April 18, 2008
Providing good doughnuts in health care
A frequent topic on this blog over the years has been the increasingly dysfunctional nature of the third-party payor health care finance system in the United States. This post from last year examined how my primary care physician changed his medical practice to a concierge model because of the financial risks involved in continuing to rely primarily on health insurance for his revenue stream, and this subsequent post touched on the developing crisis that is occurring in the financing of primary care practices around the country.
Albert Fuchs, a Beverly Hills internist, understands the problem quite well and has a straightforward solution: primary care physicians should require payments from their patients and not third party insurers:
For more than a year, I haven't received a single dollar from any insurance company. I work for my patients. A few hundred doctors across the country are working the same way, some in blue-collar towns. Routine care should be affordable to the middle class, and as more doctors and more patients form relationships that exclude insurance companies, prices will drop. Insurance doesn't make routine care affordable; it makes it more expensive by adding a middleman. I know that some patients can afford nothing, so two afternoons a month I volunteer at a clinic that cares for indigent patients, which I could not have done with the huge patient volume I was seeing a few years ago.
When doctors break free from the shackles of insurance companies, they can practice medicine the way they always hoped they could. And they can get back to the customer service model in which the paramount incentive is providing the best care. Only then can doctors reclaim the simple dignity of any businessman: These are my doughnuts; only I and my customers can determine their worth. (At the end of each week, I will donate some to the needy, but I will not let a third party set the price.)
Read the entire op-ed. Medical insurance should be true insurance from a catastrophic ailment or injury, not financial insulation from the routine costs of health care. Jonathan Kellerman, a clinical professor of pediatrics and psychology at USC's Keck School of Medicine, advances the same idea in this recent W$J op-ed:
Physicians and other providers need to liberate themselves from the Faustian bargain they've cut with the Mephistophelian suits who now run their professional lives. Because many doctors are loath to talk about money, they allowed themselves to perpetuate the fantasy that "insurance is paying." It isn't. There is no free lunch and no free physical exam.
If substantial numbers of health-care providers shook off the insurance monkey on their back, en masse, and the supply of providers was substantially increased by opening more medical schools, the result would be a more honest, cost-effective system benefiting everyone. Except the insurance companies.
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April 13, 2008
The block of the chip passes away
Arnold Kling of EconLog has long been a Clear Thinkers favorite, particularly in the area of health care finance. That was the subject of this recent post regarding Arnold's coordination of health care for his elderly father, Merle Kling, who passed away on Tuesday.
Take a moment to read Arnold's touching post on his father, who was quite a remarkable fellow. Arnold is a chip off a very solid old block.
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January 30, 2008
Arnold Kling's Medicare experience
As I've noted many times, EconLog's Arnold Kling is doing some of the best writing and thinking about health care and health care finance issues in the U.S. right now. In his latest TCS op-ed, Kling describes the care received recently by his elderly father (who sounds as if he should have been a patient of my late father) and observes:
Medicare is wonderful for relieving the elderly from the burden of worrying about health care expenses. By the same token, it is wonderful for relieving doctors of the burden of worrying about the elderly as customers. You get paid for understanding the billing system, not for understanding your patients.
Read the entire op-ed. An update post is here.
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January 16, 2008
Becker on health care finance reform
Gary Becker proposes four common sense reforms for the American health care finance system, one of which is unassailable:
Eliminate the link between employment and the tax advantage of private health insurance. Since much of the spending on health are investments in human capital, there is good reason to exempt these expenditures, along with other investments, from income taxes. However, this employment link is inequitable because it does not provide the same tax advantages to families without employment-based insurance. It also encourages expensive employer health plans that have significant consumption components since the government picks up much of the cost of such coverage.
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January 13, 2008
The People's Republic of Massachusetts
The development of in-store health care centers over the past decade has unquestionably been a positive development for the American health care system. They provide relatively inexpensive primary care and take some of the burden off of over-crowded emergency rooms that are currently required to provide non-emergency care to folks who have no other conduit to the health care system.
So, in the face of this important service that the in-store health centers are providing to people and communities, what does the Mayor of Boston want to do? Stop them from making money! (H/T Radley Balko):
Mayor Thomas M. Menino embarked on a highly public campaign yesterday to block CVS Corp. and other retailers from opening medical clinics inside their stores, . . . Menino blasted state regulators for paving the way Wednesday for the in-store clinics, which are designed to provide treatment for sore throats, poison ivy, and other minor illnesses.The decision by the state Public Health Council, "jeopardizes patient safety," Menino said in a written statement. "Limited service medical clinics run by merchants in for-profit corporations will seriously compromise quality of care and hygiene. Allowing retailers to make money off of sick people is wrong."
In a separate letter, Menino urged members of the city's Public Health Commission to consider barring the clinics from Boston.
Meanwhile, W$J columnist David Wessel writes "The business model for big U.S. banks is broken. . . . Banks and Wall Street could devise a better business model. But they'd best hurry. If they don't act, regulators will. And if regulators don't, House Financial Services Committee Chairman Barney Frank and the other Democrats in Congress will."
Wessel's column and Frank's usual anti-business antics prompted Andrew Morriss to write a letter to the WSJ, which Don Boudreaux passes along over at Cafe Hayek:
Mr. Wessel is correct that most banks’ business models are not currently producing profits, but this is not cause for concern for anyone but their shareholders. Markets are a discovery process, with firms and investors learning as they try new ideas and react to changed conditions. What markets need is a stable regulatory environment, in which every dip in the market does not produce a new set of rules.Unfortunately, there is little evidence that Rep. Frank and his comrades on the House Financial Services Committee understand this, making it virtually certain that they will rush to “solve” the banking crisis with new legislation. The best assistance Rep. Frank could offer would be to commit his committee to resolute inaction for an extended period of time, offering both banks and investors the assurance that the rules of the game would remain unchanged and allowing them to learn from their experience in the market place.
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December 18, 2007
That governmental Ponzi scheme
At the end of this common sense post that mostly points out that no useful public policy is served by the government denying grandparents the right to establish Health Savings Accounts for the benefit of their grandchildren, the always entertaining Art DeVany makes the following observation about a common topic on this blog -- Social Security reform (previous posts are here):
By the way, there is no such thing as social security. There are only people who are more or less secure against contingencies. They might pool their risks against these contingencies, but there is no effective way for a society to avoid risk. As a program for risk pooling, Social Security is very ineffective. It is not insurance, it is redistribution among generations. It is a Ponzi scheme because the risk pool is allocated from one generation to another. And, it is fraught with demographic risk and political risk. It will eventually go under or have to be modified substantially by disavowing the contract between generations because it is not sustainable.
