There’s a not bad description of the different proposals from Bush (what there is of one) and Kerry about health policy from the AMA News this week. It gets it about right on several of the key points, not the least of which is that Kerry’s plan is unlikely to get past the current Congress even if he is elected, but that Bush’s plan does nothing for the uninsured. It also ends with the fact that people are likely to vote about what is best for their health care rather than for the healthcare system as a whole. That’s a sensible point, although (tangent warning!) in the last 24 years the Republicans have managed to get people to favor tax cuts that (for most people) actually hurt themselves while favoring the 2% of the population that earns more than 5 times the national average household income. (OK, OK I know it’s complicated but if you factor in the benefit of mortgage and health insurance tax deductions to high earners, the increase in social security and Medicare taxes over the past 2 decades, and the increase in state taxes and charges for things like education to cover the reduction they are getting from the Federal pie as that gets diverted to paying interest, then it’s true).

Alright. Back on message (I’d never make a Republican, would I?). There are a couple of issues that the article does have wrong. It quotes an administration official in this section:

Bush favors establishing a monetary cap on damages for pain and suffering as part of a larger package of tort reforms that also would ease liability concerns for other industries. “HHS came out with a study that said we waste between $60 billion and $108 billion because of frivolous lawsuits, that this is money going out of the system, not to take care of patients, but to pay off personal injury lawyers,” Hauck said. “The president has a proven, common-sense medical liability reform proposal that has worked in the states.” Campaign officials argue that capping awards will discourage trial lawyers from filing meritless lawsuits that are blamed for driving up liability premiums.

Well unfortunately that number is flat wrong. The $60-108 billion number is from a paper by Mark McLellan (amazingly enough now CMS head) and that’s his estimate of the cost for the “defensive medicine” practiced by doctors who are scared of lawsuits. The actual cost of the lawsuits including settlements is around $4 billion, which is just a rounding error on a $1.5 trillion system. The trial bar-hating Republicans and their fellow-travelers in the AMA argue that if we get rid of the law suits, we’d get rid of the costs. Unfortunately, there are two reasons for defensive medicine. The first and much more minor is the fear of lawsuits. The second is that those in the system who do all the medicine associated with that “dee-fense” gets paid for doing it! There’s no evidence that anyone in the system (especially not AMA members) wants to get paid less, so the chances of actually saving $108 billion are about zilch — it’s a canard.

The other area that requires fisking here is the AHP concept. The article correctly says that:

Bush would like to see association health plans regulated by the federal government instead of the states. His proposals are expected to reach an estimated 2.1 million uninsured Americans at a cost of $90 billion over 10 years. But Bush faces some stiff opposition to his proposals. “Association health plans [are] the only policy that I’ve seen in the history of mankind that uniquely brings together governors, insurers, insurance commissioners, providers and consumers against the policy,” Jennings said. (Jennings was a senior White House health policy adviser during the Clinton administration). Those groups have complained that AHPs would destabilize the insurance market and actually raise premiums.

The issue is that AHPs are usually prevented by state law from cherry picking the best risks. For example in California we have a law that says that if you’ve had health insurance for the previous 6 months you can’t have a pre-existing condition excluded from coverage (you can though pay through the nose to get that coverage, BTW). At the moment an AHP has to obey that law. If Bush has his way, it won’t have to, which will leave the rest of the plans covered by the state law entering that insurance death spiral where the healthy people all bolt for the newly cheap AHP. And of course the additional costs incurred by the plans staying under state law will end up meaning that they rise their premiums — so that the net result may be that we end up with more rather than fewer uninsured. That’s why the current coalition mentioned by Jennings is so opposed to them. However, in any event it’s a modest change in the overall system. Meanwhile the AHPs might as well be called the Any Heist Plan, so frequent is fraud and abuse in them and their predecessors the METs. However, even if they weren’t fraudulent and made health care insurance cheaper, it’s totally disingenuous to say that they’d reduce uninsurance more than marginally. So for Bush to say that he has a commonsense plan for spreading insurance and reducing health care costs is, as you might suspect, another canard. But then again, who’s going to stop him saying it?

On the other hand Jacques Sokolov has a couple of interesting things to say about Kerry’s plan.

“Sen. Kerry believes that there will be significant savings over 10 years in the adoption of these advanced technologies, to the tune of approximately $200 billion,” Dr. Sokolov said. “Many people think those numbers won’t go very far in Congress because they’re unrealistic.”

The same thing applies here as in defensive medicine. That $200 billion is someone’s income and they don’t want it to go away! Sokolov sums it all up by saying:

Both campaigns are offering valid approaches; it just depends on your perspective, Dr. Sokolov said. “If you were an individual who fundamentally believed that there should be less government intervention in health care, you would be very much focused on the President Bush perspective. If you felt you wanted to enfranchise 26 million more people because we don’t have affordable health care in this country, you’d embrace the Kerry proposal,” he said.

