HealthMatters

Mitt Romney's Health Care Dilemma

2012-01-03T23:15:00.000-08:00

Tonight, Mitt Romney promised his Iowa supporters that as president, his first act would be to pursue the repeal of "Obamacare." Romney's dilemma is plain: The Affordable Care Act is also modeled after the Massachusetts Act Providing Access to Affordable, Quality, Accountable Health Care championed by then Governor Romney. In particular, Romney opposed mandated participation by employers in health insurance, insisting on individual mandates.

Romney's reasoning followed what was then traditional Republican logic: Requiring individuals to take responsibility for their health care eliminated free riding whereby the costs of uncompensated care are absorbed by the insured. Now, to be sure, there is plenty of free riding in American health care, and it goes beyond uncompensated care. For example, large companies use bargaining power to negotiate more favorable rates with insurers, who then pass the loss onto small businesses, the self-insured, and the uninsured. Moreover, since the self-insured do not receive a health insurance tax break, they subsidize the insurance of people with employer-provided insurance.

Senator Charles Grassley (R-IA) introduced employer mandates as an alternative to the Clinton attempt health care reform. According to Paul Starr in his book Remedy and Reaction, many Republican politicians supported individual mandates as recently as 2009. Since then, the party's desire to defeat President Obama and the ascendance of its libertarian wing has trumped a policy that has roots in the Eisenhower administration. As a result, Mitt Romney has been forced to repudiate a policy that he successfully effected in Massachusetts and that he once believed would help him run for president. If he can thread that needle, more power to him.

Are We Patients or Consumers?

2011-08-28T12:30:00.000-07:00

"[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, "...is 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.)

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

2011-06-26T06:49:00.000-07:00

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?

IOM: Six Aims of Quality Health Care

2011-06-22T10:11:00.000-07:00

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 Chasm, an 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:

Safe: Care should be as safe for patients in health care facilities as in their homes;
Effective: The science and evidence behind health care should be applied and serve as the standard in the delivery of care;
Efficient: Care and service should be cost effective, and waste should be removed from the system;
Timely: Patients should experience no waits or delays in receiving care and service;
Patient centered: The system of care should revolve around the patient, respect patient preferences, and put the patient in control;
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.

Paul Ryan on Single-Payer

2011-06-17T02:34:00.000-07:00

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.

Choice?

2011-06-10T00:16:00.000-07:00

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?

Vouchercare

2011-06-06T00:25:00.000-07:00

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 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.

Health Reform In Massachusetts

2011-05-21T03:06:00.000-07:00

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.

Reverse Deductible

2011-05-19T01:48:00.000-07:00

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"...

The New York Times: The Ryan Plan for Medicaid

2011-05-01T11:23:00.000-07:00

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.

The New York Times: A Real Choice on Medicare

2011-04-24T00:50:00.000-07:00

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.

Paul Krugman: Patients Are Not Consumers

2011-04-22T08:25:00.000-07:00

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?

Canadian Critique: A Response

2011-04-16T01:03:00.000-07:00

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.

Canadian Critique

2011-04-14T19:14:00.000-07:00

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.

Rationing of Health Care

2011-04-11T00:01:00.000-07:00

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.

The Rise in Medical Expenditures (6)

2011-04-09T00:01:00.000-07:00

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.

The Rise in Medical Expenditures (4-5)

2011-04-07T00:01:00.000-07:00

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)

The Rise in Medical Expenditures (2-3)

2011-04-05T00:01:00.000-07:00

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)

The Rise in Medical Expenditures (1)

2011-04-03T08:01:00.000-07:00

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?

The Profit Motive in Health Care

2011-03-26T20:25:00.000-07:00

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?

Country Profile: Canada

2011-03-22T23:02:00.000-07:00

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 get...health 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."

Overview

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

Structure

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.

Financing

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.

Delivery
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.

Challenges
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.

Overall
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.

State Profile: Vermont

2011-03-08T01:09:00.000-08:00

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

Universal health insurance coverage;
Provision to every Vermont resident of an adequate standard benefits package and equal access to health care;
Control of the rapidly escalating health care costs in Vermont; and
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:

We must maximize federal funds for Vermont;
There must be no increase in overall health spending and therefore all funding for the options must derive from savings;
No option could result in an overall increase of the health care cost burden faced by employees or employers;
No option could yield a reduction in the overall net income received by physicians, hospitals, or health care providers;
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;
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:

Reduction of financial barriers to provide access to all levels of health services;
Emphasis on the need for prevention and primary care;
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.

Conservative Health Care Proposal

2011-03-06T14:43:00.000-08:00

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?

Kaiser Permanente Poll on the Affordable Care Act

2011-03-01T09:59:00.000-08:00

"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.

Lower Costs and Better Care for Neediest Patients: newyorker.com

2011-02-28T13:56:00.000-08:00

Lower Costs and Better Care for Neediest Patients: newyorker.com 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.

Accountable Care Organizations

2011-02-24T10:20:00.000-08:00

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.

Money Won't Buy You Health Insurance

2011-02-23T01:03:00.000-08:00

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.

The United States of Obesity

2011-02-18T10:25:00.000-08:00

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).

State Profile: Hawaii

2011-02-16T09:56:00.000-08:00

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.

Battle Joined

2011-02-13T17:26:00.000-08:00

Jay Inslee

Rob McKenna

Last March, Washington state Attorney General Rob McKenna joined twelve other Republicans and one Democrat in suing to overturn the Affordable Care Act. McKenna, a rare Republican to hold statewide office in Washington state, has been AG for seven years and is regarded as the presumptive nominee for governor in 2012. Should McKenna be elected, he would be Washington's first Republican governor since 1985.

Historically, McKenna has positioned himself as what long-time Washingtonians call a "Dan Evans Republican," after the popular moderate who occupied the state house from 1965-1977. From this light, McKenna's decision to join the lawsuit seemed puzzling: The ACA is by no means unpopular in western Washington, where the great majority of the state's population resides. To be elected governor, McKenna must peel off a significant number of western Washington's Democrats and Independents. Why McKenna has risked alienating them and galvanizing liberal opposition in order to secure an eastern Washington base that he is in no danger of losing remains a mystery. On the other hand, McKenna has long thrived in an area that is a political Death Valley for Republicans, so there's little doubt that he took his position without long consideration.

