Repackaging Bad Ideas in Health Care

I fail to see why Ezra Klein is so excited about a proposal by Bobby Jindal to move Medicaid recipients in Louisiana into managed care plans. This is not anything new or innovative, and it is not a positive step towards health care reform. Many states have already adopted similar plans for Medicaid and it has hardly been a solution to the health care crisis.

This is primarily a way to change how the health care is paid for those already covered by the state’s Medicaid plan. There is some benefit in including more low-income individuals, but it is hardly a good model for health care reform for the entire population. The goal should be for more people to have real coverage, not to throw more people into the inadequate Medicaid systems. There is a tremendous difference between Medicare for All and Medicaid for More.

I do not share Ezra’s fondness for either the British model for universal health care or for capitated medical care. This HMO model was tried (and to some degree still exists) for employer-paid health care and was a dismal failure. (Incidentally, not that the person behind it necessarily means a particular plan is bad, but it was Richard Nixon who first began pushing this idea when he was president).

While there are undoubtedly problems with fee for service health care, the alternative turned out to be far worse, leading to the desire of most consumers to avoid HMO’s which are run in this manner. Capitated systems, in which doctors receive a fixed amount of money per patient (often with adjustments for factors such as age and health status), risk having doctors forced to provide inadequate care in order to get by on what is paid. Doctors are given financial incentive to see patients as little as possible, do as few tests as they can get away with, and treat as little as possible.

Jindal’s plan would include financial incentives if physicians met certain performance criteria. Such plans have not worked out very well so far. Frequently the burden of reporting data to receive financial incentives has been greater than the value of the incentives offered. It comes down to whether it is worth paying employees to submit more paperwork for a small amount of additional money.

While electronic medical records might change this in the future, at present the ability to monitor and reward based upon performance is quite primitive. Those who come out ahead in such systems are not those who really provide quality care but those who can best game the system by having computerized systems in place to report the data being monitored. This leads to problems such as the Veterans Administration, which has spent a lot of money on computerization, but often fails to spend the money to adhere to current standards of medical care. This leads to them looking good on paper, and unfortunately fooling some liberal publications based upon their ability to report data, despite the deficiencies in the care they provide.

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1 Comment

  1. 1
    John Freeland says:

    If it hasn’t already, that mug belongs on the cover of Mad Magazine.

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