Getting the health care discussion wrong
posted 2-8-2008 10:14 a.m.

 
Have you noticed that ever since the media — mainstream and new media alike — began marginalizing Dennis Kucinich during the presidential primary campaign, the conversation about health care reform began drifting away from any real reform?

What was a public dialog about national health insurance and universal coverage suddenly began to slide into one about whose plan would cover more people. That was a real change in conversation, and it amounts to an unchallenged bait and switch.

Now, nobody seems to have noticed that the discussion is no longer about universal coverage — because, of course, universal literally means everyone would be covered. And neither Sen. Clinton’s proposal, nor the less ambitious (read: superficial) plans proffered by Sen. Obama and Sen. McCain, let alone Gov. Huckabee, was ever intended to cover everyone. And though much has been made of Tom Daschle's book on health reform, there really isn't anything in there that will truly cover everyone, either. If voters think that any of these proposals would cover everyone, or almost everyone, they’re sadly mistaken. Remarkably, the press hasn’t pointed this out yet, probably because it didn't notice, either.

Time to rectify that. The reason is pressing: there hasn’t been this much public interest in and pressure for health care reform since the Clinton Administration’s effort went awry some 15 years ago. I said then what I’ll repeat now: that it might take a critical mass of so-called middle class Americans losing their health coverage before the pressure is great enough to force a change — and then, Congress may suddenly wake up and, in its haste to respond to the pressure to do something, will cobble together whatever the members think they can get past the lobbyists, and it will all be done quickly and badly. Then we’ll be stuck with a poorly designed Rube Goldberg contraption, and it will be years before we can recognize just how bad it is and undertake to fix it once again.

Time is of the essence, because we may not quite have that critical mass of uninsured blue-collar and white-collar middle-class Americans just yet, but we’re rapidly nearing that point. Which means this is an opportunity that the eventual new president must not neglect: it might be our last chance for another decade or more to get real change.

It strikes me that there are a whole spate of misconceptions that severely hamper this discussion and that even the members of the MSM believe. Worse, the MSM and the blogosphere both seem fixated once again on the ‘horse race’ aspect of the health care debate, i.e., on whose plan is more likely to win out and/or able to resist pressure from lobbyists and special interests and whose plan will cover more people, instead of discussing what actually works, what the reform should achieve, and what it should look like in order to meet those expectations.

So: we can start by naming the misconceptions and correcting them. Here’s what I’ve found so far:

• There is a basic misunderstanding of what the proposed 'reform' plans actually represent and the underlying assumption behind each plan.

Make no mistake, all these plans still treat health care as a benefit, meaning a privilege, not as a right that all Americans have. Because these proposals don’t treat health care as a right, what they actually represent is maintaining the status quo with a few bells and whistles tacked on.

There are only three positions possible on health care: First, health care is a benefit, no matter how desirable, and therefore you only get as much as you can pay for — and if you can’t pay for it, you don’t get it and that’s appropriate. Second, health care is an unlimited right and you get as much as you want, including elective procedures, and we find some way as a nation to pay for it, like taxes. And third, health care is a limited right like, say, public education — the government provides a basic education through grade 12 to everyone, funded by taxes, and similarly covers a basic comprehensive health benefit package, but it won’t pay all your college expenses for your Ph.D. at MIT, and it won’t pay for a nose job just because you don’t like your schnozz.

Clearly, Americans don’t believe that health care is a privilege: they think everyone should be able to get at least emergency care regardless of ability to pay. On the other hand, voters might not be willing to pay what it takes to have the most generous benefit package possible, which is what treating health care as an absolute right would dictate, so the real argument is about health care as a limited right and where to draw the line. And the basic comprehensive benefit package should probably be like the one offered by the Federal Employees’ Health Benefit Program, which is similar to the one specified by law for federally qualified HMOs and more generous in some respects than what Medicare covers. But that's not what's being discussed.

Interestingly, the presidential candidates kept referencing the benefit package of FEHBP without taking the next logical step: just using FEHBP itself as the basis of national health insurance.

This is your answer, gentlepersons of the House and Senate: Fold all existing Medicare and Medicaid beneficiaries into FEHBP, eliminate the Medicare and Medicaid bureaucracies, then let in everybody else and channel payment of all premiums through FEHBP for maximum leverage. AND DON'T create a new, additional bureaucracy like Daschle wants just to make him happy and pretend that it'll do any good, because it won't. Perhaps just using FEHBP, since it's already there, makes too much sense for politicians and right-wing government-haters to grasp the concept.

