By
With the opening of the new Congressional session, the latest health care reform effort is off and
running, with HHS Secretary-designate Tom Daschle telling senators at his confirmation hearings of his desire to work collaboratively and listen to diverse ideas.
One thing about Washington DC, there’s never a shortage of diverse ideas, and with the possibility of passage of some version of reform, there’s an especially impressive number. Daschle’s problem is going to be how to pick and choose among them.
Every reform plan—whether from Baucus, McCain, Obama, Clinton, Wyden-and-Bennett, Kennedy, Stark, Dingell, or elsewhere—comes with its own strengths and weaknesses, and cross-aisle consensus is certainly missing. But maybe it’s possible to take a little of this plan, a little of that, and so on, to create the magic mixture that can reform our system and achieve the critical sixty vote support in the Senate.
Perhaps it’s time to consider a recipe from Macbeth:
Eye of newt, and toe of frog, Wool of bat, and tongue of dog, Adder’s fork, and blind-worm’s sting, Lizard’s leg, and howlet’s wing…
Shakespeare’s witches didn’t provide precise measures, and we may have to substitute for some of the ingredients, but we’ll go ahead and start adding items to our cook pot anyway…
Eye of Newt—
Well, it’s more like website of Newt. Former Speaker Gingrich is promising a reform plan by March, but we can’t wait, so in our magical broth we’ll use his statements supporting an individual mandate and the development of a national electronic medical record system.
We’ll take a large cupful of individual mandate, since it’s hard to see how reform can succeed without it. No mandate means some non-covered population, and experience shows such a population can only grow as health care costs increase. However, we’ll use just a tiny amount of EMR, because although we want to include it in our broth, it’s a very, very expensive ingredient. Even in systems with centralized management and direction, like Kaiser and Britain’s National Health Service, the costs can be sky-high and success uncertain. Kaiser’s costs are currently estimated at over $4 billion, while the NHS system, already four years late, is now budgeted at over $20 billion.
Toe of Frog—
There was always something tentative—a toe in the water?—about Senator’s McCain’s reform plan, but his proposal to eliminate the tax deduction for employer health care payments earns a big tablespoon’s worth in our broth. The present deduction creates a huge inequality among large and small employers and individuals, while a play-or-pay alternative is likely to result in an employer coverage death spiral as current players rush to the less costly payer option.
Wool of Bat—
It’s really wiles of Baucus, with our ingredient taken from the Senate Finance Chair’s recent carefully-crafted policy paper. Because the flavor is so much like that of our next ingredient, we’ll use only a few teaspoonfuls, to include the Health Coverage Council that would set minimal coverage levels, the prohibition on pre-existing condition exclusions, and increased funding for primary care and chronic care management. We’ll make sure that our teaspoon avoids the proposal to allow buy-in to Medicare, since this would add adverse selection to a program that is already a fiscal disaster.
Tongue of Dog—
Or, at least, the tongue of Daschle, in his book Critical. Our spoonful will avoid his proposals for play-or-pay and the expansion of Medicare, but we’ll make sure our broth includes turning FEHBP into a health insurance marketplace. FEHBP has political credibility, an existing administrative mechanism, and the appeal of a program that is offered to members of Congress.
Adder’s Fork—
Bennett added to Wyden has produced a particularly well-flavored ingredient, so we’ll take a large forkful of their Healthy Americans Act, including replacing the employee health care tax deduction with employer contributions tied to business size and payroll, establishing a basic set of benefits but allowing insurers to offer separately-priced additional benefits, and rolling much of Medicaid preventive and acute care into the overall system—a big help to cash-strapped state governments in a recession. However, we’ll make sure that our fork avoids their proposed establishment of fifty-plus new state agencies to help individuals select insurance.
We’ll stir the contents of our pot at this point, since the most flavorful ingredients have been added.
Blind-Worm’s Sting—
Lower-income people might well feel stung by Ezekiel Emanuel’s proposal to fund health care through the inherently regressive and recession-vulnerable mechanism of a VAT, but we’ll take a teaspoonful from his plan for a voucher system. With our national emphasis on buying things, a tax-funded voucher that forces a deliberate choice among carriers and coverage is likely to be a more effective tool for informed purchase of individual insurance than alternatives like tax deductions and tax credits.
