health care

I agree that its sad that time is being wasted on this insane euthanasia/death panel nonsense. But what's even more upsetting is the other part of the opposition's rationale in fighting health care -- "People love the health care that they have!" Uh, yeah. People also like credit cards with unlimited credit. This is what I don't understand about the White House's approach. Why aren't they just stating the plain fact - the health care you have is not financially sustainable. We need a new business plan for health care, because its hemorrhaging money. The way I see it, there are 4 major ideas that are being proposed to cut costs:

1. Increased efficiency - I think everyone is on board with things like electronic medical records and things of that nature, but there is a legitimate argument over insuring the 45 million uninsured. But again, here, the argument over the moral imperative (is health care a 'right') is spurious - society has already determined that health care is a right. Public hospitals don't turn away people with no insurance. So what's the best way to insure people who can't pay? Thinking in terms of efficiency would suggest that broad government coverage be focused on 1) catastrophic coverage, and 2) preventative care. Shouldn't a public plan be based predominantly around those tenets?

2. Rationing - This issue was addressed by Peter Singer a few weeks ago in the NYT Magazine, where he asked a simple question:

The way we regard rationing in health care seems to rest on a similar assumption, that it’s immoral to apply monetary considerations to saving lives — but is that stance tenable?

Probably not. Some estimates suggest that up to 80% of health care costs are spent on the terminally ill. This is where the outcries of 'euthanasia' come from, but its a realistic question. Is it sustainable, or efficient, to spend most of our money in this way? Correct me if I'm wrong, but convincing a terminally ill patient that a DNR is the right decision is more likely humane than murder, or so most hospitalists believe. Or am I wrong? What's really wrong is that the cries of death panels drown out the need for legitimate discussion on rationing.

3. Driving down drug costs - One of the other big controversies in health care reform is the sketchy dealings between the White House and pharmaceutical trade representatives. One of the big potential cost-saving measures was thought to be by having Medicare (and by extension, the government), which serves as a huge buyer of drugs, use that leverage to drive down drug prices - which is basically letting market forces set drug prices. It's not entirely clear what is going on, but it appears that the White House has ceded that negotiating capacity in exchange for a guaranteed price reduction that does not exceed $80 billion over 10 years, plus about $150 million spent on advertising to get health care reform passed. Frankly, $80 billion is a drop in the bucket compared to a $1.5 trillion health care expansion, so this is pretty much a lost cause in terms of savings. Now, so I don't seem hyperpartisan, there are plenty of arguments (some presented here) that suggest that hard line Medicare negotiations would set price ceilings that would hamper drug and health care technology development.

Perhaps. But isn't there a more measured answer to this? Is Medicare always really in the market for 1st line, newly patented state-of-the-art drugs? Can't Medicare negotiate cheap prices on generic, broadly issued drugs while still allowing high prices on the newest drugs to drive more research and development? It's another argument for stratifying health care, which leads us to:

4. Driving down insurance costs - As opposed to Big Pharma, insurance companies appear to be the main target of health care reform (to the extent that its now being called 'health insurance reform' on whitehouse.gov and in Barack Obama's op-ed in NYT today). To quote:

[R]eform will provide every American with some basic consumer protections that will finally hold insurance companies accountable. [W]e will require insurance companies to cover routine checkups, preventive care and screening tests like mammograms and colonoscopies. There’s no reason that we shouldn’t be catching diseases like breast cancer and prostate cancer on the front end. It makes sense, it saves lives and it can also save money.

OK, fine. That appears to fulfill the moral imperative but almost completely ignores how exactly this is going to pay for itself (in the editorial, he offers cutting 'hundreds of billions of dollars' in Medicare/Medicaid inefficiencies and preventative screening has his two cost-saving breakthroughs - not exactly enough to knock my socks off). And in fact, there are alternate, free market proposals out there. One long-winded perspective comes from David Goldhill, who in this month's Atlantic offers a businessman's perspective on how to reform health care. His idea: a combination of government-funded catastrophic health insurance, vouchers for some preventative care, and out-of-pocket payment for everything else:

First, we should replace our current web of employer- and government-based insurance with a single program of catastrophic insurance open to all Americans—indeed, all Americans should be required to buy it—with fixed premiums based solely on age. This program would be best run as a single national pool, without underwriting for specific risk factors, and would ultimately replace Medicare, Medicaid, and private insurance. All Americans would be insured against catastrophic illness, throughout their lives. How would we pay for most of our health care? The same way we pay for everything else—out of our income and savings. Medicare itself is, in a sense, a form of forced savings, as is commercial insurance. In place of these programs and the premiums we now contribute to them, and along with catastrophic insurance, the government should create a new form of health savings account—a vehicle that has existed, though in imperfect form, since 2003. Every American should be required to maintain an HSA, and contribute a minimum percentage of post-tax income, subject to a floor and a cap in total dollar contributions. The income percentage required should rise over a working life, as wages and wealth typically do.

He then suggests that the elimination of comprehensive private insurance might lead to people being more efficient with how they spend money on health care - might they be more likely to turn to walk-in clinics, for example? But whether through out-of-pocket expenditures or through insurance plans, I happen to think that this idea of stratifying coverage - providing basic coverage for everyone and increasing coverage through increasing cost - is a good one. The benefit of a public 'option' (or government funded catastrophic insurance, whatever) is that it provides a competitive model for people to actually decide whether the extra cost of private insurance is worth it - forcing insurance companies to also be more efficient. I happen to think that insurance-based systems still provide alot of benefits - they spread risk around broadly and offer more continuity of care - but merely subsidizing people with vouchers to be able to pay for coverage does nothing to pressure insurance companies to lower costs. On the other hand, I totally agree with the potential to use cheap, efficient walk-in clinics at places like Wal-Mart as efficient triage sites. But ultimately, pretending that some kind of reform, including increased efficiency, thoughtful rationing of exorbitant health care expenditures, and competition to reduce pharmaceutical and insurance profit margins, is unnecessary, is patently ridiculous, and one need only look at spectacles like what happened in California this week to know that the system is broken, and getting worse.