Wednesday, March 28, 2007

Report on 208 Commission

I spent 7 hours today at the 208 Commission meeting with 10-15 other public witnesses.

Three items worthy of note.

First, the 208 Commission held public meetings this past week requesting feedback on the criteria it plans to use to evaluate various proposals for health care reform. The meetings were held in Denver on March 22, and on March 24, in Alamosa, Colorado Springs, Greeley and Grand Junction. About 230 people showed up to hear the various commissioners talk about the Commission and of these, 97 spoke. According to the commissioners, most of the people that testified were either medical providers or part of some specific consumer group that is a high user of medical services, such as the disabled.

A few of the commissioners seemed disheartened that few business owners and employers attended, but one commissioner reminded them that small business owners and employers work more than 40 hours a week, and had little incentive to attend. The Commission Chair also pointed out that these public comment sessions most likely did not represent the views of most of the people of the State of Colorado, but rather only those who were providers, those who felt their health care was substantially lacking, or those who had no insurance.

Which bring me to the second point. According to Colorado voters there is no crisis of health care in Colorado. According to Colorado voters polled in December 2006 for the Denver-Metro Chamber of Commerce, 77% of Colorado voters believe their own health care is good or excellent and 60% believe the quality of health care in Colorado as a whole is good or excellent. More to the point, only 7% describe the situation in Colorado health care as a crisis.

This polling data was presented at the 208 Commission meeting by Chamber of Commerce public policy-wonk Tamra Ward, and is a bit higher, but similar, to national polling data by the Gallop and Pew organizations. Nationally, about 71% consider their own care is good or excellent, and 53% think that health care across the nation is good or excellent.

One interesting issue presented by this data is that while people think their own health care is above average, they seem to have been convinced that there is a problem for other people. The numbers are split about even on whether there is a major or minor problem in the "Colorado health care system". As stated above, 7% believe there is a crisis in the "health care system" and 39% believe there is a major problem, while 45% think there are only minor problems, 3% state there is no problem and 6% have no opinion. Of those who believe there is a major problem, the most significant issue is a concern for the cost of a major illness. The solution to that problem is catastrophic insurance coverage.

All of this is excellent news for Colorado and for those who value freedom and individual rights. To the extent that people understand that there is no crisis or major problem, then they are unlikely to be sympathetic to major, significant, wholesale changes in either medicine or health insurance.

The final item of information from the 208 Commission is that they have received 31 notices of intent from different persons or organizations who intend to submit health care reform proposals, with only one clearly in favor of the marketplace, and two that mention markets, but want to have either a private/public partnership, or involve government reinsurance and coordination. Most of the other notices indicated an intent to submit proposals for single-payer, comprehensive, universal, mandatory plans, or some combination thereof.

The next 208 Commission meeting is tentatively scheduled for April 27 where they intend to select a vendor for the economic modeling of three to five proposals of the thirty-one proposals that may be submitted.

Monday, March 26, 2007

What "market-based approach?"

Ron Forthofer, former Green candidate for governor and Congress, complains about "the current failed market-based approach" in U.S. medicine. (See the March 24 Rocky Mountain News, business section.)

The problem is that all of the problems Forthofer describes are the direct result of government meddling in medicine, not a "market-based approach."

As I recently warned, "The advocates of socialized medicine... blame the allegedly 'free' market for the problems caused by previous and existing state interference in medicine, thereby generating a cycle of control that creates crisis that spurs calls for new controls."

Forthofer complains that the employer-pay insurance system is plagued by high costs. This is true. But the cause of these high costs -- and the employer-pay system -- is a combination of federal and state tax distortions and controls on the insurance market.

To address the problems created by government violations of individual rights in medicine, Forthofer calls for more such violations. He advocates a "single-payer system" of "public funding and [allegedly] private health care." He also calls this system "universal comprehensive coverage." His claim that completely tax-funded medicine can also be "private" is laughable. While medical facilities may remain nominally "private," in a tax-funded system the provision of medical services must be strictly controlled by politicians and bureaucrats. Forthofer offers Canada as a model -- without bothering to mention the onerous controls placed on doctors and the rationing of care for patients in that country.

Saturday, March 24, 2007

Speakout Op-Ed in RM News

Once again, the moral is the practical.

An op-ed in today's published Rocky Mountain News (apparently it is not on-line) entitled "Health Care on the Mend," by former State Senate Majority Leader Mark Hillman asserts that Colorado Department of Insurance statistics show that the status of health insurance in Colorado today is better than it was five years ago due to a lessening of government mandates in insurance coverage.

Previously, Colorado only allowed insurance companies to use community rating. This means that all insurers were required to make no distinction between the premiums they charged for the healthy and sick. Thus, premiums were very high, and many healthy individuals chose to forego insurance because they determined they could not afford it. The legislature altered the mandate to a modified community rating --- not free market, but a step in the right direction -- and thereby allowed insurance companies to charge up to 25% lower premiums for the healthiest customers. As a result, more small businesses and their employees have purchased insurance in the last two years. In 2006, 1,289 more businesses offered health insurance to their employees and dependents than in 2005, according to a report from the Colorado Division of Insurance.

