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Sunday, August 23, 2009

Public Optional

[Last updated Nov. 19th 2009]

To use an aviation analogy, we have turned from the downwind vector and are now (Aug 23rd) in mid-approach "base leg" on this policy reform flight prior to turning 90 degrees into the turbulent fall 2009 headwinds of final approach and (crash?) landing of "health care reform" legislation. I will add a few more observations, and recap central points and issues I've addressed in my prior three posts before moving on to another topic (drought and water policy). HCreform


I am really sick of hearing about the "public option" wrangle 24/7 in the media these days. I am increasingly skeptical of its inclusion of any final legislation that may or may not reach the President's desk, and likewise skeptical that it would comprise much of an improvement even should it pass the Congress (and, it looks increasingly to me like a slickly orchestrated "misdirection" strategy). Without a "public option" (our having taken Single Payer off the table a priori), it is difficult to see what "health care reform" would truly amount to. But, then, "public option" as currently proffered (e.g., H.R. 3200) merely looks like -- as I've said before -- [1] corporate welfare ("Play or Pay" forcing everyone to buy health insurance policies under threat of tax penalty for non-compliance), and [2] outright "welfare" (means-tested government subsidy for health insurance "affordability").

The sarcastic title of this post simply alludes to the very real political fact that, to the extent that the priorities of key legislators align with true needs of the aggregate public (e.g., universal access, better clinical quality, and restraint on cost), they will work for such things, but, the overriding, never-ending imperative of most lawmakers seems
to be simply that of re-election. And, for the Legislative Branch (in particular the House**), there's only one viable source of effective campaign funding -- special interest money. This is beyond debatable, and is not exactly news. You might be able to mount and sustain a viable Presidential campaign on broad-support grassroots small-increment donation money -- as Obama obviously did -- but this is simply not the case for Senators and Representatives. It has been recently reported that there are today six health care industry lobbyists in place for every member of Congress. The money is flowing generously, and the backroom special interest pleading is in high gear.

[**] It has long been noted that roughly 80% of a Representative's time is spent on campaign fundraising, given the short 2-year re-election cycle. In the House, staff do nearly all of the actual legislative detail work, with the elected official mostly just stopping in for "drive-by" votes.
So, your interests as a citizen are "optional."

A couple of headlines today:

"OK, so, how much is AHIP Job?" 

[2017 update. The original video I posted here in 2009 is now gone ("link rot"). Replaced it with a current one.]  AHIP (American's Health Insurance Plans) is the lobbying organization for the private health insurance industry. From their March 2009 "Board of Directors’ Statement on Setting a Goal to Achieve a More Affordable and Effective Health Care System" -
Health care reform has eluded our nation for nearly a century. But today, a broad consensus is emerging that comprehensive reform of the system – that covers all Americans and provides safer and more effective care – is possible if the growth in health care costs can be brought under control. Health care costs are rising at an unsustainable rate and adding a burden on families and small businesses, and hampering our competitiveness as a nation...
Can't argue with that: universal coverage improved quality, cost containment. Recall the opening words of my May 25th post, "The U.S. health care policy morass":
Some reform advocates have long argued that we can indeed [1] extend health care coverage to all citizens, with [2] significantly increased quality of care, while at the same time [3] significantly reducing the national (and individual) cost. A trifecta "Win-Win-Win."
Note the soothing v/o in the AHIP PSA above: "...If everyone's covered, we can make health care as affordable as possible (0:14)...and the words 'pre-existing condition' become a thing of the past (0:19)..."

Laudable, without a doubt (notwithstanding the red-flag weasel phrase "as affordable as possible").

Again, citing the AHIP Directors' Statement:

Health plans are doing their part by pioneering disease management and care coordination programs; promoting prevention, wellness and early intervention; and implementing innovative payment strategies that reward performance and outcomes. We are committed to working with the Administration, Congress and other stakeholders to advance strategies that promote effective, efficient, and high-value health care.
So, assuming this is not simply finely crafted rhetorical lorazepam PR spin, the AHIP membership in fact regard themselves as indispensably embedded, value-adding, necessary clinical adjuncts, rather than the bloodsucking, obscenely profitable (and otherwise ruinously expensive), paper-pushing, value-hampering, care-denying intermediary parasites their political adversaries claim them to be., e.g., liberal OpEd writer Chris Hedges:
The real debate, the only one that counts, is how much money our blood-sucking insurance, pharmaceutical and for-profit health services are going to be able to siphon off from new health care legislation. The proposed plans rattling around Congress all ensure that the profits for these corporations will increase and the misery for ordinary Americans will be compounded. The corporate state, enabled by both Democrats and Republicans, is yet again cannibalizing the Treasury...

...The Democrats are collaborating with lobbyists for the insurance industry, the pharmaceutical industry and for-profit health care providers to craft the current health care reform legislation. “Corporate and industry players are inside the tent this time,” says David Merritt, project director at Newt Gingrich’s Center for Health Transformation, “so there is a vacuum on the outside.” And these lobbyists have already killed a viable public option and made sure nothing in the bills will impede their growing profits and capacity for abuse.
A commentor on notes:
A Broken Process

As I've said before; our political system is not capable of dealing with long term complex issues. Between entrenched special interests that fight to maintain the status quo, a legislative branch beholden to those interests, a political culture that only looks as far as the next election cycle, a fundamentally broken news media, an ignorant misinformed and unengaged electorate and a host of other problems it will be miracle if US makes to the half century mark as anything other than third rate power with most of its citizens living in abject poverty trying to get buy with crumbling infrastructure and a collapsing environment.
A skeptical commentor in my local paper observes:
Trust in government must be earned. The 'government' programs called Social Security and Medicare have been headed for insolvency for years. What have our representatives done about that? Nothing. We have needed real immigration reform and a sane immigration policy for years. What have our representatives done about that? Nothing. I could go on but you get the point. Health Care insurance needs reform and it will not be reformed without some government action. That said, it is possible for the present system to be reformed by legislation and not replaced by a full government program if our representatives took some tough action. But just like Social Security, Medicare and Immigration, either nothing gets done or what is done is overkill or ineffective or both. I feel both shame for my government and fear of my government and in my estimation I have good reason...our government has done such a poor job for so long on so many big issues I don't have much belief in them at this point.
An even more skeptical commentor writes to my other local paper:
It is important for all of us to realize that the health care legislation currently being hotly debated is not about insuring the uninsured, reducing health care costs, etc.

This legislation is all about power -- greatly expanded power for the Obama administration, for Speaker of the House Nancy Pelosi and for Senate Majority Leader Harry Reid.

The federal government and the unions already effectively control the American automobile industry. The government has recently gained great power over the financial institutions of the United States.

Renewable energy regulations give the government a lot of power over utilities. If the cap-and-trade legislation passes the Senate, the government will totally control the production of energy in this country.

If the proposed health care legislation passes, the federal government will control one-sixth of the U.S. economy. President Obama's appointed czars and other unelected bureaucrats will control the health care system in the United States, maybe not in the next year, but certainly within the next five years.

Make no mistake, this health care legislation is all about power.

That is why President Obama, even in the face of stiff opposition from some of his own Democrats, refuses to give up his demand for a government-run health care system to compete with the private sector.
It is precisely this frequently heated divergence of characterization that comprises the core of the health care policy reform issue soon to resolve itself one way or another, for better or worse.

"OK, so, what exactly is AHIP Job?"

