The New ACA Score And The Perils Of Letting Cost Estimates Drive Policymaking

by Stuart Butler
Health Affairs Blog, July 24, 2012
If you were expecting the Congressional Budget Office (CBO) recalculation of the Affordable Care Act (ACA) to rival the drama of the Supreme Court decision, you will have been disappointed.  But the new CBO re-estimate underscores the dangers of basing major policy changes on such forecasts.
While the Court caused political shockwaves by declaring the ACA’s “penalty” to be a “tax”, that in itself did not have major implications for the new score.  CBO projects a net reduction in total federal outlays of $84 billion over 10 years (the new total is $1,168 billion) and an increase in the uninsured of about 3 million, when compared with its earlier estimates.  Significant numbers, but not earth-shattering.  The Joint Committee on Taxation provided revenue estimates for the CBO forecast.
But CBO faced enormous challenges in estimating the impact of the ruling, and its seemingly precise estimate clouds the significant guesses it had to make.
The Challenge Facing CBO
Rather than the tax-not-penalty decision, the part of the Court’s ruling with the greatest budgetary implications concerned Medicaid.  It also gave CBO its biggest headache.  The Court struck down the provision requiring states to expand Medicaid coverage to households up to 133 percent of the poverty level.  So CBO had to figure how many states – indeed which states, given different Medicaid coverage pattern today in the states – would decline short-term federal funding for the expansion (what the Wall Street Journal called the “teaser rate”), knowing they would have to pay a portion of the cost in future years.  The governors of several states, including Texas, Florida and South Carolina, have already declared they would refuse the money.
So what could CBO do?  Take such declarations at face value?  Factor in a bit of politics, consult a political crystal ball, and predict what might actually happen in state houses next year? Give a range to show, say, the different effects of all states declining or all agreeing to expand Medicaid?
To compound the scoring challenge, CBO had to project what would happen to newly eligible Medicaid households in states that decline federal money to expand Medicaid.  Some, but not all, would be eligible for subsidies in the new ACA exchanges, depending on household income.  But how many would sign up (adding to subsidy costs, even though they would not have added to federal Medicaid costs)?
According to former CBO Director Douglas Holtz-Eakin, depending on your guess the potential range of budgetary effects would be large.  If the six states currently saying they will not expand Medicaid follow through with that threat, Holz-Eakin estimates the net budget impact would be $22-80 billion between 2014 (when the expansion occurs) and 2021.  But if all states decide the expansion is an offer they must refuse because of the long-term state cost, the impact could be as high $627 billion.
A False Sense Of Certainty
Faced with the uncertainty about state action, CBO declined to give a range (a bad thing).  Instead it avoided second-guessing states (arguably a good thing for people who wear green eyeshades rather than appear on political talk shows) and projected a number based on “the middle of the distribution of possible outcomes.” That’s defensible, in the same sense as a weather forecaster splitting the difference on the chances of thunderstorms next Friday, but it results in a seemingly precise number that is almost certainly wrong and yet gives a false sense of certainty to policymakers.
This case of CBO scoring highlights once again why it is so important for policy to be driven a bit less by budget estimators generating apparently precise numbers.  That leads to policies based on guesses needed for a computer algorithm rather than on judgment and public discourse about the nature and purpose of government.  But alas, Congress insists that CBO come up with one number for its deliberations, not a range or a zone of probability.  And so even though CBO wisely warns that its number “should not be viewed as representing a single definitive interpretation of how the ACA should or will be implemented in light of the Court’s decision,” regrettably it will be.
Posted response by Don McCanne:
The policies inherent in the Affordable Care Act do create uncertainty as to how many will remain uninsured. Nevertheless, the CBO projection of 30 million uninsured will be the number quoted in policy discussions, since it is the best we have, and it does provide a rough estimate of how short ACA falls in the goal of covering everyone.
To provide a perspective of the enormity of this policy failure, let’s assume that we chose a different set of policies that would cover the same total number of individuals, still leaving 30 million uninsured. Let’s say that we want to have 100 percent coverage in each state, beginning with the largest states since they would have the greatest health care burden in terms of the sheer numbers of patients. Let’s continue to cover 100 percent of each state until we run out of funds to pay for coverage for the last 30 million people – the residents of the least populated states.
Under such a policy, everyone would be covered except all of the residents of Alaska, Arkansas, Delaware, District of Columbia, Hawaii, Idaho, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Rhode Island, South Dakota, Vermont, West Virginia, and Wyoming.
Who could ever support such a ridiculous policy scheme? Yet since we have buried other ridiculous policies into a highly dysfunctional, fragmented, administratively wasteful ACA financing scheme, we are going to accept those policies as the best we can do? It’s okay to have 30 million uninsured as long as we don’t concentrate them in two-fifths of our states?
Stuart Butler implies that we need policies based on “judgment and public discourse about the nature and purpose of government.” If we were all sincere in such a discourse, and laid partisanship aside, we would end up with a decision to enact a single payer national health program that included everyone.
http://healthaffairs.org/blog/2012/07/24/the-new-aca-score-and-the-perils-of-letting-cost-estimates-drive-policymaking/

