With respect to healthcare reform, you could not have crafted a worse 'solution' than that enacted. Here is my response to an editorial in a NJ publication from last summer. I have underlined text from the original editorial for clarity:
Mr. Silow-Carroll,
I read with great interest your August 13th column from the New Jersey Jewish News was sent to me via the Union for Reform Judaism's Daily '10 Minutes' of Torah. I would like to respond point by point. As a practicing radiologist in Washington State, I sit at the nexus of many of the trends that are discussed.
“In the richest country in the world, we’re spending twice per person on health care than other industrialized countries, over 45 million people don’t have health coverage, and costs are spiraling out of control, eating up more and more of families’ and the country’s budgets”
I will discuss some of the reasons why we spend more than other industrialized countries below. I do want to address the situation of the 45 (or 47 or 50) million without health coverage. A word about how the government counts the number of uninsured. If you aren’t covered by a plan for one day of the entire year (in other words if you have insurance for 364 days during the year), the government counts you as among the 47 million. By analogy, if you have sex with your partner 364 days of the year the government would count you as being completely abstinent for the entire year!
According to recent data from the Census Bureau, 9.5 million are illegal aliens (even Michael Moore concedes we shouldn’t pay for these folks' health care), 8.7 million make over $75,000 per year and choose not to purchase health insurance (and an addition 8.3 million make between $50,000-$75,000 and choose not to purchase health insurance), 8.5 million are between the ages of 18 and 25 and think they are bulletproof. Interestingly, 11.5 million are eligible for government programs such as Medicare and SCHIP but have not signed up. (Question: how does reforming health care reach these people?) The Kaiser Family Foundation, a left of center not for profit, estimates the number of people without access to government health programs and without insurance are between 8.2-13.9 million. Even if we assume that the number is much higher--say 20 million, this represents 7% of the population. I believe in the great compassion of Americans and polling has consistently show the public's support of programs to provide insurance for these folks.
If you review the government's data, family spending on food, shelter, transportation and health care has been remarkably consistent since 1900 at between 70-75% of family expenses. True, the ratio of health care spending has risen, but this has been offset by declines in the other items.
Do any of the current proposals begin to address the most pressing problems?
“Yes, the major proposals developing in Congress and supported by the Obama administration would make a big dent in the coverage problem. They would provide subsidies for lower-to-mid-income people to buy health insurance, change the rules so insurers can’t reject people or charge higher premiums for those with prior health conditions, and expand the federal-state Medicaid program for the poor and near-poor. They’d also require nearly everyone to have coverage, so the costs of emergency room visits and hospital services for the uninsured would no longer get shifted to premiums paid by the rest of us.”
The current House proposal in no way begins to address the most pressing problems; it only exacerbates the current problems which are largely a creation of government intervention.
A legitimate complaint about our system is cost. Let’s take a look at the country’s largest insurer, Medicare. Since its inception, the costs of the program have consistently exceeded government’s expectations. At its beginning in 1966, Medicare cost $3 billion and the initial (conservative!) inflation adjusted cost estimate of $12 billion in 1990 when in fact the cost in 1990 was $109 billion! In 2007, Medicare spending was $440 billion, 16% of the entire federal budget. Currently, the most optimistic projections have the program underfunded by 30 TRILLION dollars but let’s remember Warren Buffett’s lament, “In the insurance business all surprises are negative.” Shouldn't the government fix Medicare before attempting to fix the rest of the system?
Despite this, Medicare reimbursements do not cover the actual patient costs to physicians and hospitals. In other words, hospitals and physicians lose money taking care of Medicare patients. This results in the phenomena of ‘cost-shifting’. In order to stay in business physicians and hospitals charge patients with private insurance greater than market rates to offset the losses incurred taking care of Medicare patients. For FY 2007, the government reported that Medicare covered only 94% of actual costs and that number is projected to decline further in coming years. A recent study by the Millman health consulting firm estimated this cost shifting at 91 billions dollars (51 billion hospital/40 billion physician). As a result the actual costs of Medicare are significantly under-reported and the resultant artificially high cost of private insurance makes it less affordable.
State healthcare mandates also raise the cost of private insurance. These mandates are services that every private insurer must provide in order to be licensed to sell insurance. In the state of Washington where I live, there are 57 (!) mandates including massage therapy, acupuncture, drug and alcohol rehab, etc. These raise the cost of insurance and making it less affordable. For example, the cost of my plan includes services such as fertility, substance abuse, psychiatric services, acupuncture and chiropractic services that I would not pay for if given the opportunity to save the money.
