Free marketeers have been lauding Gov. Sarah Palin’s efforts to eliminate Alaska’s restrictions on new health care technology and facilities, calling it a push for “less regulation of health care providers and more competition”.
This blind faith in the marketplace to somehow solve the American health care crisis demonstrates not only a superficial understanding of health care, but an ignorance that would increase costs and reduce quality.
One excellent example of how wrong these ideologues are comes from KFF. The good folk at Kaiser report that:
“Physicians in 2007 ordered 68.7 million CT scans, more than three times the number ordered in 1995 [emphasis added], according to IMV Medical Information Division. In addition, a 2007 study by McKinsey Global Institute found that the number of CT scan machines in the U.S. had increased to 24,000 since the first apparatus was purchased in the U.S. in 1973, which is nearly three times the number of machines available in most other industrialized countries.
…the declining cost of the devices has encouraged more private practice physicians and independent imaging centers to install their own machines, the Times reports. According to the Times, manufacturers of the scanning machines, such as Siemens, “tout the ease of making money with the devices.” A Siemens marketing brochure notes that two scans daily generate enough revenue to cover the cost of the machine and its operation over a five-year period, while 10 scans daily can generate more than $400,000 in annual profits.”
And let us not forget the increased health risk from excessive radiation doses…
The CT scan issue is merely the latest in a long line of well-documented, rigorously-researched studies that clearly and unequivocally prove supply drives health care costs. The more health care facilities, beds, technology, the more physicians and care givers there are, the higher the cost and the worse the outcomes..
The authors of the Dartmouth Atlas have done an outstanding job in this area. Here is just a sampling of their findings:

• the U.S. could lower health care costs substantially if the highest intensity hospitals adopted the practices of the nation’s best performing hospitals.
• where medical decisions are most discretionary…admission rates are strongly correlated with the local supply of hospital beds
• higher spending and greater use of supply-sensitive care is not associated with better care
• more care does not necessarily mean better care. In fact, more hospitalizations and more procedures among similar populations resulted in higher mortality than for populations that received more conservative care.
• and the killer – any expansion of capacity will result in subtle shifts of clinical judgment toward greater intensity of care

Yet some persist in ignoring facts in favor of ideology. A piece in that bastion of intellectual rigor, the American Spectator, claims “Sarah Palin means it when she says she’s in politics to “challenge the status quo and to serve the common good.” Moreover, her push for greater competition also demonstrates that she understands the potential of the free market to cure much of what ails American health care.”
Actually, Palin’s statements don’t do that at all. Her actions show her to be ignorant of cause-and-effect, blind to the facts, and willing to sacrifice the good of Alaskans on the altar of the free market.
thanks to FierceHealthcare for the heads-up.

Igor at ThinkProgress brought up a stunningly obvious point –
Why is John McCain so adamantly opposed to Government health care?
For most of his life he’s been covered by ‘government health care‘. It’s kept him hale and hearty, taken care of his four melanoma episodes and other illnesses and injuries, allowed him to keep up with a woman 18 years his junior, and he certainly hasn’t lacked for energy and enthusiasm on the campaign trail.
McCain thinks this isn’t good enough for the rest of us; “My health care plan will make it easier for more Americans to find and keep good health care insurance. His plan [Obama’s] will force small businesses to cut jobs, reduce wages, and force families into a government run health care system where a bureaucrat stands between you and your doctor.”
(As opposed to, say, today’s private health plans, where a bureaucrat stands between you and your doctor.)
Actually, McCain has misspoken; Obama’s plan specifically calls for and encourages the use of private health plans, with the government plan as a backup (much as it is today for the poor, elderly, and disabled). That wasn’t McCain’s only ‘misstatement’.
Obama’s plan specifically exempts small businesses, does not force adults into health plans, and provides financial help to small businesses offering health insurance in the form of a refundable tax credit of up to half the cost of premiums. And, Obama allows anyone with insurance today to keep it.
What does this mean for you?
Bottom line, Obama’s plan would cover 18 million more Americans, while a million Americans would lose coverage under McCain’s plan.
On second thought, maybe McCain does need another check-up…

