No Harm Intended
reader has brought to my attention a
statement from my article (“Working
Seniors Back Into the Fabric of Society,”
March/April 2009) that needs
In my article, I wrote that the Ticket
to Work and Work Incentives Improvement Act of 1999 ultmately failed and
that “many feel this was because not
enough disabled individuals wanted to
In no way did I mean in writing that
to question the desire of disabled individuals to participate in the workforce,
although I now see how this statement
could give that impression. What I meant
was that the act ultimately failed because
there wasn’t enough economic incentive for the “employment networks” to
focus on placing disabled people into the
workforce because of the difficulty of
finding a large enough pool of disabled
workers to place.
The T rue Cost of Health Reform
was disappointed by Tony Batory’s article, “The Drivers of National Health
Costs,” in the March/April issue of
Contingencies. While I understand that the
opinions are those of the author, Academy members and the reading public
should be able to rely on a degree of accuracy in its publications, especially on
an issue as important and topical as
health financing and reform.
being picked up by social programs, uncompensated care, charitable care, and/
or philanthropic organizations. Thus,
the true increase for expanding access
is just the amount due to increased utilization. This increase has been estimated
at between $50 billion and $85 billion.
(For a fuller discussion of this topic, see
Hidden Costs, Value Lost: Uninsurance in
America, a 2003 report published by the
Institute of Medicine.)
On a positive note, if a program such
as this is revived, the discussion should
focus on all who would benefit, seniors
and the disabled alike.
Jersey City, N.J.
Mr. Batory uses a $300 billion cost for
expanding health access based on a “
pa-per-napkin” calculation. Are we truly to
believe that no research has been done
around this issue and we should rely on
mere musings? No serious policy analyst
suggests that covering the uninsured
would cost more than $150 billion.
While there is indeed a cost for providing access, there are also material savings and offsets to any figures that need
to be accounted for in order to arrive at a
net cost. Policy researchers including Dr.
Uwe Reinhardt and the Commonwealth
Fund make convincing arguments that
universal coverage would pay for itself
from administrative savings alone. Far
from loose numbers from the leftist
fringe, Reinhardt’s calculations are based
on figures from McKinsey Global.
In general, actuaries misunderstand
the importance of public health as the
foundation for any health care system.
Mr. Batory’s opinions as to the drivers
of the growth in U.S. health expenditures
are a mixed bag, solid in some areas but
misinformed in others. There are papers
from the New England Journal of Medicine, Health Affairs, the Kaiser Family
Foundation, the New America Foundation, and others that arrive at consistent
conclusions. A good starting point for
the interested party would be “Slowing
the Growth of U.S. Health Care Expenditures,” prepared by the Commonwealth
Fund Commission on a High Performance Health System.
Others, including the Institute of
Medicine and Urban Institute, have
demonstrated that broadening access
to health care would cover the cost
yet again by relieving social burdens,
increasing productivity levels, and
improving overall health capital. The
uninsured are already a burden on the
system, and the current cost of care is
The questions are big, but the information is there. Heath economists and
academics are doing the fundamental
research that actuaries would be doing if
we were not so busy serving the private
sector. We can add value in their interpretation, but more importantly, actuaries
should be involved from the ground up,
framing the questions, participating in the
research, and debating the implications.
6/26/09 11:14:00 AM