Headlines – 3/29/08

• The first national report on patient’s views of hospital care was released this week. Results were mixed. The most interesting aspect of this news is just how little we know of the quality of our health institutions.
• Hillary Clinton adds some details to her health care plan, most significantly a general cap on health care costs based on income. No one would pay more than 10% of their income on health insurance.

My Prescription

In the past I’ve been asked to lay out my health care plan straight and clear as if I was riding in that magical bus with McCain himself. Over the next few posts I am going to lay it out there for all to critique.

But first I must give credit to where credit is due. All proposals are built on previous proposals, previous ideas, previous studies, etc. Mine is no different. In order to do the academically responsible thing – the transparent thing – I must first cite an influential paper. The paper comes from – make sure you are sitting – The Heritage Foundation.

For those who don’t know the Heritage Foundation it is a staunchly conservative think-tank, and I am well, not staunchly conservative. I lean a tad left, but I liked what Stuart M. Butler has to say in his paper, “Evolving Beyond Traditional Employer-Sponsored Health Insurance.”

The basis of “my prescription” is that the foundation of our health care system is flawed. Superficial changes alone (even if they are big changes) will not cut it. Currently, our system is an employer-based system with a large safety net underneath it. The problem is that as the employer/employee relationship has evolved and the old employment-based health care system no longer works. It is leaving more and more people out to either fall into the ever growing safety net, or in the case of 45 million people, straight past the safety net.

So before we consider individual mandates, SCHIP renewal, privatization of Medicare and Medicaid, consumer-driven health plans, or whatever other fix-of-the-day let’s fix the real problem. In future post I am going to discuss why we have an employer-based system and why it no longer works. I’m going to argue that employers should no longer be sponsors of health insurance, but should act as facilitators. I’m going to discuss the need for tax reform. I’m going to argue that these changes should occur first, and then we should move toward universal coverage.

Costs Put into Perspective

I was in class last night and my professor quoted a statistic:

“For the first time insurance premiums for a family are now higher than the gross income of a person working full-time on the minimum wage.”

Let’s assume that this is a family of four, based on the federal minimum wage, and that these are nationally averaged insurance premiums. And for skeptics out there, let me be forthwright. I have not researched whether this claim is true, but my professor is a leading health care policy expert and is very well respected. The point is that costs have gotten prohibitive and this has monstrous ramifications. Think about one thing. If we are to have universal coverage without significant cost savings we will need a huge redistribution of wealth.

Huge!

There my few friends is why creating such a system is politically so difficult.

UPDATE:
I did some quick off the cuff calculations: Minimum wage is $5.85/hour * 40 hours *52 weeks = $12,168 annually. According to the Kaiser Family Foundation in 2006 the average annual premium for a family was $11,480. Lets assume that premiums are a bit higher in 2008 as annual increases range from 7-13% (roughly $13,000 assuming a 7% increase annually). It seems that this assertion above is true, or – at least for the most skeptical – very nearly true.

Allegations

As the Democratic nominating process extends into the spring the debate on health care policies has intensified. Health care was front and center at the Ohio and Texas debates thanks to Clinton’s persistence.  During these debates, and elsewhere on the campaign trail, both candidates have made claims and allegations against the others health care policy. Despite the media’s portrayal of the campaigns the debates have been relatively well- mannered and issue oriented.  I hope it remains that way.  However, each has made claims, and I hope to evaluate some of these claims as truths, stretched-truths, partial-truths, or complete falsehoods.

Clinton: Obama’s plan will leave 15 million people without health insurance.

That number comes from a MIT economics professor who stands by the fact that Obama’s plan will not cover everybody, but has distanced himself from the 15 million number – an educated guess.  The truth is neither of the plans provide enough detail to come up with concrete numbers. Clinton has taken a small step backward on this.  She now says things like, “15 million or so.”  The truth is that Obama’s plan is likely to cover less than Clinton’s, but using the 15 million stat is a bit of a stretch.

Stretched-truth, partial-truth

Obama: My plan will provide universal health care 

Clinton: My plan will provide universal health care

Not really.  Obama’s plan will leave people out.  So will Clinton’s.  Only a single payer system will truly include  every single American.  Clinton’s mandate will coerce more people to buy health care, but unless the penalty for not getting insurance is high some will choose to still not get insurance.

Stretched-truth (maybe a falsehood)

That leads to…

Obama: Clinton’s plan will force people to buy insurance that they cannot afford.

In a sense Obama is correct.  Clinton will create strong disincentives to not have health insurance.  Crazy double negative, but the most accurate phrasing.  We don’t know the extent of the disincentives, but they will be there. The question is what is affordable. Both Clinton and Obama will have tax credits based on income that should make insurance “affordable,” but Washington’s sense of affordable may be different than your sense of affordable.  What do people value?  Under Clinton’s plan the government will tell you how to value health insurance.  There are very good reasons for a mandate, but Obama is technically correct in his assertion. Her plan, unlike Obama’s, will force people to buy insurance who would not otherwise – good or bad. 

Partial-truth     

Obama: My plan will lower health care premiums more than any other candidates’ plans.

His re-insurance scheme should lower costs more than Clinton’s. Clinton will lower costs by getting more people (healthy people) into the insurance pools, but I think the Obama’s re-insurance scheme will be more effective in lowering costs. Both plans lack the details to be sure of this claim, but all in all, I think Obama is correct on this count.

Truth 

I invite you to throw out other claims made by our candidates with or without an analysis of the truth behind these claims.  We can discuss how true the candidates are being as they discuss U.S health care.