CNN special: Road Map for Saving Health Care

[Midpack]

Not sure how this post got entered before I completed the title or content, sorry. [Edit: Thanks Mods!]

No idea the merits of this show since I haven't seen it yet, but may be of interest to this audience. I plan to DVR and watch. Sounds like some of the same example countries as the excellent PBS - Sick Around the World program a few years ago. FWIW...

Be sure to catch Fareed Zakaria’s new CNN special,*Global Lessons: The GPS Road Map for Saving Health Care, Sunday, March 18, at 8 p.m. and 11 p.m. E.T. and P.T. Read my full article at TIME.com (behind a paywall).

Quote:

Two years ago, Barack Obama signed into law the most comprehensive reform of American health care since Medicare. Most of its provisions haven’t been implemented yet. But the debate about it rages on at every level. Twenty-six states have filed legal challenges to it. And this month the Supreme Court will hear arguments about its constitutionality. The centerpiece of the case against Obamacare is the requirement that everyone buy some kind of health insurance or face stiff penalties - the so-called individual mandate. It is a way of moving toward universal coverage without a government-run or single-payer system. It might surprise Americans to learn that another advanced industrial country, one with a totally private health care system, made precisely the same choice nearly 20 years ago: Switzerland. The lessons from Switzerland and other countries can’t resolve the constitutional issues, but they suggest the inevitability of some version of Obamacare. Switzerland is not your typical European welfare-state society. It is extremely business-friendly and has always gone its own way, shunning the euro and charting its own course on health care. The country ranks higher than the U.S. on the Heritage Foundation’s Index of Economic Freedom. Twenty years ago, Switzerland had a system very similar to America’s - private insurers, private providers - with very similar problems. People didn’t buy insurance but ended up in emergency rooms, insurers screened out people with pre-existing conditions, and costs were rising fast. The country came to the conclusion that to make health care work, everyone had to buy insurance. So the Swiss passed an individual mandate and reformed their system along lines very similar to Obamacare. The reform law passed by referendum, narrowly. The result two decades later: quality of care remains very high, everyone has access, and costs have moderated. Switzerland spends 11% of its GDP on health care, compared with 17% in the U.S. Its 8 million people have health care that is not tied to their employers, they can choose among many plans, and they can switch plans every year. Overall satisfaction with the system is high. When Taiwan - another country with a strong free-market economy - decided to create a new health care system in the mid-1990s, it studied every existing model. It too chose a model of universal access and universal insurance but decided against having several private insurers, as Switzerland and the U.S. do. Instead it created a single insurer, basically a version of Medicare. The result: universal access and high-quality care at stunningly low costs. Taiwan spends only 7% of its GDP on health care. The most striking aspect of America’s medical system remains how much of an outlier it is in the advanced industrial world. No other nation spends more than 12% of its total economy on health care. We do worse than most other countries on almost every measure of health outcomes: healthy-life expectancy, infant mortality and - crucially - patient satisfaction. Put simply, we have the most expensive, least efficient system of any rich country on the planet. Costs remain high on every level. Recently, the International Federation of Health Plans released a report comparing the prices in various countries of 23 medical services, from a routine checkup to an MRI to a dose of Lipitor. The U.S. had the highest costs in 22 of the 23 cases. An MRI costs $1,080 here; it costs $281 in France.... The Swiss and Taiwanese found that if you’re going to have an insurance model, you need a general one in which everyone is covered. Otherwise, healthy people don’t buy insurance and sick ones get gamed out of it. Catastrophic insurance - covering trauma and serious illnesses - isn’t a solution, because it’s chronically ill patients, just 5% of the total, who account for 50% of American health care costs.... The Obama bill expands access to 30 million Americans. That’s good economics and also the right thing to do. But it does little in the way of controlling costs. Medicare’s costs have stopped rising as fast as in the past. But for broader costs to decline, there is no alternative to having some kind of board that decides what is covered by insurance and what is not - as exists in every other advanced country. This has been demagogued as creating “death panels” when it is really the only sensible way to make the system work. When listening to the debate about American health care, I find that many of the most fervent critics of government involvement argue almost entirely from abstract theoretical propositions about free markets. One can and should reason from principles. But one must also reason from reality, from facts on the ground. And the fact is that about 20 foreign countries provide health care for their citizens in some way or other. All of them - including free-market havens like Switzerland and Taiwan - have found that they need to use an insurance or government-sponsored model. All of them provide universal health care at much, much lower costs than we do and with better results.... Fareed Zakaria

[GrayHare]

I'd like to see $ numbers spent on medical research in the various countries. I suspect part of the reason US health costs are higher is because the US researches more new treatments and meds.

