FloridaHealthCareReform.com

Several times in American history, Presidents have aimed to reform the nation’s healthcare system only to find strong opposition from interest groups.  Early movements began with Teddy Roosevelt who campaigned on a pledge to institute universal care, which was never fulfilled; Harry Truman sought to extend healthcare reform into his Fair Deal legislation but had to compromise with Congress. As American private medical technology improved vastly over the past decades, America’s hospitals and medical schools have been widely recognized as among the top in the nation.

President Lyndon Johnson finally succeeded in major health legislation in 1965 by passing Medicare legislation to provide extended coverage to low-income families. While the program has been vastly revised in successive legislation, it remains a core part of American public policy today, and the social safety net was extended further in 1985 with passage of COBRA health care benefits for the unemployed (http://www.dol.gov/dol/topic/health-plans/cobra.htm).  In the past two decades, a number of major reform efforts have met strong opposition, including the Clinton health reform effort of 1993 and President Bush’s efforts to create medical savings accounts. While President Bush did not achieve universal success, his Medicare Prescription Drug, Improvement, and Modernization Act added a prescription drug benefit to Medicare for senior citizens.  Today’s healthcare reform debate has incorporated many of the ideas and lessons of this history, and now brings new perspectives on reform.

Health Policy Ideas Today

Health policy scholars are actively working on incorporating the latest research into modern health reform efforts.  The goal is to provide a framework for more cost effective quality care, working with hospitals, insurers and government officials to create consensus.  While there are a number of approaches to reform, major efforts to reduce the costs of health care relate to better statistical analysis and record keeping of treatment options. Currently, doctors are allowed to select a patient’s course of treatment according to insurance guidelines, although research has suggested that independent analysis should also play a role in determining which treatments are optimal.

Current Office of Management and Budget Peter Orszag has been a strong proponent of Independent Advisory Panels which provide objective, independent reviews of varying treatment options. For publicly based health services, incorporating the latest research into treatment plans is a core part of ensuring the most cost effective treatment available. The OMB is also working on tax reform issues related to providing incentives for medical professionals to deliver cost effective care and tax incentives for those who deliver effective plans (http://www.washingtonpost.com/wp-dyn/content/article/2009/08/19/AR2009081902261.html).

While the primary ideological debate over healthcare reform in America is centered on the Democratic and Republican parties, a number of independent libertarians have also been vocal in expressing their reservations to current legislative options. Although few libertarians have been elected to Congress, a number of leading health and policy scholars have taken a market-based approach which suggests that government healthcare may be counter-productive. The academic debate over the merits of health reform incorporates these varying perspectives, which come from scholars across a variety of disciplines.

Economics of Health Care

Free market economists have been modeling the role of government in health markets since the 1960s, and have aimed to model the influences of government entry, irrational consumer decisions and the role of competition in the market. At the core of the issue is the role of policy in shaping incentives: while liberal economists such as Cass Sunstein argue government should encourage certain types of health behavior , other libertarian scholars have argued that providing more choices and less regulation should be the focus on improving health outcomes.

Research on Health Reform

Two major economic scholars active in health research today are MIT’s Jonathan Gruber and Harvard’s Richard Thaler. Both economists take a free-market approach to the subject but are careful to evaluate potential market failures, externalities and unintended constraints which lead to sub-optimal outcomes. Therefore, while scholars such as Robert Barro of Harvard have argued that private insurance markets can solve healthcare reform issues, centrist research has taken a more nuanced approach to the issue.

In a 2008 report on behavioral economics, Thaler argues that research into why people fail to make rational savings decisions can shed light on sub-par health care practices as well.  One overlooked aspect, according to the paper, is the presentation of the options to consumers. While many consumers might agree that quality health care is important, the availability and presentation of choices is even more important. Providing consumers with a clear road map to selecting a plan, especially when they are not given one by their employer is crucially important. For uninsured families, therefore, providing coverage guidance should be a core part of the planning process. Gruber also argues in another paper that lessons from Massachusetts state health care reform can help policy makers better understand effective reform on a national level. In particular, his paper takes a deeper look at consumers budgets and how mandatory plans can encourage more investment in quality health care, including preventative options.

