"The government may have the credibility to administer the system, but they probably don't have the credibility to act as the final deciders."

Indeed. Having the government act as the final deciders has worked so awfully in the case of Medicare. I could barely get out the door today with all the Senior Citizens protesting against Medicare's lack of credibility.

Which is why ideas like Tom Daschle's proposal for Health Care Federal Reserve have a certain political logic to them. The government may have the credibility to administer the system, but they probably don't have the credibility to act as the final deciders. One could easily imagine a regulatory body, however, that's chaired by doctors and includes consumer representatives, nurses, health economists, and assorted other folks who command high levels of public trust. Such a body wouldn't be "the government, but nor would it be the private market, or profit-focused. Instead it would simply be "public," and anchored by individuals who had the system's best interests in mind.

I think there are huge political differences between the Federal Reserve and health care. Monetary Policy is an abstract issue for the most part, particularly in comparison to health care rationing. An independent board that determines "Treaments X shouldn't be used for patients with disease Y because its low value" will inevitably see protests from the the producers of X and the patient groups affiliated with Y. That's a lot different than raising or cutting interest rates.

As I've mentioned before, I think government providing the value data which gets used by insurance companies, addresses this issue effectively and is much more realistic politically.

PS A little more nuance is needed here like you mentioned last week. Patients are still the final deciders, but the degree of cost-sharing will be determined by another party. Given that we don't know how best to do cost-sharing, better we allow some diversity of incentives versus a "Federal Reserve" that sets one policy for all.

The State of Oregon set up the 'Federal Reserve' type organization years ago (1989-93). Originally the Oregon Health Plan was envisioned as a universal health care solution, but budget issues sidetracked that approach. So the current OHP deals only with Medicaid-type clients (those below the federal poverty level).

Nonetheless, one feature that still exists is the Oregon Health Services Commission, which develops a list of priority care services. Note especially the list of preventative services at the end of the PDF priority list.

There may be some precedents in federal practice as well: the Social Security admin. has an appointed commission that reports on the financial stability of SS (although it may be too politically oriented at present), and the US Postal Service also has a appointed rate setting board of outside-the-government people. The military base-closing commission is another example.

There isn't any doubt that any group that attempts to prioritize health services based on effectiveness and costs will be highly contentious, but it can be done. The trick is to avoid the sort of organized lobbying that Congress is subject to. Maybe there is not at way to avoid this in which case I don't know what might replace it.

Perhaps a way to establish a 'core' set of prioritized national services but with optional State add-ons (at some fixed percentage of overall costs) might be a good federalist solution. Once again however, the lobbyists and bigots of various kinds will try to work their agenda. They certainly get their way with the state health insurance review boards today, showing that 'federalism' is just another way to allow business interests to work their magic by playing off one state versus another.

It works in other spheres - look at the Corporation for Public Broadcasting. Created by Congress, gets its money from the government, but is a private, non-profit company operating on a mandate as opposed to a profit motive.

Isn't that what they have in Canada -- a board of medical professionals who make the calls on allocation of resources to different types of care and treatment?

Ezra,

I like your take on private insurance's perverse disincentives. You're right.

But the Federal Reserve idea reminds me of the HCAN debacle or Mitt Romney's Massachusetts mandate mess: a complicated, Rube Goldberg-style creation designed to head off universal, non-profit health insurance at any cost.

I see at least two problems with this proposal...first of all, it adds yet another level of bureaucracy to a system that is awash in it to the extent that we spend double what some other industrialized democracies do.

Secondly, it basically relies of the moral blessing of nurses and doctors to try to prop up our private insurers; but as you know, 59% of all doctors now, and probably a wider majority of all RNs, think that we need to scrap that system in favor single-payer. So don't rely on them to try to prop up the private health insurance system. (That's the job of Beltway insiders!)

I want to echo Jim's comment about Oregon. We in the Archimedes Movement are working towards a solution that would involve a credible fair process for determining which services are covered and under what circumstances. Join us!

California Nurse,
Where did you get your data regarding 59% of physicians prefer a single payer system? PNHP?

I agree with California Nurses Shum whether their percentage numbers are correct or not.

Think of it from a business perspective...why the heck do we keep pouring all this time, energy, bureacracy and most of all money into any system that does nothing for health CARE but simply props up private for profit health INSURANCE?

Think of all the dollars we dole out to all the federal and state programs...including Medicare and the VA...plus all the dollars businesses and individuals dole out in premiums and co-pays, not to mention dental and eyecare. There simply HAS to be a way to form some sort of Medicare for all if we pool all those dollars and still come out at least even with the added bonus of everyone getting care.

I've tried to find the budgets for the VA and Medicare, but those real numbers are really difficult to come by...perhaps someone could point me in a good direction. I have seen figures by pro REAL universal healthcare that show we spend huge percentages as business and individuals on insurance..upwards of 20%...

Way too many dollars, way too much time and energy spent on making sure our insurance industry stays healthy rather than us staying healthy.

There's a level of hatred of bureaucracy in this country that's nonexistent in Europe.

Kafka is on line 3.

Full disclosure: my parents are Austrian immigrants.

G Davis,

Have you ever taken 5 minutes to work through what you say? In 2006 US spent 2.105 trillion on Healthcare. Of that 723 billion was paid through private insurance. They paid out 634 billion in claims or 88%. Only 88 billion was spent on running insurance companies and their profit. Insurance company profits are somewhere around 12 billion or roughly 5 hundredths of a percent of annual national expenditures.

The first thing we know is the claims you read of insurance costing upwards of 20% are lies.

Most importantly you want to scrap our system and replace it with Medicare. Medicare has a 10% fraud rate. Medicare loses almost as much per individual per year as it cost a private insurer to manage a person. Medicare with all of it’s administrative cost and fraud is considerably more expensive then the plans you complain about.

http://www.cms.hhs.gov/NationalHealthExpendData/downloads/tables.pdf

According to the government they spend 57 Billion to administer benefits for 80.3 million people, which is $709.84 per person per year. Private insurance spends 88 billion to administer 201.7 million people which is $436.29 annually.

Is there a reason you wish to throw away $273.55 per person or 55 BILLION dollars? This doesn’t even include the increased claims cost that Medicare loses to fraud. All together your proposing me throw away over 100 billion dollars a year because you don’t like the concept of insurance companies.

The answer is obvious to everyone but progressives, we need LESS government.

Those are the facts, between the Income, Poverty and Health Insurance report published by the census bureau and the cms data the truth is clear and indisputable, private insurance is cheaper and more efficient then Medicare or any other government ran system in the US.

I'm hungry!

Uh, Nate? The numbers for private and public insurance are 1,135 billion and 970 billion respectively according to the top of the table you're presenting. Those numbers actually add up to 2.105 trillion.

And it's entirely natural that public insurance, which covers the highest-risk population (the elderly) pays more per capita.

Medicare pays more because Medicare is designed to work as a payment system, not in the way other insurers do. It's one reason why apples-to-apples comparisons of "administrative costs" between the two can't really be done: it's not (just) that insurers are driving for profit, it's that Medicare doesn't really do what insurers do to try and drive practice decisions. "Medicare for all" is problematic because of Medicare's structure.

I think wisewon has the best point, as usual: a "best practice" review board makes sense, but it really has to be in the context of guiding patients, not directing the type of care people receive. That "Big Brother"-ish notion will not make patients feel better, and will lead to doubts about the organization (it also, I'd point out, makes the panel susceptible to fraud and influence peddling).

California Nurse may be right that care providers want single payer, but let's not pretend: the reasons docs hate insurers is because the payments have been going down. It's economically in their interest to favor a less beaurocratic systm, that would likely promise better payments (and reassert the primacy of docs as decision makers and influencers). And in that, I think, it's not clear that the interests between the nurses and the docs actually align.

I would only add that while I favor moving towards more "best practices" guidance for practitioners and patients, the reality is that there's a lot of work to be done in this field, and the "best practices" we already know still don't get practiced across the board - that's not how docs are trained, and it's not how patients understand their care. It's a lot of steps to get to where this needs to be, and I think Daschle's proposal - with it's politically chosen name - probably is more cosmetic than actual change. Having a board is nice... actually implementing the recommendations... is far harder. And I don't think we're anywhere near there yet.

Hey Ezra, I know this isn't technically a request thread, but if you had time I'd love to see a response to this:
http://news.yahoo.com/s/usatoday/20080731/cm_usatoday/thinkgaspricesarehighwatchoutforhealthcare

What happened to the old days of paying for your own healthcare? While it's almost certainly impossible to put the genie back in the bottle, I think having people pay for their own regular healthcare, minor medical, etc., and have health insurance be a little more like car insurance or life insurance--designed for big payouts for catastrophic healthcare, be it cancer or heart disease--would be a better system, overall. The more layers of bureaucracy there are between patient and doctor, the more prices go up and the worse the actual care gets, because it's no longer the patient that is the customer, and thus it isn't the patient the doctor has to answer to--it's the insurance companies. The patients are just a means to an end, whether it's private insurance or single-payer. And the less the end-user has to do with paying the bill, the more market forces are going to work against the ultimate interests (and quality of experience) for the patient.

It looks like Oregon does well in spending but what are Virginia, Colorado and Utah doing or is the data at the link below unrelable. Even Florida with all teh old people does pretty well.

http://www.statemaster.com/graph/hea_tot_sta_hea_car_spe_percap-state-care-spending-per-capita

Hi Alan,

Here's a link to the Reuters article about the survey: http://www.reuters.com/article/healthNews/idUSN3143203520080331?feedType=RSS&feedName=healthNews&rpc=22&sp=true. Indiana University School of Medicine surveyed 2000 American doctors, and found 59% support a "single-payer" system. If you think about the success AMA has had in blocking healthcare reform for years, this is an important finding.

floccina,

Every study I have seen puts MA at the top followed by NY and CA. There are a couple very relaible predictors of high cost, a Liberal legislature and passed "reform" measures. The states on the bottom all have minimal small group reform, low legislative impact,a nd open markets.

Most insurers won't write in NY becuase their laws are so bad, plus they have the NY Health Pool.

CA passed small group reform with a rating band of .9 to 1.1 and saw cost sky rocket.

We all know how active MA is with their system.

Nate do know where I can get a more accurate break down of medical spending by state.

tried responding a few times but captcha is holding all them. Guess the blog master doesn't want you having access to your own informtion, sorry floccina, you'll have to live with what your feed I guess

maybe if I don't link to more then a couple sources they will go through;

http://www.cbo.gov/ftpdocs/89xx/doc8972/MainText.3.1.shtml

also yahoo MEPS and Kaiser Family FOundation

Metlife has a good annual data dump

I always liked Mercer studies, and unlike Ezra's gold standard Leiman group Mercer is actually in the business and respected

Thank you Nate