Theodore Marmor responds to Uwe Reinhardt:
(The previous remarks are reproduced, and Dr. Marmor's additional comments are in caps, whereas his original comments are in lower case. Dr. Reinhardt's comments were made after Dr. Marmor's lower case comments, but before his caps. Please note that, although messages in all caps are considered to be the e-mail version of shouting, that is not true here.)
Dr. Marmor:
Uwe--I want to start a trend towards brevity in these exchanges, so will have in caps my responses below.
Theodore R. Marmor Professor of Public Policy & Management Professor of Political Science Yale University School of Management
Dr. Marmor:
Uwe--your arithmetic was helpful to see what is at work with projections of future national income and what one scenario forecasts for health expenditures as a proportion of that national income. But arithmetic neither produces plausible predictions (as against conditional forecasts) and, more important, does not provide the grounds for analysis of that future. (Were CBO forecasts in 1993 l8% of GNP for health by 2000? That was their forecast!)
Dr. Reinhardt:
It was projected to be 19.7%, Ted (October, 1993--I still have the paper). How could you err by so much!
Dr. Marmor:
THE POINT DOES NOT DEPEND ON WHETHER IT WAS 18%, WHICH I PULLED FROM MEMORY OR 19.7% RATHER IT IS THAT THE CBO FORECAST WAS VASTLY OFF THE MARK AS A POINT PREDICTION. WE CALL YOUR RESPONSE IN PHILOSOPHY 'FALSE SPECIFICITY.' I REGARD IT AS A HUMOROUS ACKNOWLEDGEMENT OF THE POINT.
Dr. Marmor:
I particularly want to contest your claim (repeated often by you) that "Americans have signaled that they don't want any cost control at all...." Kip challenges your claims about the effects of what is called managed care.
Dr. Reinhardt:
I attach a chart on real health spending per capita (not included in this message). Either you or Kip must explain to us all what caused the trend line to bend. We know it was not Medicare, because that kept right on its growth path until the BBA '97. So I shall temporarily concede--against superior authority--that managed care had nothing to do with it and await yours or Kip's explanation.
Dr. Marmor:
I AM NOT IN THAT FIGHT. I LEFT THE DISPUTE UP TO YOU AND KIP AND THINK MANAGED CARE MAY OR MAY NOT HAVE DAMPENED INFLATION (I SUSPECT IT DID), BUT THAT THE MORE IMPORTANT POINT IS THAT IT DID SO IN WAYS THAT COULD NOT BE CONSIDERED ACCEPTABLE BY MOST THOUGHTFUL PEOPLE.
Dr. Marmor:
I want to challenge your interpretation of the connection between what mass American wants and both public and private policy. It is decades too late to continue to repeat the fallacy of revealed preference in politics. It does not follow that because outcome A takes place, the citizens of that jurisdiction 'wanted' A. It might be, but the use of the effect to specify the cause is a logical fallacy. Until and unless you can find reason to believe mass opinion shaped events decisively, stop blaming the victim.
Dr. Reinhardt:
Again, I must defer here to superior authority. I am not a political scientist. What I await from you, Ted--perhaps all of us do--is a concise, short explanation of how democracy works in America. As an example, explain to me why the election of 1994 had nothing to do with voter preferences--among others about government's role in health care.
Dr. Marmor:
THIS IS, I AM AFRAID, A NAIVE READING OF ELECTORAL OUTCOMES. YOU CAN NOT LEGITIMATELY GO FROM THE OUTCOME--THE REJECTION OF CLINTON--TO A READING OF WHAT VOTER VALUES AND PREFERENCES WERE FOR PARTICULAR POLICIES. WHAT YOU CAN SAY IS THAT CLINTON'S FAILURE TO GET A HEALTH CARE REFORM THROUGH--OR TO FRAME AN ALTERNATIVE THAT CLEARLY MOBILIZED AGAINST HIS OPPONENTS IN CONGRESS (AS THE DEMOCRATS DID FROM 1961-64 WITH MEDICARE) MEANT THAT VOTERS WERE TURNED OFF BY WHAT SEEMED LIKE A FAILED DOMESTIC PRESIDENT IN SOCIAL POLICY. HE WAS LUCKY THAT THE REPUBLICANS OVER-REACHED IN 1995 AND THEN HE TURNED INTO A DEFENDER OF TRADITIONAL DEMOCRATIC PROGRAMS IN 1996
Dr. Reinhardt continues:
Throw in a convincing--but concise--explanation of why the referendum in California on a single-payer plan did not work.
