Friday, September 25, 2009
Wednesday, September 23, 2009
Tuesday, September 22, 2009
" “Come on,” the general surgeon finally said. “We all know these arguments are bullshit. There is overutilization here, pure and simple.” Doctors, he said, were racking up charges with extra tests, services, and procedures.
The surgeon came to McAllen in the mid-nineties, and since then, he said, “the way to practice medicine has changed completely. Before, it was about how to do a good job. Now it is about ‘How much will you benefit?’ ” "
The narrative continues:
"To determine whether overuse of medical care was really the problem in McAllen, I turned to Jonathan Skinner, an economist at Dartmouth’s Institute for Health Policy and Clinical Practice which has three decades of expertise in examining regional patterns in Medicare payment data.
Sirovich asked doctors how they would treat a seventy-five-year-old woman with typical heartburn symptoms and “adequate health insurance to cover tests and medications.” Physicians in high- and low-cost cities were equally likely to prescribe antacid therapy and to check for H. pylori, an ulcer-causing bacterium—steps strongly recommended by national guidelines. But when it came to measures of less certain value—and higher cost—the differences were considerable. More than seventy per cent of physicians in high-cost cities referred the patient to a gastroenterologist, ordered an upper endoscopy, or both, while half as many in low-cost cities did. Physicians from high-cost cities typically recommended that patients with well-controlled hypertension see them in the office every one to three months, while those from low-cost cities recommended visits twice yearly. In case after uncertain case, more was not necessarily better. But physicians from the most expensive cities did the most expensive things."
The L.A. Times article on which you base your conjecture is itself based on data from the Dartmouth Institute for Health Policy and Clinical Practice, whose publications paint an entirely different picture (from yours) of why Medicare costs differ enormously from region to region. As a matter of fact, if you visit the site, you will find several of Dr. Gawande's articles listed there - including this one.
So the answer is pretty clear. Medicare costs differ from region to region - not because of differences in the income or "life styles" of local populations - but rather, the differences in the approach by medical professionals and administrators in different areas towards how and how much health care is to be delivered. Furthermore the choice of McAllen as a case study is particularly significant, since another commonly held view is that doctors prescribe more tests and procedures to avoid malpractice complaints, and Texas is one of the few states in the union which caps non-economic damages in malpractice suits.
I think we're going to get into trouble if we start making broad assumptions about health care reform by using stereotypes. When you proceed on the assumption that income is a central determinant in how much care an individual is going to require in later life, what you are really doing is just laying the blame for high costs on "poor" people - while ignoring the real problem. Any free society is always going to have its poor and rich - and everything in between. There isn't much we can do about that. But we can, in the real world, develop more effective guidelines for doctors to rely on when considering treatment options. This concept, by the way, is precisely why the original reform bill proposed by Democrats mandates the creation of an advisory board to do that.
Monday, September 21, 2009
(1) "Studies show that the sickest 10% of patients consume two-thirds of the nation's healthcare outlay. So even small improvements could reap big savings.";
(2) "The national average for Medicare spending on such patients was $46,412, including outpatient care. But in Los Angeles County, the average cost was nearly double that, $84,179...";
(3) "...the highly rated Mayo Clinic in Rochester, Minn. Medicare spends $50,273 on chronically ill Mayo patients in the last two years of life -- 8% more than the national average, to be sure, but still a relatively modest premium given the Mayo Clinic's renowned care.";
(4) "...the tab is especially high for chronically ill patients seen at White Memorial. Medicare spends an average of $130,992 on patients seen there in their last two years of life, the biggest share of it on hospital care... That's nearly three times the national average for similar patients..."
An interesting conclusion you can reach from this article is that it costs more than twice as much to die in an LA County hospital that takes charity patients than it costs to die in the Mayo clinic. Why would it cost more than twice as much in LA County than in the Mayo Clinic? And if 2/3 of all health care costs are paid for 10% of the patients, it's pretty clear where the savings have to come from.
As others continually point out - the US spends more on health care than anyone else and we get less for it. Perhaps the above article include evidence that may lead to at least at partial explanation.
But a point which is not mentioned in the article, which I submit is that a key factor in the equation, is the economic status of the patients. Note that a significant portion of the high cost is generated by care for "the poor". This is obvious, but leads to a statement of fact which is politically incorrect, to say the least.
In a country with the greatest possible conditions where, over a lifetime, an individual can achieve great heights, some (not all, but surely some) simply CHOOSE not to do so. In other words, the individual, personal Life Decisions of "The Poor" are a critical component of WHY they are "Poor"; and why they remain so. As a result of their Life Decisions - e.g., poor decisions; no pun intended - they have positioned themselves to require more and expensive Health Care.
Yes, this is a harsh point to make. But Reality trumps Theory. I suggest no specific action (at this time) concerning this issue with respect our new and developing system. But I would like to interject that providing care is only a single aspect of the problem. There are individuals who are capable of making 'good decisions', yet simply CHOOSE NOT TO. And the implementation of a bureaucracy which imposes (i.e. FORCES) 'Good Habits' on everyone (because a few refuse to use their brains) is a dangerous and slippery slope, to be sure.
Food for thought, nothing more.
Thursday, September 17, 2009
I don't mean to rain on your parade. My diatribe above (and below) is not intended to single YOU out. Quite the contrary - your most recent posts have been thought-provoking and excellently presented. Many thanks. Like you, I am struggling with HOW to accomplish the goals - heck, I'm still trying to DEFINE the goals! - without making things worse. Yes, Our system can be improved, but the process of doing so will be painful and will require re-thinking some long-held assumptions by all sides...
OK. Enough. – Here is something to chew on...