More likely, they're afraid of admitting the total cost and using the T-word: taxes. Personal and corporate. Progressive rates, meaning a sliding scale for individuals. What you pay now from your paycheck to cover your own contribution to whatever health plan your employer offers, along with your employer's contribution, would simply go to FEHBP instead and be applied to your premium. Same with the portion of your Social Security taxes that goes into the Medicare trust fund: hand it over to FEHBP. Because that would be the logical way to channel payment.

FEHBP, in turn, would pay the local health plan of your choice that already contracts with FEHBP (and there are plenty of those in every state). That puts everyone in the nation in one big risk pool, equalizes premium rates, and gives FEHBP some real leverage to hold down premiums — which it won't have any other way. Sounds expensive — except that we all wouldn't be paying as much as we pay now for premiums in the private sector, so that's an offset. In fact, we'd probably pay less per person, on average, and there would be no cost shifting needed to cover the hidden costs of the uninsured. Because there wouldn't be any uninsured, except for illegal aliens. And portability of coverage is then truly real and automatic for everyone, regardless of employment status: in short, a non-issue.

Someone needs to crunch those numbers. National health insurance through FEHBP would probably cost a lot less per person than people assume (and you'll notice that when critics claim it'll be expensive, they never actually cite per person premium estimates so that people could actually make a legitimate comparison). My plan, folks, doable in a year's time: FEHBP sets the premium payments like it does now, and it covers everyone who's a citizen or legal resident. Phase in Medicaid and the unemployed immediately, Medicare beneficiaries in 6-12 months. Then everyone else. Moreover, once everyone's included, FEHBP has the clout to set premiums, limit increases, and set tough public health and performance goals for the health plans. It's the only real way to guarantee affordability without resorting to price controls; just a thought. And those sissies on the Hill don't want to try it, no more so than the former presidential candidates. Hmph. But I digress ...

• Neither the candidates nor the public give any impression that they understand the difference between universal coverage and universal access to care — and there IS a very big difference between the two.

What most Americans really want is universal, guaranteed access to health care services. To have that, you need two things: effective care has to be made available to people when they need it, where they need it, in a timely and compassionate manner, which means that all the resources have to be in place, and people have to be able to pay for it, which means they need insurance coverage. The first requirement is a delivery system issue, and the second is a financing system problem (and YES, this means you’re dealing with two systems — health care delivery and health financing — and the solutions for one system are different from the solutions for the other; you can't get around that).

If all you have is a financing solution (meaning you’ve somehow made sure that everyone has insurance coverage), you haven’t guaranteed anything. Just ask the farmer who has private coverage and has a tractor accident three hours away from the closest trauma center with no air transport to get him there quickly, or the rural retiree covered by Medicare who has a heart attack but no paramedics to stabilize her on site and no ambulance service to reach a trauma ER or hospital cardiac unit within that golden hour that ensures survival. These people are covered, but their coverage is meaningless if they can’t get the specific kind of care they need when and where they need it. And putting resources where they’re needed is a delivery system problem that won’t be solved through universal coverage. Universal coverage is just the first step, a necessary but insufficient condition.

• There is an almost deliberate misunderstanding, particularly on the part of conservatives and libertarians, about what universal coverage through a single-payor system really means — and it doesn’t mean socialized medicine.

First, let’s make absolutely clear just what socialized medicine really is: it means that the government owns the health care delivery system, the way it does in England or France, and sets global budgets for hospitals, clinics, and their staffs. NOBODY is talking about the U.S. federal government owning all the hospitals or paying salaries to doctors, nurses and other health care professionals. Hell, Congress doesn’t want the federal government to own the entire delivery system because then it would be responsible for fixing everything. No takers on that.

What a single-payor system really means is that there is only one financing mechanism — that is, only one overall insurance program, one health plan — with the same features/benefit package for everyone; all Americans are included in that plan; the risk is spread over the entire group; the same premium rate applies to everyone (making it equitable); and that premium is paid for by progressive taxes on both individuals and corporations (making it affordable). The delivery system stays the way it is, in the private sector. Which means that the U.S. version of a single-payor system would be our version, one that works for us, and different from any other system in any other country. It probably also means that private insurers would only be able to sell supplemental health insurance for benefits not covered by the national plan — for example, coverage for cosmetic procedures, long-term care, or in vitro fertilization.

Besides, the opponents of a single-payor universal coverage plan are wrong when they claim Americans wouldn’t want a single-payor plan and would never put up with it: Medicare is a single-payor health program, always has been, and Americans like Medicare just fine. All they’d change about Medicare, if they could, is to have lower out-of-pocket costs and more services covered (that is, a more generous benefit package with lower or no copays and no deductibles, because those deductibles can still bankrupt you, easily).

So: the next time you hear people saying that a single-payor system means socialized medicine, call them liars to their faces — because that’s what they are.

