Post on Healthcare Reform
This is a paste from a post I made on an Income Investor board (Watercooler Chat). It was in response to a post on the subject of healthcare reform commenting on the surprising lack of discussion and making a point about tort reform as part of the process.
Since the links within my post are useful and relevant to the healthcare debate I thought I'd copy it here as well.
After seeing the New Paradigm board melt down with healthcare discussion, I'm a bit shy on being too opinionated on the subject (though I am). I will say that tort reform does indeed need to be part of healthcare reform, and believe the 'costs' are understated. We have a system that is based on 'pay for procedure' and an atmosphere where litigation is feared, which only serves to drive excess, and in many cases unnecessary, services. In addition, high insurance costs burden the system.
That said, the ability to seek compensation for wrongdoing is an important control on the system, and reigning it in too much will swing the pendulum to abuses of negligence. It isn't a simple 'fix'.
Let me throw some links up though related to reform. These are from the latest New England Journal of Medicine and are on the topic of the 'pay for procedure' system of healthcare reimbursement. The NEJM has Perspective pieces freely available in each issue and almost always on the topic of healthcare reform. They are overall quite excellent and I recommend anyone interested in the topic to sign up for table of contents alerts from NEJM to read them.
Actually, before linking the NEJM commentaries, let me throw up some statistics from the Organization for Economic Co-Operation and Development, whose mission is to "bring together the governments of countries committed to democracy and the market economy from around the world". http://www.oecd.org (An interesting site to browse around in).
Here is the US data and some commentary (this always takes me forever to find):
http://www.oecd.org/dataoecd/46/2/38980580.pdf (do read this through)
Other OECD countries can also be viewed for those interested in other systems.
So, we spend far and away more than other countries on healthcare whether measured by GDP or per capita, and don't really have the results to back up the added spending.
Why? My own opinion is that the two key aspects of our system are the 'pay for procedure' model which drives incentive toward increasing use of the healthcare system, and second how we have intentionally tried to make the cost of healthcare as invisible as we can to the consumer (for most, but certainly not all). Again, in my opinion, reform needs to be a 5 year process which starts with removing the veil over the costs of healthcare to the consumer.
Now for the NEJM commentaries, there is page overlap when these print out.
The first talks about the efforts in MA (which has mandated insurance requirements aka 'universal coverage'). Specifically, the efforts here to start to move away from 'pay for procedure' at least for general practitioners (who don't benefit from this model, and whose role has morphed more into referral service than health managers).
The End of Fee-for-Service Medicine? Proposals for Payment Reform in Massachusetts
Second is another suggested reimbursement scheme (oddly named after Prometheus)
Building a Bridge from Fragmentation to Accountability — The Prometheus Payment Model
It is an interesting proposal, though perhaps Sisyphus is a more on-target name for instituting change in healthcare reimbursement.
Since there has been some commentary on the British system on the board, this article on the lessons learned from the conversion done there is instructive. I'd note that the coversion in the UK to a more socialized system followed years of debate, which we need here as well (rather than trying to jam something through congress like we are doing now).
British Lessons on Health Care Reform
Lastly, here is some commentary on why the pay for procedure model is a large part of the problem.
Getting Past Denial — The High Cost of Health Care in the United States
These are just from the last issue of NEJM.
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