Look at this trial balloon–Bush Plans Tax Code Overhaul. Getting rid of tax deductibility of health insureance as a business expense!! Are they serious? If so that really would put the cat amongst the pigeons!
UPDATE: Ross works out the logical process if this happens without some associated legislation creating the ability to buy collectively (and it must be pointed out, mandatedly with risk adjustment a la Enthoven (as the NY Times reports today). And yup, it’s not pretty
Every so often it’s worth remembering the human and economic costs behind our uninsurance statistics. The following TCHB contributor was employed and insured until about a year ago, but like many with her health condition cannot afford insurance now she’s uninsured. I’ve kept the author anonymous for obvious reasons, although she lives in the San Francisco East Bay, but read on and you’ll understand why there are economic costs for all of us from the uninsurance numbers:
I recently had my own health care crisis, and I thought I’d share it with you as something to ponder. I don’t have any context to put it in, so I will leave larger analysis to you. My basic reaction, though, is that as relieved as I am that I had access to good care, the whole process was utterly stupid from the taxpayer point of view.
A few weeks ago I had a large hemorrhage in one eye. This is a harmless condition for most people, but I was worried because I have an underlying genetic condition that causes a form of macular degeneration, and I was worried about hemorrhaging that I couldn’t see in the area of my retina. If this was the case,time was of the essence if I didn’t want to lose a chunk of my vision.
It was 2am when I discovered the problem. I’m uninsured, but I knew that an ER would have to treat me. I walked to Alta Bates in Berkeley. As a pathetic side note, I went to the wrong Alta Bates campus – I then had to walk to the Alta Bates with the ER (on Ashby). By the time I got there, I had a lot of pain in my legs (the same genetic condition causes claudication), and I had trouble explaining to the nurse that while I was limping and in tears, this was normal for me and was not why I needed to see a doctor. π The only reason I’m relating this is that I don’t think many people think about how poor people go through to actually get to the ER in the middle of the night in the first place.
I was treated very well as a person at Alta Bates. They didn’t make me feel uncomfortable about my lack of insurance at all. They gave me charity forms to fill out. I waited 5 hours to be seen, which turned out to be normal for both Alta Bates and Highland. The initial doctor I saw at Alta Bates did not give me adequate care. She glanced at my eye and told me there was nothing to worry about with that sort of hemorrhage. Since I provided information on my underlying condition up front, she should have given me a thorough eye exam. This visit cost the taxpayer $356.00 for the ER plus whatever the physician fee is (probably around $200.00).
I know enough to test my eyes myself, so the next day I tested myself. My vision was distorted. I tested over and over again just to make sure: I certainly didn’t want to go through the ER experience again. But the tests were always the same, so I went back to the ER. That’s a second $356.00 (possibly more for ophthalmology set up) plus the physician fee. This time Alta Bates gave me an urgent referral to Highland Hospital. Highland has an ophthalmology clinic, and a program for indigent patients. Highland, however, didn’t want to take the referral. It was written on my aftercare instructions instead of the form they wanted. I called Alta Bates to ask for the right form, and they insisted I was holding the referral. I called back and forth all day. Alta Bates finally faxed the referral, and Highland said it would
be at least three days before they could verify they even got the fax(!). This referral had urgent written on it because the Alta Bates physicians thought I needed to see a specialist fairly quickly. At one point I called Berkeley Free Clinic to see if I had any other county health system options for ophthalmology. Highland unfortunately was the only place for me to go.
An Alta Bates nurse then advised me to go back to Alta Bates, get a copy of my medical records, and go to Highland Urgent Care so a Highland physician could refer to the ophthalmologist. That’s right: my THIRD 5-hour emergency room visit for the same problem. The taxpayer was unnecessarily triple-billed because of some bureaucratic issue.
With travel, the trip to Highland took a spectacular 9 hours all together (I’d never been there, and two successive bus drivers forgot to tell me where the stop was). Once again, I have no complaint about my treatment as a human being. I described my situation, and the insurance person didn’t bat an eye. She just gave me the forms to fill out.
