Healthy Policy

Wendesday Health Stuff

Hey everyone, I'm back! Thanks to all the well-wishers and commentors while I was gone. The appointment went well; I won't be having surgery for at least 2 and half weeks, possibly much longer. So rest assured I'll providing my usual commentary until then.

For now, I want to point you all to Graham, who wrote on Atul Gawande's recent New Yorker interview. The post originally caught my attention because someone highly recommended me Gawande's book, Complications: A Surgeon's Notes on an Imperfect Science.

In the magazine, Gawande comments on malpractice:

Are American doctors in a tougher position than those in, say, Great Britain or Canada?

The major difference between malpractice here and in Great Britain and Canada turns out not to be in the number of lawsuits. At this point, the U.K. and Canada seem to be catching up with our rate of lawsuits. The big difference is that the awards are far smaller. This is partly because of the traditions of their court systems, but it’s also because they have universal health coverage. Patients in those systems already have their medical expenses covered for their lifetime, as well as some disability benefits. So malpractice awards are restricted to other costs—lost wages, or compensation for suffering, for example—and these are much smaller costs on the whole.

Gawande's point seems pretty solid to me. Health care costs for a disabled child or chronically critical loved one can easily reach $1 million, and when heatlh care coverage isn't assured, that's a terrifying sum.

It makes sense, except that he's wrong. This Health Affairs article found that the average payment per judement in the UK was 36% higher than the average payment in the U.S.

Surprisingly, U.S. malpractice payments (including both cases that resulted in a judgment for the plaintiff and cases resulting in a settlement) were lower, on average, than those in Canada and the United Kingdom. In 2001 the average payment in the United States was $265,103, which was higher than in Australia but 14 percent below Canada and 36 percent below the United Kingdom. While U.S. media and public attention have focused on multimillion-dollar awards at the upper end of the range, the average was actually smaller than in Canada and the United Kingdom in 2001.

So, I'm not entirely sure where Gawande is getting his numbers from, but there's a serious disconnect here. If the UK payments had been 5% higher than U.S. payments, that'd be one thing. But the average UK payment here was $411,171 to the U.S.'s $265,103.

I'm hoping to see some good letters to the editor point this out. Anyone else have an idea if this could be a reasonable discrepancy? Or is Gawande just flat out wrong?

Empty Blog for Today

Dear Readers,

I know it's a bit early to leave, but circumstances have over-taken my blogging abilities for Tuesday.

If you read my handy About page, you'll see that my knee will be going under the knife soon. Of course, I need to consult with some doctors before that can happen.

Which leads me to the explanation of my absence. While you are spending your Tuesday doing the usual, I'll be in St. Louis (here, exactly) getting my knee looked at. I'll be gone the entire day because it's four hour drive from Kansas City, and I'll be returning home immediately after the appointment.

So while I know you'll miss me terribly, I promise to be back on Wednesday. In the meantime, let me make some reading suggestions:

Over My Med Body! is a supremely enertaining blog by a Stanford med student.

Kaiser is a great place to get lost for hours. You can find research on almost any topic related to health policy, and I always learn something essential.

My column archive if you haven't read them already

And if you're health cared out and want mindless entertainment, Go Fug Yourself is the spot for all your making fun of bad celebrity clothing needs.

Enjoy!

Sincerely,

Kate

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.

All About HSAs

My latest column over at Campus Progress is up. This week's installment focuses on HSAs, as in, what exactly is that?

My employer offers Health Savings Accounts. Um, what exactly is it and should I get one?

Health Savings Accounts, known in the health policy world as HSAs, are a new way of paying for your health expenses. HSAs are a type of bank account offering tax benefits that you use only to pay for medical bills. HSAs were authorized by the Medicare Prescription Drug, Improvement, and Modernization Act in 2003 (of the confusing new drug benefit fame), and they’re becoming quite popular. Insurance companies like Blue Cross and Blue Shield, Aetna, and United Health Group sell them, and employers like Wal-Mart offer them to their employees. Over 2.4 million people have signed up for HSAs, and analysts estimate that by 2010 there will be $10 to $26 billion dollars in such accounts

And will they cover the uninsured?