McKenna's expected opponent, seven-term Congressman Jay Inslee (WA-1), lost no time in attacking McKenna's position on the ACA. (Disclosure: I have known Inslee since his election in 1998.) Warm and thoughtful, Inslee is no mean politician himself: In 1998, he drew attention from around the country when he campaigned against incumbent Republican Rick White's support of Bill Clinton's impeachment. (Arguably, MoveOn.org drew its name from Inslee's campaign.) Inslee defeated White in a close election, then in 2000 became the first Democrat in the history of the First District to win reelection. He has won every race since then by a comfortable margin. Unlike McKenna, Inslee has not positioned himself as a centrist: Inslee is an unapologetic liberal who also happens to be an effective representative.

And, he is a strong supporter of the Affordable Care Act. Inslee has been direct in opposing Washington's participation in the lawsuit and has worked diligently to make McKenna's active support of the suit an early issue. McKenna, Inslee says, wants to have it both ways: He advocates overturning the ACA while claiming to support its key consumer provisions. McKenna responds that the real issue is about the constitutionality of the law:

People sometimes forget what this lawsuit is actually about: the constitutionality of the health care law. That’s what every judge who has ruled on the matter understands. As Judge Vinson most recently observed, the health care law should be revised in order to make sure it does not violate the Constitution.

And as Attorney General McKenna has said, he does not believe that every section of the new law, including protections for those with pre-existing conditions, violates the Constitution. McKenna supports the need for affordable, accessible health care for the people of Washington and their families—he just doesn’t think we need to violate their Constitutional rights to give it to them.

So far, McKenna has not explained how the consumer protections he supports can be enacted successfully without the compulsory insurance at the heart of the bill.

In any event, the ACA is shaping up as a major issue in the 2012 Washington state gubernatorial election, as the expected main candidates include one of the bill's staunchest supporters and its most visible statewide critic. Both are formidable candidates whose strength will put Washington in the political health care spotlight in 2012.

Emergency Emergency

2011-02-02T00:01:00.001-08:00

This afternoon, I went on a hard-hat tour of a satellite emergency facility, expected to open next month as part of my local community hospital's health care system. Besides state-of-the art equipment, the building will house twenty primary care physicians, specialty care, a test lab, and a diagnostic imaging lab. Patients will sit in comfort in chairs that will unfold into examining beds, blood tests will occur on site with results returned as close to instantaneously as possible, and Electronic Medical Records will be instantly synced with the main hospital IT system.

The facility will include a conference room for group consultations -- for example, a dozen diabetics might meet with their doctor and a nurse for instruction in lifestyle changes. Should I have the misfortune to need the emergency room, the expected wait time is 15-17 minutes. This will be at least the fourth such facility in my suburban area to go with three hospitals, each of which has its own Emergency Department.

Obviously, this will be one of the better areas in the country to need emergency care.

Which at first blush makes stories like this all the more perplexing:

A 10-year old boy in Arizona had a severe asthma attack and couldn’t breathe. An ambulance was called, but all the hospitals near his home were full and on diversion, including two children's hospitals. The closest open hospital did not admit children, but opened to take him, even though it was also overwhelmed. While waiting for a treatment room to open up, the child waited in the hallway on the ambulance gurney for several minutes. He died in the hallway, before he could be seen by even a nurse, because all the staff were overwhelmed caring for other critically ill patients...

A patient was boarding in my emergency department, waiting for an inpatient bed to open in the hospital. His family gathered around him and was forced to make end-of-life decisions with him while he lay dying on a gurney in a hallway...

An elderly man came to the hospital with weakness, pneumonia and new onset of renal failure with very high potassium levels. He arrived at 10 pm and we were unable to move him to an ICU bed until 4 pm the following afternoon.

All over the country, Emergency Rooms face increasing pressure, although the reasons for this are more complex than one might think. Certainly uninsured people use the ER, but most patients have Medicare or Medicaid. Reimbursements have become so low that many physicians refuse to see Medicaid patients, and so they resort to the ER. The shortage of primary care physicians contributes as well.

Still, at a time when emergency departments are closing and urban wait times increase, it's not an accident that the facility I visited is located in a hospital district with a per capita income of over $100,000 or that there are nearly as many emergency facilities the greater suburban area as in the more populous urban core. At the end of the day, emergency care is rationed, too: The uninsured and underinsured who resort to urban emergency departments because they have no other choice have access of a sort, but it's hardly equal access.

The Tragedy of the Ten-Million Acre Bill

2011-01-29T00:27:00.000-08:00

President Franklin Pierce

I readily and, I trust, feelingly acknowledge the duty incumbent on us all as men and citizens, and as among the highest and holiest of our duties, to provide for those who, in the mysterious order of Providence, are subject to want and to disease of body or mind; but I can not find any authority in the Constitution for making the Federal Government the great almoner of public charity throughout the United States. To do so would, in my judgment, be contrary to the letter and spirit of the Constitution and subversive of the whole theory upon which the Union of these States is founded.

Franklin Pierce, in his veto of the 1854 Bill for the Benefit of the Indigent Insane

Though forgotten today and though issued by a one-term president whose name is synonymous with Oval Office mediocrity, the veto of the Bill for the the Benefit of the Indigent Insane became one of the most long-reaching vetoes in the history of the presidency. With it, Franklin Pierce derailed an early attempt to define a wide federal responsibility for the general welfare; the government would not seriously consider a broad role in this arena until forced into it by the social blight of the Great Depression.

Three times before, in 1848, 1850, and 1852, the great social reformer Dororthea Dix had petitioned Congress for a land grant that would fund asylums for the indigent insane. Three times, her request disappeared into the maw of conflicting interests and philosophies about the proper disposition of federal land. Only a few politicians considered her request from the moral angle. Finally, in 1854, she prevailed, only to see President Pierce veto the Bill for the Benefit of the Indigent Insane.