I’ve been considering why Republican politicians and pundits favor de-linking employment and health insurance. Portability is certainly a good reason; some workers can’t leave their jobs for fear they will lose coverage, or won’t be able to get new coverage due to a pre-existing condition. That interferes with the free flow of labor, and may well inhibit economic growth and prosperity.
The high cost of US health care is certainly worth mentioning, and especially the impact of that high cost on competitiveness. American manufacturers and service companies are at a big disadvantage simply because they have to pay a lot towards health care (via premiums and taxes, driven by the world’s most expensive health care).
Linking employment to insurance also means when people lose their jobs, they lose their coverage (except for those who can afford to pay the whole premium for the maximum 18 months allowed under COBRA). This last got me wondering – is there a correlation between unemployment and the President’s political party?
Turns out there is, and it isn’t what many suspect. In fact, unemployment under Republican presidents is significantly higher than when a Democrat is in the White House.
A study by Elliot Parker of the University of Nevada, Reno, found that unemployment at the end of presidential terms was significantly higher for Republicans (6.0%) than for Democrats (5.2%). And, the Unemployment Rate actually went up under Republicans (+0.3%), while it decreased under Democrats (-0.4%) Parker used the period from 1949 to present for his analysis, noting that the period prior to that date was heavily influenced by the Depression and two world wars. (but if you include the period from 1929 on, the numbers are actually worse for Republican administrations)
The reason for the differential seems pretty obvious – when economies perform better, jobs are added. As Christopher Hill at Boom2Bust writes;
“Real GDP Growth Rate (annual average) under Republican administrations now [for the preiod 1949 to 2005] stood at 2.9% and Democratic administrations at 4.2%. Real GDP Growth Rate Per Capita was 1.7% for the Republicans and 2.9% for the Democrats. These results prompted Dr. Parker to conclude that “the economy has grown significantly faster under Democratic administrations, and more than twice as fast in per-capita terms.”[emphasis added]
Parker also considered whether there was a lag effect – policies can take time to make their impact felt, time that may influence results. As Mr. Hill put it; “The professor found that even with up to four years of lagged effects, there was no evidence that the economy performed better under Republicans.”
It’s not just unemployment and economic growth. Parker’s research found that by many measures, Democratic administrations delivered better economic results than their Republican counterparts – Dow Jones Index, weekly wage indices, corporate profits…
This is one of those great validations of the internet – start looking for something and you’ll be surprised what you learn. Is it possible Republicans want to delink employment and insurance due to their poor record on the economy? I don’t think so.
And as their record indicates, they certainly wouldn’t publicize it.
Thanks to Joe Lyles for getting me thinking about this.

Gov Sarah Palin has claimed she is a reformer, maverick, independent pit bill, not afraid to take on special interests when it is in the interest of her constituents to do so.
She’s also not afraid to ignore the advice of experts when it runs counter to her ideological position.
Case in point – the Certificate of Need program in Alaska. CoN programs are in place to prevent the building of duplicative/redundant health care facilities. The theory (supported by most research) is that the more facilities there are, the more costs will increase, with no appreciable increase in health care quality. Therefore, limiting the number of MRI machines and ambulatory surgical centers reduces costs.
As I noted earlier this week, Palin has been trying to kill Alaska’s CoN program, claiming it will introduce more competition into the health care market, competition that will drive down costs and increase quality.
But that doesn’t happen. The more facilities there are, the more costs increase – and quality decreases.
When Palin convened an expert panel to review Alaska’s CoN program, they (surprise) advocated keeping it in place. The Governor didn’t like that answer. Palin ignored the advice of the experts and proposed legislation to kill the program.
Palin’s approach to health care is, to be kind, simplistic. According to the Washington Post, “It didn’t matter what you asked her about health care,” said Tony Knowles, the Democratic governor who lost to Palin in 2006. “Getting rid of certificates of need was her only answer.”
Why?
Here’s more from the WaPo piece.
“Palin was part practical politician, accepting more than $34,000 from medical groups that were trying to spur competition, [emphasis added] according to an analysis by the nonpartisan Campaign Money Watch. She also worked closely with Paul Fuhs, an Anchorage lobbyist who was helping imaging firms battle hospitals over control of a lucrative trade. And while supporters and opponents credited her with reaching out to all sides, they also said she was a fierce idealist, taking a philosophical position and not giving ground.”
What’s the net?
Another politician making decisions based on ideology and special interests, not on facts, data, and logic – decisions that will increase costs and reduce health care quality.

