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Health Care Reform For Beginners

Mike Rorty wants me to write a series introducing some of the concepts in health care reform, along the lines of Baseline Scenario's excellent set of "Financial Crisis for Beginners" posts. It's a good idea. I can think of a few obvious entries: The employer tax exclusion. Insurance market reform. The public plan. The reconciliation process.

But I'm not writing these for me. I'm writing them for you. So which entries would you like to see? I won't get to them all in a day, but I'll pull together a list and try to get to most over time.

By Ezra Klein  |  May 19, 2009; 6:00 PM ET
Categories:  Health Reform  
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Comments

I'd dig into your TAP archives and pull out the posts on comparisons of US to other countries' programs. I'm amazed, even at places like Calculated Risk blog, that so many people only compare the US with the Canada and the UK. The ignorance about France, Germany, Scandanavia et. al. is appaling. Even the facts on UK/Canada are distorted and incomplete.

This problem is at the heart of the argument over the 'public option' in a proposed US plan. A void of facts plus a distortion of bad comparisons is pitted against the advantages of having public choices plus existing private plans, versus private insurance only.

Posted by: JimPortlandOR | May 19, 2009 6:23 PM | Report abuse

Thanks for asking. A few things I've often wondered about, not in any order (and potentially overlapping):

What can and can't be learned from the experience of other countries? I hear the French system is pretty solid, for instance -- if so, why? Conversely, which ideas really don't look like they work here? (And how do things like wait times really compare between, say, Canada, and our allegedly-so-wonderful private system?)

What can and can't be expected from reforms such as comparative effectiveness research, computerized public records, etc., more comprehensive prevention? Both in terms of cost and outcomes?

What are the funding options? Which are most efficient vs. which are most politically palatable? (For example, I can't conceive of a way Obama can propose eliminating the employer tax deduction after savaging McCain for proposing the same idea in last fall's election. And I don't think that simply letting the Congress do the dirty work for him will be adequate (given, for one thing, that they seem unwilling to do any dirty work of any kind whatsoever.)

To the extent that healthcare reform will add cost, what are the countervailing economic savings (including things like private and public sector businesses theoretically not having to spend as much time and resources worrying about healthcare issues? In my town the teachers and citizens are at war over healthcare benefits, when they could each be spending their time on something more productive, and I'll bet the same thing's going on all over the country. An issue I never hear discussed -- the sheer amount of time wasted on this stuff by people whose core competencies lie elsewhere.)

Which of the potential savings associated with healthcare reform get reflected in the Congressional estimates, which don't, and why?

What happens to the current private system five, ten years out if current cost trends continue? What happens to any potential public system if it can't get costs under control?

What part of our out-of-control healthcare costs are really due to our cultural diversity, behaviors, and poverty rates, and which part is due to our inherently inefficient, poorly integrated private system? Can the two causes be teased apart?

Out of that $2 trillion the private sector promised to save, what is real (if any)?

Is it true, as some say, that better prevention will only drive costs up? Is that equally true over the long and short term?

What is the real deal with HSAs? Does the argument for them hold any water at all? (I suspect you can do a masterful job making the argument AGAINST them.)

I realize these questions aren't as modular as the ideas you suggested, but if you can keep a few of 'em in mind as you work, I'd sure be eager to hear your thoughts... Regardless, a huge thanks for your work here and at TAP previously!

Posted by: bcamarda2 | May 19, 2009 6:24 PM | Report abuse

I have lots I want to know about health care in America....

-I've been told the EOB that a consumer gets bears no resemblance to the bill paid by the insurance company to the provider. Is that true? If so, why is that? Is there a way to provide transparency in health care costs for consumers?

-What would be the impact of shifting insurance away from employers to consumers? Will people opt out of coverage, creating a bigger uninsured pool?

-Is there an advantage to keeping health insurance as an employer-provided benefit?

-If yes, what can be done to improve the coverage and decrease the costs for people who do not work for large companies?

-Can there be a pool developed for all the small businesses and individual policies, to give them the power of numbers you'd find a a large company? (I understand that small businesses are clumped in pools, but not in a way that provides a price break.)

-One of my biggest fears, as a self-employed, self-insured person, is being dropped by the insurance company the minute I'm diagnosed with a serious health issue. Or they decide to raise the price of my premium to be unaffordable. What kind of safety net can be developed for people who are dropped by their plans because they actually need the coverage?

-What exactly are the elements of "the public plan?"

-Instead of developing a "public plan," would it be possible to open up the federal group to include self-insured families - so that they can get cheaper rates that come with the larger group?

-Why does the cost of health care rise in a breathtaking way each year? My rates went up 25 percent this year (with no major illnesses at all in the family, so the increase was NOT related to the use/overuse of our policy.)

-Can you provide an overview of the profits of health insurance companies? Are they having a good year?

-What health care systems in other countries seem most effective and appreciated by the consumers who use them and the health care providers who treat patients?