Pierce vetoed the bill on three grounds. First, he wrote, nothing in the Constitution authorized Congress to pass this kind of legislation. Second, however worthy the bill might be, enactment would open a floodgate of federal welfare legislation. Third, care of the indigent insane was properly the right and responsibility of individual states. Dix, of course, pursued the legislation in the first place because in her mind the states had abdicated their responsibility.

Dix used her powerful personality in the cause of social reform. Her organizing skills were limited, though, and she did not respond to Pierce's veto with a lobby or movement. Subsequent 19th C. progressives did not pursue health care reform of any kind even when they had the organizing ability. Because of the precedent set by Pierce's veto, the federal government did not significantly involve itself in social reform legislation until the New Deal (with of course the notable exception of the bills underlying Reconstruction).

And so Pierce, a president whom historians have described as "timid and unable to cope with a changing America," established the terms of a debate that resound today. In terms of promoting the general welfare, what is the proper extent of the federal role versus those of the states and private philanthropy? Or is the question itself disingenuous? In some matters, perhaps leaving the general welfare up to the states is a rationalization that accepts injustice in the interests of limited government and the advantages that brings to special interests.

For liberals and progressives, Dix's defeat taught a lesson that went largely ignored for 75 years: Congress is unlikely to pass social reform legislation out of a sense of moral imperative. Social reform legislation requires organization, a skill progressives finally mastered and applied during liberalism's great era stretching from 1933-1965. Today, despite the left's inability to mount a large-scale progressive movement, the lesson of 1854 is reflected in the efforts of thousands of community organizations across the United States. One of their members became president.

To read more about this fascinating episode in American history, see The Social Service Review, Vol. 36, No. 1, March 1962 (link unavailable).

Country Profile: Belgium

2011-01-28T00:01:00.000-08:00

Population 10,400,000

Government Federal parliamentary democracy

Health Care Model Bismarck

GDP 395B (2010 est.)

%GDP spent on health care 9.5

Per capita income $37,900

Health care expense per capita 3,563 (adj.)

Health care expense per capita normalized to income of 50K 4,700

Life expectancy (m/f) 77/82

Health life expectancy (m/f) 69/73

Overview

Goals: Increasing access, ensuring quality of care, sustainability of system
Universal access
Choice of provider
Broad set of benefits
Mix of public and private funding
Economic efficiency of delivery comparable to other European nations
Regulated at national level
Preventive care and health promotion delivered at regional and community levels

Structure

The Belgian health care system is organized around a "principle of solidarity" that recognizes no distinction between rich and poor, healthy and sick, with no selection of risk. Based on the Bismarck concept of social insurance, the system covers more than 99% of the Belgian population with more than 8000 services. Treatment decisions are made by doctor and patient, and patients are free to choose their own doctor.

Health policy decisions are split between Belgium's federal government, regions, and communities. The national government regulates and finances the system; among other responsibilities, regions and communities deliver public and preventive health and coordinate primary and palliative care.

Financing

Financing occurs through a combination of progressive taxation, social security taxes, a consumption tax, and out-of-pocket payments (20%). Six private, noncommercial sickness funds provide compulsory health insurance to all Belgians regardless of economic status, medical condition, or risk; a federal agency supplies a budget to the sickness funds. Patients make a co-pay to physicians or hospitals, which bill the sickness fund for the remainder. Occasionally, patients make an out-of-pocket payment.

Delivery
Although primary care is typically the first point of contact for a patient and the health care system, there is no formal referral system. Thus for many patients, the specialist is the initial contact. Ambulatory care practices are private and paid via fee-for-service.

Belgium offers two forms of hospitalization: general (acute, specialty, and geriatric) and psychiatric. Alternatives include day hospitals and long-term care facilities, as well as community services of the elderly and the mentally ill.

While communities have responsibility for most public health services, including education and preventive care, they have on occasion collaborated with the federal government to coordinate and finance public health activities such as immunization and breast cancer screening.

Generally, the federal government sets policy and sets targeted taxes. For example, Belgian taxes on cigarettes and alcohol are designed at the federal level to discourage consumption. However, Belgium's Flemish, French, and German communities establish policies for their particular health needs.

Challenges

Belgium's health care challenges are familiar: The elder population will double over the next 25 years, creating budgetary and capacity difficulties. Moreover, aggregate costs will rise as medical inflation continues to outstrip general inflation. As a result, the federal government and the community government will struggle to meet the commitments to access, quality, and sustainability.

Overall

According to the Brookings Institution,

Devoting only half as much of its GDP to health as the United States does, Belgium has created a flexible, public-private partnership to pay for and deliver health care that preserves many of the attributes that Americans desire: universal coverage; comprehensive coverage of physician services, hospital care, and prescription drugs; free choice of primary physicians and specialists; and acceptable waiting periods for non-emergency services.

WHO Ranking 21 (US 37)

To read more about Belgium's health care system, click here and here.

To Live Longer: Don't Smoke, Eat Less, Exercise More

2011-01-26T10:03:00.000-08:00

According to a National Research Council report, Explaining Divergent Levels of Longevity in High-Income Countries, life expectancy in the United States continues to increase, but at a slower rate than in the past. The most likely culprits are smoking and obesity; the latter may account from 1/5 to 1/3 of the reduced rate. According to the CIA World Factbook, the United States currently ranks 49th in the world in life expectancy. (Monaco, at nearly 90, is first.)

To learn more about life expectancy, click here.

In another study, Circulation: Journal of the American Heart Association reports that the costs of heart disease are expected to triple over the next twenty years. Combined costs in dollars and lost productivity are expect to rise from $445B today to $1.094T.

Principles of Efficiency

2011-01-25T10:54:00.000-08:00

So why is it that other countries deliver health care with greater economic efficiency than the United States?

For starters, it would be hard not to: The United States doesn't really have a health care system. It's a more like a fragmented, uncoordinated apparatus linked by a loose and often contradictory regulatory framework and characterized by both overtreatment and undertreatment.. A onerous administrative burden, health care driven by profit and not value, and the absence of several vital traits of an economically efficient system combine to give the United States the most expensive health care in the world, although by no means the best.

