http://www.nytimes.com/2005/04/15/opinion/15krugman.html?hp
One thing that is interesting to me is that Krugman focuses on the very old and very true adage that we do not get much bang for our grossly overpriced health care buck. His attempt to explain that is not very good but he promises to talk about it again (I'll get back to that point later when he does). One contextual point that he glosses over that I would like to emphasize is that the old canard about the U.S. health care being the best in the world is probably wrong. The U.S. ranks poorly at nearly every quality measure (not just outcomes measures) except for customer service type things (examination room decor, magazine selection, quality of bed, food, office/visiting hours, TV channels, etc.). There are whole host of U.S. health system apologetics that hinge on the fact that while the U. S. system is not the fairest or the cheapest or the safest or the most universal AT LEAST we have high quality. The quality argument is probably a big unexamined lie.
Here is a related piece I wrote a month or so ago when asked to articulate my unease at health care activists focusing on access to care (and to some degree on fairness) without strong quality or real cost messages. The key point is that funding health care is currently regressive and is getting more regressive and that make the benefits more progressive with "universal" schemes need to make financing and cost control central to the message:
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A common slogan in the fight for better health care in the U. S. is “everyone should have quality, affordable health care.” According to polling data, this is a view shared by over 70% of people in the U.S. Universal health care proposals, from Minnesota’s proposal to make everyone buy health insurance to various “single-payer” proposals, are focused on making the “everyone” part of the slogan a reality. Reports critical of health care quality, like the Institutes of Medicine’s *Crossing the Quality Chasm*, have reignited efforts to reduce the unnecessary death and suffering caused by poor quality health care itself. Achieving quality health care for “everyone” will be a difficult and worthy task but the toughest part of achieving a better health system, if judged by the lack of serious proposals to address rising costs, remains making it affordable.
Health care costs in the U.S. are high—-U.S. health expenditures for 2004 were 1.8 trillion dollars. On a per capita basis, this is 42% more than other industrialized countries. Despite this, the U.S. is falling further behind industrialized countries in life expectancy and other health measures. All of this while health care costs continue to grow. Since 1993, when public debate was focused on a ‘health care crisis,’ health care costs have more than doubled across the board, averaging 5% growth beyond inflation per year.
On an individual level, everybody knows that his or her health costs are going up. Over half of personal bankruptcies—and the number of bankruptcies are growing dramatically—have a medical cause. With health insurance through employers, both the share of the premium paid by individuals and the cost of insuring additional family members are rising. Your insurance company is probably covering less and you have to pay more money with higher deductibles and co-payments. If you are uninsured, the charges you get when you go to the hospital are skyrocketing.
While all this is bad enough, people are paying even more in ways they likely do not realize. Employers complain about “their” health care costs and for some smaller businesses it is somewhat of a burden. But ultimately the burden nearly always falls on workers as lost wage growth. Health cost increases result in dampened growth (or even cuts) in wages, loss of other benefits, higher employee contributions to premiums, more cost sharing (co-payments, deductibles, coinsurance, etc.), and the loss of coverage. Businesses care about the total cost of a worker and do not care what form the costs take. If health costs rise, then employers will find a way eventually to cut wages (or something) to make sure their total employee costs are at a level they can afford.
This is all-important for understanding why health care costs are not controlled in our largely “free market” system. Health care suppliers and providers are looking to expand the delivery of health care. This is the fundamental driver of health costs. Based on free market theories, health insurers (including managed care programs) were supposed to control costs. They have had only limited success. But after getting a lot of bad press for crudely trying to limit care to people who needed it, insurers realized they could make more money by charging more to employers (and other customers), and thereby just get along with medical providers. Employers, as explained above, mostly just pass the buck to their workers. Ultimately, there is no system-wide accountability for controlling costs.
The latest rhetoric in health policy is that the medical consumer can control costs. I hope this article convinces you that this is “blaming the victim.” Of course, consumers should be active in their own health care decisions, but that really has little bearing on overall costs. A good example of this is co-payments. Co-payments are supposed to discourage consumers from seeking unnecessary care and make them more “responsible.” The reality is that co-payments do discourage people (particularly poorer people) from seeking some care. The problem is they discourage people from getting low cost consultations when symptoms are mild. If even a few serious illnesses result from a lack of timely care, it swamps any cost savings resulting from co-payments.
The government, as a payer for health insurance, can reduce costs. A lot of research has shown that having the government provide health insurance for all citizens reduces a considerable amount of unnecessary administration and billing. However, in many health care proposals this reduction may not offset the increase in health care demand likely as we expand coverage to the uninsured and also improve benefits to the tens of millions who receive limited insurance now. It is also important to note a considerable amount of savings will have to go toward one-time transition costs—like retraining a veritable army of health care billing professionals.
The key for good policy proposals is to have the government be a payer concerned about costs. This is particularly true if government is the single payer. The overall acceptance of public programs will always be sensitive to their costs in the “anti-tax” climate. But polls show that taxpayers will accept public health care costs if they deliver value.
To control costs, we would need an independent body (like the Institutes of Medicine) responsible for representing the public’s interest in research and practice standards. A considerable amount of health care planning would be necessary in other areas—for example, to prevent decreases in the percentages of doctors specializing in primary care each year. A public payer needs to be a smart shopper as well. Incentives matter and limiting pervasive economic incentives to overdo care in the current system has to be fundamentally changed. Two such examples are that hospitals should have global budgets; and health care professionals, including doctors, should be salaried.
Currently, there is much political debate as to whether or not the health care system needs dramatic changes, though public opinion polls seem to indicate a popular consensus that it does. Republicans have promoted ‘individualized’ payment plans, which really means that the poor and sick would pay even more for health care than they currently do. The “ownership society” makes people “own” their disability and disease. Others promote a host of incremental reforms, which may help some people get more care, but do nothing to stop the rising cost burden on the average worker. I think a key part to getting more radical reforms past the undemocratic barriers of power is to produce a coherent way to control costs. Ultimately, someone has to pay for healthcare; we might as well get a fair and less wasteful system in the bargain.
Jim