Inkwell: Authors and Artists

    
I would like to introduce another set of thoughts here. So far, this    
discussion (like most such treatments of the subject) has assumed that  
covering everyone would solve the problem of healthcare. But any close
study of healthcare economics shows that costs go up with availability.
When healthcare insurance rarely covered pharmaceuticals, for instance,
drug costs were relatively low. As these costs began to be covered in   
the 1990s, drug costs began to soar, and take up increasing percentages
of the healhcare dollar.

So if we cover everyone without changing the system any other way, we   
immediately lose the 25% that goes to insurance companies (plus the     
maybe 10% that goes to fighting with them). But we also will begin to   
see utilization and costs rise.

And going to a single-payer system would not in any obvious way address 
the manifest quality problems that we have now.

Your homework is a short, pithy article that came out today in Hospitals 
and Health Networks Online about quality and cost in today's systems: 
http://tinyurl.com/nwbkx
  

    
I would note how the terms of the debate have started to shift. Back
in 1992 you couldn't say "single payer" in public and be thought
credible. Now Paul Krugman in the NYTs puts it forward as the standard
against which everything else needs to be compared and E.J. Dionne
defensively wants to stop a rush to SP without much to throw in its way
except we don't know much about how it'll work so lets try other
alternatives. Hopefully the glasnost on SP will continue as more people
begin to ask "why ever not?"

As a wholehearted supporter of SP I note that it's Achilles heel is
the political will to fund it with sufficient tax money. This has been
Britain's problem and has resulted in excessive wait times (i.e. years
in some cases) for surgery. This means that SP as a future possibility
is directly threatened by "starve the beast" fiscal irresponsibility of
the current administration as it runs up deficits. This policy is, I
believe, a quite deliberate effort specifically to make govt funded
programs like SP impossible. If they were not impossible then they
might be implemented and people might see that they function well and
want more of them. This is intolerable for people like Grover Norquist
and his ilk who currently set administration policy. 
  

    
I agree with you, Jonathon, with this addition: What drives current 
possibility is a cross between Norquist's "starve the beast" 
anti-government mentality and the simple greed that makes lower taxes on 
the rich and corporations seem like the solution to all ills. If not for 
those two currents of thought, we could (as I pointed out above) fund 
healthcare for all by eliminating the tax-deductability of healthcare 
plans as a business expense.

In the American way, if we do get SP healthcare, it will likely be a 
two-tier system, in which wealthy people can buy up to avoid wait times, 
get better services, more lenient drug coverage, and so forth.
  

    
Is it the case that both the British and the German system have two
tiers in this manner?
  

    
Yes, and the Canadian system is getting it. The law there was quite 
restrictive: It forbid any providers from receiving payment for services 
from anyone except the government. But last summer the Canadian Supreme 
Court ruled that the law was predicated on a reasonable expectation of 
timely and comprehensive services, and when the government could not 
provide that, it was unconstitutional to deprive citizens of the ability 
to buy such services in the private market.
  

    

The questions of outsourced diagnosis and medical treatment tourism
become interesting too.  Like the old days of going to Mexico for an
abortion, for example.  A high-priced equivalent of offshore docs for the
wealthy (or desperate and willing to blow all they own) is likely, isn't
it? So long as it was not convenient it would not be likely to make the
"single payer" solution decline steeply or go away, I suppose.

I met a man in Norway who decried their socialized medicine because
his relatives had to travel to the US for top of the line experimental
treatments.  In some way we are pushing for nationalization in a world 
that is post-national for the weatlhy.

(Off to read that article you linked to!)
  

    
>>if we do get SP healthcare, it will likely be a two-tier system,

It seems to me that no matter what is done there will always be a
second tier for the wealthy. 

I really like this quote:
   "Health is a precious thing, and the only one. in truth, meriting
that a man should lay out not only his time, sweat, labor and goods,
but also life itself to obtain it." --Montaigne 

That quote nicely explains why demand will always exceed supply. The
fact that supply and demand will never balance is, I think, the crux of
the economic conundrum of health care.

Medical Insurance creates an illusion of balancing the supply and
demand through assumed risk management, and marketing hype.  In fact,
though, it just tilts the scales even farther off kilter.  Compound
that with goverment regulation that is funded by lobbyists and a system
where the purchaser (employeer groups) is not the consumer
(individuals) and you've got a really, really big mess. 
  

    
>A high-priced equivalent of offshore docs for the wealthy . . . is 
likely, isn't it? 