Dr. Marmor:
I SUSPECT, BUT DO NOT KNOW, THAT CALIFORNIA VOTERS WERE BAMBOOZLED BY SUPERIOR PROPAGANDA ON THE OTHER SIDE AND MOST HAD ONLY THE VAGUEST IDEA OF WHAT THE POLICY WOULD MEAN IN PRACTICE. THIS IS WHY, BY THE WAY, THAT DEMOCRATIC THEORISTS LARGELY REJECT REFERENDA AS USEFUL MEASURES OF WHAT VOTERS WOULD WANT IF THEY UNDERSTOOD WHAT WAS AT ISSUE. IT IS CALLED PLEBISCITARIAN DEMOCRACY.
Dr. Reinhardt continues:
Always eager to learn.
Dr. Marmor:
START WITH A REVIEW OF THE WORK OF PAGE AND SHAPIRO ON PUBLIC OPINION. TAKE A LOOK AT LARRY JACOB'S BOOK WITH SHAPIRO ENTITLED 'CRAFTED TALK', WHICH SHOWS JUST HOW MUCH POLITICAL LEADERS USE POLLS TO CRAFT THEIR MESSAGES RATHER THAN RESPOND TO POPULAR PREFERENCES.
Dr. Marmor:
I don't for a moment believe the American mass public has any clear idea about the extent to which cost control arguments are true, false, or misleading.
Dr. Reinhardt:
And how do you know that?
Dr. Marmor:
FROM A CAREER OF READING THE WORKS IN POLITICAL SOCIOLOGY THAT I URGE YOU TO CONSIDER. GO BACK TO THE MICHIGAN VOTING STUDIES AND THE WORK BY CONVERSE ET.AL. IT WILL STUN YOU, I BELIEVE.
Dr. Marmor:
Our political system is far too structured against mass majority rule to explain health policy outcomes as the result of their 'wishes.' Sure, a different distribution of wants and attitudes might make some policies more likely, but the locomotive conception you use is genuinely misleading and unsupported, as I have mentioned before, by the public opinion literature.
Dr. Reinhardt:
Too vague, Ted. Too vague.
Dr, Marmor:
BALONEY. PICK UP ANY TEXTBOOK ON AMERICAN GOVERNMENT AND YOU WILL SEE THIS VIEW SUPPORTED. I REGRET THIS KIND OF KNOW-NOTHINGISM
Dr. Reinhardt continues:
This is you in your old mode.
Dr. Marmor:
AN IRRELEVANT IN LOGICAL TERMS. WHETHER I AM UP TO SOMETHING NOW OR EARLIER HAS NOTHING TO DO WITH ITS VALIDITY.
Dr. Reinhardt:
As you know, I don't groove on it. For example, I could simply assert that your statement here is genuinely misleading and unsupported, and leave it at that.
Dr. Marmor:
THIS DOES NOT CONSTITUTE ARGUMENT; IT IS BLATHER.
Dr. Reinhardt:
No, Ted, I would like you to explain to me why voters' attitudes about the role of government in health care has nothing to do with the demise of the Clinton plan and the ascendancy of Republican rule in the House.
Dr. Marmor:
YOU AGAIN SEEM TO THINK THAT THE DEFENSE OF A BAD ARGUMENT IS AN ASSAULT ON ANOTHER. THE BURDEN OF PROOF LIES WITH THOSE WHO WOULD CHALLENGE WITH EVIDENCE ABOUT VOTER KNOWLEDGE AND OTHER DATA WHAT ARE WIDELY ACCEPTED JUDGMENTS ABOUT HOW AMERICAN DEMOCRACY WORKS. MOST ECONOMISTS DO NOT STUDY SUCH MATTERS AND HENCE THEY SIMPLY EXPRESS CONVICTIONS.
Dr. Reinhardt:
Finally, Ted, since you infer that you may know, please tell me once and for all what the American people really want in health care. I suggest a concise list. In return I shall compose what I think they want.
Dr. Marmor:
THIS IS A LARGE TASK AND ONE THAT IS WELL WORTH TAKING SERIOUSLY. THEY WANT CONTRADICTORY THINGS, HAVE CONFLICTING VALUES ON THESE MATTERS, AND THE FOCUS GROUPS NOT ONLY REVEAL THIS, BUT SHOW HOW THOSE VIEWS CHANGE AS THEY ACQUIRE INFORMATION. I THINK THIS IS A USEFUL CHALLENGE. MUCH OF THE OTHER STUFF IS NOT UP TO YOUR STANDARD.
