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Tag: Policy

POLICY/POLITICS: The cautious approach

I have another of my occasional pieces up at the Guardian’s Comment is Free site, trying to make sense of American health care for an international audience. I take aim at how the cautious nature of the main Democratic front-runners health care proposals doesn’t match their fiery rhetoric — Comment is free: The cautious approach.

Even though Iraq seems to have sucked all the oxygen out of American
political life at the moment – even Cindy Sheehan has given up and gone
home – healthcare does remain the largest domestic issue.

Several weeks have passed since the Democratic candidates for
president had a debate about healthcare. It’s interesting that despite
an attempt by probable Republican candidate Fred Thompson to take on

documentary filmmaker Michael Moore over the topic, none of the front
runners on the Republican side have made much mention of healthcare at
all. This is doubly curious as one of them, former Massachusetts
Governor Mitt Romney, left office having at least partially helped
make his state the most advanced healthcare reform " laboratory" of
them all. But apparently among the conservatives and evangelicals who
dominate the Republican primaries, the issue of universal healthcare is
not seen as a great vote-getter – a worldview the Republicans might
come to regret. 
Continue. 

POLICY: OMG–WalMart are the good guys!

Forget anything you ever knew about health benefits. WalMart are the good guys!

In fiscal year 2006, Wal-Mart spent about $4.8 billion on employee benefits – a cost made higher because many hires arrive with unattended health needs, according to Mr. Emerick. The expense was far too much, given Wal-Mart’s $11.2 billion in profit that same year, he said. Many employers, especially in retail, have increased part-time employment and made it harder for their workers to qualify for benefits as a way to manage costs, Mr. Emerick said. Employees eligible for coverage stood at 59 percent in 2006, down from 62 percent in 2004, according to a Kaiser Employer Health Benefits Survey. In comparison, Wal-Mart’s eligibility is 76 percent, up from 72 percent in 2004, Mr. Emerick said. "In many respects, we believe that eligibility is much more important than the scope of coverage," he said.

And given that all rational people want the employer-based system to be replaced with something better, let’s not mention how WalMart’s rampage through the grocery and retail business has caused a significant decrease in the number of employees of other company’s receiving health benefits, nor anything about their suggestions to their staff about how to go on Medicaid. And given that they favor high-deductible plans, let’s also not ask how many WalMart employees can take a $1,000 deductible in their stride. After all this is about empowering consumers, right?

At some point WalMart the company will figure out that a national tax-based coverage system is way better for its employees and somewhat better for it. Then of course Lee Scott will have to explain to the richest family in the world why they may have to pay just a little more tax. Something they’re not too keen on usually. Do you think he’ll keep his job after that? He’s already in a little bit of trouble as it is.

POLICY: Hoggy on Reggie

For your weekend fun read—soon to be featured in THCB conservative—David Hogberg’s review of Reggie’s new book Who Killed Healthcare in The American Spectator. Hoggy of course thinks she’s too left-wing  in that she’s in favor of an individual mandate. Of course I haven’t ready this book yet although I’m prepared to guess what’s in it. Let’s just hope that Reggie’s next forecast is a little more accurate than this one she made in 1998.

As my book describes, the market forces that revolutionized the once-bloated U.S. economy are now reshaping health care. Activist consumers’ demands for accountability, convenience, and control are making the system more informative and accessible. The focused-factory concepts that revived the nation’s manufacturing sector and fashioned its world-class service sector are now shaping high-quality, cost-controlled health care delivery systems. And the sort of technological innovations that have increased productivity since the Industrial Revolution are improving the quality of health care while controlling costs. Brilliant entrepreneurs are using the managerial lessons learned from successes such as SamWalton to create a better, cheaper,more accessible health care system.

And just to be fair and a good sport this prediction stuff is very hard. So to prove it I’ll  lay some of my ghosts. The 1997 IFTF 10 Year Forecast for which I wrote the relevant part suggested rather more success in cost containment …although I had rather different reasons for thinking that was coming about. Here’s the most wrong part of the whole IFTF 10 Year Forecast:

The biggest change in the health insurance market over the past 10 years has been the fast growth of HMO enrollment. In 1998, more than 76 million Americans were enrolled in HMOs, and a majority were in some kind of a managed care plan. By 2005, HMOs will capture the majority of the commercial market and more than 25 percent of the Medicare market. Sixty percent of Medicaid recipients will be in some form of HMO by the year 2010.3 Among this plethora of new products, it will be increasingly difficult to distinguish one health plan from another. They’ll all offer similar—and often the same— providers and pay those providers through a mixture of discounted FFS and capitation (a flat fee per patient). By 2005, more than 100 million people will be in these “HMO descendants.”

