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Health economists: Their facts, but our values

Archives for 2008

Health economists: Their facts, but our values

Health Economists’ Views of Health Policy

By Michael A. Morrisey and John Cawley
Journal of Health Politics, Policy and Law
August 2008
This article reports the views of a national survey of U.S. health economists on a series of questions ranging from mergers among health care providers to the profits of pharmaceutical manufacturers to fundamental health care reform. We find a high degree of agreement on issues of fact but considerable disagreement on issues that depend on values.
Issues of Fundamental Disagreement
Arguably the most divisive statement in our entire survey was, “The United States should adopt a Canadian-style system of universal and compulsory health insurance.” Of U.S. health economists, 47 percent agreed that the United States should adopt such a system. What makes the responses to this question so divided is the fact that the entire range of answers is used; 22 percent strongly agreed, 25 percent agreed, 21 percent disagreed, and 22 percent strongly disagreed. The nearly uniform spread of answers is unique; for all other issues reported, answers tend to be concentrated around the middle (agree or disagree) with few responses in the extreme tails (strongly agree, strongly disagree). Moreover, only 10 percent responded that they didn’t know, which is among the smallest response in that category to any question.
http://jhppl.dukejournals.org/cgi/content/abstract/33/4/707

Almost all of us want 2009 to be the Year of Health Care Reform. Almost all of us agree on the facts. We agree not only on what the deficiencies are in our health care financing and delivery systems, but we also largely agree on what the impact would be of various public policies that might be enacted during the reform process.
But the debate isn’t about facts; it’s about values! Just think about the strongly held values on the two sides of the debate over whether or not “the United States should adopt a Canadian-style system of universal and compulsory health insurance.”
Many of us can speak to one side of that debate. We want a health care system that can provide high-quality care for everyone at a cost that we can afford, both individually and collectively. An improved Canadian-style single payer system would do that. Those strongly opposed to single payer have not provided us with any model that would come close to all of those goals.
If the other side doesn’t share our specific goals, then what values do they support? Perhaps it’s unfair to try to describe their values since there is such an intense disagreement, but we can parrot some of their published statements on their values.
Many support the concept of individual responsibility. Each individual should be responsible for acquiring the means to obtain whatever products or services they desire, including health care. For those who are truly incapable, minimal basic services can be provided by private charity or by public safety-net welfare programs. For average-income individuals who can no longer afford health care, it is their responsibility to make choices – either a choice to advance themselves so they can afford care, or a choice to reduce other spending such as on rent, transportation, education or other less essential products or services, or simply to do without health care.
Many oppose wealth transfer, especially in the form of progressive taxes. They believe that those who have achieved great wealth should be allowed to keep it, and those who haven’t should simply make do. Wealth should not be confiscated by the government simply because tens of millions of individuals are not capable of paying for health care that they might need. In their view it is morally just that society be stratified, richly rewarding the producers.
Many passionately support the concept of freedom, meaning “free exercise of the natural right of sole dominion over their own lives, liberty and property,” relegating government to a minimal, custodial role. They specifically reject the United Nations Universal Declaration of Human Rights, which states, “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services.”
They value greatly the entrepreneurial spirit of the private marketplace that brings us wealth-creating insurance company middlemen, and an abundance of expensive technologies that shift the profit/benefit ratios ever upward. To them, private business success has a priority over public social policies.
Freedom, entrepreneurialism, and individual responsibility are values that are not the exclusive domain of the opponents of single payer, for we all share them. The disagreement is in how we value public policies that make these concepts work for all of us. We need freedom – freedom to chose our health care professionals – a freedom that the insurers have taken away from us. We need entrepreneurialism to provide us with better technology – but technology that meets the test of value. We need to exercise our individual responsibility to take care of ourselves – but along with our responsibility to support public policies that will enhance the health of all of us.
Princeton health economist Uwe Reinhardt has said that we can do this. The facts are easy. You tell us your values and then we can design a health care system that matches them. The question is, whose values will Congress and the Obama administration honor?

Health economists: Their facts, but our values

Health Economists' Views of Health Policy

By Michael A. Morrisey and John Cawley
Journal of Health Politics, Policy and Law
August 2008

This article reports the views of a national survey of U.S. health economists on a series of questions ranging from mergers among health care providers to the profits of pharmaceutical manufacturers to fundamental health care reform. We find a high degree of agreement on issues of fact but considerable disagreement on issues that depend on values.

