Dr. Atul Gawande, author of “Complications: A Surgeon’s Notes on an Imperfect Science”, and its follow-up, “Better: A Surgeon’s Notes on Performance“, is also a staff writer for the New Yorker, and in the January 29 issue has an article titled “Getting There From Here“.

Gawande laments the factions that have formed in American health care reform circles, and suggests that no solution will come from either camp.

…[factions] believe that a new system will be far better for most people, and that those who would hang on to the old do so out of either lack of imagination or narrow self-interest. On the left, then, single-payer enthusiasts argue that the only coherent solution is to end private health insurance and replace it with a national insurance program. And, on the right, the free marketeers argue that the only coherent solution is to end public insurance and employer-controlled health benefits so that we can all buy our own coverage and put market forces to work.

Neither side can stand the other.

Indeed – we have had some of that at this little blog. Gawande suggests that other industrialized countries have been so successful at building their systems because they took what they had and made it more expansive rather than starting over from scratch.

In Britain, for example, the National Health Service came about as the government was forced to move millions of people out of the cities and into the countryside in the face of bombing by the Nazis. The government found the then-existing health care system inadequate, and had to build clinics and hire doctors, in addition to subsidizing private hospitals.

Churchill’s government intended the program to be temporary. But the war destroyed the status quo for patients, doctors, and hospitals alike. Moreover, the new system proved better than the old. Despite the ravages of war, the health of the population had improved. The medical and social services had reduced infant and adult mortality rates. Even the dental care was better. By the end of 1944, when the wartime medical service began to demobilize, the country’s citizens did not want to see it go. The private hospitals didn’t, either; they had come to depend on those government payments.

By 1945, when the National Health Service was proposed, it had become evident that a national system of health coverage was not only necessary but also largely already in place—with nationally run hospitals, salaried doctors, and free care for everyone. So, while the ideal of universal coverage was spurred by those horror stories, the particular system that emerged in Britain was not the product of socialist ideology or a deliberate policy process in which all the theoretical options were weighed. It was, instead, an almost conservative creation: a program that built on a tested, practical means of providing adequate health care for everyone, while protecting the existing services that people depended upon every day.

France had a similar story. Labor unions and employers had built a private, not-for-profit insurance system (“not-for-profit” being the key to success) through a self-imposed payroll tax. In 1945, when seventy-five per cent of the population paid cash for medical care, the de Gaulle government built on what it had, expanding the payroll tax and private insurer system to cover the entire population. The 2000 World Health Organization survey found this system to be the best in the world. The U.S. ranked 37th in that survey. (U.S. conservatives have taken the survey to task.)

Switzerland has a similar story, but had built a system of private for-profit insurance coverage. But the system had so many gaps and inconsistencies that in 1994 they passed universal coverage. But they built on what it already had, electing to cap household insurance expenses and subsidize insurance companies.

Contrast this with the U.S. attempt in 2006 to extend drug coverage to senior citizens via “Medicare D”. The congress opted to forego Medicare itself as the disbursing agent, and used private insurance companies.

On January 1, 2006, the program went into effect nationwide. The result was chaos. There had been little realistic consideration of how millions of elderly people with cognitive difficulties, chronic illness, or limited English would manage to select the right plan for themselves. Even the savviest struggled to figure out how to navigate the choices: insurance companies offered 1,429 prescription-drug plans across the country. People arrived at their pharmacy only to discover that they needed an insurance card that hadn’t come, or that they hadn’t received pre-authorization for their drugs, or had switched to a plan that didn’t cover the drugs they took. Tens of thousands were unable to get their prescriptions filled, many for essential drugs like insulin, inhalers, and blood-pressure medications. The result was a public-health crisis in thirty-seven states, which had to provide emergency pharmacy payments for the frail. We will never know how many were harmed, but it is likely that the program killed people.

Medicare is prohibited from bargaining for lower prices – private sector competition was to take care of that. Since it took effect, drug prices have gone up, the system has become no less stodgy and confusing, and pharmaceutical companies, luxuriating in subsidy, are wont to change anything.

