Ken Thorpe writes in the NEJM on the uninsured. He’s been in the Clinton Administration, and he’s the author of the study that says the Kerry plan’s cost will be in the $650 billion range rather than the AEI’s $1.5 trillion estimate. So you can take his view the way you want to. But what he basically says is that both Bush and Kerry’s plans are incremental and neither of them will cure the problem of the uninsured. Then again I just had dinner with an (only) Fox-News watching, Bush supporter from Texas who told me –in all seriousness–that not only was my analysis of the health care system biased because the richest people in the world come here for their medical care (the Sultan of Brunei?) and so we have the best system in the world–whatever the Economist (which prefers the Swiss system) and WHO say (they rank the French first). He also told me that Iraq is in good shape, the Abu Grahib scandal wasn’t a big deal, all the networks are biased in Kerry’s favor and that uninsurance for 45 million wasn’t a problem. So given that’s the attitude of many on the Republican side (and I’m sure it is), it’s unlikely that this post is going to change many minds. However, Thorpe correctly says that:

Adults and children without insurance are given diagnoses at later stages of illness, receive fewer preventive and curative medical services, and have worse health care outcomes than those with insurance…..First, Kerry would extend coverage by Medicaid and the State Children’s Health Insurance Program (SCHIP) to people who are currently ineligible for such coverage — single adults and childless couples living below the poverty line and parents with incomes of less than 200 percent of the poverty line. He has also proposed extending the same coverage to more children by raising the cutoff level to 300 percent of the poverty line. Instead of continuing today’s federal–state matching arrangements in these programs, Kerry would have the federal government finance 100 percent of the costs of the expansion. Full federal funding is likely to result in higher rates of program enrollment.

This past week a progressive pressure group, Vote Kids, introduced several leading pediatricians in a Washington DC press conference to make a joint statement about children’s health care in America. The pediatricians included six past presidents of the American Academy of Pediatrics all supporting Kerry’s effort to extend coverage to all children. HHS Secretary Thompson responded to this week’s activity by calling the pediatricians “demagogues“ and said: “It is absurd and despicable that doctors are playing politics with children’s lives“. That sounds a little over the top to me, even though Sydney at Medpundit points out that some doctors (including her) don’t agree with the AAP on this. (Syd also has this great post on the relative risk of Vioxx, which I agree with BTW, showing my libertarian side…). Mitch Arnowitz from Vote Kids wrote to me saying:

8 million children and youth don’t have health insurance. We think that the present administration does not have a plan to provide health coverage to America’s children, and that their current tax and budget priorities are eroding hard won health care gains for children.

That statement is undeniably true so I’m going to respond to my Texan friend’s charge of bias by being biased in favor of the truth. I try not to use this blog as a soapbox, but try reading this story about a young woman born with a “pre-existing condition” who is disabled and has a terrible story, and you’ll understand why emotionally I feel that we need a single universal insurance pool for the most vulnerable. Kids are the cheapest and easiest to cover, and there is no way that even the crustiest Texan Republican can explain to me that its their fault if they are uninsured. So morally I think we should get them coverage.

You can give to Vote Kids, here. And in equal fairness you can give to Bush here. How unbiased is that?!!

UPDATE: Linkmeister Steve accuses me of going into “he said, she said” here without actually calling Thompson or Vote Kids on the truth. He cites a neat article from the Columbia Journalism Review, which tries to tell the truth on the candidate’s health care plan objectively rather than just allow each side’s spin to come out unhindered. The way it should be done is “he said, she said, we say”.

I honestly think I do the “we say” bit but let me reiterate. Vote Kids is right, in that there are more than 8 million uninsured kids and that uninsured kids (and adults) tend to be poorer and get fewer health services than insured ones. The KFF factsheet shows that. Tommy Thompson claims that Bush has done great stuff for kids–and to be fair the number of uninsured kids has gone down, due to SCHIP and Medicaid. But that’s not good enough, and the Bush “program” has no plans to further reduce that number. The Kerry plan, not that it’ll pass as is, does. And furthermore, insuring kids is relatively cheap and very good value in terms of future benefit to society–second only to getting them an education. We wouldn’t (I hope) as a society accept non-universal education for kids. At least Kerry wants to get us there for healthcare.

Proposition 72 is a referendum on the California pay or play bill that passed in the waning days of Gray Davis ill fate-second term before the Governator swept all before him a year ago. The Yes on 72 bill has been out with some TV commercials–most of their money comes from Unions while the players like Wellpoint are neutral. The opponents are the large fast food chains who would be forced to provide health care coverage to their workers. I listed out who was pro- and con a while back, with the those opposing having raised much more money, of course.

