Correspondence

Reforming Our Health Care System

N Engl J Med 1993; 329:806-808September 9, 1993

Article

To the Editor:

Why doesn't Dr. Angell (June 17 issue)1 come out and say that we are going to have to deny care? It is acceptable, perhaps, to deny care when it is not needed, but the discussion of this should be public and not hidden under criticisms of the health care system and things over which it has no control. A global budget means rationing and should be discussed as rationing. I do not know how you can have competition on the basis of quality, because measuring quality is not a simple matter, and to do this for every provider physician in the United States is an expensive and massive task that will keep many bureaucrats happily employed.

Jerome K. Freedman, M.D.
Hospital of St. Raphael, New Haven, CT 06511

1 References

1
Angell M. How much will health care reform cost? N Engl J Med 1993;328:1778-1779
Full Text | Web of Science | Medline

To the Editor:

I was disappointed with the simplistic analysis by Dr. Angell that obscures so many countervailing facts. The reference to a “Canadian-style” system conveniently leaves out the negatives, such as inflation of medical costs equal to our own, waiting lists and use of the United States as a “relief valve,” higher utilization rates, and no native medical-technology industry to speak of. There are no incentives in the Canadian system for continuous quality improvement or maximization of system productivity.

The managed competition model, on the other hand, entails a fundamental restructuring of the marketplace so that organized systems of care will compete on the basis of quality, service, and price. It's not that market forces don't work in health care; they have not been allowed to operate. A single-payer model would freeze the status quo of health care organization and delivery into place, making them unable to evolve into the health care systems of the future. The primary control in the system is budgetary, translated into price controls. Given the current infrastructure of U.S. health care, this would probably lead to more overutilization than we have now and to rapid pressure for budget increases, explicit rationing, or both. Moreover, current fragmentation of services and poor information management would be perpetuated. Dr. Angell's notion that a “global cap” would somehow result in efficient reallocation of currently wasted medical resources to unmet needs is fantastic. How could this possibly be effected?

Nick Korns, M.D., M.P.H.
73 Shagbark Rd., Glastonbury, CT 06033

To the Editor:

Given the careful past analyses in the Journal of various models for reforming health care delivery in the United States, Dr. Angell's support for a Canadian-style single-payer system is very surprising. I am concerned that she would take this position without pointing out the severe problems currently being encountered in Canada under her system of choice1-5. These problems include lack of sufficient funding, attempts to implement a “social contract” with a fixed goal by bypassing the contract with physicians that is already negotiated and signed, promises to both patients and physicians that cannot be kept, and marked and arbitrary pay cuts for physicians.

James A. Robb, M.D.
Cedars Medical Center, Miami, FL 33136

5 References

1
OMA blasts NDP cost-cutting plan for docs. Medical Times (Ontario Medical Association). Vol. 2. No. 4. May 1993:1.

2
Drastic cuts will bar new docs from practicing. Medical Times (Ontario Medical Association). Vol. 2. No. 4. May 1993:1.

3
The Ontario Expenditure Control Plan. Toronto: Ministry of Health, April 23, 1993.

4
Hospital care and the social contract: a position paper. Don Mills: Ontario Hospital Association, May 10, 1993.

5
Legislation will give government unilateral powers to ration medical services. Press release of the Ontario Medical Association, Toronto, June 15, 1993.

To the Editor:

Dr. Angell avers that the solution to the alleged problems in American medical care consists in the abolition of market forces in medicine. She wishes to replace the morality of a person's honest effort in earning the right to trade with a physician or other health care professional with that of a loaded weapon, the government, that is aimed at the head of each physician as well as each patient. She terms this a “social good.”

If Dr. Angell or any other reader wants to understand the consequences of removing the market from medicine, that person need only study the history of medicine under collectivized cultures to discover that not only does it not work, but also it cannot work. It cannot work because it is antithetical to human nature.

