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Health Care Reform: Aspirin for the Bewildered
If you didn’t notice, you’re probably dead. But if you have a pulse and still missed the obvious … ahem: The health care debate is once again radioactive. Jazz, Kathy, Robert, Jerry and Dr. E. are among the TMV contributors who have already jumped into this boiling water — and the jumpers are clearly not limited to our humble pages.
I’m not really a jumper; not on this issue; more a toe-in-the-water observer, undecided about the best path forward and woefully unqualified to help resolve the back-and-forth. That said: Here’s what I suspect to be true; these are my three resignations, the ingredients of my “aspirin,” taken at least once a day to dull the edges of the headache I get each and every time I encounter the health care debate.
1. More “free market” is probably not the best answer. For anyone who has mistaken the free market for a fair, gentle coddler of the diseased and disadvantaged, please remove your blinders: The free market is not a coddler; it is a cauldron. In its natural state, its participants compete to boost earnings by increasing revenues and decreasing costs. In doing so, they can generate tremendous wealth and spread it around, benefitting more people than any other system known to mankind. Regardless, there are a number of functions in our society that we have decided, and rightly so, should not be left to the whims of this cauldron; there are some functions for which “boosting earnings” should not be the underlying goal. We intuitively understand that one such function is law enforcement, though we have somehow managed to convince ourselves health coverage is not.
2. More “big government” is probably not the best answer. Every “big” has its drawbacks. Big corporations may be cold-hearted profiteers. But big government — especially big, centralized government — can be (like any big, centralized bureaucracy) rigid, slow, behind the curve, and out of touch. Net: If we skew too much in the direction of either “big,” there will be different but comparable levels of pain, trade-offs, disappointment. Or, in the words of Dr. Darshak Sanghavi, h/t Andrew Sullivan:
The concern isn’t who writes the checks or who writes the bills. The real question is who makes the tough decisions about the limits of the checks and bills—in other words, who ultimately rations the money. Not everybody can have everything, and the sooner we admit that, the sooner our health care debate will get realistic.
3. Don’t short circuit debate with line-in-the-sand pronouncements. If neither “more market” nor “more government” is the best answer, then perhaps there’s a blend of the two that will help. Like the ballyhooed public option … or the public cooperatives that Jazz and others have mentioned … or something else. I don’t know, but I suspect we will severely limit our ability to find the answer — the optimal blend of “bigs” — if we embrace fatalistic, “X or die!” conclusions.
Sen. Conrad seems to get that:
“It is important not to draw lines in the sand and rule out options before they are fully explored. If we do, we could easily wind up with no viable option at all,” Conrad said through a spokesman.
As does the nation’s CEO:
[The President] is not willing to call a public plan non-negotiable at this point. Asked point-blank if he’d sign a bill without a public plan, Obama didn’t want to answer, and after some jousting he made clear he wasn’t really going to. “We are still early in this process, so we have not drawn lines in the sand,” he said.
So there you have it. No answers. No “lines in the sand.” Only aspirin. I don’t know about you, but I feel better already.
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UPDATE: Earlier, a commenter on this post pointed to Andrew Sullivan, who pointed to Nate Silver, re: the “public option.” Sullivan later featured this reader dissent on the public option, which goes to my second observation above, i.e., that more “big government” may not be the best answer.
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25 Responses to “Health Care Reform: Aspirin for the Bewildered”
There is an advantage to having “big government” involved in health care. “Big government” has the leverage to negotiate lower prices for their customers and will have the incentive to do so unless they want to raise taxes year after year.
Regarding “ineffective government”, I have always read that most healthcare providers much prefer the simplicity (relative) of the Medicare reimbursement process compared with the hoops they are forced to jump through for private insurers.
Its seems reform opponents are still trying to evoke some fearful image of long lines and archaic civil war era physicians and healthcare provision, a place where your medical records are stored in some huge warehouse next to the Ark of the Covenant. In practice, the actual delivery system, doctors, nurses , hospitals, et.al will look the same. The financing and reimbursement will be the things that change. And its true that a giant risk pool comprised of every American would have a tremendous advantage in controlling costs, negotiating prices. Its obvious why insurance companies are worried. Also at issue is the notion that the “guv'mint” can't do anything right. That's a common idea proffered by some conservatives and free marketers. But we have examples of government run programs that work, efficiently. They only fail because through some act of twisted fate, we've put people who believe government run services can't work in charge of running the show.