Advocates of a single payer system like to point out that the overhead costs (i.e. the actual costs of running the program, commonly expressed as a percentage of total costs) for government sponsored programs such as Medicare. This is true but misleading. Firstly, to calculate the denominator (overhead costs/total expenditures) for Medicare is higher than other insurance plans. This is because Medicare patients are 65 and older and consume significantly more health care per capita than younger Americans. Secondly, a significant amount of the overhead cost for private insurers (who are interested in making a profit) is spent on fraud prevention. By contrast, CMS estimates of Medicare fraud are in the range of $60 billion per year, ~10-15% of total expenditures!
Advocates of the government option and single payer systems believe that they can decrease costs while maintaining quality and access to care. However, the head of the CBO recent stated that preventative programs are unlikely to result in cost savings and could even end up increasing costs (as previously undiagnosed patients receive more costly care and costs are incurred for false positive screening studies). The CBO has also estimated the tab of the current House proposal at $1 Trillion. Given the fraud statistics for Medicare and history of underestimated costs of Medicare and Medicaid, any proposed cost savings from improved efficiency would seem to be at best optimistic and ephemeral.
That is not to say private insurance as currently constituted could not be improved. Currently the costs of services are disconnected from the costs that the consumer pays. The following excerpt from The Atlantic elegantly summarizes the problem:
“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.
Comprehensive health insurance is such an ingrained element of our thinking, we forget that its rise to dominance is relatively recent. Modern group health insurance was introduced in 1929, and employer-based insurance began to blossom during World War II, when wage freezes prompted employers to expand other benefits as a way of attracting workers. Still, as late as 1954, only a minority of Americans had health insurance. That’s when Congress passed a law making employer contributions to employee health plans tax-deductible without making the resulting benefits taxable to employees. This seemingly minor tax benefit not only encouraged the spread of catastrophic insurance, but had the accidental effect of making employer-funded health insurance the most affordable option (after taxes) for financing pretty much any type of health care. There was nothing natural or inevitable about the way our system developed: employer-based, comprehensive insurance crowded out alternative methods of paying for health-care expenses only because of a poorly considered tax benefit passed half a century ago.
In designing Medicare and Medicaid in 1965, the government essentially adopted this comprehensive-insurance model for its own spending, and by the next year had enrolled nearly 12% of the population. And it is no coincidence that the great inflation in health-care costs began soon after. We all believe we need comprehensive health insurance because the cost of care—even routine care—appears too high to bear on our own. But the use of insurance to fund virtually all care is itself a major cause of health care’s high expense.”
Note the effect of well-intentioned state intervention...I believe that private insurance should be exactly that: insurance for catastrophic health care expenses beyond the reach of the average American. Additionally, we must re-establish the relationship between cost and service rendered. A high deductible, low cost alternative without state mandates should be an alternative. Savings could be used to fund Health Saving Accounts and to subsidize premiums for low income families. Individuals who want to buy insurance should have the playing field equalized and receive tax breaks for the cost of the insurance.
One reform that is little discussed in the current House proposal is tort reform. Whatever the estimates of the direct and indirect costs to our system, this cost is almost certainly underestimated. Anecdotally, as a radiologist, I see this everyday. Physicians are confronted by patients who demand expensive tests (for which they pay a small out of pocket expense) for conditions they almost certainly do not have. If you decline the patient’s request you stand a good chance of losing that patient to another physician who is willing to order the test(s) and subject to liability for any untoward outcome, no matter how low the probability. If our political class decries the ‘obscene profit margins’ of the private insurance company which currently stands at 3.3% of revenue, the evil must be ten-fold for a malpractice lawyer to take 33 1/3% of revenue! If malpractice fees were capped at the profit margins of insurance companies, the cost savings to our system would be enormous. By the way, America has 3-9x the per capita lawyers of any other advanced Western country and I don’t hear anyone suggesting that we spend too much on legal fees. That is not to say that patients are not harmed by negligent care. Health care is fundamentally a human endeavor and therefore by definition imperfect. I am intrigued by proposals to establish a pool of funds that would be administered by legal and medical experts, not by the current jury system, which at times represents a lottery.
Where do they fall short? Won't they force everyone into inferior plans?