Why is there so much hype over HSAs? Are they going to cover the uninsured?

I’m glad you asked. So far there aren’t any concerted efforts to make HSAs the main cure for the uninsured. This is, in part, because many employers of the uninsured don’t offer health insurance, period, let alone HSAs.The hype is about health care spending in general, which has been steadily rising, and premium costs in particular, which have increased 73% over the last five years.

HSAs are part of a new brand of health care initiatives known as Consumer Directed Health Care (CDHC). These initiatives, chiefly supported by free-market advocates, seek to control health care spending by shifting more of the cost onto patients. The idea is that if people see the bill for their health care, they’re more likely to seek out the lowest price for care and cut out unnecessary spending. The landmark RAND Health Insurance experiment, which used high deductible health plans, demonstrated that patients will reduce their consumption of care in these insurance arrangements. The problem is that they sought less care in all areas – necessary and unnecessary both.

Dying to know more? Go read it all.

Houston, We Have A Problem

As if we all didn't know about the looming disaster with baby-boomers retiring, the New York Times has more on spending cuts in Medicare:

The Bush administration is headed for a clash with the nation's doctors over a federal plan to cut their Medicare fees by 4.4 percent next year, even as the government tries to measure the quality of care they provide.

Doctors say that if the cut occurs, some physicians will be less willing to accept new Medicare patients.

Administration officials said that on Monday they would publish a final rule cutting 4.4 percent from the amount paid to doctors for each service provided to Medicare patients in 2006. They said the cut was required by a formula in the Medicare law. But doctors pointed out that President Bush had not proposed any specific legislation to avert the cut.

In a report to Congress in April, Medicare's trustees said the formula would produce cuts totaling roughly 25 percent from 2006 to 2011, while doctors' costs are expected to rise 15 percent.

Yeah, a 25% cut in physician fees for Medicare is really not going to fly for long.

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 public opinion. A 1994 survey found that fewer than half of the respondents would pay more taxes to finance universal health insurance. A 1993 survey found that 64 percent were willing to pay more taxes for that purpose. Many respondents balked at paying even the tiny sum of $100 per year. If respondents were told that increased taxes reduced out-of-pocket health care payments, more than half were willing to pay an additional $1,000 a year.

The tax side of health care polling is key here. It's one thing for people to agree that they want universal insurance. It's a whole other side of the beast when you ask how much they would be willing to pay. And herein lies part of would-be reformers' problem.

We rely too heavily on polls examining support for universal insurance. Past efforts suffered severely because, though people want universal insurance in theory, they're unsure how much it means to them once it gets complicated. Is the health care situation different in 2005 than 1992? Absolutely, but one thing doesn't change -- reformers must convince the public that taxes need to be increased if the reform plan calls for it. And polling must be done beforehand to figure out the acceptable trade-offs. In the 1993 survey, most people were willing to put up to $1,000 more a year if it meant lower out-of-pocket payments. These trade-offs are extremely important issues to take into consideration when designing health care reform.

So while I always enjoy polls reflecting the public's enthusiasm for universal insurance, we must take care to extend those polls to their logical end -- how much are they willing to change to get that guarantee?

Weekend Light Reading

As it's the weekend and I'm not feeling a big policy post, I figured I should at least point the direction to something to waste your time with. The Straight Dope is basically a collection of those old wives tale questions answered with absurdist flourish. From one of my personal favorites, Which will keep you drier, running through the rain or walking?

But wait, you say. What about those pesky aerodynamic effects? The requisite math is a bit daunting, but never fear. Heedless of his delicate health or his already low reputation with the neighbors, your columnist spent a recent rainy Saturday running down the street like an idiot brandishing pieces of red construction paper clipped to cardboard, the better to snag and count raindrops. Methodology: three trials of two runs each over a fixed distance, once running, once walking. Winds: calm. Angle of attack of paper relative to ground: 45 degrees. Results:

Trial #1. Running, 15 seconds to run course; 213 drops. Walking, 40 seconds; couldn't count drops, paper soaked. Shortened course.