The health insurance market will evolve into a mix of different health plan models, many of which will spend the next several years in a constant flurry of reorganization and mergers. Four dominant “intermediary” models will emerge by 2005: the case manager, the provider partner, the high-end FFS broker, and the safety-net funder. As a result, in 2007 close to 50 percent of the population will be in health plans for which cost containment is a key issue. Despite all the pressures toward increasing costs in the system, these new strategies will be successful enough to keep costs from exploding again as they did from 1960 to 1990.

 

POLICY: Eric Novack responds

Here is a fundamental problem with the debate that Matthew is having with Amy Ridenour and David Hogberg: Matthew (and single payer advocates generally) focuses his attacks on the general ‘injustice’ that might exist in the healthcare system. In the face of such injustice, the theory goes, the government must step in to ‘even out’ the system (another way of saying that the ‘risk pool’ for unhappiness ought to be as big as possible—or, put another way, misery loves company).

“Free marketeers” (presumably an effort on Matthew’s part to turn those who believe that less government intervention actually is good for economies—for which the evidence is incontrovertible—into a pejorative) are generally no more happy with the current system than ‘healthcare-by-lobbyist’ activists (my own pejorative for bureaucrat run healthcare). However, people who believe in markets want to introduce free market reforms, recognizing that this process must be incremental.

Put another way—single-payer advocates speak in broad generalities of fairness and justice and risk pools—which sounds great to the public, but is short on actual policy implementation. Limited government advocates have, thus far, been focused on actual concrete steps to improve the system.

Continue reading…

POLICY: Now I’m just messing with her

So Amy Ridenour actually almost did what I asked and went and answered the questions for the free-marketeers I posed in Spot-on. My email has been broken all day and I’m grumpy, so I thought I’d cheer myself up by replying to her replies. This is mostly gratuitous dancing in the end zone on my part. So those of you who believe in the sanctity of erudite debate may want to skip it. The rest of you can join me in the gutter….

My questions from the Spot-on piece (originally titled “How to talk to a free marketeer”) are in red. Her replies in italics. My replies to her in regular text

“Why are you so happy to have a health care system that kills so many more people who have heart attacks, and amputates the feet of so many more diabetics?”

I don’t accept either of the two premises of the question.

Why not? The data—which I referenced in the Spot-on piece—comes from the Annals of Internal Medicine quoting the OECD. That shows that people suffering heart attacks are much more likely to die here than in Iceland, Denmark and Switzerland, and diabetics are much more likely to have their feet amputated than in Canada, Australia and a few other places. Is Amy suggesting that the statisticians in those countries and here are all lying in a massive fraud perpetrated by the Health Care Quality Indicator (HCQI) Project of the OECD? Funny, because that’s the same data source which produces those breast cancer survival rates that so many on the right wax all lyrical about. And if the data is right, why doesn’t America have a case to answer? We’ve heard enough about cancer care from the right!

And BTW the question has two halves but only one premise! To be clear—it’s not logically consistent to say we’re the best at treating disease by only looking at one or two diseases!

“Ask the free marketeers to explain why they feel comfortable with a financing system that causes at least 25% of all the nation’s bankruptcies.”

Same answer as above.

The same answer as a non-answer? Pretty curious. Perhaps health care costs don’t actually cause bankruptcies, or at least not at the 50% rate that Himmelstein and Woolhandler claim. But the 25% number comes from the reworking of the 50% number by Dranove & Millenson, which was in part funded by AHIP. So even they acknowledge that it’s a problem? But Amy “doesn’t accept it”. Can’t argue with that logic, I guess. I mean you literally can’t argue with it!

“Why [do free marketeers] espouse even greater cost sharing even though it’s been shown yet again this week that increased payment at the point of care reduces people’s likelihood of following their doctor’s advice?


