Insurance aside, why is the absolute price of American health care so high? the price of going to the doctor in the united states, or of buying medicine, can sometimes be 10 times higher than in europe.
It’s particularly surprising when in every other area, from clothing to electronics to gasoline, American consumers are incredibly cost conscious and prices are almost invariably lower than elsewhere.
You are reading: Health care reform books
There are many reasons why health spending is so high and why we allow it to be high. One of the main lines of Paul Starr’s book, The Social Transformation of American Medicine, is that physicians, over many decades, have amassed considerable power over the policies that have been enacted and shaped them for their financial benefit. therefore, a large amount of money flows to health care providers, doctors and hospitals, and also to suppliers of drugs and medical equipment. those organizations are relatively powerful and have been able to keep them going.
Also, most Americans don’t see prices. Because of insurance, they don’t directly feel how expensive it is when they enter the system in any way, whether it’s a visit to a doctor or a visit to the hospital. Worse than that, they mostly don’t even see the price of insurance directly. The vast majority of Americans have employer-sponsored health insurance, with much of the premium paid by the employer. it doesn’t show up on their pay stub, and they don’t think it comes out of their own pocket, although it actually does, through lower wages. When he thinks he’s getting something for free or fairly cheap, whether it’s insurance or health care itself, he’s not as motivated to change things.
that’s for working people. then for retirees, almost everyone has medicare, so they get a hefty benefit through a public program. They also don’t see why that should change. so things keep going. we have not been able to implement sustainable cost controls, publicly or privately, largely because it is politically difficult to do so.
You see articles on spiraling insurance premiums and health care costs. Are attitudes changing, and are people becoming more aware that this is unsustainable?
Health care is like any other topic in American political discourse: it has its moments. it can surface if there are no other things in the way. if the economy is bad, that’s always going to dominate what people think. or other topics may dominate, depending on the news and where the crisis of the day is. But from time to time, health care spending and problems in the health care markets arise. they start to weigh heavily on people’s minds, and when that coincides with a political opportunity to do something, then reform can happen.
That coincidence doesn’t happen very often. maybe once every 15 or 20 years we have a genuine opportunity to do something substantial in health and it doesn’t always succeed. That’s how Medicare happened in 1965. It had been considered, worked on, and thought about for more than a decade in various ways. Other comprehensive healthcare reforms have failed over the decades, including the famous Clinton Plan of the early 1990s. That was a time when a lot of attention was paid to healthcare. people thought we should do something, and it seemed politically feasible. but it just wasn’t handled in a successful way, because politics is very harsh. it is like threading a needle. you have to do everything right for something to be approved, even if it’s imperfect. finally, in 2010, it was remarkable how well it all worked out. It was very messy, but that’s the nature of it. It was the thinnest of margins, every vote in the Senate counted. they needed 60. they got 60.
i’ve seen charts showing that increased spending in the united states doesn’t translate into longer life expectancy. Is it because uninsured people reduce average life expectancy?
There are studies showing that lack of insurance leads to higher mortality, but the estimates are not precise. It is extremely difficult to empirically link insurance to mortality, because many health-related problems that lead to reduced life expectancy take years to develop. In the United States, when you turn 65, you are insured with Medicare. if he has reached that age, he is likely to live a little longer. what is the effect on mortality, after age 65, of being uninsured for a certain number of years when you are younger? that’s very hard to know.
why we have a lower life expectancy is a good question. insurance plays a role, but it’s not the only thing that matters. what is certain is that we spend much more than any other country, twice as much as the next highest spending country, and we not only have higher mortality, but a whole range of quality measures that are worse than elsewhere. sometimes much worse. so what one can say with confidence is that we are spending a lot but not showing much for it. that doesn’t mean that if we spend less, or simply cut the budget, we won’t lose something. we’re probably getting something for all that spending, we’re just not getting it very efficiently.
one barrier to change is that wealthy and educated people, including members of congress, believe that the united states has the best doctors and hospitals in the world, and if they move to more socialized medicine, like in europe, then lose that.