"The administration and congressional leaders have learned from the past, when fears (warranted or not) of taking away people's current plans sank reform efforts. We all remember Harry and Louise, right? Under the current proposals, most people who are happy with their current job-based insurance of Medicare could keep what they have. The government would define a minimum package of benefits, so that everyone would have at least basic services covered and be caught 'under-insured' when the hospital bill comes. “What’s new in the plan is this: ‘insurance exchanges’ where people can more easily compare and buy plans, and a possible new public plan to compete with the private options. They’d be available for people and businesses who don’t have (or can’t get) coverage, or can barely afford what they currently have.”
As a recent IBD editorial noted that on page 16 of the 1,018 page (!) House proposal:
“Under the Orwellian header of "Protecting The Choice To Keep Current Coverage," the "Limitation On New Enrollment" section of the bill clearly states:
"Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day" of the year the legislation becomes law.
So we can all keep our coverage, just as promised — with, of course, exceptions: Those who currently have private individual coverage won't be able to change it. Nor will those who leave a company to work for themselves be free to buy individual plans from private carriers.”
Your commentary also demonstrates the common misconception that lack of health insurance precludes you from receiving medical care. If you are a drug addled, uninsured member of Al-Quaeda, in this country illegally to perform an act of mass murder and present with a medical problem to the emergency room, you will be treated. Indeed the government mandates the treatment.
Can government possibly offer a plan that is popular and efficient?
“Medicare, which covers some 44 million elderly and disabled Americans, is both. Basically a ‘single-payer system,’ Medicare’s been more successful than private insurers in reining in costs and maintaining access to doctors.”
Actually the federal government acknowledges that Medicare spending has consistently increased at a faster rate that the costs of private insurance. This despite the fact the Medicare does not cover the costs of services rendered. Ironically, this is forcing an increasing number of physicians to no longer treat Medicare patients in their practice.
But doesn’t our system work better than nationalized systems in Canada and England?
“Chronically ill patients in the U.S. are more likely to forgo care because of costs and experience more errors and inefficient, poorly organized care than adults in other Western nations, including Canada and Britain. Besides, our current system has de facto rationing, based on who can afford insurance, who gets left out due to pre-existing conditions, and what services the insurance companies decide they’ll cover.”
The vast majority (~80%) of Americans are pleased with their healthcare. As far as the efficiency of these government run plans, both Britain and Canada report waiting lists in the hundreds of thousands for routine operations. Every day my practice sees Canadian patients who cross the border to receive their care in a timely fashion. The Canadian system would have imploded years ago if the vast majority of Canadians did not live within 100 miles of the US border with easy access to our system. The British National Health Service (NHS) is the 3rd largest employer in the world (trailing only the Chinese Red Army and Indian Rail Service) and the largest in the Eurozone. The NHS administers to a population of 61 million. How many people will it take to administer a single-payer system in this country? Ironically, in a tacit admission of inefficiency, our government farms out the actual administration of Medicare and Medicaid to the 'evil' insurance companies. Why? Because even the government realizes that they are more efficient.
As to rationing, I will quote Mark Steyn:
"Smokers in Manchester, England have been refused treatment for heart disease and the obese in Suffolk have been told they’re ineligible for hip and knee replacements. Patricia Hewitt, the former NHS Secretary says there’s nothing wrong with the state forbidding treatment on the basis of ‘lifestyle choices’. And apparently the ‘pro-choice’ types who jump up and down in the street demanding that you keep your rosaries off their ovaries are entirely relaxed about the government getting it bureaucratics all over your lymphatics.”
On the flip side, what’s the most effective (and truthful) criticism of the current legislation made by its opponents?
“Expanding coverage on this level is expensive — upward of $1 trillion over 10 years — and there’s disagreement even among reform supporters about how to pay for it. All of the options — tax increases, spending cuts, etc. — are politically unpopular. (Interestingly, the same critics who argue that the plan is too expensive reject the provisions that are most likely to reduce costs, like a public plan competing with private insurance.)”
Given the chronic cost underestimates of Medicare/Medicaid, does anyone really believe that it will 'only' cost $1 trillion over 10 years. The reason critics argue about the wisdom of the so called "public option" is that current public plans already, by the government's own admission, fail to cover the cost of services rendered. Given the government's ability to tax and print money, opponents of the public option are rightly concerned that the government option will continue to engage in predatory pricing that raises the costs of private plans and forces people into the public option.
