Healthy Policy

Attention to the Uninsured

It's Cover the Uninsured Week, so I'll be posting something on the uninsured each day.

The Robertwood Johnson Foundation released a new report last week with standardly shocking findings about the uninsured and access to medical care.

So while others will persist with their false claims that the uninsured receive care, and therefore the problem is not immediate, remember this:

• 41% of the uninsured adults reported skipping medical care because of cost last year.  This number doesn't include the 20% of children who lack health insurance. 

• 23% of uninsured adults report their health as "fair" or "poor," compared with 12% of insured adults.

That percentage will tick higher and higher while we distract ourselves from solving this problem with brave new explorations into the world of Health Savings Accounts.  As health costs continue to outpace inflation markedly and wages remain stagnant, fewer and fewer of the uninsured will be able to afford any medical care.  State and hospital funds that currently act as reimbursement for the cost of acute treatment will cover less and less. 

This trend will happen faster than we expect; insurance indicators are ticking away at incredible speed.  Just as the number of employers providing health care decreased by 9% in five years, measures of the uninsured's health status will worsen.

Mass features reinstated

The Massachusetts legislature voted to override Romney's vetoes on Tuesday.  So the employer assessment of $295 is back (albeit still insufficient).  Other things reinstated include:

• Extension of dental and vision benefits to adult Medicaid beneficiaries and discounts on premiums and copayments for meeting wellness goals;

• A larger, revamped Public Health Council;
• A provision that would require a member of the Massachusetts House and Senate to participate in negotiations with the federal government regarding special Medicaid funding; and
• A provision that prohibits the Governor from making significant changes to mental health benefits without an explanation to the Legislature
  

These vetoed items actually say a fair amount about Romney.   Namely, that he could care less about tooth decay (for an explanation of why it matters to have dental care, go here) and doesn't think public health initiatives matter in the age of bird flu.   Too bad -- besides their disaster-combating aspects, public health initiatives need to play a large role in any reform overhaul, as the current incentives to be healthy are utterly failing. 

Luckily Massachusetts has a democratic legislature which has its priorities in line.

Canada, health care reform, and you

A few things in the health care debate have been riling my feathers lately.  The first is yesterday's post by Ezra Klein examining how the folks over at the right-leaning The Corner are busy questioning the definition of "is".    Ramesh Ponnuru writes:

I don't think [universal health care] is possible, actually. If you can't get an operation because your country's national health insurance system has you on a long waiting list, in what sense have you enjoyed "universal coverage"?

Ezra goes on to discuss how one can, in fact, define universal, and that definition is "everyone in the population receiving health insurance". 

Jon Cohn addresses the latter part of Ponnuru's argument over at The New Republic's blog, the Plank, and dug into the stats on waiting lists:

Here's the summary findings from an exhaustive survey by the Organization for Economic Cooperation and Development (OECD):

The health system in France is regarded as delivering high quality services, with freedom of choice and generally no waiting lists for treatments.
--Page 69, sourced to a 2000 study by a trio of academics

And: In Germany, "Waiting lists and explicit rationing decisions are virtually unknown."
--Page 70, citing a World Health Organization study.

If Ramesh knows something the OECD doesn't, I'd love to hear about it.

I'm going to throw myself into the fight here, and debunk another favored myth of the Right, which is that the Canadian health system is so bad, millions of Canadians come here for their health care. 

A 2002 Health Affairs paper examined hospitals near the border, as well as national surveys to tease out how many Canadians actually visit the U.S. to receive elective procedures.

In terms of hospitals along the border offering advanced treatments or special diagnostic technology (i.e. CT scans and MRIs), about 640 Canadians were seen, along with 270 for procedures like cataract surgery. They compare this to about 375,000 and 44,000 similar procedures in the region of Quebec alone during the same period. If you divide the total number of Canadians seeking those treatments in the US, divided by the number in Quebec alone that's about 0.09%.  Not even a tenth of a percent.

But the most striking stats come from the Canadian National Population Health Survey (NPHS).  From the article:

Only 90 of 18,000 respondents to the 1996 Canadian NPHS indicated that they had received care in the United States during the previous twelve months, and only twenty had indicated that they had gone to the United States expressly for the purpose of getting that care.

Only 20 of 18,000 sought care in the United States.  I can't believe how many people are coming over here!  Their system but be truly awful.

But let's give this number some context. We've all heard about seniors getting their prescriptions from Canada. (Hell, even driving to visit my sister at college in rural Kansas, I saw a billboard for "Canada Drug of Topeka!") But how many seniors really do that? Is it exaggerated, like the claims of Canadians coming stateside?

Polling data from 2003 (approximately a year after the Health Affairs article) indicates that 8% answered YES to the following question:

"Have you ever bought prescription drugs from Canada or other countries outside the United States in order to pay a lower price?"

If 8% of the 18,000 Canadians polled in NPHS had expressly sought care in the United States, that would be 1,440. Not 20, as the survey showed.

In other words, we have 72 times the number of Canadians seeking care in the US going to Canada (or at least calling there) to get prescriptions.

What angers me so much about the Right's rhetoric on health care reform is that their arguments are so weak that they're now essential questioning the definition of "is".

Universal health care has been achieved in dozens of nations on this planet.  One of which has some waiting lists, while others have essentially none.  According to surveys, less than 0.1% of Canadians are expressly seeking care in the U.S. 

The bottom line is our health care is twice as expensive, fails to cover 46 million people, has questionable quality, kills around 100,000 people a year from error, and for all this we have worse health indicators (i.e. lower life expectancy, higher infant mortality, etc).  Other countries do it better, and they do it with the help of government to pay for health costs.    

We can at least move to a system where everyone has health insurance. Or, you can believe the folks over at the Corner who are arguing that universal coverage doesn't exist.

What do you want? 

Would-be reformers, take note

Ezra writes:

Among the many reasons I'd prefer not to be a politician, navigating the remarkable confusion of your constituents as to their opinions on public policy issues ranks high up there. They're for abortion, for abortion restrictions; for lax immigration laws, in favor of draconian enforcement; for going through the UN, enamored with acting unilaterally; for tax cuts, for spending increases; and on and on it goes. The phrase "mutually exclusive" is absent from America's political vocabulary, as is the concept of a "tradeoff."

He's right on the mark. That's why we have a war that, if there was a draft, no one would want to fight, a war without any tax increases. This logic extends to health care reform and our quest to fix the system.

Just look at my post from yesterday, where I discussed the ramifications of Gov. Romney vetoing the employer assessment. 

When I attended the National Health Policy conference in February, an entire presentation was devoted to the idiosyncrasies of health policy polling. Sure, the vast, vast majority of Americans are in favor of reform, and a majority will even support a "modest tax increase". But if you name any specific dollar amount of that tax increase, the foundation of support crumbles.

I wish I could say, "This is a cultural problem; let's try and fix it." But the truth is that this is a symptom of democracies -- when you're insulated from making the calls, it's easy to support or protest them. A change in perspective, where people bring themselves to support reform with trade-offs, only occurs in the face of substantial problems and hardship (like premiums reaching $20,000/family in today's dollars).