What are some of those key traits? Let's look briefly at two systems that are efficient, despite diametrically opposed approaches to universal access. The health care system of Finland (%GDP on health care of 8.5%, HCE of 7.6) is government-owned and -operated -- classic Beveridge Model socialized medicine. Singapore (%GDP on health of 3.4%, HCE of 21.5) is a public-private partnership funded by a combination of government subsidies, a limited NHI scheme, mandatory Health Savings Accounts, and out-of-pocket payments. Nonetheless, these two disparate systems have much in common:

a national health policy formed by a democratic process and directed by the national government
a commitment to universal access and care, regardless of ability to pay
an emphasis on preventive health based on primary care and public education
a strong government regulatory presence
targeted policies and incentives aimed at bolstering efficiency within the model (Finland, for example, has a pharmaceutical policy that rewards use of generic drugs.)

As we'll see again and again, these are vital elements in the successful delivery of health care based on value, a results-driven approach that Michael Porter and Elizabeth Olmstead Teisberg, in their influential book, Redefining Health Care: Creating Value-Based Competition Based on Results, that produces both quality and efficiency. (Click here to for Porter and Teisberg's excellent web site.)

So, it turns out that the road to efficiency is straight enough. Obviously, negotiating the obstacles of special interests along the way is another story.

HealthMatters will discuss each of these conditions in detail in later entries.

An Act for the Relief of Sick and Disabled Seaman

2011-01-22T00:01:00.000-08:00

President John Adams

In 1798, President John Adams signed the United States' first health care reform law -- An Act for the Relief of Sick and Disabled Seaman. The law authorized the creation of a government operated marine hospital service and mandated that privately employed seamen purchase health care insurance. Attorney and health care journalist Rick Ungar explains the law here. Click here to read it in its entirety (believe it or not, the law is but a little over a page long).

Which Country Has The Most Efficient Health Care System?

2011-01-20T23:27:00.000-08:00

This is a raw measure, but useful for comparison purposes. I've taken the Healthy Life Expectancy of 25 countries and divided it by their % of Gross Domestic Product spent on health care. This yields a result equal to the number of healthy years purchased by each per cent of GDP spent on health care. Let's call it the Health Care Efficiency Ratio:

HCE Ratio = Healthy Life Expectancy / % GDP Spent on Healthcare

Healthy Life Expectancy (HALE) is a statistic devised by the World Health Organization, defined as the "average number of years that a person can expect to live in 'full health' by taking into account years lived in less than full health due to disease and/or injury." HALE is always less than full life expectancy, typically by 7-9 years. (To read more about HALE, click here.)

For example, Norway spends 8.4% of its GDP on health care, and Norwegians have a HALE of 73:

HCE = 73/8.4 = 7.8

In Norway, each per cent of GDP spent on health care purchases 7.8 years of healthy life.

The following ratios are taken from 2006 statistics; because of population aging and medical inflation, each is likely lower now.

Singapore 21.5 (73/3.4)
Republic of Korea 10.9 (71/6.5)
San Marino 10.6 (75/7.1)
Luxembourg 10.1 (73/7.2)
Ireland 9.7 (73/7.5)
Japan 9.6 (76/7.9)
Finland 9.5 (72/7.6)
Israel 9.4 (73/7.8)
Spain 9.1 (74/8.1)
United Kingdom 8.6 (72/8.4)
Norway 8.4 (73/8.7)
Sweden 8.3 (74/8.9)
Italy 8.2 (74/9.0)
Iceland 8.0 (74/9.3)
Netherlands 7.8 (73/9.3)
New Zealand 7.8 (73/9.3)
Australia 7.6 (74/9.7)
Belgium 7.6 (72/9.5)
Denmark 7.6 (72/9.5)
Canada 7.3 (73/10.0)
Germany 7.1 (73/10.3)
Portugal 7.1 (71/10.0)
France 6.6 (73/11.1)
Switzerland 6.6 (75/11.3)
United States 4.6 (70/15.3)

At first glance, the most interesting trend is the clustering of the Beveridge Model countries toward the upper center of the list (7, 10-14, 19). Three NHI model countries (New Zealand, Australia, and Canada) are in the bottom half, but the Republic of Korea ranks second. (The World Health Organization does not have statistics for Taiwan, which also uses the NHI model.) Bismarck Model countries are at the top and bottom, although it should be noted that WHO ranks France as having the best health care system in the world. The French get what they pay for.

Apart from Singapore's astonishingly efficient delivery of care, the most salient point is the high costs associated with having no model at all: It's no accident that the United States is at the bottom of the list.

Next, HealthMatters will examine what the top rated systems do to ensure efficient use of their health care dollars.

Country Profile: Australia

2011-01-17T21:40:00.000-08:00

Population 20,000,000 (primarily urban)

Form of Government Parliamentary democracy

Economic System Capitalist

Health Care Model National Health Insurance (Medicare)

GDP $890B

% GDP spent on health care 9.7

Per capita income $38,420 (2006, adj US $)

Health care expense per capita $3,528

Health care expense per capita normalized to income of 50K $4,591

Life expectancy (m/f) 79/84 (as of 2006)

Healthy life expectancy (m/f) 71/74

Overview

Goals: Equity, efficiency, and quality
Tax funded
Ready access
Generally cost-effective, good outcomes
High level of public support
Concerns about long-term sustainability due to rising costs
Disagreements about funding and accountability between national and state governments
Waiting lists for elective surgery
Disparities in urban and rural care
Continuing poor health of indigenous population

Structure

The Australian health care system is a mix of public funding and public and private care. The national government's role is limited to funding and formulating health policy on a population basis. States provide additional funding, provide public hospitals, and have great authority in administration of health policy. Localities are primarily concerned with providing environmental health services. The private sector supplies the majority of general practitioners and specialists, a number of private hospitals, diagnostic services, and supplemental insurance.

