The Economist has a somewhat muddled survey of health care. Being the Economist, its writers have immense faith that competitive markets and consumer choice will solve all problems. But they do run into reality: Consumers don't like being put into managed-care plans in which their insurers bargain with providers by channelling business to doctors who are willing to accept extra-low rates. When insurers bid for shares of business, they work very very hard to make sure that the high-risk patients are somebody else's responsibility.
The market for health care is perhaps the part of our economy that works least well, in the sense of there being the greatest shortfall between the value-for-money our technology promises and the value-for-money we realize. But figuring out how to improve it is really, really hard:
Posted by DeLong at July 18, 2004 01:50 PM | TrackBack | | Other weblogs commenting on this postEconomist.com: ...[R]eforms in the 1990s sought to deal with the underlying cause of health-care cost inflation: the ease with which medical providers can pass on costs when consumers pay for medical care through a third party. In America, this took the form of managed care.... Employers shepherded their workers into health plans that curbed costs by restricting members' freedom to choose their providers of medical care. Between 1988 and 2000, membership of managed-care plans rose from 27% to 92% of workers with health coverage through their employers.... [A]ll health plans have some degree of leverage over the doctors and hospitals in the HMO or PPO, allowing them to negotiate discounts on the price of their services and to exercise some control over the utilisation of medical care.
For a time, the managed-care revolution appeared to be working... a sharp deceleration in the real growth in total health-care spending per person in America, to 2.4% a year between 1993 and 1999, half the growth rate in the previous 20 years or so. The slowdown was an enormous relief to employers.... But doctors hated managed care, which attacked both their wallets and their cherished independence. So, too, did American workers, who resented the restrictions it imposed on their choice of doctor and care.... Most managed-care plans have now loosened their restrictions on choice of physicians and utilisation of service. And sure enough, employers' health-insurance costs have returned to double-digit growth.
As the dust has settled, it has become clear that the managed-care revolution was more apparent than real. The aim was to spread the Kaiser model across America, ushering in a new era of competition between Kaiser-like organisations. But according to Francis Jay Crosson, who heads the physicians' side of Kaiser Permanente, the company's culture has developed over many years and could not be replicated elsewhere overnight just because the insurers required it. Mr Pauly puts it differently: “Managed care seems not to have met the market test.” So what started as a revolution turned out to be mainly a mechanism for insurers to secure price discounts from physicians and hospitals....
The verdict on managed care is that, like every other cost-containment strategy before it, it treated the symptoms.... “Just trying to squeeze costs won't work,” says the OECD's Ms Docteur. “You have to change the medical-care delivery system fundamentally.”...
This information gap makes it much more difficult to exercise consumer power in health care than in other markets. Decisions about treatment are delegated to the very physicians who also provide and commission medical care. This is why some health economists favour government intervention, so that a powerful single payer can counter the might of medical providers. Yet this judgment about the inherent weakness of consumer power is increasingly challenged...
This is providing the private health-insurance industry in America with an opportunity for a change of tack. After the backlash against managed care, it is now seeking to delegate more responsibility to individual consumers, mainly through plans with more cost-sharing by way of higher co-payments....
Greater emphasis on individual consumers is overdue... when individuals pay a bigger share of the bill, hospitals will come under greater competitive pressure. But none of this is likely to bring about a fundamental transformation.... [B]igger share for out-of-pocket payments does not necessarily constrain health budgets.... Again, the experience of Switzerland is discouraging, because it shows that choice in health insurance can lead to perverse outcomes. Since 1996, members of the compulsory state health-insurance scheme there have had a choice between competing insurers.... But rather than wringing better deals from medical providers, insurers have gone for the best risks, despite a “risk equalisation” scheme that takes account of age and sex. Those companies able to attract the healthier members have been able to keep premiums down, which in turn has attracted more healthy members.
Because the competition has concentrated on risk selection, it has not had the desired bracing effect on medical providers, so health spending has kept on growing. Konstantin Beck, chief statistician at CSS, the biggest insurer in this system, which has ended up with more than its fair share of bad risks, explains: “The loyalty of high risks can kill an insurer.” Mr Zweifel of Zurich University, one of the intellectual architects of the Swiss reform, admits that the results have been disappointing. In America, risk selection is tempered by the link between insurance coverage and employment, which means that insurers chosen by employers have to offer coverage to all employees. Yet the practice is widespread in the individual market, says Bruce Bodaken, chairman and CEO of Blue Shield of California, which insures 2.7m members. Mr Bodaken believes that health insurers should have to accept all-comers in a system with effective risk-equalisation. “Then we would compete on service and quality instead of risk, which is an interesting idea,” he says wistfully.
But this interesting idea is based on the premise that effective risk-equalisation is possible; and experience to date suggests that it is extremely difficult....
The development of quality standards and report cards, bringing greater transparency to the medical-care marketplace, could make a big difference. In America, a number of promising initiatives are beginning to have an effect. The NCQA started by monitoring the quality of insurers' health-care plans, but has branched out to include assessments of medical provision....