From the March 2009 AHIP Directors' Report:
What Our Community Brings to the Table

Health plans offer strategies and tools to consistently improve quality and drive down the cost of care delivered to patients across all care settings:
  1. Tools to Coordinate Care Across a Variety of Settings for Specific Patient Populations: Health plans have a wealth of administrative and clinical information which can be integrated to help clinicians have a comprehensive view of a patient’s clinical history. For instance, plans may evaluate this [sic] data to identify preventable medical errors, providing clinicians with this information to address gaps in care and help make efficient, informed patient-care decisions.
  2. Incentives for an Interconnected Electronic Health Care System: A fully integrated, electronic health information exchange is essential to ensuring that high-value health care is delivered to the right patient, at the right time, and in the right setting.
  3. Clinical Decision-Making Based on Best Evidence: Health plans encourage clinical practices that rely on best data and best evidence. A strong base of evidence can help evaluate whether the costs of services, devices, and drugs are commensurate with the value of care delivered.
  4. Innovative Payment Models That Drive Real Delivery System Change: Health plans have experience with and are committed to innovative payment models that reward improved clinical outcomes and overall health status, and optimize the patient experience, such as an enhanced medical home, paying for episodes of illness, and shared risk models that promote comprehensive care management.
  5. Benefit Design: Plans can implement benefit design strategies to encourage consumers to choose the safest, highest quality and most cost-effective drugs, devices, and procedures. These strategies include offering lower cost sharing for those procedures and technologies that are proven to be the safest, higher in value and lowest in cost.
  6. Administrative Efficiencies: Health plans, in concert with providers and consumers, can drive down administrative costs and by doing so, improve efficiency and care delivery.
Mostly all high-mindedly Mom & Apple Pie laudable, no doubt. The foregoing, however, do beg a few questions. First, if the AHIP membership is equipped with and savvy with "strategies and tools to consistently improve quality and drive down the cost of care," then why the evolved crisis nearly everyone agrees is extant? Why the pressing, politically front-burner imperative for comprehensive reform? Why do we see chronically suboptimal, uneven outcomes quality, and cost escalation running three times the rate of inflation -- in particular when concomitant with the AHIP membership's enviable, ever-increasing profits? What have they been doing with all of that money?

Asked and Answered.

the reform heat, are we?

[1] "
Health plans have a wealth of administrative and clinical information which can be integrated to help clinicians have a comprehensive view of a patient’s clinical history." Really? I would take issue with this with respect to private, and most notably, employment-based coverage. "Plan-hopping" has become a commonplace, as bottom-line anxious employers increasingly shop the most affordable benefits plan du jour. As I noted in a prior post, during my last two-year job tenure, my employer switched plans THREE times. I had no say in the matter, and was not consulted in advance. Each time, my personal "administrative and clinical information" became the private HIPAA-firewalled "business intelligence data" of the new vendor. Seamless ongoing longitudinal "continuity" of my "patient history" may have a nice ring, but it is not the predominant reality -- except, I should note, for those covered under Medicare or the VA, i.e., the public entitlement de facto "single payer" programs.

[1.b] "
...plans may evaluate this [sic] data to identify preventable medical errors, providing clinicians with this information to address gaps in care and help make efficient, informed patient-care decisions." Well, that is precisely the type of analytic data-mining work I did during my two tenures with the Medicare QIO. It is also the type of extensive outcomes research performed by the CMS Agency for Healthcare Research and Quality (AHRQ). A salient -- no, critical -- difference is that entitlement beneficiaries are not put at risk of coverage exclusion/"rescission" that is increasingly common within the for-profit actuarial insurance model.

[2] "
A fully integrated, electronic health information exchange is essential to ensuring that high-value health care is delivered to the right patient, at the right time, and in the right setting." Yes, of course. Again, see my foregoing comments in response to [1]. These things go the acronym "RHIO" or "RHIE" ("Regional Health Information Organization/Exchange"). The Utah Health Information Network (UHIN) stands as a fairly mature example here. During my last QIO tenure, I sat on the Steering Committee for a southern Nevada RHIO startup attempt. I recall the fractiousness of the proceedings, given the disparate interests of the various for-profit and non-profit interests. We still don't have one in Nevada. I applaud these efforts, but they remain fraught with technical and policy difficulties [a], difficulties that would be significantly abated under a universal coverage "social insurance" paradigm (be it a "Single Payer" model or one more akin to a "Swiss Model").

[a] The private sector "EMR" (Electronic Medical Records) industry -- regarding which I am thoroughly evangelistic -- has been in high gear for a number of years and has matured greatly, but it has nothing to do directly with the health insurance industry, except to the enervating extent that the latter significantly complicates the work of the former. An integrated EMR is one wherein the front office (demographic & scheduling), mid office (the clinical/patient encounter and historical record), and back office (billing and admin) functions are synch'd (with automated CPT/ICD-9 encounter coding linked with the front and back office functions). The focus, though, ultimately remains that of reimbursement, i.e., the back office imperative of billing -- having to deal with the hundreds of 3rd party payers, each with their own proprietary submissions forms, policies, and procedures. This adds nothing substantive to improved actual health care effectiveness. Single Payer would simplify this aspect of health information technology immeasurably, enabling software developers and their end-users to focus more on leveraging the EMRs for better care.
[3] "A strong base of evidence can help evaluate whether the costs of services, devices, and drugs are commensurate with the value of care delivered." Again, no argument with that ideal. However, again, it begs the question of efficiency and effectiveness, when health care data constitute in large measure the proprietary "business intelligence" of competing for-profit actuarial model enterprises. By contrast, the research initiatives of public entities such as AHRQ (a) suffer from no such potential profit-model conflicts-of-interest, and (b) are already focused on patient populations with the higher levels of utilization experience (increasingly so as the population ages).
[4] "...innovative payment models that reward improved clinical outcomes and overall health status..." It's called "P4P" (Pay for Performance), already long a front-burner priority within CMS. Nothing exactly "innovative" about it -- it's called "evidence-based medicine," i.e., "science," which results in "clinical practice guidelines" (which, it should be noted in fairness, is derisively referred to by numerous skeptical docs as "cookie-cutter medicine"). I find it the height of hypocrisy that this is touted as a virtue by the likes of AHIP while it is also attacked by reform opponents as looming, ominous "death panels" and "federal health/lifestyle police" if undertaken by the public sector.

[5 & 6], OK, what, precisely, have you been waiting for? AHIP claims that their membership "can" do these things. The for-profit private sector evidence to date seems to infer the opposite.


"And you know what public option is? It leads to single-payer, completely government-run health care system and no choice. And we want to preserve choice for our people."

- Senator Charles Grassley (R-IA), Des Moines Register, 09/25/09

Main Entry: op·tion
Pronunciation: \ˈäp-shən\
Function: noun
Etymology: French, from Latin option-, optio free choice; akin to Latin optare to choose
Date: 1593
1: an act of choosing
2a: the power or right to choose: freedom of choice
Not exactly the sharpest knife in the drawer, this man. Beyond the patent lexical contradiction, it's undergrad sophomoric Slippery Slope Fallacy 101.

First of all, we have had Medicare in place for 44 years now. And, guess what? This government entitlement beneficiary cohort also can and does avail itself of private sector "Medi-Gap" insurance coverage. And, guess what? The Evil Government-run agency Medicare itself touts these policies on its website:

Medigap (Supplemental Insurance) Policies

A Medigap policy is health insurance sold by private insurance companies to fill the “gaps” in Original Medicare Plan coverage. Medigap policies help pay some of the health care costs that the Original Medicare Plan doesn’t cover. If you are in the Original Medicare Plan and have a Medigap policy, then Medicare and your Medigap policy will pay both their shares of covered health care costs...
In addition to Senator Grassley's transparent Slippery Slope rhetoric, he also commits the "False Dichotomy" appeal. Some germane thoughts from a blog post on the "Swiss Model" by Dr. Steve Blevins:
The Swiss system works by regulating commercial insurance. People buy insurance directly from insurance companies, so businesses are out of the loop. Everyone must carry insurance, and those who don’t pay a penalty.

The government subsidizes the cost of insurance for low-income individuals (about one-third of the population). The affluent are not subsidized. (Contrast that with Medicare, which covers everyone over the age of 65, including wealthy people who don't need government assistance.)

In Switzerland, insurance companies must provide basic insurance to all recipients and cannot deny coverage on the basis of poor health. Premiums are not affected by health status. "Basic insurance" is defined by government, which decides which drugs, lab tests, and devices will be covered. Deductibles and premiums are tightly regulated and cannot exceed certain limits. Insurance companies cannot profit from the basic plan, though they may profit from supplemental insurance...
I, for one, would oppose any type of "single payer" reform plan, such as "Medicare For All" that did not permit ancillary supplemental "private option" choices according citizens the freedom to buy coverage beyond that provided by a public program (as in the Swiss system, and as we already unremarkably seen with widely available "Medi-Gap" insurance here). As I have stated before, notwithstanding, for example, that we take basic police and fire protection as a tax-funded given, people are quite free to buy all the additional enhanced private sector protective products and service their wishes dictate and their financial resources can sustain.

"Why We Need Government-Run Universal Socialized, Call It Whatever You Want Health Insurance"

LOL. This is pretty interesting.


I will give voice herein to an articulate and representative two ("representative" in the non- angrily shouting banal bumper sticker "Town Hell Meeting" sense).
First, the libertarian arguments of Whole Foods CEO John Mackey, whose recent Wall Street Journal OpEd unleashed a torrent of contentious debate (much of it quite hostile, and which included calls for a boycott of his company).

