The Healing of America by Reid

Ref: T.R. Reid (2009). The Healing of America: A Global Quest for Better, Cheaper, and Fairer Healthcare. NY: Penguin Press.

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Summary­

  • If your disease is your fault, who should pay for your medical treatment? Britain's National Health Service, for example, or America’s Medicare system for the elderly- the cost of everybody’s health care is shared by everybody else. A person who smokes or eats too much ice cream or rides a moto without a helmet may be endangering his own body, but he also endangers my wallet. He could be imposing high costs on the health care system, a system funded by my premiums or my tax payments.

  • Foreign health insurance plans exist only to pay people’s medical bills, not to make a profit. Health care economists around the world say that there’s a basic conflict between the principle of health insurance and the pursuit of profit.

  • It would be stupid to say that everybody is equal. Some are rich and some are poor. Some are beautiful, some aren’t. Some are brilliant some aren’t. But when we get sick- then everybody is equal. Everybody must have equal right to the best medical treatment we can provide.

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Health

  • Public Health: Deals with populations as a whole and can involve changing a nation's social and cultural norms on a massive scale.  

  • Medical Model: Deals with people on an individual basis, seeking to head off diseases or detect them before they become serious.

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Beveridge Model

  • Beveridge Model: Government paid doctors and nurses working in government owned clinics and hospitals. There are no medical bills. Government serves as both provider and payer. Practiced in the UK, Italy, Spain, Scandinavia, and Cuba.

    • Costs: In the UK’s NHS, there is no insurance premium to pay, no copayment, no fee at all, whether you drop by the GP’s office with a cold or receive a quadruple bypass from the nation's top cardiac surgeon. The doctor’s bill is paid by the government, and the patient never even thinks about it.

    • Medical expenses are paid through a network of taxes; the sales tax in the UK is 17.5% on anything you buy, while income and social security taxes are higher than America’s in every income bracket.

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Bismarck Model

  • Bismarck Model: The worker and the employer share the premiums for a health insurance policy. The insurer picks up most of the tab for treatment, with the patient either making a co-payment or paying a percentage. Offer universal coverage using private providers and private insurance plans- with government exercising various degrees of regulatory control over insurance coverage, pricing, and so on. Practiced in Germany, Japan, Netherlands, and Switzerland.

    • Income: The system squeezes cost by sharply limiting the income of medical providers- doctors, nurses, hospitals, labs, drug makers.

    • Government owns hospitals, pays the doctors, buys the medicine, and covers all the bills: as close as it gets to “socialized medicine.”

    • Germany

      • Taxes: Germans pay ~15% of their paycheck for health insurance, split between the worker and the employer. Nearly equal to what an American worker and his employer pay in Social Security and Medicare taxes.

      • On a regional basis, insurance providers negotiate pricing arrangements with hospitals and doctors associations. The price established in this agreement becomes the fixed price for all physicians and hospitals in the region. For the patient, this price is basically irrelevant; the doctor collects her fee from the sickness fund and the patient never sees a bill. The patient pays a monthly insurance premium to the fund; this fee is a percentage of income (like the Social Security tax in the US).

      • Sickness Fund: The sickness funds are nonprofit entities; they exist to pay people's medical bills, not to pay dividends to shareholders. Thus, they don’t have the same incentive that the US insurance industry has to limit the people they cover or to deny claims; in fact, the German insurance plans are required to accept all applicants and to pay any claims submitted by a recognized doctor or hospital.

    • Japan

      • Costs: Health care in Japan is paid for through insurance plans; generally, the patient has to pay 30% of the doctor bill as a co-pay, and the insurance company picks up the remaining 70%.

      • Individual Mandate: Everyone in Japan is required to sign up with a health insurance plan.

      • Income: The secret of Japan’s low health care costs is simple: The system shafts doctors and hospitals, paying some of the lowest fees on Earth for medical treatment.

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National Health insurance policy

  • National Health Insurance: Healthcare providers are private, but the payer is a government-run insurance program that every citizen pays into. The national, or provincial, insurance plan collects monthly premiums and pays medical bills. Practiced in Canada and Taiwan.

    • Health Insurance Funding: Insurance companies are required to offer a basic package of benefits to all applicants, and insurers could not make a profit on basic health coverage (any profits or surplus earnings must be used to reduce premiums for the next year).