In other countries, reforms are increasingly aimed at the supply side of health care. One building block is the introduction of “prospective” payment systems for hospital services. These are now used outside America—for example, in Australia and Sweden. Britain and Germany are moving the same way.... Without further reforms, these new payment systems are likely to degenerate into another form of price control....
Michael Porter and Elizabeth Teisberg had an interesting piece in HBR June 2004. The full article is well-worth searching out. A link to an excerpt:
http://hbswk.hbs.edu/item.jhtml?id=4255&t=strategy
We all want three things from a health care system: Good quality for those that have insurance, universal coverage, and affordability. Unfortunately, we can never have all three. We can definitely have one, and we might be able to have two, although we don't have two in many parts of the US at this time.
As a family doctor who sees a lot of poor people, my preference is for basic universal coverage, either through a single payor (which might, in a relatively short time, result in explicit rationing)or through utility-like regulation of insurance companies. Of course service could deteriorate. Quality(medical outcomes for those who previously had good coverage)might or might not suffer, and costs might go up as well. And many in our individualistic society would be very very angry. No easy answers, but the idea that the free market will save us just doesn't work in health care. Too much informational asymmetry and those who need the care most often can't pay for it.
Many people don't seem to have a clear idea of exactly how expensive the US system is in comparison to what we get for what we pay. Here are two graphs that may help:
http://anonymous.coward.free.fr/scpo/exp-percap.gif
http://anonymous.coward.free.fr/scpo/pct-gdp.gif
These graphs look at expectation of life at birth, but almost any population-level measurement of health tells about the same story. The takeaway message is that, while we're certainly better off than third-world countries, among developed countries we're close to the middle in almost everything except cost. Under our current system we're basically flushing about 4 percent of GDP down the toilet for no particular benefit in health care quality. Maybe we're buying something else with that 4%, like choice, or timeliness, or freedom from oppressive interference, or refreshingly chilled specula and minty fresh breath, but we don't seem to be buying much improvement in population-wide health.
Gotta love any site that quotes the Economist. I think that you have hit the nail on the head as to why health care reform is even more deadlocked than social security reform, good solutions are really, really hard to come by. Markets work poorly when there is a lack of information between buyer and seller or in this case patient and physician. A personal example. I broke my leg last year (I heroically slipped on the ice). My doctor presented me with two in his opinion two equally viable options 1) surgery (which he said was the better option from a recovery stand point) or 2) traditional setting and 6 weeks in a cast. As I am self-employed (which means I pay more for insurance) I have a high deductible so I asked what the difference in cost was. I got the same look I get from my dog when I ask her what the phone number is for the local chinese take out place. The doctor had no clue, and even after going out ( to the billing dept I assume) could not tell me. Markets can not work well when the care decsisions are made in a cost vacuum.
The difference turned out to be around $4,000. Reducing the effective cost to zero by creating a universally funded system will cause more people to opt for the surgery option raising costs. Having a purely private system will mean that people without an extra $4,000 might walk around with limps. Clearly this gets more and more scary as these issues become matters of life and death.
I keep hoping that someone will come up with a way to fix our system that will really work and not just come up with new problems. We could really use a better mouse trap for this one.
Posted by: Dex on July 18, 2004 04:19 PMMaybe we're buying something else with that 4%, like choice, or timeliness, or freedom from oppressive interference, or refreshingly chilled specula and minty fresh breath, but we don't seem to be buying much improvement in population-wide health.
What we appear to be buying are jobs for thousands of paper shufflers and some very well paying jobs for insurance company executives.
Posted by: ____league on July 18, 2004 04:22 PMHow about the fact that the largest single payer of medical claims in the US health care economy is the US government. How about the fact that nearly every time they decide to cut the deficit or reduce expenditures one of their favorite items to cut is the reimbursement to hospitals and doctors. This coupled with the fact that Medicare does not means test create gross inefficiency in the system as a whole.
Bottom line 36 year father of four, I pay $786 per month and my insurance is free, I only pay for my dependents. Silly thing is that my plan cost the same for 2 kids as for 4 or 6 or 8 or however many you have.
I agree with Dex. If we shopped for everything else in the economy the way we are expected to shop for health care, Wal-Mart would still be a quaint little hardware store in Arkansas.
There's no doubt that health care is especially thorny, but these comparisons to other developed countries -- especially with regard to life expectancy -- need to be done far more rigorously if they're going to be at all meaningful. To take only two examples, has the impact of gun violence (both in terms of life expectancy and treatment costs) been factored out? And have the dramatic differences in traffic deaths and injuries (which, again, lower life expectancy and raise treatment costs) been factored out, as well? Finally, has the difference in drug prices been factored out? The U.S. is effectively subsidizing the health care systems of every country with price controls on drugs. And while you could say this is an argument that the U.S. should have them as well, there's no doubt that if it did, far less investment would go into pharmaceutical R&D, and far fewer drugs would be produced for everyone. So that difference needs to be accounted for, too, if you want to make a real comparison.
