Topic+3

=Topic 3: The proposed "Obamacare" health care reform represents an unwarranted departure from practices that have made US health care, and the US generally, successful in the past .=

=Do We Really Want the Status Quo on Health Care?= By NICHOLAS D. KRISTOF, Op-Ed Columnist, New York TImes, February 18, 2010 If you found a suspicious lump in your neck, you’d never put off dealing with it with the excuse: This is the loveliest neck in the world, and I don’t want to tinker with it. Sure, hospitals are expensive and serve tasteless food. Yes, surgeons can accidentally leave a clamp behind, and nobody likes blood. But burying one’s head in the sand is what ostriches do — and that’s what we Americans are poised to do if we miss this chance to reform our sick health care system. The debate about health care in recent months has focused on the shortcomings of the reform proposals. Critics are right to be disappointed that the legislation doesn’t curb malpractice suits and doesn’t do more to change the basic fee-for-service structure that incubates rising health care costs. But just think for a moment about the far costlier option that now may lie ahead of us: sticking with the status quo. Health care is on my mind partly because my eldest son, a champion high school wrestler, had his latest postmatch encounter with the medical system. You know you have a problem when the E.R. nurse immediately recognizes your son and discusses whether hospitals should give kids the equivalent of frequent flier miles. Thirteen stitches and a serious infection crisis later, my son is on the mend. He had the help of an excellent, committed pair of doctors, his pediatrician and an oral surgeon. But for tens of millions of Americans who are uninsured or underinsured, medical care is haphazard and sometimes nonexistent. And every indication is that the longer we stick with the existing system, the worse the problems will be with the two central and interlinked problems of our health care system, access and cost. For a peek at what to expect, consider that California’s Anthem Blue Cross and Blue Shield — the largest for-profit health insurance company in America’s most populous state — is explaining that it is “sound and necessary” for it to raise rates for individual insurance by up to 39 percent. The increase, originally scheduled for March, is now scheduled to take effect in May. Critics doubt that the Senate and House bills would succeed in containing health care costs very much, and they may be right. It’s hard to know. But the existing system is a runaway roller coaster. Isn’t it prudent to try brake pedals even if we’re not sure how well they’ll work? The [|United States Public Interest Research Group] calculated last year that without reform, insurance premiums for those with employer-provided health care would nearly double by 2016. Also last month, the Urban Institute applied its computer model of health insurance costs to a scenario in which there is no reform, and [|this is what it found]: “Over the next decade in every state, the percent of the population that is uninsured will increase, employer-sponsored coverage will continue to erode, spending on public programs will balloon, and individual and family out-of-pocket costs could increase by more than 35 percent,” it said. It added that the number of uninsured Americans could reach as many as 65 million in another decade. As The New England Journal of Medicine [|noted last month], the United States ranks No. 1 only in terms of spending. We rank 39th in infant mortality, 43rd in adult female mortality and 42nd in adult male mortality. Skeptics suggest that America’s poor health statistics are a result of social inequities and a large underclass. There’s something to that. But despite these problems, the population over age 65 manages to enjoy above-average health statistics — because it enjoyed health care reform back in 1965 with Medicare. The medical journal noted that “comparisons also reveal that the United States is falling farther behind” other countries each year. In 1974, for example, Australian men and boys aged 15 to 60 died at about the same rate as American men and boys in that age group. Today, Australia’s rates for that group are about 40 percent lower than America’s. “U.S. performance not only is poor at any given moment but also is improving much more slowly than that of other countries over time,” the medical journal reported. So don’t believe the canard that health reform is unaffordable. Last year, we spent 17.3 percent of gross domestic product on health care, about double what many other industrialized countries pay. The share is rising by more than one-quarter of a percentage point per year. At the present rate, by my calculations, in the year 2303 every penny of our G.D.P. will go to health care. At that time, we’ll probably get daily M.R.I.’s and CAT scans, even as we starve naked in caves. So the question isn’t: Can we afford to reform health care? Rather: Can we afford not to?

