Empathy, Taxes, Personal Responsibility, and Healthcare Reform

Two years ago I wrote a four-part blog post presenting answers the questions: Who is worthy of having adequate health insurance and high-value (safe, cost-effective) care; and what makes them deserving? And who, on the other hand, is unworthy; and what makes them undeserving? It includes debates with others about issues including free market forces, as well as government and individual responsibility, universal healthcare, taxation, smart economic growth, and problems with healthcare insurance. Here's the link http://curinghealthcare.blogspot.com/2007/09/worthiness-socialized-medicine-and.html

In January '08, we presented an in-depth analysis of the presidential candidates' healthcare proposals. The analysis included a discussion that compared (a) a publically funded universal healthcare program that included a private insurance to (b) a single-payer program (no private insurance) at http://www.nhds.com/candidate_analysis/healthcare.htm#EN3. Then we discussed whether it's necessary to increase taxes in order to fund a publically-funded universal healthcare system at http://www.nhds.com/candidate_analysis/healthcare.htm#EN4. The bottom line is that the Republicans' main focus appeared to be on minimizing taxes and making only minor changes to our current healthcare system, while the Democrats appeared more focused on providing some form of universal coverage (be it single payer or a hybrid system). The debate today seems to be along the same lines.

From a psychological perspective, here's how I see it:

Many fortunate people with plenty of money or a secure job with an excellent health plan do not want to pay more taxes nor to risk changing the coverage they believe benefits them; even if such changes may benefit many others who are suffering.

Some of those fortunate folks likely experience cognitive dissonance (i.e., are conflicted) when considering the plight of the millions of Americans who cannot afford adequate insurance and top quality care. Some may reduce this emotional discord/distress by believing that those less fortunate are somehow less deserving and should even be punished for having health problems. They may, for example, believe in the "moral hazard" myth, which states that providing adequate health insurance for all encourages risky and wasteful behavior by the insured persons since the cost of healthcare consumption is paid by someone else. So, they conclude that there ought to be considerable "skin in the game" (i.e., out of pocket expense to reduce consumption), which can have a devastating impact on the working poor and other struggling to make a living; see http://curinghealthcare.blogspot.com/2006/11/moral-hazard-idea-myth.html.

Interestingly, one key thing absent from all this is EMPATHY (i.e., the ability to put oneself in the shoes of another). That is, it's much easier for many who are better off financially and health-wise to blame those who struggle and suffer for their own woes, than it is for them to feel others' pain and willingly pay increased taxes to help them. This is not surprising since:

• Judge Sonia Sotomayor Supreme Court confirmation hearings in which empathy—the quality President Obama has proposed as a criterion for his judges—was considered a dirty word.
• Many of the bankers, brokers, and others responsible for our economic collapse didn't feel empathy for those losing (or destined to lose) their homes while they profited.
• Empathy is often absent in the health insurance industry as evidenced by insurance exec turned whistleblower Wendell Potter, who spoke out against health insurance industry at http://www.democracynow.org/2009/7/16/former_insurance_exec_wendell_porter.

Based on all this, I'm not at all surprised with the current opposition to universal healthcare—I'm saddened by it—but not surprised. After all, the "me generation" and their children are in power in the USA … and focusing on "me and mine" to the exclusion of others does not promote empathy (or compassion). This bodes very poorly for the future of our civilization, btw!

I'm not without hope, however. President Obama appears to be pushing strongly for change in a direction that will help level the playing field and improve the lives of those who suffer. Increased taxes from the more fortunate to help the less fortunate cannot be avoided, imo. So, we can expect pushback from those lacking empathy.

In my next post, I have a contentious debate with people working in the health insurance industry.
Related links:

• Low-Cost, High-Quality Care In America: A Reply
• How to Reform Healthcare Sensibly: Focus on Two Clear Goals
• Healthcare Reform’s Most Important Issue: How to Make it a High-Value System
• Empathy, Taxes, Personal Responsibility, and Healthcare Reform
• Empathy, Taxes, Personal Responsibility, and Healthcare Reform – A Timely Debate (part 1)
• Empathy, Taxes, Personal Responsibility, and Healthcare Reform – A Timely Debate (part 2)
• Healthcare Reform: Where to Focus?

Can our government be trusted to run a universal healthcare system?

I've been involved in several discussions about the Analysis of the Candidates’ Healthcare Proposals web site I published last week (and have updated since then). Much of the debate centers on mandates and trust of our government to run a nation-wide universal healthcare system.

One reader had this to say:

Within the current system, the mandated "Medicare drug plan" appears to be heavily weighted to benefit the pharmaceutical manufacturing & distribution industry. Please give me your thoughts or analysis on the recognition of the candidates in what certainly appears to be an industry with very powerful influence in government. My personal assessment/feeling leans toward a more competitive market with as few government controls as possible. However I do feel government has a needed and viable role in the healthcare of our citizens.

