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Health Policy

Life Insurance Settlements: What is Your Life Worth?

If you found out you only had a few more years to live, would you bet your life for quick cash? The New York Times article, “Are You Worth More Dead Than Alive?” presents the story of a man, Ruben Robles, who was diagnosed with brain cancer and told he had two years to live, at most. With a half a million dollars in life insurance policy, Ruben knew that he had an option to sell his life insurance policy for money upfront.  While the thought of buying a life insurance policy based on someone’s imminent death seems grim, the life settlement industry has become a common option to those with little left to lose.

In 2007, the life settlement business generated $12 billion in transactions but as the recession hit, it only brought in $3.8 billion worth of life settlement in 2010. Today there are $18 trillion worth of active life-insurance policies in the United States and very few people even know that they can sell their policies. The article states:

“Life insurance is designed to benefit the living, a spouse or heirs, not those who perish. But Carole Fiedler, who owns a firm called Innovative Settlements, knew that a life-insurance policy is an asset that can be resold to a friend or stranger just as a car, boat or house can. In a transaction known as a viatical settlement (for terminally ill patients) or a life settlement (for everyone else), the person selling his insurance gets an immediate cash payment. The buyer, in exchange, is named as the beneficiary and pays the premiums until the insured person dies. Life no longer afforded Robles a traditional way to make money, but to the right investor, Fiedler advised, his imminent death was worth a great deal.”

It’s hard to believe the business of life settlements is legal and it poses many questions as to what risks this type of transaction might bring in the future. The article makes the point that “both sides participating in settlement transactions are winners: the policy seller is paid upfront, and the buyer is paid even more later.” Yet, it’s difficult to fully understand and come to terms with a business that is gambling with someone’s life. The article is intriguing and makes valid points for both sides of the deal and I suppose it’s a decision you can’t fully judge until you are faced with terminal illness, old-age and/or short life-expectancy.

“For all the advancements that aim to make life-expectancy science more precise, death remains one of the most uncertain certainties around. When you invest in an individual life settlement, you are placing a bet. And bets hinge upon probabilities that can’t be controlled.” Read more…

Book Review: Reefer Madness

Too High to Fail by Doug Fine

Noted comedian, pundit and provocateur Bill Maher wrote a review in the New York Times on Doug Fine’s book “Too High to Fail,” which addresses the marijuana economy. The matter is gaining considerable public momentum. Several states permit so-called “medical marijuana” and have passed or have proposed referendum and laws to lower sanctions or decriminalize possession. The failure of drug laws as public policy are legion and a growing number of American’s, perhaps the majority, are not interested in pursuing further failed policies, and instead seek rational approaches to marijuana. The days of the drug being viewed as a gateway to narcotics and a life in society’s shadows are long past. If the ability to prosecute or judge offenders required prosecutors and judges who have themselves used marijuana to recuse themselves from the proceedings, many would be disqualified.

The U.S. has the highest percentage of individuals incarcerated in the world as this map shows. Among the reasons for incarceration, drug related offenses are a significant portion of these.

There is a disconnect between the significant criminal sanctions for marijuana use, possession, sale and growing and the actual risks and danger of the substance. While nothing in excess is without risk, any healthcare professional can easily recount the dangers of alcohol on the body, on violence rates, accidents, crime, trauma and social disruption. Tobacco and firearms, both decidedly legal, cause untold deaths.

Medical marijuana is a back-door entry and access point to something that may have medicinal impact for some, but is clearly being used by many as a legal way to get high. The indications for medical marijuana prescriptions are so varied and non-specific in practice as to put the lie to those who would claim it has limited application to cancer-related nausea, glaucoma and the like. Medical marijuana has become a cottage industry where legal, diverting attention from the big picture of whether it warrants continued criminal treatment. Local governments are in conflict with states and the Feds. Medical data supporting the severe sanctions and disparate treatment is lacking. Many in society, including law enforcement experts are questioning the status quo and attempting to seek rational, realistic, and economical solutions.

