Saturday, March 27, 2010
What the new Health Law does not do
Tuesday, March 23, 2010
Understanding the US health care debate (3)
Part III. The politics and controversies
The first part of the saga has just ended. President Obama finally signed the new Health Law, after the Congress earlier approved the Bill. The Law will be a major landmark for the Obama administration to push their health care reform.
With a 53% popular vote in the presidential election and a Democrat majority in both chambers of the Congress, pushing the reform seemed to be an easy job for Obama. In reality, it hasn’t been so. Republicans has pledged to block the reform, at least make it a hard-to-win battle.
Separating signal from the noise, the Republicans points were: 1) rejecting the establishment of a government-run commercial insurance which they argued will crowd-out the private insurance market, 2) allowing interstate competition of insurance companies, 3) reforming malpractice law, which had threatened doctors and hospitals with big lawsuit compensations, 4) a less costly reform involving less or no tax increase, but far fewer people would be covered by insurance. Plus some traditional Republicans issues like limiting illegal immigrants from purchasing government-funded insurance and prohibiting Federal money to finance abortion.
Learning from Clinton’s 1993 failure, Obama distanced himself (and the White House) from the micromanagement. He let the Democrats in Congress got bogged down in the details and wrestled with the opponents.
In November 2009, the House announced their version of the Bill. The version was a 1,990-page long. Many believed this version would be difficult to win. The Economist described the earlier version of the Bill as ‘soaking the rich.’ It was estimated to cost the government around US$1.5 trillion for the next 10 years, more than $1 trillion limit set by Obama. Moreover, it was not budget-neutral. It would add $239 billion to the deficit, although it included a tax increase for business with more than $250,000 per year in payroll and individuals earned more than US$350,000 a year. Plus a steep ‘surcharge’ for the wealthy.
Before Christmas, Senate came up with their version (the one which will later become the Law, with some adjustments). The procedure in the Congress requires both chambers to agree on an identical version of the Bill. This means both House and Senate would need to work on a new, merged version before going back to the voting process. The Bill is said to cost US$940 billion for the next decade, and the impact on budget deficit is US$138 lower than the baseline scenario. It aims to provide cover for 32 million out of 47 million uninsured by 2019. Still not a universal coverage, but coverage rate will increase from 85% to 94%.
Until December, this still looked to be an easy process. With a 60-seat supermajority in the Senate, Republicans would not be able to block the Bill through filibuster – keep delaying the vote on and on by continue debating a bill. But in January, Scott Brown won the Massachusetts Senate seat vacated by the late Ted Kennedy. This made him the 41st Republican in the Senate, eliminating Democrat’s supermajority power.
Obama and his party had to switch strategy. Instead of working on a merged Bill, the House would vote for the Senate version. In this case, only 51 votes (simple majority) will be required in Senate. Later they would be able to tweak some of the clauses through what is called ‘budget reconciliation’ process. (This strategy enraged Republicans. But in truth, both parties had used this in the past.)
In February, the Obama revealed their version of the Bill, after a gathering called ‘bipartisan summit’. Practically, it was similar to the Senate Bill, except for some minor clauses regarding fines for individuals not having insurance. Later Obama also asked Harry Reid, Senate Democratic Leader and Nancy Pelosi, House speaker, to ‘consider’ some Republicans ideas: malpractice law reform and an oversee board for insurance fraud.
But the Democrats also needed to deal with internal challenges. Conservative Democrats rejected the idea that Federal money could be used to finance abortions. Democratic Hispanic Caucus concerned if illegal immigrants would be barred to purchase government insurance using their own money. On the other hand, left-wing Democrats questioned why the Bill does not contain establishing a public or government-run insurance company.
The internal lobby still took place until the last minute before the voting took place on Sunday, March 21. But in the end 219 voted ‘yes’, while 212 – all 178 Republicans and 34 Democrats – voted ‘no.’ (Many gave the biggest credit to Nancy Pelosi). The next step was mere formality. The Senate passed the bill, and in March 23 Obama signed the Bill into Law.
