Mr. Moderate

I wrote an earlier page about the problem with our current health care system and the Republican and Democrat proposals to make changes to it. On this page, I look at some ideas to actually remedy the problem.

Every “first world” nation except the United States has some form of universal health care, and even some “second world” and “third world” nations do as well. One nation that is usually held up as a shining example next to the United States is the small Latin America country of Costa Rica. Here is a summary of the situation:

Statistics from the World Health Organization’s “The World Health Report 1995″ place Costa Rica third in life expectancy in the world, sandwiched neatly behind Japan and France and ahead of Great Britain and the United States; and with a per capita income about one tenth that of the other four. Certainly, some reasons for this can be found in the Costa Rican less-than-frenetic lifestyle, the healthy, fresh, non-preservative laden foods of the country, the tropical climate–Costa Rica seems to be a healthy place to live. But if one looks simply at the life issues, so are many other places on the globe. Costa Rica is a healthy place to live because its government continues a long-time commitment to affordable access to one of the finest health care systems in the world for each and every citizen. In a United Nations study conducted in the 1980s, Costa Rica’s medical system was first in Latin America and ranked near the United States and Canada among the 20 best in the world. Things are pretty much the same today [1995].

If you dig a little deeper in that article, you discover that the underlying infrastructure in Costa Rica bears a strong resemblance to the Canadian health care system:

With a government-sponsored network of 29 hospitals and more than 250 clinics throughout the country, the Caja Costarricense de Seguro Social (CCSS) has primary responsibility for providing low cost health services to the Costa Rican populace. Though presently somewhat overburdened, like most of the Costa Rican infrastructure, this system has worked well for Costa Ricans for the past 50 or so years. Open not just to Ticos [Costa Rican nationals], the CCSS provides affordable medical service to any foreign resident or visitor. Foreigners living in Costa Rica can join the CCSS by paying a small monthly fee–based on their income– or they can buy health insurance from the State monopoly Instituto de Seguro Nacional (INS) valid with over 200 affiliated doctors, hospitals, labs and pharmacies in the private sector.

Many of the country’s highly trained physicians and some dentists work in the mornings for the CCSS and have their own office and clinic hours in the afternoons and evenings. While private care is more expensive than that offered by the same doctors and surgeons through the CCSS, the price is still way below that of the average office visit in the States. For example, a private office visit to almost any medical specialist costs around US $30. Continued treatments for diagnosed problems will vary but will almost always be considerably less than comparable treatment in the United States. Dental work, such as simple fillings run between $12 and $15. I recently had opportunity to compare costs for periodontal services in the States and here. For considerable work in the States, the patient was quoted $7,000; the same work performed in Costa Rica by a U.S.- and French-trained periodontist using the same materials and techniques was $1,500.

A comparison between the US and Canadian health care systems seems to offer at least some hope, although there are also some cautions:

Canada and the United States had very similar health care systems in the early 1960s. The two neighbours are now a dramatic contrast. Canada has one of the world’s most fully socialized health care systems while the United States is one of only two OECD countries (with Mexico) not to have some form of guaranteed health insurance for all citizens.

The governments of both nations are closely involved in the delivery of health care. The central structural difference between the two is in health insurance. In Canada, the federal government is committed to providing funding support to its provincial governments for health care expenditures as long as the province in question abides by accessibility guarantees as set out in the Canada Health Act, which explicitly prohibits billing end users for procedures that are covered by Medicare. In the United States, federal and state government funding of health care needs of its citizens is limited to Medicare and Medicaid insurance programs for the eligible senior, very poor or disabled persons. Health insurance must be paid for privately, otherwise, and, in most cases, is provided by a person’s employer.

The Canadian system is 65 - 70% publicly funded, though a substantial portion of the services is provided by private corporations, namely the privately incorporated medical practices of most physicians (however, despite the fact that many doctors will refer to their “private clinics”, these are in fact merely private corporations that derive nearly all their revenue through government billings). Although some doctors work on a purely fee-for-service basis (usually family physicians), some family physicians and most specialists are paid through a combination of fee-for-service and fixed contracts with hospitals or health service management organizations.