Definitely a concern among the elite and health policy experts. the way it plays out more broadly is that there is an immense status quo bias. that is true everywhere. people tend to be comfortable with what they know. everyone wants to believe that what they have and where they live is fantastic. people are very reluctant to give up the idea that the united states is number one.
and you can get the best care in the world in this country. There’s a reason Saudi princes fly to America for treatment. But only a very small fraction of the population has access to the best health care in the United States. they don’t want to give it up, and I don’t want them to give it up either. but there are many people who do not have access to the best care. in fact, there are many people who do not even have access to basic health care. we are not talking about a state-of-the-art triple transplant surgery. we’re talking about routine preventive care, screenings, office visits, and immunizations. the disparity is great between what the best and the bottom quintile can get.
But is it true that the United States is the best country in the world for world-class medical care? Are there studies to show that if I am treated for cancer at one of the leading cancer hospitals in the US? So my survival rate is higher than other systems?
There are certain types of cancer that we rate very well. breast cancer is one of them: our survival rate for breast cancer is very good. But when you read anything that claims America has the best health care in the world, they’re picking three or four specific diseases where we have very good survival rates. it may be because the care of those diseases is good. it could also be that if you run enough stats, then by random variation we’ll be number one in some things, even if we’re in the middle of the pack or worse in 99 other things. it is not a good way to judge the overall quality of medical care.
Given the average age of members of Congress, they must have been sick themselves or have a family member who has, and thus know what it’s like to deal with the health care system and insurance companies. Or do they have some sort of gold-plated insurance that means they’re protected from the worst?
Actually, I am an employee of the United States federal government, so I have the same health benefits as congressmen. These are pretty standard employee health benefits. for people who have decent jobs, like me and congressmen, routine health care is no big deal. But I’ve heard that people like us are surprised when they become deeply involved with the health care system, such as if they or a family member becomes seriously ill and is in the hospital for a long time.
That’s when some of them finally say, “Wow, I was in a good hospital and still. Yuck. It was really nasty and they kept asking me the same questions. They didn’t seem to know I had that test already. Thanks to god I had my wife with me through all of this so she could make sure she didn’t get the wrong leg amputated.” the stories are just shocking. recently, there’s a story that a large proportion of doctors don’t follow handwashing guidelines. it’s atrocious.
let’s talk about the obama administration’s attempt to reform the system. the first book you have chosen is within the national health reform,
which explains the 2010 law and also the political maneuvers that made it what it is.
These are really two books in one. john mcdonough is an insider. he was an adviser to senator [ted] kennedy’s aid committee, which was one of the two big committees in the senate that wrote the health reform bill. he has been to many meetings, talked to many people, and tells wonderful stories about negotiating the minutiae of the health law. it’s intriguing and interesting to see how law, and this law in particular, is actually made. there’s a lot about the policy, but it also explains the rationale of the policy: why it was structured this way, why one side thought this and the other thought something else.
That’s the first half of the book, and it’s not a difficult read. the second part runs through the law in summary form, through each title and then each subsection. explains what they are and why, and how much money they cost or save, in plain language. that in itself, I admit, is quite tedious. I’ve read the law and summaries of it, and it’s not funny. you only do it if you’re looking for something. however, he intersperses long passages that explain more about the policy and the rationale for the policy. those snippets are easy to pick out with the naked eye, so you can skim through the summary of the law and jump right into the narrative. it’s just as intriguing as the first half of the book.
This book is important because most people have no idea how laws are actually made in the United States and what politics really means. not the politics of campaigns but the politics of making a law, especially one as complicated and controversial as the health reform law. In the end, the message is that the health reform law that we obtained in 2010 was the only one that we could have obtained in 2010, or almost the only one. the range of what was politically feasible was incredibly narrow. it had to satisfy so many political constraints that it almost didn’t happen. It was that law or no law.
so while it’s not perfect, it’s the best that could be done given the policy?
See Also: Amazon Kindle books on sale – a complete guide to deals and special offers
no law is perfect. no law will satisfy everyone. My opinion is that the correct interpretation of what we have is not the national health reform that we all deserve and want, but rather a good first step towards evolutionary reform. there will have to be more. we can build on what we have. but the status quo was not and is not acceptable, and this leads to some important changes.
what is the best thing about the law, in terms of moving in the right direction?