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December 4, 2007
The government and health care finance reform
EconLog's Arnold Kling is one of America's best thinkers on economic issues relating to the U.S. health care finance system (previous posts here), so this recent TCS Daily op-ed is required reading for anyone interested in the proper role of government in a reformed health care finance system. In so doing, Kling summarizes well the current state of stress in the U.S. health care finance system:
All of our health care finance systems are under stress. The government system is completely unsound--the Titanic headed toward the iceberg of unfunded liabilities. Employer-provided health insurance is a questionable concept in theory that is unraveling in practice. The individual insurance market is a disaster, with something like 3/4 of all families who do not get insurance through work or government electing to remain uninsured.
Kling sums up his view of the proper role of governement in reforming the health care finance system in the following manner:
I believe that there are things that government can do to enhance access, improve quality, and lower the cost of health care. However, I believe that we would be best served by having government focus on the policies that I put into the "good" category--clinics in poor neighborhoods, vouchers, high-risk pools, and better information on the effectiveness of services and the performance of providers. If we look to government to take a larger role in running our health care system, then my prediction is that things will get ugly.
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November 8, 2007
An expensive illusion
As I've noted several times previously, EconLog's Arnold Kling is among the clearest thinkers in the U.S. on reform of the health care finance system. He has been addressing health care finance issues again this week, first in this podcast interview with Russ Roberts, and also in posts here and here addressing issues raised by Greg Mankiw's NY Times article on the misleading nature of certain statistics that are frequently tossed around in the health care finance debates. But the most insightful Kling health care finance post this week was this Cato-at-Liberty post in which he analogizes the third party payor health care finance system to subsidized prostitution:
Suppose we were 20-year-old guys who hung out together, and one of our friends was down on his luck with women. He’s really depressed about it. We decide–not necessarily the brightest idea–to hire him a prostitute. We don’t want him to know she’s a prostitute, so we all chip in and pay her, tell her to meet our friend at a bar, and make him feel better about himself.Next morning, we ask him how it went. He says, “Great. I really feel better about myself. In fact, I’m going to see her again tonight.”
As friends of the guy, we look at each other and realize that he will be devastated if he learns the truth. So we chip in again and pay the prostitute to make our friend feel better about himself. This keeps happening day after day, and eventually maintaining our friend’s illusion about his love life gets to be really expensive.
Similarly, free health care is an attractive illusion. It’s just gotten to be really expensive to maintain the illusion.
Before the blogosphere, discussion and analysis of health care finance -- which has become one of the key domestic issues of our time -- was largely buried in technical books, economic or medical journals and an occasional op-ed on the editorial pages. As a result, health care finance was largely misunderstood by the public and even a large segment of the medical profession. Now, through the leadership of economic bloggers such as Kling, the important issues relating to health care finance reform are instantly available for the world to review as a virtual cornucopia of economic bloggers has emerged to provide commentary and insight. That's a wonderful legacy for Kling, and one for which we should all be appreciative.
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October 26, 2007
My concierge health care experience
Bill Lent is one of Houston's finest internists. How do I know this? Well, because I know who trained him (my late father) and he has been my personal physician for the past 15 years or so. Having been blessed with good health, the only medical service that I buy from Dr. Lent in most years is my annual physical, which I generally schedule for about this time each year. I always enjoy catching up with Dr. Lent, who provides me with "on the front line" information regarding the horrific cost of health care regulations, which are literally strangling the market for primary care physicians in the U.S.
It's been particularly interesting watching the evolution over the years of Dr. Lent's internal medicine practice, from one in which Dr. Lent provided an unusually high level of personal care to his patients (something my father emphasized in his teaching) to a high volume, impersonal practice that virtually all primary care practices have been required to adopt to remain even marginally profitable under the present U.S. health care finance system. Over the past ten years or so, Dr. Lent has continually confided to me during our annual visits that he was uncomfortable with the direction of his practice.
So, I was pleased to learn when I scheduled my physical a couple of weeks ago that Dr. Lent is doing something about it. Starting next month, Dr. Lent is commencing a concierge health care practice, administered by MDVIP out of Boca Raton, in which he is limiting his practice to about 600 patients who will pay Dr. Lent $1,500 annually for the benefit of receiving his personalized style of service. Coincidentally, this Wall Street Journal ($) article earlier this week described the proliferation of pre-paid health care plans, which is sort of a lower-priced form of what Dr. Lent is doing. The WSJ article essentially describes how many primary care physicians are simply dropping out of insurance plans -- both public and private -- in favor of prepaid plans that offer unlimited access to basic health care for set monthly fees.
Inasmuch as the employer-based health insurance system typically offers low-copays and deductibles for the vast majority of health care services, a substantial amount of the American health care finance system is basically prepaid health care already. In order to maintain profitability in a highly-regulated market, insurance companies compensate for these low usage fees by charging higher monthly premiums, lowballing doctors' fees, and challenging claims continually. The result has been the evolution of a primary care system that is incredibly bureaucratic (have you ever tried to figure out how your insurance pays claims?) and literally breaking down.
The MDVIP model treats primary care service similar to a health club membership. The model focuses on the delivery of relatively inexpensive, protocol-driven care than can be offered at a relatively low cost while still providing patients more overall access. MDVIP's model is relatively expensive, so low-income patients will have a difficult time affording the fee. However, providing a tax deduction for individual health insurance would make such pre-paid plans more affordable for low-income patients, while providing Medicaid patients with vouchers for prepaid health care would have a similar impact.
Who will be threatened from the proliferation of these plans under the current health care finance system? Well, it's a bit early to speculate, but my sense is that insurance companies with big stakes in employer-based health insurance will not enjoy the competition from MDVIP-type practices. Similarly, speciality providers who depend on state regulatory mandates in comprehensive insurance plans to subsidize their practices will also feel the competitive pressure if these types of plans catch on in a big way.
So, I'm going to enjoy learning about how Dr. Lent's practice changes over the next year under the MDVIP structure. If it is successful, as I suspect it will be, it makes you wonder -- if such entreprenurial spirit can be generated even in the current highly-regulated health care finance system, then imagine what could happen if we unleashed the power of the marketplace to reform the delivery of health care and the health care finance system?
