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April 06, 2007

Health Insurance Works, Trusting Its Detractors Doesn't

Some of you asked me to take a look at The LA Times op-ed by Michael Cannon and Michael Tanner on why universal health care ain't all it's cracked up to be. I should preface this by saying that I like Michael Cannon and have generally found him to be honest, thoughtful, and very, very wrong on health care issues. And so, in trying to give him the benefit of the doubt here, I will say only that this article is violently, even surprisingly, misleading.

By way of diminishing the reader's assumptions that access to health insurance is important, Cannon and Tanner write, "[y]ou may think it is self-evident that the uninsured may forgo preventive care or receive a lower quality of care. And yet, in reviewing all the academic literature on the subject, Helen Levy of the University of Michigan's Economic Research Initiative on the Uninsured, and David Meltzer of the University of Chicago, were unable to establish a "causal relationship" between health insurance and better health. Believe it or not, there is "no evidence," Levy and Meltzer wrote, that expanding insurance coverage is a cost-effective way to promote health."

Believe it or not, Cannon and Tanner are misrepresenting the study's conclusions. Finding a causal link is hard because there are just about no large scale, experimental studies on the subject, and observational studies can't establish causation. Nevertheless, here's what Levy and Meltzer actually conclude, in their own words:

The results of small quasi-experimental studies provide only mixed evidence that health insurance affects health, while larger quasi-experimental studies and the RAND Health Insurance Experiment provide consistent evidence that health insurance improves health. Only one large-scale quasi-experimental study (Perry and Rosen)fails to show a relationship between health insurance and health, and this study may not have adequate power to rule out the possibility that health insurance improves health. Taken as a whole, these high-quality studies of the health effects of health insurance strongly suggest that policies to expand insurance can also promote health...We are left with the conclusion that health insurance can improve health but remain unable to say exactly which interventions related to insurance will do so most effectively.

So yes, causality remains tricky. But the bulk of the data is unambiguous. And we can go section by section in the Levy/Meltzer study for proof. "Lichtenberg’s preliminary findings suggest there is a significant effect of health insurance on health for persons at retirement age," they write. "Currie and Gruber conclude...[that] expanding children’s health insurance coverage improves child health as measured by the reduction in mortality rates." "[Hanratty's] results suggest that there was a significant reduction of 4% in the infant mortality rate as a result of national health insurance and a smaller reduction in low birth weight of about 1.3%." "[Goldman's] study provides strong evidence that health insurance can have a dramatic effect on mortality among patients with HIV." "[W]ith the exception of Haas et al. and Perry and Rosen, these studies find evidence of significant improvements (declines) in health outcomes as result of expansions(contractions) of insurance."

And I could keep going. But I don't think it's necessary. In their zeal to beat back the momentum of universal health care, Cannon and Tanner are simply and blatantly misleading the
LA Times' readers. I'm genuinely surprised at them.

April 6, 2007 in Health Care | Permalink

Comments

I wonder what you think of Obama's health care forum in Iowa yesterday.

Posted by: Clark | Apr 6, 2007 11:01:28 AM

Ah, I see you have something up about that at TAPPED.

Posted by: Clark | Apr 6, 2007 11:35:38 AM

Bless you for that.
As an older Doc,

I remember us being responsible for
the Medical profession's abdication of health care to ...insurance companies.
I remember working for an horror of an HMO (FHP out of SLC, 1980s). 'Bottom-line' and damn any laggards.

And I am sorry. We were wrong.
To be fair, most of us hated the business of billing and were happy to surrender all that.
And most of us -in the day- were simply oblivious to consequence.

I am today cared for by the VA system.
In that, we are ALL 'second-tier' and happy to have it.
I recommend such a model.

Some sort of single payer mostly social system is crucial.
'Insurance' has failed all but the well off.
The days of our medical 'privatization' experiment. need to end. Done!

James Taylor MD(ret.)

Posted by: has_te | Apr 6, 2007 11:44:21 AM

Ezra,

Sorry, but I fail to see how you have shown that C&T misrepresent the study's conclusions. They don't deny that there is (limited) evidence of a causal relationship between health insurance and health outcomes, they say there is no evidence that expanding insurance is a cost-effective way of improving health outcomes, i.e., there's no evidence that expanding health insurance will produce a greater improvement in health at lower cost than other policies.