Issues of Fundamental Disagreement

Arguably the most divisive statement in our entire survey was, “The United States should adopt a Canadian-style system of universal and compulsory health insurance.” Of U.S. health economists, 47 percent agreed that the United States should adopt such a system. What makes the responses to this question so divided is the fact that the entire range of answers is used; 22 percent strongly agreed, 25 percent agreed, 21 percent disagreed, and 22 percent strongly disagreed. The nearly uniform spread of answers is unique; for all other issues reported, answers tend to be concentrated around the middle (agree or disagree) with few responses in the extreme tails (strongly agree, strongly disagree). Moreover, only 10 percent responded that they didn’t know, which is among the smallest response in that category to any question.

http://jhppl.dukejournals.org/cgi/content/abstract/33/4/707

Comment:

By Don McCanne, MD

Almost all of us want 2009 to be the Year of Health Care Reform. Almost all of us agree on the facts. We agree not only on what the deficiencies are in our health care financing and delivery systems, but we also largely agree on what the impact would be of various public policies that might be enacted during the reform process.

But the debate isn’t about facts; it’s about values! Just think about the strongly held values on the two sides of the debate over whether or not “the United States should adopt a Canadian-style system of universal and compulsory health insurance.”

Many of us can speak to one side of that debate. We want a health care system that can provide high-quality care for everyone at a cost that we can afford, both individually and collectively. An improved Canadian-style single payer system would do that. Those strongly opposed to single payer have not provided us with any model that would come close to all of those goals.

If the other side doesn’t share our specific goals, then what values do they support? Perhaps it’s unfair to try to describe their values since there is such an intense disagreement, but we can parrot some of their published statements on their values.

Many support the concept of individual responsibility. Each individual should be responsible for acquiring the means to obtain whatever products or services they desire, including health care. For those who are truly incapable, minimal basic services can be provided by private charity or by public safety-net welfare programs. For average-income individuals who can no longer afford health care, it is their responsibility to make choices – either a choice to advance themselves so they can afford care, or a choice to reduce other spending such as on rent, transportation, education or other less essential products or services, or simply to do without health care.

Many oppose wealth transfer, especially in the form of progressive taxes. They believe that those who have achieved great wealth should be allowed to keep it, and those who haven’t should simply make do. Wealth should not be confiscated by the government simply because tens of millions of individuals are not capable of paying for health care that they might need. In their view it is morally just that society be stratified, richly rewarding the producers.

Many passionately support the concept of freedom, meaning “free exercise of the natural right of sole dominion over their own lives, liberty and property,” relegating government to a minimal, custodial role. They specifically reject the United Nations Universal Declaration of Human Rights, which states, “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services.”

They value greatly the entrepreneurial spirit of the private marketplace that brings us wealth-creating insurance company middlemen, and an abundance of expensive technologies that shift the profit/benefit ratios ever upward. To them, private business success has a priority over public social policies.

Freedom, entrepreneurialism, and individual responsibility are values that are not the exclusive domain of the opponents of single payer, for we all share them. The disagreement is in how we value public policies that make these concepts work for all of us. We need freedom – freedom to chose our health care professionals – a freedom that the insurers have taken away from us. We need entrepreneurialism to provide us with better technology – but technology that meets the test of value. We need to exercise our individual responsibility to take care of ourselves – but along with our responsibility to support public policies that will enhance the health of all of us.

Princeton health economist Uwe Reinhardt has said that we can do this. The facts are easy. You tell us your values and then we can design a health care system that matches them. The question is, whose values will Congress and the Obama administration honor?

House party attendees in agreement

At House Party on Health Care, the Diagnosis Is It’s Broken

By Robert Pear
The New York Times
December 22, 2008
When a dozen consumers gathered over the weekend to discuss health care at the behest of President-elect Barack Obama, they quickly agreed on one point: they despise health insurance companies.
http://www.nytimes.com/2008/12/23/health/23health.html?_r=1&hp

And for reform, our nation’s political leaders are going to bring us… even more of the same?