February 19, 2010Op-Ed Columnist =California Death Spiral= By [|PAUL KRUGMAN] Health insurance premiums are surging — and conservatives fear that the spectacle will reinvigorate the push for reform. On the Fox Business Network, a host chided a vice president of WellPoint, which has told California customers to expect huge rate increases: “You handed the politicians red meat at a time when health care is being discussed. You gave it to them!” Indeed. Sky-high rate increases make a powerful case for action. And they show, in particular, that we need comprehensive, guaranteed coverage — which is exactly what Democrats are trying to accomplish. Here’s the story: About 800,000 people in California who buy insurance on the individual market — as opposed to getting it through their employers — are covered by Anthem Blue Cross, a WellPoint subsidiary. These are the people who were recently told to expect dramatic rate increases, in some cases as high as 39 percent. Why the huge increase? It’s not profiteering, says WellPoint, which claims instead (without using the term) that it’s facing a classic insurance death spiral. Bear in mind that private health insurance only works if insurers can sell policies to both sick and healthy customers. If too many healthy people decide that they’d rather take their chances and remain uninsured, the risk pool deteriorates, forcing insurers to raise premiums. This, in turn, leads more healthy people to drop coverage, worsening the risk pool even further, and so on. Now, what WellPoint claims is that it has been forced to raise premiums because of “challenging economic times”: cash-strapped Californians have been dropping their policies or shifting into less-comprehensive plans. Those retaining coverage tend to be people with high current medical expenses. And the result, says the company, is a drastically worsening risk pool: in effect, a death spiral. So the rate increases, WellPoint insists, aren’t its fault: “Other individual market insurers are facing the same dynamics and are being forced to take similar actions.” Indeed, a report released Thursday by the department of Health and Human Services shows that there have been steep actual or proposed increases in rates by a number of insurers. But here’s the thing: suppose that we posit, provisionally, that the insurers aren’t the main villains in this story. Even so, California’s death spiral makes nonsense of all the main arguments against comprehensive health reform. For example, some claim that health costs would fall dramatically if only insurance companies were allowed to sell policies across state lines. But California is already a huge market, with much more insurance competition than in other states; unfortunately, insurers compete mainly by trying to excel in the art of denying coverage to those who need it most. And competition hasn’t averted a death spiral. So why would creating a national market make things better? More broadly, conservatives would have you believe that health insurance suffers from too much government interference. In fact, the real point of the push to allow interstate sales is that it would set off a race to the bottom, effectively eliminating state regulation. But California’s individual insurance market is already notable for its lack of regulation, certainly as compared with states like New York — yet the market is collapsing anyway. Finally, there have been calls for minimalist health reform that would ban discrimination on the basis of pre-existing conditions and stop there. It’s a popular idea, but as every health economist knows, it’s also nonsense. For a ban on medical discrimination would lead to higher premiums for the healthy, and would, therefore, cause more and bigger death spirals. So California’s woes show that conservative prescriptions for health reform just won’t work. What would work? By all means, let’s ban discrimination on the basis of medical history — but we also have to keep healthy people in the risk pool, which means requiring that people purchase insurance. This, in turn, requires substantial aid to lower-income Americans so that they can afford coverage. And if you put all of that together, you end up with something very much like the health reform bills that have already passed both the House and the Senate. What about claims that these bills would force Americans into the clutches of greedy insurance companies? Well, the main answer is stronger regulation; but it would also be a very good idea, politically as well as substantively, for the Senate to use reconciliation to put the public option back into its bill. But the main point is this: California’s death spiral is a reminder that our health care system is unraveling, and that inaction isn’t an option. Congress and the president need to make reform happen — now.

