Uncovering Facts

I apologize if our focus on SCHIP seems tedious, but it really is a crucially important fight over the direction of our health care system. The Galen Institute logo is all about people who fall into the gap between being eligible for public programs like Medicaid and SCHIP and being able to afford private health insurance. If Congress were to reauthorize the program to serve children in this gap, the president has said he would sign the bill in a minute. So clearly the debate is about more than that.

I had a letter to the editor in The Washington Post on Wednesday trying to clarify some of the facts about the program. I believe that the bill does provide strong incentives for states to use SCHIP money to expand this government program to cover children in middle-income families. And the higher up the income scale you go, the more likely you are to crowd out private coverage.

In addition, advocates of expanding the program say that SCHIP coverage is "private insurance." But The Heritage Foundation explains that isn't the same as the private insurance many children already have.

"Although private insurance companies often administer benefits under SCHIP as well as Medicaid, the government largely controls both the design and financing of those benefits. In effect, the individual states contract out administration of a government-designed plan to private insurance companies." They conclude, and cite government data as validation, that, "children enrolled in Medicaid and/or SCHIP don't get the same access or quality of care as kids in traditional private insurance plans."

And Republicans are taking a lot of heat over the Democratic Radio Address last Saturday featuring a 12-year-old boy, Graeme Frost, who was seriously injured with his family in a car accident and had to be hospitalized for five months.

He argues that SCHIP saved his life. What I hear in this moving talk is a testimonial about the quality of the U.S. health care system and the value of health insurance to pay for catastrophic medical expenses like this.

The debate we should be having is over how to make sure as many people as possible have health insurance to protect them and their families if they have major medical expenses after a serious illness or accident like this.

And this is the question that will be facing us in 2008. Should that protection be supported by tax dollars through government programs like SCHIP or through private insurance, with new subsidies to help those at the lower-end of the income scale afford coverage?

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And to the question about government vs. private insurance? Two excellent economists who also happen to be good friends, June and Dave O'Neill of Baruch College in New York, have produced an important new study comparing health care in the U.S. and Canada.

They use data from a massive Joint Canada/U.S. Survey of Health and find that the added health spending in the U.S. actually creates a system that is fairer to the poor and excels at granting broad access to basic care.

The study, presented at a National Bureau of Economic Research conference, is only available to purchase, but here's a news article from the National Post in Canada with a report. Among the findings:

• Americans have more chronic illnesses than Canadians, but we are more likely to receive treatment. Canadians have a higher incidence of untreated illnesses like emphysema, hypertension, diabetes, and heart disease.

   

• Americans are more likely to receive preventive services. For example, the number of middle-aged Canadian women who have never had a mammogram is nearly double that of the U.S. And the number of Canadian women who never have had a pap test for cervical cancer is triple the U.S. figure.

   

• And regarding infant mortality, the U.S. has more teenage mothers and more low birth weight babies. When controlling for birth weight, the two countries' infant mortality rates are virtually the same.

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Finally, as promised, here is the link to the talk I gave in Rome late last month at the Pontifical Gregorian University. I was pleased with the support for my emphasis on the importance of individual dignity and responsibility in health care decisions and how that conflicts with state control over political spending and care decisions.

And finally, a bit of a Rome travelogue. We visited the must-see venues, including the Sistine Chapel at St. Peter's and the Colosseum, but we went off the beaten path to an extraordinary church that encapsulated the entire history of Rome in one small space.

San Clemente is a relatively small 15th century church near the Colosseum that is quite lovely in its own right. Then you walk down a small staircase and find yourself in a 5th century church that has been excavated to show its vaulted ceilings, alter, and sacristy.

Then you walk down another staircase to find a simple 1st century pagan temple. And then you walk down under that to find Roman baths with marble benches and an underground stream running through a covered trench.

Quite remarkable. This is not something you are likely to see on a standard tour, but well worth the visit.

And also, be sure to get coffee at Sant'Eustachio il caffe, certified by The New York Times as the best espresso in Rome. It was certainly the best we had!

Ciao.

Grace-Marie Turner

RECENT NEWS ARTICLES AND STUDIES:

State Issues

Bush's Health Care Gambit
Duncan Currie
The American, 10/10/07

The SCHIP debate presages a much broader debate over health insurance that will gain steam during the 2008 presidential campaign. Many Democrats view universal health care as both good policy and good politics, but proposed plans from Hillary Clinton and Barack Obama would expand Washington's role in managing and regulating health care. Republicans are coalescing around a few market-based reforms, including tax credits or deductions for private health insurance, cross-state purchasing of health insurance, letting small businesses pool their risk, and curbing medical malpractice lawsuits.

The Bill the President Vetoed
Grace-Marie Turner
The Washington Post, 10/10/07

In a letter to the editor of The Washington Post, Galen's Grace-Marie Turner responds to columnist Eugene Robinson's article on SCHIP, in which he wrote that the authorization to cover children in families in New York earning up to $83,000 "is not in the bill [President] Bush vetoed." In fact, Section 114(a) of the legislation would allow New York to go to $83,000, with federal approval, and New Jersey to stay at $72,000. And any other state could go to $61,000 and get the generous SCHIP federal payment. Section 116(g) of the legislation takes a second step to reassure New York that it could put children in families up to $83,000 on taxpayer-supported health insurance.

