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Wednesday, March 05, 2008

JAMA article: The "Shared Responsibility" for paying for health care is a myth

Who pays for health care? The authors of a current JAMA commentary maintain that the notion that employers ,government and individuals all share in the payment of health care is a myth and a harmful one because the false notion that they are spending someone else's money reduces the incentive for cost control. The authors are Ezekiel J. Emanuel,director of clinical bioethics at the NIH, and Victor R. Fuchs , an economist from Stanford with a long track record of publications regarding financing of health care.

They argue that the employers who provide health insurance do not pay the cost or as they put it "bear the ultimate cost" Health insurance is part of the employee compensation package i.e. wages in another form. What you get in health insurance you don't get in your pay check. They quote another economist who concluded that "the cost of health insurance are fully shifted to wages." This seems to make sense and yet we are also told ( by the same authors in this 2005 reference) that large companies , such as notably GM, have a very large burden of health care costs and that is a major reason for their economic woes. So which is it?

Similarly the "burden of government provided health coverage falls on the average citizen". This is , they argue, because the government get its money through taxation, or borrowing from future taxpayers of reducing other state services. They fail to mention financing through the printing press creation of inflation.

Victor Fuchs and Ezekial Emanuel advocate a "Universal Health Care voucher" system financed by a value-added tax and eliminating employer insurance. Dr. Fuchs views on health care financing can be found in this article in the Annals of Internal Medicine and here is a brief NPR video interview of Dr. Emanuel in which he describes his voucher program.

I would agree that in the aggregate whatever the government does is paid for by taxpayers one way or another. However, everyone in the country does not pay-as some folks pay no taxes. Further, what an individual receives in terms of health care may be significantly greater than that person paid out to the government. For some, health care is actually paid for by using "some one else's money".There is certainly some cost shifting going on and for others there may well be a illusion that health care is paid for by others.

The Fuchs-Emanuel voucher proposal has been talked about for several years now and it should be distinguished from a single payer plan which it is not and which they believe would not work well in the U.S. Although the "universal" part should appeal to Democrats and the "voucher" part should appeal to Republicans, I have not seen that either has enthusiastically embraced it. In fact, Clinton talks about shared responsibility with all the players contributing the common goal. So why has not this proposal received more support and I am not sure that it should. I am having trouble implementing my "follow-the-money" rule to explain the opposition and wonder what take DrRich at Covert Rationing Blog has on this.


Anonymous said...

Dr. Gaulte,

I am not ignoring you. I am thinking about how to answer you on this complex but important topic. I'm flattered that you would be interested in my thoughts here. While I may not be up to the task, my plan is to post on this early next week, and I'll let you know when I've done that.


james gaulte said...

Good.I'll have some mulling over planned for the weekend as well.

Anonymous said...

Why would not the insurance companies who run the plans not do most everything they do now to ration care?