Tuesday, August 11, 2009

The Health of America, Part 16

It has been a bad summer for the health reform lobby. As Ramesh Ponnuru writes in the current Time magazine:
There are two basic points about health-care reform that President Obama wants to convey. The first is that, as he put it in an ABC special in June, "the status quo is untenable." Our health-care system is rife with "skewed incentives." It gives us "a whole bunch of care" that "may not be making us healthier." It generates too many specialists and not enough primary-care physicians. It is "bankrupting families," "bankrupting businesses" and "bankrupting our government at the state and federal level. So we know things are going to have to change."

Obama's second major point is that--to quote from the same broadcast--"if you are happy with your plan and you are happy with your doctor, then we don't want you to have to change ... So what we're saying is, If you are happy with your plan and your doctor, you stick with it."

So the system is an unsustainable disaster, but you can keep your piece of it if you want. And the Democrats wonder why selling health-care reform to the public has been so hard?
That's a bad--and accurate--assessment. But, for the Administration, last Friday was almost armageddon. That was the day the Congressional Budget Office addressed the "preventive medicine" fairy tale, and drove another stake through the heart of Obamacare:
Although different types of preventive care have different effects on spending, the evidence suggests that for most preventive services, expanded utilization leads to higher, not lower, medical spending overall.

That result may seem counterintuitive. For example, many observers point to cases in which a simple medical test, if given early enough, can reveal a condition that is treatable at a fraction of the cost of treating that same illness after it has progressed. But when analyzing the effects of preventive care on total spending for health care, it is important to recognize that doctors do not know beforehand which patients are going to develop costly illnesses. To avert one case of acute illness, it is usually necessary to provide preventive care to many patients, most of whom would not have suffered that illness anyway. Judging the overall effect on medical spending requires analysts to calculate not just the savings from the relatively few individuals who would avoid more expensive treatment later, but also the costs of the many who would make greater use of preventive care.
Friday also was the day that--in what should be ominous for advocates of Obama's "public option"--David Gauthier-Villars detailed the weakness of state-supplied health insurance in the Wall Street Journal:
France claims it long ago achieved much of what today's U.S. health-care overhaul is seeking: It covers everyone, and provides what supporters say is high-quality care. But soaring costs are pushing the system into crisis. The result: As Congress fights over whether America should be more like France, the French government is trying to borrow U.S. tactics.

In recent months, France imposed American-style "co-pays" on patients to try to throttle back prescription-drug costs and forced state hospitals to crack down on expenses. "A hospital doesn't need to be money-losing to provide good-quality treatment," President Nicolas Sarkozy thundered in a recent speech to doctors.

And service cuts -- such as the closure of a maternity ward near Ms. Cuccarolo's home -- are prompting complaints from patients, doctors and nurses that care is being rationed. That concern echos worries among some Americans that the U.S. changes could lead to rationing.

The French system's fragile solvency shows how tough it is to provide universal coverage while controlling costs, the professed twin goals of President Barack Obama's proposed overhaul.

source: WSJ

French taxpayers fund a state health insurer, Assurance Maladie, proportionally to their income, and patients get treatment even if they can't pay for it. France spends 11% of national output on health services, compared with 17% in the U.S., and routinely outranks the U.S. in infant mortality and some other health measures. [NOfP note: not really.]

The problem is that Assurance Maladie has been in the red since 1989. This year the annual shortfall is expected to reach €9.4 billion ($13.5 billion), and €15 billion in 2010, or roughly 10% of its budget.

France's woes provide grist to critics of Mr. Obama and the Democrats' vision of a new public health plan to compete with private health insurers. Republicans argue that tens of millions of Americans would leave their employer-provided coverage for the cheaper, public option, bankrupting the federal government.

Despite the structural differences between the U.S. and French systems, both face similar root problems: rising drug costs, aging populations and growing unemployment, albeit for slightly different reasons. In the U.S., being unemployed means you might lose your coverage; in France, it means less tax money flowing into Assurance Maladie's coffers.

France faces a major obstacle to its reforms: French people consider access to health care a societal right, and any effort to cut coverage can lead to a big fight.
Which is why it's essential to get healthcare reform right at the outset. As columnist Charles Krauthammer did in the Washington Post that same Friday:
[T]oday's ruling Democrats propose to fix our extremely high-quality (but inefficient and therefore expensive) health-care system with 1,000 pages of additional curlicued complexity -- employer mandates, individual mandates, insurance company mandates, allocation formulas, political payoffs and myriad other conjured regulations and interventions -- with the promise that this massive concoction will lower costs.

This is all quite mad. It creates a Rube Goldberg system that simply multiplies the current inefficiencies and arbitrariness, thus producing staggering deficits with less choice and lower-quality care. That's why the administration can't sell Obamacare.

The administration's defense is to accuse critics of being for the status quo. Nonsense. Candidate John McCain and a host of other Republicans since have offered alternatives. Let me offer mine: Strip away current inefficiencies before remaking one-sixth of the U.S. economy. The plan is so simple it doesn't even have the requisite three parts. Just two: radical tort reform and radically severing the link between health insurance and employment.
Agreed--on both counts.

Read Krauthammer's whole article. And hope for a year of Fridays.

(via ABC News's Jake Tapper, TigerHawk)


Technology said...

It seems like people are understanding what they want from the proposed health plan then getting upset over nothing.

OBloodyHell said...

> Republicans argue that tens of millions of Americans would leave their employer-provided coverage for the cheaper, public option, bankrupting the federal government.

Which is the entire purpose of the progressives:

Barack Obama and the Strategy of Manufactured Crisis

Hardly new information, but, for the new chums at the fount of knowledge about progressivism, an eye opener.

Thai said...

I like your (others?) proposals, but I am not sure your point re: higher European health care inflation makes any point except the one I made a while back.

And in all fairness, the UK did have some of the lowest % of GDP devoted to health care of any country in the world. So it is no surprise to see that their rate of health care inflation has been running higher than ours.

suek said...

The problem is that the goal of the legislation is not to provide health care, the goal is to obtain more power for the Federal government.

If the goal was to improve health care, we could reach a solution. When the goal is more power, no solution is actually possible.

Carl said...


No its not surprising that Europe would want to spend more--they need to, to produce better outcomes--but it just makes the point that European systems are no panacea.


I agree.