For the past year, progressives have begun to talk about health care reform as if it is inevitable. Listen to the Democratic Party’s presidential candidates, and it seems just a question of what form the health care revolution will take, how quickly it will happen, and how we’ll finance it. After all, the polls show that the majority of taxpayers, employers and even most doctors want to see a major change. Moreover, health care research shows that if we cut the waste in our system, we could fund universal coverage. What, then, is stopping us?
As regular readers know, I recently attended a Massachusetts Medical Society Leadership Forum where what I heard about the Massachusetts plan made my heart sink. While everyone in Massachusetts wants health care reform, no one wants to pay for it. Those who are receiving state subsidies to buy insurance are enthusiastic. But uninsured citizens earning more than 300% of the poverty level are expected to purchase their own insurance. The state hoped that 228,000 of its uninsured citizens would sign up; as of last month, just 15,000 had enrolled. Many have decided that they would rather pay the penalty than buy health insurance.
At the forum, Robert Blendon, professor of health policy and political analysis at Harvard’s Kennedy School of Government, talked about what Massachusetts’ experience might mean for the national health care debate: “Massachusetts is the canary in the coal mine,” Blendon, who is also a professor at Harvard’s School of Public Health, declared bluntly. “If it’s not breathing in 2009, people won’t go in that mine.” If the Massachusetts plan unravels, he suggested, Washington’s politicians will say “If they can’t do it in a liberal state like Massachusetts, how can we do it here?”
I’m not writing Massachusetts off. The state’s leaders are behind the plan and they may be able to persuade the Commonwealth’s citizens to come on board. But it won’t be easy.
In the meantime, this week I decided to ask Blendon some follow-up questions: Just what would it take, politically, to achieve national health care reform sometime in the next two to four years? How many seats would reformers have to capture in Congress? Is this likely? Some observers say that if a reform-minded president hopes to succeed, he or she will have to ram a plan through Congress sometime in 2009. But health care is complicated; wouldn’t it make more sense for a new administration to take its time and explain what it is doing to the public, while trying to create a sustainable, affordable, high quality health care system?
Finally, what are the biggest barriers to reform? If major change proves impossible, what more modest back-up plans should a new president have in mind? What other health care legislation could he or she hope to pass?
I went to Blendon with these questions because he has had extensive
experience plumbing the Mind of the American Public while conducting
polls for the Washington Post, the Henry J. Kaiser Family Foundation
and Harvard. And what he has learned is that, beneath the seemingly
uniform surface of the polls, “the public’s views on health care issues
are often more complex and conflicted” than they appear.
Moreover, while some people have immersed themselves in the intricacies
of health care policy, and others are well-versed in the intrigue of
American politics, Blendon knows both–as his cross-appointment at the
Kennedy School and the School of Public Health suggests, and when I heard him talk in Massachusetts, I was persuaded– even though
he was not saying what I wanted to hear. Blendon understands “the
political process.” And he knows that it is not rational. Democracy is
messy; success depends on winning hearts as well as minds; an emotional
appeal can trump the most logical argument. And unlike the legal
process, there is no guarantee that the political process will resolve
disputes or end in agreement.
When I talked to him this week, Blendon began by elaborating on why he
believes that in 2009, any new administration will face a “poisonous”
political climate, making compromise on health care difficult. “Whether
we decide to stick it out in Iraq, or whether we pull the troops
out—which I think we will—we’re going to go through a very painful
period, like the period that followed Vietnam. Rather than returning to
domestic politics,” Blendon predicts that the country will be mired in
a debate about “who lost the war. Whoever wins the White House, there
will be a huge split in this country about how the war ended.”
In the best-case scenario this could lead to a search for an issue that
we can agree on. Couldn’t healthcare be that issue? Maybe. “But if
the debate over SCHIP is any model,” Blendon warns, “it shows that it
is not easy to find compromises on these issues.”
If conservatives win the presidency they are likely to pursue small
changes focusing primarily on increasing tax breaks for those who save
to buy insurance, Blendon observes. Progressives, on the other hand,
are committed to doing “something large.” But even if they win, he
says, they won’t have much time to forge a grand compromise.
In an ideal world, reformers would spend the first year of a new
administration studying the problem, educating the public, and forging
alliances that lobbyists wouldn’t be able to fracture. In the past I
have written about going slow, and doing it right.
But Blendon is convincing when he argues that “there is no relationship
between how you would think, analytically, about health care reform and
how the political process works. That first year you’ll have six to
eight months to get something done. By the second year, legislators
start to worry about getting re-elected” (which makes them exceedingly
risk-adverse.)
During that six-to–eight-month window, a wily president should meet
with the leaders of the major committees, Blendon advises, to see if,
behind the scenes, they can begin to strike a bargain. “Reformers need
to ask ‘what are the points that are absolutely critical to various
interest groups if we want them to find reform acceptable?’ You want
many people to feel that they have had a major say. Then they should
develop a very general plan.”
