Monday, June 15, 2009

The Status of Health Care and Education: An Obama Report Card

The four most important parts of Obama's presidency were:

Health care -- Universal access to health care (or, even better, universal health care), combined with reduced costs both in general and for consumers (When I put it this way, this does sound like an impossibility, doesn't it?)

Reduction in carbon emissions -- Through some kind of system that puts on a price on carbon dioxide emissions (i.e., polluting the air), and in turn, a large-scale investment in all things renewable and green.

Education reform -- Improving the quality of education and the teachers that provide it.

Economy/Banking -- Lead the US out of economic crisis and toward sustained recovery.


In case you want the short version, here's a summary:

Obama and the Democrats in Congress are giving too much ground on a universal health bill and an emissions reduction bill. As a result, both will end up being incremental measures that fail to address urgent problems. Both opportunities will be squandered, the economy will continue to tank due to burden of health costs and, by 2030, permanent climate change will have become solidified.

These both will be trumped by more pressing concerns. Because of Obama's tentative action on the economy, the US will experience another economic meltdown in 2010 and 2011, and the country will experience a 3-5 year slump afterward.



Detailed Analysis:

Health care is a difficult situation. The ideal (but also necessary) solution is made up of several key points.

1) Eliminate the link between employment and insurance, which will reduce costs for employers, make the US workers more competitive with foreign workers, and likely push up wages.
2) Lower premium costs for most people
3) Subsidies or Medicaid for people who cannot afford insurance
4) Decrease health care use (and, therefore, costs) through prevention, effectiveness studies, and quality of care incentives for doctors (as opposed to pay per procedure or paint pricing).
5) Large investment in medical education, including incentives for students who become general practitioners
6) Regulation that mandates minimal standards for all health plans and ensures no discrimmination or pricing differences based on age OR a government-run backstop plan, if strong regulations aren't passed

An even more ideal scenario would be for the federal government to merely increase the Medicare tax from 2.9% (currently split between the employer and employee) to 9%. If my math is accurate, this would be enough money to cover everyone under a Medicare-like system. Unfortunately, as you well know, this will never happen.

Currently, the Obama administration (and most other people) are afraid of severing the link between employers and health care, so (1) is a non-starter. Subsidies and increased Medicaid coverage (3) will be able to pass Congress. Iniatives to increase costs (4) will also be included, but that will not be enough (see later). Investments in education (5) is a no-brainer, but will likely not allocate enough money to be fully effective.

The problem lies with points (2) and (6). Whether premiums are lowered for everyone (2) is based on two things. First, it depends on health care spending in general to decrease, which will only be accomplished by the elimination of wasteful procedures and drugs. Second, the government must either pass regulation to help keep costs down or provide an alternative public plan that (through its competitive prowess) forces private plans to decrease premiums. If you're still with me (sorry if this is confusing), then you'll realize the crux is how much power the government will have to dictate what health care should be and what it should provide. Currently, the government has extremely little say. Most lapses are dealt with in the courts, and even the FDA has been asleep for much of the past decade. Unfortunately, government control of health matters is a tough sell, because the population has been brainwashed by an 80 year barage by medical industry organizations, including the AMA.

But if the government doesn't step in, a) health care costs will continue to skyrocket, b) more people will be left uninsured, and c) the quality of care will continue to decrease for some segments of the population. The reason I've been advocating for a government plan is because, with its bargaining power, it will be able to tell doctors: we are going to pay you based on the patient outcomes instead of how many procedures you do. The medical industry, just like our financial sector, is another example of capitalism run amok. Too many doctors and pharmaceutical/device manufacturers make more money on quantity instead of quality. Several studies have shown that this leads to poor patient outcomes. Meanwhile, insurers are doing their best to cover only healthy people that never use their insurance, while trying to deny reimbursement to those who do. Both models are anathema to the goal of improving people's health.

The federal government can balance things out by doing a few keys thing:
A) Using bargaining power to decrease the price of drugs and services
B) Using bargaining power to change doctor, pharemaceutical, and manufacturer incentives.
C) As a result of 1 and 2, reduce the price of premiums
D) Provide subsidies to people that still cannot aford insurance

Bargaining power will likely only exist if the federal government establishes its own plan that covers a large number of people. In numbers lies power, because the government can hold back funds from organizations that don't do what it says.

After following the debate for the past few weeks, I'm convinced that any public plan will be neutured to make sure that has limited negotiating power, the same price structure as private plan, and the inability to cover anyone that already has "adequate" insurance. This will result not allow for A, B, and C of the things that need to be done. That is, unless the government tries to federal regulate all insurance providers, establishes a agency to study drug and procedure effectiveness, and attempts to change the way that doctors get paid. Unfortunately, the first part will be rejected by the Supreme Court as a violation of federal power, the second part will be effective in reducing costs but not effective enough, and the third will be called fascism, communism, and a lot of other bad names. Therefore, without a strong public plan, any hope of results A, B, and C are eliminated.

As a result, costs will continue to rise, choking the US economy. Thirty million people will still be uninsured and many more will be inadequately insured. Basically, the system will improve slightly, stay expensive, and remain a catastophic burden. Unless something significant happens, this is where we are heading. D



Education: This will be short, because I haven't been reading much about this.

Mostly, I've heard that the Education department is interesting in better testing, higher salaries for teachers, and more charter schools. This, combined with the money in the Recovery Art, is a good start. But a large part of the problem is local control of school and funding discrepancies. A real solution would include federal funds for all schools, federal control of school standards, higher salaries for all teachers, better education effectiveness studies, less than 25 students per class, increased science funding, measures to increase the time that parents can spend with their children (shorter work week, better welfare for single mothers, etc), and fines for parents of students who do poorly in school.

On the college side, costs are shooting up and the only federal response is to increase the Pell Grant by a few thousand. While this was great news, too many problems still exist. For one, college loan debt is too high. Obama has spoken about eliminating private lenders from public loan programs, but this is not enough. Either the cost of tuition has to be leveled or decreased, or the government has to begin providing larger subsidies for more students. Many recent studies suggest that high loan debt for students messes up the general economy and creates inefficiencies. C+