And of course, even if there were such evidence, it wouldn't necessarily support a policy of universal health insurance anyway. "Expanded" does not mean "universal." It may be that expanding health insurance is the best policy for improving health outcomes among certain subpopulations (say, children and the elderly) but not others (say, young adults and the wealthy).

Posted by: Jason | Apr 6, 2007 1:41:57 PM

The excerpt you provide from the study would bolster your charge if cannon and tanner had suggested that the study had found health insurance to have no effect. Considering later in their article they lament that "far too many Americans lack health insurance" it is clear they do not believe this to be the case.

Posted by: the invisible pimp hand | Apr 6, 2007 4:07:23 PM

IIRC, the RAND corporation did an actual randomized study, back in the 1970's. They selected some families without insurance, and divided them into groups. One was control, which was merely tracked; the other three groups were furnished with insurance. There were 0-deductible, medium- and high-deductable groups.

The conclusions were (a) people with insurance consumed more health care; (b) lower deductibles caused increased consumption of healthcare; (c) increased consumption of healthcare caused lower death rates, and lower rates of other bad health outcomes.

Posted by: Barry | Apr 6, 2007 4:21:57 PM

Pimp, how exactly does lamenting that "far too many Americans lack health Insurance" address the question of improved health and causality? One can lament the uninsured because, ultimately, the government will have to pick up the tab for them, or they will place a burden on their children, or produce high levels of default and bankruptcy due to illness, etc. Try again.

Posted by: WB Reeves | Apr 6, 2007 4:24:32 PM

Ezra,

I think on a micro level of this kind of analysis, you can look at something like a study done by the New England Journal of Medicine last year entitled "Unintended Consequences of Caps on Medicare Drug Benefits." The study shows that where individuals have insurance that provides minimal prescription drug coverage with low overall caps, that, not surprisingly, they will not take needed medications, particularly maintenance type drugs. Thus people neglect conditions such as high blood pressure, high cholestorol, and diabetes, which can be effectively treated with drugs. This in turn results in more serious and costly conditions occurring, requiring hospital stays, surgery, etc., all of which are much more expensive and traumatic and have less favorable outcomes.

The notion that not having health insurance does not lead to poorer health outcomes could only be embraced by children who don't know much about life as it is actually lived, but embrace vicious abstraction like a shiny toy.

Posted by: Klein's Tiny Left Nut | Apr 6, 2007 5:52:13 PM

The notion that not having health insurance does not lead to poorer health outcomes could only be embraced by children ...

Sorry, but the effect of health insurance on health outcomes is an empirical question that must be answered with evidence, not unsubstantiated assertion. As the study makes clear, the evidence of a causal relationship is far from compelling or comprehensive. And even if expanding health insurance does cause improvements in health outcomes, that doesn't mean it is the best policy for doing so. Other kinds of policy may produce greater improvement at lower cost. As the authors say in their "research highlights" section:

Although extending health insurance can help people access medical care, researchers need to delve deeper to better understand how having health insurance compares to other interventions that can affect health, such as wider access to public health clinics, immunizations, initiatives to curb obesity, and programs to reduce socioeconomic inequities. This will allow policymakers to consider the value of health insurance relative to other interventions that could improve health, and avoid unnecessarily costly and misguided policy interventions that do not best improve health.

Posted by: Jason | Apr 6, 2007 6:40:42 PM

Jason,

So you argue that universal coverage may not be cost effective by suggesting that it be weighed against such things as access to public health clinics and immunizations, among other things. What is this, but other forms of universal access?

The bottom line is that if people do not have the means to pay for their health care, they will go without, at least until the point that someone else will foot the bill.

Do you have any real world experience at all with the health care system or health problems -- because it sure sounds like not. People who lack money for primary care forego doctor and dental visits, are non-compliant with their maintenance medications, and otherwise tend to wait until something catastrophic lands them in the ER. Thus, hypertension turns into a stroke, diabetes to amputations, high cholestoral to heart attacks and bypasses.

The greater life expectancies experienced by the industrialized countries with universal health care are strongly suggestive of the empirical evidence you seek.

Posted by: Klein's tiny left nut | Apr 6, 2007 7:40:16 PM

But it's insurance doesn't protect your health--it's about protecting your money!! And the ferigners understand that!

Posted by: Matthew Holt | Apr 6, 2007 7:56:39 PM

(please ignore the first "it's" in the previous comment)

Posted by: Matthew Holt | Apr 6, 2007 8:36:44 PM

So you argue that universal coverage may not be cost effective by suggesting that it be weighed against such things as access to public health clinics and immunizations, among other things. What is this, but other forms of universal access?