Reducing government burdens means more freedom, which as we all know, is not only moral, but the only way that people can flourish.

Cox and Forkum on Government Medicine

Cox and Forkum recently posted an all-too-apt political cartoon on government medicine.

However, I think it's misleading to characterize socialist medicine as the brainchild of the Democrats. It's not just that Republicans don't oppose government "universal" healthcare; they've actively pursued it. President Bush pushed through a massive new entitlement with his prescription drug plan. Republican Bill Owens signed the bill to create Colorado's very socialist 208 Commission on healthcare reform. Today's Republicans are not opponents of socialism; they simply want to give people more government-controlled choices in a socialist system. (Brad Thompson explains the details in his essay "The Decline and Fall of American Conservatism.")

Wednesday, March 21, 2007

208 Commission Public Comment Meetings

The 208 Commission is seeking public comment on the 11 criteria it will use to judge various proposals to change health insurance or medicine in Colorado by hosting public meetings around the state over the next 3 days. The questions to be answered by the public at these meetings are:
  1. What are your thoughts on the importance of any of the 11 criteria in the health care proposals? Please explain why any one or more of them are more or less important to you.
  2. Do you have any comments on the description of each of the criterion?
The first meeting is in Denver tomorrow March 22, from 4 to 7 pm at Fitzsimmons at 12800 E 19th Avenue, Aurora. The other meetings are all on Saturday -- at 9:00 in Colorado Springs, Greeley and Grand Junction, and at 2:00 pm in Alamosa.

You can also send your comments to the 208 Commission on these -- or any other issues -- by sending them to Anita Wesley, at . The Commission will be discussing these comments at its meeting next week on March 28, which is open to the public.

Tuesday, March 20, 2007

Long Waiting Times For Medical Scans in UK

According to this recent article, the waiting time for a non-emergency CT scan in Great Britain is 5 weeks, and for an MRI is 14 weeks. These numbers are considered huge improvements from the truly awful state back in 2001, when the waiting times were 7 weeks and 21 weeks, respectively. Also,
...[T]wo out of three doctors and nurses said they often did not get results when needed, and a half said the delays affected patient decisions daily.
In contrast, here in Denver, the waiting time for both is generally less than 24 hours.

Friday, March 9, 2007

Saturday, March 3, 2007

California's Health Care Costs

Denver Post columnist Al Knight recently wrote this opinion piece in which he argued that the problem with California's health care plan is that people want more health care than they're willing to pay for. In other words, he attributed the problem to too much demand.

I wrote the following online response:
One major reason that health care costs are so high is not because of demand but because of onerous government regulations. Plus, bad tax laws encourage the current perverse system of employer-based insurance, which means that people aren't spending their own money, and aren't incentivized to seek out the best value for their dollar.

It's been proven that a system where patients pay for their own basic expenses from a Health Savings Account (HSA) and supplement this with catastrophic insurance for expensive but rare conditions can result in major cost savings with no decrease in patient outcomes. If we adopted such a system, overall health care costs would go down significantly due to the workings of the marketplace.

Anyone who's bought a DVD player recently knows that the free market results in increased quality and decreased costs of goods and services. We've also seen this in the portions of the medical sector where patients are spending their own money, such as LASIK procedures - the costs continue to decrease whereas the quality continues to improve due to the competition and innovation. Increased demand is not inherently bad, but instead drives this sort of desirable innovation in a virtuous cycle.

In contrast, states like California, Massachusetts, and Tennessee which have adopted "solutions" which involve more government interference in medicine will not be able to cut costs precisely because they bypass the proven benefits of the free market. Then they'll be faced with the unpalatable choice of either skyrocketing costs or rationing, as is happening right now in Tennessee. This is the wrong way to go.

Colorado should learn from those other states' experiences, and adopt market-based health care reforms.
Brian Schwartz also got the following Letter To The Editor published, which is a shorter version of this longer response:
Al Knight (Feb 27) attributes growing health care costs to advances in medical technology. Yet, if this were true, why have cosmetic surgery and corrective eye surgery costs decreased compared to similar services? According to the National Center for Policy Analysis, costs of medical services increased by 77%, almost twice that of the Consumer Price Index between 1992 and 2005. Yet, cosmetic surgery costs increased by just 22% and the cost of corrective eye surgery has actually decreased.

The difference? Customers are prudent when spending their own money, but are big spenders when spending someone else's. Patients pay for cosmetic and eye surgery themselves, and to attract customers, providers must innovate to both lower costs and improve quality.

Health care costs so much because patients pay so little for it - just 14% out-of-pocket. Tax laws, Medicare, and Medicaid have made health care like a subsidized buffet-style restaurant. Legitimately concerned patients seek expensive MRIs and CAT scans, regardless of their cost and necessity. Yet, the RAND Health Insurance Experiment has shown that high-deductible policies reduce patient spending -- with no measurable effect on their health. Policy-makers should repeal laws that discourage such policies and expand access to Health Savings Accounts.