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April 25, 2005

Health Care WrapUp

Having spent the last week of my life drowning in health care statistics and system comparisons (the products of which you can read here), I want to make a few wrap-up points on the whole thing.  First, I see why Clintons plan failed.  In an effort to avoid the political baggage of single-player, he tried to emulate Germany's system, which is really the worst of the bunch.  Complicated, bad at controlling costs, and obviously jury-rigged to accommodate an evolution that wasn't necessarily organized.  Bad move.

Employer-based health care, which Germany and Japan's universal systems rely on, is a poor choice.  There's no compelling fiscal or policy reason to use it, and employer's, frankly, should not be in charge of their worker's health care.  It's just a silly way of organizing it. 

Canada's system is too biased against the private sector; some degree of private, supplementary insurance should be allowed.  We do not live in an equal society and we've never had a problem with allowing the richest to benefit from their funds.  But if Canada's problem is that they have a ceiling, our problem is that we don't have a floor.  Liberals shouldn't construct a system that stops Americans from getting ever-better health care, but we need one that guarantees a certain level of care.  In essence, we want a floor without a ceiling. 

France and Britain are more interesting, Britain for their enormous cost control and France for the fact that their health care is really very good.  But Britain's frugalness has a price -- care simply isn't as good, surgeries are underused, medicines under-prescribed, and so forth.  While they still have better outcomes than we do, it's only because so many of our citizens are totally without access to health care.  If you had to decide where to be treated, you definitely want it to be here. 

France is more my speed.  Government provided, ceiling without floor, etc.  The lack of a gatekeeper leads to overuse (i.e, the French go to the doctor's too often), but that's changing their, and it could easily be side-stepped here.  What a shame, then, that France is so off-limits in political dialogue.  But whether or not we can invoke the French, they're the closest thing to a model structure out there, and we should study them for ideas. 

Moving beyond countries and into specifics, our doctors make too much money and we credential too few of them.  The road to an MD is torturous, inefficient, bottle-necked and enormously, enormously expensive.  It's such a terrible path that high pay is the least we can do.  But the AMA has codified this absurd state of affairs, and serious reforms will need to chip away at it.  Doctors either need to make less, or we need to radically increase the usage and training of nurse practitioners.  One way or the other, we need cheaper general providers who don't have crushing debt they need to pay off.  To achieve the last, the government needs to step in and subsidize medical training.  That shouldn't be hard, our public universities do it, to some degree, already.  It's time to radically increase the degree.

What really leapt out at me during this series was how normal government provided health care is.  Other nations have doctor choice, hospital choice -- in France, they don't even have limits on specialist choice.  Americans have somehow fooled themselves -- or been fooled -- into believing that government-run health care is somehow different from what they enjoy now.  I genuinely believe they carry some sort of dystopian vision around with them, of gray waiting rooms and faceless bureaucrats and bread lines with stethoscopes, rather than grain, at the front.  In order to keep that prophecy whole, they've had to mentally classify medicare as some weird, third sort of category -- government paying for private health care. 

Medicare, of course, works great, and its beneficiaries are enormously pleased with the service.  it doesn't seem like government-run health care because, well, it's like normal health care, only the government pays.  We need to use that.  Which is why my vote for health care reform would be a radical expansion of Medicare, almost exactly along the lines of what Ted Kennedy has proposed.  Americans need to be assured that government run health care is not, in some weird way, a wholly different state of affairs.  They need to know that it's the health care they enjoy now, just better, cheaper, and guaranteed.  Medicare, because it's already used and liked, comes with those benefits. 

Lastly, all my comments are on the structure of health care systems.  There are many other problems too, the rapid advance of technology and ever-longer life spans chief among them.  Changing our structure won't solve those issues.  But our dysfunctional system currently makes them worse.  The poor get care, but only once the situation is catastrophic and the costs of healing them have drastically increased.  We pay too much, get too little, and remain tied to bad jobs because we can't sacrifice our coverage,  In the end, our health care system is a lead weight on employers, a shackle on employees, and a great drag on our economy.  It's not the best in the world, it's not near it, and we shouldn't pretend otherwise.  Instead, we should set out on the task of making it better.

