What is society’s responsibility for health care?

Adrian Anthony (A.A.) Gill, a Scots writer, died yesterday, December 10, 2016, at age 62, as he was receiving treatment for lung cancer from the National Health Service (NHS) in the United Kingdom. 

The system denied him life extending immunotherapy, specifically a drug called “Nivolumab,” AA Gill faces up to his cancerbecause it was too expensive: £60,000 to £100,000 a year for a lung cancer patient. This is four times the cost of chemo. 

Today, The Sunday Times [London] published his final article, “More life with your kids, more life with your friends, more life spent on earth — but only if you pay.” It is poignant, and, I think, must reading for distributists concerned with health care solutions. (The article is free to read, but you must register with The Sunday Times for access.)

Two excerpts:

Everyone standing for whatever political persuasion has to lay a sterilised hand on an A&E* revolving door and swear that the collective cradle-to-crematorium health service will be cherished on their watch. 
*“A&E”: ‘Accident and Emergency’ is the British term for a hospital’s emergency department.

We say [the NHS] is the envy of the world. It isn’t. We say there’s nothing else like it. There is. We say it’s the best in the West. It’s not. We think it’s the cheapest. It isn’t. Either that or we think it’s the most expensive — it’s not that, either. You will live longer in France and Germany, get treated faster and more comfortably in Scandinavia, and everything costs more in America. 

Distributist History: 

The distributist, Hilaire Belloc, did not like the idea of state sponsored social insurance, but saw it enacted shortly after he left parliament in 1910. (The National Insurance Act of 1911  provided health and unemployment insurance to some, but not all, workers.) Belloc feared that it would render people ‘servile’ to the state.

Quo Vadis? (Where are you going?)

What are the limits to health care?   How do politics, economics, faith and technology interact to determine what a society, a family, or a friend owes to the sick?  When is it correct to deny care and who has this authority?

Again, Belloc, who was a founder of the distributist movement, despaired of solutions that involved the state. The distributist principle of subsidiarity would seek solutions at the most local level possible; it would not call for a ‘common modality’ (that is, “one size fits all”.)


Note:  The last sentence of the posting containing Gill’s article reads:
“AA Gill began taking nivolumab after writing this article”
No additional information was offered.
 


 If you get into the article, you might want to know about these:

“Attlee”: Clement Attlee was Prime Minister of the United Kingdom from 1945-1951. The National Health Service Act of 1946 was passed on his watch. It created the current National Health Service. He was both preceded and succeeded in office by Winston Churchill.

Charing Cross Hospital” is a teaching hospital built in 1973. It is located in west London.

Health Care is a train wreck. Distributist ideas can (and must) fix it.

This post summarizes previous posts on distributist ideas for improving the health care system. Then it recommends two attainable public offices in Colorado for a Distributist who is ready, willing and able to act.


1. Please understand why health care is deeply troubled.

1. US health care is the most expensive in the developed world.

2. For all it costs, US health care ranks last among wealthy countries.

3. US health care is more “socialized” than not. The taxpayer pays for 64%; the private sector pays the remainder.

4. US health care consumes 17.2% of Gross Domestic Product, an amount nearly double that of the average of OECD member nations. (The OECD is the Organization for Economic Cooperation and Development. It is made up of developed nations.) 


Here are some numbers:
(Most of the data below is from: Himmelstein, David U., and Steffie Woolhandler. “The Current and Projected Taxpayer Shares of US Health Costs.” American Journal of Public Health 106, no. 3 (March 2016))

US Health Care Exp 2013 and 2024Total US health expenditure in 2013 was $2.919 trillion. Of that, $1.8774 trillion, or 64.3%, was tax-financed. Himmelstein and Woolhandler project that in 2024 US health expenditure will rise to $5.425 trillion, with $3.6421 trillion (67.1%) tax financed. 

In 2013 total health expenditure was $9267/person (17.2% of Gross Domestic Product.) OECD vs US health care spendingTax funded expenditure was $5960/person (11.2% of GDP). The 2013 OECD expenditure averages were 8.8% total, 6.5% tax funded.