I responded as follows:

I haven't analyzed who benefits most from the Medicare drug plan, but based on my understanding of our current healthcare system, I have little doubt that powerful lobbies influence policy. For example, a 2004 study on healthcare lobbyists [here’s the link] found that, of the of 1192 organizations were involved in healthcare lobbying, pharmaceutical companies spend more money lobbying Congress than other health care organization. Other top lobbyists are medical device manufacturers, insurance companies and healthcare provider organizations. In 2000, healthcare lobbying expenditures totaled $237 million, which was more than the lobbying expenditures of every other industry, including agriculture, communications and defense.

This supports your implication that our government can’t be trusted to do the right thing for the masses due to the influence of special interests.

At the same time, these data imply that these special interest groups--i.e., those making money from the current system--will not likely start delivering high-value to the consumer/patient on their own since greater cost-effectiveness for the consumer/patient eats into their profits under our current broken healthcare system (see this link for more about the need for a greater value).

So, I agree that more sensible competition is one part of the solution, and I agree there must be government mandates if we are to have quality improvement, cost control and good care for all. But it’s debatable as to the kind of government influence is needed (e.g., what types of mandates) and what can be done to hold politicians accountable to the people/consumers/citizens?

Personally, I’d like to see our government provide funding and management for all the reasonable quality improvement and cost control strategies presented in the candidate comparison web site. I’d like this to be done in the most effective and efficient way possible, with all government agencies involved being closely watched and scrutinized by an independent oversight organization whose allegiance is to the consumer.

One question is whether a single-payer system, which is run completely by the government as in other countries, would be better than a system in which private insurers compete with a government run universal healthcare program. As discussed in the candidate comparison web site, the main arguments against a single-payer system can be disputed. CMS does run Medicare and Medicaid after all, which is a single-payer system.

The issue of trust in our government, however, remains unresolved. I suggest that these be the healthcare-related issue we focus on.

Analysis of the Candidates’ Healthcare Proposals

After analyzing the details of each Presidential candidate’s healthcare proposal, it appears that a person is likely to select a proposal based on one’s:

• Current health insurance plan
• Level of wealth
• Priority for assuring good healthcare for all.

Combining these three factors results in eighteen groups of voters--each with particular wants and needs--who would prefer different candidates' proposals based on these factors.

Here is a link to the Analysis of the Candidates’ healthcare Proposals web site. It presents a systematic detailed comparative analysis of each candidate's healthcare proposal based on the wants and needs of the 18 voter groups. The analysis resulted in the following conclusions:

• The candidates most concerned with improving the quality and controlling the costs (i.e., increasing the value) of healthcare are: Clinton, Edwards, Kucinich, Obama, Richardson and McCain.
• Voters who want good care for all are willing to do what it takes—including paying increased taxes, etc.—to support a publically-funded UHS. Candidates who want a Federal Employees Health Benefits Program UHS (FEHBP-UHS) and want to keep private insurance as an option are: Biden, Clinton, Dodd, Edwards, Obama and Richardson. Only Kucinich proposes a government-run Single Payer UHS (SP-UHS). Choosing between these two options is discussed on the web site.


• If an FEHBP-UHS is desired, then Clinton and Edwards are the best choices because they also more focused on increasing care value, with Obama and Richardson coming in second.
• If an SP-UHS is desired, then Kucinich is the only choice. Note that his plan (HR 676) is also the most detailed (has the greatest specificity), which means it may be the most credible.

 

On the other hand, any Republican is a suitable choice for voters who (a) are not concerned about the care others receive (they aren’t interested in good care for all) and (b) are confident they will always have excellent insurance, or can afford to pay for the care they need out-of-pocket if they lack adequate insurance. Choosing between Republican candidates would likely be based on their strategies for:

• Minimizing taxes and reducing personal health-related expenses
• Increasing healthcare value (cost-effectiveness), in which case McCain is probably the best choice since he proposes the most strategies of all Republicans for improving quality and controlling costs (as well as being the only Republican addressing the health need of veterans through the VA).

Note, however, that there are significant gaps in every candidate’s proposal. It would be useful to know how what it would require to (a) evaluate all the quality improvement and cost control strategies described in this document and to (b) implement the effective ones efficiently.
All these and other related issues are examined on the web site, including issues concerning healthcare quality improvement, cost control, financing new publicly funded universal healthcare systems, subsidies, mandates, tax changes, and more.

I welcome your comments.

Presidential Candidates’ Healthcare Proposals: Public Insurance & Single Payer Plan

In my last post, I discussed whether the U.S. needs universal coverage. In this post, I examine the candidate's proposals concerning how universal coverage can be achieved. A key strategy involves the deployment of new and expanded public insurance programs, which includes a heated debate about a government run single-payer system.

All the Democrats propose universal healthcare (coverage for all Americans). Only Kucinich supports HR 676, which is a single-payer, "Medicare for All" plan that gives everyone comprehensive coverage. Gravel also proposes a single-payer solution, but through use of federally funded vouchers. All the other Democrats propose a public Federal Employees Health Benefits Program (FEHBP) type program and/or Medicare, Medicaid, SCHIP, which are supported by subsidies (e.g., through tax credits or vouchers) to low income persons.