The Law is only the first test for the reform. The Obama administration will face other big tests. How fast the administration could start the reform (and how feasible it is in practice). Will the reform cost not blow out of what was estimated? And, more importantly, will it improve the health indicators? Not to mention another battle with the Republicans, and the states.
See also: The new Health Law, what will it do?
Readings on Indonesia's health sector
Monday, March 22, 2010
The new Health Law, what will it do?
Immediate benefits:
- Insurance companies are prohibited to impose annual or lifetime caps.
- US$5 billion funds are pledged to provide temporary coverage for uninsured individuals with pre-existing conditions.
- Children can stay on their parents’ health insurance until they turn 26.
- Drug discount for seniors.
- All US residents is required to have health insurance, or face a fine of up to US$95 or 1% of their annual income in 2014, gradually increase to US$695 or 2.5% of their annual income.
- A health insurance exchange will help small businesses negotiate with insurance companies.
- Medicaid expansion and tax break for families.
- Expand medical insurance coverage to 32 million.
Source: CNN. See more details here and here.
The new health care bill
Thursday, March 18, 2010
Understanding the US health care debate (2)
Clinton's 1993 proposal
- Mandating all eligible U.S. citizens to purchase health care, and employers of all businesses and all sizes, to provide insurance for their workers.
- Standardizing benefits - the plan listed minimum coverages and maximum annual out-of-pocket expenses for each plan.
- Establish a National Health Board in charge of regulating all health care in the country.
The proposal, as we know it, failed. Many possible explanations on why it failed. But the most common arguments are it was too complex, too ambitious, and lack of incrementalism - although moving to single-payer system, oddly, was not part of the plan. Later in 2000, Mrs. Clinton remarked that the US needs a more step-by-step approach in achieving universal coverage.
Another aspect of the plan is the creation of a health insurance “exchange.” Basically, it was a clearing house to help small firms from conducting complex negotiations with insurers. Employees will be able to choose any plan approved by the state-backed exchange, and their premiums will be deducted from their pay checks.
From Fall 2006 to Fall 2007, the number of uninsured among low-income adults dropped from 24% to 13%, while among the higher income the number dropped from 5% to 3%. As of 2008, overall rate of uninsured has dropped further to 2.6%. The Massachusetts reform has been widely referred to as the model for the national-level reform by both Clinton and Obama during the 2008 Democratic primaries (although it did not provide enough leverage for Mitt Romney himself).
However, it was not immune from criticisms. It has strained the state budget, and a future budget crisis may be a consequence, failed to reduce medical spending, has subsequently drawn funding away from crucial health resources such as emergency room care, in practice the plan is not affordable for many families, and increased queues for already crowded medical services.
Some smaller attempts
A bipartisan Patient's Bill of Right, articulating a list of positive rights which doctors and hospitals ought to provide patients, thereby providing information, offering fair treatment, and granting them autonomy over medical decisions, was debated in Congress, but failed to pass as a Law. In 2003, President George W. Bush signed a Law that expanded Medicare to cover prescription drugs. Health care reform was one of the issues during Bush-Kerry 2004 debate. But in his second term, there was no major initiatives. Instead, the Bush administration was locked in a heated debate on reforming the country's social security.
The 2008 presidential campaign
Tuesday, March 16, 2010
Understanding the US health care debate (1)
Part I. The problem
The US health system faces two main problems: 1) a very high percentage of people are not covered by health insurance (with a high proportion of those with insurance are underinsured), 2) high and rising insurance and medical cost. These two are highly related to each other so it is difficult to disentangle what causes what. They also face other challenges: how to solve those two problems with minimal cost (means how not to increase the budget deficit and/or introducing more taxes), and without hampering health and medical innovations.
The Economist frequently cited that in 2009 some 47 million US residents (around 15% of the population) are uninsured. This is slightly higher than 46.3 million in 2008 and 45.7 million in 2007. In 2007, 37 million of the insurance are working-age adults, with 27 million working at least part time.
But many private insurance companies also turn down ‘risky’ applicants; for example, those with pre-existing health problems, risky lifestyle or environment. Some people point this as discrimination, because individuals with risky environment tend to come from minority race, especially Latinos. In fact, more than 30% Latinos are uninsured, compared to 10% of white, non-Latinos.