Correct, except for two details: 1) the future tense. Just Google 
"medical tourism India." 2) It's not necessarily about the wealthy. 
These big medical centers in Southern Asia and South Africa hav been 
courting US insurors and employers - they may well become covered by US 
insurance, and even incentivized. The insurer may well pay the whole 
deductible because, even counting the deductible, airfare and 
acoommodations and other perks, a heart re-fit or a hip might cost the 
insurance company 1/3 as much done overseas.

These are high-profit operations for US hospitals, which help fund 
bleeding cost centers ike ERs. If any significant percentage go 
overseas, it damages our health system further. With a Single Payer 
system, we could at least look at such problems as a whole system.
  

    
>In the American way, if we do get SP healthcare, it will likely be a 
two-tier system, in which wealthy people can buy up to avoid wait
times, 
get better services, more lenient drug coverage, and so forth.

That's how it is in New Zealand although when I left 7 years ago you
didn't need to be particularly wealthy to get private coverage. I think
its gone up a bit now but I remember paying about $40 per month for
private insurance. To me as an uninformed layman, the list of benefits
looked pretty similar to what I get from my employer provided coverage
I now have in the US.
  

    
Hi Joe, 
Great discussion so far.  Here are a couple of questions:

Would SP have any effect on the factors influencing drug companies'
research decisions - ie the profitibility of one sort of drug over
another?  What about "alternative medicine"?  If insurance companies
are somehow substituted out of the equation, do you get a different
take on what is worth paying for trying?

Also, way back to your first post about "nobody is looking out for the
hospital", I wonder if you could say a bit more about what the various
kinds of hospitals are these days.  I gather there are Very Big
Chains, but I don't know if they are regional or national, or what the
final ownership is - for all I know there could be a chain that is an
obscure subsidiary of AOL-Time-Warner, or Merck, or Exxon.  Then
there's Kaiser - is it unique, or are there other HMO Hospitals?  And
County Hospitials.  Teaching hospitals?  What else?

Finally, looking at your comments on the customer satisfaction element
gaining momentum, I find myself getting the funny feeling that the
lowest quartile hospitals' situation will start to play out like
schools.  Is there a scenario where SP could come in the form of a No
Patient LEft Behind Act containing the intent and mechanisms to
dismantle/privatize the resources, turn them over to other companies
and, surprise, leave the patients behind...  I guess I'm assuming that
the lowest quartile is the resource-starved public hospitals, but maybe
that is wrong (given your point that you-get-what-you-pay-for is a
fallacy for healthcare).
  

    
I agree we need a single payer system. I moved to Oklahoma because the
low cost of housing would allow me to pursue research in areas that I
am passionate about. I gave up an excellent tenured position teaching
in California. Now I find I must go to work doing fairly mundane work
because I can't obtain reasonable health insurance for my family of 5.
I know I could make a meaningful contribution and I am willing to use
my own money (profit from California beach property) to fund my work
but my children must come first. I know I am not the only one.

A single payer system sounds good, BUT, first we need to change the
paradigm of health care in the U.S. The way we view health care has
resulted in a very expensive system that actually causes pain and
suffering while at the same time leaves countless thousands of people
without even the most basic medical care.

i.e. My father died 5 years ago after surgeons operated on a seriously
damaged heart. The doctor talked me into authorizing the procedure by
making me feel guilty. He said my father would die without the
operation. What he left out was that my father would probably die with
it, only he woulld suffer needlessly for several weeks before he died.
He was 84 and had been disabled for years. The bill was $100,000.
Medicare paid the bill. Last month my mother died at 89. She had
alzheimers and developed pneumonia. After several very painfull
procedures the doctors wanted to do a surgically implanted feeding
tube. It would be permanent and she would be restrained (tied down) in
bed for the rest of her life. She didn't know her name or any family
and just laid in bed and cried to go home. THE DOCTORS WANTED TO
OPERATE  to keep her alive for another year or so. Alive in misery. I
denied permission, moved her to a hospice and she died peacefully in
her own bed. I just received the bill for the several days in the
hospital. $30,000. Medicare will pay the bill.

Meanwhile there are many poor people in Oklahoma who can't afford
basic medical care. But we are spending enormous amounts caring for
people who no longer have any quality of life. Somehow we say it is
inhumane to deny them care or even give the families the truth while we
don't seem to care about those who can't even obtain vacinations. You
may answer there are government programs to provide this care, but I
would answer bullshit! Very few know how to obtain this care and many
others are to proud to accept charity.

We need to make hard decisions. Withold treatment for those who will
reap questionable benefit from it and pay for those who might go on to
productive life if just given the basics. 
  