While we clearly need health care reform, the last thing our country needs is a massive new health care entitlement that will create hundreds of billions of dollars of new unfunded deficits and moves us much closer to a complete governmental takeover of our health care system. Instead, we should be trying to achieve reforms by moving in the exact opposite direction-toward less governmental control and more individual empowerment...

...Many promoters of health care reform believe that people have an intrinsic ethical right to health care -- to universal and equal access to doctors, medicines, and hospitals. While all of us can empathize with those who are sick, how can we say that all people have any more of an intrinsic right to health care than they have an intrinsic right to food, clothing, owning their own homes, a car or a personal computer? Health care is a service which we all need at some point in our lives, but just like food, clothing, and shelter it is best provided through voluntary and mutually-beneficial market exchanges rather than through government mandates. A careful reading of both The Declaration of Independence and the Constitution will not reveal any intrinsic right to health care, food or shelter, because there isn’t any. This “right” has never existed in America...
Then there's David Goldhill's thoughtful Atlantic Monthly essay "How American Health Care Killed My Father."
I’m a Democrat, and have long been concerned about America’s lack of a health safety net. But based on my own work experience, I also believe that unless we fix the problems at the foundation of our health system—largely problems of incentives—our reforms won’t do much good, and may do harm. To achieve maximum coverage at acceptable cost with acceptable quality, health care will need to become subject to the same forces that have boosted efficiency and value throughout the economy. We will need to reduce, rather than expand, the role of insurance; focus the government’s role exclusively on things that only government can do (protect the poor, cover us against true catastrophe, enforce safety standards, and ensure provider competition); overcome our addiction to Ponzi-scheme financing, hidden subsidies, manipulated prices, and undisclosed results; and rely more on ourselves, the consumers, as the ultimate guarantors of good service, reasonable prices, and sensible trade-offs between health-care spending and spending on all the other good things money can buy...
I would exhort everyone to closely read and assess these two arguments. I will detail my own reactions shortly.


It's difficult to accord much credence to a man who transparently engages in vague and broad-brush Straw Man framing right at the outset. To wit:
"Many promoters of health care reform believe that people have an intrinsic ethical right to health care - to universal and equal access to doctors, medicines, and hospitals."

Many? Who, in the mainstream forefront of the policy debate, exactly? Maybe some far-left fringe elements within the "Comrade" contingent, for whom "Property" remains "Theft," but his implicit charge of incipient "Communism" -- "
how can we say that all people have any more of an intrinsic right to health care than they have an intrinsic right to food, clothing, owning their own homes, a car or a personal computer?" -- is merely the sophomoric Straw Man tactic (wherein you disingenuously "knock down" a spurious, inflated characterization of a position with which you disagree). Conflating health care with the panoply of consumer products is simply dishonest, a red herring means of rousing peoples' ire at the thought of undeserving "Moochers," in order to poison the well.

How can we say that people have an "intrinsic right" to military defense, or to police and fire protection, (or to safe food and water, or to otherwise safe products that won't electrocute us when we plug them in)? Well, we simply say it. And then we codify it. And, then, having codified it, we don't lie awake nights worrying that everyone will demand a Special Forces FOB dug into his or her front yard, or an occupied Metro PD Black & White, an ambulance, and a hook & ladder truck parked at the curb 24/7.

A careful reading of both The Declaration of Independence and the Constitution will not reveal any intrinsic right to health care, food or shelter, because there isn’t any." Really? So,

  • The 1776 observation "We hold these truths to be self-evident, that all men are created equal" was intended to exclude fundamental aspects of successful living such as viable health?
  • the Preamble phrase "promote the general welfare" is nothing more than vapid, gratuitous filler?
  • That Article I, Section 8 of the Constitution -- "provide for the common Defence and [again] general Welfare of the United States..." (a.k.a. "the Commerce Clause") -- well, they really didn't mean it. Neither did they mean the subsequent declaration providing the Legislative Branch the authority to "make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof."
Silly me.

Move over and make room, poignantly foaming "Birthers," and "Deathers." Here come "The Tenthers"!

...all part of a movement whose members are convinced that the 10th Amendment of the Constitution prohibits spending programs and regulations disfavored by conservatives. Indeed, while "birther" conspiracy theorists dominate the airwaves with tales of a mystical Kenyan baby smuggled into Hawaii just days after his birth, these "tenther" constitutionalists offer a theory that is no less radical but infinitely more dangerous.

Tentherism, in a nutshell, proclaims that New Deal-era reformers led an unlawful coup against the "True Constitution," exploiting Depression-born desperation to expand the federal government's powers beyond recognition. Under the tenther constitution, Barack Obama's health-care reform is forbidden, as is Medicare, Medicaid, and Social Security. The federal minimum wage is a crime against state sovereignty; the federal ban on workplace discrimination and whites-only lunch counters is an unlawful encroachment on local businesses.

Tenthers divine all this from the brief language of the 10th Amendment, which provides that "the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." In layman's terms, this simply means that the Constitution contains an itemized list of federal powers -- such as the power to regulate interstate commerce or establish post offices or make war on foreign nations -- and anything not contained in that list is beyond Congress' authority...
I guess by such "logic" the United States Air Force must be disbanded. The Constitution speaks explicitly only to the establishment and sustenance of an army and navy.

Speaking of the Navy, a bit of Sept 1st blog news...


I will mostly just excerpt his eight points below. For the full text of his OpEd, click here.

  1. Remove the legal obstacles which slow the creation of high deductible health insurance plans and Health Savings Accounts...
  2. Change the tax laws so that that employer-provided health insurance and individually owned health insurance have exactly the same tax benefits...
  3. Repeal all state laws which prevent insurance companies from competing across state lines...
  4. Repeal all government mandates regarding what insurance companies must cover...
  5. Enact tort reform to end the ruinous lawsuits that force doctors into paying insurance costs of hundreds of thousands of dollars per year...
  6. Make health care costs transparent so that consumers will understand what health care treatments cost...
  7. Enact Medicare reform: we need to face up to the actuarial fact that Medicare is heading towards bankruptcy and move towards greater patient empowerment and responsibility.
  8. Permit individuals to make voluntary tax deductible donations on their IRS tax forms to help the millions of people who have no insurance and aren’t covered by Medicare, Medicaid, SCHIP or any other government program.
Some of his proffers make good sense, in the abstract. Some require verification to determine whether he's just gilding the lily, and some are questionable.

[1] What exactly are the "legal obstacles" to the creation of high deductible plans? He does not say, and I'm not aware of any. Perhaps a coupling of high-deductible "catastrophic coverage" plans and tax-deductible Health Savings Accounts (HSAs) can be of benefit to those for whom they are economically practicable, but they won't be of much help to those at the lower socioeconomic margins of society (and/or the un- or underemployed), which brings us right back to health care as a disparate economic "privilege." Perhaps at a lower aggregate cost, but disparate nonetheless.

[2] End employment-based vs "private" tax deduction discrimination for health plans? In principle, I would have to agree. My concern here is more general. For example, certain costs associated with my residential mortgage are "deductible." I have to assume, though, that this "tax benefit" may be in fact chimerical, i.e., its "value" is directly (if subtly) reflected in the market value of my property. I tend to view a lot of this "deductibility" idea as a Zero Sum Game.

[3] "Buy anywhere" and "portability"? Again, in principle, I cannot take issue with this -- provided that we don't end up with the bulk of insurance companies ending up nominally chartered in the least-regulated states. There is little mystery regarding why major bank credit card operations seem to be mostly chartered in South Dakota.

[4] Government mandates on what insurance "must cover"? I'm not at all persuaded that this is a serious problem. Moreover, insurance regulation is a state-level patchwork. I'm not aware of any overarching "federal primacy" law mandating the specifics of insurance coverage.

[5] Tort reform? I have two words: "Loser Pays." Look it up.

[6] Price transparency? Here, Mr. Mackey, David Goldhill and I could not agree more. Details when I get to the Goldhill article (which is much more nuanced and detailed).

[7] "Medicare reform"? Mr. Mackey offers up no clue as to what he means by this. The fact that Medicare has prospective unfunded liabilities cannot be disputed, but, that is a problem for Congress. I tire of critics conflating Medicare administration with its congressional funding. Moreover, what, precisely, Mr. Mackey, is the putative financial "responsibility" of a retired fixed-income Medicare beneficiary?