The reforms to the health insurance market were absolutely crucial and, leaving aside the law itself, relatively uncontroversial. Across the political spectrum, you’d be hard-pressed to find many people who would say, “It’s actually a good thing that private insurers can keep people uninsured. they should be able to keep people away, they should be able to kick people out, and it should be very expensive.” In reforming the way the market works, the law logically requires a few other things that are controversial, but that principle alone is one of the best aspects.
what will it mean in practice? for people who are already insured through their employer, it probably won’t have much of an impact.
It will not have a substantial impact on most people who are currently insured. Depending on where you work, what your employer does, and what your future holds, you may be affected. if you lose your health insurance for any reason, for example, there will be better options for you starting in 2014. and there are some aspects of the law that will change the features of your health insurance: some things you might like, some things you might not no, but in relatively minor ways.
When I first moved to New York, I tried to get individual health insurance because I had no employer. it was incredibly expensive.
oh yes. it is very expensive and very hard. it is a difficult market because it lacks the kind of rules necessary to make it work well. those rules are in law now.
let’s turn to paul starr’s book the social transformation of american medicine. this historically explains why the US healthcare system is the way it is.
This is a very long and detailed book, and it is not so easy for someone who is not deeply interested in health policy and medical care to relate it to current affairs. Its purpose is to describe the broad spectrum of the history of health care in the United States, up to around 1980. It was published in 1982, so it’s not even that current. but it is necessary reading for anyone who fancies himself or herself as a health policy expert or expert, or a health historian, or anyone who works in health care. I found it fascinating, and didn’t even know about it until relatively recently. I put it on this list to remind people of its existence, because it should be better known and read.
so, 30 years after it was written, you still think it’s relevant. what is it about the book that is so interesting?
the parallels. traces the development of institutions, many of which remain in positions of power as they did in the past, and have been able to accumulate more power. There have been some changes throughout the century, but many things have remained the same. He tells stories about reform politics and previous reform efforts, of which there were many, even before 1980. You could pull so many passages out of that book and people would be like “oh, you’re talking about 2009” and you. d say “no, that was in 1917 or 1937”. It would be great to convince people that these health care reform issues that we fight so passionately for today are the same issues that people have been fighting for in America for 100 years. that is the reason to read this book.
We have spent decades on these issues, and perhaps half of us are still not convinced that we have taken a reasonable step in the last reform. Just thinking about that is staggering: the number of years we’ve spent with the level of underinsurance we have in this country and the rate of increase in health care costs. They have been climbing faster than any other country since about 1980. Unfortunately, Starr’s book ends just as America’s health care spending trajectory diverges from that of the rest of the industrialized world. look at the charts and it’s around 1980 that the united states starts to take off, and everyone else stays at a lower level. and we continue to diverge.
A key difference from other countries is that in the United States, employers provide health insurance. why is it so accepted here?
This is part of what my next pick is about, the remedy and reaction from paul starr’s newest book. he is describing what he and others call the pitfall of us health policy. That catch is that we’ve evolved to a point where most people and most voters are insured, either through an employer or through Medicare. therefore, they and the institutions they benefit from are resistant to change. it is very difficult to move the system to something that would be more sensible. Right now, the reason people cling to employer-based care is because it’s what they know. on one level, it works. yes, it’s expensive and inefficient, but as far as they know, it seems to work for them. that’s why it’s hard to change.
do health economists think that’s a good thing?
not. it is widely recognized that a more rational system would break the connection between health insurance and employment. to the extent that the debate is about politics, it is about how to get there and on what terms. As long as the debate is about politics, it’s all too easy to use the specter of change to scare people.
why is it so inefficient?
creates too many distortions in the labor market. many people will take and keep jobs because of the health insurance, not because the job makes sense in terms of work or even in terms of wages. there are many people who do not retire because of health insurance. There are even studies that show there is less small business creation and less entrepreneurship for health insurance. it’s an unnecessary restriction on the labor market and job creation, and it just doesn’t have to be that way.
