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Are Health Care Industry Lobbyists Really Proposing to Reduce Their Members’ Revenue by $2 Trillion?
I smell a rat. Lobbyists never advocate less revenue for their members. Ever. If they did, they would be fired and replaced with new lobbyists.
The industry wants universal coverage, because that means more customers and more revenue. But universal coverage is expensive: it could cost $2 trillion itself.
If you tax your way to $2 trillion, the people revolt. If you try to “free up” the money by cutting payments to the industry, the industry revolts. Senate Finance Committee Chairman Max Baucus (D-MT) says he has reforms that will reduce health care spending over time, but the Congressional Budget Office won’t recognize those assumed savings.
So the industry may simply be trying to help Sen. Baucus cook the books by signaling, “Hey CBO – we’ll make sure those reforms work!” – with every intention of fighting those spending reductions later on.
Health Policy Death Match: Klein vs. Ponnuru
I count both Ramesh Ponnuru and Ezra Klein as friends. (I’m so post-partisan.) Why, oh why must they force me to choose between them??
Ponnuru had an op-ed in yesterday’s New York Times where he reaffirmed his membership in the Anti-Universal Coverage Club. Klein responded in a way that’s sure to satisfy his base, but I think he left the reality-based community wanting. Are you ready for the fisk?
Klein suggests that if “80+ percent of Americans . . . think the system needs fundamental changes or a complete rebuild,” then 80+ percent of Americans must support universal coverage. Hmmm, bit of a stretch. In fact, I can recall one poll where nearly one-third of likely Democratic primary voters rejected universal coverage.
Klein suggests that giving consumers the freedom to avoid unwanted state health insurance regulations would mean that Arizonans wouldn’t get coverage for colorectal cancer screening, and that there would be no mammogram coverage in Idaho. Mmm, that’s good crazy. I refer my right honorable friend to the episode where The New Republic’s Jonathan Cohn made a similar claim about mandates for prostate and cervical cancer screening. I looked up the services covered by the plans made available to the Cohn family by the University of Michigan. It turned out that six out of the seven available plans cover both prostate and cervical cancer screening — even though Michigan requires insurers to cover neither. (I offered to wager Cohn a fancy dinner that his family has coverage for both, but I never heard back from him. Foolish, really, to let me know where he gets his insurance. Klein would never give me such an opening . . . or would he?) What Ponnuru proposes is to let Arizonans and Idahoans and everyone else choose what their health plan covers. Imagine that: people rationing medical care according to their preferences, rather than the preferences of employers, interest groups, bureaucrats, health policy wonks… Why Klein clings to such regulations despite zero evidence that they actually increase access to the targeted services is beyond me.
Klein criticizes Ponnuru for proposing to replace the current tax preference for job-based coverage with a tax credit available to everyone, much like John McCain proposed during his (latest) presidential campaign. Ponnuru cites a study estimating that tax credits would reduce the number of uninsured by 20 million. Klein counter-cites one study estimating that tax credits would have zero net effect on the number of uninsured, and a second study estimating that those who transition from job-based coverage to the “individual” or “non-group” market would pay an additional $2,000 per year for an identical policy. Klein’s criticisms sound persuasive — provided you know precious little about the topic. For one thing, the two studies Klein cites are actually the same study. Pity, really. Had Klein found a second study to support his position, perhaps it would not have been quite so flawed as the one he did find. Here’s what I wrote back in September about that study’s flaws:
Filed under: Cato Publications; Health, Welfare & Entitlements
What ‘Universal Coverage’ Really Means: Higher Taxes, Government Rationing
An editorial in today’s Wall Street Journal earns that page a membership in the Anti-Universal Coverage Club.
The editors explain that the universal-coverage scheme Massachusetts enacted in 2006 is a perfect microcosm of what congressional Democrats are trying to foist on the rest of the nation: compel universal coverage now, worry about the costs later.
Massachusetts is three years into that strategy, thus its experience shows us where that strategy leads. Much as my colleague Mike Tanner predicted (repeatedly), it leads to higher taxes and government rationing. The WSJ editors write:
The state’s overall costs on health programs have increased by 42% (!) since 2006.
