I Get a Kick Out of Uwe

By Greg Scandlen

Princeton professor Uwe Reinhardt is a really funny guy. Really. If you have ever caught one of his talks, he will leave you in stitches. Not the medical kind of stitches, but the other kind usually associated once-smoky nightclubs and a lone comic on the stage.

But he tops all of his previous comedic efforts in a single letter to USAToday. He begins by trying to rebut a recent op-ed:

One of the more mindless clichés trotted out in the health care debate is that “one size doesn’t fit all.” In seeking to rebut USA TODAY’s fine editorial on “RyanCare,” a proposal by Rep. Paul Ryan, Ed Haislmaier trots it out once again. He does this in a country whose entrepreneurs discovered a century ago that there are huge economies of scale in the idea that one size does indeed fit all to meet common human needs.

But, then his comic gifts kick in. He just can’t help himself:

KFC, McDonald’s, Burger King, Holiday Inn, Marriott Hotels and many more now global companies all base their business models on the idea that one size fits all. And Wal-Mart might soon teach us that the idea also applies to medical clinics, and someone might show it for hospitals as well.

Wal-Mart as an example of how “one-size fits all?” I know a lot of my liberal brethren would rather be caught dead than be seen inside a Wal-Mart, and there may not be any in the rarified environs of Princeton, New Jersey, but c’mon – are there no photographs in Princeton? Every Wal-Mart I’ve ever seen includes acre upon acre of variety.

And, in case someone doesn’t find anything to his liking in the Wal-Mart, there are thousands of other stores from Dollar General to Saks Fifth Avenue to choose from.

Now, my friend Uwe may prefer the old Soviet-style GUM Department stores for his retail needs, but is that really the model he wants to apply to health care? I can’t wait to hear the reaction once all the Princeton professorate is required to shop only at Wal-Mart.

Fortunately, right below Uwe’s letter is one from a Frank Zoz of Waterloo, Iowa, that is not nearly as funny, but might actually work –

I am absolutely convinced that health care costs will never be brought into control until people are spending their own money, or at least think they are. “RyanCare” changes to Medicare seem to be a step in that direction.

I think the ultimate solution is Health Savings Accounts (HSA) for everyone, with which they pay for insurance premiums and health care. The question is how these accounts are funded.

I am a John Deere retiree and on Medicare. John Deere provides insurance for its retirees. It provides money into an account (similiar to an HSA) from which we can pay for insurance and medical bills. My wife and I happen to have a Medicare Advantage plan and are very happy with it. The HSA covers our premiums and any significant additional costs. We have leftover funds that can be used for emergencies. If the government must be in health care, the best thing it could do is help fund HSAs for everyone.

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8 Responses

  1. I’m probably missing something here, so please correct my misunderstandings. The last letter to the editor suggests that a way to reform Medicare costs is to follow the John Deere model (which is run by UnitedHealth Group). It’s an MA plan with an HSA. My two concerns:

    1) MA plans cost the government more per capita than traditional Medicare (if I remember correctly, ins co’s are demanding approx 125% of traditional Mesicare costs in order the make these plans profitable). I’m not sure how this curbs government costs.

    2) The MA plans use copays to help cover costs. These mask the true cost of care, and thus do not provide correct incentives.

    I don’t see how this combination will reduce Medicare costs. What am I missing?

  2. The gentleman from Iowa has an HSA and Medicare Advantage. He likes it. The government wants to do away with Medicare Advantage, leaving people in Accountable Care Organizations which are basically undefined and have an incentive to skimp on care.

    As for Medicare Advantage costing more–the way that the government determines Medicare Advantage is determined by statute and is not the way in which the normal person would measure relative cost. Claims that MA are more expensive should be taken with a grain of salt.

    • I have nothing against MA plans, and his desire to keep it wasnt really my point. The letter writer was making a case that MA plus an HSA is a path towards cost containment. I don’t see how this is the case. I’m happy to take claims of MA cost with a grain of salt, but there’s no indication that MA will lead to lower Medicare costs overall (you could argue they will lead to better care). Pairing a capitated plan, that used copays, with an HSA seems to defeat the nominal purpose of HSA’s and HDHP’s, which is cost containment through health care consumerism.

      That said, I am definitely just asking the question, and happy to be shown that I’m misunderstanding the issue.

      Thanks.

  3. I’m not sure the gentleman is saying that the current MA/HSA plan is what everyone should do, just that this kind of approach is the only way to control costs and ensure access.

    I wrote a paper with Dr. Phil Gausewitz some time ago about one way to reform Medicare. It would take all the money currenty being spent on Parts A and B and convert it into a single deductible, paying everything above that level at 100% and allowing HSAs below that level. People could use what they currently spend on MediGap to fill the deductible. Lower-income people could be subsidized for their deductible.

    The important thing is that this is the kind of approach that we should be looking at.

    Greg

  4. “KFC, McDonald’s, Burger King”. You’d think that the diversity inherent in those few words would tell Uwe that one size doesn’t fit all.

  5. I’m no fan of MA plans, but, to Andy’s question, MA plans cost more on a per-procedure basis (your 125%) by definition. The MA carriers aren’t allowed to impose medicare’s lower fee-for-service reimbursement rates. But there is no evidence that the population’s total health costs are higher (or that their quality is lower).

    I think the John Deere program is much closer to Ryan’s proposal than to the current HSA. Deere provides funds into an HRA that can be used to pay MA premiums, buy medigap, Pard D, and/or pay out-of-pocket costs under regular medicare. The amount Deere puts in is a function of years of service, etc. This is essentially the ‘voucher’ Ryan proposes.

    To be fair, the reason MA, and for that matter Pard D, works to the extent it does is that it is not an unfettered market. Government restricts what plan designs can be offered, requires guaranteed issue, egulates profits, etc. However, government allows multiple competitors to offer the product and compete on factors such as service, that are important to beneficiaries. Again, more or less what Ryan proposes.

  6. How easily my friend Greg is amused! I must write more to cheer him up.

    While outwardly very somber, however, Greg, too has a comic streak in him, as we see him busily shilling for the members of the Council on Affordable Health Insurance with which, I believe, Greg has had a close association.

    These are the folks who openly admit in their policy briefs that “In most states, individual coverage faces a loss ratio between 55 and 65 percent” (http://www.cahi.org/cahi_contents/resources/pdf/n141lossratio.pdf).

    I find something comical about Greg working so passionately for folks who burn up to 45 cents of every hard earned premium dollar on marketing, administration and profits and only 55 cents on health care proper – although tragic-comic might be a better word.

    Frankly, I prefer BCBS Alabama to that.

    Cheers,

    Uwe

    • Thank you, Uwe, I look forward to your ext open mic night. But, alas, not if you charge for admission. You see, if I were “shilling” for CAHI, wouldn’t they have to pay me a shilling? Or better yet a pound sterling? As it is, I have received nary a ha’penny from them since 1995. That is why I actually do my shopping at Wal-Mart. But I do appreciate your quest for sinister motives.

      GS

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