Good points, Pete.
We need a lot more cauldron. Hospital administrators, insurance company executives, pharmaceutical companies, equipment manufacturers, and other health care providers don't feel nearly enough heat.
And ChrisWWW is over-optimistic, it's extremely hard for big-gorilla buyers to drive efficiencies into their supply chains. They can dictate lower prices, but suppliers react by either shifting costs elsewhere or compromising quality. WalMart is the only example I've heard of a big buyer teaching suppliers how to be more efficient, and they're very unusual. Certainly none of the big buyers in health care today, either private or public, can point to much success.
The key is to toss the suppliers into the cauldron without tossing in the consumers, and the way is cleaner separation between the government's job and industry's job. Push the cost-redistribution job onto the government, through cleaner tax incentives or vouchers or whatever, but get the government out of the delivery business.
Meanwhile, deregulate the industry and let the market teach these corporations how to deliver more efficiently. Expect companies to provide consumers options at many price points, but don't expect them to redistribute money/goods/services from the rich to the poor. As numerous commentators keep pointing out, that's not what they do for a living. It's properly the government's job, and the government should stop trying to foist it off on the private sector through unfunded regulatory mandates and get on with it.
From Nate Silver, a post called George F. Will Admits Public Option Will Cut Costs
Via Andrew Sullivan.
I don't trust government to be efficient, especially while they seem to be in a mood to spend first and ask questions later. I will never believe that 172 million Americans, the number generally accepted as those with a health insurance policy of some kind, are willing to trust that Obama and Congress won't completely screw up what we have now and present us with less coverage for a hell of a lot more money.
Keep in mind that a huge portion of health care costs is malpractice insurance, which is an item I've yet to see in the debate. And it is huge: I personally know a local physician with a medium-sized practice (1 doctor, 1500 families) who pays $100,000 per year for his policy. I won't guess what he needs to add to each bill to cover that, but it doesn't take much thought to realize how large a portion of the bill MP insurance is. And yet, no talk about it????
As for the health care industry and Medicare: the fraud, waste and abuse in Medicare is legendary. The notion that providers prefer Medicare to private insurance is ludicrous at best: Thousands of doctors refuse to take new Medicare patients, but other than doctors that have chosen to limit the size of their practice, no doctors refuse an insured patient.
So what is the way to go? I suggest a government plan for those who genuinely cannot afford to pay. Anyone else, pay for a policy or certify on your tax return that you will pay for any treatment you may need and absolve the government of responsibility.
>From Nate Silver, a post called George F. Will Admits Public Option Will Cut Costs<
Uh, no. Nate Silver apparently doesn't know how to read a Will column. Or he picks a sentence out of context to bolster his own argument…. but people don't do that, do they?
Like Andrew Sullivan, I think Silver makes a strong case.
There's no excuse for hype, even hysteria, as well as childish impatience and irrationality.
The current legislation is worse than worthless and should be killed (or greatly rewritten and shrunken) and if people in Washington (and their Pavlovian hypester crowd) waited until the economy improved and finances were put in better shape, it would be much better. Don't count on that being sought by the exploitable, though. And after all, some apparently want the Dems to proceed as soon and quickly as possible while they have so much more support than any feeble Republican opposition. Hence the lunacy.
“the fraud, waste and abuse in Medicare is legendary. The notion that providers prefer Medicare to private insurance is ludicrous at best: Thousands of doctors refuse to take new Medicare patients”
True, but such unpleasant facts are denied or constitute an excuse for vicious attacks by the usual suspects.
Note that there is currently an open threat by Obama and others to “pay for” [sic] this effort to some extent by reducing payments (that often are too low already) to providers. And what will happen when the scope of Medicare (or a surrogate, even merely a “public option” claimed to be unrelated to it) is expanded and payments are further lowered?