What does Gawande propose for the U.S.? That we build on what we have – he thinks we could move seamlessly from over fifty million uninsured to universal coverage by leaving the existing private system of employer-sponsored coverage intact, along with Medicare and the very efficient and effective VA system. Massachusetts oft-derided system offers an example (Gawande practices there):

It didn’t organize a government takeover of the state’s hospitals or insurance companies, or force people into a new system of state-run clinics. It built on what existed. On July 1, 2007, the state began offering an online choice of four private insurance plans for people without health coverage. The cost is zero for the poor; for the rest, it is limited to no more than about eight per cent of income. The vast majority of families, who had insurance through work, didn’t notice a thing when the program was launched. But those who had no coverage had to enroll in a plan or incur a tax penalty.

The results have been remarkable. After a year, 97.4 per cent of Massachusetts residents had coverage, and the remaining gap continues to close. Despite the requirement that individuals buy insurance and that employers either provide coverage or pay a tax, the program has remained extremely popular. Repeated surveys have found that at least two-thirds of the state’s residents support the reform.

Like every universal system everywhere, the Massachusetts program is very popular, and will be improved. However, an individual state cannot control runaway nationwide medical costs, and that state is facing increased costs without cost controls. But as a laboratory experiment, it’s had impressive results.

So we won’t get single-payer. We might not even get anything, as President Obama is yet to mention health care reform since taking office. Whatever happens, to be successful, has to come about by pressure from below and build on what we already have for seamless transition. Gawande seems to favor opening up Medicare for more clients, and opening up the VA system to the general public. If this were done, these systems might eventually force private insurers out of business. It might even force them to institute much-needed reforms.

But something’s gotta give. What we have isn’t working. What we will have will be better … but

It will be no utopia. People will still face co-payments and premiums. There may still be agonizing disputes over coverage for non-standard treatments. Whatever the system’s contours, we will still find it exasperating, even disappointing. We’re not going to get perfection. But we can have transformation—which is to say, a health-care system that works. And there are ways to get there that start from where we are.

Note: I hope anyone who wants to read Gawande’s article can access it in its entirety. As a New Yorker subscriber, I have web site privileges. I don’t know if the New Yorker site is open to the public.

I ask this question not knowing the answer, and invite speculation. I offer my own. What will be the long-term outcome of Senator Max Baucus’s proposal to allow people age 55-64 to buy into Medicare?

We hear terrible tales about how Medicare is faces monstrous unfunded liabilities – there’s something to that, but the same studies ought to be applied to the private sector as well. The simple fact is that medical advances are effective and wonderful and expensive. If we were apply the same econometric forecasts to medical needs in the private sector, which doesn’t have to deal with old people, we would still find that medical care will be sucking up more and more of GDP. Until we ration. So set aside for the fear forecasts for sake of argument about other aspects of medical care. I’m more interested in the impacts of the Baucus proposal.

Medicare has three sources of financing – a payroll tax of 2.9% on all wages in the country; monthly premiums for “Part A” (hospitals) of $96.40 from participants; and a 75% subsidy for “Part B” (doctors). (In addition, most Medicare participants pay separately for private insurance to pay for a deductible, usually 25% of what Medicare pays. This is the equivalent of the private-sector deductible and c0-pay system.)

In 2005, the total cost of the Medicare program, subsidized and unsubsdized, was $439 billion.

(I’m deliberately ignoring Medicare Part D, which is a government-sponsored industry subsidy providing a small drug benefit to Medicare recipients. It’s wildly expensive and in need of repair. Another day.)

Part of the Baucus-sponsored health care reform act in the coming legislative session would to temporarily open up Medicare to people aged 55-64. This is viewed as a temporary solution to a market deficiency – private insurers charge huge premiums for people in this age group, and these people are also likely to have preexisting conditions, meaning they can’t get insurance coverage at all.

Baucus would let them into Medicare on a “revenue neutral” basis, meaning that no part of the current subsidy would be available to them. Hence, they would be paying much more than current Medicare beneficiaries for coverage. But there would be two advantages – one, they could get coverage, and two, they could take advantage of Medicare’s built-in cost efficiencies – that is, Medicare operates with about 3% overhead, while private insurers experience 15-30%. So premiums should be considerably less than private policies – say $3,500 versus $5,000 for an individual. That’s a guess. Premiums would certainly be more than $96.40 per month.