[8] Voluntary tax deductions for donations? Again, this already exists, and truly only serves to nominally financially benefit those who can afford to make the donations. How that will materially abate the aggregate problem of health care financing for those at coverage risk escapes me.

John Mackey clearly and unapologetically regards heath care as a privilege, one based substantively
(beyond adequate financial resources)

on one's own "lifestlye" diligence:
...every American adult is responsible for their own health. Unfortunately many of our health care problems are self-inflicted with over 2/3 of Americans now overweight and 1/3 obese. Most of the diseases which are both killing us and making health care so expensive-heart disease, cancer, stroke, diabetes, and obesity, which account for about 70% of all health care spending, are mostly preventable through proper diet, exercise, not smoking, minimal or no alcohol consumption, and other healthy lifestyle choices...
i.e., get off your butts, go to the gym, and then shop for groceries at Whole Foods on your way home. Problem solved." I posted my reaction to that in another blog comment:
I saw that assertion and then went at looked at WHO (World Health Organization) data for the European nations last night. Guess what? Similar prevalence of these same suboptimal "lifestyle" conditions, yet they STILL somehow manage to significantly outperform us on a broad array of health metrics -- at roughly HALF our per capita spending.
While it ought be a Blinding Glimpse of the Obvious that we, of course, should tirelessly exhort and rationally incentivize healthier living, it does not axiomatically follow that such measures will alone suffice to replace affordable health care access. Genetic and environmental factors alone may well serve to negate for many the most "circumspect" of "lifestyles" as currently favored by those bent on patronizingly lecturing everyone else. Consider the apt observation of Dr. Rahul K. Parikh:
I agree we need to pay for cost-effective prevention options...But it's a tough fit because that's not going to end disease in America. And as long as people continue to get sick, they will face the problem of an inadequate insurance system and an out-of-control medical system. As one intelligent commentator pointed out, every one of us is eventually going to get sick, face a traumatic injury or an unexplained illness. Every one is going to die, and many will face agonizing end-of-life medical choices -- no matter how healthful their lifestyles.

When any of that happens, they deserve a well-functioning and reasonably priced sick care system. The last thing a sick person needs is a lecture on how they ate wrong and failed to get enough exercise in the months and years leading up to the acute event."

This one, "How American Health Care Killed My Father," deservedly got a lot of national attention.
ALMOST TWO YEARS ago, my father was killed by a hospital-borne infection in the intensive-care unit of a well-regarded nonprofit hospital in New York City. Dad had just turned 83, and he had a variety of the ailments common to men of his age. But he was still working on the day he walked into the hospital with pneumonia. Within 36 hours, he had developed sepsis. Over the next five weeks in the ICU, a wave of secondary infections, also acquired in the hospital, overwhelmed his defenses. My dad became a statistic—merely one of the roughly 100,000 Americans whose deaths are caused or influenced by infections picked up in hospitals. One hundred thousand deaths: more than double the number of people killed in car crashes, five times the number killed in homicides, 20 times the total number of our armed forces killed in Iraq and Afghanistan. Another victim in a building American tragedy...

...My survivor’s grief has taken the form of an obsession with our health-care system. For more than a year, I’ve been reading as much as I can get my hands on, talking to doctors and patients, and asking a lot of questions.

Keeping Dad company in the hospital for five weeks had left me befuddled. How can a facility featuring state-of-the-art diagnostic equipment use less-sophisticated information technology than my local sushi bar? How can the ICU stress the importance of sterility when its trash is picked up once daily, and only after flowing onto the floor of a patient’s room? Considering the importance of a patient’s frame of mind to recovery, why are the rooms so cheerless and uncomfortable? In whose interest is the bizarre scheduling of hospital shifts, so that a five-week stay brings an endless string of new personnel assigned to a patient’s care? Why, in other words, has this technologically advanced hospital missed out on the revolution in quality control and customer service that has swept all other consumer-facing industries in the past two generations?...

...I suspect that our collective search for villains—for someone to blame—has distracted us and our political leaders from addressing the fundamental causes of our nation’s health-care crisis. All of the actors in health care—from doctors to insurers to pharmaceutical companies—work in a heavily regulated, massively subsidized industry full of structural distortions. They all want to serve patients well. But they also all behave rationally in response to the economic incentives those distortions create. Accidentally, but relentlessly, America has built a health-care system with incentives that inexorably generate terrible and perverse results. Incentives that emphasize health care over any other aspect of health and well-being. That emphasize treatment over prevention. That disguise true costs. That favor complexity, and discourage transparent competition based on price or quality. That result in a generational pyramid scheme rather than sustainable financing. And that—most important—remove consumers from our irreplaceable role as the ultimate ensurer of value.

These are the impersonal forces, I’ve come to believe, that explain why things have gone so badly wrong in health care, producing the national dilemma of runaway costs and poorly covered millions. The problems I’ve explored in the past year hardly count as breakthrough discoveries—health-care experts undoubtedly view all of them as old news. But some experts, it seems, have come to see many of these problems as inevitable in any health-care system—as conditions to be patched up, papered over, or worked around, but not problems to be solved...
Again, I commend this thoughtful, detailed article to everyone. He accurately notes something I have long been concerned with:
How often have you heard a politician say that millions of Americans “have no health care,” when he or she meant they have no health insurance? How has a method of financing health care become synonymous with care itself?

The reason for financing at least some of our health care with an insurance system is obvious. We all worry that a serious illness or an accident might one day require urgent, extensive care, imposing an extreme financial burden on us. In this sense, health-care insurance is just like all other forms of insurance—life, property, liability—where the many who face a risk share the cost incurred by the few who actually suffer a loss.

But health insurance is different from every other type of insurance. Health insurance is the primary payment mechanism not just for expenses that are unexpected and large, but for nearly all health-care expenses. We’ve become so used to health insurance that we don’t realize how absurd that is. We can’t imagine paying for gas with our auto-insurance policy, or for our electric bills with our homeowners insurance, but we all assume that our regular checkups and dental cleanings will be covered at least partially by insurance. Most pregnancies are planned, and deliveries are predictable many months in advance, yet they’re financed the same way we finance fixing a car after a wreck—through an insurance claim...
Yes. As I've noted before, while I have car insurance and homeowner's insurance, etc., I regard them simply as necessary (required, really) hedges against potentially bankrupting disaster, and I fork over my premiums sans significant complaint for the benefit of the contractual indemnity while being also perfectly happy to never have to file a claim. On the other hand, some sort of health care service is something most of of are going have have to seek out eventually (increasingly so as we age). Navigating an entire life without encountering one or more serious accidents or illnesses is overwhelmingly unlikely. And, while a prudent lifestyle comprising, among other behaviors, habitually healthy nutritional regimens and exercise diligence is of course to be encouraged and incentivized, the extent and impact of random malignant events beyond our control looms chronically larger than it does with respect to other aspects of economic life. We are nearly all at risk of medical malady to a far greater extent than some care to admit.

The question then becomes one of how best to address the risk? Mr. Goldhill joins the chorus of critics who claim that we must all become "smarter consumers" of health care goods and services. Arguing for price "transparency," he complains:

...try discussing prices with hospitals and other providers. Eight years ago, my wife needed an MRI, but we did not have health insurance. I called up several area hospitals, clinics, and doctors’ offices—all within about a one-mile radius—to find the best price. I was surprised to discover that prices quoted, for an identical service, varied widely, and that the lowest price was $1,200. But what was truly astonishing was that several providers refused to quote any price. Only if I came in and actually ordered the MRI could we discuss price.

Several years later, when we were preparing for the birth of our second child, I requested the total cost of the delivery and related procedures from our hospital. The answer: the hospital discussed price only with uninsured patients. What about my co-pay? They would discuss my potential co-pay only if I were applying for financial assistance...
I have had similar experiences. It is maddening. Imagine going to a restaurant and looking at a menu that had no prices therein, to then be informed that you had to order first before the price was revealed. Imagine going to the auto repair shop, only to be told that they'd tell you what your transmission repair would cost only after you signed the work order. Absurd.

David Goldhill:
Keeping prices opaque is one way medical institutions seek to avoid competition and thereby keep prices up. And they get away with it in part because so few consumers pay directly for their own care—insurers, Medicare, and Medicaid are basically the whole game. But without transparency on prices—and the related data on measurable outcomes—efforts to give the consumer more control over health care have failed, and always will...