There is an intense debate on how to provide affordable health care coverage for more Americans. Census Bureau statistics and other sources are used as the foundation of an argument for GREATER government intervention in health care as THE way to cover a larger percentage of Americans. What is often often overlooked, is the fact that government policy, particularly excessive regulatory intervention, may be the Real Reason so many Americans have been 'priced out of coverage' and therefore join the high numbers of uninsured.
To begin, Health Care Insurance is already heavily regulated at the state level. Some states require insurance plans to cover certain types of health care providers or to provide certain types of health benefits. Other state regulations affect the rating rules for insurance or the ability of insurance plans to exclude people from coverage. Still others limit the ability of insurance companies to select health care providers. Many of these regulatory initiatives, particularly in the area of health insurance underwriting, are designed to achieve specific policy goals (not actually providing Health Care). These goals include controlling escalating health care costs or expanding the availability of health coverage, particularly for high-risk individuals.
Achieving these policy goals invariably requires trade-offs, but bureaucratic policymakers rarely consider the impact of their regulations. For example, rating rules that enable high-risk, older, or sicker employees to get low-cost health insurance without exclusions for medical conditions can make health insurance affordable for those employees. However, those rules also make younger and healthier employees pay higher premiums than they would otherwise obtain in the marketplace. When younger persons do not or cannot participate in the health insurance market, their conspicuous absence increases the pressure on the premiums for those who remain in it. When they do participate, those 'higher premiums' contribute to the Lost Value for the Health Care services they receive. A Catch-22: someone is going to pay the price.
There are many rules and regulations, and the impact of bureaucratic 'meddling' to achieve policy goals varies from state to state. In some states, regulations make it impossible for individuals to purchase a low-cost plan that would provide only catastrophic coverage. In other cases, the benefit mandates and insurance rules raise premiums to the point that insurance is prohibitively expensive for many people.
The economic impact of state-level health insurance regulations has generally received little analytic attention from both the academy and the broader health policy community. For some reason, this aspect of the relationship between regulatory cost and impact on the market is frequently ignored. Consider individual health insurance plans (a small subset of the overall health insurance market). In 2000 and 2001, the Center for Studying Health System Change, Community Tracking Survey 2000–2001 indicated 67.2 percent of the U.S. non-elderly population was enrolled in employer group coverage, while only 3.6 percent was enrolled in non-group or individual coverage.
Even though only a (relatively) small number of individuals obtain insurance in the non-group market, insurance costs in the individual market can have a HUGE impact on the number of uninsured individuals. The individual market consists largely of those without access to employer-sponsored insurance. Workers who buy individual health insurance policies – as opposed to workers enrolled in employer-based group insurance - do not enjoy the generous tax breaks that accompany the purchase of employer group plans. Because non-group markets are a market of last resort for so many individuals, the cost of premiums in these markets clearly affects whether or not many of these Americans can afford to purchase health insurance for themselves and their families.
Also, current economic trends will likely increase the number of workers without access to employer-sponsored insurance. Beyond those who work in businesses where the employer does not offer health insurance, there will be increasing numbers of individuals operating as sole proprietors or independent contractors. Ensuring access to affordable non-employer-based group health insurance on a level playing field *must* be a priority.
Previously, there has been little academic and policy literature on the impact of state-level health insurance regulations on health insurance premiums. Part of the reason has been the lack of publicly available state data on individual health insurance costs. However, in January 2005, Mark Showalter, William Congdon, and Amanda Kowalski published a working paper entitled “State Health Insurance Regulation and the Price of High-Deductible Policies.” http://fhss.byu.edu/econ/faculty/showalter/insurance-regulations-1%2014%2005.pdf
The authors used two separate datasets in their analysis. Golden Rule insurance provided 2003 insurance premium data from a series of random ZIP codes in 37 states, and eHealthInsurance.com, a major Internet broker of health insurance, provided prmium data from insurance policies sold through its Web site. The authors focused on four types of regulations: (1) mandated health benefits, which require insurers to cover particular treatments or particular services; (2) “any willing provider” laws, which restrict insurers’ ability to exclude hospitals and doctors from their networks; (3) community rating laws, which require insurers to limit premium differences across individuals; and (4) guaranteed issue laws, which require insurers to sell insurance to all potential customers regardless of health or pre-existing conditions. The authors found that each of these four types of regulations results in statistically significant increases in health insurance premiums. The findings were consistent across both the eHealthInsurance.com and Golden Rule datasets. The authors estimated that eliminating all of these regulations could save individuals up to $2,000 per year in insurance premiums.
Also, the Congressional Budget Office (CBO) released a study that examines how insurance prices affect health care coverage in the non-group market. http://www.cbo.gov/ftpdocs/66xx/doc6620/08-24-HealthInsurance.pdf The CBO authors did not have direct access to state premium data, but they were able to impute premiums by examining the strength of various state community rating regulations. Community rating laws limit the extent to which insurers can charge different prices to individuals with varying medical conditions. Community rating laws are commonly thought to increase premiums because they require insurance companies to charge healthy and unhealthy people relatively similar premiums. Since low premiums will not generate enough revenue to cover higher-risk individuals, premiums eventually increase, and the cost of insurance goes up for both healthy and unhealthy individuals in the non-group market. In the CBO study, the authors found that, after holding a variety of other factors constant, more individuals choose to forgo coverage in states with strict community rating laws. This finding provides solid evidence that community rating laws (e.g., government intervention in the marketplace) INCREASES the cost of health insurance.
Caveats... Some policies compared across states are not 100% equivalent for many legitimate reasons. Also, the studies excluded some potentially relevant regulatory policies. There is missing analysis on both sides, but the conclusion remains functional.
There is a comparison of the costs of identical health insurance plans across a number of states with a wider range of insurance regulations. http://www.heritage.org/research/healthcare/cda06-04.cfm [Caveat: Partisan site]
This study includes data on the health insurance premiums for nine plans offered by Celtic, six Golden Rule plans, and seven Fortis plans as obtained from eHealthInsurance.com. The premium data come from September 2005 and September 2006 and cover 36 states. These plans have significant variance in terms of deductible, coinsurance, and coverage of doctors visits, focusing on four sets of regulations that affect health insurance premiums: Mandated benefits, Health plan liability, Direct-access-to-specialists, and Provider due process.
