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Archive for the 'Health Reform' Category
Everyone agrees. Republicans and Democrats. Conservative and liberals. Newt and Hillary. Government should force doctors and hospitals to clean up their act by: adopting electronic medical records, practicing evidence-based medicine, coordinating care, integrating care, and doing numerous other things that all right-thinking health policy analysts have determined they should do. Trouble is, what everybody knows turns out not to be true.
Who should pay for my health insurance?
I'm not raising this as a legal or contractual issue. This is an "ought" question.
As a moral and ethical issue, who should pay for my health insurance?
If you spend all your time around health policy wonks, I'm probably the only person you know who even thinks this is an interesting question. I've never heard it raised at any health conference. But then most of the ones I attend are in Washington, D.C. - where no one ever talks about the ethics of anything unless he is skewering an opponent.
Anyway, let's start with Warren Buffett. He can certainly afford it. But why Buffett? Why not John Templeton down in the Bahamas? Or the Queen of England? Or anyone else on Forbes' list of international billionaires?
Real health reform does not cost money. It saves money. Conservatively, I would guess we could reduce health spending by one-third and raise quality and increase access to care at the same time. That's $7,000 for every U.S. household. Since government spends almost half the money, we could all get an annual economic stimulus check for $3,000 - leaving $50 billion behind for government to mop up any remaining problems.
Alas, hardly anyone is in favor of real reform. For a lot of people, reform doesn't even count as reform without sacrifice and atonement. Think of California liberals and global warming. Nothing they do will have any perceptible impact on the climate. But they don't feel good about themselves unless they are enduring pain and discomfort.
Anyway, suppose we did need more money to add to our annual $2.1 trillion health care spending spree. Where could it come from?
Do you think it's possible to demonstrate with a single graph the fallacy behind every wrong-headed solution to the problem of rising health care costs? Here it is:
I call this graphic the "Health Fork," because it reminds me of a tuning fork and it has the power to fine tune potentially sloppy thinking. Once the diagram becomes widely known, it can serve several useful purposes:
- A postcard version could be used by journal editors to signify rejection of poorly conceived manuscripts, thereby saving the time and money costs of peer review.
- A placard version could be used to visually reject ill-advised health policy speeches instead of hissing and booing.
- A gold-plated version could be worn as a lapel pin by clear thinkers so the two of you will know who you are at the next event sponsored by the Center for Health Systems Change.
[Note: additional uses for the Health Fork- including the most creative and most amusing uses - have been deleted by the internal NCPA editorial censor]
I am establishing the Mondrian Award for Ineffectiveness in Health Policy. The award will go to the program, agency or proposal that promises the least health outcome for the most dollars spent.
Once this idea catches on, I think it could take on a life of its own. The GAO, for example, could award an annual Mondrian to some deserving federal agency. The CMS could give a Hospital of the Year Mondrian. Each hospital, in turn, could give an annual award to a deserving department or staff doctor.
Close your eyes and try to think of every health reform plan you've ever heard of - beginning with Hillary Clinton's plan about 15 years ago right up through Arnold Schwarzenegger's plan today. Think left and right. Think big and small. Don't overlook the self-serving plans devised by hospital, insurance and drug company trade groups. And don't overlook Len Nichol's plan, which is supposed to be rooted in the Old and New Testaments and the Koran.
Yes, I know. No one should have to do this on a full stomach. So you may want to put this exercise aside for a few hours and then come back to it. But if you really concentrate, at least three or four dozen plans should easily spring to mind.
The American health care system has three fundamental problems: cost, quality and access.
Problem of Cost: Health care spending per capita is growing at twice the rate of growth of national income. If that trend continues, health care will crowd out every other form of consumption by the time today's college students retire.
Problem of Quality: RAND researchers find that patients get recommended care only about half the time; and the type of insurance, or whether you even have insurance, doesn't seem to matter. An Institute of Medicine study found that as many as 98,000 people die every year because of medical errors. Other studies have shown that an appallingly low percentage of doctors and hospitals have patient records in electronic form, thereby missing opportunities to use error-reducing software.
It is the season for health insurance reform, and that's dangerous. The odds of doing something bad are much higher than the odds of doing something good.
At the NCPA, we are producing a handbook on state health reform. The final document will soon be ready. However, we don't want to be like the FDA and deny people life-saving remedies. So here is the URL for the latest draft:
http://www.ncpa.org/email/State_HC_Reform_6-8-07.pdf
In the meantime, here are four things to avoid.
I am probably the only person you know (or are likely to meet) who thinks all the major problems in our healthcare system are caused by bad government policies.
If you want to see the case for this position, look at the article I wrote for the Journal of Legal Medicine. In it, I ask readers to perform a thought experiment: identify the major ways in which government policies create perverse incentives to do socially bad things. Then imagine replacing those harmful policies - not with good polices, but with polices that are completely neutral, I call this the "do no harm" approach to public policy.
First, some background. Years ago I proposed an idea to Ira Magaziner and he ignored it. More recently, Governor Romney made the idea the center piece of his Massachusetts reform plan, although he tacked on an individual mandate and other regulations I find objectionable. This week, Governor Schwarzenegger took the same core idea and coupled it with so many bells and whistles it's hardly recognizable.
Here was my original proposal: Currently, the existence of free (charity) care encourages people to avoid private insurance. We should instead use the "free care dollars" to encourage people to privately insure. Dollars should follow people. If they buy private insurance, they get a subsidy. If they stay uninsured, the money stays in the safety net system. This requires no new spending. There is also no need for a mandate. The goal is 1) eliminate perverse incentives and 2) offer low-income families access to the same system everybody else participates in. (The same principle, by the way, also should apply to Medicaid enrollees). The California plan is very different. It would require people to buy insurance, spend a lot more money, create more perverse incentives than it eliminates, raise everyone's health care costs, and create new burdens for low income families.
The American Medical Association wants to require everyone who earns more than five times the poverty level to have health insurance. The thresholds are $49,000+ for individuals and $100,000+ for a family of four. Failure to comply would not earn jail time. It would result in higher taxes, however. The AMA's mistake (quite common in health policy circles) is a failure to recognize that the uninsured already pay higher taxes because they are uninsured. At $49,000 income, an individual who gets a $6,000 health insurance plan from an employer avoids a 25% federal income tax, a 15.3% FICA tax and, say, a 4% state and local income tax. If he were uninsured, enjoying taxable wages instead of health insurance, the individual would pay $2,640 of extra taxes each year precisely because he is uninsured. The problem is not the absence of financial penalties; we already have them. The problem is that the penalties primarily go to Washington, DC; whereas the free care (if needed) is delivered locally. The solution is to coordinate tax and spending programs (Gov. Romney is trying to do this in Massachusetts). There is no need for a mandate.