SPECTRAL VISION: 'A Winner's Curse'
Uwe E. Reinhardt, a Princeton economist, has a gloomy forecast in assessing Senator Max Baucus's health care proposal. Mr Reinhardt says the Baucus plan gives the insurance industry almost everything it could have wanted. But he describes a potential "winner's curse."
Because the Baucus plan does little to control runaway costs, Mr. Reinhardt says, insurers will still need to raise premiums year after year to keep up -- fueling the rising fury of a public that, under the Baucus rules, would be forced by a federal mandate to buy the increasingly expensive insurance. (Mr. Rienhardt dismisses the proposed insurance alternative, from non-profit cooperatives, as "mice that roar.")
"So imagine, if you will, solid-middle-class Harry and Louise, sitting at their kitchen table and beholding the latest premium notice from their friendly private health insurer," Reinhardt writes. "The private health insurance industry may yet find itself to be the proverbial flack catcher in the years ahead, and the public's clamor for a public health care plan may come back."
HOW THEY DO IT OVER THERE
Timothy Stoltzfus Jost is a law professor at Washington and Lee University and frequently writes on comparative health care policy. His work includes an examination of insurance coverage in Switzerland and a comparison of the Swiss and Dutch systems. He spoke to Anne Underwood.
Q. The Swiss health care system relies on public-private approaches that have been recommended as models for the United States. What are the similarities?
A. In 1996, Switzerland instituted an individual mandate by which people are legally required to purchase health insurance in a competitive market. People buy coverage from private insurers, and the government provides subsidies for those who can’t afford coverage. About a third of the population receives subsidies.
Q. What is a major difference between the Swiss system and most of the proposals in Congress?
A. The most important difference is that health insurance in Switzerland is provided by nonprofit insurers — though some are affiliated with for-profit companies that offer supplemental policies along the lines of Medigap in the United States. The basic benefit package is defined by law and is quite generous. Maximum drug prices are regulated.
Q. How is the quality of care?
A. The quality of care is excellent. Waiting times are not reported to be a serious problem in Switzerland, and most people can get the services they need quite expeditiously. Modern, high-technology services are readily available. Coverage of some new drugs and procedures, however, is reviewed for effectiveness, and some drugs and procedures available in other countries may not be available in Switzerland if they are not considered to be cost-effective.
By The Numbers
Switzerland
Life expectancy: 82 years
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Infant mortality: 4 per 1,000 live births
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Health spending as a percentage of GDP: 11
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Percentage of health spending that is private: 40
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Doctors per 10,000 people: 40
United States
Life expectancy: 78 years
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Infant mortality: 7 per 1,000 live births
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Health spending as a percentage of GDP: 15
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Percentage of health spending that is private: 54
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Doctors per 10,000 people: 25
Source: World Health Organization. U.S. statistics.
Note:
Above info from The New York Times
Editorial Cartoons by Tony Auth for the Philadelphia Inquirer
One More Link:
Opposing Opinion - The Risks for Dems Going It Alone on Health Care By Jay Newton-Small for Time Magazine.com
Bonus Round:
Hard to Believe!
It was strange to find in this economically stressed, rural region of Vermont, not far from the state capital of Montpelier, a good news story about health care.Those who live in the area, no matter what their income, can get high-quality primary care, dental care, prescription drug services and mental health assistance at a price they can afford. All they have to do is call or stop by the Health Center at Plainfield, which is part of a national network of centers that are officially (and clumsily) known as Federally Qualified Health Centers.
I was somewhat skeptical when Senator Bernie Sanders, an independent from Vermont, told me that these centers (there are 39 sites of various size in the state) had “essentially solved the problem of primary care” for local residents. Politicians are in the business of making big claims. Most of the time you don’t hold it against them. But you don’t take the claims as gospel, either.
In this case, the senator’s claim seems to be very much on the money...
Click here for complete NY Times column by Bob Herbert
Non-Bonus Round:
The Elephant in the Room: Promises have been broken by Rick Santorum
Nothing is more critical to the success of President Obama's health-care legislation than his promise that no American will have to give up his or her health plan. A related promise runs a close second: that the "government option" will create competition for the private sector, not replace it.Why are these promises so critical? Because, while most Americans are open to fixing health care, they're also happy with their private insurance. One would think Obama would oppose any provision that appears to force Americans into a government plan. Think again.
The Medicare Advantage program is composed of private insurance plans within Medicare, created to compete with government-run Medicare. Obama's call to cut funding to the program could eviscerate it.
According to Medicare Advantage insurers, their disproportionately poor and minority enrollees do better than Medicare's on many measures, getting much more primary care and avoiding unnecessary hospital admissions. Since 2004, enrollment has doubled to 10.2 million, about a quarter of Medicare beneficiaries. The program has become popular with poorer seniors because it offers more benefits for less money, including physicals, hearing aids, and glasses.
While the reforms proposed by Congress don't abolish the program, they eliminate more than $100 billion of its subsidy, which is sure to reduce benefits. On Sunday, ABC's George Stephanopoulos asked Obama how he squares that with his promise that no one would have to give up current coverage. Obama said that "these folks are going to be able to get Medicare that is just as good, provides the same benefits, but we're not subsidizing them for $18 billion a year." So, according to Obama, seniors may not have the same coverage, but they will get government-run Medicare that is "just as good."
According to the Congressional Budget Office, over the next 10 years, 2.7 million seniors who would have signed up for Medicare Advantage would end up in Medicare. And those in the program would see a reduction in benefits.
That's one promise broken.
What about Obama's promise about competition? He says he wants to cut Medicare Advantage subsidies to level the playing field between these plans and Medicare. But unlike Medicare, which can set artificially low prices, Medicare Advantage plans must pay market rates. Often, Medicare reimbursements don't even cover costs, so providers shift costs to private insurers, making them uncompetitive - exactly what many say would happen with the "government option."
I supported Medicare Advantage subsidies so the program would be available in rural areas, where managed-care plans are more expensive to operate. In exchange for the subsidies, Congress required program insurers to offer more benefits. And contrary to Obama's claim that the subsidies prop up huge company profits, the average plan profit is just 5 percent.
Bottom line: Cutting Medicare Advantage will eliminate private competition, meaning more government coverage.
That's two promises broken.
These broken promises have become a sore spot for Democratic congressional leaders such as Senate finance chairman Max Baucus. He and administration officials have gone so far as to threaten Medicare Advantage insurers with sanctions if they continue to tell seniors the facts about Obamacare. Oh, what webs we weave.