House party attendees in agreement

At House Party on Health Care, the Diagnosis Is It's Broken

By Robert Pear
The New York Times
December 22, 2008

When a dozen consumers gathered over the weekend to discuss health care at the behest of President-elect Barack Obama, they quickly agreed on one point: they despise health insurance companies.

http://www.nytimes.com/2008/12/23/health/23health.html?_r=1&hp

Comment:

By Don McCanne, MD

And for reform, our nation’s political leaders are going to bring us… even more of the same?

All I Want For Christmas Is Less Charity: Cure the Plight of Care

By ROSE ANN DeMORO
The Tampa Tribune
Sunday, December 21, 2008

The most heartbreaking e-mail alerts that crossed my computer screen this holiday season arrived from an active, progressive union that has set up a fund for medical benefits for widows and orphans of their former members.

Reliance on charity rather than a public safety net symbolizes what has become a perversely unique American solution to social problems, especially in the Bush administration era.

In “Critical Condition,” a searing 2006 indictment of the collapse of our medical system, Donald Bartlett and James Steele described how pervasive this dependence has become. Garage sales, spaghetti feeds, livestock auctions, pancake breakfasts, walkathons, bingo tournaments, pie socials, carwashes, church suppers, raffles, barbecues, basketball shootouts, even hot-air balloon rides, all to help families drowning with un-payable medical bills.

Rather than a coordinated national system, as every other industrialized country has established, our “you’re on your own” society has hit rock bottom in the most basic area of all, the care of our community.

No wonder the United States ranks last among comparable nations in preventable deaths and first in out-of-pocket costs, despite spending twice as much as anyone else on per capita health care.

Much has been said recently about Franklin Roosevelt’s first 100 days, a period that inaugurated a new standard of social action and set the stage for some of the most important reforms in American history.

But it’s also worth remembering FDR’s 1944 call for a second Bill of Rights that included the right for all Americans to quality health care and other basics in jobs, education, housing and food that he said “spell security.” In other words, a collective response to protect and defend everyone, not just the fortunate few.

Counting on personal check writers or online donors certainly relieves others of their responsibility, most notably the insurance companies that are not about to jeopardize that by starting to actually pay for medical care.

And it circumvents the vision of those who think our government should guarantee health care for all of us, much as government assumes responsibility for police, fire, armed services, schools, libraries, mail service, parks, environmental protections, airport security, national museums and prisons.

And even though the government is already in the game, financing or providing medical care for seniors, veterans, the disabled and low-income families, it should operate with less administrative waste, less bureaucracy and without rejecting people based on pre-existing conditions or dumping them when they get sick.

But somehow, a whole lineup of liberal advocacy groups, policy wonks, media pundits and politicians have concluded there is a national “consensus” to fix this broken and dysfunctional health care system by expanding the private insurance system that created the disaster.

That approach, however, would not curtail skyrocketing premiums, deductibles, co-pays or bills for care denied by the insurance companies. In recent testimony to the Senate Finance Committee, Princeton Professor Uwe Reinhardt noted that the current cost of medical services for a typical family of four consumes 26 percent of that family’s gross wages. At the present rate that will soar to 44 percent by 2018.

Perhaps those “consensus” builders are counting on the pancake breakfasts and orphan funds to make up for their policy failures. Or they could channel that giving spirit into joining a broad grass-roots campaign to demand real reform.

Registered nurses will be in the forefront of this movement. It is RNs who every day look patients in the eye and directly experience the pain and degradation of an all-too-often inhumane system. They know that every life counts and are not willing to leave anyone behind.

And they know what it would take to guarantee high quality care for everyone, a streamlined, more effective system than our current nightmare; one based on care, not insurance, by extending Medicare to cover everyone.

In an era when our government has intervened on behalf of Citigroup and AIG and Freddy and Fannie and all those financial wizards on Wall Street, maybe we can bail out the tens of millions of Americans without having to count on auctions or widows’ funds to pay for medical care.

Our plea: No more Natalines

By Hilda Sarkisyan
Los Angeles Daily News
Article Launched: 12/22/2008

One year ago, my beautiful daughter Nataline lost her long struggle with leukemia. Our insurance company, Cigna Healthcare, closed the door on us. Now we need to make sure that other families can have the security that our daughter didn’t.

