Economist: It would be terrible if people stopped depending on their employers for their health care.

Casey Mulligan says if the law actually applies to Congress, look for it to be far too bountiful, in a Speenhamland kind of way (see also Polanyi). The state, it seems, must do all it can to avoid producing healthy shirkers amongst the general populace, even if that requires dispensing a certain amount of injustice. A sad commentary on both human flourishing and the rule of law, is it not?  Excerpts:

To promote economic efficiency and the goal of universal health coverage, perhaps members of Congress should not be required to enroll in the new insurance exchanges.

...Because members of Congress are accustomed to high-quality medical care provided to them through federal employee benefit programs, one might expect that they would push for top quality care to be delivered through the exchanges too.

...If the exchange plans were good enough, people who are rushing to find a job, and people considering leaving their job, would no longer have to see employment as their only means of obtaining top quality, subsidized coverage. As a result, some of those would work less (see the Congressional Budget Office on some of health reform’s work incentives, and a 1994 explanation from Alan Krueger and Uwe E. Reinhardt). 

...Although politically incorrect and perhaps unfair, allowing members of Congress to keep their federal employee coverage might be the best thing for universal coverage and reducing the impact of the Affordable Care Act on the federal budget. 

Pay or play under the ACA

A former UW law student of mine has published this brief explanation of the employer's responsibility under the Affordable Care Act.  In brief:

The Pay or Play Rule generally requires that "large" employers (i.e., those with 50 or more full-time or full-time equivalent employees) offer health plan coverage to full-time employees or potentially pay a penalty to the federal government. 

A persistent question for large employers has been how to define a "full-time" employee. The importance of "full-time" status cannot be overstated, because if an employer does not offer health plan coverage to just one full-time employee who then receives a federal subsidy to purchase health insurance at a Health Exchange, the employer could face a penalty of $2,000 per full-time employee per year. Also, if an employer offers health plan coverage to all full-time employees but the coverage does not offer "minimum value" or is not affordable for the employee, the employer could face a penalty of $3,000 per year for each full-time employee who receives a federal subsidy to purchase health insurance at a Health Exchange.

More at the link including compliance tips for employers.  Nice job Sarah!

An emergency room is not a health care plan.

American College of Emergency Physicians (ACEP):

 "Emergency departments have become a health care safety net for everyone, but that safety net is breaking. If you continue to take emergency care for granted, and don’t support it, it eventually won’t be there for anyone.” 

So, it's not a vey good hammock then, either.  It seems sad to me that the ACEP has to explain why emergency room care is not health care.  An ounce of prevention is worth a pound of cure.  That's a conservative (small c, obviously) idea.  Yes, both cost money.  One you plan for, and it costs x.  The other you don't plan for and it costs x+.   Not having national health care doesn't get everyone out at zero.  I would rather pay for everyone at x instead of everyone at x+.

Private vs Public Healthcare Systems

Here is an interesting paper on private vs public health care systems in low- and middle-income countries, published earlier this year in PLOS Medicine, an open-access medical journal, in which the authors find that private systems don't deliver better efficiency, accountability or medical effectiveness in comparison to public systems.  But they might be faster and nicer to you in a private care system.  From the paper:

Introduction
Private sector healthcare delivery in low- and middle-income countries is sometimes argued to be more efficient, accountable, and sustainable than public sector delivery. Conversely, the public sector is often regarded as providing more equitable and evidence-based care. We performed a systematic review of research studies investigating the performance of private and public sector delivery in low- and middle-income countries. 

Methods and Findings
...Comparative cohort and cross-sectional studies suggested that providers in the private sector more frequently violated medical standards of practice and had poorer patient outcomes, but had greater reported timeliness and hospitality to patients. Reported efficiency tended to be lower in the private than in the public sector, resulting in part from perverse incentives for unnecessary testing and treatment. Public sector services experienced more limited availability of equipment, medications, and trained healthcare workers. When the definition of “private sector” included unlicensed and uncertified providers such as drug shop owners, most patients appeared to access care in the private sector; however, when unlicensed healthcare providers were excluded from the analysis, the majority of people accessed public sector care. “Competitive dynamics” for funding appeared between the two sectors, such that public funds and personnel were redirected to private sector development, followed by reductions in public sector service budgets and staff. 