The Premie Challenge

By Brian L. Grant MD

Rafi, now age 3, was born premature at 28 weeks unable to maintain body temperature, breath or feed unassisted. He spent a month in the Neonatal Intensive Care Unit and is alive now because of a multidisciplinary team, medicine and technology.

The photo of the boy holding the flustered chick is my three-year-old grandson Rafi. He is perfect in every way. But his life is a triumph of medicine and technology. Rafi was born at 28 weeks of age, after an unexpected premature labor. His mother was rushed to deliver at the University of Washington. When born, he looked similar to the photo below. The delivery of such a small baby was easy. But what followed was not. A large team took over in the Neonatal Intensive Care Unit (NICU) and for the next four weeks, Rafi was watched and cared for. He was unable to maintain body temperature, feed or fully breathe unassisted – so others helped. After a month in that unit, he spent another month in a less intensive unit in Seattle before discharge at what would have been about 36 week’s gestation.

Absent the care he received, he would have died at birth. He had no apparent abnormalities beyond prematurity, and being kept alive while being allowed to mature took care of the issue. His situation is hardly unique, as the article, “In Premies, Better Care Also Means Hard Choice,” from the New York Times describes. The article focuses on the decision(s) to resuscitate premies.

In Rafi’s case, there was no discussion, just action. Perhaps had there been severe problems or anomalies there might have been, but it appeared to be a given by the system that he would be given all resources available. I can’t imagine the challenge his parents would have faced had they been asked to make a life or death decision at that trying time. And they and we are very appreciative of the incredible care Rafi received by a skilled multidisciplinary team. The actual cost is not known to me, but I assume it was well into the six figures – covered by his parent’s insurance without challenge. Such tertiary care resources are expensive. But Rafi shared the unit with babies from less fortunate backgrounds, who received the same level of attention. While payment for and cost of care is a big issue for all of us, the source or availability of payment played absolutely no role once a baby was admitted.

When I was a medical student on the late 70’s, one of my first clinical rotations was in a NICU. My first exposure to babies was of the two-pound variety, such that when I finally worked with full-term babies, I could not believe how big they were! The technology and skills to sustain these kids and avoid long-term problems continue to evolve and even then, I concluded that this is one area of medicine that truly has an impact – lives are saved that would have ended and many or most go on to lead normal lives. But challenges remain, especially in earlier gestation births. The ethical questions and values that the choices that were not available until recently are many. And each baby, family and set of resources creates a different set of opportunities as well as challenges. Read More…

Responsible Health Behavior Should Be a Part of Our Societal Structure, Not a Domain of the Health Care System

By Brian L. Grant, MD

This  interview and article, “Health Care’s New Maverick,” with Dr. Ralph de la Torre, CEO of Steward Health Care System, is interesting. Clearly a talented and smart man with a mission, his beliefs may represent some thinking that is far more “in the box” than innovative. A fundamental flaw is that he believes that issues like health behavior and “wellness” ought to be part of a health care system rather than part of our societal structure. We have seen that once the health care system embraces an issue, individuals take a passive role as patients needing care by others, rather than engaging in conduct from birth that reduces or prevents chronic lifestyle illnesses that severely impact individual morbidity and society.

Seriously, is good nutrition and food intake a matter for doctors to dictate and treat than for individuals armed with knowledge and government and social policies that align with the knowledge? Is tobacco use something that could be better curbed by societal and political decisions rather than smoking cessation programs? If prevention, as he rightly highlights as necessary, is effectively achieved, his company’s prospects, along with all others in the health care system, is diminished. His interest as a CEO is at least in part, driving the profits of his company. Profits in health care can be made by doing good, as well as by doing more of what is less than impactful.

Health Care and Cheesecake Factory: Can the former learn from the latter?

By Vanessa Radatus

Illustration by Harry Campbell for The New Yorker

This week, The New Yorker presents a fascinating article that delves into heart of what our health care system needs. Using The Cheesecake Factory as a model, American physician and journalist, Atul Gawande, provides refreshing insight as to how hospitals could learn a thing or two from this service savvy business. After all, who wouldn’t want a healthcare model that guarantees 100% satisfaction with quality and service, all at an affordable price?