...It’s astonishingly difficult for consumers to find any health-care information that would enable them to make informed choices—based not just on price, but on quality of care or the rate of preventable medical errors. Here’s one place where legal requirements might help. But only a few states require institutions to make this sort of information public in a usable form for consumers. So while every city has numerous guidebooks with reviews of schools, restaurants, and spas, the public is frequently deprived of the necessary data to choose hospitals and other providers.
'How often have you heard a politician say that millions of Americans “have no health care,” when he or she meant they have no health insurance?"'

-David Goldhill

Sometimes it's not easy to determine the difference, even if you're not a politician. I am 63. I am overdue for a colonoscopy. My wife and I were both laid off, me in 2007, she in 2008. We then lost our COBRA coverage and went for an anxious time without any insurance. Finally, she found another job, and I am now covered under her employer-provided health plan (while her coverage is part of her compensation, we pay for my coverage).

I saw my primary care doctor earlier this year. He gave me a referral for the colonoscopy. I called to schedule. The first -- and I mean first -- four words I heard in reply to my inquiry were "who is your insurance?"
Not "what is your name?" Not "what is your age?" Not "How are you today?" Not "do you have any family history of colorectal disease?" Not "thank you."

"Who is your insurance?"

I provided the requisite information, and we scheduled my consult, six weeks or so out.

The morning of that 1:30 pm consult, the phone rang. "Mr. Gladd, we're very sorry, but we just found out that we do not in fact take your insurance" (Great West/CIGNA).

The caller magnanimously told me "you won't be charged for today if you have to cancel."

A quick Google search tells me that the average cost of a colonoscopy is approximately $3,100.

I canceled, and until I can find a specialist who does take my coverage, I am "without [this aspect of] health care," given that I don't have a spare $3,100 in the bank. Perhaps the likely delay of several months will be of no clinical consequence to me. One hopes.

"Talk to the Invisible Hand"

"The promises and perils of treating patients more like consumers."

In light of the Goldhill lament, an interesting and cautionary tale.
Five years ago, former President Bill Clinton developed chest pains caused by blockages of several coronary arteries. After going to a small hospital near his home in Chappaqua, N.Y., Clinton had further tests at nearby Westchester Medical Center, where cardiologists suggested that he undergo surgery at Columbia-Presbyterian Hospital in New York City. Clinton's condition required a complex procedure called coronary-artery bypass grafting, in which blood vessels are harvested from the patient's legs or chest and sewn around the heart to "bypass" the blocked arteries.

It's hard to imagine a savvier, better-connected health care consumer than the former president. But consider this: Beginning in 1991, state health officials in New York began releasing hospital- and surgeon-specific death rates from heart surgery. Anyone can see them online. At the time of Clinton's surgery, the most current report showed that Columbia-Presbyterian had the highest death rate of any of the 35 hospitals doing bypass surgery; it was twice the expected rate (about 4 percent instead of 2 percent, a margin not explained by random chance). Clinton's surgeon was the chief of cardiothoracic surgery, a man named Craig R. Smith. Among the four surgeons at Columbia-Presbyterian who performed more than 100 bypass surgeries each year, Smith had the worst mortality rate. (After the procedure, notably, Clinton suffered a complication requiring yet another major surgery.) According to the New York Times, there was "no indication that the Clinton family was aware of the state report."

Mortality statistics from heart surgery accurately predict future death risks (both for hospitals and individual surgeons) and also catalyze targeted improvement efforts. But Clinton isn't alone in overlooking them. Studies show that most consumers don't bother looking for this information; physicians also wrongly dismiss the statistics and fail to inform their patients about their existence.

Advocates for consumer-driven health care often claim that patients should have "some skin in the game" by sharing decision-making power for their medical care. This depends on patients making informed decisions about their care based on quality and price—but as the case of Bill Clinton demonstrates, even the brightest, most educated people don't always do that reliably...
Excellent brief article by Darshak Sanghavi on He continues:
In short, the usual rules of the marketplace seem not to apply to health care. When left to their their own devices, buyers ignore product quality, fail to value goods properly, and overpay vast sums. (Weirdly enough, they're also happy as clams with the results.) Yet every health reform bill with a chance of passing involves significant cost shifting to patients. Like it or not, patients will have to be better consumers. That's why it's critical now to fix the failures of the market before we throw open the gates for business.
To continue with my restaurant menu analogy, given that there are tens of thousands of ICD-9 and CPT codes pertaining to health care goods and services, an individual health care "shopper" would face a "menu" the size of the Manhattan phone book.

Multiple "phone books," actually. Perhaps they'd be more like the venerable Sears or J.C. Penney catalogs, replete with color-coded "Good/Better/Best" options for your meds or hip job or bypass or MRI.

David Goldhill again:
The most important single step we can take toward truly reforming our system is to move away from comprehensive health insurance as the single model for financing care. And a guiding principle of any reform should be to put the consumer, not the insurer or the government, at the center of the system. I believe if the government took on the goal of better supporting consumers—by bringing greater transparency and competition to the health-care industry, and by directly subsidizing those who can’t afford care—we’d find that consumers could buy much more of their care directly than we might initially think, and that over time we’d see better care and better service, at lower cost, as a result.

A more consumer-centered health-care system would not rely on a single form of financing for health-care purchases; it would make use of different sorts of financing for different elements of care—with routine care funded largely out of our incomes; major, predictable expenses (including much end-of-life care) funded by savings and credit; and massive, unpredictable expenses funded by insurance...

...How would we pay for most of our health care? The same way we pay for everything else—out of our income and savings...

...Today, insurance covers almost all health-care expenditures. The few consumers who pay from their pockets are simply an afterthought for most providers. Imagine how things might change if more people were buying their health care the way they buy anything else. I’m certain that all the obfuscation over prices would vanish pretty quickly, and that we’d see an end to unreadable bills. And that physicians, who spend an enormous amount of time on insurance-related paperwork, would have more time for patients...
"Imagine how things might change if more people were buying their health care the way they buy anything else."

That would be a sweeping and difficult, if perhaps abstractly laudable, social experiment. But, as I write this update to this post (having just watched much of the contentious Nov. 7th House H.R. 3962 debate on CSPAN), the political momentum seems to be marginally heading the other way -- a worrisome way, in my view. But, much remains in flux, and the only thing of which I can be certain is a further ramping up of the already overheated, increasingly inane rhetoric.


The legislative debate now moves to the much less populist, much more patrician U.S. Senate.

NY Times
November 9, 2009
Obama Presses Senate to Act Quickly on Its Health Bill

WASHINGTON — The White House, growing concerned that the Congressional timetable for passing a health care overhaul could slip into next year, is stepping up pressure on the Senate for quick action, with President Obama appearing Sunday in the Rose Garden to call on senators to “take up the baton and bring this effort to the finish line.”

Mr. Obama’s remarks came just 14 hours after the House narrowly approved a landmark plan that would cost $1.1 trillion over 10 years and extend insurance coverage to 36 million uninsured Americans; the president called it “a courageous vote.” But the votes had barely been counted when the White House began turning its attention to an even bigger hurdle: getting legislation passed in the Senate.

In the Senate, where proposals differ substantially from the House-passed measure on issues like a government-run plan and how to pay for coverage, the bill is stalled while budget analysts assess its overall costs. The slim margin in the House — the bill passed with just two votes to spare, and 39 Democrats opposed it — suggests even greater challenges in the Senate, where the majority leader, Harry Reid of Nevada, is struggling to hold on to all 58 Democrats and two independents in his caucus.

Mr. Obama has staked his domestic agenda on passing comprehensive health legislation, a goal that has eluded presidents for decades. While Democrats were forced to make major concessions on insurance coverage for abortions to win House passage of the bill, they were nonetheless ebullient on Sunday, with many saying the vote gave them momentum to push the bill forward.

“For years we’ve been told that this couldn’t be done,” Mr. Obama said in the Rose Garden. Of the American people, he said, “Moments like this are why they sent us here.”

But for all the exultation, there was a sense inside the White House and on Capitol Hill that the hardest work is yet to come. The House debate highlighted the pressures that will come to bear on senators as they weigh contentious issues like federal financing for abortion, coverage for illegal immigrants and the “public option,” a government-backed insurance plan to compete with the private sector...
Those on the activist progressive left are unhappy on a number of counts. Jane Hamsher:
I was on Democracy Now with Dennis Kucinich this morning talking about the health care vote.