[TromboneAl]

Thanks, Midpack, ver interesting.

[haha]

Seems unlikely to be replicated in the US. Way too sensible, efficient, and cheap.


Ha

[Alan]

Thanks for posting the info Midpack.

I'm afraid I'm with Ha on the prognosis of the future of Healthcare in the US.

[MichaelB]

Quote:

Originally Posted by Alan Thanks for posting the info Midpack.

+1

GPS shosw can be seen by podcast, correct?

Quote:

Originally Posted by haha Seems unlikely to be replicated in the US. Way too sensible, efficient, and cheap. Ha

Quote:

Originally Posted by Alan I'm afraid I'm with Ha on the prognosis of the future of Healthcare in the US.

I am reminded of what Jacob Marley said to Ebineezer

Quote:

Ah! You do not know the weight and length of strong chain you bear yourself! It was as full and as long as this seven Christmas eves ago and you have labored on it since. Ah, it is a ponderous chain!

Our healthcare system has become such a chain.

[Alan]

Quote:

Originally Posted by MichaelB I am reminded of what Jacob Marley said to Ebineezer Quote: Ah! You do not know the weight and length of strong chain you bear yourself! It was as full and as long as this seven Christmas eves ago and you have labored on it since. Ah, it is a ponderous chain! Our healthcare system has become such a chain.

Nice analogy.

[scrabbler1]

Great article. Thanks for posting it, Midpack. I look forward to watching the CNN show this weekend.

[Disappointed]

I remember watching "Sick Around The World", very interesting program.

I wonder how much fraud has added to the cost of our healthcare in this country.

[samclem]

Midpack,
Thanks for the heads-up and the advance synopsis. One issue with what Zakaria wrote:

Quote:

So the Swiss passed an individual mandate and reformed their system along lines very similar to Obamacare.

Absolutely not "very similar".
-- No one in Switzerland depends on their employer for insurance--individuals choose the provider and policy they want for themselves. The indigent shop for their own private plans, too (and get subsidies from their government to help pay for the insurance). Very different from what is in our new plan where employers are still in the mix. (Why?!)
-- There's no government health insurance in Switzerland--no equivalent of Medicare or Medicaid. About 1/2 of US health care spending goes through these government programs. That's more than a minor difference, and the US healthcare reform expands Medicaid, it doesn't reduce it. How much of the lower Swiss health care costs are due to the savings resulting from not having government insurance? How can Zakaria say our systems are "very similar" given this huge difference?
-- All Swiss insurance providers are nonprofits. While I don't think this matters much (nonprofits can compete against for-profit companies in the forthcoming US construct--let the best product win!) many people believe this is important.
-- Everyone in Switzerland pays something for their basic health insurance. Once the premiums exceed 8% of the individual's income, the government subsidizes the rest. In contrast, the US health care reform gives "free" healthcare to those of low income (up to $36,657 for a family of four)--no requirement to pay 8% of their income. The tax credits under the US law mean that every family of 4 earning less than $58,000 will be paying less than the "Swiss 8%" for their insurance. (Based on a medium cost area, figures from the Kaiser Calculator). Insulating people from the true cost of healthcare is no way to build a national consensus on the need for lower costs. For many voters--"hey, someone else is paying the bill--I want more of it!"

The Swiss system isn't perfect, but it's got good points that aren't in our new law. To the degree people believe (or say) it's "very similar to Obamacare" we're losing insights that might be useful.

[Gone4Good]

Yes, we've had these discussions before. Those that favor ACA point to critical similarities to the Swiss system initiated with the law; individual mandate, guaranteed issue, subsidies, non-discriminatory pricing, and required minimum coverage. These are huge changes to our system and a massive step in the direction of the Swiss approach.

Those that oppose ACA point to aspects of our existing system that weren't overturned in the new law, chiefly Medicare and employer sponsored coverage.

So these complaints aren't really that the new law isn't sufficiently like the Swiss system (because it is) it is that ACA is too timid in extending its reforms throughout our health insurance system.

But even this criticism isn't entirely true. ACA does eliminate the tax subsidy for expensive employer provided health plans. Because it doesn't index the definition of "expensive" to inflation, over time it will mostly eliminate the importance of the tax subsidy and likely end employer sponsored health insurance in the US. So yes, it addresses this issue too, albeit slowly.

And if reforms in ACA work well, there is no reason the system can't be extended to folks currently on Medicare or phased in for future generations. This is entirely possible with ACA, but entirely impossible without it.

