Blogs > Cliopatria > Health Care Reform Thoughts

Feb 11, 2009

Health Care Reform Thoughts




This began as a response to a comment by Mike Mainello to Rick’s post just below. It got long enough that I decided to expand it a bit further and post it here instead. The subject is health care reform. The basic point I hope to make is that all systems have tradeoffs, and one has to think carefully as to what the best tradeoffs are.

A majority of Americans believe everyone should have access to basic health care, even if the person in need cannot afford it. If a nation truly wishes to achieve that, it precludes a solely market-based approach because the market alone would shape health care in a way that maximizes profit. Caring for the poor is never going to be profitable in this context.

So the question is what mix of public and private organization does the best job or providing basic care to all, while researching new treatments and otherwise maintaining or improving public health. It is hard question to answer for a range of reasons. Here are three:

Health care treatments evolve.

Public expectations as to what care should be insured evolve with the treatments.

Someone or some mechanism has to draw the line between what care can be covered and what cannot.

Different countries have different answers and accept different trade-offs in addressing these challenges.

Our current mix rations health care on the basis of a combination of wealth (usually augmented by private insurance), access to government insurance, or access to workplace and retirement benefit policies. Emergency room care acts as a stop-gap for many of the people who fall outside of the above, but this is highly expensive and still misses millions.

The result is a wide range in access and quality from among the best in the world to basically non-existent. Within the realm of insurance, decisions on what is or is not affordable are likewise scattered and can often be contradictory.

By way of comparison, the British system makes the rationing decisions consciously for everyone under the National Health Service (NHS). This provides universal care. This is also far from perfect, but it's not the abject failure that some people make it out to be.

My wife got an unexpected tour of the NHS in Scotland last summer by virtue of some poorly-timed gallstones. She ended up at the Royal Infirmary of Edinburgh, (a teaching hospital with a long history). She went in very early Sunday morning ( a sign that Murphy’s Law is in force on both sides of the Atlantic).

The emergency care was first rate, as was the diagnostic unit. Fine care and no questions about insurance. (Foreign visitors get free emergency room care along with everyone else.) Once she made it to a regular ward, you could begin to see where they cut some of their costs. Nearly all patients were in ward units of 4. These were comfortable, with privacy curtains, and well staffed. Sue’s roommates were pleasant, and we could compare notes on treatment. Some of that information is reflected here. Still, that comparative lack of privacy is very different from the semi-private and private rooms that dominate in the States.

More significantly, the tests that Sue needed came more slowly than would have happened in many U.S. hospitals. That’s a clue to another way they cut costs: the trade-offs that they make between advanced diagnostic and treatment facilities and the length of stay is different than in many US hospitals.

She was in five nights and six days, and she might have been in longer if there had not been a cancellation that allowed them to get the stones out on Thursday as opposed to the Friday (they hoped) that had been the original schedule. In fact we felt a bit bad because we suspected that Sue had been moved ahead of some other patients to get that spot precisely because we were visitors. No US hospital would have moved faster on Sunday, but at our regional hospital, it seems likely that she would have been out by Thursday at the latest, and possibly Wednesday.

So, assuming that our experience was at all typical (and that’s a big assumption) here are the trade offs in what was a pretty standard situation--treatment for gall stones—and what seems customary at our regional hospital.

NHS: universal care, usually strong emergency room care, slower in-patient care, slower access to non-emergency procedures for both patients in hospitals, and probably for out-patient care as well.

US: access based on ability to pay (via income or insurance), strong emergency room care, emphasis on moving people quickly through hospitals aided by investment in diagnostic equipment and associated staff. Decision making based in part by the standards of HMOs/insurance companies.

Both: Competent but often overstretched staffs. Also, I think the site of senior doctors trailed by junior physicians and nurses rather like acolytes is universal at teaching hospitals.

Moral: As I said above, no approach is perfect. How important is universal coverage to Americans? How good should it be? What are they willing to trade—or invest—to get it? These questions mingle resource considerations and moral choices in the most unsettling ways. We should not make light of them by either demonizing or idealizing any particular approach, but look at them all with open eyes.

PS: For those who are curious, the meter starts running on foreign tourists after they clear the diagnostic unit (called “Combined Assessment” there) and are formally admitted to the hospital. The cost looked much like the costs at a US hospital—though I have made no attempt to do a procedure by procedure comparison.

We, that is Sue’s employer-based insurance, did cover it. I did have to purchase a Scottish cell phone in order to call the states and the Infirmary’s overseas representative repeatedly to make sure that they played well together. In the end, they did, though there was at least a day in which everything was stalled because the folks at Blue Cross Blue Shield Worldwide did not understand the Scottish reps accent when she gave them our policy number.

PPS: I do hope that phone access is easier in Scotland. I think it took a full day before I could figure out which number on the back of Sue’s card actually reached the people I needed to talk to.

