Universal Healthcare

Ezra Klein:

As Sarah Arnquist has written, aside from his awful internment in a Vietnamese prison camp, it is hard to find a day in McCain's life when he was not sheltered by the government-run health care he now claims to loathe. Born the son of a Navy admiral, he was cared for by Navy physicians during his childhood. After graduating from high school, he enrolled in the United States Naval Academy, and the military's care continued until he retired from the service in 1981. In 1982, he won a seat in Congress, ushering him into the Federal Employee Health Benefits Program, and in 2001, he qualified for Medicare. When he says, "we have the highest quality of health care in the world in America," he is speaking as a man who has enjoyed a lifetime of government-run care.

But now John McCain is seeking the presidency as a Republican, and a healthy distaste for government-run health care is de rigueur. "I am convinced," said John McCain at Miami Children's Hospital, "that the wrong way to go is to turn over your lives to the government and hope it will all be fine. It won't." Spoken like a 71-year-old whose government health coverage has kept him healthy enough to run for the presidency.

"Consumer-driven" health plans are favored by many Utah legislators & other conservatives as a market-based solution to rising healthcare costs. These plans typically combine high deductibles with a tax-advantaged health account that can be used to pay deductible and medical/dental expenses that are not covered.

The latest survey by the non-partisan Employee Benefit Research Institute found that

Here are two of Dr. Joseph Jarvis's six suggestions for bringing about true health-care reform in Utah (Salt Lake Tribune):

Perverse incentives: From the Wall Street Journal on April 5: "Research at Dartmouth Medical School suggests that if everyone in America went to the Mayo Clinic, our annual health-care bill would be 25 percent lower (more than $500 billion) and the average quality of care would improve. ... Of course, not everyone can get treatment at Mayo. ... But why [is] this example of efficient, high-quality care not being replicated all across the country? The answer is that high-quality, low-cost care is not financially rewarding. Indeed, the opposite is true. Hospitals and doctors can make more money providing inefficient, mediocre care."

Market-based health policy: If we are to eliminate the perverse incentives that lead to inefficient, mediocre care, we have to give up the cherished notion that health care is a commodity efficiently distributed by market forces. We do not principally fund health care through the private sector — 60 percent of revenues paying for health services come from taxpayers, making our citizens more taxed for health care than any people in the world. Beyond that, health care is not subject to market forces, such as a lowered price increasing demand. No one ever had an appendectomy because the price was right. The occurrence of illness and injury primarily determine demand for health services.

Paul Krugman says that "the power of competition" does not drive down healthcare costs:

For one thing, even if you buy the premise that competition would reduce health care costs, the idea that it could cut costs enough to make insurance affordable for Americans with a history of cancer or other major diseases is sheer fantasy.

Beyond that, there's no reason to believe in these alleged cost reductions. Insurance companies do try to hold down "medical losses" — the industry's term for what happens when an insurer actually ends up having to honor its promises by paying a client's medical bills. But they don't do this by promoting cost-effective medical care.

Instead, they hold down costs by only covering healthy people, screening out those who need coverage the most [...]. They also deny as many claims as possible, forcing doctors and hospitals to spend large sums fighting to get paid.

And the international evidence on health care costs is overwhelming: the United States has the most privatized system, with the most market competition — and it also has by far the highest health care costs in the world.

• How government lowers healthcare costs (Jacob Hacker in the Washington Post)

• How to debunk a mischaracterization of what your candidate said (Charles Krauthammer in the Washington Post, demonstrating that he can think rationally when defending Republicans)
  
• Small currency outlets in Amsterdam refuse to take U.S. dollars (Reuters)
  
• After a brief dip last week, Obama takes an 8-point lead over Clinton nationally (Gallup)

Ezra Klein is busy transcribing a speech from Dr. Mark Smith, CEO of the California Health Care Foundation. Here's an excerpt:

It's a strange business you're in. What you are selling is four different things. Why do we want people to have health insurance? I always get some variant of four answers. 1) We want people to be protected against rare, unpredictable and uncontrollable catastrophic events. 2) We want people to be covered so they can have their preventive services paid for. They're not rare, they're not unpredictable. But if we have them put it on their Visa, they don't do it. So we prepay for it. 3) So you can get discounts, and don't have to pay rack rate at the doctor. But that's not insurance, it's market leverage. 4) So people who have chronic diseases don't have to pay for the cost of their care, transferring assets from the known healthy to the known unhealthy. Each of these is a socially useful function, but they operate very differently. Saying you need to protect assets from financial loss is a difficult proposition for someone who has no assets to protect. [...]

