Public OR Private…doesn’t matter which. Just pick one.

One thing is clear. Government – federal AND state – cannot continue *only* the poor and old. The poor & old (aka the sick) can not make up stand alone risk pools, as they do now in Medicaid and Medicare. In order to work, any risk pool must be large or randomly assigned (preferably both) as to cover enough healthy and sick people…(health) economics 101. In the end, it does not actually matter if its private insurers covering both ends of the spectrum or a federal/state gov’t. Around the world either alternative has proven successful (Germany and Switzerland are entirely privately delivered for example.) A 100 billion dollar subsidy is a temporary, albeit probably very necessary, response. Addressing the mass inefficiencies inevitable from a fragmented and uneven system as ours is the solution. It will mean some stakeholders won’t be happy. But in my mind, the only stakeholders that matter are: 1)citizens, as the patient/consumer as well as the taxpayer; 2)the doctors, all of whom should earn generous compensation that *is not tied* to either the number of services (fee for service) or number of patients (HMOs/capitation.) Medicine is not measured in volume. Income (ideally salary) detached from quantity is prerequisite for true physician autonomy. Physicians, particularly primary care (internists, family practitioners, pediatricians, ob/gyns), cannot be expected to make fully independent decisions, absent of any bias, if their livelihoods are at stake – which they are.

LA Times: Tom Daschle has his own health plan

Tom Daschle has his own health plan

Learning from Clinton’s mistakes, the nominee for Health and Human Services secretary favors going on the political offensive to bring about reform.

By Noam N. Levey

December 15, 2008

Reporting from Washington — By choosing former Senate Majority Leader Tom Daschle to head his healthcare reform effort, President-elect Barack Obama got more than an old congressional hand with a policy book on his resume.

Obama has also picked up a hardheaded political strategy for his push to overhaul the nation’s healthcare system.

Guided by lessons from President Clinton’s healthcare debacle 15 years ago, Daschle has put a premium on cooperation between the White House, Congress and major healthcare interest groups, many of whom agree that major action on healthcare is vital.

Daschle, who will lead both the Department of Health and Human Services and a new White House Office of Health Reform, favors moving decisively to seize political momentum and, if necessary, cut off opposition, something he said Clinton failed to do in 1993.

He thinks delays by the Clinton administration and soft support from the left in the early 1990s allowed Republicans and industry groups such as insurers to kill the Clinton plan with a well-organized political campaign that made voters afraid of reform.

Read the rest of the article…

Athenahealth’s Bush Says Don’t Make Heath IT Reform a Bailout

“At the risk schizophrenia, I’m a very proud first cousin of the current president, and a big supporter. But I did vote for President-elect Obama. And it still feels pretty good…first time ever for me voting for a Democrat”–Jonathan Bush

more about “Athenahealth’s Bush Says Don’t Make H…“, posted with vodpod

Software “isn’t the dominant approach in financial services or retail banking or anywhere else, and it shouldn’t be in health care.” – Jonathan Bush

http://online.wsj.com/video/is-it-healthy-for-records-to-go-digital/4BDDC316-8298-4C51-8710-112D049A220A.html

Comment on WSJ Health Blog today 2

Health Blog: In Naming Daschle for HHS, Obama Pushes Health Reform

I for one am so happy to see a real evidence-based conversation about health reform. I interpret President-elect Obama’s remarks on Medicare Advantage to reflect the fact that MA plans are reimbursed 12% MORE than the standard plan on average, roughly $1,000. (see: http://www.cbpp.org/12-5-07health.htm) This is a slap in the face to the basic premise of privatizing a public program. The premise of course being the private sector can deliver services more efficiently than the public. If the MA plans were reimbursed at an equal rate as their public counterparts, I’d of course support private plans entering the market. However, the Bush admin deference to all things private and forfeited rational decision-making in favor of ideology. Ideology is always dangerous, but particularly so when we are talking about the health of our citizens.

http://healthypolitics.wordpress.com
http://carehealth.wordpress.com

Comment by Emily W - December 11, 2008 at 2:49 pm

Comment on WSJ Health Blog today 1

Health Blog: Besides HHS, Daschle to Oversee Health Reform Office

Many Americans might be interested to hear what the oft misquoted Wealth of Nations author had to say about health care. In 1776, Adam Smith wrote there are 3 important functions that government should serve, which can not be left up to the free market: 1. national defense 2. law & order (justice system) 3. common public goods of health care, education, and transportation infrastructure.

It makes Americans uncomfortable to acknowledge our health care system is broken. Sadly, that does not change the fact it is. There are two features of our system which are superior to the rest of the world, and have done their best to keep our system from imploding. They are: the best medical education, bar none, and the best surgical care worldwide. These, however, do not a high performing system make.