I was also very well treated by the triage nurse at Highland. After I told her about the problem with the referral, she physically tried to run after the on-call ophthalmologist. I almost lucked into seeing him right then and there, but he had to go into surgery. He did however give the triage nurse an appointment for me on the spot.
A morning later, I took another trip to Highland. The wait in the ophthalmology clinic was down to an hour. The ophalmologist gave me some tests, took a look at the area of my eye that was the source of distortion, and confirmed it wasn’t actively bleeding. (Keep in mind that I had gone through the past few days under continual fear that I might be losing my sight minute by minute). So, big relief. He thought the distortion was being caused by blood vessels and/or related scarring. It might have actually been there for months: I just never noticed it without the tandem visible hemorrhage. As a member of the uninsured, I had not had access to regular ophthalmology checks that are really necessary for someone in my condition.
Perhaps an economic analyst like yourself might realize that the public issue here is that denying me health care in the first place (especially in a frivolous “specialty”) means that the taxpayer gets to pay long term when I’m permanently disabled.
While I wasn’t in an acute situation, my vision was still damaged. The ophthalmologist referred me to a retinal specialist at Summit. This retinal specialist was supposed to give me an angiogram to show whether blood vessels were the issue, and whether my vision could be helped or at least prevented from deteriorating by laser surgery.
The good news for me as an indigent patient is that I was sent to the same retinal specialist that anyone else would go to. The bad news for the tax payer is yet another weird system disconnect occurred. I went to the retinal specialist, but I didn’t get the angiogram. I got the exact same eye exam I got from the ophthalmologist instead. Afterward, the retinal specialist gave me a rerun of the angiogram and laser surgery talk. He needed to schedule me for another appointment for those. The appointments system was down so the nurse was supposed to call me. My phone is sketchy, so I gave my email as well. It’s been a few days, and I haven’t been contacted by either phone or email. I plan to call after I finish this note.
So many things have been surreal about this entire situation. I was honestly surprised that the people dealing with the insurance forms were all non-judgmental and dealt with me in private. This would not have been the case in my home state of Virginia, where the economy is regulated through shame. π
On the other hand, the actual medical care varied, and it required a lot of proactive work on my part (to negotiate between Alta Bates and Highland). This was difficult for a fairly well-educated and strong person like myself: I wonder what happens to people who are more docile or more acculturated to conditions of poverty. I thought that the first doctor in the Alta Bates ER should have taken a closer look at me, but all the other doctors I saw were great.
It was also stressful to go through all the bureaucratic hassles at a time when it was possible that every minute could be costing me more of my sight. The initial trip to the Alta Bates ER actually gave me a fever – some sort of shuttle between hospital campuses would have been nice. Also, I had to deal with a guy following me and making catcalls as I made my way back home in the wee hours of the morning.
Finally, the redundancy was mind-boggling. It’s a good thing I don’t work at all, because I literally spent half my week in hospital waiting rooms. If I were temping at the time, I would have been out of a job that at this point I would be desperate to cling to. I appreciate that no one cares about the wasted time of a non-entity such as myself, but when you realize that each trip was a *separate* bill to the taxpayer, it might be time to start considering this as a social issue.
This story is not over yet: I need to go back to the retinal specialist, and then probably some laser thing after that. Hopefully, there won’t be any further adventures in nonsense. I will try to remember to let you know if I get to a point where I can total up a final bill.
The only point that is not accurate here is that the taxpayer per se won’t get these bills–they’ll probably be marked down as charity care, after the hospital makes some level of effort to get the money out of the patient. And of course $350 is the rack rate for an ER visit, not what a local health plan would pay. But in the end, we’re all picking up the tab for this foolishness–now and in the future.
UPDATE: The Sunday Boston Globe had an article about a guy who played the uninsurance gamble and lost, and now has to pay Mass General $40,000, where an insurer would have paid them $7-10,000. The key part is that he’s paying off his bill to the General at $700 a month — which is what insurance from Blue Cross would cost him. Prize to the first person who can email me the 5 counteracting incentives in the whole system this article details without having their head explode.