Republicans, on the other hand, do not propose new public programs, the expansion of existing public programs, nor universal coverage. Instead, they all propose market-based private insurance solutions through tax deduction/credit subsidies to lower insurance premiums and deduct medical expenses from the taxes of lower income persons. Other strategies include increasing competition, tort reform, and payment changes to providers.

New and Expanded Public Programs

All Democrats (and no Republicans) propose new public programs.

v Comments about Public Insurance in General

Consider the following:

Public insurance programs offer the greatest potential for automatic and continuous enrollment and the ability to cover everyone. Enrollment could be facilitated through local Medicare or Social Security offices. Those failing to enroll could be signed up when they seek health care services or coverage could be verified as part of income tax filing. With everyone eventually enrolled at birth in an expanded Medicare, people would automatically be enrolled and stay enrolled across their lifespans. Most proposals would establish a minimum standard benefit package modeled on the typical plan offered to members of Congress or to employees of large firms. For those proposals requiring enrollees to pay cost-sharing or a portion of premiums, a ceiling on out-of-pocket costs and premiums as a percentage of income would be established to ensure affordability. Some proposals modeled on the Canadian health system, for example, would not include patient cost-sharing for basic services and would be financed by federal and state taxes.
Given Medicare's low administrative costs and broad risk pooling, substantial savings could accrue in an expanded Medicare approach through a reduction in administrative costs. Other sources of savings would likely arise from paying providers Medicare rates that are lower, on average, than private rates.

The proposals modeled on the current Medicare program would provide choice of plans, including the private plan options currently available to Medicare beneficiaries and the program's self-insured plan.

The public insurance approaches to health insurance reform would create dislocation, with people moving from their current coverage to coverage through Medicare or another public plan. However, people would still likely keep their same set of providers. Proposals that would allow employers to continue offering coverage would be less disruptive initially, although it is anticipated that most employers would ultimately prefer to pay a part of the Medicare premium rather than private coverage premiums, which would probably be higher.

These proposals would allow the nation to develop and utilize common quality metrics, gather data on the health care outcomes of the full population, and evaluate and improve the performance of providers based on a large pool of patients not fragmented by insurance type. They also would allow for the creation of uniform provider payment systems that reward high-quality care, standardization in health information technology, and the creation of universal processes to improve safety systematically across health care institutions.

Financing is likely to come largely from federal income and payroll taxes or new taxes, such as a value-added tax or consumption tax. This would be less administratively complex than providing premium subsidies based on income. The distribution of financing is most likely to be more progressively related to income than either individual insurance market or mixed private–public group insurance proposals. [Reference]

Single-Payer Government-Run System

Kucinich is the only candidate proposing a single-payer government run system (HR 676), which gives each person their own healthcare card.

v Comments about Single-Payer Government Run System

The case for universal healthcare was discussed above. But should it be a government run single-payer system?
The primary arguments in favor of a single-payer system center on cost control issues.
Here are views about how it would reduce administrative costs:

The most obvious difference between [European] health care systems and ours — that their governments provide universal insurance — certainly plays a big role in the cost differences. Look behind the receptionist at your doctor's office, and you will very likely see a staff of people filing claims to different insurance companies. The insurance companies, meanwhile, employ a small army charged with figuring out how to avoid covering the unhealthy. The administrative costs of our patchwork bureaucracy eat up about 25 percent of health spending… Even in Europe's single-payer systems, administrative costs account for about 15 percent of health spending [italics added], once everything is included, according to the Lewin Group, a consulting firm…. Medicare, which has administrative costs roughly as low as those of other countries' universal plans. Younger Americans, by contrast, have private insurance, with all its inefficiencies. Yet elderly Americans' share of national health spending is similar to that of the elderly in other countries, as Arnold Kling, an economist, has noted [source].
Private insurers spend large sums fighting adverse selection, trying to identify and screen out high-cost customers. Systems such as Medicare, which covers every American sixty-five or older, or the Canadian single-payer system, which covers everyone, avoid these costs. In 2003 Medicare spent less than 2 percent of its resources on administration, while private insurance companies spent more than 13 percent … Although it's rarely described this way, Medicare is a single-payer system covering many of the health costs of older Americans. (Canada's universal single-payer system is, in fact, also called Medicare.) And it has some though not all the advantages of broader single-payer systems, notably low administrative costs. [source].

Here's a discussion of how a single-payer system would control healthcare delivery costs:

…the evidence clearly shows that the key problem with the US health care system is its fragmentation. A history of failed attempts to introduce universal health insurance has left us with a system in which the government pays directly or indirectly for more than half of the nation's health care, but the actual delivery both of insurance and of care is undertaken by a crazy quilt of private insurers, for-profit hospitals, and other players who add cost without adding value. A Canadian-style single-payer system, in which the government directly provides insurance, would almost surely be both cheaper and more effective than what we now have. And we could do even better if we learned from "integrated" systems, like the Veterans Administration, that directly provide some health care as well as medical insurance. … 

[Another] source of savings in a system of public health insurance is the ability to bargain with suppliers, especially drug companies, for lower prices. Residents of the United States notoriously pay much higher prices for prescription drugs than residents of other advanced countries, including Canada. What is less known is that both Medicaid and, to an even greater extent, the Veterans' Administration, get discounts similar to or greater than those received by the Canadian health system. 