It was one year ago that the California Nurses Association, bloggers from coast to coast, and our Armenian community mounted a massive national protest that forced the hand of our insurance company to reverse their decision to deny a lifesaving liver transplant for our 17-year-old daughter.

Tragically, Nataline slipped into a coma and died two hours after Cigna Healthcare relented and approved the procedure.

Nataline was first diagnosed with leukemia at age 14. She was in remission for only one short year before her relapse. After her sweet 16 birthday, which was a huge celebration with her friends and family, she had several months of chemotherapy. She then developed complications following a bone-marrow transplant from her brother, Bedig, which led to liver failure.

Cigna refused to pay for treatment, citing policy provisions which didn’t cover “services considered experimental, investigational and/or unproven to be safe and/or effective for the patient.”

Four prominent doctors, including the surgical director of the Pediatric Liver Transplant Program at UCLA, wrote to Cigna urging it to reverse its denial. They said that Nataline “currently meets criteria to be listed as Status 1A” for

a transplant. They also challenged Cigna Healthcare’s denial that the company said occurred because their benefit plan “does not cover experimental, investigational and unproven services,” to which the doctors replied, “Nataline’s case is in fact none of the above.”

Why didn’t they listen to the doctors and nurses at her bedside and approve the transplant the week before, when there were two healthy livers that were a match and could have saved my sweet Nataline?

We were told that the cost of a liver transplant and one year of follow-up care was $450,000 in 2007 and UCLA turned down two livers while waiting for approval from Cigna Healthcare. It took a huge outpouring of protest and Cigna Healthcare’s public humiliation to force their hand.

We agree with President-elect Obama, who is talking about the need to bring down spiraling health-care costs, but it won’t happen as long as the insurance industry is minding the till.

Having insurance is not the same as receiving needed care. We need a fundamental change in our health-care system that takes control away from the insurance companies and places it where it belongs – in the hands of the caregivers, the patients and their families.

We have a rare opening, a historic opportunity, and piecemeal solutions that keep the insurance industry open for business will only stoke the fires of financial hardship and unnecessary heartbreak for America’s working families.

My family’s New Year’s wish is to see an end to the suffering caused by insurance industry greed and misguided priorities.

We believe that the only way to guarantee all Americans health care, and assure that another young life is not sacrificed, is through a single-payer system, which is like improved Medicare for all.

Hilda Sarkisyan, of Northridge, and her husband filed a lawsuit against Cigna Healthcare of California last week.

Seize opportunity to fix health care system

by Bob Balhiser
Queen City News, Helena, Montana
Wednesday, December 17, 2008

Like the old saying, “Too many cooks spoil the broth”, it can likewise be said that too many fingers in the till ruin a health care system. Dr. Putsch has recently done an excellent job of outlining just how much of our health care dollar is spent on administrative costs by citing studies that peg the range between 31 to 38 cents. I think everyone can agree that either amount is out of line and serves to explain why our health care costs have grown exponentially.

To reinforce Dr. Putsch’s assertions, it may be instructive to enumerate just a few of the non-medical costs built into U.S. health care that could be significantly reduced or eliminated with a well-designed system to provide Medicare for all U.S. citizens. They are: 1) Insurance agent sales commissions; 2) Insurance company overhead costs five times those of Medicare; 3) Costs for doctors to deal with delays, denials, and complex rules of myriad private insurers and plans; 4) Unproductive costs of practicing defensive medicine; 5) Excessive costs of malpractice insurance; 6) Disproportionately high compensation of medical specialists; 6) Expensive advertising and “me, too” drug development costs incurred and passed on by pharmaceutical companies, and finally, 7) The obscene example Dr. Putsch used to illustrate the apparent necessity for “one billing clerk per bed” to sort out costs at Duke University Hospital.

Quoting a recent e-mail I received from Senator Baucus’s office: “The U.S. spends twice as much per person on health care as any other nation in the world, but our spending does not translate into higher quality. The U.S. ranks 19th out of 19 countries in preventable deaths”. I find it unimaginable Max can look at these statistics and not want to throw out the whole health care payer system and rebuild it from the ground up. Perhaps he would like to start over, but considers it politically impractical.

