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mattbellI'm certainly not going to complain that the healthcare bill passed. I have many friends who were denied coverage for minor pre-existing conditions. The bill will correct many of the bullying excesses of the insurance industry.
However, I'm hoping people see it the bill for what it is -- a philosophical transition to the idea of universal healthcare that does not address the big fundamental problems in how healthcare is practiced.
Currently, 16% of our GDP is going to healthcare, and that amount is rising fast. Now that the government will be picking up much of the tab for this, they are in a unique position to make these costs go down while keeping their people healthy. The government gains money when people stay alive, healthy, and productive. So they should protect their investment.
Here's the big problem: The health care industry is composed of various groups, none of which have the goal of keeping people healthy as their core motivation:
- Insurance companies want to minimize how much they pay for patients' care.
- Drug companies want to sell as many expensive drugs as possible. (For them, a cheap cure is a bad thing... an expensive treatment that is not a cure is a good thing.
- Hospitals want to bill for lots of procedures and avoid getting sued.
- Patients want to eat what they want and watch TV, and have everything taken care of when they get sick.
Here are some follow-on things the US govt should do to improve the healthcare system:
- Start a series of prizes for various cures and advances in medicine. Suppose they offer $5 billion for a cure for HIV that costs less than $X per patient, or an intravenous glucose control system for less than $Y etc. At the end the government would own the patents and technology of the winning team. Writing the prize rules will be tricky, but the result is that drug companies and other researchers will look to lower instead of raise costs for healthcare.
- Allow full health insurance portability to encourage people to keep the same insurance plan for life. Right now insurance companies are not motivated to invest in people's long-term health because they frequently switch jobs and thus insurance companies. Any upfront investment for long term benefit, such as genetic testing, doesn't usually pay off for them. By having lifetime plans, insurance companies will be encouraged to invest in their people's health in a proactive fashion. This allows for another of my favorite ideas:
- Patient incentives for preventative care. People who exercise daily and eat healthy diets should get tax breaks. There are a variety of ways of tracking progress (eg lung capacity, hemoglobin levels etc). Incentives would be relative so as to make sure everyone has motivation for improvement.
- End patents on genes. It's stupid that you can patent a gene without knowing what it does.
- End corn subsidies. It's also stupid that we subsidize the production of corn syrup, which will ultimately cost the government billions. We should be taxing unhealthy foods, not subsidizing them.
- Let health plans cover over-the-counter drugs. Sometimes people skip buying an over the counter drug because they can get an (in some cases) identical prescription drug for free (even though it's extremely expensive) because their health plan covers it. The copay system should provide proper incentives for patients to choose the treatments that are cheaper to the overall group.
- Create the equivalent of a "driver's test" for prescription drugs. If you prove decent knowledge of chemistry, statistics, math, and biology, you should be able to prescribe some common drugs for yourself alone. Quantities would be strictly regulated to ensure people aren't acting as dealers or hypochondriacs. There would also be some drugs excluded from this category for being too dangerous, too addictive, or too damaging to the commons (eg antibiotics) This would dramatically reduce doctor visits, as many times people are going in just to get a prescription refilled.
- Dramatically shorten the FDA approval process. Paradoxically, by having the FDA approval process be so long and expensive (up to $1billion and 10 years), drug companies are more likely to try to manipulate the system (eg cheating on trials, marketing the hell out of their products, proposing them for less appropriate uses) because the fate of their company is riding on a han dful of drugs getting approved. If we had a system where drugs tthat would be sold to a more limited audience (say, < 100,000 people a year) were approved faster, then drug companies would be more likely to take risks in exploring new avenues of research.
However, I'm hoping people see it the bill for what it is -- a philosophical transition to the idea of universal healthcare that does not address the big fundamental problems in how healthcare is practiced.
Currently, 16% of our GDP is going to healthcare, and that amount is rising fast. Now that the government will be picking up much of the tab for this, they are in a unique position to make these costs go down while keeping their people healthy. The government gains money when people stay alive, healthy, and productive. So they should protect their investment.
Here's the big problem: The health care industry is composed of various groups, none of which have the goal of keeping people healthy as their core motivation:
- Insurance companies want to minimize how much they pay for patients' care.
- Drug companies want to sell as many expensive drugs as possible. (For them, a cheap cure is a bad thing... an expensive treatment that is not a cure is a good thing.
- Hospitals want to bill for lots of procedures and avoid getting sued.