Like gamblers doubling down on their losses, Democrats have already hiked the fines for people who don’t obtain insurance under the “individual mandate,” already increased business penalties, taxed insurers and hospitals, raised premiums, and pumped up the state tobacco levy. That’s still not enough money.
So earlier this year, [Gov. Deval] Patrick appointed a state commission to figure out how to control costs and preserve “this grand experiment”…
To Reform Health Care, Obama Must First Convince His Advisers
In The New Republic, Jonathan Cohn makes some interesting observations about how Barack Obama’s campaign and administration approach policy issues, particularly health care.
In early January, most of Barack Obama’s senior staff assembled with the president-elect . . . It was a pivotal moment in Obama’s transformation from candidate to commander-in-chief. Obama’s advisers had taken all of his campaign pledges, factored in his promise to reduce the deficit, and put together a provisional blueprint for governing. For the first time, Obama would get a sense of how his proposals fit together in the real world.
Does Cohn suggest that candidate Obama just threw out proposals without considering their cumulative, real-world impact? That Obama launched a new administration with insufficient planning?? Perish the thought.
Obama . . . said he was mostly happy with what his advisers had produced. Investments in energy and education, plus real progress on reducing the deficit–it was all in there, Obama noted. But then the president-elect turned to his one major concern: a key item that was not, in his opinion, sufficiently funded. “Here’s my guidance to you,” one participant recalls Obama saying to the group. “Protect health care.”
It wasn’t the first time that health care had seemed to get short shrift from Obama’s advisers. Nor would it be the last. Indeed, there were moments during the transition and the early weeks of the administration when it appeared that the push for comprehensive health care reform might collapse before it had even begun. During this time, a debate raged inside the administration, with some senior officials arguing that the new president should wade into health care gingerly–or even postpone it altogether–because it would cost too much, distract from other priorities, and carry huge political risks.
Ultimately, however, these arguments failed to carry the day, and health care reform, against what occasionally seemed like long odds, managed to find a sizeable place in Obama’s budget…
The divide among Obama’s counselors was never over whether to pursue health care reform or even what it should look like in the end . . . What divided Obama’s team was the question of how to pursue reform–in particular, how quickly.
That tension stretched back to the campaign, when Obama’s political strategists advised him to soft-pedal the topic. One of them was David Axelrod. Although personally acquainted with the flaws in our health care system because of his disabled daughter, he also understood public opinion: The middle-class voters whose support politicians covet were worried about the cost of insurance, but their enthusiasm for universal coverage seemed shallow. Obama, though, always insisted on keeping health care prominent in the election.
Why so much dissension in the ranks? Partly because the nation faces much more immediate problems.
Axelrod’s anxiety hadn’t dissipated since the election. And now he had a new ally in Larry Summers, whom Obama had appointed to head the National Economic Council. One concern for Summers was the diversion of presidential and staff attention from other issues, like the economy.
But the dissension is also because Obama’s advisers understand just how difficult it will be to achieve universal coverage.
Mostly, though, Summers worried about money. Experts generally believe it will take years before better use of information technology, more preventive care, and other reforms start to yield serious savings. At least in the short run, health care reform is therefore likely to add to the government’s financial burden–during a time of rising deficits. This made Summers uncomfortable.
How bad was the dissension?
Particularly in Obama’s absence, the voices of the skeptics often predominated. “It was scaring the hell out of the rest of us,” says one of the advisers who favored more aggressive action.
Ultimately, Obama insisted on putting $634 billion in his budget to fund health care reform. But Cohn acknowledges that Obama may be over-reaching.
At a time when the economy is collapsing, perhaps Obama can’t afford the distraction of such a major policy effort; at a time when the government is pumping out so much money for other priorities, perhaps it’s foolish to incur a new obligation that, if carried out by the book, still may not pay for itself in under ten years. And, even if it makes sense to seek health care reform this year, Obama’s decision to allocate health care money now could make the budget tougher to pass–inviting an extra political fight that might make reform even harder to achieve.
Nice thing about Cohn: he may be a high priest in the Church of Universal Coverage. But he’s a darned good journalist.