Kucinich voted against the bill after they didn’t allow a vote on his amendment to allow states to create single-payer health care systems...

...It was hard to be happy about the passage of the health care bill on Saturday given the incredible blow to women’s rights that it represents...

...A public option was never anything more than a stepping stone to Medicare for all, a foothold in what would have otherwise been nothing more than a huge transfer of wealth to the insurance industry (which is still by-and-large is). But it’s going to take a lot more political organizing on the inside before any real headway can be made on that front, and we’re working on that now.
"A public option was never anything more than a stepping stone to Medicare for all..." Well, this is precisely the objection of the reactionary right, which gets derided as a slippery slope fallacy. The whole acrimonious "government takeover of health care" objection.

One concludes we should simply be grateful for not yet having been forced under the oppressive heel of government takeover of military, police, fire, and food safety services.


Monday, Nov. 9th: The media are ablaze with firestorms concerning the inclusion of the Bart Stupak [D-Mich] anti-abortion amendment in H.R. 3962.

In an interview with ABC News's Jake Tapper, President Obama said he did not support any change in current abortion laws through the health care bill -- an implicit rebuke to the House for passing an amendment that could considerably restrict women's access to abortions. The president said that he doesn't want to change "the status quo" one way or another.
  • TAPPER: Here's a question a lot of Senate Democrats want to know. You said, when you gave your joint address to Congress, that under our plan, no federal dollars will be used to fund abortions. This amendment passed Saturday night which not only prohibits abortion coverage in the public option, but also prohibits women who receive subsidies from taking out plans that -- that provide abortion coverage. Does that meet the promise that you set out or does it over reach, does it go too far?
  • OBAMA: You know, I laid out a very simple principle, which is this is a health care bill, not an abortion bill. And we're not looking to change what is the principle that has been in place for a very long time, which is federal dollars are not used to subsidize abortions. And I want to make sure that the provision that emerges meets that test -- that we are not in some way sneaking in funding for abortions, but, on the other hand, that we're not restricting women's insurance choices, because one of the pledges I made in that same speech was to say that if you're happy and satisfied with the insurance that you have, that it's not going to change. So, you know, this is going to be a complex set of negotiations. I'm confident that we can actually arrive at this place where neither side feels that it's being betrayed. But it's going to take some time...
It will be (depressingly) interesting to see how this plays out. It may in fact drown out all other major points of contention (cost, coverage, public option, etc) and may comprise the effective torpedo below the waterline the GOP has been searching for as a weapon to finally sink the reform effort and hand the President a major political defeat heading into the congressional mid-term election period.

Strange Bed Fellows:
Health Care Reform and the Stupak Amendment

- Michelle Kraus, Huffington Post

How did women’s reproductive rights become the bargaining chip for health care reform in this country? Federal funding for clinics is essential to the future of women’s reproductive rights and health. The Stupak Amendment slams women back to a time of unsafe abortions. What is the President thinking? Didn’t we fight this battle before and wasn’t it put to rest decades ago? And what alliances were forged that put women’s reproductive rights into play yet again? There is something very odd about this dilemma. It causes one to ponder how we got here and why. Realistically, health care reform has become very nasty business fraught with religiosity, prejudice, hatred and fear mongering. It has become the divisive issue that the Iraq War was in 2002, 2003, and 2004. Either you are with us or against us – clear and simple. Partisan lines were drawn again, and GOP support was withheld in the landmark bill passed in the House on Saturday evening.

Yet somehow, women’s reproductive care became the oil thrown on an already smoldering fire...
BTW, I have previously written at some considerable length on the seemingly intractable reproductive rights issue. Apparently, "conservatives" are 100% for "choice" and against "government control of health care decisions" except where it bears on womens' reproductive rights.

Nice examination of the salient issues here in the L.A. Times:

Also, the NY Times chimes in on its Opinion Page (11/09/09):
...The restrictions would fall on women eligible to buy coverage on new health insurance exchanges. They are a sharp departure from current practice, an infringement of a woman’s right to get a legal medical procedure and an unjustified intrusion by Congress into decisions best made by patients and doctors.

The anti-abortion Democrats behind this coup insisted that they were simply adhering to the so-called Hyde Amendment, which bans the use of federal dollars to pay for almost all abortions in a number of government programs. In fact, they reached far beyond Hyde and made it largely impossible to use a policyholder’s own dollars to pay for abortion coverage...
One last take on the issue for now (click the image):

At this point, I would think, it's too early to conclude what will be the upshot with respect to any final bill. Expect more nasty, counterproductive hyperbole, I suppose.


Well, this is just a tad inconvenient. From the Think Progress blog:


For now, I return to my initial thoughts when I commenced this series back in May. Can we

  • [1] extend health care coverage to all citizens, with
  • [2] significantly increased quality of care, while at the same time
  • [3] significantly reducing the national (and individual) cost?
Is there even -- yet, at this late date -- overwhelming public consensus that such are worthy and necessary national goals? If so, how do we get there in the most effective manner? Comprehensive federal legislation? Incremental federal and state legislation (e.g., incremental regulatory/tort/market reforms)? Unfettered competitive free-market initiatives, perhaps coupled with expansion of Health Savings Accounts (HSAs) and regulation anew only in areas of "price transparency" ostensibly enabling citizens to become more astute health care "consumers?"


It's obvious that the overriding U.S. political focus remains that of private for-profit health care "insurance" regulatory reform, with lobbying entities such as AHIP battling tooth, claw, and checkbook to preserve their members' core commercial advantage while paying P.R. lip service to actual reforms of significant benefit to the public.

I put the word "insurance" in quotes in recognition of the the observations of critics such as David Goldhill (and, going all the way back to my May 2009 post, Malcolm Gladwell), as we're really properly talking simply about 3rd party remittance intermediaries, not indemnity "insurance" in the otherwise accepted meaning of the term. Meaningful discussion of of this differential policy nuance is by now pretty much off the public/political radar.

Attention of late has turned to (weak?) threats of removing the health insurance industry's anti-trust exemption, concomitant with proposals to enable consumers to buy health insurance across state lines. A recent graphic posted on HuffPo readily illustrates the problem.

In a number of states your choices are limited to those of a few large players such as Anthem/Blue Cross, United Heath Group or CIGNA, etc. Removing the industry's anti-trust exemption might well force true downward price pressure competition into the industry.

Which is precisely why the AHIP membership will fight this to the legislative death. The mainstream media are increasingly ablaze with the requisite fear-mongering.

More on this from the Denver Post:

Health insurers' antitrust exemption becoming a focus of reform debate
By Jennifer Brown
The Denver Post, 11/12/09

Dr. John Bender, a family physician in Fort Collins, says his power to negotiate with health-insurance companies packs the might of a tiny bug: "We are like gnats to them."

About half of Bender's patients have either Anthem Blue Cross Blue Shield or United Healthcare — the two companies that hold 53 percent of the market in Colorado — so losing either contract could push him toward bankruptcy.

It's forbidden under antitrust law for doctors to collude about rates and demand that insurance companies reimburse them more for their work. But in what some argue is lopsided policy, insurance is one of the few industries exempt from federal antitrust laws that prohibit price fixing and "bid-rigging," the practice of unscrupulous brokers ensuring that favored insurers get contracts.

A major goal of national health care reform is to spur competition in the insurance industry. Reform advocates argue competition would drive down costs. Among the latest proposals up for debate in Washington: yank the antitrust exemption in place since 1945.

The health-insurance industry argues that it is not engaging in anticompetitive conduct and that the exemption doesn't shield such conduct anyway.

Health insurance is regulated by state insurance commissioners, so repealing the federal antitrust exemption would do little more than undermine the current regulatory structure, said the industry's national trade organization, America's Health Insurance Plans.

Democratic lawmakers pounced on the antitrust exemption soon after insurance companies pulled support for leading reform proposals. Insurers, who had cautiously supported reform throughout the past year, released reports this fall predicting that health care premiums would rise even faster than they do now under current reform plans.

"It's just political battling back and forth," said John Soma, who teaches antitrust law at the University of Denver's Sturm College of Law. "The power of this insurance lobby is just awesome."...
Click the link above to read the entire article. A subsequent salient point therein:
Regulation of anticompetitive behavior among insurers is weak in most states, Balto said. A recent Center for American Progress survey found no antitrust actions brought by state insurance commissioners and that about one-third of the states "brought no significant consumer protection actions."

