Tag Archives: health care

Another Data Point on Health Care Reform

Apparently there is an ongoing debate in ophthalmological circles about using Lucentis or Avastin to treat macular degeneration. These are two closely related drugs, both made by Genentech from the same molecule. Avastin has been approved for treating various cancers, but ophthalmologists have evidently been using it off-label for a while to treat macular degeneration. This off-label use is one of the reasons Genentech produced Lucentis, which has been approved for macular degeneration.

Why is this relevant to health care reform? Because Lucentis costs thousands of dollars per dose while Avastin costs less than one hundred dollars. Even worse, as I was told by an ophthalmologist over the weekend, insurance policies keep even those doctors who are worried about costs from using Avastin. Doctors pay $50 for a dose of the drug, but only get reimbursed $7, so they are losing $43 per treatment. If they use Lucentis, they get full reimbursement. One might argue (in fact, I probably would) that the ophthalmologists are making so much charging for the treatment that they should eat the $40 loss, but I doubt many of the doctors will listen.

I know that there are many complexities here: you can’t expect insurance companies to fund the use of unapproved drugs, and you want a drug approval system that errs on the side of safety, and there hasn’t been a head-to-head trial to see if Avastin is fully equivalent to Lucentis. But surely there is a middle ground, where drugs are sufficiently vetted yet we are not incenting doctors to prescribe thousand dollar drugs instead of fifty dollar drugs.


The Sad History of Lobbyists

I recently finished reading a great book called An All-Consuming Century by Gary Cross, a professor of history at Penn State. In this book Professor Cross traces the history of American consumerism in the 20th century, exploring the various roles of consumers, marketers, politicians and temperance movements, and teasing out theories of why America is so much more consumery (my word, not his) than other countries.

There is too much in his book to summarize, and I’d prefer that you buy it anyway, because it’s a great book. It’s currently number 330,562 on Amazon and I’m sure that we can get it up in the two hundred thousands. Suffice it to say that in a society founded on egalitarianism, consumption can be a method of both differentiation and assimilation.

One of the side themes that emerges from Cross’ book, and the one this blog entry is actually about, is the role that corporate lobbying has historically played in keeping consumption up. At a time when the role and power of Wall Street and insurance company lobbying are being much discussed, it seems appropriate to note that it’s nothing new for big business to use its money and lobbying clout to push around the little guy.

In particular, Cross discusses how after a rush of consumer rights legislation in the 1960’s (Hazardous Substance Labeling Act, Child Protection Act, Clean Air Act, etc.), corporations figured out how to lobby in order to limit the scope of those laws. “By 1976, they had begun to learn how to lobby a more decentralized Congress and to use Public Action Committee funds and grassroots pressure groups to regain dominance.” (p. 158)  Moreover, as Cross makes clear, the deregulation that marked the Reagan era was the nexus of laissez faire ideologues and corporate lobbying, and it encouraged consumption by limiting constraints on corporate marketing and product safety as well as environmental impact. Cross: “…deregulators were not friends of the average consumer, for they allowed higher bank fees, cable TV rates, insurance premiums, and child care and health costs.” (p. 205)

The fact that corporate lobbyists have been harming our hypothetical little guy for decades doesn’t make it right. I’m sure that the moneyed and powerful have been pushing their interests for longer than that. But in a US congressional system that has become so driven by the need to raise vast sums of money, the power of lobbyists is greater than ever. Solutions? Campaign finance reform and term limits are both possible answers. But the strongest answer is for voters to be aware of what their representatives are doing and act accordingly. Hey Montanans: if you don’t like that Senator Baucus took millions from the insurance industry while writing the health care reform law, then vote him out. We the people have a fair amount of power, but we have to work to exercise it.

NY Times is Copying Me

I’m not here to criticize Nicholas Kristof; not only have I linked to him before, but he is a two-time Pulitzer Prize winner and a Rhodes Scholar. But his most recent column says exactly what I’ve been saying recently.

First he says that “universal health care is not an economic or technical question but a moral one.” That is precisely what I said in this post. Then he quotes the new study showing 45,000 annual deaths from lack of insurance. Just as I did in this post. Then he closes by calling America a “great nation,” which is pretty similar to my phrasing: “the greatest…country.”

I’m not saying that Kristof is plagiarizing me. Let’s be honest: I’d be freaking psyched if a NY Times columnist stole my words. I’m just saying that if you want to know what the Times is going to say a fortnight hence, read Thoughtbasket now.

Lack of Insurance Causes 45,000 Annual US Deaths

Here is a link to a new study which estimates that 44,789 Americans die each year because they lack health insurance. This is the study that Rep. Alan Grayson referenced when he faux-apologized for mocking the Republicans’ lack of a health plan.

This is a purely statistical study, and I am totally unqualified to assess its methodology. However, it is being published in a peer-reviewed academic journal, and was written by fancy-pants researchers at Harvard Medical School, so it’s probably a pretty decent piece of work.

Health Care is a Moral Issue

T.R. Reid, author of “The Healing of America: A Global Quest for Better, Cheaper, and Fairer Healthcare,” recently wrote an article for Newsweek comparing the American health care system to the systems in other developed countries. The subtitle of the article is “To judge the content of a nation’s character, look no further than its health-care system,” and you can imagine where it goes from there. Reid notes that the U.S. is the only developed country that does not provide universal health care, and he quotes the facts that result: 22,000 Americans die per year because they can’t afford a doctor, and 700,000 Americans go bankrupt each year due to medical bills.