[donheff]

Quote:

Originally Posted by Gone4Good Yes, we've had these discussions before. Those that favor ACA point to critical similarities to the Swiss system initiated with the law; individual mandate, guaranteed issue, subsidies, non-discriminatory pricing, and required minimum coverage. These are huge changes to our system and a massive step in the direction of the Swiss approach. Those that oppose ACA point to aspects of our existing system that weren't overturned in the new law, chiefly Medicare and employer sponsored coverage. So these complaints aren't really that the new law isn't sufficiently like the Swiss system (because it is) it is that ACA is too timid in extending its reforms throughout our health insurance system. But even this criticism isn't entirely true. ACA does eliminate the tax subsidy for expensive employer provided health plans. Because it doesn't index the definition of "expensive" to inflation, over time it will mostly eliminate the importance of the tax subsidy and likely end employer sponsored health insurance in the US. So yes, it addresses this issue too. And if reforms in ACA work well, there is no reason the system can't be extended to folks currently on Medicare or phased in for future generations. This is entirely possible with ACA, but entirely impossible without it.

+1. We had a poll a little over a year ago asking whether we should repeal Obamacare and start over or work toward improving it. 75% felt we should work toward improving the ACA. I think that reflects G4G's point that many of the complaints really reflect the fact that the ACA didn't go far enough. Starting over would assure that we never go anywhere.

[ziggy29]

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Originally Posted by donheff +1. We had a poll a little over a year ago asking whether we should repeal Obamacare and start over or work toward improving it. 75% felt we should work toward improving the ACA. I think that reflects G4G's point that many of the complaints really reflect the fact that the ACA didn't go far enough. Starting over would assure that we never go anywhere.

Pretty much no one was satisfied with it, we pretty much got it due to a legislative "shotgun marriage" where the House felt forced to take the flawed Senate bill as is or get nothing at all. The choices were to accept it, warts and all, or reject it and likely start from the beginning -- and get nowhere in the Senate.

Not getting employers out of the health insurance business was perhaps one of the worst flaws, as was the formula used to phase out the subsidy. I certainly agree that the poor need a subsidy and the wealthy do not, but the subsidy phase-out effectively feels like more than a 15% tax in very middle class income groups (around $55K-$85K for joint filers, I believe).

It's fair to point out that we still have bad laws and practices that likely aren't in the Swiss model, but it remains to be seen whether those differences make "all" the difference in terms of a system that works reasonably well and gets costs under better control.

Not said anywhere is what difference there may be in Swiss doctors -- their supply relative to the U.S. supply per capita, the amount of debt Swiss doctors graduate with, the malpractice system in Switzerland, that kind of thing.

[Gone4Good]

Quote:

Originally Posted by ziggy29 Not getting employers out of the health insurance business was perhaps one of the worst flaws, as was the formula used to phase out the subsidy. I certainly agree that the poor need a subsidy and the wealthy do not, but the subsidy phase-out effectively feels like more than a 15% tax in very middle class income groups (around $55K-$85K for joint filers, I believe).

In a perfect world we'd scrap employer sponsored health insurance day one. But practically speaking, it's not reasonable to up-end the insurance arrangements of hundreds of millions of people, many of which are happy with their insurance, in one cataclysmic change - at least not in a Democracy.

Instead, ACA phases-in an excise tax on employer provided health plans that will gradually, and relentlessly, encourage employers to drop people onto the new exchanges. For everyone who thinks employer sponsored health insurance is a problem (count me among them) ACA's approach to ending it is about as good as we can realistically hope for.

You also have a fair point on the marginal impact of phasing out the subsidies. Although I don't think there is any way to fix this short of eliminating the subsidy altogether or extending it to everyone. Anytime you have a subsidy that is phased out based on income, the effect will be the same as a marginal tax increase. Possible ways to mitigate the impact: lower the subsidy and/or phase it out more gradually? Maybe coordinate changes in the actual tax rate to offset the impact of losing subsidies? I don't have a strong view on any of this, but it sounds more like "fine tuning" than radical rewrite.

[Midpack]

Change will be difficult in the US, entrenched lobbyists/campaign finance will ensure it. Until the mainstream population gets interested, the status quo won't change except at the margin.

I don't think most Americans realize how much they pay for their health care, because very little of it comes directly out of pocket for wealthy, poor or those in between. But we definitely pay dearly.

While US health care shines at the leading edge of technology and care, the bulk of the system in basic and preventive care do not. I don't think most Americans realize that our medical outcomes are far from those of most other developed countries.

There are many reasons our costs are so high and our results are only middling. Many point to malpractice, or Rx drug costs/R&D, or excessive testing, or profit incentives when it's all those aspects and many more.

I hope shows like this can help make more Americans aware of what health care really costs them, how average our overall results are and the many issues we face. And also show them there are many more cost effective approaches, that can also address the uninsured and medical bankruptcies.