Stuart Butler has a valid point that the variables in the Affordable Care Act and its implementation are great enough that we cannot accurately predict the precise numbers of individuals who will remain uninsured. The information that the Congressional Budget Office relied on to come up with 30 million uninsured does give us a very rough estimate of the total, and enough confidence that we can say with certainty that at least tens of millions will remain uninsured.
So what is Stuart Butler’s point? He indicates that instead of using this precise number to establish policy, we should choose policies based on “judgment and public discourse about the nature and purpose of government.” Well, let’s use the less precise estimate of tens of millions uninsured. What then should be the role of government?
It is clear that the private sector has been incapable of insuring everyone, and that government involvement is required if universal coverage and access are to be our goals. It is also clear that the Affordable Care Act is not an adequate response on the part of government since that is what led to this estimate of the large numbers who will remain uninsured.
So what would Butler propose? In 1989, we thought we knew the answer when he coauthored the report from the Heritage Foundation which called for the principle that, “Every resident of the U.S. must, by law, be enrolled in an adequate health care plan to cover major health care costs,” and “The requirement to obtain basic insurance would have to be enforced,” and “If the family did not enroll… a fine might be imposed.” Yes, an individual mandate.
This did prove to be partisan since the concept was used in proposed Republican legislation designed to counter the health care reform proposal of Bill and Hillary Clinton. The Clinton effort fizzled, and the Republican proposals were never enacted. Little did we realize then that a couple decades later the partisan support for the individual mandate would flip from the Republicans to the Democrats.
In a USA TODAY op-ed this year, Butler indicated that his views had changed based on newer policy research, and that today the individual mandate “means the government makes people buy comprehensive benefits for their own good, rather than our original emphasis on protecting society from the heavy medical costs of free riders.” Sort of, you take care of your own needs but don’t turn to me for help when you can’t meet them – the perpetual conflict between individual responsibility and social solidarity.
He wrote, “health research and advances in economic analysis have convinced people like me that an insurance mandate isn’t needed to achieve stable, near-universal coverage. For example, the new field of behavioral economics taught me that default auto-enrollment in employer or nonemployer insurance plans can lead many people to buy coverage without a requirement.”
We know that default auto-enrollment does result in higher rates of participation, but we also know that an entirely voluntary program for purchasing our often unaffordable private health plans would leave far more uninsured than would the policies contained in the Affordable Care Act.
We should have that public discourse that Butler calls for – the one about what we, as a nation, want. Do we want absolutely everyone to be included in our health care system? Or do we want to continue with policies that provide the equivalent of covering everyone in the most populous states, but none of the residents of Alaska, Arkansas, Delaware, District of Columbia, Hawaii, Idaho, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Rhode Island, South Dakota, Vermont, West Virginia, and Wyoming?
Heritage Foundation: “A National Health System for America” 1/2/89
http://www.heritage.org/research/reports/1989/a-national-health-system-for-america
USA TODAY: “Don’t blame Heritage for ObamaCare mandate” by Stuart Butler
http://www.usatoday.com/news/opinion/forum/story/2012-02-03/health-individual-mandate-reform-heritage/52951140/1