Posted by: Steve Carr on July 18, 2004 04:34 PMThe very term Health Care is a misnomer and points out an underlying flaw in the system. Our medical system is not in the health business it is in the disease treatment business having already failed at what should be it's primary task, the creation and maintenance of health. If insurers invested in health, paying for memberships at health clubs with mandatory visits with personal trainers that document participation, for instance, they would wind up paying pennies on the dollar compared with the projected costs of treating cardiovascular, obesity and diabetes related illnesses. The health benefits associated with exercise are extremely well documented and preventive care is well established in the area of dental insurance in the form of free cleanings twice a year. Why should our mouths be the only part of our bodies to receive this type of progressive care?
Posted by: Dubblblind on July 18, 2004 05:28 PMI agree with Rossi that there is a real problem with markets and health care. So much of a cost for a particular procedure is based on fixed costs, such as equipment, structures, doctors country club dues, lawyers, etc.. that it probably does cost a hospital 50 bucks to prescribe an aspirin.
I am not sure we should just give up on markets just yet. It reminds me about the comment that democracy is the worst form of government except for all others. What complex and opaque systems need to make them more efficient is competition. I am in favor of whatever system, government provided single payer or regulated personal insurance as long as they don't destroy the incentive to provide helth care at the best value. The current system is clearly not providing it as most people are stuck with whatever insurance thier company/union dictates while these companies/unions get big tax breaks.
Posted by: Dex on July 18, 2004 05:30 PM"Figuring out" what to do isn't hard. Single payer, universal health care is the obvious answer. Everybody "wins".
The "hard" thing is mustering the political courage necessary to take on the few, the proud, the losers in this game:
1) Over-rated, over-rcompensated, over-reaching insurance companies.
2) Over-etc. pharmacetuical, medical equipment, and medical supply firms.
3) Incompetent and/or unethical health care professionals and facilites.
Posted by: Mike on July 18, 2004 06:01 PMThe comment that the US private sector funds medical R and D for the whole world is mostly a red herring. Fact is, companies doing R and D get a huge (I think 150%) R and D tax credit. This means that the US taxpayer, not just private cash, is funding R and D. As for other health R and D, it is paid for by the taxpayer.
I am originally American, have lived in France, and now live in Australia. My family has experienced all 3 medical systems---purely private in US, mostly public in France, and mixed in Australia. The French and Australian systems both work much better than the US system.
In Oz, private med insurance is NOT bundled with employment, you join a health plan, which is a non profit. Everybody has basic and catastrophic and emergency insurance from the govt, paid for by a tax percentage add on. You do have considerable out of pocket costs, which gives cost control incentive.
I think the US would do well to emulate australia.
JHH
Posted by: Jeffrey Harris on July 18, 2004 06:36 PMHealth care cannot be a free market because the underpinnings are not those of a free market.
Physicians must be licensed.
Prescription drugs require a licensed physician.
Making it free market would allow anyone to hang a shingle and compete for business. Absent this type of reform (I am not arguing it would be good or bad) health care in the US will never be a free market.
Posted by: bakho on July 18, 2004 06:47 PMBrad,
I would be very interested in your take on the medical malpractice aspect of the health care debate. Here is my understanding of the facts: please correct me where I am wrong.
1) Medical malpractice insurance rates are skyrocketing. This varies some state by state, but it's not clear to me what state policies are effective in reducing these insurance rates.
2) The actual cost of payouts in both jury awards and settlements is a minimal fraction of total medical costs---less than .5%. The number I'm referring to is the dollar amount actually paid out, which must be reported to the federal government. The actual dollar amount of legal awards, on paper, each year is probably higher.
3) I don't know what the legal costs for medical malpractice cases are. It's possible those are significantly higher than the awards, but I find it hard to believe that they are so much more than the cost of awards to drive the insurance cost up by themselves.
4) To this disinterested observer, the root of the medical malpractice insurance rate increase is price gouging by the insurance companies
5) Doctors I have talked to blame lawyers rather than insurance companies.
In my state, Illinois, there is supposedly a crisis, as doctors leave the state to find lower malpractice insurance rates in other states.
On the other hand, the actual number of doctors in the state---including those in specialties--continues to rise at a good rate.
For me, the bottom line is that those who claim that lawyers and their suits are driving up medical costs and malpractice insurance rates are not to be believed for the simple reason that they never provide a dollar figure for the cost to the consumer of these suits.
Comments?
Posted by: marky on July 18, 2004 06:48 PMIn a truely free and informed market, only the healthy would be able to afford health insurance.
That is the bottom line. Once you accept that statement (noodle on the topic for a while and you will), then you might as well support an effective health care system. What we have here in American is just about the least effective of the major industrialized countries by any standard, possibly excepting the care of extreme cases.
Also, what Dubblblind and rc said.
Posted by: Tom DC/VA on July 18, 2004 06:52 PMBrad (or anyone else),
A while back you mentioned wanting to read David Cutler's "Your Money or Your Life" -- I don't know if you ever got around to it. But, among other things, it strongly supports a variety of risk-equalization mechanisms in insurance. (Cutler comes out against single payer health care, but concludes that in the absence of effective risk-equalization strategies, it would be the only viable alternative.) The Economist, however, says "But this interesting idea is based on the premise that effective risk-equalisation is possible; and experience to date suggests that it is extremely difficult...."
