PHILADELPHIA REFLECTIONS
Musings of a Philadelphia Physician who has served the community for six decades

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Medical Economics
Some Philadelphia physicians are contributors to current national debates on the financing of medical care.

Insurance in Philadelphia
Early Philadelphia took a lead in insurance innovation. Some ideas, like life insurance, flourished. Others have faded.

Clinton Health Plan of 1993 - Part Two
William Penn Pennsylvania HospitalAfter the Clinton Plan was dropped, and then after fifteen years of aftermath, public dissatisfaction with the health financing system is no better, probably worse. Here are some fresh ideas.

What Good Did Medicare Do?

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Amy Finklestein

An article in the Wall Street Journal by Amy Finkelstein of MIT describes evidence that Medicare seemingly produced no provable increase in longevity during the period she studied, which was 1965 to 1975. Thinking back to that time in the practice of Medicine, the conclusion while surprising seems entirely plausible after a little reflection. Our system of charity care was good enough so I really doubt if very many people were allowed to die prematurely because of poverty in 1965, at least in Philadelphia. Charity took care of them. Elective repairs were an entirely different matter, however. Working in charity clinics at the time, I well remember that almost every patient seemed to have bad teeth, an unrepaired hernia, untreated varicose veins, or a positive Wasserman and similar threatening but non-fatal conditions. There existed a vast backlog of untreated non-fatal conditions, almost to the point where it seemed we would never catch up, but of course we did eventually catch up. Whatever the costs of the government health programs during that decade, they mainly reflect that huge backlog project of correcting health impairments which were nevertheless not an immediate threat to life, in addition to lifting the former financial burden from our charity institutions of treating conditions which were undeniably life-threatening.

From this historical experience it can be deduced that any new proposals for modifying or reforming the medical system should start with the medical situation as we happen to find it. If a great many people are dying of treatable conditions as they are in Asia and Africa today, then it is likely that extra finance will promptly reflect itself as improved population longevity. If that's not the case and other institutions are providing emergency care, you must then look among the backlogs of untreated conditions -- in that locality -- for a justification of new costs and disruption. Since even the non-urgent backlog in America has now been almost totally eliminated, something else must be proposed as a goal for legitimate improvement. Otherwise, you would have to be so far-sighted that you make a decision to spend an extra 10% or so of the Gross Domestic Product for benefits, every year for ten years, until some unpredictable long-term benefits appear. It's difficult to imagine our political process launching forth on such an adventure.

NIH Map

However, let's continue to look at what did happen, to see what arguments we might have been imaginative enough to adopt. First of all, we can see that the quality of life of the elderly generation, the one I now belong to, has been enormously enhanced by joint replacement and cataract repair --significantly reducing wheelchair crippling and blindness. Neither of these benefactions can be said to result from a brilliant insight by a genius, but rather a slow, incremental process of adding small enhancements until the desirable result becomes standard practice. This sort of development, as in research and development, is very likely a response to a general increase in the funding of the provider community, as contrasted with targetted extra appropriations to the NIH for example. A plausible case can be made for asserting that the undesignated increased funding of the early Medicare program gave tens of thousands of elderly people -- in the next generation -- a comfortable life rather than a miserable one, several decades sooner than a more frugal medical system would have done.

Secondly, life expectancy did finally increase substantially, perhaps extending an average of ten or more years of life in the period subsequent to the enactment of the Medicare Act. But it did so only after a fifteen or twenty-year lag. It's uncertain how much we may credit Medicare with this benefit, however; the increased basic research funding of the National Institutes of Health seems plausibly responsible. However, at least half of the longevity benefit must be credited to research efforts in the private pharmaceutical industry, which was funded in large measure by Medicare dollars, recirculated through drug purchases. But there's restrained exuberance about even these miracles, which were surely the greatest medical advances in human history.

We have greatly extended the comfortable, useful life of our population, but now must grudgingly admit we directed these benefits to a group of people who are no longer engaged in economic activity. Unemployable people have been transformed into employable ones, but sadly we have mainly given a twenty year vacation to people who are capable of doing productive work, but don't. Instead, we import millions of foreigners to do the work, or outsource it, which accomplishes much the same result without the demographic disruptions. Worse still, we may find these people will often outlive their savings, so the extra longevity could result in years of economic misery and dispair, not necessarily an improvement on the physical and medical varieties. In other words, if we had possessed the foresight to see that ultimately improved longevity and life quality was a worthwhile goal, we should then have simultaneously taken the steps to improve economic circumstances which make that medical miracle seem worthwhile.

As we now consider further steps to over fund medical care, or reform it, or make it universal or whatever, perhaps there will be time to consider whether other improvements in American life are needed before there is a net beneficial effect. Either undertaken simultaneously with the health care financing initiatives, or even possibly, instead of them.

