The Little Health Care System That Couldn't

And here's the conundrum. In a purely profit driven system, your freedom to choose the level of healthcare you receive is directly dependent on your ability to pay for it. In other words, some people are free to choose and some are not. Is that better than no-one having the freedom to choose? I don't know. It seems like one should be able to get the old Operations Research text book out and find a way to maximize coverage and quality of care while minimizing cost. But if it were that simple it would have been done already.

I don't mean to imply that one of those choices shouldn't be a national healthcare system, but that should not be the only choice.

I'd love to see an affordable, quality healthcare system in the US. Problem is that I am reminded of the old adage "you get what you pay for."

Yep, I know what you mean.

We are already paying more than any other country for what we have. The question will come down to how we allocate finite resources. Anyone who raises the issue of rationing is shouted down, yet at some point this is a key question. Perhaps another word will have to be found for it...

There is no doubt that inorder for any universal health care system to function everyone must contribute. On the other hand it seems unreasonabe to deny people the opportunity of supplementing their health care at their own expense.

This article points out that a small increase in Health Savings Accounts is working just as economists have argued that they would - bring down costs by encouraging employees to search out the lowest costs in health care since they can keep money that they save.
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HSA's work
Michael Barone

June 13, 2005

How many times have you heard that health care costs are rising at record rates? Well, they aren't any more.

 The Bureau of Labor Statistics reports that health care costs rose 7.5 percent in 2004, well under the 11.4 percent rise in 2002. The BLS also reports that costs for employers for health insurance per employee per hour worked has slowed down even more. From March 2001 to March 2002, it rose 11 perecnt; from March 2002 to March 2004, it rose 9 percent each year. But from March 2004 to December 2004, it rose only 3 percent.

 Something is going on out there. Politicians and political commentators always assume that government must do something new and different if health care costs are to be held down to bearable increases. But the evidence is that health care costs are being held down, by the workings of the marketplace, partly in response to health care legislation passed in the last four years.

 One thing that is going on is that employers are offering and employees are choosing health savings accounts and high-deductible health insurance in greater numbers. HSAs were given a big boost in the Medicare prescription drug bill passed in November 2003; indeed that was the reason that most Republicans voted for a bill that also included the biggest new entitlement program since Medicare was passed in 1965.

 HSAs seem to be gaining in popularity. A survey by Watson Wyatt and the National Business Group on Health found that 8 percent of employers are offering health savings accounts in 2005, and 18 percent plan to offer them in 2006. Large majorities of employers believe that HSAs will help lower overall health care costs and that they will expand options for employees.

 The number of people covered by HSAs and high-deductible insurance policies increased from 438,000 in September 2004 to 1,031,000 in March 2005. Nearly half of these are people over 40 -- though some predicted that such policies would not be attractive to them.

 One thing that HSAs and high-deductible health insurance help do is to make employees more cost-conscious when it comes to health care decisions. HSAs allow employees to keep money they don't spend on health care this year and to roll it over to next year, and on and on -- therefore, there is an incentive not to fritter it away. High-deductible health insurance operates the same way high-deductible auto insurance does: It does not pay for the equivalent of your oil change but does pay you when your car is totaled.

 For many years, the World War II decision to make health insurance coverage tax-deductible for employers and non-taxable to employees has driven health insurance to a different model, one that pays for virtually every procedure but in a surprising number of cases does not cover catastrophic costs. But increasingly that makes no sense.

 As Wall Street Journal columnist Holman Jenkins points out, the tax subsidy to employees, while worth a lot to high-income earners, is worth very little to those whose income tax liability is low or, as in the case of Earned Income Tax Credit recipients, nonexistent. To them, it is hardly worthwhile to pay an insurance company to process their claims for predictable items like annual checkups and routine pediatric care, yet to be left with a policy that, to hold down employers' costs, doesn't provide catastrophic coverage.

 The other interesting development is the emergence of health insurance policies that encourage healthy behavior. Health care experts note that the increasing incidence of diabetes and other obesity-related diseases threatens to hugely increase health care costs in future years.

 Old-style health insurance policies provide no incentive to behaviors that tend to reduce the incidence of such disease. In a previous column, I looked at one company that provides such policies, including health club membership for employees. These policies may provide a long-term answer to problems that health care analysts of all political stripes are concerned about.

 The overriding assumption in much commentary on health care finance is that individuals and companies are helpless automata waiting for government action before anything can be done anything about health care costs. But recent developments suggest that, in fact, employers and employees are active players, and that provisions of recent legislation that were not much noticed by the commentariat have enabled them to take action that reduces costs and provides increased benefits and incentives for healthier behavior.

