Austin Frakt's Reading List

"This is really two books in one. John McDonough is an insider. He was an adviser to Senator [Ted] Kennedy’s HELP committee, which was one of the two big committees in the Senate that wrote the health reform law. He was in a lot of meetings, talked to a lot of people, and tells wonderful stories about negotiations over the minutiae of the health law. It’s suspenseful and interesting to see how law, and this law in particular, is really made. There’s a lot about the politics but it also explains the policy rationale – why it was structured this way, why one side thought this and the other side thought something else. That’s the first half of the book, and it’s not a hard read. The second half goes through the law in summary fashion, through each title and then each sub-section. It explains what they’re about and why, and how much money they cost or save, in plain language. That in itself, I will admit, is pretty tedious. I’ve read the law and summaries of it, and it’s not fun. You only do it if you are looking for something. However, he intersperses long passages explaining more of the politics and policy rationale. Those chunks are easy to pick out by eye, so you can just flip through the summary of the law and go straight to the narrative. It’s just as intriguing as the first half of the book. This book is important because most people have no idea how laws are really made in the US, and what politics really means. Not the politics of campaigns but the politics of making a law, especially one as complicated and controversial as the health reform law. In the end, the message is that the health reform law we got in 2010 was the only one we could have got in 2010, or pretty close to the only one. The range of what was politically feasible was incredibly narrow. It had to satisfy so many political constraints that it almost didn’t happen. It was either that law or no law. No law is perfect. No law will satisfy everybody. My view is that the correct interpretation of what we have is not the national health reform we all deserve and want, but a good first step towards an evolutionary reform. There will need to be more. We can build on what we have. But the status quo was not and is not acceptable, and this makes some important changes. The reforms to the health insurance market were absolutely crucial and, abstracting from the law itself, relatively uncontroversial. Across the political spectrum, it would be hard to find many people who would say, “Actually, it’s a good thing that private insurers can keep people off insurance. They should be able to keep people off, they should be able to throw people off, and it should be very expensive.” In reforming the way that market functions, the law logically requires some other things that are controversial, but that principle alone is one of the best aspects. It will not have a substantial impact on most people who are currently insured. It is possible, depending on where you work, what your employer does and what your future holds, that you will be impacted. If you lose your health insurance for whatever reason, for example, there will be better options for you beginning in 2014. And there are some aspects of the law that will change features of your health insurance – some things you may like, some things you may not – but in relatively minor ways. Oh yes. It’s very expensive and very hard. It’s a difficult market because it lacks the kind of rules that are required to make it function well. Those rules are in the law now."

"This is a very long, detailed book, and it’s not all that easy for someone who is not deeply into health policy and healthcare to relate it to today. Its purpose is to describe the broad sweep of the history of healthcare in America, through to about 1980. It was published in 1982 so it’s not even that current. But it’s necessary reading for anybody who fancies themselves as a health policy wonk or expert, or a health historian, or anybody who works in healthcare. I found it fascinating, and I didn’t even know about it until relatively recently. I’ve put it on this list to remind people of its existence, because it should be more widely known and read. The parallels. He traces the development of institutions, many of which remain in positions of power as they did in the past, and have been able to amass more power. There have been some changes over the century, but many things have stayed the same. He tells stories about the politics of reform and prior reform efforts – of which there were a lot, even before 1980. You could lift so many passages from that book and people would say “Oh, you’re talking about 2009” and you’d say “No, that was 1917 or 1937”. It would be great to impress upon people that these issues of healthcare reform that we fight about so passionately today are the same issues people have been fighting about in the US for 100 years. That’s the reason to read this book. We have spent decades on these issues, and perhaps up to half of us are still not convinced that we’ve taken a reasonable step in the latest reform. Just thinking about that is stunning – the number of years we’ve gone with the level of uninsurance we have in this country, and the rate of increase in healthcare costs. They’ve been escalating faster than any other country since about 1980. Unfortunately, Starr’s book ends right when the US healthcare trajectory, in terms of spending, diverges from the rest of industrialised countries. Look at the graphs and it’s in about 1980 that the US starts taking off, and everybody else stays at a lower level. And we’re still diverging. This is partly what my next choice, Paul Starr’s most recent book Remedy and Reaction, is really about. It’s describing what he and others call the US health policy trap. That trap is that we’ve evolved to a point where most people and most voters are insured, either through an employer or Medicare. Therefore, they and the institutions that they benefit are resistant to change. It’s very hard to move the system to something that would be more sensible. Right now, the reason people cling to employer-based care is because it’s what they know. On one level, it works. Yes it’s expensive and inefficient, but it’s what they know, it seems to work for them. That’s why it’s hard to change. No. It’s widely recognised that a more rational system would sever the connection between health insurance and employment. To the extent that the debate is over policy, it’s about how to get there and under what terms. To the extent that the debate is over politics, it’s just too easy to use the spectre of change to frighten people. It creates too many distortions in the labour market. A lot of people will take and hold onto jobs for the health insurance, not because the job makes sense in terms of the work or even in terms of wages. There are many people who don’t retire because of health insurance. There are even studies that show that there is lower creation of small businesses and less entrepreneurship because of health insurance. It’s an unnecessary constraint on the labour market and on job creation, and it just doesn’t need to be that way. No, and it’s not just me. I would defy anybody to come up with it. If you could go to a world where you are unaware of the American system and then design a system, there is no way you would come up with anything like what we have here. It’s just preposterous. It doesn’t make sense on so many levels. The risk pools are chopped up, there are many inefficiencies and strange subsidisations. Nobody would do it that way. One couldn’t even imagine that it would be possible. You can’t make this stuff up."