Aetna sued over out-of-network pay and referrals

By Alicia Gallegos
American Medical News, July 23, 2012

The California Medical Assn. and more than 50 physicians are suing Aetna over alleged retaliation against doctors who refer patients for out-of-network care.

The medical society and doctors say Aetna is underpaying out-of-network physicians, refusing to authorize some out-of-network services and illegally terminating the contracts of doctors who make such referrals.

The insurer’s practices violate California law and interfere with doctors’ medical decisions, said Long X. Do, CMA legal counsel.

The plaintiffs claim some of Aetna’s insurance policies enable patients to receive out-of-network care. However, Aetna discourages such practices and regularly refuses to pay for them, the suit claims.

Similarly, doctors’ contracts with Aetna do not specifically forbid all out-of-network referrals, the suit said. Yet, when doctors make such referrals, Aetna frequently threatens them with a “rate adjustment” or termination from Aetna’s network, according to the suit.

In a statement, Aetna spokeswoman Anjanette Coplin called the suit baseless and denied the insurer is mistreating physicians.

“Doctors who entice patients to have procedures performed at out-of-network facilities that they own without the patient’s knowledge are putting profits over their patients,” she said. “The wildly inflated bills of these facilities drive up the out-of-pocket costs for unwitting patients and needlessly add to premium costs for everyone.”

The CMA is aware of Aetna’s lawsuits, but said its suit has nothing to do with them. CMA’s claim centers on Aetna’s policies and practices, Do said.

http://www.ama-assn.org/amednews/2012/07/23/prsa0723.htm

And…

Silicon Valley Surgeons Risk ‘Moral Authority’ For 200% Returns

By Peter Waldman
Bloomberg, July 18, 2012

The anesthesiolgists’ ball in December 2010 was already raging when Dr. Thomas Elardo and his wife arrived. It was 11 p.m., and the Opera House in downtown Los Gatos, California, was packed with nurses and doctors dancing to ’80s covers by The Microbes, an all-doctor band. Elardo climbed the stairs to the mezzanine bar and was immediately gladhanded by Bobby Sarnevesht, a local entrepreneur, and orthopedist Samir Sharma, who pulled Elardo aside.

Elardo had known Sharma for years, but the orthopedist had never given him the time of day. That night was different — he had something to show Elardo. At the bar, Sharma flaunted a $960,000 check, Elardo recalls. Sharma said it was for his work as a surgeon and investor in an outpatient surgery center in Los Gatos, operated by Sarnevesht.

“They were saying, ‘This is the kind of money you can make. You’ve gotta come in!” recalls Elardo. “I was speechless.”

Founded by Sarnevesht and his mother, Julia Hashemieh, Bay Area Surgical Management has marshaled decades of doctor rage against insurance carriers into a profitable business.

By rejecting the discounted contracts that participating in-network providers sign with insurers, the surgery centers bill insurance companies at their own out-of-network rates, which are 5 to 35 times as much as the in-network facilities charge, and make a killing.

Knee arthroscopies that cost $3,000 in Aetna Inc. (AET)’s network earn nearly $20,000 in facility fees at Bay Area’s surgery centers, according to Aetna, the Hartford, Connecticut-based health insurer. A bunion repair that costs $3,700 in-network got almost $53,000 for Bay Area Surgical Group, one such center. A disc surgery for lower-back pain, called a laminectomy, costs about $6,000 in network yet reaps nearly $120,000 for Bay Area Surgical.