It's like trying to sell a car that's bundled together with car insurance and three dozen eggs every week and a trip to Bermuda when you turn 27. Those are kind of different things and people will be differentially inclined to buy them, but if they're bundled together you have a pretty dysfunctional product. That's part of why we have such difficulty in the public space agreeing on what is adequate insurance.

Ezra Klein examines the healthcare plan from political scientist Jakob Hacker that's the foundation of the Edwards, Obama, and Clinton healthcare plans:

The bottom line is that the Hacker structure covers just about everyone and saves huge amounts of money. At the start, bringing the changes to the [healthcare] system and the broad expansion of coverage to 46 million (or so) Americans means total federal spending increases by about $50 billion, but employer spending decreases by $10 billion, families save $22 billion, and states save about $20 billion. So it evens out.

But that's only on day one. Then, over time, the new system does quite a bit to cut costs through "restricting provider payment increases, negotiating deeper drug discounts, and simplified administration." The bottom line of the report is that "under these cost controls, total national health spending over the 2008 through 2017 period would be about $1.04 trillion less than under current law over that same period." That's $1.04 trillion in savings even with 47 million more Americans covered and far less economic insecurity for the rest of us. That's $1.04 trillion that can be spent on infrastructure, on schools, on homes and televisions and groceries and wars and iPhones and whatever else we decide to fund. And that's a big deal.

From Dr. Joseph Jarvis, a Republican who ran against now-Senator Scott McCoy (Salt Lake Tribume):

It is axiomatic that sustainable health-system reform, when (or if) it finally comes to Utah (or any part of the nation), will come only after arduous and divisive debate.

The reason is simple: Too much money is being made by too many corporations from the contributions from employers, philanthropists and taxpayers that are intended to care for the sick and the injured. [...]

Described in this section [of the bill] are a dozen different ways that the insurance industry is to be favored, including exemption from state health-insurance laws, creating minimum required coverage policies and bringing public employees into the private health insurance market.

Unquestionably, this bill was written by the insurance companies and for the insurance companies. I think the bill title should be "No Health Insurance Company Left Behind."

It is outrageous that Utah state government should be instructed to sustain a viable insurance market. Since when is government in charge of sustaining any market? How is it a market if government must sustain it?

It always amazes me that Republicans put so much effort into promoting their pet phrases and yet get so little to show for it. From the Harvard School of Public Health:

During the course of the presidential nomination campaign, some candidates' health care plans have been described as 'socialized medicine'. Historically, the phrase socialized medicine has been used to attack health reform proposals in the U.S. However, a new poll by the Harvard Opinion Research Program at the Harvard School of Public Health (HSPH) and Harris Interactive finds that Americans are split on whether a socialized medical system would be better or worse than the current system. Among those who say they have at least some understanding of the phrase (82%), a plurality (45%) says such a system would be better while 39 percent say it would be worse. Twelve percent say they do not know and four percent say about the same.

The poll shows striking differences by party identification. Seventy percent of Republicans say that socialized medicine would be worse than our current system. The same percentage of Democrats (70%) say that a socialized medical system would be better than our current system. Independents are more evenly split with 43% saying socialized medicine would be better and 38% worse.

So, roughly half the country thinks the dreaded "socialized medicine" would actually be a good idea.

Ezra Klein:

It is actually counterproductive for [health] insurers to compete on giving us the best care. It's not simply that they're not doing it, but given the structure of the marketplace, they shouldn't do it. Imagine insurer X creates the best damn diabetes protocols in the country. And they begin advertising this fact. What happens on Day Two? Well, they're flooded with individuals suffering from diabetes, or individuals who fear they will one day be suffering from diabetes. These people, in the current system, are a bad deal. Not only is it near impossible to insure them at a profit, but pooling their costs (which is what insurers do, after all) raises premiums for all the insurer's other customers. When the average customer of an insurer gets sicker, prices go up for all their customers. So the healthy folks contracting with that insurer quit the pool, and go find a cheaper deal, which forces the insurer to raise premiums again, driving out more healthy folks, which forces them to raise premiums again, which drives out more healthy folks, and so on. It's what we call an insurance death spiral, and it ends with the collapse of the insurer.

Given those incentives, insurers cannot compete to offer better care, because if they offered better care, all that would happen is they would attract worse deals. Which is why, in the current system, insurers make things worse.