"Yes. It’s mostly focused on the last several decades, and relatively more attention is paid as we get closer to the present, including the most recent healthcare reform effort. Quite a lot of it is on the Clinton effort as well. It’s really about more modern development of health policy in the US and the policy rationale for the 2010 health reform law. It includes much of the politics that were in McDonough’s book but not the stories, because Paul Starr wasn’t sitting in on those kinds of meetings. If you want to read one book and learn something about the policy and the politics of health reform, this is a fine choice. It has all the arguments and all the nuances. As you know, I’ve been paying a lot of attention to this. There’s almost no issue about health reform policy and politics that I haven’t read about and seen debated. What really impressed me is how on every single issue that I’m familiar with, he said all the things that I knew and was expecting, and then he’d say one more thing that I hadn’t quite assimilated yet, or I hadn’t recognised. It was a nuance or an insight that went one step beyond and blew me away. There was always a little bit more from him that I hadn’t seen anyone else put on paper. Paul Starr just puts it all together better and more completely than I’ve seen anywhere else."

"One of the perennial debates about Medicare is how much we should support the participation of private plans, and how much we should make it a public-only programme. It started as just a public health insurance programme. All the bills were paid directly by the federal government, it was a uniform national benefit and there was no choice: You’re on Medicare, everyone is in the same programme, it’s one big risk pool. Then, starting in the 1970s but increasingly in the late 90s and 2000s, private plans have participated. You can enroll in what is now called Medicare Advantage Plan, through which you get all your Medicare benefits and maybe more. You pay them a premium, they get a subsidy from the government and it’s like a private plan arm of Medicare. Also, the Medicare prescription drug programme, which includes drug-only private insurance, is entirely through private plans. Medicare does not have a public prescription drug programme. Every year in Congress, and also elsewhere, we debate: How much should these private plans be subsidised? Is it a good deal? Do they save money? Are they treating beneficiaries well? Are they just cream-skimming, ie choosing the healthiest beneficiaries and making a lot of profit off taxpayers? Conversely, is traditional Medicare – the public option – serving beneficiaries well? Is it slow to innovate? Is it inflexible? Is it wasting money? Is it not managing care well? One approach that would resolve the question of how much we should pay these private plans is to have them compete, along with traditional Medicare, for the rate of subsidy that they’re given. This kind of competition is akin to the sort that each of us would put a contractor through if we were remodeling our kitchen or having our house repainted. You would solicit bids from qualified painters or construction companies, and you would weigh the price of the bids against quality. You would probably ultimately pick a bid based largely on price. Medicare Advantage and traditional Medicare could do the same, but they don’t. You could have these plans compete, bid for how much of a subsidy they would need to provide the Medicare benefit, and then Medicare would say, “OK, we’re going to pick the lowest subsidy rate and give all plans that same amount. They can all participate, but if beneficiaries want to choose a more expensive plan then they have to pay the difference.” That’s what this book is about. It gives a lot of detail on Medicare pertaining to some of the things that we debate regularly. It gets into questions like: What really is the Medicare benefit? What is the social contract? Does the Medicare benefit have to include a public option that’s available to everyone at the same price? Or can it be a different price in different areas, depending on how plans bid and compete? Do plans have to provide access to all willing providers or can they establish provider networks, as private plans do and traditional Medicare doesn’t? It’s a political battle. Plans don’t want to compete. They’re very happy with the relatively lavish payments they receive now. No, it’s not the place to go on Medicare generally. For that, John Oberlander’s The Political Life of Medicare is a good book. That would be the place to go on the history of Medicare and why it was shaped the way it was – the political bargaining leading up to it, and its history since. But it was published in 2003, so it doesn’t get into the Prescription Drug Programme which was passed in 2003 and enacted in 2006."