Similarly, a Montana reporter asked Barack Obama when he was in Butte why he didn’t support a single-payer health care system despite the fact that a majority of voters support the idea. To paraphrase Obama, he said it would be too difficult and disruptive to deep-six most of the health insurance industry that employs three million people nationwide.

I supported Obama, but I must say he made a pretty lame argument in this instance! If these folks do not add value to our health care system, then they should find something useful to do. Many with claims-processing experience would likely find positions in a single-payer system, while many highly (over)compensated executives might be forced to discover their true worth in a real world job market.

I would not be at all surprised if an impartial, in-depth audit of our current health care system were to reveal that the portion of our health care dollar devoted to non-medical costs was actually as high as 50 percent. Considering all the “slippage” in our current health care system, I suggest that we should be able to root out the waste, provide basic health care for all U.S. citizens, and still have money left over.

We can fix our broken health care system, and with Max Baucus and Denny Rehberg in influential congressional seats, Montanans are uniquely positioned to get the ball rolling. Surely there are powerful lobbyists who will resist meaningful change, but just remember this: those of us who pay the bills far outnumber those with fingers in the tills. We could start by persuading Denny to promote a hearing on H.R. 676 to examine the merits of a single-payer national health insurance system in an open forum.

To fix our health care system, we need only embolden politicians to do the right thing, then support them when they do. We can bring about meaningful health care reform, but if we have become too lazy or complacent to seize this golden opportunity, then we deserve to live with a failed health care system that will ultimately bankrupt the country.

Bob Balhiser is a retired engineer who lives in Helena

Ovation extorts innocent premature babies

FTC accuses firm of drug monopoly

By James Rowley
The Seattle Times
December 17, 2008

Antitrust enforcers accused Ovation Pharmaceuticals of cornering the U.S. market on a drug for a congenital heart defect in premature infants and asked a court to break up the company’s monopoly on the medication.

Ovation, based in Deerfield, Ill., purchased the rights to Indocin from Merck in August 2005. The FTC said Ovation then bought the rights to NeoProfen from Abbott Laboratories in January 2006.

As soon as it acquired NeoProfen, Ovation raised the $36 price it had been charging hospitals for each vial of Indocin to about $500, the FTC alleged in its complaint. Ovation set a price of $483 a vial for NeoProfen when it started selling the drug in July 2006, the FTC said.

The two drugs are the only alternative to risky surgery to treat a condition known as patent ductus arteriosus in which a blood vessel connecting two heart arteries fails to close.

http://seattletimes.nwsource.com/html/nationworld/2008528981_ftc17.html

Comment:

By Don McCanne, MD

Imagine if we had a publicly-financed and publicly-administered national health program covering everyone that included a comprehensive drug benefit. Would we be reading this story? Of course not. This does not mean that pharmaceutical firms will not engage in other criminal activities, but this one would have been prevented if we had a rational system of financing health care.

This one isn’t only about money; it’s about the soul of our health care system. It is about a pharmaceutical company that merely bought rights to products developed by others and then used those rights to egregiously extort innocent premature infants who had the misfortune of being born with a patent ductus arteriosus.

Depending on antitrust enforcers to establish health policy doesn’t seem like a smart way to run a health care system. With a single payer national health program we’d be able to eliminate many of the causes of excessive spending that often brings us only mediocrity in health care. Leaving the middlemen money managers in place will never allow us to achieve a high-performance system at a reasonable cost. Yet our national policy makers are determined to protect these middlemen no matter how much it costs us both in dollars and in tradeoffs in beneficial health policies.

Prospects rising for better health care delivery

By Bill Roy
Topeka Capital-Journal
Dec. 20, 2008

As December began, President-elect Barack Obama invited our nation’s governors to meet with him in Philadelphia. I am told 48 governors showed up on 48 hours notice to discuss with him state budget problems.

The good news was Obama indicated some of the promised stimulus package will be channeled through the states to help them fund basic services, most particularly education and health, which claim well over half of every state budget.

That meeting was good for Obama, good for our states and good for our governors, who want to provide the best educational and health care services they can.

America is a great nation. Much of its reputation for good government is derived from good state governments.

In my most fertile imagination, about March 1, President Obama and new secretary of Health and Human Services, Tom Daschle, would call the governors to whatever site they choose and tell them they have a plan to turn health care administration and delivery over to them, along with adequate funds to implement the best system they possibly can.

