There’s an interesting set of six letters about Krugman’s article in the NY Times.  One of the letters is way off base, suggesting that Medicare limits what doctors can and can’t do.  Well I suppose compared to a cash paying gazillionaire that’s true, but anyone who knows anything about private health plans know that they are much tougher on limiting access to different types of care and different drugs than Medicare (not that it’s done without good reason sometimes, but as my other post this morning shows sometimes there may be no good reason). The writer wonders whether Teddy Kennedy would want to be on Medicare. Unless I don’t understand Senators’ health plans, I assume he already is, and Krugman surely will be if he doesn’t get assassinated by the loony right. It beggars belief how the Times can publish that sort of uninformed tripe which contains not one iota of evidence, but then again it never published my brilliantly argued rebuttal to a letter from AHIP’s President about a previous Krugman column.

But one of the other letters is rather more interesting.  It says"

I find Paul Krugman’s column disturbing. If 72 percent of Americans want a national health insurance program but insurance companies have the power to override that majority, what does that say about the health of our democracy?

Where can we get insurance for such an ailment?

Glenn Alan Cheney, Hanover, Conn.

Basically Mr Cheney is right. People like his namesake the VP have proved time and time again that access to power can be bought by moneyed special interests — after all we still don’t know and probably never will exactly what went on in those meetings about the energy bill, but it’s pretty damn certain that Enron execs were writing US energy policy up until the moment that they just had to be repudiated.

However, I do have to take issue with the numbers quoted.  Essentially Krugman is quoting a number that has stayed relatively constant in various surveys, and crosses party lines.  The number is basically those who would in theory support universal health insurance.  These numbers are though not very important. A much better number is those who answer the three part question Harris has been asking for 20 odd years.  That question adds in the other part to "supporting universal insurance" by asking about the amount of change required in the system.  The three answers are broadly a) very minor change required, b) substantial reforms required, and c) complete rebuilding required.

The important answer is how many people are looking for a complete rebuilding. Because if there isn’t a substantial group in favor of that, none of the reforms required to get to universal insurance can happen. That number tends to hover between 20% and 30% (and by the way it’s way higher here than in any other English speaking country, which gives the lie to those saying that foreigners dislike their systems as much as Americans dislike ours). During the early days of the Clinton Administration, the "completely rebuild" number got up to over 40%.  More recently it also got into the higher 30s.  But for an Administration or Congress to have the will to defeat the special interests on health care, that number needs to be in the 40s or even 50s and stay there for a while. We haven’t seen that, which is why we haven’t seen real reform.

It will come, but the question is, how long will it take for things to be bad enough to drive enough Americans into the "completely rebuild" camp?

In an op-ed called One Nation Uninsured Paul Krugman has given intellectual solace to all the single payer advocates out there and in his terms defined the serious argument in health poicy as being "between those who believe that the government should simply provide basic health insurance for everyone and those proposing a more complex, indirect approach that preserves a central role for private health insurance companies." Krugman is right in that this correctly excludes those avocating government-run health provision for all (and there aren’t really any of these) and the numerous HSA/individual account backers who still can’t do basic mathematics from the serious debate. (I’m having an offline conversation with a couple of these HSA promoters that may come to some resolution on that, but for now I still don’t see how giving money to healthy people doesn’t take it way from the sick ones who need it).

Krugman also puts some historical perspective to the analysis of why uninversal health insurance never passsed in this country. Yup, it’s the AMA that’s largely been to blame (and not just in 1945 either! They also helped stop it in 1917, 1933, 1965, 1971, 1977 and 1994 too). But Krugman largely ignores the doctors and says that it’s the insurance companies to blame. Jonathan Cohn moonlighting from his New Republic gig over at TMP gives some more detail about the failure of some parts of the supporting coalition to back the Clinton plan, and the success with which some parts of the opposition (notably the small health plans and their brokers) dumped tons of horse manure on top of the proposal – notably "Harry and Louise". There’s even been some comment from centrist Democrat Matt Miller suggesting that socialized medicine will finally really win support from big business.

This all apparently leads to a showdown between the voucher crowd, led by Vic Fuchs and Ezekiel Emmanuel, and the single payer advocates, whom Krugman is now supporting — although in several other forums like this months Harper’s he is backing the French model, which does have a mix of private pay, unlike Canada’s. The key question is whether or not you maintain a private insurance sector, and whether or not politically you’ll need the insurance industry’s support to pass the legislation.

Clearly the way health plans and providers interact today is a total mess.  Witness this case in N.Carolina where the doctors are accepting the local Blues plan, but the hospital at which they are practicing isn’t.  However, I actually think intellectually, there is room for independent advocates (e.g. plans) for patients to bargain or ally with providers, sort of like Enthoven’s vision of multiple competing Kaisers under managed competition. But in the end I think this is a false distinction in terms of practical running of the system.  There is no infrastructure for that kind of competition between plans at the moment(i.e. over delivering better care not avoiding risk), and crafting the legislation to get to it is so complex that it’s unlikely to be possible to get us there from our current system.