- Patients want to eat what they want and watch TV, and have everything taken care of when they get sick.
Here are some follow-on things the US govt should do to improve the healthcare system:
- Start a series of prizes for various cures and advances in medicine. Suppose they offer $5 billion for a cure for HIV that costs less than $X per patient, or an intravenous glucose control system for less than $Y etc. At the end the government would own the patents and technology of the winning team. Writing the prize rules will be tricky, but the result is that drug companies and other researchers will look to lower instead of raise costs for healthcare.
- Allow full health insurance portability to encourage people to keep the same insurance plan for life. Right now insurance companies are not motivated to invest in people's long-term health because they frequently switch jobs and thus insurance companies. Any upfront investment for long term benefit, such as genetic testing, doesn't usually pay off for them. By having lifetime plans, insurance companies will be encouraged to invest in their people's health in a proactive fashion. This allows for another of my favorite ideas:
- Patient incentives for preventative care. People who exercise daily and eat healthy diets should get tax breaks. There are a variety of ways of tracking progress (eg lung capacity, hemoglobin levels etc). Incentives would be relative so as to make sure everyone has motivation for improvement.
- End patents on genes. It's stupid that you can patent a gene without knowing what it does.
- End corn subsidies. It's also stupid that we subsidize the production of corn syrup, which will ultimately cost the government billions. We should be taxing unhealthy foods, not subsidizing them.
- Let health plans cover over-the-counter drugs. Sometimes people skip buying an over the counter drug because they can get an (in some cases) identical prescription drug for free (even though it's extremely expensive) because their health plan covers it. The copay system should provide proper incentives for patients to choose the treatments that are cheaper to the overall group.
- Create the equivalent of a "driver's test" for prescription drugs. If you prove decent knowledge of chemistry, statistics, math, and biology, you should be able to prescribe some common drugs for yourself alone. Quantities would be strictly regulated to ensure people aren't acting as dealers or hypochondriacs. There would also be some drugs excluded from this category for being too dangerous, too addictive, or too damaging to the commons (eg antibiotics) This would dramatically reduce doctor visits, as many times people are going in just to get a prescription refilled.
- Dramatically shorten the FDA approval process. Paradoxically, by having the FDA approval process be so long and expensive (up to $1billion and 10 years), drug companies are more likely to try to manipulate the system (eg cheating on trials, marketing the hell out of their products, proposing them for less appropriate uses) because the fate of their company is riding on a han dful of drugs getting approved. If we had a system where drugs tthat would be sold to a more limited audience (say, < 100,000 people a year) were approved faster, then drug companies would be more likely to take risks in exploring new avenues of research.
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no subject
Date: 2010-03-24 02:19 am (UTC)no subject
Date: 2010-03-24 06:16 am (UTC)no subject
Date: 2010-03-24 03:02 am (UTC)no subject
Date: 2010-03-24 06:16 am (UTC)no subject
Date: 2010-03-24 05:28 am (UTC)no subject
Date: 2010-03-24 06:01 am (UTC)no subject
Date: 2010-03-24 06:38 am (UTC)no subject
Date: 2010-03-24 07:53 am (UTC)For example, as of today, there are still penalties for not having insurance: The first year, consumers who make enough to file taxes ($9,350 for singles, $18,700 for couples in 2009) and who did not have insurance would owe $95, or 1 percent of income, whichever is greater. But the penalty would subsequently rise, reaching $695, or 2 percent of income.
Willful evasion of payment, by the way, is up to $250K or 5 years in jail for felony-level, $25K or a year in jail for misdemeanor; no matter how strictly enforced, or the amount, this is completely disgusting on principle.
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Date: 2010-03-24 05:04 pm (UTC)Willful evasion of payment, by the way, is up to $250K or 5 years in jail for felony-level, $25K or a year in jail for misdemeanor; no matter how strictly enforced, or the amount, this is completely disgusting on principle.
It's true that this does come off as weird. However, given how health insurance is run in a more redistributive fashion under the new system, it's actually more like paying taxes than paying health insurance premiums. That makes it slightly less weird to me.
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Date: 2010-03-24 06:14 pm (UTC)You're getting a tax penalty for not even being able to afford insurance, or for deciding on your own that the cost of insurance actually isn't worth it given your budget... which means your budget is meager, or what you'd have to give up to pay for the security is pretty large. Plus, did you know the IRS is hiring 16K new agents to make sure this goes into effect?
And I'm guessing you don't know that congress bill-writers, associated staff, and the president's own family are exempt from the bill?