This Is Why Universal Coverage Is a Religion — and Not about Compassion or Saving Lives
I was invited to participate in an email/online/sorta exchange for the Washington Post yesterday. Unfortunately, the effort was spiked after just a few rounds of emails. But rather than let my participation go to waste, I thought I’d post one exchange that I think highlights why I’m not just being colorful when I describe supporters of universal health insurance coverage as the Church of Universal Coverage. I could summarize the exchange, but I’m lazy. So I’ll just copy and paste.
I wrote:
All the interest groups are meeting with all the right politicians and making all the right noises, thus the Church of Universal Coverage says the stars have aligned for fundamental reform… Everyone is at the table right now because no one wants to be on the menu. But when the Democratic leadership makes its intentions clear, today’s love-fest will turn into a bloodbath.
Andres Martinez of the New America Foundation (who owes me a taco al pastor) responded:
I am a proud member of the church, Michael. As New America’s own recent study on the urgency of reform — which reads like a strong courtroom closing argument — noted, how can the world’s most prosperous nation afford to have tens of thousands of its citizens die each year because they lacked access to health care? Health care reform is a moral imperative, so your reference to a church (um, even if sarcastic) is appropriate…
I replied:
The Institute of Medicine estimates that every year, about 20,000 Americans die because they lacked health insurance, but as many as 100,000 die from preventable medical errors. What moral code compels the Church of Universal Coverage to solve the first problem before addressing the second?
Filed under: Cato Publications; Health, Welfare & Entitlements
Orange County Register Slams SCHIP
The Orange County Register editorializes on the State Children’s Health Insurance Program expansion that President Obama just signed into law:
Sure enough, as Jonathan Gruber of MIT and Kosali Simon of Cornell demonstrated in a recent paper for the National Bureau of Economic Research, six of every ten families enrolled in SCHIP in recent years already had private health insurance, meaning that subsidized insurance was crowding out private insurance. As Michael Cannon, director of health policy studies at the libertarian Cato Institute put it to us, “Only in government is a program deemed to ‘work’ when it covers four uninsured children for the price of ten.”
The other fallacy embodied in SCHIP (and other programs) is that providing health insurance is the key to improving the health of poor and near-poor children. Helen Levy of the University of Michigan and David [Meltzer] of the University of Chicago medical school have explored extensively the fact that improving health is more complex than generally acknowledged. It turns out that targeted programs, policies that lead to increased incomes and even improved education offer more bang for the buck than providing insurance.
Given all this, it is not difficult to imagine that the real reason to expand SCHIP is to crowd out private health insurance, and when families are faced with fewer and less affordable choices, they’ll opt for a government-run or “single-payer” system. As P.J. O’Rourke once warned us, however, “If you think health care is expensive now, wait until it’s free.”
I would say that increasing incomes, improving education, or targeted health programs may be more cost-effective than expanding access to health insurance. No one really knows, which makes adopting a one-approach-fits-all strategy like SCHIP rather foolish.
I think it’s time to induct the Orange County Register’s editorial page into the Anti-Universal Coverage Club.
Filed under: Cato Publications; Health, Welfare & Entitlements
Destination Universal Coverage?
I’ll be appearing on the Destination Casa Blanca program to share my thoughts on the State Children’s Health Insurance Program and the question, “Is this legislation the first step to universal health care?”
I’m told that other guests will include someone from the Republican National Committee and the Obama administration. The host will be Ray Suarez, senior correspondent for The NewsHour on PBS.
The program will air this Thursday night (2/5) at 9pm EST, with encore presentations on Friday (12am) and Sunday (10:30am and 10pm). Destination Casa Blanca is easiest to find on DirecTV (438) and the Dish Network (843 & 9401). Otherwise, check here.
