Crossposted from Dailykos
We all know that our current healthcare "system" is in crisis. Some 47 million US inhabitants have no health insurance and therefore very limited, if any, access to healthcare. That number increases daily. An incalculable number of people have inadequate insurance; that number also increases daily. And, as nyceve has repeatedly documented, even those who are "well insured" by today’s standards can never be sure that insurance companies will actually reimburse their beneficiaries for any particular medical service.
Since The Institute of Medicine (IOM) released its ground breaking report To Err is Human in 1999, the medical profession and affiliated groups have acknowledged that everyday safety in hospitals, the use of medications, and other aspects of medical practice is inadequate. The IOM estimated as many as 98.000 preventable hospital deaths per year in 1999. There is little indication that the situation has greatly changed during the eight years since then.
On March 24, The New York Times (behind firewall) suggested a more fundamental concern: Even those with "good" insurance may increasingly confront difficulties in obtaining even routine care.
The Times focuses on pediatricians who, entirely for financial reasons, are failing to give some recommended vaccines to their young patients. Under the current system of vaccine distribution, physicians purchase supplies of vaccine. They are reimbursed only when they administer the vaccines to patients. In recent years, the cost of vaccines has nearly tripled, as pharmaceutical companies have increased prices, and as new and expensive vaccines have been introduced (such as Merck’s Gardasil, at $360 for a course of three doses). Seven shots and four oral doses, recommended for childhood immunization cost an inflation adjusted $59 in 1980. Today 37 shots and three oral doses are recommended by age 18 at a cost exceeding $1,600.
In addition, insurance companies may not reimburse for all vaccines, and their payments may not be sufficient to cover the full administrative costs of administering them.
As a foreseeable result, physicians have become increasingly resistant to tying up thousands of dollars each year on vaccines that may not be used, or that might be destroyed by refrigeration problems or by such mishaps as dropping a full syringe when trying to inject a squirming child. And public funding cannot fill the gaps. Vaccines are too expensive for states or localities to buy, and there is not a public health infrastructure to deliver them. Most publicly subsidized vaccines are delivered by private physicians, and paid for only after they have been administered.
Some physicians are requiring patients to pay upfront for vaccines or even to get them from a pharmacy, paying a substantial markup from the wholesale price at which physicians can obtain them
The only responses to the problem The Times noted were one insurance company that raised its reimbursement rates for vaccinations, another that steered physicians to purchase vaccinations from distributors that charged less than its reimbursement, and one drug company that extended the time for physician payments from 30 to 60 days.
To date, drug manufacturers have refused to share the financial risk by allowing physicians to pay only for the vaccines they use. Such a "radical" idea as having the government buy all vaccines is, according to The Times, unlikely to gain political traction. Requiring insurance companies to reimburse adequately is also said to be a non-starter.
This story illustrates how a "market-based" health care "system" in which all insurers, suppliers and providers are motivated to pay primary attention to their financial interest fails the entire population. Public health experts consider vaccines one of the most important and cost-effective health interventions available.
Vaccination also has significant social effects. To eliminate a particular disease and its costs from a population, a large proportion of its members must be vaccinated. Thus, it is in the interest of the entire society that vaccines be universally distributed. This is also one of the primary reasons that vaccines for those who could get them in no other way have in the past been distributed through government public health infrastructures in the US and still are distributed in this manner in other nations.
Today, however, that broad social benefit of vaccination is ignored in the US. The current ideology that "the market" must "govern" healthcare arrangements has inexorably led to an untenable situation. Drug manufacturers with lengthy patents protecting their "intellectual property" raise vaccine prices to whatever levels the traffic will bear. Insurance companies pay physicians as little as possible. Physicians avoid financial risk by refusing to purchase vaccines they may not be adequately reimbursed for. Finally, patients themselves must bear the costs of vaccination, even though the entire society benefits from their broad distribution.
This story suggests the dangers of relying on "the market" to allocate healthcare. Market incentives are financial incentives. As in this case, the maximization financial benefit by each supplier, provider and insurer may reduce the availability of essential health services to many patients who have what seems to be good insurance
Note: I am using the vaccine situation as an illustration of the precariousness of the "market-based" healthcare system. There are many arguments about vaccination itself. Some vaccines may be harmful. The recent increase in the number of recommended vaccines may be a consequence of pressures from Big Pharma, which sees another means of profit maximization. I am sure there are other controversies as well. I am not well enough informed to address these questions. Please limit comments to the dynamics of the healthcare "system", not the merits (or lack thereof) of vaccines themselves.
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