“This is what Mitt Romney did when he forged a plan for Massachusetts,”
Blendon points out. “This is what Johnson did with Medicare. Of
course, Johnson had the advantage of having grown up in the Congress.
He had a sense of everyone there, and what was most important to them.
And Johnson was pragmatic.”
It’s worth remembering how Johnson won the day. He knew that he had to
appease both the American Medical Association and the lobbyists
representing the hospitals—and to do that he would need to follow the
very expensive precedent set by the private insurers, Blue Cross and
Blue Shield. He would have to agree to pay doctors “fee-for-service”
based on whatever prices were “usual and customary” in their community,
while paying hospitals not what a service might be worth, but whatever
it cost the hospital to provide that service. Thus the most inefficient
hospitals would be paid the most and as new specialists came to a
community they would continue to raise the bar for what was “usual and
customary” in that town.
The Johnson administration’s domestic policy advisor, Joseph Califano,
later recalled the moment when the president capitulated to the doctors
and hospitals. “The key meeting, I remember vividly…we sat in President
Johnson’s little green office and he said ‘We’ve got to get this bill
out of the House Ways and Means Committee. What will it take?’
“And Larry O’Brien [then the administration’s congressional liaison]
said, ‘We have to give the doctors what they want and give the
hospitals what they want.’ Johnson said, ‘What will that cost?’ O’Brien
said ‘Half a billion dollars a year.’
“Johnson said, ‘only $5000 million a year? Give it to them. Let’s get the bill.’’’
Johnson was shrewd enough, and experienced enough, to know that before
long the tab for this compromise would climb. But Johnson wasn’t trying
to craft a perfect bill. He was trying to get something through
Congress. Later, it could be fixed.
Similarly, today, reformers should forget about finding a perfect
solution. “The very best plan for reform would be polarizing,” Blendon
warns. “Every interest group would oppose it, and it would never pass.
What reformers need to do is to decide which groups they can bargain
with. In Massachusetts they decided they could make a deal with the
insurers. But reformers will need to work quietly behind the scenes,”
he argues, finding concessions they can live with—or fix later. In
other words, the operation needs to be covert, and it needs to be quick.
The critical issue will be how many seats progressives are able to win
in Congress, Blendon adds. The votes on SCHIP suggest that very few
Republicans will vote to fund substantial reforms. And not all
Democrats will vote for a major change. “If Democrats took a dozen
seats in the Senate and 20 in the House, that could give them a
Johnson-like landslide,” says Blendon, referring to the historic
plurality Johnson enjoyed in 1964. “It would be very difficult,” he
adds. “Possible, but very difficult.”
Meanwhile, reformers need to remember that, beneath the polls saying
that everyone wants a change, “the public’s view is more complicated.
Middle-income people with insurance are risk adverse,” says Blendon.
“Legislators need to be very careful about how they try to re-arrange
coverage for the middle-class. Even if these people say they are
dissatisfied with the present system, they think they have a lot to
lose—especially if they haven’t been seriously sick and tried to
actually use their insurance.”
Blendon is convinced that if a progressive is elected, he or she will
attempt major reform. But, if that first strategy fails, a president
will need a back-up plan. Offering subsidies to states willing to experiment with reform could be
a fall-back. “In the short term, if six states could show that it can
be done, that might be a way to push the idea forward,” he suggests,
“while at the federal level, Congress could vote to cover more kids
under SCHIP and Medicaid.”
It’s easier to forge a compromise at the state level, Blendon argues,
“because the political pressure is more diffuse. State legislatures are
less politically polarized. They’re more pragmatic. In Washington, you
have a huge set of ideological barriers.”
Moreover, when Congress passes legislation, it must, by law, provide a
ten-year forecast of how it will fund the new law “In Massachusetts,
they only had to show how they would pay for it over two years.”
Congress also would have to agree on exactly what benefits a universal
plan would offer—glasses? Dentistry? One can only imagine the number of
interests groups that would be knocking on legislators’ doors.
Massachusetts was able to hand that problem over to a board to work
out.
Still, the road to healthcare reform at the state level would be paved
with political land mines. “You would have problems with states like
Mississippi where 24% of the population doesn’t have insurance, and you
don’t have a wealthy tax base,” Blendon points out. “They would need a
huge grant from the federal government. Would Congress give them a
grant without guidelines?”
Blendon reports that in California, reform is currently “stalled” on
the question of how to pay for it. In Massachusetts, he is hopeful that
the state may be able to overcome resistance. “But it will take time.
You need targeted advertising. Young adults don’t think they need
insurance: ads should remind them that they could be in a car
accident. And you need moral suasion. You need signs in doctor’s
offices saying, ‘by this date, you are supposed to have coverage.’”
“I’m optimistic primarily because of the quality of the leadership in
Massachusetts backing the plan,” Blendon adds. “They don’t appear to
want to walk away from this bill.”
Will Washington’s politicians show as much political will?
SILLY, RIDICULOUS & OBVIOUS
What is more silly than the non-stop Paul Krugman attacks on “opponents of universal health insurance” is reading about Ivy-degreed corporate executives (guess what political party) who complain that they can’t figure out the U.S. health care system, either.