Filed under: Cato Publications; General; Health, Welfare & Entitlements
Tips for Blocking Socialized Medicine
Prominent health economist Victor Fuchs has an article in this week’s New England Journal of Medicine that all who care about freedom and health care reform should read. He discusses the array of forces that could be — and in my view, should be — employed to stop health care reform this year:
First, many organizations and individuals prefer the status quo. This category includes health insurance companies; manufacturers of drugs, medical devices, and medical equipment; companies that employ mostly young, healthy workers and therefore have lower health care costs than they would if required to help subsidize care for the poor and the sick; high-income employees, whose health insurance is heavily subsidized through a tax exemption for the portion of their compensation spent on health insurance; business leaders and others who are ideologically opposed to a larger role of government; highly paid physicians in some surgical and medical specialties; and workers who mistakenly believe that their employment-based insurance is a gift from their employer rather than an offset to their potential take-home pay. These individuals and organizations do not account for a majority of voters, but they probably have disproportionate influence on public policy, especially when their task is simply to block change.
Second, as Niccoló Machiavelli presciently wrote in 1513, “There is nothing more difficult to manage, more dubious to accomplish, nor more doubtful of success . . . than to initiate a new order of things. The reformer has enemies in all those who profit from the old order and only lukewarm defenders in all those who would profit from the new order.” This keenly observed dynamic, known as the “Law of Reform,” suggests that a determined and concentrated minority fighting to preserve the status quo has a considerable advantage over a more diffuse majority who favor reform but have varying degrees of willingness to fight for a promised but uncertain benefit.
Third, our country’s political system renders Machiavelli’s Law of Reform particularly relevant in the United States, where many potential “choke points” offer opportunities to stifle change. The problem starts in the primary elections in so-called safe congressional districts, where special-interest money can exert a great deal of influence because of low voter turnout. The fact that Congress has two houses increases the difficulty of passing complex legislation, especially when several committees may claim jurisdiction over portions of a bill. Also, a supermajority of 60% may be needed to force a vote in the filibuster-prone Senate.
Fourth, reformers have failed to unite behind a single approach. Disagreement among reformers has been a major obstacle to substantial reform since early in the last century. According to historian Daniel Hirshfield, “Some saw health insurance primarily as an educational and public health measure, while others argued that it was an economic device to precipitate a needed reorganization of medical practice. . . . Some saw it as a device to save money for all concerned, while others felt sure that it would increase expenditures significantly.” These differences in objectives persist to this day.
That last item speaks to a divide among left-leaning health care reformers that was discussed by Drew Altman in a column at the Kaiser Family Foundation web site:
Read the rest of this post »
Filed under: Government and Politics; Health, Welfare & Entitlements
Coordinated Care Requires Free Markets
In their zeal to achieve universal health insurance coverage, President-elect Barack Obama and congressional Democrats are likely to exacerbate a real crisis in America’s health-care sector.
Americans generally receive medical care from a fragmented collection of doctors, hospitals, pharmacists, and other health care providers. All too often, those providers don’t communicate and collaborate. The result is too many unnecessary services and too many medical errors. The problem is particularly acute when it comes to complex patients with multiple conditions.
In a paper released today by the Cato Institute titled, “Does the Doctor Need a Boss?“, Arnold Kling and I explain that government prevents coordination of care, and that improving coordination requires reducing government’s role:
Medical care typically lacks coordination, in part because payment systems such as Medicare have not kept pace with technology and patients’ changing needs, and because many doctors are unwilling to cede authority to a boss. Medicare and other payers continue to pay doctors according to the independent-craftsman model. For example, Medicare’s payment system generally does not reward coordination. Instead, Medicare and other fee-for-service payers tend to favor technologically intensive specialist services over those of general practitioners who might be best suited to play the role of project manager…
In the home-building analogy, it is as if the concrete contractor, the drywall contractor, the electrician, and the plumber all refuse to work under a general contractor. Instead, they each try to do their jobs independently, regardless of the impact on the rest of the project.
The culprit is not market forces, but government interventions that protect physicians from competition from better-coordinated providers.
Licensing of medical professionals, state health insurance regulations, corporate-practice-of-medicine laws, and policies that encourage fee-for-service payment (i.e., Medicare, Medicaid, and the federal tax code) hold at bay the market forces that would improve coordination of care…
Improving coordination of care requires two consumer-empowering reforms:
First…consumers should control the money that purchases their health insurance, and should be free to choose their insurer and health care providers.