April 25, 2005 in Health Care, Health of Nations | Permalink


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» health care wrap up from Policy Store
I was checking out these blogs and came across some interesting stories. These are worth a read. [Read More]

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I think that expanding Medicare may be the way to go IF the basic Medicare benefit is improved significantly. I think that this has a political benefit too. Most voters may not be terribly wonky, but old people study their entitlements carefully, but they also worry about their kids and might be good salesmen to their kids and grandkids.

Posted by: Abby | Apr 25, 2005 3:45:01 PM


This is my first visit to your blog and now I understand why you are no longer at Pandagon. You tend to discuss the issues and haven't mentioned "Wingnuts" once.
Things have only gone downhill over there since he allowed Miss Amanda to take over and turn his blog into a femininist women's rights vagina monologue.

I understand that you are a liberal, but I must say, I am impressed with what you have here. Real issues and real discussion. Go figure!

Posted by: Robert Zimmerman | Apr 25, 2005 3:46:11 PM


This is my first visit to your blog and now I understand why you are no longer at Pandagon. You tend to discuss the issues and haven't mentioned "Wingnuts" once.
Things have only gone downhill over there since he allowed Miss Amanda to take over and turn his blog into a femininist women's rights vagina monologue.

I understand that you are a liberal, but I must say, I am impressed with what you have here. Real issues and real discussion. Go figure!

Posted by: OggieDoggie | Apr 25, 2005 3:46:48 PM

Also if we get over the idea that business has an obligation to provide health benefits, then we can sell it as a jobs program too.

Posted by: Abby | Apr 25, 2005 3:47:56 PM

The problem with coming up with a structured alternative to what we have is that right now we have no structure. We have a conglomeration of several systems, all unwieldy, all overburdened, all with out of line cost structures. Solve for one - such as expanding coverage to the poor, and you cause ripple reactions across the others, mostly in unintended and unexpected ways (no one, for instance, has touched on the Veterans' system, which has a huge role in this).

Expanding Medicare sounds interesting.... until you realize Medicare is going broke at an alarming rate, and that of all the systems it may well have the most problematic cost structure (it is one of the reason for the hospital issues we have now in either too many or too few in the wrong places).

Additionally, while one can agree that Doctor salaries are an out of line cost, the question of shortage is problematic. Again, like hospitals, in major cities, there are lots of doctors, and in the wealthiest (and healthiest) communities in those cities, there are probably more than enough. The problem is serving poor and rural communities - just like hospitals. Even if we revamped salaries - in fact, especially if we revamped salary scales downward - there would be even less incentive to push doctors into poorer, or rural communities.

I know I just seem nothing but pessimistic, but the reality is very pessimistic at this point, if one's goal is universal access/coverage. I don't think Medicare expansion is the incremental answer. Any answer we do come up with, at best, should engage the private sector, and public policy-oriented lefties should think about how to make the insurance industry something other than the enemy. Without a partnership involving private health industries, most solutions are doomed here. That's what makes us so fundamentally different from the government driven systems across Europe.

Posted by: weboy | Apr 25, 2005 4:01:46 PM

Thanks for a great series on health care!

I'm now convinced that Medicare expansion is the way to go to get more people covered, and think this could be sold to the people involved, but unlikely to be sellable to the politicians in the Republican/Libertarian right.

What bothers me is having the Congress decide how to fund the program (in particular fees for MDs). Some kind of independent-from-politics rate-setting mechanism is needed.

Current Medicare Part A (Hospital coverage) is pre-funded through payroll deductions during the working years, but I think there is no trust fund (unlike social security). Medicare Part B (MD and Services) is pay-as-you-go, even after retirement, and the annual fees are growing much too fast. These Part B fees are deducted from the Social Security payments monthly, and are undercutting the Social Security structure seriously, since they are really not optional.

Pre-funding works for retirees, but I'm not sure that will work for pre-retirement insurance coverage if the system is expanded. Is the goal of an expanded (perhaps even universal) system a pure insurance system where risks are spread over a long period, or a pay-as-you-go type approach? More thought needed here, for sure.

The unsolved problem for all countries is how to deal with improved technology (and drugs) that the people want and that extends lifespans, but is very expensive. How much technology/cost is too much? Where does 'standard coverage' end and 'supplemental coverage paid by the user' begin?

There is also a serious moral dilemma in how to control the huge amount of money that goes into paying for the last year of life for many/most people.

That last year of payments could fund much better care for everyone, but how do we wrestle with the ethical issues? Is major investment of public funds the right answer in prolonging end-of-life by a few months using heroic efforts and huge amounts of technology?