Lizard’s Leg—
With lizard’s legs unavailable, even via the internet, we must make a complete substitution, and use instead a slice from Elizabeth Swartz’s book, Reinsuring Health. Reinsurance is unlikely to make any significant difference to total costs, but it is less complex than risk-adjustment and could be funded through a separate catastrophic coverage program to reduce insurer premiums.
Howlet’s Wing—
Our final ingredient, (h)owlet’s wing, turns out to have flown a long distance, from the Netherlands, where we’ll take a pinch of the recent Dutch reforms. Since they have the experience and the purchasing power to demand lower premium rates, large employers are allowed to negotiate with insurers in order to offer discounts to their employees of no more than ten percent off regular individual rates, thereby providing continuity from the prior system and reducing the administrative burden on the individual marketplace.
So, how does our magical broth taste?
It’s one that could appeal to both liberal and conservative palates. It establishes an individual mandate but guarantees issue and portability of coverage, shares responsibility more equitably among all employers and all individuals, encourages price competition by requiring insurers to offer a basic set of benefits but allows them to offer additional coverage, and eliminates the Medicaid “second class care” that is bankrupting state governments, while building on the strengths of the present administrative capabilities of FEHBP and large employers.
Will everyone love the result of our classic cookery? It should please many diners, but there will be some who will resist such a recipe. No matter how good the final mixture, Shakespeare also anticipated the political stewing process of the congressional debates:
“…For a charm of powerful trouble, Like a hell-broth boil and bubble.”
Categories: Uncategorized
This is a stupid debate kept alive by insurance companies. If you give any real thought you would feel the same way. The only reason we have a blood sucking middleman that comes between the American people and there healthcare is because the health insurance industry keeps people scared and confused. The health insurance industry spends billions of dollars in lobby donations (bribes) to congressmen and senators (whores) to make stupid laws allowing them to game every last blood cent from our health care dollars before it actually goes to a doctor, lab, and hospital. Ask this question to any flag waving American. If your house was on fire and your family needed help. Would you find it weird if the fire department knocked on your door and asked for your fire insurance card and copy before he saves your life and puts your house fire out? Guess what you were just saved by a socialized service. IF your car gets stolen and you call 911 would you expect the operator to ask for your police protection insurance card and a visa copy before they dispatch an officer for help. The military protects the rights and freedoms of all Americans to exist not just insured Americans. Maybe we all should be required to buy constitutional protection insurance to pay for our military as well. Wake up America. Stop putting a profit price tag on humans. Preexisting exclusion kills Americans everyday. IF you can’t get insurance because you will be unprofitable for the health insurance industry then your left out. The ER is for emergencies not preventive care. If a person has a small lump and no insurance he or she will stay home because there is not enough pain to justify 7 hours in a waiting room missing work to be a burden on society , six months later that lump becomes too painful to tolerate then he or she goes to ER and its too late. You catch stage 1 cancer with preventive medicine and stage 4 with ER medicine. The health insurance industry pays doctors more money if they don’t cure there patents to the best of there abilities. Its time to kill the parasite, that’s hurting American families.
Quaf of Wineburgh – to do something about the crazy quilt of treatment “standards”. Perhaps after a few glasses that quality vs treatment Medicare scatter plot will show a relationship between treatments and health.
Whew, from your post’s title I thought you were going to say, “First, let’s kill all the doctors.”
Every ingredient is about financing and delivery of insurance. That’s not the problem with our current system. Regardless of how you insure or finance the care delivered if there is to much care you still have a cost problem. If you could magically eliminate all administrative cost you still haven’t solved the problem.
Any tax deduction should be limited to insurance. Preventive care, low deductibles, and co-pays are not insurance they are financing and should not be tax deductible. Only high deductible health plans should receive any tax break. Employers should be mandated to offer them and citizens and all residents, legal or not, should be required to have one.
Be very careful removing the employer tax credit, because of HIPAA, guarantee issue, and community rating in some states employer coverage is already considerably more expensive then individual, the tax deduction brings them close to par, remove the deduction and many would find it unaffordable.
Minimal coverage levels set by HCC means more decades of politicians screwing up our healthcare system. There is no way you can remove politics from an organization like HCC, either through appointment or election it will have a political slant and be susceptible to influence by special interest.
