Health Care -- VA vs. private sector; efficiency vs. politics

Paul Krugman has an excellent new op-ed piece in the Monday New York Times entitled [http://select.nytimes.com/... "Health Policy Malpractice" (subscription required). In it, he discusses the results achieved by the Veterans Administration (not, as he puts it, the "decrepit" VA of the Reagan and Bush I administrations, but the new VA that resulted from changes instituted by Bill Clinton.  And he contrasts those results with the rather dismal results achieved by the private sector HMO's into which Bush II is trying to push more and more elderly Americans.

The result is a system that achieves higher customer satisfaction than the private sector, higher quality of care by a number of measures and lower mortality rates -- at much lower cost per patient. Not surprisingly, hundreds of thousands of veterans have switched from private physicians to the V.A. The commander of the American Legion has proposed letting elderly vets spend their Medicare benefits at V.A. facilities, which would lead to better medical care and large government savings.

Instead, the Bush administration has restricted access to the V.A. system, limiting it to poor vets or those with service-related injuries. And as for allowing elderly vets to get better, cheaper health care: "Conservatives," writes Time, "fear such an arrangement would be a Trojan horse, setting up an even larger national health-care program and taking more business from the private sector."

Krugman points out that Medicare HMO's actually have substantially higher costs per patient than traditional Medicare because of their tremendous expenditures for bureaucracy and marketing, and that after some initial success by recruiting healthier than normal senior citizens, many dropped out of the Medicare program when Medicare wised up and began adjusting reimbursements for the healthiness of the participant at enrollment.  Now, however, the Bush administration has pushed through billions of dollars in subsidies for the so-called "Medicare Advantage" HMO's.  And what is the "advantage" offered by these HMO's?  Certainly not better health for the seniors whose heath they are allegedly maintaining.  As Krugman points out,

According to the independent Medicare Payment Advisory Commission, Medicare Advantage plans cost the government 11 percent more per person than traditional Medicare. Oh, and mortality rates in these plans are 40 percent higher than those of elderly veterans covered by the V.A. But thanks to the subsidy, membership in Medicare Advantage plans is surging.

Why, you might ask, does our government pay more for a program that does so much well by its beneficiaries?  Krugman doesn't answer that question, but I will:

In the last several election cycles, the insurance industry has given more than 2/3 of its political donations to Republicans, and the HMO industry has also donated roughly 2/3 of its money to Republicans.  United Health Group has donated 62% of its money to Republicans, while Blue Cross and Blue Shield has donated 86% of its money to Republicans.  

The present system is serving the best interests of NOBODY other than the insurance companies and HMO's, and the Republican politicians who accept their money.  Just in the past few years, I've seen the attitude change among physicians that I know (including a couple of members of my own family).  Previously, they were adamantly opposed to adopting anything like the Canadian system, but now, they generally seem convinced that our system is broken beyond repair by anything other than what would have previously seemed to be radical means.  

As one physician of my acquaintance recently told me, "The Canadian system is much cheaper and gets much better results than ours, and while physicians in Canada make somewhat less than those in the U.S., the difference isn't as great as you'd think.  The big difference in cost is that the Canadian system siphons off much less money for overhead and profit by insurance companies.  And personally, I'd be willing to make somewhat less money if the tradeoff was less hassles from the insurance bureaucracies and better care for my patients."  (That's not a direct quote, but it's close.)  This physician, by the way, has recently had some health fairly serious problems herself, so she has experienced our health care system from the standpoint of both the physician and the patient.

I'm convinced there is a critical mass in the public for undertaking a radical overhaul of our present health care system, and why more Democratic candidates aren't prominently featuring health care reform in their campaigns is something that completely escapes me.