Could you possibly elaborate on this? Are there theoretical reasons why it can't be done right, or is it just that nobody has tried hard enough yet?
Posted by: Anno-nymous on July 18, 2004 08:16 PMJeffrey, if you're making international comparisons, it doesn't matter which Americans are funding R&D -- American taxpayers or American companies. The point about the rest of the world piggybacking on American R&D is still the same. And it is still the case that if America had price controls on drugs like the rest of the developed world, there would be less investment in R&D and fewer drugs produced. (If the possibilities for profit shrink, so too does investment.) Any cost comparisons between the US and the rest of the world need to recognize that part of America's higher costs are the effective subsidies we are giving the rest of the world.
Posted by: Steve Carr on July 18, 2004 08:58 PMThis is a subject that I know something about, being a physician who graduated medical school in 1963. I wrote an angry email to Morton Kondracke today who had talked about union members having Cadillac health care. "What infuriates me, as a physician, is your talk about Cadillac health care. Very few people have Cadillac health care in this country. The irony is that medical technology has improved while we treat patients quickly and mechanically, not just poor Medicaid patients, but affluent people as well. Most medical problems aren't life threatening and most people need someone to talk to them. You should read A Tale of two patients by Dr. FT Fitzgerald, in the June 1 Annals of Internal Medicine, www.annals.org/content/vol140/issue11/index.shtml. I have a millionaire friend, former college roommate. He has a 30-year-old son with a learning disability who hasn’t been able to keep a job. He isn’t psychotic, he is somewhat depressed because his life is unfulfilling. He’s being treated with five (5) psychoactive drugs- two, methylphenidate and modafanil are to “wake him up in the morning” because he’s so groggy from the other three. He’s being treated by an eminent psychiatrist, not a chiropractor. When my friend asked me to find him a psychiatrist who wouldn’t bury his son with drugs, I asked my friends for the name of a “humane psychiatrist”- this doctor simply said that the wrong drugs were being used and wanted to change to 5 different drugs! My friend is a real millionaire who can pay $500 a visit if he got real help, but he can’t get humane psychiatric care for his non-psychotic son who needs a rewarding niche in life (he has three sibs who are married and successful in their careers). Don’t tell me how good our health care is. It’s rotten to the core, it tramples on human needs, and it's getting worse- people need time and individual attention - the system provides less of this each passing year as payments to doctors and hospitals are racheted down. It’s not how long we live, but the meaning in our life. Most American physicians are brain washed into over use of drugs, using drugs for conditions that are better treated in other ways. Of course, Bush isn’t directly responsible, but he puts drug companies ahead of humane personal health care. Increasing the numbers of Americans with health insurance won’t stop this dehumanization of US healthcare. The system is rotten- I feel like Luther did before posting his 95 theses, but I have no power. The Democrats will have to decide whether or not to take Kevin Phillips’ advice (see www.thenation.com/doc.mhtml?i=20040802&s=phillips)."
The cost of malpractice insurance is high, but I blame insurance companies more than lawyers.
I changed jobs last year and considered private practice- aside from borrowing money to lease an office and furniture, I would have had to pay $18K up front for a year of malpractice, I, a person who has been in medicine for 40 years and never had a single malpractice judgment or settlement against me. I said hell no to private practice and borrowing 60K up front. I work in a teaching hospital. I supervise trainees and most of the patients I see don't speak English. Insurance companies and big Phrma control Washington, but over 80% of physicians that I've run into are in favor of a single payor system. The amount of paperwork per patient has increased more than ten fold. It wouldn't be perfect, but I've worked in the English NHS and it is (or rather was) humane whereas our sytem is not.
Every GP I've consulted with in the last twenty years has processed me like cheese. Hepatitis? You're alive, aren't you ... next! Heart arrest. Your insurance doesn't cover major medical ... next! Colon polyps, must have hemorrohoids ... next! Ear infection, maybe you got ear cancer!
Must be MD's malpractice insurance is eating up their profits, so they look for those big fees diseases, instead of teaching diet, exercise and preventive self-care. Think about it for a sec.
And approppo of nothing, heard a UW lecture on liver transplants the other day, a lead surgeon saying the survivability of a liver transplant (patient) was no better than simply abstaining from alcohol. So there you go. Alkie John won't quit drinking, gets a $100,000 liver transplant, chi-ching! Comes out of the medical insurance pool, and God forbid they let $100K walk away and dry out in some Betty Ford clinic.
Now Medicare has declared US obesity a disease,
even though there are few fat people globally.
The US medical system is seriously, seriously broken, nevermind who's paying it or how much, or prescription benefits or whatever. Broken.
Just like everything else in this process- and procedure-driven frankenstein we've created.
Money ... money ... money, and, uhh, *money*!
Next!
“Must be MD's malpractice insurance is eating up their profits, so they look for those big fees diseases, instead of teaching diet, exercise and preventive self-care. Think about it for a sec.”
