Monday, January 28, 2008

SCHIP, TOWARDS MORE GOVERNMENT-RUN HEALTH CARE

What divides the Congress is the attempt by some to transform SCHIP into an expensive precursor of universal government mandated health care -- Senator Trent Lott

National health care is a fraction of the cost and has much better outcome [than our present system] -- Noam Chomsky

Last week the House of Representatives failed to override the President’s veto of the SCHIP bill for the second time. He objects because the bill is a step towards more socialized medicine, because it is too expensive, because it is supposed to be for poor children but allows adults and families with income at 400% of the poverty level ($83,000) to enroll. .

Senators Hillary Rodham Clinton and John Edwards call for universal coverage, which is well received. Listening to the presidential candidates debate, the audience may believe that there is only one type of insurance, universal, and that it is free. But universal is not free and not the only choice. The issue is not settled, only ignored by the Congress, which is not interested in improving health-care, only in controlling it.

The first thing to establish is that universal means everyone in the country (or state). It does not mean single-payer, though it is likely to lead to a single-payer system, as in Canada and England . Dr. Marcia Angell, former editor of the New England Journal of Medicine says, “What we need is a national single-payer system that would eliminate unnecessary administrative costs, duplication and profit.” (Like the Post Office? Like central planning in the Soviet Union?). It is attractive because it is simple.

But when a sick person needs care, there is endless waiting. From the time of the visit to the family doctor in Canada, it took an average of 17.7 weeks in 2005 to get to the specialist --time to die in.

There is no satisfactory way to fix the system. There are no deductibles or user fees, so there is no way to restrict demand. Therefore, the restrictions must be on supply: rationing by extending waiting periods, decreasing reimbursement to doctors and hospitals, cutting the number of medical graduates (since training doctors is costly); holding back on buying new costly high-tech equipment. The German system caps spending, and doctors go on strike.

Everything is free, little is available. But what happens if you are a patient? Outcome in terms of patient health is far superior in the U.S. Of course it is more costly. Equipment is newer and better, more expensive new drugs are prescribed.

The number of uninsured, always stated as 47 million, is overstated. It includes 10 million who are not American citizens, are probably illegals, and should not be included in the calculation. Another 14 million are qualified for Medicaid or SCHIP and haven’t signed up. Another 10 million have households earning over $50,000 and probably could afford it. (A second estimate says 18 million have households earning over $75,000.) About a “quarter of the uninsured” (of 47 million? of 13 million?) have been offered employer-provided insurance but have declined coverage. That reduces the 47-million figure to under 13 million. However many, they are provided for in the federal block grants to the states.

(A related question: Should taxpayers have to pay the costs of those who can afford to provide for themselves but decline to do so?)

And it is very costly. Because the insured do not pay for their own health care, they cannot make the choices that would lower costs.

There are many ways of reducing costs: retail walk-in clinics in busy places; promoting generic drugs; shifting care to nurse-practitioners; allowing doctors to practice and patients to secure insurance across state lines; giving refundable tax credits to help the uninsured buy individual Health Savings Accounts (in states where they are allowed); electronic record-keeping. A government study involving electronic record-keeping finds that if 18 percent of doctors in Medicare adopt e-prescribing, government would save $4 billion and nearly three million adverse drug events could be prevented over five years.

The Congressional Budget Office points out that higher-spending does not generate better health care. For example, delivering an underweight baby costs $1,800 at Cambridge’s Mt. Auburn Hospital and $5,300 at Massachusetts General Hospital (though both are affiliated with Harvard University).

Dr. David Gratzer, a psychiatrist with knowledge of medical practice in Canada and the U.S., has written THE CURE, a very clear and thorough book. He subtitles it, “How Capitalism Can Save American Health Care. Health-care is an excellent issue for comparing capitalism and socialism. He observes:

But the direction of change is clear: toward a market orientation, away from central planning. American academics may rhapsodize about the triumph of socialist health care in other countries. But in the streets of Stockholm and London, it’s the ideas of Adam Smith that percolate.

By Natalie Sirkin
C2008
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