Because of the division-of-power structure of Australia's democracy, the national government and the state governments must achieve consensus in matters of health policy. (Australia has six states.) Clinical practice is largely self-regulated, although licensing and accreditation is required of most providers.

Financing
The public-private financing breakdown is two-thirds/one-third, with the national government paying nearly half of health costs, collected through general taxation and a mandatory Medicare levy of 1.5% of personal income. The majority of consumer expense is for uncovered pharmaceuticals.

Delivery

Treatment is largely free and unlimited, although public hospital services are prioritized. Two-thirds of Australia's doctors are general practitioners in private practice; in addition to providing primary and preventive care, these doctors perform minor surgery and serve as referral gatekeepers to the rest of the health care system.

70% of the hospitals that provide secondary and tertiary care are public. Combined with cost pressures, improvements in surgical technique and patient management has reduced the average length of stay in recent years. The chief complaint about Australian secondary care is about lengthy waits for elective surgery, a function of the prioritization of services.

Australia's national and state governments have combined to deliver a robust public health program that has had notable success in reducing coronary disease, the AIDS/HIV infection rate, cigarette smoking, and the mortality rate from traffic accidents. Australians enjoy a high level of immunization vaccination that has reduced the level of infectious disease, although not entirely.

Challenges
As with virtually all developed nations, Australia's health care system faces financial pressure brought about by budget constraints and medical inflation. Health care services in Australia are not well integrated, and debate is ongoing regarding the proper balance of public and private insurance. The health inequalities experienced by indigenous Australians are so protracted and severe that the World Health Organization calls them "intractable."

Overall
Australia has three basic goals for its health-care system: Equity, efficiency, and quality. Progressive taxation protects equity, although there are concerns that a two-tier system could develop. The mixed national-state governance compromises efficiency and also renders reform difficult. In recent years, quality has emphasized measurement of health outcomes, which have improved as reflected in Australia's long life expectancy.

WHO ranking 32 (US 37)

Click here to learn more about Australia's health care system.

The National Health Insurance Model

2011-01-11T21:58:00.000-08:00

The National Health Insurance model places a foot in both the Bismarck and Beveridge camps. Like the Bismarck Model, it is insurance-based; like Beveridge, it is single payer. The most familiar application of National Health Insurance to Americans is Medicare: Employer-employee contributions are used by the federal government as an insurance fund. The government in turn pays private providers. That's the essence of the NHI model.

Because the government is the sole payer, it can exert tremendous bargaining influence on the prices of medical services and drugs. That's why Canada -- whose Medicare system is the most well-known version of NHI -- has cheap drug prices that lure Americans north of the border even though it is illegal to purchase prescription medication abroad. NHI countries generally control costs by limiting the services they will pay for and by limiting the availability of certain services, thus creating the lengthy waits for non-acute secondary care.

Therein lies the essential tradeoffs of the NHI model; to achieve universal coverage with cost controls, the government

strongly influences prices and therefore provider compensation
limits the services covered by the national insurance
limits the volume of selected services and procedures

Besides Canada, Australia, South Korea, and Taiwan have adopted the National Health Insurance model.

Preventable Deaths

2011-01-09T12:54:00.000-08:00

Of the top five countries, France and Japan provide health care via the Bismarck Model, Australia uses National Health Insurance, and Spain and Italy use the Beveridge Model.

Getting Health Reform Right

2011-01-05T00:01:00.000-08:00

Peter Berman, William Hsaio, Michael Reich, and Mark Roberts -- authors of Getting Health Care Right: A Guide to Improving Performance and Equity -- have consulted around the world helping countries design health policies and systems. (Hsaio was an instrumental figure in Taiwan's adaptation of National Health Insurance in 1995.) Over the years, the group has developed ten guiding principles for reformers:

Clarify goals and values. A health care systems is a means to a number of ends, and it's vital to articulate precisely what those ends are. Moreover, they must be achievable in a context that is both politically feasible and ethically sound.
Diagnose the root problem -- honestly. Work backwards from a problem until you've have identified its source, which might be anything from costs to corruption to apathy to ignorance of public health.
Build health systems, not just medical systems. A effective health care infrastructure is horizontal, based on prevention driven by funded and staffed subsystems for primary care, sanitation, nutrition, and education.
Plan based on your nation's history, culture, and needs.
Remember: Experts don't know everything: Reflect on personal values and political strategies, and incorporate them.
Become a political animal. Reform is about more than policy. "Reformers need to embrace, not shun, politics."
Just do it. Reform won't happen in one fell swoop, and there will be setbacks. Focus on progress and keep plugging away.
Refine and refine. Fixing one thing might break another. Make refinements using the five "control knobs" of financing, payment, organization, regulation, and behavior.
Learn from mistakes. Accept that health care reform means two steps forward and one step back. Learn not only from your steps back, but from the errors of others.
Be proud of what you do. Rewards are few and far between, and the time required for meaningful change means that many reformers do not live to see the fruits of their labors. Look to yourself for validation and know that what you do is important.

For details, see PHC's Harvard Public Health Review article here.

The Bismarck Model

2011-01-02T00:01:00.000-08:00

Otto von Bismarck

In 1883, the reactionary German chancellor Otto von Bismarck, a Prussian autocrat through and through, proposed the health care model that came to be adopted by many European nations and that echoes decisively today in the American health care apparatus. Though no social reformer, Bismarck viewed universal health insurance as an effective tactic in his grand design for German unification, which trumped his conservative tendencies. What has come to be known as the Bismarck Model survived the German militarism of World War I, the unstable democracy of the Weimar Republic, Naziism, World War II and its aftermath, and eventual reunification. Its durability cannot be doubted.

