Sunday, August 28, 2011

Are We Patients or Consumers?

"[There is] no difference between men, in intelligence or race, so profound as the difference between the sick and the well." 
F. Scott Fitzgerald, The Great Gatsby
"Everyone who is born holds dual citizenship, in the kingdom of the well and in the kingdom of the sick." 
Susan Sontag, Illmess as Metaphor
Advocates of consumer-driven health care contend that patients are consumers of health care and that choice of insurance plan forms the basis of a successful health care model. In their seminal book Redefining Health Care, Porter and Teisberg argue that CDHC champions err by focusing on consumer choice rather than value-driven care as the primary economic driver of competition in health care.

The question of whether we are patients or consumers need not be considered in such binary fashion, writes George Annas in The Rights of Patients: The Authoritative ACLU Guide to Patient Rights. The word "patient," Annas says, " the best term to describe an individual who is sick or injured and in need of medical care." Annas recognized the paternal implications of the term and agrees that it requires refining.

However, he also finds "consumer" wanting, writing that it best applies to healthy people physically and psychologically able to contemplate a choice of plans or elective procedures. An important reason why there has never been a sustained, effective, widespread consumer movement in health care is the when we are sick or injured, our first priority is to become well, and we are willing to cede rights that we might otherwise take for granted in order to regain health.

Moreover, public attention lies elsewhere: Advances in medical technology that delay death and increase the curative power of modern health care, costs, access, patient rights, and matters as basic as adequate time with physicians.

In short, we are consumers when well, and patients when sick.

(Source: The Rights of Patients: The Authoritative ACLU Guide to Patient Rights, 3rd ed.)

Sunday, June 26, 2011

State Profile: Court Blocks Indiana Law to Cut Planned Parenthood Funding

Federal judge Tanya Walton Pratt has overturned provisions of an Indiana law that blocks Medicaid funding to Planned Parenthood because some of its clinics perform abortions. In denying funding, Indiana invoked its authority to determine the qualifications of a provider. However, Judge Pratt responded that the services offered by a provider were unrelated to its qualifications and therefore not a legitimate consideration. She also cited a recent federal Medicaid ruling warning states that they could not exclude qualified providers simply because they performed abortions.

Although federal law already bans the use of Medicaid money to pay for abortion services, the Indiana statute goes further by refusing funding to “any entity that performs abortions or maintains or operates a facility where abortions are performed.” It calls for the immediate termination of state contracts with such providers, hospitals excluded.

On January 22, 1973, the Supreme Court issued the Roe v. Wade decision affirming a woman's right to an abortion under the due process clause of the Fourteenth Amendment. Subsequent rulings confirmed that the right exists up until viability. Although Roe v. Wade remains controversial, it has been the law of the land for almost forty years. While conservatives decry the heavy hand of the state as a health care regulator, Republican-controlled state legislatures have shown little compunction in passing laws intending to erode Roe and in effect restrict abortion rights.

Judge Pratt's opinion alludes to the likelihood that suits challenging the Indiana legislation were likely to prevail. Perhaps. But conservative judicial activism is driven more by ideology than legal interpretation. Is the eventual upholding the Indiana statute a foregone conclusion?

Wednesday, June 22, 2011

IOM: Six Aims of Quality Health Care

The balance of health benefits and harm is the essential core of a definition of quality.
Avedis Donabedian
In 2002, the Institute of Medicine published Crossing the Quality Chasman influential book that framed all future discussions of quality health care. Crossing came on the heels of the IOM publication To Err Is Human (2000) and a Journal of the American Medical Association report (1998) that warned of "serious and widespread quality problems...throughout American medicine." The report called attention to three broad categories of quality defects:
  • underuse, whereby scientifically practices are not used as often as they should be;
  • overuse, especially of imaging procedures and prescription of antibiotics; and
  • misuse, when a proper procedure is not administered correctly (such as prescribing the wrong drug)
To Err Is Human estimated that as many as 98,000 people dies each year in hospitals from injuries or illness contracted during care.

In Crossing, the IOM outlined six specific aims (explained by Dr. Donald Berwick in the video above) that a health care system system must fulfill to deliver quality care:
  1. Safe: Care should be as safe for patients in health care facilities as in their homes;
  2. Effective: The science and evidence behind health care should be applied and serve as the standard in the delivery of care;
  3. Efficient: Care and service should be cost effective, and waste should be removed from the system;
  4. Timely: Patients should experience no waits or delays in receiving care and service;
  5. Patient centered: The system of care should revolve around the patient, respect patient preferences, and put the patient in control;
  6. Equitable: Unequal treatment should be a fact of the past; disparities in care should be eradicated.
Recognizing that aims must be accompanied by observable metrics, the IOM defined sets of measurements for each aim. For example:
  • Safe: Overall mortality rates or the percentage of patients receiving safe care;
  • Effective: How well evidenced-based practices are followed, such as the percentage of time diabetic patients receive all recommended care at each visit;
  • Efficient: Analysis of the costs of care by patient, provider, organization, and community;
  • Timely: Waits and delays in receiving care, service, or results;
  • Patient centered: Patient and family satisfaction;
  • Equitable: Differences in quality measures by race, gender, income, and other population-based demographic and socioeconomic factors.
Of course, this is all easier said than done. Hospitals could more easily follow evidence-based practices were there a national outcomes data base that provided population-based information. Effecting efficiency programs can mean a complete redesign of institutional culture, as in Virginia Mason's (Seattle) 20-year commitment to Lean management principles. Equitable care is unlikely without a sea change in national health policy (not that there is one) that extends well beyond the limitations of the Affordable Care Act.

The most encouraging developments in the industry-wide reassessment of quality are the recognition that safety and efficiency need not be mutually exclusive, an increased capacity for the practice of evidence-based medicine, and a new emphasis on patients when it comes to setting goals and measuring results.

Source: The Healthcare Quality Book (2nd edition), edited by Elizabeth R. Ransom, Maulik S. Joshi, David B. Nash, and Scott B. Ransom.

Friday, June 17, 2011

Paul Ryan on Single-Payer

As Sam Husseini reports, there is a fair amount of floundering and disingenuousness in Ryan's remarks. It's not the case, for example, that government-run health care has failed wherever it's been tried. The actual track record of government-run health care is good, including in the United States: The VA health care system is highly regarded. Moreover, Ryan's own plan is "patient-centered" only in the sense that it shifts costs onto patients without doing anything to slow medical inflation or end fee-for-service payments.

Also, anyone who thinks that U.S. health care is not rationed hasn't been paying attention. Ryan would state his case more honestly (and accurately) if he said what he apparently believes: De facto rationing by the free market is acceptable, while policy-based rationing by government to assure equal access is not.

Friday, June 10, 2011


David Brooks argues that the future of health care comes down to "centralized technocratic" planning or a a free market solution. Health care, he sagely observes, is "phenomenally complicated," then goes on to inform us that providers have more information than patients and that insurance companies "are rapacious and are not in the business of optimizing care."

Brooks then compares what he calls the Affordable Care Act's concentration of cost-control power into a board of fifteen experts with the Republican laissez-faire model, which opposes top-down decision making (at least from the government). Rep. Paul Ryan's proposal to finance U.S. health care with a "premium support system" would replace fee-for-service medicine (in fact, it would not):

Seniors would select from a menu of insurance plans. Their consumer choices would drive a continual, bottom-up process of innovation. Providers could use local knowledge to meet specific circumstances.
Brooks writes with great confidence that this will happen -- presumably due to the Magic of the Market -- without explaining exactly how or why anyone should buy this argument.

