Since I previously read the GAO report on SCHIP, I found the allegations made by Factcheck in this article to be fascinating. So I decided to read the GAO report again and see if I agree with their assessment. Maybe I missed something. Let me start out with the first false claim that FactCheck makes in the second paragraph.

He said it “would result” in covering children in families with incomes up to $83,000 per year, which isn’t true. The Urban Institute estimated that 70 percent of children who would gain coverage are in families earning half that amount, and the bill contains no requirement for setting income eligibility caps any higher than what’s in the current law.

This is an interesting rebuttal to Bush’s claim that the SCHIP program will result in covering children up to $83,000. They are saying that the administrators of the SCHIP program are not “required” to expand the program the coverage limits. The point about the Urban Institute estimate is interesting but not relevant to the discussion of expanding the income coverage limits. The GAO report does show that the SCHIP program has a history of expanding coverage beyond the recommended levels and until recently the SCHIP program had a surplus of funds available. The GAO also says that SCHIP administrators allowed some states to spend funds than they were not allocated. This resulted in the situation as described in the second paragraph of the GAO report.

some states have consistently spent more than their allotments, …

Since the present spending trends threaten to exceed available funding, the option to further expand the coverage limits at this time is a moot point. Despite the funding problems this did not stop several states from attempting to expand the coverage further. Several states have a history of expanding coverage limits and they have shown the motive to further expand the coverage limits. The only ingredient they are missing is the opportunity. It is reasonable to assume that once the funding is attained, New Jersey or New York will quickly ask for higher coverage limits and the SCHIP program will start covering children in families making up to $83,000. This is not a big step for New Jersey since they allow families with incomes of $72,275 already. Since funding appears the limiting factor to expanded coverage, I think FactCheck is stretching the truth more than George Bush. In fact I would be quite comfortable in arguing that every politician fully expects that the coverage limits will be expanded once the expanded funding is passed.

The second false claim that FactCheck points out is about the differences between “poor” and “low income”. I find that the quibbling over this statement to be particularly annoying. I regularly volunteer with Habitat for Humanity and out of necessity I know the difference between poverty and low income definitions. The importance of this subtle distinction is something only politicians can love. This debate on the semantics of poverty classifications does serve the purpose of not talking directly about whether the SCHIP program has lost its sense of direction. Is improved health care for children still an important issue for SCHIP? Is it necessary that a government health insurance program have a defined sense of direction? How bad does a government health care program have to be before we say that we need something better rather than just larger? These questions are the proverbial elephants in the room and are not lost to the folks who wrote the GAO report. If you look at the GAO report you will find:

1. In Table 5 the present SCHIP program provides coverage for a large number of adults. Several states cover more adults than children. One of the most common scenarios I see in working with low income people is a single mom with several children. Huh, how does this happen?
2. In Figure 2 of the GAO report you can see that Florida and Texas have the largest percentage of uninsured children. Since these states are two of the more populous states, there are a lot of uninsured children. How is the increased funding supposed to help these states? I don’t ever hear those states campaigning to increase the income limits. Do they have problems with children’s health care that are significantly different than other states?
3. 87% of the people enrolled in the Minnesota SCHIP program are adults. Minnesota also has one of the lowest rates of uninsured children. What does additional SCHIP funding mean for Minnesota?  If children’s health care problems are the same in every state, maybe we can get Texas and Florida to out source their children’s health care to Minnesota.
4. At the end of the report, the GAO questions the “financial sustainability of public commitments”. In laymen’s terms, the GAO is asking if it is good public policy to allocate federal funds to the states who consistently overspent their allocation? Is this good government? They also ask whether the federal government is responsible for the states who have over-promised future health services? Is this the model for a sustainable universal health care system?

Generally I find FactCheck to be a welcome addition to the debate on a variety of subjects but this was a weak piece. It is just that I expected to see more convincing evidence of false claims from the fact checkers.

FactCheck.org: Bush’s False Claims About Children’s Health Insurance

“Nobody is talking about a free-market approach in health care. The spectrum today is between fascism and Communism.”
–John Graham

The Pacific Research Institute’s John Graham offered this glum assessment during a brief chat recently when he came to Washington, DC for a meeting. He points out that the focus of health care policy is on how to get to “universal coverage.” In this context, the conservative approach involves mandatory health insurance. The liberal approach involves expanding government coverage. Hence, it is either fascism or Communism.