Of the 85% individuals who have some kind of health insurance, 60% receive it through their employers (or employers of their spouses, partners or other family members). That means many individuals will lose their insurance if they or their family bread-makers lose their jobs. Some 9% purchase health insurance individually.
The government also provide health insurance through several schemes (Medicare, Medicaid, SCHIP, TRICARE, IHS and some state-provided ones). Public health insurance schemes provide coverage to some 28% Americans – there are some overlaps between the public and private coverage.
Cost
By far, the US health care system is the most expensive in the world. In 2007, total health expenditure accounts for 16% of GDP; other developed countries spend no more than 11% of their GDP. In the same year, the US spends $7,400 per person on health care. Around half of the spending goes to hospital care (31%) and physician/clinical service (21%). Ironically, with that level of spending, the US is one of the worst among developed countries in terms of health indicators.
What drives the health care cost? According to Kaiseredu.org, rising costs of medical technology and prescription drugs and high administrative costs (e.g. marketing, billing, which accounts for 7% of total cost) contribute from the supply side. On the one hand, technological progress has made the US health system is perhaps the most innovative and advanced in the world. But it means the consumer needs to bear some of the investment cost. On the other hand, this has also made the industry become more and more supply-driven; they generate demand for more intense and costly services, though not necessarily more effective. Similar story happens with the pharmaceutical industry.
From the demand or consumer’s side, demographic changes that have occurred over the past century have resulted in higher life expectancy, older population but also new, more complex health problems. Prevalence of chronic lifestyle-related illnesses has increased substantially.
Another contributing factor, although the relative contribution is still debatable, the legal process-related costs. According to one estimate, Medical malpractice lawsuit accounts for 5-10% of total medical cost each year. Medical service providers, facing high financial and reputation costs, are then ‘forced’ to perform extra procedures for patients.
There are also arguments pointing out that rising health care costs have been driven by the public insurance scheme (Medicare, Medicaid etc.). They are lack of competition, and the reimbursement system has created perverse incentives for medical care providers (see this or this). The other side of the argument blame more on private insurance companies because they have been overcharging consumers, so a cap on insurance premium needs to be introduced.
Tuesday, March 9, 2010
Missing women, again
It is often said that women make up a majority of the world's population. They do not. This mistaken belief is based on generalizing from the contemporary situation in Europe and North America, where the ratio of women to men is typically around 1.05 or 1.06, or higher. In South Asia, West Asia, and China, the ratio of women to men can be as low as 0.94, or even lower, and it varies widely elsewhere in Asia, in Africa, and in Latin America. How can we understand and explain these differences, and react to them?
In China the sex ratio for the generation born between 1985 and 1989 was 108, already just outside the natural range. For the generation born in 2000-04, it was 124 (ie, 124 boys were born in those years for every 100 girls). According to CASS the ratio today is 123 boys per 100 girls.
Where did the number come from? Let's take 1.05 as the 'normal' ratio of women to men.1 It means that if a country like China has a ratio of 0.94, this alone amounted to more than 50 million deficit of women. Together with the female deficit in South Asia, Africa, and other developing countries, they added up to more than 100 million.2
But another more important and radical change has occurred over the past decade.T here have been two opposite movements: female disadvantage in mortality has typically been reduced substantially, but this has been counterbalanced by a new female disadvantage—that in natality—through sex specific abortions aimed against the female fetus. The availability of modern techniques to determine the sex of the fetus has made such sex selective abortion possible and easy, and it is being widely used in many societies.
Friday, March 5, 2010
Investing in nutrition in developing countries
Thursday, March 4, 2010
Geography, sanitation and diarrhea
The most important information we'd want to collect is whether the household has access to 'improved sanitation.' Improved sanitation is based on an international definition. Basically, if the sanitation facility is just an open pit, open area or riverside, then it is 'unimproved.'
Could culture explain the variation in sanitation behavior? Too early to conclude, since so many variables may interact with each other. But this could be a starting point to look further.
What is clear is there is a correlation between improved sanitation and diarrhea incidence among children under five. This suggests that an intervention aims to improve sanitation quality could be an effective measure to reduce diarrhea prevalence for children, among other illness.