Jonathan Cohn points out that the Republican plan has a track record, and that it's not especially encouraging. He argues that Ryancare would effectively eliminate health insurance for elders and summons the 1959 congressional testimony of retired autoworker John Barclay:
We retired workers are very proud of being citizens of the greatest country in the world, but … we cannot think it is the greatest possible country when about 65 percent of the aged do not have any insurance to deal with their needs for hospitalization and medical care. Without such insurance, the retired person must pretty much exhaust any savings he has before he can get free hospitalization. This is a constant source of worry. Many of my acquaintances will not visit a doctor for minor illness because they have no money to pay for drugs. After they exhaust their savings they go on welfare to get medical aid, but then, in many cases, it is too late.
The real difference between Democrats and Republicans on health care is not, Cohn writes, between an idealized free market and Stalinist central planning. Rather,
The most salient difference is that Democrats would preserve Medicare's fundamental guarantee of health benefits at affordable prices. Republicans would not.
Meanwhile, Ezra Klein contests Brooks' claim that
...if 15 Washington-based experts really can save a system as vast as Medicare through a process of top-down control, then this will be the only realm of human endeavor where that sort of engineering actually works.
It happens all the time, Klein writes: Around the world, government-regulated and -planned health care has a excellent track record for controlling costs without sacrificing outcomes.

At The Economist, M.S. dismisses Brooks as well, and focuses on the distortion brought about by the marketing and advertising of drugs and devices. 

As I've written before, Ryancare substitutes ideology for honesty. Brooks sips from this cup of Kool-Aid regularly, rarely if ever pointing out that Ryancare is all in on controlling costs by shifting them to elders. If that's what the country wants, then it's what we should do. But how about being up front about the choice?

Monday, June 6, 2011


Paul Krugman writes that Vouchercare is not a "new, sustainable version of Medicare." It may be new and I suppose that its adherents can call it whatever they like, but its recipients would not find it especially sustaining.

Vouchercare, a.k.a. the Roadmap for America's Future, would starting in 2022 provide seniors with an average of $11,000 with which to purchase insurance. But there's a catch: That's $11,000 in 2012 dollars. To understand what that means in terms of actual purchasing power, calculate the present value of $11,000 using a discount rate based on historical medical inflation rates (3-5% over the last ten years):

  • At 3%: $8,135
  • At 4%: $7,431
  • At 5%: $6,753
Moreover, Ryancare vouchers are indexed to the general rate of inflation as opposed to the medical rate. The medical rate is historically higher. Suppose that the vouchers grow at an average rate of 3% a year for five years while medical inflation increases at a rate of 4%. Although the payout would be $12,752, the actual purchasing power will have dropped to $7,081. This table shows the declining actual value of the vouchers over 25 years given a medical inflation rate of 4% with the vouchers indexed to 3%:

  Payment Value
Year 1 $11,000 $7,431
Year 5 12,752 7,081
Year 10 14,783 6,747
Year 15 17,138 6,428
Year 20 19,867 6,125
Year 25 23,032 5,836

The Center on Budget and Policy Priorities, using the CBO assumptions provided by Rep. Ryan, estimates that by 2080, Medicare benefits will have been effectively cut by 76%. And even that may be optimistic: Medicare currently operates with an administrative overhead of 1-2%. One organization estimates health insurance company overhead to be as high as 31%, all of which is passed on to purchasers in the form of reduced purchasing power.

So, Krugman is right: Vouchercare is not Medicare. It would be one thing if its adherents were forthright about their intent to gradually eliminate the government role as a health insurer for elders. Then we could have an honest debate, albeit one they would lose. But, as happens too often in the health care reform discourse, ideology has once again trumped honesty.

Saturday, May 21, 2011

Health Reform In Massachusetts

From the New York Times:
Mitt Romney’s defense of the Massachusetts health care reforms was politically self-serving. It was also true.
Despite all of the bashing by conservative commentators and politicians -- and the predictions of doom for national health care reform -- the program he signed into law as governor has been a success. The real lesson from Massachusetts is that health care reform can work, and the national law should work as well or even better.
Read the complete editorial here.

Anecdotal evidence suggests that finding a primary care physician for the first time will take a while, at least until Massachusetts can absorb all of the newly insured people. Although a familiar complaint from the left about the Affordable Care Act is that complete implementation takes too long, adding 32,000,000 people to the American health care apparatus by 2014 is realistically a very ambitious undertaking.

The health care infrastructure has evolved ("designed" is too kind a word) to accommodate different levels of insurance, with the uninsured and underinsured consigned to emergency care. (Which may or may not amount to much: By law, ED's must screen and stabilize anyone reporting to an emergency room for treatment. They must treat only if the screening identifies an actual emergency condition.) Until the infrastructure can adjust and provide an adequate number of primary care physicians and facilities, it's likely that many of the newly insured will continue to seek care in ED's.

Critics will cite what is a period of adjustment as evidence of failure, but the Affordable Care Act is a massive undertaking. Rushes to judgment will make no more sense than declaring the winner of a baseball game based on the score in the first inning.

Thursday, May 19, 2011

Reverse Deductible

A problematic byproduct of the American approach to health care has been the divorcing of a substantial number of patients from health care costs. Patients with low deductibles and extensive coverage have little incentive to moderate use of health care; many economists believe that this contributes to medical inflation. Policy analysts from across the political spectrum have recommended higher deductibles as a antidote.

Yesterday during a talk at the University of Washington, Kaiser Permanente CEO George Halvorson turned this argument on its head. Deductibles, he argued, should reflect the French approach and come only after payment had been exhausted. It works like this: Insurers cover a given procedure up to a standard amount. The patient pays anything in excess of that. Halvorson believes that this sets up a a situation in which doctors will compete to design procedures that charge the standard amount. Nothing prevents anyone from charging more for a blue-ribbon approach, but in that case the only people paying more would be those who chose to.

This one is new on me, and I don't know what the arguments against it would be. However, there are definite holes in the idea of charging higher deductibles. For one, companies that offer insurance with low deductibles and extensive coverage are unlikely to change this practice even though it would mean lower costs for them.

Businesses don't offer gold-plated benefits packages out of altruism: They offer such benefits because they are competing for employees. They're unlikely to adopt an approach that would put them at a competitive disadvantage; it would be penny-wise and pound-foolish for Google to lower benefits if that reduced their intellectual capital by putting them at a recruiting disadvantage with Microsoft. Thus, the very people who overuse the health care system would be unaffected by the high-deductible policy meant to curb their enthusiasm...

Halvorson, a Norwegian-American, favored the audience with a Norwegian joke: "Then there was the husband who loved his wife so much that he almost told her"...

Sunday, May 1, 2011

The New York Times: The Ryan Plan for Medicaid

Whatever you call this, it's not reform and -- except to its victims -- it's not serious. It is a thinly disguised way for the federal government to wash its hands of the health care needs of 60 million Americans by driving them further into poverty.