=The Emotion of Reform= By [|DAVID BROOKSOp-Ed Columnist]March 9, 2010

There is something morally impressive in the Democrats’ passion on this issue. At the same time, it’s interesting to compare it to their behavior on other issues in which they have no emotional investment. Small business owners have been screaming about the health care bill that forces them to offer coverage or pay a $2,000-per-employee fine but doesn’t substantially control rising costs. Democrats hear their concerns, but push ahead because getting a health care bill is more important. Then there is the larger issue of exploding federal deficits. A few Democrats are genuinely passionate about this, President Obama among them. He has fought tenaciously to preserve a commission that might restrain Medicare spending. But 90 percent of the people in Congress have no emotional investment in this issue. They’re going through the motions. They’ve stuffed the legislation with gimmicks and dodges designed to get a good score from the Congressional Budget Office but don’t genuinely control runaway spending. There is the doc fix dodge. The legislation pretends that Congress is about to cut Medicare reimbursements by 21 percent. Everyone knows that will never happen, so over the next decade actual spending will be $300 billion higher than paper projections. There is the long-term care dodge. The bill creates a $72 billion trust fund to pay for a new long-term care program. The sponsors count that money as cost-saving, even though it will eventually be paid back out when the program comes on line. There is the subsidy dodge. Workers making $60,000 and in the health exchanges would receive $4,500 more in subsidies in 2016 than workers making $60,000 and not in the exchanges. There is no way future Congresses will allow that disparity to persist. Soon, everybody will get the subsidy. There is the excise tax dodge. The primary cost-control mechanism and long-term revenue source for the program is the tax on high-cost plans. But Democrats aren’t willing to levy this tax for eight years. The fiscal sustainability of the whole bill rests on the naïve hope that a future Congress will have the guts to accept a trillion-dollar tax when the current Congress wouldn’t accept an increase of a few billion. There is the 10-6 dodge. One of the reasons the bill appears deficit-neutral in the first decade is that it begins collecting revenue right away but doesn’t have to pay for most benefits until 2014. That’s 10 years of revenues to pay for 6 years of benefits, something unlikely to happen again unless the country agrees to go without health care for four years every decade. There is the Social Security dodge. The bill uses $52 billion in higher Social Security taxes to pay for health care expansion. But if Social Security taxes pay for health care, what pays for Social Security? There is the pilot program dodge. Admirably, the bill includes pilot programs designed to help find ways to control costs. But it’s not clear that the bill includes mechanisms to actually implement the results. This is exactly what happened to undermine previous pilot program efforts. The Democrats have not been completely irresponsible. It’s just that as the health fight has gone on, their passion for coverage has swamped their less visceral commitment to reducing debt. The result is a bill that is fundamentally imbalanced.

= If only we'd listened to Nixon, Carter or Clinton=

But one of the hardest things to convey is the terrible cost of inaction, which is much higher, both in human and economic terms, than many realize. The big player on the cost side is that even small benefits compound over the years. Slowing the system's spending growth by 1.5 percentage points -- so the rate of spending inflation will be six percent, rather than 7.5 percent, in a year -- doesn't seem like a terribly impressive outcome. That still has the system growing faster than GDP, or inflation, or Europe's health-care systems. But over time, the benefits would be enormous. The Commonwealth Fund, in a [|very smart piece], tries to show this by tallying the savings if we'd instituted the Nixon, Carter and Clinton reforms and they'd worked to slow spending by the aforementioned 1.5 percentage points. That's not, it should be noted, an unreasonable estimate. If anything, it's conservative, as these plans included hard government controls on the rise of provider payments or insurance premiums. That's a blunt stick to swing at the system, but it's an effective one (Paul Ryan's plan also caps spending, for any conservatives out there who're skeptical of the merits). You can see the impact in the graph atop this post. The earlier you start, the more you save. These days, we spend a bit more than 17 percent of our GDP on health care. That comes out to more than $2.5 trillion. If we'd reformed the system in 1995, and our spending had slowed by 1.5 percentage points then, health care would only be 14.2 percent of GDP right now. If we'd followed Carter's schedule and moved in 1980, we'd be down to 11.5 percent of GDP. And Nixon's plan in 1975? A mere 10.75 percent of GDP, which as you can see on the graph, isn't that far from what Europe spends. The lesson is simple: The earlier you start, the more you save. And with each opportunity you miss, you lose years of accumulated savings.

=Per Capita Healthcare Expenditures, an International Comparison=



=U.S. Health Care Spending: Comparison with Other OECD Countries= A Report by the Congressional Reseach Service, September 17, 2007

Summary of Findings

Total Spending. In 2004, the United States spent more than twice as much on health care as the average OECD country, at $6,102 per person (compared with the OECD average of $2,560). Health care spending comprised 15.3% of the U.S. GDP in 2004, compared with an average of 8.9% for the average OECD country (Figure 1). Although a country’s health expenditures are highly correlated with GDP (Figure 2), U.S. health spending is nevertheless 60% greater than its GDP alone

Health Care Resources. The United States has fewer hospital admissions (Figure 3) and doctor visits (Figure 4) than the average OECD country. The United States has a below-average number of hospital beds (Figure 22) and practicing physicians per population (Figure 15), but its number of nurses per population is roughly the same as the OECD average. The United States has a higher than average number of staff per hospital bed (Figure 10) and nurses per bed (Figure 11). The length of hospital stays in the United States are the same as the OECD average The United States spent a per capita average of $2,668 on outpatient care in 2004 — three-and-a-half times the OECD average. In most OECD countries, visits to general practitioners outnumber visits to specialists — but not in the United States.

