The Triumph of Socialized Medicine

Right here in the USA.

The English language desperately needs a word to describe something that is objectively true but unrecognized as such because nobody wants to believe it. I hereby coin one: “flakt.” Henceforth, a flakt will be defined as a measurable, demonstrable reality that the great majority of people refuse to acknowledge. It is a flakt that, even though the American public is convinced that foreign aid makes up a huge proportion of the federal budget—in one 2001 poll, respondents put it at 24 percent of total spending—foreign aid makes up less than 1 percent of the federal budget. It is a flakt that the war in Iraq has impeded the international manhunt for Osama Bin Laden. It is a flakt that Million Dollar Baby was nowhere near the best picture released during 2004.

Phillip Longman published an article in the January/February Washington Monthly (“The Best Care Anywhere“) that states a very important flakt: Socialized medicine has been tried in the United States, and it has proven superior to health care supplied by the private sector. This is a case the Monthly has made at least once before, in an article published by Phil Keisling in 1982, and possibly before that. But Longman’s article should leave absolutely no room for doubt. (I should note here in the interest of full disclosure that Longman is a friend of mine; that 20 years ago I was an editor at the Monthly; and that today I’m a contributing editor.)

The socialized medicine to which I refer is the complex of hospitals managed by the Veterans Administration. Longman cites a study published in the New England Journal of Medicine in 2003 comparing veterans’ hospitals with fee-for-service health care funded by Medicare. Both, of course, constitute socialized medicine in the sense that both are paid for by the federal government; but the hospitals treating elderly patients on Medicare are not government-run institutions. By every criterion, the New England Journal found the veterans’ hospitals to be superior. This is especially striking when one considers, as the New England Journal noted, that patients in VA hospitals

are more likelyto be in poor health; to have a low level of education, disability,or a low income; to be black; and to have higher rates of psychiatricillness. These characteristics are associatedwith receiving poorer quality care.

Surveys by the National Committee for Quality Assurance and other organizations, have reached the same conclusion. The superiority of VA hospitals is so obvious that by now it ought to be common knowledge. But it isn’t, because an insane political consensus that firmly opposes turning health care over to the government—because the government is presumed incapable of doing anything well—doesn’t want to hear that government hospitals are outperforming private hospitals.

There are many reasons why this is so. One reason, Longman explains, is that people don’t shuffle in and out of the VA system the way they shuffle in and out of private health care plans, either because they change jobs or because their employer decides to do business with a different insurance company. Another reason is that the doctors are salaried, and therefore lack any conceivable financial interest in subjecting a patient to avoidable medical procedures. But the main reason the VA hospitals are doing especially well these days is that they have adopted the same modern information technologies that have been embraced by every other sector of the economy.

As the husband of a recently deceased terminal patient, I can attest that doctors frequently make medical decisions without having all the relevant data in front of them. My wife and I energetically collected this information ourselves and brought it to doctor’s appointments, because we knew that on any given day there was perhaps a 50 percent chance that, say, the results of a very expensive blood test had been misplaced under a pile of faxes on somebody’s desk and therefore never made their way into my wife’s medical chart. Staying on top of the data was practically a full-time job. Even so, there were times when we ourselves couldn’t make the missing data point appear—films of CT scans were particularly elusive after they were filed away in the hospital’s film library—and the doctor had to make a decision without it. The nature of my wife’s illness was such that any wrong calls the doctors may have made as a result wouldn’t have made much difference, but that isn’t true for most hospital patients.

This is a problem computer technology can easily solve, but hospitals have been resistant to computerizing medical records, for the simple reason that it’s difficult for them to benefit financially from such an investment. “Suppose a private managed-care plan follows the VHA example and invests in a computer program to identify diabetics and keep track of whether they are getting appropriate follow-up care,” Longman explains.

The costs are all up-front, but the benefits may take 20 years to materialize. And by then, unlike in the VHA system, the patient will likely have moved on to some new health-care plan. As the chief financial officer of one health plan told [the University of Chicago’s Lawrence] Casalino: “Why should I spend our money to save money for our competitors?” Or suppose an HMO decides to invest in improving the quality of its diabetic care anyway. Then not only will it risk seeing the return on that investment go to a competitor, but it will also face another danger as well. What happens if word gets out that this HMO is the best place to go if you have diabetes? Then more and more costly diabetic patients will enroll there, requiring more premium increases, while its competitors enjoy a comparatively large supply of low-cost, healthier patients. … An idealistic commitment to best practices in medicine doesn’t pay the bills.

The Bush administration is pushing energetically to provide more information technology in hospitals, but its commitment to making health care more competitive and market-driven is undermining that effort, Longman says. “Health savings accounts” are a case in point. These are new tax-free accounts that can be used only to pay medical expenses. But, as Arnold Relman, former editor of the New England Journal, noted in the March 1 New Republic,

Healthy, young families would choose the least expensive plans with the highest allowable deductible, and those with health problems would be forced to choose plans with the lowest allowable deductibles but higher premiums. The premiums or the required co-payments of the latter plans would spiral upward because of the greater use of services by sicker beneficiaries, so it would become even harder for those with the greatest need for insurance to afford coverage. In this way, one of the most important values of insurance—the sharing of risks over a broad population base—would be lost.

To whatever extent hospitals absorbed these costs themselves, they’d have even less money left over than they do now to pay for computerization. What’s really needed is to make private hospitals more like VA hospitals. Even Bush has recognized that “the VA has got an advantage because the—all the administrators work for the same—same outfit, the same organization.” But he doesn’t want to think about what that says about the virtues of socialized medicine. He doesn’t want to face flakts.