Posted by Tom at 12:10 AM | Comments (5) | TrackBack (0)
October 18, 2007
The end of socialized medicine
Peter Huber is a Manhattan Institute senior fellow, an MIT-trained engineer and a lawyer who has authored several books, including Hard Green: Saving the Environment from the Environmentalists and Galileo’s Revenge: Junk Science in the Courtroom. In this provocative City Journal article, Huber observes that the complexity of modern diseases virtually assures that a "one-size-fits-all" socialized medical system will fail:
That is the real crisis in health care—not medicine that’s too expensive for the poor but medicine that’s too expensive for the rich, too expensive ever to get to market at all. Human-ity is still waiting for countless more Lipitors to treat incurable cancers, Alzheimer’s, arthritis, cystic fibrosis, multiple sclerosis, Parkinson’s, and a heartbreakingly long list of other dreadful but less common afflictions. Each new billion-dollar Lipitor will be delivered—if at all—by the lure of a multibillion-dollar patent. The only way to get three-cent pills to the poor is first to sell three-dollar pills to the rich.With almost $30 trillion under management, Wall Street could easily double the couple of trillion it currently has invested in molecular medicine. The fastest way for Washington to deliver more health, more cheaply, to more people would be to unleash that capital by reaffirming patents and stepping out of the way.
On the other side of the pill, molecular medicine can only be propelled by the informed, disciplined consumer. Any scheme to weaken his role will end up doing more harm than good. Foggy promises of one-size, universal care maintain the illusion that the authorities will take good care of everyone. They reaffirm the obsolete and false view that health care begins somewhere out there, not somewhere in here.
Neither Pfizer nor Washington can ever stuff health itself into a one-price uniform, One America box—not when health is as personal as ice cream, genes, and pregnancy, not when every mother controls her personal consumption of carbs, cholesterol, Flintstones, and Lipitor. But the thought that government authority can get more bodies in better chemical balance than free markets and free people is more preposterous than anything found in Das Kapital. Freedom is now pursuing a pharmacopoeia as varied, ingenious, complex, flexible, fecund, and personal as life itself, and the pursuit will continue for as long as lifestyles change and marriages mix and match. Given time, efficient markets will deliver a glut of cheap Lipitor for every glut of cheap cholesterol. And given time, free people will find their way to a better mix.
Read the entire article here.
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October 12, 2007
The Achilles Heel of Health Care Finance Reform
In an interview years ago, the late Milton Friedman summed up the basic problem with a nationalized system of health care finance:
There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you're doing, and you try to get the most for your money.Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I'm not so careful about the content of the present, but I'm very careful about the cost.
Then, I can spend somebody else's money on myself. And if I spend somebody else's money on myself, then I'm sure going to have a good lunch!
Finally, I can spend somebody else's money on somebody else. And if I spend somebody else's money on somebody else, I'm not concerned about how much it is, and I'm not concerned about what I get. And that's government. And that's close to 40% of our national income.
However, even more troublesome than the illusion that A will get top-flight service from B when C is forced by government to pay the bills, who is going to provide the health care under such a system?
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September 26, 2007
House calls making a comeback?
Despite the drag that America's highly-regulated health care finance system places on the delivery of medical services, glimmers of entrepreneurial hope still shine through occasionally:
A new kind of medical practice is flourishing nationwide that offers to go to where the patients are — whether a home, an office or a hotel — to treat ailments as diverse as a sprained ankle or a bad case of bronchitis. Some services may even wheel in a mobile X-ray machine or an ultrasound machine, depending on the ailment, or perhaps pull out kits to test for strep throat or to draw blood. They may dole out medication on the spot or arrange for pharmacies to deliver prescriptions.“When you call, you can speak to a doctor in five minutes, and that doctor can be there with you within the hour. Where else do you get that kind of delivery?” said Walter Krause, founder of Inn-House Doctor. The company says it has 40 physicians on call in Boston, Chicago, Dallas, Houston, Las Vegas, Phoenix, Philadelphia and Washington; some of the doctors are in private practice or work in hospitals, and they make house calls during their time off.
The convenience comes at a price. Appointment fees can range from $250 to $450, with additional tests and medication extra. And payment is due at the time of the appointment.
The website for the service is here. Critics will contend that this service amounts to house calls for the rich, but it is nevertheless a good example of how medical service markets will respond to patients controlling the funds that they are willing to spend on medical services. Frankly, my bet is that that this type of service would already be available at a much lower cost but for the fact that most patients have been insulated from the true cost of medical services and the expenditure of their health care dollars for decades now.
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September 14, 2007
Stossel on "Sicko"
ABC News investigative reporter John Stossel provides this WSJ ($) op-ed in yesterday's paper in preparation for his long-awaited ABC special on America's health care and health care finance system tonight at 9 p.m., CDT:
Mr. [Michael] Moore [in his documentary "Sicko"] claims that because private insurance companies are driven by profit, they will always deny care to deserving patients. For this reason, he argues, profit-making health-insurance companies should be abolished, our health- care dollars turned over to the government, and the U.S. should institute a health-care system like the ones in Canada, Britain or France. [. . .]Mr. Moore thinks that profit is the enemy and government is the answer. The opposite is true. Profit is what has created the amazing scientific innovations that the U.S. offers to the world. If government takes over, innovation slows, health care is rationed, and spending is controlled by politicians more influenced by the sob story of the moment than by medical science.
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August 8, 2007
The Universal Distraction
As noted in these earlier posts, Arnold Kling continues to provide an enormous amount of lucid analysis on what ails America's health care finance system. In this TCS Daily op-ed, Kling makes two excellent points, the first regarding tax treatment of health insurance premiums:
I would like to see the abolition of the tax break for company-provided health benefits as well as the tax break for Medical Savings Accounts. Company-provided health benefits ought to be included with personal income and taxed at the personal income rate. There should be no special benefits for savings accounts labeled "medical." (I think that all saving ought to be tax-free, but that's another topic.). . . Although I prefer real health insurance to insulation, I do not want to impose my preferences on others. All I ask is that we reform our tax code so that it is neutral.
Second, Kling makes an important point regarding the freedom to buy health insurance and the health care limits that society needs to accept if a person chooses not to do so:
[M]ost of the people who are uninsured today are reasonably healthy. They just do not want to pay for their own health insurance. In my view, they ought to be allowed to make that choice, but they should face the consequences. If they require health care, the cost should not be shifted onto other people who have insurance.
