How do we pay for it?
August 14, 2009, 3:42 pm
Posted by Joseph A. Komonchak
Charles Krauthammer’s column in today’s Washington Post makes a good deal of use of three reports from the Congressional Budget Office about the very high cost of the proposed reforms of health care. He is particularly concerned to show how prevention does not reduce but increases the total costs. I don’t know where the truth in any of this lies, but the one great question I’ve had from the beginning is this: How do we pay for it?
Perhaps the solution to the health care dilemma is to dissolve the CBO :-)
If I were to lose weight, that would improve my health. The government doesn’t need to hire a counselor or enroll me in a program for me to know that or do that.
Fr. Komonchak, today, as a society, we pay a lot of money for a health care system that handsomely benefits people like me and fials to do much for many other people. We, as a society, pay for what we now have through our fees to medical professionals, our tax policies for individuals and corporations, etc. In short, we presently have a societal health care system that we collectively pay for in various ways and that serves some of us very well and some of us not well at all.
The whole point of any responsible health care reform is to lessen the imbalances that presently afflict our society. To do so, there will have to be a redistribution of the overall costs of our health care system.
The only institution capable of effecting this rebalancing is the federal government through legislative reform. Redistributions are sure to lead to some people having to pay more than they presently do and some people being better off, either financially or in their health care or both.
For my part, deciding to keep the present system is a decision to keep millions of people without sufficient health care. I can’t see the justice of continuing the present system.
So, how do we pay for the reform. By making the necessary adjustments o in our present way of doing so that reduces the glaring inequities that presently exist in our society.
I don’t have the technical or political expertise to construct the actual rreforms, but it seems clear that justice demands that we do all that we can to reduce the systemic inequities that prresently afflict the poorest among us.
Thanks to Bernard for underlining the common good notion in sayiong how we pay. In Montana, the president says 2/3 from savinga administratively and 1/3 by raising taxes of those making moie than 250 g’s. If that’s in the ball park, that seems to me like a fair redistribution.
This is a very interesting article and should be taken into consideration in this debate. However, the point here seems to be about preventive care vs other kinds when both are covered by insurance. Though I could be wrong, I suspect when we are comparing preventive care vs emergency room care there is a different cost-benefit story to tell…especially when one thinks about the impact this has on all of the hospital costs for the insured. For multiple reasons, we need reform that will make a concerted effort to reduce the number of persons who get their health care in the emergency room.
“How do we pay for it?” is an important question, but it is not be the same as “Should we pay for it?” We have to ask the question as if we are standing in a drugstore, counting our money and trying to decide if we will treat our diabetes or feed our children.
In that light, Krauthammer’s statistics take on a new tone. If the cited study is right that it will cost 162% more to prevent diabetics foot amputations, the question is do we want to spend the money, or have some people without feet?
Bernard and Jim McK – yes, we should do something, somehow. But if we do something that makes the country go broke, we end up without the health care and without many other things we take for granted today.
Charles Krauthammer appears a lot younger than I am . However his being in a wheelchair, I suspect that his medical bills life long have been substancially higher than mine.[I'M healthy. thanks be to God] Has he not been heavily subsidized in paying for his health treatments? past and future?
Revenue? I suggest a 50c a gallon gas tax and a tax on sugar soft drinks as both healthy, and with many other long term benefits. 5c can recycle has done wonders.. ‘no nanny state’ is not a convincing argument except on talk radio!
Who counts as the total the cost of war the life long costs of treating the wounded, the vets, and their families.. certainly not conservatives who are eager in their use of force.
Peter Nixon’s analysis of government involvement in the present health care system demolishes the outcry of ‘Socialized medicine’ As a Kaiser permenente HMO member for almost 60 years I can remember that in the 50s, it was falsely labeled ‘socialized medicine’ at the large utility where I worked . My retort that there was no US flag on the Kaiser buildings was not understood. Almost all the utility’s 50s workers who yelled socialized medicine have now dropped Blue Cross on opted into Kaiser in their retirement. .
Douglas Elmendorf, the CBO director who can’t verify the alleged savings from preventive care, is doing far more than the Republicans to undermine the Democratic plan. He’s from the liberal Brookings Institution.
Krauthammer is a trained psychiatrist and MD who, because of his own health reasons, moved to op-ed writing. He is openly Republican and has many biases that make him less than objective.
BUT, his comments are correct. My experience in behavioral health is that identifying lifestyle and health conditions early on and providing treatments such as health coaching, does increase costs in the short term. But, what he fails to say, is that it decreases costs over the long term and it makes the health delivery system better because the focus is not on chronic, emergency, or old age care but on total health. What he leaves out is that reform of the way we do healthcare currently, also would address the costs to employers who have to cover these types of cases.