Second, state licensing regulations make it difficult for corporations to design optimal work flows for health care delivery. Under institutional licensing, regulators would instead evaluate how well a corporation treats its patients, not the credentials of the corporation’s employees. Alternatively, states could recognize clinician licenses issued by other states. That would let corporations operate in multiple states under a single set of rules and put pressure on states to eliminate unnecessarily restrictive regulations.
By centralizing control in Washington, the ruling Democratic left will give new strength to the protectionist forces that have blocked quality improvements in health care.
Filed under: Cato Publications; General; Health, Welfare & Entitlements
Obama Proposes Eliminating Medicare Advantage, Ousting 9 Million Seniors from Their Health Plans
On This Week with George Stephanopolous, president-elect Barack Obama proposed eliminating the ENTIRE Medicare Advantage program:
We’ve got to eliminate programs that don’t work, and I’ll give you an example in the health care area. We are spending a lot of money subsidizing the insurance companies around something called Medicare Advantage, a program that gives them subsidies to accept Medicare recipients but doesn’t necessarily make people on Medicare healthier.
And if we eliminate that and other programs, we can potentially save $200 billion out of the health care system that we’re currently spending, and take that money and use it in ways that are actually going to make people healthier and improve quality. So what our challenge is going to be is identifying what works and putting more money into that, eliminating things that don’t work, and making things that we have more efficient.
Medicare Advantage allows seniors to choose a private health plan rather than get their health coverage from the traditional Medicare program. The Left has complained Medicare Advantage costs taxpayers more than if those seniors remained in the traditional Medicare program. (I agree, though the reason is not because government is more efficient than private insurance.) The Left has long dreamt of eliminating Medicare Advantage, in part because it poses a threat to their plans for a completely government-run, single-payer health care system. Yet the Left has had to settle for attacking and attempting to eliminate the “overpayments” that Medicare Advantage plans receive. Of course, one can eliminate Medicare Advantage stealthily by reducing payments to private plans until none will participate.
For Obama to suggest eliminating Medicare Advantage outright, however, is extraordinary. First, Obama made a campaign promise that he will let Americans keep their current health insurance. Eliminating Medicare Advantage would force 9 million seniors out of their current health plans and back into traditional Medicare. Second, a man who wants to reform America’s health care sector ought not begin the effort by proposing to take something away from seniors, America’s largest and most politically active voting block. Maybe the Obama folks haven’t learned the lessons of the Clinton health care battle.
Eliminating Medicare Advantage would be bad for non-seniors, too, because it would block innovations that make medicine better, cheaper, and safer. The main reason that the U.S. health care sector fails to coordinate care, fails to provide patients with electronic medical records, and fails to prevent medical errors is that whenever providers try to do those things, the traditional Medicare program’s change-resistant payment system punishes them for doing so. (Universal coverage kills.) Medicare Advantage plans use different financial incentives that actually encourage coordination, EMRs, and error reduction. What a novel thought…
I thought Obama’s remarks were a misprint when I first read them. But then I saw the video.
How Should Developing Nations Regulate Health Care?
The latest issue of the journal Health Affairs publishes a letter I wrote to the editors concerning articles on health care regulation in China and India. The entire letter follows (links added):
Recent articles on China and India (Jul/Aug 08) share the assumptions that markets for medical care and health insurance require extensive government regulation and that each nation should focus on universal coverage.
I am unfamiliar with the history of regulation in those nations. But the track record of clinician and insurance regulation in the United States is not encouraging. Both have been used by incumbents to block competition, leading to higher costs and lower quality. Gerald Bloom and colleagues worry that unless India imposes clinician licensing, “the natural process of competition is expected to force each insurer to come up with its own accreditation policy and reimbursement procedures.” Does that mean that prepayment would compete openly with fee-for-service? And that physicians could not increase costs by blocking health plans from employing mid-levels when appropriate? Dear God—not that.