Just a few of the things I'm curious about..

http://wardonwords.blogspot.com

Posted by: anne3 | May 19, 2009 6:30 PM | Report abuse

I would like to read a good overview of the economics of healthcare as it exists now. Who are the big players, what are their interests, what fraction of the big healthcare pie do the various funding/insurance systems constitute, which work efficiently and which don't. Maybe something like this already exists, in which case you could just point us to it.

Posted by: cmonsour | May 19, 2009 7:38 PM | Report abuse

Thanks for tackling this topic Ezra, a few more bits and bobs:

-- I've always been mystified by the billing differential between the hospital invoice and what an insurance company actually pays. I assume this is a "charge high rates so we can get negotiated down to a reasonable price" methodology. On the flip side, those without insurance get absolutely skewered because they have to pay the full MSRP. Outside of a mandated pulic plan, how would this issue be addressed? How much does the current cash-only customer subsidize the insured customers? I rarely see this mentioned in the media; is this an issue that is being discussed?

-- Is there any plan to simplify hospital/doctor billings? For example, any single line item would look like: Hospital Charge | Insurance Payment | "Adjustment" | Patient Balance . Both the "Charge" and the "Adjustments" are completely outside of my control. It's like going to an auto mechanic that already performed his work; they can just tell me that I owe $1000 and there's not much I can do about it. Outside of government mandated prices (ala Medicare), is there any plan for making pricing more transparent?

-- Why isn't pooling allowed for either small businesses or individuals to join together and get a rate that a large corporation can get?

-- It seems like the time would be ripe for a not-for-profit insurer to be created in the private marketplace (ala Germany's insurance companies), which should be able to offer lower insurance premiums. Do these exist in the US and, if not, why?

Posted by: elganso | May 19, 2009 8:41 PM | Report abuse

You've said before that Obama's plan puts off the hardest decisions on cost controls for a future date. Could you clear up for me how? Covering the uninsured, instituting comparative effectiveness reviews, health IT, all of these things taken together would put a dent in costs right? What are the hard decisions Obama's plan fails to address? More generally, what are the biggest drivers of rising costs in health care?

I would also like to see the idea of the National Health Insurance exchange fleshed out a bit more. The rules insurers (both public and private) would have to abide by in the exchange, how would consumers access the Exchange, what types of consumers would be allowed to participate in the exchange. Would it just be individuals or small businesses too? What are the proposed subsidies for people to buy plans?

Posted by: MattMilholland | May 19, 2009 9:40 PM | Report abuse

Ezra: you might want to flesh out some of the reasoning as to why making coverage universal helps the government's fiscal position (at least over the long term). I've been reading a fair amount of criticism from right wing and libertarian bloggers questioning the logic, and saying things like: "what savings would be enabled by UHC that can't be forced right now on Medicare/Medicaid."

This wouldn't necessarily be in a beginner's guide, but I've been wondering if you have any thoughts on some of the opposition to tax code reform in conjunction with UHC we've seen coming from Congressional Democrats. I'm especially thinking of Charlie Rangel. I had thought any taxation of insurance benefits would surely only kick in at a fairly high dollar amount -- thus not negatively impacting the vast majority of working Americans. Why such seemingly implacable opposition, especially given the fact that it's intended to create dollars for a major, vital expansion of the safety net? I don't get it. Or maybe the opposition isn't that implacable, and taxing healthcare benefits isn't really off the table. Your take?

Posted by: Jasper99 | May 19, 2009 11:50 PM | Report abuse

Let's not just see comparisons: let's see foreign examples of "reform in action". TR Reid talked about Switzerland and Taiwan for his Frontline documentary, and there's meant to be a book accompanying it. But it'd be nice to show how modern reforming nations use the examples in other countries to try and tailor their own plans to their population.

It'd also be nice to have a piece addressing the Cato/libertarian line that the optimal solution is basically a return to fee-for-service medicine, with perhaps catastrophic / chronic conditions being covered by insurance.

Posted by: pseudonymousinnc | May 19, 2009 11:50 PM | Report abuse

Wow, I just registered just so I could urge you to explain the various models in use in other countries, ala T.R. Reid's "Sick Around the World" Frontline documentary. I'm heartend to see I'm not the only one who sees the value in this.

I think you would do a great service by shedding light on what other countries are doing and how their various models are being represented (or not represented) in our current debate.

You would be amazed how many people fail to grasp the variety of options out there - it's far of course far more nuanced than the common distillation of just what we have now versus the cliche of "socialized medicine"

Posted by: nowinsf | May 20, 2009 12:13 AM | Report abuse

While writing about each facet, please make sure to give us the 30,000 foot view. When writing about coverage, maybe add a pie chart consisting of insured by self, insured in employer provided plan, Medicare and Medicaid, and uninsured; when talking about where insurance dollars go make clear how big the insurance industry is and where the money is allocated; and if you get into a few different reform alternatives, be sure to set out the costs and benefits of each and as always use CBO numbers as much as possible (which really goes without saying).

