Boston Globe: Sachs, Angell, weigh in on health care reform

Jeffrey  Sachs of  Columbia University is not a health care guy; he’s a big picture guy. One in  a series of lengthy columns in The Boston Globe offered this:

captureOBAMACARE INCREASED health care coverage but did not solve the crisis of sky-high prices, and may well have exacerbated it by adding government subsidies into a system marked by pervasive market power and lack of competition.

I therefore recommend the following policies to address America’s urgent health care crisis.

First, as I’ve suggested in previous articles in this series, America should adopt policies to reduce income inequalities, end the over-incarceration of the poor, empower workers, clean and green the environment, and raise the social status of working-class families. Over time, such measures would help to reverse the epidemics of drug abuse, mental illness, obesity, and other diseases exacerbated by poverty and low social status.

Second, America should move toward universal health care coverage through public financing, as in Canada and Europe, with health providers (both private and not-for-profit) supplying coverage on the basis of capitation rather than fee-for-service. Capitation would encourage and enable health providers to offer supportive services (nutrition counseling, social support, health advising) that help to prevent, treat, and manage chronic conditions such as cardiovascular disease and adult-onset diabetes.

Third, the government should move to a system of price ceilings for medicines under patent through rational guidelines that balance the incentives for R&D with drug affordability and access. Economists have long argued that today’s patent law does not do an adequate job of balancing the needed incentives for innovation with the assurance of access to affordable medicines. The situation became intolerable after the advent of Medicare Part D, with the government now spending vast sums for drugs and drug companies grossly abusing the system by setting outrageous markups on the cost of production.

None of this is a dream or a utopian vision. These reforms would simply put the United States on the path toward improved health care coverage, affordability, and outcomes already enjoyed by the citizens of Canada, Japan, and many countries in Europe.

To which Dr. Marcia Angell, a former NEJM editor vocal critic of health care profiteering, had this to say:

JEFFREY D. SACHS has written an excellent overview of what makes the American health system so inadequate, inequitable, and expensive, compared with other advanced countries, and he recommends some important reforms. But one of them — paying providers a set yearly amount for each patient covered (capitation), instead of paying on a fee-for-service basis — would not work in this country, because, unlike other countries, our providers are largely for-profit (or behave that way).

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