Health insurers don't need the antitrust exemption now because the market isn't competitive, Balto said. But after health care reform, new companies or cooperatives will emerge and the country will need to prevent the four or five dominating insurers in a given area from colluding to kill off new competition, he said...

I would commend to everyone an instructive book "The Paradox of Choice" by Barry Schwartz. Additionally, Thaler and Sunstein's excellent "Nudge" is usefully illuminating in the context of this topic.

It is particularly hard for people to make good decisions when they have trouble translating the choices they face into the experiences they will have...

Take the problem of choosing a mutual fund for your retirement portfolio. Most investors (including us) would have trouble knowing how to compare a "capital appreciation" fund with a "dynamic dividend" fund, and even if the use of those words were made comprehensible, the problem would not be solved. What an investor needs to know is how a choice between those funds affects her spending power during retirement under various scenarios -- something even an expert armed with a good software package and complete knowledge of the portfolios held by each fund can have trouble analyzing. The same problem arises for the choice among health plans; we may have little understanding of the effects of our selection. If your daughter gets a rare disease, will she be able to see a good specialist? How long will she have to wait in line? When people have a hard time predicting how their choices will end up affecting their lives, they have less to gain by numerous options and perhaps even by choosing for themselves...

...people may most need a good knowledge for choices that have delayed effects; those that are difficult, infrequent, and offer poor feedback; and those for which the relation between choice and experience is ambiguous. A natural question is whether free markets can solve people's problems, even under such circumstances. Often market competition will do a lot of good. But in some cases, companies have a strong incentive to cater to people's frailties and exploit them.

Notice first that many insurance products have all of the fraught features that we have sketched. The benefits from holding the insurance are delayed, the probability of having a claim is hard to analyze, consumers do not get useful feedback on whether they are getting a good return on their insurance purchases, and the mapping from what they are buying to what they are getting can be ambiguous. But the insurance market is competitive, so a natural question to ask is whether market forces can be relied upon to "solve" the problem of fraud choices.

...There is a general point here. If consumers have a less than fully rational belief, firms often have more incentive to cater to that belief then to eradicate it...
The foregoing speak directly to my own dubiety with for-profit market-based "choice" driving, to the virtual exclusion of all other considerations, health care policy reform. Every marketing, legal, and otherwise corporate bureaucracy dollar devoted to the concoction of, hawking of, and administration of excess, inscrutably byzantine (and frequently spurious) "choice" is a dollar unavailable for actual clinical care.

But, as my former QIO Senior Medical Director Dr. Brent James would often say, "every misspent dollar in the health care system goes into someone's paycheck."


Recall from my initial post on this topic which commenced on May 25th a simple, broad, and bracing statistical revelation set forth by AHRQ:

How Are U.S. Health Care Expenses Distributed?
A Small Proportion of the Total Population
Accounts for Half of All U.S. Medical Spending

As policymakers consider various ways to contain the rising costs of health care, it is useful to examine the patterns of spending on health care throughout the United States. In 2004, the United States spent $1.9 trillion, or 16 percent of its gross domestic product (GDP), on health care. This averages out to about $6,280 for each man, woman, and child.

However, actual spending is distributed unevenly across individuals, different segments of the population, specific diseases, and payers. For example, analysis of health care spending shows that:
  • Five percent of the population accounts for almost half (49 percent) of total health care expenses...
  • ...[while] half of the population spends little or nothing on health care...
And, the rest of us move up and down somewhere in between from year to year. It should be obvious that the highest expenditure cohort is -- unsurprisingly -- generally correlated with advanced age (as I have come to know all too well via the course of my next-of-kin duties concerning my aged and ailing parents). Now, consider a summation of some data I just culled from a U.S. Census Bureau database.

Click the graph to enlarge. It depicts relative percentages of our population in five-year age increments (dark blue line) along with projections going out 25 years (2024, light blue line), and 50 years hence (2049, red line). I drew in a vertical black line to demarcate the +/- age 60 threshold. You might think of these as simple current and forecast "survival curves" indicative of our graying population, i.e., relatively more people will be alive in the 60+ group going forward. Increasingly so with the advance of time.

Sometimes, a data table is more illuminating than a graph. While the foregoing illustrates shifts in relative age-strata percentages, we must be even more concerned with the impact of growing population in actual enumerative terms. Below, blended projected U.S. population growth (both sexes, all races) 25 and 50 years out respectively.

Most noteworthy here is that, while our population is projected to increase by perhaps 42% by 2049, the age 60+ cohort -- precisely the demographic accounting for a hugely disproportionate share of health care expenditures -- is predicted to double.

The most excruciating of economic and ethical choices inescapably await us. And, while much of the public continues to sleepwalk into this morally daunting future (abetted by the well-funded stultifyingly fear-stoking fallacies of corporate status quo interests), we really don't have the luxury of time to continue to kick this policy can down the road. Sadly, it appears to a worrisome degree that that is precisely where we're headed at best.

Health insurers could bypass some key reforms
By David S. Hilzenrath
Washington Post Staff Writer

Friday, November 13, 2009 4:54 PM

Nobody wants to spend a lot of time, energy -- and taxpayer money -- and end up back where they started. But that's what could happen with one of the principal elements of health reform, the so-called exchange or gateway.

Legislators are designing this new insurance marketplace to protect consumers from many of the pitfalls and inequities in the current system. But even as they focus on the details of how the marketplace will work, senators have indicated that they would allow insurers to continue operating outside it, much as the health insurance lobby has sought.

One of the Senate bills would preserve the possibility that insurers could tailor policies to draw healthy individuals out of the new markets, leaving coverage less affordable for those who stay behind.

"It's a leak in the system," said Karen L. Pollitz, a professor at Georgetown's Health Policy Institute. "It returns you to problems that we have today."

Senate bills guarantee that certain basic reforms -- such as requiring insurers to accept people regardless of preexisting medical conditions and banning annual and lifetime limits on coverage -- would apply both inside and outside the new markets for individuals and small businesses. But that would not be true for a host of other requirements that should help consumers compare health plans on an apples-to-apples basis and force insurers to compete more directly on price.

For example, the bill written by the Senate health committee would not require insurers operating outside the marketplace to provide standardized disclosures about what they cover.

It would not prohibit health plans outside the exchanges from using marketing practices that discourage the seriously ill from enrolling, nor would it demand that they offer "a wide choice" of medical providers -- including "essential community providers . . . that serve predominantly low income, medically-underserved individuals," as the bill prescribes for insurers inside the exchanges.

Perhaps the sharpest dichotomy is that, under the health committee proposal, certain standards governing the nature and extent of covered benefits would apply only to policies sold inside the exchanges.

All of those factors contribute to the possibility that insurers might offer cheaper, less comprehensive policies outside the exchanges and entice healthier people to leave the new markets. That would leave the exchanges responsible for sicker people who are more expensive to insure.

Similarly, outside the exchange, the bill drafted by the Senate Finance Committee would not regulate the marketing of individual coverage, nor would it require that health plans be rated based on quality and price...
The image above (from a Nov 15th HuffPo article) says everything. Nothing new, either. Recall from my July 9th, 2008 post "Privacy and the 4th Amendment amid the 'War on Terrror'."

I had to laugh when I found out about this one. Amid the recommendations of President Bush's Postal Reform Commission was one advocating the implementation of what they called "intelligent mail" as yet another "tool" for combatting terrorism. Ostensibly driven by anxieties regarding toxic "anthrax letter" incidents, the idea was to require verified sender and recipient ID for every piece of USPS mail...

...given my chronic and tedious inclination for looking under the hood, I reviewed transcripts and supporting documentation of the Postal Commission hearings. Therein I found a document supporting "intelligent mail" proffered by Pitney-Bowes, one of the vendors salivating over the prospect of getting the contract to implement such a system.

Well, guess, what? The section of the Postal Commission's final report advocating implementation of "intelligent mail" was lifted nearly verbatim from the Pitney-Bowes proffer...
Different day, same, M.O. Bidness as usual within DC and the halls of Congress.

"Public Optional"


This is rich:

Health bill foes solicit funds for economic study
By Michael D. Shear
Washington Post Staff Writer
Monday, November 16, 2009

The U.S. Chamber of Commerce and an assortment of national business groups opposed to President Obama's health-care reform effort are collecting money to finance an economic study that could be used to portray the legislation as a job killer and threat to the nation's economy, according to an e-mail solicitation from a top Chamber official.

