Preview of Bush speech

[gailkate]

I'm told there are people who have parties while watching the S.O.U. - chug a shot of beer every time the President says one of his standard phrases - national security, affordable health care, protect our way of life, yada yada. The game involves various complex rules, including roles and costumes,snacks on toothpicks, etc. People are warned to have a designated driver.

So here's Paul Krugman on what we can expect Bush to say about healthcare, which he dredges up every year but really needs now in order to pretend the whole country isn't gagging over the SURGE strategy.
As people who don't have company-provided health insurance, we're especially sensitive to someone yanking our chain about the most critical economic issue facing this country.

President Bush’s Saturday radio address was devoted to health care, and officials have put out the word that the subject will be a major theme in tomorrow’s State of the Union address. Mr. Bush’s proposal won’t go anywhere. But it’s still worth looking at his remarks, because of what they say about him and his advisers.

On the radio, Mr. Bush suggested that we should “treat health insurance more like home ownership.” He went on to say that “the current tax code encourages home ownership by allowing you to deduct the interest on your mortgage from your taxes. We can reform the tax code, so that it provides a similar incentive for you to buy health insurance.”

Wow. Those are the words of someone with no sense of what it’s like to be uninsured.

Going without health insurance isn’t like deciding to rent an apartment instead of buying a house. It’s a terrifying experience, which most people endure only if they have no alternative. The uninsured don’t need an “incentive” to buy insurance; they need something that makes getting insurance possible.

Most people without health insurance have low incomes, and just can’t afford the premiums. And making premiums tax-deductible is almost worthless to workers whose income puts them in a low tax bracket.

Of those uninsured who aren’t low-income, many can’t get coverage because of pre-existing conditions — everything from diabetes to a long-ago case of jock itch. Again, tax deductions won’t solve their problem.

The only people the Bush plan might move out of the ranks of the uninsured are the people we’re least concerned about — affluent, healthy Americans who choose voluntarily not to be insured. At most, the Bush plan might induce some of those people to buy insurance, while in the process — whaddya know — giving many other high-income individuals yet another tax break.

While proposing this high-end tax break, Mr. Bush is also proposing a tax increase — not on the wealthy, but on workers who, he thinks, have too much health insurance. The tax code, he said, “unwisely encourages workers to choose overly expensive, gold-plated plans. The result is that insurance premiums rise, and many Americans cannot afford the coverage they need.”

Again, wow. No economic analysis I’m aware of says that when Peter chooses a good health plan, he raises Paul’s premiums. And look at the condescension. Will all those who think they have “gold plated” health coverage please raise their hands?

According to press reports, the actual plan is to penalize workers with relatively generous insurance coverage. Just to be clear, we’re not talking about the wealthy; we’re talking about ordinary workers who have managed to negotiate better-than-average health plans.

What’s driving all this is the theory, popular in conservative circles but utterly at odds with the evidence, that the big problem with U.S. health care is that people have too much insurance — that there would be large cost savings if people were forced to pay more of their medical expenses out of pocket.

The administration also believes, for some reason, that people should be pushed out of employment-based health insurance — admittedly a deeply flawed system — into the individual insurance market, which is a disaster on all fronts. Insurance companies try to avoid selling policies to people who are likely to use them, so a large fraction of premiums in the individual market goes not to paying medical bills but to bureaucracies dedicated to weeding out “high risk” applicants — and keeping them uninsured.

I’m somewhat skeptical about health care plans, like that proposed by Gov. Arnold Schwarzenegger, that propose covering gaps in the health insurance market with a series of patches, such as requiring that insurers offer policies to everyone at the same rate. But at least the authors of these plans are trying to help those most in need, and recognize that the market needs fixing.

Mr. Bush, on the other hand, is still peddling the fantasy that the free market, with a little help from tax cuts, solves all problems.

