Health Reform In Massachusetts

From the New York Times:

Mitt Romney’s defense of the Massachusetts health care reforms was politically self-serving. It was also true.

Despite all of the bashing by conservative commentators and politicians -- and the predictions of doom for national health care reform -- the program he signed into law as governor has been a success. The real lesson from Massachusetts is that health care reform can work, and the national law should work as well or even better.

Read the complete editorial here.

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

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

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

Reverse Deductible

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

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

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

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

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

The New York Times: The Ryan Plan for Medicaid

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

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

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

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