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January 26, 2006


exec summary: tax credits don't fix the system; Bush isn't the one to do reform. The SOTU suggestions will not be serious policy.

oh, btw, the medicare headache continues.

Americans aged 65 and older continue to resist signing up for the new Medicare prescription drug program than went into effect on Jan. 1. Just 22% of those 65 and older report having joined the program (as of the Jan. 20-22 interview dates for the new CNN/USA Today/Gallup poll). Only 15% say they plan to join in the future. That leaves 55% who say they do not plan to join, and 7% who say they don't know.

Samuelson, as is his wont, misses a bigger point: most of the admins and paraprofessional who surround his doctors (visibly and invisibly) wouldn't be necessary in a world-class h/c finance system, and the small practices he likes would be on more even footing with large provider complexes, cost/volume/profit-wise.

Also, his net cost would be less. The top-drawer private insurance he has now has to pay providers who have to maintain margins for uninsured write-offs and discounted public coverages of last resort ... and his upper-middle-bracket tax bite pays for a lot of h/c/services he'll never qualify for.

And he'd be more likely to find an emergency room open and in good order when he needs one.

No question Samuelson isn't looking at the big picture. Access isn't even on his radar nor is quality of care. But he's a good example (david wessel of the WSJ is another) of how poorly this is going to go over with moderate-conservatives. Since liberals and progressives will not like it, who will?

I don’t have the answer to our healthcare crisis, that’s for sure. Personally, I try to find people in private practice when I have an illness or injury but these days, that’s not easy.

Last summer I injured myself and was sent to a large physical therapy clinic. On several occasions I was put into a cold room to wait for my PT. On one occasion I was actually forgotten. They were busy, you see. Also, I was not improving. After a couple of months I decided to take things into my own hands and go to a PT in private practice I had seen a few years prior. I hesitated in doing so initially because she doesn’t take insurance.

To make a long story short, I started improving immediately. She gives me a receipt that I send to my insurance company myself. They pay about two thirds of the cost. Less than the clinic but her costs are also less. The clinic charged two to three times as much as my present practitioner. So, it’s more work and money for me, but in the end, not that much more money and she never puts me in a cold room or forgets I’m there.

OK. Health care reform is triple-pronged. But we CAN and should take the first step first, then work on the others. I'm not pooh-poohing quality of care or finance reform. Obviously, we can't ignore these.

But, for me, the first reform must be getting EVERYbody covered for the basics, even if they have to sit for a while in a cold room while waiting service. And that reform goes hand in hand with improving the public health sector, which, as we all know, is in a frightful shambles. Indeed, it is something Americans ought to be as embarrased about as we are about our lunatic foreign policy.

It seems to me that the Canadian system offers the best model for emulation in this matter, although I'm aware that it, too, has its flaws. And, obviously, opposition from many quarters would make getting such a model adopted here extremely difficult, or, presumably, we'd already be there.

However, in spite of all the talk, and the trillion and a half dollars we spend on health care, we never seem to make any real progress. I'd donate a lot of cash to a Democrat who was determined to make her top priority the solving of the health care conundrum you describe in this post.

it'd take some straight talk, since there are no easy solutions. But I'm with you on the access issue. watch bush claim to address it. i'm telling you, he ain't.

We are the only country in the "industrialized west" with a rising infant mortality rate. I'll take the Canadian system.

MB: I agree everyone should be covered for the basics. I’ve been an advocate for universal care for a very long time. But having gone through cancer and some other health problems and thus dealing a great deal with the medical system, I know all healthcare and healthcare providers are not the same. Choice is a very BIG deal to me.

Of course, pacifica, and I wasn't in any way trying to downplay your experiences or needs. I'm not suggesting that we abolish the existing system first - as if that were possible. I'm just saying that the first agenda item for ME is to get everybody covered for a list of agreed-upon procedures. Then, we move onto the next reforms.

A friend of a friend was hit by a car (as a pedestrian) and ended up with close to $1M in hospital bills -- fortunately they were able to save his legs, but barely. But, this guy is in his mid-20s and, on top of crippling injuries, now facing lifetime debt. (The driver of course had no insurance & no money.) The recent bankruptcy law changes should not part of health care discussion.

erm, apparently my brain couldn't decide between "should not be omitted" and "should be a part of" take your pick.