The market, properly defined and explained, is not evil; it is good. Although not the cause of human progress, it is the effect of humans who are left free from the coercive forces of governments and criminals. When humans are protected from physical coercion, they are left free to develop honest means to produce and trade their products, including intellectual products such as medical knowledge. When producers vie for patients' dollars, the ultimate results are high quality and the lowest possible price. If trade in medicine becomes illegal, however, as Dr. Angell advocates, the only alternatives are military-style governmental coercion or criminal gangs. After that, it does not take long to understand that the first victims of such a scam are physicians, and ultimately their patients. This, however, is what Dr. Angell considers a social good.

There is another name for the cure for medicine -- one that is usually cursed but is in fact an objective social good. It is a cure that respects the rights of each individual, regards all property as private, and forbids the initiation of physical force in all human relationships. It is a multithinker system, a multiproducer system, and a multiprovider system. It is also a moral system. Its name: laissez-faire capitalism.1

Mark A. Hurt, M.D.
St. John's Mercy Medical Center, St. Louis, MO 63141-8277

1 References

1
What is capitalism? In: Rand A. Capitalism: the unknown ideal. New York: New American Library, 1967:11-34.

To the Editor:

Dr. Angell's editorial widely misses its mark. Although it thoughtfully identifies problems facing health care today, it ignores fundamental economic principles. Although it recognizes that market forces have been inefficient in distributing and pricing health care, it proposes handcuffing those forces by minimizing price competition through government regulation and payment. Instead of making market forces more efficient, it would make them less so. This will not work.

The free-market economy is today's de facto economy. This is so through neither luck nor fate, but simply because the market is the most effective way of distributing goods and services. Price controls, such as those President Nixon tried in the 1970s, simply do not work. A single-party payer plan, with minimal competition, is simply inefficient.

The system Dr. Angell proposes exists today. It is the Veterans Affairs system. The supply of health care is regulated, and payments are equalized. The results are notoriously inefficient, with patients waiting hours and months for routine appointments. To extend this system to the whole country is simply unacceptable.

Government should reform the system so that market principles apply. Then efficiency would be rewarded, and inefficiency would be punished. Only then would costs truly be kept to a minimum.

Raul Grosz, M.D.
1380 Miami Gardens Dr., North Miami Beach, FL 33179

To the Editor:

If I were still teaching college economics, I would mark a large, exasperated “F” on any student's paper that included this sentence: “Market forces are simply not suited to distributing health care efficiently according to medical need, no matter how successful the market may be in distributing toothpaste or computers.” The truth is, if health services in America were allowed to be traded as freely as toothpaste or computers, doctors would be too busy lowering prices and competing for customers to give the naive economics of the Journal more than a passing chuckle.

Our system is “inefficient and inflationary,” but not “peculiarly” so, and not because it relies too heavily on market forces. On the contrary, our system, like those of Canada and other countries suffering from medical inflation, is excessively dominated by government. State and federal governments purchase 42 percent of all health care services in America -- nearly $400 billion in a $900 billion health economy. Medicare and Medicaid alone are projected to swell to $220 billion apiece by 1997, more than doubling in just four years.

All the price controls, global budgets, and single-payer insurance schemes in the entire statist cookbook won't do a thing to stop this massively inflationary spending spree. Forty centuries of human experience suggest that such foolish expedients will wreck the world's finest health care system.

In the words of that estimable economist P.J. O'Rourke: “If you think health care is expensive now, wait until you see what it costs when it's free.”

Dick Armey
U.S. House of Representatives, Washington, DC 20515

To the Editor:

I agree with Dr. Angell -- we need a national health care system “with a global budget, a single payer, and competition on the basis of quality and not price.” However, I disagree with her on one small point. She writes that “all health maintenance organizations have in common payment by capitation rather than through fees for service.” The Group Health Cooperative of Puget Sound is a noteworthy exception to this rule. The physicians employed by the cooperative do not receive capitation payments or fees for service. They receive a salary, and so they do not have financial incentives to either undertreat or overtreat their patients.

The cooperative has three other noteworthy features. First, its members elect the trustees who oversee the management of the cooperative. Second, at annual meetings, members may participate in setting the level of the cooperative's monthly premium. They may also decide whether megabucks should be spent on the latest forms of medical technology. Third, medical care is managed by the cooperative's primary care physicians -- i.e., they handle routine matters when they can and refer patients to specialists when such referral is medically appropriate.

The structure of the cooperative gives consumers substantial control over the quality and cost of their medical care. That structure also allows physicians to practice in an environment that minimizes the intrusion of financial considerations into medical judgments. I therefore believe that cooperative health care should be a prominent feature of any plan to reform our health care system.

Scott G. Beach
8185 Walnut Fair Circle, Fair Oaks, CA 95628

To the Editor:

Dr. Angell argues that “if we regard health care as a social good rather than a commodity, as other Western countries do, we could devise a more rational system for delivering it.” The concept of “social good” needs to be at the very foundation of a reformed system. It would establish as a moral imperative the provision of basic health care services. Currently, it is not a right. Presidential leadership must clearly articulate the broad outlines of health care reform, including the right of every American to basic services. This can be done without delay, while the details of the plan are being spelled out.

Since this is our fifth attempt at reform in this century, I am not optimistic1. In 1945, President Truman recommended national health insurance to Congress., and like the current administration, Mr. Truman spoke of the “desire of the public for health security.” After its defeat, he wrote of his disappointment in those “who promoted lobbying by medical organizations to further their own interests”2.

As the French say, “Plus ca change, plus c'est la meme chose.”

Daniel R. Longo, Sc.D.
University of Missouri-Columbia School of Medicine, Columbia, MO 65212

2 References

1
Marmor T. The history of health care reform: four times this century presidents have tried and failed to implement national health care reform. Roll Call. July 19, 1993.

2
Truman HS. Memoirs. Garden City, N.Y.: Doubleday, 1955.

Author/Editor Response

Dr. Angell replies:

Contrary to the contention of Dr. Freedman, rationing of medically justified services is not a necessary feature of a global budget. Our present wasteful, open-ended system is much more likely to bankrupt itself and lead to draconian rationing than is an efficient, adequately funded, closed system.

Canada's system is not without problems, as Drs. Korns and Robb point out, but it has achieved important goals that still elude us, including basic coverage for everyone, low administrative costs, and no third-party interference with the practice of medicine. Unlike the U.S. system, the Canadian system enjoys the strong support of the public, as well as more support from its doctors than in the United States1.

Elsewhere in this issue of the Journal, Dr. Morse2 draws an analogy between the Canadian system and Medicaid, but there are important differences. Medicaid applies only to the poor, a politically powerless group. Services are mandated by the federal government, but the states determine eligibility and funding, which they may severely restrict. Medicare is a better analogy. It applies to everyone who lives long enough, just as the Canadian system applies to everyone. Thus, everyone has an interest in making it work. Medicare's administration is far more efficient than that of the private insurance sector, and the system is relatively popular with the population it serves, as evidenced by the fact that the elderly strongly resist any proposals to fold Medicare into a larger system.

Dr. Hurt resurrects Ayn Rand's libertarian capitalism, which is totally inappropriate for health care. What would he wish for people who are both poor and sick? Furthermore, he forgets that society grants physicians a monopoly for their services and subsidizes their training and the research they depend on. Physicians owe something to society in return.

Korns, Grosz, and Congressman Armey also celebrate the market. But how would a market explain the fact that medical costs rise as the number of providers grows, not the reverse? And why is our overall system, the most market-driven in the world, so expensive? The fact is that markets naturally expand, yet we want the health “market” to contract.

Mr. Beach is correct when he says that HMOs may pay their doctors salaries (or fees for service), but the organization is paid by capitation. In my view either a fee-for-service delivery system, as in Canada, or a capitation system, as in HMOs, could work in a reformed system, but fee-for-service payment would require some way of controlling fees and volume, whereas capitation payment would require some way of preventing undertreatment.

The chief point of my editorial was that we Americans are spending so much on health care now that we could have the best system in the world if the same amount were allocated differently. Dr. Morse refers to the heavier tax burden on Canadians, but of course Americans spend much more on health care than Canadians; it simply comes out of their pockets in more ways.

Marcia Angell, M.D.

2 References

1
Blendon RJ, Donelan K, Leitman R, et al. Physicians' perspectives on caring for patients in the United States, Canada, and West Germany. N Engl J Med 1993;328:1011-1016
Full Text | Web of Science | Medline