The Death Throes of Single Payer

Consumer Choice Matters

IN THIS ISSUE:

 Relman in The New Republic

 Europeans Lose Faith in Government Health

 Wealth Brings 17 More Years of Health in UK

 

Relman in The New Republic

 

"The New Republic" has published a major article called, "Medicine and the Free Market. The Health of Nations," by Arnold Relman, former editor of "The New England Journal of Medicine." The article is broken into several sections. The first is a fairly selective review of the history of American health care policy. I say selective because he starts in 1960 and completely ignores the distorting effects of tax policy and public policy encouragement of third-party payment over all other forms of health care financing. Even within his time frame, he says not a word about the many disastrous public policies on health planning, mandated benefits, price controls, and federal encouragement of HMOs and self-insurance by large corporations that have ensued since 1960. He places the blame for most of health care's problems on the commercialization of the system that "diminish the special aura of professionalism and social service…of medicine."

 

From there, he goes into a pretty accurate description of consumer driven health care and the hopes and rationales of its proponents. For that I congratulate him. It isn't easy to provide a fair description of an idea one opposes vehemently. For instance, he says that "it is commonly believed that in health care the most important missing ingredient of a free market is the traditional consumer who has the incentive and the ability to bargain for the desired price and quality of services." Fair enough. So it is important to take his criticisms seriously.

 

His first criticism is that under consumer-driven health care, "low- and modest-income families…would feel financial pressure to cut their doctor visits and their use of other medical services… [while] higher earning beneficiaries would not feel such pressure and would continue to use all medical services freely." I think that is true. Wealthier people are much less influenced by financial incentives than most of us are. But it is irrelevant. Wealthier people will always get what they want because they have the means to pay for it. Even in Canada, the wealthy are able to bypass waiting lists and shortages by coming to the United States and buying what they want. But the wealthy are a small portion of the population, so in terms of system-wide reform it doesn't matter what they do.

 

He also does the usual riff on selection, saying that the young and healthy (who presumably are not also the "wealthy") will prefer high-deductible coverage while "those with health problems would be forced to choose plans with the lowest allowable deductibles but higher premiums." This is an argument I simply don't understand. In many cases, the premium savings of a higher-deductible plan exceed the cost of the deductible, so a high-deductible plan would benefit the young and the old, the rich and the poor. Plus, we know from experience that the people who most resisted low-deductible managed care were the "people with health problems" who used the services most. The "young and the healthy" didn't much object to these plans because they didn't use the services enough to notice the problems.

 

He is also concerned that "CDHC would impede efforts to improve the quality of care." He argues that "the Institute of Medicine's recommendations about quality [could not] be achieved if doctors and hospitals were expected to function as independent vendors do in ordinary markets, simply responding to the demands of consumers… and the uniform adoption of modern information technology would be impossible." Huh? If I'm not mistaken, the banks are light-years ahead of health care providers in the use of "modern information technology" such as ATMs precisely because they are responding to the demands of consumers. To date, the bureaucracy has been an abysmal failure in assuring quality or encouraging the use of information technology. It is time for the bureaucrats to step aside and let popular demand take over.

 

Still, Dr. Relman concedes that consumerism is "now firmly embedded in current thinking about health policy and will surely be more widely tested." He expects it to ultimately fail, though it may take a decade to do so. In anticipation of that failure, he proposes a different system featuring a single-payer system even more rigorous than Canada's. All physicians would be working in multi-specialty groups, paid by salary, and would be confined to providing the services on an approved list. Patients would choose their own "physician group" but could change only at "specified intervals." Facilities would all be non-profit and paid by a global budget. The entire system would be overseen by a "National Health Care Agency" that would be "sufficiently independent of congressional and administration management to be protected from political manipulation and annual budgetary struggles."

SOURCE: http://www.tnr.com/doc.mhtml?pt=lkWDsxbKs8PSs20MmELh7c%3D%3D

 

Europeans Lose Faith in Government Health

 

Dr. Relman reminds me of the Japanese soldiers holed up in caves on Pacific islands fighting for the Emperor decades after the end of the Second World War. Only Canada comes close to having a true Single-Payer system, and no other countries are looking to adopt one. Even in the United Kingdom a vigorous private system runs along side the National Health Service. Most countries, even Sweden, are privatizing elements of their national systems. Writing in "The Seattle Times," Rebecca Goldsmith explains why. She says, "Fed up with long waits and worried about the quality of medical care, more European patients are losing faith in government-run health systems. Informed by the Internet and motivated by cheaper travel, many now seek medical care abroad and buy private health insurance." She cites a London clothing wholesaler who needed a hip replacement. He could have had it done for free through the NHS, but was "unwilling to wait months or years" because he has to be on his feet in his work. So he went to Germany and got it done in less than two weeks for a cost of $12,000. The article goes on to say that "England, whose health service is one of the most generous in Europe, made patients wait an average of 18 months for an operation in 1997 – including for simple-to-fix but disabling conditions such as cataracts and worn joints. Since then, the average has fallen to less than nine months." The article continues that due to a ruling by the European Court that requires EU members to reimburse citizens for care they get in other countries, "'health tourism' is rapidly becoming a mainstream alternative to socialized medicine across Europe."

