Tag Archives: costs

A Doctor’s Prescription

Public Policy and Governance, , , ,

As the primary battles heat up, “Medicare for All” (or in Mayor Pete’s more “do-able” formulation “Medicare for All Who Want It”) has become perhaps the hot-button issue.

The Trump Administration continues to wage war on the Affordable Care Act, a/k/a Obamacare–part of Trump’s determination to erase anything and everything Obama accomplished– and thanks to Mitch McConnell’s success in placing partisans on the federal bench, that attack may succeed.

Anyone who follows the news, or has a Facebook feed, knows what we “consumers” think, and polling confirms that large majorities of Americans would welcome some form of national, universal healthcare. But what about doctors? What do medical professionals who have to work within today’s uneven patchwork of a system have to say?

I asked my cousin, the cardiologist whose insights I periodically share.

I encourage you to click through and read his post in its entirety, but I want to share several observations that I found particularly telling. The first is his reminder that we don’t go “shopping” for healthcare the same way we shop for a new pair of shoes.

Although comparison shopping makes sense when we buy a product like an automobile, such market forces do not apply to health care. Negotiation of prices of various treatments is seldom available, especially not for the complex needs of the desperately ill who consume a large share of resources. Multiple private insurance plans obscure this issue even further.

He then cites a recent study that found a significant part of the variation in medical spending–and more than half of all Medicare spending– to be determined by capacity rather than by medical need.

And speaking of cost…

In contrast to the ACA’s requiring private insurers to spend at least 80-85 percent of their revenue on delivery of health care, more than 98 percent of Medicare’s expenditures are so devoted. Estimates vary, but one-quarter to one-third of our current costs are driven by insurance company overhead, profits, and the administrative costs. Roughly half of these costs would be recovered under single-payer and could instead be devoted to the delivery of meaningful health care.

And then there are drug prices.

Drug prices must be controlled:  Acceptable drug lists vary widely among health plans. Negotiated prices depend strongly upon the buyers’ purchasing volume. Only a single-payer system enables the kind of unified bulk purchasing of drugs and medical devices that would give the buyer adequate power. A model for this structure exists today here in the Department of Veterans Affairs (VA). Due to governmental authority to negotiate drug prices for the VA, it pays roughly half the retail price of drugs.

I italicized that last sentence, because it astonished me. No wonder other countries allow government to negotiate drug prices–and we can all guess why Congress expressly forbids our government to do the same.

But what about doctors’ pay? Shouldn’t doctors’ incomes compensate them for those years of medical training and residencies? Wouldn’t we lose medical personnel under a national system?

A recent analysis found that a single-payer model does not lead to a loss in physician income, allowing for care-givers to receive adequate reimbursement of expenses plus fair profits, while ensuring value for taxpayers. Streamlined billing under single payer would also save physicians vast overhead costs, enhanced by reducing the need for the many employees to fulfill the varied requirements and forms of the private insurance companies. Moreover, physicians might best be compensated with regular salary-type payments rather than the current “fee for service” model, which encourages excess medical tests and procedures that drive up costs without providing better outcomes.

And finally, what about private insurance? Opponents of a single-payer system warn that people who love their current coverage (these are people I’ve yet to encounter, but I’ll assume for the sake of argument that someone, somewhere, actually likes Anthem, et al) would lose it. My cousin seems to be recommending Mayor Pete’s “Medicare for All Who Want It” approach. He also makes a point that Kamala Harris made in a recent interview:

The population of the U.S. would likely require additional tiers of care provided by private insurers, which might add extra services to basic care such as private room selections, lower waiting periods for non-urgent problems, elimination of co-pays, long-term care, dental care, etc.

The bottom line: the doctor has diagnosed America’s current approach to healthcare as deathly ill and probably terminal. You can read his prescription in its entirety at the link.

On The Other Hand, Good Things ARE Happening

Random Blogging, , ,

The news, and my comments on that news, have been pretty bleak of late, so I thought I would look for evidence that good things are also happening in the world. (Probably even in the U.S.)

And I found some things!

I particularly looked for technological breakthroughs that might mitigate climate change or otherwise represent environmental progress, and this one struck me as especially promising, not least because I’ve been driving in “pothole city”–aka Indianapolis.

Jambulingam Street, Chennai, is a local legend. The tar road in the bustling Nungambakkam area has weathered a major flood, several monsoons, recurring heat waves and a steady stream of cars, trucks and auto rickshaws without showing the usual signs of wear and tear. Built in 2002, it has not developed the mosaic of cracks, potholes or craters that typically make their appearance after it rains. Holding the road together is an unremarkable material: a cheap, polymer glue made from shredded waste plastic.

Jambulingam Street was one of India’s first plastic roads . The environmentally conscious approach to road construction was developed in India around 15 years ago in response to the growing problem of plastic litter. As time wore on, polymer roads proved to be surprisingly durable, winning support among scientists and policymakers in India as well as neighboring countries like Bhutan. “The plastic tar roads have not developed any potholes, rutting, raveling or edge flaw, even though these roads are more than four years of age,” observed an early performance reportby India’s Central Pollution Control Board. Today, there are more than 21,000 miles of plastic road in India, and roughly half are in the southern state of Tamil Nadu. Most are rural roads, but a small number have also been built in cities such as Chennai and Mumbai.

