Category Archives: Health care and insurance

I appreciate the sentiment, but this is basically false

“Your health care decisions are not your boss’s business,” said Senator Patty Murray, Democrat of Washington –New York Times story about a Democratic bill to override the Supreme Court’s Hobby Lobby decision

I’m as unhappy about the Hobby Lobby decision as anyone else, especially since the U.S. Conference of Catholic Bishops say they don’t object to insurance covering Viagra. There’s an obvious double standard, and I hate it.

But really. Here’s reality:

  1. By ‘Your health care decisions’, what Murray means is ‘what your insurer is required to pay for.’ Let’s be clear on that, because you can still go ahead and pay for contraception on your own. Again, I’d like to see insurance plans pay for contraception, but let’s be clear on what “Your health care decisions” means.
  2. Your health-care decisions, by that standard, are never entirely up to you. Insurance pays for some things and not for others.
  3. This would still be true even if — as I would prefer — we had a single-payer health system. The government would still pay for some things and not pay for other things.

I think it’s hopelessly muddled to frame this in the language of “your health-care decisions”. What the big debate is about is simply this: what do we believe that the our insurers — whether it’s the government or a private insurer — should be required to pay for? That’s an ethical and economic decision. And our insurers will sometimes make decisions at variance with our own ethics. And that sucks. Those on the other side would, presumably, say that it sucks when they need to go against their ethics to pay for something that they consider objectionable. My response to that would be: how far are you willing to take that? If my religion forbids male doctors from palpating naked female patients unless the doctor is married to the patient, are you willing to deny coverage in that case? Are you willing to make female patients seek out female doctors if they want the insurer to pay for it?

Indeed, I think I need to read more on the Religious Freedom Restoration Act and the Hobby Lobby decision, because I’m confused why religion here doesn’t excuse just about everything. SCOTUS describes the RFRA as follows:

The [RFRA –SRL] prohibits the “Government [from] substantially burden[ing] a person’s exercise of religion even if the burden results from a rule of general applicability” unless the Government “demonstrates that application of the burden to the person—(1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.” 42 U. S. C. §§2000bb–1(a), (b). As amended by the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA), RFRA covers “any exercise of religion, whether or not compelled by, or central to, a system of religious belief.” §2000cc–5(7)(A).

I’m tempted to find some excellent regulatory arbitrage out of this, whereby I can make a lot of money by hiding fraud under cover of religion. More than that, though, I find it offensive that I have to pay, through my taxes, for wars that I don’t agree with. Did the government use the least restrictive means of furthering its compelling government interest in destabilizing Iraq when it taxed me? Okay, arguably yes. Was the government’s decision to require coverage of contraception 1) not in furtherance of a compelling governmental interest? Or was it 2) not the least restrictive means of furthering that interest? I guess I need to read the decision.

So anyway: yes, this sucks, and it conflicts with my ethics. Let’s be clear that this is an ethical objection, not an objection — as Murray would have it — about someone interfering in your health decisions. Someone’s always going to interfere in your health decisions.

Why doesn’t Blue Cross fly me to Nebraska?

This paragraph in a Vox post about Vermont’s single-payer plan pokes at a question I’ve had for a long time:

American doctors spend lots of money dealing with insurers because there are thousands of them, each negotiating their own rate with every hospital and doctor. An appendectomy, for example, can cost anywhere from $1,529 to $186,955, depending on how good of a deal an insurer can get from a hospital.

My mental model of this part of health care is that there are four players: the patient, the insurer, the employer, and the provider. The insurer negotiates a price with the provider for a given procedure. The employer picks an insurer, based on price and various other things. (I’m ignoring the VA Medical System, which is like the UK’s National Health System; I’m ignoring Medicare, which is like Canadian single-payer; I’m ignoring the individual market; etc.) I … well, I just work where I work, and in practice I’m not going to pick my employer based on how cheap a deal they get on appendectomies.