We're talking about large cost savings. Indeed, the available evidence suggests that if the United States were to replace its current complex mix of health insurance systems with standardized, universal coverage, the savings would be so large that we could cover all those currently uninsured, yet end up spending less overall. That's what happened in Taiwan, which adopted a single-payer system in 1995: the percentage of the population with health insurance soared from 57 percent to 97 percent, yet health care costs actually grew more slowly than one would have predicted from trends before the change in system [source].

And the following argues that a single-payer system is the only way sensible solution:

A mere shift of power from Republicans to Democrats would not, in itself, be enough to give us sensible health care reform. While Democrats would have written a less perverse drug bill, it's not clear that they are ready to embrace a single-payer system. Even liberal economists and scholars at progressive think tanks tend to shy away from proposing a straightforward system of national health insurance. Instead, they propose fairly complex compromise plans. Typically, such plans try to achieve universal coverage by requiring everyone to buy health insurance, the way everyone is forced to buy car insurance, and deal with those who can't afford to purchase insurance through a system of subsidies. Proponents of such plans make a few arguments for their superiority to a single-payer system, mainly the (dubious) claim that single-payer would reduce medical innovation. But the main reason for not proposing single-payer is political fear: reformers believe that private insurers are too powerful to cut out of the loop, and that a single-payer plan would be too easily demonized by business and political propagandists as "big government." 

These are the same political calculations that led Bill Clinton to reject a single-payer system in 1993, even though his advisers believed that a single-payer system would be the least expensive way to provide universal coverage. Instead, he proposed a complex plan designed to preserve a role for private health insurers. But the plan backfired. The insurers opposed it anyway, most famously with their "Harry and Louise" ads. And the plan's complexity left the public baffled. 

We believe that the compromise plans being proposed by the cautious reformers would run into the same political problems, and that it would be politically smarter as well as economically superior to go for broke: to propose a straightforward single-payer system, and try to sell voters on the huge advantages such a sys-tem would bring. But this would mean taking on the drug and insurance companies rather than trying to co-opt them, and even progressive policy wonks, let alone Democratic politicians, still seem too timid to do that [source]. 

Two important lessons can be learned [from the Massachusetts Health Reform Law]. First, we need to sever the connection between healthcare and employment. People need continuous, portable coverage that is affordable, comprehensive, and equitable. Second, we cannot depend on the private insurance industry to provide this for us.
Piece-meal reform such as the new law will not work. Both employers and the public support the concept of single-payer healthcare. Big business is starting to realize that a single payer system will be the only affordable way to cover everyone. When will our politicians understand that their political futures will depend on supporting this kind of comprehensive reform? [source] 

The reason we spend more and get less than the rest of the world is because we have a patchwork system of for-profit payers. Private insurers necessarily waste health dollars on things that have nothing to do with care: overhead, underwriting, billing, sales and marketing departments as well as huge profits and exorbitant executive pay. Doctors and hospitals must maintain costly administrative staffs to deal with the bureaucracy. Combined, this needless administration consumes one-third (31 percent) of Americans' health dollars. 

Single-payer financing is the only way to recapture this wasted money. The potential savings on paperwork, more than $350 billion per year, are enough to provide comprehensive coverage to everyone without paying any more than we already do.
Under a single-payer system, all Americans would be covered for all medically necessary services, including: doctor, hospital, long-term care, mental health, dental, vision, prescription drug and medical supply costs. Patients would regain free choice of doctor and hospital, and doctors would regain autonomy over patient care.
Physicians would be paid fee-for-service according to a negotiated formulary or receive salary from a hospital or nonprofit HMO / group practice. Hospitals would receive a global budget for operating expenses. Health facilities and expensive equipment purchases would be managed by regional health planning boards. 

A single-payer system would be financed by eliminating private insurers and recapturing their administrative waste. Modest new taxes would replace premiums and out-of-pocket payments currently paid by individuals and business. Costs would be controlled through negotiated fees, global budgeting and bulk purchasing [source]. 

Single payer, universal health care administered by a state public health system would be much more democratic and much less intrusive than our current system. Consumers and providers would have a voice in determining benefits, rates and taxes. Problems with free choice, confidentiality and medical decision making would be resolved [source].

The primary arguments against a single-payer system center on concerns about:

• Loss of options or increased expense to those who currently have employer-paid plans
• Rationing of care
• Stifling of innovation
• Long wait for care.

