Healthy Policy

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.