Sally C. Pipes, a Canadian who lives in San Francisco, works for the Giuliani campaign, and is President and CEO of the regressive Pacific Research Institute (PRI) — funded, no surprise, by Pfizer and the Pharmaceutical Research and Manufacturers of America (PhRMA), among others — has ripped our move toward improved health care in Massachusetts. (To buy a $50,000 ticket to PRI’s October gala dinner featuring Jeb Bush, click here). Key passage:
The Connector Board also bowed to political pressure and agreed to reduce the premiums, a move that boosted program costs by $13 million. Some plans are totally free–and have therefore been popular. Other subsidized plans for people earning between 150 and 300 percent of the poverty line will cost people as much as 9 percent of income for just the premium. Not surprisingly, these plans have proven less popular. Of the 79,800 people who’ve enrolled in the health plans as of June 1 of this year, 59,816 signed up for the totally free plans.
This structure will produce a fiscal disaster. Considering the high premiums for those who have to pay, many will opt to remain uninsured. The fine of $216 will be more attractive than the premium. Politicians will face strong pressure not to enforce the mandate if the fines increase. Indeed, before the program started they exempted 20 percent of the target population.
The basic problem with her argument is that our current system is such a catastrophe the WHO ranked us 37th in the whole world in 2000, the last time it checked. Move anywhere else in the developed world — you’ll pay less, and probably get better care. That sucks! We should be #1. We have to change, and Massachusetts and California are leading the way.
Still, setting aside this obvious point, I’d like to know from the people here what the Giuliani campaign’s health care advisor missed in her review.
Actually, some of that criticism is true.
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But I think it’s funny how “the subsidized plans are popular!” = BAD BAD BAD, even though polls indicate people are even willing to pay higher taxes to get everyone covered.
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No. Subsidized plans are good. They are popular because they’re good. The taxpaying public agrees.
She published an op-ed in the Globe on MA health care a few months ago. Charley described it as the work of a “right-wing hack.” I chimed in, noting that her piece was “one of the stupidest pieces of writing I’ve ever seen published in the Globe.” Why anyone is giving this person the time of day on health care is quite beyond me.
Is giving her the time of day, as I pointed out. What I’d like to hear is where she’s wrong. So far, with respect to this piece, all I have heard is the Charley thinks some of the criticism is true.
The only criticism I have of her quote is that what she thinks is bad — the popularity of the subsidized plans — I think is good. I think in order for the plan to work, the subsidies need to go higher up the income ladder. And yes, that’ll cost money, but it will be fair.
…What I’d like to hear is where she’s wrong….
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What you have to do is reflect on where is she correct? She can spout all kinds of factoids that suggest that the world is flat, but do those factoids make any sense? She is a paid public relations operative from a particular point of view. If you want to believe her blatherings uncritically, please feel free.
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I have given you in recent months my experience from Germany, in comparison with my experience from the US, and that, plus my study of international comparisons over the Internet, I will tell you that Americans are getting screwed on health care costs.
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As I said, feel free to believe her public-relations-mandated blathers as you wish. I do not wish to.
…we seem to be getting all of these right-wing nut-cases from Canada expounding on American policy? Pipes is far from the first one. David Frum comes to mind, as does Mark Steyn. Is there no market for them in Canada?
Sally Pipe?s article is certainly a biased and partisan hit job, but she does raise an absolutely valid point: the subsidies of certain health plans will increase the consumption of health services, perhaps drastically.
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This is true for any product or service, of which health care is one. If the government subsidized the price of gasoline or cheese there?d be a lot more people driving more miles and eating more cheese.
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This has cyclical supply and demand implications for our recent health care mandate. If premiums for some consumers are subsidized in an effort to make health care ?affordable,? we are likely to see increased utilization and increased program costs. Lower costs=increased consumption. This may spark some measure of rationing in order to control those costs. And it is likely to drive up taxes to pay for it all.
