LTC Bullet:  First Do No Harm 

Tuesday, April 24, 2007 

Seattle-- 

LTC Comment:  How does the first rule of medical ethics apply to health and LTC policy?  After the ***news.*** 

*** THE BOOMER CENTURY.  Remember the two-hour Ken Dychtwald PBS special we've mentioned a couple times?  Now you can get a DVD copy of the program for $10 shipping and handling.  Simply contact Robyn Hamilton at Ken's company Age Wave, 415-705-8015 or rhamilton@agewave.com.  She'll send you an order form and instructions.  Otherwise:  check the PBS website for future air dates:  http://www.pbs.org/boomercentury/airdates.html.  One way or the other, don't miss this entertaining and educational program. *** 

*** TRUSTEES' REPORT.  "Social Security, Medicare Get a Year's Reprieve http://www.fee.org/in_brief/default.asp?id=1258, 4/24/2007, "The trustees who oversee Social Security and Medicare issued new warnings yesterday that the two programs are becoming unaffordable but pushed back slightly their predictions of when the crunch will hit." (Washington Post, Tuesday) http://www.washingtonpost.com/wp-dyn/content/article/2007/04/23/AR2007042301963.html.  If your kids were as irresponsible as politicians, you'd ground them.  FEE Timely Classic:  "A College Fund on the Social Security Model" by William B. Conerly http://www.fee.org/publications/the-freeman/article.asp?aid=4619.  Source:  FEE In-Brief, 4/24/7  

The following article contains links to the full text of the Social Security Trustees' 2007 report, to a summary and to Treasury Secretary Hank Paulson's comments on the report. 

"The U.S. Social Security trust funds are expected to be exhausted by 2041, a year later than last year's estimate, while the Medicare trust fund is projected to go broke by 2019, also one year later than 2006 projections, according to the latest annual report from the funds' trustees."  Source:  Benton Ives-Halperin, "Funding of Social Security Is Seen as Slightly Less Dire," WSJ Online, April 23, 2007, http://online.wsj.com/article/SB117733366955278937.html. *** 

*** BOOMER BOOMERANG.  The idea that younger workers will meekly bear the huge tax increases needed to pay all boomers' promised benefits is delusional, says Robert Samuelson in the Washington Post at http://www.washingtonpost.com/wp-dyn/content/article/2007/04/10/AR2007041001311.html.  Source:  NCPA: Daily Policy Digest 04-11-2007. ***  

LTC BULLET:  FIRST DO NO HARM 

LTC Comment:  My health policy hero is John Goodman, Founder, President and CEO of the National Center for Policy Analysis in Dallas. 

His 1992 book (with Gerald Musgrave) Patient Power was my introduction to acute care health policy and I've often applied Goodman's ideas and principles to my own analysis of long-term care policy. 

Today I want to share with you a short piece Dr. Goodman published recently that I think holds the key to both health policy and long-term care policy reform. 

First do no harm.  In other words:  don't let public policy crowd out personal responsibility and private insurance.  

-------------------- 

Reprinted with permission from "Health Alert - Reform, April 2, 2007," on the John Goodman Blog at http://www.john-goodman-blog.com/

Health Alert  

Applying the Economic Way of Thinking to Health Policy 

Subject:  Reform 

I am probably the only person you know (or are likely to meet) who thinks all the major problems in our healthcare system are caused by bad government policies. 

If you want to see the case for this position, look at the article I wrote for the Journal of Legal Medicine [see below for a link to this article].  In it, I ask readers to perform a thought experiment: identify the major ways in which government policies create perverse incentives to do socially bad things.  Then imagine replacing those harmful policies - not with good polices, but with policies that are completely neutral, I call this the "do no harm" approach to public policy. 

Here's how it works: 

Distortion Number 1: Our system of government funded (and mandated) free care encourages people to forego insurance and rely on the charity of others. 

Neutrality Solution: Let government offer just as much financial incentive for people to privately insure as the expected free-care spending under the current system, making private insurance just as financially attractive as reliance on charity care. 

Distortion Number 2: The existence of government funded insurance (Medicaid and SCHIP) encourages people to drop their private coverage and become insured at taxpayer expense. 

Neutrality Solution: Let people apply their Medicaid subsidy to private insurance, making the two types of insurance equally attractive from a financial point of view. 

Distortion Number 3: While the current system provides lavish tax subsidies for employer-specific insurance, it provides very little tax relief for people who purchase individually owned, personal and portable insurance. 

Neutrality Solution: Create a level playing field for all forms of insurance under tax law. 

Distortion Number 4: Although there is in principle no limit to the amount of tax subsidy available for spending on third-party insurance, the tax relief for self-insurance (though a savings account) is very limited and tightly constrained. 

Neutrality Solution: Put third-party insurance and individual self-insurance on a level playing field under the tax law. 

Distortion Number 5: Largely in response to the problems created by all of the above, government has essentially outlawed a real market for risk - encouraging individuals to be uninsured while healthy, secure in the knowledge that insurance will be available at premiums totally unrelated to the expected cost of their care if they get sick. 

Neutrality Solution: Like the market for life insurance, allow the market to price and manage risk. 

Notice that in adopting these solutions we are not trying to do good.  We are mainly trying to avoid doing harm.  The result: a system so completely different from our own, it would hardly be recognizable. (And there are many more harmful distortions yet to be removed!) 

Link to article:  

"Applying the 'Do No Harm' Principle to Health Policy" by John Goodman:]   http://cdhc.ncpa.org/files/20070326JCG.pdf    

Comment on this Health Alert: 

http://www.john-goodman-blog.com/  

Cheers, 

John