…

In Canada, every citizen has coverage, but access can still be a problem. Based on 2003 data from the Canadian Community Health Survey, an estimated 1.2 million Canadians do not have a regular doctor because they “cannot find” one and just over twice that number do not have one because they “haven’t looked”. Those without a regular doctor are 3.5 times more likely to visit an emergency room for treatment. Complaints of long waiting lists for some services are also common. For example, in a survey of hospital administrators conducted in Canada, the United States, and three other countries, 21 percent of Canadian hospital administrators admitted that it would take over three weeks to do a biopsy for possible breast cancer on a 50 year old woman. Less than one percent of American administrators made this claim. according to the same survey, fifty percent of Canadian administrators versus none of their American counterparts stated that it would take over six months for a sixty-five year old to undergo a routine hip replacement surgery.

In the United States, the majority of citizens have health insurance that is related to employment or purchased directly. The federal government does not guarantee universal health care to all its citizens, but certain publicly funded health care programs help to provide for the elderly, disabled, and the poor and federal law ensures public access to emergency services regardless of ability to pay. Those without health coverage are expected to pay privately for medical services.

So, it would seem that Costa Rica has found the proper balance between a government monopoly health care system and a dysfunctional totally-private system such as that found in the United States. So, what should the United States do?

A fully-comprehensive answer seems impossible to achieve at this point in time. But a good start can be made if we do the following things:

1. Create a chain of government-funded health care doctors and hospitals, building first in the biggest cities which have the greatest unfilled needs for health care services, and gradually expanding until every single metropolitan area has at least one central facility of this type.
2. Look at the current hospital chain run by the Veterans Administration as a model for where to start; veterans should get the best possible publicly-provided health care, but ordinary citizens who lack private insurance should be not-very-far behind as second-best.
3. However, staff the new health care chain in non-traditional fashion, with as large an emphasis as possible on health care delivery by the lowest level competent staff (i.e., nurses for most routine needs; people would never see a doctor during most routine office visits).
4. Negotiate medical supply and drug purchase contracts with any governmentally-approved drug supplier in the world based upon the lowest delivered cost to the government, and assist any such supplier to obtain FDA approval for delivery and use within the United States.
5. Eliminate the need for medical malpractice insurance for government staff by a government guarantee of corrective action and compensation that can be based upon a rule set similar to that employed by workers compensation laws.
6. Large government-funded health care facilities would be “cities within cities,” providing room, board, and other basic needs for staff members, thus allowing greatly-reduced salary costs and greater use of hospital facilities (the cafeteria, for instance).
7. Foreign-trained health care practitioners would be encouraged to work in this system alongside US trained practitioners.
8. This system would be phased in as a parallel system to the existing health care system, and would be expected to initially take over all “non-emergency” visits to emergency rooms (after triage by an existing emergency room, a patient would be transported to, or otherwise encouraged to transfer to, the related publicly-provided hospital facility).
9. Require any health care practitioner who receives any kind of government aid in obtaining their professional training to spend a minimum amount of time working in the public system before they become eligible to obtain licenses to practice privately.
10. Have this government-run system “fit in” alongside the current private health care system, accepting insurance coverage as a provider from any existing source of payments (Medicare, Medicaid, or private plans).

The above is necessarily an incomplete list. But it is a start which recognizes the imbalance in the supply of, and demand for, health care services as the primary factor contributing to the huge costs of health care within the United States as compared with other countries (like Canada and Costa Rica). When the price is too high, the response by a free market is to either raise the supply or reduce the demand. However, as the demand for health care services is among the most-inelastic of consumer demands, only the supply side is susceptible to government intervention in an attempt to remedy the obvious imbalance in the marketplace. The above proposal is but a sketch of a method of reducing costs by increasing supply and controlling the internal costs within the new supply system.

This is an extremely complex topic. But let us at least try to do it some justice by viewing a few takes from the political perspective. First, we have a new plan from Hillary Clinton, candidate for President:

1. Install a Groundbreaking National Prevention Initiative to Reduce the Incidence of Obesity and Diseases Such as Diabetes and Cancer that Impose Huge Human and Financial Costs [MY RESPONSE: this hardly adds anything new to the current system as insurers already engage in managing the care of insured patients to try to motivate them into taking such actions.]
2. Institute a New “Paperless” Health Information Technology System [MY RESPONSE: As the New York Sun points out, this "is such a matter of bipartisan consensus that it has been a pet project of Karl Rove."]
3. Transform Care of Today’s Chronically Ill Population to Improve Outcomes [MY RESPONSE: again, this adds little to the current system.]
4. End Insurance Discrimination to Help Reduce Administrative Costs [MY RESPONSE: this is an absolutely mandatory reform which is controversial only because of the huge costs entailed by treating chronically-ill people under the current system.]
5. Create an Independent “Best Practices” Institute to Empower Consumers, Providers and Health Plans to Make the Right Care Choices and Invest in Research for New Treatments [MY RESPONSE: Not a bad idea, but if it only saved North Carolina $80 million per year, it isn't going to put much of a dent in a multi-trillion dollar health care bill.]
6. Implement Smart Purchasing Initiatives to Constrain Excess Prescription Drug and Managed Care Expenditures [MY RESPONSE: Again, not a bad idea. But can it pass once the drug company lobbyists get near it?]
7. Put in Place Common-Sense Medical Malpractice Reforms [MY RESPONSE: The devil is in the details, and her details are sparse. As the New York Sun points out, trial lawyers are among her biggest contributors, so she is probably greatly constrained in what she can do there.]

