Wednesday, December 13, 2017

Let’s Be Sure that We Are Solving the Right Problem

The Republicans are Solving the Wrong Problem

Health care costs continue to rise, and as they do, the problem of providing health care for every American becomes more and more difficult. Most Americans believe that health care is a right and that every American should be able to receive adequate care, but if we do not control its cost, we will soon be unable to afford to do what we know that we should do.
The Republicans in Congress mistakenly focus on controlling federal health care spending instead of focusing on the problem of controlling the cost of health care as a whole. They propose to solve the federal spending problem by shifting the cost of health care from the government to the people.  They propose to achieve that by turning Medicare into a voucher program.  The idea is that each Medicare recipient will receive a voucher to use to purchase health insurance in the private market. Thus, the federal obligation will be fixed at the cost of the vouchers.

Focusing only on Federal Spending Will Make Health Insurance Unaffordable for Everyone

This solution to the federal spending problem will work only if the dollar amount of the vouchers does not rise with the cost of healthcare, but of course, the cost of healthcare will rise, and as it does, most of us will become unable to afford health insurance. That is happening already to people who buy individual insurance through the exchanges, and it is only a matter of time before it happens to those who get their health insurance through their jobs.

We Can Reduce the Cost of Health Care

In order provide health care to every American, we have to address the problem of controlling the cost of health care itself. We have to understand the causes of the high cost of American health care, and we have to address those causes directly.  In an earlier post on this blog, I wrote about the causes of the high cost of health care in detail, and I will not repeat that discussion here. To deal with those causes, there are several things that we can do:

  1. We can change the way we compensate health care providers to encourage them to reduce costs. The current fee-for-service system encourages them to maximize costs by providing expensive and unnecessary services. This is key. We cannot reduce the cost of health care unless we change the incentives of the health care providers.
  2. We can bargain with the drug companies to reduce the cost of medications.
  3. We can insist that each service and product have a standard price, and we can make information on prices available to doctors and patients to use in deciding what diagnostic tools or treatments to choose.
  4. We can increase our support for primary care to encourage patients and health care providers to maximize its use.  Primary care is cheap, and if people care for themselves when they are not yet so sick that they need to be hospitalized, we will save money because emergency care and hospital care are much more expensive than primary care.
  5. We can increase our support for health education and provide incentives for people to choose healthy lifestyles because that will reduce the need for expensive management of chronic conditions like diabetes, obesity and coronary disease. 

These are not complicated ideas, and there are several ways that they can be implemented. All of them have been tried in other countries and in some places in the United States.

If we reduce the cost of health care, we will also reduce its drain on the federal budget, and we will do so without making health insurance unaffordable for most Americans. So, let’s make sure that we solve the right problem – the cost of health care – rather than focusing narrowly on federal spending. If we do so, we will be able to afford health care for every American.

Monday, December 4, 2017

Let’s Work with the Republicans to Build a Real and Sustainable Universal Health Care System

Vouchers Are Coming

Republicans like Ted Cruz and Paul Ryan are now openly proposing “structural changes” to Medicare in order to avoid having its cost blow up the federal budget. They have, for example, proposed turning Medicare into a voucher program in which each person is in effect given a fixed amount to spend.  That voucher would replace the program’s open-ended commitment to pay each patients’ bills without limit. 

This Can Be an Opportunity

Democrats are justifiably horrified that our seniors will lose their health care, but if we think carefully, we can find ways to leverage the Republicans desire to limit the government’s costs to build a healthcare system that is both just and sustainable.  The Republicans will be looking for ways to obtain Democratic support for what they want to do because otherwise, they will have a difficult time persuading the voters to accept limits on Medicare, and if we know what we want in exchange for our cooperation, we may be able to make good use of this opportunity.
Democrats have nothing to lose by offering to cooperate. If we succeed in obtaining cooperation, we will be able to improve our healthcare system. If the Republicans refuse to cooperate, they will look bad, and we will look good. However, in this situation as in all situations that involve negotiation, the key to success is knowing what we what we want. We have to know what will make a deal a good one for us.

Using This Opportunity to Move toward Sustainable Universal Healthcare

The idea of placing a budgetary limit on spending is not in itself a bad idea. Several European countries – including Germany – use budgetary limits to control the cost of healthcare. However, in those systems, the budgetary limits are coupled with other measures that insure that the costs will really be reduced rather than being shifted to the patients. Without such measures, budgetary limits will end up causing great injustice and hardship by transferring the costs to the patients. On the other hand, with such measures, budgetary limits may be a part of a system that provides healthcare to everyone in a sustainable way.
Here is are some examples of the provisions that progressives might fight for to provide healthcare for everyone while supporting the goal of cost control.

  •   Restore the individual mandate under the ACA
  • · Fund the subsidies for insurance companie
  •    Allow Medicare to bargain with the drug companies over drug prices
  •    Insist that information on prices be available easily to both doctors and patients so that they can make informed choices of procedures for diagnosis and treatment.
We can also propose to reduce the cost of healthcare
  •  Shifting some of the financial risk onto providers to encourage them to become more efficient. This may be done through bundled payments or other mechanisms.
  •   Insisting that payments to providers be based at least in part on measures of the quality of care.
  •   Encouraging the establishment of local or state healthcare cooperatives to bargain with healthcare providers
  • Increasing funding for primary care to avoid excessive use of expensive emergency rooms and hospitalization
  • Increasing funding for health education to reduce costs associated with the management of chronic conditions like obesity and diabetes.
  •  Making the amounts of the vouchers realistic and obtaining buy-in from the patients and the healthcare providers by making the amounts of the vouchers dependent on the results of the negotiations between the healthcare cooperatives and the healthcare providers.

These are only a few of the ways that we could take advantage of this opportunity. Let us prepare to fight for what we care about rather than objecting fruitlessly. Let us move beyond mourning the fate of the ACA and develop realistic, sustainable and forward-looking Democratic health care proposals.