Most of those in the US who are under 65 get their insurance through their insurer because "the tax code favors such insurance."
Paul Krugman, healthcare economist and newly a Nobel Laureate is one of my favorite NY Times columnists. In “Health Care Destruction,” (Oct. 5, 2008), he criticizes the McCain health plan, while showing some preference for Barack Obama’s proposals for healthcare insurance reform.
He says that most of those in the US who are under 65 get their insurance through their insurer because “the tax code favors such insurance” in that the employer’s contribution to insurance coverage is not considered to be taxable income, so long as the employer obeys certain rules. In particular, the same plan has to be available to all employees, regardless of the size of their paycheck or the state of their health.” He continues:
This system does a fairly effective job of protecting those it reaches, but it leaves many Americans out in the cold. Workers whose employers don’t offer coverage are forced to seek individual health insurance, often in vain. For one thing, insurance companies offering “nongroup” coverage generally refuse to cover anyone with a pre-existing medical condition. And individual insurance is very expensive, because insurers spend large sums weeding out “high-risk” applicants — that is, anyone who seems likely to actually need the insurance.
And in the process of comforting the comfortable while afflicting the afflicted, the McCain plan would also lead to a huge, expensive increase in bureaucracy: insurers selling individual health plans spend 29 percent of the premiums they receive on administration, largely because they employ so many people to screen applicants. This compares with costs of 12 percent for group plans and just 3 percent for Medicare.
- Paul Krugman, NY TImes, Oct. 5, 2008
However, Arnold Relman, professor emeritus of medicine and social medicine at Harvard Medical School, and the erstwhile editor in chief of The New England Journal of Medicine, is appropriately critical of him as well, saying: “he does not mention that neither candidate offers practical suggestions for effective control of the rising costs that make universal coverage unachievable.” Dr. Relman’s next statement neatly summarizes the failure and opportunity of managed care which I hope to expand on here, weekly, over the next month and a half.
“This problem [the lack of “ practical suggestions” results from the inappropriate organization and perverse economic incentives of a health care delivery system that motivates physicians and medical institutions to maximize their income rather than focus on optimal patient care.”
“The solution will require more than regulation of medical insurance. It will need major reform in the way we structure and finance the delivery of medical care — a difficult, incremental task that we will nevertheless soon be forced to undertake. “
- Arnold S. Relman*, “Reforming Health Care.” NY Times, Letter to the Editor; Published: October 10, 2008
Managed care or not, “Performance on measures of health system efficiency remains especially low, with the US scoring 53 out of 100 on measures gauging inappropriate, wasteful, or fragmented care; avoidable hospitalizations; variation in quality and costs; administrative costs; and use of information technology.” So, what are we to do?
, 2008, Authors: The Commonwealth Fund Commission on High Performance Health System, [Contact:
] , July 17, 2008; Vol. 97 as posted by: anne on Economist’s View, October 06, 2008 at 03:36 PM.
The following is an attempt to list what ails the American healthcare system; the “Big 10 Hit List":