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A Floor, Not a Ceiling

This issue came up in today's chat, but I wanted to address it more directly. There is a difference between health-care systems that provide a ceiling and a floor. A floor on health care means everyone gets a certain, minimum amount of care. A ceiling means there is some theoretical maximum you can't exceed. That exists, with some caveats, in Canada. It's a bad idea. I would oppose such a policy, were it suggested. People should be able to spend what they want on health care.

But no one is considering a ceiling in health care. No one wants a policy where you can't pay out of pocket for more care, thus retaining a market for the absolute best health care possible at any price.

What we are considering is a floor on health care, so people have basic and guaranteed access to care. Uwe Reinhardt has calculated that a generous plan of this sort — a plan costing $1.6 trillion over the next 10 years — would cost about 4 percent of what we're projected to spend on health care between 2010 and 2020. You might think that's worth paying, or you might believe it isn't. But that's what's under discussion. A ceiling on health care expenditures, whether public or private, is not on the table.

By Ezra Klein  |  August 13, 2009; 4:38 PM ET
Categories:  Health Reform  
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Comments

Absolutely, worth it. A guarantee for every family that they have a safety net, regardless of employment or economic condition of a floor of health care.

And present satisfaction is not the issue. I am happy as a clam with my health care services. But I know that there is no one immune in this country from losing their health care coverage and with it, going totally bankrupt and economically destitute from health care costs.

Health care insecurity is the issue:
http://www.politico.com/blogs/bensmith/0709/Insecurity_not_satisfaction_with_heath_care_system.html

Posted by: cmpnwtr | August 13, 2009 5:12 PM | Report abuse

Is it necessary to ban buying and selling individual plans outside of the exchange, or can the exchange still do what it's intended to even without a "monopoly" on individual plans?

Posted by: bluegrass1 | August 13, 2009 5:15 PM | Report abuse

Unless, of course, your hundred-year-old Mom needs a pacemaker. Then you will find that the ceiling is where the pain pills kick in. Take the pill, grandma -- our healthcare system has a "floor."

Posted by: whoisjohngaltcom | August 13, 2009 5:16 PM | Report abuse

Good points here. I think this is really a fundamental answer to the critics, at least the good faith ones. I happen to think that this bill ought to create more fundamental change (though I also oppose legally mandated spending cap), but the reason it doesn't is because it wants to make sure that no one's care will change.

The irony is that people's care will change, but it will change because market forces begin to price people out of coverage, or at least full coverage. Under a free market system, in which costs are allowed to run wild, almost everyone except the absolute elite will have some sort of spending cap because you can't pay for care if you don't have the money.

Posted by: Matt40 | August 13, 2009 5:24 PM | Report abuse

On a side, but related note, I just noticed this article on the NYT website: http://www.nytimes.com/2009/08/14/health/research/14cancer.html?hp

Its not obvious from the article exactly how revolutionary this discovery will be and I certainly don't know enough on the topic to answer that question, but what is obvious to me is that the discovery has the potential to revolutionize cancer treatment and that this discovery was made by a NON-PROFIT research institute.

Of course when it comes to the task of developing this discovery and turning it into actual medication, the profit sector will take over and subsequently charge exorbitant fees. But there's absolutely no reason why that has to be the case. Some (cough...Megan McCardle...cough) might argue that the profit motive is necessary to make this discovery applicable to actual medical treatment by further developing and eventually manufacturing, marketing and distributing the drug. At its core, this idea implies that the real innovation isn't motivated by profit, but that manufacturing and distribution are (I left out marketing because it actually is motivated by profit, but is not a necessary part of the chain.) This is, of course, completely absurd.

University affiliated research institutes, in this instance and many others, made the most important part of the discovery and do so apparently with no institutional profit motive. There's absolutely no reason to believe that other non-profits couldn't handle the development stages. Clearly we do just fine in the discovery stages through the use of government/university/philanthropic funding. Sure development is more capital intensive, but its even more capital intensive with a profit motive. Whats should be even more obvious is that government could easily handle manufacturing and distribution, which requires no real creativity or high entry costs.

We've chosen to create pharmaceutical development process that requires private investment in the final stage, but thats a choice. Nothing in the process of creating a drug would be hindered by the removal of profit.

Sorry, I know this is a bit off topic, but struck me as relevant to the general discussion.

Posted by: Matt40 | August 13, 2009 5:58 PM | Report abuse

Ceiling on treatment using public funds, like Medicare, that needs to be there.

No matter how many times Palin blames that as 'death-panel'; neither do I want to suck more of other people's money nor would I like others to do that to my tax dollars. It is other people's money, it is SOCIALISM as Thatcher said.

It is government as a 'trustee' model. The job there is to be just a judicious distributor of Medicare dollars collected. The job there is not underwrite infinite expenses for every member just because the member paid some Medicare taxes years back.

Posted by: umesh409 | August 13, 2009 6:05 PM | Report abuse

Actually, it is our current insurance system that has the ceiling. Read the fine print on your insurance policy with special attention to yearly and lifetime maximum benefits.

