Uwe Reinhardt, James Madison Professor of Political Economy, Professor of Economics and Public Affairs
Biography provided by participant
Recognized as one of the nation’s leading authorities on health care economics, Uwe Reinhardt has been a member of the Institute of Medicine of the National Academy of Sciences since 1978. He is a past president of the Association of Health Services Research. From 1986 to 1995 he served as a commissioner on the Physician Payment Review Committee, established in 1986 by Congress to advise it on issues related to the payment of physicians. He is a senior associate of the Judge Institute for Management of Cambridge University, UK, and a trustee of Duke University, and the Duke University Health System. Reinhardt is or was a member of numerous editorial boards, among them the Journal of Health Economics, the Milbank Memorial Quarterly, Health Affairs, the New England Journal of Medicine, and the Journal of the American Medical Association. Ph.D. Yale University.
Fraud Difficult To Pin Down I believe fraud and waste are triggered by both public and private defined-benefit health insurance contract. We talk more about fraud in Medicare and Medicaid because these programs are at least semi-transparent. Two features of Mr. Gingrich’s set-up stem stand out. First, he does not offer a concise definition of fraud. Second, whatever he may mean by it, he seems to believe it occurs only or mainly in the public Medicare and Medicare programs. Defined-benefit health insurance contracts, whether they are public or private, are among the most complicated contingency financial contracts.… Read more
Michael Cannon invites us to reflect on his throught-provoking statement, and so I shall. It has been known for many years that, at the aggregate level, the use of health care as we define it is only one of numerous factors that drive the average health status of populations (what we call "population health"). In fact, in health-production-function work or other research on the drivers of population health status, health care per say is only a minor player. Education, nutrition and environment rank higher. So it is true that if "population health" were our objective in health reform, we would… Read more
Let me state how touched I am by John Goodman's candor and modesty. All of us, I am sure, will from time to time encounter situations or statement that push uas beyond our intellectual capacity. Usually, at meetings, we remain quiet about it, lest someone discover our intellectual limitations. How refreshing then that John openly admits them, for all of us to see. Uwe … Read more
It's funny how we all talk about it as if we knew what it was; but operationalizing it is quite a challenge. The definition has at least two distinct dimensions: (a) the benefit package that is considered minimally adequate and (b) the fraction of discretionary income (disposable income minus estimated minima spending on food, housing, utilities, etc.) that is absorbed by health spending on that minimum package (out-of-pocket spending on it plus premiums paid). So we would count as "uninsured" anyone who has less than that minimum package or spends mor than the normative percentage of discretionary inome on it or is characterized… Read more
Although any such forecast is a composite of guestimates, it was made under strict rules and we must take it at face value. It will sorely disappoint the people who broke out the folks who broke out the champaign when Chicago lost the Olympic bid, it must be gratifying to the hardworking Senate Finance Committee members and staff--well, most of them anyways--and to the White House. All the more so in comparison with the fiscal impact of the MMA 03 which will add close to $1 trillion to the deficit over 2010-19--more if one includes the $170 billion or so… Read more
The President’s overarching aim in the speech should be to present to the Congress and to the American people a realistic – and I emphasize “realistic” – picture of the situation in which American health care finds itself. It should be a sober speech, without rhetorical flourishes. According to the Milliman Medical Index, total health spending for the typical non-elderly, privately insured American family has grown at an annual compound rate in excess of 8 percent throughout this decade. By contrast, wages and salaries in the U.S. have grown at an average annual compound rate of only… Read more
Question to John Goodman: Did your IQ also fall 15% when you wrote your post on health care in this round? Or did it stay up, because you were not thinking about health care when you wrote your post. Just curious. Best, Uwe… Read more
There is no objective answer to this question. Different people may have different views on it, and each warrants respect. All health systems are structured on an underlying social ethic on how the resources of the health system are to be financed and shared. Most nations articulate that ethic quite explicitly and allow it to be a powerful constraint on their health policy. Unfortunately, we have never done likewise, which can explain why our health system embraces unbridled compassion and amazing callousness side by side. Among the ethical questions nations must answer in structuring their health system are: 1. To… Read more
I agree with James Gelfan'd statement: "Talk about lowering costs. Talk about bending the curve. Talk about *how* this is going to be accomplished. And don't just talk about it... do it. There is no way to talk about the House bill that is going to make it a good bill that lower costs. Congress needs to go back to the drawing board and bring forward bills that actually do something for most Americans, by lowering costs." Question to James: Fair enough! But do you have any concrete proposals on controlling health spending? And be careful how you answer, lest the… Read more
