AI
Tuesday, October 28, 2008 2:46:34 AM
Obama Can Cure Health Care's Ills
David M. Cutler and J. Bradford DeLong
10.28.08, 12:01 AM ET
Every other North Atlantic country spends less than half what we spend on medicine. Every other North Atlantic country is healthier than America.
This extraordinary gap--between how much we spend on health care and what we get for it--is not because our doctors, nurses and pharmacists are unskilled or undedicated. On the contrary, they are the best in the world. But they are embedded in a poorly designed system that gives us low value for our money.
Taking the long view, the inefficiency of our health system is the biggest threat to economic growth over the next two decades--bigger, even, than the current financial crisis. The doubling of health insurance premiums since 2000 has forced employers to choose between cutting wages, cutting benefits and hiring fewer workers. The result is lost profits and lost wages, in addition to pointless risk, insecurity and a flood of personal bankruptcies. Without serious changes, this problem will only get worse.
Democratic presidential nominee Barack Obama wants to address the health care crisis head-on. Like Franklin Roosevelt, who faced equally large challenges, Obama will try many strategies and be guided by results, not predetermined ideological conviction. The strategies he proposes fall into four general areas.
One element of reform is information: Doctors, patients and administrators simply do not know enough about which treatments work and which are ineffective or harmful. An estimated one-third of medical costs go toward care with no value. Obama proposes to jump-start the long-overdue information revolution in health care with $50 billion to computerize the medical system and spread the word about best practice. [see related article below]
A second element is to fix perverse incentives in medical care. Doctors and hospitals today are paid for performing procedures, not for helping patients. Insurers make money by dumping sick patients, not by keeping people healthy. Obama proposes to base Medicare and Medicaid reimbursements on patient outcomes in a coordinated effort to drive the entire payment system toward paying for improved health rather than just more care.
A third element is to help the small players--individuals and small firms--get the same deals as large buyers. Obama proposes purchasing pools where individuals and small firms get the same low rates as large firms and sick people get coverage the same way as the healthy. Our current system of excluding the sick from coverage does not make their costs disappear but rather assume other, less efficient guises.
A fourth element is prevention. In today's health-care market, less than one dollar in 25 goes for prevention--despite the fact that three-quarters of medical care is for conditions that could be prevented. Guaranteeing access to preventive services will improve health and, in many cases, save money.
As the reforms take hold, costs will drop. As costs drop, insurance will become more affordable. Millions previously priced out of the market will be able to buy insurance. Add on tax credits for those still unable to afford coverage and for small businesses, and everyone will have access to affordable, portable insurance.
By contrast, Republican presidential nominee John McCain believes that the central problem in health care is that people have too much insurance and, because of it, consume too much medical care. McCain seeks to reform the health care system by taxing and punishing businesses that offer employer-sponsored insurance. Once they are forced to drop coverage, he holds, their workers will find themselves in the non-group health insurance market, where they will buy less generous plans and go to the doctor less often. Modest tax credits would help some, but nowhere near all, of the uninsured afford coverage.
We are skeptical of the value of McCain's plan for three reasons. First, the tax increase McCain proposes and the resulting dislocations it creates are the last thing American business needs now, when it's in the midst of a severe economic crisis. Second, the non-group market is nowhere near as rosy as McCain makes it out to be. People who buy insurance in that market now are risk rated, see their pre-existing conditions excluded from coverage or priced higher and are never secure in their coverage. The McCain plan would amplify, not fix, these problems.
Third, the McCain health plan has a huge financing hole--between $1 and $2 trillion over the next decade. Only the most draconian Medicare and Medicaid cuts would make the plan work [see http://investorshub.advfn.com/boards/read_msg.aspx?message_id=32689636 ]. But such cuts would be devastating for the very providers that are needed to make health reform work.
It is clear to us that Barack Obama's health care reform plan is much better for the country, and much more likely to be successful, than John McCain's.
David M. Cutler, the author of Your Money Or Your Life: Strong Medicine for America's Health Care System [ http://www.amazon.com/Your-Money-Life-Medicine-Americas/dp/0195160428 ], is the Otto Eckstein professor of applied economics at Harvard's department of economics and Kennedy School of Government. He is also an adviser on health care to Barack Obama. J. Bradford DeLong, who blogs at http://delong.typepad.com/sdj/ , is a professor of economics at U.C. Berkeley. Both authors are research associates at the National Bureau of Economic Research.