I have a feeling that if I started from scratch, I wouldn’t create a system like American Healthcare.
no, and it’s not just me. I would challenge anyone to think of it. if you could go to a world where you don’t know the American system and then design a system, there’s no way you could come up with something like what we have here. it’s just absurd. It doesn’t make sense on so many levels. risk pools are fragmented, there are many inefficiencies and strange subsidies. nobody would do it like that. one could not even imagine that it would be possible. you can’t make these things up.
Tell me more about the remedy and the reaction. It just came out and takes us practically to the present.
yes. it focuses primarily on the last few decades, with relatively more attention given as we move closer to the present, including the most recent health reform effort. Much of it is also due to Clinton’s effort. It is really a more modern development of healthcare policy in the United States and the policy rationale for the 2010 healthcare reform act. It includes much of the policy that appeared in McDonough’s book, but not the stories, because paul starr didn’t go to those kinds of meetings. If you want to read a book and learn something about the politics and politics of healthcare reform, this is a good option. it has all the arguments and all the nuances.
what makes you recommend it in particular?
As you know, I’ve been paying a lot of attention to this. There is hardly an issue about the politics and politics of health reform that I haven’t read and seen debated about. what really impressed me is how on every topic I’m familiar with, he said all the things I knew and expected, and then he said one more thing that I hadn’t quite grokked yet, or hadn’t. unrecognized was a nuance or insight that went a step further and struck me. there was always a little more to him that he hadn’t seen anyone else put on paper. paul starr brings it all together better and more fully than I’ve seen anywhere else.
See Also: 13 Best Books On Overcoming Fear | illogicalscript.com
his fourth book is bringing market prices closer to medicare. I know from his blog that he thinks we should take the authors’ advice on this, and that it would cut healthcare costs by 8%, or about $50bn (£32bn) a year. can you explain?
one of the perennial debates about medicare is how much should we support the participation of private plans and how much should we make it a public-only program. It started out as a simple public health insurance program. all the bills were paid directly by the federal government, it was a uniform national benefit and there was no other option: you are in medicare, everyone is in the same program, it is a large risk pool. then, beginning in the 1970s but increasingly in the late 1990s and 2000s, private plans have been involved. You can sign up for what is now called a Medicare Advantage plan, through which you get all of your Medicare benefits and maybe more. you pay them a premium, they get a subsidy from the government and it’s like a private plan arm of medicare. In addition, the Medicare prescription drug program, which includes private drug-only insurance, is conducted entirely through private plans. Medicare does not have a public prescription drug program.
Every year in Congress, and elsewhere, we debate: How much should these private plans be subsidized? It’s a good deal? save money? Are they treating the beneficiaries well? are they just skimming, i.e. choosing the healthiest recipients and making a lot of taxpayer profits? By contrast, does traditional Medicare, the public option, serve beneficiaries well? is it slow to innovate? is it inflexible? is it throwing money? Are you not managing care well? One approach that would resolve the question of how much we should pay these private plans is to have them compete, alongside traditional Medicare, for the subsidy rate they receive. This type of competition is similar to what each of us would face against a contractor if we were remodeling our kitchen or painting our house. I would solicit bids from qualified painters or construction companies, weighing bid price against quality. you’ll probably ultimately choose an offering based largely on price.
medicare advantage and traditional medicare could do the same thing, but they don’t. you could have these plans compete, bid on the amount of subsidy they would need to provide the medicare benefit, and then medicare would say, “okay, let’s pick the lowest subsidy rate and give all the plans the same amount. everyone can participate, but if the beneficiaries want to choose a more expensive plan, then they have to pay the difference”. That is what this book. provides a lot of detail about medicare related to some of the things we regularly discuss. gets into questions like: what really is the medicare benefit? what is the social contract? Does the medicare benefit have to include a public option that is available to everyone at the same price? Or can it be a different price in different areas, depending on how plans are bid and compete? Do plans have to provide access to all willing providers, or can they establish provider networks, as private plans do and traditional Medicare does not?
Is this competitive bidding going to happen? from the way you describe it, it sounds like a no-brainer.