This may be the last word for now on the idea of using the VA for the uninsured, raised by Dave Moskowitz last week. Let me try to put this in a little context. We’re not likely to have a universal health insurance scheme come out of the next Congress. As I write about elsewhere, the proponents of this year’s version of healthcare reform (California’s Prop 72) which I support because it’s better than nothing, come straight out and say that incremental change is all that we can expect. While I don’t approve, I don’t disagree. So Dave’s idea is an incremental change that’s worth considering and also not to far away from Bush’s idea of spending more money on community health clinics for the poor. I did though have a couple of concerns before I appointed Dave to run the much revamped VA. He replies here (and you may notice him getting into the somewhat cynical but jocular spirit of THCB):
You asked two more questions, which I’d now like to reply to:
Is Congress ready to come up with $100 B for healthcare? Perhaps Congress has grown amnesiac since the 1994 Contract On America. They are spending, after all, our taxpayer money. According to the Constitution, they’re supposed to be working for us, not the other way around. Congress has already spent $180bn for the War in Iraq, and have just been asked by the Administration for another $70bn, bringing the total to $250 B, a project which enjoys less than 50% popularity with their constituents. So it would be only reasonable, in a representational democracy, for them to spend $100 B of our money annually on a need near and dear to 70% of Americans. I understand that using the government to help the people has fallen out of favor as a political concept since Reagan took office in 1980, but perhaps the people will gently remind their elected representatives who’s paying their salary and why.
Why separate but unequal in healthcare when it no longer applies in education? Au contraire, gentle blog-meister. Separate but unequal is no longer supposed to apply in PUBLIC education, but Brown vs. Board of Education of Topeka, KS never struck down the inherent separateness (and demonstrated inequality) between public and private schooling. In the US, roughly 85% of education is public, open to all comers, and 15% is private. We’re all aware of public school districts where daily survival is the most one can pray for, let alone a college-prep education. And weβre all aware of the training ground set up by the power elite that includes prep schools like St. Paul’s, St. Alban’s, and Andover. After all, the Presidential candidates for the past four years have come only from those three high schools. Waterloo is still being fought on the rugby fields of Eton, so to speak. (Ed’s diversionary note: They don’t actually play rugby at Eton; they play this weird sport instead and the correct quote is “playing fields”. Anyway Rugby wasn’t invented till decades after Waterloo! End of history and English elitist culture lesson!) So separate and unequal is in no way un-American.
It’s actually as American and as much a pillar of capitalism as apple pie (not to intimate that the pillars of capitalism are grounded in less than cement). It’s seen, for example, in airplane travel (Business Class vs. Coach), ground transportation (luxury SUV vs. public transportation), housing (4-star hotels vs. economy motels; gated mansions vs. trailer-parks), food (fresh T-bone steaks vs. frozen bulk hamburger), medicines (branded vs. generic), etc., etc., etc. People get what they pay for. The goal of government is to ensure that the cheapest commodity is at least non-toxic. In government as in medicine: primum non nocere (first, do no harm). In the case of healthcare, I’ll let you in on a very well-kept secret: the cheaper public system is very likely to yield better patient outcomes than the more expensive, private alternative.
Here’s why: Modern health plans started with the Blue Cross/Blue Shield plans set up in the 1920’s by surgeons to make sure they got paid for the operations they did. Healthcare reimbursement has kept its close ties to the hospital ever since. For 70% of healthcare dollars to be spent in the last 12 month’s of a patient’s life means that it is spent on surgery and ICU care that is futile but expensive. An excellent example of how the system works is the recent decision by CMS to pay for lung volume-reduction surgery (essentially, popping emphysematous blebs) the week after a study in the New England Journal of Medicine showed that it was useless. Only in America!