The real problem with Medicaid is that it is being overwhelmed by an economy that generates poverty as rabbits generate more rabbits. Today, more than 60 million Americans receive Medicaid, and many economists and sociologists argue that the United States' antiquated definition of poverty keeps as many as 30-60 million more from Medicaid eligibility.

The GINI coefficient has measured income inequality since the 1920s. Without going into a lengthy statistical discourse, the closer a country's measurement to zero, the less its disparity in income.  Sweden has the lowest GINI coefficient (23); the US measure of 45.7 is markedly higher than any country in western Europe, higher than that of Jamaica, equal to Uganda's. Moreover, in the last fifteen years the European Union has declined slightly (from 31.2 to 30.4) while America's has grown from 40.8 to 45.7.

To truly reform Medicaid, the US must reduce the number of people who need it by implementing policies that build the middle class instead of eroding it.

Sunday, April 24, 2011

The New York Times: A Real Choice on Medicare

The New York Times editorializes on competing plans for the future of Medicare:
We know it is not how most people want to spend their time, but Americans need to give a close reading to the Democrats’ and Republicans’ plans for Medicare reform. There are stark differences that will profoundly affect all of our lives — and clear political choices to come.
Click here for the complete editorial, which lays out the differences and similarities between the Democratic and Republican plans for the nation's 46-year commitment to old age health care:
President Obama wants to retain Medicare as an entitlement in which the federal government pays for a defined set of medical services. The Ryan proposal would give those turning age 65 in 2022 “premium support” payments to help them buy private policies. There is little doubt that the Republican proposal would sharply reduce federal spending on Medicare by capping what the government would pay at very low levels. But it could cause great hardship by shifting a lot of the burden to beneficiaries. The Congressional Budget Office estimates that by 2022 new enrollees would have to pay at least $6,400 more out of pocket to buy coverage comparable to traditional Medicare.
It's an open question as to whether either proposal is the right one. Congressman Ryan's proposal would, as the Times points out, reduce spending on Medicare. It would do little, however, to reduce spending on health care as costs would simply be passed from the government to the elderly.

Unless their use is mandated and heavily regulated, the insurance vouchers are likely to be practically worthless. Individual health insurance is sold on the basis of experience-rated premiums, meaning that the claims experience of the relevant group dictates the price of an individual premium. No group requires medical care more than the elderly, and their premiums will reflect a pool consisting only of the elderly. The CBO estimate for 2022 reflects only the first year of Rep. Ryan's plan. By design, in subsequent years the value of the vouchers increases at less than the rate of medical inflation; over time, they will purchase less and less insurance. Thus, even if premiums don't go up, coverage will go down at the time of life when people need it most.

What about President Obama's proposal? Economist Laurence Kotlikoff argues that we have already passed the point of no return regarding Medicare, and that even well-executed reforms will be too little too late. Given the proven power of medical, pharmaceutical, and insurance lobbyists and given Congress' unwillingness to turn Medicare reform over to an independent commission, it's easy to imagine that many if not most reforms will be hobbled right from the starting gate.

At the end of the day, the best way to reform Medicare may be to eliminate it as a vehicle dedicated to elder health care (as the Republicans propose) and put in its place either a single program of basic benefits that covers all Americans or strong incentives to individual states to tailor universal coverage to their needs and sociopolitical culture.

Friday, April 22, 2011

Paul Krugman: Patients Are Not Consumers

Paul Krugman writes:

How did it become normal, or for that matter even acceptable, to refer to medical patients as “consumers”? The relationship between patient and doctor used to be considered something special, almost sacred. Now politicians and supposed reformers talk about the act of receiving care as if it were no different from a commercial transaction, like buying a car — and their only complaint is that it isn’t commercial enough.
What has gone wrong with us?

More here.

Consumer Driven Health Care advocates legitimately point out that health care's supply-driven economics insulate patients from costs and thereby increase them. However, CDHC counts on a degree of health literacy that isn't possible under the best of circumstances, and the United States doesn't have the best of circumstances. For example, patients rarely have access to care outside of their insurance plan, meaning that quality and competition is subject to financial penalty. Moreover, there are no standards with which patients can compare costs and quality, and even if there were, there's no way to access them.

Negotiating the U.S. health care apparatus is a daunting task for medical professionals. How can people facing potentially mortal conditions be expected to do it?

Saturday, April 16, 2011

Canadian Critique: A Response

One hardly knows where to begin. Although he claims to be Canadian, Mr Bugos apparently remains ignorant of the fact that Canadian health care is not socialized. Of course, he also believes that anyone disagreeing with him is either a socialist or -- worse -- a Soviet. 

I appreciate that Mr Bugos is Canadian and that I am not; however, this renders his at times factual mischaracterization of Canadian health care all the more baffling. Essentially, his argument is one long assertion without supporting data; also, he states things like “economics teaches us” as if he were advancing a truism rather than a debatable point. A couple of observations:
  • Unlike the Veteran's Administration in the United States, Canadian health care is not socialized: The government does not own and operate the means of production or service. Instead, the thirteen provincial and territorial governments administer tax-financed insurance a la Medicare (the name of the Canada’s health care system) to reimburse private providers. Thus, there is no "state monopoly in the provision of Medicare." The national government serves to set standards and to negotiate on behalf of the Canadian people. That's a good thing;
  • The genesis of the Canadian health care system goes back to the mid 40s. It arose as a result of need, not a left-wing scheme to undermine the free market. Canadians believed that the free market had failed to provide equal access to quality care. The system that emerged is a statement of pragmatism, not ideology;
  • Government regulation of health care is the common denominator of the health care systems of every developed nation. All -- even the United States -- have concluded to varying degrees that the health of their country and the people who reside there cannot hope to succeed based on rates of return;
  • Canadians like their health care system. In 2003, 57% of Canadians reported satisfaction with their health care, compared with 25% of Americans. (Danes, who have a true socialized system, register the highest degree of satisfaction at over 90%);
  • The World Health Organization does not share Mr Bugos' assessment of the poor quality of Canadian health care: It ranks their system ahead of ours (30th to 37th). Canadians live longer than Americans and have a healthier life expectancy. Their maternal mortality rate is lower than ours, and they even smoke less. And, of course, Canada accomplishes this while spending less than we do. Mr Bugos' understanding of quality seems to have the same relationship to reality as the Land of Oz;
  • Canada’s health care system reflects a national egalitarian ethos that exceeds that of the United States or even France;
  • The argument that American health care somehow serves as a safety valve to relieve pressure on other systems is a canard never accompanied even by anecdotes, much less actual evidence. I am immersed in this stuff, and have yet to see this particular claim seriously advanced. Here is an anecdote: One of my MHA colleagues is an interventional cardiologist, i.e., a heart surgeon. By no means is he the class liberal. Someone asked him if he had many Canadian patients fleeing the supposed inadequacies of Canada’s secondary care. He was genuinely puzzled by the question. Even someone extremely wealthy, he explained, would think twice about paying 100K for a procedure that would be performed in Canada both free and perfectly well;
  • Why does Mr Bugos cite 1904 AMA restrictions as an example of unwarranted state intervention? The AMA is a private organization. This is a case of the market imposing artificial controls, not the state;
  • American history suggests that when the money gets big enough (i.e., railroads, oil, telecommunications), unregulated markets will consolidate until a few major competitors emerge as price setters, a development in health care that most Americans would find unacceptable. Mr Bugos does not address this as even a possibility even though history suggests that it is a likelihood;
  • Mr Bugos writes that the United States government "forced" employers to contribute to health care, the presumes to lecture about what "economics teaches us." Had Mr Bugos passed his freshman Econ class, he would know that payroll taxes are inevitably passed on to consumers. Moreover, Mr Bugos ignores altogether the impact of the Revenue Act of 1954, which established a tax exemption for employer-provided health care benefits. In what way is that government coercion?
  • In the same paragraph. Mr Bugos accuses the United States government of sabotaging the free market, then touts its relative freedom. Admittedly, by then I didn't know whether he was coming or going either.
Overall, Mr Bugos makes an argument typical of the ones advanced by privatizers: It assumes a debatable premise and proceeds from there, rather than constructing a theory supported by underlying data. The result consists of cherry-picking, ad hominem attacks, and straw men. 

