It’s a fiery Medblogger Deathmatch, with an initial comment on health care reform by Dr. Rangel, a response by Matthew Holt, and a follow up by Dr. Rangel. Since I’ve got another several hours of plane waiting and flying, and I’m done with finals, I’ve got plenty of time to respond. Nothing better than a policy rant! I’ll start with Dr. Rangel’s first bit.
bq(quote). It seemed like a good idea 80 years ago but as we all know, communism failed and Dr. Woolhandler is just another in a long line of people who should be wearing “Those who are ignorant of history are doomed to repeat it” Tee shirts.
Although the health care industry does not entirely fit the economic model for a free market it does have enough elements of a free market system to make it vulnerable to unintended consequences of a single payer system. The prescription drug coverage alone would make the Federal government the only consumer for medications and this would effectively impose price controls on this industry. The government would decide which drugs it will pay for and how much it will pay for them much like many insurances and HMOs do now. There would invariably need to be these restrictions because -with a single payer system there is no longer a free market to set prices and without price restrictions the drug companies would change the government what ever they wanted. Drug prices would skyrocket out of control.
It’s a common misperception that single-payer (aka national health insurance, aka Medicare for All) is communism, or anything like it. It’s a health administration system used by a lot of industrialized nations, most of which are capitalist–Canada, Taiwan–to name a few. And on the “drug prices” point–almost every other industrialized country has some sort of bulk purchasing program, and they don’t seem to be breaking big Pharma’s bank. (And I have yet to see any drug company charge a government “what ever they wanted,” causing drug prices to “skyrocket out of control.” That’s simply not happening, Dr. Rangel.) If you’re curious how Canada sets its drug pricing, there’s an excellent piece in last week’s NEJM that explains the system. Drugs are set by Canada’s Patented Medicine Prices Review Board (PMPRB), which “tether(s) the price of new medications both to those of existing medications and to the price of other consumer goods.” “Me-too” drug prices are limited to the price range of the already existing drugs, and “the prices of ‘breakthrough’ drugs with no related agents on the market are limited to the median price charged for the drug in the United States and selected European countries (where drug prices are a great deal lower than in this country).”
bq(quote). Strict price controls could significantly effect innovation and competition within the prescription drug industry… It costs a drug company potentially hundreds of millions of dollars to investigate hundreds of compounds through hundreds of clinical trials just to bring one product to market and hope that it pays off.
And they spend three times that amount on marketing. If you want to follow that logic, couldn’t we have even more effective drugs in our palette if they spent some of their marketing and administration money on research and development?
bq(quote). Part of the reason is because competition and innovation are lost. The other part is that the single payer underpays in order to contain costs. Dr. Woolhandler doesn’t seem to understand that this happens when she was asked if rich and middle-class people would accept a single payer system
Single-payer underpays? By what measure? Canadian physicians are still some of the highest paid professions in the country–while specialists’ salaries do typically decrease under single-payer, general practitioners’ incomes remain about the same. (And in one study, 60% of physicians were willing to take a salary cut in order to have less administrative complexity.)
bq(quote). Thus the U.S. government health service will begin to look like the National Health Service in the UK or the socialized health service in Canada.
Can we get this straight, at least in the medblogger community? Single-payer is entirely different from the UK system. You can’t even compare the two. In the UK, doctors are employed by the government. In Canada, the government pays and administrates, but the doctors and hospitals are still private. It’s not a “socialized health service.” It’s “socialized” insurance, if you want to use the word.
bq(quote). they have no incentive to opt for outpatient care when they don’t pay anything either way… And what of those stories about waiting lists being months to even years long in Canada and the UK just to get an operation or procedure that most patients in the U.S. wait only days to a week or so for?