Without going into *all* the details, the study reports premiums tend to be higher in states that regulate more heavily. On average, states with health plan liability laws, direct-access-to-specialists laws, and provider due process mandates have higher health insurance premiums than states without these regulations. States with more than 26 mandated benefits have higher premiums than states with 26 or fewer benefits. The study includes additional regression analysis, which isolates the effects of each individual type of regulation by “holding constant” other factors. Three sets of regressions were run and the results provide solid evidence that the state-level regulations of health insurance are correlated with higher premiums. The regression model estimates that the presence of health plan liability laws increases monthly premiums by $21.84. Laws that give subscribers direct access to specialists increase monthly premiums by $31.15. Provider due process laws increase premiums by $16.62. Finally, each additional mandated benefit increases premiums by $0.75.
(Yes, some of the variation in health insurance premium costs could be due to regional differences in the underlying cost of health care, which includes prevailing wages and professional fees, the volume of medical services, or medical practice patterns. However, the premiums in high-cost states are routinely 50 percent to 100 percent higher than premiums in low-cost states; it's unlikely regional cost differences are a factor.)
All this goes to say that while it is a given that there are other limitations to the study, the point remains valid... there are distinct and legitimate costs associated with INCREASING the role of government involvement in Health Care. The argument that imposing government controls and regulations will bring costs down is unsupported in Reality... (at least not in a country that values freedom of choice and individual responsibility). Conversely, using the regulatory powers of government to provide highly favorable advantages in the marketplace to a select few companies or industry groups is equally wrong. We are a country founded on the concept of the Equalization of Opportunity, *not* on equalizing the Outcome.
Condense it to three points: A - Only use government power to keep the playing field level for all players (no favorites; not at either end of the spectrum); B - Take only those steps required to provide and maintain CHOICES for the consumer, and the bureaucracy is *not* in control of the options available or their costs; and C - Then, let the chips fall where they may, even if that means people who 'choose poorly' suffer personal hardship from their decisions. (Provide education and full disclosure, but if the horse won't drink, let him go thirsty)
Harsh? Perhaps. Do I *like* it? No. Reality trumps Theory - no matter how much we would like it to be otherwise. Is it better to centralize what (minimal) regulations are required at the Federal level (take this issue away from the States entirely)? Or do we assign FULL responsibility and control back to the States and have the Federal government take a backseat? There are advantages and disadvantages to either approach... if providing Health Care this is a proper function of government, we should do one or the other, since the hybrid mixture we have today is killing us.
Regardless, the only method historically proven mechanism which consistently reduces cost to the consumer over time is INCREASED COMPETITION. Eliminating regulatory obstructions is a critical step in this process. Simply choosing to replace what is now an effective insurance 'monopoly' – consisting , as you correctly pointed out, of a very few Very Large companies – with an undefined, unrestrained, and virtually unaccountable REAL Monopoly (total government control) is a cure that is worse than the disease.
Tuesday, September 15, 2009
The National Coalition on Health Care sports an impressive, bi-partisan list of members and supporters, including former Presidents George H.W. Bush and Jimmy Carter. Just a few excerpts from their site:
-National health spending is expected to reach $2.5 trillion in 2009, accounting for 17.6 percent of the gross domestic product (GDP).
-In just three years, the Medicare and Medicaid programs will account for 50 percent of all national health spending.
-The average employer-sponsored premium for a family of four costs is close to $13,000 a year, and the employee foots about 30 percent of this cost. Health insurance costs are the fastest growing expense for employers. Employer health insurance costs overtook profits in 2008 (!!!), and the gap grows steadily.
-Without health care reform, small businesses will pay nearly $2.4 trillion dollars over the next ten years in health care costs for their workers, 178,000 small business jobs will be lost by 2018 as a result of health care costs, $834 billion in small business wages will be lost due to high health care costs over the next ten years, small businesses will lose $52.1 billion in profits to high health care costs and 1.6 million small business workers will suffer “job lock“— roughly one in 16 people currently insured by their employers.
Frankly, these numbers are just plain unsustainable. But to me, the most staggering, reach out-and-slap-you-around statistic is this:
-A recent study found that 62 percent of all bankruptcies filed in 2007 were linked to medical expenses. Of those who filed for bankruptcy, nearly 80 percent had health insurance. (my emphasis)
I guess what this last statistic boils down to in plain English is that health insurance in this country really isn't insuring us from anything. Let's do the math. Almost 50% of all bankruptcies in 2007 were the result of excessive health care costs and were filed by individuals who had insurance, which presumably protected them from excessive health care costs! But guess what...it didn't. I checked the American Bankruptcy Institute and found the number of bankruptcy filings in the first half of 2008 alone amounted to over five hundred and twenty thousand. By extension, what this means is that last year, almost 650,000 Americans filed health care expense related bankruptcies, and of these, over half a million had health insurance. And to this half million you can confidently add several million more who underwent extreme financial hardships as a result of medical expenses. In my business, it has become virtually axiomatic that medical expenses are the number one cause of poor credit scores.
If this doesn't forcefully bring home how dysfunctional the health insurance industry in this country is I really don't know what else will. What we have here is a perpetual dealer-can't-lose game of blackjack and the only thing really being insured is the insurance industry's share of the take. This makes me so mad, as my dear mother was so fond of saying, I could just spit. Who could blame the Democrats in Congress for wanting to force a little civic responsibility on private insurers by offering a public option? Don't worry, I won't go there now. But it adds a little perspective to all the stupid tea bagging going on lately, which consists apparently of nothing more than a gaggle of intellectually challenged citizens demonstrating for the right to get screwed by private insurance companies. I don't think its over-reacting to say we are facing a national emergency here.