What’s really striking about Mr. Bush’s remarks, however, is the tone. The stuff about providing “incentives” to buy insurance, the sneering description of good coverage as “gold plated,” is right-wing think-tank jargon. In the past Mr. Bush’s speechwriters might have found less offensive language; now, they’re not even trying to hide his fundamental indifference to the plight of less-fortunate Americans.

[doctork]

I went and bought today's New York Times just to read Robert Pear's article commenting on the healthcare proposals in his State of the Union address. I like Pear and usually find his comments accurate and insightful. But this article was short and general, so I guess I'll have to watch the address tonight to hear for myself, then the whole speech will be published tomorrow, probably with more detailed commentary by Pear.

I believe in the economic principle (supposedly) underlying the healthcare proposal, namely that the tax subsidies provided to corporations which make their contributions to employee health insurance non-taxible (to the corporation and the employee) distort the market in an unfavorable way. But wow, is the concept mangled in this propsed execution!

Health insurance is regulated by the states, with some federal floors (Medicaid and ERISA), but health policy could be led on a federal level in a very positive fashion. This proposal won't do it.

I used to work in health policy and government programs (Medicare mostly, some Medicaid) but quit that job a year ago to work exclusively at the state level, which I believe will be much more active and effective for the next three years, at least. Some reform is necessary in short order, as the implosion can't be more than 3 - 5 years away, much sooner if there is a disaster involving bioterror or epidemic influenza (like 1918).

We'll see what tonight brings, but I'm not holding my breath - still planning on lobbying heavy in our state capital week after next.

[gailkate]

I'll be interested to hear what you have to say, Kristin, and hope you'll explain in more detail. In truth, I can parse this sentence
I believe in the economic principle (supposedly) underlying the healthcare proposal, namely that the tax subsidies provided to corporations which make their contributions to employee health insurance non-taxible (to the corporation and the employee) distort the market in an unfavorable way.
...but I don't understand it.

The differences in state vs. federal programs are not addressed in Krugman's piece, and I'd like to know more. But I applaud his comment on the tone and the patronizing "gold-plated coverage." In our state, a county attorney who is now a senator (yay!) took an insurance company to court for imposing a 24-hr limit on hospital care for giving birth. Since when is childbirth a luxury item? There have also been attempts to make a mastectomy into day surgery. Been there - can't be done. Because Mr. Bush has never in his life had to worry about any medical procedure for himself or anyone in his family or even in his circle of acquaintances, he ought to have his mouth washed out with Fels Naphtha.

[doctork]

GK, this topic is rather wonky, but very important. Let's see if I can explain my thoughts about healthcare economics and financing. I'm pretty sure that GWB is clueless on these points, hence his silly, irrelevant and disdainful comments.

In general, we tend to believe there are three "payers" for healthcare in our country - the citizens, the government and the employers. In reality, there is only one payer, and it's us, the taxpayer. We pay for healthcare by 1) writing a check or 2) paying taxes, which governments use to fund Medicare/Medicaid, or 3) we accept health insurance in lieu of higher wages (sometimes this is overt, as in union negotiations which center around health benefits rather than hourly wages).

Currently, the US spends about $2.1 billion dollars on healthcare annually, or $7,000 per person; Canada spends about half that, the UK less than half, and the other European OECD nations cluster around the UK. All of those nations have better health indicators than the US, which suggests we have unnecessary and/or misdirected spending. Pretty good studies show the "excessive cost" is due to more procedures, more imaging, more ICU days, and more specialty doctor visits, all of which are priced higher in the US than the other OECD nations. But in the US, market incentives encourage more of the same.

My own interpretation, also supported by pretty good studies, is that some people get "too much care" because their marginal cost for this is very low (they have good employer-sponsored insurance to pay the bill), while others receive not nearly enough care because they are uninsured and can't pay the very high bills (ultimately they cost more when they seek emergency care for advanced disease). The uninsured pay (or at least are billed) the exorbitant "list price" while those who are insured pay very little out-of-pocket, and their employers pay a negotiated discount rate. But still, employers are paying about $10,500 per year per employee on average for family coverage for each employee. It's no wonder employers are dropping coverage for their employees, and our products are non-competitive.

