Saturday, November 13, 2010

So What Should We Do About Health Care?

The last few posts left it unclear exactly where I think we should go with health care.  The honest answer is that I don't think it matters that much as long as we get universal coverage.  Once that is in place I think the various actors in the debate will have their incentives lined up in a way that will over time lead to cost controls.  The problem is essentially structural in that it has to do with the power, and diversity, of the various groups involved far more than it has to do with the technical aspects of providing care.

That said, I think there are some clear areas where there are real possibilities for reform that would save costs.  The first of these is to debate whether we want to move to fairly comprehensive health care as the norm, or if we want more limited access.  In either model, catastrophic coverage must be given, and have it clear who is providing it (having the government as a backstop for insurers is the problem, this exists today) for the system to work.  Beyond this, we can have a reasonable debate about how much we are willing to pay to increase access.  Given the disparity between low and high cost patients it is also essential to understand that expanding access is unlikely to do much to increase costs, between Medicare and Medicaid we are already paying for the most expensive conditions.  But there is a real debate to be had over whether we should be paying for routine payments out of pocket, or through individually purchased health care, or if the advantages of early detection and consistent follow up for more cost sensitive patients are worth the additional costs to the system

The second major issue is what limits we wish to impose on care provided from universal insurers.  Right now, it seems pretty easy to continue to get treatment well after the possibilities of success are low.  Should people really have the option of having the government pay for 2nd and 3rd line cancer treatment or is it reasonable to limit the publicly provided funds to the treatment with the highest chance of success, to give one example.  At some point a line will have to be drawn, the question is where.  My take is that everyone deserves at least one shot at treatment, after that I don't think there is a public responsibility to continue to provide public treatment for the same condition (I'd also hedge this with numerous exceptions, such as cost benefit analysis.  If a second treatment isn't expensive no reason to stop it.  Also if its a chronic condition and there is a high long run payoff to successful treatment it should also be paid for; some form of expert panel to weigh these issues, with feedback from the public, is necessary.).  Though a responsibility for hospice remains.

The third question regards supplementary insurance.  This being America, I think the answer is easy.  Whatever the minimum level of insurance required we should always have the option of purchasing more.  This should not bar us from getting the public version as well to prevent perverse incentives.  This should be a less regulated market but if we're not going to cover 2nd and 3rd line cancer treatments, or cover routine doctors visits from the other side, we certainly should allow a market in supplementary benefits.  Those that favor high degrees of equality are not infrequently against this, I ran into it often enough in Canada, but here I think there is a very strong argument that whatever the government offers those that want a Cadillac plan should be able to buy it.  I certainly don't think this should be subsidized, however.

At the end of this, I will admit that I simply don't know enough about the system to make specific recommendations.  I do think there are compelling reasons to approach the problem from a more systemic approach of how health care needs to look in the long run to fulfill its purpose.  Without doing this as well as looking at specific reforms that are possible today I don't think its possible to carry the public along with reform proposals or to deal with the perverse incentives that got us to where we are today.  Its not just a matter of specific flaws in the current system, it's also about fundamental problems with the system itself.


  1. The biggest problem, I think, is that nobody knows enough about the system to make reliable proposals. It's really massive and a medical expert, a hospitals expert and a public health expert probably together don't know enough to put together a proposal that won't create perverse incentives in other parts of the system. We're just going to have to try stuff and fix the problems, I think.

    Unrelated but I'm watching Fareed Zakaria as I type and George Schultz is on and was just giving a gardening metaphor for diplomacy which gave a very pleasant Being There flashback.

  2. I agree with that. I don't think we'll be able to do this in a few reforms, it will take many. I do think that the critical element is to get all of the interest groups to feel enough pain that they want to reform the system as a whole, rather than to redistribute the pain to other actors.