder is: it's someone who has a "stake" in making a profit monetarily from our health care system. As such, the term really has nothing to do with patients, since patients are always the one's paying the for the big, juicy 64-ounce porterhouse "steak" that health care has become.

You see, "stakeholder" is a business buzzword, and make no mistake, health care is business, America. Big business. And Big Business wants what's best for you - really - just so long as they get their piece first. Rest assured that the back-room dealings in our non-transparent system will assure that they will continue to adjust prices to assure their profits, paying themselves first and justifying payment costs to the doctors and nurses ultimately responsible for your care in turn. That's the way business works - they MUST respond to their shareholders - those with a financial stake in their business - before they respond to their customers. For viability, business interests must always come first.

So who are these "stakeholders?"

The Insurance Companies

Insurance companies are powerful players in the health care debate. This is not to say that insurers are not important to future health care policy. On the contrary: insurers can play a vital role at making health care affordable to many by spreading risk across many contributors. But insurers do not currently modify their practices based on the individual policy holder's needs. No, insurers answer to the individual's employers, and regrettably a conflicted intermediary is born: one who wants to limit costs and bids on behalf of their group of patients, rather than individual preference or need.

The Employers

Employers are the next big "stakeholder" in the health care debate. They feel they have to pay the bill. At least they did. Suddenly, with the increasing costs associated with health care, they're finding harder than ever to offer health insurance to their employees. They know that without insurance, they might be placed at a competitive disadvantage when recruiting new talent for their company if this benefit is NOT offered. So they succumb to market pressures, and offer a policy that will be affordable, yet just accommodating to the majority of their employees. Lately, these policies shunt more of the costs to the employees themselves.

Hospitals

But the complexity (and "stakeholders") expands further. Hospitals compete for the large patient population of patients held by employers. They spruce up their facilities, increase their market footprint, and buy the latest gadgetry in a never-ending marketing push to secure more of the patient population under their care. There is a business imperative to be all-accommodating to patients and open, Walgreens-like, a clinic on every corner. With more patients, they drive a harder bargain with insurers, pointing to the high cost of doing business as rationale enough to justify their demands for higher payments from the insurers. Insurers, then, court the businesses, and fight negotiate with the hospitals until a price-point that will make both entities happy is struck.

The Pharmaceutical, Device, and Health Care Support Industries

The fight between hospitals and insurers would not be as brisk if it weren't for the high cost of consumables in health care. Drugs and devices are the easy entities to discuss, but one cannot overestimate the ancillary service industries that have sprouted to support the complicated billing-denial-payment collection cycle that is now commonplace in health care delivery today. Everyone gets a piece of the action. A new cardiac device supplants the old, without any real need, because it adds a new bell or whistle and market analysis says "it's wanted." We have over 75 drugs to treat hypertension, but only the latest and greatest are touted. Advertisers subsume the nightly news with their commercials asking the public if they've talked to their doctor about erections lasting four hours. It's crazy.

You

Meanwhile, the patient is paying the bill for this expansion and market positioning through higher insurance premiums, higher deductibles, and higher cost markups that appear on their health care bill.

With our most recent election, our health care funding crisis began to surface as a critical issue. Americans voted for "change." But so far it appears we're going to get more of the same when it comes to health care, simply because the system of third parties remains intact. In its current iteration, it appears now another layer of bureaucracy is being envisioned: a board modeled on the Federal Reserve to “offer a public framework within which a private health-care system can operate more effectively and efficiently — insulated from political pressure yet accountable to elected officials and the American people.”

What?

The only real objective "change" I have heard discussed has been an overt shift of Medicare payments from specialists to primary care to support the primary care troops.

Okay. I'm game. Socialists principles are applying. I get it.

But employers will still be paying for their employee's insurance, insurers will still be bickering with hospitals and courting employers, hospitals will still be growing their networks and facilities, and the patients will still be paying all of the costs, except now some of those costs will be conveniently disguised as our national debt.

In essence, we seem to have a bunch of plate-spinning going on here by the steakholders stakeholders of health care that does absolutely nothing to address the cost crisis we have in health care today. Unfortunately, because stakeholders really hold the money to affect change, it seems unlikely there will be a move for self-introspection: rather, they all have to compete with each other as government funds the spending orgy. Doctors and nurses are increasingly employees of hospitals and the AMA is funded by and as such have lost much of their bargaining power in the debate.

And so, from the 50,000-foot view, patients will ultimately be left holding the financial bag, unless somehow, some way, we wrestle control of our own money from that of the third party stakeholders and assume responsibility for our own long-term well-being and health. Structuring such a system would amount to real change.

But then, we want the government to make the change for us, don't we?

-Wes

Image reference: Sizzle on the Grill

1 comment:

CB said...

Nice looken T-Bones! ~CB