Daschle could say, “The principles of this plan are so simple that we believe that after careful study you will quickly call upon your members of Congress to go to work and pass the enabling legislation.”

When I was a once-upon-a-time congressman, unprejudiced by previous public service, I realized, and repeatedly stated in Washington and on the stump, that if we didn’t have states we would have to discover them.

State governments are both physically and culturally closest to the people they serve. If people of a state don’t get decent government, it’s usually their own darn fault. States also differ greatly in a multitude of ways, enough so to nearly always guarantee one federal law or one federal program does not fit all.

Many eager states have had a lot of sad experiences trying to have universal health care for their citizens and trying to pay for it. Without exception, they have failed. Oh, they have done some good things, such as marginally decrease the number of uninsured, provide public hospitals and support education and training of health professionals. But they have always fallen short on coverage and money.

But with this proposal, the federal government will share costs if states meet a handful of requirements. Yes, other countries have been successful with similar programs, although admittedly all nations are having difficulty keeping up financially with the rapid advance of biomedical sciences. But the other 29 nation-members of the Organization for Economic Cooperation and Development have been successful in covering nearly everyone for about two-thirds of what we are spending. Our problem isn’t money, it’s trying to deliver care through scores of money-making private health insurance companies.

This country has talked about universal health care too long for anyone to try to be cute, so I won’t. Yes, these are Canadian principles, and it could be called a Canadian plan — and that water was poisoned long ago. If it needs a foreign name, it might be best to call it the Taiwan plan, because that nation implemented a similar single-payer program in 1995 after studying the health systems of industrial nations to find out what works.

The Taiwanese have a smart card that includes all medical information of the holder, and is used for automatic billing that reduced their administrative costs to 2 percent, about one-tenth of our average administrative costs.

The requirements for states to receive federal money would be straight-forward: universality, comprehensiveness, accessibility, portability, and public administration. Yes, it could also be called state-administered Medicare for All.

The privilege of buying private health insurance to cover uncovered services or amenities distinguishes this proposal from the Canadian system, which absolutely forbids private insurance. It makes the system less egalitarian, but infinitely less discriminatory than our current system where health depends on income.

Bill Roy is a retired physician and former member of Congress. He has a law degree and lives in Topeka. He may be reached at wirroy@aol.com.

Atlanta physicians on curing faulty system

Letters to the Editor
Atlanta Journal-Constitution
Dec. 21, 2008

Responses to “Health care reform: We can’t afford to wait to fix this broken system” and “There is a cure available,” by Dr. Oliver Fein,” Dec. 14.

Stabilize primary care

I agree with the AJC editorial that pooling all our children in one consolidated system of health financing could solve many problems.

Even among families with insurance, children must often defer needed care when their health plan changes rules, raises costs, drops a physician or terminates the employer’s contract.

Effective primary care needs stability and continuity in the patient-doctor relationship, and it functions best when the families have freedom to choose their doctor or clinic.

A universal, single-payer system would — for less money — bring us closer to these goals for children.

Why not extend a universal single-payer system to all Americans?

Dr. Oliver Fein’s commentary provided good reasons why the National Health Insurance Act offers a sensible way forward.

Dr. HENRY S. KAHN
Kahn is a professor emeritus at Emory University School of Medicine.

Single-payer system works

As a board-certified internist, I concur with Dr. Oliver Fein’s idea of a single-payer system.

I have seen many Georgia patients with strokes and myocardial infarctions that could have been prevented if they had access to good primary care. Helping these victims fit into a broken health care system has been frustrating to say the least.

Although born and raised in the United States, my medical education at McGill University in Montreal gave me a chance to observe the Canadian single-payer health care system.

While it is not perfect, it is far better overall (and less expensive) than what we have here.

Let’s put the dollars that would otherwise be spent paying administrators back into the health care system and enact a single-payer system.

Dr. SUSAN HENDERSON
Henderson is a physician at Grady Health System.

And the downside is …

Dr. Oliver Fein, in arguing for a single-payer health care system, states that eliminating the $400 billion private health insurance industry would enable us to cover the uninsured and do away with co-pays and deductibles for most Americans. But think of what we would lose if that industry vanished!

