Wednesday, November 18, 2009

Expanding Coverage = Increased Costs for Current Dysfunctional Health Care System, Less Innovation

Our health-care system suffers from problems of cost, access and quality, and needs major reform. Tax policy drives employment-based insurance; this begets overinsurance and drives costs upward while creating inequities for the unemployed and self-employed. A regulatory morass limits innovation. Deep flaws in Medicare and Medicaid drive spending without optimizing care.

Speeches and news reports can lead you to believe that proposed congressional legislation would tackle the problems of cost, access and quality. But that's not true. The various bills do deal with access by expanding Medicaid and mandating subsidized insurance at substantial cost—and thus addresses an important social goal. However, there are no provisions to substantively control the growth of costs or raise the quality of care. So the overall effort will fail to qualify as reform.

In discussions with dozens of health-care leaders and economists, I find near unanimity of opinion that, whatever its shape, the final legislation that will emerge from Congress will markedly accelerate national health-care spending rather than restrain it. Likewise, nearly all agree that the legislation would do little or nothing to improve quality or change health-care's dysfunctional delivery system. The system we have now promotes fragmented care and makes it more difficult than it should be to assess outcomes and patient satisfaction. The true costs of health care are disguised, competition based on price and quality are almost impossible, and patients lose their ability to be the ultimate judges of value.

Worse, currently proposed federal legislation would undermine any potential for real innovation in insurance and the provision of care. It would do so by overregulating the health-care system in the service of special interests such as insurance companies, hospitals, professional organizations and pharmaceutical companies, rather than the patients who should be our primary concern.

In effect, while the legislation would enhance access to insurance, the trade-off would be an accelerated crisis of health-care costs and perpetuation of the current dysfunctional system—now with many more participants. This will make an eventual solution even more difficult. Ultimately, our capacity to innovate and develop new therapies would suffer most of all.

There are important lessons to be learned from recent experience with reform in Massachusetts. Here, insurance mandates similar to those proposed in the federal legislation succeeded in expanding coverage but—despite initial predictions—increased total spending.

~Jeffrey S. Flier, Dean of Harvard Medical School, in today's WSJ - "Health 'Debate' Deserves a Failing Grade"


3 Comments:

At 11/18/2009 9:36 AM, Blogger PeakTrader said...

House Health Care Bill Includes New Taxes, Fees, Government Mandates
Friday, October 30, 2009
By Julie Hirschfeld Davis, Associated Press

The health care overhaul bill produced by House Democrats would impose an array of new taxes, fees and government mandates on major players in the health industry, including insurers, doctors and drugs and medical devices makers.

Among the industries targeted in the bill are medical device makers -- one of the few that failed to cut an early behind-the-scenes deal with Obama and Democrats to help pay for an overhaul. The House added $20 billion in taxes on sales of medical devices like artificial hips and heart stents to the legislation Democratic leaders unveiled Thursday.

That's more than the industry wants to pay, but it's a substantial reprieve from an earlier plan in the Senate to slap a $40 billion fee on medical device makers.

The measure is less kind to drug makers, an industry that did strike a deal with Obama and key senators to hold down its costs. Pharmaceutical companies agreed to cough up $80 billion in the health overhaul.

Ken Johnson of the Pharmaceutical Research and Manufacturers of America said lawmakers were being "unrealistic in their expectations of what our industry can contribute to health care reform without triggering catastrophic job losses and driving innovation and business overseas."

The $80 billion figure "is a huge amount of money -- it's not loose change we found sitting around in the sofa," said Johnson.

Also:

Retail expert and all-around economy watcher Howard Davidowitz

The proposed price tag for health-care reform? "Minimum $3 trillion," Davidowitz says. "One trillion? Are you kidding?"

 
At 11/18/2009 7:59 PM, Blogger juandos said...

So much for any hope of a quick economic recovery...

From Bloomberg: Reid’s proposal would apply Medicare taxes to non-wage income earned from capital gains, dividends, interest, royalties and partnerships for U.S. couples earning more than $250,000, the aides said. He’s also considering an alternative that would simply increase the 1.45 percent Medicare tax on salaries of couples who earn more than $250,000, one of the aides said...

 
At 11/19/2009 5:28 AM, Blogger juandos said...

Here's an odd idea I found via a posting in the Business Insider...

From the Health Care Blog: Sell Patients like Baseball Players - Seriously

By JOE FLOWER

 

Post a Comment

Links to this post:

Create a Link

<< Home