Sick Around the World looked at health care in Japan, Germany, the UK, Switzerland & Taiwan. Evidently the upcoming GPS program will again look at the last three countries health care.

I don't think the answer lies in adopting the complete model of any one country. Nor do I think we can move to something better in one giant step. And I hope we can see a bigger picture beyond PPACA, or we may never move beyond the status quo.

Probably naive...

[ziggy29]

Quote:

Originally Posted by Midpack There are many reasons our costs are so high and our results are only middling. Many point to malpractice, or Rx drug costs/R&D, or excessive testing, or profit incentives when it's all those aspects and many more.

Ideologically, almost no one in a policy making position is willing to consider all aspects of the problem. There are real issues that one side wants to address, and real issues the other side wants to address. But the problem is that the "intersection" of common ground is pretty nearly a null set, and neither side seems willing to consider anything that incorporates the best ideas of both. Defeating the "enemy faction" is more important than good policy.

I could probably come up with a list of, say, 10 problems I see with how we deliver health care in the US. And most likely, one side or another would embrace several of them -- but would also consider any proposal that includes all of them as "dead on arrival."

[Gone4Good]

Quote:

Originally Posted by ziggy29 Ideologically, almost no one in a policy making position is willing to consider all aspects of the problem. There are real issues that one side wants to address, and real issues the other side wants to address. But the problem is that the "intersection" of common ground is pretty nearly a null set, and neither side seems willing to consider anything that incorporates the best ideas of both. Defeating the "enemy faction" is more important than good policy.

I don't actually think this is true. ACA is in many important respects the reform the Herritage Foundation dreamed up, certain current presidential candidates proposed nationally, implemented locally and now completely reject.

The ideological divide used to be between a single payer government system and a private system where strong regulation blunted known market failures. That is a worthwile debate to have between two workable solutions to a complex problem.

Today, we've passed legislation that moves strongly in favor of the private system, which is itself a huge compromise. But in so doing, the middle ground has shifted dramatically. Now the debate is between a private system with strong regulation and . . . nothing - or at least nothing obvious or comprehensive. That's not a reasonable debate to be having, and not one that is going to have any middle ground by definition.

[Midpack]

Quote:

Originally Posted by ziggy29 Ideologically, almost no one in a policy making position is willing to consider all aspects of the problem. There are real issues that one side wants to address, and real issues the other side wants to address. But the problem is that the "intersection" of common ground is pretty nearly a null set, and neither side seems willing to consider anything that incorporates the best ideas of both. Defeating the "enemy faction" is more important than good policy. I could probably come up with a list of, say, 10 problems I see with how we deliver health care in the US. And most likely, one side or another would embrace several of them -- but would also consider any proposal that includes all of them as "dead on arrival."

As can I.

So (and I'm asking not telling), no matter how expensive, no matter how average the outcomes, and no matter how many uninsured or medical bankruptcies US health care delivers - the mainstream can never prevail over the elites (lobbyists and large campaign contributors) who will protect the status quo and even enhance their grip to the detriment of most of us.

It's admittedly hard to be hopeful short term, but I still refuse to believe that's ultimately true...

Not to hijack the thread, money in politics eclipses most policy issues IMO.

[samclem]

Quote:

Originally Posted by Gone4Good Instead, ACA phases-in an excise tax on employer provided health plans that will gradually, and relentlessly, encourage employers to drop people onto the new exchanges. For everyone who thinks employer sponsored health insurance is a problem (count me among them) ACA's approach to ending it is about as good as we can realistically hope for.

We'll see. The law is so poorly crafted that (to paraphrase one leading legislator) we're "still waiting to see what's in there" as the implementation rules are put into place. The law was prominently sold to constituents with "If you like your present (employer-provided) health care, you'll be allowed to keep it." And the law fines employers who fail to buy insurance for employees. None of this is consistent with the intent of phasing out the link between employment and health insurance: The public isn't being told by the administrators of the program that the goal is to get employers out of the picture, and the employers get to pay a fine for doing what the drafters of the law want them to do?

I'm only making the point that Zakarias is wrong to say the Swiss system is "very similar to Obamacare." It's obviously not. We're crossing the street halfway, and the results of that are often suboptimal.

[MichaelB]

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Originally Posted by samclem I'm only making the point that Zakarias is wrong to say the Swiss system is "very similar to Obamacare." It's obviously not. We're crossing the street halfway, and the results of that are often suboptimal.

You have a valid point. Fareed Zacaria is a respectable journalist and he - or his program staff - should not be hyping a show in this way. Hopefully it is just marketing hype and not a reflection of the program itself.