Those of you who get my FierceHealthcare newsletter (and if you don’t you should as it’s free!) will have read plenty from the NY Times last week about how Medicaid is a web of corruption and fraud and from the Washington Post this week about how Medicare is a maze of inefficiency that wastes one dollar in every three. OK; not exactly news to those of us in health care. In fact the very first post on THCB was about how screwed up Medicare was and why. (Hint: the answer is fee-for-service medicine)

This has now degenerated into a blogging argument between those "pro-business" DLC Democrats who think that the party should get in the vanguard of reforming those programs, and the liberal Dems who are scared (rightly) that given who’s in power (i.e. neither of them) any excuse possible will be taken by the current bunch of clowns running the country to eviscerate both programs to the detriment of those they cover.

And worse, TNR’s Jonathan Cohn who is probably quaffing his third latte before setting off to get his kids from soccer practice in his Volvo 4×4 has decided that, as his time is more valuable than mine, I should have to do remedial education for the whole party.

The first point obviously is that in any sensible country the liberal end and the pro-business end of the Democratic party would be two different parties, and the fundamentalist loonies/mercantilist thieves that compromise the Republican party here would still be locked in the attic. But given that that’s not the case, let me try to set out the problem here as simply as possible.

The problem: Government-funded health care programs in the US (and Medicare and Medicaid are by far the two largest programs within that category) do two completely different things

First, these are benefit programs for seniors and the very poorest of the poor. Without them, the elderly would be dying in the streets (just as the uninsured actually are), just as without social security we’d be back to bread lines. That is because (and this is something the American public just cannot get its brain around) health care costs are very uneven –they are concentrated among the old, the sick and the poor far more than other groups — and if we want to help those groups we have to subsidize them. That is what social insurance is, and that’s why we pay taxes. (Or at least that’s a small part of why we pay taxes, and it’s the part that Grover Norquist et al think we shouldn’t be paying for). The good news is that overall the American public believes in that cross-subsidization, whatever Grover and his pals may think.

Now we come to the second part of the story. Medicare and to a smaller effect Medicaid are extremely complex programs that don’t give a direct benefit to their "members" but instead allow an entire industry (in fact many industries) to deliver goods and services to those people with the government picking up the tab. Yup, Medicare is closer to defense spending than anything else, and within it there’s the same level of complexity, fraud and bad behavior as in that sector (and I never mentioned Halliburton once. Dang, just did!). In fact as Medicare sets the tone for almost all health care spending, but there are hundreds of payers rather than just one big one, health care is probably more complex, fraud-ridden, and inhabited by murky characters than defense…but I digress.

More importantly the defense contractors doctors,hospitals, insurers and more recently drug companies were heavily involved in the writing of the original rules of these programs (for more read down in my Hillarycare article from last week). So they made the programs look as much like an open spigot to the US Treasury as possible, and the Federal government has been trying (and failing) to balance between the aggressive demands of those concentrated interests and those of the beleaguered taxpayer ever since. And although Medicare is very popular among its recipients (remember their alternative is dying in the streets), because costs have gone up so much, as a share of income those recipients have greater proportional out of pocket costs than they did back when the program was introduced–even though Medicare is taking care of most of their costs.

Why is this? Well essentially the cost of health care is the services delivered times the price. Those delivering services will always tell you that if you want to reduce costs you must reduce services, and will always explain why the other side of that equation must be fixed (or in fact must ratchet upwards). Of course, that’s been explained many times to be rubbish, but that won’t stop providers putting a bunch of old ladies on the street to protest Medicare cuts….and hence blurring the lines between the two parts of the story.

If they are really interested in getting this debate advanced along, both sides within the Democratic persuasion should agree on two things.

First, that the health care system as a whole will always raise prices and accept losing a few to the uninsured pool as a price effect, rather than seek a different solution because that solution is to put everyone into one pool and, gulp, limit the total dollars going into it. That’s why universal coverage (with some manner of a controlled budget) is in the end the only way to get costs under control–and it’s done that way in every other country, even if they all look very different to each other. If you don’t do that, the system will inevitably keep costing more and more, and Medicare and Medicaid will have to pay their share of it. You see we can always spend more, and would you deny care to a little old lady?

Second, that even without getting to universal coverage, you can reform Medicare and Medicaid in ways that providers may not like without financially or physically hurting patients, and that those reforms may also help reduce the waste and fraud (or at least put it on the tab of a private insurer!). How to do that is a much, much longer conversation, but the important part for this piece is that it is theoretically separable from the need to privatize the funding of the system (via means testing), which will turn Medicare from a benefit program to a welfare program — with the inevitable result of it being marginalized and all the gains of the first part of our story being eroded.

As you’d rationally expect, immigrants end up using less health care than those born here. My assumption is that it’s a factor of income and insurance status, and it seems that they do use relatively more ER care because of that. On the other hand many legal and illegal immigrants are paying taxes and not using services (especially those of working age paying Medicare tax, but planning to retire back to their country of origin), and are probably a net financial gain to the health care system.

But overall I just wonder how Don Johnson’s going to spin this.

NY Times Op-Ed columnist John Tierney (the guy who is the replacement for long-time conservative columnist William Safire) has written two excellent articles; one on the war on patients and one on pain doctors — basically exposing the DEA for the corrupt, vicious organization that it is. I’m very glad that this issue is getting off the more limited pages of the anti-drug war crowd’s blogs and into the mainstream.  I have posted about this on THCB plenty of times, but it’s great that it’s getting more mainstream.  What’s tragic is how bad things have become before the major media in this nation has noticed at all.