Regarding the first two bullets, consider the following:

Most lucky Americans with good insurance are doubly isolated from financial reality. They don't pay for their health care and they don't even pay for most of their insurance—their employers or the government pays. …[With a single-payer system, the government would have to start] saving money by simply not providing effective treatments that cost too much. …Should people be allowed to opt out of [such] rationing if they can afford it? That is, if the system (private or single-payer) won't pay for the $100,000 pill, should you be able to pay for it yourself? …There are the makings of a deal here. Better-off or better-insured people could be told, individually or as a group: Give up your health-care subsidy [i.e., buy insurance or healthcare with your own money] and you may opt out of any rationing-type restrictions that the system imposes [source]. 

In a Single-Payer system, everyone has an EQUAL access to insurance coverage. But it doesn't mean that everyone is able to access all the care that they want or even believe they need. …Since users of the system don't pay for care directly, the only way to control costs is to limit utilization & access to medical technology. A single-payer system's economic success is …to limit access to services, as well as access to the most sophisticated and expensive types of medical treatment and services. …Significant savings in single-payer systems come from limiting the supply of medical services to curb demand (rationing of treatment and technology)… 

Residents in countries with single-payer systems pay significantly higher taxes…Canadians are currently paying 40 percent more taxes than Americans, and Europeans are paying 60 percent more than we are! [source]

A counter argument is that our system needs to increase value to the consumer, so that everyone gets the safest, most cost-effective care possible. That will only happen when (a) we know what care gets the best results for the least cost for each person (which is a problem in its own right) and (b) there are mandated rewards for delivering such high-value care and punishments for not. Single-payer system countries are working diligently to identify the most cost-effective tests, treatments and prevention methods, and to minimize over-testing, over-treating and use of expensive drugs and procedures when more cost-effective options exist. The U.S. healthcare system, on the other hand, does just the opposite: More profits go to providers, pharmaceutical companies and medical device manufacturers when patients get sick, receive more tests and treatments, especially when they're expensive; this does not bring high value to the consumer [see this link]. This means that we've got to transition from "pay-for-volume" to "pay-for-value"—instead of arguing that waste is "a benefit" private insurance allows—and a single-payer system can help drive such value.

Nevertheless, what if certain consumers want to throw their money away for expensive care with little evidence of efficacy? Or what if they want to pay more than is necessary for care when there are less costly options that are just as good? If they are willing to pay for it out of their own pocket for it—through costly private insurance or cash—then shouldn't they have that option? Should our government refuse them access to overly expensive or ineffective care? Well, this depends on whether allowing people to opt out of the single-payer system drains so much money from the system that it cannot survive. This issue is discussed later in the mandates section.
Anyway, here's a discussion of why rationing makes sense:

Americans seem to be less willing [than Europeans] to take no for an answer and more willing to try almost anything, no matter how expensive or how slim the odds, to prolong life. … It has made us obsessed with medical advances and turned this country into the world's research laboratory. …But much of it is simply wasteful. Expensive procedures…are often no more effective than basic ones, according to research. Yet doctors can keep on getting reimbursed for the expensive ones. "Basically, anything that doesn't kill patients is paid for by Medicare and insurance companies," said Jonathan Skinner, a health care researcher at Dartmouth College. …We Americans tend to treat any rejection of a health claim as some conspiracy by insurance companies, the government, doctors and the pharmaceutical industry. In other countries, people have arrived at a better understanding that health care necessarily involves economic triage [reference].

The argument that switching to a single-payer system would stifle innovation is based on the fact that since the U.S. spends so much more on healthcare than other nations, it enables researchers to obtain superior financial compensation, which leads to more medical discoveries in our innovation-rich environment. The counter-argument states that there isn't any proof:

…that it is the difference in health care systems that has caused the agglomeration of research facilities in the U. S. Even if the U.S. were a single-payer system, drug companies, etc. would still do research and it is likely that much of it would be carried out in the U.S. just as it is now. In addition…much of the research that is done here is funded directly or indirectly by the government. [And,] given that European countries can free ride on this research, comparing the amount spent in the two countries may not accurately reflect European willingness to fund health care research since the two figures may not be independent. If the U.S. spent less, European countries might be induced to spend more [source].

When it comes to waiting for care--while people in the US go without needed healthcare because of cost more often than people do in the other countries--waiting time for specialized healthcare services (e.g., elective surgery) is typically shorter in America than in other countries, at least for insured Americans. However, the US ranks low when it comes to the prompt accessibility of appointments with primary care physicians, often waiting six or more days for an appointment, and having trouble making an appointment on weekends and evenings [ reference ]. So, waiting time for non-emergency care is an issue in countries with universal healthcare. Nevertheless, things are improving in many of them [ reference ]. In other words, there are problems with both systems and the question is whether access to excellent primary and specialist care, even if there's a longer wait for elective surgery, is a better option than not being able to afford excellent care.

