Response of Prof. Ramon Castellblanch:

February 26, 2001
Don, Quite a debate you're running in incremental change toward universal coverage. Here's my take on how the HIAA - Families USA proposal affects it:

Given the principles by which for-profit medical insurance operates, I doubt that pushing the HIAA - Families USA proposal is a step toward universal coverage. One key principle for the success of for-profit insurers is avoiding risk. In this regard, they try to enroll mostly healthy people. This is what the industry is doing in pushing CHIP; it is targeting largely a healthy population, children.

Another principle of the industry is to be as stingy as possible when paying for the medical care. For decades, the industry has used co-pays, deductibles and other arbitrary measures to reduce its costs. Starting in the 1990's, it made wide use of "utilization review" and other "managed care" techniques. It has become so good at using these techniques, that it may have greatly undermined the value of having coverage, including CHIP coverage.

The industry has a record of abusing public health care funds. Look at Medicare HMOs. The insurance industry tended to enroll healthy seniors and used managed care techniques to impede their access to medical care. For a while, it made large profits doing so. As the government wised up and began demanding more for their money, the industry began bailing out of the program.

CHIP insurers may, eventually, go the way of Medicare HMOs. They may tend to rip off the program until the government figures it out. Then, reforms may be demanded and the industry may bail out.

I believe that health insurance must be run according to the principles of public programs to be able to expand to universal coverage. They must pool the coverage of high-risk and low-risk people like Medicare
and Medicaid. By not breaking off low-risk people, they can afford to give coverage to high-risk people.

They must be directly accountable to publicly elected officials. That is why Medicare and Medicaid maintain their benefits. Unlike for-profit insurance, it is hard for their overseers to summarily dismiss concerns
of people needing medical coverage.

Both Medicare and Medicaid have shown the capacity to expand. Medicare was able to cover people with end-stage renal disease. In the 1980's, Medicaid enrollment and benefits grew greatly.

I'm for incremental change toward universal health coverage. Expanding programs like Medicare, Medicaid, and public hospital systems would be that kind of change.

It is fine with me for folks to promote CHIP. It certainly will help some people. But, when it comes to universal coverage, I don't think that you can get there from here.

Ramon Castellblanch

February 27, 2001 - Uwe Reinhardt responds to the responses:

To my gentle critics:

I feel like a heel beating up on people like you, for whom I have a great deal of admiration and affection. I would assume that you are physicians who, in their medical school days, were members of AMSA and
who do not see themselves, as so many other American physicians do, as "the last bastion of free enterprise."

On the other hand, I have despaired of ever seeing in this country a health system that balances the dignity and freedom sought by doctors and their patients with society's desire to have the health system operate within some larger budget constraint. You cannot ever have such a system, my friends. You cannot ever have it, not under our system of governance.

The US is, in many ways, a lovely and often graceful country--one blessed beyond belief. But some higher power seems to have saddled it also with sundry curses, among them a system of "justice" that is anything but just and a health system that is the strangest mixture of unbridled compassion and unbridled isolated Social Darwinism, with many shades in between. All systems of human services in the US always bracket the best and the worst everywhere else: we always have the best and the worst in the OECD, all within one system.

I give a talk with colored PPT slides in which I show that any nation's health system actually balances two "qualities of life": the quality of life of patients, and the quality of life of those who derive their incomes from surrendering real resources to patients (directly, as, for example, doctors, or indirectly, as, for example, researchers at Pfizer). In most other nations, the trade-off between these two qualities of life seems to be heavily weighted in favor of patients. In this country, on the other hand, the quality of life of providers always
has been and always will be the overarching goal, to which all others are subordinated. That is why patients will always come second (unless they can pay their way to first place here and there).

There is nothing you or your patients can do about it, because under our system of governance your voice simply does not count. We do have representative government, but it does not represent you: it represents
whoever can purchase that representation. Do you have the money to do that buying?

The upshot of this sermon is that your choice in America is not, as you seem to believe, between (a) 1990s style "managed care" and (b) a dreamlike, comprehensive, universal health-insurance coverage with a simple, humane administrative structure and a reasonably adequate budget. That is what you are talking about, I think, but you cannot ever have it. In fact, even your beloved Medicare may soon be dismantled to be rendered a lot more complicated and, I believe, frustrating to you all. And you cannot stop that either, because you are powerless. After all, how much money could you ever concentrate on state and federal legislators to be properly "represented"?

Instead, your choice in health care will be between one rather flawed system (the current one) and other possibly even more flawed systems. You simply must get used to it.

And here is where I may possibly shock you. In a talk entitled "Would Jesus have loved 'managed care'?", delivered about two years ago at the Palo Alto Medical Foundation's conference, I tried to convince the
audience--and I believe I even convinced physicians in the audience--that the managed care system of the 1990s probably would have pleased Jesus more than would have the unmanaged American health system
of the 1980s, mainly because his Mom would have been treated better in the 1990s than she would have been in the 1980s. Furthermore, during the 1990s, America's medical establishment--physicians, alas, in the lead--
was busily helping to price kindness out of America's soul, and Jesus would not have liked that either. I recall making a Xmas card about this pricing-kindness-out-of-peoples'-soul business that at the time.

If anyone would like to take me on in a debate "RESOLVED: THAT U.S. HEALTH CARE OF THE 1980s WAS BETTER THAN US HEALTH CARE OF THE 1990s," I'll gladly take the negative of the debate, because I love to win debates, and this one I would win hands down. My opponents would not even have a fighting chance. Any takers? Try me and make my day!

Best wishes,


P.S. I have attached a paper that may fire you up even more.

Note from Don: Dr. Reinhardt attached his paper, "On the Utterly Predictable Managed-Care Kvetch," from the Journal of Health Politics, Policy and Law. It is vintage Reinhardt and quite provocative, and I definitely recommend reading it. Because it is a 194KB file, I have not attached it to this message since it could overload e-mail systems. If you would like to receive this paper by e-mail, please notify me with the message: Send "Kvetch"

Don McCanne

February 27, 2001 - Prof. Pauline Rosenau responds:

Dr. McCanne, Please send me "Kvetch" but I have something to add to the

>From Dr. Reinhardt's assessment I can only conclude that what this country really must have is campaign financing reform. It is a top priority, the key to so many policy matters. It would work a revolution - not just in health policy but across the board. Only when the people pay for candidates' campaign expenses and take on
the nasty task of regulating those expenditures (even if it requires a constitutional amendment) will Congress be accountable to the electorate. Only then will the cynicism that encompasses the entire electoral process and results in the lowest voter turnout of any industrialized country, change.

It's fundamental!


February 27, 2001 - McDermott's tax credit proposal

Rep. Jim McDermott's tax credit concept was presented today in remarks
before The Annenberg Public Policy Center and The Atlantic Monthly
conference, "Bipartisan Paths to Expanded Health Coverage: Prospects for
2001 and Beyond"

Reading his statement, it is clear that significant problems with a
refundable tax credit model have not been resolved. The hurdles are
great enough such that I would not anticipate a bill in the near future,
although we should remain alert to that possibility. The full statement
is available at: