Thursday, September 03, 2009

Reforming healthcare in the United States

I've reproduced the content below from a page that I recently created on my website. Some of the links here have been discussed in earlier posts. Feel free to voice your opinion.


By all accounts, the United States healthcare system is in crisis. We hear this every day: some 45 million people are uninsured; hundreds of thousands go bankrupt every year because of medical bills. Everybody agrees the current system is dysfunctional. But the solutions are contentious and divisive. Should government play a greater role by introducing a public insurance option in addition to Medicare and Medicaid to cover the uninsured? If everyone is going to be insured, where will the money come from? These questions elicit shrill noises from both extremes of the political spectrum. And there's the question of culture, culture of the nation -- that ambiguous but all-too-influential presence in the background. Mention 'government' in connection with US healthcare and the term 'socialized medicine' will follow like a stigma.

My intent in creating this page was to aggregate content from the internet pertaining to policy issues in US healthcare. This is a daunting task of course, and I am no expert. But in the process of teaching a healthcare class last spring, I came across essays, documentaries, radio clips that I'd like to share. Email me if you think there is material that should be added.


The PBS Frontline documentary Sick Around the World compares the health systems of developed countries -- Britain, Japan, Germany, Taiwan, Switzerland -- and reveals the glaring flaws in the US healthcare system. Three key shortcomings emerge. In the countries listed above 1) No one with a pre-existing condition is denied insurance 2) Everyone is covered one way or another 3) Pricing mechanisms are transparent and nobody goes bankrupt because of medical bills. Are these basic things too much to ask in the United States? Sick Around America, another PBS Frontline documentary, focuses on the shortcomings of the American health insurance industry.


It is true that European nations have a much better universal care record. But history played an important role in shaping the insurance structure of these countries. The national health systems of Britain and France emerged as a result of the devastation wrecked by the Second World War. Switzerland, because of its wartime neutrality, took the private insurance route before opting for reform in the last decade. Surgeon and writer Atul Gawande says in Getting There From Here that the experience of the United States is different and that difference must be acknowledged. Hence piece wise reform of healthcare, by building on what currently exists currently in the US, is better than a radical overhaul based on models elsewhere.


Healthcare insurance reform is not healthcare reform, although the two are related of course. True healthcare reform is possible only if costs are brought under control. Atul Gawande explains why healthcare costs are ridiculously high in the United States. Technology can collude with strange monetary incentives to increase health care costs and reduce the quality of care. Physicians are leaning towards more tests, more scans, more surgeries -- all of which generate revenue -- when simpler wait-and-watch alternatives would have been preferable. And there is no conspiracy here: the system in the United States seems to have subconsciously evolved this way because of the incentives in place. Gawande travels to the city of McAllen, Texas and finds that the over utilization of medical resources has sent costs skyrocketing. Only by trimming the fat from the system will Obama be able to finance healthcare reform.


David Ignautius argues that Denise Cortese, CEO of the famous Mayo Clinic, should be made "medical commander" of Obama's health reform initiative. Cortese's message is similar to Atul Gawande's: Health insurance reform is necessary, but true reform is possible only if medical practices are paid for value (outcomes, safety and service) rather than for the number of services provided. Peter Ubel, a primary care physician, says yes, we must change how we pay physicians, but we must also change how much they are paid in the United States. Certain types of specialty physicians have disproportionately high incomes. Unfortunately, this is an issue no one is willing to tackle politically.


Princeton economist Uwe Reinhardt talks with Terry Gross (NPR) about the lack of transparency in healthcare pricing. Each hospital may negotiate a different rate with a different insurance company for the same service; and the prices are kept secret. Indeed, there may be a tenfold difference in prices because of this secrecy. Hospitals have to hire an army of hagglers to negotiate and keep track of prices. This hikes up administrative costs. In other developed countries, pricing is not this opaque.

Reinhardt also discusses the feasibility of a public, Medicare-like insurance option for the uninsured. The private insurance companies don't like this, because they fear they will no longer be able to complete with a government run option that enrolls millions and sets its own prices. Paul Starr, author of the famous 1984 book, The Social Transformation of American Medicine, weighs in with pieces in the American Prospect: Sacrificing the Public Option and Perils of the Public Plan. Finally, this essay in The New York Review of Books discusses the messy political process underlying healthcare reform; and Bill Moyers of PBS interviews scholars and policy experts on various aspects of reform.