It is not unreasonable for Americans to wonder what health reform will do to their family, among other things. In assessing public policy, one always trades off the personal good against the larger public good. And the tradeoff does not always go to “Me.” For example, many well-to-do Liberals favor taxing the rich more, full well knowing that their tax bills will go up, but hoping that these taxes will benefit others. Surely everyone who joins the armed forces must conduct this calculus. A question is whether in recent years the trade-off willingness curve (as economists call it) has been… Read more
Updated at 11:00 a.m. on July 27. Imagine a corporation whose Board of Directors are allowed to do business with or accept money outright from vendors to the company. Imagine what a mess that would be in practice and what kind of decisions the Board would make. It would violate all tenets of good corporate governance. Now, there is, in fact, a very large American insurance company where just such a system is operative and deemed perfectly acceptable. That insurance company is known as Medicare. The Directors on Medicare’s Board are the members of the House Ways and Means Committee… Read more
I believe that Elmendorf spoke what he and his researchers believe to be the truth and, indeed, most likely is the best, unbiased assessment of the impact of health reform on future health spending in this country. Normally one does not view the act of merely telling the truth as a form of heroism; but perhaps in American politics it is. I think he just fulfilled his fiduciary duty. In blog posts I have written for the New York Times I have estimated roughly that full universal health insurance coverage, if attained in 2910, would entail between $1.6 to $1.8… Read more
John Goodman is right in his argument that, as a matter of economic theory, and in the light of some empirical research, it is the case that employers will try to shift as much of the cost of fringe benefits as they can back into lower take-home pay for workers. H overstates the case a bit by arguing the backward shift is $ for $. It is a bit more complicated than that, depending on the structure of the labor market. As a matter of theory, for every $ of employer-paid fringe benefits take home pay may fall by less or more… Read more
The sophistry surrounding this issue could be avoided if we copied the social-insurance approach used in continental Europe – e.g., in Germany. There the private, non-profit sickness funds are that in name only. They bear so many government mandates and are subject to so much regulation as to be effectively arms of the government. Yet the premiums they collect from enrollees and expenditures on their health care do not flow through the federal or state governments. They are never pitted against items in the government’s formal budgets. Transferred to the US, any public plan, such as it may be,… Read more
May I, for once, be a little bit provocative and propose that the plebs – otherwise known as “the American public” – is not (and should not be) even in the game of health reform and therefore need not be consulted on it? So who cares how health reform is pitched to the plebs? The American public had its say last fall, when two quite different visions for health reform were clearly put before them, and they made their choice. Now it is the turn of the chosen emperor (the President), the courtiers (the Congress) and the gentry… Read more
Pushing aside pure ideologues at either extremum of the ideological spectrum, we should ask ourselves what Americans are likely to crave in their health insurance system. I would assume these desiderata: Reliable health insurance that is not lost with the loss of a job; Health insurance premiums independent of their and their family’s health status Health insurance premiums the family can afford at any income level. In a nutshell, I would surmise that the typical American family craves the same solid protection from the financial inroads of ill health that has long been enjoyed by citizens in… Read more
I am not sure whether this comment should be addressed to the issue of fraud or to today’s happening in the White House concerning the pledge of $2 trillion in “savings” on health spending, or both. Let me say a bit about both. In connection with fraud in the Medicare program, the question can be asked whether $2.7 billion is a lot of money, worth all that much attention. Assuming the $311 million extra spending on fraud detection is annual and the $2.7 billion is annual as well, the rate of return on investment would be stunning. So… Read more
Brazen as it may be for me, the immigrant, to lecture John Goodman, the thoroughbred American, on English usage, let me point out to him that there is a difference between “error” and “disagreement.” Defining as an “error” a disagreement with John strikes me as novel English usage – probably even in Texas. In his first paragraph John asserts that that universal coverage (or even 50% of universal coverage) can be achieved “without an increase in government outlays.” Ira Magaziner used to come up with these free lunches during the Clinton years and I laughed at them… Read more
As Stuart Butler aptly puts it: it didn't take long. Except that I was thinking of something else than he does. It didn't take long before one of several howitzers got dug in to shoot at the idea of universal health insurance. The one out now is the familiar "we need to control health care costs in our bloated, inefficient health system first before we can bring yet other Americans under the umbrella of health insurance and into the system." That cannon has served us well for over three decades now. I can imagine its roar already, even before… Read more
The debate over the role of a public health plan in the promised health reform is unlikely to be settled over the economic merits or demerits of the idea. It will be a purely political compromise that responds to different demands from different people. I already know the nature of that compromise, but will keep it a secret. In the meantime, comment we must, and so we shall. Of recent the American people have had a lesson in economics that the country’s blind-sided economics profession never could have imparted to their students or the public, namely,… Read more
