A mantra for true health care reform

My takeaway from T.R. Reid's comparative look at national health care systems, The Healing of America, is distilled in this mantra from former British health minister John Reid:

We cover everybody, but not everything (p. 221).

That is the key to equitable, effective, sustainable health care delivery. As (T.R.) Reid's tour of successful health care systems makes clear, the very different systems at work in France, Germany and Japan (which channel payment through private but nonprofit insurers), Canada (single payer, Medicare model) and Britain (direct government funding) share these three elements:

1. Everybody has the same access to the same treatment
2. Every provider of each treatment (or of each patient, in a capitated system) gets the same pay as every other provider of that treatment.
3. One entity sets all treatment prices for the whole nation (or province, in Canada's case).

Establishing these conditions doesn't make cost control easy. It just makes it possible.

The health care reform bills pending in the U.S. won't create these conditions in one fell swoop. At best, they will establish adequate minimum insurance coverage standards and create viable nonprofit alternatives to the for-profit industry. Then, if we're lucky, those nonprofit options will indeed kill off for-profit insurance, exactly as AHIP fears.

Brooks v. Brooks on the Baucus bill

David Brooks continues to write nonsense about health care.

Professing ambivalence about the Baucus bill, he complains in one breath that it "will retard innovation by using monopoly power to squeeze costs." Two paragraphs later, lauding the bill's "many provisions to make government-run health care more rational," he includes that it "would create a commission to perpetually squeeze costs," also cataloging specific measures favored by health care experts -- bundling payments, encouraging doctors to work in teams, improving IT, measuring comparative effectiveness. He acknowledges that savings from these measures "could be significant."

As for that free market shibboleth that cost controls are always bad: in health care, virtually every industrialized nation has found them necessary. Is Brooks aware that in France, Germany and Japan, three countries that get better health outcomes than the U.S. at half to two-thirds the cost, the central government sets prices for every medical procedure performed in the country, and all insurers are required to pay all bills submitted under that schedule by all providers? That those countries provide universal comprehensive coverage at minimal cost to their citizens? That the fee schedules are completely transparent, posted on doctor's office walls in France, available in a phone book-sized reference in Japan? (For a doctor's- and patient's eye view of these systems, see T.R. Reid's The Healing of America.)

The only "innovation" squeezed by governmental cost controls is the innovation of insurers, ingeniously determining how not to cover procedures or how to wring out maximum premiums by charging different rates for different levels of coverage.

Yes, health care providers in all three countries feel squeezed by government cost controls. Yes, they make much less than doctors in the U.S. They also come out of medical school with zero debt, pay pennies by US standards for malpractice insurance, and spend almost no time or money on administrative costs -- in contrast to American doctors, who have to employ whole staffs to deal with the byzantine billing and claims approval processes of multiple insurers.

Brooks also claims that the Baucus bill (or any set of subsidy levels for people purchasing insurance on exchanges) "will impose huge costs on people as they rise up the income ladder, distorting the whole economy."

Subsidies keyed to income are only relevant to those who do not get insurance from their employer, including the self-employed. Right now, such people suffer "huge costs" indeed -- buying individual insurance on the open market with no subsidy. For many, a rising income will be the result of better employment, which likely means employer-provided health care. For the self-employed or those who work long-term in workplaces that don't provide insurance, it seems perverse to complain that reducing subsidies as their income increases is an imposition of "huge costs."

T.R. Reid: For-Profit Insurance Destroys Health Care Delivery

T.R. Reid's indispensable book about successful national health systems, The Healing of America, provides a patient's- and doctor's-eye view of health care delivery in France, Germany, Japan and other countries that provide complete coverage for all residents and pay half to two thirds of what the U.S. pays for health care (as a percent of GDP) with better outcomes. The book induces startling clarity about the key dysfunctions of our system.

Our primary dysfunction is simple. While France, Germany and Japan all rely on private insurance to pay for comprehensive health care, the private insurers are all nonprofit. In all three countries, the government sets uniform rates for all procedures; all providers charge the same rates, and all insurers must pay all claims. In France, every citizen's complete medical history, including procedures performed and their costs, are embedded in a national health card (the carte vitale). Doctors simply record each service performed - and get paid by one of the country's fourteen insurers within a week.

The lesson is clear: U.S-style for-profit insurance for basic comprehensive health care is purely parasitical (for-profits are in the mix in The Netherlands, but they're subject to strict price controls and risk equalization, by which plans with a higher concentration of sick members are paid more). Our for-profit health insurance industry creates a needless bureaucracy, matched in no other country, which it pays itself handsomely to manage, and it makes money by denying claims.

Any reform that makes health insurance available and affordable to all Americans is worth doing. Mandates requiring insurers to cover all eligible comers without differentiating cost according to condition are key; so are mandates laying out minimum coverage standards.

But to meaningfully narrow the gap between health care costs in the U.S. and other rich countries, reform would have to kill for-profit insurance, quickly or slowly. Health care co-ops are actually closer to the system that works so well in France and Germany than a single "public option." But in those countries, the "sickness funds" did not have to evolve in competition with for-profits.

Every industrialized country is wrestling with rising health care costs. In France, the sickness funds operate at a deficit; in Germany, doctors are up in arms because the government keeps imposing new limits on permissible treatments for given conditions. But both countries are continuing to reform from a position way ahead of us, with complete universal coverage, costs 1/2--2/3 of ours, and the government in complete control of rates and mandated coverage.

None of this should be secret. Legions of American health care experts know how things work in Europe and Japan. Senators are reading Reid's book. But as Reid stresses, it's political anathema in the US to suggest cribbing from other countries' successes. Our national 'debate' is obfuscated by lack of full discussion of how successful systems work.