The bill won’t do too much about California’s uninsurance crisis–maybe putting 1.4 million out of 6 million uninsured into coverage. The problem is concentrated in smaller firms, who politically can’t be forced in providing coverage. But a band-aid on a wound is better than nothing for supporters of universal insurance. My feeling is that big businesses that do not offer benefits (e.g. the Walmarts of the world)are competing unfairly with those who do–while the taxpayer picks up the tab. A RAND study shows that 95% of businesses with more than 50 workers already offer insurance to their employees. (I mean offer insurance that is taken up, as offering insurance that the worker can’t afford is a cop out). But 15% of all workers in that size of firm do not get coverage, mostly because they can’t afford (see chart 9). The bill maxes out the workers premium share at 20%.

So it’s the big businesses paying low wages (i.e. fast food) that are being targeted here. And most of them can’t easily move, unless Los Angelinos are prepared to drive to Phoenix for their burgers. Of course the No on Prop 72 folks are keen to suggest that this bill will put mom & pop businesses under, but the bill doesn’t apply to businesses with fewer than 50 employees. So it’s a little amusing that the “No on 72” guys got caught faking their most seen ad. It was supposed to be a poor immigrant restaurant owner. But the restaurant in question wouldn’t be affected by the bill, and the “owner” was an actress. Oops.

For more on this and other California propositions see the California HealthCare Foundation site.

A couple of days back in a piece on HSAs I challenged someone, anyone to speak up for HSAs against this criticism from Don McCanne. While I’m not a straight single payer advocate like Don, we both believe in one risk pool/universal insurance. And HSAs destroy that concept. Here’s Don’s logic in full:

Imagine everyone having a health savings account (HSA) and a low cost, high deductible insurance plan. Now let’s fund our entire health care system, currently at $1.8 trillion, with the HSAs and high deductible plans. Keep in mind that 80% of health care costs are used by the 20% of individuals with serious acute and chronic disorders.

Current contributions for HSAs are capped at $2600 for individuals and $5150 for families. For illustrative purposes only, let’s assume that each individual has $2000 in an HSA. That means that the 294 million U.S. citizens would have $588 billion in HSAs. For the 20% with significant needs, their $117 billion would be rapidly depleted, having been spent of health care. The healthy 80% might use an average of $300 per person in incidental health care costs, depleting their accounts of $70 billion. The “beauty” of HSAs is that the $401 billion remaining in the HSAs of the 80% who are healthy will be converted into retirement pensions. That’s a great deal for the majority of individuals who remain healthy. But that removes about $400 billion from the $1.8 trillion that we are already spending.

HSAs will have funded $187 billion of the $1.8 trillion, leaving costs of $1.61 trillion for the catastrophic care of the 20% of individuals with greater needs. But after the HSA funds are removed from the equation, there is only $1.21 trillion left to pay for care that currently costs $1.61 trillion.

Where will the $400 billion shortfall come from? Not from most of those with greater needs since current health plans already fail to provide adequate financial security, and this would add an average additional burden of $6800 per person. The only practical solution would be to increase the premiums for the high deductible coverage to a level that would fund the full balance of the $1.8 trillion that we are spending.

There are two significant consequences of this. First, the low cost, high deductible plans would no longer be low cost. Second, there is a perversity of the fundamental principle of health insurance, in which funds of the healthy normally help to pay for care for the sick, in that, with HSAs, the funds of the sick help to pay for the retirement accounts of the healthy.

Landon Alger (the government employee you may recall from his contributions a few weeks back) took up the challenge, and just to really annoy The Industry Veteran, I’m printing it here. Interestingly enough there is a teensy bit of common ground between him and McCanne, the single payer advocate. I’m coming over all moderate and centrist. Perhaps I’d better go sit down. Here’s Langdon’s piece:

Single payer lunatic Don McCanne provides a simple example of what can happen when HSAs are applied on a macro-scale. The healthy 80% realize savings not just on health insurance premiums, but also on actual healthcare costs. They are definite winners (therefore implying a loser) that get a nifty new savings vehicle-a health pension. These individuals have no need for the single payer paradigm and would not benefit from such a system. For these 80%, the single payer system introduces inefficiencies and would add to our national healthcare expenditures.

The remaining 20% that need 80% of the healthcare dollars (these ratios are not set in stone and one of the goals of national healthcare policy should be to flatten the curve) are now definitely losing out at this point. They need the taxpayer subsidized single payer type system and aggressive, outcome-incentive based disease management programs on a national level. While it is surely difficult to implement a system where individuals must qualify into the “single payer system” (yes, I know, it’s really not pure single payer anymore), there is no definite exclusiveness of HSAs and single payer. McCanne isn’t wrong, just incomplete.

Additionally, current HSA law does have a few flawed provisions. The HSA should only be able to be used for healthcare costs, and not simply another IRA once a person gets to age 65. And at death any remaining HSA balance should be forfeited into the single payer system.