Genomics makes it possible (finally!) to prevent diseases from occurring, or at least not to be ambushed by them, as we all currently are. Genomics makes it possible to keep people healthier and out of the hospital. The current hospital-based system, which represents the medical establishment in every country, with its research institutes and medical schools, will not go quietly, as the TB sanitaria did in the 1950’s when streptomycin was discovered. But the dynamism of capitalism will save the private sector. In order to regain market share, the hospital-based system will be forced to adopt preventive molecular medicine. Patient outcomes will begin to improve in the private sector, too. There will be aggressive marketing, encouraging patients to stay with their fancy, branded private sector health plans. If the tobacco and ammunitions industries can survive despite their effect on the public health, then the private healthcare system will do fine, too. But we need both players, because the government by itself simply cannot pay for healthcare at the current level, let alone with double-digit inflation. Healthcare would have to be rationed, as in Canada and the UK.
This is politically unacceptable. Americans like the notion that anybody who can afford a liver transplant can get one, and Mickey Mantle can get two in a week. If the private sector folded, the $100 B annual price tag for 45 million currently uninsured Americans would balloon up to $600 B a year for all 270 million Americans. Getting this Congress to spend an extra $600 B a year on health for the nation will be infinitely harder than getting them to spend six times less. So by all means, let’s keep both systems. But if you happen to find yourself, for a time, in the public sector healthcare system, don’t be upset–you may actually be getting better care!
While I think he’s hit the nail on the head with his analysis of the wasted money spent on end of life care — and the Dartmouth crowd agree — I’m still not quite sure if I follow all Dave’s logic. Surely if Congress is going to spend a lot more on health care for all Americans, private sources (that is employers and individuals) will spend less. However, the idea that health plans have to compete on outcomes is something I like the idea of, even if its mostly fantasy for the near-future. I’ll see if this idea crops up elsewhere, but hopefully this has added something to the debate.
Meanwhile certain wags have pointed out that as a non-natural born citizen I can’t be Preznit and appoint Dave as head of the VA. Even if the Constitution was changed and I could be, I might find a tough opponent in a certain ex-steroid using body-builder. The Guvernator is raising my ire this week by both opposing Prop 72 (which given his business connections I’d expect) and much more so by toadying up to the most appalling union in America, the California Correctional Peace Officers Association, in opposing Prop 66 — the much needed amendment to the nutty three strikes law. You may recall that in the recall race Arnie said he was opposed to special interests. The prison guards have been the most egregious and aggressive special interest group in this state for over a decade. Good one, Guv.
Liberal historian Mark Santow has written a book about Social Security, Medicare and Medicaid with his fiscal conservative dad, Leonard. I haven’t got through much of it, and it’s a 100 pager, not a 3 pager, but well worth looking at for you wonks. Here’s the link to the explanation, and here’s the full PDF. The full title is Renewing the “Promise of American Life”: Social Security, Medicare, Medicaid And Beyond.
Dave Moskowitz’s idea of using the VA as a public provision system to cover the uninsured has got a little bit of feedback. While some of you wonks might be thinking as I do that the VA would be overwhelmed as employers opted out of providing insurance if the VA (or would it now be the UA?) did a half decent job of providing care for free, Linkmeister Steve has a much more mundane objection. It surrounds of course the most important element of American life — parking. Steve writes:
It’s an interesting idea, using the VA to cover the uninsured. But I wonder if that $100B includes such prosaic things as parking. Here’s the VA 7/03 factsheet for Hawaii VA facilities. The Matsunaga clinic is located at Tripler Army Medical Center , which is a huge facility with about 500-750 parking stalls. I can speak from unpleasant experience that that ain’t enough. I doubt whether most VA facilities, particularly non-urban ones, are as large and as well-appointed or supplied with even that sort of infrastructure.
Additionally, Tripler has sentries (well, private rent-a-cops…why our military has to contract out that function is the subject of another article), and access is limited to the number of people who have military ID cards and a legitimate reason to go through. I have to flash my mother’s card AND her written prescription to pass muster.
I’m just sayin’ it would require a lot of mundane planning.