Pre-Ex already doesn’t apply to those that have coverage, enforce the mandate and you won’t need to outlaw pre-ex. In reality you will need to keep pre-ex as any mandate that falls short of executing people for not maintaining coverage will have uninsured people that get sick then seek coverage. If you don’t allow pre-ex people will have a financial incentive to forgo coverage then sign up when they need it, performed daily all across the country now. The government will never take a “poor” persons last penny nor lock then up for not having coverage. It’s dishonest to even pretend any mandate will cover 100% of people. There will always be someone lazy or who thinks they can save $5 by not enrolling, see the 25% of presently uninsured entitled to free insurance that choose to not enroll.
FEHBP marketplace sounds eerily similar to CalChoice which has been a huge failure. What will you change from CalChoice to prevent it from driving up cost and employers out of the market? Repeating the same mistakes tend to lead to the same results.
What do you envision as a basic set of benefits? $5000 deductible, no co-pays, no rx, and no preventive would be an efficient core benefit package. I suspect you have something in mind more similar to most states core plans after all their mandates, the same basic plans that get more expensive each year and drive more employers away from offering coverage. How do you take the politics out of the core benefits? Will you cover massage therapy? Acupuncture? Homeopathic? Download the list of State mandates;
http://www.cahi.org/cahi_contents/resources/pdf/MandatesInTheStates2007.pdf
This is why coverage unaffordable.
What level will you administer the voucher at? Look at the history of fraud in every government voucher program. Katrina for example. Federal and State government has no desire or ability to efficiently operate a voucher. It would collapse under it’s own weight from fraud and abuse. Conceptually it’s a great idea but in practicality doesn’t work.
Not sure why you would remove catastrophic coverage from insurers. If you want to reduce premiums subsidize the risk they take. Creating an entire program to carve out something that is already carved out is inefficient redundancy. We also need to determine how many carriers we want, you consistently refer to insurers when half of the employer covered population is not insured by insurers. Years ago Congress determined they wanted a handful of Federally regulated insurers to control the market. Personally I think this has had terrible consequences on the market. Adoption of HRAs in Ohio where there is considerable carrier competition versus CA where HRAs are almost outlawed and there is minimal competition. Politicians and regulators have never grasped that a couple mega companies in a market aren’t competition. For efficiency and innovation we need to foster competition. There needs to be a handful of small hungry carriers biting at the heels of the large carriers to keep the market functioning at an optimal rate. Allowing small insurers and employer plans to participate in an effective reinsurance market would foster this. Many years of regulation killing this market would need to be undone.
Howlet’s Wing, not sure how this would work as individual coverage is almost always cheaper then employer coverage is now. How would this reduce the burden on the individual market? If you kill the employer tax incentive completely you will drive most people into the individual market but that isn’t affected by legislating pricing bands. Look at CalChoice and the consequences their .20 margin had on rates. Rates need determined by actuaries not politicians. When politicians artificially limit rates for higher risk people they don’t lower cost they just drive it up to the point the less risky can’t afford it. This then leads to higher overall rates and more healthy risk fleeing the market.
The crucial element to health care reform is empowering physicians to do be accurate and cost effective. It is of course important that consumers also promote accuracy and cost effectiveness, but they already have many of the incentives and already have access to much excellent material on treatment but lack the knowledge to do much on the diagnosis end.
We need more of a bottom-up approach to health care – figuring out what doctors and patients need to be doing better and craft the incentives to encourage those behaviors.
As an example, doctors need to do more to make diagnoses instead of referring to large numbers of specialists and sub-specialists and ordering large numbers of expensive tests.
I first became involved in the health care issue when I was asked to write a position piece for Jimmy Carter’s transition team. At that time I focused more on the type of top-down solutions discussed in this blog item. Having since finished medical school and done medical practice, research and software to help in diagnosis, I now see the key to reform as being more bottom-up.
If a doctor makes a diagnosis more cost effectively the doctor and consumer should be better off as a result. If a doctor is able to come up with a more efficient treatment, the doctor and the consumer should be better off as a result.
We need to think broadly about restoring the role of good advice and good practice through proper incentives and through advisory and evaluation roles. Just solving the payment issues will get us more of what we already have, and we can do better than that, and we must do better if we want to avoid having our entire economy centered around health care.