POLICY: Hubbard, Bush’s guy on health care

(Note-I moved this to the correct sequence in the WHCC Conference)

Allan Hubbard is Bush’s health care guy. Here’s what he had to say (my comments are in parens)

Primary reason for health care costs being so high is third party pay. When we consume healthcare we don’t ask the price, so we treat it if it’s free. And out of pocket costs have been declining over the last twenty years (Ed notes—although not the last five). And therefore price pressure being absent prices go up, and efficiency goes down.

There are three visions—status quo but that’s not sustainable

Single payer, expand Medicare a la Ted Kennedy, which will lead to rationing.

Or we can go to consumer directed health care where consumer picks amongst transparent options.

(He seems to have missed all the other universal coverage options—never heard of Enthoven, Fuchs, et al?)

The HSA is the solution, and a portable HDHP will not be underwritten for health reasons, so that’ll reduce job lock. But there;s still one problem that exists, and there’s not good information about pricing. Right now providers do to make that information available. He asked for people who disagreed, and then picked on a doctor who said no.  The physician said that he doesn’t know what the “best heart surgery” meant, so how could a consumer? (And Hubbard will probably join Beth McGynn on the AMA’s contract hit list should the news about his plans get out).

You talked about consumerism as a way to reduce prices and increase efficiency. What about the medical/emergency situations when the patient doesn’t have a choice about when, where and what type of care takes place?

Doesn’t work in emergencies…but that’s rare

Do you think HSAs could make the problem worse by driving the young, healthy or wealthy into these plans leaving the sicker in traditional plans which will drive up the cost of health care for the most vulnerable part of society?

Hubbard says that its not for the wealthy, as 40% of people getting them earn less than $50,000 (of course that means that 60% earn well more than the average, but lets leave that aside!)  For the chronically ill—he says 2–5% of population—this doesn’t work so well. so Administration wants to allow employers to put a bigger amount in the HSA for the chronically ill. But thats the problematic part. (Yup he admits it!)

(THCB readers know what I think about this, but after all you’ll comment here. )

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