TCS Daily – The Universal Distraction

An interesting article that goes to the heart of the universal coverage debate but it ignores the biggest health care problem, rising health care costs. “Universal coverage” and mandatory health insurance are health care supply issues and I just do not see these issues as the biggest problem. It is my belief that we will not make progress toward better health care until we get smarter about managing the demand for these programs. From an economic perspective the biggest problem is that there is too much demand for health care services. There are a variety of easy to see symptoms such as obesity and drugs. It is easy to be critical of something as simple as obesity but it is at the core of several of our health problems and we are doing little to control it. Then there are the ads for drugs on television. We are constantly being bombarded with ads to fix symptoms I never knew were a problem. It seems we have drugs for everything. Despite Roger Moore’s allegations that the health insurance industry is at the root of the health care problem, “someone” has to restrict the health care demand and tell the patient/doctor there is a better way. Sixteen years ago when my son was born I was amazed at how clueless doctors were at billing and understanding the health care cost issues. Doctors have become more knowledgeable about cost issues over the years but they still have a long way to go. Although I do not think the doctors and the health insurance industry has done a particularly good job at managing the health care cost issues, I have slightly more faith in their existing partnership than a partnership with a newly created government bureaucracy.

Recently the National Review and the Wall Street Journal have been trying to rouse support against the Democratic plan to expand the State Children’s Health Insurance Program(SCHIP). It is widely viewed that that Democrats view the expansion of SCHIP as the down payment for universal healthcare. Their plan is to start with a bad “universal” health care system and then when it fails replace it with the health care system they really wanted. The original objective of SCHIP was to help insure children and their parents who earn too much for Medicaid and too little for private insurance. It is pretty obvious that the program achieved as much success as they are ever going to attain with children’s healthcare some years ago. From the Congressional report it is obvious that some states, Florida and Texas, have persistent problems with children’s healthcare despite the subsidy. Lower health insurance costs is just one part of the children’s health care issue. Other states without serious children’s health care issues have taken advantage of the program to expand the program to cover adults without children and to provide insurance children of middle class parents. This is not what Congress intended but the result is not surprising. New Jersey has a health care crisis due to their own bungling so it is not surprising that they are leading the pack in this area. A government health care program can be cheaper for a middle class family due to the subsidy but I doubt it is better or more efficient than private insurance alternatives. Expanding SCHIP has all of the characteristics of a program that is spirally out of control, more service from an inefficient program with ambiguous objectives. I view the SCHIP program and most of the health care reforms a various forms of a “free lunch”. Most of the programs promote their service and down play their financial oversight. Universal health care attempts at the state level have failed because they are unable or unwilling to control health care costs. Inevitably the state programs fail because they cost more for less service and are widely viewed as a poor way to transfer wealth from one group of people to another. Despite the budget failures of universal health care at the state level, I doubt that Congress will ever get rid of a health care system even if it is inefficient and costs more money than expected. SCHIP is no longer about children’s health care.

With the recent bridge collapse in Minnesota it is not hard to see the coming budget conflict. Assuming that the war in Iraq will be winding down in the next year or so, the next budget conflict will be between health care subsidies and infrastructure repairs. The Defense Department budget will gradually decline to historic norms while health care subsidies and infrastructure earmarks duke it out for their slice of the budget pie. Let the games begin!

Yesterday I decided to do a little research on the State Children’s Health Insurance Program(SCHIP). The media is not much help in this area but the testimony before the Senate Committee of Finance was pretty informative. You can read the testimony here. The program is in the news because it is up for reauthorization. Some presidential candidates want to expand the program but there are some fundamental questions about whether the program is working as intended. Eighteen states are projected to have a funding shortfall. The three most common characteristics of the shortfall states is that they include a Medicaid component, they cover a higher percentage of adults, and they have a broader eligibility range. The states that have opted to use Medicaid to provide children’s health insurance have higher costs than the states with a separate program. As of 2005 the state programs are not allowed to add non-pregnant adults to the program. It is surprising to see how many adults are in the SCHIP program. Several states have more adults than children in their program. The sad part is that the availability of this program does not appear to have made much of an impact the two states, Texas and Florida, who have the highest percentage of uninsured children. Health insurance availability is just a part of the children’s health care problem.