To which Dave replies:
Security should not be a problem for the public, given the added security the public is already used to in airports, museums, and government office buildings. It also represents a wonderful way to employ people getting off Welfare, i.e. expanding security is already a great jobs program for the government.
So there might be some additional expenses for security, but I would think they could legitimately come out of the Dept of Homeland Security (DHS) budget and not out of the US PHS’s budget. At Trippler, the base would just need to apply for extra funding from DHS, if the Pentagon’s budget was too constrained to help (a bit unlikely given the current climate). DHS and the military are already extremely well intertwined. And the US PHS, one needs to remember, is a uniformed service within the Coast Guard, if I’m not mistaken, making it already eligible for DHS funds.
As for parking, the VA has a terrific shuttle and bus system which is utilized well below capacity. In St. Louis, for example, there’s a daily bus to and from the outlying cities 200-300 miles away. The bus seats 60 but never has more than a dozen riders. So if people were worried about finding a parking space in the big city, they could just take the shuttle. For people living in the big city, they would just need to hop a bus to the nearest VA. The medical centers are all located in the center of the city, exactly where the uninsured people are.
So given that Dave thinks that parking isn’t a problem and that the VA Medical Centers are well located near to the uninsured, there are only two questions remaining before I put Dave in charge of the VA in my new adminstration (assuming I win the write-in vote a week from now!).
One: Is the Congress (or anyone else) prepared to front up the extra money required to cover the uninsured, even if it doesn’t require a new institution?
Two: In the year 2004, 50 years on from Brown versus Board of Education of Topeka is “separate but sort of equal” the best we can do in American health care — even if it is better than the current status quo?
Today there’s a new contributor to THCB. Dave Moskowitz runs a genome company that claims that judicious use of ACE inhibitors can reduce the prevalence of heart disease and cancers. But those of you interested in that must navigate over to his GenoMed web site. Here I’m more interested in his ideas for changing the health care system. Dave has an interesting idea: expand the VA and use it as a basis for public-sector health care service provision to cover the uninsured. He writes:
We both agree that a single-payer system would be a disaster (Editor’s note: I don’t — I think some version of single payer would be better than the current system, but Dave has confused single payer with “government as the only provider”). I don’t think it’s the best answer, with long waiting times and rationed care. There is a need, in my mind, for both a private sector healthcare system, and a state-supported healthcare system. The incentives in both are perverse enough that they need each other to stay honest.
For example, if the private system remains primarily a fee-for-service system, then the incentive is to do unnecessary medicine and run up the bill (the current U.S. system). On the other hand, a capitated or salaried government-run system encourages physicians to do as little as possible for their patients. I’ve seen this at close hand when I worked at the VA for 11 years. The only way to keep the two systems honest is to make them compete on patient outcomes.
Now, we need to discuss the mix of private vs. public healthcare. In the UK, it’s 95+% public, and in the US it’s 95+% private. What would be ideal is an 80% private, 20% public mix, essentially the ratio of public vs. private schooling in the US, inverted.
There would clearly be a dynamic equilibrium between the two systems. If the private system priced itself too high, or continued to spend too much on administrative costs, then it would lose clients to the public system. The lines would get longer at the public clinics, and people would complain. In fact, the distaste people have for long lines would keep most folks in the private system. But people who currently have no medical care at all, the 45 million Americans, would at least get some care, smelly waiting rooms and long lines notwithstanding.
How much would it cost to deliver healthcare for 45 million through the VA? About 6 times what the current VA healthcare budget is. A few years ago, it was $15 billion. It’s probably closer to $20 billion now. Here’s how I figure the ramp-up. Currently, the entire VA infrastructure takes care of 3 million people. It consists of 150 medical centers and some 300 satellite clinics and nursing homes. Not a single new building would need to be built. Instead, staff would need to be expanded.
45 million patients is 15 times more than the VA currently serves. But VA physicians currently have an average of 300 patients in their panel (many subspecialists have only 150). If every VA physician were to take care of 1,000 patients, which would require half-time clinical work, then the number of patients seen could be increased immediately to 9 million. Hire 5 times the number of physicians, and you’re up to 45 million patients.. Throw in an extra 1X of spending for ancillary help, and you’ve multiplied the current budget by a factor of 6, and you’re taking care of the VA’s current 3 million patients plus the 45 million uninsured.