Fed up, Aetna sued Hashemieh and partners in February, claiming they gouge on rates, pay surgeons excessive compensation for referrals and defraud health plans.

http://www.bloomberg.com/news/2012-07-19/silicon-valley-surgeons-risk-moral-authority-for-200-returns.html

Comment: 

By Don McCanne, MD

Although it is always tempting to take on the abuses of private insurers such as Aetna, this time we should look further: the system by which we finance health care in the United States.

Perhaps the most important contribution of the private insurance industry in the past several decades has been the slowing of health care price increases through the process of provider contracting. Of course, public insurers such as Medicare are more effective, though through administered pricing rather than contracting. Nevertheless, health care prices would be even higher had the private insurers not engaged in contracting.

A problem that has never been satisfactorily resolved, in spite of many efforts, is what to do about charges by physicians and facilities that do not have contracts with the insurers – out-of-network providers. In some instances, the insurers pay nothing, except when required by law in certain emergency situations. In other instances, the insurers may pay at lower rates than they do for in-network providers, leaving the high balances as the responsibility of the patients. Often insurers will attempt to negotiate rates after the fact in order to prevent their clients from being stuck with these very high balances.

It is the latter situation that has become a problem. The Bloomberg article above (a very long, ugly story) goes into detail explaining how some entrepreneurial types in the health care delivery system have leveraged out-of-network care into a very lucrative operation. I dare say that Aetna looks like a saintly organization in comparison.

Why should we care? To quote Anderson, Reinhardt and colleagues, “It’s the prices, stupid!” In spite of the limited success of provider contracting, the private insurers have not been capable of adequately controlling price escalation, which is far greater than in all other nations – nations that depend on some sort of government role in establishing fair prices that cover costs and provide fair margins. We all pay more through higher insurance premiums when gougers are rewarded by the private insurers.

Seeing that everyone receives the care that they need, and controlling prices, are the most important functions that the private insurers should be carrying out. Yet they are doing neither competently. The defect is in the design of our health care financing system. The flaws in a system of competing private plans cannot be repaired. The private insurers will never have enough power, and even if they did, how would they use it? And those greedy health care providers who place business interests above professionalism will always be with us.

By replacing the private insurers with our own universal public financing program – an improved Medicare for all – we can include everyone, set prices at their proper level, and shut down the gougers. What are we waiting for?

Aetna sued over out-of-network pay and referrals

By Alicia Gallegos
American Medical News, July 23, 2012
The California Medical Assn. and more than 50 physicians are suing Aetna over alleged retaliation against doctors who refer patients for out-of-network care.
The medical society and doctors say Aetna is underpaying out-of-network physicians, refusing to authorize some out-of-network services and illegally terminating the contracts of doctors who make such referrals.
The insurer’s practices violate California law and interfere with doctors’ medical decisions, said Long X. Do, CMA legal counsel.
The plaintiffs claim some of Aetna’s insurance policies enable patients to receive out-of-network care. However, Aetna discourages such practices and regularly refuses to pay for them, the suit claims.
Similarly, doctors’ contracts with Aetna do not specifically forbid all out-of-network referrals, the suit said. Yet, when doctors make such referrals, Aetna frequently threatens them with a “rate adjustment” or termination from Aetna’s network, according to the suit.
In a statement, Aetna spokeswoman Anjanette Coplin called the suit baseless and denied the insurer is mistreating physicians.
“Doctors who entice patients to have procedures performed at out-of-network facilities that they own without the patient’s knowledge are putting profits over their patients,” she said. “The wildly inflated bills of these facilities drive up the out-of-pocket costs for unwitting patients and needlessly add to premium costs for everyone.”
The CMA is aware of Aetna’s lawsuits, but said its suit has nothing to do with them. CMA’s claim centers on Aetna’s policies and practices, Do said.
http://www.ama-assn.org/amednews/2012/07/23/prsa0723.htm