2008 Forbes.com LLC™
http://www.forbes.com/opinions/2008/10/27/obama-healthcare-reform-oped-cx_dmc_bd_1028cutlerdelong.html [with comments]
----------
How to Take American Health Care From Worst to First
Paul Sahre
By BILLY BEANE, NEWT GINGRICH and JOHN KERRY
Published: October 24, 2008
IN the past decade, baseball has experienced a data-driven information revolution. Numbers-crunchers now routinely use statistics to put better teams on the field for less money. Our overpriced, underperforming health care system needs a similar revolution.
Data-driven baseball has produced surprising results. Michael Lewis writes in “Moneyball” that the Oakland A’s have won games and division titles at one-sixth the cost of the most profligate teams. This season, the New York Yankees, Detroit Tigers and New York Mets — the three teams with the highest payrolls, a combined $486 million — are watching the playoffs on television, while the Tampa Bay Rays, a franchise that uses a data-driven approach and has the second-lowest payroll in baseball at $44 million, are in the World Series (a sad reality for one of us).
Remarkably, a doctor today can get more data on the starting third baseman on his fantasy baseball team than on the effectiveness of life-and-death medical procedures. Studies have shown that most health care is not based on clinical studies of what works best and what does not — be it a test, treatment, drug or technology. Instead, most care is based on informed opinion, personal observation or tradition.
It is no surprise then that the United States spends more than twice as much per capita on health care compared to almost every other country in the world — and with worse health quality than most industrialized nations. Health premiums for a family of four have nearly doubled since 2001. Starbucks pays more for health care than it does for coffee. Nearly 100,000 Americans are killed every year by preventable medical errors. We can do better if doctors have better access to concise, evidence-based medical information.
Look at what’s happened in baseball. For decades, executives, managers and scouts built their teams and managed games based on their personal experiences and a handful of dubious statistics. This romantic approach has been replaced with a statistics-based creed called sabermetrics.
These are not the stats we studied as children on the backs of baseball cards. Sabermetrics relies on obscure statistics like WHIP (walks and hits per inning pitched), VORP (value over replacement player) or runs created — a number derived from the formula [(hits + walks) x total bases]/(at bats + walks). Franchises have used this data to answer some of the key questions in baseball: When is an attempted steal worth the risk? Whom should we draft, and in what order? Should we re-sign an aging star player and run the risk of paying for past performance rather than future results?
Similarly, a health care system that is driven by robust comparative clinical evidence will save lives and money. One success story is Cochrane Collaboration, a nonprofit group that evaluates medical research. Cochrane performs systematic, evidence-based reviews of medical literature. In 1992, a Cochrane review found that many women at risk of premature delivery were not getting corticosteroids, which improve the lung function of premature babies.
Based on this evidence, the use of corticosteroids tripled. The result? A nearly 10 percentage point drop in the deaths of low-birth-weight babies and millions of dollars in savings by avoiding the costs of treating complications.
Another example is Intermountain Healthcare, a nonprofit health-care system in Utah, where 80 percent of the care is based on evidence. Treatment data is collected by electronic medical records. The data is analyzed by researchers, and the best practices are then incorporated into the clinical process, resulting in far better quality care at a cost that is one-third less than the national average. (Disclosure: Intermountain Healthcare is a member of Mr. Gingrich’s organization.)
Evidence-based health care would not strip doctors of their decision-making authority nor replace their expertise. Instead, data and evidence should complement a lifetime of experience, so that doctors can deliver the best quality care at the lowest possible cost.
Working closely with doctors, the federal government and the private sector should create a new institute for evidence-based medicine. This institute would conduct new studies and systematically review the existing medical literature to help inform our nation’s over-stretched medical providers. The government should also increase Medicare reimbursements and some liability protections for doctors who follow the recommended clinical best practices.
America’s health care system behaves like a hidebound, tradition-based ball club that chases after aging sluggers and plays by the old rules: we pay too much and get too little in return. To deliver better health care, we should learn from the successful teams that have adopted baseball’s new evidence-based methods. The best way to start improving quality and lowering costs is to study the stats.
Copyright 2008 The New York Times Company
http://www.nytimes.com/2008/10/24/opinion/24beane.html
Greensburg, KS - 5/4/07
"Eternal vigilance is the price of Liberty."
from John Philpot Curran, Speech
upon the Right of Election, 1790
F6
David M. Cutler and J. Bradford DeLong
10.28.08, 12:01 AM ET
Every other North Atlantic country spends less than half what we spend on medicine. Every other North Atlantic country is healthier than America.