I did find an interesting problem with the eligibility range that could make the SCHIP program a little less political. The SCHIP program eligibility is defined as twice the federal poverty guideline(FPL) although several states use a much higher multiple. At first glance the states that use the higher multiple look like they are taking advantage of the system. That got me to thinking so I did a little more research and then I cranked some numbers. The problem is pretty obvious. The federal poverty guideline is the same for the 48 states excluding Hawaii and Alaska. Hawaii and Alaska have their own poverty guidelines. Using a single poverty guideline for the remaining 48 states is a pretty crude tool to estimate a family’s need for assistance. It is difficult to understand the rationale for using the same poverty level in New Jersey as in Mississippi. On the other hand some of the states look like they are targeting a different and larger population segment than the legislation intended. My solution is pretty simple and is modeled after the practices we use at Habitat. Create a new set of income ranges based on a percentage of the local median income. As an example a two person family could earn up 62% of the local median income. That number should be pretty close to the median of the current plans. Like the present system we could have a higher percentage for the families with more children. This proposal is much easier for the average person to understand and a little harder to mangle by the media and political candidates. This does not solve the problems the SCHIP programs has with too many adults in its program and its inability to lower the percentage of uninsured children in states like Texas and Florida. It is just a start in the right direction of better transparency, lower abuse, and better focus on children’s health care.

Filmmaker Stuart Browning has a response to Michael Moore’s Sicko explaining who the insured are in America–for those of you who prefer to read a transcript rather than watch the short film, go here.

Who are the Uninsured in America?

Here are some of the more interesting statistical highlights on this complex problem as quoted in the transcript. The media and our politicians talk about how it is a shame that United States has 45 million uninsured and how simple it should be to provide universal health care. On the farm we have a saying, “You can lead a horse to water but you can’t make them drink.”

1. “According to the US Census Bureau, 17 million of those without health insurance live in households having over $50,000 in annual income. That’s 38% of the uninsured in America.(2)”
2. “In fact, 9 million – 20% of the uninsured – reside in households pulling down more than $75K a year. (3)”
3. “Over 18 million of the uninsured are people between the ages of 18 and 34. (4) They spend more than four times as much on alcohol, tobacco, entertainment and dining out as they do for out-of-pocket spending on health care.(5) They represent 40% of the uninsured in America.”
4. “14 million people without health insurance are eligible for government health care programs like Medicaid and S-CHIP but choose not to enroll. (7) They represent %31 – nearly one third – of the uninsured in America.”
5. “So, how many are truly uninsured? Around eight million. Just 18% of the 45 million that we hear about so often. (11) “

(2007-03-05) ”” Democrat presidential contender Sen. Hillary Clinton today decried the allegedly poor conditions, stifling bureaucracy and negligent care at Walter Reed Army Medical Center and throughout the VA healthcare system, but added, “Just think how bad it would be if it weren’t a government run system.”

As military patients and their spouses testified before a Senate panel about vermin-infested, moldy rooms, neglect and miles of red tape, Sen. Clinton told reporters, “This crisis serves only to highlight our desperate need for a tax-funded, government-managed universal healthcare system for all Americans.”

“When I’m president,” she said, “I’ll give the average American the same excellent quality of care we now provide for our nation’s heroes…but without the rats, mold and bureaucracy. I’ll sign legislation outlawing that kind of inefficiency, mismanagement and public employee apathy.”

Link to Walter Reed Highlights Need for Universal Healthcare

It was a natural pick for Scrappleface to link Universal Healthcare to the VA healthcare system and lampoon them. It is a funny piece but I still maintain a modestly good approval of the military healthcare system. My father is retired military and one of his retiree benefits is military healthcare. Both of my parents are over seventy years old and use the military system frequently. They have their complaints. Appointments with specialists can be difficult to get for the retirees. Sometimes the appointments get outsourced to the private sector. There is a symbiotic relationship between military healthcare and the private sector. The military is more than willing to pay for the education of a doctor if they can get a few years of service. I am not sure how this system is supposed to work if we have a dominant Universal healthcare system and a diminished private sector. The lure of the good life has been the hope of many a person to endure the hardships of becoming a doctor. I believe Universal Healthcare will have the same doctor issues as military healthcare. Without special enticements to doctors it is likely that Universal Healthcare will reduce the supply of doctors to the military healthcare system, the Universal healthcare system, and the private sector.

Once the government is in charge, will doctors view their loss of autonomy over their practices as reason to turn compassion over the government? I think so. It is human nature to work for an incentive of some kind and to feel that one has some kind of autonomy over one’s work–that is why capitalism is the only system that works, it allows people to reap the rewards of their own work and rewards those who are better than the competition. To completely take the market out of healthcare allows mediocrity to flourish. Can we really afford to do that with people’s lives?

Source: Dr. Helen: Outsourcing Compassion in Health Care?