According to this and other articles, so-called “modified” asphalts, consisting of virgin polymers (and sometimes ground-up old tires), have been used here in the U.S., and have been found to perform well: Illinois has used them to build high-traffic roads used by lots of trucks, and Washington State uses them for noise reduction. They tend not to buckle in extreme heat the way conventional roads do.

But the modified asphalts being used here are pretty costly–they can increase the cost of a road anywhere from 30-50%. The paving being used in India costs less than conventional roads.

While polymer roads in the US are made with asphalt that comes pre-mixed with a polymer, plastic tar roads are a frugal invention, made with a discarded, low-grade polymer. Every kilometer of this kind of road uses the equivalent of 1m plastic bags, saving around one tonne of asphalt and costing roughly 8% less than a conventional road….

In India, plastic roads serve as a ready-made landfill for a certain kind of ubiquitous urban trash. Flimsy, single-use items like shopping bags and foam packaging are the ideal raw material. Impossible to recycle, they are a menace, hogging space in garbage dumps, clogging city drains and even poisoning the air.

That same plastic trash has become a huge hazard in the oceans.killing marine life and littering previously pristine beaches. In the middle of the Atlantic, there is an area that spans the distance between Virginia to Cuba called the Great Atlantic Garbage Patch: it has  up to 26 million plastic particles per square kilometer.

Turning plastic trash into cheaper, longer-lasting roads–now that should make us smile! (At least until civil engineers and construction special interests block adoption of the technology here….)

 

As The Bullets Find Their Mark..

Public Policy and Governance, , , ,

I will never understand the GOP obsession with repealing Obamacare.

I could certainly understand efforts to improve it, or even replace it with a different mechanism (not the smoke and mirrors sort of replacement that Trump yammered about but was unable to describe, but a different way to deliver actual healthcare).

It is hard for me to accept that there are people who genuinely believe poor folks aren’t entitled to medical care, that being unable to afford a doctor means you don’t deserve one. On the other hand, I recall that telling–and chilling– moment in a GOP debate when Ron Paul was asked what should be done with people who don’t have insurance, and the audience members yelled “let them die.”

So there’s that…

Even though Paul Ryan and his cronies couldn’t manage a complete repeal of the Affordable Care Act, they did manage to make it less workable. They didn’t kill it–they just made it more incoherent and costly.

According to Michael Hiltzik in the L.A. Times,

Those fiscal geniuses in the White House and Republican-controlled Congress have managed to do the impossible: Their sabotage of the Affordable Care Act will lead to 6.4 million fewer Americans with health insurance, while the federal bill for coverage rises by some $33 billion per year.

Also, by the way, premiums in the individual market will rise by an average of more than 18%.

These figures come from the Urban Institute, which on Monday released the first estimate of the impact of two GOP initiatives. The first is the elimination of the individual mandate, which is an offshoot of the GOP tax-cut measure signed by President Trump in December. The measure reduced the penalty for not carrying insurance to zero as of next Jan. 1.

The second is Trump’s plan to expand short-term insurance plans, which don’t comply with many of the ACA’s essential benefits requirements and allow insurers to reject or surcharge people with preexisting medical conditions or histories.

Both of these provisions siphon younger, healthier people out of the insurance pool–an entirely foreseeable (and indeed, widely foreseen) consequence. When the pool of insured individuals contains older, sicker participants not offset by as many young healthy ones, insurers must raise premiums.

Because government premium subsidies rise in tandem with premium increases, the cost of subsidies borne by the government will rise by $33.3 billion next year, or 9.3% — to $391.4 billion from $358.1 billion under existing law.

It isn’t only taxpayers who will get hosed by the changes Trump is so proud of. The article goes through a variety of ways in which people needing health insurance will get screwed over, and I encourage you to click through and read the whole analysis.

It’s hard to disagree with Hiltzik’s conclusion:

The damage estimate can’t be restricted to the immediate impact on individuals and families, the researchers observed. “As healthier enrollees exit for short-term plans, insurers will by necessity reexamine the profitability of remaining in the compliant markets. This may well lead to more insurer exits from the compliant markets in the next years, reducing choice for the people remaining and ultimately making the markets difficult to maintain.”

In other words, the Republican sabotage will continue to undermine health coverage in the U.S. The only alternative, it becomes clearer with every day, is some form of single-payer, Medicare-for-all coverage. That’s increasingly becoming part of Democratic Party orthodoxy, and it’s about time.

One more reason why we need a wave election in November.

Now For The Numbers….

Public Policy and Governance, ,

So–the nonpartisan Congressional Budget Office has released its analysis of “TrumpCare.”