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(I fault Pipes for not taking into account the potential savings from reducing the state-paid, ER-provided ?charity care.? Cynic that I am, I doubt those numbers will be included in any assessment of the Connector?s overall effectiveness. And since the cost of that care is zero anyway, what incentive do the poor have to join the Connector, at any price? None.)
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Pipes analysis of this ?downward spiral? is economically correct. It remains to be seen how the Connector and Beacon Hill respond to these potential pressures. If we hear noises about ?cost control?, ?service limits?, or ?additional funding,? then I think we?re headed for that downward spiral.
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This is usually what happens whenever politics gets directly involved with economics ? you pay more, get less, and the service sucks. Let?s see if this applies to the Connector.
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In general I agree that the less expensive something is, the higher the demand will be; but to a certain extent isn’t healthcare and outlier?
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At a certain point I’d think that that increased consumption must start to level off. I mean there are only so many doctor’s visits I’m going to want to make, or prescriptions I’m going to want to have filled simply because they’re covered by my health plan.
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“Gee, I have an afternoon free, better go to Dr. So-and-so and get some more of those litte purple pills I saw advertised on TV. Hey, I may as well get an MRI while I’m at it. It’s not like it’s going to cost me anything….”
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(Which gets me off on another tangent… the ridiculous over-selling of pharmaceuticals and medical services.)
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Second, isn’t the objective to increase consumption of health care services — particularly among those who can’t currently afford it and who might otherwise delay treatment? What’s the economic cost of not having these people properly cared for? (A healthier, better-educated workforce would also presumably increase the supply of medical professionals.)
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I mean, we’re talking healthcare here, and certainly some “common sense” things — like providing decent healthcare to all of our citizens — are worth the price even if they don’t make “theoretical sense” from some economist’s ivory tower.
Gee, I have an afternoon free, better go to Dr. So-and-so and get some more of those litte purple pills I saw advertised on TV.
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You are obviously of my generation. Do you recall the Rolling Stones song Mothers’ little helpers? It was obviously about Valium, and (male) doctors would provide presciptions for it to (female) patients as if it were going out of style.
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Direct advertising of regulated pharmaceuticals (fancy name for “drugs”) to the public should be outlawed. It is in much of the Western world.
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I’ll tell you a little story. My mother-in-law became hooked on Valium when she was in the US because the doctors were throwing pills at, particularly, women. When she returned to Germany, she wanted a pill of some sort (not Valium and I don’t recall the details) and her excellent doctor told her No, I will not prescribe it for you because you don’t need it. That was the best thing that ever happened to her. Seriously.
But I’m certainly familiar with the song and its connotations.
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đŸ˜‰
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Interesting anecdote about your mother-in-law.
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Just out of curiosity, do you have any stats on the % of German workers in the healthcare professions? (Relative to total workforce, of course.) I’d also be interested to see comparable stats for other countries with subsidized healthcare, just to see if there is in fact a corrleation.
But the WHO has an interesting fact sheet on the impact of the global shortage of healthcare workers.
Just out of curiosity, do you have any stats on the % of German workers in the healthcare professions? (Relative to total workforce, of course.)
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Of course. And no I dont have the stats.
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What I have beaten on here for months is the obvious inefficiencies that I have seen in the American system vs. what we get in little offices in Germany.
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Example: I was in Lahey clinic. Some technician ran an ultrasound on me. The results were given to another technician for interpretation. A few months later a “primary care physician” called me in for a consultation. Three people.
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Counter-example. In our little Dorf just west of Munich, the doctor (Arzt) had a new toy. It was called an ultrasound device. He loved playing with it. He ran it over my body himself. He saw the results (he showed them to me on the computer screen: do you know what your kidneys look like? I know what mine do). He interpreted the results and he determined: no problem. One person, 15 minutes, no three people involved.
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Second counter-example, when we first went to that practice, the doctors ran an x-ray scan on me. They discovered a cyst that had never, ever been discovered or reported by an american health care group. The Germans concluded that it was probably benign.
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Now, you tell me, who is giving better care, at reasonable prices? A system that notes potential problems, decides that they are not likely to really be problems, and that does diagnoses on the spot without requiring intermediaries, or a system that encourages intermediaries and ignores potential problems?