Now then. Who has the incentive to keep things cheap? Well, I do, I guess, inasmuch as I have some “skin in the game”, which is why the terrible state of the art in health insurance is that I pay more and more and have a very large deductible. (Hey, at least I won’t go bankrupt! I mean that half-seriously.) My employer does, to some extent. For one thing, they pay the majority of my health-insurance premium; they’d like to pay less of that. For another, every dollar they pay toward health insurance is a dollar they can’t pay toward salaries, and every dollar they take away from salaries decreases their odds of getting good candidates.

Where the rubber really hits the road on prices is the insurer. The less the insurer can pay for appendectomies, the more profit they make. To the extent that the insurer can just pass costs along to the patient, the insurer doesn’t really care what it’s paying for appendectomies. The more urgent the care, the more the insurer can pass it along to the customer, maybe. (I’ll gladly bankrupt myself to pay for an emergency appendectomy.)

Let’s assume that the insurer can’t just pass costs directly along to the patient. And let’s assume that neither the insurer nor the provider has unlimited bargaining power: the insurer can’t pay $0.01 for an appendectomy, and the provider can’t charge $1 million for it.

If the insurer negotiates a rate of $100,000 with one provider for a given procedure, and negotiates a rate of $1500 with another … why not pay me to fly to the cheap hospital? Suppose it’s in North Dakota while I’m in Boston. Why not pay for the plane ticket, pay for the airfare, and — hell — compensate my employer for the value they lost while I was gone. If I estimated that all of that together, plus the cost of the procedure at the cheap hospital, would cost the insurer $10,000, I think I’d be radically overestimating it. But that’s $90,000 less than they were going to have to pay. So: good for them!

Maybe emergency procedures are a bad example: if you need them now, you need them now. Even there, though, I wonder whether it would be medically justified to stick me in a chartered flight to North Dakota. Maybe there’d be a whole fleet of medical airplanes run by the insurance companies. Just spitballing here!

Two other notes:

  1. All of the above, I think, shows that “consumer-directed health care” is nonsense. The insurer is still going to be the locus of the cost savings, under any system (and whether that insurer is the U.S. government or a private company). There’s just no reason to expect that the consumer can do anything here. Maybe consumer-directed health care means that I’ll go to my podiatrist a little less often. If I need that appendectomy, though, I need that appendectomy.

  2. Somehow that Vox piece goes through 3,000-plus words, by my count, without once explaining what has to be the most interesting question about single payer in Vermont: how did they bring the insurers and the hospitals on board? How did they get around the hospitals? There are vague nods in the direction of Vermont being liberal, and the movement being grassroots. And they mention that the hospitals aren’t happy with this. (Really?) But how did they neuter the hospitals here? How did they neuter the private insurers? Or did they? I’m worried that skipping this part of the story is an occupational hazard at Vox. They’re trying very hard to explain “just the facts”, and there are only so many words they can pack in. If we get to the level of What Is The World Wide Web? it’s going to take us a while to get up to “how did Vermont and Canada claim victory over the pre-existing health-industry power structure?” I’ll wait patiently, but that kind of depth seems a ways off.

Doctors are part of the capitalist economy as well

That would be my takeaway from any number of Atul Gawande’s works, maybe taking canonical form in The Checklist Manifesto. If you’re looking for a short intro to the idea, how about Gawande’s piece on the Apgar score? According to Gawande, there’s a more or less straight line between the Apgar score and the rise of C-sections. C-sections may be industrial and clinical, but they seem to lead to higher Apgar scores. You optimize for what you can measure.

Boy, did that Apgar-score essay ever irritate an ex-girlfriend of mine, who had had experience with the hospital system and absolutely hated the idea of birth being mechanized, and mothers being routinely subjected to surgery for something that should be natural and beautiful. I’ll even set aside for the moment the whole question of whether the C-section is better for mothers and babies; a lot of people just hate the idea of medical care being turned into this cold, mechanical, capitalist process.

