Monthly Archives: December 2009

A Just Health Care Reform

As 2009 draws to a close, I’d like to recommend that you read a piece from Dr. Leonard Fleck entitled “When Is Compromise Just?” He makes a valiant attempt to discuss the requirements of a just health care reform effort, and his conclusions are rather sobering. I’ll look for something a bit more cheery to begin the new year.

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Posted by on December 31, 2009 in Uncategorized


Two Roads to Single Payer

A few days ago, I read this post from Robert Reich, and it got me to thinking: I am becoming more and more convinced that the future of American health care financing will be single-payer. It’s not inevitable–at least not quite yet–because health reform just might work and just might preserve and strengthen the public-private balance we have today. The health reform legislation we have in Congress right now, however, is not going to be enough in the long term. There will necessarily be additional legislative fixes that we’ll have to figure out as we go.

In fact, Atul Gawande is back with another excellent piece in the New Yorker that highlights the very important role of demonstration projects in the health reform legislation intended to discover–by trial and error–which approaches to cost control actually work and which do not. He argues quite effectively on the basis of historical precedent in agriculture that this is the only way forward when there is no clear single answer to the problems confronting us. So, if reform passes, and we stumble upon some things that work to bring costs down, quality up, and the like, then there’s a chance that the advent of single payer will be delayed–perhaps indefinitely. That’s one scenario.

Or, despite the best of intentions, health reform will fail to control costs well enough. That wouldn’t surprise me, because the simple fact of the matter is that everyone seems to want to live forever (in theory) and that puts a pretty high ceiling on the amount that people are willing to pay for medical care with any potential for benefit. Never mind that all care also comes complete with potential risks or that people who are willing to pay exorbitant amounts are actually shielded from the majority of the costs associated with their decision to seek care. Those two factors are only akin to ignoring that you’re burning and dousing yourself with more and more gasoline. So costs increase, and we actually arrive at the much talked about point of unsustainability. Our health care system broken, the government has no choice but to step in and create a single payer system with global federal budgeting for health care. If you’re one of those people who likes to worry about the notion of socialized medicine, please feel free to envision this scenario and commence to freaking out now. That’s road number one to single payer.

Road number two also leads to single payer, but the payer isn’t the federal government. Instead, it’s a private insurance mega-corporation. We’re already seeing that in many states, one or two private insurers make up about 85% of the market. In fact, as Reich reports, these data are from almost 5 years ago. In the intervening time, the private insurance market has consolidated even further, and it shows no signs of stopping. If the trend continues, it’s not difficult to envision one or two extremely large insurance companies buying everyone else out. Ordinarily, the government would intervene in such cases to break up the emerging monopoly. But here’s the kicker: insurance companies are specifically excluded by law from all anti-trust provisions. That means nothing’s stopping Cigna or United Healthcare from taking over the whole show. And that’s the second road to single payer, which Reich describes bluntly as: “a national health care system that’s controlled by a handful of very large corporations accountable neither to American voters nor to the market.” The prospect of that, friends, is far more likely than I’d care to envision.

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Posted by on December 30, 2009 in Uncategorized


Oh, The Humana-ty

I don’t mean to pick on Humana, folks. It’s just that I couldn’t resist the pun. This post is about something really fundamental. So fundamental, in fact, as to be largely assumed by pretty much everyone. But you know what they say about assumptions. The assumption is this: That having health insurance translates into better health. Actually, it’s the negative form of that statement that is most concerning: Does lacking health insurance translate into poorer health? Before I jump to answering that question, I want to share an excerpt from a recent piece by Jonathan Cohn that I think does a good job of reminding us what health reform is–or should be–all about:

“Although it’s become strangely unfashionable in elite political circles to frame health care reform as an effort to curb human misery, health care reform is, in fact, an effort to curb human misery. Numerous studies have suggested that thousands of people die every year because they cannot pay for the medical care they need. And that’s to say nothing of the many more who endure severe financial hardship….There’s a natural tendency in politics to assume the very best about our allies and the very worst about our adversaries…When a politician stands up for a cause we think is righteous, we tend to assume that politician is righteous. When a politician stands up against a cause we think is righteous, we tend to assume that politician is venal, craven, or callous. Sometimes that is true, to be sure. But sometimes it is not. Health care is a perfect example. It is certainly possible to oppose health care reform on principled, moral grounds. If you sincerely believe that even modest, incremental reforms will destroy innovation, crush the economy, create nightmarish bureaucracies, and spark harsh rationing for the sick and elderly, then opposing health care reform isn’t putting lives at risk–it’s saving lives, not to mention a way of living. And if you don’t believe any of those things but do believe that, overall, health care reform will be a net negative to society, then opposing health care reform is less a matter of high principle but very much a matter of sound judgment. [It is also possible to support health care reform on similar moral grounds.]”