In the meantime, we should keep talking about all the things that are wrong with the U.S. health system, and all the ways other countries succeed where we fail. That way, when it's time for reform, the foundational message and education will have been laid, and coupled with the public's willingness (if not desperation) to act, efforts will hold strong.   

Romney says no to employer assessment

The Boston Globe is reporting that, in a show of his Republican colors, Massachusetts Governor Mitt Romney will sign the new health bill, but veto the employer assessment (you know, the paltry $295?). 

This bill is shaped with the assumption that the vast majority of employers will not drop coverage of their employees.  It does not make plans for what to do (and in particular, how they would pay for it) if that is the case.  $295 is significantly lower than originally proposed, and that number is already causing uneasiness.

Fortunately, there are more than enough Democrats to override Romney's veto.  But it still sends a message that employers shouldn't be punished for not providing insurance.  If you're like me, and you want to uncouple the employer-insurance relationship, that's just fine.  But MA hasn't planned for it, and who knows how they'll handle it if there's an exodus of employers from the system.

It's never good to leave people without a parachute, and if Romney had his way we might see a lot of people crashing to the ground as their insurance is pulled out from under them. 

Random resource

Talk of the Nation is discussing Massachusetts and health insurance, tune in if you're an NPR nut like me.

Single payer vs. HSA's

Matt Holt has a great conversation going in the comment thread of this post.

More on Mass

After reading dozens of opinions and articles on the Mass Health Reform Bill, I want to put in some additional two cents.

I think people are being too harsh on this in general.  So what if Romney is running for president?  As Ezra excerpted (originally from Jon Cohn) over at TAPPED:

And while it will undoubtedly annoy some progressives who don't love the plan or think he's taking credit for an idea (and favorable circumstances) that fell into his lap, they should be thankful for this development.

Thankful, because nationally the most important impact of this new law may be on politics, not policy. Once Romney starts boasting about how he achieved universal health coverage in Massachusetts, it will become that much harder for conservatives to demonize the very concept as "big government." Oh, they'll try--and they'll have at least some success. But now Democrats will have this retort: If a Republican governor and leading presidential contender with strong conservative credentials thinks universal health care is a good idea, how radical an idea can it be?

Progressives are also screaming "follow the money!", which strikes me as ridiculous.  Is coverage only good if it comes from a "pure" place?  Is it more important to have insurers out of the equation NOW, or to get everyone covered affordably?  To me, it's obvious.  In an ideal world, private insurers would be out of the equation.   But this is far from an ideal world, and a world where we can get everyone into insurance without bankrupting ourselves seems good enough for me.  Keep in mind this is a state initiative, and compromises here are much different that what we'd want for a national system.  These reforms are laying the road to universal care, not the building. 

I also disagree with Joe Paduda that there will be a huge rise in demand.  Only 11% of Massasschussetts is uninsured; and they have huge free care pools.  There will probably be a small increase, but no rash of people all of the sudden having tons of elective procedures and crowding specialists.  There just aren't enough people without insurance to do that.

That being said, I have a few concerns:

• There is no dedicated funding source.  This program will absolutely fail if there isn't enough money for it.  State budgets don't have the ability to absorb cycling costs like the Fed.  This could prove problematic.

•  The penalty for not insuring employees is terrible.  It is much, much too low to be any kind of disincentive for dropping insurance.

• It's unclear what will happen with the number of employers dropping care.  This statement over at Ezra's is making me think.  I'm unsure whether we'll see that.  And without a stiffer penalty, we well might.  But taking it a step further -- what happens if employers do drop care?  There's the affordable option being subsidized by the state so they'll still be covered.  But costs to the state will greatly increase unless there's a new source of funding dedicated toward this problem.  It won't work if employers drop coverage and just pocket the money, or funnel it toward other expenditures.  The state won't be getting any more money to deal with the increased cost.

There will be many lessons learned from this experiment.  It's a major change, and it will give much insight into the "right" and "wrong" ways to reform.  I know we'll all be watching eagerly.

More on the MA bill

Ezra has a great round up of the MA bill, with some thoughtful questions and concerns about the bill's funding. 

Also see Leif Wellington Haase over at the Drug Bill Debacle.

Want some more money?

Graham writes about our inefficient health system, with a great way of framing what's at stake:

Would you mind having an extra $900 a year? (You’d also get another $900 per kid.) What is that—about the cost of a really nice vacation every year? Going to a great restaurant once a month? Several pairs of shoes, clothes, and diapers for a child?

Often people don’t realize that they have something to lose from this inefficient mess we call “The US Health Care System.” Even if they have health insurance. See, because every time that your employer’s health insurance premiums go up, that’s money that your employer can’t pay you as a raise. So all that raise that you’ve been wanting to get? Oh, you’re getting it—but it’s in the form of higher health insurance costs, not a fatter paycheck. (And you probably didn’t even spend more on health care this year than last, either.)

Go read the rest.

Massachusetts Mandate

Apparently someone was listening to my post from Monday, as Massachusetts has taken the leap and mandated health insurance for all of its residents. Ok, kidding, I know it's been in the works for months.  But I'm thrilled to see a state take such a drastic step in solving insurance problems.

Gov. Mitt Romney (R) supports the proposal, which would require all uninsured adults in the state to purchase some kind of insurance policy by July 1, 2007, or face a fine. Their choices would be expanded to include a range of new and inexpensive policies -- ranging from about $250 per month to nearly free -- from private insurers subsidized by the state.

Romney said the bill, modeled on the state's policy of requiring auto insurance, is intended to end an era in which 550,000 people go without insurance and their hospital and doctor visits are paid for in part with public funds.

"We insist that everybody who drives a car has insurance," Romney said in an interview. "And cars are a lot less expensive than people."

The health insurance as compared to auto insurance is a common meme, although I take issue with the author's phrasing elsewhere in the article that goes, "[this is] the first state to tackle the problem of incomplete medical coverage by treating patients the same way it does cars."  You know, or it's the first state to open up real options to make sure everyone can afford health insurance.  They make it sound like patients are going to treated like automobiles going through factory assembly when put like that.

In any case, this is a huge first step, and it makes allowances like I laid out in my earlier post: opening up low-cost insurance to everyone, subsidies for those who can't afford insurance, and financial punishment for those who continue to go without insurance.

In Iowa they've started a program (Iowa Care) where the uninsured are given all the information for signing up for the low cost insurance whenever they go to the hospital.  I hope lawmakers will adopt similar tactics in MA to get as many people enrolled before the deadline as possible.

What's more; this is a major experiment.  It will demonstrate how affordable these programs are, what major flaws the program didn't for see, what major benefits the program brought, even how easy or difficult it is to get the chronically uninsured into insurance.  Everything that goes on under the program will be carefully watched by universal insurance advocates. 

I would, however, really like to see an EMR initiative along with this legislation, but I guess that's too many birds to kill at once.  Hopefully HIT pushes can be adopted in the next few years.

Also, Shadowfax has more.

