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.
Monthly Archives: December 2009
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.
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.
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.
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.
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.
Senate Health Reform According to Matchbox Twenty
Before they entered an indefinite hiatus, the band Matchbox Twenty released the song “How Far We’ve Come” which posed that title in the form of a joint exploration-style question: “Let’s see how far we’ve come.” Today, after being asked by a friend to weigh in on the pros and cons of their just-reached deal, I’m asking that question of the Senate on the issue of health reform. They’ve been working on it for a while now, compromising things away, while getting little to nothing in return. In fact, here’s just how far the public option has come (click to enlarge):
What should be painfully obvious from the above chart is that the public option is dead. If you don’t believe it, I suggest you go here and read this, this, and this. The apparent “throwing away” of health reform has progressives up in arms. In fact, past presidential candidate and former Governor of New Hampshire, Howard Dean, is on the record as saying that if he were a senator, he “would not vote for the current health care bill.” Some are even saying that the Senate bill is so bad at this point that it hurts the Dems more if it passes than if it doesn’t. New York Times pundit David Brooks is somewhere in the middle (coward). Who can we thank for this watering-down of health reform? Most fingers are pointing at Joe Lieberman, who has done a great deal of holding health reform hostage by withholding his vote in the most irrational of ways (flip-flopping on issues like a Medicare buy-in is just one such way–and he’s on video doing that). Once the public option was killed, Lieberman came onboard and got the Dems to 59 votes.
The final holdout, though, was pro-life Sen. Ben Nelson (D-NE) who finally agreed to vote for the bill after several concessions, including tighter restrictions on abortion funding were included. All of these holdouts just draw attention to the absurdity of requiring 60 votes in the Senate to end a filibuster and actually *gasp* hold a vote. As I and a colleague of mine have written in this space before, the filibuster is a very real threat to our system of representative democracy. The power given to any single Senator allowing them to demand benefits to their home states exclusively–as Nelson’s deal with Reid does–is not just. But politics is sadly not fair. It is the art of the possible.
But there’s much more to health reform than the public option. In fact, there’s still plenty of good stuff left in the legislation. It would change a lot of important things about the way our health care system currently works, and it would extend coverage to most of the people who don’t have it now. While it doesn’t do a whole lot to control costs at this point, it does put important insurance regulations in place, and it can tackle the cost issue as the next item of business. In fact, here’s a run-down of some key provisions and my take on what’s good or bad about them:
- Individual mandate – This is a great thing. After all, insurance is a risk pooling mechanism, and it works better the bigger the pool is. It also allows Congress to ban insurers from denying coverage for pre-existing conditions. If you don’t have a mandate, healthy people would not get coverage until they got sick (remember, no pre-existing condition exclusions) and that would destroy the very principles upon which the insurance industry rests. The only issue here has to do with the level of the subsidies being adequate, so that lower-income individuals who do not qualify for Medicaid are actually able to purchase coverage. The mandate is enforced with a fine, but fining people for not getting coverage is not likely to be well-received. Fortunately, there are some good alternatives to that floating around.
- Insurance across state lines – While this is limited to plans participating in the exchange (all new plans), it is both good and bad. It is good because it eliminates the non-competitive insurance markets that exist today, and this has the potential to drive down costs, but this ability will be limited by the lack of competition (i.e., consolidated power) in the provider markets, which ties insurers’ hands. Also, there’s a very real risk that insurers will choose to locate in states with more lax insurance regulations, which could hurt beneficiaries. The federal government can preempt state laws, however, and I’m not yet sure how far they go in this regard to set minimum requirements of all insurers.
- Reform is paid for – Yes, there are new taxes–most of which are levied on the very wealthy (individuals earning over $200,000 a year)–but there are also significant savings to be found by eliminating wasteful spending from the Medicare program. That’s something that is fiscally responsible and should have been done ages ago even if health reform weren’t on the table.
- So much more – There’s a lot more in the Senate’s bill than I could possible hope to discuss here. The bottom line is that it is good, not great, but does not threaten to do the things Republicans say it will. They are motivated primarily by the fear that the Democrats will do something good, and you’d do well to remember that that’s usually the case in political matters.
So while the legislation has fallen far short of ideal, I’m still for it. Pulitzer prize winner and Princeton sociologist Paul Starr shares my view. So does Nobel prize winning economist Paul Krugman. And Hank Aaron a Senior Fellow at the Brookings Foundation. Almost anything at all would keep the door ajar–even if only slightly–and keep the reform movement going, making future incremental improvements to the health care system imminently more doable than attempting to put reform back on the table anytime in the next decade or two if it fails now. So, just how far have we come? Farther than we ever have before. Now is not the time to throw in the towel.
Islands of Excellence in a Sea of Mediocrity
A short time ago, I wrote a series of posts about the relative cost of a variety of health care services in the United States as compared to other industrialized western nations. The results, you might recall, indicated that prices in the U.S. are far and away higher than they are in the other countries considered, which more than likely explains why per capita health care spending in the U.S. is roughly double that of the next closest “competitor.”