Posted by Tom at 12:15 AM | Comments (7) | TrackBack (0)
July 2, 2007
An important distinction in the health care finance debate
Clear Thinkers favorite Arnold Kling, who appears to be everywhere these days in regard to discussions over reform of America's health care finance system, reminds us in this Washington Times op-ed of an important distinction in the health care finance debate -- despite the problems in health care finance, American medical care and research remains the hope of the world:
On one side of me at the graduation [of my daughter] sat [my wife], a breast cancer survivor. On the other side was my father, whose heart condition and blood pressure threatened to take his life before my daughter was ready to graduate kindergarten, much less college. Finally, there was my daughter herself, who since high school has had a chronic intestinal illness sufficiently contained that she could graduate on schedule.None of these three stars would have been there without medical treatments that only became available since my daughter was born. New drugs played a significant role in each case. In fact, some pharmaceuticals critical for my daughter only were approved for her condition a few years before she was given them. Drugs in the pipeline are likely to play an important role in her future.
In other countries, would the same state-of-the-art medicines and equipment have been available to my father, my wife and my daughter? Perhaps. But it is a safe bet these technologies were not invented elsewhere.
Much of the medical innovation that the world enjoys comes from America. While as an economist I find much to criticize about our health-care system, America's role in medical innovation is crucial not just for Americans, but for the entire world.
Read the entire op-ed.
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June 30, 2007
More Kling on health care finance
Clear Thinkers favorite Arnold Kling continues in this TCS op-ed to provide his typically insightful analysis on what is needed to reform America's health care finance system. He concludes:
"[R]eal health care reform in the United States will not happen because of some wonk's clever plan. It will not happen as a result of an election. It will only happen when we change some of our beliefs about health care."
Read the entire piece.
Posted by Tom at 12:37 AM | Comments (0) | TrackBack (0)
June 5, 2007
Texas' medical licensing logjam
The number of insurance companies offering medical malpractice insurance policies has dramatically increased and malpractice insurance premiums have substantially decreased since the 2003 legislation enacting medical malpractice caps in Texas, but the med mal caps have contributed to at least one unanticipated problem:
. . . about 2,250 license applications await processing at the Texas Medical Board in Austin. The wait could be as long as a year for some of the more experienced doctors because it takes longer to review their records.The fear is that some doctors will give up on Texas and go elsewhere instead of waiting. A $1.22 million emergency funding request was approved during the last days of Texas legislative session for the Texas Medical Board, which licenses physicians. That is on top of the $18.3 million regular biennial appropriation, said Jane McFarland, the board's chief of staff.
The board plans to add nine new employees to its 139-member staff, seven of which will help chop away at the backlog of license applications.
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April 5, 2007
Rationing health care
Charles Wheelan, the Naked Economist, lucidly addresses the key issue in regard to the U.S. health care finance system:
Here's a question to ask any presidential candidate from either political party: How do you plan to ration health care?If the answer is "I won't," then he or she doesn't understand health care. Or, more likely, they understand health care and aren't in any mood to talk straight about it.
"Rationing" has a bad connotation, which is odd, because we ration just about everything. In fact, that's what capitalism does best.
Not everyone gets an S-Class Mercedes-Benz or courtside tickets to the NBA playoffs or roses on Valentine's Day. Who does? People who are willing to pay for them.
We call that a market, which is just rationing with a more attractive name. Everything worth having is scarce to some degree, so we use prices to figure out who gets what.
Health care is similar to German cars and basketball tickets -- not everyone gets everything they want. But health care is obviously different in a crucial respect: People who don't get what they want may become sick, stay sick, or even die. Unlike roses or Lakers tickets, health care is literally a life-and-death matter.
As a result, the most fundamental policy question related to health care is who gets what kind of care -- or, put another way, how we choose to ration resources. Forget all the other complications, like aging baby boomers, malpractice lawyers, greedy drug companies, shockingly fat Americans, insurance forms in triplicate, and so on.
Do those things help to explain why our system is expensive and getting more so? Yes. But for anyone looking to control costs (e.g., a presidential candidate) those factors pale in comparison to the fundamental health care design question: Who gets what care and why? [. . .]
And therein lies the fundamental inefficiency of the American system. We have no good mechanism for saying "no" to expensive technologies and treatments that provide marginal benefits. If you're a patient, that sounds terrific; your doctors will spare no expense. If you're a business trying to keep up with skyrocketing health care costs, or a family trying to pay for benefits, it's not. And, of course, as insurance costs go up, fewer people will have access to that kind of coverage.
At the same time, we don't do a very good job of saying "yes" to treatments for the uninsured that would profoundly improve their health.
The combination of those two factors goes a long way toward explaining why the U.S. spends a ton of money on health care (15 percent of the GDP, compared to 8 percent for Britain and Japan and 10.5 percent for France) and gets relatively mediocre outcomes. . . .
In short, the rest of the industrialized world does a better job of rationing health care than we do.
Which brings me back to my original point. Every presidential candidate is going to talk about controlling health care costs. Most are going to talk about expanding coverage, too. Those goals are impossible unless we can design a system that says "yes" to the most cost-effective care -- even very expensive treatments, provided they have corresponding benefits -- and "no" to treatments with benefits that are too small to justify their costs. In other words, rationing.
Read the entire article. Wheelan doesn't propose any solutions, but he does an excellent job of framing the issue. Stated another way, to what extent is American society willing to underwrite health care costs that individual citizens cannot afford -- or are unwilling -- to pay?
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February 14, 2007
Five big health care issues
EconLog's Arnold Kling, who is doing some of the best thinking these days on reforming America's dysfunctional health care finance system, identifies in this TCS Daily op-ed the five big questions in health care:
1. What will we do about the large projected deficit in Medicare?2. What can we do to reduce government subsidies for extravagant use of medical procedures with high costs and low benefits?
3. What should we do about the health care needs of the very poor?
4. What should we do about the health care needs of the very sick?
5. What should we do about a scenario in which both income inequality and the share of average income devoted to health care rise sharply?
Kling goes on to discuss our social fetish with health insurance, which is really not insurance at all:
If you ask me what kind of health insurance I would like for my family, my instinct is to answer, "None." The only reason we have health insurance now is to avoid the stigma of being called "uninsured."Somehow, health insurance has become a social fetish. I could travel to the far reaches of the globe, and almost everywhere I would find merchants where my credit is good and my dollars are welcome. But here at home, trying to enter a local hospital with nothing but a wad of cash and a credit card would be like urinating on the sidewalk.
Read Kling's entire piece. As the WSJ's ($) Holman Jenkins pointed out awhile back, government policy has exacerbated these issues and is unlikely to solve them through greater involvement in the system:
The tax code is the original hectoring mommy behind our health-care neuroses. It gives the biggest subsidy to those who need it least. It pays the affluent to buy more medical care than they would if they were spending their own money. It prompts them to launder our health spending through an insurance bureaucracy, creating endless paperwork. It prices millions of less-favored taxpayers out of the market for health insurance. It fosters a misconception that health care is free even as workers are perplexed over the failure of their wages to rise.
