I realize that I'm a healthcare policy nerd and that most folks find this stuff boring. I try to avoid talking about policy with most people and limit most of these kinds of discussions to friends and family members who are fellow "political junkies". Still, it never hurts to educate yourself, especially with an election coming up. The Kaiser Family Foundation (highly respected and credible source for healthcare policy issues) has developed an excellent website for comparing and contrasting the major candidates’ healthcare policy platforms.
If you’re already annoyed or completely bored at this point please don’t read the rest of this and go directly to the website. http://www.health08.org/sidebyside_results.cfm?c=5&c=11&c=16
I've been tracking this stuff pretty closely. To a certain extent it's all fairly predictable. The Republican candidates mainly talk about increased competition and tax incentives for individual purchasers. The major Democratic candidates all offer proposals aimed at achieving universal health insurance coverage (not "socialized medicine"! ...whatever that means?), generally by strengthening employer-based coverage and providing access to government-sponsored plans.
There's been a lot of media coverage lately about the big dispute among the Dems, which is about whether or not to include a mandate that everyone must have insurance (Clinton, and former GOP candidate, Mitt Romney, support the idea, Obama opposes it).
I'm basically a right-leaning moderate, so the very idea of such a mandate makes me squirm. However, as a practical matter, it's absolutely essential for these kinds of "universal coverage" models to work. Clinton and Obama propose new federal regulations which would require health insurance companies to insure people on a guaranteed issue, community rated basis. (Guaranteed issue means they can't turn you down for coverage. Community rating means everyone pays the same premium, regardless of health status.) The practical problem with both of these well-intentioned concepts is that healthy people quickly figure out that they're paying artificially higher rates to subsidize coverage for unhealthy people. Many of them, therefore, opt out of the system and decide to take their chances, rather than "overpay" for coverage. This creates a vicious cycle of spiraling rate increases, as the risk pool steadily gets less and less healthy and more and more people find coverage too expensive to purchase.
An individual mandate solves this problem. By forcing everyone to have coverage, healthy or not, you stabilize the risk pool. In my semi-educated opinion, the guaranteed issue, community rated model is simply unsustainable without either a mandate or some form of single-payer national coverage. Since the latter seems unlikely to happen in the foreseeable future, mandates are probably the way to go.
http://www.health08.org/sidebyside_results.cfm?c=5&c=11&c=16
8 comments:
very insightful. I appreciated the link. it's nice to see what each plan looks like. So often I feel like they focus WAY too much on making each other look bad instead of telling us what they are going to do to help us.
Well done jeff, I just learned more right then then I have in the last year of following the whole race pretty close. I don't know if that says something aboout me or they way things are ran either way thanks.
Non-educated cousin,
Greg
Very good analysis. It's nice to hear the opinion of someone who actually knows how the health care industry works. Thanks.
Jeffrey,
You're not boring...
Actually that was really helpful. I like "listening" to you talk about health care.
Stupendous Jeff! I thoroughly enjoyed your health care post.-Nate
Hi Jeff,
Thanks for your post. It's extremely helpful to have someone "on the inside" talk about this issue. I've been a proponent of the single-payer system for a while, just because it seems like it would solve some of my own personal health care issues. You mentioned it briefly in your post, but I'd be interested in hearing what you thought about the viability of going the single-payer route, (not politically but functionally).
-Matt
Hi Matt,
I hope that everything is going well for you and Amanda. I’ve always enjoyed hearing your perspective on important issues and I believe that we probably see eye-to-eye when it comes to healthcare. I’m not sure that I’m a proponent of a single-payor system, but I do believe that universal health coverage is a step in the right direction. I believe healthcare is a basic human right and should, therefore, be accessible to everyone, regardless of health or economic status. Anyway, I hope I can help in a small way to make this a little less murky for you.
