Monday, December 24, 2007

Health Insurance "Focus" and Cost Containment

The Washington Post tells us,
When it comes to health care, the way policymakers define the problem determines the answer they produce. Democratic presidential candidates tend to focus on the uninsured, Republicans on rising costs. Both are important: The unaffordability of health insurance won't be addressed without tackling health-care costs, but reducing cost growth alone won't solve the insurance problem.
That, of course, is false.
  • Clinton: Right up front, "Hillary's American Health Choices Plan covers all Americans and improves health care by lowering costs and improving quality. It speaks to American values, American families, and American jobs." She explains further that she sees potential cost savings through such measures as prevention programs, chronic disease management, reduction in administrative costs, electronic medical records, improved communication between doctors, and waste reduction.

  • Obama: While Obama doesn't focus on cost containment, his plan summary states, "Senator Obama strongly believes that greater use of health information technology can contain costs and improve the efficiency of our health care system. He introduced the Federal Employees Health Benefits Program Efficiency Act, which would leverage the federal government's purchasing power to encourage increased adoption of technology by participating health plans."

  • Edwards: Provides numerous examples of how costs might be contained, including increased competition, better communication between doctors, lifestyle choices, error reduction, telemedicine for rural areas, and malpractice reform.

So just how do the Republicans focus on "rising costs"? Well, the McCain plan ballyhooed by the Washington Post... doesn't. At least not as they describe it. Instead it removes the tax preference for employer-based health care, and gives employees a tax credit ($2,500 per individual and $5,000 per family) which will be inadequate to replace a typical employer-based policy. I would venture that the Post's own employees receive insurance that costs substantially more.

McCain wants to change Medicare such that it reimburses " doctors and hospitals for treating overall conditions, not performing individual tests and treatments." Pilot programs in this area, the Post notes, have shown little promise. If McCain proposes to extend this proposal to all treatments, the obvious retort is that, given how much of Medicare costs go to end-of-life care, does he propose not paying hospitals, clinics and doctors when their patients die? As for other major costs, such as hip replacement surgery, how would this proposal change anything? Does he propose that doctors and hospitals not be paid until the outcome of treatments are known? Is the goal here to improve Medicare, or to convince doctors and hospitals to opt out? Is this really a shallow effort to put Medicare at a disadvantage as compared to private insurers, who currently cannot compete with Medicare without a hefty subsidy?

Mr. McCain's plan is weakest on the underlying problem with the health-insurance market, in which insurers have every incentive to cherry-pick the healthiest purchasers. "We should give additional help to those who face particularly expensive care. If it is done right and the additional money is there, insurance companies will compete for these patients - not turn them away," Mr. McCain says.
So, to make up for a market failure, we're going to provide such massive subsidies for the chronically ill that insurance companies can't wait to sign them up? Boy... that sounds like cost control to me....

Let's compare the "cost control" focus of the other major Republican candidates....
  • Giuliani: Quality and price transparency to "expand competition and open up new motivation for improving quality and reducing cost", malpractice tort reform, streamline the FDA drug approval process, use electronic medical records. You know... everything John Edwards has said, and less. Meanwhile he proposes a cost increase with the proposal that "Health insurance must be redefined to cover wellness as well as sickness."

  • Huckabee: Huckabee's primary focus is on preventing chronic disease - again, something that will result in (at least) a short-term increase in health care costs under the current system. Beyond that, "We can make health care more affordable by reforming medical liability; adopting electronic record keeping; making health insurance more portable from one job to another; expanding health savings accounts to everyone, not just those with high deductibles; and making health insurance tax deductible for individuals and families as it now is for businesses." That is, an even stronger echo of Edwards and Clinton.

  • Romney: Romney is a strong advocate of individual mandates and big government subsidies to make insurance affordable to all... or was that last year?This year he says, The health of our nation can be improved by extending health insurance to all Americans, not through a government program or new taxes, but through market reforms. - that's the entire summary of his health care plan from his website.

I guess this turns on how the Post defines the word "focus". The Democratic candidates address both universality and cost control. The Republican candidates echo some of the "cost control" ideas of the Democrats, particularly Edwards and Clinton, propose "reforms" which will reduce or eliminate insurance coverage for even more Americans, and... because they mostly ignore the uninsured... the Post describes them as being "focused" on cost containment.

If the Post was trying to achieve balance with that description, it failed.

(Meanwhile, at the Times, we learn that doctors will not turn in their incompetent colleagues or report serious mistakes by other doctors, and that a third will order expensive unnecessary tests - not out of worry of litigation, but simply because their patient asks - perhaps at a testing facility in which they have an ownership interest. I'm not sure that either set of candidates is addressing these issues.)

No comments:

Post a Comment