And what does it say for proponents if they're willing to, or want, it made illegal for providers to refuse Medicare? We already know how the most fervent would treat any future “private option” (in fact, the Conyers bill, for example, specifically prohibits private duplication of any services provided publically).
“spend first and ask questions later”
And count the costs later, and find a way to pay for it later: This specifically is what is wrong with the current effort — this is inexcuseable (though apparently the many exploitable people don't care at all).
“The current legislation is worse than worthless and should be killed (or greatly rewritten and shrunken) and if people in Washington (and their Pavlovian hypester crowd) waited until the economy improved and finances were put in better shape, it would be much better.”
Shrinking the already too small health care proposals will cost more in the end, not less. We need big changes to try to curb costs and increase availability.
Waiting until things get worse for health care is not the responsible thing to do.
“Waiting until things get worse for health care is not the responsible thing to do.”
Rushing without thinking, and failing to address the costs and how to pay for them, is far more irresponsible, irrefutably, than any appeal to emotion or casting government as a “caretaker.”
<font face=”sans-serif”>ChrisWWW: </font>There is an advantage to having “big government” involved in health care. “Big government” has the leverage to negotiate lower prices for their customers
Dr. J: it's extremely hard for big-gorilla buyers to drive efficiencies into their supply chains. They can dictate lower prices, but suppliers react by either shifting costs elsewhere or compromising quality.
Chris is right on this point. Medicare pays doctors 19% less than private insurers, yet 97% of doctors accept new Medicare patients. That is solid, numerical proof of concept. It IS possible for a big payer to negotiate lower prices and our “guvmint” has done better than any other source. Plus, they have succeeded with the highest risk patient population in the business, the elderly. I know I'll be told they shift costs to private payers, but no one has offered proof. As disproof, my Medicare-accepting doctor is not allowed to charge private insurers any more than my Medicare-denying doctor friend.
I do agree with Dr J that pharma hasn't felt the heat nearly enough. They lie constantly about how they need big profits to drive innovation, but the truths are: first, they need government to drive innovation, and second, they are no more innovative than their European rivals, who now dominate the pharma market (4 of the top 5). On the first point, look at taxol, one of our newest chemotherapy agents. Discovered by govenment grants to an academic researcher, the development was funded by NIH, yet Bristol Meyers Squibb got the patent and then wants top dollar from the very people, “we the people” who gave them the drug in the first place.
Then Dr. J veers off into the Friedmanite mantra “privatize, deregulate” saying if we just give insurers more slack (less regulation) they'll compete by lowering prices and becoming more efficient. I disagree. Take a look at the national flood insurance program. Insuring people in flood plains is just too risky for private insurance, so the government has to do it, and does it well. Same thing with Medicare. The expensive risk pool of over 65 Americans is too risky for private insurance, yet the government runs the program at MUCH lower cost than private insurance with the easier risk pool. Plus, private insurers take advantage of and use the work of millions of staff hours of federal work (like their diagnosis system) and still private insurers and their adherents pretend that they *almost* compete because the free market is so efficient.
GerSan, malpractice is actually a tiny part of health care cost, around 2%, and doctors who are crooked or incompetent deserve judgments against them. Malpractice *insurance* is costly, but that's the same insurance industry that is responsible for other out of control costs. “No one talks about it?” OK, let's burst that bubble. A Dartmouth College study destroyed the idea that insurers raised malpractice rates to cover lawsuit costs. In fact, they were covering losses due to their bad investments.
As to your points that a government run program will be worse than private, that's a scare tactic. Government already covers almost half of heath care in the US, so it's not a speculative exercise of how bad they could do. There is fully as much data on government paid health care as there is for privately paid health care. Medicare wins hands down. Not sure? Name me a single other insurance policy, outside of a government one, that has these features:
No eligibility requirements or physical
no exclusion of pre-existing conditions
no cancellation for excess use of services
no penalty for moving or changing jobs
no re-applying for coverage if moving or changing jobs
a stable, mature program known to both physicians and patients
no marketing cost
no sales cost
no commissions
no bloated executive salaries
no palatial executive suites
no corporate jets or limos
A recent poll has shown that 80% of people are happy with their health insurance. Another study shows that 44% of the uninsured have enough income to afford insurance if they elected to buy it. So why do the President Obama and the Democrats want to nuke our current health care system in order to cover the insurance costs of a relatively small number of people? It just makes no sense what so ever.