So, what does the right-leaning New York Sun have to say in reply?

Delve into the details, however, and it becomes clear that, 13 years after her health care plan failed, Mrs. Clinton hasn’t lost her instinct for socialized medicine. Her version of medical malpractice “reform” doesn’t cap punitive damages. It doesn’t create specialized medical courts, and it doesn’t create a “loser-pays” system for legal bills. Doing any of that would actually confront the problem, but it would also risk alienating a key Democratic constituency, trial lawyers. Instead she proposes to allow doctors who admit their errors to settle with patients — not a bad idea, but somewhat beside the point.

She proposes to create new restrictions on commercial free speech — and attack the already ailing newspaper and magazine industries — by saying she would “limit direct-to-consumer advertising” by drug companies. It’ll be interesting to see how Mrs. Clinton’s base in the abortion-rights community reacts to the idea of restricting, say, Duramed’s advertising of Plan B, the emergency contraceptive.

The end comment about “Plan B” is off-base as “Plan B” is an over-the-counter drug not requiring a prescription. I do not believe Senator Clinton’s proposals are designed to affect that kind of advertising. I would definitely support restriction or elimination of direct-to-consumer advertising for prescription drugs for which a visit to the doctor is necessary. The only form of advertising I would allow for prescription drugs would be something like “if you have this condition, you ought to see your doctor to explore which treatment options might be able to help you.” Some minimal (and very restricted) naming of the drug and drug company paying for the ad could be allowed. And the quantity should be greatly restricted as well. I’m certain that television advertising costs were one of the largest costs for any of the Erectile Dysfunction drugs (Viagra, Cialis, etc.). A public information advertising campaign ought to be extremely limited as to the type, quantity, and frequency of advertising it can insert, all with the goal of reducing the cost to the consumer, who pays for everything in the end.

The other thing I’m absolutely against is “loser pays.” The last thing an injured patient needs is a bill from an successful (and very expensive) law firm hired by an insurance company just because the insurance company was willing to pay the law firm hundreds of thousands of dollars to defend its client and managed to win for whatever reason. There are already ways to obtain payment for the filing of “frivolous” lawsuits. Additional protections for “frivolous” suits are not needed. And certainly, further disincentives for injured people to sue are similarly not needed. On the other hand, having trial lawyers end up with 30% to 60% or more of any judgment is clearly an outrage. I would strongly support the elimination of contingency fee arrangements and the use of judge-approved hourly rate bills in their place. (Those are what you would get with “loser pays” in any case.) If the patient’s lawyer loses, he gets nothing, as it exists now. If the lawyer for the injured patient wins, he does not get a piece of the award, but instead gets an extra award of fees from the losing insurance company, with the judge approving the award under current systems that already exist for cases where legal fees are allowed. That might motivate more insurance companies to settle rather than take cases to trial.

Finally, punitive damages are rarely an issue in medical malpractice cases. To win, the injured party must prove that the doctor deliberately intended to injure the patient. Most punitive damage awards in health care cases arise when a patient sues their own insurance company for a failure to give them the standard of care called for by their insurance policy. Even then, those cases are few and far between, and very tough to win. They are not part of the health care cost crisis by any means. I would guess that the New York Sun is just being a flack for the insurance companies who advertise in their pages.

And the biggest problem of all is that Senator Clinton’s “socialized medicine” proposal is really nothing of the sort. It simply attempts to arrange for transfer payments so that everybody’s health care insurance premiums are paid. That is not what is needed to solve the health care crisis in the United States. Not by a long shot!

And yet, Senator Clinton is supposed to be a national leader on the health care issue? Oh, who will protect us all from such a leader? Not the New York Sun and the businesses it flacks for, that’s for sure!