This extraordinary gap--between how much we spend on health care and what we get for it--is not because our doctors, nurses and pharmacists are unskilled or undedicated. On the contrary, they are the best in the world. But they are embedded in a poorly designed system that gives us low value for our money.
Taking the long view, the inefficiency of our health system is the biggest threat to economic growth over the next two decades--bigger, even, than the current financial crisis. The doubling of health insurance premiums since 2000 has forced employers to choose between cutting wages, cutting benefits and hiring fewer workers. The result is lost profits and lost wages, in addition to pointless risk, insecurity and a flood of personal bankruptcies. Without serious changes, this problem will only get worse.
Democratic presidential nominee Barack Obama wants to address the health care crisis head-on. Like Franklin Roosevelt, who faced equally large challenges, Obama will try many strategies and be guided by results, not predetermined ideological conviction. The strategies he proposes fall into four general areas.
One element of reform is information: Doctors, patients and administrators simply do not know enough about which treatments work and which are ineffective or harmful. An estimated one-third of medical costs go toward care with no value. Obama proposes to jump-start the long-overdue information revolution in health care with $50 billion to computerize the medical system and spread the word about best practice. [see related article below]
A second element is to fix perverse incentives in medical care. Doctors and hospitals today are paid for performing procedures, not for helping patients. Insurers make money by dumping sick patients, not by keeping people healthy. Obama proposes to base Medicare and Medicaid reimbursements on patient outcomes in a coordinated effort to drive the entire payment system toward paying for improved health rather than just more care.
A third element is to help the small players--individuals and small firms--get the same deals as large buyers. Obama proposes purchasing pools where individuals and small firms get the same low rates as large firms and sick people get coverage the same way as the healthy. Our current system of excluding the sick from coverage does not make their costs disappear but rather assume other, less efficient guises.
A fourth element is prevention. In today's health-care market, less than one dollar in 25 goes for prevention--despite the fact that three-quarters of medical care is for conditions that could be prevented. Guaranteeing access to preventive services will improve health and, in many cases, save money.
As the reforms take hold, costs will drop. As costs drop, insurance will become more affordable. Millions previously priced out of the market will be able to buy insurance. Add on tax credits for those still unable to afford coverage and for small businesses, and everyone will have access to affordable, portable insurance.
By contrast, Republican presidential nominee John McCain believes that the central problem in health care is that people have too much insurance and, because of it, consume too much medical care. McCain seeks to reform the health care system by taxing and punishing businesses that offer employer-sponsored insurance. Once they are forced to drop coverage, he holds, their workers will find themselves in the non-group health insurance market, where they will buy less generous plans and go to the doctor less often. Modest tax credits would help some, but nowhere near all, of the uninsured afford coverage.
We are skeptical of the value of McCain's plan for three reasons. First, the tax increase McCain proposes and the resulting dislocations it creates are the last thing American business needs now, when it's in the midst of a severe economic crisis. Second, the non-group market is nowhere near as rosy as McCain makes it out to be. People who buy insurance in that market now are risk rated, see their pre-existing conditions excluded from coverage or priced higher and are never secure in their coverage. The McCain plan would amplify, not fix, these problems.
Third, the McCain health plan has a huge financing hole--between $1 and $2 trillion over the next decade. Only the most draconian Medicare and Medicaid cuts would make the plan work [see http://investorshub.advfn.com/boards/read_msg.aspx?message_id=32689636 ]. But such cuts would be devastating for the very providers that are needed to make health reform work.
It is clear to us that Barack Obama's health care reform plan is much better for the country, and much more likely to be successful, than John McCain's.
David M. Cutler, the author of Your Money Or Your Life: Strong Medicine for America's Health Care System [ http://www.amazon.com/Your-Money-Life-Medicine-Americas/dp/0195160428 ], is the Otto Eckstein professor of applied economics at Harvard's department of economics and Kennedy School of Government. He is also an adviser on health care to Barack Obama. J. Bradford DeLong, who blogs at http://delong.typepad.com/sdj/ , is a professor of economics at U.C. Berkeley. Both authors are research associates at the National Bureau of Economic Research.