Change is evolutionary. The system will fix itself, over time. Some, like the six illegal immigrants burned in the Calif. fire, will get millions in health care. Meanwhile, Jane Six-Pack will wait in a line. And med-mal lawyers, surgeons, and hospital CEOs will keep driving 7-Series BMWs. Life will go on, even if a Clinton or Bush is not president.
If anything is going to get done at the federal level, barring one party getting 60 seats in the Senate, both sides will have to be less intransigent if they are really serious about getting everyone insured.
One of the beauties of federalism is that the states can act like fifty independent laboratories of democracy in action, and that’s where the comparison of Massachusetts to a “canary in a coal mine” is particularly apt. By starting on a smaller scale, the rest of us can observe what works and what doesn’t. And if the people and government of Massachusetts can figure out how to overcome the current shortcomings — getting it right is, after all, an iterative process in most cases — it could serve as a blueprint for other states to work with, even if the Democrats and the Republicans would rather allow the current mess to continue than betray their ideology even a little bit.
But given how polarized things are at the federal level, I don’t expect any *significant* reforms to happen federally unless the Democrats find a way to take the White House and at least 60 seats in the Senate. And if one side called all the shots, be it D or R, I don’t think the resulting program would be a good one. But given the steadily increasing emphasis of partisan victory over pragmatism and the people’s business, I doubt much will happen in Washington. Maybe they’ll prove me wrong, but barring Democratic landslide a year from now (I don’t see a GOP landslide occurring), there will be tinkering on the margins and major initiatives will be left to the states for a few more years.
I remember reading in Paul Starr’s book, The Social Transformation of American Medicine, about how we almost got national health insurance reform in 1974 with the Viet Nam war winding down. If I recall correctly, the Democrats proposed a comprehensive insurance package with a $1,000 per person annual deductible (about $5,000 in today’s dollars) while the Republican proposal called for a similar package but with a $1,500 deductible ($7,500 in today’s money).
Then, organized labor overreached and nixed the compromise. It felt that with Nixon weakened by the Watergate scandal, Democrats were likely to make large gains in the upcoming November elections. Assuming that came to pass (which it did), their view was that they would have the clout to ram through a single payer system over Nixon’s veto.
As it happened, Nixon resigned in August of 1974. In the aftermath of the first Arab oil embargo of October, 1973 and the elimination of wage and price controls in April, 1974, inflation took off, and the economy sank into the worst recession since the Depression. Suddenly, there was no money, and thus no appetite in Congress for expensive new entitlement programs. In short liberal interest groups (mainly organized labor) overreached and wound up with nothing.
The lesson hear is don’t let the perfect be the enemy of the good. Be pragmatic and focus on what’s doable. Translated to today, I think catastrophic coverage for the currently uninsured would be a good first step. If insurance does nothing else, it must cover most of the cost of catastrophic events. Hospitals would be the prime beneficiary of such an approach. Yes, poor people won’t be able to afford the deductible, but if they suffer a very expensive catastrophic event (serious accident, heart attack, cancer, etc.), they can get care, and most of the bills will be paid. If cat cover turns out to be a reasonably affordable approach, perhaps it can make it through the political process where very expensive comprehensive coverage cannot. Remember, even the least expensive family coverage under the FEHBP costs about $10K per year. Maybe catastrophic coverage could be had for 60%-65% that amount. If we can institute other reforms aimed at safely driving down utilization of healthcare services such as more widespread use of living wills, malpractice reform, comparative effectiveness research, electronic medical records, price and quality transparency, etc., we could probably free up enough money to provide the insulation coverage piece to the currently uninsured later.
As an aside, one disadvantage of state level experimentation is that states are required to balance their budgets. In recessions, the number of lower income people in need of subsidies will expand at the same time state revenues are shrinking. That said, the California experiment is important because of the sheer size of the state. Anything that proves its worth in CA can probably be scaled up to apply nationally. The national political process should find it a lot easier to pass something that proves it can work on a significant scale than something that so-called experts think will work but don’t actually know that it will, and, of course, can’t guarantee that it will.
Well said Barry, the other problem with state expirements is this, there will be a sick draw from neighboring states. we have seen it with welfare, when the system benefits are more easily accessable and provide more you get an influx of those who need them, in this case it is likely to be the expensive sick, thus placing a significant burden on that states budget.
Russ, Tim, Barry and drmatt–
Thank you for your comments.
First, Russ, yes, change can be evolutionary, but in this case, given the ideological barriers, I think change will come only when things get bad enough that people are ready to make a revolutionary leap. The system won’t fix itself.
Tim- I agree “getting it right is largely an iterative process.” To put it another way, writing is all about re-writing.
And the “increasing emphasis on partisan victory over pragmatism and the people’s business” is I’m afraid going to continue to stand in the way of healthcare reform–unless progressives enjoy a landslide victory.