Obama's program for trying to get rational -- not rationed -- health care in the US is inspired by examination of the Mayo Clinic and some other provider systems. It turns out that Mayo health care costs 25% less than average and 50% less than a lot of other similar high profile providers. However -- surprise -- Mayo doesn't do that by throwing grandma from the train. They do it by eliminating care that is not effective, or is no more effective than care that costs much less, or is actually harmful.

And one more surprise: Mayo care actually works better -- the results for patients are better than the higher priced places.

I am pretty sure that most informed people know this, and I don't think that the people who are talking about euthanisia and death panels actually believe what they are saying -- no one could really be that disoriented and be able to cross the street. They are trying to confuse the general public and are just engaged in what some Republicans have already admitted is an attempt to damage Obama regardless of the effect on most Americans' well being.

Posted by: PatS2 | August 13, 2009 6:10 PM | Report abuse

"Unless, of course, your hundred-year-old Mom needs a pacemaker. Then you will find that the ceiling is where the pain pills kick in. Take the pill, grandma -- our healthcare system has a "floor.""

I can't tell if you're being facetious or serious here, but in case you're being serious, I feel obliged to let you know that this is absolutely NOT the case.

What the floor refers to is a basic level of treatment to which NO ONE will be denied. That doesn't mean, of course, that everyone will get whatever treatment they need/want. But the reason for that is because not everyone can afford whatever treatment they need/want - thats true now and will be true under any of the proposed health care reforms.

But there is no rule whatsoever that says you can't spend the maximum amount that you are capable of spending. A pacemaker for a 100 year old would be prohibitvely expensive for a lot of people. But there's no one suggesting that you should be denied the right to pay for it out of pocket or buy private insurance that would pay for it, if you have the means and desire to do so.

Posted by: Matt40 | August 13, 2009 6:14 PM | Report abuse

I would even disagree that Canada has a ceiling. There is no limit on government spending on any individual's care.

As for private spending, there are limits (varying by province) on whether people can buy private insurance, or whether providers can service both public or private clients. But these are not ceilings as you've defined the term.

Posted by: tyronen | August 13, 2009 6:14 PM | Report abuse

"

Ceiling on treatment using public funds, like Medicare, that needs to be there.

No matter how many times Palin blames that as 'death-panel'; neither do I want to suck more of other people's money nor would I like others to do that to my tax dollars. It is other people's money, it is SOCIALISM as Thatcher said.

It is government as a 'trustee' model. The job there is to be just a judicious distributor of Medicare dollars collected. The job there is not underwrite infinite expenses for every member just because the member paid some Medicare taxes years back."

I agree with this, but I think the point Ezra is making is that while certain programs, like Medicare may and should have a floor and ceiling, the system as a whole should have only a floor. I too think that we need to be realistic about how much of our money gets spent on healthcare. You simply cannot have an insurance scheme, public or private, in which every and any medical procedure is funded regardless of cost and expect to remain solvent. At the same time, individuals should be able to spend as much of their own money as they choose and should have the option, if they are able and would like to do so, of buying supplementary insurance with a large enough price tag to cover for everything under the sun.

Most of that extra stuff strikes me as superfluous in a well-planned medical system. A truly intelligent system would incentivize Doctors to provide quality care vs quantity (rational - not rationed, as PatS2 puts it) and it would remove the profit motive from all forms of service provision (prevention, drug treatment, therapy) and service finance. This would cut costs significantly and allow for universal and comprehensive coverage - making it unlikely that many would find it necessary to spend additional money on health care, but again, if someone would like to do that, they should never be prevented from doing it.

Posted by: Matt40 | August 13, 2009 6:37 PM | Report abuse

Your capacity to lie ought to have a floor, Galtroid. Stop lying.

Posted by: pseudonymousinnc | August 13, 2009 6:59 PM | Report abuse

Ezra,

Most liberals are hung up on this idea that poor people have to get "equal" access to healthcare that rich people get. That doesnt happen in the USA, that doenst happen in the UK, it doesnt happen in France, it doesnt happen in Germany, it doesnt happen anywhere.

Why? Because all those systems allow you to pay out of pocket to get "extra" healhtcare that the public system wont pay for.

The ONLY way to get "equal" healthcare for everybody is to absolutely ban all private enterprise in healthcare--make all doctors and clinics property of the US govt who are not allowed to work for rich people who want to pay them out of pocket for "extra" medical care.

No country in the world does that, and its ridiculous for your fellow liberals like Maggie Mahar to insist on it as a condition of any reform package.

"Equal" healthcare for all is not in the cards and will NEVER be in the cards, even if you live in Europe.

Posted by: platon201 | August 13, 2009 8:13 PM | Report abuse

I never lie, pseudonymousinnc. It's your reality that is out of alignment.

Posted by: whoisjohngaltcom | August 13, 2009 10:36 PM | Report abuse

Just to play devil's advocate....Putting a limit on the employer healthcare tax exemption could be considered an upward limiting move. Maybe not a ceiling, but at least some shade.

Posted by: zosima | August 14, 2009 12:21 AM | Report abuse

I think John Galt is referring to this:

http://www.politifact.com/truth-o-meter/statements/2009/aug/03/dan-lungren/lungren-says-obama-would-have-government-require-c/

Posted by: PeterH1 | August 14, 2009 10:53 AM | Report abuse

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