Wednesday, March 23, 2011

Health Care - We Can Do Better

Today is the first anniversary of the Affordable Care Act (Obamacare).  It will not take full effect until 2014 and even then will only begin to chip away at health care costs and the number of people uninsured.  Our health care system has a long way to go.
We still spend way too much on health care, do not cover everyone, and have poorer medical outcomes than other industrialized countries.  The chart below tends to substantiate the position of the United States relative to its peers in the OECD (Organization for Economic Co-operation and Development) states.  
In the chart we see that generally life expectancy increases with per capita spent on health care.  The outstanding exception is the United States that spends almost twice as much as most other states but surpasses only the lowest few in life expectancy.  These data strongly suggest that the United States does not deliver health care effectively or sufficiently.

Life Expectancy (years) vs Per Capita Health Expenses ($US) from publicly available OECD data.  Data Labels removed for legibility are Belgium, Finland, Iceland, Ireland, Netherlands, and Sweden, which are in the $3000 to $4000 cluster.

Over time, if the ACA does its job, health care costs will come down and more people will be covered.  But, the improvements will be minimal even after five years and may never allow us to catch up with our international peers.
Conservative Washington Post columnist Charles Krauthammer, an ACA opponent makes the following criticism that we might consider to be praise.
And here's what makes it so politically seductive: The end result is the liberal dream of universal and guaranteed coverage -- but without overt nationalization. It is all done through private insurance companies. Ostensibly private. They will, in reality, have been turned into government utilities. No longer able to control whom they can enroll, whom they can drop and how much they can limit their own liability, they will live off government largess -- subsidized premiums from the poor; forced premiums from the young and healthy.
It's the perfect finesse -- government health care by proxy. And because it's proxy, and because it will guarantee access to (supposedly) private health insurance -- something that enjoys considerable Republican support -- it will pass with wide bipartisan backing and give Obama a resounding political victory.
Although ACA didn’t come into being on such a triumphant note nor with nationalization, it could be a start.
Across the country, we use regulated or publicly owned utilities to deliver water and electric power to everyone at reasonable prices.  We should be able to follow that example and deliver health care to everyone at reasonable cost.
In his book, “The Healing of America” (The Penguin Press, New York, 2009), T. R. Reid identifies three models for delivering health care.
The Bismarck Model began in Germany during the nineteenth century under the auspices of Prussian Chancellor Otto von Bismarck.  It has lasted through two world wars and German reunification, because the people demanded it.  As in the US, the program is funded by employers and employees through payroll deductions and health services are provided through private insurance companies.  
The big differences are that the insurance companies are non-profit, everyone is covered, and cost control is accomplished through regulation of medical services and fees.
Other countries using this basic model are Japan, France, Belgium, and Switzerland.
The Beveridge Model was founded through the persistent efforts of one William Beveridge, who was the motive force behind the National Health Service in the United Kingdom.  So popular is the NHS that when Margaret Thatcher privatized almost everything in Britain, she never considered touching it.
This model is funded through taxes, and typically the government owns the facilities and hires the medical staff.  Medical services are available to everyone, and there are no medical bills.  Patients register with a physician’s surgery, and the doctor gets a fee whether or not the patient visits the doctor.  So, there is a built-in wellness incentive.
Other countries that employ this model are Italy, Spain, and most of Scandinavia.  This form of the dreaded “Socialized Medicine” is found also in the US Veterans Administration.
The National Health Insurance Model is a hybrid of the above two models.  The health care providers are private, but the government acts as a single-payer insurer that collects premiums and pays the medical bills.
Canada is the best known country that uses the NHI system.  Taiwan and South Korea also have adopted it.
These models prove that a heath care system can work when the emphasis is put on care rather than profit.
Of course, the default is an Out-of-Pocket model that applies to Cambodia, rural areas of China and India as well as all those still uninsured in the US.
We can hope that our ACA will converge, sooner rather than later, on a system similar to  those that have succeeded in other OECD countries.   

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