Posted by: JimPortlandOR | Apr 25, 2005 4:14:41 PM

When are we getting coverage of Sweden?

Posted by: Abby | Apr 25, 2005 4:26:38 PM

It should be noted that federal dollars already get pumped into rural hospitals and clinics, to keep them afloat and to have some semblence of health care in distant communities. We already have a large component of our nation's health care propped up by tax dollars simply because the private sector never will do the job. This little factoid is simply never acknowledged. If more people realized these failures of the free market and understood that they already, unwittingly, support a type of single payer health care system for some Americans, we might could realize how a system like this could benefit everyone.

Posted by: sprocket | Apr 25, 2005 4:31:38 PM

weboy wrote: "Expanding Medicare sounds interesting.... until you realize Medicare is going broke at an alarming rate, and that of all the systems it may well have the most problematic cost structure (it is one of the reason for the hospital issues we have now in either too many or too few in the wrong places)."

I don't agree, Medicare is not going broke at an alarming rate because Medicare has problems. It is going broke at an alarming rate because there is a health care crisis. Dealing with the health care crisis would make Medicare viable. Dealing only with the Medicare financing problem will do nothing to solve health care's problems in this country.

He also wrote: "Even if we revamped salaries - in fact, especially if we revamped salary scales downward - there would be even less incentive to push doctors into poorer, or rural communities."

Again, don't agree. The pay differential between rural and urban MDs is so great that the 10% Medicare bonus isn't a great enough incentive to move MDs out of the city or burbs. Don't get me wrong, even the UK and Canada have problems getting providers into rural areas, but if rural citizens had the same coverage that urban do (rural residents are currently far less likely to be insured at all) and we ratcheted down MDs pay, we could add enough $ to rural docs income to motivate them to look into practicing there.

Posted by: SteveH | Apr 25, 2005 4:43:55 PM

Interesting stuff. In response to weboy's comment about rural doctors and what Ezra said about government funding of medical education - what about loan forgiveness programs for doctors who choose to work in rural/underprivileged areas? Should these programs be expanded?

Posted by: Ali | Apr 25, 2005 4:56:20 PM

Good job, good stuff Ezra

Posted by: Tony | Apr 25, 2005 5:08:07 PM

Good stuff, good job Ezra.

Posted by: tony | Apr 25, 2005 5:08:54 PM

John Kerry's catastrophic coverage did provide a floor, albeit a very minimal floor, but I think it's a good place to start. HMOs have controlled costs by cutting doctor's salaries and removing some incentive to order unnecessary testing and procedures. However, they have also shifted risk from insurance companies onto doctors' groups. That has resulted in a lot of loss of choice and the conglomeration of groups into giant, inflexible beaurocracies which frustrate the consumer as well as the M.D. If the government assumes the catastrophic risk, the large group beaurocracy will disappear. Allowing market forces to work on the cost of less expensive medical utens would help keep cost in line more effectively than the HMO model.

If I were to design a health care delivery system, I would make catastrophic coverage universally available -- sort of Medicare part A for the masses. I would also means test single payer coverage for limited chronic and acute conditions and let HSAs, private insurance, and plain old cash pay for everything else. Employers could provide (much less expensive) insurance to cover the gap. But then again no one listens to me anyway.

As far as lower salaries for M.D.s go, compared to other professionals M.D.s are not nearly as well compensated as you all think. Since compensation makes up such a small percentage of the cost of healthcare, you would have to make a pretty drastic cut in pay to provide a significant impact on total costs. Right now I'm actually looking at returning to engineering. The money is about the same and the hours (I was called 5 times between 11 p.m. and 6 a.m. last night) and stress levels are better.

Posted by: J Bean | Apr 25, 2005 5:21:57 PM

This is all well and good, but I despair of ever getting universal health care enacted in the U.S. We are up against an opposition that will make up facts, bulldoze past reasoned argument, intimidate the press, and otherwise do whatever it takes to scuttle progressinve reform in this country. They will once again have the country trembling in fear of the parade of horribles that never seems to actually materialize in countries with nationalized health care.