Ashoke Bhattacharjya and Puneet Sapra write, “It is encouraging to note that notwithstanding the myriad issues and challenges discussed above, both countries are developing a constructive working framework to balance the interests of government, providers, employers, the insurance industry, and patients, en route to the goal of universal coverage and fairness in health care financing.” That’s just the problem: a policy of universal coverage puts too much power in the hands of elites. It inevitably “balances” those interests, when patients’ interests should trump all others. Does not the fact that “these countries lack the fiscal resources required for universal coverage because of their…low average wages” suggest that many residents have more pressing needs than health insurance? For things that might just deliver greater health improvements? In a profession where universal coverage is a religion, such questions are heresy,I know.
China and India are in the process of a slow climb out of poverty. It is entirely possible that the best thing those governments could do to improve these markets and population health would be to enforce contracts, punish torts, contain contagion, and nothing else.
Michael F. Cannon
Cato Institute, Washington, D.C.
Filed under: Health, Welfare & Entitlements; International Economics and Development
Jindal’s Rx: the Most Coordinated System of Care that No One Can Access
Louisiana Gov. Bobby Jindal’s (R) proposed Medicaid reforms are getting a lot of press. Jindal proposes to expand eligibility for Medicaid, enroll Medicaid patients in private managed-care plans, and do other things to improve the quality of care. Writing in The American Spectator, Joseph Lawler says the approach is “market-based” and “could forestall universal health care.”
A friend asked my thoughts about Jindal’s proposal. Here’s what I emailed back:
Why is it that when politicians propose giving taxpayer dollars to private companies, people think that’s “market-based”?
Jindal’s plan is not market-based reform. As a general matter, market-based charity care is just that: private charity. So the only market-based Medicaid reforms are those that remove people from the Medicaid rolls — e.g., federal block grants, eligibility restrictions, etc.
Jindal wants to expand eligibility. For a welfare program. And we call that market-based?
Jindal may be able to improve the quality of care through greater coordination. Which looks good on paper. But if the quality of care in Medicaid improves, more people will enroll. Only 2/3 of those eligible actually sign up for the program. (Many of the 1/3 who don’t enroll actually have private coverage.) So improving Medicaid benefits could cause enrollment to increase 50 percent. And that’s before Jindal expands the eligibility rules.
With all the additional cost pressure, what’s going to happen to Medicaid payments and enrollees’ access to docs? (There are reasons why Medicaid pays so little.)
Louisiana’s Medicaid program could someday achieve the most coordinated system of care that no one can access. Should we pull people out of private health plans for that?
Expanding enrollment in a government-run health plan is supposed to forestall universal coverage? Discerning consumers of market-based ideas should keep shopping.
Filed under: Cato Publications; Health, Welfare & Entitlements
Anti-Socialism = Racism ??
At Salon.com, Michael Lind asks and answers, “Is Barack Obama a socialist? If he is, then so is John McCain.“ I have to agree. McCain so often plays the class warrior that his “desperate use of the socialist smear is particularly shameless.” I might add that McCain is giving anti-socialism a bad name by associating it with hypocrisy, anger, piety, trigger-happiness, etc.
But I can’t go as far as Lind, who doesn’t really seem interested in the answer to his own question. Indeed, it appears Lind’s purpose is to teach McCain the true meaning of shameless. Lind writes:
McCain and Palin claim that Obama’s proposed healthcare system is socialist. It is nothing of the sort. It is a variant of the employer-friendly, insurance-friendly “play-or-pay” scheme discussed in the 1990s. Employers will be given the choice of providing tax-favored health insurance to their employees or being taxed to support a public insurance system. Over time the latter might expand, but for the foreseeable future our dysfunctional private insurance system will survive.
I’m sorry, but the fact that Obama would preserve private health insurance says absolutely nothing about whether his health-care plan is socialist. (If your jaw just hit the space bar, you probably need to read my paper, “Does Barack Obama Support Socialized Medicine?“) The Church of Universal Coverage loves pointing to the presence of “private” health care because it distracts attention from what they’re really doing.