Posted by Tom at 4:13 AM | Comments (0) | TrackBack (0)
January 31, 2007
Doctoring under an increasingly regulated system
Christopher Tozzo recently articulated a troubling thought about the perverse incentives involved in a one payor, government-administered health care finance system:
A key premise in any call for socialized medicine is that physicians (and nurses and dentists and physical therapists and orderlies and equipment technicians and pharmacists and ...) will continue to do what they do now, as much as they do it now (and where they do it now and as well as they do it now and for as long as they do it now and ...) despite the efforts by government to enslave them. Like a battered spouse, the health care professional will, the bureaucrats presume, simply put up with it forever. [. . .]If you're smart enough to become a doctor, then you are smart enough to become a lawyer, accountant, investment banker or a dozen other ultra-skilled occupations that are not price capped. The laws of economics are not subject to repeal by any legislature. An artificial price ceiling creates a shortage, regardless of what "noble goals" underlie it. Doctors, especially future doctors, will not be turned into indentured servants without limit.
Tozzo's point is a good one, and reminded me of the following note that I recently from one of my old friends, Dr. Jim Bob Baker. Jim Bob is a first-rate internist who was one of my late father's best and brightest medical students. Jim Bob wrote about a new regulation that is creating similarly-skewed incentives for doctors under the current American health care finance system:
I wanted to let you know about the next new development in the mess that is the U.S. health care finance system. The newest wrinkle is what is being called "P4P", or "Pay for Performance." Ostensibly, the program purports to be a budget-neutral process whereby doctors and hospitals who meet certain guidelines in the provision of healthcare in specific illnesses will be given higher reimbursement, while those who fall below the benchmark will see their payments cut even further.What we expect will happen has more of an Orwellian flavor. Hospitals and private practitioners are already preparing for the first installment of a scheduled 40% cut in Medicare payments to them that will occur over the next several years. In all likelihood, we will see an across-the-board cut to all providers. Then, if you want to see an "increase" in payment to get a portion of that cut reinstated, you have to jump through the particular hoops mandated by CMS. Those who fall below the standard will see their payments cut even further.
Pay for Performance is a noble idea. The doctors and hospitals treating patients most correctly get a higher payment for that treatment. However, as with most governmental programs, implementation of the noble idea falls woefully short of intended result.
One of the benchmarks for outpatient treatment is for patients with Diabetes. The goal for chronic therapy is to keep the Hemoglobin A1c level below 7% -- this is a measurement of the amount of glucose bound to hemoglobin, which provides a correlation to a patient's average blood glucose level over the past three months. A HgbA1c of 7% implies and average glucose of 150-180. However, it is an imperfect measurement, as 7% would also correlate to glucoses ranging from 50-540, which obviously is not ideal control, but we'll ignore that fact for the time being.The P4P benchmark for a doctor treating diabetics would be set as a certain percentage of his patients (90% for the sake of argument) with HgbA1c's under 7%. Meet this artificial standard and your payment from Medicare is "increased" as discussed above. Fall below this standard and payment for treating these patients falls further.
Imagine two physicians. Dr. A is a family physician who works in an affluent suburb with educated and motivated diabetics. Dr. B is a diabetes specialist who sees complex and less informed diabetics at an inner city medical center.
Which physician will be more likely to meet the P4P benchmark?
Add to this the likelihood that Dr. A will refer many of his difficult-to-treat patients to Dr. B, because he is the "specialist," further improving Dr. A's statistics and driving down Dr. B's. And this does not take into account the percentage of Dr. B's patients who willfully choose not to follow his recommendations about medications, diet, exercise, etc, which also worsen Dr. B's "performance."
There are many other benchmarks being proposed by the feds for both outpatient and inpatient care, with similar unintended consequences. The worst of these influences from my perspective is the intentional "cherry picking" of patients by physicians with more superficial training or by smaller community hospitals, with the subsequent "turfing" of the more difficult patients (along with the lower reimbursement for taking care of them) to the specialists and medical centers.
Another factor about P4P that is not readily apparent is the expense of producing the data necessary to determine if a doctor or hospital is meeting the benchmarks. Already inundated with regulatory paperwork, providers wanting to continue to feed at the Medicare trough will have to commit even more overhead resources to the process of documenting and transmitting to federal regulators the information necessary to show that they are meeting the guidelines.
This process is already in effect for the hospitals, at least partially so. To maintain eligibility for Medicare dollars, hospitals have to submit to reviews by JCAHO -- the Joint Commission of Accreditation of Healthcare Organizations. The hospital must invite this federal agency to come on site every 2 to 3 years to survey their operation and tell them what they are doing wrong.
Imagine the medical equivalent of boot camp inspection of footlockers by a drill sargeant with a bad attitude. And the hospital has to pay JCAHO for this enjoyment. Failure to do so means loss of accreditation, and with it, loss of Medicare dollars.
With these decreasing payments and increasing regulation, I think that there will be an increasing number of physicians opting out of Medicare in the next several years. Indeed, it would not surprise me if it becomes difficult to find a decent physician who will be willing to accept any Medicare-eligible patient, even with the world's most generous secondary insurance. This is a difficult process to imagine for the Internist -- the vast proportion of patients we care for are on Medicare. But if it costs more to provide the care than we can get reimbursed, then there is no future in seeing these folks. Kinda like the guy who said that even though he lost money on every business transaction, he would try to make up the difference by increasing his volume.
In closing, I think that your rather Walter would be very disappointed with where the practice of medicine is headed today. It is becoming less and less of the art that he practiced and taught. As I reflect on the recent changes I have made in my work situation, I am reminded of a line from the movie, "War Games," the Matthew Broderick film where he plays a teenage computer geek who hacks his way into the national nuclear defense computer network. After getting the super computer to play tic-tac-toe multiple times to a draw, the computer says, speaking about thermonuclear war, that "the only way to win is not to play." I kinda feel the same way about medicine these days.
And that's bad. Because who's going to be left in medicine to take care of you and me when we are in our 70's and 80's?