Alex Engwete said...

Hari, I don't know whether in my reading of your well-thought and well-documented presentation of the different strands relating to this issue I might have overlooked somewhere this word: "taxes!"... Only in America do people expect to have holistic government services without some form of taxes...

Additionally, there's no real debate over different options like the one you so rationally expounded. In fact, debates have been hijacked by goons like Glen Beck of Fox News or Rush Limbaugh... In some countries, like France, they won't let people of this ilk poison the intellectual well-being of a nation. I just cited France. There, there's a media authority that ensures that media coverage and comments are actually factual...

Also, America has always been praised for the "democracy of proximity" that city hall meetings provided. Now, look what travesty they've turned into. The other day, I saw on MSNBC the clip of this Republican congressman who was attempting to bamboozle his constituents at a city hall meeting, claiming that some coverage was denied a patient because of government bureaucrats. Fortunately, a citizen contradicted him on the spot, and said that it was actually HMO bureaucrats that turned down the patient... This is madness--pure and simple! And America has great schools and great colleges... how could people lack so much wisdom in separating fact from fiction?

Another instance, still on MSNBC, Keith Olbermann quoted an editorial of a newspaper that was attacking what they've now dubbed Obama-care and claimed that Stephen Hawking, who the newspaper claimed was an American citizen,would have died already under the health reform being proposed because of the "death panel" it would set up!...

It's just hopeless, Hari!!!

Hari said...


It's frustrating, isn't it? Miscreants, like the ones you mention, have indeed hijacked the whole discussion. They get a lot of media attention; this in turn alarms the undecided and perpetuates all kinds of falsehoods. Suspicion of government is ingrained in this country’s fabric. That's not such a bad thing, but the stubbornness currently on display irrational.

You are right: there is no real debate.

RKI said...

Apart from the fact that the media & the lawmakers are in large parts stoking passions on either side of the political divide while they continue to make light of their
reponsibility of educating the public and deliberating on the intricacies of the bill, the real culprit is health care reform itself! It is complicated (and that's an understatement)
and even the best of minds has difficulty trying to grasp the consequences of the various
policy initiatives that are needed to bring about the kind of reform that they envision. It is but natural that it would open itself up to false allegations which cannot be easily disbanded unlike say issues such as abortion rights or "don't ask don't tell" which are in no way trivial but at the same time it is much more difficult to use fiction to spread fear among the general populace when talking about them.

Personally, I feel that attempting to achieve comprehensive heath care reform in a single bill is just a non-starter. There are too many issues that are of genuine concern to conservatives such as the public option that will further delay passing of the bill to the detriment of more important policy initiatives (albiet less highlighted) that may be part of the bill. I think the majority agrees that the current health care costs are too high and that it needs to be and indeed it can be brought down without necessarily having to go through health care insurance reform. So the focus should be on whittling down the bill to those initiatives that can really bring about efficiences and bring down costs in the current system, a bill that can actually be bi-partisan even though its hard to believe that
such a thing exists. I'm optimistic that it can be done. That would be a good starting point on which other things (perhaps a public option) can be built on in the future.

Hari said...


You have a point. Why pack everything into one bill? Address the cost issue first and then think of health insurance reform. That’s fair enough, except that the issue of access, of patients getting denied because they have pre existing medical conditions, is a serious one. It is also part of the cost question: when uninsured individuals end up in the emergency room because of a catastrophic health issue that could have been addressed earlier with adequate insurance, the system incurs more costs.

Massachusetts is the only state that has passed a universal coverage bill. Since 2006, everyone in the state has to be insured – it’s a mandate. Those who cannot afford private insurance can use a government option. The state had 600,000 uninsured but since 2006, around 450,000 now have insurance. But the costs have gone up and the state is trying to fix that problem now.

So it is possible to go the other way as well: cover everybody (health insurance reform), then think of cost cutting measures: paying for outcomes rather than paying for volume, making healthcare prices transparent etc.

And universal coverage does not necessarily need a public option, the root cause of all the distress. Britain may have government run healthcare (which gets panned all the time), but there are a variety of models in other developed countries that the US could borrow from.