Doctors seemingly hate the idea of being treated as mere cogs in the capitalist machine, churning out the same medical procedure over and over again. They’d probably hate to be penalized for deviations from accepted practice. That would explain the resistance that Gawande encountered among doctors to their merely washing their hands more often. They might like to believe that each patient is a separate entity with his or her own feelings and needs, and that the main thing the doctor brings to the relationship is empathy — deeply personalized empathy.

I want to believe that too. I also want to believe that the data would bear it out: the more empathetic the doctor, the better the care and the better the health outcomes. And maybe that’s true. But it’s just as easy for me to believe that we want to be measuring rates of central-line infection and hand-washing, and that the way to measure these things is to get doctors to spend a lot more time feeding data into the system that confirm they’re running procedures exactly the same way every time. Hospitals become Taylorist factories. Sorry.

That’d be my response to Bill Gardner’s thought-provoking latest piece at The Incidental Economist. Maybe measuring everything is at odds with understanding the patient as a human being. But given that conflict, which do you think will win? Capitalism always wins. The bet isn’t remotely fair.

Sounds like “ObamaCare kills jobs” in the same way that “stopping people from smoking increases health-care costs”

I.e., this may be another “tyranny of accounting” problem. See Matt Yglesias for an example.

The usual story with how ending smoking could increase health-care costs is that people live longer, so the medical system has to take care of them when they’re older. (Though without looking at the numbers, I don’t know if this is true. It could be that smokers have to go through long, agonizing cancer treatments that end up costing the same.) By this measure, the best thing for the medical system would be if everyone died in infancy.

Likewise, ObamaCare might make it possible for more people to take part-time jobs now that they don’t need a full-time job to secure insurance; and it might allow people to retire earlier without fear of losing their insurance. I rejoiced almost four years ago that this might happen, and now the CBO thinks that it might.

If we think that people dropping out of the workforce because they can is a bad thing, that is equivalent to saying that it’s bad for people to have more choices. Likewise, if we think that it’s bad for people to live longer and cost society more for their health care, I submit that we’re measuring the wrong things.

Telling Massachusetts patients how much their health care will cost

This is fine, but … isn’t this what insurers are for? If one hospital on one side of Boston charges much less than another hospital on the other side of Boston, then shouldn’t my insurer be willing to pay me to use the cheaper hospital?

Similarly: shouldn’t my insurer be willing to fly me to another state or even another country, if the cost of airfare plus the cost of the foreign medical care is less than the cost of the local medical care? And if I refuse to fly to India for dental surgery, shouldn’t my insurer say to me, “Fine, but you need to pay us a fee for not having taken the cheapest equivalent medical care”?

I’m not saying this is necessarily desirable. But it’s puzzling that the brave new world of medical care involves my sitting on the phone for hours, rather than letting my insurer take care of it. Paging Corey Robin

The war on the bros

What Uwe Reinhardt said. In short: if you think that it’s an outrage that you have to pay more for your health insurance so that everyone can pay the same premium, including women and the elderly and the sick, then you should have been upset at the existing system of employer-based health insurance. Women and the old and the sick at your company are also paying the same premium as you, even though they likely go to the doctor more.

Reinhardt doesn’t even touch on the other obvious fact: one of these days you will be sick. One of these days you and your spouse may want to have a child. One of these days you will be old. When that happens, you’ll benefit from the same community rating that supposedly harms the “bros” today.

Did this country at some point lose the notions that we’re all in this together, that we’re sharing burdens, and that we’re all only one accident away from catastrophe? The phrase is “there but for the grace of god go I”; a just society protects everyone from unexpected, uncontrollable disaster. I hope we can relearn this.