I do think a progressive sweep might be possible, given how the country is feeling about the war in Iraq, and given what is happening in the economy. The dollar is likely to continue to slide, making imported goods more expensive and, perhaps, forcing the Fed to raise rates in order to make the dollar more attractive to foreign investors who buy U.S. Treasuries.
Meanwhile, the price of oil and food will almost certainly continue to rise. . .
Americans do tend to vote their pocketbook, and by 2008 they may be ready for a major change in Congress. We’ll see.
If we can’t get reform at the federal level, encouraging the states to experiment could, as you say, serve as blueprint for the future.
Barry–
I’m partially persuaded by what you say about California being a major test case. Because of its size and diversity it is more like the nation as a whole. On the other hand, California is such an exceptional state (I’m tempted to use the word “crazy” but let’s stick with exceptional) I’m not certain that it really can serve as a model for anything else.
I do agree that we shouldn’t let the perfect be the enemy of the good.
But I don’t think catastrophic coverage is the answer for this reason: Roughly 70% of the more than $2 trillion that we spend on health care goes to care for 10% of the population. That 10% is comprised of people suffering from just five serious Chronic diseases–not catastrophic trauma, or cancer. Those disesases are: diabetes, congestive heart failure, depression, asthma and coronary artery disease.
In other words, most of our healthcare dolalrs are spent on people who need consistent long-term care for diseases that last for years. If they don’t get the chronic disease management they need, they wind up in the hospital where they need very expensive acute care (amputations for diabetics, etc.)
If you give these people catastrophic coverage many won’t be able to afford the chronic disease management that is essential to keeping a lid on health care costs. (You may say that it’s up to them to take personal responsibility for making sure they get the chronic care they need, but the fact is many won’t. And in the long run, we all end up paying the much higher bill.)
You’re right that catastrophic coverage would help hospitals that now care for uninsured and undeinsured people who are in auto accidents or are struck down by cancer.
But the catastrophic coverage would not help the people who need help–people suffering from long-term chronic illnessees. And catastrophic coverage would not make much of a dent in our nation’s total health care bill.
Catastrophic care is more visible than long-term chronic care–castastrophic illness are the stuff that hopsital TV shows are made of. But it accounts for a surprisingly small amount of total care.
Dr. Matt–I think you’re entirely right: if a few states manage to achieve health care reform, sick people will move there. If the state really can’t afford to cover them, it might want to pass a one-year residency requirement before someone could sign up on the state plan.
On the other hand, migration to states that have a better social safety net is not always a bad idea. When I was growing up in upstate New York we had a much better welfare system, better public schools, and better scholarships for college than most states. During that time many people came to New York from the South.
It was a burden for the state, but those people received services they really needed. In particular, the educational opportunities made a huge difference for many families. If a student went to decent public schools he could hope to get a Regents scholarship (which were then very generous scholarships) to a state college (and the state colleges were good.)
Finally, the fact that a state can’t run a deficit is another reason why leaving it to the states to take care of health care reform is not a final answer. But if Congress can’t pass reform at the federal level, letting the states experiment could be an interim solution . . .
Even though the bulk of the costs are generated by folks with chronic diseases I think the notion of ‘requiring’ catastrophic care as a foot-in-the-door strategy is good.
Healthy people never think they’ll get sick, but everyone can relate to an accident.
Make the minimum plan only cover disasters. This might be less than what states require as their minimum insurance package. Let people get the required cost of minimum insurance into their budgets and thinking. Then offer add-on options. Once someone has a new baby, and has to pay then the notion of paying more and getting more services won’t be such a big jump.
I say this as someone who only thought basic cable was worth buying. Then came the Gulf War and 24 hour news casts made the extra monthly fee seem worth it. A few more years, and the ‘Sopranos’, I’ve got a hundred channels and HD TV.
I wouldn’t have gone for that in the beginning, but once I got into it it all became a necessity.
Nobody wants to go from paying nothing to paying $1,000 a month. No politican will vote for a law that requires people to pay that because they’ll be out of a job. Politician and Policy folks need to think more like marketers.
Going back to Barry’s comment about catastrophic coverage, yes, it is important to protect people from being bankrupted by health problems. But if people who can’t even afford a simple office visit can’t get preventative exams or treatment for minor conditions which could become major if left untreated, it’s only a small piece of the puzzle. You’re taking what could have been an expense of a few hundred dollars a year and turning it into a five-figure problem or worse if the only provisions for health care are at the catastrophic level.
For sure, doing things at the state level has its drawbacks, but I don’t think the states have the luxury of waiting for Washington to tackle the mess.
Maggie and Tim,
I see catastrophic insurance coverage as a fallback position if comprehensive coverage can’t make it through the political process. I also look at is as a lot better than nothing for the currently uninsured. If I’m an uninsured person and I’m suddenly offered affordable catastrophic health insurance coverage, I’m not going to say no thanks, but come back when you can provide me with comprehensive coverage. I’m going to think that I’m a heck of a lot better off than I was previously. Maybe in the future, comprehensive insurance coverage can make it through the legislative process, and I’ll then be even better off.