If you are in the least interested in this issue — and if you are about health care and/or freedom you should be — I urge you to visit the Pain Relief Network site, to see Radley Balko’s excellent posting on the Karen Tandy, the head of the DEA’s pathetic response to his earlier article, to see Ron Libby of Cato’s long article on the subject.

And finally, why has the AMA not gotten involved? This is a national medical disgrace (so much so that my venerable surgeon father has sent money to William Hurwitz MD’s appeal fund).

So the next Supreme Court justice has been announced and women’s right to choose about their own reproductive health will likely be substantially reduced, according to NARAL which really doesn’t like Roberts. Given that an interesting study was released today about the number of abortions in the US. The data shows that abortion rates fell dramatically over the 1990s.

In the year 2002, about 1.29 million women in the U.S. had abortions. In 1990, that number was 1.61 million…. for every 1,000 pregnancies that did not result in miscarriage in 2002, there were 242 abortions. This figure was 245 in 2000 and 280 in 1990.

In other words despite the rumor that abortions have gone up in number under Bush, they’ve stayed about the same overall (assuming a little population growth) and actually gone down per capita in the last few years — but not in a significant way. The really big change was from 1976 to 1990 when the numbers went up, then from 1990 to 2000 when the numbers went down.

I’m no expert on this issue and I tread very gingerly here, but doesn’t that at least somewhat imply that Clinton’s removal of the gag orders imposed by Reagan and Bush didn’t increase the number of abortions, but was some part of reducing them?

But the fact remains that some 20% of pregnancies end up in abortions. On a wider level that implies to me that we do a shitty job of helping women who don’t want to be pregnant from becoming pregnant. Given that we’re known how to do that since the 1960s, shouldn’t we be doing better?

Using these international data I found on this New Zealand government website, it seems that we are not doing as well as other countries in this aspect of our health care too.

Abortion ratios (abortions per 1,000 live births plus abortions) provide an alternative international comparison. The latest abortion ratio for New Zealand (223) is above that for Japan (217), and is lower than those for England and Wales (225), Australia (264), Canada (242), Sweden (258) and the United States (259). International comparisons are, however, affected by both coverage and laws relating to induced abortion. Consequently, the comparisons between New Zealand’s and other countries’ abortion experiences should be interpreted with caution.

The chart above (purloined from this article from the British Medical Association) suggests that some countries have done better, and of course it’s no surprise that the Dutch who have full reproductive rights along with comprehensive sex education, come out on top.  Apart from of course the Irish, where abortion is illegal — so their numbers are probably pretty dubious.

But overall, no one is doing too well. We are sadly a long way from "safe, legal and rare" and likely to be further from there after last night’s decision.

While I’ve been ragging on Florida, the NY Times has noted something we’ve all known for a while — New York’s Medicaid fraud may reach into the billions. Given that New York’s Medicaid program spends more in total and way more per capita than California’s, the tricks going on within the system there have been going on a long time.

The Industry Veteran comments:

Of the $44.5 billion annually spent on the program, sources tell the Times that as much as 10% is diverted to fraud and abuse. I quote here what I consider to be the article’s key paragraph:

"The lax regulation of the program did not come about by chance. Doctors, hospitals, health care unions and drug companies have long resisted attempts to increase the policing of Medicaid. The pharmaceutical industry, which has spent millions of dollars annually on political contributions and lobbying in Albany, has defeated several attempts to limit the drugs covered by Medicaid; other states have saved hundreds of millions of dollars annually with such restrictions."

I can’t say that this is exactly surprising news and I eagerly look forward to indictments of numerous physicians, hospital administrators and pharmaceutical company vice-presidents. I have written before in THCB my opinion that a large percentage of physicians are amoral, sociopathic mafiosi who lack even the charm of a Tony Soprano. When these “made men” (and women) join forces with the truly narcissistic psychopaths who run our Big Pharma companies, corruption on a scale of the Tweed Ring remains inevitable. I can see why Frank Rich and others refer to the U.S. under George Bush as a new Gilded Age.

Two studies out. Not exactly new news. I did a study looking at laproscopic cholecystectomy between Japan and the US for my master’s thesis in 1992. The result then was that it cost twice as much here, when in those days everything else in Japan (land, food, cars, golf club memberships, hookers) cost twice as much. Outcomes seemed to be similar even though patterns of care were very different overall.

Now a similar study (albeit done in a major journal and not for some punk’s masters thesis) is showing the same thing about the costs of CABGs between the US and Canada. They cost twice as much here too. Outcomes again seem to be similar.

The in-hospital cost of CABG in the United States is substantially higher than in Canada. This difference is due to higher direct and overhead costs in US hospitals, is not explained by demographic or clinical differences, and does not lead to superior clinical outcomes.

Finally, in a repeat/update of an article he wrote with Uwe Reinhardt a while back called "It’s the prices, stupid" Gerald Anderson shows that we spend more money here because in general we pay more for the same thing.

U.S. citizens spent $5,267 per capita for health care in 2002—53 percent more than any other country. Two possible reasons for the differential are supply constraints that create waiting lists in other countries and the level of malpractice litigation and defensive medicine in the United States. Services that typically have queues in other countries account for only 3 percent of U.S. health spending. The cost of defending U.S. malpractice claims is estimated at $6.5 billion in 2001, only 0.46 percent of total health spending. The two most important reasons for higher U.S. spending appear to be higher incomes and higher medical care prices.

So we’re shopping at Nordstroms and the rest of the world goes to K-Mart. Of course if you can’t "afford" Nordstroms, you’re SOL.