Atul Gawande says it nicely: “In medicine, too, we are trying to deliver a range of services to millions of people at a reasonable cost and with a consistent level of quality. Unlike the Cheesecake Factory, we haven’t figured out how. Our costs are soaring, the service is typically mediocre, and the quality is unreliable. Every clinician has his or her own way of doing things, and the rates of failure and complication (not to mention the costs) for a given service routinely vary by a factor of two or three, even within the same hospital.”

So, what can we learn from these flourishing businesses that continue to serve millions while managing efficiency, quality, and cost? For one, we must accept that whether we agree with recent health laws or not, our system needs a new model and fast.  With trillion-dollar healthcare costs only getting higher and a shortage of doctors to treat 30 million newly insured Americans, utilizing key business strategies from successful chains like The Cheesecake Factory may not be a bad idea.

In his article, “Restaurant Chains have Managed to Combine Quality Control, Cost Control and Innovation. Can Health Care?” Gawande takes a close look inside of The Cheesecake Factory’s  strategies to see how the business makes $1.2 billion in yearly revenue while maintaining affordable, high-quality products that always leave customers smiling. He explains that the success secrets behind the business is that instructions are precise, objectives are clear and oversight is tight. “The formula was Business 101: Use the right amount of goods and labor to deliver what customers want and no more. Anything more is waste, and waste is lost profit,” Awande stated.

If our hospitals aimed to reach the same amount of quality, efficiency and positive outcomes as these enterprises do, our healthcare system would not be in its current crisis. Awande proves a good point when he asked Dave Luz, Regional Manager of eight L.A. Cheesecake Factory’s, what he would do if he were manager of a neurology or cardiology unit in a hospital:

“This is pretty obvious. I’m sure you already do it. But I’d study what the best people are doing, figure out how to standardize it, and then bring it to everyone to execute.”

Unfortunately, this is not how medical care works. But new health-care chains are now hoping to do this on a mass scale, Awande says.

“They want to create Cheesecake Factories for health care. The question is whether the clinicians in the operating rooms, in the medical offices, in the intensive-care units—will go along with the plan. Fixing a nice piece of steak is hardly of the same complexity as diagnosing the cause of an elderly patient’s loss of consciousness. Doctors and patients have not had a positive experience with outsiders second-guessing decisions. How will they feel about managers trying to tell them what the “best practices” are?”

After a lengthy yet intriguing look into both the medical and food industry, Awande ends with this final thought for readers: ”

“The critical question is how soon that sort of quality and cost control will be available to patients everywhere across the country. We’ve let health-care systems provide us with the equivalent of greasy-spoon fare at four-star prices, and the results have been ruinous. The Cheesecake Factory model represents our best prospect for change. Some will see danger in this. Many will see hope. And that’s probably the way it should be.”  Read More…

Atul Awande is a highly respected physician and journalist. His writings on the process and practice of healthcare are important. His book “The Checklist Manifesto” is a must read for anyone concerned about health care and hospital quality.

U.S. Doctor Shortage Expected to Worsen as More Become Insured

Source: Kaiser Family Foundation

From The New York Times comes this interesting article, “Doctor Shortage Likely to Worsen With Health Law,” stating that increasing access to health care will mean physician shortages in many regions. It would be interesting to understand the assumptions behind these conclusions. Many factors impact these trends. Including the relative low status that primary care specialties hold in medicine, at least economically, the preference for well-educated clinicians for some settings and communities over others, an aging population beset by many chronic conditions, and a care model that may need revision. As we understand many common disorders, other practitioners, including nurses, physician assistants and others may be quite qualified to address and care for them. Read More…

The Los Angeles Times describes one possible solution to the doctor shortage in their article, “In-store Clinics Look to Be a Remedy for Healthcare Law Influx.” With an estimated shortage of 40,000 primary-care doctors by 2020, pharmacy giant CVS Caremark Corp, Target Corp., Walmart and other retailers are preparing to open more walk-in clinics to help address the physician shortage. Read More…

Medical Payment Collection Gone Wild

By Brian L. Grant, MD

Emergency rooms sit of the front lines of the health care payment crisis as they must provide care to all who come though many can’t afford to pay. Photo by Adam Gault / Digital Vision / Getty Images.