Health disparities, revisted

Matthew Holt has an interesting editorial from Brian Smedley on the recent health disparities study:

This view, however, squarely contradicts what the vast majority of research studies have found for decades – that some patients, most notably African Americans, Latinos, those who don't speak English well, and in some cases, women – receive a lower quality of health care than their counterparts, even when they have similar health insurance and are treated for the same health conditions in the same hospitals. This applies across the gamut of health care, ranging from basic services such as screening and immunization, to primary care, to more expensive, high-tech, specialty procedures.

 

These are the conclusions of literally hundreds of studies published in peer-reviewed journals over the last two decades.  And while a few studies, such as the Asch study, find that disparities are diminishing or that all groups receive equal (albeit poor) treatment, their findings must be considered relative to the massive volume of evidence to the contrary. Even the U.S. Department of Health and Human Services' National Healthcare Disparities Report, released in January and which represents the most comprehensive survey of its kind, finds that, despite some areas of improvement, racial and ethnic healthcare disparities persist, and are worsening in some areas.   For example, the NHDR found that Latino patients with diabetes are receiving poorer quality care today than they were even a few years ago. 

Smedely doesn't discuss where the research disparity comes from, but clearly there's something to think about here.  Asch's study may very well be abberration, but the bottom line is that quality of care is poor, and everything else tells us it's even worse for the actual poor.   Also, remember again that Asch's study only looked at what happens after patients get to the hopsital -- it says nothing about those who can't afford care. 

Words of Wisdom

Everyone knows Paul Ginsberg is just freaking awesome.  Hop over to the Health Care Blog and read his testimony on price transparency and consumer directed health care. 

Association Health Plan Primer

cross-posted from tpm

The Senate Health, Education, Labor and Pensions Committee on Wednesday voted along party lines to approve an association health plan (AHP) bill.  President Bush pointed to AHP’s in his state of the union address as one of many reforms to help individuals attain health insurance.  But AHP’s expose individuals to another frontier of risk, where their health benefits are paltry, uncertain, and expensive. 

The key complaint driving the creation of AHP’s is that state regulation bars insurers from offering affordable health plans.  If insurers could offer plans on a national market, bypassing any state regulations, more plans would be offered and more individuals would become insured. Unfortunately, this type of thinking isn’t supported by reality.

Bare-bones plans have been offered for years, and people don’t want them.  But more than that, Ezra Klein takes a look at why we have state regulations in the first place:

The reason states mandate that insurers cover certain procedures is so insurers can't price folks who are likely to need those treatments out of the market. Insuring young women, if you didn't need to cover anything related to pregnancy, would be relatively cheap. Pricing the pregnancy package through the roof would be relatively easy. And denying the claims of those who bought the base package and then got pregnant would be trivial -- and would save you a ton of money. So almost all states mandate that you cover maternal care. And this goes across the board, from procedures the old use but the young don't need to packages that target specific lifestyles. If you allow the insurance companies to subdivide the market by treatment needs, what you'll have is bargain-basement pricing for the young and healthy coupled with unbelievable premiums for their less-lucky friends.

But this statement from Committee Chair Mike Enzi (R-WY) on the purpose of AHPs is the most revealing:

Let us put the power in the hands of small employers and family-owned businesses, rather than in the hands of insurance companies or the government. Let the consumers band together to drive the change that we want to see happen

Enzi is completely wrong about where the power in this situation is going.  It’s funneled directly to the insurers!  They’ll be offering bare-bones plans to these small businesses, who will have no ability to negotiate higher benefits.  Why?  Because there’s nothing barring them from trying to negotiate plans with insurers now.  Insurers simply aren’t interesting in offering an affordable but comprehensive product to small businesses. 

But why trust history?  Enzi wants consumers to band together and force doctors/ hospitals/ insurers/ employers to provide them with cheaper health care.  Because they surely haven’t had enough time to do so the last forty years. 

The bill has already passed committee.  If it passes the Senate, it will only continue to weaken health insurance as we know it.  The way to solve our health insurance problems isn't by cutting benefits, it's by fixing our fragmented system that costs twice as much as our more generous international counterparts.

Holt and Reinhardt

Matthew Holt is quite enamored with Uwe Reinhardt's discussion of HSA's at a recent KFF event.  Matt pasted the transcript over at THCB, but the gist is that using HSA's as a way of controlling costs actually shifts the responsibility of cutting back on health services principally on the backs of the lower third of the U.S. income bracket.  It's well put and worth reading if you have a few minutes.

Uwe Reinhardt also spoke at the National Health Policy Conference in February.  He's a fantastic, engaging speaker.  I don't think I've ever seen someone able to make health policy so funny.  Any Democratic candidate with health reform on the brain would be genius to just bring him along on campaign stops to go after HSA's.  He's damn convincing.

Distinctions

There seems to be a problem here.  For some reason, people are having a hard time getting it through their heads that there is more than one way to do government sponsored health care. 

In today's edition is Michael Kinsley.  Ezra notes:

The usually good Michael Kinsley ignored his better angels yesterday and turned in a truly muddled effortmanifesto (full disclosure: I'm mentioned in the piece). Kinsley's article is sold as a defense of "modest reform" against "single-payer," which he achieves by ignoring the range of single-payer systems and, like so many others, stereotyping single-payer as Canada. His main complaint is that he fears rationing and, moreover, the inability of rich people to escape it, and thus demands that private money be allowed in purchasing health treatments, and fears that it won't be within the Kurgman-Wells, which is to say single-payer, context.

Kinsley, usually a purveyor of progressive ideas, takes a strange turn here.  He's fallen into the trap of equation government involved health care to mean "Canada". 

Take a gander at Ezra Klein's The Health of Nations series which examines five countries and their health systems for just a glimpse at the different ways good health care is structured in this world. 

There is nothing inherent in government involvement that bars private involvement.  In fact, I'd shudder to see the U.S. in a system that does just that.  There are ways to insulate against all the fears Kinsley lays out in his column.  By making a place for the private market, the richest can buy as much health care as they desire.

And don't give me any more of this rationing talk.  We already ration.  It's just buy ability pay.  Allowing supplementary private insurance in a new system allows for individuals to surpass waiting lists. 

Last week I wrote about France and their private/public hybrid, a great system for the U.S. to take a deeper look at.  I don't know if Kinsley is truly ignorant of health care in these countries or if he's just ignoring it.  But with such a prominent stage in which to voice his opinions, I wish he'd take the time to examine all the options.  He makes the case again and again for modest reforms.  But with our system costing more than twice as much per person as other countries, who have better health outcomes, better equity of care, and much cheaper health systems, I've yet to see an argument for modest reform that promises to bring us up to par with them.

Why we need reform in eleven easy sentences

Joe Paduda makes a strong case for health reform (not that we need a new one, but his is particularly well-put):

"This isn't only about us," said Bruce Peters, a flight technician ... This is a nationwide problem with medical care." Peters notes that any wage increases the workers have been offered will be consumed by insurance costs - - the additional copays, co-insurance, and employee premium contributions contained in the company's latest contract offer.

Peters personalizes the national disparity between wage growth and employees' personal health care costs.  Premiums for employer-sponsored health care have grown five times faster than wages since 2000. 