 

In Colorado, nearly 1/4 of the population is on Medicaid. ( Medicare and Medicaid are only a portion of taxpayer financed Colorado Medicare and Medicaid Expenditurehealth care . The Department of Defense, the Veterans Administration, and tax credits/deductions to support the purchase of health care are also taxpayer supported.)


 2.  Consider worthy ideas.

 The efficiency of the health care system in the US is determined by very, very large “players”: the government, big pharmaceutical companies, and big insurers to name three. Market mechanisms do not seem to be able to control expenses. Distributist John Médaille says that there are too few competitors to make that possible. 

The cost of health care (17.2% of GDP) compared to that in other developed nations (8.8% of GDP on average) is high. It is not competitive. Therefore it is not sustainable. 

It is hard to imagine that anything will ‘reset’ the fundamentals of this system, short of jubilee. Revisions to payment systems like those Bernie Sanders and ColoradoCare proposed do not address the most dysfunctional features of the health care system: monopoly and monopsony. 

 John Médaille has made suggestions regarding cost containment. One of these suggestions concerns revisions to pharmaceutical licensing law. These changes, moving from a ‘patent’ based system to a ‘manufacturing license’ based system, would be challenging to implement. Think of it as moving from medallion taxis to Uber when all the medallion cabs are owned by Wall Street lawyers. 

John Médaille’s other suggestions concern three particulars of the practice of medicine: training, licensing, and supervision. 

3. Take action in Colorado.

 In Colorado, there is a place from which an engaged citizen can effect the practice of medicine and its costs, perhaps importantly so. This is the Colorado Medical Board which operates under the Department of Regulatory Agencies (with much autonomy.) 

The Colorado Medical Board is charged with “regulating and controlling the healing arts, which include establishing and enforcing [licensing standards for medical practitioners.]” The board consists of eight Medical Doctors, three Doctors of Osteopathy, one Physician Assistant, and four members of the public. Members are appointed by the governor for a term of four years. Recent deliberations included the use of licensed aestheticians to carry out procedures in medical offices. 

A similar group, the Nurse-Physician Advisory Task Force for Colorado Healthcare (NPATCH), has been established to improve and recommend codification for matters that involve the relationship between physicians and nurses, such as physician mentoring for nurses who are to become advanced practitioners. The Governor appoints the Task Force’s 12 members, comprised of five physicians, five nurses and two consumer representatives. One physician is a representative from the Colorado Medical Board, and one nurse is a representative from the State Board of Nursing. 

This board and this task force are places where distributist ideas (like John Médaille’s ideas on training and on licensing) can inform policy… and a cursory review of recent deliberations suggests that these ideas might be welcomed! 

One last thing.

There is a new federal program that is soon to insinuate itself on the practice of medicine. The Federal Government wants to “improve the efficiency” of medical practitioners who serve the elderly through Medicare and children through CHIP (Children’s Health Insurance Program.) Beginning in 2019, physicians are to be paid based on the outcomes of their care. This program has been authorized by MACRA – The Medicare Access and CHIP Reauthorization Act of 2015. 

It is controversial. The reporting requirements are substantial; concern has been raised that they will overwhelm small medical practices. The final regulations are 2400 pages long. The introduction to the regulations contains a list of 72 new acronyms. 

There are three interested parties in medicine: the medical practitioner, the patient, and the payer. The payer makes the rules. 

I now digress to make a point. The federal government uses its power to reduce costs, not by improving efficiency (again, US health care is the most inefficient in the developed world), but by reducing benefits: 

A person born before 1943 could retire with ‘full’ Social Security benefits at age 65. Persons born 1943-1954 must wait until age 66. Those born in 1960 or later will wait until age 67. Is there any reason to think that similar economies will not now be sought by controlling the practice of medicine under Medicare? To repeat: physicians will increasingly be paid based on the outcomes of their care. What outcomes? 

John Médaille has suggested the establishment of medical guilds. He urges competition between medical fraternities to achieve efficiencies and excellence, rather than the dreary meddling of the federal bureaucracy. A full exploration of this idea is more compelling than ever.