I would like to make a couple of comments on the five chronic diseases that account for a large share of medical costs. In my own case, I take five prescriptions, all cardiac related, including four generics. If I had to pay for them myself (without insurance), the would probably cost about $2,000-$3,000 per year. I see the cardiologist once or twice a year and need a stress echo every other year. Multiply that by probably millions of people and it adds up. On the other hand, the costs are manageable for many of us, especially if they were partially or even completely offset by the difference in cost between high deductible and low deductible health insurance.
Second, many elderly people who have advanced disease or multiple co-morbidities ultimately wind up in a nursing home or in need of extensive home health care. Both are expensive and are generally not covered by conventional health insurance but would be covered (at least in part) by separately purchased (and expensive) long term care insurance. As for prescription drugs, most drug companies have low income assistance programs that make drugs available free or at low cost to those who clearly can’t afford them. Moreover, quite a few of the drugs needed to manage these chronic diseases are now available as generics at very low cost from Wal-Mart, Target and Costco.
Finally, for diabetics with kidney failure and in need of kidney dialysis, Medicare pays for it even if the patient is less than 65 years old.
So, a considerable portion of the healthcare costs incurred by those who have one or more of the five chronic diseases you cited need services that are either (1) not covered by conventional insurance anyway, (2) paid for by Medicare, (3) can be accessed through drug company low income assistance programs, or (4) can be paid for out-of-pocket by millions of us in the upper half of the income distribution. At the same time, catastrophic coverage could provide peace of mind that comes from knowing that you and your family will not be bankrupted by healthcare costs related to a catastrophic medical event. Yes, it would be nice if we could all have comprehensive health insurance coverage and pay for it without driving the tax burden through the roof or crowding out other worthwhile public priorities. As a fallback position, however, high deductible, catastrophic insurance coverage would be far better than nothing, especially for the 47 million people with no health insurance today.
By the way, after the 1974 Watergate blowout election, Democrats enjoyed majorities of 290-145 in the House and 61-39 in the Senate (filibuster proof). Yet, because of the recession then underway, national health insurance went nowhere because the money wasn’t there even though “progressives” enjoyed huge majorities in both the House and the Senate.
“Health care research shows that if we cut the waste in our system, we could fund universal coverage. What, then, is stopping us?”
I think part of the problem is that there is very little waste in the system THAT WE KNOW HOW TO STOP, at least in the short term. The fruits of comparative effectiveness research are years in the future. So are the benefits of interoperable electronic medical records. Even with sensible malpractice reform, the culture of defensive medicine will likely persist for quite some time. Physician pay for performance is a concept that is much easier to articulate than to implement. More widespread use of living wills and advance directives will also take many years to bear fruit in the form of much less spending on futile end of life care. Price and quality transparency would be least useful with respect to expensive hospital services, many of which are delivered under emergency conditions.
When we try to quantify both the magnitude and the impact of the cost of insuring the currently uninsured, we need to understand the following:
First, healthcare costs should really be broken down into what I would call a core piece that most people think of in the context of health insurance benefits and a non-core piece. In 2005, the California Healthcare Foundation pegged total medical spending in the U.S. at $2.0 trillion. What I call the core piece accounted for 71% of that amount consisting of:
1. Hospital Care: 31%
2. Physician and Clinical Services: 21%
3. Prescription Drugs: 10%
4. Administrative Costs: 7%
5. Other Medical Products: 3%
Non-Core healthcare costs include:
1. Dental and Other Professional Services: 10%
2. Nursing Home and Home Health Services: 8%
3. Government Public Health Activities: 3%
4. Investment (hospital construction, medical education, etc.): 6%
Estimates from Democratic candidates to cover the currently uninsured range from $90 billion to upwards of $120 billion, and I think it could easily be as high as $150 billion. This would probably raise the cost of core medical services by 8%-10% If the incremental demand strained physician and hospital capacity to the point where prices started to rise even faster than they have in recent years, the cost would rise even further.
I think Democratic politicians and other advocates for universal coverage have been disingenuous in suggesting that we just have to cut waste or insurer administrative costs or raise taxes on “the rich” and everyone else can have a free ride without needing to make any sacrifices. I believe they are wrong, their cost estimates and financing schemes lack credibility, and the public is justifiably skeptical. Middle class people who have employer provided health insurance generally like it and want to keep it. If politicians were honest and forthright about how much it will cost to cover the uninsured and what financial and other sacrifices might be required from the middle class to bring about sensible system reforms, healthcare and health insurance reform would probably be an even tougher sale than it already is. This is why I think catastrophic insurance coverage for the currently uninsured might be much more doable in the short term and would be a significant improvement over what they have now which is nothing. If systemic reforms can achieve meaningful savings over the intermediate to longer term, we can use those savings to improve coverage after they materialize.
USA spends 16% of the GDP for health care, OECD, EU, states, industrialized countries 8-9% of GDP, and most of them outperform the US healthcare. So the American system might have huge reserves! See:
http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=403925
How can that happen? The answer is quite simple:They – both the governments and the – citizens have a clear vision about it. They all know well what they want from a well operating healthcare-system, and what they do not want at all.