Federal Employees Health Benefits Program (FEHBP)

Biden, Clinton, Dodd, Obama and Richardson want the new program to be based on the Federal Employees Health Benefits Program (FEHBP).

v Comments about FEHBP Model

Biden, Clinton, Dodd, Obama and Richardson want insurance coverage to be modeled after the FEHBP, but this may not be realistic. The least expensive FEHBP coverage for a family appears to cost at least $10,000 per year, and most plans cost $12,000 or more. The government (taxpayers) pay only 75% of that amount on behalf of employees leaving the employee to cover 25% of the premium plus copays and deductibles out of his or her own resources. It is highly unlikely that low income people would be able to afford that much. At the same time, to provide an adequate subsidy or limit the individual's out of pocket exposure for premiums, deductibles and copays to some acceptable percentage of income (6.5% has been suggested) would likely be a tough sell when the staff and Congressional Budget Office try to estimate the overall cost to taxpayers. While less than perfect, defining minimum creditable coverage as a high deductible insurance plan would be considerably less costly and more feasible. If we can develop ways to save money by safely driving down utilization of healthcare services, we could always expand coverage later.

Vouchers

Gravel proposes the federal government issue annual vouchers to individuals based on projected health care needs, which they would use to pay for their care.

In the next blog post, I will discuss the thorny issues of allowing private insurance, mandating that everyone has access to coverage through individual and/or employer based requirements, and the use of insurance pools.

Presidential Candidates’ Healthcare Proposals Comparative Analysis

This post presents a small part of the Presidential Candidates' Healthcare Proposals Comparative Analysis, which is still in development. After studying the details of the candidates' proposals, it seems that the main issues relate to these two questions:

1. Should all citizens have healthcare coverage (universal healthcare)? If so, what's the best way to do it?
2. Should healthcare value be improved? If so, how?

Following is an introduction to answering the first question.

To help answer this question, key points are presented followed a commentary and brief overview of the candidates' proposals. In my next post, I will give the details of their proposals, along with comments.

Universal Healthcare: Key Points

The case for universal coverage based on the philosophy that it is shameful for our wealthy nation to have approximately 47 million uninsured plus 16 million people underinsured, a number that's been growing constantly, along with the rising healthcare costs [reference]. Some argue that everyone in our nation should be covered since it is our moral responsibility, i.e., it's about communal spirit. And some claim that having a healthy, well cared-for population is a strategic imperative since you can't have a strong nation with a large percent of people at risk for serious illness and death due to lack of access to good, affordable care. That means, to the extent possible, it is in our country's vital interest to help our people lead longer, healthier, and more productive lives.

Of course, some argue that it is not their responsibility to sacrifice their hard-earned money for the well-being of others. These folks tend to be young, healthy or wealthy and resent having to pay more in taxes for publicly funded healthcare programs just because others have done irresponsible things in their lives that have made them sick or unable to afford good care. In other words, they don't deserve the care they need because they were not responsible and failed to make wise decisions. In addition, some opposed to universal coverage justify their position by claiming that the uninsured just don't want insurance, that the American system relies primarily on private enterprise to support health care, and that it's only the liberals and the urban poor who want a stronger public sector in health care. To help make sense of these arguments, consider the following commentary.

Universal Healthcare: Commentary

It is certainly understandable how young and healthy Americans do not want their tax monies going to help pay for the care of an older person with chronic illness. This kind of self-centered mind set is promoted in our culture. People in most other countries, where universal coverage is the norm, are willing to pay more in taxes to cover their needy. It's a cultural and moral issue, of which many Americans have been conditioned to think in terms of "me" rather than "we." Nevertheless, there is something to be said about personal responsibility.

To be responsible, people ought to take good care of their health by, for example:

• Eating foods lower in fat and carbohydrates, not smoke tobacco, avoid drinking much alcohol and using dangerous drugs, breath clean fresh air, stay out of the sun, exercise, etc.
• Earning good money, invest it wisely and save in order to afford treatment should they someday have a catastrophic or chronic condition.
• Rejecting short-term pleasures that have a potential negative health consequence.
• Going to the doctor, dentist, therapist, etc. only when necessary and selecting providers and treatments that are the most cost-effective.

And, it is only sensible that our culture, government, and economic system more likely that our citizens do such responsible things by making radical changes, such as:

• Making junk food more expensive than high-quality food
• Making tobacco and alcohol extremely expensive, while discouraging advertising to young people
• Putting businesses that blatantly pollute our air and waters out of business
• Down-playing the vanity of a sun tan
• Stopping the use of TV as the opiate of the masses, which creates so many "couch-potatoes," and start promoting more physical activity
• Rewarding healthcare providers for delivering high-value (cost-effective) care and preventive services, and insurers for offering high-value policies, as well as enabling consumers to select them through robust transparency of quality and cost
• Being role models of responsible money management, such as balancing the Federal budget rather than pushing incredible debt onto our children
• Making wise investing something that anyone can do rather than making the system so complicated and full of underhanded practices that it's so easy to get ripped off and make poor financial decisions
• Encouraging business to focus on long-term societal benefits rather than short-term investor returns
• Increasing the incomes of the working poor, so they have a chance to save for the future and purchase health foods, etc.
• "Leveling the playing field" so the disparity between the haves and have-nots aren't so drastic (the top 5 percent currently have more wealth than the remaining 95 percent of the population combined)
• Linking profit to value for the patient/consumer
• Putting at least some of the money currently being spent on political pork (estimated to be over $50 billion per year) and war (now about $500 billion and expected to go to $2 trillion) into improving our healthcare system.