The folks over at Think Progress have compiled a brief summation of Alaska Gov Sarah Palin’s record on health care. There’s not much there, given her short tenure as governor.
What’s the net?
Alaska is a state with healthy people, very expensive health care, comparatively poor care for children and little in the way of a safety net for those kids. To date the governor’s answer has been to eliminate the CoN program and build a government bureaucracy to promote more transparency
Perhaps her most significant initiative is Palin’s effort to overturn the state’s Certificate of Need program – the details are here.
Palin has also called for passage of a bill authorizing a new state agency to promote transparency in health care. “The bill would establish an Alaska health care information office to give consumers factual information on quality, cost and other important matters to help them make better-informed decisions about health care in the state.”
Interesting that a staunch conservative would seek to increase the size of government to address a problem that private insurers are already working on.
The governor did sign a bill that slightly increased the amount of income an Alaskan could earn (from 150% of the poverty level to 175%) and still qualify for the SCHIP program. Still, Alaska’s criteria are among the lowest in the country; in comparison most states allow income well above 200% of the poverty level.
Of course, Palin’s health care record has to be viewed in context – which in this case is Alaska-specific. The most recent data from the Commonwealth Fund indicates health care quality in the state is ranked near the bottom, while access is also poor (36th), in general Alaskans lead healthy lives.
From a cost perspective, Alaska consistently ranks as one of the most expensive states for health care in the nation. For kids, the state was ranked in the bottom quartile by the Commonwealth Foundation.

Colleague Bob Laszewski has ferreted out a couple of health care-related items from Sarah Palin’s brief tenure as Governor of Alaska. One is her push to eliminate Certificate of Need requirements for building health care facilities, the other calls for more transparency via government intervention; “Alaska Health Care Transparency Act to provide consumers with information on quality and cost which would be provided by a new government-run health care information office.”
Today we’ll focus on Palin’s efforts to overturn the Alaska CON process.
The short take? She has no clue what she’s talking about.
According to Palin, “The Certificate of Need is being used by lobbyists and health-care organizations to limit competition — through appeal of other’s certificate awards or by filing suit against the state for those awards…[eliminating the CON process] will not only reduce the cost of health care, it will also improve the access to health care, allow more competition and improve quality of care for patients.”
Palin referenced a recent paper authored by the Federal Trade Commission as support for her position; I’d note that the document was written during the present administration, one that has not been noted for an even-handed approach to science, analysis, and research. In fact, the FTC report clearly states its intent to encourage movement to a ‘consumer driven’ health care system that relies on market forces to determine costs access and quality. (for a thorough critique of the FTC paper, click here.)
In addition to the FTC report cited by Palin, another study from twenty years ago (based on 1983 and 1984 data) concludes that there is :”no evidence that CON programs have led to the resource savings they were designed to promote, but rather indicates that reliance on CON review may raise hospital costs.”
The study goes on to say that were states to significantly relax their regulatory thresholds, “total hospital costs would not increase, but rather would decline by 1.4 percent.”
Turns out that the FTC (then and now) may have missed something – a 1998 Duke University study found “Mature CON programs are associated with a modest (5 percent) long-term reduction in acute care spending per capita, [emphasis added] but not with a significant reduction in total per capita spending.” And this is supported by more recent research, which clearly indicates the supply of health care facilities drives demand, not the other way ’round.
Ohio eliminated their CON program in 1995. Over the next four years, there were 19 new hospitals built, a five-fold increase in the number of freestanding MRIs, and the number of ambulatory surgical centers grew by 600%. These weren’t being built to reduce costs.
Wait, there’s more. The big three automakers all compared costs in CON v non-CON states, and found that states with substantial CON programs had significantly lower health care costs. In fact, when considering locating plants and facilities, the big three consider CON “as a positive factor“. Chrysler found that their per-employee health care costs were substantially lower in CON states than in non-CON jurisdictions, with costs as much as 164% lower in CON states. GM found its health care costs were nearly a third less in CON states in a similar analysis. Their report states “”Some argue that deregulating health facility expansion will trigger free-market forces of supply and demand, and lead to lower costs. On the contrary, General Motors has not found that to be true based on our vast experience in states that have varying degrees of CON regulation.”
And an analysis by Ford found that inpatient and outpatient hospital costs were 20% lower in CON states.
Specific procedure prices were also lower in CON states, refuting Palin’s contention that freeing up the market to more competition will reduce costs. MRIs were at least 11% more expensive, and CABG operations were at least 20% more expensive. Ambulatory surgery center charges were also 25% lower.
Quality is also higher in CON states.
A study published in JAMA found that the quality of outcomes in coronary artery bypass surgery was directly linked to the CON process. Those who had CABG in non-CON states were significantly more likely to die (5.1% chance v 4.4% in CON states) due primarily to the higher volume per facility in CON states. Notably, in states that repealed CON laws, the percentage of patients undergoing CABG in low-volume hospitals tripled.
The CON legislation Palin supported has yet to be approved by Alaska’s legislature, and continues to face strong opposition from within the state.
Here’s the net. Palin’s doctrinaire position on health care is in lock-step with the GOP – it relies on an unfounded and unsupported faith in the free market’s ability to somehow reduce health care costs and increase quality, despite all evidence that there is no such linkage.
What does this mean for you?
As John Wennberg and others have demonstrated conclusively, the more supply there is, the higher costs are. Health care is not like other economic goods, no matter how much Palin et al may want it to be. If you are looking for solutions you’ll not get any examining Palin’s record on health care.
For a thorough summary of the current CoN picture across the country, click here.