On this topic I like Everybody In, Nobody Out people, even if they do have an ugly website. Pressure on this is going to have to come from grassroots passion which just might engage the Beltway folks,

I don't pretend to have aa answer on health care, but basically since it began I have been covered by Kaiser Permanente, as are/were my parents. That model has some drawbacks, but overall works very well. Doctors' judgment is not questioned and they just practice medicine. The overhead is pretty low and the care is more than adequate (except for the emergency room, but that is true everywhere).

Why couldn't we expand this kind of system for everyone, perhaps with a few plans, with the gov't paying the plan instead of the employer, and people who want something really special and can afford it can buy that on top?

The problems outlined, access, choice and cost can all be achieved through a combination of catastrophic event insurance and individual health care savings accounts (PHCSA).

By placing the power of purchasing back into the hands of the individual, access is assured, the choice of who’s treating you is solely yours and costs are reduced through competition and efficiency.

Imagine a scenario where a national catastrophic care policy would pay 90% of all costs of any treatments over $8,000/year. All treatments that fall under the 8K/year level would be paid directly out of a PHCSA using a debit card. The individual would have total control over who treats them, along with the extent of the treatment.

Over 20% of medical costs are wasted in classifying, applying for and fighting over payment for services. By using direct debit payment, the provider is paid immediately and the amount is registered for comparison with other providers in an on-line database.

PHCSA would be funded through either personal, employer or government contributions. National catastrophic insurance would be an extension of Medicare.

No government run universal health care plan can provide the answers to access, choice and costs. The only way to solve the problems is to put the decision making power into the hands of the end user.

j. west, your input is appreciated on the is complex issues and all ideas shoudl be on the table. However, the idea that market driven HCSA would be an answer is likely only true for the wealthier, more savvy population. I don't see how this helps most of the South bronx or the lower 9th ward, methaphorically speaking.

But I'd hate to dismiss any serious approach out of hand. I like the idea of mnational catastrophic health insurance; that needs further exploration.


No one cares about the people from the South Bronx, but for the 9th Ward, the accounts could be funded through existing or new programs. Remember that currently no person in the country, citizen or not, is refused treatment. We are already paying for a very inefficient form of universal health care, so the actual problem is how best to reorganize the system for maximum benefit to the customers (us).

A trip (eventually) to the doctor under PHCSA…….

You wake up feeling sick. Instead of calling your doctor for an appointment (two weeks from next Friday), you call your local Advanced Degree Registered Nurse (ADRN). This would be a registered nurse who has taken the equivalent of a master’s degree in diagnostics.

The ADRN comes to your home and accesses the problem. Your complete medical records are available to (let’s make the ADRN a female) her through the internet by using the encoded information on the PHCSA debit card. Because the ADRN is less expensive than a doctor, she would be more able to spend the appropriate amount of time listening to what your problem is. Blood pressure, temperature etc. are taken and transmitted to either your doctor or a specialist depending on the situation. If blood/urine etc. is needed for tests, they are collected at this time. The ADRN can also gain information from your environment that may have contributed to the ailment. ADRN’s bill by the hour and are paid through your PHCSA debit card.

Once a determination is made that you need to see a doctor, the ADRN lays out the options as to specialists, locations and general costs. You decide on which doctor to use and the appointment is arranged. If the procedure is straightforward, you are apprised of the procedure costs along with the 10 lowest costs for the same procedure within a certain radius.


The doctor says he needs to lance that nasty boil on your nose. He puts the “boil lance” code into his computer and magically the 10 lowest prices recently charged for the same procedure within a 15 mile radius pops up on the screen. If his price is reasonable, you agree to have the procedure done. If he is outrageously expensive compared to his competition, you may opt to go elsewhere. You don’t have to go elsewhere. If you have a great deal of confidence in this particular doctor, go ahead and use him – it’s your money.

Once the procedure is done, you present your PHCSA debit card, punch in you PIN and the debt is paid. Since you’re a relatively healthy individual and this was your only expense during the year, your PHCSA account would only be depleted by a few hundred dollars. If your employer or the government is contributing to your account each year, you can take the excess to buy that new plasma screen TV you’ve been wanting.

