Insight, analysis & opinion from Joe Paduda
I’ve been following with interest the political slap fight surrounding the Obama v Clinton/Edwards positions on mandated coverage. And just when I was getting ready to wax eloquent yet again, into the mailbox arrives Maggie Mahar’s well-written, comprehensive, thoughtful and adult discussion of the subject.
Dammit, she’s hogging all the good stuff.
And I have nothing to add. At least not now.
Paul Krugman and Ezra Klein say yes, mandated universal coverage would – and it is also a key part of serious health care reform. Richard Eskow says no; we have to fix the cost problem before we can cover everyone, and mandates won’t achieve universal coverage (actually Richard says 100% effectiveness, which I agree with – but 99.5% is fine with me).
The first part of the question is rather basic – can a mandate, that is, required coverage for all residents, actually cover all residents?
Adding to the seemingly-endless list of compelling arguments in favor of universal coverage is the rather obvious “if we insure them now, we won’t have to pay for more expensive care tomorrow.”
Specifically, I’m referring to a recent Commonwealth Fund/AHRQ study on health care costs for new medicare enrollees; the study found that new Medicare enrollees with chronic conditions that previously lacked health insurance incurred substantially higher treatment costs than those that had health insurance before enrolling.
While all previously-uninsured Medicare recipients had higher utilization, this was particularly noticeable for those with hypertension, diabetes, heart disease, or stroke, where prevention and routine care can prevent costly and calamitous acute episodes. The uninsured with these conditions reported more doctor visits (13% relative difference), more hospitalizations (20% relative difference), and higher total medical expenditures (51% relative difference) from ages 65 to 72 years than previously insured adults.
Each year, approximately 2.3 million seniors qualify for Medicare. Of this population, 57% had chronic conditions. The average medical cost (2003 numbers) per Medicare enrollee in the 65-74 age group was $9473. While the information available doesn’t allow a precise calculation of the additional cost involved in treating this group, the amount is certainly well up in the billions.
According to the original article in the NEJM, “The costs of expanding health insurance coverage for uninsured adults before they reach the age of 65 years may be partially offset by subsequent reductions in health care use and spending for these adults after the age of 65, particularly if they have cardiovascular disease or diabetes before the age of 65 years.”
What does this mean for you?
Covering the uninsured would reduce Medicare’s expenses.
A back-and-forth betwixt your author and an interested reader got snarled up in a debate over coverage for illegal immigrants in the event that mandated universal coverage happens (once again, I’m betting it will).
What’s interesting about this (and I promise there’s a pony in here, just a para or two below) is that Mexico will likely have universal coverage before we do.
No, it is not perfect, nor does it cover every conceivable condition and ailment, but it is in place, it is working, and covering more people each month. The program goes by the rather cool name “Seguro Popular”.
I try to keep my posts brief, reference-rich, and conclusive. Blogs don’t lend themselves to long treatises on dense topics, especially those of interest to actuaries.
That is what actuarial journals are for. The latest journal of the Academy of Actuaries includes my piece on the inevitability of health care reform, and which ideas have the most promise.
Regina Herzlinger of Harvard University is one of the more visible academic supporters of consumerism in health care. She’s also wrong a good bit of the time, not in her statements of fact, but rather in her conclusions about what the facts ‘mean’.
Take, for example, Dr. H’s observations in the WSJ(sub req) (11/19/07) about the Swiss health care system. She notes that individuals have a lot of financial skin in the game as they pay 65% of their premiums. Dr. H then demonstrates her acrobatic verbal athleticism by leaping over a rather broad logical chasm to a conclusion that is not supported by the facts; to wit, because the Swiss pay a lot out of their own pockets, health care costs in Switzerland are lower, and increasing at a lower rate, than here in the US.
Fortunately, Maggie Mahar has seen fit to carefully analyze the Swiss insurance and health care systems, and her efforts blow away Herzlinger’s sloppy work.
Maggie’s net is simple – rather than individual consumerism at work, Swiss success is built on careful, consistent, intelligently designed (no pun intended) and rather comprehensive regulation of insurance and health care.
Economist N Gregory Mankiw published a piece in the NYTimes OpEd section calling into question some common perceptions about health care cost, affordability, and the rate of uninsurance.
Mr. Mankiw did make some excellent points; his interpretations on others were either inaccurate or misleading.
Let’s start with this statement “the 47 million (uninsured) includes about 10 million residents who are not American citizens. Many are illegal immigrants. Even if we had national health insurance, they would probably not be covered.”
First, good to see that Mr. Mankiw hews tightly to the “illegal immigrants” talking point. Have to get that into every policy piece.
But is it true?
No. Mankiw’s estimate of the number of uninsured is likely in the ballpark. However, his statement that illegal immigrants would probably not be covered is not.
We health wonks have been accused (and in some cases convicted) of endless arguments similar to the oft-cited “how-many-angels-can-dance-on-the-head-of-a-pin”.
But every so often an intellectual debate erupts over a core concept, a foundational understanding that underlies what passes for generally-accepted wisdom in the health care world.
One recent example is the ‘does making people share cost reduce unnecessary utilization?’ question, with the latest foundation-shaking brought on by an article questioning the seminal study on the issue, the RAND Health Insurance Experiment.
Fortunately, we can turn to an objective economist who actually understands both health care and the awkward science (my term of endearment for econ) to referee the verbal volleying – Jason Shafrin. Jason has posted his thoughts on the controversy over the RAND HIE, and notes that, despite some methodological concerns, the central takeaway is still valid – people who have to pay for some portion of their health care tend to use less health care than those who get it for free.
OK, so that’s settled.
The next question is the tough one, and it is not how much care we are getting, it is are we getting the care we should?
And on that subject, the RAND study is silent.
The RAND Health Insurance Experiment study demonstrated that people factored in costs when making decisions about utilizing health care services. And cost-sharing reduced hospitalizations by about 25%, with little to no negative effect on health status.
For 25 years, this conclusion has been the basis for decisions on health care policy, insurance cost-sharing and copays, and the recent push (in some quarters) for HSA-based health plans.
But some are now thinking the experiment was flawed, and that this flaw may call into question what we now “know” about cost-sharing’s influence.
Rudy’s been silent on health care over the last few days. Could it be because he’s been hoist by his own petard?
Ezra Klein’s deep dive into Rudy’s flat out lies is well worth a perusal.