Today, the Bismarck Model serves as the predominant means of guaranteeing universal coverage in Europe, used in Germany, France, Switzerland, Belgium, Netherlands, and others. (Japan is also a Bismarck Model country.) The implementation varies, but all mandate insurance in one form or another. In Germany, for example, employers and employees jointly fund insurance via withholding; in Switzerland, individuals purchase their own policies. Even so, Bismarck Model countries share common traits:

Short waits, quality care, relatively low costs, and simplified administration
Tight regulation of insurance which is often (but not always) sold on a nonprofit basis
Claims paid without challenge
No exclusion for pre-existing conditions
Prices for most procedures fixed by the state
Private hospitals and physician practices
Generally high positions in the World Health Organization's overall rankings

There are, of course, tradeoffs. By eschewing a socialized system for which culturally most of them are ill-prepared, the Bismarck nations accept greater costs and less efficiency. (In health care, efficiency refers to performance measured against outcomes and costs.) While physicians receive a free education, have virtually no administrative overhead, and are rarely sued, they also earn less than their American counterparts. Moreover, despite state price fixing, cost issues are often addressed by raising premiums instead of controlling costs.

With the exception of veterans eligible for the VA system and active duty military personnel, most Americans under the age of 65 are either self-insured or have health insurance either as a benefit of employment. However, as indicated in the table above, the American approach to health insurance comes at a much greater cost than to countries operating under a pure version of the Bismarck Model. Lessons we can draw from these countries include:

The importance of a universal mandate for insurance under the auspices of single program
Consumer protections such as no exclusion for pre-existing conditions are feasible only with mandates
Immediate payment of claims without challenge lowers administrative burden and the financial impact on patients
Insurance regulation, nonprofit insurance, and a fixed price for procedures help control costs
Privatized care can exist successfully in a regulated environment

Later, HealthMatters will look in detail at the approaches of various Bismarck Model countries.

The Tiger or the Tiger?

2010-12-30T07:46:00.000-08:00

In the tale of the lady and the tiger, a man was asked to choose one of two doors. Behind one was a beautiful bride, behind the other was a ferocious man-eating tiger. But at least the man had options.

Cut to this story about baby boomer fears that Medicare won't be there for them:

Initially, 63 percent of boomers in the poll dismissed the idea of raising the eligibility age to keep Medicare afloat financially. But when the survey forced them to choose between raising the age or cutting benefits, 59 percent said raise the age and keep the benefits.

However one feels about raising the eligibility age for Medicare, this is a misleading way of presenting the option. Suppose that I live to be 75 and that starting at 65 my Medicare benefit averages $500 per year for a total payout of $5000. If the eligibility age is raised to 70, the payout drops to $2500. That is a cut in benefits, which means that far from presenting a real choice, the poll in effect manipulates respondents into selecting an option without presenting meaningful alternatives.

Worse, the story frames the discussion as if raising the eligibility age for Medicare benefits is the only alternative to bankrupting the system, and that's simply not the case. Rather than direct people to think narrowly, journalism should facilitate consideration of a wider, more imaginative context. That's especially important in health care; it's too bad that the media doesn't seem to have gotten the message.

The Beveridge Model

2010-12-26T00:01:00.000-08:00

William Beveridge

Want is only one of the five giants on the road of reconstruction and in some ways the easiest to attack. The others are Disease, Ignorance, Squalor, and Idleness.

-Social Insurance and Allied Service, a.k.a. The Beveridge Report (1942)

In 1940, Great Britain tottered on the edge of extinction. Its armies badly mauled by the Wermacht in France, its cities absorbing a ferocious shellacking from the Luftwaffe, and the United States still over a year from entering World War II, the British government in an act of supreme optimism began making plans for post-war life on the assumption that it would prevail over both Nazi Germany and the Empire of Japan.

There was little doubt that the aftermath of two world wars and an economic depression would wrought profound changes on British life. The working- and middle-class men who had fought the wars would insist on taking charge, and the heretofore dominant patricians admitted that they had a point. Prime Minister Winston Churchill appointed noted economist and social reformer Sir William Beveridge to define a paradigm for the brave new world; Beveridge's effort changed the face of Europe.

Social Insurance and Allied Service, published in 1942 and also known as the Beveridge Report, became the blueprint for the postwar British welfare state. A bestseller in its day, the report was distributed to British troops despite an aborted attempt by Churchill to suppress it until after the war. Wildly popular across the political spectrum, the post-war implementation of the Beveridge Report became a foregone conclusion.

While it focused mainly on social insurance -- what Americans think of as Social Security -- the report also articulated the right of anyone to receive health care on the basis of clinical need regardless of ability to pay, and gave rise to a health care system known as the Beveridge Model. While the term "socialized medicine" is often used carelessly and inaccurately, the Beveridge Model is in fact socialized medicine: A health care system owned and operated by government.

Today, the Beveridge Model is applied by Cuba, Denmark, Finland, Great Britain, Hong Kong, Italy, Norway, Spain, and Sweden. With the exception of Cuba, all are capitalist democracies that have decided to remove the profit motive from health care on the grounds that it compromises equity and efficiency.

While the model is implemented differently in each country, it operates on the basis of a set of one or more common characteristics:

Health care is a human right, not a privilege
Government ownership and operation of health care
National government responsibility for delivery of equitable and efficient health care
Full access to all regardless of ability to pay
Primary care physician as gatekeeper to the rest of the system

One misconception about the Beveridge countries is that the costs of providing expansive health care for all residents have been prohibitive and bankrupting. The following table shows that Beveridge Model countries deliver health care efficiently and with great effect:

As a whole, Beveridge Model countries spend a lower percentage of GDP on health care than any other nation. Why? Because the Beveridge Model is tax-based and not insurance-based, the governments of those countries have great incentive to emphasize the biggest bang for the health care buck, that being preventive care. As a result, Beveridge Model countries tend to have robust public health programs (Finland is one of two countries to reverse the obesity epidemic plaguing the developed world) and a strong emphasis on primary care. (Seventy per cent of British doctors are PCPs as opposed to 30% in the United States.) Primary care contributes to better outcomes, increased use of preventive services, fewer hospitalizations, reductions in overall costs, fewer hospitalizations, and less use of emergency departments.

All approaches to health care have tradeoffs, and the Beveridge Model is no exception. Welfare state values that call for a high level of social services also mean higher taxes. The emphasis on efficiency often results in less choice for patients, and broad service offerings tend to concentrate in urban areas. While doctors receive free education, have little administrative burden, and are almost never sued for malpractice, they are also salaried and earn less than their American counterparts. Equal access and the emphasis on primary care can translate into long wait times for non-acute secondary and tertiary care. Finally, the imperative to hold down costs means that the newest technologies are not easily available.