The first impact of the Baucus plan would be similar to what Massachusetts is experiencing right now – a huge influx of sick people to whom coverage had previously been denied. This would stress the system, and cause many to cry out that it’s not working. The private sector would experience no loss or pain, however, as it is not offering coverage to these people anyway.

The second impact would be a migration of people in to Medicare. These would be people who are employed, retired and paying on their own, or retired and enjoying company-sponsored coverage as a long-term benefit. This would present a loss of revenue to the private insurers, and they would scream. They would probably try to head Baucus off at the pass, lobbying instead for premium subsidies for themselves to avoid loss of clientele. But assuming the Baucus package were to pass intact, the private insurers would suffer.

The premium advantage that people above age 55 would experience would create pressure from below as people less than age 55 would see that older people are paying lower premiums. They too would want to avail themselves of the low-overhead Medicare option. Political pressure would start to mount to expand Medicare yet further into lower age groups. Cost-conscious and financially strapped employers would want in as well.

In the end, the Baucus plan would chip away at our current hodgepodge system of profitable clients for the private sector, with non-profitable ones left out in the cold or dumped on government. Face it: We’re not going to get single-payer health care in this country even though most of us want it. The Baucus plan would be the start of a process that would eventually undermine the private sector entirely. Private insurers, as in Germany, would be left to take care of the needs of the wealthier sector, paying for private rooms and and helping them avoid waiting queues. There’d still be a niche for them, but we would no longer rely on them for basic care.

It’s going to take years, if not decades. Given the power of the medical lobby, it might not happen at all. I’m often a critic of Senator Max Baucus – he’s at best tentative and right-leaning on most issues. But I support him wholeheartedly on this. If we cannot blow up the house, at least we can chisel away at the foundation.

By the way, full disclosure: I’m 58, have a preexisting condition and am therefore uninsurable, and have to buy into the wildly expensive MCHA program.

Over the past few weeks I’ve had a few exchanges with people on the right side of our health insurance debate, lively and informative to be sure. I certainly don’t have all the answers, but I know the general direction we need to go. And it’s not where we are headed – Barack Obama and Max Baucus will take us down the path of corporate subsidy, hoping, as the old saying goes, that a few sparrows get fed via the cow’s intestinal path.

We’ve been round and round, so I’ll jump to my own conclusion – there should be a mixture of mostly public and some private, and the wealthy, who have the least to lose, should be able to buy whatever care they can afford. But a basic level of care should be available to everyone, paid by the tax system, so that those who cannot afford care get it. There ought to be diminishing co-pays. The French have a nice system, making people who can afford it pay up front, to be reimbursed later. That seems to deal effectively with the moral hazard.

That’s where I’m at. I await the Democratic-inspired boondoggle about to be visited on us. I and my fellow travelers will be blamed for whatever evil comes of it. Let me say in advance – the Democrats are as much beholden to the medical and insurance lobbies as the Republicans, and will not solve our problems without payment of a huge royalty to them. It will be no different than Baucus’s Medicare D, wherein a huge subsidy was thrown at the pharmaceuticals so that some might trickle down to ordinary people.

In the meantime, I encountered two lost souls of the right, two people up against a brick wall. Their philosophy had dead-ended them.

From “Max Bucks”, at Missoulaplis, in a thread containing 127 comments:

I am someone without health insurance. I pay cash for all my medical services. I am not a “free rider.”

From “Lt. Ripley” at mt.pundit, in a much shorter thread:

Yes, the specter of death and destruction looms over all of us… but it’s called LIFE. When you get into a car, you face the possibility that you may die. Life has risks. You cannot remove them all, nor do I understand why you would want to. Your health is part of that risk.

And I do completely understand. You do not know me. My ideals and principles are formed because I have experience and knowledge of it. What would I do if I faced a life threatening disease, and the prospect of huge bills? Well, either I do not accept treatment and die… or I do what I can to pay the bills that my treatment requires. Either way, it’s up to ME.

At some point, we all die, Mark. You can mitigate that somewhat by good preventative care (which I practice) and by looking ahead…. by mentally and financially (if you can) preparing for whatever life throws at you.