He also leaves out one of the primary drivers for reform of the current system – 90% of all insurance is provided via employers. Within 3-5 years, employers can continue to increase premiums to employees (their costs have been and will continue to rise in double digits); or they can raise the prices of their services and products. The result is what we see with GM and Chrysler – they became non-competitive (their cars include 15-20% pricing increases because of the cost of insurance for their employees). This also results in mid and small businesses no longer being able to offer insurance, increasing the uninsured.
He does not address the Baby Boomer Generation that is starting to retire. Using his methods, we let this generation get their chronic illnesses and die younger and faster in order to save money. Not sure an actuary would agree with his figures. We have no idea what the costs of the Baby Boomers will be like but it will substantially increase.
He does not factor in the current obesity epidimec in the US and its impact for the future of healthcare.
So, short term about prevention – yes, it will cost more but long term by shifting to a total wellness/prevention model rather than treating only chronic, catastrophic illness, we just might see a better system for all citizens. The CBO has yet to show what happens when 98% of all Americans are insured – that changes the way hospitals operate, budgets, costs; it means that currently emergency care for the uninsured (amounts to billions) moves over to the insured column.
But, ultimately if we truly want to change healthcare in the US, congress will have to pay for it using some type of tax or insurance exchange that allows for good basic insurance for all and choices that offer even more for those willing to pay more.
I should have been clearer – all of us currently working will continue to see our insurance coverage costs increase. Why isn’t anyone saying that?
Think about those cost increases and some of the proposals that indicate we may have to pay a tax, etc. for coverage. I personally would rather reform the current system, include everyone, focus on total wellness, and pay for that throught some type of tax, etc. than watch my premiums continue to rise every year and my coverage in some areas disappear, decrease, or be limited or shifted to me paying 100%.
I think Bernard said it very well.
In addition to the fact that we’re already paying, even assuming the assessment has anything to do with reality, Krauthammer’s arithmetic no doubt does not account for the fact that a person with amputated feet is a lot more likely to be receiving total disability and in need of a lot of additional personal and medical services than one whose diabetes is under control.
I am always amazed at those whose health care needs put them in the upper brackets of need who seem to think that none of this has anything to do with public policy and preferences. Even Andrew Sullivan has begun to figure it out. To put it in perspective, if we were to apply the normal rules and attribute everything spent on Charles Krauthammer by a third party, be it employer or insurer, as income, we would find that his net income tax is close to zero. Even if you get nothing in the way of benefits, just the fact that insurance is paid on your behalf means that your net tax rate is much lower than any uninsured working person in America.
My question really is about how to pay for the needed reform, or new system, whatever it is to be.
Another question, which I guess is historical. When and why did it become taken for granted that health insurance would be something one would expect to get through one’s employer? It is not in the very nature of things that employers should be involved, and I don’t believe I heard about this benefit, say, forty years ago. Was it set up by the unions?
Father, F.Y.I.-
http://wikipedia.org/wiki/Health_insurance_in_the_United_States
http://content.nejm.org/cgi/content/short/355/1/82
This could be one of the topics discussed if The University of Notre Dame decided to dialogue with the current administration by inviting the Bishops as well as experts in Health Care, Research, Academia, Buisness, Government, etc., to the University to come up with a plan for Health Care reform based on a Catholic framework to preserve Human Life.
If The University of Notre Dame is not up for the challenge perhaps Catholic University would be.:-)
The issue of cost needs to be recast as an issue of strategic investment. You cannot disentangle cost from the model of health care and the vision of care. Depending on the vision, resources will have to be redeployed into different kinds of health strategies.
Community based clinics instead of hospitals, for examples. Invest in technology which will make hospital stays shorter. There is an uptick in the initial investment but dividends work in the long run,
Bill is right in terms of his analysis. At issue though is political vision and will to carry it through. As i mentioned in another post, Tommy Douglas was the originator of the Canadian medicare system and his vision was precisely to move later to less hospitals and more community based clinics or models such that Bill was suggesting. But, and this is a really big but, politicians in Canada have lacked the understanding, vision and history of Douglas’s original vision. Thus we are still labouring (and paying for) a 1940′s and 1950′s styled system because we haven’t redeployed resources (i.e. $$$$) to the development of clinics and reduce dollars to hospitals.