Trial #2. Running, 7 seconds; 131 drops. Walking, 20 seconds; 216 drops.

Trial #3. Running, 7 seconds; 147 drops. Walking, 17 seconds; 221 drops.

There's your classic sampling, very scientific indeed. Head to the site to get all your life-long questions answered!

Further Effects of Medicare Part D

From Blue Cross Blue Shield News:

The Philadelphia Inquirer on Thursday examined pharmaceutical companies that plan to eliminate charitable prescription drug programs for seniors enrolled in the new Medicare prescription drug benefit. Last year, the pharmaceutical industry donated $4.1 billion wholesale value in prescription drugs through tax-deductible charities. However, under a decision released last week by the HHS Office of Inspector General, Medicare beneficiaries who enroll in the new prescription drug benefit will lose eligibility for the medications donated through the charities. According to the Inquirer, an estimated three million to four million Medicare beneficiaries nationwide will lose access to prescription drugs under the charitable programs on Jan. 1, 2006, as a result of the decision.

Rx Company Response
Some pharmaceutical companies -- such as Pfizer, Bristol-Myers Squibb and Merck -- have said that they will allow Medicare beneficiaries to decide whether to enroll in the prescription drug benefit or continue to receive medications through their charitable programs. Amy Rose, a spokesperson for Merck, said, "Our broad interest is making sure that the people who need them have access to their medicines. That's the overall goal of everyone in the industry." However, other pharmaceutical companies -- such as AstraZeneca, Wyeth and GlaxoSmithKline -- have said that they will eliminate their charitable programs for Medicare beneficiaries, regardless of whether they decide to enroll in the prescription drug benefit. Carla Burigatto, a spokesperson for AstraZeneca, said, "Our program always has been to provide access for people with no other coverage." Title II Community Aids National Network, a coalition of HIV/AIDS groups, has called on federal officials to revise the HHS OIG decision. In addition, the Pharmaceutical Research and Manufacturers of America has asked CMS to clarify the decision to allow Medicare beneficiaries who enroll in the prescription drug benefit to retain access to medications under their charitable programs "when their expenses hit a gap in coverage -- the so-called doughnut hole," in which annual prescription drug costs reach between $2,250 and $5,100, the Inquirer reports (Ginsberg, Philadelphia Inquirer, 11/17).

No joke on ending charity coverage, which, although quite uncharitable, makes sense from a financial standpoint. Why should they give drugs away for free when people can access them for full cost (thanks to lobbying for no price negotiations)? But PhRMA's decision to push for donated pharmaceuticals in the donut hole (for explanation look here) seems totally out of left field. Considering the monumental lobbying effort to get the disaster-of-a-benefit passed, I must admit I'm shocked to see PhRMA doing something, well, nice. Kudos.

Useful Stuff for Part D

If you want to know more about Medicare Part D, Kaiser's got an excellent list of resources.

Food for Thought

From new RAND Health research:

Local produce prices are one of the factors most-strongly associated with weight gain, and children in areas with higher produce prices (adjusted for income and cost-of-living) gained more weight than comparable children in areas with lower produce prices relative to income and cost-of-living.

Growing up in Suburban Kansas, grocery stores are plentiful and cheap; almost every family has a car and the public schools are among the best in the nation. Head 15 minutes into urban Kansas City, the schools have lost accreditation, houses are dilapidated, grocery stores are packed with dusty boxed food and bruised produce. Obvious symptoms of poverty, yes, but research like this RAND study is important to tease out the uncontrollable consequences. The poor have little access to affordable produce, and are therefore more likely to be obese, and therefore more likely to be obese as an adult and experience lifelong health problems as a consequence (diabetes, high blood pressure, etc). With more health problems they'll miss more work days and be less productive, not to mention more likely to be uninsured. With cycles like these, is it any wonder that poverty is endemic and cyclic?