If we all paid for what we used, and paid for it directly to doctors, hospitals, etc, then we would be facing lower costs and better care. If we all faced those costs OURSELVES, you would see people educating themselves and using more preventative care. Whenever I am sick, or one of my children, I don’t first head to the ER or even the doctor. I research what it is, watch symptoms and decide if there are things I can do myself. If I need to, THEN I head to the doctor. If he/she suggests a certain treatment or course of action, I find out what that entails, what risks may occur if we don’t do it, and find out costs and difficulty.

Both of these gentlemen are driven by the “rugged individualist” model, and assume that either via savings or loans or family charity that they will survive any medical emergency that comes along. But they are free riders. Ripley takes it even one step further – he says that he would end his own life if he could not afford treatment. So too, I suppose, would any heroic character in Ayn Rand’s Atlas Shrugged,, that damned demonic novel that has inspired this type of thinking.

Anyway, neither Max nor Ripley understand the nature of health care. At the coffee shop I frequent is a bowl to collect offerings for a young man in Billings who was beaten senseless in a bar fight. His surgeries and reconstructions cost over $2 million. This, for a man who can probably barely afford his truck. You might say he brought it on himself, but what if it were cancer, or something only Dr. House could remedy with last second heroics? The point is, it’s beyond our control.

And that’s the bottom line – health care emergencies hover over us like the Angel of Death. Any one of us can be afflicted, and every year a small percentage of us are. This year there will be 500,000 bankruptcies in the U.S. due to medical costs. That specter haunts us all. We’re all vulnerable.

Max and Ripley have dead-ended. Their philosophy took them as far as it could, and left them high and dry. They are now faced with an ugly truth: We depend on one another, we help one another. Private charity is one means, and government is another. Each has its place. In Bob Cratchit’s world, there wasn’t enough private charity to go around, so only a few got help. In the modern world industrialized countries have used government to achieve widespread health care, and have done so effectively.

In the United States we’ve got one foot in Cratchit’s world, one in Tommy Douglas’s. (He’s the founder of Canada’s Medicare, and was voted the greatest Canadian in a 2004 CBC-sponsored poll up there.) We are leaning Tommy’s way, but there’s still too much resistance for an effective remedy to take hold.

Obama has won, Baucus has proposed reforms. It’s going to get much worse before it gets better. It’s time for cowboy foreplay: Brace yourself, honey.

2008 is on the way out, and 2009 will be devoted to condescending commentary on Obama’s inexorable rightward drift and the left’s begrudging acceptance of it – this before they internalize it and begin to actively enable him. It is, after all, good to be king.

Two things need to be resolved before we exit 2008 – health care, and globalization. I’ve spent an inordinate amount of time on these subjects, to no resolution. But I see a common thread in both now, this after reading Zadie Smith’s essay in the New Yorker, Dead Man Laughing. I realized that her father’s wisdom was a truism – “no good can come of this.”

Start with globalization – one of my favorite TV shows is on the Science Channel – it’s called “How It’s Made”. In it, they show us the complicated and fascinating manufacturing processes behind products like hockey sticks and curling stones and charcoal briquettes. What I began to notice after a few episodes was that 1) the workers were usually Anglo men and women, and 2) the products were more often Canadian. I began to suspect that they still make things up north.

Dave Budge perhaps had the final word on the situation in a comment under my post “A Markist Dialectic“:

Ask any random economist, even Keyesians, and 95% of them will tell you that we’re better off with trade where we employ our resources to our most efficient production. What we’re experiencing now is the pain of globalization. But it won’t last forever and we’ll redeploy our excess labor in useful ways over time. That is, unless we stifle innovation with protectionist policies.

This is the right’s answer to the pain and dislocation of a trade policy dominated by the needs of capital. Accept it, internalize it, enable it. You can’t fight it. But far from Zadie’s proscription that no good can come of this, Dave is chipper and optimistic. Something good will happen.

What, exactly? Something. We’ll find some use for our labor. We make good movies. Perhaps we can all be actors. We make hamburger by the COSCO boatload. Perhaps we can all make burgers for one another. Maybe we can all become counselors, or join the military and attack yet new and innocent foreign places. Something good will happen.