Here are their numbers:

14 million Americans will lose their insurance by 2018
21 million Americans will lose their insurance by 2020
24 million Americans will lose their insurance by 2026
There will be 52 million Americans with no health insurance by 2026 (for comparison, there were 46 million uninsured before Obamacare became law)
The bill will cut $880 billion from Medicaid by 2026
15 percent of Planned Parenthood patients will lose access to care
A 64-year-old making $26,500 would have to pay $14,600 for insurance in 2026 (for comparison, that 64-year-old pays $1,700 under Obamacare), and

After transferring $275 billion from public-health spending to the richest 1 or 2 percent via tax cuts,  it will reduce budget deficits by $336 billion between 2018 and 2026.

AHCA–aka “Trumpcare” or perhaps “Ryancare”– would reduce deficits by $336 billion but would cut government spending on healthcare programs by $1.2 trillion.

When you think about it, this is a brilliant approach to deficit reduction that we could apply across the board.

We can cut billions out of the budget if we stop paving Interstate highways and inspecting and fixing bridges. We can reduce the deficit significantly if we stop hiring those high-priced CPAs to monitor bank compliance with financial regulations and enforce the SEC’s oversight of corporate securities offerings. We can save another bundle if we no longer enforce rules against air and water pollution (actually, Scott Pruitt, the new EPA Chief, has already begun that effort.) Betsy DeVos assures us that schools don’t need oversight, so we don’t need the Department of Education. We probably don’t need those bean-counters at the CBO or the Bureau of Labor Statistics, either.

And of course, we could stop paying Social Security to all those useless old people. Think of what that would save us!

It’s true that if we did all these things, government would no longer function, and we’d be thrown into a Hobbesian, dog-eat-dog world, but that’s actually the result many Republican Congress-critters have been working toward. The President wouldn’t mind, because he really has no idea what most of government does anyway.

Of course, if we wanted to make a real dent in the national debt, we could dramatically reduce the bloated amounts we spend on the military. But something tells me that might be a bridge too far…..

Do Basic Income Proposals Make Any Sense?

Public Policy and Governance, ,

As much of the developed world struggles to address the growth of income inequality, several countries have considered proposals for a guaranteed basic income. There are a number of variations, but the basic idea is that government would eliminate the various forms of social welfare that are currently in place, and would instead send each citizen an annual amount sufficient to cover basic living expenses.

Most of us understand that without economic freedom, guarantees of personal, political and religious freedom aren’t worth much. If your day-to-day existence is consumed with the struggle for survival, the fact that you have freedom of speech is small comfort.

A practical argument for a guaranteed income is efficiency—there would no longer be a need for the massive bureaucratic apparatus currently required to administer social welfare programs, no need to determine eligibility under the different standards for different programs. (Many years ago, conservative economist Milton Friedman proposed something similar: a “negative income tax” that would require payment from those earning above a certain amount, and send remittances to those below that threshold.)

Social science scholars see other benefits. As automation steadily displaces what were once middle-class jobs, receipt of a stipend sufficient to cover basic living expenses would allow people to go back to school, or to train for alternative employment, or work part-time. It would give new mothers—or fathers—the option to take time off to care for newborns; it would similarly facilitate caretaking for gravely ill spouses or parents.

We also might expect that with a lessening of abject poverty, a number of the social ills that accompany privation would improve.

As positive as all that sounds, however, there are reasons why efforts to implement a guaranteed income have fared badly. In Switzerland last year, a basic income proposal on the ballot was overwhelmingly defeated; in 2013 ,the German Parliament debated a similar proposal and rejected it.

The first—and most obvious—negative is cost. Although economists argue about the actual net cost, after savings from eliminating our current expensive patchwork of social programs—any such approach would clearly require tax increases. In the United States, where taxes have become a dirty word even when they are earmarked to support basic services, this fact alone probably presents a politically insurmountable barrier.

Economists and others also question whether receipt of a guaranteed income, no matter how modest, would reduce the incentive to work. There is very little empirical data on that issue; however, there was an interesting experiment in Manitoba, Canada, during the 1970s, called Mincome. It was intended to assess the social impact of a guaranteed annual income, including whether it would cause such disincentives, and if so, to what degree. Apparently, only new mothers and teenagers worked substantially less. Mothers with newborns stopped working because they wanted to stay home longer with their babies, and teenagers worked less because they weren’t under as much pressure to support their families, which resulted in more teenagers graduating. However, participants knew the project was not permanent, and it is impossible to know whether—and how—that knowledge affected the results.

There are a number of other legitimate concerns about so drastic a shift in the way we discharge our obligations to our fellow-citizens.

Given American cultural attitudes that valorize work and demean those who rely on public assistance, it’s safe to say that the United States is unlikely to institute a guaranteed income program (it certainly won’t happen in my lifetime). But even if guaranteed income isn’t the answer, it is worth asking what it should mean to be a member of a political community. What are the reciprocal obligations of the citizen and the state?

What do we owe the nation, and what do we owe each other?

If membership has its privileges, what should those privileges look like?