Tag Archives: Health Care Spending

COVID-19 and the End of the Neoliberal Era in Health Care

The subject of neoliberalism has been discussed in this blog five times between 2018 and 2019, and is the focus of an article in The Milbank Quarterly, by John E. McDonough, professor of public health practice at Harvard’s TH Chan School of Public Health.

In the article, Professor McDonough points to a Commonwealth Fund chart (see below) that shows the growth in gross domestic product (GDP) for health care, comparing the US to 10 other high income nations. The chart shows that from 1980 to 2018, spending by the US was among the highest 40 years ago, but that in the early 1980s, US spending leapt above the others. and growing wider over four decades.

 

He then asks, “what happened to US health care in the early 1980s-and since then?”

McDonough responds by pointing to two New York Times columns by Austin Frakt, Medical Mystery: Something Happened to U.S. Health Care Spending After 1980 and Reagan, Deregulation and America’s Exceptional Rise In Health Care Costs.

McDonough suggested that a big part of the answer involves the broad economic and political trade winds of the late 1970s and 1980s, often called “Reaganomics” or “supply-side economics”, because Reagan ushered in a new era in the US. Some, like George H. W. Bush, running for President in 1980 for the Republican nomination, called it “voodoo economics.” However. as McDonough states, and as my previous posts on the subject calls it, it is “neoliberalism.”

This term evokes Adam Smith, but the 20th century version owes itself more to the works of Friedrich Hayek and Milton Friedman, among others. According to McDonough, the neoliberal agenda consists of cutting taxes, repealing regulations, shrinking or privatizing government (remember Grover Norquist’s desire to shrink government to fit in his bathtub and strangle it), suppressing labor, encouraging free-market trade, accepting inequality as price for economic freedom (something that has come under fire this year and since the 2016 election, making people receiving services and benefits pay as much as possible, and reorienting corporate thinking and behavior to promote return on equity as their only goal.

The New Deal era that was replaced by neoliberalism, McDonough states, lasted 48 years, from 1933 to Reagan’s inauguration in 1981. The neoliberal era, he points out, is 40 years old and showing signs of rust, cracks, and failing systems. Signs of this are Trump’s war on trade, deficit-exploding tax cuts for the wealthy and corporations,, anger over “deaths of despair” from opioid and other addictions and economic distress, awareness and revulsion about rising levels of inequality across society, and spreading rejection of absolutist “shareholder capitalism.”

In addition, recent protests over the deaths of African-American males at the hands of police, coupled with the Corona virus pandemic, are all signs that something is terribly wrong.

But what about health care, McDonough asks again?

Reiterating what he said above, US health care between 1980 and 2020 saw spending rise far above US economic growth, while growth in insurance premiums and cost-sharing increased well beyond advances in household incomes. On key indicators, he reports, the US performs worse than most nations on life expectancy, infant and maternal mortality, chronic disease mortality, levels of overweight and obesity, suicides, and gun violence, as well as glaring systemic health inequalities, as has been discussed during the BLM protests as one factor in people taking to the streets.

Despite the advances in technology and high spending, Americans give their system the lowest satisfaction ratings.

Yet, between 1965 and the 1980s, major infusions of investor capital has gone to all corners of our health care system, courtesy of shareholder-owned for-profit companies who often cut long-lasting ties with local communities, according to McDonough. It did not help that in 1986, the Institutes of Medicine, instead of convicting for-profits of “killing” health care, released a 600 page report on “For-Profit Enterprises in Health Care, that identified pluses and minuses that called for greater monitoring.

Finally, McDonough concludes that the US need to look outward, not inward, as is usually the case to solve big problems with health care. One such study, in 2018 from the William and Flora Hewlett Foundation, Beyond Neoliberalism, is a clarion call for a new policy sphere forming in think tanks, academia, advocacy and activist groups, and the legal community, as well as some Republican/conservative quarters as Marco Rubio, who rejects shareholder primacy. He says the search is on for a new paradigm, and hopes the election in November will bring it forth.

He doesn’t have to look far. Bernie Sanders, Elizabeth Warren, the PHNP, and others have the paradigm. It is Medicare for All/Single Payer. But first we have to rid ourselves of the baboon in the Oval Office and his economic minions, Mnuchin the Mieskeit, and Kudlow the Meshuggeneh.

Stay safe everyone.

KFF Health Tracking Poll – September 2019: Health Care Policy In Congress And On The Campaign Trail | The Henry J. Kaiser Family Foundation

This month’s poll probes Democrats’ views about the general approaches to expanding health coverage and lowering costs put forward by the candidates; the public’s health care prio…

Source: KFF Health Tracking Poll – September 2019: Health Care Policy In Congress And On The Campaign Trail | The Henry J. Kaiser Family Foundation

 