In the meantime, we are shutting down industry, good-paying jobs are disappearing for ordinary people, and poverty is edging ever-upward into what we once called our middle class. But something good will come of it. We’re letting markets work, after all, and we don’t question the wisdom of markets.

Which brings me to health care. Again, Dave Budge, this time at Gregg Smith’s active and lively Electric City Weblog:

Prior to HIPAA Montana had hundreds of companies that wrote health insurance. Upon the act being put in force the number of companies writing health insurance fell to less than 10 (There are only 2 in Idaho and only 1 in Washingston.) HIPAA limited pre-existing conditions limitations to 12 months and accordingly many insurance companies left the individual insurance business in favor of selling group plans.

So, prior to 1997 your wife wasn’t uninsurable even with cancer. HIPAA is likely the most damaging piece of health care legislation ever written. It screwed those who need individual coverage by limiting competition, increasing premiums, and re-enforcing the employer based health care model.

And again, later:

There’s no point in talking to you about health insurance because A) you think health care is a right (at some arbitrary level of care) and B) you’re unwilling to see that it’s been the government that has created this bollixed system with all of its intervention. For every fix government enacts two or more problems are created.

HIPAA is the Health Insurance Portability and Accountability Act, a 1996 law that made it more difficult for insurance companies to deny coverage to people because of pre-existing conditions. It didn’t outlaw the practice, by any means. It merely said that if workers switch policies due to job change, that they could not be denied coverage due to a preexisting condition on a new policy if they maintained coverage and did not go for long periods uninsured.

Prior to that time, insurers would either refuse to cover someone with a preexisting condition, or exclude that condition from coverage while covering other ailments. That’s an industry fix, and a good one in Dave’s mind – don’t cover the one thing the person most likely needs coverage for. Under-insure them.

Ted Kennedy was behind HIPAA, and he looked at the market-driven system and thought to himself “no good can come of this”. What the hell is the point of insurance that doesn’t cover illnesses? He fixed it, and, as Dave notes, insurers fled the market. The game was up. Dave sees this and a failing on the part of government. The industry was only doing what comes naturally: Seeking profit, avoiding risk.

…you think health care is a right.

At last he, flustered with me and all of the bollixing of government, said what was true. We have it now on screen for all to see. Dave thinks that people who cannot afford coverage should not have coverage. That, dear friends, is our philosophical bottom line. I say where the market fails, fix things. He says that the market doesn’t fail. If a market outcome is bad, it’s destiny. Accept it. Internalize it. Enable it.

Oh, we’ll do it his way. Obama is drifting inexorably right. The left will begrudgingly accept it, internalize it, and then enable it. There’ll be no heath care fix, no middle class tax cut, no end to Iraq, no protections for workers displaced by globalization. We’ve elected a secret member of the DLC. No good can come of this.

The Veterans Administration health care system took quite a publicity hit with the Walter Reed scandal in early 2007. That’s too bad – Walter Reed is not part of the VA. It’s run by the Department of Defense, specifically the Army. Furthermore, Walter Reed was one of the privatization targets of President Bush’s competitive sourcing initiative, and was actually managed by IAP Worldwide Services, which is managed by Al Neffgen, a former senior Halliburton official who testified before Henry Waxman’s Committee on Oversight and Government Reform in July 2004 in defense of Halliburton’s exorbitant charges for fuel delivery and troop support in Iraq. IAP is also the outfit that had trouble delivering ice in the aftermath of Hurricane Katrina.

That’s all old news. Here are some snippets from an essay entitled “Just How Good Is American Medical Care?”, by Elizabeth A. McGlynn, David Meltzer, and Jacob S. Hacker. It’s a long essay, not available on the web, comparing quality outcomes in our health care system with other countries. (We don’t do that badly – as always, our problems center around the millions who don’t have access to quality care.) These particular passages are from the section entitled “A Surprising Story of High-Quality Care”, about the VA.

No single statistic better illustrates [the] remarkably good performance [of the VA] than the share of VHA system participants who receive recommended care. In the rest of the American health system … adults and children receive only about half of the care that they should. The figure for VA is just over two-thirds.

…Beginning in the early 1990’s, VHA leadership instituted both a sophisticated electronic medical record system and a quality measurement approach that holds regional managers accountable for several processes in preventive care and in management of common chronic conditions. Other changes included a system-wide commitment to quality improvement principles and a partnership between researchers and managers for quality improvement.