Skyrocketing health care costs are sapping American industry. However you care to look at it ideologically, we are looking at a massive paradigm shift: as revenues, profits and investments are rapidly drained from bedrock manufacturing industries and transferred to health care. I daresay no nation in history has ever been able to experience sustained prosperity without a solid manufacturing base - and ours is disappearing before our very eyes.
Now I will accept that free enterprise, driven by consumer choice, has the capacity to furnish society with all sorts of wonderful, affordable rewards. But health care doesn't seem to be one of them. How did we get to this point? Answering this question is absolutely crucial to defining a solution...
I see an interesting parallel between health insurance today and the domestic auto industry back in the sixties and seventies. Most people would point to this era as that during which the Big Three acquired the legacy costs which today have handicapped them in competition with leaner, more responsive foreign companies - particularly Asian. You will recall the constant UAW strikes of that period and the escalation of labor costs which were far out of line with other industries. Then, it didn't matter. All the Big Three had to do was raise prices and consumers had little choice but play along. A good friend of mine, whose career in auto sales spanned that period, cites it as where and when longer and longer term auto loans became commonplace: itself an interesting insight.
It seems to me the health insurance has undergone a similar economic evolution. 400 corporate mergers in the last 13 years have resulted in a market which is virtually dominated by 7 mega sized companies: United Health Group, Wellpoint, Aetna, Humana, Cigna, Health Net and Coventry. Controlling as they do individual marketplaces and with next to unlimited funds to influence legislation, these companies, just like the Big Three of 30 years ago, have been able to insulate themselves from any real form of competition and pass rate increases on to consumers without penalty. And, for their part, consumers have no choice but to play along. The only difference here is that there are no Toyota's, Honda's or Datsun's waiting in the wings.
From a Progressive States article:
"In 2000, the CEOs of the largest hospital system and largest insurance company in Massachusetts shook hands on a plan to manipulate the health care market and ensure each other greater profits and market-share, an extensive report by the Boston Globe has revealed. Under the wink-and-a-nod handshake deal, Blue Cross insurance agreed to raise reimbursement rates to Partners HealthCare - the largest hospital system and private employer in the state - in exchange for Partners' insistence that other insurers pay them at least the same rates paid by Blue Cross.
The agreement enabled Partners to secure higher reimbursements from all insurers and gave Blue Cross a competitive advantage in the market. Since the agreement, Blue Cross has raised its payment rates to Partners by 75%, far more than it pays to other hospitals, helping Partners hospitals earn 30% more than other teaching hospitals - resulting in hundreds of millions in extra payments to Partners each year, as the Globe reports. Blue Cross, for its part, dominates with 60% of the health insurance market and has seen profits soar from $82.7 million in 2002 to more than $200 million each year since. Consumers in Massachusetts have faced ever-rising premiums, with individual insurance premiums raising 9% each year, twice the rate of the late 1990's, before the handshake deal." (my emphasis...BTW: Progressive States is a "liberal" site - however all the facts and numbers here are independently verifiable)
What this all boils down to is the rapid escalation of price without any increase in value. In essence, consumers pay more and more for less and less because, unlike other industries, consumer choice has virtually no impact on health insurance. So, expecting that consumers, armed with government sponsored Individual Health Care Accounts, will rush out into the free market and effect genuine change is ludicrous. My solution is as follows:
First, along the lines of your suggestions, create government owned and controlled Health Maintenance Organizations, comprised of government and government contacted assets which deliver actual health care services and are available as an extended form of Medicare to all citizens for purchase with their HCA's. Second, if it is true, as The National Coalition on Health care says, that Medicare and Medicaid constitute 50% of health care spending in the U.S. - why then allow these programs to use this huge bargaining power go out and contract with individual medical professionals, hospitals, drug companies - even private insurers, and drive hard bargains to create managed care plans - again available only for purchase with HCA's. Third, allow private insurance companies to develop supplemental policies which can be purchased with HCA money only if they meet certain, definite criteria.
What my starting point here consists of is essentially the creation of a huge co-op of private citizens, organized on a scale to take advantage of its immense bargaining power to reduce costs and increase value. This contrasts with the current situation, where private insurers own the bargaining high ground and have no built in incentives to offer a better product.
As we are both aware, this starting point does nothing to address the question of supply and demand. I'll consider that in my next post. What do you think so far?
Thursday, September 10, 2009
I think we have arrived, almost by chance, at a suitable means by which we can fashion a solution to the question of health care financing. I'm going to propose we tentatively adopt the concept of Individual Health Care Savings Accounts as our starting point. In future posts I'll refer to them as HCA's.
This is important, and reflects on the nature and purpose of our blog altogether.
As you know, health care reform is turning into something of a Mexican stand-off, both in Congress and the public. I won't ask you to agree with this Steve, but I like to think Republicans in Congress are cynically manipulating this issue as a matter of pure politics. They lost handily in the last election and have been looking for a way to redefine themselves as the party of fiscal responsibility and traditional values. Cynthia Tucker, who I never considered an intellectual heavyweight, this time nailed it:
"...Take those recent polls showing that the public has suddenly grown very concerned about ballooning deficits. Last month, Quinnipiac University released a poll in which respondents said — overwhelmingly — that they are more worried about the deficit than they are about fixing the health care system... Another factor is household debt, which, for many voters, can seem to mirror national debt woes. Americans understand their own personal circumstances, which often include high mortgage interest payments, staggering credit card debt and shrinking savings. Their personal budgets serve as a reminder of what can happen when an individual or a government takes on too much debt... " (my emphasis)
So, massive new government programs, like TARP, the Stimulus Plan and now Health Care Reform are being framed as wildly irresponsible, particularly during this time of recession and a shrinking economy - and this is a criticism which appears to be gaining traction. Whether you agree with this criticism or not (I suppose you do), its hard to argue that Republicans have any political motivation to negotiate in good faith. Tellingly, although Republicans mostly agree that reform is necessary, they haven't come up with any kind of detailed alternative whatsoever - other than the standard, vague platitudes.