In 2004, the average family's insurance premiums came within an x-ray charge of $10,000.  In contrast, median family income in 2004 was slightly over $43,000.  Yes, you read that right - health insurance costs came to 23% of family earnings. 

And yes, things have gotten worse since the sunny days of 2004; predictions are that 2006 will see the average family's insurance costs hitting $14,500 per year. 

A survey of smaller employers in California indicates that more than half will not be offering health insurance to their workers this year.  This despite their optimism about growth and increased revenues in 2006.

Joe is also the founder of Health Wonk Review.  He's a great commenter with a wealth of knowledge about policy (and apparently managed care), so if you've never been by I recommend making him a regular read.

O'Neill weighs in

Via Kaiser, former Treasury Secrety Paul O'Neill weighed in on health reform on Wednesday:

According to O'Neill, Congress should pass legislation that would require all U.S. residents with annual incomes of more than $30,000 to purchase catastrophic health insurance for themselves and their families. The federal government would use general revenue funds to purchase health insurance for U.S. residents with lower annual incomes, O'Neill said. He added that Congress also should pass legislation to establish a commission to examine problems with health care prices and reimbursement practices and to require the federal government to develop national performance measures for health care facilities to help reduce medical errors. In addition, O'Neill said that the use of tax credits to address problems in the health care system is inadequate. "When you use tax credits and deductions, unless they are refundable ... they're very inequitable, because the value of the credit or deduction depends on the level of income or wealth accumulation an individual has," he said in a telephone interview (Reston, Pittsburgh Post-Gazette, 3/9).

A major component of any reform needs to be an insurance mandate.  It simply is too expensive for everyone and too risky for health care providers (not to mention the uninsured themselves) to continue allowing people to be uninsured.  What concerns me here, though, is that O'Neill doesn't specify any new avenues to do this.  You can't just mandate insurance when there are clearly not enough affordable options for people to buy into. 

But O'Neill is quite right about using tax credits and deductions to solve our health problems.  Forget inequities, they're an incredibly inefficient way to go about paying for health care and a waste of tax dollars. 

Ladies and Gentelmen, I give you France

(cross posted from tpm)

A substantive debate has been circulating tpmcafe and other corners of the web among us health policy wonks and what we deem to be the Right Way to go about fixing our health system.

But there appears to be some discrepancy among the policy wonks when using the term “single payer”.  Some mean pure single payer, or a Canadian or UK style way of delivering care, where there is no or a very small role for the private sector.  Others are making “single payer” synonymous with “universal care”, which is a different issue indeed.

Although some have argued otherwise, I think the one thing nearly all (>95%) progressives agree on that we need to have universal health insurance.  Not that all health insurance and health care services should be funneled through the government, but every single person in the United States should have health insurance, and if necessary the government should step in to fill in the gaps.  That is the baseline of agreement.

From there, you get any number of ways to achieve it.  Hence the quibbling among PPI and Kevin Drum about incrementalism.  Then there's the question of whether or not we should adopt a true single-payer system.  On that front, Leif Wellington Haase wrote an excellent meditation on why we should be cautious with single payer, and today Ezra Klein has a good look at why Canadian-style health care should not be our goal in the United States.

Instead, a better model for the U.S. would be a public-private hybrid that provides a floor of care and universal coverage for everyone, along with varying levels of benefit packages offered by the private sector. 

But what would this kind of system look like, and does it work?  France is one nation with quality results within a public-private framework, and a look at this system is a sound place to start.   

Everyone in France has a basic level of publicly-funded insurance.  This insurance covers everything and makes no demands on physician choice (or the number of tests or visits).  These public funds cover 75% of health costs, with the rest of the cost split between out of pocket payments and private insurance.  85% of the population has a form of supplementary insurance to cover the rest.  All doctors in France take either public or private insurance, so there’s no migration of doctors toward one avenue or the other.

There’s a few things about the French system that address single payer concerns Leif laid out:

• Because of the allowance for a private sector, the development and adoption of technology won’t be stifled

• Private insurers will stay around because they’ll still have “skin in the game”, thus avoiding a complete administrative disaster

Again, the most important goal is to cover everyone.  Once a plan allows for that, we need to examine the ways it can hold down costs. In the case of France, that’s done in many different ways.  Two of the main controls:

• Because the majority of health spending is directly financed by the government, it has great bargaining power to ensure lower prices (think the right way to do Medicare Part D)

• The state plans hospital locations, ensuring a uniformity of available care

And the French system was given the number one rating by the World Health Organization in 2000.  Where did the United States stand? Number 37. 

As Leif said, there are many ways to Rome.  But France represents a well-traveled and smoothly paved avenue. 

Do we want to keep it with employers?

(cross-posted from tpm)

There’s an essential question beyond the incremental debate.  When considering health care reforms, do we want to continue working in an employer-based framework?

John McDonough from the MassHealth campaign writes:

It’s not the size of the assessment, and it’s not the total revenue needed to fund reform – other ways to square those circles. It’s the establishment of a new principle: all businesses with at least ten workers have a responsibility to cover their workers or to pay something for the cost of their coverage.

Is this the principle we want to reify?  The problem with the Massachusetts bill is that it’s laying the foundation for health care as an employer- sponsored right.  And in the long run, that’s not the way to frame health care.

Health care needs to be established as more than a right, and particularly more than an employment- linked right.  It’s a necessity. To pave the way for something substantial, that inimitable necessity needs to be the foundation. 

In his last post, Ezra wrote:

The politics of health care are the politics of economic security, and no one is comfortable with what they don't understand. So as much affection as I have for all the FEHBP expansions and tax credits proposed by various think tanks and pols (see PPI's new proposal for a good example), the way forward is not a technocratic compromise that cleverly mixes market mechanisms with regulated insurers and individual mandates in order to emerge as ideologically indistinguishabl e as possible. Single-payer, presented without compromise or apology, is simplicity itself.

He’s quite right to peg the security argument with health care reform.  As our health system rapidly shifts and premiums sky rocket, things feel very insecure.  And the continuation of the employer-health insurance connection reinforces that perception. 

When insurance was first pegged to employment, the employer- employee relationship was quite different.  There was a sense of job security unknown today.  The average working person today will have many different employers.  Assuming employer-based universal coverage, each time they change employers adds an expensive administrative cost.

There's also something to be said for relieving the burden of rising costs on businesses.  Reforms like the MassHealth bill have nothing to say to GM or Ford.

Further, a continued employer-based system (again with a universal mandate) will be a patchwork system.  How are we paying for the self-employed? Those who do not/cannot work?  This can certainly be done; Germany and Japan have employer-based systems and still have better care than the United States. 

But as Ezra said, single-payer is simplicity itself.

 

Hagel's health commission

From the News Bin:

Sen. Chuck Hagel (R-Neb.) has formed a commission of health care experts to develop health care reform recommendations for federal legislation, the Omaha World-Herald reports. The commission comprises 10 members who will examine health care access and quality, cost control, the roles of medical science and technology to improve care, and the effect that baby boomers will have on future costs, according to the World-Herald (Thompson, Omaha World-Herald, 2/23). Part of the commission's mandate is identifying "more effective financing vehicles for American health care than current public and private plans." Hagel said that the goal will be to ensure sustainable health care for all families.