    
How would you have felt if you wanted your mom and dad to have the
surgery and you were told they couldn't?
  

    
I'm glad that you've raised the end of life question here, Jim. I will
withhold comment for now, but it is one of the biggest cost pressures
on the system as it currently stands. 
  

    
Joe, I don't think you ever addressed my thought that fears of the
next Great Depression if we get rid of the health insurance industry
are probably greatly exaggerated.  Getting the insurance
paper-shufflers out of the equation (they are "useless" as you say,
which seems overly kind to me) is critical to cutting the Gordian knot.
 

The real problem is not that the economy would collapse (as I said,
similar predictions were made about banning child labor), but that this
is a fierce and powerful and rich industry.  Do you think we as a
society will be able to take on this useless industry and eliminate it,
or are we stuck with them in perpetuity?
  

    
<jimsnow>, what would you think of a single payer system that mandated
that all enrollees must have on file advance directives specifying
exactly what sort of end-of-life care they would or would not want?  

One of the big problems in end-of-life care is the situation where (1)
a patient has not prepared advance directives and is now so ill that
they can't communicate their wishes and (2) there are family members
who do not understand the medical situation and who are afraid of the
guilt they would suffer if they approved "pulling the plug" and
(3)there are doctors ready, willing and able to "do something" no
matter how futile.

I am intimately familiar with this scenario from both the family and
the physician's point of view.  During my father's terminal illness I
had a wet-behind-the-ears surgeon attempt to guilt trip me into
authorizing entirely useless surgery.  Fortunately, I knew my father's
wishes and had the advantage of being able to pull rank.
  

    
Whoah. Lots of questions. Let's take a whack at some:

> SP change drug company decisions?

Not unless the legislation got the government more involved in leading 
drug research, both by subsidizing development, and perhaps by allowing 
special patent rights (there are some drugs that are now out of patent, 
but seem to have so new and better uses, but need FDA trials to prove 
the uses e.g. Google multiple sclerosis Naltrexone)

>hospital ownership

To a first order approximation, all hospitals are not-for-profit, only 
about 10% for-profit. Even when you hear that a hospital is a "Tenet" 
hospital, that may only mean that Tenet has the management contract of a 
not-for-profit. There are regional chains, often religious-based, such 
as Summit (CA, OR, HI), Banner (mountain state), Catholic Healthcare 
West, Ascension (Midwest), and Christus (Southwest). There are a few 
national religious chains, such as Adventist. There quite a few small 
chains in metro areas such as Partners (the Harvard-associated 
hospitals). There is no General Motors of healthcare. Kaiser, as a 
staff-model HMO, is almost unique. Only Group Health of Puget Sound is 
similar (it is a patient-owned single cooperative, rather than two 
intertwined self-owned not-for-profits and a for-profit physician's 
group, like Kaiser).

The reason that the fragmentation of hospital ownership is a problem is 
that the insurance companies are not fragmented. The few at the top - 
and you can name them as well as I - are enormous. And in most markets 
one or two of them hold virtual monopoly power, and can pay whatever 
they want to pay, and treat their customers however they like.
  

    
> worst hospitals = lack of resources

Not necessarily. One category of hospitals that is really suffering is 
the rural hospital. It takes a certain population base to support, for 
instance, a neurosurgeon, or a cath lab. So all the hospitals in Iowa, 
for instance, are "Critical Access" hospitals, which means that they get 
extra reimbursement from the government, but survive under a regime of 
severe restrictions.

Except for rural hospitals, though, the worst hospitals are the worst 
managed hospitals. There are some vey good hospitals in very poor areas. 
East Jeff in Metarie, Louisiana, was a great hospital until Katrina. 
Griffin, in Derby CT, one of Connecticut's less-well-off areas, with 
lots of competition, including Yale New Haven 15 minutes away, is a 
world-class champion institution.

Oh, and by the way, never equate "not for profit" with "poor" - there 
are NFPs with literally billions in the bank.
  

    
Jim, the end-of-life questions you raise are very relevant, very 
important. We spend huge sums taking care of people whom we know are 
dying, and dying soon, often increasing their misery in the process. 
This is largely because there is nothing in the Medicare payment system 
to put the brakes on it, and every incentive (as Alan pointed out) to do 
it. A single-payer system would not help this, since at that stage, it's 
already single-payer. But we will not be able to afford ot cover 
everyone, as you suggest, unless we put in place some mechanism for 
determining that it is worse than useless, for instance, to do major 
heart surgery on an 89-year-old who has cancer.