Corey Robin gets at what’s so annoying about Obamacare

Excellent post. Just one sample:

A version of this notion came home to me not long ago when my wife’s employer announced that they were changing their healthcare coverage. It used to be that our entire family—my wife, daughter, and I—were covered under her plan, which provided great insurance for fairly low cost. Very old school. Then the employer announced that from now on any member of the family—i.e., me—who was eligible for coverage from their employer would have to use that insurance first. But, and here’s the kicker, if that insurance didn’t cover some particular procedure or doctor’s visit, then my wife’s insurance would cover it. So now, on certain procedures or visits, I have to submit two claims: one to my insurance, and then, once they refuse to provide coverage, one to my wife’s insurance. And then, because we have one of those health care accounts that makes the right so giddy, I can submit a third claim to that company (in the event that my wife’s insurance does not provide full coverage).

One procedure, three claims, all to get what, in more mature democracies, would be mine by right. That’s some freedom.

That comes by way of Robin’s post at Crooked Timber. Like Robin, “I’m not interested in arguing here over what was possible with health care reform and what wasn’t; we’ve had that debate a thousand times.” I too would like single-payer. I too think it would just be radically simpler. You pay your taxes, you get your services. Done.

I’m feeling this lately in particular. Our insurance has decided to emphasize “consumer-directed health care,” which means “making the user of health insurance pay more attention to how much things cost.” (We’ve also been offered a new, low-premium, higher-deductible health-insurance plan, paired with a health savings account. An HSA is like a 401(k) for your medical expenses. I hate 401(k)s and love Social Security for the same reason that I hate HSAs and love Medicare.) Two things to note about this:

  1. Most of us are not responsible for most of this country’s health-care costs. Getting me to buy a generic medication rather than a name-brand one is just not going to solve any problems. So when a health-insurance company tells me that it’s “consumer-directed,” that’s when I reach for my revolver.
  2. There are numerous points of negotiation in the health-care system. There’s the insurer negotiating with the provider (refusing to pay for certain services, say). There’s the insurer negotiating with the health-services consumer (refusing to cover certain procedures). There’s the health-services consumer negotiating with the provider (insisting on generics, or opting for a CAT scan at a scan center rather than at a hospital). And then there’s the government interacting with all the other parties. “Consumer-directed health care,” as I understand it, only works on the provider-consumer side. I’m not convinced that there’s very much negotiation to be had there.

Health care in this country costs more because it’s more expensive. This is not a tautology. For a given unit of care, we pay more for it. You can break down costs in various ways, but basically (total health care cost) = (cost per unit) times (number of units consumed). We don’t consume more units of care; we use hospitals less, in fact. We just spend more for a given unit of care than other countries do. One very obvious way to pay less for a given service is to change the balance of power between the provider (the doctor) and the insurer. If there were only one insurer out there that paid for all of your medical services, it could strong-arm the doctors. This is not rocket science; it’s how Wal-Mart offers low prices. It’s how Medicare offers low prices.

So whose problems is the insurance company solving when it makes me negotiate more with my doctor? It’s not solving the health system’s problem as a whole. It’s not likely to lower my prices. A priori, my assumption is just that this is a disguised way for the insurer to make more money, by covering a smaller fraction of my costs with Obamacare’s blessing and with a friendly pat on the back while they tell me I’m on my own. If we had perfect price transparency, then maybe our negotiating power would have some teeth. And maybe Obamacare has some innovations to push in that direction; it certainly is filled with experiments that may really pay off. And Medicare is putting price data for individual providers up on the web. It’s not consumer-friendly at the moment, but it’s a start. With that sort of transparency, maybe we could actually make some use of “consumer-directed health care.” Even then, I’d still prefer that someone else — someone who spends all his or her time working to get good deals on health care — do this for me. Someone like my employer, say. But then, why would my employer want to do this? My employer is good at building software; there’s no reason to expect that it’s any good at judging which tests the doctor should give me. Let’s centralize the bargaining.