Thursday, April 14, 2011

Canadian Critique

An associate recently forwarded the following critique of Canada's health care system, written by a Canadian Ed Bugos:

A subscriber and friend, Laurence Hunt (who has his own blog here, who lives in Canada, as do I, made some comments to the effect that the Canadian socialized medical system is better than a free market medical system.This is a very prevalent attitude in Canada.  Here was the main thrust of his argument:"The Canadian system delivers world class healthcare at half the cost due to disintermediation. The system is run like infrastructure, like the highways, and is more economical.   I'm still an advocate of government running infrastructure, as there has to be a method of collective participation. I do think that without government, the bullies would be in charge (they are hard to restrain under any system). Nothing is perfect, including freedom."The following is my response: 
Laurence I respectfully disagree with your comment. First, we would hope that healthcare is ultimately not run like "infrastructure," especially not like the highway system.  A warlock of Austrian Economics, Walter Block, who wrote a book lobbying for a return to private roads and highway, notes:"If the highways were now commercial ventures, as once in our history they were, and upward of 40,000 people were killed on them annually, you can bet your bottom dollar that Ted Kennedy and his ilk would be holding Senate hearings on the matter.  Blamed would be "capitalism," "markets," "greed," i.e., the usual suspects. But it is the public authorities who are responsible for this slaughter of the innocents."   
Aside from your comment on "infrastructure", if you are going to compare the Canadian system to the US system we need to first recognize the difference. In Canada there is a state monopoly in the provision of medical care (though not in the provision of essential goods to the medical system monopoly).In America they have had increasing state intervention into the medical industry starting with the AMA who in 1904 limited the number of doctors entering the field and closed down a bunch of schools.  This was done in the name of protecting the consumer, but in reality the doctors got together and did it to raise their incomes.They essentially created a labor monopoly within a private system.  This is typical, by the way. In Canada the state likes to control the industry; in the US monopoly power is doled out by the state but usually vests in private hands - so up here you have state monopolies and crown corporations while down there you have antitrust and cronyism...or "state capitalism" (or corporatism) - in Russia you have oligarchs. Progressively, over the years, the US government eventually forced employers to contribute, then granted the power of licensing to the states, and began to underwrite (subsidize) medical care demand a few decades ago.
Economics teaches us that when you restrict supply and subsidize demand you will get shortages and higher prices - and that's even before we throw the Fed into the mix.  The so called free market medical system in the US has been progressively sabotaged over the past century.  The universal coverage - Obamacare - is just a final straw.So the high price of medical care has nothing to do with it being relatively more private in the US than in Canada - in fact economics teaches us also that prices would fall if the industry were free from government.  So make sure to put the blame for the high cost where it belongs: on government regulation and subsidy, as usual. 
As for Canada's healthcare system costing half as much, undoubtedly the figures do not account for the lower 'quality' and the greater shortages we get here. So in reality you are getting half as much too. As the US system is more socialized you will find that our medical costs not only start to rise more, but also, their quality/availability will fall. 
Like it or not Canada has been a big beneficiary of the innovations of the relatively freer market down south in this industry.  I can attest to that personally.  If you slow down those innovations, because, say, the system is totally socialized, then our state monopoly system will suffer as well.That is, costs will rise and quality will fall.The soviets were the first to try out universal medical care.  As one of Gorbachev's economists pointed out, the system basically deteriorated to the point where a black market developed based on bribery - outside of which the doctors would quip that their patients "pretend they are paying us and we pretend we are working".  And if you were dying, they pushed you out the door so that the hospital statistics wouldn't look bad. The only reason this hasn't happened in countries like Canada that have adopted a similar system is that the rest of the economy here is not centrally planned.  Thankfully, there is a relatively free market in the goods that supply the medical provider monopoly.  And the state is loosening its grip on some provisions lately.
But the main point is that it is a matter of economic law that a private system in medical care would result in lower prices and better quality.  After all, all we want is to allow competition.  It's a ridiculous argument to say that we are better off because our government restricts competition.  Effectively, that is what our system is.In regard to your comment that "nothing is perfect, including freedom," of course you are correct.Undoubtedly nothing is perfect.  Let's not put that stick man up.  The socialists are always criticizing the imperfections of the market but the idea is not to achieve perfection.  Neither Jeff nor I nor Mises would claim the market is perfect.  Far from it. It is a matter of what is better - a state monopoly service or free market competition. 
The socialists will decry the quality of movies produced by Hollywood or the books written in a capitalistic society.  No doubt that in many cases they can produce better quality stuff - even better quality goods - if it were planned.  But the market may not want the "best" quality goods.  In a free system it gets what it wants.People get what they want.I hate what Hollywood produces personally, and it does show that the majority of people (the market) has bad taste, etc.  That doesn't mean that I would favor a centrally planned movie industry.  It would produce movies no one would want to watch even if by someone's standards they would be considered perfect.I'm sure that a centrally planned body could build better cars than we have on the road -but would everyone get one?  Would it be as cost effective without any competition?  In a market economy you would have goods that are near perfect that only a few millionaires could afford - like the Lamborghini - and you would havegoods like the Hyundai that everyone could afford.  You would have a full range for everyone.  This is just not possible through a state monopoly.We'd all either be driving the Yugo or only the despots would be driving their perfect autos.But one thing is for sure - apodictic  - competition ensures that the costs of providing goods is lower than it would be otherwise. 
In regard to your comment about the Government needing to intervene or we'd all be taken over by bullies.  How ironic to say that bullies would take advantage in a voluntary society so let's replace voluntarism with a coercive apparatus that prevents free competition.  Whenever the state controls an industry it is the coercive apparatus that is used instead of voluntary decisions that are being made.This stuff about a "bully" is another socialist tactic.  They've been using it on essential services since time immemorial.  It's almost as bad as the first stick man you used above!  But it's okay.  We're indoctrinated that way up here in Canada.  Unless you have read Mises and Rothbard you're defenseless against the socialists. In order to discredit the myth about bullies in a free market system one of my favorite authors, Frederic Bastiat, used to say: "In war, the stronger overcomes the weaker.  In business, the stronger imparts strength to the weaker."  This is 100% true.   
It is pure irony to say that the state protects the weak from bullies. The state is the biggest bully of all. It's this simple.  If you would not put the state in charge of providing electronics goods why put them in charge of providing ESSENTIAL goods?  Explain to me how anyone is "bullied" in any other industry that we'd agree was a free market industry.  I don't see it.  I see that businesses are accountable to consumers.  I also see that government is not.  I pay FEDEX for any important mail.  The post office is a great example of how government does things. Sure, it all looks great as long as there is no free market alternative. 
Free market medical care would be cheaper and it would be better.  It would be better all around.  I don't expect anyone to agree.  No one agrees, after all, that we could eliminate recessions altogether by going to a real gold standard.  They don't buy it because we've had a gold standard but we still had recessions.  For the same reason, people won't buy that a true free market would be 100 times better than what they call free medical care! They don't buy it because they see the so-called private system in the US costing more.  But they fail to credit the state with that problem, just like they failed to acknowledge that the gold standard of old was rigged too. For every story about a private doctor not treating someone, say, because the customer has no money, there are a dozen such stories under universal medical care systems where patients in dire need are either shoved out the hospital door or discharged by a death committee or otherwise mistreated.  There are many stories.  I can tell you from experience with markets in general that if I had a heart attack and no money I'm confident that the doctor in a free market system would still help me even if he wasn't going to get paid. Charity is something only a free market system can afford.

