Friday, August 07, 2009

Views from Across the Atlantic

Like James Wimberley I live East of the Atlantic and want to talk about Kent Conrad and health care reform. Wimberley is very smart, but I disagree with this post. In it he proposes regional health insurance cooperatives as a compromise between public option and no public option (very much more along the lines of Sent Conrad's proposed compromise than Wimberley seems to think).

I have two specific objections to the post and, more importantly, I don't find any convincing case for federalism at all.

Again James Wimberley is an extraordinarily well informed genius who writes real well and is a pleasure to read. I've learned a lot from him.

1. As mentioned above, Wimberley seems confused about Conrad's proposal. Wimberley writes "The co-op idea is of course just wimping out and progressives have to fight this "compromise". Universal coverage requires compulsion through law - on employers, citizens, and taxpayers."

update rude sentence deleted:

Conrad definitely supports compulsion through law on citizens (individual mandate) and taxpayers. The Baucus caucus has talked about watering down but not eliminating the employer mandate. The Conrad proposal or even a proposal with no public option and no co-operative would have health insurance exchanges. The only difference I see between Conrad's proposal and Wimbereley's is that Wimberley has a map of the regions which he proposes.

2. He makes an uconvincing (rude word deleted) argument comparing apples and typewriters

"There clearly are diseconomies of scale that count against giant national structures in the USA. The VA is generally thought to work better than the much bigger Medicare and Medicaid;" This argument is total utter nonsense. The VA does not differ from Medicare in scale only. The VA provides health care via its employees, Medicare is just a health insurance program.

To find evidence of diseconomies of scale one would have to compare medicare to small health insurance programs not to a health care institution and to compare the VA to a larger health care provider. Medicare is much more efficient than medicare advantage private subsidized competitors of medicare. The VA is much larger than and rated higher than any other health care providing entity in the USA.

Winning NCQA's seal of approval is the gold standard in the health-care industry. And who do you suppose this year's winner is: Johns Hopkins? Mayo Clinic? Massachusetts General? Nope. In every single category, the VHA system outperforms the highest rated non-VHA hospitals.


Comparing apples to apples and oranges to oranges the examples chosen by Wimberley provide very strong evidence of economies of scale at the US national level.

Comparing the VA to medicare is like comparing the reality based community to the defence department. The DOD is much larger and their writings are, on average, less interesting. This blog is smaller than the RBC so, by Wimberley's logic it is probably better.

Also Wimberley has a problem with his guess of "25% market share". The public option as in the House bills would only be available to employees of small firms and the unemployed who don't get medicare and would be an option. If one argues that the VA is about the right size then argues that the public option would be about 10 times to big, one really ought to claim that enrollment in the public option would be larger than the VA patient population currently about 5.2 million patients under care (not policy holders such that the VHA mails checks to the people who actually provide health care).

Sticking to the identification of health care provision and health insurance, Wimberley suggests a good number for his cooperatives would be 3 million enrollees. He assumes that 25% of the population of his regions would be enrolled. This means he doesn't know about the agreed no longer debated restrictions on eligibility for the public option. No one over 65 (medicare). No poor people (medicaid) no one who works for a firm with a payroll over 500,000 (employer mandate and employers are not offered the public option)

update: an estimate of enrollment in the plan which Conrad considers too big

The House plan envisions only about 10 million people joining the public option at the outset because access to the exchange would at least initially be limited to about 30 million uninsured and small-business employees to prevent the unraveling of employer-based insurance.


Finally, Wimberley says that lefty Europeans like federalism. So what ? Do they have any good reason to like federalism ?

1. the Federal Republic of Germany is federal.
The idea was to keep Germany weak. The concerns of Germans were not the only factor. Everyone else had concerns about the German nation for reasons which aren't related to alleged medicare diseconomies of scale.

2. Tony Blair supports federalism. That should convince everyone who thinks that Tony Blair can do no wrong, a group which notably does not include James Wimberley or for that matter and very much to his credit Tony Blair.

3. People complain about the UK NHS which is just incomparably bigger and more centralized than any health care provider anyone is imagining in the USA and delivers decent health care at half of the US cost. The public plan which is a bit too far for the Baucus caucus is a health insurance plan not a health care provider.

finally there are 50 existing US states not 51.

If one decides to count Washington DC as a sortof state, why not count Puerto Rico which has a much larger population ?

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