Where do we go?

Here are some quotes from the Huffington Post regarding the failed healthcare vote. Let’s use these as a Segway to discuss several aspects of the problem of healthcare cost in the US.

“Until the nation is willing and prepared to seriously fix these underlying systemic problems, simply extending coverage will only serve to pour gasoline on a fire.”
Interestingly, this same thought occurred in another paper on healthcare costs. The thesis is that there are systemic problems in the way healthcare is delivered and paid for that go beyond insurance. Providing wider coverage-even universal coverage—will just bring more people and money into a broken system. In this case, “broken” means expensive. There is no incentive for doctors or hospitals to become more efficient or to charge less for their services. Until we create those incentives, no one will venture forth. My personal mantra is that price competition would go a long way. If Medicare published an RFP for each of their tensest expensive procedures (e.g. total hip replacement), hospitals would find a way to become more efficient or else abandon the procedure. Estimates of potential savings vary from 20% to 50% just by eliminating waste in the procedure.

“Five decades of efforts by both approaches using bureaucratic controls, micro­manage­ment, and token bonuses to make providers efficient have failed to contain run-away cost.”
We’re not there yet. You can’t do this by top-down management or perverse incentives. Providers must compete with each other on price. What would your new car cost if there were no price competition between manufacturer? General Patton is quoted as saying, “Tell people what you want done, but don’t tell them how to do it. They will amaze you with their ingenuity.”

“The National Academies estimate at least 30 percent of health expenditures are waste, of little or no benefit and possible risk to good health results.”
You have to be a little careful in evaluating assessments of waste. Many Academies are influenced by provider groups and resist the notion that providers could charge much less for what they do and still have the same income by becoming more efficient.

 

Over at last

Quote from HuffingtonPost.com. Kind of says it all.

“It turns out “Obamacare” has made life better for a great many people.
Millions of Americans now have health insurance because the law has put it within financial reach. They are enrolling in Medicaid, or buying private insurance with the help of tax credits ― and taking advantage of laws that prohibit insurers from denying coverage because of pre-existing conditions. Millions more have insurance that is cheaper, better, or more comprehensive than what they could get before. They are more financially secure, they have better access to care, and they are probably getting healthier, too.”

Someone else wrote that the Republicans seem more interested in removing something with Obama’s name on it than the Affordable Care Act itself. Time now to move on.

Trying

Some people never give up, even on a bad idea. Republicans are still trying to pass some sort of legislation they can call a repeal of the ACA. In general, their proposals would greatly decrease the federal money spent on healthcare. That’s their basic aim. This money would then go to the very rich in the form of increased tax breaks. Relative to the present ACA, Republican proposals would increase the number of uninsured Americans by 20 to 30 million, decrease Medicaid funding by $1 trillion, reduce Medicaid enrollment and eligibility, decrease premium support for the poor, eliminate basic standards for “essential health benefits,” require Medicaid recipients to work, eliminate the employer mandate, eliminate any payments to Planned Parenthood, and eliminate the individual mandate for insurance.

These provisions that the Republicans would eliminate were put into the ACA for a reason. Most are there to help some segment of the population obtain health insurance they could not otherwise obtain.

The individual manadate is an actuarial requirement. Without this, no one would buy insurance until they needed care. Every new application would then come with an invoice. This would greatly increase the cost of insurance and thus premiums. The CBO estimated that premiums would increase 25 to 30%. Combined with the lack of standardized coverage, there would be chaos in the insurance markets.

None of this is good, so the best hope is for blanket failure of this effort. When you look carefully, the ACA is not so bad. In fact, it’s hard to devise a better system.

McCain

John McCain returned to the Senate yesterday to cast the tie-breaking vote for a bill that would deprive millions of their health insurance. McCain’s recent healthcare was paid for by taxpayer-supported insurance which may soon be denied to others.
Many have called him a hero, citing his courage in captivity during the war. However, others have derided him for projecting an image as a “maverick” while still voting with other Republicans on various social issues. For example, he previously voted to repeal the ACA without a replacement proposal. Even after voting in favor of the current bill, he gave a speech against it. This is a pattern he has exhibited on several occasions–trying to create an image on one side of an issue but voting with Republicans on the other side.

Urban Legends

William Falk, Editor of The Week magazine, wrote the following in his letter for the 21 July edition: “The US spends 50 to 100 percent more of its GDP than other advanced nations…(on) a system that still leaves millions uncovered and ranks at the bottom of every independent assement of quality. …study systems in …Singapore, Switzerland, and France, (which) mix government-mandated universal coverage with consumer choice. No one is left out but free-market competition drives costs down and improves care.”