 I'll respond to Mr Bugos later in the week.

Monday, April 11, 2011

Rationing of Health Care

The cost of eliminating all medical needs, no matter how small, means forgoing the benefits of spending those resources to meet other needs, such as food, clothing, housing, and education. Forgoing these other needs is the real cost of fulfilling all of our medical needs. As no country can afford to spend unlimited resources on medical services, each society must choose some mechanism to ration or limit access to medical services.
Paul J. Feldstein, Health Policy Issues: An Economic Perspective
The question, then, becomes one of fair and effective access. If health care must be rationed, how to ration it in order to ensure the best possible outcomes across a population?

What are the costs to the United States in terms of foregone food, clothing, housing, lost wages, and education? Currently, America spends about 18%, or 2.61 trillion, of its $14.5 trillion Gross Domestic Product on health care, by far the most in the world. This amounts to a per capita expense of about about $8,400. Switzerland, the next most lavish country, spends about 12% GDP on health care, or $5100 per capita. If the United States could reduce health care spending to 12% of GDP, it would have $870 billion for the aforementioned necessaries or to invest in the economy. It could also reduce the deficit by nearly three-fourths or effectively raise average household income by over $10,000.

Saturday, April 9, 2011

The Rise in Medical Expenditures (6)

What events occurred during the 1980s in both the public and private sectors to make the delivery of medical services price competitive?
The HMO Act of 1974 legitimized HMOs; the lifting of restrictive federal qualifications in the 1980s allowed HMOs to flourish.  Meanwhile, federal subsidies to medical schools increased the supply of physicians and exerted downward pressure on prices. The introduction of DRG payments incented hospitals to reduce length of stay and to monitor physician practices that increased costs.

Meanwhile, as the United States emerged from a recession, businesses eager to continue their recovery pressured insurers to better control the cost and use of services. Other practices, such as increased deductibles and copayments, prior authorization and length-of-stay reviews, and application of antitrust laws also contributed to a reduction of prices.

Thursday, April 7, 2011

The Rise in Medical Expenditures (4-5)

Why were HMOs and managed care not more prevalent in the 1960s and 1970s?
Organized medicine’s success in including the concept of free choice of provider along with state restrictions retarded the development of HMOs. HMOs preclude their enrollees from choosing any physician in a community, which is a violation of the free choice concept. The government thus could not make capitation payments to HMOs, further entrenching fee-for-service as the primary form of reimbursement.

What have been the federal government’s choices to reduce the greater-than-projected Medicare expenses?
Increased Medicare expenses left the government with three choices: (1) Raise the Medicare payroll tax and income taxes on non-elders; (2) require elders to pay higher premiums along with increased deductibles and co-payments; (3) reduce payments to hospitals and physicians. Although each risks antagonizing an important constituency, government efforts have focused on reducing payments. Some policies (ending free choice of provider and increasing the supply of physicians, requiring acceptance of either all or no Medicare patients) worked better than others (utilization review, restriction on investment in new facilities and equipment, limiting fee increases).

Next: What events occurred during the 1980s in both the public and private sectors to make the delivery of medical services price competitive?

Source: Health Policy Issues: An Economic Perspective (Feldstein)

Tuesday, April 5, 2011

The Rise in Medical Expenditures (2-3)

Why has employer-paid health insurance been an important stimulant of demand for health insurance?
The high inflation rate of the 70s began pushing employees into upper tax brackets. Employers responded by supplanting salary increases with additional health insurance, which is not taxable. This had the effect of stimulating demand and increasing prices.

How did hospital payment methods in the 1960s and 1970s affect hospitals’ incentives for efficiency and investment policy?
Medicare’s cost-plus-2% reimbursement for services gave hospitals little incentive for efficiency and great reason to expand services even if that meant duplicating services available in nearby hospitals. Meanwhile, physicians pressured hospitals to invest in new technology so that they would not have to refer patients elsewhere, and possibly lose them. Typically, patients covered by hospital insurance were hospitalized for diagnostic workups. Less expensive outpatient services were usually not covered.

Next: Why were HMOs and managed care not more prevalent in the 1960s and 1970s?

Source: Health Policy Issues: An Economic Perspective (Feldstein)

Sunday, April 3, 2011

The Rise in Medical Expenditures (1)

Paul J. Feldstein is Professor and Robert Gumbiner Chair in Health Care Management at the Paul Merage School of Business, University of California-Irvine. Feldstein has written six books and over sixty articles about health care, including Health Policy Issues: An Economic Perspective, a standard text in Public Health and Health Care Administration programs. Over the next few months, HealthMatters will publish responses to the discussion questions in Professor Feldstein's book, starting with:

What are some of the reasons for the increase in demand for medical services since 1965?
A) Medicare lowered out-of-pocket prices for elders, leading to an increase to an increase in demand for hospital and physician services.
B) In the late 1960s and 1970s, growth in income, the high marginal tax rate, and inflation (which pushed people into higher tax brackets) stimulated growth in private insurance. Employers took advantage of a tax subsidy to provide more before-tax insurance, which in turn stimulated demand.
C) As out-of-pocket expenses declined, patient incentive to worry about price declined, thus increasing use of services.
D) Advances in medical technology not only allowed patients with previously untreatable diseases hope for recovery, it increased their use of medical services.
E) The arrival of new diseases (such as AIDS).

Next: Why has employer-paid health insurance been an important stimulant of demand for health insurance?

Saturday, March 26, 2011

The Profit Motive in Health Care

In case there was any doubt, Gapenski and Pink's textbook Understanding Healthcare Financial Management spells out the decision drivers for profit and not-for-profit hospitals. They're specifically referring to capital budgeting, but the principles hold across the health care financial board:
Projects that will contribute to shareholder wealth should be undertaken, while those that will not should be ignored. However, what about not-for-profit businesses that do not have shareholder wealth maximization as a goal? In such businesses, the appropriate goal is providing quality, cost-effective service to the communities served. (A strong argument can be made that investor-owned firms in the health services industry should also have this goal.) In this situation, capital budgeting decisions must consider many factors besides a project's financial implications. For example, the needs of the medical staff and the good of the community must be taken into account. In some instances, these noneconomic factors will outweigh financial considerations. [Emphasis mine.]
What does this mean? Simply put, when it comes to the for-profit sector, health care is no different than any other business: Maximization of shareholder wealth trumps all other considerations, including the good of the community and medical staff needs. For not-for-profit health care institutions, conditions are the opposite: freed of the responsibility to shareholders, they may make decisions based on the needs of the community.