Emergency rooms  sit on the front lines of the health care payment crisis. On the one hand, they must provide care to all who come – by law, custom and ethics. On the other hand, the care is expensive and many can’t afford to pay. Many of the uninsured use ER’s as their care sources rather when they lack access to clinics and physicians. Creative companies have found ways to profit and help pay for the care provided. In this case, one such company crossed the line of decency and legality. Our fee for service health care system assumes that personal responsibility and solvency can be relied upon. Is society served by financial triage for essential or urgent medical needs?

One day not too far off, stories such as the one featured in the New York Times article “Medical Debt Collector to Settle Suit for $2.5 Million” will be looked at with the same shame we feel towards the discrimination practiced in our country based upon race and other factors in past decades. We would regard it as abhorrent to deny access to K-12 education for the poor. Why do we believe that different standards ought to apply to access to health care? Why should employers have the burden and responsibility of providing health care for their employees, rather than this be a basic part of the social contract as members of society?

Do we as citizens and particularly those of us who have chosen to enter the field of health care have obligations beyond caring for our patients – to address systemic shortcomings and abuses the adversely impact the public health? Or is medicine just a job, and our goals to maximize profit?
Read more here: “Medical Debt Collector to Settle Suit for $2.5 Million”

The United States- A Third World Health System?

By Brian L. Grant, MD

This rather long feature article from the New York Times magazine is worth a read on many levels. It is an in the trenches view of the reality of life for too many American’s, and some creative efforts to import a system that had value in Iran to the poor of Mississippi. The article “What Can Mississippi Learn from Iran?” notes that 84% of our health care dollar is spent on treating and managing chronic conditions. Interventions that impact these conditions pay off in reduced morbidity and expense.

Health care does not exist in a vacuum but rather in a larger social context. The article raises many questions about poverty, equity and humanity. What are the implications of promoting our current system over other alternatives that recognize human shortcomings and work within existing social contexts? Imagine how the U.S. appears to those in countries as disparate as Iran, France, Great Britain, Canada and many more that provide health care as part of the social contract?

Compare and contrast the crying needs and resource shortages described in this article to the context that many Americans, provider and patients alike exist in – where technology, procedures and interventions reign, all too often driven by factors other than clear evidence, and frequently administered not based upon clear and compelling need, but rather by the ability to pay or the desire to be paid. There is nothing inherently wrong with profit, but should it be the driving factor in a health care system any more than it should be the driver for education or other social needs and goods?

Read more here: “What Can Mississippi Learn from Iran?”

Fighting Over Obamacare Won’t Solve Our Trillion Dollar Problem

By Vanessa Radatus

Despite the  Supreme Courts’ decision to uphold Obama’s Affordable Care Act this month, heated debate over its future blazes on.

Opponents of the Act vow to “repeal and replace” the mandate and claim they will continue to provide the same improvements,  yet refuse to explain how they will pay for such improvements. On the other hand, supporters of the law propose that 30 million uninsured Americans will gain coverage and the policy will eventually reduce health care spending. But this is only the first step to curbing health costs and improving the quality of our health care system.

Christina D. Romer, an economics professor at the University of California, Berkeley provides a valid perspective in her New York Times article, “Only the First Step in Containing Health Costs.” As the former chairwoman of President Obama’s Council of Economic Advisers, she explains that while Obama’s healthcare plan is a step in the right direction the law must be expanded and built upon.