They're specific health programs and services targeted to particular groups within the general population to address particular health care needs. That's obviously not the same thing as "universal health care" or "universal health insurance" as those term are usually used to refer to a comprehensive set of health care services broadly available to the entire population.

The bottom line is that if people do not have the means to pay for their health care, they will go without, at least until the point that someone else will foot the bill.

The indigent and uninsured are already able to obtain free or heavily subsidized health care services through a variety of public and private health care providers and programs. "No health insurance" does not mean "No health care." There are obviously other ways of improving the health of these groups besides universal health insurance, or even expanded health insurance. That's the basic point Cannon and Tanner are making in their piece in the LA Times.

Do you have any real world experience at all with the health care system or health problems --

Yes.

The greater life expectancies experienced by the industrialized countries with universal health care are strongly suggestive of the empirical evidence you seek.

Average life expectancy is virtually worthless as a measure of the quality of a nation's health care system, at least for comparisons between industrialized countries. Life expectancy is so strongly influenced by so many factors other than health care interventions, including such obvious cultural factors as patterns of diet and exercise, that it tells you virtually nothing about the health care system.

Posted by: Jason | Apr 6, 2007 9:26:42 PM

Universal health coverage -- ideally of the government sponsored single payer type without private sector vampires like United Health Care, HCA, etc -- is all about socialization of risk, rational allocation of resources and expertise, and easy access to care geared to produce optimal outcomes.

We could do so much better in terms of health outcomes in this country and spend less of GDP if we went in this direction and eliminated all of the resources devoted to profits for insurers, HMOs, PPO providers, pharmaceutical benefit managers, health care consultants, insurance brokers, and the myriad staff dedicated to navigating this maze for hospitals and doctor's offices rather than providing actual care.

Posted by: Klein's tiny left nut | Apr 6, 2007 9:28:19 PM

Universal health coverage -- ideally of the government sponsored single payer type without private sector vampires like United Health Care, HCA, etc -- is all about socialization of risk, rational allocation of resources and expertise, and easy access to care geared to produce optimal outcomes.

I disagree, and I think you'd be hard-pressed to show that countries with universal health care (single- or multi-payer) allocate resources more "rationally" or produce better health outcomes overall than does the U.S. health care system. Of course, since the issues of the "rational" allocation of resources and "optimal" outcomes are as much a matter of political and ethical preferences as empirical fact, the question can never really be resolved to everyone's satisfaction. In large part, the differences between the American and European health care systems reflect broader political and social differences between the U.S. and Europe in terms of the responsibilities of the state vs. the individual, markets vs. government programs, liberty vs. equality, and so on. Basically, Europe stresses equality and consistency at the expense of liberty and quantity, while the U.S. does the reverse.

Posted by: Jason | Apr 6, 2007 10:45:55 PM

How does the U.S. System stress liberty? There is little liberty in the current patch work private health care systems. Doctor and facility choices are generally constrained through the use of PPO and HMO type arrangements. There is a lack of transparency with respect to outcomes at given facilities.

Money is drained from the system for various entites that take a cut of the health care dollar without actually providing health care. Massive resources are used to deal with the various insurers and their requirements. This is all money lost that could be providing patient care.

There is no liberty by the way in being one of 45 million people without health insurance or the many who are underinsured or afraid to leave or lose jobs due to the nexus between employment and health care coveerage.

Check out the life expectancies in Western Europe and Japan and I think it gives the lie to your assertion.

Posted by: Klein's tiny left nut | Apr 6, 2007 11:05:43 PM

How does the U.S. System stress liberty?

It provides its citizens and businesses with greater choice about how much health care to buy. It doesn't force its people to pay the high payroll taxes, gas taxes, VAT and other taxes that European governments levy to pay for their huge national health care systems.

Your post is so full of dubious or patently false factual claims I won't bother to go through them all. You make all sorts of factual claims and provide nothing to substantiate them. For example, it is certainly not true that there "is no liberty by the way in being one of 45 million people without health insurance." Many people forgo health insurance by choice. It's not that they can't afford it, it's because they figure it'll probably be cheaper for them to pay for health care services out of pocket as and when they need them rather than pay regular health insurance premiums. That option may be particularly attractive to young, healthy adults, or to wealthy people who prefer to buy the highest-quality health care directly rather than settle for lesser-quality care provided by medical insurers. Another option is to buy a relatively inexpensive "catastrophic" policy to provide a measure of protection against the risk of bankruptcy from a serious illness or accident, and to pay for routine and preventive health care out of pocket. A friend of mine, for example, has a policy that is relatively inexpensive but has a $5,000 annual deductible. He could certainly afford a more expensive policy with a lower deductible, but he figures that would end up costing him more money.

