Tuesday, April 17, 2007

Why progressives should learn to love cost-sharing in health care

An article below (excerpts) by Leftist Ezra Klein -- who sees some of the realities

It is a common complaint among Democrats that they have no success with framing. On health care, however, they've had too much success with the framing -- what George W. Bush might call catastrophic success. "Universal health care" is an ingenious phrase; it easily garners majoritiy support when polled and is almost impossible to argue against. What sort of grinch is against health care for all? The trouble is, defining the conversation in terms of universality (or a lack thereof) means implicitly defining the problem as an issue of access. Make no mistake, the fact that 45 million Americans are uninsured is a moral disgrace. But if we could achieve full coverage tomorrow, holding all other things equal, the system would collapse within a matter of decades. No one would be able to afford it.

Since 2000, health insurance premiums have shot up 87 percent. The economy has not grown by anything near a comparable amount. In 30 years, Medicare alone will be almost 8 percent of GDP. Give it a few more decades and it'll take more than 10 percent. And so we reach a tongue-in-cheek dictum known as Stein's Law: If something cannot go on forever, it will stop. Since we can't afford this sort of cost growth forever, eventually, we'll stop it. The question is how.

Progressives tend to focus, rightly, on the access question. It makes sense for a number of reasons. One is that the worst of the cost crises won't materialize for decades, while the uninsured lack health coverage now. Another is that cost control is only possible within an integrated, more centralized system, and such a system is better sold on grounds of access than on overall cost.

But how to best control costs should be considered, even if it never becomes a preeminent political talking point. It must be considered not only because the health system will collapse unless spending growth slows, but because we spend too much on health care in the United States. We spend more than we need to, first of all, because our prices are so high and our system is so inefficient. But even if we could purchase care at wholesale rates and construct the most effective delivery system in the world, we would still be spending more than we probably should. On this, the data is clear: We purchase more care than really benefits us.

The largest study of health insurance ever conducted, done over 15 years by the RAND corporation, randomly sorted individuals into different insurance plans with varying levels of generosity. Those in the most expansive plans received 40 percent more care than those in the least -- and their health outcomes were no better. The only exception was for the poor, whose health outcomes were hurt by cost-sharing and improved by more generous plans. The Dartmouth Atlas studies showed that regional variations in medical culture and doctor density led to, among other odd effects, 30 percent of seniors in Miami seeing more than 10 specialists in their last six months of life, compared to just seven percent of those in Oregon. Even with this huge variation in care, outcomes among the two populations were no different. The research is clear: Not only is more care not always better, it is sometimes worse -- and it is always more expensive.

For progressives, that's a problem, as excessive money spent on unlimited care could instead be going towards everything from more generous income supports to increased education funding to infrastructure improvements to rebates on payroll taxes. Health care is the most urgent of domestic progressive priorities, and rightly so, but it would be a better world if, in fixing the health care system, we could free up more money for other progressives priorities.....

But even though conservatives have embraced a crude, even regressive, form of cost-sharing, there's a kernel of insight to their account. In 1965, the average American received a bit under $1,000 in health care, and paid $483 out of pocket. In 2006, Americans received $6,640 in health care, and paid . $837 out of pocket. While total costs have increased by nearly 700 percent, out of pocket spending hasn't even doubled. It's not, however, as if we don't pay for that spending. It just goes through premiums, and lost wage increases, and taxes. In the end, we pay it all, we just do so in a way that encourages using ever more health care, and thus paying ever more for it.

Moving some of the spending to the front-end -- making us pay for care rather than premiums -- would certainly right some of those odd incentives. But it should be done in the context of a system-wide shift to a nationalized structure. The increased financial exposure of consumers will force better behavior from providers, but that's only half the battle. Even as you increase the perceived financial vulnerability of Americans (though their total costs will be far less), you can increase their protection against the practices and whims of providers. A major factor in our sky-high health costs is that Americans simply pay more per unit of health care than any other nation. We're getting gouged, and it has to stop. For that to happen, a new system must bring Americans into the same pool, so the government can use its massive market share to bargain down prices and advocate for their interests -- just like every other nation does.

More here





Reality: Health Care Will Cost More And Nationalization Rations & Destroys Quality

While the Left continues on its tired campaign for nationalized health care, revived by excitement over currently barely holding the majority in Congress, it has lost the core argument that it would effectively and efficiently bring access to all at lower costs and higher quality. Facts just won't comply with statist fantasy.

Some conservatives pay compliments to Ezra Klein, perhaps because he doesn't engage in Kosian vulgarity or excess, writes well, and does engage in civil discourse, certainly traits to be welcomed from the Left. However, make no mistake, Klein tactically veers from Leftist tropes while remaining faithful to its core. His latest, on health care, says we are spending far too much on health care, which will increase, and admits that, indeed as conservatives aver, more exposure of health care consumers to the cost of treatments will rein in some excessive usage.

But, Klein perseveres in the Left's theme that the only way to really and humanely expose health consumers to cost is by a sliding scale of major cost sharing within the framework of a nationalized system that imposes severe price restrictions on providers. Klein asserts that such a nationalized health care will continue to deliver the access and quality Americans expect.