Smart move.  Methinks someone is getting ready for '08.

Why patch-work initiatives fail

The WSJ reported yesterday that an initiative to cover part-time workers is failing:

Although a coalition of 60 large companies last year announced the National Health Access program -- a plan to offer affordable health coverage to their part-time workers, who generally are ineligible for employer-based health benefits -- only 10 of the companies are actually participating so far...Through the effort, the employers will use their collective bargaining power to negotiate low-cost health plans for about three million uninsured part-time and temporary workers, contractors, consultants and early retirees. Employers will not subsidize the coverage. The packages offered under the program vary from allowing workers access to discounts on physician services to a high-deductible major medical insurance plan, and the Journal reports that several of the options "are essentially bundled health care services rather than insurance."

There's a couple things happening here.  Employees prefer comprehensive health plans over bundled services, so  they might not deem the latter worth paying for.  And if employees don't show much interest, employers won't invest the cost of designing tailored plans. 

There's a larger wall to climb than employee interest, which is that it's extremely costly for employers to subsidize health insurance for part-time workers.  That's partly due to the fact that health insurance isn't a part-time thing.  You theoretically need it all the time, and it's not easy to scale it back to a part-time level that's still recognizeable as insurance.  Because many employees work part-time to supplement income, devoting a big chunk of that income to health insurance can defeat the purpose of that second job.  Further, many part-time employees are covered by their spouse's insurance and don't need supplementary coverage.

Our system just isn't designed to cover the self-employed or part-time.  The cost sharing mechanisms are based on employers and their bargaining power.  And even that power doesn't go far -- huge firms weren't able to negotiate anything above bundled services for their part-timers. 

Within our current constraints, these workers not covered by their spouses will continue to struggle for care.  Tweaks aimed at the private market won't work here; it's just too inelastic.  Allowing these workers to buy into Medicare with a sliding premium scale, however, can at least affordably cover them in lieu of a better system. 

Pay for Performance

One of the break-out sessions at the National Health Policy Conference focused on pay for performance initiatives and ways to make them successful.   Speakers included Ron Bangasser, a physician in charge of implementing P4P changes at his medical group in Redlands, CA, R. Adams Dudley, a professor at the University of California, San Francisco, and Margaret Stanley of the Puget Sound Health Alliance.

One of the main points I took from the discussion is that slow implementation of P4P measures is essential for success.  If a hospital or medical group takes on too many measures of quality at once the whole P4P initiative is likely to fail.  It's also important to ask providers what they'd like to see measured, as this improves compliance.  At the Puget Sound Health Alliance indicators for depression and back pain were added to the list (perhaps the Pacific Northwest's clouds and rain have something to do with that?). 

Adams Dudley encouraged would-be P4Pers to use three different incentives to increase compliance: monetary rewards, reputation incentives, and work-load incentives.  Monetary rewards are obvious and can range from dinner and movie certificates to salary increases.  Reputation, especially at large institutions, can act as a powerful incentive.  If a doctor perceives that his/her reputation is being tarnished in their P4P reviews they're likely to turn things around quickly.  It's also important to show physicians that certain measures will reduce their work load (particularly with primary care docs and internists).

While we're still a long way off from a majority of docs using P4P measures, the simple act of using patient satisfaction surveys will cause a lot of change.  As one panelist pointed out, administrators can't give any more time to docs to spend with their patients; it's up to doctors to make their patients feel like five minutes is three hours or three seconds.  We can all think of that arrogant doc who has a horrid attitude towards patients but goes around proclaiming what a fabulous doctor s/he is.  Satisfaction surveys will help bring some of those egos back down to earth.

One major problem with implementation is the very infancy of pay for performance.  Without a clear compass (or evidence to reinforce the direction), administrative and political squabbling often supersede real changes. 

It was also made clear that states can lead the way in some key respects.  If states adopt a set of P4P measures, it gives organizations a place to start from, rather than "Gee, I think pay for performance is a good idea, but what should we measure?"

 

Paradigm Shift

The Wall Street Journal yesterday featured an editorial on Harvard Business School professor Michael Porter:

Porter last week at the World Economic Forum in Davos, Switzerland, previewed "Redefining Health Care" -- a book scheduled for release in May that he co-wrote with University of Virginia professor Elizabeth Olmsted Teisberg -- Murray writes, adding, "Too bad President Bush and his advisers weren't there." According to Murray, Porter, like Bush, "believes competition can solve much of what ails the health care industry," but Porter believes that "the president is making a big mistake by focusing mostly on cost." Porter believes that the "real problem in health care ... is a lack of good information on quality and outcomes" and that, "without that information, any effort to drive down costs through competition will backfire," Murray writes. In addition, Murray says, Porter believes that the "focus ... should be on value" because the "scandal of today's health care is that the quality is often shoddy." Porter also believes that, although "much of the effort to drive up value needs to happen in the private sector," the "government should take the lead in measuring health care quality and outcomes," according to Murray. He concludes, "If competition is going to rescue the U.S. health care system, it will have to be competition on price and quality"

Readers know I don't think competition will rescue our health system.  But I agree with Porter that we focus too much on cost and not nearly enough on quality.  Quality has bearing on cost as well -- medical errors are expensive, poor disease management leads to costly interventions, etc.  They shouldn't be viewed as separate -- quality affects cost and vice versa.   

But any single-payer or universal system must enact quality reforms  in order to be the best and most efficient system.  I'd focus on the following:

• Widespread adoption of electronic medical records and other HIT quality intiatives

• Redefined roles for PCPs to act as care managers

• Higher reimbursement rates for managing disease, as opposed to the current system which rewards for intervention

• Malpractice reforms that provide greater incentives to report errors, as well as preventing injury

• Major public health initiatives to reduce obesity and diabetes rates

Those are my top five -- what do you want?

Wrong on all counts

Via Matt Holt, it appears that HSA's aren't the only thing on Bush's SOTU agenda this year (from WSJ):

President Bush: The government must work to reduce costs through the spread of information technology, which many in the health field say will help reduce the rising costs substantially; litigation reform to prevent these frivolous lawsuits from running up the cost of medicine, either through the practice of defensive medicine and/or premium increases, and actually drive good docs out of business. I'm particularly concerned about OB/GYNs; we have an OB/GYN crisis in states because of these lawsuits.

This is excellent.  Bush is proposing not one, but two completely inept approaches for reigning in health care costs.  I'll refer to my Medical Malpractice Myth series, but here's your handy bullet-point approach to refuting medical malpractice:

• The vast majority of patients injured in malpractice do not sue.  Research has found that 3-4% on average end up filing lawsuits, and many of these are simply to glean what happened

• Malpractice awards are lower in the United States on average than other countries

• Research indicates no jury bias towards patients, in fact juries tend to be biased in the favor of doctors. 