Here’s an unexpected consequence: half of the medical schools won’t have to close. Without this change, the VA will close most of its hospitals, and the 125 medical schools with a VA hospital on campus will have to lay off at least a third of their research and clinical faculty.
Interestingly enough the $100 billion that Dave suggests we should spend on beefing up the VA to cover the uninsured is roughly what many experts think the cost of covering them with a decent insurance coverage would be and double the current $50 billion that gets spent on the uninsured in various places now. This idea has some similarities to Bush’s concept of spending more on community health centers (albeit on a much, much larger scale), and has the advantage that it wouldn’t require a system change, just more money. The current Congress seems happy to spend more money, but unhappy to implement new social programs.
On the other hand, if there was a decent service that was available for free, why would those providing marginal benefits to their employees keep them up? They’re dropping off in droves anyway, and if the employer can point to the VA system and say “go use that”, it’s not much of a stretch to say that many would. So this might accelerate the collapse of employment-based insurance, especially for those on low or middle-income, leading to more demand and more money needed by the repositioned VA.
Still, an interesting idea, and no less likely to pass than the Kerry plan or the Bush plan, given the current deadlock in the Congress!
Meanwhile, veteran health economist Joe Newhouse has a piece in the NEJM on Financing Medicare in the Next Administration. The shorter version? The gap in the increase between Medicare spending and GDP means that we have an upcoming crisis. But neither candidate will admit to it, so we’re screwed.
In case you missed it at Ross’ site, here’ Uwe Reinhardt’s guide for journalists ot the health care debate. Brilliant, and rather tragic. More at his site.
In today’s post I risk upsetting The Veteran even more, by featuring a new comment from Joe Crea, a doc who’s run off to academia and so doesn’t need to care what anyone thinks of him! Joe is peeved at my comment in Friday’s post that:
Hence I’m told again and again that government healthcare would be inefficient (as I heard from a Democrat I met tonight), despite the fact that Medicare’s admin costs are 3% while private insurance’s costs are 8-15%. You’d think that the onus would be on the defenders of the staus quo to show why a change would be worse.
I later went on to say:
But it is a long way from being a government dictated-system like that of Canada or the UK. Given the record of American private health care, that may be a bad thing…
Joe thinks that there is a flaw in my logic:
One of my pet peeves is the presenting of “the fact that Medicare’s admin costs are 3%” without appropriate qualification or explanation. I have attached such a succinct qualification here, courtesy of Healthleaders.
“Medicare overhead has the appearance of a gold standard: 2.1 percent overhead compared to a commercial average of 13 percent and a “best practices” company commercial average in the range of 5-8 percent. Medicare clearly has economies of scale, but its overhead figure is a bit misleading. The average per-member-per-month premium for commercial HMOs in now in the $200-$250 range, while the typical PMPM for Medicare is in the $600 range. If the Medicare PMPM were $200 rather than $600, then it would have an administrative overhead of 6.3 percent rather than 2.1 percent-still very good, but not out of the range of the very lowest-cost private insurers.
“For that relatively low overhead, Medicare offers only a single product (little choice except in urban areas where Medicare+Choice is available), provides limited medical management (and that seemingly by lawsuit), conducts provider contracting by fiat (negotiations take place in Congress), and has almost no marketing costs (no competitors).”
The other two things that are not mentioned are the hiding of the debt service to other areas of the government, and the shifting of administrative costs to providers by way of mandates and voluminous paperwork.