Yes medical training concentrates on episodic illness and not prevention. But prevention is not so easy. Yes a doctor could teach his patients about diet and exercise, but would that help? I doubt it. Almost nobody succeeds in losing weight on a permanent basis. Very few people (especially those over 50) have the discipline to exercise correctly and regularly. When food is widely available and cheap, people over eat and get fat. Even pets are fat these days. One of the worst things for your body is the very thing we are doing now, using personal computers. Are you going to stop? Incidentally the Mayo Clinic does push patient education and illness prevention. They counsel patients on self care right down to what heart rate monitor to buy (for aerobic exercise) and how to take your own blood pressure. But remember you can lead a horse to water, but you can’t make him drink.
"The point about the rest of the world piggybacking on American R&D is still the same."
I'm not convinced you're on the right track. It's a debatable point, and has been debated, (sorry no URLs today), but I lean toward the view that American taxpayers pay for most groundbreaking drug development thru university research (which then gets licensed to whomever, US or foreign-owned) whereas Pharma is mostly chasing larger shares of existing mega-markets, especially "new and improved" cold medicines and allergy drugs. Once a sure thing comes along, usually from some university lab, they attempt to piggyback with low-cost tweaks to the already existing research. By mining, for example, public domain databases for useful compounds that can be modified slightly and patented they minimize investment and maximize return.
Posted by: dennisS on July 19, 2004 07:17 AMHealth care is rife with agency problems and informational assymetry that render the assumptions of perfect competition moot. These are the real problems of health policy, common to all national health care systems, while malpractice is at best a tangential issue peculiar to the US and at worst a red herring distracting us from real issues necessary to achieving a socially satisficing solution.
Health policy struggles to anticipate how to avoid perverse incentives in a market of uncertainty. Consider that the incentive of any insurer, whether it is a public universal scheme or a private market competitor, is to minimize their outlays. A nationalized health system has the advantage (from its standpoint) of controlling its outlays by restricting the flow of capital to medical care, but can't really control demand for services if it is a truly universal system. (Even if capital restrictions result in queues and costs are borne by those suffer longer in waiting or in worsened conditions, some sort of care must be delivered at some point in time). The private insurer can control its outlays by negotiating with providers, but also by controlling the demand of its members by making them pass through bureaucratic hurdles, or, as the Economist article points out, by selecting better risks and leaving those with greater objective need for services in a disadvantaged position in the market.
In an environment that encourages technologically intensive care like the US, the individual consumer observes the outlay of technology on her behalf, might compare that outlay with the experience of family, neighbor, or friend, and, quite naturally, wants to have everything done that can be done no matter how unlikely the improvement. The consumer then voices her preference not through the direct purchase of those services but through political agitation for "patients' bill of rights", mandates for coverage of certain politically fashionable services, and restrictions on managed care.
In a universal system the norms of equity reduce the opportunities for interpersonal comparisons, so that differences in the quality of care delivered to individuals that might be shocking to the clinician are unobservable to the actual patient. Still, European and Canadian health systems are subject to mass political mobilization over the aggregate flow of resources to that sector.
Posted by: chazbet on July 19, 2004 07:45 AMChaz make Dex head hurt with phrases like "norms of equity", hehe good post.
One might quible about "Even if capital restrictions result in queues and costs are borne by those suffer longer in waiting or in worsened conditions, some sort of care must be delivered at some point in time" waiting times are not the only way capital flow is restricted, the other way is simply denying life extending procedures to those who don't meet certain age and or other medical conditions. The "some sort of care" might simply be pain management therapy while the patient expires. This may be the correct sociatal decision but we should not kid ourselves into believing that under a universal system all medical decisions will be made betweent the patient and their physician. We will in some cases be substituting evil insurance executive for uncaring government beurocrat.
Posted by: Dex on July 19, 2004 08:19 AMA few thoughts:
1) The U.S. life expectancy stas are heavily skewed because we have a large immigrant population, we have more traffic deaths/ injuries, we eat too much and don't exercise, and we have more young deaths due to violence. Corrected for these factors, the U.S. actually has some of the highest life expectencies in the world. (I am looking for a link now for all of you naysayers)
2) There was an incredible backlash by consumers against restrictive managed care insurance plans. What makes you think these same people will gladly be subject to government imposed rationing? Keep in mind that the majority of people in this country currently HAVE insurance.
3) If the government provides care to everyone why will that hold down costs? If I don't have to pay, I am going to get as much health care as possible. It is only when I bear the cost that I make rational decisions.
4) Why is healthcare the only thing that people think should be provided for free? Why don't we provide food for free, or free housing, or free cars and free gas? They are all necessities as well aren't they?
5) How much is an extra year of life worth? There have been numerous references to greedy doctors/hospitals/pharma companies/ medical device, etc. Yet, no reference to greedy consumers who want something for nothing. Personally, I would pay a lot for an extra year of life. That is what pharmas, doctors, and medical device companies are selling....LIFE. It seems to me to be common sense that something that can extend your life should cost a lot because there will naturally be a lot of demand for it.
6) How long do you think it would take once national healthcare is established here for side agreements to emerge where people can pay extra for immediate access? I give it about 30 seconds.
7) Wouldn't it be easier to move to a system of mandatory catostrophic coverage where all other costs are paid for out of pocket by consumers?