Now I'm sure you have a higher opinion of Republicans than I do. But regardless, reform has become a political football, and both sides are now apparently calculating the effect of the issue on the next election - as opposed to whatever benefit or harm it will result in for the American public. Which brings us to you and me.
If we ever do arrive at a finished plan (I think we will), both of us are going to have to accept ideological compromises. I sincerely believe you are capable of that - and, despite my frequent ravings - I think you know I am too. That's the cool thing. And, HCA's are the perfect vehicle to begin sorting those compromises out. If properly constructed, they would have a mechanism which allows for consumer choice, which you favor, and universal access to a basic level of government sponsored health care, which I favor.
I think you already planted the seeds of compromise in your first post (7/28), where you said:
"A. The primary objective is to provide Health CARE (not “insurance”) to those who legitimately 'need' care, but are unable to pay for it for whatever reason.
B. Private (personally controlled) insurance programs must remain viable and available.
C. Any Government action must be designed to provide actual SERVICES, not simply payment or other types of funding transfers....
"I propose we start by expanding the existing VA program, which is absorbed into a new, comprehensive service-providing system."
I believe later on you asked why I hadn't responded to these basic ideas. Well, I thought they were excellent - but as usual, I am always getting caught up in all the crap flying around outside LRA&H and probably spent too much of our time blogging on that. Oh well. Give a Lib a break here, after all, we're the ones who turned tree hugging into an art form. This comment in your last post dovetails nicely into those earlier points:
"Likewise, we must directly and carefully address the SUPPLY side of the equation, not just the DEMAND side. "The demand for a free good or service is infinite." (That horse should be dead by now, but as long as it moves, I'll keep shooting at it.) If we don't address the staffing requirements for providing services, we will FAIL. Having the government HIRE and encourage the creation of *new* trained staff is critical. Simply working out an alternative payment plan is ineffective in the long run."
Next I'm going to start crunching some numbers. Be advised that I don't ever agree with everything you say. As a matter of fact, some of the things you accept as given actually horrify me. However I'm going to use as a starting point the bizarre idea that health care reform can be managed without one single cent of additional tax. Not only that, but it will also put a great deal of money currently spent in the private sector, back in our pockets. Imagine that!
P.S.: Sorry for the length of this post - since it really doesn't advance our agenda with any new stuff. But this is the first time we have agreed on a contentious issue and I don't feel creepy about it. Peace...
Wednesday, September 9, 2009
This post consists mostly of bits and pieces I've strung together from a few posts I started and never finished. It doesn't advance our project any - or add any new ideas. I'm just putting it up to clear the cobwebs out of my "compose mail" archive: a little "brain candy" if you will, though you might view it as Brussels sprouts. Enjoy...
As I'm sure you are aware, the internet's a'buzzin with all kinds of outrageous, if not mentally unbalanced ideas on how to solve every problem from the health care crisis to jock itch.
Yet here at LRA&H we hold ourselves to a higher standard, unlike elsewhere in the blogosphere, where life is cheap and truth is rare - which is probably why we made it to the last heat of the 2009 Bulwer-Lytton Fiction Contest. By the way the winner was David McKenzie, who wrote the magnificent:
"Folks say that if you listen real close at the height of the full moon, when the wind is blowin' off
...although my favorite came from the diminutive Mariann Simms, of
Tuesday, September 8, 2009
However, I am guessing you will suggest having the 'contributions' to these personal accounts being initiated by direct government payments (with a possible option for additional voluntary contributions). That sort of public financing takes away from the 'take personal responsibility for yourself' that I try to encourage. *BUT* I could support such a government 'contribution' of largess from the taxpayers *IF* it is applied EQUALLY to *all* citizens. That means Joe SixPack and Bill Gates *both* get the exact same contribution to their respective self-directed accounts. (This is similar both in concept and in principle to the monthly "pre-bate" to compensate for for sales taxes on basic necessities within of the FairTax - another good idea, but that is a discussion for another day.)
I consider this aspect of Equal Public funding as critically necessary because of a long-ignored concept called "Equal In The Eyes Of The Law". Following it also eliminates the need for a bureaucracy devoted to deciding "Who Qualifies" (which both reduces cost and possibilities for potential abuse). I submit this 'pre-existing condition' (pun intended) for public funding for your consideration as I eagerly await further details of your proposal...
* * * * *
Also, I really appreciate the effort you have put into researching where, when and how much we are spending. Your recognition that our society and culture doesn't really allow following the path and approaches adopted by other countries is gratefully acknowledged. (Loud Cheers!) The inherent mechanisms of our captialism-based system has generated a quality of care and treatment options which are unmatched in the world.
Even better, our program (LRA&H) is still in development. It doesn't hurt to learn from the mistakes (and success) of others, but we should continue to move with caution since we are rebuilding from the ground up apx. 1/6th of our economy. As such, we should not expend much effort attempting to modify ('fix') existing programs which have already failed, usually due to administrative overhead as much as anything. The "let's *really* start over" tactic, as we have stated our intent, is the proper approach.
* * * * *
*However*... I do not recall a response to my point: If we are doing all this 'restructuring' to make sure Health Care is available for those who need it... why can we not simply increase or implement government programs to PROVIDE that care? The focus of most (all?) proposals has at their core some aspect of providing (financing) INSURANCE coverage... IMHO, that is putting the cart before the horse by only being concerned solely with how to distribute the Cost of Health Care, not on what it takes to Provide it.
