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Sarah Palin’s limited health care record staunchly free market

Republican vice-presidential candidate Sarah Palin has very little on her health care
policy resume from her short time in office as Alaska’s Governor but what she does have fits right in with Senator McCain’s strategy to use the market more effectively in bringing down America’s health care costs and improving access to the system.Palin

Her health care efforts have focused on two things in Alaska:

  • Eliminating the 1970s era strategy of requiring providers to file Certificate of Need (CON) applications before being able to build more health care facilities.
  • Providing consumers with more information.

On the Certificate of Need issue she recently wrote in an op-ed in the Anchorage Daily News:

Health care: Do we have too much government or too little? Should we have regulated markets or open markets?

Those are the perennial questions.And that’s what makes the state’s proposal to repeal the current Certificate of Need (CON) program so contentious. Yes, there are solid arguments on both sides. But after much consideration, we believe that the program has not accomplished what it set out ultimately to do more than 30 years ago — lower costs for the consumer. It is time to end Alaska’s program in its present form. Doing so will not only reduce the cost of health care, it will also improve the access to health care, allow more competition and improve quality of care for patients.Certificate of Need programs were required in all states in the mid-1970s by federal mandate. The goal was to make sure that health care facilities matched community need and provided access and quality care, which in turn would help reduce health-care costs. The federal mandate was repealed in 1987 — 20 years ago! — along with its federal funding.The basic assumption in those days was that excess capacity, in the form of overbuilding, directly results in health-care price inflation. However, after more than 30 years of such programs, the National Conference of State Legislatures has found that there is no solid proof that the state-sponsored CON programs have actually controlled health-care costs. In fact, in 2004 the Federal Trade Commission and the Department of Justice both asserted that these programs actually contribute to rising prices because they inhibit competitive markets.Many opponents of CON programs have argued that health-care facility development should be left to the economics of each institution, in light of its own market analysis, rather than being subject to political influence…As I said recently in my State of the State Address to the Legislature, "Under our present Certificate of Need process, costs and needs don’t drive health-care choices — bureaucracy does. Our system is broken and expensive." Eliminating the CON program, with certain exceptions, will allow free-market competition and reduce onerous government regulation.

Governor Palin has also been calling for more price transparency, openness and competition as a solution for rising health care costs in Alaska.A task force set up by the Governor on health care issues in Alaska recently concluded that consumers needed more information to be able to compare costs.As a result, Palin introduced the Alaska Health Care Transparency Act to provide consumers with information on quality and cost which would be provided by a new government-run health care information office.Both of these relatively minor forays into health care policy could hardly be described as heavyweight attempts at health care reform. But both are consistent with the McCain market-based strategy to remake America’s health care system.I expect Governor Palin will have no trouble fitting right in with Senator McCain on the health care issue.See also Laszewski’s analysis of John McCain’s health plan and a Washington Post story about Palin’s health care record.

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Gregg Masters
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Barbara: In case you haven’t been following recent trends: medical care inflation runs consistently 200% to 300% above CPI, 46 million Americans are uninsured; the primary care infrastructure to ostensibly service the demand is crumbling in part based on the “private market choices” of physician specialty elections, Medicare can’t find enough “par” physicians, Medicaid is a disgrace from a provider payment POV, non community rated products cherry pick and push off the higher health risks to some other sucker. These are just several dependent variables downstream from decades of “managed” private market solutions. Fundamentally, they are nothing more than cost… Read more »

Andy
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Andy

This whole debate about who should pay for health care completely misses the point of reducing costs. Do you really think that the government providing health care is going to get encourage the 42 year old obese man with high blood pressure to change his diet or exercise so that he doesn’t have to take a multiple hundred or thousand dollar medication? Or convince the parents of the 13 year old child who is obese to make any of the same changes so that he doesn’t develop type II diabetes and cause him to be on more expensive medication and… Read more »

Denise
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Denise

I appreciate the reasoned discourse on this blog. Choice is fundamental to American healthcare and Obama’s plan recognizes that. It is a smart policy compromise on many levels. As to free market being the answer for healthcare, compare how the market has driven actions by the major corporate insurers of property: Pull out of high risk areas like the Gulf Coast and cancel fire insurance in areas of California. Applied to healthcare, aggregates groups of people would continue to be uninsured because rendering care for them is costly. We can not afford to rely on free market for healthcare. Literally,… Read more »

Peter
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Peter
Michael
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Michael

Re: healthcare quality measures and the market. Yes, it would be great if healthcare could function as a market, but patients and policymakers will continue to ignore quality information for 2 major reasons. 1) ask anyone you know who sees a doctor (over the long term)- their most important reason is usually the bedside manner or other “qualitative” reasons. How do you put this into a hard quality measure? 2) even numerical quality information is impossible to understand, or difficult to access. The site quoted above (wheretofindcare) has 0 useful information about hospitals in my area (NYC), and the one… Read more »

Dean S.
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Dean S.