Let the insults begin! After all, I must be a heartless conservative!
Posted by: wtf on July 19, 2004 08:40 AMI think JRossi and Dex make excellent points about prices and markets. My father, a recently retired orthopedist, noted that in the mid-1990s, as health co-pays started rising, people started asking about how much procedures would cost. Was the MRI necessary or could the patient wait two to four weeks to see if the backpain eased based on my father's recommendations about proper posture, stretches, breaks when seated, and over-the-counter pain medicine? Those with higher co-pays more often took the conservative approach.
When I had numbness in my third and fouth fingers and upper shoulder pain, an MRI could detect a bone spur nudging the spinal cord. I had MRIs done in 1991 and in the mid-1990s, both of which were inconclusive. But insurance covered them, so as the docs said, "Why not?". I knew there was a real social cost but if there was a bone spur, I would have liked to know. Of course, home traction and a wall pillow solved the problem, at a tenth or less of the MRI's cost.
If you consider healthcare complaints, however, what many Americans say is: "Those damn insurance companies won't pay for my MRI" Or, "My ins. co. is sending me to a facility with a two-week wait." Jeffrey Harris backs up JRossi: there is a trade-off between coverage, cost, and quality. If you ramp up coverage, there will be a greater cost even if you only maintain quality. The Australian model, he notes, forces patients to pay for non-emergency and non-catastrophic healthcare -- which will be a problem for eldery and poor patients. The answer there is income supplements for those in need. But it reflects one problem with American attitudes: we want near-free healthcare without any tradeoffs, and politicians pander to that possiblity.
A universal single-payer system won't solve many of the problems that middle-class Americans cite. To reduce the cost -- which will be paid for by taxes -- quality will need to be cut. This will be more on the conveinence side of quality rather than reducing the safety of service, but people will not be happy to be told, "You get the doctor on duty at the time" or "MRIs are reserved for use only in cases where serious disease is suspected, not for moderate backpain that is asymptomatic of cancer." Those un- and under-insured would benefit, but most Americans would be annoyed at restrictions of the conveinence side of quality, and would gripe about the cost.
We could insure all un- and under-insured today if the government folded them into existing federal programs and taxpayers footed the bill.
CLB
I love all the ignorant comments here about how American drug companies are the only ones that innovate. I guess this means that Novartis (Diovan, Lamisil) and Roche (Valium, Rocephin) are American drug companies. That would surprise the Swiss, I'm sure, but what the hey. And it's great to hear that Boeringher-Ingelheim (Flomax) and Bayer (Cipro) are American drug companies. That would surprise the Germans, I'm sure, but what the hey.
Regarding the quality of American medical care: Last year in Phoenix, AZ, there was at least three instances where no (zero) emergency rooms in the entire metropolitan area was accepting ambulances. None. If you were in an auto accident, scraped off the road, and to be dead within minutes unless getting prompt emergency care -- well, your relatives would be paying for a funeral, not medical care. In hospitals, wards that would have had a full-time nurse thirty years ago now share a nurse with four other wards. The fact is that the American medical care system is in a state of meltdown, especially the emergency care system, but the entire hospital system is only a few steps away from total collapse. Part of this is the inevitable result of commercialization of the hospital system (thirty years ago for-profit hospitals were unheard of, virtually all hospitals were owned by community-based non-profit organizations), which has sucked investment out of the hospital system and reduced care in order to improve profits. Part of this is that Medicare reimbursements continue to fall as a percentage of costs, and the big insurers continue to squeeze the hospitals. And part of it is simply that companies have discovered that lawyer's fees defending malpractice suits are cheaper than providing adequate care. But the fact of the matter is that America no longer has the best health care system on the planet, to the point where my mother (who has been a nurse for over 30 years) now refuses to work in a hospital because she does not agree with providing such poor care to patients.
We have two choices: We can try to patch up the current system, which is a combination of single-payer system (Medicare) and employer-funded system. Or we can move to a system that is known to work better than and be cheaper than the American system -- a single payer system.
Only an ideologue will turn down a known-to-work solution just because it doesn't agree with his ideology. As a realist, I say let's expand Medicare to apply to *ALL* Americans, expand the payroll deduction for Medicare to pay for it, and move on. If a single-payer system is good enough for our old people, why isn't it good enough for the rest of us?
- Badtux the Realist Penguin
BadTux:
1) If a single payor system works so well, why do Canadians that can afford to, come to the U.S. for care?
2) How would a single payor system allow emergency rooms in Phoenix to treat more patients? How does it have anything to do with the hospital being non profit or for profit? For profit hospitals have an incentive to provide more care, not less. Oh, and Medicare pays the lowest rates of any payor, how would increasing the number of people enrolled change that? I would imagine that the problem in Arizona (and everywhere for that matter) probably lies in the ability of people to use an emergency room for non-emergency conditions. After all, a hospital cannot refuse emergency room care.
Also, with regards to your drug company comment, Why is Novartis moving its R&D to the U.S.? Why does the U.S. have more drug companies than the rest of the world combined? Could it be that the price policies of other countries stifle innovation and research?