The United States has a greater supply of advanced technological equipment than other OECD countries, with nearly twice as many CT scanners per capita as the OECD average (Figure 12) and three times as many MRI machines (Figure 13). The United States also performs far more heart procedures per population than the average OECD country (Figure 9), and an above-average amount of organ transplants per capita, but does not perform more of all types of surgical procedures.

Pharmaceuticals. The United States spends more on prescription drugs per capita than any other OECD country (Figure 18). The United States also consumes more prescription drugs than most OECD countries, according to a nine-country study (Figure 17). That study found that the United States paid more for brand name drugs but less for generic drugs than other OECD countries (Figure 16).

Health Administration and Insurance. Spending on health administration and insurance cost $465 per person in the United States in 2004, which was seven times that of the OECD median (Figure 20). Americans pay less out-of-pocket for health care (as a percentage of total health care spending) than residents of most OECD countries (Figure 21).

Prices. Although OECD data does not compare prices of medical care, other studies have found that the United States pays higher prices for medical care than countries such as Canada and Germany. Part of the reason for this may be that U.S. general practitioners and nurses are the highest paid in the OECD, and U.S. specialists are the third-highest paid in the OECD (Table 2). Health professionals in wealthier countries earn higher salaries than those in poorer countries (Figure 14), but even accounting for this, U.S. health professionals are paid significantly more than the U.S. GDP would predict (for example, specialists are paid approximately $50,000 more than would be expected). However, U.S. health care professionals also enter the careers with substantially more educational debt than in other OECD countries. For example, in 2006, 62% of new U.S. medical school graduates had educational debt exceeding $100,000.102 Population Risk Factors. The United States had a lower than average proportion of the population that is elderly in 2004, and lower than average rates of smoking and drinking. The United States consumes more calories and sugar per capita than any other OECD country: the United States consumes 156 pounds of sugar per person per year, compared with 99 pounds in the average OECD country. In 2004, 34% of Americans were overweight and an additional 32% were obese. Obesity is associated with a 77% increase in consumption of medications and a 36% increase in inpatient and outpatient spending, according to one study.

Quality. In terms of quality of health care, a five-country study found that each of the five countries studied (the United States, Canada, the United Kingdom, Australia, and New Zealand) had the best and worst health outcomes on at least one measure, but no country emerged as a clear quality leader. For example, the United States had the highest breast cancer survival rate but the lowest kidney transplant survival rate. A six-country study (the United States, Canada, the United Kingdom, Australia, New Zealand, and Germany) found that Americans were most likely to report receiving specific recommended preventive services for diabetic and hypertensive patients, but were most likely to complain that their doctor did not spend enough time with them and did not have a chance to answer all of their questions.

Wait Times. The United States is one of eight countries in which wait times for elective surgery are reported to be low. In a recent survey, a quarter to a third of respondents in Canada, the United Kingdom, and Australia reported waiting more than four months for a non-emergency procedure, compared with only 5% of Americans. In terms of doctor visits to primary care physicians, a five-country survey found that Americans had the greatest difficulty getting care on nights and weekends and were the most likely to forgo care because of cost.

Health Outcomes. The United States has the third-highest percentage of the population that reports their health status as being “good,” “very good,” or “excellent” (Figure 23). However, the United States has below-average life expectancy (Figure 24) and mortality rates (Table 5). The United States has the third-highest rate of deaths from medical errors (Figure 25) and the highest infant mortality rate among the eight countries that report this metric similarly (Figure 26). However, such measures are often subjective or limited by differing measurement methodologies. They may also reflect fundamental population differences (in underlying health, for example) rather than differences in countries’ health care systems. These are just some of the difficult research issues facing international comparisons like those used in this report.