Thursday, July 9, 2009

A Moneyball Approach to Health Reform

7/8/09 - From The New Republic's health care blog, by Anthony Wright (see below for short bio).

Complete article at: http://blogs.tnr.com/tnr/blogs/the_treatment/archive/2009/07/08/a-moneyball-approach-to-health-reform.aspx

Yesterday, we had yet another health reform/CBO moment, when a published report indicated that the Congressional Budget Office had scored the House proposal at $1.5 trillion dollars. Both the CBO and the three House committees swiftly denied the report that there was any such estimate.

My first reaction was to react as Jerry Seinfeld would: The cost estimate is not $1.5 trillion...not that there's anything wrong with that! After all, the House proposal looks to be the one that would extend better help to more people while providing a lot more value to health care consumers. If doing health care right costs $1.5 trillion, then that's money worth spending. As Paul Krugman indicated, it's still less than the Bush tax cuts-which were $1.8 trillion, without any of the same health and economic benefit.

My second reaction, to stick with this blog's love of baseball analogies, is one that comes from the book Moneyball, by Michael Lewis. In it, Billy Beane, the general manager of my state's Oakland A's--sorry, Jon, no love for the Boston Red Sox there--exploits the fact that most of his competitors rely on narrow statistics that don't reflect the true worth of players. Instead of focusing on battage average, which doesn't consider the value of walks, he looks at metrics like On Base Percentage (OBP) that capture a fuller range of offensive production. (As they say, a walk is as good as a hit...)

What does this have to do with health reform? Well, right now most of us look at health care the way Beane's competitors were looking at baseball players: By relying on a handful of narrow statistics--primarily, the reduction in the number of uninsured and the amount of money a plan will cost, as determined by the CBO.

Both of these measures are woefully incomplete. It seems to me we need some new (or at least additional) metrics to properly evaluate these health reform proposals.

Every time we mention the impact of a health reform proposal on the federal budget with a CBO score, we should also give an estimate of how the proposal impacts a family budget. Call it the Consumer Budget Impact--the CBI. It would indicate how a family's premiums would go up or down--and how much their exposure to significant medical debt would decline.

True, no single number can capture this. So we may need to come up with a set of numbers and perhaps compile them into an index, the way Dow Jones uses a mix of stocks to demonstrate the performance of the market as a whole. Elected officials should know if John's family at just over the federal poverty level will be able to get coverage--and if we are expecting too much for Alice the 60-year old who is around 400 percent of the poverty level.

Remember, the subsidies in health reform don't simply help the uninsured get coverage; they also help people who already have coverage but are struggling to pay for it. Think of the early retiree who spends over $1,000 a month, and thus over a third of his or her limited income, to keep coverage. Or the underinsured young adult who can only afford the bare-bones, high-deductible health plan. Or the workers who would lose coverage if not for the assistance and new affordable options their employer is being offered.

All of these people are insured, but in a way that is inadvisable and/or unsustainable. Depending on their income, they and millions of others will get help, so they don't have to pay over a certain percentage of their income for premiums to get a standard package of benefits.

When the Senate Finance Committee comes out with its bill, I hope the political conversation concentrates less on the CBO and if they met this arbitrary $1 trillion budget target, and more on IOUs and what would be the impact on family budgets, and how many people are helped, both insured, underinsured, and overstretched.

That's what voters will care about--just like baseball fans know the win-loss record of their team, more than the cost of the team's operations. Both our elected officials and the media need to do better focusing on the score that matters.

--Anthony Wright

Anthony Wright is executive director of Health Access California, the statewide health care consumer advocacy coalition. He blogs daily at the Health Access WeBlog and is a regular contributor to the Treatment.

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