Comment by Don McCanne
According to this new poll, Democrats support Medicare-for-all (“a national health plan”), Independents are split, and Republicans are opposed. Also, Democrats and Independents both support a public option (“a government-administered health plan”), and Republicans are split. However, the public is confused as to whether Medicare-for-all and a public option are similar or different, and half have not heard much about Medicare-for-all and even more have not heard much about a public option.
It seems as if individuals do have an opinion on Medicare-for-all and on a public option even though many are confused as to what they are. The fact that the pollsters referred to one as “a national health plan” and the other as “a government-administered health plan” likely leaves many of those polled with little understanding of the refinements distinguishing the two models.
Features that people might be interested in include the following:
Everyone is automatically covered for life
Affordability is assured through equitable taxes based on ability to pay
Financial barriers such as high deductibles are eliminated
Choices of physicians and hospitals are assured through elimination of insurer networks
Hundreds of billions of dollars in administrative waste is recovered
Of course, these are features of the single payer model of Medicare for all and none would apply by merely adding a public option to our fragmented financing system of a multitude of public and private insurance programs.
When will the pollsters finally ask the following questions?
Should everyone be covered or just some of us?
Should insurance be automatic forever or should it depend on life circumstances?
Should payments into the system be made affordable based on income, or should many be left out because they can’t afford the premiums?
Should high deductibles and surprise medical bills be used to deprive individuals of health care that they should have?
Should patients have choices of their physicians and hospitals or shall we continue to allow private insurers to restrict choices to their networks?
Should we continue to tolerate wasting about half a trillion dollars in administrative excesses, or should we redirect those funds that so that we can pay for care for those currently uninsured or underinsured?
In other words, do we want a health care system that we can afford that takes care of all of us, or do we want to merely add a public option and a couple of tweaks to ACA that leaves our overpriced, highly dysfunctional system in place? People really need to understand the differences between Medicare-for-all (single payer version) and a public option. Let’s see that they do.

Medical Mystery: Something Happened to the U.S. Health System After 1980 | The Incidental Economist

Good morning all. While perusing my LinkedIn feed, I found this article from May of last year, and thought it would be a perfect addition to the series of articles posted last week about Medicare for All/Single Payer, and why opposition to it is more harmful than the alleged or imagined fear-mongering we are seeing from many quarters.

This is especially significant in light of my post last week, Health Care Is Not a Market, and as the article below suggests, the US health care system diverged exactly at the time of the election of Ronald Reagan in 1980, and the introduction of pro-market forces, supply-side economics.

So it is no coincidence that as Austin Frakt writes, that prices went up, while health outcomes went down, and that socioeconomic status and other social factors exert larger influences on longevity.

Here is the article:

The following originally appeared on The Upshot (copyright 2018, The New York Times Company). Research for this piece was supported by the Laura and John Arnold Foundation.

Source: Medical Mystery: Something Happened to the U.S. Health System After 1980 | The Incidental Economist

The Price is Wrong: Why the high price of medical care in the US cannot be maintained.

Thanks to Philip Eide for bring the following post to my attention. It’s been discussed before in many other blogs and newsletters, but needs to be repeated often enough so that it sinks in…we have the most expensive health care “system” in the world, and for workers’ comp, that’s not good, especially as Joe Paduda reported earlier this week with regard to consolidation in the workers’ comp services sector.

Also, a shout-out to Megan Hanley, Executive Vice President, Business Development at Ascential Care Partners for re-posting Joe’s post and thus allowing me to tie the two articles together.

Here is the article by Kathryn Mayer, of BenefitsPro:

http://www.benefitspro.com/2014/04/17/the-real-health-care-spending-problem

If prices don’t come down, and if the cost of workers’ comp services goes up as a result of consolidation of the workers’ comp services providers, then some other alternative to high prices has to be found.

I stand by my belief that medical tourism could be such an alternative, but it is up to you to decide whether it is better to pay through the nose (pun definitely intended), or to find a lower cost alternative that is not a rip-off and is able to provide the same or better quality than what is available in the US.

But this is also a challenge to the medical tourism industry, not just the facilitators, but the medical providers, hospitals and clinics, and businesses that wish to attract American business, whether it is for individual patients, group health patients, or workers’ comp patients, to be transparent in terms of pricing, quality outcomes, efficiency of facilities, skills, understanding of English and American cultural norms, etc.

In my earlier post, Of ‘Aged Statutes and Old Case Law’ — Why Workers’ Comp Must Change, I discussed a bio-psycho-social theory of development calledSpiral Dynamics“. I also mentioned a book I am currently reading called ” MEMEnomics” which explains why the US and the global economy is in a mess, and discusses what needs to happen for the world to progress to the next level of human existence, which is a difficult and painful process because it involves leaving behind all of the old, unhealthy value systems of the past, so that the planet and the human race can sustain itself for the future. Such a leap from the “Existence” tier we now exist in, to the “Being” tier we are emerging into will move the entire human race up the spiral to a brighter and more prosperous future.

To deny this or to try to prevent this will only lead to more dysfunction and chaos, and will probably be the end of all life on Earth as we know it, so anyone whose interests lie in keeping the status quo, is only harming the rest of us.

Globalization is not just about moving businesses offshore, or getting connected with people on the Internet. It is about creating a healthy and prosperous future for all humanity, and all aspects of human culture will be changed because of it.

For those celebrating Easter, have a happy holiday.