Poor quality regulation

Lyn Stout says in his book: Good laws makes good people. Today I would like to confirm again that bad regulation distorts markets. In 1999 it was decided that only group contracting for private health insurance would have some tax rebates, individual insurance lost such consideration. Fifteen years after, the government has decided that such rebates will be subject to social security contributions, this exactly means an increase in buyer's cost by 36%, 30% for the employer and 6% for the employee. In 2012 the average premium in the individual market was 731 €, while the group premium 562€. Such difference is huge since the product is nearly the same, and differential cost can't justify a discount of 23%. Former regulation may explain such distorsion, and precisely this was my argument in an article 3 years ago.
Nowadays group health insurance is not included under income tax, although it may be in the next step. Any government should assess how regulation distorts markets, and fit decisions to strictly improve markets functioning. I think that right now they are strictly thinking on more income and don't care about the impact that may be relevant next year.

On being accountable

FOCUSING ACCOUNTABILITY ON THE OUTCOMES THAT MATTER

A new report from a recent conference has been released. Accountable care is the term that summarises a US trend.
Beyond fashionable concepts, there is the reality. Let's take the definition for health care:

Delivering accountable care for a population involves five key components:
1. A specified population for which providers are jointly accountable.
2. Target outcomes for the population - outcomes that matter to individuals.
3. Metrics and learning, to monitor performance on outcomes and to learn from variation.
4. Payments and incentives aligned with the target outcomes.
5. Co-ordinated delivery, across a range of providers, of the care necessary for
achieving the desired outcomes.

My impression is that in our health system we already have good examples of such organisations. Unfortunately, some issues fail due to wrong regulation. For example, payment and incentives, an issue that should be reformed as soon as possible.

PS. Here you'll find an older post on the same topic of payment and incentives.

PS. Definition. Accountable. adjective \ə-ˈkau̇n-tə-bəl\ : required to explain actions or decisions to someone : required to be responsible for something

The one and only option

Imagine for a moment a country, their citizens are presumably under the same constitution and tax law. Some citizens in a geographic area have a per capita public budget for health care for 2014 equal to 1.541 €. Other citizens, 1.091 € or less. There is no possible argument to maintain such huge and increasing differences. Is there any clever politician in the room to treat such disease? For sure, there isn't.
Simplistically speaking, my understanding is that we could decrease taxes by 28% or otherwise increase public health expenditures by 41%. Since these options are not plausible, the third is to forget such country because it is unable to solve the real public policy challenges. And worst than that, it obliges to apply budget cuts to those that already are spending less. Since such problems have persisted for three decades, the one and only option is to leave, reform is not a credible option.

PS. Data

Reading suggestions

Christmas reading suggestions:

'The Humble Economist' by Tony Culyer is now available to download for free in PDF, Kindle and epub formats

Waste, Economists and American Healthcare by Robert G. Evans

Hospital Board Oversight of Quality and Patient Safety: A Narrative Review and Synthesis of Recent Empirical Research

The Healthy NHS Board. A review of guidance and research evidence

Health Policy Basics: Health Insurance Marketplaces

The Optimal Practice of Evidence-Based Medicine Incorporating Patient Preferences in Practice Guidelines

 Fee Increases and Target Income Hypothesis: Data from Quebec on Physicians’ Compensation and Service Volumes

 The influence of cost-effectiveness and other factors on NICE decisions

 NHS Productivity from 2004/5 to 2010/1

 Methods for the estimation of the NICE cost effectiveness threshold

Effectiveness of Medicines and Therapies

 Elaboració d’un sistema universal de priorització de pacients en llista d’espera

La pràctica de la medicina clínica: art i ciència

La mort i l’imperatiu de recerca 

Can Mobile Health Technologies Transform Health Care?

Idoctor. NBC News

Should The Cochrane Collaboration be producing reviews of efficiency?
Mike Drummond, Ian Shemilt & Luke Vale, on behalf of the Campbell and Cochrane Economic Methods Group 

A new stream of work from NICE - Medtech Innovation Briefings

Health systems taxonomy

Five types of OECD healthcare systems: Empirical results of adeductive classification

Once upon a time there were two types of health systems: Beveridge and Bismark based. Social Health Insurance vs National Health Service. This was an easy categorisation. Now, things are much more difficult to classify. Have a look at Health Policy and you'll find an update:

We argue that there is a hierarchical relationship between the three dimensions, led by regulation, followed by financing and finally service provision, where the superior dimension restricts the nature of the subordinate dimensions. This hierarchy rule limits the number of theoretically plausible types to ten. To test our argument, we classify 30 OECD healthcare systems, mainly using OECD Health Data and WHO country reports. The classification results in five system types: the National Health Service, the National Health Insurance, the Social Health Insurance, the Etatist Social Health Insurance, and the Private Health System.

Is there anybody available to guess where we are?. 

We the people

A Constitution of Many Minds: Why the Founding Document Doesn't Mean What It Meant Before

Cass R. Sunstein is a distinguished professor of Law at Harvard. For economists he is well known for his book with R. Tahler on "Nudge". Today I would like to reproduce several statements of his 2009 book: A Constitution of Many Minds: Why the Founding Document Doesn't Mean What It Meant Before. Just for those that consider that law should constraint people's expectations:

I mean to identify and explore three approaches to the founding document: traditionalism, populism, and cosmopolitanism.We shall see that in all three contexts, what is at work is a many minds argument–an argument that if many people think something, their view is entitled to consideration and respect.

Traditionalists insist that if members of a society have long accepted a certain practice, courts should be reluctant to disturb that practice. Some traditionalists go further, urging that even po-litical majority should respect longhstanding practices. Populists believe that if most people believe a certain fact or accept a certain value, judges should show a degree of humility—and respect their view in the face of reasonable doubt. Some populists think that if many people be-lieve something, they are probably right, and elected representatives should defer to them too.Cosmopolitans believe that if many nations, or many democratic nations, reject a practice, or accept a practice, the United States Supreme Court should pay respectful attention. Some cos-mopolitanians believe that if most nations, or most democratic nations, do something, other nations should probably fall in line with them.

Of course the three positions are different, and it is possible to accept one while rejecting the other two. But the structure of the central argument is identical in all three contexts. Nothing in the Constitution itself rules out any of the three approaches that I shall be ex-ploring. The Constitution does not set out the instructions for its own interpretation, and many approaches fall within the domain of the permissible. But traditionalism, populism, and cos-mopolitanism all run into serious obstacles. In the end, much of my argument will therefore be negative and critical. I will try to show why each approach has intuitive appeal – but also why each of them faces powerful objections.

Today is a day to reflect on such issues. Laws are created after a political process, popular sovereignity is above them. I wanted just to reflect on that in a historic day.

It's the budget, stupid

Last week the proposal of health budget was submitted to the Parliament. The expected expenditure will be 1.095 € a level achieved 9 years before (2005) in nominal terms (if we consider the figure in real terms, there is an additional 20% less due to CPI -unfortunately no health CPI available). These are the figures, and this is the reality for those that talk about the end of recession. Next year, we are going to spend actually 20% less in publicly funded health care of what we spent in 2005. If somebody had predicted such trend I'm sure that would be considered a fool.
Now I would like you to suggest you an exercise. Estimate how many years it will take to return to 1.300 € (the peak of 2010). For sure, it will take many, many, many years.
Public Expenditure on health care has been reduced, mostly through salaries.This is a partial measure that has a limit. The review of regulatory and organizational structures is the key issue that is mostly forgotten.

PS. No complains about budget cuts, it's just the reality, we are poorer than before. The option is to work in a different direction, more of the same will get the same result.