When a little country-bumpkin economist from rural New Jersey, such as I, mingles with the sophisticates of Washington, D.C. at their cocktail parties, he hears the sophisticates breathe darkly over their cocktail glasses scary phrases such as "the Medicare mess," or "the unsustainability of Medicare," or "Medicare needs to be restructured," or, most scary of all, mutterings about "the perils of socialized medicine." Oooooh! Obviously, these phrases are code for utterly serious problems that are well understood by the Washington sophisticates, but whose meaning eludes the little country bumpkin from rural New Jersey. Out in the New Jersey hinterland, where… Read more
I think one great regret we may have a decade hence is our not being more respectful of Jack Wennberg's and his research associates' work at Dartmouth University. I do not know what more health services researchers can do to alert policymakers to a glaring flaw in our health system. Yet the Dartmouth research findings have been studiously disregarded by policymakers for over two decades. To be blunt, I am quite tired of hearing Americans wring their hands over the alleged Baby Boom Tsunami and over the "entitlements crisis" we are said to have. But what are the proposed solution to this "entitlements… Read more
I have long argued – and written about it – that the American health care sector, more than any other economic sector, now is THE locomotive of our economy. BUSINESS WEEK’s economist Michael Mandel has long recognized it as well. Indeed, I can show that without health spending, the first term of President George W. Bush would have been truly an economic disaster. Between 2001 and 2002, for example, over half of the dollar growth in GDP was added health spending. Thus, providing uninsured Americans health insurance through whatever channel we have at hand would add to GDP and… Read more
One can answer this question from a longer-run, strategic perspective or a short-run, tactical perspective. LONG-RUN, STRATEGIC VISION The answer from a longer-run strategic perspective would depend on which of two alternative views one has of the role of children in society. On the first perspective is that children are viewed as national treasures. In my view, that perspective ought to come easy in a country whose ratio of workers to elderly will fall steadily and substantially during the next several decades and whose adults endlessly fret about that prospect. On this view parents who give children… Read more
Those of us who regularly attend health-care conferences have come to appreciate that the U.S. appears to be lagging many other developed nations in the application of health information technology (HIT), even though American entrepreneursdevelop much of the hadrware and software of first-rate HIT systems. What can explain this paradox. One explanation is that our health system has not been spending enough on HIT overall. It often is the stepchild in the budgeting process of hospitals and medical practices. Government has a role to play here by mandating the use of certain types of HIT, but also to help fund it. There have… Read more
All COBRA really does is to provide someone unfortunate enough to have lost his or her job to purchase health insurance coverage at the community-rated premium for the risk pool made up by the previous employer’s workforce. Depending on the number of employees in that risk pool and their risk profile, that community-rated premium may be higher or lower, but will generally be a major hit on the households already stressed budget. That the U.S. Congress, which represents the American people, would consider this arrangement as a solution to the financial distress suffered by someone unemployed is in… Read more
Charles Duell, Commissioner of the United States Patent Office, is said to have remarked in 1899: “"Everything that can be invented - has already been invented." This turned out to be patently untrue. But if I said, in 2008, that “Every idea that could possibly be had to reform the United States health system has already been put forth in writing somewhere,” I most probably would be proven correct, even 100 years from now. Every health reform plan by necessity is either a new assembly of well established ideas or, more commonly, a mere recycling of a plan already put… Read more
I could not disagree more with Stuart Butler’s assertion “I don’t think there is much disagreement about the moral need for action.” I find it much too facile. The problem all along has been that, unlike in other countries, there has never evolved in this country a political consensus on the distributive social ethic that ought to govern health care. In fact, much of our debate over methods is really but a camouflaged debate over social ethics. To illustrate, policy analysts and politicians who advocate health insurance with annual deductibles up to $10,000, coupled with tax deductible deposits into a… Read more
Before even thinking about Marilyn’s question, I would like to raise the following questions: “What should American society do about people 55 years or older who find themselves without health insurance (1) either because their employer does not provide employment-based health insurance on the job, or (2) the individual cannot afford out of his or her wage base to cover the employee’s share of health insurance offered by an employer, or (3) the individual is unemployed, an increasingly likely prospect in the years ahead. Should we as a society (a) turn our backs on these people and expect them to… Read more
After following the health-policy debate in this country ever since coming to America a while ago, I have learned to my amazement that Americans crave a free choice among health insurance products more so even than free choice among doctors and hospitals, which is why many Americans have given up the latter choice to have the former. People in other countries do not quite understand this, because they typically crave free choice among providers more than free choice among insurance products. I view it as the essential difference between Americans and peoples elsewhere. (The latter-day de Tocqueville going by… Read more
Biography provided by participant