Posted by: Donny | Apr 25, 2005 5:54:21 PM

Great series, Ezra (though like another commenter above, I would like to have heard about some of the Scandinavian systems). You should also check out Kash' series at Angry Bear, if you haven't already. I agree that France is the best model, but I have no idea how to sell that politically. Medicare expansion is really the way to go, but we'll have to address Medicare's problems first (getting rid of some of the absurdly industry-friendly provisions in the drug bill would be a good start). I suspect Clinton emulated the German model because it was the most similar to ours, and he thought that would have the best chance of being accepted. Of course he was wrong, but it was a reasonable strategy. Of course, we'll have to get some Dems in power for anything to happen.

Posted by: Rebecca Allen, PhD | Apr 25, 2005 6:36:47 PM

Good series and I agree with you basic conclusions. However, I would be interested in seeing any support for your contention that the AMA is behind restrictions on the physician supply. The AMA is primarily a lobby for practicing physicians and a surprisingly large percentage of physicians do not belong because it tends to be a physician advocacy organization rather than a health care/patient advocacy organization. Medical schools and academic physicians have their own organizations.

Medical school is not like undergraduate programs or some other graduate programs where you can expand the lecture halls, hire a few more faculty and churn out more degrees. There is a significant apprentice like experience in the clinical years so it takes large hospitals and many mentors to train each student.

History also shows that more physicians simply generate more health care costs. There is not a fixed demand for health services since physicians can generate additional demand by recommending more frequent visits and additional evaluations. Physician salary is a minor issue. The big problem is the costs physicians generate with unecessary drugs, expensive drug choices, and unecessary tests and procedures. Getting the right incentives for physicians to order not too many tests and not too few is tough.

Posted by: jb | Apr 25, 2005 9:51:19 PM

Medicare is going broke because health care costs are rising at a rate that outpaces inflation. Which is, indeed, a crisis. How expanding Medicare - in essence, getting the government further into the buiness of funding health care while costs rise exponentially - solves that crisis eludes me - for many of the reasons cited by Jim from Portland. There are large segments of private sector health care that would like nothing better than expansion of Medicare as it stands, because it's more money, pure and simple. The notion that single payer solves all the problems in health care goes back to a point about lefties on health care that baffles me - there's no magic single payer wand. How exactly do you propose reining in costs? And don't tell me the solution is all in "administrative" cost reductions. It isn't. In fact, don't even be exact - just give a vague notion of how costs in health care get reduced. And keep in mind, that's just question #1 of a really long essay test.

As for doctor's salaries, I'd echo jb's point - salaries aren't the problem - it's doctor's making extra money from unnecessary procedures and extraneous care that are the real issues. Second, I agree there need to be additional incentives to get doctors to practice in poorer, and more rural communities. The notion that pushing overall physician wages downward encourages this seems counterintuitive. I'd agree that loan forgiveness might be a solution, but that has all kinds of implications related to costs in higher education that no one's remotely touched on yet.

Posted by: weboy | Apr 26, 2005 9:18:24 AM

weboy wrote: "Medicare is going broke because health care costs are rising at a rate that outpaces inflation." Right, which means simply slapping controls on Medicare costs, cutting benefits, or raising taxes doesn't solve the problem because the real problem is health care inflation. If we could control or moderate health care inflation, Medicare takes care of itself.

Loan repayment for docs and other providers is already used by the National Health Service Corps (NHSC), Indian Health Service (IHS) and a few other Federal programs. Various States have similar programs. The money is limited for these programs. NHSC currently places about 2700 health care providers, total. For the whole country. Don't remember their budget number, but it's not near enough.

One of the biggest Federal programs that affects physician distribution is the J-1 visa. The J-1 allows foreign docs to stay in the US when their visas expire as long as they provide care in an underserved area. J-1 visa waiver docs are estimated to provide care to more than 4 million people. After about 5 years though they can pick up, move and practice wherever they want and frequently do just that as they can earn more money as well as for other reasons. Several hundred waivers are granted every year. If I look at from a standpoint of providing health care in the US, we'd be hard pressed to replace those docs if we stopped issuing J-1s. But, I find it morally offensive for the richest nation in the world to skim the cream of poorer countries, allowing them to put resources into training docs, then using those docs to care for our underserved.

Single Payer is not a magic wand, believe me I'm aware of that. Nonetheless, every problems the health care system faces is exacerbated by the large numbers of people with no coverage. Even health care inflation.