Prescription Drugs

Cherry Garcia and the End of Socialized Medicine
Peter W. Huber
City Journal, Autumn 2007

Humanity is still waiting for countless more blockbuster drugs like Lipitor to treat incurable cancers, Alzheimer's, and other serious illnesses. Each new billion-dollar drug will be delivered by the lure of a multibillion-dollar patent, but the only way to get three-cent pills to the poor is first to sell three-dollar pills to the rich. With almost $30 trillion under management, Wall Street could easily double the couple of trillion it currently has invested in molecular medicine. The fastest way for Washington to deliver more health, more cheaply, to more people would be to unleash that capital by reaffirming patents and stepping out of the way.

Health Systems Abroad

Euro Health Consumer Index 2007
Health Consumer Powerhouse, 10/01/07

Austria is Europe's most consumer-friendly healthcare system, according to the 2007 Euro Health Consumer Index (EHCI) of all 27 European Union member states as well as Norway and Switzerland. The EHCI finds that more than half of European national health systems systematically delay the introduction of new medicines. The report also finds that hospital-acquired infections that are antibiotic-resistant are now a significant health threat in one out of two measured countries.

Europe and Central Asia's Great Post-Communist Social Health Insurance Experiment: Impacts on Health Sector and Labor Market Outcomes
Adam Wagstaff and Rodrigo Moreno-Serra
The World Bank, 10/07

The health system reforms that European and Central Asian countries implemented during their transition from socialist economies in the 1990s provide a unique opportunity to assess the impacts of social health insurance (SHI) on the health and labor sectors. The paper finds that tax-financed systems are more successful at ensuring universal coverage within a single health system; SHI systems, by contrast, typically struggle to cover the informal sector and the poor. SHI adoption also increased government health spending per capita, but an analysis of several mortality and morbidity indicators showed that, despite spending more on health care than their tax-funded counterparts, the transition to SHI has not caused general improvements in health outcomes. The authors write that the largely negative results in their paper ought to serve as a warning to those contemplating shifting from general revenue finance to SHI.

U.S. Cancer Care is Number One
Betsy McCaughey
National Center for Policy Analysis, 10/11/07

U.S. survival rates are higher than the average in Europe for 13 of the 16 types of cancer reported in Lancet Oncology. Highlights of the study:

• American women have a 63% chance of living at least five years after a cancer diagnosis, compared to 56% for European women.
• American men have a five-year survival rate of 66% -- compared to only 47% for European men.
• Great Britain fares worse than the European average: British men have a five-year cancer survival rate of only 45%; women, only 53%.

Consumer-Driven Health Care

Healthcare Consumerism: Trends in Consumer Cost-Sharing
Booz Allen Hamilton, 10/01/07

An analysis by the consulting firm Booz Allen Hamilton projects that up to 60% of the privately insured in the U.S. -- 120 million people -- will be enrolled in some form of high-cost health plan by 2020. The analysis points to the urgent need for a radical restructuring of the U.S. healthcare system because the move towards greater consumer cost responsibility is far more widespread than consumer-driven health plan enrollment data show. Consumers need more information so they can shop for value, more options in health care delivery and health insurance, and new incentives to adopt healthy behaviors.

Putting Health in Health Care

The Sweet Lowdown about Weight Gain
Scott Gottlieb, M.D.
The Wall Street Journal, 10/06/07

Gottlieb writes that Gary Taubes' new book, Good Calories, Bad Calories, makes a fascinating case that refined carbohydrates have a deleterious effect on our health, weight, and well-being. Taubes proposes that obesity is not related to the quantity of calories we consume, or even to how many calories we burn, but to the quality of calories. The bad ones, he says, come from refined carbohydrates found in starchy food and sweets. Sugars -- especially high-fructose corn syrup -- are particularly harmful, probably because the combination of fructose and glucose overloads the liver with carbohydrates and elevates the body's levels of insulin, the hormone that governs fat accumulation. But the danger from refined carbs is not just that they cause weight gain; Taubes suspects they are the dietary cause of heart disease, diabetes, and perhaps cancer.

First, Do No Harm: The Toll of Unhealthy Health Care Practices
Lorraine Mooney and Roger Bate
American Enterprise Institute, 10/10/07

Hospital-acquired infections (HAIs) are estimated by the World Health Organization to kill between 1.5 and 3 million people every year. In the U.S., HAIs are estimated to occur in 5% of all acute care hospitalizations, resulting in more than $4.5 billion in excess health care costs, and accounting for about 99,000 deaths in 2002. The challenges of maintaining a safe supply of blood in rich countries are magnified many times in developing countries, where even the basics are lacking. Infection control practices are unglamorous and mundane and require constant diligence, but failure to maintain hygiene will mean that infection rates never diminish. While the principles of infection control are universal, the exact procedures must be tailored to suit local customs and expectations, and the ultimate safe disposal of waste depends on local authorities.

UPCOMING EVENTS:

The Medical Arms Race and the Impact of Government Regulation and Payment Systems
National Institute of Health Policy Event
Monday, October 15, 2007, 2:00 p.m. - 3:30 p.m.
Minneapolis, MN

The Tax Code and Health Insurance Coverage
House Budget Committee Hearing
Thursday, October 18, 2007, 10:00 a.m.
Washington, DC
Grace-Marie Turner will testify before the House Budget Committee regarding health care and tax policy.

Changing the Culture and Improving Quality: Innovations in Long-Term Care
Alliance for Health Reform Briefing
Friday, October 19, 12:15 p.m. ? 2:00 p.m. (Lunch included)
Washington, DC

Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features research and writings by participants in the Health Policy Consensus Group, articles of interest from the health policy world, and announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at www.galen.org.

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