In other words, on this like on so much else, we’re a nation divided between a dogmatic supposed “free-market” ideologue and a wishy-washy centrist who wants to use a third-way public-private approach to fix a problem that has only been fixed elsewhere in the world by massive regulation and intervention.

Meanwhile, as for now the recent Bob Blendon article in the NEJM last week showed health care is only fourth on the list of things voters worry about — but it’s just behind terrorism (Iraq and the Economy top the list). So whoever wins and whatever passes, the American health care crisis — high costs and high uninsurance — will make a return visit at the time of the next recession; say in time for the 2012 election?

Go read Ross’ fun piece on who’s winning in the Pharma vs Insurer death match. It’s called Medicareless: Formu-hilarity

The casual reader who’s been following the health care system and the election–which has had a touch of health care injected into its rhetoric recently–might believe that a nation spending 15% of its GDP on health care, while having a few other “priorities” in places like Eye-Rak, perhaps ought to be wondering about how to slow down its health care spending. Other readers might have noticed that pharmaceuticals are very expensive compared to other countries, and that the odd rogue representative from that industry is starting to suggest that the industry might think about how to moderate those costs. But of course you wouldn’t get to be the CEO of a major pharma company if you thought like that.

Instead you’d think like this. First, health care spending ought to be 18% of GDP. And that spending should be funded by middle and upper-income individuals saving up to 10% of their incomes in special accounts to pay for it because, well, because you just can’t trust those government people. Second, the health care system should be rebuilt with Medicare changed to focus on integrated patient care (presumably with the government taking a lesser role). Third, people need to shape up and practice personal responsibility and pay for their own preventative care. Fourth, the environment for brave pharmaceutical companies who take such high risks should be made easier, and the politicians–instead of criticizing them–should realize that the font of all wealth and success in the modern world comes from pharmaceutical research.

If you think that this is a strategy for a more efficient cost effective health care system, delivering more of its products and services to a wider population more equitably, then you too are probably in line to be the CEO of a major pharmaceutical company, or maybe you already are.

Although he says one or two sensible things about Medicare and school meals, Fred Hassan’s Four Pillars of Wisdom Health Care Reform might look to the outside observer as being just a leetle, leetle bit self-serving. But he has his supporters on the libertarian right. At Tech Central Station, which BTW genuinely doubles as a PR agency for oil companies that for some obscure reason don’t believe in global warming, libertarian columnist Arnold Kling thinks that critics of the system hate those “producers” in the industry. Those people who hate the producers include Uwe Reinhardt, who complains about the high cost of health care and attributes it to the high cost of services. Kling feels that Uwe’s counting the wrong things (services) and that really we should be looking at those outputs–although he doesn’t explain what outputs are, and that everyone who understands health care knows that outcomes (one version of “outputs”) are poorly counted and often just plain poor in American healthcare.

But while they are loathe to criticize producers of health care services, especially producers of very expensive medical technologies which enjoy monopoly protection, those on the political right of a more fiscally-conservative ilk are starting to complain about the costs that are being dumped into new government programs–which will end up being transferred to those producers under our current system. Blogger Josh Clayborn is one such conservative who maintains that these government programs are something we can’t afford. Although the cynical amongst us might note that while we can’t “afford” to borrow money to offer drugs to Medicare recipients, apparently we seem to be able to afford to borrow money to give huge tax breaks to the super-rich.

But those of us who think that the health care system consumes too much money inefficiently have a little bit of ammunition. For the perfect Adam Smith market to appear in health care, information and expertise has to appear on the consumer side, and monopolies have to be broken on the producer side. Well anyone who knows anything about health care knows that we are far from that happy state. While Fred Hassan is unhappy about alleged government interference in the pharma business stopping his precious innovation, the real story is that he doesn’t seem to be objecting too much to the government interference in the market that allows his industry to routinely increase prices and play all sorts of games to prevent competition.

And while we’re on the subject of consumer knowledge, it’s worth taking a quick look at this table which shows that only 33% of Americans believe that we spend more on health care for the elderly than we do on health care for kids. Given that level of understanding of the health care system, its hard to imagine that the “consumer” versus the “producer” is a fair contest. And fifty years of “free market” health care shows that it hasn’t been. Which is why the single payer crowd and the managed care/managed competition crowd all believe that some specialist entity needs to at least be attempting to level the playing field.

And when a major pharma CEO is promulgating about how the rest of us should be funding his retirement fund (rather than our own), well one of my correspondents suggested that it reminded him of when the Chicago press would interview Al Capone in the 1920s and Scarface Al would opine on topics ranging from the changing status of women to juvenile delinquency and government policy for small business. The less amusing aspect of all of this is that health policy in the first and (gawd help us) second Bush term is being run by Hassan and his cohorts in big pharma, so we can expect the current level of producer versus consumer imbalance to continue. Unless of course I’m wrong and the CDHPs first become common and then work to restrain health care costs. But I’m not holding my breath.