So, when it comes to the uninsured, the first question must be: Is the lack of insurance hurting them? In a 2002 report Care Without Coverage: Too Little, Too Late the Institute of Medicine answered that question with a resounding yes, and a 2008 report issued by the Urban Institute confirms that finding. The IOM concluded that lacking insurance equated to a 25% increase in mortality risk among working-age adults. According to Urban, this meant approximately 137,000 Americans died between 2000 and 2006 because they didn’t have insurance. That’s like wiping a city the size of Savannah, Georgia off the map every 7 years. Obviously, as the percent of uninsured Americans increases, the volume of “excess” deaths will rise as well. You see, this isn’t just a statistic, and it isn’t just a matter of politics. It’s a matter of life and death for a very significant number of people in this country. We may disagree over the specifics of how to fix the problem, but I sincerely hope that we can all agree that being uninsured is a problem. No American should die because their lack of health insurance prevented them from getting the care they needed. Sitting idly by while it happens to thousands and thousands of people every year is–ironically it seems to me–both completely un-American and yet almost uniquely American. I pray that we will rise above our pettiness of self and change that.

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Posted by on December 29, 2009 in Uncategorized


Great Stuff from Dana Goldman in the NYT

The New York Times Economix blog is usually a pretty whimsical place. Sure, they tackle some important issues, and their methods are pretty solid, but their content and presentation is much more Freakonomics than it is Krugman-esque. That is, until recently. Dana Goldman from the University of Southern California has written one of the best critiques of the U.S. health care system–and of rationing in particular–that I have ever read. I don’t say that lightly.

Goldman’s arguments are clear, well-reasoned, and surprisingly fair–he criticizes Michael Moore and Sarah Palin in the same breath. My only issue with his article is the reference to “death panels.” He uses the term sarcastically, but the average reader might not pick up on his rather subtle tone. Still, he succinctly describes the problems with the health care system from every perspective–payers, providers, and patients–and lays out an oversimplified, but right on target set of four key action items to start fixing things. I can’t improve on what the man has written, and I fear a summary would do his work a disservice, so you just need to go ahead and read it. Seriously. I mean it. Do it now.

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Posted by on December 28, 2009 in Uncategorized


Merry Christmas!

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Posted by on December 25, 2009 in Uncategorized


An Economist’s Christmas Card

Uwe Reinhardt sent the following Christmas card to friends and family in 1989:

As he explains in more detail here the idea is that Americans are just as charitable as their counterparts around the world, at least in spirit. That’s why the two supply of kind acts lines are parallel to one another. But, as you can see, the U.S. actually provides less charity–not because of a difference in attitudes toward charity–but because the price per “kind act” is higher in the U.S. than it is elsewhere in the world.

It’s just a thought. After all, we do lack a great deal of social solidarity in this country that I think might make our charitable inclinations a bit less charitable. But wouldn’t it be nice if we actually were just as compassionate as people in other countries? I’d really like to believe in that. I’d really like to believe that if health care costs came down in this country, we’d suddenly find ourselves doing more for our neighbors than we do now. Uwe Reinhardt’s hypothetical Christmas card suggests that that’s exactly what would happen. I think there’s only one way to find out. This Christmas, I’m hoping that Sen. Claus fills all of our stockings with lower health care costs.

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Posted by on December 24, 2009 in Uncategorized


The Ins and Outs of the Public Option

I’m on an Urban Institute kick. This time around the topic is a November 2009 brief on the public option in health care reform. This document covers it all, including the purpose of creating the public option, the basis for the political debate for and against the public option, and the pros and cons of various alternative forms of the public option that have been proposed in Congress. If you’re looking to be enlightened with minimal digging around on your own, then this paper is for you.

Of course, a lot of you won’t read it. So, I’ll tell you give the quick and dirty version. First of all, as the authors explain, the public option is primarily about controlling the rate of health care spending growth, not about regulating the insurance markets–other aspects of the legislation would do the latter. As the paper lays out, one of the big problems in the health care market is not the consolidation of market power by the insurers (although that has been and remains a concern), but the consolidation of market power by providers, which limits insurers’ ability to negotiate lower payment rates, and drives costs up.

The irony is that opponents of the public option are proponents of the free-market, which the report outlines, would actually benefit from a strong public option. In fact, absent some corrective measures being taken in short order, health care costs are likely to continuing growing at an alarming and unsustainable rate. At some point, drastic measures will need to be taken–such as the government setting global health care budgets–which would mean far more government involvement in health care than a public option represents. In short, the public option is designed to restore balance to the private health care market, which everyone, especially free-market conservatives should support. Then again, if the whole house of cards comes tumbling down and we get single-payer out of it as a last resort, I will sit back and laugh and try my damnedest not to mock the opponents of what is currently a sensible reform measure designed to reinforce the strengths of our current system. But I digress.

How would the public option work? What are the political hurdles? Why is an opt-out option better than an opt-in option? What in the world are “hard” and “soft” triggers? Is there any historical evidence that triggers can work? How should a trigger be designed? Why would co-ops never fly? The report answers all of these questions. I fear that discussing them here could get a little too wonky for the audience I’m hoping to reach. The real takeaway is that the public option should not be considered a catch all for the liberal-conservative debate, because the goal of the public option (a liberal proposal) is to protect and strengthen the private market by addressing the problem of consolidation of power in the provider market (a conservative ideal). When liberals suggest doing something that conservatives ought to support on the basis of their ideology, and all we get is a fight over the role of government, I fear that our Founding Fathers did more than give us checks and balances: They may just have given us the governmental equivalent of Quickrete.

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Posted by on December 23, 2009 in Uncategorized

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