PPPS: Sue’s gallstone removal went well. Within two days she felt better than she had in months. We even managed to salvage a portion of our trip and tramp around the Royal Troon golf course watching the British Senior Open. The weather was even sunny!



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Oscar Chamberlain - 2/13/2009

Interesting reply, thanks. I'm intrigued by your support for mandatory health insurance purchases, as it was part of H. Clinton's campaign proposal. (I suspect other features of her proposal would not earn your support.)

When I first heard of the mandatory idea, I will admit that I was opposed. Over time I have come to realizd that--barring a single payer approach--it's a logical end point for any number of paths to more universal coverage.

You may find this article on Walmart of interest. A combination of bad publicity, union activism, and extremely smart judgements by the big W's management has resulted in stronger coverage for more people. that they still cannot offer insurance to all of their employees does suggest the limitations inherent in employer-based coverage.


Mike A Mainello - 2/12/2009

Sorry I haven't commented sooner, but I have had trouble accessing the site.

The pre-existing question though difficult can be solved.

Initially I do see the government creating some kind of risk pool to cover these people. The government will have to use money from existing programs and a portion of the funds paid by individuals to the insurance company.

Overtime this pool will continue to shrink because all people will be required to purchase private health care. Pre-existing conditions occur because people roll the dice and don't purchase health and all of sudden when things go bad, they are hurting.

The conservative in me does not want to mandate anything. I believe people should plan and take care of themselves. However, there are too many people that have become over-dependant on the government to "fix" their problems that this needs to be addressed.

The cost of health care and health care insurance will drop if the government gets it fingers of the delivery, but acts as an independent referee.

There are many areas where this has happened, even in the medical field. I just use eye care as an example. First take routine eye care, you can go to numerous places to get your eyes checked and purchase glasses or contacts for a reasonable cost. Once the government and insurance got out of Lasik Eye Care, the cost of this surgery dropped from over $2500 per eye in 1992 to $600 in 2008.

Let the markets work and quit trying to codle people.


Oscar Chamberlain - 2/11/2009

Interesting article. This is a real problem with the Canadian system.

Of cours here, people often cannot get treatment because they are uninsured. Sometimes such people are able to negotiate the various assitance programs available to get decent care, but depending on the state and degree to which such programs are coordinated, this can be extremely difficult. This article, about someone who was underinsured, shows how challenging that can be, even when it works: http://www.msnbc.msn.com/id/29122761/.
This does not invalidate the article you posted. It's intended as a reminder that the costs saved in the tragedies caused by the Canadian system may be preventing other tragedies. I would like to find a system that minimizes both.

Question for you: one of the big problems with private insurance is the tendency not to cover pre-exisitng illnesses. Do you see a free market approach to rectifying that?


HNN - 2/11/2009

Thanks for sharing!

Rick


Oscar Chamberlain - 2/10/2009

Glad you liked it. I wish I knew more about some of the other national models out there, such as Germany's.

I understand your preference for insuring the disasters while paying for small stuff out of pocket. It would help control some of the costs and would eliminate a considerable amount of unnecessary testing.

The downside to your suggestion is that it's hard to have that approach and encourage preventive medicine (aside from vaccinations, which could be separate category).

The problem is that it is difficult for individuals to distinguish between important preventive actions such as the investigation of minor but persistent problems and the more frivolous use of one's insurance to check out minor annoyances. Out of pocket payments tend to discourage both.

I don't have a good solution for this dilemma by the way. In fact, if Obama came out with a universal catastropic policy that also improved support for people in poverty but left it to people not in poverty to arrange for insurance to cover the smaller stuff (or to pay for it out of pocket) I could imagine supporting it.

It would not be perfect, but what is?


Mike A Mainello - 2/10/2009

After I left my comment and continued my evening reading I stumbled upon this editorial in the Wall Street Journal on Canadian health care.

http://online.wsj.com/article/SB123413701032661445.html?mod=rss_opinion_main

Food for thought.

Free markets work, when allowed to work.


Mike A Mainello - 2/10/2009

You might be surprised, but I enjoyed your article on European Health Care. When we lived in Germany, we were impressed with portions of their health care system.

First, everyone in America has access to emergency health care. Just as your wife was treated so would any American or foreign national visiting our country.

The problem as I see it, is that government (both state and federal) is removing the incentive for people to obtain health insurance. As governments mandate more and more coverage of insurance companies and reduce cross state competition then prices go up.

If the government set basic rules for insurance companies to operate and got out of the mandate business, more people would be covered.

I wish we would get rid of all insurance for routine care - coughs, colds, sniffs, sneezes - and mandate insurance coverage for expensive treatment, i.e. your wife's gallstones.

Just like you can go to many places to get your car fixed (without making an insurance claim), you should be able to go and pay out of your pocket to get minor problems fixed.

The government should set standards, enforce them and get out of the delivery of health care and insurance. Unfortunately, people know they can get access emergency room coverage and make the choice not to get insurance coverage.