By the way, ask the average person on the street what Medicare is and they'll say health care insurance for the elderly. If they're really informed they'll say health care insurance for the elderly and disabled. You can talk to health policy experts who don't know that Medicare pays $7-8 billion per year to underwrite Graduate Medical Education.

Posted by: SteveH | Apr 26, 2005 11:30:25 AM

You totally skipped Australia. I am interested in how it stacks up against all the others.

Posted by: Samantha | Apr 26, 2005 7:41:48 PM

There is no question that a great part of the health care crisis is the remuneration of physicians. Who here would argue that they are not, indeed, out of line?
As with any other commodity, the price can and should be controlled by the natural laws of economics.
Currently, the AMA, one of the most powerful lobby organizations on capitol hill, makes is difficult to build new medical schools. Making schools plentiful is a good start. Also, there are other disciplines such as Osteopathy who eventually take the same state exams and are able to provide the same services as medical doctors. Another good idea would be to start outsourcing services to India, who aspires to be the medical center of the world. A great percentage of the doctors there are trained in America, but who's pay is a small percentage of what it is in the states.

These are just a few ideas.

Posted by: Robert Zimmerman | Apr 27, 2005 11:29:39 AM

A very intersting blog. I actually wrote a paper making a cross-national comparison of health care deliver systems 11 years ago. I wish I had access to this site back then :)

I agree with the assertion that an expansion of medicare would act to provide a floor. It fits my what I like to call America's mindless incrementalism when it come to health care reform. Others have pointed out that this must come with signficant new streams of revenue, given the current affairs in financing medicare. It's a far larger problem than the social security issue the president seems fixated on. A political discussion of where to get the tax dollars needs to happen.

I just recently changed jobs. I went from working for IBM to a much smaller company. When large employers like IBM struggle to provide benefits, we have a problem. When employees at IBM get 40% premium increases for 2 consecutive years, we have a problem. When companies like GM would rather open a new plant in Ontario instead of Michigan because of healthcare costs, we have a problem.

Healthcare costs and access in the US has an impact on the competitiveness of American enterprise. The loss of productivity and the suffering from a lack of coverage is both a moral failing and a straight up economic loss to the country. We need to join the rest of the industrial world and provide basic health coverage to all our citizens.

Posted by: Beowulf | May 3, 2005 10:36:23 AM

I agree with your conclusion and how medicare does work great.

Posted by: California Health Insurance | Oct 26, 2005 1:22:27 AM

Hi Ezra

I'm a public health student at the University of Western Australia.

I would very much like to read your comments on Australia, please deliver as promised :)

Posted by: Sam Gray | Nov 7, 2005 6:03:36 AM

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Posted by: shaved | Nov 10, 2005 11:55:44 PM


This has to be one of the most ridiculous articles I have ever read in my life. Government run healthcare is the worst idea ever conceived by man or woman. Just take a look at every other service that the government has tried to take over and all you will see is total inefficiency and huge costs. The United States has the best health coverage in the world due to its wonderful system. The competition that all of the Health Insurance companies and brokers provide helps to lower the cost of Healthcare. If you think healthcare is expensive now, just wait until there is no competition!! If you have one government organization running the healthcare system, you have no competition and costs will go through the roof. How often do you see people in America go to another country to get healthcare? They don't because we have the best doctors and technology right here in this great nation. There are financial and career incentives that doctors have here that they can not get anywhere else in the world. Personally, I hope the democrats use this platform for their next presidential run because they will fail miserably. If you have government run healthcare, does the government set the salary for every single healthcare provider in this great nation? Would there be one salary for all Doctor's, nurse's, Chiropracters, Dentists, etc. Do they then go to regulate the cost of each medical procedure or each drug? Trust me, if you want the government to have their finger on every aspect of healthcare, this great nation is in for a world of hurt. I have friends and family living in France, Sweden, Canada, Denmark, Great Britain, and Germany. They talk on end how horrible their service is and how much they have to pay in taxes. When we talk, they talk about dreams of having the great system we have.

The only reason medicare works right now is because the American that have Health Insurance are subsidizing that horrible system. If you get rid of Health Insurance, the Medicare system gets shut down. There is no switch that can be turned on to say, here we go, the Unites States now has governemnt run healthcare. The earliest we will ever see government run healthcare is probably 30-60 years and hopefully never!!!!!!!

Posted by: Danny Brodin | Jun 6, 2006 12:17:19 PM

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