Some of this is true, but some is urban myth. As a package, it paints an unfair picture of US healthcare. Everyone would agree that we have the capability to provide the best care in the world. One problem is consistency. We do it well on Monday but not on Tuesday. Do it well in one place but not everyplace. We’re getting better with that but disparities persist with respect to income and socioeconomic status. Overall, the quality of care in the US is arguably better than anywhere. The US State Department brings all pregnant employees to the US for delivery.

Our other problem is coverage. All other industrialized nations have government sponsored healthcare, so everyone is covered. Some countries also allow private providers (hospitals and physicians). It’s complicated, but the private system exists for the wealthy and does not affect price.

The primary goal of the ACA was to reduce or eliminate the coverage gap. It did that. Not perfectly, but pretty well. No proposed replacement has come close. The “Medicare for all” banner is waved to correct that problem, but it brings another set of problems.

Yes, we spend a lot on healthcare, but other countries are catching up. All developed countries are wringing their hands over escalating costs for healthcare.
Why does it cost so much here? Technology and physician salaries. We pay our doctors more than any other country. Substantially more. Technology brings sophistication and higher costs for more expensive procedures. Take, for example, mammograms. The new thing is 3-D mammograms. Better? Yes, in some cases but debatable as a strategy. What if Medicare said, “Hey, this is what we pay for mammography. If you want a gee-whiz procedure, find someone who will do it for the same price.” They would come. Or, another common procedure, repair of an inguinal hernia. This can be done under local anesthesia. Dr. Earle Shouldice made his name doing this at a clinic in Canada. (One of seven private hospitals allowed under Canadas healthcare system.) the high tech alternative is laparoscopic repair, which requires general anesthesia, expensive equipment, and additional assistants. Results of the two approaches are not different. The laparoscopic approach is more expensive, and complications, when they occur, can be life threatening.

Some frequently cited outcomes, like longevity, have little to do with healthcare, per se. It has been said that discovering a cure for cancer would not create a blip on the longevity curve. Longevity has more to do with genes, clean air, clean water, and economics. (Rich people live longer than poor.)

We have an excellent healthcare system. The envy of the world in many respects. Coverage isn’t perfect, but expansion of Medicaid everywhere would largely fix that. There are ways to address cost. My favorite is price competition, but Congress has been unwilling to address this problem.

 

Discredited Ideas

The concept of “Just say no” was tried and discredited during the Reagan years. Some people just weren’t listening. Teenage pregnancy is a terrible thing, and we know how to prevent it. HHS has just cancelled funds for teen pregnancy prevention for over 80 hospitals and health departments. Most were 5 year grants awarded in 2015, but some funding will end immediately and the rest in June 2018. HHS secretary Tom Price favors abstinence only programs over sex education or birth control advice.

Teen birth rate in the US is above that of other industrialized countries but has been declining recently. In 1991, it was 62 out of every 1,000 females aged 15 to 19 but by 2014, it fell to 24 per 1,000. This move by HHS will reverse that trend and likely lead to more abortions for unwanted pregnancies. For teens dropping out of high school, pregnancy is frequently cited as a reason.

Pat Paluzzi of the Healthy Teen Network in Baltimore said, “They (Republicans) frame it as a moral issue” rather than a public health issue.

HHS refused to answer questions, but it was noted that the chief of staff for the office of the assistant secretary for health was previously president of the National Astinence Education Association. For more, see revealnews.org.

Many lives will be ruined to promote an idea that was discredited years ago.

 

 

Gratuitous Unemployment

More in the category of unanticipated consequences. For many cities and counties in the US, healthcare is the largest employer. Rappahannock county doesn’t have a hospital, so the education system is the largest empoyer. As there is less money in Medicare and Medicaid, less will be spent on healthcare generally, and fewer employees will be needed. The Republican healhtcare bill would cost 919,000 jobs in the healthcare industry, accordig to the GWU Sch Pub Hlth and the Commonwealth Fund. Those numbers are not insignificant and may lead to unprecedented unemployment in the healthcare industry.

Also, as government budgets are cut, fewer employees will be needed overall. This is particularly problematic in the Wasington, DC, area, where the federal governmnet is the largest employer. Furthermore, many other local industries are driven by federal expenditures. (Think consltants, contractors, and suppliers.) As you suck that money out of the system, the local economy will shrink, and tax revenue will diminish. The IRS is already reporting a decrease in taxes collected in the last quarter. If government spending is an effective way to stimulate the economy, cutting taxes is a sure way to tamp it down.