President Obama is now calling on his supporters to come up with a lot of hard luck stories about their problems with the current health care system The problem is that government run health care may be even worse than the current system. Think about it, Medicare and Social Security are going broke and Medicaid is a big reason States like NY and CA are going broke. So why would anyone think that government won't make an even bigger mess out of health care and put the Nation into even deeper debt.
The bottom line is that the only way government can cover an additional 47 million people (while at the same time reducing health care costs) is to ration health care. This translates into the government making life and death decisions on who get what health care if any based on political favoritism and one's “worth” to the elite in power. Already the Democrats are giving the Unions a better deal on health care deductions than the average Joe which is a preview of things to come if President Obama gets his way and government takes over health care.
Think about it. Do you really want to give up the insurance you are happy with and give the government absolute power over your life and death health care decisions ? I think President Obama and the Democrats know the majority of people would be against giving over that kind of power to them and that is why they are trying to push health care through so fast before too many people catch on to what President Obama is up to.
My aunt is on Medicare and has to pay a lot extra to get better coverage. By the way, if you are on the bare bones Medicare coverage a lot of physicians won't even treat you because they do not get enough reimbursment to cover their costs. If government takes over the rest of health care, reimebursement would most likely go down even further. Which means, many doctors, with “no skin in the game” aka profit will just leave the game rather than busting their a## for nothing. There is no free lunch you know. So everyone will have coverage but no doctors to treat them.
Also, President Obama and the Democrats are already proposing big cuts ot Medicare and Medicaid to help pay for the coverage of the additional 40 some million people they want to cover. This means my Aunt may be out of luck when it comes to that hip replacement she needs because the government has decided she is of less “worth” to society than a younger person is. Bottom line, in order to cover an additional 40 some million people government (while at the same time reducing costs) government will have to ration health care. That translates into some bureacrat deciding who gets what health care if any based on political favoritism and one's “worth” to the elite in power. You may want to turn over that type of absolute power over your life to government. However, most sane people would say no to handing over that type of power to a greedy and heartless government who will reduce costs by denying care to the elderly and poor.
GreenDreams: “It IS possible for a big payer to negotiate lower prices and our “guvmint” has done better than any other source. [Medicare has] succeeded with the highest risk patient population in the business, the elderly.”
I didn't say lower prices couldn't be negotiated, I said that doing so doesn't really make providers more efficient. Medicare is a huge player in the health care market, but providers keep charging 5% more every year without making us 5% healthier. Medicare is failing even to contain costs, much less to drive them down.
As for the “highest risk patients,” you've got it backwards. Given that Medicare pays for treatments rather than cures, elderly patients aren't risks for providers, they're cash registers.
“I'm not sure what regulations are thought to keep insurers from reducing cost,”
Where would you like to start? How about the tax incentives that make sure employers–not you–are insurers' customers?
But it's a silly question, because it's not insurers who are raising the costs. They're just passing on providers' costs, exactly like Medicare does.
Well, interesting. Tsuh essentially says there's no problem. The uninsured just choose to be that way. That's really not true, but it's an ideologically driven belief. For readers open to the facts, the US is 24th of 25th in the satisfaction of its citizens for it's health care system. Most say it needs major overhaul, not minor changes. 76% favor a public option. 59% of doctors like the idea vs 32% who don't. And as I pointed out, with insurance companies hemorrhaging customers, the two largest are on the brink and may soon be asking for a taxpayer bailout. They're losing 14,000 customers A DAY. That's not people who just decided to drop their insurance. They can't afford it. Tsuh again asserts that doctors don't like Medicare because it pays less. Not true. It does pay less (which is cost containment and is good for the public), but 97% of doctors take new Medicare patients, the same % that take new private PPO insured patients. Nearly all hospitals do. This line is simply untrue. Doctors can't lie about whether they accept Medicare patients. The facts are in the number who submit claims under Medicare. Tsuh also claims the government will be making “life or death decisions”. Likewise with private insurers, who have a limit on claims. The limits are no better on the private side than the Medicare side. Tsuh trusts private corporate bureaucrats whose stated goal is to maximize shareholder wealth, but not government bureaucrats whose mission is to pay (not deny) claims. There's no profit motive to serve in a nonprofit model. Again, according to the insurance industry itself, its cost including profit is at least 12% higher than Medicare. They admit Medicare overhead is declining, while their own “is not expected to change by more than a percent or two.”