That is why I propose we remove as many government (including both federal and state-level) conditions and regulations which get in the way of allowing competition in the marketplace. If the government becomes another provider - for those who choose it - and there are options allowing private concerns to shift non-critical care burdens to that program as needed, then everyone wins. Private remains private, the much ballyhooed 'public options' exist as a separate entity, but are not mandatory, and individuals can make their own decisions and reap the consequences thereof. Win-Win.
I also suggest that the eventual cost savings (if such things actually existed) would be much greater if the focus was not on getting one's hands filled by a direct transfer of payment from the public trough.
And if you don't like the quality of service or available treatments or waiting in line or other objectionable realities in the public option? You can go get what you desire / want / need / gotta-have in the private sector (at it's free market price)...
Just because you have a desire (or even a need) for a particular level of service or access to a specific product - according to YOUR judgment - does not mean you are entitled to use the force of government to TAKE IT from someone else at the point of a gun: TANSTAAFL!
Likewise, we must directly and carefully address the SUPPLY side of the equation, not just the DEMAND side. "The demand for a free good or service is infinite." (That horse should be dead by now, but as long as it moves, I'll keep shooting at it.) If we don't address the staffing requirements for providing services, we will FAIL. Having the government HIRE and encourage the creation of *new* trained staff is critical. Simply working out an alternative payment plan is ineffective in the long run.
We agree that whatever system we devise *must* be aware of BOTH the Goods and Services to be provided, and how access to those programs are likely to be USED. That means considering the application of check-and-balances as well as severe penalties for mis-use of the system.
Much of this is merely restating both the obvious and issues you have already acknowledged. We have a long way to go. So - Keep at it, my friend! We're making progress, slowly but surely...
Calling your attention to a 122 page report from the McKinsey Global Institute. In case you don't know (I didn't), McKinsey and Company is one of the world's largest management consulting companies. They can hardly be labeled as politically liberal or "anti-business". Among their alumni are 70 past and present Fortune 500 CEO's, as well as, of all people, Bobby Jindal. I'm e-mailing you a copy of the report: "Accounting For The Cost Of U.S. Health Care: A New Look At Why Americans Spend More", but you can retrieve that and most of their other reports on various subjects by simply registering at the McKinsey site.
The McKinsey report has a lot of nice things to say about health care in this country. Many of the conclusions they draw are intuitive. If I can say this without sounding ideologically motivated, it would appear that no issue better illustrates the disparities in American society than health care. Our hospitals, medical professionals, research facilities and researchers are the best in the world. All of this translates to the finest health care available.Yet when measured in terms of overall performance for society as a whole, we are behind every other industrialized nation.
Once again, the reasons for this can be arrived at intuitively. Although we do, in the form of Medicare, Medicaid and SCHIP, offer massive programs of "socialized medicine", health care in this country for most people of working age is generally subject to the same free market principles of supply and demand which characterize any other product. Thus, the health care industry here is more oriented towards profits than elsewhere. Higher profits in the industry provide more investment for world class health care for individuals at the high end of the income spectrum, and lack of affordability for individuals at the low end.
My sense is that the real losers in this equation are probably not the ordinary "victimized" classes which social progressives usually point to in debates over social inequalities. Medicaid, SCHIP, AFDC and the like are programs aimed at taking care of that class defined as impoverished, which is disproportionately represented by minorities and single parents.
The real losers in my view are working stiffs like my youngest son. Evan has a job as a manager of a local (franchise) restaurant and under the circumstances makes a decent living. In fact, he makes just enough that he doesn't qualify for most government hand-outs. Yet, probably like millions of Americans like him, he is caught in a virtual Cache 22. Since he doesn't have health insurance, almost any extended illness would wipe him out. And, if he goes out in the market and buys insurance, the only kind he can really afford would have such high deductibles and co-pays that such an illness would wipe him out anyway. So, again like millions of Americans like him, he bets his own health in a game of roulette. Since he is young and relatively healthy, there is a good chance he will come out OK. But thousands, if not millions of Americans in his situation will not be so lucky.
Now I think it best we stay away from arguments about how much profit those involved in health care are entitled to. The whole idea of placing artificial limits of the right of free enterprise to make money runs counter to the spirit of the constitution on which our whole society and system of government are based.
For instance, I really like Al Frankin, but I doubt if he ever looked at a contract negotiated by his agent and said: "Hey, I shouldn't be making that much money! Tell them to pay me less...". On the basis of fairness, does it really make any difference if the contract is for cracking jokes or health insurance? I think you can assume any entertainer out there preaching against the sinful profits of insurance companies would scream bloody murder at the idea that government should limit what they can charge so that more people can enjoy their performances.
My vision of health care reform does not include health care savings based on government engineered restrictions on profits. And let's face it, the concept of a "public option" is considered by many conservatives to be a veiled attempt at just that. To wit: government offers health insurance to citizens based on a cost which does not include profit, simply because they don't have shareholders to satisfy with quarterly dividends. Government thereby enjoys a tremendous competitive advantage. This forces private insurers to cut costs by cutting services, which makes them even less attractive to prospective shoppers. Let's take a look at Japan...
The Japanese system of health care produces enviable results. From an article in the Washington Post:
"Half a world away from the U.S. health-care debate, Japan has a system that costs half as much and often achieves better medical outcomes than its American counterpart... The Japanese visit a doctor nearly 14 times a year, more than four times as often as Americans. They can choose any primary care physician or specialist they want, and surveys show they are almost always seen on the day they want. All that medical care helps keep the Japanese alive longer than any other people on Earth while fostering one of the world's lowest infant mortality rates."
And how does Japan do this?