Slowly, inexorably, inevitably, the government is becoming the nation’s health insurer.
The latest report from the US Census Bureau indicates the number of Americans without health insurance dropped from 2006 (15.8 percent) to 2007 (15.3 percent) – good news, especially for those who finally got coverage. The source of the expanded coverage – government programs, especially for kids. Almost half of the 1.3 million folks who found coverage in 2007 were children; 600,000 more kids were covered in 2007 than the previous year, largely due to expanded efforts to enroll them in the SCHIP programs.
And another 400,000+ were from a single state – Massachusetts, that adopted a controversial plan to expand coverage.
But that’s just the tip of the iceberg. The real story is the expanded role of governmental programs, primarily Medicaid. The percentage of Americans covered by governmental programs increased from 27 percent in 2006 to 27.8 percent in 2007; while the Medicare population grew (we are getting older…), Medicaid alone added 1.3 million lives.
Employment-based health insurance continues to erode (59.7 percent of Americans covered through work in 2006, 59.3% in 2007), as employers seek to reduce costs they slash jobs, drop health insurance, reduce benefits, and increase employee contributions. Employment continues to decline, with expectations that it will hit 6.0% later this year.
The number of folks who lost coverage over the last seven years now stands at 5.9 million. And those with coverage have seen the ‘quality’ of that coverage decline – deductibles/coinsurance/copays have increased dramatically while limits on coverage have expanded. Couple that with the lack of coverage available for individuals with pre-existing conditions (only 5 states offer guarantee issue on all products – Maine, Massachusetts, New Jersey, New York and Vermont) and the full scope of the insurance crisis starts to become apparent.
Many employers can’t afford to provide insurance and many families can’t afford individual plans or can only get coverage for conditions they don’t already have (try getting full coverage if you’re on lipitor, paxil, or insulin…) or with deductibles that require them to pay upwards of $5000 out of pocket.
What does this mean for you?
The market is not solving the problem of the uninsured. That’s why government, in its bumbling, stumbling, inefficient, messy way, is becoming the answer for more and more Americans.