Posted by Tom at 4:35 AM | Comments (0) | TrackBack (0)
January 25, 2007
Gauging the health care finance litmus test
It's looking as if the health care finance litmus test noted earlier this week is already quite revealing. The Washington Post's Steve Pearlstein, who has never been particularly enthusiastic about the Bush Administration, reports:
But the most surprising and encouraging development is that a president who for six years has only nibbled around the edges of health-care issues has weighed in with some bold ideas to expand coverage, rein in costs and bring some fairness to the tax code. And get this: It actually involves raising taxes on the rich and lavishly insured and giving the money to the working poor and the uninsured.Given that, you'd think Democrats would have welcomed a politically courageous proposal to put a cap on one of the biggest and most regressive features of the individual income-tax code. But instead, they've shifted reflexively into partisan attack mode, mischaracterizing the impacts of the proposal and shamelessly parroting the propaganda from the labor dinosaurs at the AFL-CIO.
"Dead on arrival," declared Rep. Pete Stark (D-Calif.), chairman of a key health subcommittee in the House, hinting at a dark conspiracy to kill off employer-sponsored health insurance.
"A dangerous policy that ultimately shifts cost and risk from employers to employees," said Charlie Rangel, chairman of the House Ways and Means Committee.
Sen. Harry Reid, the majority leader, called it nothing less than an "attack" on American workers.
Worst of all was the five-page memo distributed by Sen. Edward Kennedy to Democratic colleagues that ought to embarrass a man who considers himself the Senate's leading health-care expert -- a compendium of half-truths, unsupported assumptions and outright lies. Kennedy reverted to the hackneyed rhetoric of class warfare, asserting that the president's proposals will do nothing for working families, give new tax breaks to the rich, increase the number of uninsured and encourage everyone to buy less insurance coverage than they should have.
In fact, all of these are almost precisely the opposite of the truth.
The president's health plan would, in fact, put a cap on a $200 billion-a-year tax break that now goes disproportionately to those with the most generous and costly employer-provided health insurance plans. It would redirect a small portion of that break to those who have less generous coverage or those who have to buy their own insurance because their employer does not offer it. For a few million of the roughly 47 million Americans with no insurance, it may also make the difference between being able to afford basic insurance or not.
The fact that some of those who have these rich policies happen to be members of auto or postal unions doesn't change that the president's proposal would make the tax code more progressive, not less. They are the aristocrats of the working class who, like lawyers, investment bankers and journalists, earn more in tax-free benefits each year than uninsured janitors earn in taxable wages. And whatever modest tax increase they might face from the cap on tax-free health benefits, it is certainly less than the tax cuts they got from Bush that Democrats are so eager to rescind.
Almost every health economist agrees that the tax subsidy for employer-paid health insurance is not only unfair but that it also encourages people to buy too much insurance, consume too much health care and pay too much for both. Bush deserves praise for having the political courage to confront the issue.
Now is this the magic bullet that will solve the health-care crisis? Of course not.
Would any real solution also require finding billions of dollars more to subsidize the purchase of health insurance by low-income workers and getting states to reform dysfunctional markets for individual and small group insurance? No doubt about it.
But anyone seriously interested in health reform would welcome the president's proposal as a basis for negotiations, raising public expectations and increasing pressure on the president to embrace more comprehensive reform. Unfortunately, that is not the approach of Messrs. Stark, Rangel, Reid and Kennedy, who apparently prefer demonizing the president and grandstanding on the issue until the next election.
Haven't we had enough of this?
Read the entire piece. President Bush's proposal -- although not an all-encompassing solution to America's dysfunctional health care finance system -- addresses a fundamental problem of system -- tax subsidies that have insulated many Americans from the true cost of health care through employer-based health insurance. The president's plan identifies the problem and responds to it in a common sense way by proposing to negate the distorting subsidy. There are reasonable alternatives that should be examined -- such as removing the tax subsidy of health insurance altogether -- but to castigate the President's proposal in favor of the insulation provided by the current system is the epitome of elevating political form over substance.
Posted by Tom at 4:18 AM | Comments (4) | TrackBack (0)
January 22, 2007
A first-rate health care finance proposal
The Bush Administration announced over the weekend that President Bush will propose a common sense reform of the health care finance system during his upcoming State of the Union Address -- extension of the tax deductibility of health coverage to everyone who acquires it outside of the workplace.
As has been noted many times in this blog, the federal government doesn't currently tax employer-provided health insurance benefits but gives no tax breaks to most consumers who buy medical insurance outside the workplace. President Bush will propose to make it easier for consumers who do not have employer-provided health insurance to buy coverage on their own by making the tax incentive for doing similar so simlar to that of homeowners who deduct interest payments on their mortgages. The Bush Administration's plan would also set a cap on the amount of employer-based health care benefit that an employee could receive tax-free.
The Bush Adminstration proposal is particularly sound because it addresses the mindset that has developed over the past couple of generations of Americans who are conditioned to employer-based health insurance -- that is, that health care benefits are some sort of obligation from employers with regard to which employees have little incentive to care much about cost. The Bush plan treats employer-based insurance as compensation (which it is -- such insurance arose as a loophole to get around wage and price controls during WWII), which provides a much sounder basis for assessment of the value of employer-based insurance. In so doing, it addresses the problem of medical "insulation" policies that Arnold Kling and others recently addressed over at Cato Unbound (see here and here).
By the way, this proposal addresses one of the issues that is a wonderful litmus test for political candidates. Although a politician could argue that removing the tax deductibility of all medical insurance makes even more sense than President Bush's proposal, no reasonable argument can be made to support the current disparate tax treatment of employer-based versus individual policies. The Administration's proposal is actually much more progressive than the current state of affairs because the wealthier employees currently benefit the most from not having to declare the value of their employer-based insurance as income.
Thus, if a politician opposes the Bush Administration's proposal, then that politician is probably either ignorant about the issues involved or in the pocket of the large business interests that profit from the current employer-based insurance system. That's a pretty clear indication that such a person should not be in a position of deciding one of the most important economic and social issues facing American society today.
Posted by Tom at 4:20 AM | Comments (5) | TrackBack (0)
January 19, 2007
More on health insulation policies
This previous post reported on Arnold Kling's insightful Cato Unbound piece in which he explains how America's health care finance system is being undermined by health "insulation" policies rather than real health insurance.
Kling's article has provoked three excellent responses, including this one from Duke University professor Clark C. Havighurst, who has taught courses and written on health care law and policy, antitrust law, and economic regulation at Duke since 1964. Professor Havighurst explains cogently how the tax subsidy on employer-based health insurance has become a destructive force in the health care finance system and why it survives despite the fact that everyone knows that it is the principal cause of wasteful spending on health care:
The tax subsidy thus introduces new “moral hazards” into health care decision-making. Not only are employers, union leaders, legislators, and courts happy to commit employee-voters’ money in ways that make themselves appear to care about health above all things, but their stake in not having to say “no” to more and better health care also coincides perfectly with the preferences of the politically powerful health care industry. For these reasons, the tax subsidy has survived through political thick and thin even though every policy wonk knows that it is a principal cause of wasteful spending on health services. Liberals, of course, resist proposals to fix this glaring defect in the incentive system that drives health care spending. Why fix incentives to encourage consumers to make more appropriate health care choices when big government stands ready to choose for them?