Unfortunately, our nation often does just the opposite, so it's no surprise our citizens are often irresponsible. Under these destructive forces, does it really make sense to punish ill people for not taking good enough care of themselves? For more, see: Are you worthy of health insurance and high-value care? and Three stories about the dilemma modern consumers face in this era of "personal responsibility"

Also consider the myths--recently disputed by the Centers for Disease Control and Prevention (CDC)--that may affect one's point of view (quoted from New CDC Report: The Nail in the Coffin for Health Care Myths).

Myth: If people don't have health insurance or get medical care, it's because they don't want it.

Reality: Actually, the big issue with access is cost. According to the CDC report, more than 40 million Americans—almost one in five Americans over the age of 18—have foregone one of the following in the past year because they couldn't afford it: medical care, prescription medicines, mental health care, dental care, or eyeglasses.
It's not that uninsured people don't understand the value of coverage. Last year a study from the Urban Institute found that less than 3 percent of uninsured adults and children have never had insurance or report having no need for insurance. That same report also found that the high cost of coverage alone explained over 50 percent of those cases where people are uninsured

And even when the uninsured cite job-related difficulties as the reason why they can't access employer sponsored coverage, the problem isn't just that they can't get it through work—it's also that they can't afford individual policies. (Individual policies are much more expensive than group policies, and in many states private insurers can charge individuals astronomical premiums if individuals have any "pre-existing conditions.) According to the Urban Institute, for 79 percent of adults and 74 percent of children who are uninsured because of job-related problems, the high cost of individual insurance is a major problem.

Myth: The American system relies mostly, if not exclusively, on private enterprise to support health care.

Reality: Yes and no. While the U.S. does have the biggest private sector share of health expenditures in the world, making up 55 percent of our funding, personal health care expenditures (i.e. spending on actual patient care) is mostly public. The CDC reports that in 2005 the federal government and state and local governments combined paid 45 percent of personal health care expenditures; private insurers only paid 36 percent, with 15 percent coming from out-of-pocket payments. …

There's also a bigger public sector coverage presence than many would like to admit. Though two-thirds of insurance policyholders have private coverage, a Census Bureau report from earlier this year noted that more than one quarter of Americans (about 27 percent) are covered by government insurance. The [current] American model is much more of a private-public mix…

Myth: East coast liberals and the urban poor are the only ones who want a stronger public sector in health care.

Reality: Health care reform is often stigmatized as being something that only socialist, bleeding hearts dream of...But in fact, one particular area that could greatly benefit from a more proactive public sector is Middle America.

The CDC report notes that 4 percent of counties across the nation have no physicians. None. And more than 90 percent of these physician-less counties are non-metropolitan, i.e. do not contain a town of at least 10,000 people. In fact, across the nation only 9 percent of all of the nonfederal patient care physicians in the U.S. are located in these rural counties.

These sparsely populated locales are pretty much where you'd expect them to be: the Plains states and the Southwest (think Texas, the Dakotas, Oklahoma, Alaska)—home to many good old fashioned middle Americans. Initiatives to connect patients in these regions with physicians have come from the government, not the private sector...
[Both liberal and] conservative folks across the nation could benefit from a revitalized public sector [that makes] care accessible to regions where the medical market is non-existent.

Another report outlines questions American should consider when evaluating healthcare reform proposals. It contrasts proposals built around these three distinct philosophies, which assesses proposals "based not only on their ability to achieve universal coverage, but also on their potential to move the nation's health care system toward high performance …

1. Tax incentives for individual market insurance. Proposals that rely primarily on individuals' responsibility for obtaining coverage, with tax incentives to subsidize purchase of insurance in the individual insurance market.
2. Mixed private–public group insurance with shared responsibility for financing. Proposals that build on our current mixed private–public system of health insurance with shared responsibility for financing coverage by government, employers, and households.
3. Public insurance. Proposals that would cover nearly all Americans under public insurance programs, such as Medicare, with everyone covered through the same public system.

…both the mixed private–public group insurance and the public insurance reform proposals have the greater potential to move the health care system toward high performance. Both approaches have the potential to provide everyone with comprehensive and affordable health insurance, achieve greater equity in access to care, realize efficiencies and cost savings in the provision of coverage and delivery of care, and redirect incentives to improve quality. From a pragmatic perspective, however, the mixed private–public approach would cause far less dislocation by allowing the more than 160 million people who now have employer-based health coverage to retain it, instead of asking them to enroll in a new program. This approach would build on the best features of our current system while addressing its most serious shortcomings: gaps in coverage and the absence of the incentives, organization, and infrastructure required for a high performance health system.