Lind further attempts to innoculate Obama from the charge of socialism by associating the candidate with that great anti-socialist Friedrich Hayek. Lind describes Hayek’s Road to Serfdom as “the bible of free-market libertarians,” and refers to the part where Hayek writes:
Filed under: Cato Publications; Government and Politics; Health, Welfare & Entitlements; Political Philosophy
Church of Universal Coverage Denies Its Own Progeny
Ezra Klein, high priest of the Church of Universal Coverage, kindly concedes the point that government — including Medicare, America’s experiment with universal coverage — tips the scales toward fee-for-service payment rather than prepayment.
But in case that scale-tipping actually hurt anybody, he exonerates government and pins the blame on the physicians who got government to do their bidding:
I’ll happily admit that it may have thrown up some roadblocks. But that one’s not really on government — it’s on the medical profession itself.
I’ll respond to Klein with what I told Paul Krugman and others at a recent debate:
The industry has way too much influence when the government gets involved. And it’s nice to think that we could have this wonderful universal coverage plan, and we could just get the industry out of it; we could just not have the industry be a part of it; we could cut off their influence.
But we know that the industry’s always going to be around. We know that there’ll always be drug companies and greedy private health insurance companies. And Republicans who will mess things up like they messed up FEMA and they mess up everything else. So you can’t say that universal coverage is this wonderful idea and we can separate out this part.
This is an inherent part…all the rent-seeking from the industry, and all the buffoonery from the Republicans. Unless you have a plan to abolish Republicans, they’re part of your plan.
Response to Criticisms of “Universal Coverage Kills”
I have received a fair amount of criticism for my recent oped “Universal Coverage Kills,” which appeared at National Review Online and in the Orange County Register: Fun excerpts include:
- A philosophically sympathetic eICU medical director emails that I am “off the mark.”
- A “free-market believer and an attorney” emails that he is “upset about the increasingly anti-physician rhetoric of Mr. Cannon. It is extremely biased and counter-productive to the free market…The DOCTORS are the ultimate producers of health care. Get off their backs.”
- A “libertarian doctor” emails that I “insult our intelligence with well-meaning but fundamentally obtuse, ignorant opinions. If you don’t know, and you clearly don’t know, ask a practicing doctor.”
Moving beyond my philosophical allies…
- In a letter to the editor, an Orange County pediatrician writes, “Cannon’s preaching from his high horse that hospitals and doctors are ‘rewarded’ for medical errors is irresponsible and wrong. He needs to walk in our shoes and, perhaps, he will be less cynical and be more grateful that we, as a medical profession, are here to heal with our hearts and souls, to cure with our mind and body and to always do no harm.”
Bloggers have also offered their two cents:
- WhiteCoat writes, “It amuses me when people possessing little knowledge of the inner workings of the practice of medicine write articles as if they are ‘in the know.’ Mr. Cannon’s article is one such work…there are several statements Mr. Cannon makes that are either purposely inflammatory or that show a fundamental lack of insight…I’m glad he links to a few statistics, but the conclusions he comes up with are flat out wrong.”
- Ezra Klein mocks as usual, yet (damn him!) fails to provide any juicy quotes.
So what’s all the hubub about? I claimed that America’s grand experiment with universal coverage — Medicare — has stifled innovations that reduce medical errors, and has thus caused unnecessary deaths.
Here’s my argument:
Universal Coverage Kills
Members of the Anti-Universal Coverage Club will be interested in my article published today at National Review Online:
McCain, Obama, and the voters would do well to keep in mind what this month — October 2008 — has to say about the quality of medical care when government is in charge.
Federal bureaucrats have announced that, as of this month, the Medicare program will no longer provide financial rewards to doctors and hospitals who harm patients.
That is not a typo. For more than 40 years, Medicare has provided financial rewards to providers when a patient requires follow-up care following a medical error…
It doesn’t have to be this way. More than 60 years ago, markets devised health plans that discourage medical errors by forcing doctors and hospitals to bear the financial costs of all such errors. You know them as plans like Group Health Cooperative and Kaiser Permanente. Doctors and patients who choose those plans tend to like them, and the plans receive high marks for quality, which suggests the financial incentives they use serve patients better.
Why does it take Medicare more than 40 years to take such baby steps? Especially when the market developed a solution to this problem over 60 years ago?
The answer is that Medicare — like all universal-coverage schemes — is operated by the government, and government resists innovation. In this case, resistance to innovation kills.