…the reforms have worked. The VHA has substantially better quality of care than found in the rest of American health care. Although present research does not indicate exactly why VHA is so much better, it appears that the VHA’s promulgation of specific performance measures and emphasis on accountability are at the heart of the system’s success. The use of computerized reminders and electronic records, the emphasis on standing orders, improved interprovider communication, facility performance profiling, leveraging of academic affiliations, and accountability of regional managers for performance; and creation of a more coordinated delivery system – in tandem, all of these reforms have allowed VHA medical care to create and uphold very high standards of quality.

An American success story. If there is a good idea out there, others will surely steal it. We should soon see promulgation of VA accountability standards and electronic record keeping across our medical system.

Maybe. Then again, this is Bushworld. Perhaps success of the VA system explains a late-term Bush Administration initiative to “shift away from renovating or constructing health-care facilities, in favor of leasing facilities or purchasing care from outside providers.”

In other words, to privatize. We have a public sector success story here – the best health care in America.

Can’t have that.

I have some background in the oil and gas industry. My early days were in a small company in Billings. During the time I was there we had two geologists. It was there I first heard the expression, which I roughly quote, that there are some mighty fine theories that make their way around, but the real world has a way of undoing them.

In the oil business, wells are drilled. The geological theories stand or fail, and success for failure is there for all to see. Many a time a hard-working and highly stressed geologist sat in the trailer next to the drilling rig, waiting for samples, hoping, and then going home and putting away his travel brochures till another day, undone by reality.

What is it going to take for Rob Natelson to come to face reality? Is it that he is nestled away, secure with a tenured government job, free to theorize, never having to drill a well? Time to put him in that trailer.

Check out his latest.

Check it out.

Rob Natelson put up a surprisingly shallow piece on health care over at Electric City Weblog. Here are his talking points (he’s responding to a Mike Dennison piece in Lee newspapers:

First: Pure single-payer means the government pays all the bills. If you hire a doctor on the side using your own funds because your desperately-ill child is on a waiting list and can’t otherwise get care, you are committing a crime. Few countries have such a vicious system. And countries, like Britain, that used to have purely “regimented national plans” (Mike Dennison’s phrase) are headed toward more mixed systems. (I’ll give an example in a future post.)

Second: As anyone who works in government knows, the costs as reported for government programs are nearly always understated. They often don’t include capital expenses. Or costs are kept down by deferring necessary longer-term investment (that’s why it has been so difficult to get certain kinds of procedures in Canada). And, of course, they never count the costs to the economy from the taxes necessary to pay for the system.

Third: Under “regimented national plans” the waiting lists generated in government programs are themselves a form of uncounted cost – because pain and death saves money.

Fourth: The U.S. has the most innovative health care in the world for a reason – that despite the fact that government and insurance companies dominate the system, they have not yet quite taken it over completely. More government control means, of course, less of that innovation. Another prospective cost.

Fifth: The cost in privacy and autonomy of government medicine can be staggering. (Remember the British Columbia lost health records scandal?) Are you worried about a few hundred prisoners at Guantanamo? That human rights problem pales before the prospect of several hundred million prisoners of government-controlled medicine.

I responded (how could I not?):

Well spoken for the 37th best health care system in the world! We’re 37! We’re 37!

1. All countries that offer universal care must ration and triage based on need. Less important procedures must wait. We’d be doing that here except that we ration based on money and don’t provide services to 47 million except in emergencies, and then only to stabilize, and not treat.

2. If the costs of Medicare, Medicaid, SCHIP and VA are “understated”, you’d better put up something better than “everybody knows”. How about “All the Helen’s in the world agree”?

3. The American notion that ‘ferners ‘ are on waiting lists for vital health care needs is mostly useful domestic propaganda. Yes, there are waiting lists for non-life threatening illnesses. We’d be doing that here if we took care of everyone. All countries ration – our system is based on 1) money, 2) access to employer-sponsored care, 3) access to government-sponsored care, and 4) good luck after that.

4. Most innovation (not all) comes from government sponsorship of outfits like NIH, colleges and universities. It is already government sponsored.