“Despite Republican claims that the law is a budget buster, the Congressional Budget Office, the nonpartisan, official scorekeeper on budget matters, estimated it would actually reduce the deficit over the next 10 years. Such fiscal responsibility is in stark contrast to the last major health care legislation, the Medicare prescription drug benefit passed in 2003, which was projected to add nearly $400 billion to the 10-year deficit,” writes Christina Romer.

The fact is, the U.S. spends substantially more on health per capita than many other developed countries but we don’t have superior health system performance, according to the Organization for Economic Co-operation and Development (OECD).  Even more, other developed countries actually enjoy the benefits  (longer life expectancy and health) even though they pay a third less.  Read more at “5 Reasons Why Health Care Costs Continue to Rise.”

Romer writes, “Sadly, serious debate over further cost-savings measures may be a long way off. Some Republicans seem more interested in just limiting the government’s share of health care expenditures than in slowing overall spending. And some Democrats seem more interested in just preserving existing government programs than in making the entire health care system more efficient.” Read More…

In an US News article “Bickering over Affordable Care Act Gets Us Nowhere,” David Brodwin, cofounder and board member of American Sustainable Business Council, agrees that our government is wasting time arguing over the mandate and should be focusing on finding a solution together.

David Brodwin writes a list of what he believes a true fiscal conservative would do to solve the healthcare challenge:

  • Stop making promises you can’t keep to win the vote. Pretending that we can maintain the coverage improvements that Obamacare brings without a plausible plan to pay for these improvements just won’t work.
  • Address the “free riders” who drive costs up. There has been significant discussion about our nations’ uninsured who consume healthcare services paid for by others. “But an equally damaging free rider problem allows the rest of the world to ride free on what Americans pay for their drugs. It’s well known that U.S. residents pay far more for prescription medicines. The extra revenue, arguably, goes to finance the tremendous R&D costs for advanced medications and devices. As a result, the rest of the world gets to enjoy the new and better drugs but not pay their fair share of development costs. This needs to stop. The American public cannot finance the world’s healthcare,” Brodwin says.
  • Be willing to challenge overutilization. ” Doctors continue to prescribe drugs and procedures that haven’t been shown to work. We can debate whether we want a “government bureaucrat between you and your doctor” or an “insurance company bureaucrat between you and your doctor.” We can’t solve the underlying problem without seeking quality  cost-effective treatments.
  • Recognize that we can’t improve health care spending unless we wring excess cost out of the system. “The level of marketing and administrative overhead in our system far exceeds the spending elsewhere in the developed world… Either we must stimulate more direct competition among providers and insurers, or we must regulate to ensure that the money charged goes toward care, not overhead.” Read More…

What our nation really needs is to put our partisan driven views aside and agree on a solution that meets our nations’ enormous medical spending challenge. We spent $2.7 trillion on health care expenditures last year and it’s projected to rise in the coming decade. With or without the Affordable Care Act, the U.S. health care system will remain broken until an altruistic agreement is made.

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How would you fix the United States Health Care System?

Does Our Health Care System Provide Better Value For Money: The Data Suggests Not.

by Brian L. Grant, MD

Rhetoric abounds in defense of the U.S. health care system. The rhetoric tends to focus on access, freedom, and choice. But critics of change are generally quite silent when it comes to the measurements of health that count the most in the public health world, including lifespan.

Data supports the fact that the U.S. spends more per capita than any other country on health care, while at the same time our lifespan lags. Among the Organization for Economic Cooperation and Development (OECD) countries studied , the US stands at 28th, at 78.2 years, just behind Chile, and well  below the OECD average of 79.5 years.

Reasons are complex and include many factors that one might argue fall outside of our healthcare system, including lifestyle factors such as obesity. But if this is part of the answer, it further argues against directing massive funds into healthcare rather than potentially more meaningful social and public health focus.

We attach two news articles and one paper that detail this information:

U.S. Ranks 28th in Life Expectancy While It Pays the Most for Health Care

U.S. Health Care Costs More Than ‘Socialized’ European Medicine

Health at a Glance 2011: OECD Indicators: Why Is Health Spending in the U.S. So High?