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I will leave it up to you to decide which you would prefer. But I will suggest to you that the fact that a private German insurance company is willing to privately insure a breast cancer survivor (with a lot more amenities and no deductables) than the BSCS was willing to insure a reasonably healthy American in MA who is 20 years younger should tell you more than a bit about the condition of the health care financing system in the USofA.
I agree with you Tim that there’s an optimal level of health care for society. But subsidized plans are NOT going to help allocate care efficiently to those who need them. The demand for “free” care will be greater than the available supply. Supply constraints will emerge, and rationing is next.
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You see this in today’s emergency rooms everywhere. They’re filled to the brim with non-emergencies. I spent an hour at BMC the other month. There were 10 people who had non-threatening issues; security asked 3 to leave the premises.
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At MGH over Memorial Day I had a potentially serious problem, stepped up to the desk, and was triaged over SRO crowds. I’m no physician but plenty of people didn’t need immediate or emergency care. What are they doing in a hospital emergency room?
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Although both my experiences were anecdotal, unless people are charged something for the service, they will go to the doctor for any minor ache or pain. If there’s no cost, there’s no constraint.
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Health care services, like any service, are a scarce resource being mis-allocated because the real cost is hidden and not borne by the consumer. The lower the cost, the higher the utilization.
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Maybe a doctor’s visit is $250. When you charge a $5 or $10 or $25 co-pay for an office visit, it’s more to limit utilization, not so much to cover costs.
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This is what happens when health care becomes a “right,” and its true cost is hidden.
We need to be clear about exactly what we’re encouraging demand for. Yes indeed, universal coverage is intended increase demand for primary care: Primary docs, Med assistants, nurses and NP’s, etc. But it is also intended to lower demand for unbelievably expensive (and disorganized, and hurried, and generally low quality) ER care.
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So yeah, we do intend to increase demand for relatively cheap, timely and good care over expensive and too-late care. It’s much better to pay for ongoing diabetes treatment than to saw off a limb — for pretty much all concerned.
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So your anecdotes about emergency care are relevant, but not in the way you think. We want to keep folks out of the ER; I just think charging them more is the wrong way to do it. We need a comprehensive strategy for getting them to ordinary, scheduled doc visits.
If the statistics from the entire rest of the world aren’t compelling, I don’t know what is.
It’s easy to scare people with health care costs. Health care already is a fiscal disaster. One out of every six dollars spent in America is spent on health care. GM claims — I find this a bit dubious, but they say it — that health insurance for its workforce adds $1,500 to the cost of every car they sell.
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A number of factors boost the cost (in no particular order):
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– Administrative costs of payment processing
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– Public demand for the latest and greatest (nobody wants a plastic hip when they can have a titanium one)
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– Advertising (e.g., the aforementioned purple pill)
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– The lengthy approval process for new drugs, and the FDA’s requirement (supported by the industry, no doubt) that new drugs be significant improvements over existing drugs. As my friend says, this is like requiring every new car to be better than a Cadillac.
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– You (and me), wanting good returns in our 401(k) accounts, which, if they include mutual funds, are almost certainly invested in large publicly traded insurance firms that must turn a profit.
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Where does it hurt?
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The problem with the uninsured is that use too little care, and thus don’t have optimal health. When they do use services, too much is in ERs and acute hospitals, and not enough of it is preventive care and care for chronic conditions.
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That’s what health reform is trying to fix.
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The vast majority of enrollees in Commonwealth Care, the new subsidized health coverage, came from the “Uncompensated Care Pool,” our hospital charity care reimbursement program. This is an unmanaged program, with most care coming in ERs.
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Now they have a primary care doc, and medical home, the ability to get drugs and preventive services. Costs will definitely go up (they were getting too little care before), but so will their health.
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This puts a squeeze on primary care and other services, but opens up ERs for true emergencies.
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So far, 105,000 are enrolled. This is a good thing. We’re just going to have to pay for it.