From Mother Jones: “But how is she at actually governing? Here’s Anchorage Daily News reporter Gregg Erickson: It is clear that she has not paid much attention to the nitty-gritty unglamorous work of government, of gaining consensus, and making difficult compromises. She seems to be of the view that politics should be all rather simple….The Republican chair of the Alaska State House Finance budget subcommittee on Heath and Medicaid says he can’t find anyone in Palin’s executive office who cares about helping bring that budget under control. He is furious with her about that. That would be Republican Mike Hawker,… Read more »

Barbara
Guest

I think the private market runs more efficiently and it should be utilized whenever possible. Alaska has focused on providing more health care information to consumers – I assume this is in the form of building and maintaining a public website to display quality data. I wonder why a government body should spend tax dollars on such an effort when a private company could probably do much better, more efficiently and at a lower cost. I have yet to see a well-built, easy to use/understand government-run website. Many private websites like http://www.WhereToFindCare.com already exist and they do a great job.

Gregg Masters
Guest

Peter writes:
“Why when investors are concerned government intervention is OK, but when people can’t afford healthcare it’s the “private” market that will save us?”
IMO, this is the threshold question in the debate, and should serve as a values based, or ideological screen from which one’s point of view can be filtered.
Thanks for the clear recap!

Peter
Guest
Peter

Well Barry, even with an array of tax strategies the present cost structure is unsustainable and that is where you and I really disagree. I don’t believe your mild “fixes” will do much to control costs and that as the fed finds it necessary to save investors bacon by taking over Freddy and Fanny, it will find it necessary to take control of healthcare as well. Why when investors are concerned government intervention is OK, but when people can’t afford healthcare it’s the “private” market that will save us? Again the right deals two hands, one for itself and one… Read more »

Barry Carol
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Barry Carol

Peter, “You’re really talking about a flat tax system aren’t you?” Not exactly. I think integrating payroll and income taxes would make it clearer that the current tax structure is flatter than looking at the income tax in isolation would suggest. I prefer to think of it as a broader and more effective Alternative Minimum Tax. I also wouldn’t have any problem with a couple of additional brackets at the high end – say, 35% for incomes between the maximum wage to which the new health insurance payroll tax would apply and $100 or $150K above that an a 40%… Read more »

Peter
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Peter

Barry, looks like we’re both up early today.
You’re really talking about a flat tax system aren’t you?

Barry Carol
Guest
Barry Carol

Peter, You raise a fair point about the payroll tax not applying to income from capital gains, dividends, interest, rent and other non-wage income. This is actually a subject I’ve thought quite a bit about given my longstanding interest in tax policy. I think the solution is something called integration of the income tax and the payroll tax. It would work something like this. There would be a minimum federal tax rate of 30% that applied to all income, with the probable exception of interest from municipal bonds, above a standard exemption equal to the federal poverty level of income… Read more »

Barry Carol
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Barry Carol

rbar, With respect to price and quality transparency, I think this is most needed for medical events that take place in hospitals, especially expensive surgeries. It would be helpful if we also had package pricing that covered a complete episode of care including the surgeon and anesthesiologist fees, the hospital stay, physical therapy, follow-up care for an appropriate period, etc. I remember seeing some months back some data regarding outcome rankings for 54 cardiothoracic surgeons in Boston who each performed a specified minimum number of procedures. Two stars represented the broad middle range, three stars meant outcomes meaningfully better than… Read more »

Peter
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Peter

Barry, I understand that the “rich” get pretty much what they want, and I don’t want to restrict them from be able to fly to some elite clinic overseas, but I don’t want them to use my tax money to subsidze air fare or their medical lifestyle through concierge medicine not available to the public at large. You state as well that healthcare using vouchers would be paid through payroll taxes (upper limit $200K). Those earning their income NOT through payroll, and hence paying no health tax, would they also receive a voucher? Because if that is your intention I… Read more »

rbar
Guest
rbar

Barry, I am not in the free market camp as you know, but let me point out a few things: “I think healthcare can be made to work more like a normal market (but not completely) if both consumers, and more importantly, referring doctors had robust, user friendly information about the cost and quality of specialists and hospitals to which they refer patients.” I have yet to hear any specialist convincingly claiming that he/she knows how to measure quality given the fact that healthcare is so complex. Sure, you can take a few routine procedures and compare outcomes adjusted for… Read more »