The main problem with Americans – as I see – is, that you yourself do not know what you want.
What you want from the gov’t, and what you are ready to give against it, as to keep things in a right balance. Since – on the other hand – the gov’t doesn’t know where and to what extent it can count on you, it can not offer you the right thing as a kind of compensation for your efforts.
Ginger, Tim and Barry–
Ginger–your point about catastrophic insurance being a foot-in-the door strategy is a very good one–particularly for young, healthy upper-middle class adults (i.e. earning more than $24,500 to $39,000 which represents the middle (median) fifth of all singles in the U.S.)
People at the high end of that bracket –or above that bracket– do worry about being wiped out financially by a catastropic illness, and even if young and healthy do realize they could be in a car accident. If that happens, they have something to lose–money in the bank, a car that they are making payments on, perhaps a condo or a house.
The parallel you draw between catastropic coverage and basic cable is a good one. .. So even if selling them cheap catastropic insurance doesn’t help the nation’s health care bill that much–and doesn’t help the individual that much (because the odds of a catastrophe are low) it’s a way of getting him started.
Tim–But as you point out, if we are worried about the collective health of the nation, and our collective health care bill, catastrophic coverage is “only a small piece of the puzzle” when many people ” can’t even afford a simple office visit can’t get preventative exams or treatment for minor conditions which could become major if left untreated.”
Unfortunately, this is the case for many in that half of the nation’s households earning less than $52,000, joint income, before taxes.
Barry– yes, you could afford $2,000 or $3,000 a year, out of pocket, even if you didn’t have insurance. But we’re not talking about you. We wish you well, but you’re not the problem. We know you’ll be okay.
But what if you were a single mother earning $31,800, and had two children? And that’s not poor, that’s the median income for a female who is the head of a household (i.e. more than one person in the family) in the U.S.
Half of all female heads of household earn less than that.
What if you were a man with three children earning $40,000 while your wife, who worked part-time, earned $7,000??
In other words, you tend to look at the problem from your own point of view –taking an individual rather than a collective view of health care, while rather casually acknowledging that you belong to a privileged class–“affordable for many of us.”
For you, a catastrophic illness is the major worry. You have assets that you would not want to lose. But for people who have very little, bankruptcy is not such a big deal.
Not being able to afford insurance and needing $2,000 or $3,000 or $5,000 worth of care for an asthamatic child, a diabetic husband or a mother who lives with you and suffers from congestive heart failure is.
Secondly, in your latest post, you suggest that we just don’t know to cut the waste in our health care system.
This isn’t true. We know that we pay twice as much as we should for most drugs and devices. If Medicare insisted on discounts the way the VA does, it could cut its drug and device bill in half. (And drugs account for more than 10% to 11% of the nation’s health care bill. That figure represents just the drugs that are sold, retail, in pharmacies. It doesn’t inlude all of the very expensive drugs that patients receive in hospitals or doctor’s offices (cancer drugs.) Nor does it include devicies.)
We know that certain specailisits (cardiologists, orthopods, etc.) are over-paid and if we paid them a salary (as doctors are paid at the Mayo Clinic, the Cleveland Clinic, etc) or on a capitated basis , rather than fee for service, they would perform many fewer procedures.
We know that we do roughly 3 times as many angioplasties as we should and many unncessary by-passes. Also, cardiac patients take too many drugs. Some drug therapy is good, but exercise and diet is equally if not more important.
If Medicare and insurers refused to pay for procedures and multiple drugs until the patient had gotten into a exercise and diet program, we could save money. (This could be particularly effective with upper-middle class patients who can afford a gym, have the time to exercise, and can afford fish, fresh fruit, vegetables, etc.)
We know that we most of the money we are spending treating early-stage prostate cancer has little or no benefit. And this is just one example an area where we know that we have no evidence that the care is effective. We also know that watchful waiting is a safe alternative.
Yes, we need much more comparative effectiveness research, but there are many areas where we have the info we need. The problem is that lobbyists have pressured Medicare to cover ineffective, over-priced treatments.
We know that we’re spending too much building hositals where they are not needed. The reserach shows that certificates of need can work. And capitated managed care can work. In states, like Minnesota, where there most care is non-profit mangaed care, people are healthier than in places like N.Y. or Miami where most care is unmanaged fee-for-service care.
In other words, there is a lot of low-hanging fruit out there, most of it related to over-treating well-insured affluent people (while undertreating the uninsured and underinsured.)
You also make a lot of assumptions about how chronic disease management is “covered” that are in fact simply wrong.
For example: dialysis for a diabetic is not chronic disease mangament. Dialysis is what happens when the diseases is not mangaged.
And dialysis is covered by Medicare only because the dialysis industry managed to push a special law through Congress. So now many people are on dialysis who shouldn’t be while Medicare doesn’t cover other care that diabetics need.
