Matthew Holt

The Master and I agree on the goals

Writing in his blog in the NY Times, Uwe Reinhardt sets out three overarching goals of health reform

1. Financial barriers should not stand between Americans and preventive or acute health care that they sincerely believe will address concerns over a troubling medical condition, in a timely manner, before that condition grows into a critically serious illness.

2. Having received needed health care, no American family should be so financially devastated by medical bills that it cannot meet routine daily living expenses — for example, make utility or mortgage payments on time or finance the education of the family’s children.

3. The future growth in national health spending should be constrained to fall significantly below currently projected spending growth, which has the United States devoting about 40 percent of its G.D.P. to health care by mid-century.

All other goals are subordinate to these three overarching goals, as are the means to reach them.

Last week I posted a very similar Two rules by which to judge a health reform bill.

Rule 1 A health care reform bill needs to guarantee that no one should find themselves unable to get care simply because they cannot afford it. Neither should anyone find themselves financially compromised (or worse) because they have received care.

Rule 2 A health care reform bill needs to limit the amount of GDP that is going to health care to its current level, with an overall aim of reducing the share of health care going to GDP.

Uwe is a touch more eloquent in his goals 1 and 2 which split apart my Rule 1, and he’s a touch less aggressive in his goal 3, which is my Rule 2. But other than that these are the same.

Unfortunately in his column of the previous week Uwe created a list of 8 (but it could have been 20) completely contradictory statements about the completely “confused state” of what Americans seem to demand from health reform.

And right now the confusion seems to be winning.

Will we get nothing out of reform? I spotted something very sensible from Len Nichols over at New America Foundation’s relatively new “The New Health Dialogue’s Blog”. (Incidentally how long before Len and friends are sued for trademark violation by Health Dialogue? )

Here’s what Len says about the public option, and this is the likely compromise—if the insurance industry is really prepared to take it.

To be clear, I support a public plan operating on a level playing field because it provides Americans who distrust private insurance another choice and establishes a benchmark competitor much needed in some markets that lack any true competition. However, I also believe that properly reformed markets, generous subsidies, and a credible threat of a public plan if premiums are unsatisfactory in the first year could make insurance markets work very well for all Americans. This option is far superior than doing nothing. The debate over a public health insurance plan should not stand in the way of reform.

Which tells you that the major backers of the public option will trade it for the correct set of insurance regulations. So we could get to a real compromise, albeit on comparatively minor reforms, as I’ve said before.

But if the crazies at the Town Halls and the continued inability of the Democrats to explain how what they’re proposing is going to work continues, then I suspect Uwe’s “confused” rules will overcome his laudable overarching goals.

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campaign cpiTom LeithMikeHealth Plan Veteranhappyinhawaii Recent comment authors
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campaign cpi
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Tom Leith
Guest

Ewe Reinhardt writes:
> Financial barriers should not stand between Americans
> and preventive or acute health care that they
> sincerely believe will address concerns over a
> troubling medical condition
Change “sincerely” to “reasonably” and this seems like a good, pluralistic start.
t

Mike
Guest
Mike

I have to respectfully disagree with you goals, as I feel they are putting the cart before the horse. Constraining spending and making health care universal should be the products of health care improvement, but not the starting point. People didn’t start off with the idea that phone service had to be cheap and universally available. Gradually, as technology became cheaper and widespread, those 2 things happened all by themselves. Same with TV, computers and any other commodity. WHy should it be any different for health care? The main reason seems to be that people don’t WANT to spend their… Read more »

Health Plan Veteran
Guest
Health Plan Veteran

I’d like to comment on the observation that Association Health Pools (AHP’s) work as well as community rating.
The short answer is that if small employers are free to enter and exit the pool at any time, then AHP’s are not as effective.
Those groups with rating “factors” more favorable than the overall AHP will have significant financial incentives to leave the pool, creating a “death spiral” for the AHP in which it becomes the insurer of last resort over time.
Community rating doesn’t have this issue.

happyinhawaii
Guest

We have been blogging (on the Down to Earth blog) in recent weeks about the debate in Washington and the nation on the health care crisis and how we aren’t hearing any discussion about addressing the root causes of the crisis, i.e. the underlying unhealthy diets and lifestyle choices (meat and junk food based diets, lack of physical activity, consumption of tobacco, alcohol, illegal drugs, etc.) and the widespread practice of defensive medicine. Another major cause of the bloated medical system’s costs to add to the list is the cost of medical mistakes. (To read the rest of this blog… Read more »