Champions of privatization contend that the very nature of the profit motive dictates that maximizing shareholder wealth and community good are congruent, and that decisions based on the former will lead inevitably to the latter. Skeptics point out that given a choice between the two, the community good will always come in second and therefore suffer. One might also ask that if decisions based on profit are inherently good, what exactly prevents decisions driven by community good from producing maximized profits?

Tuesday, March 22, 2011

Country Profile: Canada

I felt that no boy should have to depend either for his leg or his life upon the ability of parents to raise enough money. I came to believe that people should be able to services irrespective of their individual capacity to pay.
Tommy Douglas, father of Medicare, Canada's National Health Insurance system
Population 32,000,000

Government Constitutional monarchy based on parliamentary democracy

Health Care Model National Health Insurance

GDP 1.335T (2010 est)

% GDP Spent on Health Care 10.0%

Per Capita Income $39,600

Health Care Expense Per Capita $3,672

Health Care Expense Per Capita Normalized to Income of 50K $4,636

Life Expectancy (m/f) 78/83

Healthy Life Expectancy (m/f) 70/74

The health care writer T. R. Reid (The Healing of America) has described Canada's health care system as the paradigm for the national health insurance model. Its genesis goes back to 1910, when the Douglas family migrated from Scotland to Canada. A Winnipeg doctor chose young Tommy Douglas as the beneficiary of a new technique in orthopedic surgery, and a boy who had expected to limp through life suddenly had a normal stride.

But even then, the boy was troubled. Why him? Was it right that chance blessed one boy with health and left another crippled? The question gnawed at Douglas, and when he became governor of Saskatchewan in 1944, he instituted a hybrid form of the single payer model in which the government served as insurer while providers remained private. By 1961, every province and territory in Canada had adopted Saskatchewan's model. The Republic of Korea and Taiwan later followed suit, and in 1965, the U. S. Congress adopted the name of Douglas' model for the legislation that established Medicare. In 2004, a national poll named Tommy Douglas as the "greatest Canadian of all time."

  • Goals: Universality, public administration, comprehensiveness, portability, accessibility
  • Thirteen provincial and territorial single-payer systems varying approaches to financing, administration, delivery, and range of service
  • Eligibility for national funding dependent on meeting the five goals listed above
  • Heavy emphasis on equality of access regardless of income
  • High level of population health
  • Challenges: Aging population, medical inflation (especially pharmaceuticals), waiting times, shortage of health human resources
Canadian health care is organized around the federal government, provincial and territorial governments, and intergovernmental cooperation. Provinces fund hospitals, negotiate with physicians' association to determine remuneration, oversee public health, and may fund health research and evaluate new technologies. Intergovernmental councils and committee play a largely facilitative role, coordinating cross-provincial advisory committees and various national foundations and institutes.

Canada finances 70% of its health care services via a group of federal and provincial taxes, including an income tax, corporate taxes, consumption taxes, and targeted supplementary taxes called "premiums." The bulk of the remaining 30% comes from out-of-pocket payments and voluntary supplementary insurance.

Canada's primary care physicians serve as gatekeepers to the rest of the health system. Canadians are free to choose a PCP, and most choose based on long-standing family relationships. Recent reforms have extended selected primary care responsibilities to nurse practitioners. While the physicians typically work on a basis of fee-for-service, provinces are experimenting with alternative payment contracts based on such modernizations as 24/7 availability and telehealth applications for rural and remote areas.

In general, care has trended toward a discrete model wherein family physicians and community health facilities provide provide primary care, hospitals provide secondary and emergency care, and nursing homes provide long-term care.

Federal and regional authorities provide public health services, as defined by these six categories: population health assessment, health promotion, disease and injury control and prevention, health protection, surveillance (i.e., collection of health data to guide public policy), and emergency response.

The chief challenge facing Canada's health care system is well-known: Lengthy waits for diagnostic tests and non-acute surgical procedures and -- in some areas -- primary care physicians. In 2005, Canada's Supreme Court determined that the country's prohibition on private insurance limited access was therefore dangerous. The long-term effect on Canada's single-tier system remains to be seen.

Beyond that, Canada faces the vexing, worldwide issue of medical inflation. Its decision to address this by stinting on expenses has aggravated the issue of lengthy waits.

Despite issues with waiting times and mediocre survival rates on some chronic diseases, Canada ranks high in such aggregate indicators as healthy life expectancy, potential years of life loss, and survival rates from stroke. The 2005 court decision notwithstanding, Canada's commitment to equality of access remains the signature statement of its health care system. And it has provided an object lesson that Vermont may be taking to heart: Single-payer need not start at the national level. As T. R. Reid observes,
Universal coverage doesn't have to start at the national level. Once [Tommy] Douglas established free hospital care in a poor rural province and made it work, the demonstration effect drove other provinces to do the same thing. And once Douglas established his taxpayer-funded Medicare system to pay all medical bills in the province, the demonstration effect quickly turned Saskatchewan's idea into a national health care system that covers everybody.
WHO Ranking 30 (U.S. 37)

Click here to read more about Canada's health care system.  T. R. Reid's book The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care, includes a chapter on Canada.

Tuesday, March 8, 2011

State Profile: Vermont

Last November, Vermont voters elected Peter Shumlin as the state's 81st governor. Shumlin ran in part on a platform of health care reform in the state, which has absorbed one of the highest rates of medical inflation in the country. Since Shumlin's election, the Vermont General Assembly passed Act 128, which sets forth four goals for health care reform
  1. Universal health insurance coverage;
  2. Provision to every Vermont resident of an adequate standard benefits package and equal access to health care;
  3. Control of the rapidly escalating health care costs in Vermont; and
  4. Establishment of a system that prioritizes community-based preventive and primary care, as well as integrated health care delivery.
Vermont turned to Dr. William Hsiao to develop alternatives based on these principles. Hsiao designed Taiwan's health care system and has led or advised eight other nations on health care reform. He is one of the world's leading experts on health care economics and the implementation of health care reform. 
    Vermont's health care issues are acute: The medical inflation rate of 8% exceeds the national rate of 5%, with a predictable impact on employment, wages, and quality of care. While Vermont has a relatively high coverage rate of residents (93%), the state estimates that 15% of Vermonters are underinsured. Combined with the 7% uninsured, over a fifth of the state lacks adequate access to health care.
    In designing a plan for Vermont, Hsiao and his team operated within the parameters of six design factors:
    1. We must maximize federal funds for Vermont;
    2. There must be no increase in overall health spending and therefore all funding for the options must derive from savings;
    3. No option could result in an overall increase of the health care cost burden faced by employees or employers;
    4. No option could yield a reduction in the overall net income received by physicians, hospitals, or health care providers;
    5. The implementation of any option must move Vermont toward an integrated health care delivery system that allows for a transition to global budgets and risk-adjusted capitated payments;
    6. No option would entail changes for Medicare efficiencies in Vermont.
    Guideline 5 in tandem with the first and fourth goals of Act 128 form the crux of a successful universal coverage: Elimination of fee-for-service replaced by capitated payments that finance a delivery system based on primary care and preventive health.