One argument for “letting” people control more of their own health care spending is that the people who earned the dollars have the highest moral right to decide how they are spent.


So now it’s about the moral right to spend your money the way you want. I have no problem with that. Unfortunately those like Amy occupying the high moral ground don’t seem to care that the little people who have to choose between spending money on doctor visits and drugs or on food or rent—and yes there are some—are likely to not take their drugs or get needed care. She may feel all moral and good about that, but there are direct consequences. The most obvious being that more expensive things need to be done to them later (like the diabetics getting their feet amputated). Which of course the little people don’t pay for (at least not monetarily), but the rest of us do. But I’m glad she sees the moral rather than the practical effect of cost sharing at the point of care.


Another argument, which Matthew Holt presumably knows already, is the theory that folks who are spending their own money will shop around for the lowest prices, thereby adding incentive for health care providers to keep prices competitively low.


And while we’re at it, which country has the highest prices at the point of care for drugs and office visits? And which one has the highest proportion of consumer spending out of pocket on those drugs and office visits? Could it be that it’s the same one? As in this one. And how does that work in Amy’s theoretical model? Maybe she’ll enlighten us.


“Why do you want to raise taxes in order to transfer money from the poor and sick to people who are already richer and healthier than average?”


I don’t. Nor during my working lifetime have I seen many examples of tax increases afflicting primarily the poor and the sick (though perhaps tobacco tax increases could be considered an exception; those of us who opposed those, however, were considered to be puppets of Big Tobacco). My primary health care concerns are these: I oppose a U.S. adoption of a government-run, so-called “single payer” or “universal” health care system because I believe it would lead to needless misery, pain and death. I also am extremely concerned about Medicare’s poor financial prognosis (which I also believe will lead to an ever-worsening standard of care under Medicare). I do not believe that my position on either of these means I “want to raise taxes in order to transfer money from the poor and sick to people who are already richer and healthier than average.”


Now I’m a dumb guy so I’m having trouble following Amy here. It’s good that having criticized me for using the terms “screwed up” and for being “emotional” she remains so coldly analytical while accusing universal health care of causing “needless misery, pain and death.”


But original question was unconcerned with the desires of evil government single-payer bureaucrats to ration pre-natal visits for the first 10 months of pregnancy and the like. Instead it referenced the desires of some on the right to give everyone their own personal account with all the nation’s health care dollars divided up proportionally in it. I simply pointed out that if we do that, then money that previously would be spent on health care would instead remain in the accounts of those who are healthier and wealthier than average. If we were to continue to care for the sick in such a system then someone would have to pay the equivalent that’s now sitting unused in those accounts to cover it. That someone would either be the sick themselves, or the taxpayer or both. In my humble economics, that’s a transfer away from taxpayers (who are presumably of average wealth and health) and from the sick (who are of less than average wealth and health) to those who are healthier and wealthier. Amy may not believe that this is a good idea, but in that case she should refute the personal account concept and join those of us who believe in a social insurance model as being the only effective way to pay for health care. I somehow doubt that’s where she’s at.


So there you have it. All my questions completely answered to the satisfaction of anyone who doesn’t care about logic, health services research, or reality. The rest of you may be awaiting her man Hoggy’s shot at it coming soon.


And for those of you who really can’t figure out what “rent-a-quote” means, look at this obituary.

POLICY: Doing my bit to piss off the unthinking right

Cool. I make an off hand remark about conservative think tanks and get them all riled up. Amy Ridenour, who has an interesting place in the panoply of right wing think tanks and influence peddling, prints an email I wrote her and tries to answer my questions. I’m sure Mr Scaife thinks his money is well spent.

Of course what my piece was doing was directly stealing the conservative right’s tactics of changing the debate. Except in my case I’m doing it logically.

For instance, the right called inheritance taxes “death taxes” suggesting that they fall on everyone who dies—even when only a tiny minority pay them. So the law is changed and a mythical family farm is saved, and so funnily enough is the family fortune of the Waltons and their billionaire friends.

Similarly the right has been attacking foreign countries for alleged sub-standard care, and using that to justify our appalling health care financing system. All I’m doing is asking them to defend the care here that’s found to be of a worse standard. And of course Amy can’t. Perhaps her man Hoggy can. I’m looking forward to his response!