Ultimately, my major problem with ‘ObamaCare’ is philosophical. As with all systems that promise utopia (universal coverage, increased quality and decreased cost), the House proposal represents the imposition of a moral construct with the implicit understanding that this will improve the individual. As with any utopian (or statist) solution, it is well-intentioned. However, experience tells us that these intentions do not translate well into reality. It is a system that is primarily concerned with dividing the pie rather growing the pie. Another flaw inherent in such a statist solution is as Margaret Thatcher quipped “The problem with socialism is that you eventually run out of other peoples’ money to spend.”
President Obama claims that health care is a ‘right’. I disagree. “Observe that all legitimate rights have one thing in common: they are rights to action, not to rewards from other people. The American rights impose no obligations on other people, merely the negative obligation to leave you alone. The system guarantees you the chance to work for what you want-not to be given it without effort by somebody else.” I believe this is the great and liberating insight of so-called democratic capitalism. After all, you can have food, shelter and health care and still be a slave. This freedom is not simply pursuit of material wealth; it is the freedom to pursue whatever fulfills your soul. For some it is material good, others may choose to work at a non-profit or become a community organizer. In a sense, this is the ultimate fulfillment of the Judeo-Christian responsibility to love your neighbor as yourself.
While a democratic capitalist system does not impose a top down moral structure ,it paradoxically yields moral fruit for the society as a whole. As De Tocqueville observed “Providence has given to each individual, whoever he may be, the degree of reason necessary for him to be able to direct himself in things that interest him exclusively…Extended to the entirety of the nation, it becomes the dogma of the sovereignty of the people.” As Jacques Maritain noted “At least as regards the essentials, their souls and vital energy, their dreams, their everyday effort, their idealism and generosity, were running against the grain of the inner logic of the superimposed structure. They were freedom-loving and mankind-loving people, people clinging to the importance of ethical standards, anxious to save the world, the most humane and the least materialist among modern peoples which had reached the industrial stage.”
To summarize I will quote at length from the great Mark Steyn:
“Government-directed health care is a profound assault on the concept of citizenship. In a nanny state, big government becomes a kind of religion: the church as state…It deforms national politics very quickly…Why is the cost of my health care Barack Obama’s business? When he mused recently as to whether his dying grandmother had really needed her hip replacement, he gave the game away: Right now, if Gran’ma decides she doesn’t need the hip, that’s her business. Under a government system, it’s the state’s business – and they have to ‘allocate’ ‘resources’ and frankly at your age your body’s not worth allocating to. What’s so moral about relieving the citizen of responsibility for his own heath care? If free citizens of the wealthiest societies in human history are not prepared to make provision for their own health, what other core responsibilities of functioning adulthood are they likely to forgo? You’d be surprised how quickly the ‘right’ to health care elides into the government’s right to tell you how to live in order to access that health care. A government-directed medical system can be used to justify almost any restraint on freedom: After all, if the state undertakes to cure you, it surely has an interest in preventing you needing treating in the first place – or declining to treat you if you persist in you deviancy"
He concludes “the acceptance of the principle that individual health is so complex its management can only be outsourced to the state is a concession [that] dramatically advances the statist logic for remorseless encroachments on self-determination. It’s incompatible with a republic of self-governing citizens. As society in which you’re free to choose your cable package, your iTunes downloads and who ululates the best on ‘American Idol’ but in which the government takes care of peripheral stuff like your body is a society no longer truly free.”
I've outlined the basic reforms that would truly improve the system and reduce costs without imposing a government solution. including:
1) Eliminating government insurance mandates
2) Leveling the playing field with respect to tax deductions for purchasing individual insurance plans
3) Enact Medicare reform. This should include the requirement that Medicare/Medicaid and SCHIP pay for all of actual expenses for its enrollees.
4) Enact tort reform
5) Allow tax deductible donations to finance government sponsored health insurance.
6) Allowing insurance portability
Best regards,
Dr. Mark S Zobel
P.S.- Please feel free to forward my email to the White House health care snitch line (flag@whitehouse.gov). (Anyone care to hazard the reaction if the Bush administration had set up a snitch line for people spreading 'disinformation'?)
, how about the use of the word "challenge." Obama uses it every other word as it seems every other politician. It is a positive sounding word for to cover up lack of ideas or ability to want to work through whatever the issue is. The fact that they use it thinking we don't understand insults listeners intelligence. Any difficult question gets answered with: "well, that is definitely a challenge." That is not an answer. But many just stop at that. "We have a big challenge in front of us." etc. etc. They all anxiously ran to be in the position they are in. They don't get to complain after the fact that the job or specific task is "challenging." You were full of answers the day before. Now it is all a "challenge?"