…Extending health insurance coverage to people who currently lack it is a necessary, but not sufficient, condition for achieving high performance. The way in which a universal coverage system is designed will have a deep impact on its ability to make sustainable and systematic improvements in access to care, equity, quality of care, efficiency, and cost control. With these goals in mind, the following are some key principles policymakers and the public should consider in developing or evaluating health reform proposals:

Access to Care

• Provides equitable and comprehensive insurance for all.
• Insures the population in a way that leads to full and equitable participation.
• Provides a minimum, standard benefit floor for essential coverage with financial protection.
• Premiums, deductibles, and out-of-pocket costs are affordable relative to family income.
• Coverage is automatic and stable with seamless transitions to maintain enrollment.
• Provides a choice of health plans or care systems.

Quality, Efficiency, and Cost Control

• Health risks are pooled across broad groups and over lifespans; insurance practices designed to avoid poor health risks are eliminated.
• Fosters efficiency by reducing complexity for patients and providers, and reducing transaction and administrative costs as a share of premiums.
• Works to improve health care quality and efficiency through administrative reforms, provider profiling and network design, utilization management, pay-for-performance payment models, and structures that encourage adherence to clinical guidelines.
• Minimizes dislocation; people can maintain current coverage if desired.
• Simple to administer.
• Has the potential to lower overall health care cost growth.

Financing

• Financial commitment to achieve these principles.
• Financing should be adequate and fair, based on ability to pay, and is a shared responsibility of federal and state governments, employers, individual households, and other stakeholders.

…Conclusion
Ultimately, we must move the health care system to high performance using goals and properly aligned incentives that orient all participants in the same direction: toward improved access, quality, equity, and efficiency. The most important feature of any health insurance reform proposal is whether it can succeed in providing health insurance and access to care to all. In addition, proposals should be examined for their ability to produce better access, higher quality, and greater efficiency. Whenever possible, we must seek synergy between coverage expansion and reform that will move the U.S. to a high performance health system.

Achieving universal coverage will require engaging everyone in a debate on values, our commitment to a healthy and productive life for all, and the merits of different strategies for achieving improved coverage and better performance from our health system. …Serious reform will require broad consensus and a significant financial investment by federal and state governments, employers, households, and other stakeholders. A shared responsibility among all stakeholders will be needed to achieve the goals of reform in a way that is effective and fair.

Brief Overview of the Candidates' Proposals

All the Democrats propose universal healthcare (coverage for all Americans). Only Kucinich supports HR 676, which is a single-payer, "Medicare for All" plan that gives everyone comprehensive coverage. Gravel also proposes a single-payer solution, but through use of federally funded vouchers. All the other Democrats propose a public Federal Employees Health Benefits Program (FEHBP) type program and/or Medicare, Medicaid, SCHIP, which are supported by subsidies (e.g., through tax credits or vouchers) to low income persons.

Republicans, on the other hand, do not propose new public programs, the expansion of existing public programs, nor universal coverage. Instead, they all propose market-based private insurance solutions through tax deduction/credit subsidies to lower insurance premiums and deduct medical expenses from the taxes of lower income persons. Other strategies include increasing competition, tort reform, and payment changes to providers.

The strategies related to universal coverage, which are discussed below, include:

• New and expanded public programs
• Allowing private insurance
• Mandates for individuals and businesses
• Insurance pooling (community ratings)
• Changes in Private Insurance
• Subsidies/tax credits/deductions for individuals and businesses
• Funding it through taxes and savings

In my next post, I discuss whether government can be trusted to run a single-payer system.

How to determine the best healthcare reform plan

There’s great debate about which candidate is presenting the best healthcare reform plan. A key issue is whether insurance companies (the private sector) or our government would do a better job managing universal healthcare. Both have been criticized for serious problems of inefficiency, bureaucracy and waste (as well as questionable practices and fraud).

 

It seems to me that the only way to determine who presents the best strategy is to compare the different plans head-to-head. The comparisons must consider costs to the public and patients in terms of taxes, premiums, deductible, co-pays, and coverage for people in different locales, who are in different economic and age groups, and who have different types of health problems and risk factors. This is a very complex issue, which cannot be understood with generalities and sound-bites. So, access to a detailed comparison grid that enables in-depth analysis is critical.

 

But even such an analysis, I contend, would fail to deal with the most important factor: The need for radical reduction of inefficiency, waste and fraud; errors and omissions; over-testing, under-testing, over-treatment, under-treatment; inappropriate care, problems with safety, quality and accessibility; inadequate wellness/preventive services; poor coordination of care; etc.

 

In other words, I assert that if all patients received cost-effective (high value) sick-care and well-care services—delivered safely, efficiently and competently—people would stay healthy longer, recover more quickly from illness, utilize fewer expensive services, medications and medical devices, and have a better quality of life. In addition, the system should give competitive advantage and financial reward to healthcare providers who get the best results for the best price. The resulting quality improvements and cost savings would be astronomical.

 

I would vote for plans—be they single-payer/government-controlled or private-sector insurer based—that return the greatest savings to the consumer through lower out-of-pocket expense (including taxes and shared responsibility payments), while providing the broadest coverage and supporting policies/plans/procedures that promote continuous improvements in quality and efficiency.