Employers have been less sensitive to these high costs in the past because they receive tax breaks for providing this health insurance (it's a fully tax-deductible business expense for them, but not for you if you buy it individually), thus masking its true cost. Employees haven't paid tax on this "income" either; so most people are under the impression that health insurance costs $26 every two weeks - what is taken out of their paychecks - or $15 they pay as a copay, not $10,500. If they have had the misfortune to become acquainted with the true cost (through being ill), they are petrified to leave their job and lose their insurance. Such job lock is often not the best economic use of their talents.

Employment is itself an underwriting criterion. People who work are less likely to be sick and less likely to be poor (poverty is itself associated with illness and high healthcare costs). There is "adverse selection" - people who are most costly to care for are the very ones excluded from the best health insurance coverage.

This is the market distortion - employers offer tax-subsidized health insurance to a population that is generally healthier than "average," but gets more costly sevices, while those sicker than average are forced into the individual market where they can't get coverage, or it is terribly expensive and excludes pre-existing conditions (which of course are what most needs care), or they become impoverished and wind up on Medicaid. They get fewer services than they need. Insurance companies seeking to maximize profits (and, to be fair, lower costs for employers) do stupid stuff like requiring drive-by deliveries and mastectomies.

A "perfect market" would level the playing field (really, not just right-wing happy talk) by removing the slanted tax subsidies, and making individual (permanent) health insurance available to all at a fair cost ("community rating", which is what Schwarzeneggar proposes), one that represents spreading the risk and cost across large population groups. Many low cost healthy people pay a little more to insure adequate coverage for the few who are high-cost and sick. Concomitantly, there would have to be a mandate that all buy health insurance, otherwise healthy people would pass on it until they become ill, and sick people would buy at necessarily high cost. There would need to be subsidies for those who can't afford the fair cost - "premium support" which exists and works well in many states even under the current non-system. This is similar to what has been legislated to take effect in Massachusetts on July1.

This all involves major change, which won't happen quickly, and in the interim, there are a lottle of chronically ill people who aren't getting the care they need (even if they are insured, preventive services are under-utilized, while marginally effective procedures are over-utilized). Poor people can't benefit from a tax credit, and sick people have little room for "wise purchasing" as espoused by Health Savings Accounts enthusiasts, and they will never accumulate a nest egg for future illness because they spend it all this year. But removing tax bias which distorts the market, and making affordable, community-rated health insurance universally available, encouraged by tax exemptions for all (but not like naive "home purchasing" analogies) are a start.

Sorry for the extensive treatise, but you asked, and it is complex.

[joew]

doctork said:

…
Currently, the US spends about $2.1 billion dollars on healthcare annually, or $7,000 per person; Canada spends about half that, the UK less than half, and the other European OECD nations cluster around the UK. All of those nations have better health indicators than the US, which suggests we have unnecessary and/or misdirected spending. Pretty good studies show the "excessive cost" is due to more procedures, more imaging, more ICU days, and more specialty doctor visits, all of which are priced higher in the US than the other OECD nations. But in the US, market incentives encourage more of the same.

My own interpretation, also supported by pretty good studies, is that some people get "too much care" because their marginal cost for this is very low (they have good employer-sponsored insurance to pay the bill)….

This is the market distortion - employers offer tax-subsidized health insurance to a population that is generally healthier than "average," but gets more costly sevices, while those sicker than average are forced into the individual market where they can't get coverage, or it is terribly expensive and excludes pre-existing conditions (which of course are what most needs care), or they become impoverished and wind up on Medicaid. ….

This strikes me as a less colorful way of saying that "some people" have "gold-plated" health insurance.

[doctork]

Perhaps true, but incomplete. If there is "gold-plating" it is at a systemic level rather than an individual or even corporate choice, though the patronizing tone used by the administration suggests condemnation of an individual. And "gold-plating" or more accurately, "comprehensive coverage" occurs in an honest attempt to provide "good coverage" and do right by employees.