5. Medical privacy is now protected not by private companies, who are dying to share information so they know who to reject for coverage, but rather by government.

In the comment section, Rob reiterates the right wing talking point that excessive consumption (a moral hazard) is driving up costs:

In my view, phrasing the question in terms of getting more people insured misses the crux of the problem, which is too much insurance, not too little. We are not going to make medical care affordable again unless patients pay directly for most day-to-day care, in which case it will almost certainly be far cheaper than it is now.

There is a role of third-party payments in the system, but it should be the exception, not the rule — catastrophic events and care for the poor come to mind.

That’s a right-wing talking point – they have attempted to re-channel the debate from the high cost and unavailability of care into less important areas where they have financial interests waiting to accommodate us: HSA’s.

Finally, here’s a study, Phantoms in the Snow, from the late 1990’s that measure the incidence of Canadian “refugees” coming down to the states to take advantage of our health care system. The number is virtually negligible – far less than 1% in the survey. Of that small number, very few were actually coming here specifically for health care. Most were here incidentally (like “snowbirds”). Canadians routinely buy travel insurance policies when they come here due to our high prices, and those policies are designed to cover traveling emergencies, and not chronic conditions.

Some Canadians were here under contracts between Canada and the US to use procedures we have not available there or to ease their waiting queue.

The report’s conclusion:

Despite the evidence presented in our study, the Canadian border-crossing claims will probably persist. The tension between payers and providers is real, inevitable, and permanent, and claims that serve the interests of either party will continue to be independent of the evidentiary base. Debates over health policy furnish a number of examples of these “zombies”—ideas that, on logic or evidence, are intellectually dead—that can never be laid to rest because they are useful to some powerful interests. The phantom hordes of Canadian medical refugees are likely to remain among them.

Sen Max Baucus is an energy drain – that is – he sucks up all of the good energy of active Democrats, and makes sure that nothing comes of it. He also acts as assurance to uninvolved Democrats that they have someone in office looking out for their interests, so they fall asleep. I was deeply involved in Democratic politics back in the mid-nineties, and carry with me memories of Max’s supporters, clueless, and his staffers – beady-eyed followers. It was weird – staffers were not just loyal to Max, they were fearsome in their loyalty, more about Max than Democrats in general. They would actively try to steal volunteers from other candidates.

Bob directed me to a Mike Dennison Article in the Helena Independent on Max’s new health plan. It’s everything I’ve come to expect from Max over the years. A little bit, but not without a bow and a kiss on the ring of power.

Max’s plan is not totally without merit – it would expand coverage for Medicare, Medicaid, SCHIP and Indian Health Services.

If I understand correctly, my wife and I (age 58) would be allowed to buy into Medicare, and that should be cheaper than the plan we have now, MCHA. But since we are uninsurable by private insurers (preexisting conditions), letting me and others like me into Medicare will put additional strain on that already-strained system. Nonetheless, I’ve seen the care my Mom (and late-Pop) get from Medicare, and it’s excellent. I would not mind buying in.

Here’s where Max goes off the rails in a very predictable manner – he leaves the private health care system intact. If a person is unwillingly married to his job because he needs the insurance, he’s still stuck. He does nothing about the current employer-provided system, which is such a drain on companies like GM. Max mandates that we all have insurance, with varying degrees of support. All of that support would be funneled to private insurers. The big problem we have in this country – the hodgepodge of private insurance companies, each with their own multi-layered bureaucracies, each with their own profit requirements, would not only remain intact – it would be strengthened. If you think it’s bad now, wait until these private little tyrannies realize they are no longer threatened by single payer.

Baucus staffers say it would come close to universal coverage over several years, by expanding public programs and requiring everyone to buy health insurance. Still, that prospect relies on the private, for-profit insurance market to fill some big gaps — something it hasn’t done after decades of being in business.

Max says that that real reform, single payer or a true national health plan is “off the table” and “not politically feasible”. Even though that vast majority of the public wants it, the insurance companies don’t. We’re not a functioning democracy.

Welcome to Maxville. Everything good is usually down the road somewhere. He’s like gas station coffee – he only resembles the real thing.