 We have problems, yes, but we are not helpless.

Source

I paid someone's Pennsylvania hospital bill for 4.5 days service/treatment earlier today. Over $81,000 U.S. The provincial government here thinks the service is worth something less than $2000 Canadian.

The truth is likely somewhere between the two, with the lower number being slightly more accurate.

The thought of going to an American system horrifies me. So many people will lose access to good medical care. That is not acceptable to me.

As much as some Canadians travel to the U.S. for treatment, so do Americans travel to Canada for medical treatment. Different specialties have different waiting lists between the countries. One of the biggest issues for some years has been the numbers of Americans who travel to Canada, particularly BC and Ontario, to sign up for provincial health cards - and then return to seek free treatment.

That billing suggests cost shifting, a way that US hospitals survive. This is especially true for hospitals that treat a lot of uncompensated patients. The patients who do have insurance receive inflated bills to cover the costs of other patients.

This kind of creativity is one consequence of our health care "system" -- that is to say, no real system at all...

An interesting backgrounder (for those who actually think this is an interesting topic of discussion)

http://www.cbc.ca/news/background/healthcare/public_vs_private.html

A link to one of the CBC archives features on Tommy Douglas

http://archives.cbc.ca/300c.asp?IDCat=73&IDDos=90&IDLan=1&IDMenu=73

Tommy Douglas was recently found to be the greatest Canadian ever.

http://www.cbc.ca/greatest/top_ten/nominee/douglas-tommy.html

True, D'art, but having 'free' health insurance isn't really going to do anyone any good if they die while waiting to see a doctor, which is exactly what the Canadian Surpeme Court says is widespread in Canada.

Have you read the decision, JW?

If you're interested, there is a link to the full decision within my first CBC link.

Not the entire decision - just the parts that the NYTimes highlighted in reporting on it.

The case which went to the Supreme Court was not in regard to a 'life and death' matter. It was about a hip replacement.

There is discussion in Quebec of using the notwithstanding clause to override the Supreme Court decision.

The discussion/argument is not over, by any stretch of the imagination.

"The evidence in this case shows that delays in the public health care system are widespread, and that, in some serious cases, patients die as a result of waiting lists for public health care," the Supreme Court ruled. "In sum, the prohibition on obtaining private health insurance is not constitutional where the public system fails to deliver reasonable services."

This is, I think, going to be very difficult for Charest.

Yes, the article also covered the split decision.

"The language of the ruling will encourage more and more lawsuits and those suits have a greater likelihood of success in light of this judgment," said Lorne Sossin, acting dean of the University of Toronto law school.

Patrick Monahan, dean of the Osgoode Hall Law School of York University in Toronto and a well-known critic of the national health care system, was even more emphatic about the import of the decision. "They are going to have to change the fundamental design of the system," he said. "They will have to build in an element of timely care or otherwise allow the development of a private medical system."

And this:

The case was brought to the Supreme Court by Jacques Chaoulli, a Montreal family doctor who argued his own case through the courts, and George Zeliotis, a chemical salesman who was forced to wait a year for a hip replacement while he was prohibited from paying privately for surgery. Dr. Chaoulli and Mr. Zeliotis lost in two Quebec provincial courts before the Supreme Court decided to take their appeal.

In a news conference, Dr. Chaoulli declared a victory and predicted that the decision would eventually apply to all Canada. "How could you imagine that Quebecers may live," he asked, "and the English Canadian has to die?"

The view in the rest of Canada isn't quite what the good doctor might have anticipated. In fact, it isn't even the same in Quebec as it was in the Supreme Court.

Lots of discussion and negotiating is still down the pike.

If it's paid for out of general tax revenues, doesn't everyone contribute, whether they also choose to buy private insurance or not?

Yes, that's true, but the government still has to pay for services. The problem is that resources (doctors, hospitals, nurses, medicine, beds) are finite. If these become allocated in a way that those who have private insurance receive a disproportionate allotment of resources, then the problem that national healthcare was created to address returns. In effect, those who can't afford private insurance would be subject to longer waits and further rationed care because those who can pay get preference. That's pretty much how it is here in the US.

I don't know a whole lot about Canada's system, so what I've just said may or may not apply to them. However, it seems to me that long waits and unavailability of some forms of care are the result of some sort of prioritizing and rationing of services.

Which begs the question: Should those who are depending on others to pay for their medical care expect the same standards of care (timeliness, etc.) as those who pay for their own? People keep suggesting that if you are able to afford your own healthcare you'll be able to buy a higher standard of care and keep suggesting that somehow that is a bad thing. Is it?