Posted by: wtf on July 19, 2004 10:23 AMBadTux snarks:
"I love all the ignorant comments here about how American drug companies are the only ones that innovate. I guess this means that Novartis (Diovan, Lamisil) and Roche (Valium, Rocephin) are American drug companies. That would surprise the Swiss, I'm sure, but what the hey. And it's great to hear that Boeringher-Ingelheim (Flomax) and Bayer (Cipro) are American drug companies. That would surprise the Germans, I'm sure, but what the hey. "
Okay, let's reduce profits for those foreign companies in the American markets to be no greater than profits they realize in Canadian markets and see what happens. The American consumer is still driving nearly all innovation in pharmeceuticals because of the price caps imposed by other nations. They get away with it because we don't do the same.
Posted by: Jason Ligon on July 19, 2004 11:30 AMDo nor forget the role of the AMA. By drastically restricting the number of medical schools, it has artificially reduced the supply of doctors at the vast expense of consumers. Doctors will argue that their goal is to achieve a "cadillace standard" of quality, but consumers are much, much better at determining who is and who is not a good doctor than the self-serving AMA.
Posted by: Brad on July 19, 2004 01:20 PMI'd just like to slash into the use of Kaiser Permanente as a 'model' company, which one hears quite a lot in these discussions. Here in Colorado, Kaiser keep their costs down by not offering coverage AT ALL outside of the metro front range area. This means that residents in some 80,000 sq miles of the 104,000 total in this state cannot obtain coverage from this organization. Kaiser therefore cannot be used as a model for nationwide healthcare solutions.
Posted by: Mark on July 19, 2004 02:37 PMFor all those who crow about how innovative American pharmaceutical companies are, I suggest that you consider some of the specifics in this excellent essay on the topic in the NYRB.
http://www.nybooks.com/articles/17244
Posted by: Tom DC/VA on July 19, 2004 04:13 PM1) 'wtf', why do you believe Canadians that can afford to, come to the United States for care? Do you have any statistics by any reputable body stating that this is so? Or is this yet more "proof by anecdote"? Hint: If you ain't got statistics, you're talking bullshit. I haven't seen any statistics stating that Canadians come to the U.S. for care in any significant numbers.
2) The emergency rooms in Phoenix are packed because (doh) PEOPLE DON'T HAVE HEALTH INSURANCE! Duh. If you don't have health insurance, you don't go to the doctor until you are so sick that it's an emergency. If people could afford to go to their doctor because they had (duh) HEALTH INSURANCE, they wouldn't end up getting so sick that they had to go to the emergency room.
3) If a drug company is moving R&D to the U.S., it's probably because the U.S. government is paying for them to do so. Which is fine and dandy by my book -- subsidizing R&D is one of those functions of government that I have no real problem with. The Internet is a perfect example of the benefits of government R&D, since all of the fundamental technology was developed at government expense for the ARPANET.
4) One thing I *WILL* note is that drug prices are *NOT* the reason why the U.S. has the most expensive medical system in the world. Drug costs per capita in France, for example, are almost identical to that in the U.S. So we can rein in health care costs without reducing drug costs to the point where drug companies cannot afford to develop new drugs. A single payer system does not mean the drug companies go bankrupt.
In fact, if you actually look at the dollars and cents, the U.S. spending on ACTUAL MEDICAL CARE is similar to that of France, which is widely acknowledged as having one of the best (if not the best) medical care systems in the world... what is eating us alive are administrative costs related to insurance companies, and insurance company profits. Most doctors nowdays are spending 20%+ of their gross profits just dealing with insurance company paperwork. And insurance companies are making a 10% profit margin, i.e., over 1% of GNP is pure profit to health insurance companies, as well as chewing up significant amounts for administrative expenses. In short, costs related to health insurance are almost 100% of the difference between France's medical costs (around 11% of GNP) and the U.S.'s medical costs (around 15% of GNP).
And finally, regarding per capita supply of physicians: physician salaries have been declining for the past 20 years. If declining salaries means there's a surplus, then we have a surplus, and the AMA's supposed "monopoly" (via medical school graduation limits) is not an issue. Unless the laws of supply and demand have been repealed, we have to look elsewhere for the cause of rising medical costs -- the supply of doctors isn't it.
- Badtux the Factual Penguin
Posted by: BadTux on July 19, 2004 04:40 PMTwo points. I need an MRI related to hearing problems. I asked the nurse doing the scheduling how much it would cost. She not only did not know, she did not offer to price it for me at any of the several private MRI shops here in town. If I care about price, which I do, I have to shop.
The costs of administration of the medical system are painfully obvious in Nashville, home of the for-profit hospital as a securitized business. Every time Hospital Corporation of America has gone from private to public to private, to spin-off to merger to whatever else Wall Street can dream up, the Frists have made a fortune. Each time, their profits have come from the money paid by the sick. You should see all the medical administrators living in million dollar homes, who have never treated a sick person in their pencil-pushing lives.