Reid compares this to Europe, where they approach health care with an emphasis on equality, on providing service to everyone. Here are some key quotes from Europeans regarding their view on health care:

  • A French physician: “But when we get sick – then, yes: everybody is equal.”
  • A former president of Switzerland: “Because it is a profound need for people to be sure, if they are struck by the stroke of destiny, they can have a good health system.”
  • A Swedish health minister: “The formula is so simple: health care for everybody, paid for by everybody.”
  • The Czech constitution: “health care for all.”

Reid sums it up: “The principle seems so obvious to people in Europe, Canada and the East Asian democracies that health officials asked me over and over to explain why it isn’t obvious to Americans as well.”

In America, on the other hand, we approach health care with an emphasis on freedom of choice, particularly during this summer of health care debates. But it’s not true freedom, since those without insurance are, in fact, denied any choice at all.

Reid again: “In the U.S., in contrast, some people have access to just about everything doctors and hospitals can provide. But others can’t even get in the door (until they are sick enough to need emergency care). That amounts to rationing care by wealth. This seems natural to Americans; to the rest of the developed world, it looks immoral.”

Republicans this summer tried to frame the issue as industrious workers supporting the lazy unemployed and uninsured, but that’s a canard. This frame ignores reality. To look at reality, take two factory workers: one is employed by GM, and has thus insurance, and the other is employed by a small local factory which doesn’t provide insurance. They are equally industrious, equally hard working, but the one without insurance is more likely to skip his doctors visits and – statistically speaking – more likely to die. Or take Nikki White, who was industrious and employed, until she became too sick with lupus to work, thus lost her insurance, was unable to afford the care she needed, and soon died.

The issue is not one of who works hard. The issue is whether we, as a society, want to let the people who randomly get sick (or randomly don’t have insurance) go bankrupt or die, simply because of their random bad luck. As Reid notes, this is a moral issue, and I don’t believe that American morals have decayed this far. We are better than this. We live in America, the greatest and richest country in the world. This country was founded on the premise that “all men are created equal,” remember? Not “all healthy men” or “all wealthy men.” Do we really want to live in a country that allows people to die purely because of their financial situation? I don’t think we do.

FYI, here is a New Republic article on the moral dimension of health care.

Follow Up to Markets & Health Care

Just a quick link to this article by a pediatric cardiologist giving both data and anecdotes on what bad consumers we all are when it comes to health care. Something to keep in mind as we look at more market-driven approaches to our health care system.

A Market Approach to Health Care

As regular readers know, I am focused on health care reform and am frustrated by the general dysfunctionality of the American health care system. My few posts have approached the problem from the perspective of working within the system we have, in particular by pushing doctors to emphasize patient care instead of revenue generation.

However, the latest issue of The Atlantic magazine has a fascinating article that takes the entire system to task and suggests a radical new approach. The author, David Goldhill, is a businessman rather than a policy guy, but he was driven to explore the health care system after his father died from a hospital-acquired infection. (Disclosure: I know David and am friendly with him) This article has been praised from the right and the left, and even has its own Facebook page.

Goldhill starts from the specifics and moves outward. He notes the 100,000 deaths per year in the US from hospital-acquired infections, and how hard it is to convince doctors to adopt a checklist that has been proven to dramatically reduce infection. “But many physicians rejected the checklist as an unnecessary and belittling bureaucratic intrusion, and many hospital executives were reluctant to push it on them.” He wonders how a society that shuts down restaurants for a single case of food poisoning tolerates this.

As a businessperson, Goldhill assumes there must be a reason for these terrible facts. Since people respond to economic incentives, the incentives in health care must be deeply flawed for our system to work as poorly as it does. Goldhill’s diagnosis: rather than following a market system, where consumers drive providers to lower costs and improve service, our health care system is a patchwork of information-obscuring insurance and lobbying-influenced regulations. In a market system, DVD players get better and cheaper, while in the health care system, nothing ever gets cheaper.

Goldhill’s treatment plan is to make health care more like a standard consumer product. Everyone will have catastrophic insurance, but in his system, those plans will have a deductible of $50,000 rather than the usual $2,000-$4,000. The government will provide subsidies to make this insurance affordable. But for most medical expenses, consumers will pay for them out of income and savings. Where will they get the money for this? Under Goldhill’s plan, since employers will no longer need to provide insurance ($12,000 per year for the average family), workers will be paid more, and thus have money to spend on medical expenses. If consumers are paying for most things themselves, the entire system will be subject to market forces, which improve quality and decrease cost.

I’m not doing justice to Goldhill’s solution. When read in full, it makes a lot of sense. Goldhill notes at the beginning of his piece that he is a Democrat who believes that everyone should be covered, and his system would do that. Ignoring the fact that Goldhill’s system will never happen (the insurance and hospital lobbies are way too strong), I have only one general critique, which has that Goldhill has, I think, too much faith in the market, which we have seen over the past two years is not always efficient, and is sometimes capricious and cruel. It’s bad enough when the market screws up your mortgage, but if it ruins your health care….

Here are two specific examples where I think Goldhill overestimates the wisdom of the market:

  1. Goldhill says that if companies did not have to provide insurance, all the money saved would go to the workers as increased salary, so they could afford their own health care. But we all know that the majority of the savings would actually go to executives and stockholders, and workers would be left uninsured and unable to pay for visits to the doctor.
  2. I certainly agree that we want people to be better informed consumers in the health care market, but as the mortgage debacle has shown us, many people are simply incapable of making intelligent decisions in a complicated environment. If somebody is unable to figure out if they can afford an adjustable rate mortgage, can we really expect them to intelligently perform the cost-benefit analysis between possible treatment plans for their cancer?