Converting the United States to the Beveridge Model -- and there's little reason to believe that the American people want this -- means eliminating the health insurance business, making virtually all physicians salaried government employees, tightening the regulatory screws on pharmaceutical companies, and establishing wholly new government bureaucracies at the federal, state, and local levels. In the absence of a complete societal breakdown, American history suggests that this degree of systemic change requires a sustained nationwide mass movement of at least 8-10 years. Given the undesirability of the former and the unlikelihood of the latter, it's most productive to think of the Beveridge Model in terms of what can be gained from it.

So while opponents of socialized medicine can rest easy, there are nonetheless lessons to be drawn from the Beveridge countries:

The value of a national health policy to provide guidelines and direction for federal response to national health issues
The importance of a strong public health program (at all levels of government) to preventive health and reduced costs
The key role of primary care, again in prevention and efficient allocation of health care resources

Later, HealthMatters will look in detail at the health care systems of Beveridge Model countries.

How Much Money Do You Spend On Health Care?

2010-12-22T03:07:00.000-08:00

The per capita annual income of the United States is $44,070. Of that, $6,174 goes to health care expenses, meaning that the average American spends 14.3% of his or her income on health care. This can come in many forms: co-pays, Medicare withholding, deductibles, out-of-pocket expenses, and tax subsidies for employer-based health insurance.

As a point of comparison, consider the averages of six of the Beveridge Model nations. (I've excluded Cuba, Hong Kong, and Norway: Cuba has a command economy and so is not comparable; Hong Kong is an outlier; and Norway's nationalized petroleum helps fund its social services.) As a group, Denmark, Finland, Great Britain, Italy, Spain, and Sweden have an average per capita income of $37,222. Of that, $3,031 goes to health care, meaning that the residents of these countries spend 8.1% of their incomes on health care (including the tax burden).

Six Bismarck Model nations (Belgium, France, Germany, Japan, Netherlands, Switzerland) have an average annual per capita income of $35,067, with $3,379 going to health care (9.6%). (Keep in mind that there are more than six Bismarck model nations.)

So, if the average American per capita expense on health care was 8.1%, as it is in Beveridge model countries, he or she would spend $3,570 on health care for a savings of $2,604 person. For a family of four, that's over $10,000 a year. For the economy as a whole, that's about $786B per year that is arguably being spent unnecessarily and unproductively.

If the average American per capita health care expense was 9.6%, as with the Bismarck model countries cited here, he or she would spend $4,230 annually for a savings of $1,944, or nearly $8,000 annually for a family of four and $583B for the economy as a whole.

Another way of looking at it is to compare per capita incomes before and after health care expenses:

United States: $44,070/$37,896

Beveridge: $37,222/$34,191

Bismarck: $35,067/$31,688

None of this is intended as an endorsement of either model. But it illustrates the impact that reducing the per capita health care expense from 14.3% to 10% would have: A family of four would have an additional $7,000 a year to save, buy food and clothes, travel, or enjoy family activities. Moreover, 10% is a completely reasonable goal: It's still higher than almost every other country in the developed world.

The Big Four

2010-12-20T00:01:00.000-08:00

The nations of the world have coalesced around four approaches to delivering health care:

The Beveridge Model, wherein the government owns and operates health care. Cuba, England, Hong Kong, Italy, Spain, and the four Scandinavian countries all provide health care via the this model, which is named for the British reformer who designed the parameters of Britain's welfare state. Beveridge Model systems are characterized by their commitment to public health and primary care, as well as efficiency. Also known as single payer, the Beveridge Model is the embodiment of socialized medicine
The Bismarck Model, wherein all residents of a country are required to have health insurance and insurance companies are required to sell it to them. France, Germany, and Switzerland and most countries of western Europe operate under this model (as does Japan), named for the German chancellor who designed it in the 19th Century. Insurance can be profit, non-profit, or both (depending on the country); individual or employer driven. In any case, the insurance and health systems of Bismarck countries are tightly regulated. Bismarck Model nations often have advanced systems of health information technology.
The National Health Insurance Model, wherein each resident pays into a government run insurance program that compensates private-sector providers. As the sole insurer, the government has a powerful negotiating role with providers and pharmaceuticals. Canada, Taiwan, and South Korea provide national health insurance.
The Out-of-Pocket Model, wherein access to health care depends on the individual ability to pay. All undeveloped, non-industrialized countries must resort to this approach, as they have neither the resources nor the infrastructure to adopt the Beveridge, Bismarck, or NHI models.

As you can tell, the United States has a bit of all four. VA health care is government-owned and -operated (Beveridge); most Americans get insurance through employment and will soon have it mandated (Bismarck); most Americans pay into Medicare (NHI); and the uninsured and underinsured look to their own devices (Out-of-Pocket).

HealthMatters will examine each of the first three models, covering their implementations in different countries and pointing out the tradeoffs that each country makes.

One Man's Agenda 1, Honest Debate 0

2010-12-19T10:57:00.000-08:00

In his column today, New York Times columnist David Brooks writes:

But it should be possible to strengthen the safety net while modernizing some of the Great Society structures. Paul Ryan, a Republican, and Alice Rivlin, a Democrat, have come up with a Medicare reform plan in which new enrollees would receive a fixed contribution from the government, growing a bit faster than inflation. They would apply that money against the cost of health insurance. This would make Medicare a defined contribution program and save hundreds of billions. If Obama said he was open to thinking about this sort of fundamental reform, he'd generate tremendous excitement on the right.

Medicare inflation is a Titanic burden on the health care system and on the overall economy. It must be addressed, and one way to start is with an honest presentation and not an ingenuous sales job. Unfortunately, Mr Brooks' remarks are closer to the latter.

