Comments on: Health Reform: Part I: Things to Avoid

By: Mark Litow

Mark Litow — Mon, 30 Jul 2007 16:12:08 +0000

I agree absolutely with you on ideas to avoid. but pay-or-play systems as they have frequently been defined, where play means buy insurance or pay means you enter a government program, is a bad idea. If the pay is a penalty that goes to safety net usage but does not pay for any coverage, that can be a reasonable idea. The reason the former idea is so bad is that it creates an adverse selection scenario where the high cost groups relative to the tax take the government option and others play.

By: Jackson Brown

Jackson Brown — Thu, 14 Jun 2007 20:53:48 +0000

Thank you for you very insightful email. I agree with the points in the email. I am fearful that the push to expand SCHIP is just a back door route to a single paying financing system for America’s children. According to data that I have seen, 400% of poverty includes between 70% and 80% of the Nation’s children, depending on the source of the data. The Ebenezer Scrooge charge is, of course, untrue, but can be a very disarming weapon. In dentistry, I believe we have data that indicate that coverage of middle class children with public funding simply shifts the source of funding from private to public. Moreover, since middle class parents are more demanding users of dental services, I believe there is a real chance that covering children from families that can pay for dental care works to the disadvantage of poor children because they could be crowded out of the delivery system, certainly in the short-run.

I believe that the traditional Medicaid program have failed to realize its objectives for medical care, but especially for dental care. The excellent book “Lives at Risk” that your coauthored with Gerry Musgrave and Devon Herrick provides example after example of the inadequacies of single payer funding system. I have never understood why one would want to bring all children in the U.S. down to the dismal level of utilization that the disadvantage suffer, instead of trying to improve the utilization of the disadvantaged so it is more like that of middle class children – which by the way is very good. We need a different approach, not more of the same. Savings accounts and portable insurance separated from employment are two approaches that I have followed closely. Your example of using the child tax credit is very interesting.

There is a program in Michigan called Healthy Kids Dental. It provides Medicaid eligible children with the same coverage that Michigan Delta provides for populations like the UAW. They are given an insurance card that is essentially indistinguishable from other families covered by Delta. Dentists are reimbursed at market levels. The results have been rather amazing and in a rather short period. Utilization rates of Healthy Kids Dental have nearly doubled over Medicaid children in just four years. The number of participating dentists have increased to such an extent that it is no longer an issue. Untreated dental disease in the covered children is declining which such reduce the out year costs of the program. The problem, if it can be called a problem, is that poor children are receiving more care and that is costing the State of Michigan more, but what do they expect – more care for less resources – dentistry is too efficient for there to be much potential for that.

By: Bill Waters

Bill Waters — Thu, 14 Jun 2007 20:52:43 +0000

Wow. Have already programmed my reading time for this coming weekend.

By: Roger Beauchamp

Roger Beauchamp — Thu, 14 Jun 2007 20:51:52 +0000

If one believes that a competitive market is the best arbiter of efficacy, quality and price, then one should consider the following:
The only thing that government can do to make health care more affordable is to not tax earned dollars set aside for that specific need, thereby leaving more dollars under the direct control of those citizens who earn the benefit dollars and and take responsibility for providing for their own needs.
Fairness dictates that this amount should be capped annually and tied to the CPI.

1.Cap the employment based exclusion and permit every citizen to exclude up to the same amount in a health financing account. This way citizens who do not have an employment based health care benefit can exclude up to the same amount that those working for Fortune 500 companies can. Leave them free to decide how much to spend for an insurance product that meets their needs and how much to save for the direct payment of health care. All dollars, under the cap will have exactly the same tax treatment. No tax at all. New insurance products will appear to entice them to purchase insurance.
2. Permit married couples to choose the better of two earned employment based benefit programs as their primary insurer. Permit the spouse to direct that the dollar equivalent of their employment based program be direct deposited into their Health Financing Account or divided between a contribution to the HFA with the balance taken as taxable wages. This will create an opportunity to transition from first dollar third party payment of health care to individually owned policies designed to fit well with a Health Financing Account. The market will have to reprice risk as it should and this will a change in the benefit plan design of existing programs.

Your 5 conclusion points in the booklet titled Reforming the Health Care System. I am not clear on what you mean by neutral between private insurance and public insurance (assistance?), giving equal encouragement for people to be privately insured or enrolled in a public program? The above policy would seem to be an excellent fit with all the other points.

By: ajfortin.com Remembering “Do No Harm” in Health Care Reform «

ajfortin.com Remembering “Do No Harm” in Health Care Reform « — Wed, 13 Jun 2007 03:57:20 +0000

[...] Remembering “Do No Harm” in Health Care Reform June 12th, 2007 — Fred Fortin As the passion starts to build for health care reform this summer, I’ve tried to remind us to be cautious and deliberative in our thinking. Others seem to be advising similar caution. In John Goodman’s Health Blog warns us against rushing to entitlements, overly broad mandated benefits, installing perverse financial incentives, and public programs that encourage people to drop private health care coverage. Goodman also has authored a paper “Applying the ‘Do No Harm’ Principle to Health Policy” in the Journal of Legal Medicine expanding on these points. [...]

By: Rob Moffatt

Rob Moffatt — Tue, 12 Jun 2007 19:13:36 +0000

I disagree with your concept of health improvement as a one time cost shift in "Illusory Solutions" on p.9. I agree that it doesn't work as a stand-alone reform platform, but improvement in long term health risk is a cost control mechanism, not a shift. Prevention of disease doesn't shift cost, it eliminates it. No reform solution will be sustainable without changes to current lifestyle-related health trends.

By: Dr. Bob

Dr. Bob — Tue, 12 Jun 2007 15:27:31 +0000

Could not agree more. If any kind of health care reform is to happen, it becomes necessary to:

1 Remove the insurance industry from the decision making process and let them be third party administrators

2 Make physicians and other care providers accountable for the way they take care of patients.

3 Incentivize wellness and good health

4 Reward for doing the right thing, not just for doing it right.

5 Embrace "Dr. Bob's Rule of Six". Do the right thing, to the right patient, for the right reason, in the right place, at the right time, for the right price.

6 Defined contribution will only work if we restore some ethics and morality into our system.

It would be wise for our administration to use the defined contribution model to fund the war in Iraq. It certainly better than the open ended entitlement that the DOD seems to have at the present time.