Read the entire Havighurst piece, as well as this one by Jonathan Cohn, (a New Republic senior editor and the author of Sick: The Untold Story of America's Health Care Crisis — and the People Who Pay the Price, which will be published by HarperCollins later year) and this one by Matthew Holt (author of the Health Care Blog), both of whom favor a universal care, one-payor system administered by government. Holt, in particular, provides a pithy explanation of why meaningful reform of the health care finance system is so difficult to achieve:
[T]he political strength of the health care system actors combined with the disaggregated weakness of the consumers and those paying the bill — intermediated by the costs of health care being hidden within overall employment compensation and buried in the murky finances of the federal government — has meant that the system has chewed up and spat out any serious attempt to reform it since the 1930s.
Update: All of the authors have now responded to each other pieces in this cyber-conversation.
Posted by Tom at 4:55 AM | Comments (0) | TrackBack (0)
January 10, 2007
Health "insulation" policies are the problem
EconLog's Arnold Kling is doing some of the best thinking and writing on America's broken health care finance system these days. In this lucid Cato Unbound article, Kling channels one of this thoughts from his book Crisis of Abundance: Rethinking How We Pay for Health Care (Cato 2006):
The health coverage most Americans have is what I call “insulation,” not insurance. Rather than insuring them against risk, most families’ health plans insulate them from paying for most health care bills, large and small. [. . .]Real insurance would pay for treatments that are unavoidable, prohibitively expensive, or for illnesses that occur relatively rarely. Instead, insulation reimburses even relatively low-cost services, such as a test for strep throat or a new pair of eyeglasses. Insulation pays for treatment even if it is commonplace or discretionary.
For health care providers, insulation is a bonanza. Because consumers are not spending their own money, they accept doctors’ recommendations for services without questioning them and without concern for cost. Faced with an insured patient, a health care provider is like a restaurant catering to convention-goers with unlimited expense accounts. The customer will gladly take the most high-end recommendation and not worry about the price.
Consumers are happy as well. Insulation relieves the patient of the stress of making decisions about treatment. The patient also does not have to worry about shopping around for the best price.
The problem with insulation is that it is not a sustainable form of health care finance. Individuals, employers, and government are all under stress. [. . .]
Today it is fairly deeply ingrained with most Americans that health care services are something that you should not have to pay for yourself. Insulation is the norm, and real health insurance as I would define it is almost nonexistent.
Ultimately, I think we are headed for a collision of cultural values. We prefer insulation to real insurance. We expect services to be readily available, without the supply limitations or waiting lists that exist in countries where government is responsible for more health care funding. And yet we are growing increasingly concerned over the expansion of health care spending that takes place in a system that lacks constraints on either supply or demand.
Real health insurance may not be popular now. But when Americans see that the providers of insulation, including Medicare, have to turn to the rationing of health care services in order to meet budgetary constraints, real health insurance may start to look like a good alternative.
Posted by Tom at 4:21 AM | Comments (3) | TrackBack (0)
October 19, 2006
A big hurdle to health care finance reform
Don Boudreaux, chairman of the economics department at George Mason University and the driver of Cafe Hayek, authored this Christian Science Monitor op-ed that addresses a fundamental problem with reforming the American health care finance system -- the expectation of most Americans that health care is a basic human right and entitlement. Boudreaux explains the fallacy of that attitude:
But not everything that is highly desirable is a right. Most rights simply oblige us to respect one another's freedoms; they do not oblige us to pay for others to exercise these freedoms. Respecting rights such as freedom of speech and of worship does not impose huge demands upon taxpayers.Healthcare, although highly desirable, differs fundamentally from these rights. Because providing healthcare takes scarce resources, offering it free at the point of delivery would raise its cost and reduce its availability. [. . ]
Medicare, Medicaid, and tax-deductibility of employer-provided health insurance created a system in which patients at the point of delivery now pay only a small fraction of their medical bills out of pocket.
This situation leads to monstrously inefficient consumption of healthcare. Some people consume too much, while many others with more pressing needs do without.
Because the wasteful consumption caused by heavily subsidized access drives up healthcare costs, taxpayers must pay more and more to fund Medicare and Medicaid, while private insurers must continually raise premiums. The sad and perverse result is that increasing numbers of people go without health insurance.
Employer-based health insurance -- which proliferated as a means to attract scarce labor during the wage and price controls of World War II -- triggered the societal shift in attitude regarding payment of health care costs. Milton Friedman summed up the basic problem during an interview several years ago:
There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you're doing, and you try to get the most for your money.Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I'm not so careful about the content of the present, but I'm very careful about the cost.
Then, I can spend somebody else's money on myself. And if I spend somebody else's money on myself, then I'm sure going to have a good lunch!
Finally, I can spend somebody else's money on somebody else. And if I spend somebody else's money on somebody else, I'm not concerned about how much it is, and I'm not concerned about what I get. And that's government. And that's close to 40% of our national income.
Posted by Tom at 4:45 AM | Comments (1) | TrackBack (0)
October 17, 2006
Trials and tribulations at UTMB
Baylor College of Medicine's struggle to define its future in the choppy waters of America's health care finance system has been a frequent topic on this blog. But Baylor is far from the only medical school that is struggling with such problems. This Kevin Moran/Houston Chronicle article reports on the recent troubles at Texas' oldest medical school, the University of Texas Medical Branch at Galveston. Those troubles were alluded to in this earlier post.
In a year when this island city has avoided even the threat of a major natural storm, its largest and oldest employer — the University of Texas Medical Branch — is experiencing an unprecedented financial, employment and political tempest.Facing a $20 million deficit and aiming to cut $130 million in spending in 2007, the 13,000-employee medical center started the year by hiring a consulting firm to heavily reduce expenses.
Faculty and staff feared that any solution involved a massive layoff. Morale dropped precipitously when UTMB announced in June it would cut 1,000 jobs. Next came a storm of dissatisfaction when administrators unveiled plans to cut salaries of tenured faculty, physicians, researchers and others.