• There is an equally stubborn, willful misunderstanding and disregard of the dubious merits of tax credits, tax deductions, and programs such as Health Savings Accounts (HSAs) as means to get more health care costs covered and/or get more people covered by private insurance. In reality, NONE of these devices makes health insurance more affordable or accessible.

Tax credits are a hoax, a false promise devised by conservatives who secretly hope that few people ever get to use them, because tax credits favor the wealthy. As incentives, tax credits and deductibles don’t work for one ridiculously obvious reason that still escapes anyone with a comfortable income: if you don’t have the money up front to pay the outrageously high premiums for decent health care coverage, the tax credit or deduction is meaningless to you, because you’ll never be able to take advantage of it. BTW, this is equally true for every other purpose for which tax credits have ever been offered or suggested: they're strictly for those who can afford to spend out of pocket, up front, for the intended purpose. Failed idea #1.

A health plan with a good benefit package that covers preventive care as well as acute care isn’t cheap. Moreover, health insurance premiums are even higher if you have to buy them as a non-group enrollee because you’re either self-employed, unemployed, or your employer doesn’t offer health coverage. Nobody wants to buy so-called 'bare-bones' coverage plans — precisely because they don’t cover much — yet their premiums aren’t that much cheaper than premiums for plans with more comprehensive benefits. Efforts to introduce such stripped-down coverage plans during the mid-1980s generally met with failure because so few people were interested in them. So most of them were dropped. Some bare-bones plans are attempting to make a reappearance now and pitching their product as 'affordable' in the hopes that desperate people who don't understand health insurance will buy them.

Similarly, high-deductible plans are only attractive to people who either are affluent enough to pay for their routine care out of pocket or never intend to use their health insurance for anything other than true emergencies — but that’s an idiotic attitude to have. First, you can never predict when or whether you’re going to need non-emergency care that is still quite serious enough to cost plenty, in which case your emergency-only high-deductible plan isn’t worth the premiums you’ve paid. Even with emergencies covered, your high deductibles and copays for covered services can still break you financially if you don't have the cash to cover those costs. And high-deductible plans typically don't cover any extended or long-term care, maybe not even rehab services, so you'd better not need a lot of inpatient rehab or nursing home care after that car accident you didn't anticipate.

Second, we know from the last 50 years of medical practice that we’re better off treating medical conditions earlier rather than later, and even better off preventing them altogether — which means that routine preventive care is important. However, high deductibles and other out-of-pocket costs such as high copays have been shown to discourage people from getting medical care early, when it would be least expensive to prevent or treat the illness or injury. So, bare-bones and high-deductible/high cost-sharing plans are stupid idea #2, based strictly on hard financial and medical realities.

HSAs, on the other hand, are created only to pay for out-of-pocket costs such as deductibles and copays and are only useful to those who can afford to have part of their income diverted to such accounts. If you have that kind of money to spare in this economy, goody for you — but I'm guessing you aren't unemployed or underemployed, in that case. Like tax credits and deductibles, HSAs do nothing to make health care premiums more affordable, and they’re not helpful to families that can’t afford health insurance premiums in the first place. Worse, if all you have is an HSA, the amount that most uninsured people can divert into that account won’t begin to cover a serious episode of illness — it’s a drop in the bucket whereas acute care can be expensive, which is why you needed real health insurance to begin with. HSAs are a break for the affluent, not for the uninsured: another tax giveaway to the wealthy.

To the extent that employers offer HSAs, they usually make a trade-off by limiting either the dollar amount they spend on health insurance premiums or the total amount spent per employee for all health benefits combined, including dental and vision coverage, prescription drugs, and HSAs; this is sometimes known as a cafeteria-style plan, but your choices are more limited than they look. Thus, employees who can apportion that total dollar amount as they wish are lulled into the false impression that they’re getting a better deal than if their employer simply paid the entire health insurance premium. Fat chance. Make no mistake, employers may call that giving employees choices, but it’s really about dumping more health care costs back onto the employees. The polite term is 'cost shifting,' and the employees in this case are the ones being shifted against. The term 'greater cost sharing' is merely a euphemism for the same cost shifting. The actual phrase should be 'sticking it to the workers' because employers merely use HSAs as cost-cutting mechanisms — for themselves, not you. So: ridiculous idea #3 — again, based on economic reality for the non-wealthy.

Is the message clear yet?

• Finally, there is a very real misunderstanding even on the part of some health economists as to what really drives rising health care costs, and it isn’t what most people think.

This, however, is a longer conversation based on health services research by people like Kenneth Thorpe, and very different from the financing discussion here. I’ll address this topic separately in the future.