Now the article Joe references does take a look at the “best practice” plans with the lowest medical loss ratios. They tend to be big monopoly Blues in rural states, or staff/group model HMOs which practice shoulder to shoulder restraint (or push medical management doen to the physician level). But with the exception of Kaiser they are not the core private health insurers that dominate the national market. Those guys not only have very high admin costs (or in the jargon “low medical loss ratios”) but are making them higher. Following United Health Group raising its profit forecasts CBS Marketwatch reports that Health insurers (are) getting bigger cut of medical dollars:
From 2000 to 2003, medical loss ratios for the 17 companies dropped from an average of 84.8 percent four years ago to 81.5 percent last year. So while medical expenses have increased, the proportion of dollars devoted to them has dropped.
So for the bigger players getting bigger, more money is sticking with them, so adminstrative costs are going up not down. And, duh, that’s the way the system is designed. Everyone at Anthem, Pacificare, Wellpoint, Aetna, etc, etc is incented to try to reduce their medical loss ratio.
Now that might not be such a bad thing if they were truly managing care, auditing for quality, and increasing the amount they’re spending on administrative functions in order to reduce the amount being spent on medical care. But if you think that’s what they’ve been doing for the last 5 years, you really haven’t been paying attention. I talked to a VP of HR at a very, very big telecoms company last week, and she disputed my notion that the health plan’s clients (like her) haven’t been holding their feet to the fire. She claimed that they’d done huge amounts to try reduce their costs. I said, “Tell me another industry that supplies you from which you’ve accepted 15% annual increases in costs for no perceived additional benefits for the last 5 years in a row?” The HR VP went very quiet.
Now maybe Joe is right and we should be calculating Medicare’s admin charge on its higher cost per case. But even at 6% it looks pretty good compared to all but monopoly Blues plans. In other words Medicare and those plans all share a bunch of characteristics leading to their low overhead (from the same Healthleaders article):
I’d actually dispute Joe’s point about Medicare off-loading admin work to providers. Given the lack of UR in the Medicare system I think it off-loads less admin onto providers than private insurers–certainly it doesn’t create more. And because it’s so big and only needs things done one way, it’s a lot less work for providers than dealing with 5-10 plans of the same cumulative size who all want things done just their way (the thing that HIPAA simplification was supposed to do). But even if he’s right, Medicare’s adminstrative cost is as low as it is because of all the things he finds so terrible such as being able to set its own provider rates, only offering a limited “product” line up, limited medical management, etc. The problem is that private health plans are “charging” through the nose to deliver all those things and yet it just costs more and more with no apparent gains. And those “charges” are increasing (or the MLRs are going down).
So let me ask one more time. Why is the onus on the government program to prove that it is more administratively efficient than private plans when it already is, and they are getting less efficient?
Coda: I don’t want you to think that I’m a huge fan of the way Medicare works. I think it needs drastic changes, including upping its oversight of the system and changing the way it pays providers to a performance-based reimbursement system. And I said as much in the very first post of THCB. But given its huge clout and the government’s ability to change the law, I think a reformed Medicare could do that in a way that will improve the care delivered at a lower cost, bloody battle though that’ll be. The private plans’ record of the the last 5 years shows no sign that they could.
Bush has certainly been attacking Kerry on his health care program. Jonathan Cohn is an editor at the New Republic who specializes in health care and is currently a Kaiser Family Foundation media fellow. For those of you who don’t track the political leanings of the weeklies, the New Republic is the Clintonian Democratic magazine, way to the right of the leftish The Nation, while far to the left of the conservative National Review. Cohn’s latest piece has been reproduced on CBS web-site which may (or more likely may not) hint at whom CBS’ parent Viacom wants to win the election.
In any event he does a much better job than Kerry has done himself on crying bullshit at Bush’s attempt to call the Kerry plan a government takeover of health care. In the article called A Guide To Bushspeak On Healthcare Cohn says:
The Clinton health care plan really was a government-run health plan (albeit one that was hardly the menace its critics warned it would be). That’s simply not the case with Kerry’s health plan, for reasons that I (among many others) have already written about. Today, in fact, a group of 68 health care policy experts led by Mark Peterson at the University of California at Los Angeles, released a petition calling upon the Bush campaign to end its gross distortions of Kerry’s plan. “Although Senator Kerry’s proposals should be subject to a full analysis of their cost and impact, any claim that they amount to ‘government-run health care’ or a ‘government takeover’ of the health care system or of health care decision-making is simply inconsistent with the facts. We are not aware of any expert in health care or health care finance, whatever his or her political orientation, who believes otherwise.”So why would Bush produce an ad like this Β and continue to raise the specter of “government-run health care” Β even though the charges are now widely known to be false? Because he keeps getting away with this dishonesty.