Plus an aging population will require certain investments and pharmaceuticals are a big issue.It;s not like Lilly and Bayer are going to welcome with open arms generic drug companies manufacturing their drugs and half the cost. In fact, my niece works as a paralegal for a firm that is hired by a generic drug company who regularly sued for intellectual infringement or copyright infringement when they produce a generic drug.
It is a complicated area.
Bottom line though you cannot disentangle cost from the system issues. And you should speak less of cost and more of public investment.
Joseph:
About your question regarding the origin of employer-provided health benefits: I believe much of it can be attributed to employment in the aerospace/defense corporations during the cold war. It was a way to attract engineers, scientists, etc., when those fields were the subject of intense efforts by the corporations to recruit them. When I began my career in aerospace/defense at Hughes Electronics (1978), health benefits were a huge part of the package, and since I had six kids, a very welcome one. By the time I retired from Boeing-Rocketdyne (2004), the benefits had already begun a precipitous decline.
What about what Jimmy Mac wrote on another thread on health care. Or is war profitable?
“Let me get this straight: we don’t want to spend hundreds of billions of dollars for the health of our people, but we are perfectly OK with spending hundreds of billions of dollars on unnecessary wars, fought by an “all volunteer force” in places in which we will most likely get our butts kicked big-time (Afghanistan will be Obama’s Vietnam.)”
Father K: As Bob Schwartz and others indicated above, our employer-based health care began in WWII as part of incentives to attract scarce workers. It continued, as most things do, even as it became part of the problem.
I found a New Yorker piece by Atul Gawande (who also co-authored an informative op-ed in the NYT this week) very enlightening on how different countries got to different places in their health care systems.
Here is the link: http://www.newyorker.com/reporting/2009/01/26/090126fa_fact_gawande
Here is a relevent snippet:
As far as costs, health care reform will by its nature be much cheaper than what we have now, and doing nothing will bankrupt us. A fundamental myth being spooled out if that we are paying out something “extra” for health care with a reform package. In reality reform reduces our costs because as a country we will pay far less for better and more universal coverage. And that’s just a monetary argument, which is where the debate will live or die, I think.
Related to all this I think Peter Steinfels went easy on Daniel Callahan in his Beliefs article today. Callahan is a relentless advocate for limiting health care costs for those over 70. Recently he underwent an enormously expensive seven hour heart procedure to help him continue past his present 79 years in this world.
Amazing when push comes to shove. http://www.nytimes.com/2009/08/15/health/policy/15beliefs.html?scp=1&sq=beliefs&st=cse
Bill Mazzella, I think you’re too glib aboout Daniel Callahan. I certainly don’tknow enough about his condition and his choices to cast aspersions, especially on someone who’s been so thoughtful for so long about these important issues.
Now let me add a bit to my earlier comments. It’s in the nature of all political programs and practices, e. g., tax policies, health care regulations, etc. that there is no definitive right answer that is timelessly valiid. All such policies, etc. have to be regularly adjusted to fit changing conditions. However, from a Christian standpoint, as well as from the standpoint of responsible political practice,these adjustments ought always to aim at an equitable distribution of benefits and burdens.
What we presently have, as Callahan pointed out some months ago in Commonweal is a health care system that is simply unsustainable. It is also far from equitable. So the need for reform is both evident and urgent. To repeat my earlier colloquialism, we fatties cannot justify simply leaving the skinnies out in the cold in health care matters until we’re comfortable with all the p’s and q’s.
Bill Clinton and other pragmatists among the Dems.
http://www.politico.com/news/stories/0809/26137.html
“I want us to be mindful we may need to take less than a full loaf,” he said after recounting the political troubles that followed his failed reform effort in 1994.
It won’t be an easy sell. Even former national party chairman Howard Dean this week threatened Democrats who don’t support the public insurance plan with the prospect of primary challenges – the first rumblings of what could devolve into a Democratic civil war over health care.
There is no guarantee, either, that progressive House and Senate members wouldn’t make good on their promise to oppose a bill without a public insurance plan.
But the signs were everywhere this week that Democrats, stung and seemingly caught by surprise by the vehemence of the opposition to President Barack Obama’s overhaul plans, were already gaming out September and what it would take to get a bill to Obama’s desk…
Bernard, the reference article quoted Callahan as giving a lot of thought to what transpired. Peter juxtaposed Callahan’s experience with his stated position.
We cannot excuse anyone who diverts from his stated position. Especially when he clearly espoused the opposite of what he did. I merely compared his actions with his philosophy. Can you argue with data? We are in trouble if we analyze something according to a person’s reputation rather than the facts.
