Map of life expectancy at birth from Global Education Project.

Friday, June 13, 2008

Okay, you want health policy wonking

you got it. The upcoming election may well be the most important election in U.S. history. Oh, the election of 1860 was important, but the outcome was never much in doubt and the terrain was very different. Lincoln was a regional candidate: he was not even on the ballot in most of the southern states. The election of 2008 will be contested, and it won't be about a single issue, obviously, but about a complex web of enormous challenges facing the nation and the planet.

There will be so much for President Obama and the new, Democratically controlled Congress to address (I'm not even contemplating the alternative, because I would have to move to Tasmania) that it's probably feckless to try to predict where health care reform will fall on the agenda and how it will fare in 2009 with everything else that's going on, but people are peering hard into the crystal ball.

As you probably know, Obama himself has proposed an incremental reform that addresses availability, although it does not result in universal coverage and does little to contain costs. He would make the federal employees' plan available to everyone, and set up an authority similar to the Massachusetts Connector to facilitate access to private plans, which would have to be offered on the basis of community rating (i.e., they'd have to issue insurance even if you're sick and they couldn't charge you extra for it). There would be sliding scale subsidies for lower income people, but no mandate to have coverage, except for children. Employers who did not contribute to their own employees' health care coverage would have to make an (unspecified) contribution to subsidize the national plan.

If this were to be implemented as written, it would certainly make the system more fair, and would almost certainly reduce the number of uninsured people, by extending coverage to people who are now excluded due to pre-existing conditions or high risk such as age), and perhaps to some extent by providing subsidies to low income people who do not qualify for Medicaid. The latter proposition is questionable, however, because such a reform could actually make insurance more expensive than it is now for young and healthy people - as they would have to join the same risk pool as older and sicker folks.

Whether the subsidies would be adequate to pull such people into the market is not clear. That is one reason why Obama's decision not to include a mandate, as in the otherwise similar Massachusetts plan, has been questioned. Pushing them in with a mandate forces them to act against their own interest in actuarial terms (although if they are hit by a bus they'll be happy they are insured), but it provides a subsidy for the higher risk people in the pool. Without the mandate, the insurance is more expensive for everybody else. And when the generation Y or Zers or whatever they are do find themselves under the bus, the taxpayers are probably going to end up paying for their trauma surgery anyway.

As for cost containment, there are vague concepts of disease management programs and a U.S. equivalent of the British National Institute for Clinical Excellence, but no stated commitment to enforceable guidelines for cost-effective treatment. Much of the cost problem concerns Medicare in any event, which would still pick people up as they turn 65 and which is not really discussed. Obama would allow Medicare - and I suppose the new national plan as well - to exercise its buying power and negotiate with drug companies, which would result in a substantial one-time reduction in cost to the government but would not stop the long-term upward trend in spending.

Proposals that currently have the most support in Congress -- notably the Healthy America Act sponsored by Sens. Wyden and Bennett -- aren't much different. The HAA also offers access to community rated plans, with individual mandates and subsidies for moderate income people. It lacks the national plan in the Obama proposal, however -- rather, it would only create the regulated private insurance market. Given that there seems to be an emerging consensus around a reform of this basic outline among Democrats and the nearly extinct species of moderate Republicans, we may indeed get something like it in 2009. Large employers are happy with this style of reform, which will likely end up saving them money. Health insurers probably don't like it much, since the more heavily regulated market will probably squeeze their profits, and drug companies will like it even less. Physicians, for the most part, should be okay with it, but we'll have to see how hospitals feel about it since these proposals do aim at keeping people out of hospitals and reducing spending on the most expensive services, in various ways.

So, even with the overwhelming public demand for change, and a landslide victory for the party of reform in November, we'll have a long way to go. They'll be yelling about socialized medicine, government control, taking away your individual choice, restricting competition, rationing, and Obama is actually an alien from Aldeberan sent to infiltrate the government and prepare the way for the extraterrestrial invasion. And they'll be spending a lot of money to stop it. After November, la lucha continua, on this and every other contested ground.

No comments: