Reforming the reform

It took many years for Americans to get better access to healthcare; Israelis have had universal entitlement to core medical benefits for 22 years. Both countries can learn from the other.

If a camel is a horse designed by a committee, then the US health system – the way it was before Obamacare and how it will function after the Trump Administration tries to “reform” his predecessor’s program – will probably look like a real monstrosity.
Although Israel’s national health insurance system, established in 1995, still has problems, they are small compared to those in the tortuous, outrageously expensive and still inadequately inaccessible American medical system. It takes some 70 pages for Wikipedia to explain the Patient Protection and Affordable Care Act (ACA or Obamacare) enacted by the US Congress in March 2010; only a few pages are needed for it to describe the universal health insurance that Israelis enjoy.
The ruling Republicans, facing Senate and House of Representatives’ elections in November, have become aware of the fact that many of the 24 million grassroots Americans who now have health insurance after not having it before the ACA will not be happy if it is taken away by Donald Trump’s proposed Better Care Reconciliation Act (BCRA).
Retrospective research just published in Cancer Epidemiology has shown that the ACA has already influenced American healthcare outcomes. For example, a Loyola University study found an increase in the percentage of breast cancer patients who were diagnosed at the earliest stage, especially among African-American and Latina breast cancer patients, compared to white patients. With copayments for mammograms and other services almost eliminated, they were able to get diagnosed and treated faster. In addition, the rates of depression and anxiety among people who now have health coverage have declined.
Meanwhile, the American College of Physicians has voiced its fierce opposition to the Trump’s efforts to repeal and replace the ACA with BCRA. In a letter sent to the Senate, ACP insisted that the BCRA “does not meet – or come close to meeting – the criteria that ACP established that any reforms to current law should first, do no harm to patients. The BCRA would radically change how Medicaid [health coverage for the poor] is financed, reduce premium and cost-sharing subsidies for people who most need them in the individual insurance market and significantly weaken essential consumer protections for the most vulnerable patients.”
PROF. SHERRY Glied, dean of New York University’s Robert F. Wagner Graduate School of Public Service – who served in senior positions in the Bush and Clinton administrations – was here recently to discuss US health reforms at a small forum at Jerusalem’s Taub Center for Social Studies Policies in Israel. Dov Chernichovsky, emeritus professor of health economics at Ben-Gurion University of the Negev and today the chairman of the Taub Center’s health policy gave an interview to The Jerusalem Post to discuss what the American system can learn from the Israeli one and vice versa.
Glied was for many years a health policy and management professor at Columbia University’s Mailman School of Public Health and an assistant secretary for planning and evaluation at the US Department of Health and Human Services. The economist has served as a senior economist for healthcare and labor market policy on the president’s council of economic advisers and a member of the Congressional Budget Office’s panel of health advisers.
“It’s nearly impossible to explain what is currently happening in the US healthcare system,” Glied confessed. “There is much more separation of powers in US compared to that in Israel. In Obamacare, much more is left to the bureaucracy. It is not universal healthcare coverage as you have in Israel, as some people still fall between the cracks.
There are so many rules and minutiae. The health system is prejudiced against changing direction. There is a lot of pressure to stay with the status quo.”
The replacement BCRA was finally passed by the House of Representatives only in May. “Trump has said that he ‘couldn’t believe how complicated US healthcare is.
It doesn’t come as a surprise to me,” said the NYU economist.
Of the key problems facing Americans before the ACA is that health insurance was tied to being employed. If you were fired or resigned and did not find work, you were most likely to be left without health coverage.
Many of those who had health insurance were limited in how much they cost their health-maintenance organization; if they had a condition that was very expensive to treat, a limit could end their coverage.
Those over 65 had and continue to have Medicare, while the very poor have Medicaid coverage, but tens of millions of other people – including non-citizens and the undocumented illegals – even today are excluded from decent health care. In addition, each state has different rules and entitlements.
Those in Massachusetts, for example, are quite similar to those under Israel’s National Health Insurance system, while those in poor states get much less.
Federal courts, Congress, right-wing groups and some states challenged the ACA bill; it even reached the US Supreme Court.
But it finally went through, representing the biggest revamping and expansion of health coverage since Medicare and Medicaid were passed into law in the Johnson administration in 1965.
“Obamacare’s policy envelope had strict rules. It couldn’t cost more than $800 billion of new money over a decade out of $3 trillion-a-year health expenditures in the US,” Glied said. Under the ACA, even the wealthy are reluctant to be without coverage, “because there is a big markup – up to 70% -- on private health insurance premiums compared to what is available under Obamacare.”
The 50 states were asked if they were willing to expand Medicaid coverage to include the unemployed and others without coverage.
The Federal government would pick up almost all of the costs for this program. But some states decided for political reasons not to cover them. Only 32 states of the states signed on, while the rest have not adopted the program, Glied said. Small businesses with fewer than 50 employees were not required to sign up.
It is quite incomprehensible to Israelis, but before Obamacare, most health policies didn’t cover childbirth, and two-fifths didn’t cover treatment for substance abuse.
The ACA required that all health benefits cover all hospitalization and outpatient needs, and no one could be excluded due to health status.
But, said Glied, there remained “bronze,” “silver,” “gold” and “platinum” options, differing according to how they divide up premiums and out-of-pocket costs. For example, bronze plans have the lowest monthly premiums and highest out-of-pocket costs, while platinum plans have the highest monthly premiums and the lowest out-ofpocket costs. There is no plan with 100% coverage except for the very poor on Medicaid, she added. “Only preventive services such as vaccinations are free; you pay something for everything else.” Yet, if you have no health insurance and have to go urgently to a hospital, the staff are required just to stabilize you, no more than that.”
The small print in Obamacare is so overwhelming that “most people have no idea what’s in the law, and most people blame bad things on it. There was massive marketing to reach those Americans who would benefit from the new coverage, but it has proven so mercilessly complicated,” she continued.
Despite all its faults from being patched together and revised due to political opposition, “most of the American people think that having the right to get health insurance is good. Within a short time, Obamacare has become probably the most redistributing act of legislation in the US.”
Because health insurance is still expensive, many young Americans preoccupied about paying rent, buying food and worried about their companies closing and losing their jobs give healthcare low priority. Almost a third of the US population under the age of 65 have no contact with doctors for the whole year because of this. “They think they don’t need it at this stage in their lives, and many pay penalties for not joining up,” Glied said. But if they don’t take care of themselves in their 20s and 30s, they may find themselves as much sicker when they are older, and much more expensive to treat, said the NYU economist.
CHERNICHOVSKY, who has extensive experience in a wide variety of health systems around the world and publishing his findings in leading journals, told the Post that on average, Americans work about two months a year to pay for their medical bills.
This contrasts with their Israeli counterparts, who work about half the time for their coverage financed mainly through income-related general taxes and a special health taxes pooled by the National Insurance Institute (the Israeli equivalent of of the US Social Security Adminstration).
And the average Israeli lives longer than his or her counterpart (life expectancy at birth here is 82.2 years compared to only 78.8 in the US). The basic universal entitlements of health services is generous by international standards. The majority of Israelis purchase supplementary (group) health insurance policies from their public health fund and a growing number also get commercial health insurance, to meet personal preferences.
Although most Israelis were voluntarily members of health funds before 1995, they could not always join the one of their choice due to political limitations. A key objective of the 1995 reforms, said Chernichovsky, was, in addition to providing universal coverage, to break the coercive powers of the Histadrut General Labor Federation, which owned the largest – Clalit – health fund and to severe the link between employment status and place and access o health care. These powers limited choice and transparency in the system and prevented its members’ free choice of health plan and care. Membership fees were also used for other, non-medical purposes. Today, he continued, the health funds are more accountable to their members, who have freedom to switch to other insurers.
“There are principles in our system,” he continued. “They are universal entitlement through general progressive taxes including an earmarked health tax. Thus, the rich pay for the poor, the young for the elderly and the healthy for the sick. The implied equalization is through capitation that also allocates money to the participating health funds, independently of our tax contributions.”
Although the four public health funds – Clalit, Maccabi, Meuhedet and Leumit – are a fundamental part of our National Health Insurance system, the Taub economist said: “one may question the need for health funds in Israel. The systems in Canada, Finland and Britain, for example, have universal entitlement overseen by what is generally known as a National Health Service. Having four health funds does not create much competition at the end of the day; very few Israelis shift from one to the other, some because they don’t want to lose long-term care insurance that is not transferable from one fund to another. If we liquidated three health funds and left one strong one like Britain’s National Health Service, we would save a lot of money spent on extra buildings for management and salaries.”
Medicare, continued Chernichovsky, is “a variant of the Israel system except that it is only for the elderly. The principles are quite the same. The US has a patchwork of programs, even those paid by the public, a maze of payments and services. At the end of the day, they pay for care by far more than any other nation and have, on average, worse care than any other developed nation, in spite of high-level technology.
While Obamacare does not aim at, let alone match, the achievements of Israel and other of America’s closest allies among developed nations, it has gone in the right direction.
Trump is going in the opposite direction of Obamacare, compared to any other developed healthcare system. “I for one agree with Prof. Glied. I do not understand what the Trump administration wants. I don’t think the American people who gained health insurance under Obamacare will be ready to give up this insurance once they have it. This is far from being as simple proposition that President Trump presents.
In fact, to the best of my knowledge, many of these people may constitute the core of the president’s Republican constituency and may rebel against the effort to repeal Obamacare.”
But, Chernichovsky went on, the American psyche “is different than ours. The state and especially Federal governments feel that they need to control everything from afar like the Mars Exploration Rover. For this reason, the Israeli National Health Insurance Bill is about 20 pages long, and the ACA is thousands of pages and incomprehensible.
If there is no major disaster in the US health system, no deadly Ebola or SARS epidemic, a Pearl Harbor, a Depression, the system doesn’t budge. If there were such a crisis,” predicted Chernichovsky, “the Americans would institute universal national health insurance.”
The US would “do well to shake off unfounded rhetoric and perceptions about ‘socialized medicine’ and ‘single payer system’ and align its healthcare policies with those of its close allies among developed countries like Israel. I believe that doing so would save American lives and make US citizens even healthier and more prosperous than they are today.”
Israel’s healthcare system is good, but “we can still learn from the Americans. “They excel in micro-issues such as how to run a hospital, a clinic, the organization and management of facilities and accounting.
Their facilities operate around the clock, very efficiently. We don’t do this for a variety of reasons. But the Americans are not efficient at the macro level,” Chernichovsky concluded.