Another must-read health care column in the Globe today — yesterday it
was <a
href=”http://www.boston.com/news/globe/editorial_opinion/oped/articles/2006/01/10/an_unpleasant_diagnosis?rss_id=Boston+Globe+–+Op-ed+columns”>Mike
Dukakis, today <a
href=”http://www.boston.com/business/healthcare/articles/2006/01/11/prestons_blueprint”>Steve
Bailey gives us the history behind Our Guv’s health care “plan.”
Drawn up by Ron Preston (here’s the pdf, from HCFA), formerly “the best health and human services
secretary in the nation”, Romney’s plan originally had — get this —
an employer assessment! Yup, businesses would have to pay $150 a month
for every uninsured employee, adding another $951 million to take care
of the uninsured. ($150 a month is very roughly equivalent to a $1/hour
raise.) Quite confusingly, Preston says on one hand, “Reminds you of
the DiMasi plan, doesn’t it?”, and then on the other, the “governor’s
position is not unreasonable.” I’d love to hear some context to those
remarks.
In any event, here are the two important things to take away from all
this:
- Preston wrote in 2004, “‘The program must be fair … Everyone
must share in its
benefits and burdens. Employers who currently pay nothing toward
their
employees’ insurance must contribute something.” [My emphasis.] He
says now, “‘Everyone must pay some or give some, and most must do both.
If we all do our parts, we can do this task.” - Bailey writes, “Business has been loud in opposition. It is clear
what business is
against; it is not nearly as clear, however, what business is for.”
And there’s our current problem. I can’t blame businesses one bit for
wanting to get out from under or
avoid entirely the crushing weight of health care costs. But for a
group which calls itself “Massachusetts
Businesses for Real Health Care
Reform” to merely defend a status quo that crushes job growth and
health care alike, is not so much Orwellian as ironic and sad. What is
so damn great about the system we have, unless you’re an employer
that’s on the public dole, depending on taxpayers to cover your
employees’ doctor visits? And even then, your employees’ health
suffers, affecting your productivity and bottom line. How
short-sighted. How inhumane.
Let’s step into an alternate universe here, where people cooperate and
work together to solve problems, without rancor or territorial
reactions:
What if business groups were to say what many reasonable people have
been saying: That our employer-based system of health care is broken
completely; that it creates incentives for crappy, cut-rate care at
huge expense; and is bad for employees’ health and for our economic
health at large; and that they would prefer to cut the huge expense and
effort of buying private insurance, in exchange for somewhat higher
taxes, but better efficiency, access and outcomes in a state-run
system? What if business were genuinely a part of the solution, acting
out of enlightened self-interest, and not a reactionary enforcer of the
growth-strangling status quo?
Unfortunately, we don’t live in that world, and so we’re trying to
patch up the inefficient employer-based system, ironically because employers
won’t give it up. And because of that, we’re forced to drag them,
kicking and screaming into helping out anyway. No one’s been able to
explain to me why Dunkin’ Donuts should foist their health care
expenses on the taxpayers; but Starbucks, which does insure its
workers, has to pay extra to subsidize Dunkies.
There is a real lack of vision in much of the business community in
Massachusetts. It’s a shame, because we could really use their help. What
do you guys want?
being subsidized because the state of Massachusetts decides that it wants to give healthcare to people without it? Remember, it’s not Dunkin Donuts’ obligation to provide healthcare to its employees.
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Although $150 a month doesn’t sound bad to me, the problem is that it’s just another administrative, bureaucratic hoop for businesses to jump through. What about part time employees? How do you define full time?
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I’d like to see a transition to a true free-market system. You want to visit a doctor? Look through the newspaper just like you would for a roll of paper towels or something and find the lowest price of a doctor’s visit.
Sure, you’ll get market competition for price, but you’ll get lousy, sloppy doctors charging less, which increases costs down the line.
After all, if the market didn’t compete both in terms of quality and price, wouldn’t this be true in any profession? Shouldn’t mechanics do a bad job of fixing cars because all car maintenance isn’t covered by a “car insurance” program? You can make this case for anything. By removing insurance as a factor, you’d have nationally advertised chains of clinics that would develop and compete with each other to provide the best service and lowest price. It would be like any other industry. Think Jiffy Lube, Midas, and NTB. You still have plenty of non-chain mechanic places, just like youd have non-chain doctors offices. But the difference is that a doctor’s visit wouldn’t cost $125.
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Of course, having insurance solely for catastrophic stuff is a different issue that may have merit.
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And I’d have to argue with the point that sloppy doctors or only going to see a doctor when it becomes an emergency increases costs overall. To a certain extent, yes, if you have a major problem and you don’t get it diagnosed early, it’ll increase costs down the line. But the vast majority of doctor’s visits are not diagnosis types, they’re just physicals or minor things. Things that increase people’s quality of life in the short term, but that, if left untreated, wouldn’t develop into much of anything down the line, or would just go away. I know that personally, more 9 out of every 10 doctor’s visits I’ve ever made were, in hindsight, unnecessary (think poison ivy, etc). IMO, the decrease in long-term costs that would come with having insurance and seeing a doctor regularly are more than eclipsed by the increased costs of unnecessary doctor’s visits. Then again, I don’t have any statistics to back this up – if you do, I’d be interested in seeing them.
that shows how completely messed up our spending priorities are in health care. The underlying assumption to the article is that health insurers ought to be paying for the preventative coverage, but for some strange reason they don’t. But they do pay for the expensive, unnecessary surgeries, which explains why we pay so damn much for insurance. In other words, you’d think the system would be rational, but it ain’t.
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As far as whether the preventative visits (which a physical surely is) pay off, to me it’s intuitively obvious, but you deserve better than my assertion. Be careful of anecdotal evidence: we are both relatively young, relatively healthy, and male, so our “utility” for a preventative doctor visit is different from someone who doesn’t share those qualities. Anyway, I know I’ve read it, and that assumption is central to my thinking about health care, so let me dig around for some numbers, and I’ll get back to you. Sorry to be so lame, but c’est la blog.
that if we had a more free system based less on insurance, people would be more likely to go for the preventative care when it is proven more successful? The problem with insurance is that nobody is bearing their own direct costs. They don’t feel it in their pocketbooks when they go with less successful or more expensive care. If people had to directly pay for the costs of surgery, etc, wouldn’t there be much more of an incentive to find out exactly how to get the best “bang” for their buck? That’s how it works with most goods and services.
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Sorry about the mechanic analogies, but I can’t think of a better example: People get their oil changed regularly because they know that if they don’t, they will have to pay much more when their engine overheats, or whatever. But if they had “car health insurance”, then they wouldn’t be bearing the direct costs when it overheated, so they wouldn’t be so worried about maintaining it regularly – going through the hassle of all the oil changes. And when everyone is less worried about maintenance, costs skyrocket. That’s essentially what we see with our system.
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And also, when you’re bearing the direct cost of doctor’s visits, you’re only going to go to the ones that make financial sense – you’re not going to go for something unnecessary like poison ivy, you are going to go for preventative visits that you know save you money down the line.
I hear you — people who have paid their insurance premiums feel the need to justify the expense, and so they probably go to the doctor for things that aren’t absolutely necessary. The problem is that with a lot of visits, you don’t know. I had this problem this fall — I didn’t know if my wrist was broken or merely sprained. So I had a very expensive (for the insurer) visit with the hand doctor, who told me it would take a while to recover, but it wasn’t broken.
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What you’re suggesting is essentially “consumer-driven health care”, usually high-deductible (i.e. catastrophic) insurance with a savings account for the kind of visits you’re talking about. The problem is that people cut down on both the necessary and unnecessary visits, because guess what? they don’t have the training to diagnose themselves. I also think you’re underestimating the incentive people have just for good health. Yes, they irrationally discount preventative measures, which costs a lot of money down the line. But that’s just human nature. Perhaps insurers could be a little more coercive about requiring a good diet, for instance. Hrm….
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For further reading on this, try Malcolm Gladwell’s article on moral hazard, and this profile of David Cutler, a Harvard prof who works on this stuff. And here’s my (kinda) complete health care reading list.