You also make generalizations about how low-cost medications are available to everyone who needs them through the generosity of the pharmaceutical industry!
Just how many families do you know living on, say less than $40,000 a year?. Probably very few. In other words you really don’t know many people you have to choose between buying food and buying the medicine their doctor told them they or their kids need. But they are out there. Interview a dozen doctors who treat middle-class and lower-middle class patients and they will tell you about them.
This is not your fault. Everyone lives in their own little pond. But you shouldn’t make assumptions about what life is like for those on the bottom half of the ladder unless you’re living there.
For example, most people–including President Bush– think that if a poor person if very sick and goes to an ER, he will be cared for. That is no longer true. Under the law, he can be turned away if he is not dying–defined as “able to walk out the ER door.” This includes chronically ill patients.
In my book, I write about a man who had been severely beaten, his jaw smashed, teeth broken. He went to three ERS –two at public hospitals–and was turned away because he didn’t have insurance or a credit care. (Though he did have I.D. showing he was a legal citizen.)
By the time he got to the third ER, he couldn’t speak (teeth and jaw too badly smashed), and he was drooling blood.
The doctor who treated him said that if he hadn’t been treated that night, he probably wouldn’t have died–unless the jaw got infected. But to treat him the next day or the day after the jaw would have meant re-breaking his jaw — and probably he would never have been able to eat or speak properly again. (The man got a part-time job as a mechanic in the town where he was treated and paid the doctor and the surgeon off, on a monthly basis over a period of many months. He was, as you can imagine, very grateful.)
The story was reported in one local newspaper. No charges were brought against either of the hospitals or personnel who turned him away. They were acting within the law. And I talked to other ER directors who said they too turned patients away who clearly needed treatment if they didn’t have insurance.
Finally, going back to the chronically ill, the way you can tell that they are not “covered” is by looking at the resarch. The reason such a large chunk of our healthcare dollars go to care for these people is because they are not getting the consistent ongoing treatment that they need in the first place.
Start reading studies in Health Affairs (www.healthaffairs.org)and you’ll find the facts about chronic disease management in the U.S. versus other countries.
Maggie,
Thanks for the detailed response. As it happens, I’ve been subscribing to Health Affairs for about a year now and have read a significant number of the articles in each issue I’ve received so far.
You cite several examples of waste that we know how to stop. Unfortunately, there are significant impediments to making it happen. For example, Medicare needs Congress to give it the authority to negotiate prices with drug companies. Moreover, if it is to have any real negotiating power (once its authorized), it also needs to be able to refuse to include drugs on its formulary if it cannot come to a satisfactory agreement with the manufacturer. The same is true for devices. If it had that power and started to use it, both CMS and the Congress would likely also have to deal with adverse reaction from vocal seniors.
Regarding cardiologists and orthopods doing too many procedures, I don’t understand how we would go about inducing them to switch their current practice approach to either salary or capitation. It’s not as though we could just order them to do that.
On the excess angioplasties, while we can make that case at a population level, it’s not clear how cardiologists would identify which specific patients would be better off with medication adjustments or a diet and exercise regimen. I had a personal experience with this as well. I complained of some new chest discomfort a couple of years ago. My cardiologist, who is very cost conscious, orders a routine stress test which shows an adverse change from my last one. He sends me for an angiogram a week later. A new blockage is found and a stent is inserted on the spot (took about 15 minutes). I am discharged the next day. The NYC academic medical center where this was done billed $31K of which insurance paid about $20K. Maybe my case was clear cut, but in more marginal cases, with the team already there, the path of least resistance is to insert the stent, and it pays well too. I have no way of knowing, of course, what, if anything, would have been done differently if this sequence of events occurred in Canada, Germany, France or the UK. Defensive medicine probably also drives U.S. docs in the direction of more aggressive intervention rather than less in cardiac cases.
Defensive medicine is probably also an issue in the prostate cancer cases. I don’t know enough about how easy it is to discriminate between low grade cancers that probably will never cause harm and the more aggressive variety. Would the Gleason score be of any use here? I think it is hard for many men to accept watchful waiting once a diagnosis of cancer is made. Maybe we would be better off just not doing the PSA test as part of routine physical exams. Then again, the docs are probably worried about being sued for a failure to diagnose – defensive medicine again.
So, most or all of this waste can’t easily be stopped without new tools – appropriate legislative authority for CMS to negotiate with drug companies and malpractice reform, along with a different attitude among the public, to make it more acceptable for doctors to try less aggressive strategies first to see if they will work before moving on to more aggressive interventions.
Poll after poll for several years now puts health care as an issue of vert significant concern to Americans. Now with the exception of the health care sector)business leaders are increasingly calling for reform.
I don’t see incrementalism despite the numbers in Congress you describe above.
I don’t buy the Stuart Altman notion that there are enough middle class citizens out there who are sufficiently satisfied with the status quo so as to prevent a people’s revolt.
I think the patients have had it(even if the politicians haven’t) -especially with insurance companies.
Ask your family,friends, co-workers and neighbors.