Meanwhile the 68 academics that Cohn quotes as opposing the Bush rhetoric represent a middle of the road group of health care economists. The only notable exceptions are Alain Enthoven of Stanford (although his one time colleague Richard Kronick is in the group) and Mark Pauly of Univ. Pennsylvania, the foremost defender of the status quo of the healthcare market. It’s also missing a certain (ex) Stanford Business School professor called Mark McClellan, who’s written extensively about health care and seems to know a thing or two about it. He might want to want to sign this too, but I think his boss might be a little unhappy with him!
Part of the problem is that both sides get their say on the talk shows, with no one (aside from the Columbia Journalism Review or John Stewart) being able to say “this is true — that isn’t”. On a personal note I tend to be able to demolish many arguments I meet with from people complaining about, say, Canadian health care or how inefficient the government program would be, by quoting referred studies that tell the truth. (It’s good to be a researcher wonk when these arguments come up). But there are two problems. One is that a well-financed opposition can cite its own fake studies, and two, no one gives a dam about studies when they have their own fears and anecdotes to back them up.
Hence I’m told again and again that government healthcare would be inefficient (as I heard from a Democrat I met tonight), despite the fact that Medicare’s admin costs are 3% while private insurance’s costs are 8-15%. You’d think that the onus would be on the defenders of the staus quo to show why a change would be worse. But instead–and I realize why–Kerry is running away from any program that could be described as a “government takeover”, even though a rational candidate should be able to defend it. And if I hear Bush say one more time that we have the best healthcare system in the world…..well to say the least he needs to be told by someone that there is a difference between having the most technologically advanced medical spottily applied, and having the best health care insurance and delivery system. There’s a reason we’re ranked number 37 by the WHO, and it’s not just that they’re a bunch of cheese-eating surrender monkeys.
Believe it or not, there’s a very detailed and fair explanation of the Kerry plan by the Heritage Foundation (they of the vast right-wing conspiracy) which goes through it line by line. Heritage of course prefers a consumer-based HSA-type system and (as debated ad nauseam on THCB) as that’s not part of the Kerry agenda they don’t approve. But despite their many criticisms of the Kerry plan, they represent it mostly fairly, unlike their friends on the Republican national committee and at the AEI. They say:
Based on independent estimates, it appears that the Senatorβs proposals would significantly increase federal health care spending while substantially reducing the number of Americans who are without insurance coverage. At the same time, he would refrain from undertaking any substantial reform of either private health insurance markets or government health care programs, including Medicaid.
Another detailed commentary on the plan comes from Jeff Lemieux at Centrists.org. Lemiuex’s extremely long examination of the plan suggests that it could be basis for bi-partisan reform to the system, as it relies on a mix of government and private action (or liberal and conservative ideas).
While I’m increasingly convinced that Kerry will win a very close election, I’m inclined to doubt that he’ll get anything like his plan past a Republican house and a very evenly divided Senate. So his plan is a starting point which may–if anything passes and that’s a longshot–work to get more people at the bottom into public programs, allow those in the middle to buy into the FEHBP, and slowly implement DSM programs and other cost saving methods into a more regulated private sector (and hopefully into Medicare too). But it is a long way from being a government dictated-system like that of Canada or the UK. Given the record of American private health care, that may be a bad thing. But the point is government-run health care can’t survive the political rhetoric here. It would be nice if just occasionally Bush would talk something akin to the truth about this issue, but then again why break a 4 year habit?
Ross at the The Public Health Press has a just excellent summation of the flu vaccine issue, in the context of the two rather odd replies from Bush and Kerry to that question in last night’s debate.
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