To quote my friend Michael, "I don't know how many libertarians/conservatives/classical liberals I've heard saying 'I wish they had just gone with straight socialized medicine and/or expanded medicare instead of this monstrosity.' The left would never believe how many."
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Date: 2010-03-25 12:13 am (UTC)They're exempt in the sense that they have health care through their employer so it doesn't apply to them. In that sense, I am also exempt.
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Date: 2010-03-25 01:59 am (UTC)It applies to other members of congress, just not bill-committee members and (their unelected) staff, leadership. And it's not just the section that I mentioned about being penalized that they are exempt from.
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Date: 2010-03-25 06:31 am (UTC)no subject
Date: 2010-03-25 08:09 am (UTC)no subject
Date: 2010-03-24 08:03 am (UTC)As for the first point, I think that the "choice" of what's in your plan is something that most people currently don't have. And since people are bad at risk estimation, I imagine large numbers of people (if given the choice) would drop coverage for certain rare conditions to save themselves money, but would be making bad decisions based on the actual risk of going bankrupt. Though I get the point about groups lobbying to get included.
The second is an interesting point. I had always heard "community rating" discussed as a way to avoid discrimination against people with unfortunate histories (or race or gender or orientation or whatever), but I hadn't thought about it banning incentives for healthy living. That's a problem. But maybe there's a way around it.
High deductibles and HSAs don't matter except for the people who have enough money that they don't need insurance. My understanding of HSAs was that they expire at certain periods, which incentivizes at least as much wasteful health spending as they were designed to eliminate. I would have thought that the real problem with waste was unnecessary MRIs etc, rather than unnecessary physicals and cholesterol tests - the former would easily reach past the deductible while the latter is what an HSA and high deductible would disincentivize.
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Date: 2010-03-24 03:46 pm (UTC)Not necessarily true. I have a high deductible HSA - and it's certainly not because I have enough money. It's because I don't have enough money to afford a more comprehensive plan, and realized that for my risk group - it's actually much more cost effective. Also, as a full time traveler in the US (so most health plans would rate me as 'out of network' in most places I might need service anyway) - it was also one of the only ways I could even get insurance.
My premiums are only $140/mo. The money I save over my previous $500/mo HMO I put into my HSA for routine care. I still have access to negotiated rates within my extensive provider network, have access to a 'TeleDoc' for routine infections/prescriptions (so I don't have to go to a doctor for this sort of stuff) and I have a cap on my annual expenditure that keeps me protected from cleaning out my funds for big stuff. And, if I don't actually need care.. I end up saving a lot more over my previous plan.
And bonus.. now all of my health care spending is immediately tax deductible - instead of having to itemize. (And for a little bit more per month, I could include preventative care coverage on my plan.. but I worked out the numbers, and for me, it's cheaper to self-pay via the HSA).
My understanding of HSAs was that they expire at certain periods
I think you may be confusing employer provided FSAs (Flexible Spending Accounts) to self funded Health Savings Accounts. HSA's don't expire.
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Date: 2010-03-24 05:08 pm (UTC)It's funny that health insurance companies didn't bother to incentivize healthy living under the old system. But perhaps that's because of the other issue I mentioned -- if people switch providers every few years, there's much less of an incentive for the insurance companies to encourage healthy living.
HSA's don't expire after certain periods... you're thinking of FSAs. An HSA is basically just a regular health plan with a high deductible, but it gives you the right to save up to $3000/yr in an IRA that can be withdrawn for health purposes but can be invested over time and does not expire.
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Date: 2010-03-24 07:48 am (UTC)I think this isn't a very big difference from the current system. Currently Medicare spends $400 billion a year (source, a .pdf that's been translated to light format by google). The total new expenditures of this bill are under $1000 billion over the next ten years. Assuming that all of this starts five years from now and all goes into health insurance subsidies (I believe that much starts in three years and at least some goes to R&D subsidies rather than just insurance), that's only 50% of the cost of Medicare. Not to mention Medicaid, the VA system, and whatever other health care/insurance the government already runs. So the government really has had the fiscal incentive to take on a lot of this stuff for ages. The fact that it hasn't done so yet unfortunately seems to bode ill for it doing so in the future. (I think some of it has been left behind because it smacks too much of "death panels" - e.g., anything that encourages people to adopt scientifically proven treatments rather than just whatever makes the patient feel good. I note you didn't address any of those issues, which might make your proposals safer, but I worry that it also means they don't address the biggest issues. But any progress would certainly be good!)