"It does so by banning insurance company profits, limiting doctor fees and accepting shortcomings in care that many well-insured Americans would find intolerable... ...As a result, most Japanese doctors make far less money than their U.S. counterparts. Administrative costs are four times lower than they are in the United States, in part because insurance companies do not set rates for treatment or deny claims. By law, they cannot make profits or advertise to attract low-risk, high-profit clients.... ...There are shortages of obstetricians, anesthesiologists and emergency room specialists because of relatively low pay, long hours and high stress at many hospitals..."
Although I must admit I get a guilty pleasure at the prospect of doctors putting more effort into medicine than they do golf, this kind of government control over the rights of a certain economic class to earn all they are capable of earning is absolutely foreign to our way of life. Perhaps it works for the Japanese, but it won't work here, and for obvious reasons. Once you allow government to regulate the livelihood of persons in one industry, where do you stop? I mean, wouldn't it be nice if plumbers were required by law to charge less? How about electricians, or for that matter, auto mechanics? Who wouldn't be tickled to death to see government slap a healthy fine on the next service tech who charges $600.00 for a measly set of brakes? And what's up with that twenty bucks for a movie and a bucket of popcorn anyway? Don't get me started on that.
If we're going to reform health care to make it more affordable and accessible to all citizens, we're going to have to do it within the realities of the American economy. Is there a way out of this? And, is a Public Option a singularly regressive approach, as many Republicans in Congress are arguing?
You can go here for an excellent summary of why health care costs are so much higher in this country than they are in other developed countries. This is a site jointly operated by Mark Hoofnagle (a general surgery resident), Chris Hoofnagle (a professor at U.C. Berkley) and "PalMD"(an medical internist). In their blog they list what they consider to be the 7 main causes of excessive costs:
1. An excess of cost in administration far out of line with most countries around the world.
2. Pharmaceutical costs - especially due to the effects of direct to consumer advertising (DTCA) encouraging use of more expensive, newer drugs (which is only allowed in the US), Medicare part D which forbids collective bargaining for lower drug prices, and a broken patent system that allows drug makers to patent and charge more for non-novel medications.
3. The absence of a universal system that prevents risk-sharing, and causes the uninsured to avoid treatment until problems are more critical, and more expensive.
4. Excessive reimbursement of physicians for procedural skills, rather than cost-saving physician roles such as primary care and family practice that emphasize early diagnosis and proper management of disease.
5. Excesses of cost caused by "defensive medicine". While torts themselves don't cause a great deal of monetary damage, the culture they create is one of paranoia in physicians who make decisions with lawsuits in mind, rather than the interests of patients and society
6. The excessive costs in ICU care, especially at the end of life, which may also be reduced by better EMRs with recording of living wills, and public information campaigns designed to inform people about the pain, invasiveness and futility of "doing everything" in the elderly.
7. The absence of an electronic medical record that is universal which causes redundancy in testing as patients see new doctors who then order redundant tests because sharing of information is so inefficient.
Now I would consider the Hoofnagle's and PalMD to be political progressives. Yet nowhere do they point to "excessive profits" as a cause of excessive health care costs in this country. Which by itself is instructive.
Now, repeating what I said in an earlier post, I think we do need a public option - but not one which has the purpose of simply forcing private insurers to reduce profits. The public option which I would advocate is one which includes that demographic of Americans who, like my son, are caught in the middle. More and more I am convinced that the most rational mechanism would be the creation of Individual Health Care Accounts (IHCA's) which I suggested in an earlier post.
IHCA's would not represent a new tax, rather a combination of existing taxes and the creation of funds which would give citizens more control over how those funds are spent. In my next post I'm going to explore exactly how much IHCA's would accumulate per citizen and how they could be augmented by individual contributions. I will be rolling up my sleeves and getting down to brass tacks.
Thursday, September 3, 2009
Hey Dad, got a minute?
Sure son. What's up?
I've just been reading some stuff in the newspaper and it's kind of hard to understand...
No problem son. I just read the sports section myself and why they picked that new football coach is a mystery to me...
No Dad. I'm not talking about the football team. It's this stuff on the editorial page...
Hold it right there son. You're not reading that trash by Beatrice Weems are you? I hear she owns a bookstore over in High Top.
No Dad. Its this article by Abner Trout.
Hey, now you're talking son! Abner's the kind of guy who knows what he's talking about. What's so hard to understand?
Well its about this health care stuff...
OK. Let me see the article....
Hummm... Seems to make sense to me. Let's see. Says here the government is trying to take over health care. Abner says they do the same thing in all those communist countries.
Well what's so bad about that Dad? Won't that mean everybody will get health insurance and prices will go down?
Woah son. Where'd you hear that?
Well that's what Tommy says.
Tommy? Hey, isn't he that kid whose father teaches economics over in High Top?
Yeah, so what?
Didn't I tell you before you can't trust eggheads like that? There isn't a one of 'em who could hold down a job in the real world.
OK. OK. Sorry Dad. But here's what I don't understand...
Well Mister Trout says we got a great system just the way it is 'cause its all based on private enterprise. And private enterprise is just about the bestest thing there is. Mister Trout says it always works better than anything else...
You bet it does son. Listen. Every time government gets their grubbly little hands on something it always turns out costing more and doing less. Abner says that right here in black and white.
Well Dad, that's what I don't understand...
How so, Son?
Well, Mister Trout says we don't want "European style" health care.
You got that right son. Abner says those countries over there use socialized medicine. And that never works.
Well that's just it Dad. Tommy says France spends about half what we do per person on health care and England spends about a third. And they cover everyone over there.
So what, don't those countries have crappy health care? You get what you pay for son.
Not according to the World Health Organization Dad. They rank all those countries ahead of us in terms of quality of care. That's what Tommy says.
Say, maybe you shouldn't be hanging around kids like Tommy...
He gets straight A's Dad. But that's beside the point. What I don't understand is if private enterprise always works best and over there they pay less and get more, wouldn't that mean they're the capitalists and we're the socialists?