You may well believe that the Ryan plan is the best way to curb Medicare costs: It would likely save billions of dollars, would offer the benefits of portability, would force greater consumer involvement in health care choices, and would limit the health care role of government to that of financier. If you do advocate Rep Ryan's approach, then you also know that the vouchers are scheduled to take effect in 2021 based on 2010 dollars. You are also aware that while they are indeed indexed to a rate above general inflation, they are also indexed at a rate below the higher rate of medical inflation. The idea is to provide momentum to reign in Medicare costs, but it requires elders to increasingly bear the risks of success or failure. That is the actual crux of the question about the Ryan plan: We can save billions of dollars, but who bears the cost and the risk? And is the answer to that question acceptable? What are the alternatives? Many advocates of the Ryan plan are prepared to discuss these questions honestly, but unfortunately one of the leading columnists in the country is not.

If we're to accomplish anything, we must debate health care proposals based on their actual content, not on what sounds most inviting. Mr Brooks has failed to contribute to that debate.

At What Cost Is The Right to Know?

2010-12-18T10:41:00.000-08:00

Gina Kolata writes in the New York Times that new tests have raised an ethical dilemma for physicians: Should they notify patients who do not have Alzheimer's that they are at risk for the disease?

Ms Kolata's article implies another dilemma as well: Should the tests be performed at all? Should we be spending hundreds of thousands of dollars on procedures and tests for a condition that has no cure, that can eventually be diagnosed without the tests, and when not everyone who receives them descends into Alzheimer's? Americans and their physicians have become addicted to the latest diagnostic technology, and yet our healthy quality of life is no better -- and in many cases worse -- than the citizens of other wealthy economies. Our costs, though, are staggering -- nearly double those of some of the same countries.

Moreover, whether by design or economic imperative, the United States has chosen to invest in secondary and tertiary care at the expense of primary care and public health. At some point, dollars spent on specialty care negatively impact the savings and improved health from the preventive medicine made possible by primary care and public health policy. Is the detection of a predisposition to early Alzheimer's worth that?

That patients should live with uncertainty is a frightening thing. But so are the crushing health and economic burdens of overtreatment and inadequate investments in primary care and public health.

Where It All Began

2010-12-16T16:28:00.000-08:00

Justin Kimball

In 1929, Justin Kimball, then a vice president of the Baylor University medical extensions in Dallas, reflected on a pile on unpaid hospital bills, many of them from teachers. He proposed a prepaid plan wherein for $6 a year, Dallas teachers would receive up to 21 days of hospitalization. The idea proved popular, and soon 75% of Dallas teachers were enrolled. From this modest beginning, the American health insurance business took root.

Meanwhile, the ravages of the Great Depression influenced New Deal policy makers to urge President Franklin Roosevelt to propose a national policy of guaranteed health care. But Roosevelt's attention was preoccupied with other legislative priorities and with conducting World War II. Moreover, he shied away from battles with the American Medical Association and southern segregationists, who feared that a national plan would lead to integrated hospitals.

Harry Truman, Roosevelt's successor, felt a stronger commitment to guaranteed health care and made it a central platform of his remarkable reelection campaign in 1948. But after Congress rebuffed an initial effort, Truman set health care reform aside in favor of other priorities. Still, he had proven its resonance as a political issue, so much so that the next president, Dwight Eisenhower, searched for a public-private alternative to the federal program he feared was coming.

Eisenhower could never make a public-private plan pencil out, but he did articulate a conservative alternative for health care reform. More importantly, he signed the Revenue Act of 1954, which formalized a wartime regulation making employer-provided health care expenses tax deductible. Employer-provided insurance became a cornerstone of compensation, and by the end of the decade more than 50% of Americans had health insurance coverage.

Two groups, though, did not: the elderly and the very poor. In 1962, John Kennedy sought to change that, undertaking a national crusade for Medicare legislation that was unable to surmount Congressional opposition. Kennedy lacked the legislative skills necessary to pass Medicare, but Lyndon Johnson did not. With his able guidance, Medicare/Medicaid became law in 1965.

Liberals, led by Senator Edward Kennedy, continued to pursue a single national health program for all. Seeking to blunt their momentum, Richard Nixon advocated a public-private partnership based on the emerging concept of managed care. Watergate weakened Nixon politically, and Kennedy would later regret not having allied himself with Nixon on this issue.

Kennedy's primary defeat by Jimmy Carter and Ronald Reagan's subsequent election spelled the end of the liberal push for national health insurance or a single-payer system. Bill Clinton's complex effort, which collapsed under its own weight, contemplated neither. Republicans had prepared an alternative approach based on mandates, but pulled it once it became apparent that the Clinton plan would not succeed.

The presidency of George W. Bush saw passage of Medicare Part D, which offered prescription drug coverage through a public-private mechanism. Though complex and unfunded, Part D proved popular despite its inadvertent creation of a "doughnut hole," which left uncovered a middle tier of expenditures. Meanwhile, in 2006, Massachusetts Democrats teamed with Republican governor Mitt Romney to pass a law requiring all residents to obtain state-regulated minimum coverage.

In 2009, President Barack Obama proposed what in became 2010 public law 111-148, also known as the Patient Protection and Affordable Care Act. Health Matters will review the ACA in detail; for now, it is enough to say that it stems from the public-private values originally envisioned by President Eisenhower, that it tracks closely to the Massachusetts law, and that -- ironically -- it takes advantage of policy alternatives proposed by Republicans in the 1990s.

Unfortunately, opposition to ACA concentrated on defeating political adversaries; as the war of words escalated, the quality of the discourse degenerated and the country missed a chance to debate health care reform in meaningful terms. It is not true, for example, that the ACA funds death panels, nor is it socialist. (There is a such thing as socialized medicine; the ACA isn't it.) It is also not the case that the leading conservative alternative to the ACA amounts to "get sick and die."

America needs an honest debate about health care reform: The stakes are high and the issues are so complex that it makes no sense to discard tools and alienate each other on the basis of ideology. After all, we'll all need health care eventually, and we want the health care that we get to be both affordable and good. Unfortunately, today there is no guarantee of that despite the best efforts of dedicated, highly trained doctors and nurses with access to world-class health care technology.

That must change.

	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