Hamlet, Act 3, scene 2, 230

Rightly so, it was pointed out that the post on socialized medicine does not entirely relate to the current election. Here are summaries of the plans presented by the two candidates, as well as several other points applicable to topic.

Senator John McCain’s plan

This summary is from his statement in the Journal of the American Medical Association4.

Senator McCain states that the foundation of his plan rest on the belief that families, not government bureaucrats or insurance companies, should choose their own coverage, as government controlled systems will diminish health care quality. He identifies four ‘pillars’ to outline his reform: affordability, portability and security, access and choice, and quality.

Affordablity: This portion includes is tax credit to help individuals pay for health care, $2500 for individuals and $5000 for families.

Portability and Security: There will be government supported coverage for individuals that follow individuals or families from job to job, or job to home.

Access and Choice: Law would open up health insurance markets nationally, creating greater competition to lower cost. Also a Guaranteed Access Plan would help those who have difficulties getting insurance due to existing health conditions. Law would also set reasonable limits on premiums for health insurance.

Quality: Institute a pay for performance system within Medicare and Medicaid to cut excessive costs and streamline medical workups, paving the way for other health care providers to do the same. Address the growing epidemic of obesity, diabetes and heart disease through early intervention programs, education and healthy eating initiatives. Enact tort reform to limit frivolous law suits.

Senator McCain concludes by stating that he will conduct a bipartisan effort to achieve these goals.

Senator Barack Obama’s plan

This summary is also taken from his statement in the Journal of the American Medical Association5

Senator Obama’s plan rests on the goals of reducing the rate of uninsured and decreasing the cost of health insurance for everyone.

His three part plan consists of (1) providing affordable, accessible health care to all; (2) modernizing the US health care system to contain spiraling costs and improve the quality of patient care; and (3) promoting prevention and strengthening public health to prevent disease and protect against natural and man-made disasters.

To provide affordable, accessible health care, he proposes a new National Health Exchange—a government health insurance plan at a low affordable cost. Those that cannot afford it and do not qualify for SCHIP or Medicaid will receive a tax subsidy to purchase health care. Financing for this plan will by by requiring employers to make a ‘meaningful contribution’ or to ‘contribute a percentage of their payroll’. Small businesses will be exempt from these ‘contributions’, and will even receive tax credits up to 50% of the premiums paid.

To modernize the system to lower cost and improve quality, the plan will invest in electronic medical records, help with reimbursement of employers in the even of catastrophic illness if they use their savings to lower workers premiums, require disease management programs to promote good health, require health plans to disclose the percentage that goes to administrative costs, launch efforts to tackle health care disparities, reform malpractice, eliminate medicare subsidies. It will allow Americans to import inexpensive drugs from other countries and stop big drug companies from paying to keep generic drugs out of the market to preserve their profits, and will also allow Medicare to negotiate with drug companies for better prices.

To promote prevention and public health, Senator Obama states he will work with every sector of society—employers, school systems, community groups and families—to ensure that Americans have access to preventative care. He will require that federally supported health care plans cover the costs of preventative services. He will also increase community based preventative interventions to help Americans make better choices to improve their health.

Senator Obama concludes by stating that his plan will guarantee that every American has health care when they need it, and promises to sign it into law by the end of his first term.

Which plan addresses health care reform more effectively?

The data I refer to here was published by the Lewin Group, an independent national health care and human services consulting firm.13

McCain’s plan reduces the number of uninsured by 21.1 million, and Obama’s reduces it by 26.6 million over the next 10 years. Both are admirable in reducing the number of uninsured. Although 5.5 million more that McCain’s plan, Obama’s plan has not completely reduced the number of uninsured as his promise that “every American will have health care when they need it” might lead one to expect.

McCain’s plan is estimated at a net federal cost of $2.0 trillion and Obama’s at a cost of $1.2 trillion over the next 10 years. At first this may seem to weigh in favor of Obama’s plan, but lets look at the what net federal cost means. McCain’s plan will cost the government more because it will be taking less taxes from the people. Obama’s plan will be paid for by increases in payroll taxes to companies with 25 employees or more, among other myriad of questionable savings—ie electronic medical records, drug negotiations, etc. Other estimates place McCain’s plan at a cost of about $1.3 trillion over ten years and Obama’s at about $1.6 trillion.14

Which plan will lead to loss of insurance at work? Estimates of McCain’s plan state that approximately 9% of employers will drop health care coverage. No estimates are given on how much increases in payroll taxes will effect companies with more than 25 employees.

Whose plan will lead to decreasing the cost of health insurance per individual? McCain’s plan is significantly more effective than Obama’s at reducing the cost of family health spending across all income levels.



My Opinion

Uwe Reinhardt, a health economist at Princeton University, said, "It's garbage in, garbage out. Every econometric study is an effort in persuasion. I have to persuade the other guy that my assumptions are responsible. Depending on what I feed into the model, I get totally different answers" (Sack, New York Times, 10/22).

Since the details and laws that will be put into place to enact the vision of each candidate have not been written, I whole heartedly agree with Reinhardt. Depending on how you play with the model, either candidate can come out on top.

I base my opinion on which program will be better by carefully looking at whether or not the candidate has a clear understanding of the problem, and if the candidate presents a plan that can actually work. Both candidates do an adequate job at identifying the issues of improving access to care for the uninsured. Both address the causes of rising health care costs, although their plans either vague or of questionable value.