    Hsiao has recommended that Vermont make significant structural changes in the way it delivers health care by adopting a single payer system funded by an employer-employee payroll deduction. Hsiao stated to the General Assembly that moving to single payer would by a conservative estimate save Vermont 25.3% in otherwise expected health care costs between 2015-2024. According to Hsiao, single payer in Vermont will
    • yield administrative savings because there will be one standard benefits package and one common system for payment and adjudication of claims;
    • significantly reduce instances of fraud and abuse within the system;
    • allow providers to share information about their patients more efficiently, resulting in considerable savings and reduce overuse of services, tests, duplicative procedures, as well as the negative impact of overtreatment and drug interactions. 
    • result in a favorable environment to reevaluate how medical malpractice claims are litigated and paid out. The opportunity to design tort reform, including the possibility of a no fault system, would reduce the practice of defensive medicine.
    (Note: Strictly speaking, the recommendation is single payer for that portion of Vermont's population that is not on Medicare or Medicaid.)

    As requested by the General Assembly, Hsaio's team designed packages of essential and comprehensive benefits based on these three principles:

    1. Reduction of financial barriers to provide access to all levels of health services;
    2. Emphasis on the need for prevention and primary care;
    3. Protect Vermonters against the risks of poverty and bankruptcy brought on by health care expenses.
    The comprehensive benefits package covers a range of services including prevention, primary and specialty medical care, mental health, other allied health services, prescription drugs, vision care, dental care, nursing home care and home health care. The essential package does not include nursing home care and home health care. For both packages, the cost-sharing burden on patients is light and based on co-payments. They also encourage employer-based incentives for a healthier workplace and preventive care, as well as a statewide initiative to promote healthier lifestyles. Hsiao estimates that the savings produced by changing systems will be more than adequate to finance either package of benefits.

    In terms of provider payment, the proposal recommends a transition to Accountable Care Organizations by first establishing a uniform payment method and uniform rates for all insurance plans. Eventually, the ACOs will negotiate payment rates for providers; the proposal recommends that primary care providers be paid on the basis on risk-adjusted capitation (wherein the providers receive a premium for each person in a population as opposed to charging fee-for-service to individual patients) and pay-for-performance. Specialists would receive a salary and bonus.

    The General Assembly anticipates passing some version of Hsiao's proposal. Vermont must also apply for a waiver from the Affordable Care Act, which the Obama Administration is expected to grant. Vermont would be come the first state to adopt single payer, and the second entity (after the Veteran's Administration). Meanwhile, Governor Shumlin's office released the following statement:
    Healthcare reform is tremendously important. The current system will bankrupt us, and bankrupt small businesses. In just 10 years Vermont has gone from spending $2.5 billion to spending $5 billion a year on healthcare. Yesterday the best Congressional delegation in the country joined Governor Shumlin to talk about how they will help Vermont get a federal waiver to make single-payer a reality. We are not asking for a penny more than we would otherwise get from the federal government, we are simply asking to be able to distribute that money to providers in a way that is more fair. The current reimbursement is not sensible. It is not fair to patients. It is not fair to providers.
    We are committed to moving as quickly as we possibly can. It is an ambitious goal but we need to get it done. And we will.

    Dr Hsiao's statement to the General Assembly is here. His team's complete report is here. Click here and here for reactions to the proposal.

      Sunday, March 6, 2011

      Conservative Health Care Proposal

      I came across this comment recently, which is a response to a question asking for a conservative alternative to federally based health care policy. I've been looking for a community-based conservative perspective to round out some of the views I've expressed; the author graciously acceded to my request to publish it on HealthMatters. 
      It's hard to lay out a program that will satisfy you given that you want something which deals with all issues better than Obamacare. But that rests on what your opinion if of those issues. For me, liberty is a major issue, for instance, but perhaps for you it is irrelevant to this debate. Still, there is an answer, though I doubt it will help you much.
      First is to figure out how we got to the point we have, where most people using medical services use a third party payer to pay the bulk of the cost. Tax code provisions is the answer, along with wage controls, all during WW2. This matters because if any commodity is provided to you at a cost lower than its actual cost (someone else has to pay the difference) then you are likely willing to use more of it (health care services) than you otherwise would if you had to pay the full amount yourself.
      So, if you want to control costs, which was a claim of Mr. Obama and which nothing has been done in this "reform" to do so, then you must connect the user of the service more closely to the cost of the service. Ah, but medicine is expensive, you might say. And you are right, but for most uses the costs are within the ability of most consumers to pay. Like regular check-ups, or visits to urgent care for colds, simple cuts, and so on. But you'd also want to connect consumers to those higher cost services more as well. Higher co-pays, higher deductibles, and so on, could help.
      Second, eliminate all tax preferences for medical care costs. Employers should get no tax benefit to provide medical insurance for you, OR, you should have to declare the benefit as income. But we should not be able to both deduct the cost as a business expense and not have you declare it as income. It's this kind of irrationality that has helped to lead us to an era where we feel entitled to someone else's money in order to gain some personal benefit with it.
      Third, for the millions in the USA unable to afford their own insurance, your state, or mine, but all states in total, should be able to provide intra-state benefits if they want. This is not a federal issue, and about the only thing, imo, that Romney gets right about this subject is that the feds have no constitutional authority to involve itself. How the states do this is up to them, but I would think that wise states might offer a refundable tax credit for state residents to buy their own major medical policy. But for those who want the benefit provided more directly I think there is a way to both help insure more people and cut costs.
      Provide a voucher to each person who qualifies that provides to them something slightly less that what a regional policy for their status might cost. And if, during the covered year, those people using those vouchers are able to use less medical care, and so save money for the state, we should reward their frugality with a "savings sharing" policy--for every dollar saved to the state the person in question might get some percentage, say 25%, of that amount. Say a year of coverage costs $5,000 where you live. Give the beneficiary a voucher for $4,200 and let insurers work out ways to provide coverage for less. But say you end up finding a plan for $3,500 that is suitable, so you save $700 for the government. Well, let's reward you with part of that amount, in your pocket.
      If taxes can be said to guide behavior, then certainly putting money into your pocket could guide your behavior too. So, everyone who wants coverage can get it, and incentives that would cause people to use less medicine though not punish them if they want to use more would be in place. More people covered, structural cost controls put into place which don't require some form of governmental rationing, and your liberty is not diminished. Add to that the fact that the US Constitution isn't once again peed on, and I think many conservatives would be right there willing to help.
      But, and I mean this sincerely, you really didn't want someone to present a valid alternative which solves the problems you claim exist and does it without the oppresiveness of a federal program, did you?