I think it may be useful to compare our system to that of countries who have already implemented a single-payor system, such as Canada. First, I think it’s important to understand the inner workings of health insurance. There are four main functions of a country's health insurance system: revenue collection, risk pooling, purchasing, and social solidarity. Revenue collection is, of course, the process of collecting health revenues through taxation, premiums, out-of-pocket payments, or other methods such as deductibles. Risk pooling is the aggregation of health insurance revenues for groups of individuals to protect each from the full cost of health care in the event of illness or injury. Purchasing is the system by which insurers procure health services from providers for their beneficiaries. Finally, and perhaps most importantly, social solidarity is the sense of unity, interdependence, and community among members of a society that can be affected by mutual participation in a health insurance system. I’ll attempt to draw comparative advantages of single-payor and multi-payor systems, like that of the U.S.
Revenue Collection:
Single-payer systems usually have an advantage over multi-payer systems in the efficiency of collecting revenues, overall cost control, and the capacity to subsidize health care for low-income individuals. Multi-payor systems can limit the amount of government control over revenue collection.
Risk Pooling:
Single-payer systems, since they have a single risk pool, do not need to take measures to counteract adverse selection. Adverse selection is the tendency for only those who will benefit from insurance to buy it. Specifically when talking about health insurance, unhealthy people are more likely to purchase health insurance because they anticipate large medical bills. On the other side, people who consider themselves to be reasonably healthy may decide that medical insurance is an unnecessary expense. Risk selection is a potentially serious problem in multi-payer systems. Several methods exist to prevent adverse selection, but they often have a considerable data burden, can be expensive, and are not entirely effective in practice. However, if risk selection is avoided, multi-payer systems have the capacity to tailor benefit packages to specific risk groups.
Purchasing:
Single-payor insurance systems are able to take advantage of being the sole purchaser to obtain better prices. This is particularly apparent with Canada’s ability to use their leverage as a single-payor. The danger is that if prices are lowered too far on services the under-provision of care could be encouraged. In addition, single-payor systems are able to exert strict control over the products and services covered. However, the control over services available could be used to selectively encourage the provision of appropriate, cost-effective treatments and discourage inappropriate or non-cost-effective care. Multi-payor systems lack this degree of purchasing power but are able to provide a more diverse set of insurance products to beneficiaries. This diversity and competition for beneficiaries may stimulate innovation in approaches to insurance. The design of these products, however, may not follow a long-term perspective on health since beneficiaries may change insurers.
Social Solidarity:
Single-payor systems are more likely to create a sense of national solidarity through national redistribution of resources and legitimization of the government. However, governments might sometimes gain more support for public insurance systems by allowing better-off individuals multiple insurance options. Canada, however, does not allow individuals to have private health insurance or pay out-of-pocket. Multi-payor systems can also create solidarity among smaller groups at the possible expense of national solidarity. As you know, our nation is very individualistic, which, in my humble opinion, is perhaps the largest barrier to implementing a single-payor system.
Jeff’s Opinion:
I like the idea of a single-payor health system, but I have a few reservations. (I especially like the idea of a single-payor being able to negotiate drug prices. Right now in the U.S. such an action would be illegal under our current laws.) Single-payor systems, like any health system have their problems. As you know, Canada is infamous for their long waiting periods to receive essential, possibly life-saving, medical procedures. The long wait times are a result of strict managed care provisions and bureaucracy. Canada is forced to ration care due to the lack of resources, including labor, available to them. This provides great savings to the country. However, Canadians who are very sick are forced to come to the U.S. to access care. They do this because of their laws that prohibit citizens to purchase services through private insurance or out-of-pocket. Alright, I’ll stop! I could go on forever about this stuff, Matt.
I hope this helped a little bit. Let’s hope that Obama gets elected this fall so that we can begin to address healthcare reform. I actually think that Clinton’s plan makes the most sense, but it’s not looking so good for her. Obama just needs to get over the mandate issue and adopt Hillary’s plan! He does not seem to be as polarizing and would be more effective in pushing this kind of controversial and monumental legislation through Congress.
Talk to you later.
Jeff
Thank goodness you're so smart, Jeff. It really helps the rest of us :)
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