Posted by: Jason | Apr 6, 2007 11:51:45 PM

Jason, you wrote
I think you'd be hard-pressed to show that countries with universal health care (single- or multi-payer) allocate resources more "rationally" or produce better health outcomes overall than does the U.S. health care system.

Outcomes comparisons are a mixed bag: in some things we're better, in some we're worse, but by and large we're in the same ballpark as other developed nations. The generally higher outcomes other nations have, as measured by average quality-adjusted life expectency, can be accounted for in significant part by their healthier lifestyles. So let's just say that outcomes are a wash. That far I agree with you.

However, you really miss the forest for the trees when you say that the US system isn't any worse than other systems in the rational allocation of resources. What part of twice as expensive as peer nations do you not understand? Spending twice as much for results that aren't any better is an irrational allocation of resources. The US fails miserably on this count, and it isn't hard to show at all.

Posted by: jd | Apr 7, 2007 12:30:20 AM

I'd like you to cite the acutally dubious or false claims I make.

I have worked with union sponsored health plans for over twenty years. The emphasis of these plans is on quality care and there is no profit motive. Yet I see large sums of money that under the irrational system that we have must be paid by any such plan. There is the renting of the PPO network, the payments to the PBM, the consultant to deal with plan design, the actuary to calculate post-retirement liabilities, etc. This is massive inefficiency. If you throw an insurer into the mix, where you have a substantial profit motive, then the waste grows larger. (Look for instance at United Healthcare, whose CEO drained $128 million from the system recently -- check out the multi-million dollar compensation for the top executives at CIGNA, Aetna, Wellpoint, etc.)

Your arguement vis a vis Europe would be a lot more persuasive if we were spending less on health care than the Europeans. But we're not. It would also be an argument in your favor if our system was less bureaucratic and required less time spent on paperwork, forms, etc., but it doesn't.

Perhaps some young people who fancy themselves immortal and could never get hit by a bus opt to go without health insurance. The notion that a sizable number of the 45 million uninsured like it that way seem rather dubious to me. I am only in my mid-40s, but can already name at least a dozen peers who have had serious, sometimes fatal types of cancer. Treatment of such illnesses can easily run in the six figures. I know very few people past the age of 30 who feel very comfrotable without health coverage.

A high deductible policy may be a viable choice for your friend, but for many people a $5,000 hit would be catastrophic. It is probably equivalent to close to two months of take home pay for an average worker. You can check out the number of personal bankruptcies related to health claims if you don't believe me.

Completely pooling risk and eliminating private sector profiteers would result in affordable care for all. You could probably drop the percentage of GDP devoted to health care and provide coverage to everyone.

Posted by: Klein's tiny left nut | Apr 7, 2007 12:32:19 AM

低血糖 胰岛素 血糖仪 胰岛素泵 糖尿病常识

Posted by: 糖尿病 | Apr 7, 2007 4:37:07 AM

It provides its citizens and businesses with greater choice about how much health care to buy.

Oh, that's utter balderdash.

The amount of health care to "buy" is obvious: enough to keep you healthy. Jesus, why in the world is it difficult for people to realize this? (An aside: how much rural electrification was it necessary to "buy"? We're talking about a national health care co-op here in order to keep people healthy. It's a very clear parallel -- pure capitalism just doesn't work in some markets. Rural electrification was one; health care is another. Case closed.)

You can quibble about the most cost-effective way to make sure bird flu doesn't rip through your population before people can afford to go to the doctor -- is it through an insurance program or free clinics or what? But that's beside the point. The fact is, overall health care costs in the US are higher than in other nations, with much poorer *overall* outcomes. Nobody doubts that for the fortunate few the outcomes are generally pretty damned good. But *overall* the situation sucks, and it will kill you, too, if half the uninsured in your city have bird flu, no matter how fantastic a health care you "buy".

And that's completely sidestepping the moral issue of whether people's employment luck should determine whether their children live or die. Or they themselves, of course, but think of the children! (Or think only of your own, if you're a Republican.)

You could probably drop the percentage of GDP devoted to health care and provide coverage to everyone.

Yes. Yes, you could.