It's extraordinarily difficult to design the "best" insurance product. Not to mention the difficulties of delivering it in our healthcare non-system, operating in a distortional tax system. Which system BTW originated during WW II, and is thus admittedly, not the fault of George Bush!

[gailkate]

Thanks, Kristin, I need to think about this when I'm not sleepy. What you say seems sound, but don't we also have to factor in the profit motive of insurance comapanies and healthcare providers? At some point I think we have to ensure a stable system that provides good care - not bargain basement care - to everyone. If some people then want to add on gold plating at their own expense - as people do for dermatological and plastic surgery treatments - then those who can afford it can do so. But the basic system must have a floor and a ceiling, a room big enough for everyone.

[joew]

I agree, drk, that we (including the President) should not blame individuals or employers for the "gold-plated" policies. In fact, I think that they are good things for anybody who can afford one. Perhaps, as you suggest, fewer people would think they could afford them or would want to pay the price, if the true impact on their disposable income were made clear. But I wouldn't want to further penalize those who are paying for that level of insurance.

[ptcaffey]

Interesting topic, but Bush's proposals are DOA.

[doctork]

joew said:

But I wouldn't want to further penalize those who are paying for that level of insurance.

Another way of leveling the playing field - upward, by allowing unlimited health deductions for everyone. That removes the distortion in favor of corporations, so it's fairer, but it would be costly.

And gailkate, we certainly should look at the profit motives of insurance companies - their high overhead and profits are a strong argument infavor of single payer systems. But they carry a lot of political (corporatocracy) weight. It will be interesting to see what happens in Massachusetts, as I understand their new program will be delivered primarily by private payers (who can do a good job at offering the variety of alternatives that Americans like).

As for profit motives of physicians - we have a capitalist system and most physicians are in small businesses to earn an income commensurate with their education and effort, just like insurance companies and other employers. I hate the "divide and conquer" techniques used successfully to manipulate the physician community, so I generally avoid getting into that battle. (Full disclosure, I work for our local medical society setting up a program that provides free specialty care to low-income uninsured residents of our county; all of our specialists donate generously and their efforts are much appreciated). But, the literature clearly shows that a strong primary care system is associated with lower costs and better outcome; the US does not have a strong primary care infrastructure, and one of the principle causes of that is low reimbursement of primary care compared to sub-specialty care.

Lastly, PT is correct, Bush's healthcare proposals are DOA. Fixing the healthcare system by reform at the federal level is harder than fixing Iraq. That is why I am working at the state level. There are good things going on which may eventually be more widely expanded.

[mike]

Firstly, yesterday afternoon, my time zone, I was checking the various news-websites (CNN, MSNBC, FOX, BBC, etc...) and I was bemused to see several of them with big bold banners "Breaking News -- Bush gives State of the Union Address" . How is this breaking news?

Secondly, purely as an observation: President Bush asking to give his surge a chance reminded me of the John Lennon song "Give Peace A Chance". I can hear it now...

...All together now, All I am saying... Is give War a chance!

[scotbrit]

Can someone explain the colloquialism DOA please?

From the remarks made I get the drift, but I have not come across that one insofar.

[mike]

Dead On Arrival

[doctork]

Dead On Arrival.

He mentioned it in the speech, he probably realizes healthcare is important, but tossed out a few buzzwords and bromides, knowing it will all go nowhere.

Congress is not going to act on healthcare reform; it's being set up as an issue to argue about in 2008.

[scotbrit]

Thanks both!