2008 Forbes.com LLC™
http://www.forbes.com/opinions/2008/10/27/obama-healthcare-reform-oped-cx_dmc_bd_1028cutlerdelong.html [with comments]
----------
How to Take American Health Care From Worst to First
Paul Sahre
By BILLY BEANE, NEWT GINGRICH and JOHN KERRY
Published: October 24, 2008
IN the past decade, baseball has experienced a data-driven information revolution. Numbers-crunchers now routinely use statistics to put better teams on the field for less money. Our overpriced, underperforming health care system needs a similar revolution.
Data-driven baseball has produced surprising results. Michael Lewis writes in “Moneyball” that the Oakland A’s have won games and division titles at one-sixth the cost of the most profligate teams. This season, the New York Yankees, Detroit Tigers and New York Mets — the three teams with the highest payrolls, a combined $486 million — are watching the playoffs on television, while the Tampa Bay Rays, a franchise that uses a data-driven approach and has the second-lowest payroll in baseball at $44 million, are in the World Series (a sad reality for one of us).
Remarkably, a doctor today can get more data on the starting third baseman on his fantasy baseball team than on the effectiveness of life-and-death medical procedures. Studies have shown that most health care is not based on clinical studies of what works best and what does not — be it a test, treatment, drug or technology. Instead, most care is based on informed opinion, personal observation or tradition.
It is no surprise then that the United States spends more than twice as much per capita on health care compared to almost every other country in the world — and with worse health quality than most industrialized nations. Health premiums for a family of four have nearly doubled since 2001. Starbucks pays more for health care than it does for coffee. Nearly 100,000 Americans are killed every year by preventable medical errors. We can do better if doctors have better access to concise, evidence-based medical information.
Look at what’s happened in baseball. For decades, executives, managers and scouts built their teams and managed games based on their personal experiences and a handful of dubious statistics. This romantic approach has been replaced with a statistics-based creed called sabermetrics.
These are not the stats we studied as children on the backs of baseball cards. Sabermetrics relies on obscure statistics like WHIP (walks and hits per inning pitched), VORP (value over replacement player) or runs created — a number derived from the formula [(hits + walks) x total bases]/(at bats + walks). Franchises have used this data to answer some of the key questions in baseball: When is an attempted steal worth the risk? Whom should we draft, and in what order? Should we re-sign an aging star player and run the risk of paying for past performance rather than future results?
Similarly, a health care system that is driven by robust comparative clinical evidence will save lives and money. One success story is Cochrane Collaboration, a nonprofit group that evaluates medical research. Cochrane performs systematic, evidence-based reviews of medical literature. In 1992, a Cochrane review found that many women at risk of premature delivery were not getting corticosteroids, which improve the lung function of premature babies.
Based on this evidence, the use of corticosteroids tripled. The result? A nearly 10 percentage point drop in the deaths of low-birth-weight babies and millions of dollars in savings by avoiding the costs of treating complications.
Another example is Intermountain Healthcare, a nonprofit health-care system in Utah, where 80 percent of the care is based on evidence. Treatment data is collected by electronic medical records. The data is analyzed by researchers, and the best practices are then incorporated into the clinical process, resulting in far better quality care at a cost that is one-third less than the national average. (Disclosure: Intermountain Healthcare is a member of Mr. Gingrich’s organization.)
Evidence-based health care would not strip doctors of their decision-making authority nor replace their expertise. Instead, data and evidence should complement a lifetime of experience, so that doctors can deliver the best quality care at the lowest possible cost.
Working closely with doctors, the federal government and the private sector should create a new institute for evidence-based medicine. This institute would conduct new studies and systematically review the existing medical literature to help inform our nation’s over-stretched medical providers. The government should also increase Medicare reimbursements and some liability protections for doctors who follow the recommended clinical best practices.
America’s health care system behaves like a hidebound, tradition-based ball club that chases after aging sluggers and plays by the old rules: we pay too much and get too little in return. To deliver better health care, we should learn from the successful teams that have adopted baseball’s new evidence-based methods. The best way to start improving quality and lowering costs is to study the stats.
Copyright 2008 The New York Times Company
http://www.nytimes.com/2008/10/24/opinion/24beane.html
Greensburg, KS - 5/4/07
"Eternal vigilance is the price of Liberty."
from John Philpot Curran, Speech
upon the Right of Election, 1790
F6
Greensburg, KS - 5/4/07
"Eternal vigilance is the price of Liberty."
from John Philpot Curran, Speech
upon the Right of Election, 1790
F6
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