Conclusions
Studies evaluated in this systematic review do not support the claim that the private sector is usually more efficient, accountable, or medically effective than the public sector; however, the public sector appears frequently to lack timeliness and hospitality towards patients.  

The incentive structure is interesting and echoes thoughts I've had before on privatizing water and waste disposal.  This study is not about high income countries, but the health care cost difference between the US and the rest of the high-income world suggests the findings might translate beyond the sample studied.

Which Americans have no health insurance?

The Census has published Income, Poverty and Health Insurance Coverage in the United States: 2011, which yields the following picture of where the 48.6 million Americans without health insurance live (numbers in thousands):

So almost half live in the south, most of which are red states (opposed to national health care, writ large):

Summary of results of the 1996, 2000, 2004, and 2008presidential elections:

  States carried by the Republican in all four elections

  States carried by the Republican in three of the four elections

  States carried by each party twice in the four elections

  States carried by the Democrat in three of the four elections

  States carried by the Democrat in all four elections

Source: Wikipedia

They are also many of the poorest states:

Source: The Poorest States of America

Many (but not all) spend the least on health care:

Source: What Our Health Spending Buys Us

And they are among the states with the worst health outcomes across the nation:

Source: What Our Health Spending Buys Us

Gender Surcharge: Health Insurance edition

From Barack Obama on tumblr, no less. 

The High, High Cost of U.S. Health Insurance

"This chart says it all," says Yves.






























Of course, I like my charts with more visual data, so i redid it and ordered by size instead of alphabetically:

Now I think it really does say it all.

Links

The fraud involved in the theory that tax cuts pay for themselves; "some lessons here to be learned about how people think and how they want to be convinced things work. When confronted with something they don’t like, like taxes, they are happy to believe a secondary effect, namely stifled growth, actually dominates a primary effect, namely tax revenue. It’s wishful thinking but it’s human nature."

Bolivia has transformed itself by ignoring the Washington Consensus

What causes inequality: institutions, culture, or taxes?

The health care system in the UK is pronounced dead, or nearly so.

Health care spending: US vs the rest of the world

A series of visual depictions compiled by the Atlantic, the first one showing the U.S. as an outlier in terms of cost:outcome ratio:

That's quite a tale of U.S. exceptionalism.  Also, this, which tells a slightly more conservative story of administrative costs (13%) than Zakaria's 20-30%:

A few more charts at the link breakdown health care spending by sector, and the article ends with this chart of U.S. federal spending:

Health care as a public good

Fareed Zakaria says private health insurance is inefficient and health care should be seen as a public good:  in the U.S., "an estimated 137,000 people died over seven years because they were uninsured," while in Britain (for now), "irrespective of what you afford, irrespective of your illness, you will be able to access health care."  Zakaria discusses the "health care behemoth" in the UK:

The NHS is Europe's largest employer, with well over 1 million people on the payroll. So you'd think it would be inefficient. 

T.R. Reid, a former overseas bureau chief with The Washington Post toured the world's health care systems for his recent book, The Healing of America. Reid says: 

"That seems sensible, right? The private sector can do things more efficiently?  It doesn't work in health care. The least efficient payers in the world are the American private insurance companies.  They have administrative costs of 20 to 30%.  That's a 30% tax on every dollar you spend on health care. Britain is totally socialized medicine [and its] administrative costs [are] 5%.  Canada is private doctors and public payers - 6% administrative costs. So it turns out, for some reason in health care, governments are doing this more efficiently than our private sector."