Hmmmm … can’t seem to think of anything.

Dr. ANNETTE BERNARD
Bernard is an Atlanta physician.

Real Health Care

Letter to the Editor
New York Times
Published: December 22, 2008

To the Editor:

Re “Necessary Medicine?” (Week in Review, Dec. 14):

The problem with President-elect Barack Obama’s supposed emphasis on the costs of health care is that his proposals fail to deal with the biggest source of wasteful expenditures, our dependence upon private health insurance.

Mr. Obama’s plans, by continuing to embrace a role for private health insurance in our system, wed us to the waste, profiteering and venality of an industry that exists only to take our money and spend as little of it as possible on the objective.

The private insurance industry seeks to increase the proportion of its revenue reserved for profits by spending as little as possible on health care, instead directing its expenditures to marketing, underwriting, “product development” and executive compensation.

I’d prefer my health care dollars to be spent — surprise! — on health care. Only a move toward “Medicare for all” can do that.

Aaron M. Roland
San Francisco, Dec.

The writer is a practicing family physician and clinical associate professor of medicine at the University of California San Francisco.

CBO's deficient report on analyzing health insurance proposals

Key Issues in Analyzing Major Health Insurance Proposals

The Congress of the United States
Congressional Budget Office (CBO)
December 2008

Chapter 4 – Proposals Affecting the Choice of an Insurance Plan

Medicare-for-All
Many of the considerations that arise in designing a new option for individuals to enroll in Medicare would also affect the analysis of proposals to establish a single-payer system based on Medicare through which all U.S. residents could obtain their health insurance. In particular, the federal costs of such a proposal would depend primarily on the benefits that the system provided; the rates it used to pay doctors, hospitals, and other providers of health care; and the extent of any premium subsidies it offered to enrollees—all of which could differ from Medicare’s current design. The rules and processes used to determine eligibility for the program and to enroll individuals who are eligible would also have significant implications.
Even under a single-payer system, individuals could have a choice of insurance plans or benefit designs, but the extent and nature of those options would also depend on the features of the proposal. If enrollees were allowed to choose a private health plan paid through Medicare or could purchase supplemental private insurance (as many Medicare enrollees currently do), the rules governing those choices and the possibility of adverse selection would remain important considerations. If, instead, the Medicare plan was the only option offered and all residents were required to enroll in it, then adverse selection would not occur. That approach could reduce the administrative costs that doctors and hospitals currently incur when dealing with multiple insurers. Some enrollees might prefer a different design, however, and the lack of competition from private health plans could take away a benchmark that is commonly used to assess the adequacy of Medicare’s payments and the efficiency of its performance. More generally, that approach would raise important questions about the role of the government in managing the delivery of health care.
CBO Study (196 pages):
http://www.cbo.gov/ftpdocs/99xx/doc9924/12-18-KeyIssues.pdf

Everyone who is participating in the efforts to reform health care financing in the United Sates should have a copy of this CBO report. It describes in considerable detail the various policy decisions that must be made as we approach the goal of affordable health care for everyone, but only those policies that would apply to a multi-payer system of private and public programs.
What is clear is that each policy decision under this scenario increases the administrative complexities of the financing system, and that the inevitable tradeoffs that must be made can only result in compromises that cause us to fall short on our goals of universality, equity, efficiency, quality, access, and affordability. Once the decision is made that we must build on our current system, there is no possible way to avoid spending more money for reform that would fall so short of a high-performance system.
There is a very serious deficiency in this study. In the 167 pages constituting the main body of this report, there are only two paragraphs (above) on a model that would be far less expensive and would come as close as possible to achieving our goals. To say that single payer received short shrift in this important policy document is not simply an understatement; it is a glaring example of the extent to which Congress has gone to glibly dismiss single payer as not being a feasible option. They are going to make policy decisions impacting not only one-sixth of our entire economy, but also the physical and financial well being of each of us.
All of us throughout the nation need to rise up and express our outrage! We need to contact our members of Congress immediately and demand the urgent preparation of a CBO report that describes the policy options, and the impact that they would have, under a single payer national health program. We, the people, deserve the same detailed analysis as was given the multi-payer model catering to the special interests.