So the question is, if we are to get to universal health insurance, what are the circumstances that will get us there.  This is where the real lessons of the Clinton debacle come in.  The legislation will have to be done in response to a genuine crisis, and probably be done in the early days of a new Administration with a new Congress. Waiting for 18 months for the First Lady to draft something with her buddies won’t cut it, not least because the crisis may go away. (That’s what happened in 1994 and that’s the real untold story of the Clintons’ failure).

In that case there’s probably no time to do anything more complex than to create a universal Medicare-for-all that takes in everyone, allows people to buy supplemental insurance at the margin to pay for nicer waiting rooms (as in the UK), and fixes prices for providers at the prevailing rate, with some tough caps in the out years to contain costs. That’s how we’ll get it done. 

The real issue will be how does it get reformed to be a logical system beyond that. It’s taken the Brits 60 years to get to pay for performance, and we’re only just starting for Medicare. The real trick to get to better care will be the incentives to change medical care delivery, once everyone is in the same insurance risk pool, and payers and providers can’t run away from the cases they don’t want.

But, and this is a huge "but", the level of crisis that we need to be at to get this new Adminstration and new Congress elected to change the health care system will need to be very large indeed. I don’t think that we are anywhere close yet. Meanwhile we’ll meander around with HSAs, more uninsured and health care coming up on the 2008 radar, but not as a defining issue. So methinks the apparent optimism of some of my more liberal colleagues that something is gong to get done here just because GM is hurting understates the inertia in the system.

I’ll be writing more about the data behind the Clinton plan failure and what I think will constitute a crisis later.

Sometimes you just wonder how these press release lists get put together. The Pacific Research Institute, which with its fellow traveler organization the Fraser Institute, has been issuing nutty and just plain wrong "research" about Canadian health care for years, decided to start sending me press releases today. They now have their own blog (well it’s not alive yet but a press release is as good as, dontcha think?). The blog will explain why importing drugs from Canada is a bad idea and why paying more for drugs is a good idea.

Well as they’re nice enough to send me the release I went and looked at their annual report, and if you like pictures of Maggie Thatcher you should go look there too. It does worry me a little when Sally Pipes can only find Rick "Man on Dog" Santorum to quote effusive things about her health care work, but I guess you get praise where you can.

However, their press release also says that they solicit corporate contributions from the health care industry. No biggie, as I do that too (although I call it consulting work!), but you might get the impression that the "research" PRI conducts probably fits the views of certain parts of the health care industry very well. So well that I’m a little surprised PRI only manages to get 15% of its $4.1m budget out of the corporate sector–although it gets another $2m odd from "foundations" which may well be corporate-controlled ones too. But they’re not honest enough in the report to say who it is who’s coughing up.

What you really see from reading the report is that PRI has been somewhat effective in turning a small amount of money into either effective policy interventions or totally muddying the policy waters (take your pick). The end result is that whenever Canadian health care comes up, there is a loony cry from the right that manages to obscure a few basic facts, and makes sure that no rational conversation can be had here about real health reform. Even though the genuinely independent Lewin group showed that single payer would save money in California–a report that sank without trace. So to that extent, this little corner of the vast right wing conspiracy (in San Francisco no less!) is doing its job. Pity that PRI’s claim about individual freedom being the be-all and end-all don’t appear to have transmuted over to a stated position on the drug war or medical marijuana.  Perhaps they don’t notice where they are. The Independent Institute, a more intellectually honest libertarian think tank across the Bay has no such qualms.

In an article called  "Solved!" Vic Fuchs (and new-ish partner) Ezekiel Emanuel go into much more detail about their plan for creating a VAT-funded voucher system for health care. I’m moderately in favor of vouchers for health care and education so long as they are indiscriminate between public and private institutions (i..e don’t take money from public schools and give them to private ones). In fact the best of all worlds would have no "public" provision of either education or health care, but a voucher system that was closely controlled to make sure that inequality of geography and class was corrected. In other words you’d get a more valuable voucher if you lived in the ghetto than if you lived in the suburbs, which would encourage health plans and schools to set up there.

Having said that, I don’t think that Fuch’s plan has much chance of success in the medium term because I don’t think that Americans care enough about universal health care. More likely will be some kind of incremental legislation, such as that being discussed in secret by Heritage, Families USA et al. As I’ve railed many times on THCB, if it’s not universal and compulsory, no system will work in either reducing costs or reducing the number of uninsured, because the producers can keep on putting the prices (and services) up and the net result will be more people unable to afford insurance. So an incremental approach will not solve the problem for which a solution is being demanded (which is rising costs for the middle class rather than uninsurance for the lower class).

So in the long run this incrementalism will lead to a single-payer government funded (and possibly provided) system, which will have a defined and fixed budget–and may be administered via a voucher system  But it will take us a long time, or a national crisis to get there.  Who was it who first told me that health care reform only happened in times of national crisis?  Vic Fuchs.