[gailkate]

Again, I'm not sure I follow.
//As for profit motives of physicians - we have a capitalist system and most physicians are in small businesses to earn an income commensurate with their education and effort, just like insurance companies and other employers. I hate the "divide and conquer" techniques used successfully to manipulate the physician community, so I generally avoid getting into that battle. (Full disclosure, I work for our local medical society setting up a program that provides free specialty care to low-income uninsured residents of our county; all of our specialists donate generously and their efforts are much appreciated). But, the literature clearly shows that a strong primary care system is associated with lower costs and better outcome; the US does not have a strong primary care infrastructure, and one of the principle causes of that is low reimbursement of primary care compared to sub-specialty care.//
Some docs are hideously well off and it's hard to call them selflessly dedicated to their patients. But aren't a number of them - new young people especially - forced into groups where their choices are made by the owners or boards? I'm not sure of the right terminology. We used to be a major HMO state, but that isn't so true now. Nevertheless, I've had 2 young docs who were able only to refer me to someone "in the network," even though I hadn't joined the clinic as part of an HMO. The network isn't dictated by the insurance company, although the company only covers providers in these lower cost clinics. It's most confusing.

I used to have a doctor who was a very wealthy man. He also worked his tail off and could do anything. He didn't have to send me to a dermatologist for a rash. He had equipment in his office, rapid onsite testing with immediate results. I knew him and trusted him. Of course, he ended up getting driven into one compromise after another and retired before he wanted to. I sure miss him.

[doctork]

Some doctors are indeed very wealthy, usually because they work hard and have chosen a lucrative specialty (ones with highly reimbursed procedures). Not all are selflessly dedicated to their patients, but I still feel that with the same intellect and effort, most physicians could make more money in another field. It's unwise to choose a medical career just to make lots of money - the return on investment for an MD degree is lower than most other professions. Still, certain specialists routinely earn very high incomes which lead to the criticisms from academic health economics wonks who complain that excessively high fees are the cause of the our sky-high per capita health costs.

Especially now - as you point out, many docs don't have the autonomy and respect they once did. They are "providers," just another cog in the clutches of insurance clerks who can't spell HMO. The system is complicated for docs as well as patients. The typical doc contracts with numerous insurers, each of whom has its own network, pharmacy formulary, designated lab facility and quality indicators, etc - none of which are the same, or even overlap.

Your two young docs who felt the need to refer you "in the network" even though you were not part of the HMO, may have been confused about your insurance coverage, or their group may indeed require that referrals be within their own self-defined network, apart from any HMO requirement. But they join the group because that is much easier than setting up a solo private practice in today's environment. In our county, the solo practice, and even the small group, is no longer financially viable. Too bad, because that is one good way to get very personalized healthcare.

PS - if your insurance doesn't require you to stay in-network, you can refer yourself to the specialist of your choice, though that might annoy the doc, or his group may give him demerits or something. When I chose to go to Mayo Clinic for surgery, my Seattle neurologist was very upset, and told me I would not be able to get any care in Seattle if I had a post-op complication after my return from Minnesota! I went to Mayo anyway, and had excellent results, no complications.

[gailkate]

Hmm, taking yourself off to Mayo is quite a revelation from a physician. I like to pretend that every doctor is a veritable Hippocrates, but the truth is far different.

I realize I can refer myself (within the limits of my insurance company unless we're able to pay the whole tab). The clinics I'm referring to really do have their own networks. I don't quite get how it works, but it has to do with the cost-savings you refer to in formularies and related specialists.

But I'm also concerned about the issue of docs being mere providers. The ones I'm thinking of seem to see themselves that way, too. "Oh, I can't do that" is the standard response to anything outside of a throat culture. My excellent former doc made his money doing it all, including surgery. He never met a new drug or procedure he didn't like. I'm sure insurers hated him. But he was the quintessential family doc -- like those who did surgery on kitchen tables. And though he loved making money, he really did love medicine. When he tried to cut his schedule and spend long weekends at their cabin in WI, he ended up working in the local ER.

Brit, have you any insights? Trapped as you are in evil socialized medicine, do you wish you had our system?

[doctork]

When I was in private practice, I had an office lab, did minor surgery, assisted in major surgery, set broken bones, made house calls, the whole enchilada, like your former physician. I really loved it.