Also, Most people don't understand how the insurance market works step by step through the process, so maybe walking a claim from the doctors office through to the end in the course that they usually follow.

Posted by: econowonk | May 20, 2009 8:08 AM | Report abuse

How about just repeating this wonderful piece by Sara Robinson: 10 Myths About Canadian Health Care, Busted?
http://www.pnhp.org/news/2008/february/10_myths_about_canad.php

I first read it from a link at your old site.

BTW, you need tags in your comments.

BTW2, congrats on your new home.

Posted by: wvng | May 20, 2009 9:53 AM | Report abuse

I for one would like to see your take on the current and historical difficulties inherent in reform; e.g. the countless factions / stakeholders involved and why one interest group's gain is often another's loss = hence, no agreement.

Posted by: jasonlyle | May 20, 2009 9:55 AM | Report abuse

How about a post on the benefits (and risks) of electronic health records?

How about one on the single-payer principle, and how single-payer advocates are being energetically ignored in the current debate?

How about a series laying out the motivations/agendas of the different players in the discussion (e.g., what we can expect the medical device industry to lobby for/against, and why).

Posted by: dyonstefanon | May 20, 2009 10:38 AM | Report abuse

Congratulation on the new Gig!

Some thing I would like to see discussed Is the inefficiency of the insurance companies. We are going to be told again and again that the insurance companies are the most efficient way to get insurance but this is not true. I would like you to compare several things. Overall administration costs private vs existing public plans. CEO compensation vs public plans. I once added up the CEO pay of 15-20 health exects and their compensation topped 100,000,000. Economies of scale for public vs private.

Also, I would like to see what government(fed) employees currently receive for health care, members of congress. If there is a public plan will all federal employees be enrolled? How about members of congress. I would feel better about the public plan if the members of congress were enrolled.

Posted by: cheflovesbeer | May 20, 2009 10:49 AM | Report abuse

Followed you here from American Prospect; congratulations and best wishes for your continued success.

Topics I would like to know more about:
a) An in-depth guide to the major players (insurance, device manufacturers, lobbyists, medical associations, congress) and their respective financial interest
b) A breakdown of a typical doctor's bill/emergency room bill today versus one ten years ago, twenty years ago, etc. so that we can see why costs are rising so fast. It is incomprehensible to me why education and health care cost more every year when wages across the board have remained flat - where is the money going?

Posted by: alouw | May 20, 2009 11:40 AM | Report abuse

I'd start with a comparative review of different countries approaches. Pick a country and tell us about it. How does Germany do Health Care? What outcomes does it get? At what cost? I'd like to hear about Canada, France, England, Germany, and Japan (at minimum).

Then I'd like a discussion of why various state level plans have failed/are failing.

Then a comparison of the plans actually on the table along the lines of your old review of the Wyden and Hacker plans.

After that, a review of the political obstacles between us and workable other systems would be nice. Which Senators will matter on this and how are they thinking about it?

Then you could end with the details about the process of moving forward(reconciliation, etc.).

Posted by: DanWithExtraCharacters | May 20, 2009 11:40 AM | Report abuse

Ezra -- I would like very much if you could try and forecast some of the lobbyists' arguments to the recent series of reports by the Senate Finance Committee. It looks as though these reports lay out the backbone of what the forthcoming health care reform bill may look like. It is clear that some of these options will enrage different industries. For example, employers and employees will be upset for any changes in the employer-employee health benefits exemption. What kinds of arguments can we expect from both sides?

Posted by: glyf | May 20, 2009 11:41 AM | Report abuse

I'm a grad student, and I was recently laid off--that's the end of my insurance. I'm unmarried, too old to be added to my parents' insurance, and I can't afford the option my school provides. Basically, I'm looking for answers on a program for students/young unemployed.

Posted by: Margarita2 | May 20, 2009 8:02 PM | Report abuse

How it affects paychecks! My employer negotiates a group rate, and we each pay part of the premium required to cover me. They pay most of it. There are tax implications, which are already on your list, for the employer.

What are the implications, in the event of a good public option, if I decide to opt out of my employer's coverage and participate in the public plan? I have never understood this.

Now *that* is basic.

Posted by: ajw_93 | May 21, 2009 1:45 PM | Report abuse

Would love a post on health care and unions. For that matter, a very basic intro to unions in general would be great.

Any chance you can comment on Paul Levy's posts about SEIU and their advertising campaigns? Every time the topic comes up I wonder what your thoughts are.


Posted by: aalvarez25 | May 22, 2009 4:02 AM | Report abuse

Do you think you could write something about the canadian health care system?. I know that it's outcomes are worse than some european systems, but I don't really understand why.

Is it just that France lets people buy extra insurance?

The debate up here is too ideological to have anything intelligent come through, and I would like the insight of your wonkery.

Posted by: StephenBank | May 22, 2009 1:22 PM | Report abuse

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