As to how this relates to the poor, it has the benefit of bringing dignity into the system. Everyone would have the same PHCSA debit card and the money being used is the property of the person whose name is on the card. If a poor woman from the South Bronx wants to have her nasty, old, crusty toe worked on by the most expensive specialist in Manhattan, that’s her business. Alternately, if a billionaire from 5th Avenue wants to drive 50 blocks to get a discount on his penicillin shot, that’s ok too.

And another thing…….

Think of the Medicaid/Medicare fraud that is rampant today. Using the PHCSA cards, it would be easy for authorities to show up at the offender’s clinic the following morning and say:

“Tell us about the 20 liver transplants you performed yesterday.”

The primary fraud prevention aspect of a system like this is that the individual health care consumer is the front line in detecting criminal activity. Also, simple algorithms in the debit software would detect unusual combinations of procedures and timing that could point to “for profit” illnesses.

The scenario described by j west assumes a number of very costly assets that currently don't exist: a comprehensive electronic medical record maintained centrally, a supply of qualified nurses that's large enough to make house calls economically for over 200 million persons who could wake up with a sore throat any day, a reservoir of funds to make contributions for many millions who do not have the resources to make the contributions themselves.

The discussion so far has not addressed one aspect of our current system that adds measurably to our costs: profit. Not only the profit taken by providers that are clearly labeled as for-profit, but also the de facto profit in "reserve funds" maintained by "not-for-profit" providers, the whopping CEO salaries paid by many of these, and the rampant gaming of the system by the same (do you have any idea how many of those CEOs set up dummy corporations and sell to themselves?).

Even though the overcrowded public clinic is not looked on as a desirable alternative by most, there is a publicly run health system that achieves quality consistently higher than found in the prvate sector, at a per unit cost that is less. It can provide enough access as long as its funding is appropriately scaled to the population it covers (something currently being undercut by Repubs). It's called the VA, believe it or not. You can read about it here: http://www.washingtonmonthly.com/features/2005/0501.longman.html

We've had a number os studies done in out state (Minnesota) in the past couple of years -- one was led by former Senator Durenberg -- another by the current Attorney General, and both concluded the system as is would go totally bankrupt within five years. It may well be that only in crisis will the political will to make substantial change occur.

I believe we are now in the last years of employer paid health insurance -- I suspect if Ford and GM are able to eliminate it, most other employers will follow suit. And while saying that I think this a good thing sounds preverse, it is probably necessary for the existing system to break down in this fashion in order to get serious about reordering a reformed system.

In the early 90's I spent lots of time talking with Paul Wellstone about this as he, as a single payer advocate worked his way through the disaster that Clinton'; proposals were as policy, and as politics. He eventually came to a modified single payer idea -- one that had a consolidated Federal Health Budget that designated certain functions as national programs (CDC, research, medical training as examples) and then turned over to the states the responsibility to design universal service delivery systems. He thought the proper governance model would be something like a University Board of Regents -- a board with fairly long terms, appointed by the Governor, approved by the legislature -- and thus indirectly politically sensitive. He thought the only way you could deal with the "big players" in the existing system -- the insurance industry and the HMO's -- was to allow states to contract with them to operate pieces of the delivery system, but that they would have to accept regulated payments. Paul thought you had to totally eliminate "fee for service" models, and essentially have a system where your state defined "jobs" and then hired Doc's, Nurses, technicians and the like on salary. (Paul would have traded off full subsidy for the cost of medical education for the defined job notion. -- it is interesting that in virtually all scientific fields graduate students generally are subsidized with one exception, Medicine. and Medical School is grad school afterall.) He also believed it necessary to create all sorts of incentives for redicing costs in the delivery system -- and in fact today the incentives are the reverse. He thought if states were responsible for design and operation of delivery systems, they would seek out economies.

The Medicare Part D is in an interesting way one of the best examples yet of preverse incentives. It is designed to alienate by complexity. They've maximized not only the benefits to the pharm industry, they have also built in huge bureaucracy in the private sector with the result that if it gets up and running probably about half of the cost of the program will go toward overhead.

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