Dean Baker recommends we import doctors to lower the cost of medical care.

Dean Baker is the co-director of the Center for Economic Policy and Research. 

He has published an article titled “Why don’t we have free trade for highly paid professionals in the U.S.?” on the PBS Newshour blog, “Making Sen$e.” 

He argues that the cost of medical care could be lowered by opening our borders to doctors from abroad. For reason of restraint of trade, argues Baker, we pay our doctors twice what we need to. 

The United States has supported cross border movement of goods and capital. (NAFTA, the North American Free Trade Agreement, 1994, is case and point. Prior to Donald Trump’s election to the office of President, other multi-lateral trade agreements were pending. Trump says his administration will negotiate trade deals on a bilateral basis.) To open the borders to the free flow of labor, as has happened in Europe, is another matter. Doctors from the Netherlands and truck drivers from Mexico can enter and work in the U.S. if they obtain the correct visas and licensing, but admission is based on an individual’s application, not on a country of origin.

Traditional healers from Lassa, Nigeria

Traditional healers from Lassa. Globalization = Homogenization. Are we ready for one worldwide medical bureaucracy?

 On November 15, 2016 the Ford Motor Company announced that it is moving a small car factory from Michigan to Mexico. It will be importing other cars from India. 

Why do we not import workers instead of cars? And what is a fair wage?  US auto workers hired before 2007 earn between $28 and $32 an hour. Those hired since make between $16 and $20.  And, Mexican auto workers make from $1 to $4 an hour.

It is hard to overstate the complexity of this problem. In a forthcoming posting I will look into the matter of medical licensing in Colorado. Medical care in Colorado is too expensive (as it is elsewhere in the U.S.) 

Distributists seek local solutions, ones cut with surgical precision.

As a distributist, I  hope that any eventual exchange is made medical board to medical board, and not trade representative to trade representative. Medicine is local.  It is good that Dean Baker has raised the issue, but a race to the bottom wage-wise is not a solution.  There are many other things that can be done. 

Larimer vs. Weld on energy

The Christian Science Monitor has published an article, “Why climate change divides us” that highlights differences in climate change politics and beliefs found in two Colorado counties: Weld and Larimer.  In sum: Weld County is a conservative community with an economy strongly linked to petrochemical production.  Larimer County is critical of the way its neighbor earns its living.

I live in Larimer County but have earned a living driving fracking water to and from fracking sites in Weld County, including Wells Ranch (an area of intense fracking that is referenced in the article.) 

This is to say, I have a dog in the fight. 

In the coming months, I will seek out Distributist ideas that might bridge the divide explained in the article. I do believe that the climate is changing and that at least a portion of that change is anthropogenic. 

I also think that some of the best paying jobs to be found in Northern Colorado are in the oil field. When I left the field, in 2014, oil was over $100/barrel, now it’s about $45. So there are fewer of those good jobs there, although in a market economy, it is only logical to expect demand for petrochemicals to grow as price falls. Perhaps production is moving to places with lower costs of extraction… Saudi Arabia, for instance. 

buckeye road power plant

Buckeye Road Power Plant – North of Fort Collins

As for Larimer… I think it is and will be a good laboratory for social solutions. In 2014, coal provided 74.2% of the electrical energy to Fort Collins, Loveland, Longmont (Boulder County), and Estes Park. 

Climate change is a dog’s breakfast.  I recommend the Monitor article.

Do Obamacare concerns augur poorly for ColoradoCare?

Health insurance rates under the Affordable Care Act are set to increase by 25% next year according to this report in the Denver Post on October 24, 2016, Obama administration confirms double-digit health insurance premium hikes.”

The reasons for the increases are a muddle; articles like this one from Yahoo Finance on October 25, 2016, “Do Increases in Health Insurance Premiums Spell Doom for Obamacare? No, and Here’s Why.” offer only spotty explanations.

It is safe to say that insurers are raising their prices because they can; those that cannot are reducing their participation, if not leaving the market altogether.

ColoradoCare (Amendment 69 on the ballot) does nothing to take up the Distributist reforms that are so badly needed. ColoradoCare’s model is not the same as Obamacare’s, but without addressing the issues underlying the ever increasing cost of health care, a more efficient result is unlikely.

See this previous post for a summary of Distributist economist John Médaille’s analysis and proposals regarding health care.

ColoradoCare will entrench a medical system which needs, instead, to be challenged.

There is a struggle to provide universal health care because an equitable and affordable way to treat sickness for the rich and the poor is yet to be found. ColoradoCare proposes to provide equitable care. Instead it will anchor an inefficient medical system to the constitution of the State of Colorado.

Prior to the Affordable Care Act (Obamacare), the very sick and the very poor could be denied comprehensive medical services.

In 2010, the Affordable Care Act set out to provide a standard of medical care for everyone. It did so by trying to mandate three things:
1. The requirement that pre-existing medical conditions would exclude no one from coverage.
2. The requirement that everyone purchase insurance or pay a penalty. (The young and healthy would thereby underwrite the old and infirm.)
3. Subsidies for the poor.

The authors of The Affordable Care Act provided special funding to cover the Act’s start-up period. This was needed because many previously uninsured sick and poor people would want remedial care at the outset of the program. However, the planned funding has been insufficient; demand for care has been greater than forecast.

By 2015, insurance companies that had been willing underwriters of Obamacare in 2010 began to reconsider; some have withdrawn. Of 25 health care cooperatives formed to serve new participants 19 have failed, among them the Colorado HealthOp.

All this has happened against the background of rising health care costs.

According to the American Journal of Public Health, in 2013 health spending in the US was 17.4% of GDP. The tax-funded portion was a little more than 2/3 of that total (11.2%.) Average health care spending for OECD countries (Organization for Economic Cooperation and Development, a group of 35 of the worlds most prosperous economies) was 8.8% and 6.5% of GDP respectively. OECD health status data (available here and summarized on Wikipedia here) does not indicate that the US enjoys better health for all the extra cost. (In fact, it receives half the health care for twice the cost. The word ‘scam’ comes to mind.)

ColoradoCare proposes a single-payer system to manage and improve health care for Coloradans. New efficiencies are expected to be found in the administrative areas of billing and claims. Otherwise, costs are expected to grow. (Concerns regarding Obamacare have fueled competing ideas, too. Several current proposals would provide tax credits instead of Obamacare style subsidies, and offer incentives for participation in HSAs (Health Savings Accounts.))

Alas, while these proposals ask the question “How can we most efficiently and fairly cover costs?” they beg the question, “How can we tame the costs themselves?” This is remarkable considering the OECD’s data showing that the US system delivers so much less for more. For the most part, policy makers do not question the price of medications, modalities for training and licensing of health care professionals, monopolistic practices on the part of providers, and monopsony in government purchasing of health care services.

An exception is the Distributist economist John Médaille.john-medaille_ver003 In his article, “Distributism and the Health Care System,” published in the Distributist Review, Médaille lists the following concerns:

1. The proportion of GDP consumed by health care costs in the US (17.4% in 2013) is unsustainable.
2. Although technology is improving costs are increasing. This indicates monopolistic pricing. In most cases when the government permits a monopoly (an electrical utility for instance) it sets prices. In the case of health care, the government plays almost no role in pricing.
3. Health care for seniors (Medicare) is socialized. This means that non-seniors must compete with the government when purchasing health related products and services. The government has a monopsony on health care, rather like it has on aircraft carriers. (A monopsony exists when a single buyer controls the market.)
4. HSAs, which permit a tax deduction for health care related savings, are of most benefit to the rich (those with higher tax brackets.)

Then, Médaille offers some ideas to contain the cost of health care:

1. The patent system for pharmaceuticals could be replaced with manufacturing licenses. Developers of pharmaceuticals would license their products to a manufacturer or manufacturers for a fee. The fee would provide a smaller up front profit, but would not expire as a patent does. Returns to the developer would be ongoing, rather than front loaded. Manufacturers would compete on price and service. Speculation in pharmaceuticals, a practice that has received recent attention because of the particularly egregious actions of the owners of Daraprim and the EpiPen, would not be systemically supported as they are now.
2. Medical licensing could be revised to include gradations of care to optimize alignment of medical need with medical service. (The poor must often visit a costly “Emergency Room” because no other service is available to them.) Here is a PBS Newshour report on how this might begin: “Can ordinary citizens help fill gaps in U.S. health care?
3. Medical training would be provided by stepping through grades of practice (LPN > RN > Nurse Practitioner > etc.) as compensated apprentices. This would permit practitioners to become experienced in administering care as they advanced professionally. A medical doctor could earn her way through her formation, arriving at the M.D. well experienced, and without hundreds of thousands of dollars in student debt to repay.
4. Supervision, training and licensing of medical personnel would be provided by local competitive guilds. Guilds would stand surety for (insure) their members. Medical personnel would buy and own shares in their guild which would establish its own facilities (clinics, hospitals, pharmacies and the like.)  Medical operations, training, and supervision would be closer to the communities served. The practice of medicine would be shaped by a community’s response to it.

Médaille’s article is very readable. He does not address the matter of providing care for the poor particularly, but a more rational business model will improve access for everyone.

Whether or not Médaille’s ideas will work shall be determined by testing them. Current patent law is national, if not international. Medical licensing, insurance, and training are at the state level. Impediment to consideration is not concern about an idea’s efficacy; it is pushing past bureaucracy threatened by such innovative thinking. Médaille’s Distributist ideas move the discussion beyond the obedient state of “How can we keep paying whatever is asked?”… a question ColoradoCare, a constitutional amendment, appears to be dedicated to answering … to a reconsideration of our systems, services and practices.

Question:
What, then, can be done while awaiting jubilee?
 

Answer:
Step 1.  Do not support ColoradoCare.
Step 2.  Do support an open review of the medical establishment.

A Political Party formed around ‘Rerum Novarum.’

american solidarity party logo

A political party has formed around Catholic Social Teaching. It is called the American Solidarity Party. The ASP has nominated Michael Maturen for President and Juan Mũnoz for Vice-President of the United States. 

Maturen and Mũnoz will be on the ballot in Colorado. 

In addition to the party’s web site (linked above), information can be found at
ASP’s Facebook Page,
ASP’s Wikipedia Entry, and
an article in
First Things titled, “The Politics of Solidarity: A Case for the American Solidarity Party”. 

You can get a bumper sticker here.

ColoradoCare is upon us.

The November ballot question known as Amendment 69 seeks authority to establish a single payer health care system for the State of Colorado. It is to be called ColoradoCare. Proponents of ColoradoCare claim the benefits of universal coverage and improved affordability. Opponents say that although coverage may be universal, information regarding its particulars is minimal. They also say that accountability is non-traditional, and assertions regarding affordability are speculative.

The Colorado Health Institute has published an analysis.

Several things are clear:

1. The cost of health care continues to rise notwithstanding advances in the art which, in other industries, would be expected to reduce costs.

2. The people find the cost of health care an unrelenting concern.

3. ColoradoCare offers to substitute a giant state institution (financially, ColoradoCare will double the state budget) for a bunch of giant insurance companies. That is, a monopoly will take the place of an oligopoly.

ColoradoCare is, surely, a good faith effort to manage point 2. But it does not speak to point 1 (except for a projection that insurance and administrative billing costs can be reduced.)  As to point 3, ColoradoCare will create from scratch a monopolistic bureaucracy with the same financial weight as the entire State of Colorado. ColoradoCare is to begin collecting transitional taxes (0.9% of payroll) in July, 2017. Launch of coverage and full taxation (10% of payroll) could begin January, 2019.

…that is if it launches at all. The law provides ColoradoCare’s governing body with the power to terminate ColoradoCare operations if certain features of it do not prove viable.

Future postings will look at alternatives to ColoradoCare.

Next posting regarding ColoradoCare : The problem that ColoradoCare is trying to fix. And why that’s not what is actually broken.