Friday, January 30, 2009

Build Upon Or Rebuild Our Health System?

This article by Dr. Atul Gawande on healthcare policy in the Jan 26, 2009 edition of the The Yorker has created quite a buzz in the US. Prof. Jagdish Bhagwati drew my attention to it last week, as did my brother Viranjit and his friends through email exchanges. Atul (bio here) is remarkable in that he's a prominent cancer surgeon in Boston, as well as a celebrated writer and a Macarthur (or "Genius") award winner. His longish article (that you can read first to compare your impressions with the comments below) contains vivid analogies and knowledgeable references to developments far beyond medical matters.

Atul's main theme in "Getting There From Here" is that it's far better to build on (or modify) the healthcare system that we have, rather than create a new one from scratch. He argues that good European healthcare systems like those in France, Britain and Switzerland are different from each other and evolved from some existing structures. He also draws lessons from technology advancement in phone service to stay with the tried and the tested. He blames debacles like China's Mao-era Great Leap Forward, Rumsfeld's Iraq war strategy and Bush's prescription-drug plan for seniors on the mistake of introducing something completely new. He cites the Massachusett's universal coverage plan as an example of successful incremental reform.

I partly agree with Atul and have the following comments:
  • Borrowing from hi-tech terminology we certainly need a proper and well thought out migration path to smoothly shift to an improved system.

  • There can also be "path dependance" in the system we end up with, as Atul points out. Snopes reports on the widely circulated email about vital design features of our booster space rockets (claimed to be) "determined over two thousand years ago by the width of a horse's ass."

  • However, it doesn't follow that the final healthcare solution has to look anything like the inadequate and expensive mess that we have today. (How much do the space rockets resemble a horse's ass?) Talking practical policy, John Edwards at the beginning of the last primary season introduced healthcare reform proposals that addressed transition issues well. Hillary and Obama borrowed a lot of his ideas, and all three outlined sound migration plans.

  • The major healthcare problems aren't confined to the people without coverage. Even "the hundreds of millions who depend on it" as Atul says of those who're insured incur criminally high costs. They at least indirectly pay for it through lower take-home pay (since employers look at the total cost of their employees), through higher taxes, and/or lack of international economic competitiveness. So a Massachusetts type plan that doesn't address costs is very inadequate.

  • Atul does not offer solutions that address the high prices (double of those in Europe) of healthcare, and ways to reduce the scarcity of doctors.

  • International trade (exporting patients and importing doctors) that Prof. Bhagwati and I have advocated isn't mentioned here. It can enormously help in savings and coverage while transitioning to the new system over say, a ten year period.

  • The article has been selective in picking examples and laying out facts where others can lead to different conclusions. Some takeaways (as from the problems with the prescription drug plan) seem to be fallacious. See quoted text below.

I'll close by reproducing a detailed note from my brother Viranjit's friend Jonathan that's interesting and seems to make a lot of sense.


My reactions to the article are mixed. Some things that I think are done well are:
1) It gives an interesting and helpful presentation of some of the history of a few (but just a few) existing national healthcare systems.
2) It nicely introduces the concept of "path-dependence" in the development of present systems of various types.
3) It gives some evidence that in some ways the Massachusetts statewide coverage program might be working well. (If so, then it is the first of several such state-based attempts to succeed, or even survive, in a meaningful way. The others have failed to expand coverage on a sustained basis, and have become so expensive as to become politically unsustainable. I had previously read that the Massachusetts program was becoming financially untenable as well, but perhaps I should look into this further.)

Some things that I think are poorly done, or are very misleading, in the article:

1) The author is extremely selective, for failure, in his choice of large-scale, centrally-planned systems to describe. Instead, he might have described the Taiwan health-care experience. Here, government health-planners chose specifically to overhaul the entire existing system, studied various other national healthcare systems (and pointedly rejected the U.S. model), created a comprehensive new plan, and implemented the plan nationwide. The implementation went smoothly and the results are very good and popular. Closer to home, the national introduction of the U.S. Medicare system in 1965 also went very smoothly, even in the absence of modern information technology and other present advantages. And, as the author of this article notes himself, the Medicare program is extremely popular with beneficiaries and with medical personnel.
2) The choice of the recent introduction of the Medicare prescription-drug benefit as a cautionary example of ineffectiveness of central planning is very misdirected. The difficulties in the introduction and administration of that program were and are direct consequences of the success of the Bush Administration (and its associated insurance and drug industry lobbyists and Congressional fellow-travelers) in PREVENTING centralization of this program. Had this benefit simply been incorporated into the existing Medicare program, it could have gone very smoothly. But instead, Bush and company wanted to assure that private insurers got the most financial benefit out it, and that the pharmaceutical companies would not face a purchaser with large negotiating leverage. Consequently, they consciously pushed for and implemented the decentralized, disjointed, and confusing system that we got. (Furthermore, they introduced no new funding source, other than more federal borrowing, to pay for this new benefit.) So, this example should serve as support in favor of a more centralized approach, not as an example against it.
3) The author admits that present public programs are more successful than private insurance at improving quality of care. (The paper by Professor Hacker at Berkeley, which I have mentioned in previous emails, documents this as well.) The author also admits that the Massachusetts program does not control costs well, and he does not make any other meaningful suggestion for controlling costs through any other "path-dependent" evolutionary program. Meanwhile, Medicare has been shown to limit administrative overhead and to contain costs better than private insurance (see again the Hacker paper).

The author, Atul Gawande, clearly is well-intentioned and concerned about assuring quality medical care for all. In this, he is joined by other high-minded medical professionals (including Ezekiel Emanuel, the brother of the new administration's Chief of Staff) who have written sincere and thoughtful articles and books recommending methods to improve care and expand coverage without resorting to a single-payer system. But, while they often have very good suggestions for improving care (some of which are being actively pursued by the Daschle team), their ideas often seem extremely weak, naive, and poorly-examined on the financing side. (I plan to write a new little review of some of these publications to share with the single-payer-advocacy crowd, among others, and will share it with you.)

The various "middle-ground" and public-private-hybrid approaches that have been proposed might nominally (or just theoretically) make some level of healthcare insurance available to most or all, but they retain many of the problems of the present system: high administrative and insurance-company overhead costs, care-denial by profit-minded insurance companies, deflection of care-provider efforts and time to dealing with insurance-related matters, poor payer-based impact on care-quality improvements, anti-competitive burdens on American businesses, etc.

Medicare for All would expand an existing and popular program to cover everyone. The administrative structure is already in place. There would be enormous cost-savings from reducing administrative costs, eliminating insurance industry salaries and profits, increasing consumer negotiating leverage on fees and prices, and even from improving the identification and dissemination of information on the most effective approaches to care of particular conditions. The potential for improving health-care outcomes is enormous, and documentable from existing experience. Employers would be spared the financial and administrative burdens of providing healthcare insurance to employees (while simultaneously paying taxes to support existing public programs). Physicians, nurses, and other healthcare professionals could spend more time providing care and less time battling (often futilely) with innumerable insurance companies, and would be paid more predictably and reliably as well. Choice of medical-care providers would be maintained, and even increased compared to a lot of private programs which limit such choices to participating providers. And, supplemental insurance plans still could be offered privately (just as they already are now) to cover things not covered by Medicare.

Leadership is the key, just as it was when LBJ got Medicare (and numerous other publicly-beneficial programs) approved, and just as it was (to contrary effect) when George W. got his badly-conceived prescription-drug benefit (and even more badly-conceived tax-cuts for the wealthy) approved. What impact will our present leadership choose to have?

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