I have three items for my write-up today on Howard Dean's Prescription for Real Healthcare Reform.
On page 81, Howard Dean takes on the argument that the public plan
would reimburse health care providers at a low rate, and thus the
providers would shift the cost difference onto Americans who have
private insurance. This is actually a concern that has been raised
about Medicare and Medicaid: that they do not reimburse doctors
adequately, and so doctors have to make up the cost difference by
passing the cost on to consumers, resulting in higher health care
prices. Or the fear has been raised that doctors may not be able to
make up the cost difference and thus will quit. Moreover, there are
doctors who currently do not accept Medicare and Medicaid patients. Dean,
however, refers to a study by the Medicare Payment Advisory Commission
that says that financially pressured hospitals that operate efficiently
are actually able to make money off of Medicare patients. His point may
be that the problem is not Medicare but rather the inefficiency of
health care providers.
2. On page 82, Dean refers to the
fear among pharmaceutical companies that the government will use its
"huge purchasing power" to bring down the prices of pharmaceuticals.
This may explain to me the whole concept of Medicare negotiating for
lower drug prices. The idea may be that, because Medicare is
such a huge customer, it is able to bargain with pharmaceuticals about
what the prices should be. A fear among some conservatives, however, is
that this will reduce the amount of money that pharmaceutical companies
make, and thus cut research and development and hinder innovation,
since people may not innovate new drugs once they realize that they
won't make a lot of money (see here). How, then, can we solve the problem of rising drug prices?
On pages 90-91, Dean disputes the conservative argument that tort
reform will significantly bring down the cost of health care. Dean says
that malpractice "constitutes just 0.46 percent of total healthcare
expenditures" and that only a small number of people are suing their
doctors. Dean acknowledges, however, that "the increasing costs of
malpractice insurance premiums are hurting doctors", but he does not
believe that is a significant cause of rising health care costs. I
wouldn't take tort reform (of some kind) out of the equation when it
comes to health care reform, for malpractice insurance premiums probably
are a burden on doctors, and I can envision doctors doing defensive
medicine out of fear of making a mistake and being sued. At the same
time, I do not think that tort reform is the end-all-be-all. Texas has
it, and the cost of health care continues to rise (see here).