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The Newsweek writer overlooks the two biggest problems : in about a decade the bulge of baby boomers will overwhelm Medicare with unfunded costs, and secondly, large employers got us into an HMO mess which tempts them to ditch employer-based health insurance entirely. Just about all of the complaints in the article are either derived from these two blunders, or trivial by comparison with them.
Posted by: George Fisher   |   Jul 26, 2007 12:58 PM
From Jane Bryant Quinn of Newsweek

July 30, 2007 issue - Prepare to be terrorized, shocked, scared out of your wits. No, not by jihadists or Dementors (you do read "Harry Potter," right?), but by the evil threat of ... universal health insurance! The more the presidential candidates talk it up, the wilder the warnings against it. Cover everyone? Wreck America? Do you know what care would cost?

But the public knows the American health-care system is breaking up, no matter how much its backers cheer. For starters, there's the 46 million uninsured (projected to rise to 56 million in five years). There's the shock of the underinsured when they learn that their policies exclude a costly procedure they need—forcing them to run up an unpayable bill, beg for charity care or go without. And think of the millions who plan their lives around health insurance—where to work, whether to start a business, when to retire, even whom to marry (there are "benefits" marriages, just as there are "green card" marriages). It shocks the conscience that those who profit from this mess tell us to suck it up.

I do agree that we can't afford to cover everyone under the crazy health-care system we have now. We can't even afford all the people we're covering already, which is why we keep booting them out. But we have an excellent template for universal care right under our noses: good old American Medicare. When you think of reform, think "Medicare for all."

Medicare is what's known as a single-payer system. In the U.S. version, the government pays for health care delivered in the private sector. There's one set of comprehensive benefits, with premiums, co-pays and streamlined paperwork. You can buy private coverage for the extra costs.

Health insurers hate this model, which would end their gravy train. So they're trying to tar single-payer as a kind of medical Voldemort, ready to destroy. Here are some of their canards, and my replies:

Universal coverage costs too much. No—what costs too much is the system we have now. In 2005, the United States spent 15.3 percent of gross domestic product on health care for only some of us. France spent 10.7 percent and covered everyone. The French comparison is good because its system works very much like Medicare-for-all. The other European countries, all with universal coverage, spent less than France.

Why are U.S. costs off the charts? Partly because we don't bargain with providers for a universal price. Partly because of the money that health insurers spend on marketing and screening people in or out. Medicare's overhead is just 1.5 percent, compared with 13 to 16 percent in the private sector. John Sheils of the Lewin Group, a health-care consultant, says that the health insurers' overhead came to $120 billion last year, of which $40 billion was profit. By comparison, it would cost $54 billion to cover all the uninsured.

Eeeek, your taxes would go up! Maybe not, if Sheils is right. Both the Congressional Budget Office and the General Accounting Office have testified that the United States could insure everyone for the money we're spending now. But even if taxes did rise, you might still come out ahead. That's because your Medicare plan would probably cost less than the medical bills and premiums you're paying now.

We get world-class care; don't tamper with it. On average, we don't. International surveys put France in first place. On almost all measures of health care and mortality, we lag behind Canada and Europe. Many individuals do indeed get superior care, but so do people in single-payer countries, and at lower cost.

They have long waiting times. No advanced country has waiting periods for emergency surgery or procedures that are urgently needed. The United States has shorter waits than Canada and England for elective surgery. Still, queues are developing here, at the doctor's door. In a study of five developed countries, the Commonwealth Fund looked at how many sick adults had to wait six days or more for an appointment. By this measure, only Canada's record was worse than ours. But waits depend on how well a system is funded, not with the fact that it's single-payer. Many countries that cover everyone, including France, Belgium, Germany and Japan, report no issue with waits at all.

There's no problem; people get care even if they're uninsured. They don't. They get emergency treatment but little else. As a group, the uninsured are sicker, suffer more from chronic disease and rarely get rehabilitation after an injury or surgery. They also die sooner—knowing that, with insurance, they might have lived.

Right now, Congress is trying to bring 3.3 million uninsured children into the State Children's Health Insurance Program. President George W. Bush says he'll veto the expansion as "the wrong path for our nation." He objects to "government-run health care" (like Medicare?) and says that SCHIP "deprives Americans of ... choice" (like the choice to go uninsured?). Buzzwords like "government run" are supposed to summon up monsters like "socialized medicine" that apparently still lurk under our beds. If these terror tactics work, prepare for another 46 million uninsured.

Reporter Associate: Temma Ehrenfeld
Posted by: George 4th   |   Jul 25, 2007 3:14 PM

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