As for the Church of Universal Coverage . . . well, they may catch the vapors.
Filed under: General; Health, Welfare & Entitlements
You Want to Cover Everyone with This?
I just listened to a fantastic talk that Mark Smith of the California Healthcare Foundation gave last month at a conference sponsored by the Center for Health Policy and the Center for Primary Care and Outcomes Research at Stanford University. Here’s an excerpt:
It’s increasingly dysfunctional actually to talk about people in binary fashion as insured or uninsured because there are people with insurance who are going bankrupt…. On the other hand, there are people who are uninsured who are now able to access certain services for less out-of-pocket than people who are insured.
It is not clear to me why we pay Aetna $20, so they can pay Medco $15, so they can pay CVS $10, so CVS can collect their $5 copay from us for something we could have just bought at Wal-Mart for $4 in the first place….
Yet our debate in the public space is how can we get everybody into these traditional insurance products…at an increasingly unaffordable rate.
Read the whole thing.
Smith could be a candidate for the Anti-Universal Coverage Club.
“Before we give up on free markets, let’s actually give them a shot.”
Cato adjunct scholar Shirley Svorny has an oped in today’s Los Angeles Times. An excerpt:
We’ve been hearing a lot about universal healthcare. But before you give up on market competition, consider that government regulation of hospitals and medical professionals makes medical care much more expensive than it need be…
One of the reasons healthcare costs are growing is that lobbyists for medical professionals and hospitals use such laws to protect their members from competition. If they keep blocking cost-saving innovations, it could backfire on them. The public will get so frustrated with the high cost of care that they will demand universal healthcare, which won’t be a picnic for the industry or the rest of us…let’s deregulate medical care so that providers can find innovative ways to deliver high-quality care cheaply.
Universal coverage sounds appealing, but it means government will be running the trains. Here and abroad, government does not have a good record when it comes to access, oversight, or innovation.
Svorny’s oped draws from her recently released Cato study, “Medical Licensing: An Obstacle to Affordable, Quality Care.”
I’m inducting Svorny into the Anti-Universal Coverage Club.
NPR Article, Audio of IQ2 Universal-Coverage Debate
Today, National Public Radio’s Julie Rovner writes about the recent Intelligence Squared debate where John Stossel, Sally Pipes, and I squared off against Paul Krugman, Michael Rachlis, and Art Kellerman on whether the federal government should pursue a policy of universal health-insurance coverage. The article includes links to the full audio recording of the debate, an edited audio recording, and audio excerpts. (You can also absorb the debate via YouTube and the transcript.)
Rovner quotes me:
You can have a health-care sector that guarantees universal coverage, or you can have a health-care sector that continuously makes medical care better, cheaper, and safer, making it easier to deliver on that moral obligation that we have to help the less-fortunate among us. You cannot have both.
If you agree, you may be a candidate for the Anti-Universal Coverage Club.
Filed under: General; Health, Welfare & Entitlements
A Clarification
In a previous post, I wrote the following about friend and debate partner Sally Pipes:
And I’m now prepared to induct John Stossel into the Anti-Universal Coverage Club. Sally Pipes I’m still not sure about; you can judge for yourself when the IQ2 folks post the transcript of the debate here.
My intention was not to disparage Pipes. The Anti-Universal Coverage Club exists to challenge the idea that government should pursue a policy of universal health insurance coverage. Some free-marketers believe that’s a fine goal, so long as government goes about it using market mechanisms. At our recent Intelligence Squared debate, Pipes remarked:
By supporting universal choice in health care, and empowering consumers, we will achieve universal coverage.
Pipes is one of the leading opponents of government-run health care. When I heard that remark, though, I thought perhaps Pipes might fall into that aforementioned group of free-marketers. So I didn’t want to induct her into the Anti-Universal Coverage Club if that’s not her thing.
Colleagues of Pipes objected to my blog post. In an email to me, Pipes writes:
I support allowing the market to work resulting in more choice for consumers. The government should not be involved.
I did not mean to suggest anything to the contrary, but I can see why they would think I had. I apologize to Pipes and her colleagues.
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