    • Taiwan

      • “When you have a single payer…for the doctors and hospitals, then you can identify who’s really abusing the system. That also allows you to put a global budget in place. When you have a single payer, you can say, “I'm only going to spend X percent of my GDP for health insurance,” and you can enforce that.”-Hsiao, Taiwan.

      • The low rate of spending has emerged as the most serious problem facing Taiwanese health care. Many clinics and hospitals are defaulting on bank loans and threatening to declare bankruptcy unless National Health Insurance agrees to pay higher fees.

    • Canada

      • The constant fear is that rich people will turn more and more to private insurance and away from Medicare. The result would be two-tiered medicine. Many fear that if Canada did move to two-tier medicine, the rich might get better care, with less waiting, than the poor.

      • Doctor shortages and waiting lists continue to be a basic frustration for anybody who has to rely on Canada’s health care system.

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French System

  • French System: Every health facility is “in network,” any patient can go to any doctor, any specialist, any surgeon, and any hospital or clinic in the whole country, and the insurance system must pay the bill.

    • French Spending: ~3165 per capita (10% of GDP) to cover everyone (US spends >$7K per capita (17% of GDP) leaving tens of millions without coverage).

    • Vital Card: Contains the patient's entire medical record, back to 1998. Embedded in the gold metallic square is a digital record of every doctor visit, referral, injection, operation, X Ray, diagnostic test, prescription, warning, etc., together with a report on how much the doctor billed for each visit and how much was paid, by the insurance funds.

    • Education: No French doctor pays a penny to go to college or medical school.

    • Malpractice Insurance: French physicians pay less in a year for malpractice insurance than their US counterparts pay in a week.

    • Income: The average French doctor is making about a third of what his counterpart in the US would earn.

    • Health Insurance Funding: The major health insurance funds are all operating at a deficit, and the costs of the health care systems are increasing significantly faster than the economy as a whole. That’s why the doctors keep striking and the sickness funds keep negotiating and the government keeps going back to the drawing board, with a new major health care reform every few years.

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USA Health Care

  • US Healthcare: For veterans, active-duty military personnel, and Native Americans, the US uses the British model. For people over 65 and the poor, the Canadian Model (Medicare and Medicaid, respectively). For working people who get insurance through their employers, the Bismarck model. And for the tens of millions without insurance coverage, the US is another Out of Pocket country like Rwanda.

    • Admin Costs: The US spend 20% of every dollar for nonmedical costs: paperwork, reviewing claims, marketing, profits, and so on.

    • Government Programs: 44% of healthcare programs are covered by major government programs.

    • Veterans Affairs (VA): The VA operates one of the planet’s purest examples of socialized medicine.

    • In-Network: Limits availability via “in-network” list of doctors, or “preauthorization” by the insurance company.

  • Affordable Care Act (ACA): Expands coverage in two major ways; 1) requires all employers with more than 49 people to provide a health insurance plan and 2) extends Medicaid by raising the limit to 138% of the poverty line.

    • Normally, the cost of Medicaid is split between the Federal Government and each state; under the new law, Washington will pay all the costs of the expanded coverage for the first five years.

    • Individual Mandate: The individual mandate is not firmly established so people don’t HAVE to buy insurance.

    • Rescission: The ACA outlaws rescission, where the company accepts your premium payments every month if you’re healthy, but then rescinds, or cancels, your coverage when you face big medical bills.

    • Reporting: US Firms will still be allowed to deny your claims (although they will have to report, for the first time, how many claims they reject each year). When they do pay, they can take weeks or months to do so, without the strict time limits that are common elsewhere. And the US will continue to be the only developed nation that permits health insurance companies to make a profit on the basic package of coverage.

    • Costs: ~$940B over the first ten years. To raise the money Congress is taxing Drug Companies, medical device makers, and health insurance companies.

    • Taxes: Raises Medicare tax (beginning in 2013) for people earning >$200K ($250K for couples) from 2.9% to 3.8%.

    • Guaranteed Issue: Insurers will be required (beginning in 2014) to issue, or renew, a policy to anybody, regardless of any preexisting condition.

    • Insurance Exchange: Requires states (beginning in 2014) to setup an insurance exchange; each exchange will offer five different levels of coverage plans (Bronze, Silver, Gold, Platinum, Catastrophic) to give buyers a broad choice.

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Misc Quotes

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Chronology

  • 1965: Medicare is passed by the USC guaranteeing health care to all American’s over 65 through private providers using public financing.-Healing by Reid.

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