TED MARMOR
Dr. Ellen Shaffer and Dr. Kip Sullivan follow up on Kip Sullivan's March 4 comments on oligopolies:
Dr Shaffer, in a March 5 response to Dr. Sullivan's comments:
Just for the record, a slight wrinkle to Kip's comments, which are always wonderful: HMOs, and the 1973 Act promoting them, were not destined to become large or competitive. Group practices flourished for over 50 years, including Kaiser, without having this effect. The reason consolidation occurred in the mid-1980s, and not the mid-1970s, was because of laws permitting selective contracting: for the first time purchasers (employers and others) were encouraged and permitted to choose providers based on price, and health plans and other providers were compelled to compete based on price. Hence consolidation, for-profit conversions, the whole ball of wax. HMOs aren't necessarily a bad idea. and group practice still makes sense. Managed competition, on the other hand, turns out not to work if you leave out the "managed" part. - ES
In the following comments, Dr. Sullivan is responding to Dr. Shaffers' comments above, and Dr. Shaffer, in turn, is responding to Dr. Sullivan's comments:
Dr. Sullivan:
I appreciate your comment. I'd like to pursue it with you for an email or two.
What laws permitting selective contracting are you referring to? I'm not aware of any such laws in Minnesota, for example. I am aware that there was a great to do about such a law in California. But did any state other than California pass such a law?
Dr. Shaffer:
Good question. CA's law was 1982; the turn to selective contracting by MediCal in particular, as well as by private purchasers, greatly accelerated HMO enrollment in the 1980s, and shifted leverage to purchasers. Would have to look back at related legislative history to see if other states or the feds followed, or if the snowball just rolled.
Dr. Sullivan:
A second issue I'd like to raise with you is the question of whether prepaid group practices were any better at providing medical care than fee-for-service docs were. I don't know of any evidence to indicate they were. I do know the founders of some of the early prepaid practice groups were very altruistic people, and they insisted that their docs emphasize prevention. But that's evidence only of what a founder, or an altruistic board, can achieve. It's not evidence that capitation and other managed care tools inevitably lead to better medicine.
Dr. Shaffer:
I don't think that any reimbursement method leads inevitably to better care, nor would I suggest that managed care has grown because it offers better quality. I think financial incentives have totally distorted clinical practice, and propose in a recent paper that we switch to salaries for all clinicians, and work back to adding in whichever financial as well as organizational incentives seem to make sense. Again, wd. have to go back and see what kind of outcomes research was done on Group Health of Seattle, MN and DC, Mayo Clinic, and Harvard Health Plan (research tools weren't as good then) before they were corporatized. (I do not include Kaiser in this group, though some would; it was never controlled by patients, as the Group Healths were, nor were the MDs driven by any particular mission). Seem to recall a fair amount of favorable analysis in the 1970s. I think energized professionals practicing in teams, who are accountable to patients, do provide better medicine, and research into QI efforts that rely on this model show promising results (see icsi.com, e.g.). Since early FFS medicine was driven by reimbursement for acute care, in order specifically to finance hospitals and later drug companies, it did make a difference that group models covered prevention. The same thing could be accomplished under FFS or salaried systems, but was not for historical reasons.
Dr. Sullivan:
If I'm right, and the pioneering HMOs were no better at taking care of patients than FFS docs, then, regardless of how widespread selective contracting laws were, I'm back to my original argument, which is, HMOs were destined to "compete" with size rather than "health maintenance" because HMOs couldn't do health maintenance any better than traditional docs could. And since they couldn't, they had no way to cut premiums other than to ration and extract discounts, and both of those tactics are much easier to execute for huge HMOs than for little ones.
Dr. Shaffer:
I agree with your central argument that HMOs have grown due to muscle and financial clout, not quality. I was just trying to raise a few historical points of analysis re: how and when that concentration and growth came about. It was not inevitable, nor the result primarily of the 1973 Act, since most growth and consolidation occurred in some areas in the 1980s (CA and MN in particular) and in most of the US after 1994. The intentional shift by purchasers, particularly by employers, was decisive in events after 1994. I agree that larger MCOs have prevailed due to their ability to extract discounts from providers. As premiums rise once again, employers will rely on defined contribution plans to control their costs. Our argument is, however, that this financial finagling is not a long term solution, and that in fact universal coverage is possible and affordable; we may need to reconsider both organizational factors and methods of financial reimbursement, to suggest what will produce good quality of care, as well as affordable care.