The Commonwealth Fund continues its advocacy for universal coverage and a larger role for government in our health sector with a new paper in Health Affairs: It cites the rising number of people with health coverage that does not adequately protect them from high medical expenses — the under-insured.
News coverage has headlined the study's finding of a 60% increase in the number of people who are underinsured since 2003, bringing to more than 25 million the number of adults under age 65 who "had inadequate insurance in 2007." You will hear this number repeated often in the political debate this year, but it is worth noting that the number is based solely upon subjective recollections of participants in a telephone survey taken last year.
Here's the back story: People are considered underinsured if they had out of pocket medical expenses equal to 10% of their income (5% for those earning under $40,000) or if their deductible was 5% or more of their income.
That means that if a family earning $60,000 a year purchased a health insurance policy with a $3,000 deductible, they were underinsured, even if they chose that option — as they very well might do in order to save on insurance premiums and qualify for a Health Savings Account.
Certainly there are millions of people for whom paying for health care and health insurance is a hardship. But should those who choose the sensible option of buying a more affordable, higher-deductible policy also be considered victims of the system?
Yes, the authors imply, led by Cathy Schoen, senior vice president of Commonwealth.
This gets to the fundamental definition of health insurance: Should it provide financial protection against major medical bills or protect against even moderate expenditures on health care? That is a valid policy question, but one ignored by the study.
Fast forward to a system where government domination of the health system is firmly established — in Italy. I spoke in Milan last Friday at a seminar sponsored by my good friend and colleague, Alberto Mingardi, director of the Istituto Bruno Leoni.
While academics predictably defended their system as fair and equitable, others said that it was increasingly not serving its citizens: A lack of public money leads to shortages of personnel, equipment, surgical time, diagnostics, and medicines.
"We have a promise of universal care in name only," one participant told me.
Clearly, the problems of cost and access to care are universal.
Europeans increasingly are facing a more informed patient population that is gaining access to information via the Internet and demanding greater access to care and new medicines. These nations recognize that consumerism is inevitable, and some are looking at new models of supplementary private insurance and even Health Savings Accounts to meet patient demands.
They have a hard time listening to the ideas and innovations offered in the U.S. because they have been so poisoned against our system by the constant drumbeat tearing it down. But the U.S. system is flexible and adaptive, and these ideas and innovations could be beneficial.
No one country has a lock on the right solution. But recognizing that all of us share similar problems would be a big step toward exploring solutions enabled by a more efficient and rational use of resources and a more informed, engaged patient population.
Recent News Articles and Studies
It's Hard to See Doctors Favoring Less Pay, Care, More Paperwork
Obama's Bad Prescription
A Primer for Follow-On Biologics
A Shared Responsibility: Advancing Toward a More Accessible, Safe, and Affordable Health Care System for America
47 Million and Counting: How the Health Care Marketplace Is Broken
The Common Sense Guide to Health Savings Accounts: What You Need to Know about High Deductible Health Plans and Health Savings Accounts
Grace-Marie Turner, Galen Institute
Omaha World-Herald, 05/20/08
A new study shows that a majority of U.S. physicians surveyed say they would favor legislation to establish national health insurance, but doctors may be a bit less enthusiastic if they knew more about where such a system would take us, writes Grace-Marie Turner. U.S. doctors would surely face a huge pay cut if government were in control of as much of the health sector as it does in other developed countries. The average physician in the U.S. makes between $200,000 and $300,000, while his or her European counterpart makes much less than half of that ($116,000 in France, $81,000 in Italy, and $56,000 in Germany). The government would also decide what drugs, medical procedures, and other treatments will be available — or not, writes Turner. So when we hear that nearly six in ten doctors support national health insurance, that most likely means that the other four in ten know enough to be concerned.