"I suggested this book because it raises some very important points about healthcare spending in the US. We spend a lot, and it’s generally believed there is a lot of waste. There are a lot of things we could cut, or ways we could save on spending that wouldn’t harm health. Looking internationally suggests that this must be true. But even so, Cutler’s argument is that we do receive great value from our spending on healthcare. He argues that even if you look at just a few health conditions – heart conditions, mental health, low-birth-weight infants – and work out the value that we’ve received from improvements in healthcare, quality of life and prolonged life, it is greater than what we spend. He says we get high value for all this money. That doesn’t mean we shouldn’t spend less and still get that high value, it just means that we’re still making, on average, investments that are worth it. If one is in favour of cutting health spending because there’s so much waste and so forth, then the next easy place to go – which is often where we do go – is to make very crude cuts across the board. To just cut Medicare, for example. That runs the risk of throwing out the baby with the bathwater. The book suggests that we do need to get smarter about how we make our health system more efficient. You can cut spending in a way that could be harmful to health or, in principle, you can cut it in a way that isn’t. We know ways to cut that aren’t going to harm health, we know some things that we shouldn’t be paying for. But we don’t know as much as we ought to. Things are very bad if you don’t have insurance. If you become ill, then not only will you suffer from that illness but you will also suffer from bill collectors. They don’t care – it’s not their job to care how badly you may be doing. They will harass you and repossess what they can. Eventually you’ll have nothing. You will be bankrupt. This does happen to people in the US. The reason it happens is that the safety net has a lot of holes in it. You mention Medicaid, which is supposed to be the programme for the poor. Ultimately, if things are bad enough, if you spend all your money and have no job or income, then you might be able to go on Medicaid. But actually, it doesn’t even cover all the poor. You have to be poor and you have to fall into one of a number of qualifying categories, like being pregnant, elderly, blind or disabled. Beyond those federally mandated categories, individual states have the discretion to cover more. Many of them don’t. Or if they do, they only cover them if your income is extremely low, a fraction of the poverty level. So it is possible in the US to be horribly poor and not have access to any health insurance programme. You’re at the mercy of charity care. And there is charity care. You can also walk into an emergency room and if it’s an emergency they will treat you. But that is no way to have a healthy, satisfying life. Yes. They will try to collect payment but eventually, if you can’t pay, they can’t take what you don’t have. Many states have uncompensated care pools, so they’ll try and collect that or just write it off. Sometimes hospitals don’t get reimbursement for the care they provide. There’s a lot of variation. In urban areas, there will tend to be better access and support for such things, because of population density and infrastructure. In rural areas, obviously there’s a lot less. And even though you may have access, it is constrained; you may not have access to many specialists, and you’re at the mercy of whatever quality those programmes are. There are many studies showing that your access is greatly restricted, and you’re not getting regular preventative care. Oh yes. Many doctors don’t take Medicaid. It’s not in any way a requirement and reimbursements are low. That’s widely misunderstood, and is one thing that the health reform law will change. As of 2014, anyone with income within 133% of the poverty level is eligible for Medicaid, independent of anything else."