Matthew Holt

A little ain’t enough, or is it?

I've been so buried in the run up to Health 2.0 that I haven’t had a chance to add to the deluge of electrons about the bills in Congress, Obama’s speech, the several hundred amendments to Baucus’ bill in mark-up, etc, etc. And my colleagues on THCB and elsewhere are taking good care of you in the details.

But I thought that I’d quickly respond to today’s WaPo article in which Erza Klein connects two themes that matter, while leaving out two that matter more. The first of the two he identifies is that most Americans don’t see the cost of health care. If we made them all write a check for $13,000 a year, and they’d seen that number go from $8,000 a decade ago and realized that it will be $25,000 in another decade, then the cost problem would be much more real. It would also get associated with the access problem as people realize that as the cost goes up, they (and their employer) can afford less. At the moment those problems are disconnected.

The ignorance here remains palpable. An HR exec I know did an exit
interview last week with an employee who was astonished to find out
that now he was on his own he could buy family health insurance in
California for under $500 a month which was less than his contribution
to the company plan. The concepts of risk pooling, risk selection,
varying benefit levels et al were clearly foreign to him. And of course
had his family had a pre-existing condition that policy might have cost $3,000 a month or more.

Ezra’s second point is that there’s some hope that in the Baucus bill, with the language around pay for performance and bundling, we might bend the curve. But we’re in agreement that this aspect of the bill is well hidden and has yet to be exposed to what the industry wants, and—as Alain Enthoven has already pointed out—what it’s agreed it’s getting.

What Ezra doesn’t mention but what (he knows) really matters are two things.

First, this limited reform leaves the system intact. So the most we can hope for is that the impunities visited on the un and under-insured are taken away. Maggie Mahar’s review of the House 3200 bill shows that health care costs would be capped for individuals and families—albeit at relatively high levels (up to $10,000 per year per family). The specter of medical debt financially crushing families could be relieved if that makes it into a final bill. But the confusion caused between switching between employer based coverage, Medicaid, the individual market, the exchange et al will surely leave many to fall through the cracks. After all conservatives love to tell us that many of the uninsured could sign up for Medicaid now but somehow don’t (hint as to why: it’s damn hard to do so and if they did those programs would be cut!), so we already know that those cracks are huge.

Second, the devil is completely in the details of the insurance regulations. The Medicare Advantage experience has shown us that if we’re lax with regulations mandating both standardization of benefits and very good behavior, the insurers will game the system and do risk selection rather than the hard work of care management and improvement.

So the relatively minor insurance reforms we have in prospect may make a difference to those most vulnerable in the current system. Whether they’re enough to actually do anything about our underlying problems remains doubtful.

Categories: Matthew Holt

Tagged as: ,