Dr. J, is right about the tax incentives. As I've pointed out to those who balk helping someone else with their health care costs, I SUBSIDIZE THEM, as a person without employer paid health insurance. My taxes pay for the tax breaks for employer paid health insurance. I pay more as a small businessman to make their bill lower. And since small businesses can't afford the cost, and since small businesses are the biggest source of new jobs, we're really hurting our own recovery with this senseless policy. I also agree with Dr J that the real problem is rising costs, which need to be curtailed. But the shrieks of those like tsuh about government setting limits is a big problem, because like it or not, public payment or private, we will have to make some tough decisions about limits, especially on expensive end of life procedures.
PS, I note no one has identified a private insurer who can match ANY of the Medicare advantages I listed.
GreenDreams: “Those of us who want to see health care cost come down have to look at the inability of private insurers to get the best price on treatment.”
Then please explain Medicare's failure to even contain those costs. It's not enough for Medicare to beat private insurance. If it is to provide a general solution, it must also be affordable and sustainable on its own terms.
“No one has identified a private insurer who can match ANY of the Medicare advantages I listed.”
Well, duh. It's illegal for private enterprise to collect premiums from “future beneficiaries” without amortizing those liabilities on its books. But if they could get away with it, they could offer today's customers some great bargains. Bernard Madoff was doing exactly that. Shame they put him away; if the government is going to expand Medicare it will need more skills like his.
Dr. J, for all your assertions that you're not arguing for the status quo, you sure do defend the insurers as if they're essential to medical care. I have agreed before that neither Medicare, nor private insurers, nor Canada, nor anyone on this planet has contained costs. So it's no help at all to criticize a government plan for what a private plan can't accomplish either. As I noted, controlling costs requires some painful decisions. I assume you're familiar with our former CO gov Dick Lamm (we used to call him governor Gloom), who has written about the unsustainability of our health care system. He argues (as I have above) that we will need to limit end of life procedures. He says “if you're over 75, you don't get a heart transplant.” Those are the really tough decisions ahead. But the decision to slash the 12% total waste of private insurance, and ditch the 20% higher payments they make; easy decisions. Painless for me. Maybe tough for doctors, so uh, sorry doc. We can't afford to pay top dollar any more.
But wait. I'm not calling for mandatory single payer. ANYONE who thinks Blue Cross will get them better health care by paying the doctor more and adding a layer of “shareholder wealth building” to their tab, by all means, go for it.
And the blah blah blah about Medicare being a Ponzi scheme is just not compelling at all. The truth is, we have to pay for health care. Whether it's with a hundred private insurers, or just three (like in my state) or just one, we still need to pay the doctor and the hospital and pharmacy. We're just arguing about what the check says on it. You want it to say Blue Cross. I don't care what it says. I want the best for the cheapest. Period. I've been very detailed about exactly why I think a Medicare for all model is the best and cheapest. No one here has produced a single salient point in favor of the price-gouging bastards in the insurance industry, and believe me, as both an individual insured and as a small employer, I know them very very well.
OK, I'll comment on your appeal to my business sense. You compare Medicare to Madoff, which is not a great comparison. Madoff really had nothing. Just paper. Medicare provides services. The total cost is not really that overwhelming. Total cost, including all overhead and even including all fraud, is $300 billion a year. It's not bankrupt or even close at this time. You project that it will be eventually, and at the current rate of cost increases and the aging population you may be right. Same thing with private insurance, which as I mentioned, is already in trouble and losing customers FAST. You never did answer if you're willing to prop them up with tax dollars, because doc, their model is failing, even with the aforementioned price gouging, or maybe because of it. So, using your business sense, if we have to apply the balm of federal dollars, shall it be to increase private wealth or dedicated to nonprofit payment of doctors, hospitals and pharmacies responsible for actual medical care?