The article goes on to report on how UTMB's initiatives to generate more income is being opposed by competing physicians and how little of UTMB's professional services are compensated through proceeds of health insurance. Although somewhat different from Baylor's problems because UTMB operates its own hospital in Galveston, UTMB's difficulties are another reflection of the cascading problems that are resulting from the federal and state governments' failure to address America's broken health care finance system. The risks of that broken system are a decline in the quality of physician training and medical care, which is something that should concern us all.
Posted by Tom at 6:40 AM | Comments (2) | TrackBack (0)
September 24, 2006
Declining Texas medical malpractice premiums
This Ft. Worth Star-Telegram article from about a month ago reports that, since enactment of the Texas Medical Malpractice and Tort Reform Act of 2003, medical malpractice lawsuits in Tarrant and Dallas Counties have been reduced by as much as 60%. A couple of weeks later, this Austin Business Journal article and this PIAA press release report that Texas doctors are enjoying one of the steepest declines in malpractice insurance premiums rates in recent history -- almost 30% over the past four years.
Pretty hard to argue that the parallel reduction in lawsuits and insurance premiums are a coincidence.
Posted by Tom at 8:27 AM | Comments (11) | TrackBack (0)
May 20, 2006
The true cause of rising medical malpractice premiums
Alex Tabarrok of Marginal Revolution fame is studying the causes of rising medical malpractice premiums, which is a subject explored in the recent book that he co-authored with Eric Helland, Judge and Jury: American Tort Law on Trial (Independent Institute, 2006).
In this excellent Wall Street Journal ($) op-ed, Professor Tabarrok takes on the canard that rising medical malpractice premiums are primarily the result of price-gouging by greedy insurance companies:
On its face, price gouging is a peculiar explanation for recent increases in insurance premiums. Is greed new to the world? Were insurance companies followers of Mother Teresa just a few years ago? If greed and gouging are the explanations for rising premiums, why did the St. Paul group -- one of the nation's largest suppliers of medical malpractice insurance -- pull out of the market in 2001? Were the profits from all that gouging just too much for St. Paul's guilty conscience? And consider that almost half of doctors are insured through mutual, i.e., doctor-owned, insurance companies. Are the doctors gouging themselves?
Professor Tabarrok then cogently explains the primary element in how insurance companies establish medical malpractice premiums -- i.e., attempting to predict the future:
Over the long run, insurance companies must cover their costs, so increases in premiums track increases in tort awards. As we show in our study, during the last 30 years every dollar increase in awards has led to a dollar increase in premiums. But tort awards are very difficult to predict because past awards tell us very little about future awards. Insurance companies, therefore, have a difficult job: They must predict future awards based on just a handful of the most recent awards. Was the latest multimillion dollar award a signal of permanently higher costs, or was it just a blip? Is tort reform working or were the more reasonable awards of the last year just a pause in the long upward trend?Given the difficulty of forecasting awards, it's no surprise that insurance companies sometimes make mistakes. As a result, insurance companies can price premiums based upon a projection of future awards that are too low.
You never hear critics of the industry complaining of low prices, but we now know that prices in the 1990s were not high enough to cover the increase in tort awards. Recent increases in premiums are simply a belated recognition of the reality of what appears to be permanently higher medical malpractice awards. Since the insurance cycle is a function of the uncertainty of tort awards, not an independent cause of higher prices, the best way to dampen premium variation is to make tort awards more predictable.
Of particular interest to Texans is the effect that Texas' dubious system of electing judges has on medical malpractice premiums:
States with partisan elected judges, for example, have medical malpractice awards per claim that are $36,000 higher than in other states.
Professor Tabarrok concludes with this common sense advice:
The way to fix broken medical malpractice systems . . . is to address the underlying problems of the tort system -- whether through federal statute, state legislation or judicial oversight. Pointing fingers at the insurance industry for price gouging or mismanagement may help trial lawyers block reform, but these accusations make little sense and are not supported by the data. As Daniel Patrick Moynihan famously said, "While all men are entitled to their own opinions, they are not entitled to their own facts."
Read the entire op-ed. Definite clear thinking.
Posted by Tom at 7:05 AM | Comments (3) | TrackBack (0)
May 8, 2006
Self-help dentistry
This NY Sunday Times article explores Britain's state-financed dental system and finds that the lines for treatment are so long that some citizens simply opt to treating themselves:
Britain has too few public dentists for too many people. At the beginning of the year, just 49 percent of the adults and 63 percent of the children in England and Wales were registered with public dentists.And now, discouraged by what they say is the assembly-line nature of the job and by a new contract that pays them to perform a set number of "units of dental activity" per year, even more dentists are abandoning the health service and going into private practice — some 2,000 in April alone, the British Dental Association says.
How does this affect the teeth of the nation? [ . . .]
"I snapped it out myself," said William Kelly, 43, describing his most recent dental procedure, the autoextraction of one of his upper teeth.
Now it is a jagged black stump, and the pain gnawing at Mr. Kelly's mouth has transferred itself to a different tooth, mottled and rickety, on the other side of his mouth. "I'm in the middle of pulling that one out, too," he said. [ . . .]
A recent Guardian newspaper article about the company titled "D.I.Y. Dentistry" (meaning Do It Yourself) said that the previous week British drugstores had sold 6,000 jars of the filling replacement, and 6,000 of the crown-and-cap replacement.
Keep this article handy to show to the next person who advocates a state-funded health care finance system for the U.S.
Posted by Tom at 5:39 AM | Comments (1) | TrackBack (0)
February 27, 2006
Canadian health care finance system implosion?
Following on this post from last week regarding the Veterans Administration as a model for a government-sponsored health care finance system, this NY Times article reports that the Canadian government-administered health care finance system -- which has been widely-heralded as a model for a similar U.S. system -- is showing signs of imploding as a result of a recent Canadian Supreme Court decision:
Canada remains the only industrialized country that outlaws privately financed purchases of core medical services. Prime Minister Stephen Harper and other politicians remain reluctant to openly propose sweeping changes even though costs for the national and provincial governments are exploding and some cancer patients are waiting months for diagnostic tests and treatment.But a Supreme Court ruling last June — it found that a Quebec provincial ban on private health insurance was unconstitutional when patients were suffering and even dying on waiting lists — appears to have become a turning point for the entire country.
"The prohibition on obtaining private health insurance is not constitutional where the public system fails to deliver reasonable services," the court ruled.
The Times article goes on to report that the Canadian Supreme Court decision is spurring the markets to respond to the deficiencies in the Canadian government-administered system:
The country's publicly financed health insurance system — frequently described as the third rail of its politica