When the Congressional Budget Office released a report suggesting that healthcare reform legislation may not reduce the overall budget deficit , many policy makers and citizens raised a critical eye. A core part of the healthcare reform debate today relates to its role in lowering overall public spending on health expenses. Since the national US budget deficit is at an all-time adjusted high, structuring legislation to reduce long-run health expenses provides a means for more sustainable health policy. Expert Cost Estimates Today, aggregate healthcare expenses cost nearly 20% of the annual Gross Domestic Product, totaling over $2 trillion in spending, and over $7,000 for each citizen. More importantly, the rising trend in health care costs suggests that health expenditures are growing faster than either currency or wage inflation, making adjusted health expenses even higher in a down economy. The current debate in Congress relates to creating incentives for more affordable treatments, better preventative care and broader coverage for the uninsured (whose lack of coverage leads to adverse effects on the aggregate economy.) Over half of aggregate medical expenses are attributed to direct care in terms of hospital stays and direct medical coverage. Spending on preventative care, education and fitness, on the other hand, represents a much smaller portion of costs. As a result, the overall debate on healthcare reform expenses relates to policy conditions under which consumers and local organizations can make better health allocation decisions. Elements of Savings While there is no single panacea to lowering healthcare expenses, there are several approaches which are being actively incorporated into reform efforts. One of these savings elements relates to better medical technology, including electronic medical records, more efficient medical devices and improved communications between health providers. The theory is that with better information, health care professionals can make most efficient and cost effective decisions. By adjusting their decision making, doctors can lower unnecessary medical costs and help encourage faster recovery. Another aspect of savings includes streamlining and prioritizing existing coverage. By investing more in early education, regulating drug marketing costs and providing more effective public options for senior care, policy makers believe they can take steps to lower overall health expenses. Policy makers argue that creating a public regulator which oversees the pharmaceutical, private insurance and medical device industries can provide an effective way to reduce unnecessary costs and prioritize effective, necessary care options.

While healthcare reform in America remains the center of a contentious debate over economic planning, America’s neighbor to the north has integrated public health options for decades. Many policy analysts have analyzed Canada’s public health care plan as a blueprint to better understand the potential implications for Healthcare reform in America. We wanted to provide you some insight into Canadian healthcare, along with its options, costs and implications for international policy making.

Background to the Health Plans

The Canada Health act established a public healthcare option in the country funded by provincial taxes and a subsidized general premium rate scaled by income. The Ministry of Health issues each citizen a Care Card  which provides access to essential professional medical care options, while also allowing patients to invest in supplemental and premium private care. The Government negotiates prescription drug pricing, leading to lower wholesale and direct consumer costs, which lowers out of pocket expenses for many consumers.

Under the plan, the elderly and poor are offered subsidized treatment options which help to ensure complete coverage. The program also has a strong focus on preventative care with mandatory checkups and evaluations, along with a focus on delivering efficient care. Patients are encouraged to use their medical care wisely, and there are stringent limits on over-use or irresponsible personal choices that may lead to higher medical costs. The Canada Health Act went into law in 1984, following on provincial programs which established universal access to health care on a local level.

Costs and Options in Canada

According to the plan, nearly ¾ of essential health care costs are covered under the government’s plan. These expenses include treatment for disease, preventative care, pregnancy and disability costs, as well as support for low income families and the elderly. Citizens still pay a pro-rated monthly premium around $50 per month as well as supplemental costs for specialized care. As part of the plan, citizens pay for aspects of care including dentistry, vision care as well as the cost of certain prescriptions.

While many groups argue that the system under delivers care to those in need, the country’s vital health statistics rank remarkably well in areas ranging from life expectancy, infant mortality and overall healthcare efficiency. As a result, many policy makers in the United States have studied Canada’s health care system carefully with an aim of incorporating some of its most productive elements into our own national plan.

Even the most seasoned policy watcher may be confused by today’s healthcare reform bill debate. With multiple legislative options being debated in Washington, we wanted to provide a guide that highlights the key differences and principles of each plan. As Congress moves closer to passing a reconciled health reform bill for the President’s signature, there are several competing principles related to taxation, coverage and the role of the public option that are worth evaluating. While President Obama revealed his own set of principles for the debate earlier in the year, the mechanics of the legislation are largely a product of Congressional committee compromises, debates and ideas.

Senate Finance Committee

The single most prominent plan devised by senior Senator Max Baucus, the committee passed the America’s Health Future Act (http://www.opencongress.org/bill/111-s1796/show) in October and has drawn widespread attention from health professionals as well as the media at large. The plan is based on the idea of creating state health exchanges which encourage more affordable options for individual insurance as well as subsidies for families who earn up to four times the Federal poverty guidelines. The plan generates revenues by taxing medium and large employers who do not offer coverage, medical device manufacturers, private insurers and holders of premium plans above a certain income threshold. Additionally, the plan aims to extend Medicaid elderly coverage for those earning below 133% of the Federal poverty guidelines, further expanding the reach of the program.

Senate HELP Committee

Passed by the Senate Committee this past summer, the Affordable Health Choices Act (http://www.opencongress.org/bill/111-h3200/show) establishes health cooperatives at the state-level to encourage broader coverage. Families earning less than 400% of the Federal Poverty limit would qualify for subsidized health care on a sliding scale and would have increased access to public health options. The plan mandates health coverage for businesses, and taxes those who do not offer coverage to their employees. Under the HELP plan, Medicaid would cover elderly citizens up to 150% of the poverty limit and would also closely regulate private insurance plans to ensure more equitable treatment of the unemployed, as well as those with pre-existing conditions.

House Tri-Committee

Although the plan never passed by a full committee vote, the America’s Affordable Choices Act  is viewed as a pivotal statement with respect to the Congressional approach to healthcare reform.  The plan creates an Exchange where small businesses and individuals could purchase reduced-rate coverage, with options ranging from subsidized private care, with regulations by State and Federal agencies, as well as a low cost public plan.