There would still be plenty of incentives to opt for outpatient care. Triage wouldn’t go away. If you have a sore throat, or a weird rash, are you really going to spend several hours waiting for the more emergent cases to go ahead of you in the ER, or will you go see your personal physician, who knows you, your history, and your family? Who really enjoys going to the ER, besides the chronically ill and hypochondriacs? And on waiting lists: short waits in non-emergency settings aren’t generally a bad thing. They keep the system in a constant queue, so that operating rooms aren’t sitting empty and unused. And if we maintained our levels of current health spending, waits would be much shorter than Canada’s.
bq(quote). Her solution like any other socialist responding to criticism of poor quality in nationalized health care is to raise funding, i.e. raise taxes. But how high?
Most funding schemes (Excel) for single-payer involve a 2% progressive income tax, and progressive payroll taxes. Technically, because the money would be going to a government entity, it’s a new tax. But the payroll tax is not any “new” money–it’s simply the money that employers are currently paying to HMOs to insure their employees, paid to the single-payer, instead of a private HMO.
bq(quote). Dr. Woolhandler blames “administration costs” especially in private insurance for the soaring cost of health care in this country. Administrative costs and overhead in many HMOs and private insurance companies can be as high as 30% but this can’t be the major reason for such massive increases in health care costs in this country. Medicare and Medicaid are our largest health care providers and they have very low administration costs, on the order of about 4% (lower than Canada’s governmental health care administrative costs). Does Dr. Woolhandler expect us to believe that the administrative costs of private insurance is what is responsible for the increases in health care costs?
If you take a look at the growth of administrators over the past 30 years (slide 32), it’s exponential. And it’s not administrative costs that are causing the massive increases in costs, but they do greatly waste money that could go toward patient care. There are a number of reasons why costs are going up, but our health care system is certainly one of them. Take a look at Canada’s health care cost increases–before and after they implemented their medicare program (slide 127).
bq(quote). Partly out of the fear of lawsuits and partly because the patient and their family expects it doctors inundate patients with a ton of radiologic scans, blood tests, biopsy’s, specialist consultations, and monitoring for even the most basic hospital admission.
Malpractice fees are much lower in Canada, too. There are many reasons why–including the fact that patients are less likely to sue their physicians if they know and trust them (you get to choose your doctor in Canada, not from an HMO list), and if people know that they’ll be guaranteed health care in the future, they’re less likely to sue to have money to take care of a patient who may have been injured by a physician.
bq(quote). The fact that there are tens of millions of Americans who have no health insurance does not mean that they won’t get treated when they need to. By Federal mandate all ERs and hospitals in this country are obligated to provide emergent and stabilizing treatment to everyone (including noncitizens) regardless of their ability to pay and there are numerous publicly funded hospitals and clinics that are able to provide services for these patients.
You’re an ER physician, Dr. Rangel, but you’ve never heard of ambulance dumping? It happens all the time in Chicago. An ambulance takes a patient to one hospital, they don’t have insurance, so they dump them at another one (usually Cook County). And I can’t imagine where the idea’s coming from that there are numerous publicly funded hospitals and clinics that provide emergency services. The few that are left are barely making it, and are generally one step away from closing their doors permanently. You said it yourself–wouldn’t it make sense to have the uninsured insured, get them preventative care, and give them a primary care physician to see instead of a ER doctor every time they get a cold?
bq(quote). And I don’t understand Carey’s position that America’s extravagant spending on health care is not justified because we lag behind other countries in life expectancy and infant mortality. We do have higher infant mortality rates (6.69/1000 live births vs. 5.45) and slightly shorter life expectancies (77.4 years vs. 77.99 years) than the UK. But these statistics are highly influenced by such non-health variables as genetics, immigration rates, sanitation, access to healthy food and water sources and so it shouldn’t be surprising that they don’t correlate perfectly with health care spending (if it did then life expectancy for Americans would be about 100!).
Life expectancies are similar in the UK. But they’re much better in Japan, Sweden–most of the countries with some sort of national health program. And try looking at Canada’s infant mortality. Before medicare, theirs was higher than the US’s; after medicare implementation, it dropped below the US’s (slide 113).