They’re at it again.
The latest assault on logic and reasoned debate comes from a physician in California (no longer practicing) who claims:
“Low birth weight infants are not counted against the “live birth” statistics for many countries reporting low infant mortality rates.
According to the way statistics are calculated in Canada, Germany, and Austria, a premature baby weighing <500g is not considered a living child. But in the U.S., such very low birth weight babies are considered live births. The mortality rate of such babies -- considered "unsalvageable" outside of the U.S. and therefore never alive -- is extraordinarily high; up to 869 per 1,000 in the first month of life alone. This skews U.S. infant mortality statistics." This is a very sneaky way to push a political position.
The doctor, Linda Halderman, has apparently not done any independent research. Instead, she has merely rehashed a 2005 article authored by a ‘scientists’ employed by that noted bastion of scientific objectivity, the Discovery Institute (for those unfamiliar with these folks, their primary mission is to promote creationism/”intelligent design”, perhaps that’s why their science is so faulty)
For comparison purposes, infant mortality statistics should be calculated using the same definitions for all countries, with very few exceptions (specifically a couple former USSR satellites, the Czech Republic and Poland). It is possible that other countries ‘report’ their data differently, but for comparison purposes, a standard definition is used. Fortunately, infant mortality rates are reported using WHO standards, which do NOT include any reference to the length of the infant, duration of the pregnancy, but do define a ‘live birth’ as a baby born with any signs of life for any length of time. For a detailed explanation of WHO data definitions, click here, for a really long discussion of the issue, click here.
Perhaps the good doctor was so busy providing policy advice to the California (she claims she is no longer practicing medicine due to low Medicaid reimbursement) that she didn’t have time to do her research thoroughly. Either that or she’s attempting to intentionally mislead her readers.
Halderman takes a couple rhetorical shots at our friends to the North, shots which are easily refuted. She claims “When Canada briefly registered an increased number of low weight babies previously omitted from statistical reporting, the infant mortality rose from 6.1 per 1,000 to 6.4 per thousand in just one year. [Canada has been reporting births of babies <500 grams at least since 2001]." Canadians report their birth rates two ways; babies between 500 and 2500 grams, and babies <2500 grams. And the percentage difference between the two is negligible - 0.1% (5.8% including babies <500, 5.9% for all births) for 2001, 2002, and 2003.
Regardless of the measure you use, Canadian infant mortality figures look way better than the US’. And for comparison purposes, the WHO uses the same definition for Canadian and American births.
Halderman also says “Pregnancies in very young first-time mothers carry a high risk of delivering low birth weight infants. In 2002, the average age of first-time mothers in Canada was 27.7 years. During the same year, the same statistic for U.S. mothers was 25.1 — an all-time high.” The statement just sort of sits there, but I’m assuming she’s using this to somehow say that if you correct for the age of the mother, then we aren’t so bad.
Uh, not so fast. In fact, older Canadian women are at higher risk (9.3% higher, to be precise) of delivering low birth weight babies than their younger compatriots.
And Canadian women as a whole are at much lower risk than American women.
Before someone makes the ludicrous claim that Canadian women at high risk go to US hospitals, thereby increasing the US’ infant mortality rate and lowering Canada’s, know that Statistics Canada counts Canadian women giving birth in the US in their stats.
Halderman makes another incorrect statement – “In Switzerland and other parts of Europe, a baby born who is less than 30 centimeters long is not counted as a live birth. Therefore, unlike in the U.S., such high-risk infants cannot affect Swiss infant mortality rates.”
Wrong again, doc – for comparison purposes a standard definition is used.
This nonsense has been picked up by others in the right wing media machine (attempting to refute the liberal bias of the main stream media, no doubt). As of today, there were 1700 hits on a search for halderman infant mortality; a brief scan indicated a substantial portion were from bloggers rejoicing at the Halderman’s insights and using same to make them feel better about high US infant mortality rates.
What does this mean for you?
It is indeed distressing when a physician spews this nonsense. This is a textbook example of an ‘expert’ using an inaccurate conclusion based on faulty research to support a political position.
So much for the Hippocratic Oath, Dr. Halderman.