Suppose they offer $5 billion for a cure for HIV that costs less than $X per patient, or an intravenous glucose control system for less than $Y etc.
I like the idea of these "H prizes", but I think it probably makes sense to focus on more incremental goals. For one thing, those are more likely to provide incentives to do research that will actually get completed. Also, they're more likely to be new incentives (what company wouldn't want to have the cure for HIV on their books, even if they got no profit from it? goodwill is worth a lot). And they're also more likely to stimulate new development - if there's open access to the patents for certain basic drug delivery techniques and molecular synthesis protocols that will probably subsidize a lot of developments in related areas, more than just having one particular drug for one particular disease being available cheaply.
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Date: 2010-03-24 05:17 pm (UTC)As for the prizes, I think having prizes for partial solutions would only work if the path to the final solution is clear. Otherwise it could end up biasing the research
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Date: 2010-03-24 07:48 am (UTC)Should preventive care be incentivized through tax breaks? I would have imagined that the private insurers should just be encouraged to incentivize it in their clients. The new health care bill doesn't add any new public insurer (unfortunately) - it does add some people to the Medicaid rolls, but people who are eligible for Medicaid tend not to pay much tax other than social security and sales tax, which are extremely difficult to give credits on. (Isn't it crazy that the tax burden in the US falls so disproportionately on the poor? We like to claim it's a progressive tax code, but social security phases out over $100,000 and sales tax is definitely regressive.)
Gene patents, corn subsidies, I totally agree. But we have to wait at least another four years for the farm bill to come up again I think. Maybe by then the growing worries about obesity and agribusiness will have built up enough to do something, but I wouldn't hold my breath.
Health insurance doesn't cover over-the-counter drugs? That seems surprising, but I've had very little experience with the medical system in general. If they don't cover them, I would imagine that's more of a business decision than a legal decision. Maybe there's a way to change the law to require coverage of some amount of OTC drugs per year? I guess the main worry is that any coverage of something totally optional like this has too much potential for abuse.
Would the ability to self-prescribe really "dramatically reduce doctor visits"? First of all, I find it hard to believe that even 30% of the population would be able to pass the tests that ought to be required. Second, I'm skeptical that very many people make a majority of their doctor's visits just to re-fill prescriptions, but maybe this is just my ignorance of the medical system rising up again. Even in the cases where they only make the visit to get the prescription, doesn't it sometimes prompt them to get a general check-up that has useful preventive functions? I would have thought that the prescription system was generally well thought-out, but I may be totally wrong.
The FDA approval process probably does need some streamlining. Of course, in order to make this change plausible, we'd have to give the FDA more power to revise its approval of drugs that are already on the market. As I understand the current system, the FDA has almost no power once a drug is on the market, except in certain extreme cases.
Anyway, very interesting ideas.
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Date: 2010-03-24 09:17 am (UTC)no subject
Date: 2010-03-24 05:43 pm (UTC)Also, on the FDA, yes, the rapid approval process would need to carry with it more ability for the FDA to reverse its decisions upon the gathering of further evidence.
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Date: 2010-03-24 03:53 pm (UTC)The biggest problem I see with your plan (and any actual total reform I'd like to see in an ideal world) is getting there. It's too much of a leap from our current system to be attainable without a fairly comprehensive reset.
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Date: 2010-03-24 05:22 pm (UTC)no subject
Date: 2010-03-31 04:42 am (UTC)I am actually very encouraged by my sense that Obama understands that this was only step one, and a lot of work remains. The first hurdle was getting the idea of universal coverage (or close enough to it) on the books. Then we start making it efficient...
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Date: 2010-03-31 05:15 am (UTC)no subject
Date: 2010-03-24 06:21 pm (UTC)I don't understand the American drive to reinvent the wheel on this one. We have three perfectly good models around the globe, each working magnificently. Obamacare or Mattcare is all well and good but ultimately experimental, when we have decades and decades of the global success of the NHI model, Lord Beveridge, and Chancellor Bismarck telling us exactly what works.
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Date: 2010-03-24 06:53 pm (UTC)Just a few quick google links:
http://www.nytimes.com/2008/02/21/world/europe/21britain.html
"Armed with information from the Internet and patients’ networks, cancer patients are increasingly likely to demand, and pay for, cutting-edge drugs that the health service considers too expensive to be cost-effective.