And…

Silicon Valley Surgeons Risk ‘Moral Authority’ For 200% Returns

By Peter Waldman
Bloomberg, July 18, 2012
The anesthesiolgists’ ball in December 2010 was already raging when Dr. Thomas Elardo and his wife arrived. It was 11 p.m., and the Opera House in downtown Los Gatos, California, was packed with nurses and doctors dancing to ’80s covers by The Microbes, an all-doctor band. Elardo climbed the stairs to the mezzanine bar and was immediately gladhanded by Bobby Sarnevesht, a local entrepreneur, and orthopedist Samir Sharma, who pulled Elardo aside.
Elardo had known Sharma for years, but the orthopedist had never given him the time of day. That night was different — he had something to show Elardo. At the bar, Sharma flaunted a $960,000 check, Elardo recalls. Sharma said it was for his work as a surgeon and investor in an outpatient surgery center in Los Gatos, operated by Sarnevesht.
“They were saying, ‘This is the kind of money you can make. You’ve gotta come in!” recalls Elardo. “I was speechless.”
Founded by Sarnevesht and his mother, Julia Hashemieh, Bay Area Surgical Management has marshaled decades of doctor rage against insurance carriers into a profitable business.
By rejecting the discounted contracts that participating in-network providers sign with insurers, the surgery centers bill insurance companies at their own out-of-network rates, which are 5 to 35 times as much as the in-network facilities charge, and make a killing.
Knee arthroscopies that cost $3,000 in Aetna Inc. (AET)’s network earn nearly $20,000 in facility fees at Bay Area’s surgery centers, according to Aetna, the Hartford, Connecticut-based health insurer. A bunion repair that costs $3,700 in-network got almost $53,000 for Bay Area Surgical Group, one such center. A disc surgery for lower-back pain, called a laminectomy, costs about $6,000 in network yet reaps nearly $120,000 for Bay Area Surgical.
Fed up, Aetna sued Hashemieh and partners in February, claiming they gouge on rates, pay surgeons excessive compensation for referrals and defraud health plans.
http://www.bloomberg.com/news/2012-07-19/silicon-valley-surgeons-risk-moral-authority-for-200-returns.html

Although it is always tempting to take on the abuses of private insurers such as Aetna, this time we should look further: the system by which we finance health care in the United States.
Perhaps the most important contribution of the private insurance industry in the past several decades has been the slowing of health care price increases through the process of provider contracting. Of course, public insurers such as Medicare are more effective, though through administered pricing rather than contracting. Nevertheless, health care prices would be even higher had the private insurers not engaged in contracting.
A problem that has never been satisfactorily resolved, in spite of many efforts, is what to do about charges by physicians and facilities that do not have contracts with the insurers – out-of-network providers. In some instances, the insurers pay nothing, except when required by law in certain emergency situations. In other instances, the insurers may pay at lower rates than they do for in-network providers, leaving the high balances as the responsibility of the patients. Often insurers will attempt to negotiate rates after the fact in order to prevent their clients from being stuck with these very high balances.
It is the latter situation that has become a problem. The Bloomberg article above (a very long, ugly story) goes into detail explaining how some entrepreneurial types in the health care delivery system have leveraged out-of-network care into a very lucrative operation. I dare say that Aetna looks like a saintly organization in comparison.
Why should we care? To quote Anderson, Reinhardt and colleagues, “It’s the prices, stupid!” In spite of the limited success of provider contracting, the private insurers have not been capable of adequately controlling price escalation, which is far greater than in all other nations – nations that depend on some sort of government role in establishing fair prices that cover costs and provide fair margins. We all pay more through higher insurance premiums when gougers are rewarded by the private insurers.
Seeing that everyone receives the care that they need, and controlling prices, are the most important functions that the private insurers should be carrying out. Yet they are doing neither competently. The defect is in the design of our health care financing system. The flaws in a system of competing private plans cannot be repaired. The private insurers will never have enough power, and even if they did, how would they use it? And those greedy health care providers who place business interests above professionalism will always be with us.
By replacing the private insurers with our own universal public financing program – an improved Medicare for all – we can include everyone, set prices at their proper level, and shut down the gougers. What are we waiting for?