Klein, and others whether conservative or liberal, fail to admit that the increased portion of our budgets that will be spent on health care is largely unavoidable, at least if we are to receive the access and quality we expect. Aging population coupled with advancing technology and the natural rise in expectations that comes with expanding national wealth will continue to increase spending on health care.

Only rationing of access and quality will reduce or seriously slow the rise in health care spending. Nationalization may do this, but more likely would not - as the revolt against overly restrictive HMO's demonstrated, and the political pressures for runaway costs of existing federal programs' demonstrates. What we'd be left with would be no way back, and a disastrous decline of health care access and quality just as demand for it increases.

Ideologues revel in "silver bullet" grand schemes, whether from the Left or Right. Conservatives' counter to the Left on health care, that more exposure to costs will make wiser consumers and restrain costs, is overstated because by its very nature health care choices - particularly in severe illnesses or accidents -- are not usually subject to informed choice, and can't be, but must rely upon informed and trained professionals whose own knowledge is in dynamic growth.

There are certainly marginal improvements that come from better information systems and from more self-responsibility and access to useful information. But, it's not a panacea. As I pointed out here, the Trojan Horse of the uninsured is overstated, to propel nationalized health care, and used to undermine the health care of 80% of Americans. The latest poll of the privately insured (consistent with many other polls), for example,

found most U.S. workers are very satisfied with their employer-provided health care benefits..At least seven in 10 workers consider their health plan to be excellent or very good at providing easy access to providers and covering a wide range of services, while two in three say their plan provides a sense of security that they will be able to afford good health care.

At the same time, contrary to conservative support for decoupling employees from employer-provided insurance, "About three in four employees would prefer to get health benefits through their employer rather than getting additional salary to buy their own."

Nationalized schemes trade on natural and legitimate anxiety of others about ability to obtain insurance, or the unwillingness of some of those who can afford insurance to pay for it. Incremental reforms, like COBRA and HIPAA and some states' small group legislations, have reduced this insecurity by providing guaranteed access to insurance. RomneyCare is the next step of incremental reform, although its details are in process of elaboration in the face of empirical analyses.

These are not "silver bullets" or all-encompassing systems. They are consistent with pragmatic trial-and-error focusing on specific problems, wholly in line with the American approach to governance that blends private enterprise and flexibility with only so much legislative compulsion as necessary to impel and regulate.

Ideologues, or politicians seeking to trade on fear, will no doubt continue to propound grand schemes. Smarter ones, however, will recognize what most voting Americans do: incremental reforms that save what's best, work best.

Source





Australia: The government version of urgency



LIFE-threatening ambulance delays at overcrowded hospital emergency departments are growing longer. Emergency ambulances now take an average of 32 minutes to unload a patient. This "at hospital time" has jumped four minutes in the past six months and has stretched by eight minutes, or 33 per cent, in the past two years. A frustrated paramedic sent photographs of ambulances queueing outside the Monash Medical Centre's emergency Department to the Herald Sun. He said six emergency ambulances and two patient transfer ambulances waited for up to an hour to offload their patients last week.

Metropolitan Ambulance Service operations general manager Keith Young acknowledged growing delays were affecting emergency response times. "There are growing pressures on some hospitals that ultimately result in a delay in us unloading patients, which is a concern," Mr Young said.

The MAS aims to respond to 90 per cent of emergencies in 14 minutes. In 2005, the target was 13 minutes. A MAS survey in 2005 found a strong community preference for response targets of less than 10 minutes. In recent months the average response time to 90 per cent of emergency calls has been close to 16 minutes, a Health Department source said. "There have been several close calls where it looked like it would hit 16 minutes," the source said.

Paramedics said there was no doubt the delays would cost lives. One said hospitals continued to force ambulances to queue to avoid financial penalties imposed by the State Government on hospitals that go on full or partial bypass too often. "The system is broken and (Premier Steve) Bracks has hidden behind a lot of smoke and mirrors for a long time," the paramedic said. "The early warning and bypass system is fundamentally flawed. "It penalises a (struggling) hospital by taking money from them when they need the money to pour into (extra) staff. "The end result is patients are put at risk."

A Health Department source said overcrowding had become so dire at the Royal Melbourne Hospital that it had virtually given up telling the MAS when it was too busy to cope with more patients. Hospital emergency department staff claim they are regularly directed to ignore bypass and early warning systems designed to help ambulances avoid crowded hospitals. The practice has become common since the Herald Sun revealed last year that the Royal Melbourne had spent 102 hours on full or partial ambulance bypass last May, more time than any other hospital. Mr Young confirmed some hospitals had been spoken to about diverting ambulances when their emergency departments were full. A reference committee of MAS, department and hospital representatives was looking at new management strategies to deal with delays.

Source

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For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation. Both Australia and Sweden have large private sector health systems with government reimbursement for privately-provided services so can a purely private system with some level of government reimbursement or insurance for the poor be so hard to do?

For more postings from me, see TONGUE-TIED, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, FOOD & HEALTH SKEPTIC, GUN WATCH, EDUCATION WATCH, AUSTRALIAN POLITICS, DISSECTING LEFTISM, IMMIGRATION WATCH and EYE ON BRITAIN. My Home Pages are here or here or here. Email me (John Ray) here. For times when blogger.com is playing up, there are mirrors of this site here and here.

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