What mechanism could we build that would not seem arbitrary and cruel?
  

    
Finally, <mcdee>, I dno't see how we could eliminate 5% of the US 
economy without having a pretty severe adjustment. But you are right - 
the greater problem is that the insurance companies are simply to big 
and politically powerful to imagine eliminating - or even to imagine 
reducing their influence. We saw that in 1993.

For me, this seems to be an intractable problem: How do we imagine a 
future healthcare system that makes sense - while imagining a reasonable 
political path to it?
  

    
Points:

* Other societies have managed to take on entrenched interests when
going to SP. As I understand it, the British Medical was opposed to the
creation of the National Health Service there. 

* The economic impact of going to SP would be offset in the long run
by the increased competativeness of American companies no longer
saddled with healthcare premiums as well as a huge increase in
flexibility as people were no longer stuck in jobs just to keep health
benefits. This would free up a huge amount of entrepeneurship as people
were no longer afraid to start businesses or take positions with
small, particularly start-up companies. Without the vice-like grip of
health benefits employers would have to seek other ways to be keep
employees and with decreased costs could afford to pay higher salaries.
This in turn would create more disposable income further stimulating
the economy. Carrying the no-value-added insurance industry is huge
drag on the economy which would be lifted by SP. To offset the pain of
the transition we could have re-training programs. 

* End of life costs could be reduced by making it easy to specify your
wishes, for example having a form to fill out when you get/renew your
driver's licsence. In my limited experience most people are appalled at
the idea of being "kept alive with a bunch of tubes" and would gladly
specify that this be avoided. 

* Oh and while we are at it, how does existence of big pharma serve
the public interest? Why not have drug development driven by need
established by a scientific body with research doled out through
competative grants and peer reviewed results available to all? Out go
high prices driven by profit maximization, executive compensation and
marketing. Come to think of it marketing shouldn't even enter in to it.
Medicine should be evaluated by its efficacy and prescribed as needed,
"convincing" really has not place there. 
  

    
All excellent points, I think - and all pointing to the stark 
differences between a rational system driven by the public interest and 
the one we have now. Other nations have, indeed, beaten entrenched 
interests. But I am very skeptical of our ability ot do the same, since 
these we eem to have a government of the people, by the entrenched 
interests, and for the entrenched interests. 
  

    
That's very interesting that hospital ownership is so fragmented. 
Reading your list, I realize there's another category of hospitals too
- the VA.  How would veterans benefits fit into SP?  (Especially in
light of the likelihood of big costs coming over the years from
Iraq/Gulf War Syndrome?)


As far as insurance companies, how would a future with a growing
interest in SP (but not quite there yet) interact with, say, a Peak Oil
Economic Collapse future?   Is there some scenario where insurance
companies *would* "simply vanish" the way, say the government of Poland
or Romania or the Soviet Union did?  (Or, for that matter, Enron or
savings-and-loans?) If healthcare insurance companies don't actually
add anything, is there any sense in which they're hollow, such that
pressure from elsewhere in the economy would cause them to collapse?
  

    
>VA

Since the VA has generaly been seen as doing a good job, has been on the 
cutting edge for new communication technologies and quality management, 
it is hard to imagine it being simply folded into a plan that covers 
everyone.

>health plans "hollow"

The Soviet Union, Enron, and the S&L industry has one thing in common: 
They were _financially_ hollow. When the music stopped, they had no 
chair. The insurance companies are doing very well, thank you. And they 
have been spending billions on incredibly sophisticated information 
systems to solidify their position. Unless somenoe offered an 
alternative - unless, for instance, the federal government were to go 
into competition with them by offering subsidized, low-cost insurance 
for anyone who wanted to buy it - I don't see an obvious vulnerability.
  

    
Their vulnerability is that we are having this conversation. 

"Emporer he may be, but he's got no clothes!"

Once the idea of SP moved from the fringe into one of the ideas being
discussed then as an idea it begins to compete with other ideas. Since
it's benefits are manifest other ideas need to compete with it and it
sets a high bar. At the moment it is not part of the election cycle so
it can't be "defeated" by a quick smear job the way the Clinton plan
was basted. As the idea gains currency there comes a tipping point
where the need to justify shifts from SP to not having SP as yet.
Congruent with this process is the growing realization in the buisness
community that their idealogical opposition to SP hurts them while
providing a gimme for the insurance industry. 
  

    
>> the federal government were to go into competition with them by
offering subsidized, low-cost insurance 

From where I sit - which is a little gray cube in a big health
insurance company - I'd say it is far more likely that the gov will
partner than compete.