      Tuesday, March 1, 2011

      Kaiser Permanente Poll on the Affordable Care Act

      "Public opinion on health reform remains dug in this month, with the public roughly divided on the new law and partisans holding opposite views, a pattern that has been in place since passage last March. Overall, 48 percent of Americans have an unfavorable opinion of the law and 43 percent hold favorable views."
      "Three in ten say they want Congress to expand the law, not something high on the legislature’s agenda at the moment. And two in ten votel for the status quo – leaving the law to be implemented as enacted. On the other hand, four in ten want to see the law repealed – with half of those (19 percent) hoping to see it replaced with a “Republican‐ sponsored alternative” and the Republicans other half (20 percent) wanting no further action."
      "Even as there are ongoing legislative discussions as to whether implementation of the law can be effectively stalled by funding cuts inserted into this year's budget process, most Americans (61%)...oppose using the budget process in this fashion." 
      "...while the public in general is divided over whether to keep or repeal the legislation, if they could pick and choose, the large majority (roughly eight in ten Americans) would keep the provisions providing tax credits to small business, and upwards of seven in ten would keep the provisions that close the Medicare doughnut hole, provide coverage subsidies to those of low and moderate income, institute the new voluntary long term care insurance program known as the CLASS Act, and prohibit insurance companies from denying coverage based on pre‐existing conditions. Even among those who want to repeal the law, most say they would like to keep five of the seven provisions queried. The one provision that the public remains happy to repeal: the individual mandate, which 67 percent would be happy to strip from the law, even as many experts say that without it the system may not work as intended."
      Click here to read the complete report.

      Monday, February 28, 2011

      Lower Costs and Better Care for Neediest Patients:

      Lower Costs and Better Care for Neediest Patients: Atul Gawande reports from Camden, NJ, the one percent of patients account for a third of the city's medical costs. He also recounts the efforts of a Casino Workers Union to reign in health care costs and increase wages.

      Thursday, February 24, 2011

      Accountable Care Organizations

      The Affordable Care Act encourages experimentation with a new method of delivering health care called an Accountable Care Organization. Currently, Medicare/Medicaid reimburses under a payment method called fee-for-service, wherein providers receive payment for each visit, hospitalization, and procedure. A criticism of fee-for-service is that it encourages overtreatment and therefore overspending. Former Democratic Party Chairman Howard Dean, also a one-time primary care physician, says of fee-for-service,
      Fee-for-service medicine is the No. 1 driver of health-care cost inflation in this country, and everything else is such a distant No. 2 [that] it almost doesn't pay to debate about it. Fee-for-service medicine – that is 'the more I do, the more you pay me regardless of the outcome.' 
      Accountable Care Organizations offer an alternative to fee-for-service. Here, Medicare compensates an ACO with periodic payments for each member of a population served, based on that member's age and condition. The ACO would then pass along proportionate payments to its member providers. An ACO itself is more like a network than a formal organization -- think of the ACO as a general contractor and the providers as subcontractors.

      The underlying hope is that by removing the fee-for-service incentive to overtreat, ACOs will encourage communication among providers and decrease duplication of services, thus reducing costs. Skeptics note that provider-led efforts to manage costs are historically unsuccessful, and that as currently conceived require too much up-front financial sacrifice from providers and are not close enough to patients.

      The Boston Globe has a useful Q&A about ACOs here. Author, consultant, and futurist Ian Morrison offers his take here.

      Wednesday, February 23, 2011

      Money Won't Buy You Health Insurance

      Donna Dubinsky writes:
      This isn't the story of a poor family with a mother who has a dreadful disease that bankrupts them, or a child who has to go without vital medicines. Unlike many others, my family can afford medical care, with or without insurance.
      Instead, this is a story about how broken the market for health insurance is, even for those who are healthy and are willing and able to pay for it.
      Click here to read Ms Dubinsky's story.

      Co-founder of Palm, Inc and Handspring, Ms Dubinsky has been called "one of the most important businesswomen in the United States" for her pioneering work in the development and strategic marketing of handheld computing devices.

      Friday, February 18, 2011

      The United States of Obesity

      Click to enlarge.

      Obesity has reached epidemic proportions, and not only in the United States. In the wealthy world, only Finland and Canada have reversed national trends. Here, some estimate that as many as 60% of Americans are overweight and that more than 30% are obese. Obesity is a risk factor in cancer, depression, heart disease, diabetes, and even asthma.

      In their article "Halting the Obesity Epidemic: A Public Health Policy Approach,"Marion Nestle and Michael F. Jacobson make a series of public health policy recommendations in areas of education, food labeling and advertising, food assistance programs, health care and training, transportation and urban development, taxes, and policy development. I've selected one from each area to provide an idea of the complexity and extent of an issue that has little to do with individual willpower (see the others on p20, Figure 3 in the article linked above).

      • Require instruction in nutrition and weight management as part of the school curriculum for future health education teachers;
      • Restrict advertising of high calorie, low nutrient foods on television shows commonly watched by children 
      • Protect school food programs by eliminating the sale of soft drinks, candy bars, and foods high in calories, fat or sugar in school buildings
      • Require health care providers to learn about behavioral risks for obesity and how to counsel patients about health-promoting behavior change
      • Provide funding and other incentives for bicycle paths recreation centers, swimming pools, parks and sidewalks. (Note: We didn't let our kids walk to school, even though we didn't live in anything remotely resembling a high crime area and even though we lived near enough to school for them to walk. But they would have to negotiate too many arterials for us to be comfortable with the idea. So, they rode a bus.)
      • Remove sales taxes on, or provide other incentives for, the purchase of exercise equipment.
      • Produce a Surgeon General's Report on Obesity Prevention.
      Nestle and Jacobson made their recommendations ten years ago. We haven't gotten any thinner since.

      Click here to read what the Centers for Disease Control has to say about obesity (and to see more maps).

      Wednesday, February 16, 2011

      State Profile: Hawaii

      Based on what happened here to me, I don’t think there’s one thing wrong with the American health care system. It is working just fine, just dandy.
      -Rush Limbaugh, speaking about his experience with Hawaii's health care system. 
      Was the billionaire broadcaster correct about health care in Hawaii? And is it indicative of the health care offered by the other 49 states? Yes and no. According the American Human Development Report (2005), Hawaiians live longer than residents of any other state (81.4 years). According the New York Times, Hawaiians are bullish about a system that leads the nation in breast cancer cure rate and where insurance premiums are among the lowest in the country as well as the lowest Medicare costs per beneficiary, despite Hawaii's high cost of living.

      There's another major difference in Hawaiian health care, one that sets it apart from every other state: Employers must purchase health insurance for any employee who works more than twenty hours a week. All in all, about 90% of non-elderly Hawaiians have health insurance. (Elder Hawaiians are, of course, covered by Medicare.) Certainly, some employers duck the requirement by keeping hours under twenty a week or by simply refusing to pay. Others, though, are proud of the generous benefits afforded their employees.

      The law is simple enough: Employers provide standardized health plans with no co-pays, low deductibles, and limits to out-of-pocket expenses. This in turn results in low administrative costs of around 7%. Employers purchase either a pre-approved plan, one they select subject to approval, or provide a self-funded plan. They may share costs with employees up to 50% or 1.5% of an employee's gross monthly earnings.

      Hawaii does face problems with its health care system: The recession and the accompanying rise in unemployment has increased the number of uninsured, reflecting an inherent weakness in employer-based health care; the small hospitals of the outer islands face serious financial problems; and state health care benefits do not extend to long-term care, which has been plagued by a lack of liability insurance. Moreover, its geographic isolations and lifestyle may boost its outcomes. Nonetheless Hawaii's outcomes combined with its low cost of health care in a high cost-of-living state suggest the health and economic advantages of universal and equal access.

      Click here to learn more about health care in Hawaii.