Nate
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Nate

I don’t think they are over-reaching at all Barry. I think they are grapping for what they always wanted but lie to the public to try and sneak it through. Democrats have never cared about healthcare or peoples access to it, that is why every bill they have passed has raised cost and decreased access. They have always wanted nationalized healthcare and to control the money that comes with it. It has always been what they are reashing for, they tell you it is insurance reform, or mandates to protect something but it really is taking complete and total control… Read more »

jd
Guest
jd

Speaking of MA, saw this immediately after posting my previous comment:
http://www.nytimes.com/2009/08/09/opinion/09sun1.html?_r=1

jd
Guest
jd

In answer to the question, “Where has community rating ever worked?” the answer is: England, The Netherlands, Sweden, Germany, France, Canada, Switzerland, Japan, Taiwan, etc. Premium = medical costs + administrative costs + net income (averaged out over time). “Net income” here refers only to the profit of insurers; the profit of providers, suppliers and other middlemen is baked into the medical and admin costs. In a universal healthcare system, “premium” can take the form of a premium paid to an insurer, or a dedicated tax (similar to Medicare Part B) or taxes paid out of general funds, but regardless… Read more »

Barry Carol
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Barry Carol

Nate – I like catastrophic insurance conceptually. I’ve said many times that if health insurance does nothing else, it must cover catastrophic events. I think HDHP’s could work quite well, at least for the upper half of the income distribution. We could devise a means tested approach for helping the bottom 50% of the income distribution acquire a HDHP and cover most of the deductible as well. Interestingly, in early 1974, the Congress was close to agreement on national health insurance. I think the Democrats proposed a comprehensive plan with a $1,000 deductible and the Republicans wanted a $1,500 deductible.… Read more »

John Ballard
Guest

Matthew, please forgive me for feeding the troll. I should have known better. It won’t happen again.

Nate
Guest
Nate

PPOs In Ohio there has been some consolidation in PPOs. I can rent Interplan which is the consolidation of 3 once stand alone PPOs in the State. Cost around $3, has every hospital in the State but 1, discounts of 30% on physicians and 20-35% on hospitals. THe best discounts are MMO, they charge $5 plus 15% but give 50% physician and 40% hospital discounts. They have almost every hospital in the state. Anthem and UHC’s discounts are between those two closer to Interplan. MMO is hard to work with, won’t take all cases. Interplan is easy. Either network providers… Read more »

Nate
Guest
Nate

Barry, Over 50% of employer insured are in self funded plans. Because of this there are very strong PPOs across the country I can rent for my clients. In most states the networks I can access are just as good or better then any fully insured carriers. There are exceptions to this, usually in the states with the highest cost. MA I can’t compete with BCBS. CA it is hard to compete outside the major cities. PPO access runs from as little as $3 PEPM to as much as $10 plus 15% of savings. The networks that keep % of… Read more »

Matthew Holt
Guest

I think the answer to your quiestion Barry is that Nate thinks poor sick people brought it on themselves, and should suffer accordingly.
The fact we have to pay for them any way appears to escape Nate’s notice, as he waxes lyrical about the HMO Act and blames it on Kennedy while letting Nixon off the hook. After all we all agree with Nate that the HMO act was by far the most significant piece of legislation ever passed in the US right?

Barry Carol
Guest
Barry Carol

Nate, A couple of things. First, I think if you can do a better job than United or Anthem in serving the small group (<51 lives) market, you deserve to capture as much business as your firm can handle. I think the biggest challenge might be winning provider discounts from list price comparable to what the large carriers are able to negotiate. Providers, for their part, are required to bill everyone at the same (high, list price) rate. To do otherwise would run afoul of price discrimination laws. As you well know, insurers then pay based on whatever discount they… Read more »

Nate
Guest
Nate

I see no reason to decouple true insurance from employment. It’s an efficient delivery system. We should expand the options of both large and small employers to deliver true insurance so it is more cost effective and stable. Couple of mistakes there John; “By law, the monthly premium for Medicare Part B must be sufficient to cover 25 percent of the program’s costs, including the costs of maintaining a reserve against unexpected spending increases. The federal government pays the remaining 75 percent.” If your only paying for 25% of your care I would expect those premiums to be pretty modest.… Read more »