SOURCE: (registration required) http://archives.seattletimes.nwsource.com/cgi-bin/texis.cgi/web/vortex/display?slug=euromed09&date=20050210&query=Rebecca+Goldsmith

 

Wealth Brings 17 More Years of Health in UK

 

Recent studies by the Institute of Medicine and others correlated the lack of health insurance with poor health in the United States. However, as I wrote in a paper for NCPA almost three years ago, the studies failed to adjust for income in determining the effects. The low-income tend to have worse health than the general population, and the low-income also are more likely to be uninsured. IOM argued it is this lack of insurance that leads to poor health. But it failed to consider that low-income people may be equally in poor health with or without insurance coverage. Now comes new information from Great Britain that it is precisely income that affects health status, not insurance. Writing in the far-left paper "The Guardian," John Carvel says "Wealth brings 17 more years of health." He says, "People in the most prosperous neighbourhoods (sic) of England enjoy 17 more years of fit and active life than those in the poorest, the Office for National Statistics said yesterday." Yet England is a model of the kind of universal health coverage the Institute of Medicine and others would like to see adopted in the United States. The article explains, "A man in one of the most prosperous wards? could expect to live to 77.4 years. During that time, he would have 11.2 years in poor health, giving him a 'healthy life expectancy' of 66.2 years." But a man in one of the poorest areas would have a total life expectancy of 71.4 years, with 22 years in poor health for a total healthy life expectancy of 49.4 years – 16.8 fewer years than the wealthier fellow. Similar differences apply to women and to people with disabilities.

SOURCE: My NCPA nalaysis may be found at  http://www.ncpa.org/pub/ba/ba416/

And the Guardian article is at http://www.guardian.co.uk/uk_news/story/0,,1424938,00.html

 

Please send all comments/questions directly to me at gmscan@aol.com.

 

"Consumer Choice Matters" is a free weekly newsletter published by the Galen Institute, a not-for-profit public policy organization specializing in research and education on health policy. Visit our website at http://www.galen.org for more information.

 

If you wish to subscribe/unsubscribe or update your address, please send an e-mail to galen@galen.org.

 

The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors.

 

 

 

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Consumer Choice Matters

IN THIS ISSUE:

 Relman in The New Republic

 Europeans Lose Faith in Government Health

 Wealth Brings 17 More Years of Health in UK

 

Relman in The New Republic

 

"The New Republic" has published a major article called, "Medicine and the Free Market. The Health of Nations," by Arnold Relman, former editor of "The New England Journal of Medicine." The article is broken into several sections. The first is a fairly selective review of the history of American health care policy. I say selective because he starts in 1960 and completely ignores the distorting effects of tax policy and public policy encouragement of third-party payment over all other forms of health care financing. Even within his time frame, he says not a word about the many disastrous public policies on health planning, mandated benefits, price controls, and federal encouragement of HMOs and self-insurance by large corporations that have ensued since 1960. He places the blame for most of health care's problems on the commercialization of the system that "diminish the special aura of professionalism and social service…of medicine."

 

From there, he goes into a pretty accurate description of consumer driven health care and the hopes and rationales of its proponents. For that I congratulate him. It isn't easy to provide a fair description of an idea one opposes vehemently. For instance, he says that "it is commonly believed that in health care the most important missing ingredient of a free market is the traditional consumer who has the incentive and the ability to bargain for the desired price and quality of services." Fair enough. So it is important to take his criticisms seriously.

 

His first criticism is that under consumer-driven health care, "low- and modest-income families…would feel financial pressure to cut their doctor visits and their use of other medical services… [while] higher earning beneficiaries would not feel such pressure and would continue to use all medical services freely." I think that is true. Wealthier people are much less influenced by financial incentives than most of us are. But it is irrelevant. Wealthier people will always get what they want because they have the means to pay for it. Even in Canada, the wealthy are able to bypass waiting lists and shortages by coming to the United States and buying what they want. But the wealthy are a small portion of the population, so in terms of system-wide reform it doesn't matter what they do.

 

He also does the usual riff on selection, saying that the young and healthy (who presumably are not also the "wealthy") will prefer high-deductible coverage while "those with health problems would be forced to choose plans with the lowest allowable deductibles but higher premiums." This is an argument I simply don't understand. In many cases, the premium savings of a higher-deductible plan exceed the cost of the deductible, so a high-deductible plan would benefit the young and the old, the rich and the poor. Plus, we know from experience that the people who most resisted low-deductible managed care were the "people with health problems" who used the services most. The "young and the healthy" didn't much object to these plans because they didn't use the services enough to notice the problems.