• Research shows that juries aren't awarding any more money (adjusting for inflation and the cost of injury) than they did 40 years ago, nor are there more lawsuits

• The idea of defensive medicine is almost impossible to measure, but studies ambitious enough to do so have found very slightly higher rates of increased intervention.  States with tort reform have slightly lower rates of increased spending (5-7%), but that benefit appears to disappear after 10 years

• All spending related to malpractice is estimated to equal less than one half of one percent of all health care spending

• There is no evidence of a rash of doctors leaving practice because of malpractice costs

Issues like tort reform and buzz-worthy insurance plans easily gain traction with the public.  But neither of these solutions will make a dent in rising costs.  They're only prolonging substantial reform, exposing more and more families to financial ruin in the meantime. 

What do you want to do?  Keep trying things we know won't work?  Or something that does? 

Pick an angle, buddy

Steve Pearlstein wants to have it both ways:

In other words, it's important to get it right this time, and a president nearing the end of his second term who is willing and able to take on the special interests is just the person to lead it. Unfortunately, by framing the debate as an ideological choice between individual control and more government, Bush is setting himself up for another Social Security-like failure...

Government -- in the form of Medicare, Medicaid and insurance coverage for employees and veterans -- already pays half of the nation's health bill. Those are among the most popular government programs, cherished by Republicans and Democrats alike. So to think government won't be heavily involved in health care is an economic and political fantasy.

Moreover, we know that by its nature, health care is a highly imperfect market.

It suffers from tremendous "information asymmetries" between sellers (doctors, hospitals and insurers) and buyers (patients).

It is rife with what economists call "principal-agent problems" -- like the doctor who benefits financially by providing more medical treatment than patients need, or health insurers that are always trying to get them to consume less.

In rural areas, there are often few providers and little or no competition.

And left alone, insurance markets will tend to lower costs for the young and healthy and raise them for the sick and aged -- an outcome that is as socially unacceptable as it is economically efficient.  So, please, let's dispense with the free market, personal choice rhetoric. Economically, its inappropriate. Politically, its just stupid. It didn't work with Social Security and -- trust me on this one -- it really won't work with health care.

So he does a fairly solid job laying out the reasons why health care doesn't respond to economic pressures, and why the government should be involved in health insurance.  All things progressives agree with.  But then he decides he wants to please conservatives as well:

That doesn't mean there aren't ill-advised government policies that need fixing, as Bush suggests, like the malpractice-tort system or the tax-free treatment of employer-provided health insurance.

Someone hasn't gotten the memo on the tort system, and why changing it won't fix anything.  But I digress...

Health savings accounts combined with higher-deductible catastrophic insurance -- the centerpiece of the Bush consumer-driven health care push -- are already gaining traction in the marketplace and show some real promise.

So here's the thing.  There's definitely an argument to be made about inducing more competition and making the health care system more transparent.  But if you spend the first half of your column bemoaning the belief that we don't need government in health care, or that competition and "individual choice" will fix things, it doesn't work very well to turn around and laud HSAs.  Especially when you think about the 80/20 rule, or that 20% of Americans use 80% of health care dollars.  That 20% will continue blowing their deductible, HSA or no. 

And how does he think HSAs are showing promise?  The only promise I see is in employer's eagerness to shift costs back to their employees.  Health care spending may have slowed in 2004, but that's mostly due to less consumption of brand name prescription drugs and more use of generics -- not because of lowered health care usage across the board caused by HSAs. 

It's great to call for universal health insurance.  But when Pearlstein first claims that consumer directed reforms will go the way of social security, he's right.  And that includes HSAs.

 

Maryland, Walmart, and Medicaid

Ezra flushes out why targeting Walmart to pay more for health care doesn't fit:

Putting aside questions about the utility of entrenching the corporate welfare state, Wal-Mart simply does not abuse Medicaid. The retail sector as a whole sees an average six percent of its employees relying on Medicaid; Wal-Mart averages five percent. As for the children of employees, who do rely disproportionately on state services (though for perfectly good reasons), kids of Wal-Mart employees use government health care 27 percent of the time; for the retail sector as a whole, that number is 36 percent.

So not only is Walmart not causing a Medicaid problem, but Maryland doesn't have a Medicaid problem. (It does have a wage problem, however) Its growth in Medicaid spending from 1991-2001 is actually 1% under the national average. The state isn't struggling more than others under the weight of health spending.

It seems as though Maryland has come up with a very clever way to get more money in its Medicaid bank. Walmart is a favorite punching bag for the left and the myth that Walmart sends a large chunk of its employees to Medicaid is obviously still afloat. Maryland legislators are riding that wave.

If we're trying to "fix" health care, to reduce the number of uninsured, we need much broader solutions than demanding large companies demanding 8% of payroll to health insurance. That's partly because large companies usually offer insurance, while a number of small businesses don't. But rather than thinking about acutal reform, states are using political capital to kill off one or two bad guys. But this legislation could pass because it's not that intrusive. Wal-Mart claims it already spends near 8% on health care. If legislators really wanted to decrease the number of uninsured, they should have said, "You must provide insurance to 2/3 of your employees".

In terms of a viable solution for health care, this is just running in circles.

There's a way we can all win...

Ezra makes a great point in the wake of the Administration's annoucement that they'll be focusing on health care in 2006:

But if [Bush's] proposals appear weird, that’s because The WSJ is complicit in an administration lie. There are two groups deeply concerned about health costs in this country: individuals and their employers. And individuals, as Kaiser’s polling found, are primarily worried about “having to pay more for health care.” Businesses, on the other hand, are worried that employees won't pay more for health care. This is a zero sum problem under the current system: individuals want their employers to stop shifting health costs onto their backs, and employers want to keep forcing their employees to pay more out-of-pocket. Barring a total restructuring that severs health insurance from employment, for one to gain, the other has to lose.

Ezra's got it right. One reason why it's so difficult to get minor reforms passed is because we're just shifting the costs of our bloated health system back and forth.

HSAs are just as complicated as any other head-scratching reform approach, so don't expect the public to take to them well. Any plan that boasts high deductibles (i.e. lots of $$ out of pocket if you get sick) as one of its key components will face a major struggle under the public's cost concerns. The Administration's attempts at social policy are falling flat -- even something as essential as a Medicare drug benefit was made into an unbelievable mess of paperwork and bureaucracy. Don't expect this initiative to be much different.

Paying or Playing

Matthew Holt explains why San Francisco's initiative to get employers to cover their employees will fail:

Half those employed in city businesses don’t live in San Francisco and many of those who live in the city work outside it. On top of that, many of the employees who do not get insurance at their businesses get it elsewhere as part of the employment package of a family member. . . But of course this isn’t really about the hard done-by small business that won’t be able to afford it. Real small businesses aren’t even covered by Ammiano's legislation, (and that’s a problem in and of itself). This is instead about the big businesses that employ lots of low-wage workers—in other words, fast food chains and Walmart.

That gets us to the next problem with state-wide solutions. They, too, are ineffective. Let’s face it, no one is locating in San Francisco for low labor costs, and restaurants here can pass on the extra costs to their customers — sorry, your $27 entree will now be $28.50.