Posted by: Michael | Apr 7, 2007 10:12:02 AM

jd,

Outcomes comparisons are a mixed bag: in some things we're better, in some we're worse, but by and large we're in the same ballpark as other developed nations. The generally higher outcomes other nations have, as measured by average quality-adjusted life expectency, can be accounted for in significant part by their healthier lifestyles. So let's just say that outcomes are a wash. That far I agree with you.

You're not agreeing with me because I didn't say that outcomes are a wash. I am saying that the health of a nations' population is determined by many social, political, environmental and cultural factors, including such obvious factors as prevailing patterns of diet and exercise, rates of smoking, alcohol and drug use, public education, public health, etc. Medical care interventions provided by a nation's health care system are just one factor, and not even the biggest one. Therefore, you cannot draw meaningful conclusions about the quality of different countries' health care systems simply by comparing various measures of the health of their populations. It is even more absurd to draw conclusions on the basis of just a handful of health-related indicators, such as average life expectancy and infant mortality rate. Japan has one of the highest life expectancies in the world, but no serious health policy analyst believes this is because of its health care system. The primary reason is that Japanese people tend to lead healthy lifestyles--good diet, plenty of exercise, low rates of smoking, alcohol and drug use, strong family and social support, and so on.

However, you really miss the forest for the trees when you say that the US system isn't any worse than other systems in the rational allocation of resources. What part of twice as expensive as peer nations do you not understand? Spending twice as much for results that aren't any better is an irrational allocation of resources.

You haven't shown that the "results aren't any better." On metrics that actually do measure the quality of medical care interventions, such as waiting times for surgery, the U.S. is superior to almost all other countries. Megan McArdle says thaat the differences in health care spending between the U.S. and other countries can be accounted for almost entirely in terms of consumption. Americans pay more because they get more. They get more tests, more drugs, more surgeries, and so on.

Posted by: Jason | Apr 7, 2007 7:08:24 PM

Jason,

You continue to totally ignore the fact that huge dollars are drained for the coffers of corporations and their CEOs that don't actually provide care. This is an enormous waste of money.

You are also ignoring the detriment that is done to businesses with a social conscience that provide good health care coverage and are thereby put at an unfair advantage by the bottom feeders of the business world. A single payer system would completely even this part of the playing field and allow for greater worker mobility at the same time.

Posted by: Klein's tiny left nut | Apr 7, 2007 10:00:00 PM

Now guys, we're being unkind to Jason here. After all, the heart of his argument rests on the premise that health care insurance is worthless because it provides no better outcomes !

Posted by: opit | Apr 8, 2007 2:00:11 AM

"the heart of his argument rests on the premise that health care insurance is worthless because it provides no better outcomes"

Its actually been a matter of some dispute. But the bulk of the evidence is contrary to his position to the tune of at least 18,000 deaths a year.

http://www.iom.edu/?id=6035 ("The main findings of the report are that working-age Americans without health insurance are more likely to receive too little medical care and receive it too late; be sicker and die sooner; and receive poorer care when they are in the hospital, even for acute situations like a motor vehicle crash.")

http://www.ncbi.nlm.nih.gov/entrez/query.fcgi?cmd=Retrieve&db=PubMed&list_uids=11507814&dopt=Abstract("We found that uninsured patients are sicker, indicating that hospitals should expect uninsured patients to have increased service needs. Our results indicate that the uninsured exhibit higher likelihood of leaving against medical advice, shorter lengths of stay and poorer health outcomes suggest that the uninsured may not be receiving necessary care.")

http://www.kff.org/uninsured/4118-index.cfm ("· The uninsured receive less preventive care, are diagnosed at more advanced
disease stages, and once diagnosed, tend to receive less therapeutic care and
have higher mortality rates.
· A conservative estimate based on the full range of studies is that a reduction in
mortality of 5-15% could be expected if the uninsured were to gain continuous
health coverage.
· Better health would improve annual earnings by about 10-30 percent and would
increase educational attainment.
· On average, the uninsured receive about half as much care as people who are
insured all year. In 2001, persons uninsured for the full year used $1,253 per
year in medical care compared to $2,484 for persons with private coverage for
the full year.
· Total uncompensated care provided in 2001 was estimated to be $35 billion
dollars. The primary source of funding for uncompensated care is government,
which spent an estimated $30.6 billion for care of the uninsured, two thirds of
which is federal.")

Jason, how about some links?

Posted by: RW | Apr 8, 2007 3:11:43 AM

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