Tag: Health

More on that Massachusetts ‘Model’

By
Michael D. Tanner

Amid reports that the Obama administration, congress, and some conservative groups still consider Massachusetts to be a model for health care reform, the New York Times reveals that despite assessing insurers and hospitals, raising the penalty on noncompliant businesses, increasing premiums and co-payments for consumers, and raising the state tobacco tax, the program’s financing remains unsustainable.

Massachusetts has significantly reduced the number of people in the state who lack health insurance. However, it has not achieved, nor does it expect to reach, universal coverage. (The best estimates suggest that more than 200,000 state residents remain uninsured). And, significantly, roughly 60 percent of newly insured state residents are receiving subsidized coverage, suggesting that the increase in insurance coverage has more to do with increased subsidies (the state now provides subsidies for those earning up to 300 percent of the poverty level or $66,150 for a family of four) than with the mandate.

The cost of those subsidies in the face of predictably rising health care costs has led to program costs far higher than originally predicted. Spending for the Commonwealth Care subsidized program has doubled, from $630 million in 2007 to an estimated $1.3 billion for 2009.

Now the state is turning to a variety of gimmicks to try to hold down costs, including possibly cutting payments to physicians and hospitals by 3-5 percent. However, the Times quotes health reform experts who have studied the Massachusetts system as warning “the state and federal governments may need to place actual limits on health spending, which could lead to rationing of care.”

The more one looks at the Massachusetts “model,” the stronger the argument for keeping the government out of health care.

Topics: 
Health Care

The Beginning of the End of All that Comparative-Effectiveness Research

By
Michael F. Cannon

In “A Better Way to Generate and Use Comparative-Effectiveness Research,” I predicted that taxpayer-funded research on which medical treatments work best would ultimately be defunded at the behest of those who make a living providing the less-effective treatments. Because, well, that’s what always happens.

Well, it turns out those folks have gone and formed themselves a coalition and launched a media campaign to ensure that comparative-effectiveness research doesn’t put a dent in their incomes. According to the Associated Press:

People’s lives and plenty of money are at stake when it comes to determining which medical treatments work best.

So some prominent health industry and patient advocacy groups are trying to reframe the debate over how such decisions are made in order to ensure their interests are protected…

It’s a big concern for drug and biotech companies too since they could lose out if a treatment they’ve developed is found to be less effective than a competitor’s. But a drug company’s bottom line isn’t likely to draw as much public sympathy as a disabled person’s needs.

That makes [former Rep. Tony] Coelho a good face for the Partnership to Improve Patient Care, which formed as the issue began to surface last fall and is funded by groups including the Easter Seals, Friends of Cancer Research, the Alliance for Aging Research, the Advanced Medical Technology Association and the powerful pharmaceutical and biotech industry lobbies.

It also makes the Partnership to Improve Patient Care the very type of “patient-provider pincer movement” of which Tom Daschle wrote in his book.

Topics: 
Cato Publications, Health Care

Looking to a Failed Model for Health Care Reform

By
Michael D. Tanner

CNN health care correspondent Sanjay Gupta, who was briefly considered for surgeon general in the Obama administration, reports that the administration is looking to Massachusetts as a model for its forthcoming health care reform proposal. That model would involve an individual mandate, an employer mandate, a “connector” with increased insurance regulation, and massive subsidies for the middle class.

Given that the Massachusetts plan is expected to run $2-4 billion over budget over the next 10 years, has failed to come close to universal coverage, has done nothing to reduce health care costs (indeed, may have driven up insurance costs), and has actually led to increased wait time for primary care physicians, that may not be the best model out there. In fact, perhaps the Obama administration might like to look at studies by David Hyman and me detailing the Massachusetts model’s many problems.

Topics: 
Health Care

More Praise for Cochrane’s ‘Health-Status Insurance’

By
Michael F. Cannon

This time, it’s coming from Reihan Salam at Forbes.com:

Choice and Security: Professor John Cochrane’s advice to President Obama

Last week, at a White House forum on reforming health care, President Obama issued a challenge to advocates of less government control of the medical marketplace.