It’s a political battle. the plans do not want to compete. they are very happy with the relatively generous payments they are receiving now.
is the book complete on medicare?
no, it’s not the place to go for medicare in general. For that, John Oberlander’s Political Life of Medicare is a good book. That would be the place to continue with the story of Medicare and why it was formed the way it was: the political negotiation that led to it and the story of it since then. but it was published in 2003, so it does not fall under the prescription drug program that was passed in 2003 and enacted in 2006.
let’s move on to the latest book, by another highly regarded health economist, david cutler of harvard. why have you chosen your money or your life?
i suggested this book because it raises some very important points about health care spending in the united states. we spend a lot, and it is generally believed that there is a lot of waste. there are many things we could cut back or ways we could save on expenses that would not harm our health. looking internationally suggests this must be true. But still, Cutler’s argument is that we get great value out of our health care spending. He argues that even if you look at just a few health conditions (heart conditions, mental health, low birth weight babies) and calculate the value we have received from improvements in health care, quality of life, and extended life, It is greater than what we spend. he says we get high value for all this money. That doesn’t mean we shouldn’t spend less and still get that high value, it just means we’re still making worthwhile investments on average.
Are you recommending this book because that’s not an argument you hear often?
If you’re in favor of cutting health spending because there’s so much waste, etc., then the next easy place to go, which is often where we go, is to make very crude cuts across the board. to just cut off medicare, for example. that you run the risk of throwing the baby out with the bath water. the book suggests that we need to be smarter about how to make our healthcare system more efficient. You can cut spending in a way that could be detrimental to your health, or you can, in principle, cut it in a way that is not. we know ways to cut that won’t harm your health, we know some things we shouldn’t pay for. but we don’t know as much as we should.
For our international readers, can you describe how bad things are in the US for people who can’t afford health insurance? you hear horror stories, but there is also protection like medicaid for people with very low incomes.
Things go very wrong if you don’t have insurance. if you get sick, then you will not only suffer from that disease but you will also suffer from bill collectors. they don’t care, it’s not their job to worry about how bad you’re doing. they will harass you and take back what they can. eventually you will have nothing. you will be bankrupt. this happens to people in the united states. the reason it happens is that the safety net has many holes.
you mention medicaid, which is supposed to be the program for the poor. Ultimately, if things are bad enough, if you spend all your money and have no job and no income, then you may be able to get Medicaid. but in reality, it does not even cover all the poor. you have to be poor and you have to fall into one of several qualifying categories, such as pregnant, elderly, blind, or disabled. Beyond those federally mandated categories, individual states have the discretion to cover more. many of them don’t. or if they do, they are only covered if their income is extremely low, a fraction of the poverty level.
so it is possible that in the us. uu. is terribly poor and has no access to any health insurance program. you are at the mercy of charity care. and there is charity care. You can also go into an emergency room and if it’s an emergency, you’ll be seen. but that is no way to have a healthy and fulfilling life.
People always tell me this, that if you’re really in trouble, you can always go to an ER and they’ll treat you. but collectors will come after you if you don’t pay that bill, presumably?
yes. they will try to collect payment but eventually, if you can’t pay, they can’t take what you don’t have. many states have uncompensated care groups so they will try to charge you or just cancel you. sometimes hospitals are not reimbursed for the care they provide.
Is there also a lot of difference depending on where you live?
there is a lot of variation. in urban areas, there will tend to be better access and support for such things, due to population density and infrastructure. in rural areas, obviously, there is much less. and although you can have access, it is restricted; You may not have access to many specialists and you may be at the mercy of the quality of those programs. there are many studies showing that his access is severely restricted and he is not receiving regular preventive care.
and some doctors just won’t take medicaid even if you have it.
oh yes. many doctors do not accept medicaid. it is in no way a requirement and the refunds are low.
I always thought Medicaid covered everyone with low incomes.
that is widely misunderstood and is something that the health reform law will change. As of 2014, anyone with income within 133% of the poverty level is eligible for Medicaid, regardless of anything else.
See Also: The Get Down-Booklist: A Celebration of the Bronx, Hip-Hop, Disco, and Art – The Hub