It's a good discussion of the issue, and pertinent to some of my posts here at HP, mostly this one on states forcing employers to spend a portion of their income on health insurance. One key problem with state-wide initiatives is that they can cause some cost and spending shifting to surrounding states, whereas a nation-wide reform can't be absorbed in that way. Go read the rest of the column for more.

Doctor salaries today and tomorrow

Matthew Holt has a great post up about the effects of Medicare's cuts to physician fees:

But the problem physicians face is that they don't really have an alternative. Sure some will retire early, some will move to cash only practices. But given that Medicare is about a third of the money in the system, realistically they can grumble all they like but they'll end up taking it, and of course doing more things to those patients to make it up on volume. And that's not just my opinion, it's the findings of this five year study by the HSC folks. After all, they went to medical school and residency for all those years, what else are they going to do? There's only so much room on the poker circuit and only so many of them can run health plans.

That's why I say that physicians should be figuring out how they collude with government to reduce overall spending while maintaining as good a position as they can. That's what's happened in other countries, and one day it'll happen here. Of course there's lots of time for gnashing of teeth and entrepreneurial end-arounds before then.

Now "whether it will happen here" is certainly the eternal question. Doctors have dual stakes -- one in preserving the status quo and its high salaries, and another in high salaries in the future. Unfortunately humans as a general rule tend to plan for now, not "some day in the future", so I wouldn't expect to see doctors jumping on the single-payer bandwagon until things start looking really bleak.

But considering how much higher physician fees are here than the rest of the world, that's probably in the rest of country's best interest (in terms of costs) anyway.

More on states

Speaking of state legislation, some interesting bills are coming down the pipe that would compel private companies to spend a certain percentage of their payroll (varying between 8-11%) on health insurance for employees. It's basically an indirect way of requiring employers to provide health care -- requiring only 8-11% is still requiring health spending.

The problem with states compelling coverage is that, while they have the muscle to do so, they don't necessarily have the resources to cope with the fallout. More than a few states are buckling under the weight of their Medicaid programs. It's tricky to demand coverage when the reasons many employers don't offer it (or employees don't buy in to it) is because it's just too expensive. Small businesses, in particular, have difficulty buying into the market.

But small businesses aren't the targets of this legislation. The bills are meant to crack down on large retailers who don't (and should) provide coverage. Wal-Mart relies on its large profit margins by playing monoply with its suppliers and paying low-as-dirt wages. Requiring it to spend 8-11% of payroll on health care, when it's often the largest private employer in the state, will get bloody. That, coupled with several states' efforts to raise the minimum wage, will send some shockwaves through Wal-Mart's business model.

It's not clear what these initiatives will do, but it's much easier to get major reform passed in the state versus the fed. We might see reform come through that avenue if enough states enact satisfactory changes.

But you can be sure this policy wonk is waiting behind her laptop with baited breath.

Do we aid in its demise?

Ezra's got a post up asking an important question:

There is a serious question here: should Democrats be fighting to strengthen the current health care system because it's better for folks in the short term? Or should they allow it to collapse, hastening the switch to a more equitable, affordable, and sustainable structure? The two are not necessarily mutually exclusive, but they may well be. So while the spectrum of options is larger than Newman and Sklar, there's a basic, legitimate point of contention here. Do you sacrifice long term gain to avoid short term hurt and allow the system to limp along indefinitely? Do you burn the village to save it? Or is there, in fact, a viable middle way?

Burning the village is a terrible horrible very bad no good idea.

The issue at base here is whether Democrats should advocate for ending the employer tax break for health benefits in favor of a program to strengthen health benefits for the poor.

What makes Democrats think that they can successfully do this? There is no way, until 2008, that this is even possible. Do backers want the Democratic candidate in '08 to have this as an initiative? How unbelievably poisonous would that be? This conversion isn't feasible, period. Even if the deduction was eliminated, there's a slim to none chance that it go toward health care for the poor. Americans around the country will say, "they have Medicaid!" and efforts to the contrary will be killed.

Further, it's unnecessary to ask if Democrats should hasten the collapse of the status quo -- Republicans are doing it for them! Consumer Directed Health Care, HSAs, High deductible health plans, all the "market oriented" fixes experts currently tout are going to be nothing but another dip in the graph (see below) in five years, followed by the inevitable rise in spending. Everything policy makers have tried before has failed -- CDHC changes aren't nearly as intense as managed care. Thinking their impact will be greater is just silly. The system is working itself to implosion already.

Now, onto the Machiavellian ethics of burning the village. Progressives should never advocate for policies that hurt large numbers of vulnerable people as a means toward a desired end. As a commentor over at Ezra's wrote:

Here's the thing:

Politics and policy are not games.

There are real people who get hurt when people in positions of power decide it has to get worse before it gets better. And, guess what? The people who get hurt the most are the poor and working poor.

There are many workable plans for universal coverage. But it will require a political fight. And doing it on the backs of the middle class is no way to build a long term progressive future in this country.

It's as simple as that. This isn't a political game about the hurricane, the war, or the deficit. This is people's health. If we're going to make major changes in the structure of health care delivery, it's our responsiblity to ensure a smooth transition. People are already hurting because of the current system. It's important to work to ease that pain in the interim, while pushing for changes to make it better for everyone.

In the meantime, Democrats should absolutely not be advocating for ending the deduction without a viable policy for major reform.

One of Many Parts

Fuchs and Emanuel, in their discussion of health system problems, point to an important facet of the increasing costs associated with health care delivery:

Another major problem with care organization and delivery is insufficient attention to benefit-cost trade-offs. Most physicians are conscientious about evaluating the benefits versus the risks of any intervention, but many fewer will consider costs, except perhaps for uninsured patients. Physicians often do not know what the costs are; they may believe that their responsibility is to deliver the best care that is technically possible, regardless of costs; or as Shojania and Grimshaw write, "Financial incentives may be misaligned." Over the years, there has been a plethora of recommendations as to how physicians can contribute to more cost-effective care, but the fact that they have not been implemented on a wide scale suggests that the problem is systemic in nature. Some experts advocate a complete overhaul of the financing of health care to give physicians the information, opportunity, and incentive to deliver cost-effective care.

This is ground that many fear to tread. Physicians are the doorway to changes in care -- we simply can't get anything done without their assistance and cooperation. But while we're fine pointing to inadequate standards of care, we often shy away from any substantial critique of doctors and their personal contribution to rising costs.

Health Affairs Blogging

Later today I'm going to blog Health Care Reform: What? What? When? by Victory Fuchs and Ezekiel Emanuel. The article dissects three approaches to health reform: individual mandates, single payer, and universal vouchers. But the abstract makes no secret about the authors' belief for the chances for reform:

Over the long term, reform is likely to come in response to a major war, depression, or large-scale civil unrest.

So... you guys are like, optimists, right? You expect big changes tomorrow, I can tell. Um...yeah.

