Wednesday, September 10, 2008

Changing the Subject on Health Care

Robert Samuelson attacks the candidates for proposing how the uninsured might gain insurance coverage, by changing the subject to health care inflation. There's absolutely nothing wrong with his belief that the country has no moral imperative to ensure that all citizens have access to healthcare. Agree or disagree, it's a legitimate point of view. But that's an entirely different issue than "controlling costs".

Samuelson laments both the inflation in healthcare costs, as well as the provision of unnecessary or ineffective services. He argues that increased costs threaten the government's ability to pay for other programs, depresses wages, and transfers wealth from young, healthy workers "to the old, accomplished through taxes and the cross-subsidies of private insurance, because the old are the biggest users of medical care". Those are legitimate concerns that should be addressed. But what does any of that have to do with insuring the uninsured?

Of the uninsured, Samuelson tells us,
In 2008, their care will cost about $86 billion, estimates a study for the Kaiser Family Foundation. The uninsured pay about $30 billion themselves; the rest is uncompensated. Of course, no sane person wants to be without health insurance, and the uninsured receive less care and, by some studies, suffer abnormally high death rates.
Okay, so that's $56 billion passed on to other patients or to governments each year due to the needs of the uninsured. And the uninsured still "suffer abnormally high death rates". It would seem to benefit the insured to have that $56 billion covered by other health insurance policies, rather than being picked out of their pockets through taxes and the cost of their own medical care. Samuelson also ignores the fact that a big chunk of that money is for emergency room care, the place many uninsured people go for services that should be provided by a primary care physician. If you're concerned about waste, that's a big source of waste that expanded access to insurance could help remedy. So how does Samuelson respond to these facts?
But other studies suggest only minor disadvantages for the uninsured. One study compared the insured and uninsured after the onset of a chronic illness -- say, heart disease or diabetes. Outcomes differed little. After about six months, 20.4 percent of the insured and 20.9 percent of the uninsured judged themselves "better"; 32.2 percent of the insured and 35.2 percent of the uninsured rated themselves "worse." The rest saw no change.
Of course. The "But other studies" retort. Who cares which studies are better or more reliable, right? If two studies contradict each other, all you can do is throw up your hands in despair and walk away from the problem. No, really, if Samuelson feels sufficiently informed to speak on this subject, why isn't he capable of reading the studies and trying to determine which have greater validity?

The study he does reference, a six month follow up for patients diagnosed with lifetime chronic illness, doesn't seem convincing. It appears that both the insured and uninsured patients are getting treatment over that short time, so how much of a difference would you expect? More relevant measures include, were uninsured patients less likely to get a timely diagnosis? Timely initiation of treatment? Over the long-term were they less likely to continue treatment, or to limit their treatment due to their inability to afford medical supplies, equipment, medication, or return doctor visits? Is there a difference in their outcome over a period of years, or the duration of their lives? Were Samuelson to think about the issues he would recognize that nothing in the six month study is inconsistent with the previously cited "abnormally high death rates" study. It's quite possible to have similar outcomes over six months and wildly divergent outcomes over a longer time period.

Now let's look at Samuelson's actual figures. He claims that there were 46 million uninsured people last year. He claims that most of these people are young and healthy. He claims that (in 2003) the richest 1/5 of the population incurs $4,451 per person, per year in health care costs. He claims that the uninsured presently pay $30 billion per year for their own care and pass on to the rest of us some $56 billion in unpaid bills. He then claims that it will cost another $123 billion per year to provide the uninsured with insurance. That's $209 billion, or $4,543 per person, per year. Now I'll grant that his 2003 figure needs to be increased for inflation, but what Samuelson is telling us is that a disproportionately "young and relatively healthy" population that doesn't need insurance will incur medical costs roughly on par with the wealthy, who are far more likely to be older and to thus have the medical problems associated with age. He's cherry picking his figures, without paying any attention to whether they render his argument internally inconsistent.

But beyond the bad numbers and reasoning, the fact is that the problem of the uninsured is a different problem than healthcare inflation. Beyond mouthing that the cost of insurance will be an additional $123 billion, Samuelson provides no evidence or argument that this will result in further inflation of healthcare costs. It doesn't even occur to him that by moving uninsured care out of emergency rooms we might actually reduce unneeded testing and the other high costs of emergency room care.

If we ignore the change of subject, what does Samuelson tell us? The candidates need to focus less on universal coverage and more on "more electronic record-keeping, better case management, fewer dubious tests and procedures, and a fairer sharing of costs between the young and the old". In terms of the first three, what's his excuse for overlooking the fact that Obama explicitly endorses improved technology and electronic record-keeping as part of his healthcare reform proposal? Waste should be addressed, but it's difficult to address medical waste, as the moment you do the political right starts squawking about rationing, or "government bureaucrats telling your doctor what to do." The issue of the division of healthcare costs between the young and old isn't either an issue of cost control or an issue of universal coverage. It's reasonable to assert that wealthy people who can afford to do so should pick up an increased portion of their own medical bills, but it's understandable why that's not being suggested during an election year.

For now, let's try to do the following:
  • Stop pretending that universal health insurance coverage is incompatible with taking measures to limit healthcare inflation and waste.

  • Take an honest look at these separate issues - universality, waste, inflation and cost-shifting due to Medicare - set some priorities, and figure out which should be addressed first

Samuelson believes waste, inflation and cost-shifting should be our priorities? No problem. But lay out the actual case, rather than clouding the issue with false dichotomies and dubious financial claims.


  1. Waste can be addressed at any time. The public will line up behind fighting waste.

    Universality is an election issue, and is likely to be addressed only if Obama wins. (I'll give him the benefit of the doubt that, if elected, he'll fight for universal coverage.)

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