I think Bill’s characterization of the Steinfels article is inaccurate.
I will say, however, that until access is rendered more equal, it is simply hopeless to talk about rationing, and that Callahan should have a better intuitive understanding of the relationship between justice and limits. It is clear that many people are looking for an excuse to stop caring for — paying for — other people — and if the default were changed, so that society was generally trusted as one that wants to provide for and take care of the sick, it might be easier to make someone understand that the limits of reasonable treatment have been reached.
George D. — I happen to live in Saskatchewan, where Tommy Douglas initiated the first public health care system (which others keep calling socialized medicine). You are right that the goal of having more local clinics and less hospitals makes sense, but you are not right that nobody has tried it. In Saskatchewan, there are many smaller hospitals and clinics in rural areas. The problem is that since the 1940s when the system was established, health care has become dependent on large diagnostic tools, such as MRIs. It is simply not cost effective to duplicate equipment, so the health care system tends to have regional hospitals with outlying clinics. The other way in which health care can be dispersed rather than centralized is through an emphasis on home care rather than extended hospitalization. In Saskatchewan there is a semi-public home care system. Many people receive basic home care visits after being discharged from a hospital, especially if they do not have family who can assist them. Others who need long-term home care will be assessed based on need and ability. The system is designed to provide as much care as possible, and to assist the other health professionals to prevent further complications that make recovery difficult, that decrease the quality of life, or that increase the load on the health system.
Prophylactic care is very important in any health system, but in a public system the best planning involves assigning scarce resources to ensure that larger needs do not develop. At this point the accountants and the health professionals can finally find some common ground.
One big question needs to be faced at some point: if the public is paying for your health care, does the public have a right to restrict certain forms of unhealthy behaviour? This is the argument behind “sin taxes”, particularly those on tobacco. There have been studies that indicate that every 1% of smokers that quit reduces long-term health care costs more than the tobacco tax lost. As a result, it makes sense to raise tobacco taxes to a level where they are prohibitive. Their purpose is not to raise revenue, but to influence behaviour. Unfortunately, when Canadian governments took this approach, they also generated a very lucrative cigarette smuggling business. It is like Prohibition, but the smuggling is northwards.
It should also be pointed out that these economic arguments do not take account of the taxes paid by those who with early prevention are able to remain in the workforce rather than have more severe health problems at a later date.
One big question needs to be faced at some point: if the public is paying for your health care, does the public have a right to restrict certain forms of unhealthy behaviour?
And if the “public” turns out to be the Federal Government, with the power to define “unhealthy behavior”, we would have instant totalitarianism. No thanks.
Bob S., don’t you think that local governments have the right to ban smoking in restaurants and bars?
If there is no public option, whatever plan results could be Obama’s Waterloo. It would be a shame if he turns out to be a one-term president, but unless he grows a spine, he will be.
You can’t tout one thing during the election and then drop it so quickly and wimpishly before the big guns are even out.
Bob: that mantra is old, old, old. Right now insurance bureaucrats with an overwhelming profit motive define lots of things that they don’t want to pay for.
Everyone should read this if they haven’t already: http://www.americamagazine.org/content/article.cfm?article_id=11816
This is the citation to the Dartmouth study referenced in the above-cited article: http://www.dartmouthatlas.org/atlases/Spending_Brief_022709.pdf
“Governments” can, have and should ban many kinds of “unhealthy behavior.”
At various levels, governments require —-
•Seat belts in cars
•Proper placement and quality of child seats in cars
•Helmets for bike riders
•No driving while drunk
•No dumping of toxic wastes in or near public potable water sources
•Elimination of PCBs in power transformers
•Smoking in public places
•Health warnings on tobacco products
•The non-legal use of addictive drugs
•The exclusion of many substances from the processed foods we eat
•Etc.
If “government” waited for voluntary compliance with their “suggestions” by corporations, there would be on compliance with anything that hurt “the bottom line.” I spent way too many years working in large corporations to grant them one iota of altruism in any actions they choose to take.
That should be (of course) NO smoking in public places and THE PROHIBITION OF the non legal usef of addictive drugs.
We just had a discussion folowing a meeting in county last night on health insuranc echanges. A big issue on cost is where will we find primary care physicians and nuses? How will they pay back their education expenses?
Of course, there’s the story of those medical students from UNM from the US in Cuba ( a dozen or so, I think) who are getting the education free on the basis they will serve in poor communities here.
They are a drop in the bucket.
Things prospectively are looking worse all the time, while we continue to lokk at countries doing much bette rwith less and deriding them