James C. Capretta, Ethics and Public Policy Center
National Review Online, 05/29/08
Sen. Barack Obama's health reform plan would sow the seeds of destruction for private health insurance, writes Jim Capretta. Sen. Obama's plan would create a new publicly-run insurance plan modeled on Medicare, with the federal government acting as the insurer and collecting premiums from enrollees. Large employers might, for a time, continue providing health insurance for their workers. But with each passing year, the premium differential between private plans and the public option would grow and induce additional migration from private to public insurance, he writes. This would, in turn, increase the government's ability to impose lower prices, further widening the premium gap. The tragedy is that price controls are only effective if they control and limit the supply of services. In time, he warns, that means waiting lists and other barriers to accessing care, along with skyrocketing costs to the taxpayer.
Sally Pipes, Pacific Research Institute
Conventional generics have proven effective at reducing health care costs and increasing medical access. Unfortunately, the same model simply cannot be applied to follow-on biologics, writes Pipes, because they are much more complex. For example, Herceptin, a popular anti-cancer biologic, is comprised of about 25,000 atoms — more than a thousand times as many as Tylenol. Further, biologics can combine several patents — one on the molecule itself and numerous others on the process for creating it. A longer period of data exclusivity and financial protections are needed if future medical breakthroughs are to continue.
America's Health Insurance Plans, 05/29/08
The nation's total health care expenditures could be reduced by $145 billion by 2015 by implementing five initiatives outlined by AHIP, according to a PricewaterhouseCoopers analysis. They include:
- Giving providers, patients, and purchasers access to information that compares the effectiveness and costs of treatments
- Encouraging widespread adoption of health information technology
- Reforming the legal system
- Rewarding safety, value and effectiveness in payment policies
- Deploying enhanced disease management, care coordination and prevention programs.
Ronald A. Williams, Aetna Inc.
Senate Committee on Finance, 06/10/08
Solving the problem of the uninsured will require addressing the interrelated areas of cost, quality, and access, said Aetna Chairman and CEO Ronald Williams in testimony before the Senate Finance Committee. Williams discussed the systemic challenges that stand in the way of achieving universal coverage and described Aetna's experience in grappling with them. For example, Aetna has been a leader in increasing transparency, providing new tools to control costs and enhance quality. Aetna is also focusing on wellness, prevention and early intervention. Strategies include providing access to preventive care without co-pays and deductibles, promoting smoking cessation and weight loss programs, and offering new disease management tools.
Roy Ramthun, former Treasury official, senior health policy advisor at the White House, and now president of HSA Consulting, has updated his guide to Health Savings Accounts, and he also has released a version of the guide in Spanish. The "Buyer's Guide" provides advice, reminders, and things to consider when examining an HSA plus answers to frequently asked questions, definitions of terms, and a description of additional resources available throughout the Internet.
Forum on Drug Safety and Post-Market Evidence
The Brookings Institution Event
Friday, June 13, 2008, 8:30 a.m. – 12:30 p.m.
Healthcare and Markets
Acton Institute Event
Friday, June 13, 2008, 2:00 p.m. – 3:15 p.m.
Grand Rapids, MI
Grace-Marie will discuss market-based solutions to health care consistent with Christian anthropology and ethics.
Prepare for Launch: Health Reform Summit 2008
Senate Finance Committee Event
Monday, June 16, 2008, 8:30 a.m. – 4:30 p.m.
Solving the Medicare Crisis with Personal Accounts
The Hudson Institute Center for Employment Policy Event
Tuesday, June 17, 2008, 2:30 p.m. – 3:30 p.m.
Responsible Health Reform: Competition, Innovation, and Individual Control
American Enterprise Institute Event
Thursday, June 19, 2008, 9:00 a.m. – 10:00 a.m.
A Health Care Debate: What is the Best Way to Control Costs, Improve Quality and Expand Access?
National Center for Policy Analysis Event
Friday, June 20, 2008, 11:30 a.m. (Lunch included)
Center for Medicine in the Public Interest Reception
Monday, June 23, 2008, 6:30 p.m. – 8:00 p.m.
New HSA Rules Webinar
Wednesday, June 25, 2008, Noon EDT
Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features a commentary by Grace-Marie Turner on the major developments and issues of the week as well as summaries of writings by participants in the Health Policy Consensus Group and other articles of interest from the health policy world, plus announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at www.galen.org.
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