The e-mail, written by the Chamber's senior health policy manager and obtained by The Washington Post, proposes spending $50,000 to hire a "respected economist" to study the impact of health-care legislation, which is expected to come to the Senate floor this week, would have on jobs and the economy.

Step two, according to the e-mail, appears to assume the outcome of the economic review: "The economist will then circulate a sign-on letter to hundreds of other economists saying that the bill will kill jobs and hurt the economy. We will then be able to use this open letter to produce advertisements, and as a powerful lobbying and grass-roots document."...
I have just a couple of brief reactions.
  • To the (debatable) extent that conventional "economics" can be considered "science, "this is classic "junk science" (as is the poignant "Creation Science"), wherein you start with an a prior conclusion and then work backward, picking off and retaining only "evidence" that supports your ideological conclusion;
  • While the relative socioeconomic impacts of various flavors of national health policies around the world have been studied in detail for decades, given that we as yet have no firm final reconciled House-Senate legislative proffer, this "study" would necessarily be entirely speculative -- and, the thrust of that speculation is, of course, already known. This would be nothing more than one more latter-day exercise in partisan fig-leafery posing as economic "research."
Uninsured ER patients twice as likely to die
New study highlights disparity of care for those who don't have coverage CHICAGO [AP] - Uninsured patients with traumatic injuries, such as car crashes, falls and gunshot wounds, were almost twice as likely to die in the hospital as similarly injured patients with health insurance, according to a troubling new study. The findings by Harvard University researchers surprised doctors and health experts who have believed emergency room care was equitable. "This is another drop in a sea of evidence that the uninsured fare much worse in their health in the United States," said senior author Dr. Atul Gawande, a Harvard surgeon and medical journalist...

...The researchers couldn't pin down the reasons behind the differences they found. The uninsured might experience more delays being transferred from hospital to hospital. Or they might get different care. Or they could have more trouble communicating with doctors.

The hospitals that treat them also could have fewer resources.

"Those hospitals tend to be financially strapped, not have the same level of staffing, not have the same level of surgeons and testing and equipment," Gawande said. "That also is likely a major contributor."...

While I will continue to follow the legislative developments as this policy fight draws to a close, let me end where I began back in May. Can we, via federal legislation
  1. provide health care coverage for all, with
  2. improved levels of quality, while concomitantly
  3. reducing health care costs?
Incontrovertibly laudable goals, one would think, but the skeptics remain many and loud (many of them simply rigid ideologues, most of them comfortably and hypocritically secure in their own amply feathered nests). I have tried through this series of posts to shed detailed light on the various core aspects and issues from all of the serious contending perspectives. As I follow the "final approach" debate these day, I hear this or that argument and think "yeah, I already covered that," so it's time to move on.

What are the options going forward?

  1. Do nothing;
  2. Further de-regulate free market health care, with legislation perhaps limited to expansion of things like Health Savings Accounts (HSAs), tort reform, and permitting consumers to buy insurance across state lines;
  3. Health insurance reform containing a "public option" via which to put countervailing pressure on health coverage costs;
  4. Health insurance reform based more or less on the "Swiss Model";
  5. One or another of the "Single Payer" variants -
    • "Medicare for All";
    • UK Model National Health Service (true "government run health care");
    • "Canadian" style Single Payer Model (essentially just "Medicare for All").
Possible outcomes this time around? Option 1 remains a serious possibility ("...hand the President a serious political defeat heading into the mid-terms.."). Option 2 is politically DOA right now, as are options 4 and 5. So, in my view only one or another inscrutably complex version of option 3 is likely to pass should the entire effort not fail. To date I see nothing to materially abate my concern that we will not accomplish much of truly transformative, socially beneficial substance that gets us anywhere near goals 1, 2, and 3.

Where do I come down? Net, (and guardedly), "Single Payer / Medicare for All" (all not otherwise covered by the active DOD or VA systems) But, I could live with a "Swiss Model" system, perhaps to exist alongside our current long-functioning single payer systems -- (VA and Medicare) -- the latter perhaps expanded to permit lower age enrollment as a de facto "public option" without being structured as means-tested "welfare" with a wasteful "corporate welfare" "affordability eligibility" vetting process. (And under that scenario I would subsume Medicaid under Medicare, and do away with the former).

I won't be holding my breath.

TV is incessantly blaring these days with well-funded anti-reform ads replete with the ominously sneering baritone voice-overs gloomily intoning the terrible job-killing, economy-wrecking upshot of passage of health policy reform, given the estimated federal price tag. Intentionally glossed over, of course, is that fact that the money will have to be spent one way or another, and, by all accounts, absent some sort of mandated restraint, we are on course to national financial ruin. The for-profit actuarial model, applied to health care, contains the toxic seeds of its eventual destruction, and left to continue largely unabated, will be a principal factor in that national ruination.

The shallow, media-fueled antipathy toward "government" (emblematically characterized by the "Teabagger" movement), to me, speaks to a broader concern; the still mostly inchoate anxiety increasing numbers of us are feeling that the world has gotten too complex and unmanageable, and the favored U.S. sociopolitical perch of our lifetimes is inexorably attriting away.

It is not a baseless concern. We comprise roughly 5% of world population, while consuming 25% of its resources. As climate scientist Tim Flannery observed in his book "The Weather Makers,"

In 1961 there was still room to maneuver. In that seemingly distant age, there were just 3 billion people, and they were using only half of the total resources that our global ecosystem could sustainably provide. A short twenty-five years later, in 1986, we had reached a watershed, for that year our population topped 5 billion, and such was our thirst for resources that we were using all of Earth's sustainable production.

In effect, 1986 marks the year that humans reached Earth's carrying capacity, and ever since we have been running the environmental equivalent of a budget deficit, which is sustained only by plundering our capital base. The plundering takes the form of overexploiting fisheries, overgrazing pasture until it becomes desert, destroying forests, and polluting our oceans and atmosphere, which in turn leads to the large number of environmental issues we face. In the end, though, the environmental budget is the only one that really counts...

...By 2001 humanity's deficit had ballooned to 20 percent, and our population to over 6 billion. By 2050, when the population is expected to level out at around 9 billion, the burden of human existence will be such that we will be using -- if they can still be found -- nearly two planets' worth of resources." [pp. 78-79]
As I wrote in a prior post in response:
We can choose to continue to drill, mine, cut down, and grind up the planet in pursuit of short-term business-as-usual, unevenly distributed consumerist comforts, but the day of tragically harsh mass reckoning draws ever closer. The lessons to be drawn from Jared Diamond's "Collapse" are compelling in this regard. There is no shortage whatsoever of constructive and remediative work to be done in support of a sustainable and broadly prosperous future for all of humanity. But, let's not kid ourselves that an unregulated "invisible hand free market" alone will suffice to insure its emergence. Recent economic history alone refutes that assertion.
Complicating this unsustainably destructive "consuming the future" market ethos, consider this: In this decade, more than 40% U.S. corporate profits have come from the "financial services sector," with perhaps 3/4 of those "profits" accruing from iterative, non- tangible-value-adding, grotesquely leveraged "fee income" that fueled the recent economic bubble and caused the current recession.

Let me repeat what I wrote a few days ago (scroll back up a bit):
"The most excruciating of economic and ethical choices inescapably await us. And, while much of the public continues to sleepwalk into this morally daunting future (abetted by the well-funded stultifyingly fear-stoking fallacies of corporate status quo interests), we really don't have the luxury of time to continue to kick this policy can down the road. Sadly, it appears to a worrisome degree that that is precisely where we're headed at best."

I would love to be wrong. I would love to hear from others, too. I certainly don't have all the answers.


  1. The U.S. health care policy morass
  2. Doing some basic health care reform math
  3. BREAKING: Foreign born Radical Communist Obama wants to kill Grandma and Grandpa


Harry Reid has released his compromise Senate draft, H.R. 3590.

Our private, for-profit health insurance system, designed to fatten the profits of private health insurers and Big Pharma, is about to be turned over to ... our private, for-profit healthcare system. Except that now private health insurers and Big Pharma will be getting some 30 million additional customers, paid for by the rest of us.

Upbeat policy wonks and political spinners who tend to see only portions of cups that are full will point out some good things: no pre-existing conditions, insurance exchanges, 30 million more Americans covered. But in reality, the cup is 90 percent empty. Most of us will remain stuck with little or no choice -- dependent on private insurers who care only about the bottom line, who deny our claims, who charge us more and more for co-payments and deductibles, who bury us in forms, who don't take our calls.

- economist Robert Reich