The link in the article to the book by Adam Wagstaff and others does not work from my computer… Could you provide the title of the book, so I could take a look.

Thanks for the great article.

Mead Over’s comparison between the health reform efforts of the United States and China in his blog is more pertinent than it might at first seem.

Both countries’ leaders are firmly committed to health reform. If the experiences of other countries are anything to go by, this is a necessary (though not sufficient) condition for a health reform effort to succeed. Health reform, as Mead notes, almost always involves some groups losing out; political commitment is required to ensure the losers are compensated or are forced to make concessions. In both the US and China, health reform has been pushed to the top of agenda for economic reasons. A sizeable fraction of the population in both countries has been and still is uninsured. Health expenditures and the amount paid out-of-pocket has been rising rapidly in both the US and China, and is now high relative to the average family’s income. The high cost of care is apparently deterring patients in both countries from seeking care, and impoverishing and bankrupting those who do get care. Not coincidentally, health care providers in both countries are paid largely via fee-for-service (FFS), and government subsidies are limited. In both countries, researchers have argued that much of the care delivered is hard to justify in terms of leading to better health outcomes.

Debate in the US is increasingly focusing on the more limited agenda of health insurance reform, and some doubt whether even that part of the health system will actually see much reform. China has already taken steps to achieve universal insurance coverage within the next few years, through government-run insurance programs that have increasingly generous subsidies. Coverage is still somewhat shallow, but is getting deeper each year.

The Chinese are now trying to make progress on a set of interrelated challenges facing both countries—how to devise ways to contain health sector inflation, curb unnecessary care, promote ‘basic’ cost-effective care (including preventive care and control of chronic conditions), and in general improve the quality of care. As in other areas of reform, local governments in China are being encouraged to innovate and pilot new ideas. Shifting from FFS seems likely to be a feature of at least some of these local reform efforts, but the challenges are considerable, a key one being how to wean doctors and other providers (including drug companies) off a payment system that has given them considerable latitude to increase their income.

The fact that the US debate seems stuck on health insurance reform may well reflect the larger financial interests at stake in a reform of the US health care payment system. But it may also reflect the different ways the two countries have sought to bring in the views of ordinary people—a difficult but important task when strong vested interests are at stake. President Obama and his colleagues have been gauging public opinion through “town hall meetings”, where grumblings over health care have mingled with grumblings over the recession, and where—if The Economist is right—bona fide grumblers have mingled with grumblers planted by interest groups. By contrast, the Chinese—not known, as Mead notes, for their democratic ways—launched an anonymous online discussion forum for a period of one month. Over 30,000 comments were received, all painstakingly classified and fed up to the country’s policymakers by two teams working around-the-clock. People who took the trouble to write their views were, it seems, anxious that the new system will not only provide insurance coverage to everyone, but will also do a better job at making sure providers deliver good-quality health care at a price that people can afford. This latter anxiety—much in evidence in the early days of the US debate—has been conspicuous by its absent in recent months, even though the evidence that Mead cites suggests it is as much a legitimate concern in the US as it is in China.

Shifting the U.S. Health Care Debate
President Obama has shifted the health-care debate. It now takes place exclusively within the Democratic Party. One side favors the health bill because it increases government control. The other opposes it because they want even more control. Largely ignored is the opportunity to reduce government’s current massive role (over 40% of health expenditures), and to place that responsibility back in the hands of consumers. This requires a policy repugnant to health insurers, State regulators, and some doctors: for consumers to be free to choose their insurance policies across State lines, and for doctors to be able to practice across State lines with a universally recognized license.
Unleashing competition, the Government’s dual role would be: First, to share information about insurance choices and the price and quality of care, and Second, to provide means-tested direct subsidies (say medical debit cards) to people that falls through the cracks. Free choice also requires fixing a distortion created by WWII’s wage and price controls. Since employers couldn’t raise wages to attract workers, the government temporarily allowed companies to offer tax-free health benefits. No one bothered to repeal this War-time artifact. Today workers in large companies are tied to their health plans, while those not as fortunate must purchase their own, subsidize those that don’t, and receive no tax breaks. Worse yet, no one covered cares about costs.
On the demand side the key to reducing costs is informed and motivated patients that pay for health services with their own money out of tax-deductible medical savings accounts, combined with a high deductible catastrophic insurance policy. On the supply side the key is to unleash the power of competitive markets. Why couldn’t we trust informed consumers to pay for delicate and complex procedures with their own money, and to make good choices in highly competitive national markets for health care services? If so, then like any other competitive market this guarantees steadily increasing quality, wider access, and lower costs. Too good to be true? Consider laser eye surgery, or plastic surgery. Better, safer, more accessible, and cheaper than ever before. The U.S. may be missing an opportunity. It might be the right time for China to consider this prescription….Dr. F. Melese