Readers,

Matt Kukla, a PhD candidate in the field of Health Care Economics, is my guest blogger this week. With an interest in  health economics in the U.S. and developing nations (particularly India), Matt provides an overview of how national and international health care systems function.

An Introduction to Health Care Reform

Author: Matt Kukla

Understanding the workings of health care systems can be overwhelming and complex.  In a world of ideological debates and partisan politics, it’s difficult to sift through the garbage and comprehend what works and what doesn’t.  As a guest columnist at Public Health Bugle, my goal is to help you become more knowledgeable and think critically about health care, both economically and through international experience.  This means using your own ethical framework to determine how equitable, efficient and effective a health system should be and ultimately use this foundation as a guide to health care reform.

A terrific book published by several leading health experts at Harvard University (Getting Health Reform Right: A Guide to Improving Performance and Equity, Roberts et al. (2008)) discusses critical factors that may shape the direction of health care reform.  It breaks down the inner workings of health policy into five control knobs, all of which can be turned independently or simultaneously to change a health care system.  These include financing, payments, organization, regulation and social behavior.

Financing health systems throughout the developed and developing world often breaks down into four categories: general revenue, self-pay, private insurance and social insurance.  Each mechanism shares three primary functions: How will revenue be collected? How should contributions be pooled so as to minimize risk? How are contributions used to purchase health services?

The V.A. hospital system is a sound example of general revenue, such that health care is paid for by the government through general tax revenues, tossed around the pot and spit back out to pay for health care services.  As with the U.K. and Canada, there generally exists greater accountability and controlled spending within this system; however, funding fluctuates according to the economy and no specific organization exists to set aside taxes for health care.  Administrative costs are also considerably lower, equity is greater, though efficiency is often weaker.

Alternative forms of financing include private health insurance & self-pay and represent the majority of health care financing for Americans.  As will be discussed in later posts, economists promote the free market as an arena for efficiency, though strong evidence indicates that markets often fail in the health care sector.  In brief, private insurance companies experience excruciatingly high administrative costs (25-35% in the U.S.) due to price negotiations among providers and hospitals.  It is generally less equitable for the population, because without regulation insurers can “risk select” by choosing who they do and don’t want to cover.  Nations that opt for private insurance must find ways to regulate and manage these markets and plan for high costs.  Similarly, roughly 15-25% of all health care spending in developed nations is due to self-pay (cost-sharing) in the form of co-pays, co-insurance or deductibles.  Evidence shows that cost-sharing limits a form of market failure called moral hazard; if insurance companies cover all health care costs, patients will over utilize unnecessary health care services.

Thank you Miguel Barbosa of Simoleon Sense in referring me to this very informative discussion about health care reform.

(source: MIT World)

About the Lecture

(source: MIT World)

Years of extreme partisanship and lobbying have left Americans cynical and bewildered about health care reform, but, say these panelists, the urgency of achieving some measure of change is not diminished, both for American families and the nation as a whole. The sad truth is that the problem may have become too complex and provocative for either public discourse or constructive legislative action.

In his overview of the reform debate to date, Jonathan Gruber describes “what needs to be resolved to make it across the finish line.” He invokes the example of Massachusetts, which implemented an approach to health care in 2006 that Gruber calls “incremental universalism.” The system rests on three pillars: reforming insurance markets, an individual mandate, and making health insurance affordable for the poor. The bills idling in the House and Senate generally follow Massachusetts’ approach, but differ from each other around affordability and financing. Another big issue, cost control, is a hard sell to the majority of Americans currently carrying health insurance, since many would stand to lose. Cherry-picking popular pieces of legislation will fail, because “you need all three legs of the stool.” Gruber warns that “the Democrats and the President have to decide: Are they willing to go for all or live with nothing?”

Today, one in every five dollars spent by the federal government goes toward health care, says Joseph J. Doyle, and in a decade or two, the U.S. will spend 10% of its GDP tending to health needs. Bending this steep cost curve, with or without expanding access to the uninsured, must be a priority because of the ballooning federal deficit. But doing so poses difficult choices: while the U.S. has an expensive health care system, rooting out waste isn’t easy, since “some things are expensive and save lives.” Doyle approves the current Senate bill’s demonstration projects that seek “to cut costs without hurting patients.” Experimenting with financial incentives for providers and consumers while capping insurance payments may help with rationing.

Amy Finkelstein examines the economic consequences of expanding health care insurance. She anticipates increased spending, whether public or private, as a larger population consumes more medical services, sheltered from actual costs by insurance. This will put even greater pressure on the federal budget. But benefits of expanded coverage include improved financial security for families who might otherwise face catastrophic financial loss due to a significant health problem; possible improvements in the overall health of the population; and likely progress in medical technologies and drugs.

About this Talk

(source: TED)

Anthony Atala’s state-of-the-art lab grows human organs — from muscles to blood vessels to bladders, and more. At TEDMED, he shows footage of his bio-engineers working with some of its sci-fi gizmos, including an oven-like bioreactor (preheat to 98.6 F) and a machine that “prints” human tissue.

About Anthony Atala

(source: TED)

Anthony Atala is the director of the Wake Forest Institute for Regenerative Medicine, where his work focuses on growing and regenerating tissues and organs. His team engineered the first lab-grown organ to be implanted into a human — a bladder — and is developing experimental fabrication technology that can “print” human tissue on demand.

In 2007, Atala and a team of Harvard University researchers showed that stem cells can be harvested from the amniotic fluid of pregnant women. This and other breakthroughs in the development of smart bio-materials and tissue fabrication technology promises to revolutionize the practice of medicine.

Being involved in an multi-state obesity-prevention effort, I was curious to know what interventions work and what interventions do not. The following paper by Stice et al provides an overview of current obesity prevention efforts and whether they were effective.

Original Paper

(source: Pub Med, U. of Texas, by Stice et al.)

Abstract

This meta-analytic review summarizes obesity prevention programs and their effects and investigates participant, intervention, delivery, and design features associated with larger effects. A literature search identified 64 prevention programs seeking to produce weight gain prevention effects, of which 21% produced significant prevention effects that were typically pre to post effects. Larger effects emerged for programs targeting children and adolescents (versus preadolescents) and females, programs that were relatively brief, programs solely targeting weight control versus other health behaviors (e.g., smoking), programs evaluated in pilot trials, and programs wherein participants must self-select into the intervention. Other factors, including mandated improvements in diet and exercise, sedentary behavior reduction, delivery by trained interventionists, and parental involvement, were not associated with significantly larger effects.

After last night’s speech to Congress, President Obama hoped to stir urgency in passing a COMPLETED health bill.

Original Article

(source: New York Times)

President Obama’s speech to Congress did nothing to resolve differences between the House and the Senate on health care legislation, which is now stalled by internal disputes among the Democrats and lock-step opposition from the Republicans. But he defended his proposal as a vast improvement over the status quo, and warned Democrats not to “run for the hills.”

Can President Obama’s words change the political dynamic? Where will the health care overhaul go from here, if it goes anywhere at all?