“If there is a way of getting this done [i.e., reforming health care] where we’re driving down costs and people are getting health insurance at an affordable rate and have choice of doctor, have flexibility in terms of their plans, and we could do that entirely through the market, I’d be happy to do it that way.”

More to the point, Obama added that he’d be just as happy to pursue an approach that involved more government control as well, and that seems to be the tack he’s taking…

Congressional Republicans have criticized Obama’s approach, and they’ve been particularly hostile to the idea of a new public insurance plan. They argue that Obama’s reforms will eventually lead to a nationalized health care system. But as of yet they’ve failed to offer an alternative that meets Obama’s criteria for a successful health care reform.

Enter John Cochrane, an economist at the University of Chicago Booth School of Business. Professor Cochrane has long advocated a proposal he calls “health-status insurance,” an approach that could guarantee long-term health security while also freeing medical insurers to compete for customers. To most health care reformers, this sounds like a contradiction in terms.

Cochrane’s paper is, “Health-Status Insurance: How Markets Can Provide Health Security.”

Topics: 
Cato Publications, General, Health Care

Schism in the Church of Universal Coverage

By
Michael F. Cannon

On the Diane Rehm Show last week, I predicted that all the lovey-dovey coalition-forming by the Church of Universal Coverage would fall apart as soon as people started talking about actual reforms instead of vague principles.

Today, The New York Times reports:

Two labor unions have pulled out of a broad coalition seeking agreement on major changes in the health care system.

The action, by the American Federation of State, County and Municipal Employees and the Service Employees International Union, shows the seeds of discord behind the optimistic talk at a White House conference on health care this week.

It also illustrates the difficulty of reaching agreement on two of the knottiest issues in the health care debate: whether to offer a new government-sponsored insurance option, and whether to require employers to help pay for employee health benefits.

I made a similar prediction in this op-ed, where I urged that a new government-sponsored insurance option and mandates are two of three proposals that must be blocked at all costs. The third: price controls.

Topics: 
Cato Publications, Health Care

“Fascinating ‘Outside-of-the-Box’ Thinking on Health Insurance Reform”

By
Michael F. Cannon

At Reason Online, Ronald Bailey reviews John Cochrane’s recent Cato Policy Analysis, “Health-Status Insurance: How Markets Can Provide Health Security.”

Writing in advance of last week’s health care summit held by President Obama, Bailey explains:

Summit attendees will break into various working groups that are supposed to engage in “outside-of-the-box” thinking. As it happens, they now have some fascinating “outside-of-the-box” thinking on health insurance reform to draw on. Earlier this month, University of Chicago economist John Cochrane published an intriguing policy analysis for the libertarian Cato Institute that looked at how “health-status insurance” can provide health security for Americans. Cochrane claims that with health-status insurance, free markets can solve the vexing problem of how to insure people with pre-existing medical conditions and “provide life-long, portable health security, while enhancing consumer choice and competition.”…

Creating and selling separate health-status insurance policies would mean that medical insurance companies would no longer have an incentive to offload sick people. Instead, because those with pre-existing conditions would have the funds to pay higher premiums, insurers would compete for their business. “Constant competition for every consumer will have the same dramatic effects on cost, quality, and innovation in health care as it does in every other industry,” argues Cochrane.

Health-status insurance also helps delink medical insurance from employment because…a worker diagnosed with diabetes…can switch jobs without worrying about whether or not he can obtain medical insurance…

While Cochrane acknowledges that his proposal is not a comprehensive health care reform program, adopting it would go a long way toward satisfying President Obama’s eight health care reform principles, especially affordability, aiming toward universality, portability, and choice, and being fiscally sustainable. “Health-status insurance can simultaneously give us complete and portable long-term insurance, great individual choice, and cost-containment beyond the dreams of any health policy planner,” concludes Cochrane. Asked if he has been invited to the president’s health care reform summit this week, Cochrane said no, but quickly added, “If I got the phone call, I would definitely be there.” Mr. President, there’s still time for your summiteers to hear about this outside-of-the-box thinking.

Topics: 
Cato Publications, General, Health Care

Pages