Dr. Rick Lippin
Southampton, Pa
Barry and Rick–
Thanks for your responses.
Barry, I’m very glad to hear that you are reading Health Affairs. I think everyone who is really interested in health care policy should. And I’m glad I didn’t offend you in my somewhat heated response. (We’ve been corresponding long enough that I didn’t think I would. You’re very level-headed.
Re: Your specific points:
I suspect that Congress will authorize Medicare to negotiate discounts with drug-makers and device-makers in 2009 or 2010.
The lobbyists are very very strong, but at this point Americans really hate drug-makers.
And when it comes to Medicare, Congress is caught between a rock and a hard place. The law that Congress passed a number of years ago says that if costs continuet ot rise, it must start slashing reimbursements to physicians who care for Medicare patients.
Congress has been postponing those cuts, year after year, but nowit’s facing a crisis. This year, the law says it must cut reimbursements to all physicians by 10% and next year, by another 6%.
If Congress does that, many docs will stop taking Medicare patients.
Congress must find another way to keep Medicare from going under financially.
Most Medicare patients like their doctors. Most Medicare patients do not like pharamceutical companies.
If you were a legislator, how would you vote?
Seniors won’t like it if Medicare starts to refuse to pay fee-for-service, but that is what MedPac (the Medicare Payment Advisory Comission )is talking about. Inevitably it will happen, later if not sooner.
Seniors also won’t like it if Medicare stops covering ineffective services, but as ineffective procedures and services get more publicity in the mainstream media (as they are–look at all of the stories in places like the Wall Street Journal and the NYT about unncessary angioplasties, about the dangers of coated stents, about the dangers of defibrillators, about dangerous drugs. . . )
Re: defensive medicine, as I explained in an earlier comment, one state has already passed legislation making it hard to sue a doctor over elective surgery (and treatment for prostate cancer) if he took the patient through the process of shared decision-making.)
And there has been only one case where a prostate cancer patient has won when he sued his doctor for not doing the PSA test.
See Jack Wennberg’s article about this in the Nov Health Affairs.
Rick–As you know, I basically. And when I talk to my friends co-workers and neighbors, they do too.
But we don’t represent all Americans–or even most. I know exactly one person who voted for Bush, and he is an inlaw, i.e. someone I didn’t pick as a friend.
I was completely baffled/horrified when Bush was elected the second time. Okay, he stole the election. But nevertheless, he didn’t steal it by 10 points. Somewhere between 48% and 49% of Americans voted for him.
We live in a very split nation, a nation that does not value education.
I’m not convinced that most middle-class Americans (as defined by median income of $52,000, joint income for a household) are happy with our healthcare system.
But the people who vote–and most importantly, who have the money to contribute to campaigns–may be pretty satisifed. Certainly, many of them don’t want to risk losing anything they have to share with anyone else.
Make no mistake. I am not giving up on serious health care reform. Not now, not ever. And I don’t think that incremental change is the answer.
But maybe we will have to wait until things are much worse–until 25% of the nation is uninsured– before people will be ready for change.
I don’t know. In the meantime, I’ll just keep onwriting, as persuasively, as I can, about the need for a radical change.
Just to be sure, that we all are talking about the same things:
http://www.medscape.com/viewarticle/564144_print
Experimental Mouse–
Thanks for referring us to a very interesting article.
It seems to me that we think of ourselves as a society that falls into the first category: “a society that values autonomy and equality and that considers the ethical principles that are integral to the ‘Universal Declaration of Human Rights'[1] as fundamental to its moral framework”—
though I think we need to give more attention to some of the values of the second category, a society that “considers utility and efficiency as primary values and whose ethical perspective is driven by the principle of the greatest good for the greatest number.”
If we did that, we would pay more attention to public health, and to the ways in which poverty, a lack of education and the environment contribute to the poor health of the population. (See my September post on Class and Health http://www.healthbeatblog.org/2007/09/class-and-healt.html
Maggie,
SOLIDARITY is the word, and the kind of attitude, what combines the two in an easy way. That’s what most of the countries, that “outperform” the US health care in any way are not afraid to declare as one of the main principles operating their healthcare systems. On the other hand that is what people – when paying either taxes or allowances, or both for it, except those, having no income at all – accept entirely. Saying: Maybe today I’m healthy, and somebody else uses my money to become healthy again, but that can change in a minute and I’ll be in need to use that WE ALL have, to become healthy. And I’m happy to do so, because as long as I’m “lending” the money and not “borrowing” I’m HEALTHY.
Experimental Mouse: You wrote: “‘Solidarity’ is the word that combines those two attitudes.” {Other readers–see my 10:34 Nov. 17 response to experimental mouse).
EM– I couldn’t agree more.
Change is evolutionary. The system will fix itself, over time. Some, like the six illegal immigrants burned in the Calif. fire, will get millions in health care. Meanwhile, Jane Six-Pack will wait in a line. And med-mal lawyers, surgeons, and hospital CEOs will keep driving 7-Series BMWs. Life will go on, even if a Clinton or Bush is not president.