Essential Health Benefits and cost benefit analysis: can we maintain doctors’ incomes and provide decent care for all?
by Linda Beale
So we thought we had finally created a national system of health insurance that would permit near-universal coverage for essential health benefits to every American.
But the Obama administration says it is not going to write rules regulating exactly what benefits must be covered. Again bowing his head to the GOP personal responsibility/states’ rights mantras, the president is willing to let states “experiment” like they do with Medicaid. Question whether this amounts to allowing right-wing states to shift benefits to private profits and away from care for Americans?
This goes back to the recommendation from a panel at The National Academic of Sciences, which said that the federal government should take cost into consideration in deciding what’s essential to be provided by health insurance plans under the reform act and that new benefits should be ‘offset’ by cost cutting elsewhere. Robert Pear, Panel Says U.S. Should Weigh Cost in Deciding ‘Essential Health Benefits'”, New York Times, Oct. 7, 2011, A14.
But a primary problem with cost-benefit analysis as typically understood is that it favors the status quo because any new benefit for which money must be expended will cost compared to the current system, and the benefit is much harder to turn into a quantitative number that will prove that the cost is worth it. It is very hard to do truly ‘dynamic’ cost-benefit analysis–the assumptions used tend to be a one-size-fits-all and it is hard to calculate the way that the immediate benefit builds even more substantial long-term benefits and then result in much lower costs down the road,
so that current costs that will have substantial long-term benefits that may not add up to significant numbers until years or decades have passed will tend to be viewed as negatives, whereas maintaining a terribly ineffective and unjust status quo will be seen as positive. Even more killing for any cost-benefit analysis of medical reform where part of the reason for the problem is the exorbitant pricing that creates large profits for doctors and for-profit hospitals is that If ‘costs’ take into account the fact that decent health care modeling should reduce the highest end medical provider incomes (like the excessive profits made by private nursing homes and hospitals and surgeons who do not work on salary, etc.), then of course the cost-benefit analysis will favor the status quo where those that have money get good care and those that don’t die.
One of the ways that the failure to adopt at least a public option or ideally a single (national) payer option for health care reform shows is that the panel suggested that the minimum coverage required should conform to what small employers provide–typically much less generous coverage than that provided by large employers. As the October New York Times article on this noted, “This reading of the law was unexpected, but the panel said it was justified because small businesses ‘will be among the main customers for policies in the state-based exchanges.'” Id. Not surprisingly, the article also concludes that “the recommendation is likely to please employers and insurance companies and could cause concern among some advocates for consumers and patients with particular illnesses who want more expansive benefits.” Id. Again–just more evidence that the right option for health reform is an extension of Medicare for all, not this piece-meal attempt to appease health insurers and health providers by attempting to guarantee that they can still reap huge profits out of what should be a universally provided public good.
originally published axingmatter
Linda,
The problem is, and has always been, what constitutes ‘essential’ benefits? What will you let poor grandmother die for that rich grandma writes a check and lives for another 6 months or 6 years?
Everything I see is ‘essential’ = everything.
Islam will change
Until we separate how to get the money from the patient to the health care provider from the issue of what is or is not health and healing we will not solve the rising over all costs.
This destinction of the 2 issues is the advantage all the other developed national health systems have.
The primary reason to have a single payor system is simply to put to We the Peoples advantage the sharing of risk…pooling. With that, all health care should be in the pool thus removing at least 50% of the reason people sue in personal injury and workers comp, etc.
Becker
has it right. but to say it another way, it’s insurance, stupid.
the game the congress at its handlers are playing is to turn what should be insurance into a government subsidy for high cost health care.
the “personal responsibility” meme is a lying way to say “maintain the leverage of doctors and large corporations over individuals, 99% of whom have no way to know what they need or what they should pay for it.
i am not a particular fan of government, and i’d be thrilled to see a not for profit union of people design a health care plan… that probably included low cost clinics and doctors on payroll, and even include medical school… that would be low cost enough to attract customers away from the existing medical predat… er practitioners and protec… er, insurance companies.
but failing that, including that, the answer is simply add up all the costs of health care every year and pay for it with a premium per capita that covers all the costs. then you can start to tweak it and get rid of “treatments” with no real value, and find ways to deliver “routine” care that don’t involve million dollar practices.
and you’d probably need to adjust the premiums according to some “ability to pay” formula. the best i can think of is … well, two parts… first… you pay for your lifetime expected costs (without regard to “prior conditions”) over you “earning years”, and second your premium includes both your medically expected costs and your “expected” chance of not being able to pay those. In this way a basic premium might be set at, say 3000 per year, with about a 300 per year “superpremium” to cover those timew when you can’t find the 3000. for some people this would be “most of the time” so they would pay a reasonable “what they can afford” (and wages would have to rise to include this as a basic cost of living), but the premium of the wealthiest would be limited to, say, that 3300.
i have no idea if the arithmetic here is in the ballpark, but i think it’s good enough as a place to start.
and yes, it would be good to preserve some aspect of “the free market” just to keep government honest, which as we know, we can’t count on.
buff
i think you are making the case for single payer. if “essential” is defined to be what “experts” or even “the people” think is essential, then we just pay enough to cover it.
if someone thinks that something else is essential then they are free to pay for it themselves, or take out supplemental insurance to cover it. in the long run the political “market” will adjust in exactly the way the free market adjusts… except by one person one vote instead of one dollar one vote….with a minimum of a hundred thousand to play.
meanwhile look around and tell me about the cases where rich granma is living six years longer than poor grama… that don’t depend on working poor granma to death by kiling her Social Security.
“Until we separate how to get the money from the patient to the health care provider from the issue of what is or is not health and healing we will not solve the rising over all costs.”
You have stated today’s healthcare cost model paradigm well enough and in brevity. Insurance is the lesser of two evils and is reflective (mostly) of the healthcare industry. I do not see doctors as the issue as much as what type of doctor to emphasize.