“So it's no help at all to criticize a government plan for what a private plan can't accomplish either.”
Of course it is, that's my whole point. No insurance-centric scheme has slain the rising-costs demon, yet slay it we must. So insurance-centric schemes are not the answer.
You're right that Medicare is not bankrupt today, but that's only because of the unique way the government keeps its books. Law requires the government to make up any Medicare shortfall out of general revenue, so Medicare in theory can't go bankrupt the way Aetna can (which would be fine with me, BTW). But the government doesn't have enough money to meet the projected expenses even for the group Medicare currently covers, so it will have to raise taxes and/or cut services at mind-blowing scale. From http://www.aei.org/outlook/24319:
There are obviously a million ways we could tax people more, for example more than doubling payroll taxes immediately would bring in the $200-something billion Medicare needs. But no one has much appetite for dramatically higher taxes, so politicians opt to ignore the gap, and the clock continues to tick.
In my mind it's not a question of whether or not health care is worth spending federal dollars on. Federal dollars or private dollars all ultimately come out of our pockets, so it's much the same thing. It's a question of how we can avoid being eaten alive by these rising costs.
The answer seems very clear to me: we need to get a lot more efficient about delivering health care (not just insurance, but the whole package). Honesty about costs is a necessary ingredient we're missing today; sweeping costs under the rug makes it impossible to talk sensibly about the end-of-life tradeoffs you raised, and you're right that they're a major part of the problem.
Dr J, good points and I do appreciate your thoughtful, relatively flameless style. In most discussions here, everyone seems spitting mad and hurling insults about how stupid everyone else is.
I'm not sure what you mean about getting more efficient at delivering health care. In what parts of the process could we be more efficient?
Thanks, I appreciate your relatively flameless style too.
What part *couldn't* be more efficient? We could do fewer needless treatments and tests. We could retire the paper-based data systems everyone relies on. We could stop giving nurses 6-figure starting salaries. We could kill fewer people as a result of medical errors. We could stop demanding patients fill out forms with unreliable versions of their medical histories. We could chuck that ubiquitous but low-value privacy disclosure paperwork all providers are required to administer. We could shortcut certain malpractice settlements and save a bunch of lawyers' fees. We could spend more on prevention and save in ER bills. As you pointed out, we could limit taxpayer-funded end-of-life heroics.
Those are just bits of waste I see in the current system; I'm sure for every one there are 100 others I'm unaware of, or potential improvements that no one has thought of yet. If we give companies and people the right incentives, we'll have a million brains looking for ways to improve, and they'll find a great many.
And note that one man's “waste” is another man's “value.” I don't flatter myself to imagine great throngs of people are eager to hear about my lumbago, so I personally assign a low value to medical privacy and consider privacy disclosures tremendously wasteful. Your mileage may vary. But sadly in the current regulation-heavy system we don't get a choice, because the government has made a single privacy/cost tradeoff for everyone. If we eased such regulations, providers would be better able to tailor their products to customers' preferences and offer you more of the things you personally value for less money. (That is, assuming you were really free to choose providers based on their relative costs and benefits.)
Dr_J, your link to AEI (the conservative think tank that shaped the GW Bush Admin) makes some factual statements, then wanders off into the usual “competition is the solution” meme. In fact, private insurance competition to Medicare has proven worse than worthless. The idea was, as expected, introduced by Bush as “Medicare Advantage” programs, in which Medicare dollars go to private insurers. Who in the world thought there was any chance that this would lower costs. Every senior who elected to have a private insurer manage her Medicare dollars lost on the deal, and enrollment in the program has tanked.
The President and CEO of Kaiser had this to say about Medicare bankruptcy:
GreenDreams, the Kaiser guy isn't saying anything different than the Medicare trustees' report or the link I posted: Medicare faces a big funding gap that the government is legally required to close. No one is suggesting Congress won't do *something*, but the poorer their choice and the later they do it, the more pain will be involved.
If you keep hearing the “competition is the solution” meme, perhaps that's because competition is the solution. It has been the solution in every other industry.