 

He is also concerned that "CDHC would impede efforts to improve the quality of care." He argues that "the Institute of Medicine's recommendations about quality [could not] be achieved if doctors and hospitals were expected to function as independent vendors do in ordinary markets, simply responding to the demands of consumers… and the uniform adoption of modern information technology would be impossible." Huh? If I'm not mistaken, the banks are light-years ahead of health care providers in the use of "modern information technology" such as ATMs precisely because they are responding to the demands of consumers. To date, the bureaucracy has been an abysmal failure in assuring quality or encouraging the use of information technology. It is time for the bureaucrats to step aside and let popular demand take over.

 

Still, Dr. Relman concedes that consumerism is "now firmly embedded in current thinking about health policy and will surely be more widely tested." He expects it to ultimately fail, though it may take a decade to do so. In anticipation of that failure, he proposes a different system featuring a single-payer system even more rigorous than Canada's. All physicians would be working in multi-specialty groups, paid by salary, and would be confined to providing the services on an approved list. Patients would choose their own "physician group" but could change only at "specified intervals." Facilities would all be non-profit and paid by a global budget. The entire system would be overseen by a "National Health Care Agency" that would be "sufficiently independent of congressional and administration management to be protected from political manipulation and annual budgetary struggles."

SOURCE: http://www.tnr.com/doc.mhtml?pt=lkWDsxbKs8PSs20MmELh7c%3D%3D

 

Europeans Lose Faith in Government Health

 

Dr. Relman reminds me of the Japanese soldiers holed up in caves on Pacific islands fighting for the Emperor decades after the end of the Second World War. Only Canada comes close to having a true Single-Payer system, and no other countries are looking to adopt one. Even in the United Kingdom a vigorous private system runs along side the National Health Service. Most countries, even Sweden, are privatizing elements of their national systems. Writing in "The Seattle Times," Rebecca Goldsmith explains why. She says, "Fed up with long waits and worried about the quality of medical care, more European patients are losing faith in government-run health systems. Informed by the Internet and motivated by cheaper travel, many now seek medical care abroad and buy private health insurance." She cites a London clothing wholesaler who needed a hip replacement. He could have had it done for free through the NHS, but was "unwilling to wait months or years" because he has to be on his feet in his work. So he went to Germany and got it done in less than two weeks for a cost of $12,000. The article goes on to say that "England, whose health service is one of the most generous in Europe, made patients wait an average of 18 months for an operation in 1997 – including for simple-to-fix but disabling conditions such as cataracts and worn joints. Since then, the average has fallen to less than nine months." The article continues that due to a ruling by the European Court that requires EU members to reimburse citizens for care they get in other countries, "'health tourism' is rapidly becoming a mainstream alternative to socialized medicine across Europe."

SOURCE: (registration required) http://archives.seattletimes.nwsource.com/cgi-bin/texis.cgi/web/vortex/display?slug=euromed09&date=20050210&query=Rebecca+Goldsmith

 

Wealth Brings 17 More Years of Health in UK

 

Recent studies by the Institute of Medicine and others correlated the lack of health insurance with poor health in the United States. However, as I wrote in a paper for NCPA almost three years ago, the studies failed to adjust for income in determining the effects. The low-income tend to have worse health than the general population, and the low-income also are more likely to be uninsured. IOM argued it is this lack of insurance that leads to poor health. But it failed to consider that low-income people may be equally in poor health with or without insurance coverage. Now comes new information from Great Britain that it is precisely income that affects health status, not insurance. Writing in the far-left paper "The Guardian," John Carvel says "Wealth brings 17 more years of health." He says, "People in the most prosperous neighbourhoods (sic) of England enjoy 17 more years of fit and active life than those in the poorest, the Office for National Statistics said yesterday." Yet England is a model of the kind of universal health coverage the Institute of Medicine and others would like to see adopted in the United States. The article explains, "A man in one of the most prosperous wards? could expect to live to 77.4 years. During that time, he would have 11.2 years in poor health, giving him a 'healthy life expectancy' of 66.2 years." But a man in one of the poorest areas would have a total life expectancy of 71.4 years, with 22 years in poor health for a total healthy life expectancy of 49.4 years – 16.8 fewer years than the wealthier fellow. Similar differences apply to women and to people with disabilities.

SOURCE: My NCPA nalaysis may be found at  http://www.ncpa.org/pub/ba/ba416/

And the Guardian article is at http://www.guardian.co.uk/uk_news/story/0,,1424938,00.html

 

Please send all comments/questions directly to me at gmscan@aol.com.

 

"Consumer Choice Matters" is a free weekly newsletter published by the Galen Institute, a not-for-profit public policy organization specializing in research and education on health policy. Visit our website at http://www.galen.org for more information.

 

If you wish to subscribe/unsubscribe or update your address, please send an e-mail to galen@galen.org.

 

The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors.

 

 

 

SHARE THIS ARTICLE

About the author