What is the reason?  Is it that the government need not strive to maximize returns to shareholders?  Zakaria has a program this evening on CNN, perhaps he will discuss it.

Pricing Obamacare & the trouble with projections

It's often difficult to understand what a social program costs each year or over the years, and it seems that the science of projecting these costs stumps even those who apparently ought to know better...or, from an alternate view, the difficulty creates political opportunities for those who would sway us one way or another regardless of what the projections suggest.  I discussed the anti-Obamacare litigation earlier; it seems that fuel is being added to the fire as commentators take apparently opposite views of the CBO's recent modification to the projected cost estimates.

An article in the Hill tells us "CBO says Obama's latest budget would add $3.5 trillion in deficits through 2022" and then confuses us mightily.

Krugman pulls the article apart and suggests that this is not just poor reporting but an attempt to spread misinformation, since "What the CBO report actually says is that it expects deficits to be a bit smaller than Obama projects."

He adds that "people who can’t read numbers making dumb claims about Obamacare," with a link to Johnathan Cohn, who says "No, Obamacare’s Cost Didn’t Just Double. Sigh".  (Cohn, it appears, is also tired of trying to reason with you people.)  Cohn says:

Sorting through the deceptive attacks on health care reform gets old, even for me. But on Wednesday the Republicans and their allies made a claim so obviously misleading that they, and the media outlets parroting them, must have known they spreading false information. 

...If CBO had truly determined that health care reform’s cost will be twice the original estimates, it would be huge news. But CBO said nothing of the sort. 

...The real news of the CBO estimate is that, according to its models, health care reform is going to save even more taxpayer dollars than previously thought. 

I want to be clear about something. The Affordable Care Act has flaws: Among other things, it reaches fewer people and provides less financial protection than I would prefer. The revised CBO report actually suggests this problem will get mildly worse, since it also expects slightly fewer people to end up with insurance. That’s one reason why the law will cost less; it’s helping fewer people. Another reason is that more employers pay penalties for not offering insurance and more people pay penalties pay penalties for not obtaining it. That’s obviously not great, either.

Cohn explains more about how to understand budget projections, worth reading.

The real cost of the U.S. health care system

In American if you are not an employee, you will not have health insurance but must seek it out in the private market if you want it.  If you don't have insurance, you will be billed directly for the costs of any health care you end up using.   Without the (much maligned) Affordable Care Act (aka Obamacare), getting health insurance is optional, so people who are not covered under an employer plan can choose to go without. But when things go badly, those who choose to forego insurance and bear the costs of whatever health care they actually use, do not in fact always bear these costs.   Instead, they can externalize these costs by filing for bankruptcy, throwing the unpaid cost onto health care providers, who in turn pass it on to insurance companies, and from there onto people who do pay for health care coverage.  Allowing people to both under-insure themselves and then discharge health care costs in bankruptcy thus creates a tremendous potential for free riding and externalizing costs onto others in society.

It seems the face of anti-ACA litigation has done just exactly that:

"As someone who chose not to purchase health insurance —and felt strongly that the federal government had no business telling her that she had to buy it whether she liked it or not—Mary had become an active and outspoken critic of the law. As a result, she was the perfect candidate to be a human face on the challenge to Obamacare.

Last fall, Mary Brown and her husband filed a petition of bankruptcy seeking relief for some $55,000 in debts the couple had run up . . . [including] $4500 worth of medical bills... 

Almost half of the medical debt run up by the Browns is owed to Bay Medical Center in Panama City, Florida. A spokesperson for the hospital had this say about their experience with the Browns and the many others who cannot pay their medical bills because they have chosen to remain uninsured.  “This is a very common problem. We cover $30 million in charity and uncompensated care every year,” “If it’s a bad debt, we have to absorb it.”

And related to that is this:

In America, when employment contracts, so does health care coverage:  "From 2007 to 2010, the share of children and working-age adults with employer-sponsored coverage fell  to 53.5 percent from 63.6 percent".