The view from a wonk-in-training

For those of us just discovering the health policy realm, things look pretty ugly. They also appear to have changed significantly in the last five to eight years, and therefore must be headed for disaster. Despite yesterday's New York Times article claiming "Employer-Backed Health Care Is Here to Stay, for Lack of a Better Choice," it's stats like these that make us baby wonks believe the end is coming:

Only 60 percent of employers now offer coverage, compared with 66 percent as recently as 2003, according to annual survey conducted by the Kaiser Family Foundation, a nonprofit health research group in Menlo Park, Calif. In 2000, the percentage was 69 percent.

How could the sky not be falling with that kind of change happening!

At least that was my naïve view five months ago. The deeper I delve, the clearer it becomes that we've balanced on such precipitous edges before. Several times. The bottom line is, barring a major terrorist attack, collapse of the housing market, or other economic disaster, the vast majority of Americans (85% currently) have health insurance. Although employers are only covering 60%, we've got Medicaid, Medicare, and that network of other orgs I discussed yesterday filling in the gaps.

That fortunate 85%, though ostensibly in support of universal coverage, probably won't push for significant reform anytime soon. Certainly the events of the last year have solidified that opposition. In a time of national uncertainty and disaster (hurricanes, housing market, the war), it's almost impossible to get the public to consent to the total restructuring of something as essential as health care.

As the piece says:

And while change may be inevitable at some point, no one is willing to predict how soon a sufficient consensus might emerge to allow something significantly different than the current system. "We've been teetering towards a crisis for a long time now," Mr. Custer said.

But the flip side of a health policy wonk-in-training's naïveté is that, while I can be realistic about our chances for change in the next few years (quite slim), I've got this irrepressible, annoying optimism. I know we've failed to fix this system many times before, but the chips are always different, and I'll be damned if I can't believe we're capable of doing it.

There's another piece, too

So one thing HSA and CDHCers harp on is how we, as patients, don't feel the full effect of our health decisions. But there's another group contributing to this that's rarely mentioned (perhaps so the CHDCers can keep in the good graces of the AMA?): doctors. I'm going to quote Avorn again, because I think we need to add this angle into cost discussions:

But when a doctor is spending other people's money, whether it's from a large insurance company, a government health program, or the patient, he's likely to worry less about what the drug will cost somebody else. . . And if the doctor doesn't hear the other side of the story or doesn't even know what the price tag is, it's hard to act other-wise.

You can also group this problem along with drug oversight boards. But really -- what were all those docs contributing to the New York Medicaid mess thinking? They weren't, because they're not paying, and it's usually not their problem. Responsible prescribing can make a big difference in keeping pharmaceutical costs down. We just need the golden key to all those clinical trials. That, and an easily navigable system to glean lessons from them.

Why Health Care is Different from Groceries

There's probably not much use in responding to this, but I can't help myself:

Here's one way I think of the matter. Suppose we had taxpayer provision of 'universal' grocery needs. That is, we are all taxed to stock supermarket shelves, and in return for these higher taxes that we pay, each of us is accorded by government the 'right' to take from each supermarket whatever grocery items we 'need.'

Isn't it obvious that each of us, having to pay no marginal cost of whatever grocery items we take from supermarkets, will take more than we need -- or, at least, try to take more than we need? Isn't it obvious that, having to pay no marginal cost of whatever grocery items we take, we will consume wastefully? Isn't it obvious that the prices of grocery items (and the actual costs, including queuing, of acquiring such items) will rise to heights far higher than those that we pay now with our private system of supplying groceries?

Let's take the grocery analogy. First, most people know exactly what food they need and the consequences of eating said food. We know getting an apple instead of a candy bar is bad for our health and might make us fat. We don't have to go to a "food consultant" every time before we buy food in order to attain it, nor do we need someone to give us a prescription for our food. We also know that we need food every day, at least three times a day.

Let's compare that to going to the doctor or hospital. You can't even get health care without an appointment (unless you're going to the ER). Then the expert tells you what you need and orders it for you. You can't treat yourself (but you can feed yourself). And it's an infrequent endeavor for most people -- rarely do you need health care 3 times a day, every day.

So we can't treat ourselves and we don't need health care very often. The urge to eat every time you're hungry is surely greater than the urge to see the doctor, especially for routine care. No one becomes like a kid in a candy store when going to the hospital. (Can you imagine going in and saying "give me that operation and that procedure, Oh, and a colonoscopy too, while you're at it!")

Boudreaux continues:

What am I missing? Why do so many people -- including some faculty members tenured at presigious Departments of Economics -- fantasize that if we collectivize medical-care provision, ordinary people will be made better off?

Why do so many people fantasize that ordinary people will be made better off? Seriously? Oh, I don't know, maybe because premiums have risen horribly, the industry is trying to hold down costs by shifting them to patients, and 45 milllion people have no insurance at all. But having the government guarantee coverage would greatly ease those problems for ordinary people, who struggle paying their medical bills and fear losing their coverage. I'd say that's a pretty big benefit.

Regressivity and Paying for Health Care

I've always taken a "liberal" approach in my thinking towards health care, which also happens to be the subject of Thomas Bodenheimer's article in this month's Health Affairs. He expertly flushes out the regressive way we pay for health care in the U.S., and it's a point I think those who ascribe to a "liberal" approach should be well aware of:

In 2002, 52 percent of health care services were financed through out-of-pocket payments and premiums, which are regressive, while 44 percent were funded through government revenues, which are proportional. The sum total of health care financing is regressive. In 1999 the poorest quintile of households spent 18 percent of income on health care, while those in the highest income quintile spent only 3 percent. The liberal perspective, based on equality, would likely substitute proportional employer-employee contributions and progressive taxes for regressive insurance premiums and out-of-pocket payments.

Italics mine

First, it's great framework for understanding exactly why paying for health care is regressive: out-of-pocket payments and premiums are generally the same, and therefore make up different percentages of income. That being said, the gap between the top 20% and bottom 20% shouldn't be so huge, should it? According to this research, the bottom 20% spends six times that of the top 20% on health care.

And I'd really like to see how HSA's are going to affect this differential. I'm thinking they'll only make it worse. An average $4,000 deductible for a family is no joke.

But what this all underscores goes way beyond the "problem" of the uninsured. It's the very basis upon which we pay for our care. It's incredibly unequal, and it deserves more attention.

Beyond Percent Supporting

As part of my effort to blog the current Health Affairs issue, I want to touch on a point Thomas Bodenheimer makes in "The Political Divide in Health Care: A Liberal Perspective". I have a special soft spot for Bodenheimer, mostly because he authored the first substantial text I read on health policy: Understanding Health Policy. It reads like an entertaining text book and it's a great discussion of the structure of the American health system. I definitely recommend it to anyone looking to deepen their understanding.

Soft spot aside, Bodenheimer makes an essential distinction in health care polling:

A 2004 Opinion Research Corporation survey of U.S. adults found 76 percent agreeing that access to health care should be a right. In a 2003 Pew Forum on Religion and Public Life survey, 72 percent of U.S. adults, including 51% of Republicans, agreed that the government should provide universal health care even if it meant repealing most of the Bush tax cuts . . . One caveat concerns the impact of taxes on