As a nation, we all need to get behind a major reform effort. Take a stake in the reform, the new administration has made an unprecedented effort to give everyone a voice and listen to anyone whose willing to share their opinions. These past election we chose reason, cold unyielding reason. And abandoned ideology, partisan conflicting ideology. I encourage everyone to challenge received wisdom, question preconceived notions, and to form your own ideas about how to best go about strengthening our country – through health reform, financial recovery, and ensuring our national security, to name a few.

http://healthypolitics.wordpress.com
http://carehealth.wordpress.com

Comment by Emily W - December 11, 2008 at 12:10 pm

Comment on Huffington Post today

Tom Daschle To Also Oversee New White House Office of Health Reform

Health reform will be an incredibly complex challenge for 2009. I believe it will happen because Obama has picked the best of the best. Not just Sen Daschle, but people like Peter Orszag, now heading up OMB, who really get it. He’s departure from CBO leaves me a little sad, only because I won’t get to benefit from his CBO director blog anymore! Yes, Obama appointed one of the highest positions in his admin to a blogger. Way hip. I encourage everyone to take a stake in upcoming public discourses on health reform. Scour print and the web for the best sources and read read read! Visit sources you may not normally frequent (I recommend http://blogs.wsj.com/health/) to gather varying perspectives. Learn as much as you can. If we’ve learned anything from the last administration it’s that the luxury of apathy is no longer an option. http://healthypolitics.wordpress.com http://carehealth.wordpress.com

posted Dec 11, 2008 at 12:43:16

Bailout Relativity – UPDATED from 11/14

From now on I’m going to relate giant health expenditures to the bailout as much as possible. Point #1. Peter Orszag* ** is the Director of the Congressional Budget Office (who arguably understands the US health care system better than anyone else in the country) & he estimates 33% of our national spending every year is effectively waste. Now that stat alone should terrify you but let’s tease this out into dollars. Take our $2.2 Trillion system and multiply by 33% = more that $700 Billion.

$725 BILLION. aka a rough equivalent of the financial bailout package. AWESOME.

*Check out his blog at: http://cboblog.cbo.gov/

** UPDATE: The day after I first posted this blog I heard rumors Mr. Orszag was plucked my President-elect Obama to be his Director at the OMB.  A few days after that Obama indeed announced his selection.

Good news for the country. He’s known as a centrist, respected by both liberals and conservatives. Senators Baucus (D-Mont.) and Grassley (R-Iowa) released a joint statement responding to the appointment, saying “Peter Orszag’s economic expertise and his responsiveness to the Senate Finance Committee make his nomination to lead the Office of Management and Budget a welcome one. This difficult time calls for smart, straightforward leaders on the nation’s economic team, and Peter’s credentials are evident to us and to our colleagues on the Committee. If he is confirmed for this position, we know that he will continue to serve his country well.” He’s admired for his unfailing candor and suspicion of received wisdom/ideology.

Bad news…no more blog :(

Federal Employee Health Benefits (FEHB)

There is one place we’ve been able to achieve manage competition, that’s the Federal Employee Health Benefit program (FEHB.)  One writer describes the FEHB stating: “those who know the FEHBP know that it is indeed a well-run, popular program, fueled by the market forces of consumer choice and competition, with a high degree of consumer satisfaction. The best features of the program are choice and competition among a variety of health plans, and it has been historically free of the kind of micro-management that characterizes Medicare and Medicaid. The salient features of personal choice and national competition among a wide variety of plans have properly made it a model for reforming today’s highly regulated health insurance markets, where personal choice and robust competition are conspicuously absent.”

FEHB provides extensive consumer information and protections, including a flat premium rate that applies regardless of an enrollee’s age or health status. For most federal employees, the enrollee share of an FEHB plan’s premium is between 25 and 30% of the total cost of coverage, which provides a sufficient subsidy to entice most workers to enroll.  However, the enrollee share is large enough to create a strong incentive for federal workers to choose wisely b/c they have a significant financial stake in their choice. 

The potential cost-savings are huge. The agency that runs the FEHB program, the Office of Personnel Management (OPM), has enormous residual power to negotiate rates and benefits for health plans and can impose a high degree of control if he wishes to do so. If a significant number of employers chose this option, and it’s likely they would, the cost-savings generated would be equal to their employee pool. Because the pool of risk for each plan would grow, covering a random sampling of  healthy and sick individuals (as only employer-based health insurance can promise), the result is greater efficiencies through decreased administration from annual contracting with each employer/company. 

