Map of life expectancy at birth from Global Education Project.

Thursday, October 23, 2008

Apologies . . .

for not posting yesterday, was very busy. Anyhow . . .

On the one hand, it is really horrifying to watch the self-destruction of John McCain. This guy spent decades carefully constructing a reputation and public image that most members of the journalistic profession, such as it is, swallowed like candied opium. Now he has systematically destroyed it down to the last particle. All the elements of classical tragedy are in there, complete with the chorus of hairhatted talking heads.

But the good news is that we may end up being grateful to the Senator for destroying himself. If we get the electoral blowout that might, just might happen -- if an only if, I should say -- there is a chance to get something meaningful done about health care. We often hear CW to the effect that Americans prefer divided government because they want to restrain government activism. Right now, that is the opposite of what we need to hear. Major changes are urgently needed.

Victor Fuchs, a gray eminence of health care policy, analyzes the political trap in which we find ourselves. The basic difficulty is the intersection of substantial vested interests -- interests which are well aware of their political peril and are very well organized and activated to fend it off -- with a flawed deep structure that will not yield to incremental change.

In a nutshell, we pay for services, not for results; and bad results actually increase the profits of providers, because they generate more services. At the same time, the immense waste built into the system represents income and profit for a whole lot of people, who are determined to defend it. In Fuchs's essay I don't really see a path out of the trap, but I believe there may be one if we get an overwhelming Democratic congress with an Obama presidency.

The trick is to provide a publicly sponsored option, an alternative to private insurance that's available to everyone -- including employers who currently sponsor their employees in private plans -- community rated, with low administrative costs and no need to make a profit, so it has an edge in the marketplace. It may suffer from adverse selection to some extent, but it it's selling to large employers that won't be a big problem. It will be politically difficult for the insurance and drug industries to resist if it's just offered as an option -- the same insurance Joe Biden gets, that you or your employer can buy into. What's wrong with that?

It will become very popular, and then the political pressure will be to sustain it, which will require containing costs, by bargaining with the drug companies, rationalizing care, and changing incentives to support high quality primary care that emphasizes prevention, disease management, accessibility, and evidence based treatment. All the hollering about rationing will ring hollow if the public plan actually delivers what people want and its cost advantage keeps growing. The private plans can hang around as long as they are able, but with proper management of the public plan, they'll become superfluous.

This still requires confronting very powerful constituencies that know how to play dirty. But it must be done.

UPDATE: And right on cue, They are successful pharmaceutical company executives, and both have schools of pharmacy at prominent universities named after them. Between them, they have given nearly $4 million to a new North Carolina-based 527 group that is sponsoring ads attacking Sen. Barack Obama's tax policies.

No comments: