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Yes We Can?

23 Jan 2008 10:55 am

Like Kevin Drum, I've been pretty pessimistic for a while that a good health care bill will be signed into law in 2009-10 as so many seem to hope. And I agree with him that Ezra Klein's new American Prospect article does a reasonable amount to temper that pessimism. That said, the way the article is framed explicitly as a look back at the "lessons of '94" winds up leaving some of my concerns unaddressed.

For example, mightn't we see something analogous to the Medicare prescription drug fiasco where a reasonably sound proposal to help some people out with some health care problems turned into a feeding fest for pharmaceutical and insurance company lobbyists?

Speaking of which, one thing that's bothered me about the health care conversation as it's tended to play out among progressives over the past year has been a tendency to equate determination to achieve universal health care with determination to fight the entrenched power of the insurance companies. In reality, the main measures by which people are proposing to achieve universality -- forcing people to purchase health insurance and providing government subsidies to help people buy insurance -- aren't contrary to the interests of insurance companies at all. Similarly, the main measures on the table that are contrary to the interests of health insurance companies -- community rating, guaranteed issue, and public-private competition -- don't achieve universality (as Barack Obama's critics will hasten to tell you). Under the circumstances, the easiest way to get universal health care may be to not fight the insurance companies at all: just give them the mandates and subsidies they crave with none of the regulation.

Now go too far in that direction and the overall price tag gets so high that the whole thing collapses. But it's quite possible to imagine congress constructing a bill that throws public-private competition overboard and then is structured so as to both increase health insurance firms' profitability and to give everyone health insurance. Again, the 2003 Medicare reform bill would be the model. Depending on the details, a bill like that might even be an improvement over the status quo (though I kind of doubt it). After all, a program for "universal car ownership" isn't something you'd expect to achieve by fighting the car companies.

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Comments (62)

I've said this multiple times, MY, and I'm glad to see someone else saying. It which highlights the main point: if progressives aren't careful, we can end up with "universal healthcare" being, in effect, a corporate hand-out. We mandate people to buy private insurance, and then subsidize their payments on premiums. And get no closer to single-payer!

Awesome!

Which is why the mandate-debate was such a dodge. The true heart of any attempt at moving closer to universal healthcare is CREATING A PUBLIC OPTION

Which is why I thought (and said) the mandate debate wasn't just a distraction, it was actually harmful. If the narrative becomes prioritizing mandates, we could actually shoot ourselves in the foot. A plan with robust public/private competition will be far closer to the true goal, single payer, than a mandates/subsidies/regulation without a public option.

And we can't lose sight of that.

Matt is truly an idiot.

the problem with this isn't the price tag, it's that insurance companies will just keep doing what they've been doing: Denying claims with the knowledge that they either 1.) have immunity, or 2.) the law suits are to expensive and long, and even if they lose, they win in the long run.

I'm maybe getting in over my head, but my feeling is that any plan for universal healthcare under which for-profit insurance companies still exist is not going to solve the problem of healthcare being hugely expensive for whoever ends up paying the bill.

A program for "universal car ownership" might not be something one would expect to achieve by fighting the car companies, but a plan for "universal access to transportation" that focused on expanded public transit is something car companies would probably oppose. And I think that's a more relevant metaphor here.

If the Dems don't have 63 or so Senators next year, it's a moot point anyway.

I typed as fast as I could, and two people still beat me to my (admittedly obvious) point. I deeply regret never having learned to touch-type.

Agreed, this crap is worse (perhaps much worse)than doing nothing. If this is what's on offer, better wait till the whole system collapses of its expensive absurdities(which it will) whereupon public opinion will be ready for truly root-and-branch reform -which MUST put the current private health insurers out of business in order to achieve universality at an affordable cost. Which is not to say that private insurance can't play an important role in a good system (see Germany for example)- but not these companies which are nothing but parasitic bullies and can have no place in a genuinely reformed system.

Under the circumstances, the easiest way to get universal health care may be to not fight the insurance companies at all: just give them the mandates and subsidies they crave with none of the regulation.

Yes, that is what will happen. Even if regulations are proposed, or even implemented, they'll be gutted in practice, because the insurance companies control all the information flow.

The problem is the existence of profit-making insurance companies as gatekeepers for care provision. Their incentives are perverse. In any other business, you make more money providing more service. In their business, you make more money providing less service. It is in the fiduciary interests of their shareholders to approve the delivery of as little health care service as possible.

Mandates make this worse; it will concentrate the industry, simplifying collusion. It will end what little competition remains--looking at a complicated, purposely opaque description of the plan provisions in December, which locks you into that provider for the next year.

It's a disaster.

The only beneficiaries of the insurance company role are the shareholders and the senior managers of those companies. That 275 million Americans have awful, expensive health care in order that these people continue to make money is an appalling indictment of our political system.

The key to all these health-care plans is
community rating (is that the right jargon ?) - i.e.
forcing the insurance companies to insure everyone -
even those with pre-existing medical conditions -
at a standard rate. And you can bet your last
dollar the insurers are going to fight that tooth
and nail, because it will change their business
completely, forcing them to compete on efficiency
rather than competing to get a pool of healthy
clients and screw the sick.

Community rating changes the whole game. Without
community rating, the sick get denied coverage, or
offered coverage only at an impossibly high premium.
With community rating, the premiums from the
above-average-healthy subsidize the care for the
below-average-healthy. So in that case, those
who feel fairly confident about their health
will tend to opt out. Which is where the need
for a mandate comes it. Quite how you enforce
a mandate is a tricky issue.

None of this makes a whole lot of sense -
a single-payer system like the VA gives better
incentives for the kind of long-term preventive
care that gives the best cost/health outcome.
The insurers aren't going to do that. So all
they bring to the table is risk-pooling - but
risk-pooling works best when you have the biggest
pool possible (the entire population) and a payer
that doesn't need to leave a margin of safety
to avoid bankruptcy (i.e. the US government,
which can raise taxes or sell bonds to raise
money cheaper than anyone else).

Bootom line: mandates without community rating
would result in a system where everyone gets
insured *except the sick*, and insurers make
obscene profits. Not good.

Could we not achive Universal Car Ownership while excluding the banks that front us the money to pay for the things?

For what little it's worth, Matt, I'm pretty much convinced that a real solution to the health care problems here is not possible while the insurance industry occupies the space it does in the system. Since nobody seems to be talking seriously about shoving them out, I believe the probability of actually fixing the problems this go round is approximately 0.

If this is what's on offer, better wait till the whole system collapses of its expensive absurdities(which it will) whereupon public opinion will be ready for truly root-and-branch reform...

I couldn't disagree more; with the above approach we go, what, another five, ten, maybe twenty-five years with non-universal coverage? If anything, taking the "mandates with heavy subsidies to the insurance industry" approach will likely force the "collapse" to arrive more quickly, because the government's finances simply won't support the explosion in spending implied by this course of action. And, although I agree that community rating is a desirable provision of any reform, its adoption really doesn't make that much difference with respect to government finances, so long as there is an out of pocket cap on premiums (tied to, say, percentage of income). Either way the government ends up with a big subsidy bill. As for guaranteed issue, well, either the legislation includes it, or a public sector Medicare-like option, or we don't have universal coverage.

To my mind, the public sector option and/or a premiums cap (as a percentage of income) are the keys to a successful bill. "Root and branch reform" can flow from these two provisions, as people vote with their feet to the government insurance offering (Edwards has explicitly said his plan bascially allows people to decide for themselves whether or not "single payer" is the best way to go), or, as the government's subsidy bill becomes too onerous.

I believe EdwardCare or HillaryCare II (or even ObamaCare if he's willing, as he has stated, to adopt a mandates "trigger" if certain benchmarks aren't met) can get us to a much better system in a short while. Progressives shouldn't make the mistakes the unions made in 1993. Single payer may well arrive in America in the near future. But it is much more likely to do so as second or third stage reform -- necessitated by the financial pressures faced by a government that guarantees universal health insurance to all citizens as a matter of law. Single payer is very unlikely to be enacted into law as the first stage of a reform of America's healthcare system.

Richard Cownie is absolutely correct. If insurers aren't allowed to price their clients by risk, all sorts of perverse incentives disappear from the current system. That's the way out of this mess.

The problem is the existence of profit-making insurance companies as gatekeepers for care provision. Their incentives are perverse. In any other business, you make more money providing more service. In their business, you make more money providing less service.

What utter nonsense. All companies obviously have an incentive to maximize profits and minimize costs. They also obviously have an incentive to provide the best product to their customers at the lowest price in order to avoid losing business to their competitors. The incentives of health insurers are no more "perverse" than those of any other kind of insurer or any other kind of for-profit corporation.

Jasper,

If anything, taking the "mandates with heavy subsidies to the insurance industry" approach will likely force the "collapse" to arrive more quickly, because the government's finances simply won't support the explosion in spending implied by this course of action.

Sure they will. It's called "deficit spending." Spending more money than you have. The French have been running their health care system like this for a generation. We run Medicare in the same way. The private insurance companies would get rich off the backs of future generations of taxpayers.

Alternatively, if the government strictly limits the level of subsidy (a la Britain's National Health Service), private insurers will deliver a commensurate level of service. That is, lousy.

Pick your poison.

Wrong, Mixner, because WE are not their customers- employers are. And they care a whole lot more about keeping prices down than about quality of care. The insurers have every incentive to pay for as little care as they can get away with, to maintain profits while keeping costs to their real customers down yet allowing the latter to still give lip service to providing health "benefits" for their employees. And yet, in our worst-of-all-possible-worlds, the price for this crap "coverage" still keeps going up at an unsustainable rate because of the enormous, wasteful administrative overhead. This is how we "achieve" such a miserable failure in coverage while spending much more than many countries which do a much better job of providing care.

This "system" has to go- tinkering around the edges of it simply will not work. People need to get that through their heads. Proposing different ways of rearranging the deck chairs on the Titanic is a waste of time.

Mixner, the only reason why Britain has relatively strict rationing is that it spends considerably less than the average of OECD countries- if they wanted more care, they could get it while STILL spending a LOT less per capita than we do. (Look at France, which has top-quality universal care for considerably less then our expenditures.) And yet the Brits EVEN SO have substantially better overall public health indicators than we do, so they're doing the really important things right.

They also obviously have an incentive to provide the best product to their customers at the lowest price in order to avoid losing business to their competitors.

The relevant differences between insurance companies and other service providers are pretty obvious. Specifically, in the case of insurance companies, they can also refuse to cover, or simply deny service to, a customer based on the likelihood that customer might actually need their services.

I'd say, "better trolls, please," but really, Mixner, your disingenuity here is almost too weak to even be called trolling.

"They also obviously have an incentive to provide the best product to their customers at the lowest price in order to avoid losing business to their competitors"

Mixner, you're just wrong. Suppose you have a
chronic health condition requiring expensive
treatment. No insurance company can make a profit
out of offering you insurance at a low price: so
they'll deny you coverage. The big incentive is
for insurance companies to make profits by *only
insuring healthy people*. And that doesn't serve
the public interest well.

What you're missing is that to a large extent
in the current system insurance companies are free
to pick and choose their customers. And they're
not at all concerned about losing the unprofitable
business of insuring sick people: that's
precisely what they want.

Wrong, Mixner, because WE are not their customers- employers are. And they care a whole lot more about keeping prices down than about quality of care.

No, their customers are both individuals and employers, and their incentive to provide the best product at the lowest price applies to both. Health insurers compete for the business of employers just as they compete for the business of individuals.

Mixner, no insurance company will insure a cancer survivor for an amount the average person will be able to pay. It's just not in their financial self-interest.

To most folks, that situation is perverse, it's wrong, it's a bad outcome for the cancer survivor and for society in general. Hell, the insurance company folks probably don't like it either, but there's little enough they can do about it.

What planet do you live on, Mixner? Most Americans who have health insurance get it though their employer, and most of us have Hobson's choice when it comes to health plans. We are NOT the customers, we do NOT make the choices.

Smarter right-wing shills, please.

Mixner, you're just wrong. Suppose you have a
chronic health condition requiring expensive
treatment. No insurance company can make a profit
out of offering you insurance at a low price: so
they'll deny you coverage. The big incentive is
for insurance companies to make profits by *only
insuring healthy people*.

No, they may deny you coverage or they may offer you coverage at a price commensurate with your level of risk. Same as any other kind of insurer. If you're a 16-year-old kid with a Porsche trying to get car insurance or a homeowner with a house in a flood plain trying to get homeowners' insurance or a dying man trying to get life insurance, you're likely to have a hard time getting low-cost insurance too.

What you're missing is that to a large extent
in the current system insurance companies are free
to pick and choose their customers.

Of course. That's true of all insurers, and indeed of companies in general. So what? Where are these "perverse incentives?"


Mixner, no insurance company will insure a cancer survivor for an amount the average person will be able to pay.

I know a couple of cancer survivors making ordinary incomes who have private health insurance. Your claim is just factually incorrect.

Most Americans who have health insurance get it though their employer, and most of us have Hobson's choice when it comes to health plans.

More nonsense. First, you are obviously free to purchase individual health insurance regardless of whether it is offered to you by your employer. Many employers will even refund part or all of their costs of covering you if you decline that coverage. And second, employers typically offer their employees a choice of health plans, from low-cost "catastrophic" plans to more conventional comprehensive ones. Health insurance is part of the compensation package employers offer to attract and retain employees. An employer who offers substandard insurance will be at a competitive disadvantage in the labor market. The rapid growth in recent years of the number of companies offering domestic partner benefits to their employees is one obvious example of this competition at work.


The relevant differences between insurance companies and other service providers are pretty obvious. Specifically, in the case of insurance companies, they can also refuse to cover, or simply deny service to, a customer based on the likelihood that customer might actually need their services.

Look, you're just spouting nonsense. This is not a difference. Home insurers, car insurers, life insurers, disability insurers and every other kind of insurer can also refuse to offer you coverage. And, generally speaking, companies can refuse to sell anyone their product if they so choose.

First, you are obviously free to purchase individual health insurance regardless of whether it is offered to you by your employer.

Assuming you can afford it. And the problem is that lots of people can't afford it.

And second, employers typically offer their employees a choice of health plans...An employer who offers substandard insurance will be at a competitive disadvantage in the labor market.

Lots of employers (and the number is increasing) don't offer their employees any insurance at all. As far as the "labor market" goes, most of the people I know (well-educated media professionals in their 30s and 40s) feel lucky to be working at all right now. So--anecdotally at least--employers competing for workers by offering additional benefits is not something that's even happening.

"Of course. That's true of all insurers, and indeed of companies in general. So what? Where are these "perverse incentives?""

Mixner - the public interest is in keeping people
healthy and productive. The incentive for insurers
is "perverse" in that it encourages them to throw
sick people on the scrapheap.

Since you seem to be a fan of markets, think about
this way: what we have is mostly not a market where
people buy insurance from a number of competing
options; instead we have a market where insurers
buy groups of people, based on the insurers'
calculations of their likely health costs, by
quoting premiums. The commodity being bought and
sold in the market isn't health (best of all),
nor even health care, but groups of people with
varying degrees of health risk. And, like most
markets, that is going to be pretty good at optimizing *something*; but what it's going to
maximize is the total profitability of the total
insured population - not the health of the
whole population, which is what we the people
would prefer.

Home insurers, car insurers, life insurers, disability insurers and every other kind of insurer can also refuse to offer you coverage. And, generally speaking, companies can refuse to sell anyone their product if they so choose.

True in both cases. Now, Mixner, would you say that if 50 million Americans couldn't obtain car or home insurance, they should just suck it up and live with the risk?

Regarding companies' rights to refuse service to anyone, if 50 million Americans were starving because food companies refused across-the-board to sell them food, would you say that constituted a problem?

The issue here is that the free-market approach to health insurance is not working.

"And, generally speaking, companies can refuse to sell anyone their product if they so choose."

A restaurant can't refuse to serve someone on the
basis of race or gender. So that is by no means
an absolute right: it can be restricted - and has
been restricted - by the federal government when
the public interest requires it.

The basic problem in all this is that most of us
in our heart of hearts think that access to health
care is a *right* - and we're shocked when, say,
a ten-year-old-boy dies of a untreated brain
infection because he had no health insurance.
Yet the actual system currently in place does not
reflect those values: people can and do die for
lack of health care. Now if you're really a
die-hard right-winger who thinks the current
system is fine, then the question is this: does
it bother you that innocent children die for
lack of basic health care ? Do you think we
*should* try to fix it ? Or do you think it's
just inevitable that the richest country in the
world will continue to have inferior health
outcomes than other slightly poorer nations ?

I think this *can* be fixed, and I think it
*should* be fixed.

Another point to raise with those who favor
free markets is that the current employer-
subsidized system imposes large distortions on
the employment market. Employers are reluctant
to hire permanent workers because of healthcare
costs; workers with medical issues are reluctant
to change jobs lest they lose insurance. Those
effects impair the economy *and* effectively
restrict individual liberty. Which is positively
un-American in my opinion.

James Gary,

I love the bait-and-switch. Your argument was that health insurers are subject to perverse incentives because, unlike other insurers and companies, they can turn away potential customers. You now concede this claim is false. Other insurers and companies can do this too. So what are the perverse incentives? To the extent that your policy position was based on your false claim, you need to revisit your policy position. And if the ability to turn away customers is irrelevant to your policy position, I don't know why you mentioned it in the first place.

You now say:

Now, Mixner, would you say that if 50 million Americans couldn't obtain car or home insurance, they should just suck it up and live with the risk?

Not necessarily, no. I assume you mean to imply here that 50 million Americans cannot obtain health insurance. That just isn't true, either.

The issue here is that the free-market approach to health insurance is not working.

Seems to be working pretty well to me. But without some reasonably clear standard of what it means for a health policy to be "working" versus "not working," your claim here isn't terribly meaningful.


Steve LaBonne,

Mixner, the only reason why Britain has relatively strict rationing is that it spends considerably less than the average of OECD countries- if they wanted more care, they could get it while STILL spending a LOT less per capita than we do.

I doubt that's the only reason, but the point is that if our government strictly limited subsidies in the way the British government does, we'd have strict rationing too.

(Look at France, which has top-quality universal care for considerably less then our expenditures.)

The French health care system is going bankrupt. It has been in deficit every year since 1985. They're going to have to either cut services, raise taxes and user fees, or both.

And yet the Brits EVEN SO have substantially better overall public health indicators than we do, so they're doing the really important things right.

Comparing different countries' aggregate health indicators tells you nothing about the relative quality or performance of their health care systems, because there are so many other variables that have a much greater effect on overall levels of health and mortality. Most obviously diet, exercise, and rates of smoking, alcohol and drug use. Unless you control for these other variables, you can't draw any meaningful conclusions about the performance of the health care system from these statistics.

If you want an example of a health-related statistic that IS meaningfully related to health care system performance, try cancer survival rates. The U.S. outperforms every other country in the world on this measure, reflecting the better performance of our health care system at diagnosing and treating cancer.

The basic problem in all this is that most of us in our heart of hearts think that access to health care is a *right* - and we're shocked when, say, a ten-year-old-boy dies of a untreated brain infection because he had no health insurance.

How much health care do we have a right to? What kinds of health care? How quickly do we have a right to it? If that ten-year-old boy dies because he was put on a waiting list rather than because he has no health insurance, why is that better? As the Canadian Supreme Court put it in its landmark ruling striking down the government ban on private health insurance in Quebec: "Access to a waiting list is not access to health care." Last week, the Economist had a story about health care in Britain. It mentioned that a "tidal wave" of new pharmaceutical drugs is likely to appear in the next few years. Around 40 are expected just to treat cancer. And Britain's National Health Service is likely to refuse to pay for any of them. Do people have a right to these drugs?

Another point to raise with those who favor
free markets is that the current employer-
subsidized system imposes large distortions on
the employment market. Employers are reluctant
to hire permanent workers because of healthcare
costs; workers with medical issues are reluctant
to change jobs lest they lose insurance. Those
effects impair the economy *and* effectively
restrict individual liberty.

Employers would be even more reluctant to hire new workers if they were required to provide health insurance. And the high taxes imposed on employers and workers by countries with single-payer health care systems obviously also distort the labor market. Given the chronically high unemployment rates in Europe and the better economic performance of the U.S., I don't think you can seriously argue that their labor market works better than ours.

"How much health care do we have a right to? What kinds of health care? How quickly do we have a right to it?"

All good questions, and I would *love* to see a
debate on those issues. But the bottom line right
now is that the USA's current system doesn't
implement *any* right to health care. Which is
what needs to change. Sure, let's debate whether
we would prefer the British model (cheap but long
waiting lists), the French model (good but
expensive) or the Canadian model. The USA's
model - vastly expensive, lousy or non-existent
care for the poor and unemployed - is morally
indefensible.

"Employers would be even more reluctant to hire new workers if they were required to provide health insurance"

Yeah. Which is one reason why the current
mostly-employer-funded system is collapsing
around our ears. More and more people are in
jobs that don't provide health insurance; and
the quality of employer-subsidized health
insurance has declined drastically, with all
kinds of copays and deductibles and employee-paid
premiums. The current system is falling apart:
if nothing is done, 30-40% of the population is
going to end up uninsured. If you've got a
constructive plan to change those trends, let's
hear it. But more of the same ain't the answer.


"Given the chronically high unemployment rates in Europe and the better economic performance of the U.S."

First, the so-called "unemployment rate" as measured
in the USA is a sham. True unemployment is much
higher.

But anyway, I checked real GDP growth for France and
the USA the last few years and here's what I found:

France GDP 2001 1497B euro, 2006 1792B = +19.7%
USA GDP 2001 9,7T$ 2006 11.3T$ = +16.4%

Now, what were you saying about "better economic
performance" ? And it would look worse if we
brought it up to date, given the drop of the
dollar against the euro.

You can't secure this alleged "right of access to health care" until you've defined what that right means in concrete terms. Which means answering the kind of questions I asked. We already do guarantee certain "rights" to health care through programs like Medicare and Medicaid, the Community Health Centers program that provides free or low-cost primary health care to the indigent and uninsured, and laws guaranteeing "access" to emergency health care services regardless of insurance status or the ability to pay.

The USA's model - vastly expensive, lousy or non-existent care for the poor and unemployed - is morally indefensible.

There you again. I guess I could say in response that Britain's and Canada's health care systems are "morally indefensible" because they are plagued by waiting lists and rationing and that France's health care system is "morally indefensible" because it is funded by borrowing huge sums of money that future generations will have to pay back. This kind of argument-by-sloganeering doesn't get us very far.


Mixner said:

The French health care system is going bankrupt. It has been in deficit every year since 1985. They're going to have to either cut services, raise taxes and user fees, or both.

Why is it that no one ever talks about the US Department of Defense being in deficit or going bankrupt? It seems that when health care or anything similar is under discussion, the expense is going to crush us all, but when it comes to funding weapons and wars money just magically appears.

He also said:

Given the chronically high unemployment rates in Europe and the better economic performance of the U.S., I don't think you can seriously argue that their labor market works better than ours.

The European economy has been out-performing the US economy for the past 5 years. I'm not making that point to argue that a European-style health care system will necessarily lead to a better labor market, and I also don't think that the past performance of the European labor market says that a national health care system is a bad thing. What about the economies of east Asia? Japan, Taiwan, Singapore, and South Korea all provide national health care systems and they've all seen robust economic performance over the past 50 years (with a bump here and there). Also, Ireland has had a booming economy these past 15 years and they provide a national health care system as well.

Also, Mixner, I'd like to see a reference for your assertion about cancer recovery rates. I'm not saying I don't believe you. I'd genuinely like to see those statistics.

First, the so-called "unemployment rate" as measured in the USA is a sham. True unemployment is much higher.

Please substantiate this claim. And in particular, please show me your evidence that the "true" unemployment rate in the U.S. is higher than the "true" unemployment rate in Europe. All official unemployment data I have seen contradicts your claim.

But anyway, I checked real GDP growth for France and the USA the last few years and here's what I found:

You give no source for your numbers. Try this website, which provides a handy-dandy tool for graphing GDP growth in various countries and regions since 1970, using OECD data. Plug in "France" and "USA." You will see that GDP growth in the U.S. has far outstripped GDP growth in France. The same is true for GDP per capita.

The European economy has been out-performing the US economy for the past 5 years.

This is just factually wrong. See the website I linked to in my last post. Or any other website reporting OECD data on economic growth.

I also don't think that the past performance of the European labor market says that a national health care system is a bad thing

I don't think that, either. I was responding to the specific claim that the U.S. health care system is bad for our labor market. To whatever extent that may be true, the effect of single-payer systems on the labor market seems to be worse.

Also, Mixner, I'd like to see a reference for your assertion about cancer recovery rates. I'm not saying I don't believe you. I'd genuinely like to see those statistics.

See this Medscape report, for example.

I see that my last link somehow hides the article behind a subscriber wall. To view the article, just google the string "Cancer Survival Rates Improving Across Europe, But Still Lagging Behind United States" and click on the first result.

Plug in "France" and "USA." You will see that GDP growth in the U.S. has far outstripped GDP growth in France. The same is true for GDP per capita.

Mixner: You're smart enough to know that much of the difference between per capita GDP in the US and Western Europe flows from the fact that Americans work more than Western Europeans. The latter simply take more of their "wealth" in the form of leisure. They may or may not be wise in doing so -- but either way it has very little to do with healthcare. Indeed, even if we were to finger higher taxes (rather than more leisure) as the main culprit for Europe's slightly more modest prosperity, it hardly follows that the "socialist" healthcare systems of the Europeans are to blame, for the simple fact that America's government-run healthcare system (about 8% of US GDP) is as large or larger than the corresponding government-run healthcare systems in Europe.

In regards to community rating: most health insurance is already community rated since most people have insurance through an employer group where everyone's premium is the same. (Correct me if I am wrong, but I think community rating of a sort also applies to Medigap policies for seniors) The employment group is of course rated for its risk as a whole, but individuals are not (there are no health questionaires to fill out when signing up for health insurance at work and by law you cannot be turned down). The big players (Kaiser, the Blues, Aetna etc.) are already accustomed to this form of group rating and would not have a problem with making it the law across the board provided it is combined with a mandate so people do not wait until they are ill to sign up for insurance. It is rather a handful of surprisingly influential smaller players in the insurance market, who mostly write individual policies and as such have honed cherry-picking to a fine art, who are opposed to community rating. It was these folks who brought us Harry and Louise back in 94 and who can be counted on to fight reform, any reform, tooth and nail. They can be fought however: the 1996 HIPAA law was passed against their furious opposition. The trick will be to get the big players on board (as was done with HIPAA, but not so much in 93-94). Companies like Kaiser and the Blues have useful expertise at case management and that can help hold costs down, making universal coverage more affordable.

As for Mixner's weird diatribes against universal coverage, I get more disgusted everytime I read his bilge. Were the Three Ghosts too busy to visit him this Christmas, so he is still shouting "Are there no free ERs, are there no potters fields?" I understand there is plenty of room for debate on how to attain full coverage, but I cannot conceive how that goal itself can be questioned-- that's like arguing we shouldn't allow poor children to go to school, or should ban the poor from using indoor plumbing, or something equally benighted. Will someone please deprogram these 19th centuries rejects, or else send them back where they belong in a time machine?

Matt,

I really do share the same concerns you have that universal health care will, if we are not careful, and, in particular, get the wrong Dem in the White House, turn out to be "The Private Health Insurance (PHII) and Big Pharma 9 Digit Executive Bonus Protection Act."

Let me try to provide some of the lineaments of the PHII and Big Pharma strategy (collectively PHII, though I do understand there are real differences between these two interest groups). I will try to steer clear, at least in this post, of the internal DEM food fights between Edwards/Clinton and Obama on whether mandates really do matter. In my opinion they do. But I have expatiated elsewhere on that theme.

Here's the probable inside baseball dynamics of this thing once the election is over and the Dems have won (we'll assume, so I don't have to slit my wrists). The public will go into a "it's too wonky for me" nod out and the Private Health Insurance Industry (PHII) and Big Pharma boys will go to work doing what they are paid to do and are, alas, very good at.

With trumpets blaring and drums drumming they will step up and take the pledge for "universality." But the fight will come in terms of adverse selection and the public option. Whoever is negotiating has to stand firm on both of these issues. But PHII (but, alas, apparently not Obama) knows that an argument for adverse selection can't be made to wash without mandates once this matter has been turned over to the wonks.

Unless, of course, you dump the high risk cases (i.e., compromise on adverse selection) into the public option – either directly or through "off balance sheet" financing. And in the process so emasculate the public option by burdening it with so many costs that even a no bid Halliburton contract will look efficient by comparison.

Poof! There goes the dream of single payer.

Poof! There goes any chance for the public option to be any kind of check and balance on the oligopolistic Bacchanal that will ensue for PHII.

Here's the most prophetic sentence in your piece:

"Again, the 2003 Medicare reform bill would be the model."

And for the folks who have misplaced their scorecards, that was the fight over Medicare Prescription D where PHII and Big Pharma emerged so triumphant in their attempt to emasculate a public option -- I mean, they only got it declared illegal! -- that they still can't believe their lucky stars.

Which has not prevented them from figuring out in their internal councils that this was the camel's nose – would you believe second hump and tail? – under the tent for taking over any future so-called universal health care reform, and backing up their Brinks trucks to the Treasury to load up on all the public dollars which will be gushing their way – with, as I said already, nary a public option in sight with any credibility to serve as a check and balance against the looting.

A nightmare without a coherent strategy behind it?

Hardly. Check here for how the Part D world is becoming rapidly oligopolistic. Check here for how Part D is a wedge that oligopolistic PHII is already using to embed itself even more deeply into Medicare through irredeemably inefficient Medicare Advantage plans. Check here for how numero uno in the oligopolistic market for Part D, United Health Care (yeah, that's the one that has AARP riding shotgun for it when they go into Congressional offices), and numero quattro, Humana (yeah, that would be Billie Frist's family business), are betting that, despite all the undeniable economic stats being against them, they can still use Part D as a platform for Medicare Advantage – and then move on to their ultimate conquest, universal health care for the 18 to 65 population – greased all the way, of course, by a lot of golf trips to St. Andrews or wink, wink, nod, nod Billy Tauzin and Trent Lott type visions of sugar plums dancing in heads about life after Congress.

From Part D oligopolistic dominance (done), to Medicare Advantage dominance (under construction), to presenting themselves as the "best" alternative to run any universal health care system for the 18-65 population* (only the right Dem President stands in the way).

*But again remember, except of course for those high risk folks who should, bien sûr, be the wards of the state in the public option. "Gee, Federal Government, how come your costs for health insurance are so high?"

This scenario may sound a bit dispiriting. But as surprising as it may seem, I'm an optimist. I don't really see super majority in the Senate as the biggest obstacle. And I really do think the PHII lobbyists can be kept in check, especially if the super majority problem is managed appropriately. I am not so naïve, however, as to think that there not be some real trench warfare fought here.

The main threshold to get across is having a President in the White House who really does understand what this is all about, and who will, as a result, effectively draw some lines in the sand and simply steamroller over Mitch McConnell – if he's even still around – and any other Republican Neanderthals or bonus salivating lobbyists, with tasseled loafers or not, who try to stand in the way.

Yes, we can. But let's make sure there is a laser-focused clear head leading the charge for the "we."

Jasper,

Mixner: You're smart enough to know that much of the difference between per capita GDP in the US and Western Europe flows from the fact that Americans work more than Western Europeans. The latter simply take more of their "wealth" in the form of leisure.

And you're smart enough to know that you cannot assume that someone who works less does so because he chooses to "take wealth in the form of leisure" rather than because he simply lacks the opportunity to work more. Unemployment is not chosen leisure, it is unchosen idleness.

They may or may not be wise in doing so -- but either way it has very little to do with healthcare.

Tell that to Richard Cownie, who raised the issue of a connection between health care and the labor market in the first place.

I understand there is plenty of room for debate on how to attain full coverage, but I cannot conceive how that goal itself can be questioned

Try thinking about what the term "full coverage" might mean, and perhaps you will be able to conceive it.

I know from experience Mixner has had difficulty reading graphs before, so I ain't spending too much time on it--the dude ain't worth it.

The same is true for GDP per capita.

I don't know Swedish, but I'm guessing this is not indicated on the page you linked, which seemed to be just GDP, not GDP per capital. This matters, because the US is growing faster than the EU, drawing in a large population of able-bodied immigrants boosting our production.

But even were that the case (it could be, I ain't sure), you've still got the following to contend with. Americans are working more hours. European productivity per hour is rising faster than American. That might just be diminishing marginal returns as Americans burn midnight oil. But the difference in GDP growth (and, again, I'm not so sure you're right about the per cap numbers) is not a case of Europe failing, but Europeans and Americans wanting different stuff out of life.

The US population is not only growing faster, it's also greying slower--more workers, fewer retirees. This will still be the case no matter what our health care policy is (unless national health care is so awesome that old people start living way longer, but I'm willing to risk that.)

And some EU countries have really bad policies that decrease the fluidity of the labor market--France's problems are infamous here. While you would hate those policies even more than I would, I'm sure, they are not related to the issue at hand.

Not to mention that our health care system is way the hell more expensive than even France's system. So, really, no matter what chart you find about economic growth, you've got absolutely nothing here--Europe would be in worse fiscal shape if they Americanized their system.

Finally, the cancer survival rates have been discussed to death elsewhere--Americans diagnose way more borderline cases of cancer than Europe does--the actual fatality rate from cancer is about the same.

Wow, that is a lot of independent reasons your conclusions do not follow from your data. And that's just today.

Anyway, I ain't spending time looking data up, when the logic you use interpreting the data is obviously wrong, and I know from experience that the logic you would use in interpreting my data would be nonsensical too.

If some one else wants to look up your data (maybe the per capita and productivity numbers, maybe looking at individual EU countries) good for them. They shouldn't be dissuaded by your assertion that it's otherwise--you've asserted false things before, and American GDP per capita growth hasn't really been outta sight for the last couple years. On the other hand, they shouldn't be motivated by thinking that answering you matters--he could be some homeless guy in the public library for all I know--and if he is, good for him, he's an inspiration to us all for rising up out of adversity to make himself heard. Have fun with him (I did!) but don't worry too much about him. But I've wasted too much time as it is. Bye.

Tell that to Richard Cownie, who raised the issue of a connection between health care and the labor market in the first place.

Oh I can't resist what I saw what I posted.

So Jasper points out that American health care is more expensive than Europe health care systems, therefore Europe's health care cannot be dragging it down more than America's health care.

Richard Cownie argues that American health care is so much more expensive than European health care that is dragging our economy down.

You think there's a contradiction between them.

Classic! Mixner, I love you.

Consum,

Not to mention that our health care system is way the hell more expensive than even France's system. So, really, no matter what chart you find about economic growth, you've got absolutely nothing here--Europe would be in worse fiscal shape if they Americanized their system.

This claim makes no sense. If they "Americanized their system," they'd probably spend more money on health care and as a result of that get better results. The point about France's system is that it is unsustainable in its present form. It's a fiscal train-wreck in progress. The French are either going to have to cut their health care services or pay more in taxes and fees. A lot more.

Finally, the cancer survival rates have been discussed to death elsewhere--Americans diagnose way more borderline cases of cancer than Europe does--

I'm not sure what your point is here. America is better at both diagnosis and treatment. The better treatment is in part a consequence of the better diagnosis. The earlier you detect cancer ("borderline cases"), the better your chances of treating it successfully.

the actual fatality rate from cancer is about the same.

As I said, aggregate mortality data alone tells you nothing meaningful about health care system performance, because it doesn't control for the effects of countless other variables that strongly influence overall levels of health and premature death in a national population. Cancer survival rates are important because they are directly related to services the health care system provides--diagnosis and treatment of cancer. Cancer mortality rates, in contrast, are a consequence of numerous socioeconomic and environmental variables, from smoking rates to dietary patterns to climate to pollution levels, and thus are worthless as measures of health care system performance.

"You can't secure this alleged "right of access to health care" until you've defined what that right means in concrete terms"

Really ? So I guess we also shouldn't care about
such vaguely-worded concepts as the rishts to "life,
liberty, and the pursuit of happiness" ? Or the
right to "equal protection" under the law ?

It's pretty simple to tackle this two ways: you
can work bottom-up from stuff that surely we
agree everyone should get: regular checkups,
vaccinations, dental care, antibiotics for
common infectious diseases, emergency trauma
care. And then we could try t push further:
but just that much would be a big step forward.
Or else you can point at another country and
say "we're richer than they are, we should get
at least what they get". And I don't care if
it's France, Canada, or the UK; any of them
would be better than the current mess.

Or you can dodge the question altogether and
let kids go on dying of easily-preventable
illnesses. We're getting a clear picture of
where you stand,.

So Jasper points out that American health care is more expensive than Europe health care systems, therefore Europe's health care cannot be dragging it down more than America's health care.

No, the assertion of Jasper's that I was responding to in the text of mine you quoted is that Europeans "may or may not be wise" in taking "more of their 'wealth' in the form of leisure." You've mistated both the assertion of his I was responding to, and my response to that assertion, so it's not surprising that your rejoinder makes absolutely no sense.


It's pretty simple to tackle this two ways: you
can work bottom-up from stuff that surely we
agree everyone should get: regular checkups,
vaccinations, dental care, antibiotics for
common infectious diseases, emergency trauma
care. And then we could try t push further:
but just that much would be a big step forward.

As I said, the indigent and uninsured already have "access" to free or low-cost primary health care. I've never heard of even a single case of a child not getting a recommended vaccination or course of antibiotics because of cost. If some kids are not getting certain vaccinations, it appears to be mainly because of the irresponsibility or ignorance of their parents or caregivers, such as the fear that certain vaccines cause autism or other health problems. In general, we don't force people to get health care services either for themselves or for their children.

Or you can dodge the question altogether and
let kids go on dying of easily-preventable
illnesses.

How many American kids are dying of easily-preventable diseases, Richard? How does that number compare to the numbers in Canada and Europe? If this does happen, to what extent is it the result of cost-related difficulty in "accessing" health care, rather than irresponsible or ignorant parenting, or something else? Do you know? Instead of just speculating and guessing, why not try actually looking into the empirical questions you raise in a serious way.

Richard Crownie,

Just a bit more statistical data to whack the "gimme a definition of rights" sophists over the head with. You may have already noted this post about "Mortality Amenable to Health Care, 2002-03" table in a Krugman January 9 blog post.

Krugman wittily titles it "A health care system to die for." I can't really top that, but I might suggest for runner-up honors:

"If you're worried about dying from something that's probably preventable in a well-functioning health care system, there are 18 countries other than the U.S. you might want to consider moving to."

billyblog,

You and Krugman are playing games. You pretend that "potentially preventable" means "probably preventable" and you ignore the crucial issue of differences in disease prevalence between different countries. See here for a more detailed critique of the study itself and Krugman's interpretation of it (predictably echoed by Kevin Drum).

"I've never heard of even a single case of a child not getting a recommended vaccination or course of antibiotics because of cost"

Whatever, dude. The infant immunization rate in
the USA is 81.3%. So about 1 in 5 infants don't
get all the shots. That's pretty feeble. You
just don't happen to know those people.

"How many American kids are dying of easily-preventable diseases, Richard? How does that number compare to the numbers in Canada and Europe?"

Look at infant mortality - deaths per 1000 live
births - for various countries:

http://www.infoplease.com/ipa/A0004393.html

Canada 4.6
France 4.2
Germany 4.1
Switzerland 4.3
Australia 4.6
UK 5.0

Norway 3.6
Sweden 2.8

Care to guess the figure for the USA, the richest
nation of all ? And also the one with by far the
greatest healthcare budget ...

USA 6.4 (and in 2004 it rose to 7.0)

This isn't ambiguous: infants are slipping through
the cracks of the USA's patchwork healthcare system
and dying as a result. Lots of them, even compared
to a so-so system like the UK. More than double
the infant mortality in Sweden.

Another bogus comparison, Richard. Not only are infant mortality rates influenced by all sorts of variables other than the health care system, but "infant mortality" is not even defined or recorded in the same way by different countries, so it's an apples-to-oranges comparison anyway. See here for a more detailed explanation of these problems.

I don't know why you can't understand that differences between countries in diet, exercise, smoking, alcohol, drug use, crime, accidents, pollution, climate, and many other variables have a huge impact on their health and mortality statistics. These factors swamp any differences in these stats attributable to differences in health care systems. That's why you need to look at indicators that actually measure the effects of the health care system, such as cancer survival rates, rather than indicators that measure only overall levels of health and mortality, like infant mortality rate or average life expectancy.

"I don't know why you can't understand that differences between countries in diet, exercise, smoking, alcohol, drug use, crime, accidents, pollution, climate, and many other variables have a huge impact on their health and mortality
whole lot of statistics"

Maybe you don't have any kids. I do. I assure
you that in the first 12 months they don't do a
whole lot of smoking and drinking, they don't
take much exercise because they can't walk, and
they're not eating burgers and fries before they
have teeth. So infant mortality is a pretty
decent measure of how your society cares for
its weakest.

The comparison with Canada seems especially
revealing, since there's no great difference of
culture, ethnicity, or even geography. But
there sure is a big difference in the healthcare
system.

Maybe you don't have any kids. I do. I assure
you that in the first 12 months they don't do a
whole lot of smoking and drinking,

But their mothers often do while they are still in the womb. Or do even worse things, like smoke crack. And we know that such behavior has a significant impact on the chances of premature birth, low birth weight, and health problems in the child later in life. How do the rates of these behaviors among pregnant women differ between the U.S. and, say, Sweden? As Healy writes in the essay I linked to:

Infant mortality in developed countries is not about healthy babies dying of treatable conditions as in the past. Most of the infants we lose today are born critically ill, and 40 percent die within the first day of life. The major causes are low birth weight and prematurity, and congenital malformations.

The comparison with Canada seems especially
revealing, since there's no great difference of
culture, ethnicity, or even geography.

There's a huge difference in socioeconomic inequality. The U.S. has a large underclass of poorly-educated, impoverished women among whom drug use, crime, teenage pregnancy and other social pathologies are much more common. And while these problems are not entirely absent in Canada, they are much less common.

Another confounding factor, at the other end of the socioeconomic scale, is fertility treatments. These have become more common in the U.S. in the past few decades. These treatments are much more likely to produce multiple pregnancies. And multiple pregnancies are much more likely to produce low-birth-weight babies or babies born with congenital health problems. How does the rate of fertility treatments in the U.S. compare with Canada?

"There's a huge difference in socioeconomic inequality. The U.S. has a large underclass of poorly-educated, impoverished women among whom drug use, crime, teenage pregnancy and other social pathologies are much more common"

And somehow I get the feeling that you probably have
no constructive proposal to do anything about
inequality. Just as you have no constructive
proposal to do anything about the health system, as
costs swell and the proportion of uninsured grows.
Even if you think it's fine right now - I sure
don't, but you seem to - keeping it just the same
is not an option. Employers are getting out of the
game of providing health insurance, and the
patchwork provision for the uninsured is going to
be massively overloaded.

I'm not interested in a discussion about inequality here. I'm just rebutting your claim that comparing the infant mortality rates of different countries tells us something meaningful about the quality or performance of their health care systems. Apart from all the non-health-care-system influences on fetal and infant health, the numbers reported by different countries simply are not measuring the same thing. To quote Healy again:

The United States counts all births as live if they show any sign of life, regardless of prematurity or size. This includes what many other countries report as stillbirths. In Austria and Germany, fetal weight must be at least 500 grams (1 pound) to count as a live birth; in other parts of Europe, such as Switzerland, the fetus must be at least 30 centimeters (12 inches) long. In Belgium and France, births at less than 26 weeks of pregnancy are registered as lifeless. And some countries don't reliably register babies who die within the first 24 hours of birth. Thus, the United States is sure to report higher infant mortality rates. For this very reason, the Organization for Economic Cooperation and Development, which collects the European numbers, warns of head-to-head comparisons by country.


Re: Try thinking about what the term "full coverage" might mean, and perhaps you will be able to conceive it.

I know what universal coverage means and I can not conceive of how anyone with any common sense or remotely decent ethics can oppose it. Are you that greedy that you'd rather see innocent people suffer and die just to have a few more baubles in your lifestyle?

Richard, Jon--You're wasting your time arguing with the guy. It's obvious at this point he's just being a troll.

First of all, sorry I've been away from the thread for other reasons – if only because folks have probably long since moved on and this particular comment ill be like the proverbial tree falling in the forest where no one can hear it.

Anyway, in response to Mixner:

"You [billyblog] and Krugman are playing games. You pretend that "potentially preventable" means "probably preventable" and you ignore the crucial issue of differences in disease prevalence between different countries. See here for a more detailed critique of the study itself and Krugman's interpretation of it (predictably echoed by Kevin Drum)."

I don't know about "games," but I do appreciate Mixner supplying a link to a critique at coyoteblog.com of the Commonwealth Fund sponsored study by Ellen Nolte and C. Martin McKee, "Measuring the Health of Nations: Updating an Earlier Analysis," which study contained the "Mortality Amenable to Health Care, 2002-03" table cited by Paul Krugman in his blog. As Coyote notes, you can get at the full text of the Nolte-McKee study by going through the Commonwealth Fund's press release site for the article.

I am always looking for trustworthy sources of information to help me critically refine my views, and even revise them when they appear to be off base. So I linked over to the Coyote critique. And I strongly encourage everyone else to do so as well.*

When I got there I quickly realized that this was going to require some investment of time and effort, if only because Coyote is clearly a master of the whack-a-mole, counterfactual subjunctive.

However, not generally being one to be deterred out of the blocks by seemingly wonky details, I started burrowing into Coyote's screed. I confess I did search for a better term than "screed," but after noting some of the more colorful descriptors that Coyote uses when referring to the peer reviewed work of two otherwise apparently professional academics – "crappy," "idiots," "don't know squat about data analysis," "laughable," well, you get the point – I think "screed" is probably just about spot on.

Anyway, as I proceeded further into Coyote's "professional" review of Nolte-McKee, the phone rang. I took the call, and when I turned back to the screen several minutes later, I happened to note for the first time over in the right hand column a list of other subjects Coyote has held forth on recently. Here is a partial sample:

* Video: A Critique of Catastrophic Man-Made Global Warming Theory
* A Skeptics Primer to Global Warming
* 60 Second Refutation of Socialism, While Sitting at the Beach
*A Critique of Man-made Global Warming Theory
* Coyote's Law [Summary: "In lieu of conspiracy, assume sustained stupidity, confusion and/or incompetence"])
* How to Spot a Dictatorship
* In Praise of "Robber Barons"
* My Current View on Global Warming
* Progressives are too Conservative to Like Capitalism
* Skeptical Layman's Guide to Anthropogenic (Man-Made) Global Warming
* Skeptics Primer for "An Inconvenient Truth"
* Statism Comes Back to Bite Technocrats
* The 60-Second Climate Skeptic
* Why the Right to Vote is Not What Made America Great [though I'll confess to having at least some sympathy with anyone who refers to "the increasingly insane Lou Dobbs"]

"Oh, oh," I said to myself, especially after poking around in a few of these posts, though by no means comprehensively. "I appear to be dealing with someone who certainly has the 'potential' for and most 'probably' will slip into using statistics in his own quirky way to show that the statistics and data analysis employed by the overwhelming majority of scientists who work specifically in the area of global warming, and who have concluded that, 'Yes Virginia, it's real, and it's we who are causing it,' are simply more examples of 'idiots employing crappy methodologies who don't know squat about data analysis.'

"So," I continued with my internal monologue, am I maybe justified in taking Coyote's position on global warming as a cautionary proxy for withholding credence from what this soi-disant data analysis expert has to say about health care matters?"

But let me turn to Mixner for help here. Given that life is short, how much time do you recommend that I spend wading through the intemperate, to put it mildly, "data analysis" on cross-national health care issues of someone who appears to think that the data analysis by the overwhelming majority of scientists in the field of global warming is, shall we say, considerably off base?

*Note: I am fairly new to blogging and I had never run into coyoteblog.com before this particular encounter. I would assume that I am in the minority here, i.e., that others who frequent this blog – certainly Mixner – have been exposed to the with and wisdom of Coyote previously. If you haven't been, it really is a trip worth taking at least once. Hey, that's what makes this a great country.

billyblog - I heard your tree fall. Nice work!

"I'm not interested in a discussion about inequality here."

i'm guessing the word 'here' is not necessary in that sentence.


Comments closed February 06, 2008.