Senator (and now Secretary of State-designate) Clinton’s proposed opening up FEHB to everyone. I quite like this idea. However, unlike her proposal, I would only propose opening it to the employer-based health insurance market, with employers choosing among a number of local options and several national plans most federal enrollees have. Among the plans employers choose to offer, they would pay matched dollar amounts the government contributes for its employees. (Clinton’s proposal allowed uninsured individuals to buy coverage as well, which may be desirable but unless they were willing to pay 100% of the premium themselves, it is not clear who would pick up the remainder)

 

Managed care in the US; Managed competition abroad

The United States and Europe appear to have opposite challenges in implementing market forces in their health systems.  Unlike in the US, managed competition has been widely adopted across Europe; conversely European countries have had far less success with managed care, while it exploded (while with some ensuing backlash) and is now nearly ubiquitous here. The suggestion of managing (restricting) care has evidently been far less appealing to our counterparts in France, Germany and Switzerland to name a few. Manage care has taken form in the US as greater cost-sharing (with consumers bearing greater out-of-pocket expenses), selective contracting (limiting consumer’s choice of provider), utilization review (the insurance company determining if claims submitted are deemed medically necessary and will be covered), and reimbursing physicians largely on by capitation (physicians receive set amount annually per patient, which has led to a problem particularly in primary care with overextended physicians unable to spend adequate time and attention with their patients.) According to cross-national researchers, populations in Europe, Canada and in some Asian countries reject the suggestion of limiting their choice of provider and related restrictions to access and guarantee of health care services.

 

tom daschle speech today

http://www.c-span.org/Watch/watch.aspx?MediaId=HP-R-13141

Frontline: Sick Around the World

A phenomenal documentary by the journalist TR Reid:

Frontline: Sick Around the World

Five Capitalist Democracies & How They Do It

Each has a health care system that delivers health care for everyone — but with remarkable differences.

Taiwan’s Medicare

In the early 90s Taiwan planners looked abroad at a number of health systems across the world. The model they chose is based on one of our own – Medicare – but implemented universally like Canada’s Medicare.

It’s very important for the conversation about health reform in this country to mature. One country in the world has socialized medicine – Cuba!! EVERY other country in the world has some mix of private, single payer, partly-socialized or social insurance. Socialized medicine means the government owns the doctors & hospitals and pays the bill. Health care is provided and financed by the government through tax payments, just like public schools or the library. To reiterate, single payer is NOT socialized medicine. In single payer one party (the gov’t) pays for health care. In socialized medicine one party (the gov’t) pays for AND provides health care.

Social insurance is perhaps the most widespread health system today. Now bankers will probably be familiar with the principles behind social insurance – it is fundamentally the equivalent of limited liability in corporations. Limited liability isn’t such a bad thing in the corporate world, eh?

Taiwan’s health care delivery system in brief. The bulk of Taiwan’s health care facilities—86 percent of hospitals (1999) and 65 percent of all hospital beds (2000)—are privately owned. Most of the privately owned beds are in nonprofit hospitals that nevertheless can earn sizable profits, like their U.S. counterparts. Doctors in Taiwan are either salaried staff physicians in hospitals or self-employed owners of medical practices known as clinics, of which 97 percent are privately owned. 1.

In Taiwan they have Smart Cards, plastic cards containing an individual’s electronic medical records. (As do France & Germany.) Citizens may see any physician they chose. The gov’t monitors utilization through the residents smart card and the doctors. It is an enviable system we could learn much from (much like they learned from us) but the gov’t isn’t charing nearly enough for this comprehensive coverage to cover their expenses. Case in point, national expenditure on health care is 6.3% (we spend more than 16%) & the average premium for a family of 4 is $650 (ours is $12,000.) It doesn’t take much imagination to envision what streamlining could do for the US system.

1. Cheng, TM. Taiwan’s New National Health Insurance Program: Genesis And Experience So Far.” Health Affairs, 22, no. 3 (2003): 61-76

Truer words were never spoken

“In the long run, Americans will always do the right thing — after exploring all other alternatives” -Winston Churchill

What the newly federalized banks have in common with insurance companies

A great analogy I’ve heard the about recent bailout of the financial system is that the federal government now has to get into the business of banking, except it has to act like a poorly run for-profit bank. It can’t set prices too low, or it wastes tax payers money. And it can’t set them too high, or they bankrupt the banks anyways. How does this related to insurance companies?

Because I’m not convinced the continued presence of for-profit insurance companies is sustainable in the US setting for the same reason. I don’t think it’s fair or practical to assume for-profit insurers will ever knowingly agree to give up market share. Why would they? Their incentive to block any reformative change to the system is too great, it eclipses any moral imperative or inefficiency (33 cents on every dollar) the fragmentation within our system (with competing private/public insurers) creates. I don’t think an endeavor should ever be asked to run itself like a “poorly run for-profit” company, which is inevitable in the US context. The capitalist instinct is too strong in America, I believe. Conversely, the reigning spirit of communitarism and social solidarity in Europe lends to a culture and a business culture more inclined to accept non-profit status as part and parcel to the overall objective of universal health insurance.