Incidentally, I’m also convinced that, within my employer, everyone is going to end up on bronze plans, or what would be called bronze plans if we were buying them through the exchanges rather than through our employers. Imagine that you have a choice between a high-deductible, low-premium plan and a low-deductible, high-premium plan. People who believe that they’re not going to need much health care (the young, the healthy) will opt for the high-deductible plan. Those who are more worried about their health will opt for the low-deductible one. This will lead to something that looks a lot like the classic adverse-selection death spiral: since the high-deductible plan is getting the healthy people, the low-deductible plan will have higher costs this time next year, which means it’ll have to raise its premiums. But then more people (now a somewhat sicker group) will rationally decide that the low-deductible plan doesn’t make financial sense for them, and will opt for the high-deductible plan. And so on.

I don’t know how much of this was planned ahead of time, but it seems perfectly obvious now. The cynical but, I’m afraid, probably correct take on it is that we now have two choices:

to be ground down a bit at a time by technocrats who either won’t admit to or do not understand the ultimate consequences of the policy infrastructures they so busily construct or to be demolished by fundamentalists who want to dissolve the modern nation-state into a panoptic enforcer of their privileged morality, a massive security and military colossus and an enfeebled social actor that occasionally says nice things about how it would be nice if no one died from tainted food and everyone had a chance to get an education but hey, that’s why you have lawyers and businesses.

“Conservative” health reform

You should go read Uwe Reinhardt. That’s true 100% of the time, but it’s especially true here. Reinhardt writes about “conservative” health reform, where “conservative” somehow means “involving a great deal of intrusion into everyone’s life.” Remember how one of the big problems with HealthCare.gov is that it’s required to connect to so many other systems to confirm details of the beneficiary’s life? It needs to confirm that you’re not in the U.S. illegally; needs to confirm that your income is low enough to qualify for subsidies; needs to connect to private insurers’ websites; etc. How is that conservative? It’s likely to make an already inefficient system even less efficient.

Why is this so hard? I don’t need to sign up for bronze, silver, and gold national defense. I pay my taxes, and I get a service in response. Let’s just expand Medicare to everyone and call it a day. Or extend the VA hospital system to everyone and call it a day. Inasmuch as ‘conservative’ should mean ‘delivering a given level of service as cheaply efficiently as possible’, those approaches would be highly conservative. Instead we get systems that are more and more jerry-rigged over time, with more and more obvious flaws. Enough already.

Affordable Care Act silence is deafening

Does it seem to anyone else like Democrats — including the President — passed the Affordable Care Act and then promptly stopped talking about it altogether? If my read on the situation is right, that’s because they perceived the law polls very poorly. But

  1. If you’re going to lose an election, lose with your back straight. Either voters dislike your voting for the law or they don’t. If they don’t care how you voted, there’s no need for you to be silent about it. On the other hand, if they dislike it, and you believed in the law when you passed it, then stand up for it. You didn’t run for office just to win re-election; presumably you ran because you wanted to achieve something positive, and you thought the law was positive. If the voters do care and you didn’t believe in it when it was passed, your opponent is still going to hound you for your vote when you run for re-election. So what’s the point in hiding from it?

  2. Whether something polls well or poorly isn’t an objective fact ‘out there’ in the universe; whether it polls well depends a lot on whether people whom Americans like — such as President Obama — are out there selling it. Which they aren’t.

  3. The ACA as such polls poorly, because it’s been demonized as ‘Obamacare’. But some of the individual provisions — no discrimination against pre-existing conditions, lengthened coverage under one’s parents’ health insurance — poll well. In many cases I think it’s just that people don’t know what’s in Obamacare. In other cases, like the mandate, people genuinely seem to hate it. That seems like a failure of education: people need to understand that there are only a few ways to make health coverage universal without the market unraveling. Democrats have been terrible about selling the mandate.

  4. Do you care about ensuring that everyone has health insurance, or don’t you? We really need to make clear that that’s what this comes down to: we believe in universal coverage; they don’t. If you believe in universal coverage, something like a mandate is unavoidable. (Expanding Medicare to everyone would have been another option, but insurers never would have stood for it.) Lately Republicans seem to be facing up to this, and at least admitting that they don’t care about universal coverage. If nothing else, that has the virtue of consistency. But it’s morally repugnant.