By Joseph E. Stiglitz
W. W. Norton & Company, June 2012

This book attempts to fathom the depths of one aspect of what has happened in the United States – how we became a society that was so unequal, with opportunity so diminished, and what those consequences are likely to be.

****

As we look out at the world, the United States not only has the highest level of inequality among the advanced industrial countries, but the level of its inequality is increasing in absolute terms relative to that in other countries.

****

Our political system has increasingly been working in ways that increase the inequality of outcomes and reduce equality of opportunity. This should not come as a surprise: we have a political system that gives inordinate power to those at the top, and they have used that power not only to limit the extent of redistribution but also to shape the rules of the game in their favor, and to extract from the public what can only be called large “gifts.” Economists have a name for these activities: they call them rent seeking, getting income not as a reward to creating wealth but by grabbing a larger share of the wealth that would otherwise have been produced without their effort. Those at the top have learned how to suck out money from the rest in ways that the rest are hardly aware of – that is their true innovation.

****

This book is not about the politics of envy: the bottom 99 percent by and large are not jealous of the social contributions that some of those among the 1 percent have made, of their well-deserved incomes. This book is instead about the politics of efficiency and fairness. The central argument is that the model that best describes income determination at the top is not one based on individuals’ contributions to society (the “marginal productivity theory”), even though, of course, some at the top have made enormous contributions. Much of the income at the top is instead what we have called rents. These rents have moved dollars from the bottom and middle to the top, and distorted the market to the advantage of some and to the disadvantage of others.

****

Health care for all

The two most important impediments to individuals’ achieving their economic aspirations are the loss of a job and an illness. The two together form a lethal combination, one often associated with bankruptcy. Health care in America has traditionally been provided by employers. This inefficient and antiquated system has contributed greatly to the reality that the United States has the most inefficient and poorest-performing, overall, health care system among the advanced industrial countries. The problem with our health care system is not that we spend too much; it’s that we don’t get value for our money and that too many people don’t have access to health care. Obama’s health care reform partially addressed the latter problem… but it did little to improve efficiency. Our high costs are due in part to rent seeking by insurance companies and the pharmaceutical industry. Other countries have curbed these rents. We have not. Other countries not as well-off as the United States have managed to provide universal access to health care. Most countries treat access to medicine as a basic human right. But even if one doesn’t approach the issue from this principled perspective, our failure to provide access to health care increases the inefficiency of our health care system.

Lack of access to health care contributes significantly to inequality, and this inequality in turn undermines the performance of our economy.

http://books.wwnorton.com/books/detail.aspx?ID=4294967848

And…

OECD Health Working Paper No. 58: Income-Related Inequalities in Health Service Utilisation in 19 OECD Countries, 2008-09

By Marion Devaux and Michael de Looper
OECD (Organisation for Economic Co-operation and Development) ,July 10, 2012

This Working Paper examines income-related inequalities in health care service utilisation in OECD countries. For doctor visits, horizontal equity was assessed, i.e. the extent to which adults in equal need of physician care appear to have equal rates of utilisation.

OECD Working Paper on Income-Related Inequalities in Health Service Utilization

http://www.oecd-ilibrary.org/social-issues-migration-health/income-related-inequalities-in-health-service-utilisation-in-19-oecd-countries-2008-2009_5k95xd6stnxt-en
Click on “PDF” for the 61 page paper.

Comment: 

By Don McCanne, MD

Today’s comment is very brief in order to give you more time to read the excerpts from Nobel Prize-winning economist Joseph Stiglitz’s new book, “The Price of Inequality.” One of the prices we pay is our most expensive but poorest performing health care system. Supporting his theme is the coincidental release of a new OECD working paper showing that the United States has the most inequitable access to physicians of the 19 OECD nations studied.

When you read about rents and inequality in Stiglitz’s book, you’ll understand better why the United States is again first… this time in inequitable access to physician visits!