Hummm. You got me stumped there son. Maybe we should write the Chronicle and get Mr. Trout to look into that...
Don't hold your breath Dad.
OK smarty pants. Why don't you and I just go read something together that makes more sense.
Sure Dad. How 'bout "Snow White and the Seven Dwarfs"?
Sounds like a plan to me son. I always liked that one.
Up anchor Dad and full speed ahead. Can I go first?
Wednesday, September 2, 2009
Oh my. Is it Christmas already? Your effective use of color in your posts has really gotten me in the Yuletide Spirit...
I follow your logic, but leash your hounds for a second or two. Of course a public option is going to involve rationing. Why wouldn't it? What really amazes me is how much this kind of criticism relies on nothing more than a semantic sleight of hand as well as false logic. Today, when we hear critics of health care reform talking about rationing, what they really mean is limitation - which is a far less pejorative word. Placing limits on the extent of the public option is not only necessary, but logical. As you note, health care, like any resource, is a limited commodity. Do you actually think liberals like myself are so foolish to as to advocate a public plan which promises unlimited benefit, when the resources on which it is founded are limited?
The language which lays out potential limitations on services is clearly laid out in the text of H.R. 3200, conveniently available with comments here. Before you start talking about rationing, do yourself a favor and sift through the bill - it really isn't that difficult, despite what the critics are telling you.
Why do you consider it such a bad thing that government would put limits on a public plan? Aren't you conservatives all for that kind of thing? Look, the real issue is that the American system of health care is inefficient and too expensive when compared with other developed countries. Here's a chart available at The Commonwealth Fund:
If the same kind of price inflation had occurred in the auto industry, that little Scion xA you bought in 2003 at around $13,500 would now be selling for almost $19,000.00. Clearly something is wrong. While you're at Commonwealth, you can scan through the data and see for yourself that health care spending per capita in the U.S. is double or triple what it is other countries.
Steve, health care in this country is headed in the wrong direction. A public option, properly executed, isn't going to solve every problem - nor should we expect it to. What it aims to do is give the 47 million or so uninsured people in this country a shot at an affordable alternative. But it is only one aspect of reform - the larger goal of which is to bring down health care costs for everyone.
Now does this mean we aim to make health care some kind of 1950's, Soviet Union brand of egalitarianism? Of course not. Sometimes I wish you had the same abiding faith in American private enterprise that I do. Because it will necessarily involve all sorts of limitations, the public option is most likely going to result in all sorts of annoying consequences, like longer wait times, restrictions on choice and limited access to very costly, patented medicines. That's where private enterprise steps in and offers innovative alternatives for those who can afford it. Why is that so scary?
Tuesday, September 1, 2009
It has been well-documented that (primarily to control costs) Canada, Great Britain and other socialized systems routinely restrict access to 'expensive' treatments and services. The critical nature or 'need' for the service is cast aside and a decision is rendered on purely economic considerations. The best interests of the patient - as defined by the care provider and patient - fall to the bottom of the list.
We do *not* want that to happen here...
First, we must recognize that rationing does *NOT* occur in the free market... Hold on there! Do Not succumb to the temptation and head down the road which claims the free market is just "another way to ration", only it uses Price instead of Government Decree. Many contend that "government must intervene" to guarantee a (supposedly) "fair" distribution of goods and services. Hogwash. Why do you think rationing happens in those other systems?
You don't think government controls in this country - because we're smarter - will lead to rationing? ... Remember sugar in WWII? How about gas in the 1970's?...
Let's consider this definition for Rationing: to distribute in a particular manner, by the decision of an absolute authority, with the recipients having no choice whatsoever considering what they are to receive. While it can be argued "everyone has an equal claim to whatever is being rationed" - this *claim* is meaningless since distribution is under control of an appointed 'master' who may choose to ignore any 'claim' without fear of retribution.
I don't have to personally experience being forced by law to 'stay down on the plantation' and be grateful for the largess bestowed upon me by my masters to recognize Slavery when I see it. Electing or appointing my 'master' doesn't change what I will have become.
We must remember that Health Care does not grow on trees. Effort is required. The effort of rational and learned thought. The effort of applied skill, experience, and hard work. THESE EFFORTS ARE NOT FREE! (TANSTAAFL!)
In a free society, it is the Producers - not the government - which create the good or service. It is morally correct and appropriate that they define the price they are willing to accept from a willing consumer. In a Free Society, there is no "just" or "fair" distribution of product apart from the voluntary exchange between Producer and Consumer in a free market.
I will not sugar-coat the obvious: Government programs which attempt to guarantee "universal health care" are, at best, state-sanctioned THEFT, or in some cases, outright SLAVERY. The free market is the antithesis of rationing. It respects individual rights, where rationing unjustly violates individual rights and restricts freedom.
This is a critical moral distinction that we ignore at our peril.
Now - I will concede that the current (American) system is not a true free market, either. (It's a hodge-podge mixture.) However, there *are* aspects of today's marketplace - which, not coincidentally, are the least-regulated - which enjoy the benefits of following the typical free-market pattern of falling prices and rising quality. This is not limited to cell phones and personal computers... you can see it in the Health Care arena with the marketplace evolution of services and procedures such as LASIK eye surgery.
The Free Market *can* work... if it is allowed to. It's a Win-Win scenario - the seller benefits by getting a price he will accept, the buyer gets the product/service he desires. The alternative, absolute government control of the entire process, is where (eventually) no one wins.
Free-market concepts can and should be an integral part - and should be the norm - for any Health Care system which has the intention of being a long-term success in providing Health Care.
Look at it this way... one day, we're going to need an MRI for a proper and accurate diagnosis (I have personally had several). Without a healthy respect for freedom, individual rights and the inherent property rights... we'll be waiting six months on that MRI - just like all those other socialism-based experiments - instead of only waiting six days, or maybe even six hours.