My Opinion on Access:

Lets talk about the uninsured. 45.8 million or 15% of the total US population is uninsured1. 25 percent of the uninsured are below the poverty line (precise income varies by number in household and by state11, mostly this directly relates with minimum wage12). 28 percent are between 100% and 199% of the poverty line. These 24 million individuals are less likely to be working (full or half time), less likely to receive health insurance through a job, and of course are unable to afford an offer of coverage. Many of these 24 million low income individuals are eligible for coverage under Medicaid and SCHIP.7,8 Although qualifications guidelines vary from state to state, generally those in these first two tiers that qualify are children, parents of dependent children, pregnant women, the disabled, and the elderly.1

Surprisingly their also exists 27% of uninsured that have incomes above the 300% poverty level, and 11% at 500%. This is over 17 million of the total 45.8 million individuals who should be able to find affordable health care, as estimates place affordable insurance to consist of only 2-5% of total income at these levels.1

Looking at the age distribution of the uninsured is also educational. 21% of the uninsured are below age 18, 19% between 18-24, and 22% between 25-34. This gives 63% or 28.8 million of the total uninsured under 35.1

Conclusion: approximately 38% of uninsured individuals have a non-financial reason for being uninsured. The majority of uninsured are younger than 34. Both candidates plan will provide incentives to gain access to care. McCain does it by opening up the market to interstate competition and tax rebates to return money to American’s pockets. Obama does it by creating a new government health care exchange program—a government subsidized HMO of sorts—that will be cheap for low income families to buy. I am a free market, freedom of choice type of person, and less of a depend on the government for help type. I chose McCain’s in regards to access.

My opinion on reducing rising cost:

We’ve talked about a few of these already: inefficiencies, excessive administrative expenses, inflated prices, poor management, and inappropriate care, waste and fraud.2

Unhealthy behaviors such as obesity and diabetes have doubled during the past 25 years, and more than a quarter of health care spending growth in recent years is attributable to the rise in obesity and related growth of diabetes, high cholesterol, and heart disease.3 Smoking, alcohol abuse, as well as motor-vehicle collisions, gun violence, domestic violence, and other forms of trauma6, contribute as well.3

Unnecessary medical tests are costing the U.S. health care system millions—and potentially billions—of dollars annually, with an estimated annual costs of unwarranted use of just three low-cost tests alone—urinalysis, electrocardiograms, and X-rays—cost $50 million to $200 million a year.3

Overuse of medical services also occurs because of the high risk of medical liability lawsuits. A March 2003 report from the U.S. Department of Health and Human Services estimated that defensive medicine cost the nation between $70 and $126 billion in 2001.3

Both plans call for initiatives to improve education and preventative medicine, but are vague at what these might be. I don’t know if the government can do much about controlling the obesity rates in the US. Doctors can’t even do much about it—success stories are rare. Americans are going to pay for their poor eating habits not only with years of life, but with dollars as well. Neither talks about smoking, a tremendous burden to the health care system.

Both address inefficiencies: McCain calls for a pay for performance measures within Medicare and Medicaid, and Obama calls for electronic medical records. Point to McCain. It is unclear how much electronic medical records will improve inefficiencies. Where pay for performance measures are a clear way to streamline health care excess and eliminate unnecessary tests.

Both address tort reform. Defensive medicine is bad everyone.

I think McCain has a slight advantage in cutting the costs, and his understanding of what is causing the problem is a little more insightful.

Conclusion

If you’ve read this far, kudos. You must have more time on your hand than I do.

When you get down to looking at both plans, they’re very similar.

I think McCain has an advantage in the fact that he opens free market forces to drive down prices, gives tax rebates to help make health insurance more affordable, and addresses the rising cost of health care with a clear pay for performance system within the existing framework of Medicare and Medicaid. He doesn’t increase government administration in doing this.

Obama seems to promise too much. His plan covers many more problems, many of questionable benefit and of unclear meaning (ie how does launching efforts to look into health care disparities decrease cost of care?). Creating a government HMO for lower income individuals to purchase creates more bureaucracy, at a cost that may be passed on to employees. He also promises to sign it in by the end of his first term.

I get the feeling McCain has a clearer understanding of what CAN be done. His plan is simpler yet affective. Obama’s youthful inexperienced zeal leads him to promise quite a bit.

The [younger candidate] doth protest too much, methinks.

-Al

1) http://aspe.hhs.gov/health/reports/05/uninsured-cps/index.htm#income
2) http://www.nchc.org/facts/cost.shtml
3) http://www.ama-assn.org/ama/pub/category/18295.html
4) http://jama.ama-assn.org/cgi/content/full/300/16/1925
5) http://jama.ama-assn.org/cgi/content/full/300/16/1927
6) http://encarta.msn.com/media_701508606_761557270_-1_1/leading_causes_of_death_in_the_united_states_by_age.html
7) http://www.cms.hhs.gov/MedicaidEligibility/01_Overview.asp
8) http://www.cms.hhs.gov/LowCostHealthInsFamChild/02_InsureKidsNow.asp#TopOfPage
9) http://www.medicare.gov/MedicareEligibility/Home.asp?dest=NAV|Home|GeneralEnrollment#TabTop
10) http://www.cdc.gov/nchs/data/nhis/earlyrelease/insur200806.htm
11) http://en.wikipedia.org/wiki/Poverty_in_the_United_States
12) http://www.bls.gov/cps/minwage2005.htm
13) http://www.lewin.com/Home/
14) http://www.economist.com/displaystory.cfm?story_id=12321573