The Price of Inequality

By Joseph E. Stiglitz
W. W. Norton & Company, June 2012

This book attempts to fathom the depths of one aspect of what has happened in the United States – how we became a society that was so unequal, with opportunity so diminished, and what those consequences are likely to be.

****

As we look out at the world, the United States not only has the highest level of inequality among the advanced industrial countries, but the level of its inequality is increasing in absolute terms relative to that in other countries.

****

Our political system has increasingly been working in ways that increase the inequality of outcomes and reduce equality of opportunity. This should not come as a surprise: we have a political system that gives inordinate power to those at the top, and they have used that power not only to limit the extent of redistribution but also to shape the rules of the game in their favor, and to extract from the public what can only be called large “gifts.” Economists have a name for these activities: they call them rent seeking, getting income not as a reward to creating wealth but by grabbing a larger share of the wealth that would otherwise have been produced without their effort. Those at the top have learned how to suck out money from the rest in ways that the rest are hardly aware of – that is their true innovation.

****

This book is not about the politics of envy: the bottom 99 percent by and large are not jealous of the social contributions that some of those among the 1 percent have made, of their well-deserved incomes. This book is instead about the politics of efficiency and fairness. The central argument is that the model that best describes income determination at the top is not one based on individuals’ contributions to society (the “marginal productivity theory”), even though, of course, some at the top have made enormous contributions. Much of the income at the top is instead what we have called rents. These rents have moved dollars from the bottom and middle to the top, and distorted the market to the advantage of some and to the disadvantage of others.

****

Health care for all

The two most important impediments to individuals’ achieving their economic aspirations are the loss of a job and an illness. The two together form a lethal combination, one often associated with bankruptcy. Health care in America has traditionally been provided by employers. This inefficient and antiquated system has contributed greatly to the reality that the United States has the most inefficient and poorest-performing, overall, health care system among the advanced industrial countries. The problem with our health care system is not that we spend too much; it’s that we don’t get value for our money and that too many people don’t have access to health care. Obama’s health care reform partially addressed the latter problem… but it did little to improve efficiency. Our high costs are due in part to rent seeking by insurance companies and the pharmaceutical industry. Other countries have curbed these rents. We have not. Other countries not as well-off as the United States have managed to provide universal access to health care. Most countries treat access to medicine as a basic human right. But even if one doesn’t approach the issue from this principled perspective, our failure to provide access to health care increases the inefficiency of our health care system.

Lack of access to health care contributes significantly to inequality, and this inequality in turn undermines the performance of our economy.

http://books.wwnorton.com/books/detail.aspx?ID=4294967848

And…

OECD Health Working Paper No. 58: Income-Related Inequalities in Health Service Utilisation in 19 OECD Countries, 2008-09

By Marion Devaux and Michael de Looper
OECD (Organisation for Economic Co-operation and Development) ,July 10, 2012

This Working Paper examines income-related inequalities in health care service utilisation in OECD countries. For doctor visits, horizontal equity was assessed, i.e. the extent to which adults in equal need of physician care appear to have equal rates of utilisation.

OECD Working Paper on Income-Related Inequalities in Health Service Utilization

http://www.oecd-ilibrary.org/social-issues-migration-health/income-related-inequalities-in-health-service-utilisation-in-19-oecd-countries-2008-2009_5k95xd6stnxt-en
Click on “PDF” for the 61 page paper.

Comment: 

By Don McCanne, MD

Today’s comment is very brief in order to give you more time to read the excerpts from Nobel Prize-winning economist Joseph Stiglitz’s new book, “The Price of Inequality.” One of the prices we pay is our most expensive but poorest performing health care system. Supporting his theme is the coincidental release of a new OECD working paper showing that the United States has the most inequitable access to physicians of the 19 OECD nations studied.

When you read about rents and inequality in Stiglitz’s book, you’ll understand better why the United States is again first… this time in inequitable access to physician visits!