25 July 2009
 
QALY



I was relieved that the President has been in touch with the Cambridge Police Department, and everyone can sit down and crack a frosty one over something that we will all laugh about sometime.
 
Actually, I am chuckling a bit now. The last time I yelled at people with firearms and the legal right to employ them along a spectrum of response, I was suitably restrained by some friends.
 
A belated thanks to those pals is surely in order, and here it is:
 
“Thanks.”
 
It is good to have friends. That is how you survive in command-driven systems. In the old Soviet Union, for example, the Party handed out the perquisites that made life pleasant as rewards for loyalty and fidelity. It made things quite bearable for some in an otherwise bleak environment. It even provided a sort of perverse meritocracy for those who engaged in activities beneficial to the state.
 
In the Soviet Union, it was a little like everyone was in the Army.
 
It is a little harder when there is more transparency in government, which is something we occasionally see here in the West. We do not always get that, of course. There is too much going on for anyone to pay any detailed attention. Consequently, we take collective umbrage when the egregious wrong is brought forcibly to our attention.
 
The rush to Health Care reform is one of those cases in point. The highest single priority of this crisis-driven Administration was knocked right out of first place by the unfortunate confrontation of a citizen and his law enforcement system.
 
I am hoping that by the next news cycle we will have returned to more lofty contemplation; lost in the static was the placid word from the Senate that no vote would be taken on Health Care until after the August recess.
 
The House is in agreement with Majority Leader Reid. The Administration really does not have much of a choice but to put a happy face on things and say that the situation is fine, and legislation by the end of the year will do just fine.
 
It was the rush that was the key, since as the President observed, if you do not have deadlines in Washington, nothing will happen.
 
He is way right on that. The question of what happens, played out against a deadline, is all too predictable, and happens all the time.
 
The Congress passes things that they have not bothered to read. No kidding- the last time it happened was in the 2008 Farm Bill. When the House and Senate initially approved the bill in May of last year, the official "parchment" copy sent to the White House omitted one of the measure's critical fifteen titles.
 
As a result, the bill initially vetoed by President Bush was not the full version of the bill approved by Congress. The error was not discovered until after the House had already voted to override Bush's veto- which of course was not vetoed because of the error, but because of philosophical disagreements with what everyone thought might be in the bill, since the White House people had not read it either.
 
It was a mess. Thankfully, that was only a matter of $290 billion our tax dollars, and not something serious.
 
It is too bad, since reading the legislation really slows down the efficient running of the system. In terms of health care reform, please do not chalk me up as a Republican naysayer determined to “break the President.” The only people in own I distrust more than the people in power are the ones who are conspiring to take it back. There is a real problem that has existed for more than half a century. It resulted from the last time we tried a command economy in this Republic.
 
The great defense ramp-up to sustain World War Two lead to rising wages. These were regarded as inflationary, and a threat to workforce stability that was a threat to the war effort. Treasury Secretary Henry Morgenthau should be remembered, with General Montgomery Meigs, as one of the most visionary and creative bureaucrats of all time, and his monuments are even more important than the Washington Aqueduct.
 
In addition to the payroll withholding tax and War Bonds, Morganthau imposed an elaborate system of wage controls on the American people. Creative companies competed for available labor via lavish (and uncontrolled) fringe benefits. Voila! The linkage of job and health care was born.
 
The rest of the American Century, and robust collective bargaining, enshrined employer-provided health care benefits as the one of the key means of untaxed compensation. Well, direct costs, anyway. No one said this wasn’t complicated.
 
So here we are. Most of us have some sort of health care, and most of it is an untaxed benefit. Some plans are pretty lavish, or rather lavish enough to make us think we are not going to die anyway. The existing plans are the product of extensive back-and-forth in union contracts or pension and service related. No wonder there is a fierce loyalty to our individual circumstances, and no wonder it is impossible to visit an emergency room, which is worse than a trip to the Department of Motor Vehicles.
 
Again, please don’t confuse me with the Republicans. They are just as happy to mess with the market as the Administration. The pharmaceutical industry has battalions of lobbyists working on the Congress. They are very good, and determined that whatever happens they are going to make out just fine. Remember their previous work as an example.
 
The government is, by law, specifically prohibited from negotiating the price of drugs available to the elderly in Medicare Part B. It is another disaster of a program, and a product of the lobbyists and the last gasp of a Republican congress.
 
President Obama is up against a pretty significant price-tag on reform. It is somewhere north of a trillion dollars for ten years. He has chosen to express it differently, while still acknowledging the cost. He told us the plans which were hurtling through Congress were going to save the first two thirds of the net cost in unspecified "efficiencies."
 
He made quite a point of it in the press conference, and then rapidly moved on to talk about who was going to pay for the other third. He also made quite a point about the other great democracies and how they pay less than we do.
 
It is an excellent point, though naturally he did not address the fact that our employment-based system really has to go to a “single-payer” system if anything is going to change. I think there may be some merit in that- although the hodge-podge we have now seems to work well enough for most of us.
 
Before we give up what we have now, wouldn’t you prefer to clearly understand what is to replace it?
 
I must have missed he discussion of tort reform. Wouldn’t you think that might be one of the first ways to limit bogus malpractice suits and endless self-defense testing by the docs? I must have stepped out of the room when that issue was discussed.
 
I’m sure the lawyers in Congress will ensure there is something about that in the bills they pass.
 
The savings in Medicare and Medicaid will be realized by emulating our cheaper cousins in the UK and Canada. They are single payer already, which I suspect is where the President would really like to go, since the strange hybrid system being proposed doesn’t make a great deal of sense.
 
The Wall Street Journal looked at how one of the single-payer systems really works to contain costs this week. It was very illuminating. In Britain’s much-envied National Health Service, for example, you will see that an independent panel of experts issues guidelines for what will be covered by the national plan and what will not. It is essentially like the rationing schemes that helped get Britain through the war.
 
A similar panel has been proposed for American, and naturally I was curious about how it works.
 
The panel of experts in the UK is called the National Institute for Clinical Excellence, or (I'm not kidding) "NICE."
 
That board effectively rations care based on a formula- I have to chuckle, since I cannot make things up stranger than reality- called the "Quality Adjusted Life Year,” or “QALY."
 
The guidelines are understandably complex, and I invite any of my British pals to chime in here. Maybe everyone has agreed on the social contract that there is only so much to go around, and it is fair to queue up for what is available. Brits are very civil.
 
As I understand it, NICE decrees that the UK will not spend more than about $22,000 to extend a life by six months, as determined by the QALY. The Brits were confronting the same spiraling costs we are. NICE and the QALY are simply the caps on what the government is willing to pay for health care.
 
Twenty-two grand is an odd amount, though I imagine it is a round number in Pounds or Euros. It is not a medically-based, but rather determined on budgetary grounds. It has not been adjusted for inflation since being adopted in the late 1990s. There are exceptions, of course, but usually those are reserved for cases that wind up in the press.
 
The formula of the QALY includes actuarial information, and hence falls disproportionately on the elderly, who are more likely, on average, than the young.
 
Since the savings the President promises will come principally by imposition on existing government programs that serve the elderly, applying a standard like QALY should be interesting, don’t you think?
 
Not that I have a problem with that. I will not be forced off my military medical plan and onto Medicare for another seven years, and anything could happen.
 
But if the savings are going to gouged out of Medicare, would this not have the practice effect of being a budget-based exercise in euthanasia lottery?
 
If the old are made to queue up for what is available, won’t that be a curiosity of the new middle class paradise, won't it?
 
Of course, there are several other way to finance things, and there might be a way to spread it around in a way the pisses everyone off equally. I am not sure what that is, though. They and that would simply be to slide the scale of prospective bill-payers down from the millionaires to people like you and me and then further south. That is what this is all about, after all.
 
I vividly recall the moment in the press conference when the President included himself in the category of he wealthy who would be happy to pay more.
 
This is not a democracy, I know, and the Republic was structured to protect us from smooth-talking politicians, regardless of which of the three branches of government they come.
 
There is only one crisis in progress at the moment that justified actions as swift as those of Secretary Morganthau. That was the melt-down of the world financial system. They are telling us we have stepped back from the brink on that, and have a chance to think about what comes next.
 
As to the next big thing, I suggest we put these grand ideas in writing, just like a real contract, before the Congress acts. It is nothing personal, but I don’t trust any of these people. They are not putting anything personally at risk, and neither is the President.
 
Whatever happens, they will have their own health care.
 
Since this only affects the rest of us, and it is a pretty big deal, maybe we ought to have a chance to talk about it, instead of being talked at. We might even want to put it to a vote, don’t you think?

Copyright 2009 Vic Socotra
www.vicsocotra.com