Most poor folks who don’t have health insurance would if they could afford it. We’ve settled that.
But that’s the problem – health insurance is just not affordable – today. And costs are not going down, in fact the latest data indicates employers will see another 10%+ jump next year – which will certainly lead to fewer employers offering coverage, fewer employees opting for coverage, and more folks without health insurance.
We’ve seen in Massachusetts that reducing insurance premiums does increase coverage, but the premium levels are still too high for some.
Leaving aside the uncomfortable realities of the real world, what is the correlation between ‘price’, defined as a percentage of family (not household) income, and insurance coverage takeup?
Here’s one data point from one of Bob Laszewski’s posts on Massachusetts –
“The state has seen a gain of only 18,000 Massachusetts residents with incomes above 300% of the poverty level in the Commonwealth Choice plan. That’s because it costs $7,000 – 12,000 a year for a family of four to buy the baseline health plan that includes a $2,000 single/$4,000 family deductible before most benefits are available. A family of four with an income of at least $61,000 (300% of the federal poverty level) would not qualify for a subsidy.”
One study suggests that family income should not be the only metric used when assessing ‘affordability’, as total financial assets, home ownership status, and other indicators may strengthen the correlation with take-up rates.
A paper on the topic was authored by Kate Bunford and Mark Pauly in 2002. (full version here) They used two different methods to determine affordability, one based on income and the other on the coverage purchased by similar folks with similar incomes. Perhaps unsurprisingly, there’s a wide discrepancy in the results obtained from the two methods.
Here’s an excerpt from a summary of their report.
“the insurance-adjusted poverty rate for adults aged 25-64 in 2000 was 10.5 percent; on that basis, health insurance is unaffordable for 10.5 percent of adults aged 25-64. For the whole sample, using the poverty line as a benchmark, 71 percent of the currently uninsured population could afford health insurance coverage…
…Using the threshold that 80 percent of similar households purchase insurance, they find that around 25 percent of the uninsured could afford coverage based on peer comparisons.”
Pauly and Bunford conclude that “Depending on the parameters chosen in our definition, we find that health insurance was affordable to between 24% and 55% of the uninsured in 1998.”
I’d note that the the summary states the “affordability of health insurance, measured in various ways, is not a particularly accurate predictor of whether a person will obtain coverage. It is certainly not the only explanation of observed patterns of insurance coverage.” I’d also note that Bunford and Pauly’s methodology is the basis for that conclusion; they looked at insurance takeup rates and analyzed similar populations, while other analyses relied on survey research.
What does this mean?
More research needs to be done.

There’s more recent data to refine our understanding of who is uninsured – and more apropos to earlier posts here, why. Sorry, libertarians, it’s not because they don’t want health insurance.
When asked why they don’t participate in their employer’s program, 1% of survey respondents said it was because didn’t think they needed insurance.
One percent.
The survey, conducted by the Washington Post, Kaiser Family Foundation and Harvard University provides a “detailed look at the real life experiences and views of low-wage workers”, with ‘low wage’ defined as less than $27,000.
Given the cost of health care and insurance premiums, it is not surprising that for many respondents health care is becoming unaffordable. When asked how easy or difficult it is to afford health care and health insurance, 1/3 of the respondents said ‘very difficult’, and 29% ‘somewhat difficult’. A significant majority would also settle for lower pay if the job had health insurance (56%, compared to 39% who would prefer better pay and no health insurance).
And fewer and fewer are getting insurance through their employer. 69% of the respondents’ employers offer insurance, but only 60% sign up (most because they already have coverage through another source, e.g. via a spouse’s plan, Medicaid or Medicare). Adding up all those with coverage, 72% have some form of coverage, and the remainder does not.
Some claim that a hefty portion of the uninsured don’t have coverage because they just don’t want it. Could be; like I don’t have a place on a lake in New Hampshire because I ‘just don’t want it’. Actually, that’s not true; I also have three college educations to pay for, a mortgage and individual health insurance, so I ‘want’ the lake house, but I can’t afford it.
Here’s a passage from the American Enterprise Institute’s magazine on the issue:
“more than 17.6 million uninsured live in households earning more than $50,000 a year, and household income is above $75,000 for more than 9 million uninsured. However, those numbers overstate the actual income available to those uninsured individuals, because household units are defined more broadly than are insurance purchasing units. As the composition of “households” changes, their income isn’t the same as family income available for spending on health insurance. The rising cost of coverage remains the primary barrier to insurance coverage for the uninsured, and in some cases, its value just may not be “worth it” [emphasis added] for those in higher income families. But a more narrow and consistent measure of the higher income uninsured is closer to 2 million, involving people with regular incomes over $50,000 who lack insurance for spells of more than a year. [emphasis added]”
My sense is that’s what’s really going on here. Poor people can’t afford coverage, and thus don’t have insurance. People of greater, but still modest means, also can’t afford health insurance, so they ‘choose’ to go without.
But most don’t ‘choose’ to be uninsured; the cost:expense equation makes that choice for them.
The question is – at what cost level would people buy coverage?
I’m going to take a shot at that tomorrow.