Unbiased Analysis of Today's Healthcare Issues

Washington Monthly Articles

Written By: Jason Shafrin - Sep• 19•07

Recently I came across two Washington Monthly articles in their Health Care Issue which are both very interesting.

The first (“Newtered“) by Shannon Brownlee talks of the lack of evidenced based medicine in the U.S. In the mid-1990s, the Agency for Health Care Policy and Research (AHCPR) panel concluded that there was little evidence to support surgery as a first-line treatment for low back pain; non-surgical treatments should be tried first. The back surgeons, understandably, were upset by this finding and decided to start lobbying Congress. What happened next?

The agency’s name soon appeared on a House Budget Committee “hit list” of 140 federal programs targeted for elimination. (The list also included the congressional Office of Technology Assessment, which evaluated the effectiveness of medical technology.) The Republicans saw the AHCPR as a wasteful government agency, and in 1995 the House voted to eliminate its funding, calling it the “Agency for High Cost Publications and Research.” Eventually, the agency was rescued with the help of a handful of Republican supporters in the Senate, but it suffered a 21 percent cut of its already meager $159 million budget.

The article gives another example:

Just this August, the Washington Post reported that the Department of Health and Human Services, under heavy pressure from the infant formula industry, had buried the AHRQ’s comprehensive finding that breast-feeding leads to better health in babies.

What is Ms. Brownlee’s solution? To create a new agency–which she names ACE–which “would fund systematic reviews of the medical literature, as well as clinical trials to test the comparative effectiveness of everything from drugs to treatments.” This agency would have to be independent of political pressure, like the Federal Reserve.

I agree that having government research agencies is important, but we already have the Agency for Healthcare Research and Quality (AHRQ).  Insulating any government agency from lobbying or corruption is always difficult and I no sure that making the agency unaccountable to public opinion or politicians is the answer.  Is the answer to bad government more government?

The second article (“Best Care Everywhere“) by Phillip Longman argues for a nationalized version of the Veterans Affairs health care system, which he names Vista.

Uniquely among U.S. health care providers, the VA has a near-lifetime relationship with its patients. This, in turn, gives it an institutional interest in preventing its patients from getting sick and in managing their long-term chronic illnesses effectively. If the VA doesn’t get its pre-diabetic patients to eat right, exercise, and control their blood sugar, for example, it’s on the hook down the road for the cost of their dialysis, amputations, blindness, and even possible long-term nursing home costs. Unlike the vast majority of American health care providers, the VA also has no incentive to perform unnecessary surgery or redundant tests. Where other health care providers make money by treating patients, the VA makes money by keeping them well.

The author proposes that an individual health insurance mandate.  While ideologically I am not in favor of health insurance mandates, they do make some sense if the uninsured can 1) save money from not purchasing insurance while 2) still receiving free care at non-profit clinics or emergency rooms.  Wisely, the author will offer subsidies to low-income individuals so they will be able to purchase insurance.  The Vista program will not be the only health care option–private health insurance will still be available–so competition between Vista and the private market should drive down cost and increase quality.   Mr. Longman proposes that “…any person in the Vista system who gets a job with health insurance should be allowed to direct his or her company to pay premiums to the Vista system if that person wants to remain in the system.”

One problem with this idea is that the VA current policies are based on serving the patient over their entire lifetime.  If the VA was nationalized and people could switch to private health insurance, then the incentives for preventative care would be greatly reduced if there were moderate amounts of turnover.  Further, Longman envisions Vista being run by an independent board appointed by the President–similar to the Federal Reserve Board.  Yet, would insulating the medical board from public opinion/politics really be the correct thing to do?  Having a government or health care system run by partisan politicians may not be optimal, but neither is having a health care system run by technocrats who have no accountability to the public.

I am very amenable to having a basic healthcare package available to all Americans as long as each person has the choice to opt to purchase their own insurance if they please.  I also find a health insurance mandate reasonable.  We must, however, eliminate poverty traps such as currently exist in Medicaid.  If working more and increasing my income by $5000 will cause me to lose my Vista subsidy, the health insurance program will have serious work disincentives.  Thus, the health care subsidies must take these issues into account.  Vouchers may be a more reasonable solution.

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2 Comments

  1. […] The book is non-technical and the first 9 chapters document the way in which and the reasons why Americans get so much medical care. Chapter 10 offers some solutions to these health care problems. These solutions are similar to the ones expounded in Ms. Brownlee’s article in the October 2007 edition of the Washington Monthly (see my comments here). […]

  2. […] the past, I have commented on an article by Phillip Longman describing the quality of care at the VA.  Mr. Longman recently […]