Thursday, March 25, 2010

Zimbrucare

Healthcare in the US


This week started out with the signing into law of healthcare reform in the United States. Somehow over time, the richest country on Earth managed to build one of the world's most expensive healthcare systems (as a % of GDP), and still not manage to achieve universal coverage of its citizens.

In a nutshell, the US system relies mainly on private provision of healthcare, backed by insurance systems which are mainly private, but also include state systems such as Medicare and Medicaid.  Medical staff are frequently the object of malpractice suits which dramatically increase the cost of healthcare in the US.  An aging population is putting further pressure on the cost base.

The Obama reforms attempt to extend coverage and pay for it by cutting costs elsewhere.  they are broadly (but not completely) supported by democrats but overwhelmingly rejected by Republicans, who see them as intrusive and socialist in their nature.

Healthcare in Eastern Europe

Healthcare in Eastern Europe is also in a mess, but for reasons which are both different and the same.  Compared to the US we have low fertility and net emigration, exacerbating the aging population trend.  Unlike the US our healthcare has traditionally been exclusively provided by the communist state, and that system has survived largely intact to the current day, choking off the development of the private sector (how can you go private when, in theory, the state still provides all healthcare?).

What has happened in practice is that healthcare has been 'spontaneously' privatised.  If you get sick you get to "enjoy" the experience of being treated in a decrepit state hospital using outdated techniques and equipment.  Even for this dubious privilege, however, you have to bribe the (relatively lowly paid) doctors and staff to get anything resembling decent service or treatment.

A Human Right?

To me it is critical to understand whether or not healthcare is a human right.  If it's not, then my liberal instincts tell me that the best thing to do is to privatise 100%, give the markets full sway and promote the running of healthcare for the poor by charitable organisations.  If it is a human right, then government (as the representative of the demos) needs to be made responsible for its fulfillment.

There are two aspects to this question - moral and legal.  From a moral perspective, I note the following

  1. Healthcare is (typically) a need, not a want.  Most of us don't go to hospital because we like hospitals.
  2. Other basic needs (food, shelter) are defined as human rights by most reasonable human beings, because without them, people die.  Healthcare is no different.
  3. If anything, healthcare has a stronger case to be defined as a human right than food or shelter because of the unpredictability of the onset of the need (i.e. it is more difficult to plan for)
  4. I note that the right to food is the right to sustenance, not to sirloin steaks, and that the right to shelter means simply a dry, warm environment out of the elements, not a five-star hotel.
From a legal perspective, I think the case is even clearer that a right exists.  Article 25 of the Universal Declaration of Human Rights says "Everyone has the right to ... medical care ... and security in the event of ... sickness".  It can be argued that some national constitutions do not include rights contained in the UDHR, but to me that means there is a problem with the constitution, not with the UDHR.

State Care

The existence of a human right to healthcare means that the state must be the guarantor of its provision.  There is no other organisation which has both the responsibility and authority (as the representative of the demos), and the capability of ensuring that everyone's rights are met in this area.

That doesn't necessarily mean that the state has to be the provider of healthcare.  It could well be that better and more efficient care, purchased by the state on behalf of its citizens, could be provided by the private sector.  In Eastern Europe, where the state healthcare system is run down and needs investment, and where governments lack funds to provide this investment, an arrangement based on private investment in and provision of healthcare is probably the way to go.  In richer countries a state-run system (a la Canada) could be a better option.

The way it would work is that the state would set up a healthcare purchaser.  The first thing this body would do each year is to establish the services to be purchased for the following year, based on historic averages and projected trends.  The services would then be purchased from private providers at auction.  Subsequently, the state purchaser would perform programmed and random audits of healthcare providers to ensure that services purchased are being provided as expected and at the required level of quality.

As noted above, the right to healthcare covers the basics only.  Elective procedures are out.  Cheaper methods should be used where available.  Meals should be basic rather than gourmet.  Rooms should be clean and tidy, but that's it.

As healthcare is a right, it should be funded by taxes out of the state budget.  Establishing a complicated national insurance scheme with differential contributions would undermine the human right and create an additional, unnecessary bureaucracy.

A Private Option

Some readers will dislike the thought of the state managing their healthcare, controlling what happens to their bodies and deciding which hospitals they end up in.  Indeed, Art. 3 of the UDHR says that "Everyone has the right to ... the security of the person".  What I would propose is that individuals be allowed to opt out of the state system and instead seek a higher quality or wider scope of care through private health insurance.

The government would fund the health insurance for "opt-outers" to the same level as the expenses no longer expected to be incurred in the public system.  Essentially if the state has 10m citizens and the government spends 10bn each year on healthcare, then on average it is spending 1,000 per citizen (let's call this the 'average state cost').  A citizen who opts out and spends 2,000 on a private medical insurance would have half of the policy paid for by the state.

There would need to be some rules:

  1. The private coverage would have to have a scope at least as wide as the state provision and be of a quality which is at least as good.  Otherwise the state is failing in its duty to guarantee the human right.
  2. To avoid selection issues and to recognize that they are (in part) delivering a human right, the health insurers would have to offer a single rate for all and refrain from using information on the health of applicants or other potential rating factors (e.g. age).  Otherwise a disproportionate number of healthy people would tend to migrate to the private system (where they would get more for their money) and leave the sick folks (and most of the healthcare expense) with the state.
Rule 2 could be relaxed a bit if the 'average state cost' was determined separately for different categories of people (e.g. age groups).  In this case the private system could also have premium rates set by age group.  Use of medical evidence would still be ruled out, though.

Getting the Cost Out

One of the major problems with healthcare is cost, which is very high and spiraling higher.  I have a couple of ideas which would take significant cost out of the system:
  1. Restrict the right to sue for malpractice, by lifting the burden of proof from "balance of probabilities" to "beyond reasonable doubt" (and by doing so, trim massive amounts of legal and insurance cost from healthcare in more litigious jurisdictions such as the US).  The threat of a malpractice suit needs to remain, in order to keep doctors on their toes, however in my view malpractice needs to be conclusively proven rather than 50% proven.  There is way too much grey in medical practice to rely on the weaker standard.
  2. Calibrate the level of education required and the service to be provided.  A spray-painter is not required to understand the workings of your car's engine in order to paint the vehicle.  Why then, do we require a dermatologist to go through many years of medical school, and then on top of that undertake a few more years of specialist training?  We just need someone who is trained to recognize melanomas when they see them, and this training could be picked up in a far shorter period of time.  Currently we massively over-train medical personnel, resulting in higher-than-necessary salary costs and shortages of staff.
There are other ways of reducing expense (e.g. generic drugs, co-payments, focusing on prevention rather than treatment) but these have already been well-debated and I'm not going to go into them here.

In Summary

Zimbrucare, as set out in the paragraphs above would achieve all of the following:
  1. Ensuring that every citizen's right to healthcare is met
  2. Ensuring that necessary investment can flow to the healthcare sector
  3. Ensuring that services are provided in a competitive environment
  4. Ensuring that service quality is maintained
  5. Ensuring that costs are minimised
  6. Ensuring that citizens have choice in selection of their provider and their level of care
There, that wasn't too painful now, was it?

1 comment:

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    ReplyDelete