Some people are unfazed by that. In fact, as if to support my recent post on the psychology behind cost-control, many people are of the opinion that we are getting what we pay for. To them, our extremely high per capita health care spending is the price we pay for having the “best health care in the world.” To the extent that it is true, such a claim would be quite reasonable. We value health care, our health care is of an exceptionally high quality, ergo we pay a lot for our health care. But what if the middle part of that statement isn’t quite true?
In politics, there are three sides to every coin: the obverse (heads), the reverse (tails), and the edge. In the health reform debate, in particular, there are those who oppose reform, because they are worried that changing the status quo will jeopardize the “world’s best health care” (as if there’s a coffee mug with this slogan printed on it somewhere beneath the dome of the capitol building) and those who push for reform because they see large swaths of the population with limited access to care, which they translate into low quality. As you might guess, neither extreme has cornered the market on the truth. When it comes to assessing health care quality in the United States in comparison to health care quality in other wealthy nations, the truth is somewhere in the middle: We do some things well and other things terribly.
I could use this space to expound on Cicero and the etymology of “quality” or share the seminal work of Avedis Donabedian, but I will spare you for now. (If you’re interested, let me know, and if I hear from enough of you, I’ll tackle these subjects in future posts.) Instead, I want to draw your attention to an August 2009 report issued by the Urban Institute. It’s about a dozen pages long, so I’ll just hit the high points for you.
In short: The United States isn’t getting what it’s paying for. Compared to other developed nations, we’re in the bottom third when it comes to life expectancy. Our medical care is a mixed bag. We’re relatively poor at preventive medicine and care of chronic conditions, but good at treating cancer, for example. What’s especially notable, given the pejorative manner in which references are made to the “socialized” Canadian health care system, is that the evidence strongly supports that the quality of health care in Canada is better than the quality of health care here at home.
The bottom line is that many definitions of quality introduce quite subjective elements into the analysis, making it hard to draw conclusions about the level of health care quality in the United States, let alone to determine how we compare to other countries. In reading the Urban Institute report–and synthesizing its findings with the rest of my experience of health care quality in the U.S.–here’s what I would consider to be a “fair and balanced” assessment of U.S. health care quality: It’s highly variable. The quality of care you receive depends on a host of factors ranging from what care you require to who provides it and from where you go for care to what kind of insurance coverage you have. The experience of someone–Ted Kennedy, say–who has the means to pick up from Washington, DC or Massachusetts and go to the Cancer Center at Duke University in Durham, NC will be quite different from the experience of someone in Brunswick, GA who is uninsured, has poorly controlled diabetes, and has their foot amputated as a result in the local community hospital.
Without a more universal system in place, we are left drawing straws when it comes to health care quality. Actually, that’s a bit too generous. Our system is such that it allows you to buy better odds of drawing a longer straw. They don’t do business like that in other countries. To quote from the Urban Institute report, the “best U.S. health care is the best in the world”–but most Americans don’t receive anything close to the best U.S. health care. Consequently, the results produced by our health care system–weighted by who does and who doesn’t have access to the best care–fall far short of being the “best health care in the world.” On the contrary, we have islands of excellence in a sea of mediocrity. It’s time to start bringing everyone ashore.
Moving Parts In Employer-Sponsored Health Insurance
Most Americans get their health insurance through their–or their spouse’s–employer. Of course, that’s more or less an unintended consequence of wage freezes that took place during World War II, but hey, our accidental health care system has really grown on us. There’s also that pesky little piece of information that often goes unreported that our employers aren’t required to offer us insurance. Shhhh! Don’t tell anyone, or employers might find out and stop offering coverage. In fact, not all employers currently offer benefits. You probably knew that, but it’s the first crack in the facade. There are two more. Even if employers offer health insurance benefits, the employee’s portion of the costs may be prohibitively expensive, or the employee may not be eligible for the benefits (perhaps they only work part-time or they haven’t worked for the company long enough to receive benefits). Those are cracks two and three.
A new statistical brief from the Agency for Healthcare Research and Quality (AHRQ) takes a look at employer-sponsored health insurance over the period from 1998 to 2008 and finds that some of the cracks in the system are growing larger. First, it seems that about 87% of employers are on average offering benefits to their employees, and that didn’t change across the decade. The gap between large firms (50+ employees) and small firms (<50 employees) is notable, though. About 97.5% of large firms offer benefits. In 1998, only 64.7% of small firms did so, and that number dropped significantly to 61.6% in 2008.
Eligibility rates were statistically flat, however, going from 77.6% of employees at firms offering insurance in 1998 to 78.1% in 2008. The real noticeable decline has to do with eligible employee uptake of benefits, which across all firms dropped from 85.3% in 1998 to 78.7% in 2008. So, significantly fewer employees who work for companies offering benefits and who are eligible for those benefits are electing to purchase the benefits. Why? The answer is painfully obvious: It costs too much.