Now there are many restrictions imposed on such practices - liability insurance, fed and state regs, health insurer/payer rules, hospital privileges on what family docs are allowed to do. If you've always done it, it is easier to continue to do most of the same things, but to start anew at square one (as new residency grads would do) is very difficult. And it is very time consuming, as your doctor demonstrated. I regularly worked 80 - 100 hours per week in "busy" weeks, buffered by intermittent "light weeks" where I worked only 60 - 70 hours. My gross earnings were well above average, but on an hourly basis, I earned less than our plumber.

I've interviewed for jobs across the border in Canada. For family docs, the income is similar (Canadian taxes are higher though), and the lifestyle is much better. For most day-to-day care, patients are much off - everyone is covered by health insurance so they get what they need. It's not truly socialized medicine in Canada (it's "single payer" with private service delivery), but it's a very good system - certainly not evil.

[booklady]

It's time for this commercial message from Booklady's Book Plugs:

Not As a Stranger, by Morton Thompson

An Ode to Hippocrates
Monday, Jan. 18, 1954
NOT AS A STRANGER (948 pp.)—Morton Thompson—Scibner ($4.75).


At an age when his contemporaries dreamed of becoming cowboys or firemen, seven-year-old Lucas Marsh already knew his life work: he would be a doctor. He was handicapped from the first. Mamma, a neurotic and mystic who believed that only the spirit could heal, hated the very idea of medicine and hysterically begged Luke to forget it. Daddy Marsh, the crude, unscrupulous owner of a string of harness shops, insisted that Luke shift his sights to business and the big money. Luke obediently said yes, mother, yes, dad; but what his parents never knew was that they had produced one of life's rare ones: a truly dedicated man.

Lucas Marsh is the hero of Morton Thompson's vast, sprawling novel, Not as a Stranger, a book as fantastically sincere as its hero. When Novelist Thompson died last summer at 45, he had to his credit an intense, rough-edged novel about Dr. Ignaz Semmelweis, the identifier of childbed fever (The Cry and the Covenant; TIME, Nov. 14, 1949). One thing Thompson had obviously wanted to be: a doctor. Failing that, he had desperately wanted to write well, especially about doctors and medicine. He never became a doctor, and he never became a top writer, but what he lacked in craft was more than made up in sincerity. If Not as a Stranger is nothing else, it is a triumph of I-Will-Be-Heard.

When Lucas' father stopped sending money during his college pre-med course, the boy borrowed; and when he failed to borrow enough, he married for money—not much money, and not, by his standards, much of a woman. Kristina was a well-built Swedish girl from Minnesota who had read nothing, talked and dressed like an immigrant, and called him "Lu-key." But she was the head operating-room nurse at the university hospital, and she loved Luke in spite of all his inhuman fanaticism for his career. She put him through medical school. For Luke, it was the last that mattered.

When in school, Luke saw tarnish on his ideal: students faking their way through, professors who did not know their business, a fine professor of pathology scorned because he was a Jew. But when he went into practice as a small-town doctor's assistant, Lucas came upon more shocking specimens: doctors who let old, indigent patients die to get them out of the way, doctors who refused to answer night calls, a doctor who was a thief. As for Kristina, she was a wonder as a part-time nurse in the shabby county hospital, but as a doctor's wife she was a social embarrassment.

At novel's end, Dr. Lucas Marsh has learned that most men are compromisers, has learned to live with the facts of life without compromising too much himself. He has even learned that Kristina's virtues have it all over drawing-room talents. Most of all, Not as a Stranger is a heartwarming though crudely repetitive story of a passionate idealist whose passion is medicine. No novel ever written has contained more authentic, hard-won facts about doctors, patients, hospitals. Hypochondriacs will devour it; few of those who are not will consider its nearly 1,000 pages a waste if they stick it out. With all its literary embarrassments, Not as a Stranger speaks up for life as few recent literary successes have done.



And now, back to today's medical chatter.