Wednesday, July 27, 2011

Health Reform: You Can Please Some of The People Some of The Time, And All of the People Some of The Time, But You Cannot Please All of The People All of the Time

You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.

Abraham Lincoln (1809-1965), To a caller at the White House, Lincoln Yarns and Stories(1904)

Americans take pride in the fact that their society – including the health care system – is characterized by a pervasive pluralism. Government – federal, state, and local- does not dominate the economy, the educational system, or the health care delivery system. Most Americans oppose “big brother”; government should be guarded from dominating any critical aspect of their lives. There are advantages to pluralism – form stimulating innovation to avoid the intrinsic rigidities of bureaucracy.

Eli Ginzberg (1911-2002), The Road to Reform: The Future of Health Care in America (The Free Press, 1994)

July 27, 2011- A piece in the July 28 NEJM prompts this blog. Three PhD academic reformers and observers, from NYU, Yale, and the University of North Carolina, argue in “Managed Competition for Medicare? Sobering Lessons from the Netherlands,” that the Dutch experiment with regulated competition among private insurance companies offering universal coverage, launched in 2006, isn’t working out well.

Dutch Problems with Managed Competition

The Dutch problems are: 1)overall costs are still going up at a 5% rate, with costs to Dutch families escalating by 41%; 2) some Dutch people are still uninsured, and many of the insured are failing to pay their premiums; 3) expansion of consumer choice has faltered, and employers rather than individuals are choosing physicians; 4) despite the rhetoric about competition, the Netherlands still depends heavily on regulation.

The Lesson

The lesson I draw from the Dutch experience is this: No perfect system exists, even in a small country like the Netherlands, that can serve as a model for the U.S. Keep in mind that Health Exchanges, a pillar of the new health reform law, are essentially a form of "managed competition."

Kaiser may work in California and selected markets like Denver; Geisinger may work in rural Pennsylvania; Mayo and Marshfield Clinics may work in the upper Midwest; Group Health Cooperative may work in the Pacific Northwest; Community Health Clinics may work in under-served regions; integrated hospital and academic systems may work in certain regions; and Managed Competition models with capitation , the dream-child of Alain Enthoven, and the forerunner for Accountable Care Organizations, may work on the West Coast.

But there is no comprehensive model that will satisfy all of the people all of the time.

Unitary Government System Not in Cards for U.S.

Proponents of unitary government health system covering everybody and pleasing everybody are fooling themselves, but not the people.

As Abe Lincoln so aptly observed, with health system reform,

• You can fool some of the people all of the time - compassionate liberals who believe in using other people’s money to finance universal coverage and universal equity for all and laissez-faire isn't fair.

• And all of the people some of the time – fair-minded liberals, conservatives, and independents who will periodically believe somewhere out there is a system - that will be fair to all.

• But you cannot fool all of the people all of the time - people who want to avail themselves of the best medicine has to offer – access to the latest technologies and breakthroughs and the best specialists – when it comes to their own health, youthful well-being, and serious illness.

To be more specific, you cannot at the same time, fool or even please:

• The elderly, who know $575 billion in Medicare cuts under the new health reform law, will deprive them of benefits.

• The young invincibles, who know that the individual mandate will force them to pay for health premiums, depriving them of money they have previously chosen to spend elsewhere.

• Millions of new Medicaid recipients, who know the Medicaid system provides a substandard level of care because many as half of doctors, who are already in short supply, refuse to see Medicaid patients.

• Millions of baby boomers, 78 million in all, now turning 65 at the rate of 12000 a day over the next 18 years, will have a hard time finding doctors to treat them.

• Millions of businesses, small and large, perhaps 30% according to recent McKinsey survey, say they would rather drop coverage than incur the expense of providing expensive coverage for employees that meets expensive federal standards.

.Hundreds of thousands of physicians, who are aware the health law lowers their Medicare reimbursements to less than Medicaid rates by 2019 and sets up an Independent Payment Advisory Board with the power to lower their payments even further starting in 2015.

• The rest of us, who will quickly became aware that the new health care law, will impose $500 billion of new taxes over the next 10 years, which will be passed on to consumers, and perhaps $2.5 trillion of new expenses for government from 2014-2024.

In a pluralistic society in a culturally diverse, continental nation like the U.S., there is no perfect unitary system that will please some of the people all of the time, and all of the people some of the time, and all of the people all of the time.


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