“You have a population that is informed and consumerist about how it behaves about health care information, and an N.H.S. that can no longer afford to pay for everything for everybody,” he said"
http://www.csmonitor.com/2007/1019/p04s01-woeu.html
http://www.politicsdaily.com/2009/08/05/when-health-care-rationing-fails-why-the-british-have-bad-teeth/
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Date: 2010-03-24 09:45 pm (UTC)Right now, armed with information from your own doctors and your own providers, you will have to make decisions out of your own budget for whether certain drugs and treatments are too expensive or cost-effective. NHS can't afford to pay for everything for everybody, sure, but you can't afford to pay for everything for you.
If you take the NHS and compare it to "infinitely good" then of course it will fail. The summed total of our entire Commonwealth of Nations is paltry when compared to the standard of "infinitely good".
But have you ever lived under a Beveridge system? Lived in a country where you're NOT working for a paycheque but also for the next dose of insulin or the next antiviral or the next antibiotic? Where your boss doesn't have just your livelihood but your health in her hands?
My home country is a hybrid NHI and Beveridge system. It's the size of New Jersey and has an economy smaller than that of the Bay Area. Yet we manage to be a global exemplar of how to treat our citizens, our residents, our visitors... even our illegal uninvited visitors.
We love the NHS
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Date: 2010-03-24 11:59 pm (UTC)I don't think I was ever looking for what you call the 'infinitely good', which seems like a bit of a strawman argument. There are ways the British system would be cool/preferable (certainly, if I broke my leg or got diagnosed with cancer tomorrow poor and w/o healthcare I would still be screwed here), but other ways it doesn't seem to principally work so well, and that's why I took issue with you describing it as oh-so-simple for Americans to just go with other systems that are clearly working 'magnificently'.
One of the stories I linked was about a woman who either a) couldn't get the drugs she needed, or, if she chose to pay it out of pocket, b) couldn't get any coverage for the rest of her (arguably inflated-cost for non-insured - here too) cancer treatment. I think there's something seriously wrong with that.
That said, if it wasn't clear I'm completely willing to acknowledge that *some* things are done reasonably well in, say, Britain. Actually, I've noticed that smaller/localized economies tend to do better with a *lot* of the type of thing you refer to. Singapore, New Zealand come to mind - though New Zealand, like Britian, seems to excel at easy/'free' cost of accidental ER injury care (like broken bones, yes even for visitors!), and not be so great at other things.
Past anti-socialist bias, many Brit doctors and health specialists seem to acknowledge: months-long waiting lists for arguably life-saving treatments, lotteries and delayed diagnosis for cancer patients (and dental funds for kids), old and comparably unsophisticated operational equipment, etc. If we're going for optimal *possible* healthcare, the question would then become how to take the best from these different systems and make sure it doesn't get lost when translated to a larger economy of scale.
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Date: 2010-03-25 10:33 pm (UTC)The reason 'infinitely good' isn't a straw man is that I drew it from the quote that you bolded. "“You have a population that is informed and consumerist about how it behaves about health care information, and an N.H.S. that can no longer afford to pay for everything for everybody.” The bolded section is a description of an infinitely good situation, and then the NHS are described as unable to meet it.
Having seen the effects of America's system as compared with Costa Rica's, I can say that NHS style waiting lists, even months long, are preferable to the absolute denial of access.
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Date: 2010-03-25 10:36 pm (UTC)no subject
Date: 2010-03-25 08:13 am (UTC)no subject
Date: 2010-03-25 10:33 pm (UTC)no subject
Date: 2010-03-24 06:40 pm (UTC)One of the big downsides is that these tests would take years to plan, test, evaluate the data, possibly run additional tests, and then implement on a large scale.
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Date: 2010-03-24 06:45 pm (UTC)However, the experiments aren't always adopted. No one's really publicizing the fact that legal prostitution works perfectly well in Nevada or using it to make a case for legalizing it nationwide.
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Date: 2010-03-24 07:20 pm (UTC)no subject
Date: 2010-03-31 04:45 am (UTC)no subject
Date: 2010-03-31 05:19 am (UTC)tease
Date: 2010-03-24 06:44 pm (UTC)I think it's funny how you slipped watching TV in there... didn't even think to include "all day"... what about sitting on your arse browsing the internet, or stuck at a job with a long commute? ;)
Re: tease
Date: 2010-03-24 06:47 pm (UTC)Re: tease
Date: 2010-03-24 06:55 pm (UTC)