And this is why Max Baucus is so bad for us. He always offers a little, seldom delivers, and when he does deliver, the biggest package with the biggest bow and shiniest wrapping paper goes to entrenched power. Max knows how to play the game.

Six more years of Max. I was one of the anonymous writers over at “Eyebrows Over Highbrows” – I thought it was a fun gag. I never took it seriously. Baucus had no serious opposition, and that allowed him to carry on being Max. Sigh. Montana needs a new Senator – a Democrat to replace Baucus. He’s been sucking our energy for too long.

Addendum Dennison’s Part II here – damn fine piece. Rob Natelson take him on here – hard to believe that a man as erudite and well-researched as Natelson claims to be merely repeats tired old canards, like “Under “regimented national plans” the waiting lists generated in government programs are themselves a form of uncounted cost – because pain and death saves money.

Is he aware of at least 18,000 Americans who die each year due to lack of health insurance coverage?

The 1990’s saw an attack on Medicare from the right wing – said Newt Gingrich, the program was “Soviet-style health care, too bureaucratic, too centralized, too dominated by government.” Gingrich is a smart man, but is blinded by ideology. Anyone who can compare private health insurance to government-run and say the latter is “too bureaucratic” is missing the big picture.

The primary thrust these days from the right are HSA’s – health savings accounts. The objective is to counter what insurers call a “moral hazard” – the idea that people use too much health care when it is provided by others. HSA’s force people to save for their own care, making them cautious about spending, thereby making only medically necessary expenditures.

HSA’s are appealing to younger, wealthier people. These people have fewer medical problems, and are attracted to the idea that they can accumulate cash in an IRA-like fashion that could later be converted to an IRA account. But medical costs are like the angel of death hovering over all of us, affecting only a few at a given time. A major medical problem quickly wipes out an HSA, and the owner becomes part of the larger scheme again. The overall thrust of HSA’s is to segregate the population into sick and healthy, forcing larger costs on the sick, negating the benefits of large insurance pools of healthy and unhealthy alike. That’s a moral hazard.

HSA’s face another moral hazard – the fact that financial institutions are drawn to the deposit and fund-management aspects of the program. Their main objective is to build up deposits, but HSA’s also offer opportunity for fees for account processing. As with mutual funds, these fees draw down asset accumulation and income stream over time – a subcommittee of the Senate Finance Committee found that mutual funds on average lose 26% of their accumulation to fees. (Social Security drain: 3%.)

People do tend to spend less on medical costs when they are dependent on HSA’s. The problem is that most of us don’t have a crystal ball, and don’t know what’s important, what is not. HSA’s end to decrease the chance for early detection, meaning later and more expensive treatment of diseases and conditions. Furthermore, poor people are most likely to scrimp on expenditures, meaning that they would, as with the current insurance system, get the short end of the stick.

The above are condensed thoughts from Jill Quadagno and J. Brandon McKelvey from an essay entitled “The Transformation of American Health Insurance”, not available on the web. (The 26%/3% figures come from a Sen Max Baucus aide on the Senate Finance Committee whose name eludes me. He was here in Bozeman to address seniors are part of the Wonderlust program.) Here’s an interesting excerpt:

In the past few years, Congress has enacted measures that have given private insurers a larger role in Medicare, most recently with the Medicare Modernization Act of 2003, which created Medicare Advantage, a private insurance option. There is already evidence that inserting private insurance into a social insurance program exposes beneficiaries to the risk of abuse. The private insurers who run Medicare’s new drug benefit program and offer other private insurance options encouraged by the Bush Administration have used deceptive sales tactics and improperly denied claims to thousands of beneficiaries. The problems include improper termination of coverage for people with HIV and AIDS, huge backlogs of claims and complaints, and a failure to answer telephone calls. In 2007, Medicare imposed more than $770,000 in fines on eleven companies for marketing violations and for failing to notify beneficiaries about changes in costs and benefits in a timely fashion. Many of the marketing abuses occurred in sales of the Medicare Advantage product.

Sounds like we need to deregulate.

But seriously, folks, private insurers and patients are at odds with one another, one seeking health care, the other benefiting only when that care is denied. It’s a system in conflict with itself, and doomed to fail. Yet it is the only one that free-market types can fathom for us.

It is probably best to jettison the free-market types. They are a moral hazard.