Posted by: masaccio on July 19, 2004 05:53 PMmasaccio: I would not necessarily pick an MRI provider on price. I had a spinal MRI done (in California for a CA doctor) last year, and I sent the pictures to my radiologist friend (also a PhD in physics) and he ridiculed the quality of the scan. On the other hand, the Mayo Clinic physicians were satisfied with it, and they are pretty fussy about diagnostic tests. If the docs are looking for an acoustic tumor, I would think you want a high quality scan. The House Institute in Los Angles is probably the best place to go.
Posted by: A. Zarkov on July 19, 2004 06:32 PMMassaccio -- HCA's profits are not only from fun and games with securites. They're also from cutting patient care. My mother once was an RN in one of their hospitals. She started out overseeing a wing. Next round of cost cutting to increase profits, she was overseeing *TWO* wings. Next round, she was overseeing the entire floor (*THREE* wings) while most patient "care" was provided by re-trained minimum wage janiotirial staff. At that point she started filing complaints with the state department of hospitals about the dangerous lack of supervision and care at the hospital. For her troubles, after the next round of cuts she oversaw *TWO* floors. She quit then, saying that she wasn't going to participate in killing patients.
Turns out HCA had figured out that it was cheaper to pay settlements on lawsuits than to provide adequate patient care. It was a perfectly adequate business decision, if you're an accountant. After all, the patients don't know any better -- they're not doctors, they don't know that the nittily-garbed person providing "care" to them is a janitor wearing a greens. You can say that the hospital was defrauding the patients by promising them medical care then not providing it, but it was a fraud that was not immediately obvious, and by settling cases in secret with cash payouts, the hospital managed to hide the fraud from the general public as a whole. But what makes good fiscal sense for HCA is piss-poor public policy, which should be about providing care, rather than about defrauding patients.
(And no, I'm not going to give details on what HCA hospital or etc. because my mother is close to retirement and doesn't need a lawsuit by a pissed-off mega-corporation).
Too many people who state nonsense like "the U.S. has the best medical care in the world" haven't the foggiest notion what's actually happening with our medical system. My mother has been a nurse for over thirty years. She has seen the system decay from when it WAS the best medical system in the world (when corporatized hospitals were virtually unknown, almost all hospitals were locally owned non-profit corporations, often owned by the very same doctors who practiced there) to the current state, where it is a farce that kills patients every day.
- Badtux the Disgusted Penguin
BadTux: What you describe is a major and criminal fraud. Were the doctors aware that their patients were under the care of janitors? If so they are guilty of willful negligence. If not then they are still negligent. In the case of willful fraud, HCA would be liable for punitive damages. Since it would be illegal for janitors to pose as licensed nurses, they would be subject to prosecution. Any court aware of what happened would be guilty of obstruction of justice if it failed to report the deception.
Posted by: A. Zarkov on July 19, 2004 08:37 PMI know that many doctors in the US graduate from med school with debts of $100,000 or greater. Does this have a large impact on the fees that they must charge when they go into practice? How does it compare with the financial situation of new docs in other developed countries?
Posted by: Michael Cain on July 19, 2004 09:06 PM> Corrected for these factors, the U.S. actually has some of the highest life expectencies in the world.
And corrected by some other factors, the US is actually a nation of immortals. Perhaps you don't make the connection, but perhaps at least some of those things you try to factor out are problems raised by the US system being one of chronic treatment and life extension, rather than preventative care?
> Why is healthcare the only thing that people think should be provided for free?
Straw man. A universal single-payer system isn't 'provided for free'; there are some (small) up-front charges, and the bulk comes from general taxation. The idea is that such a system spends its money more efficiently than the current mess. And there's a combination of moral and pragmatic issues at stake: a healthier population is less likely to become an unproductive one. A system where one can start a business or become self-employed without taking on a huge burden in terms of healthcare costs is one that's more likely to encourage people to innovate and venture out on their own. There's the constitutional argument that healthcare can be considered part of the 'general welfare' (I.8) for which Congress is empowed to provide. There's the example across the developed world that universal healthcare is a social good. Meritocracy is all well and good, but should part of the 'American dream' be to aspire for... healthcare?
And talking about 'mandatory catastrophic coverage' as if it's a solution is ridiculous. The emphasis needs to be on averting the need for catastrophic coverage in as many cases as possible.
The American system is sick, people. It's sick beyond cure. My 'catastrophic coverage' is an open-ended one-way flight back to the UK. The pharmaceutical companies spend billions on developing and marketing 'me too' and lifestyle drugs, while the sharp end -- the cases that private medicine won't touch with a bargepole -- is subject to massive state budget cuts.
Posted by: nick on July 19, 2004 09:12 PMBad news for you guys. Rationing will happen. It can either happen as a result of pricing or it can happen as a result of a government policy. Everybody doesn't get infinite free healthcare.
Aside from incentives to innovate, the other question about single payor systems is whether we would prefer to be told by a bureaucrat that we are not connected enough to be first in line.
Rationing will happen.
http://www.parapundit.com/archives/000634.html#000634
Posted by: Jason Ligon on July 19, 2004 10:14 PMCorrection: Rationing *ALREADY* happens. Every day, accountants in the pay of health insurance companies detirmine what care someone will receive based upon criteria of how profitable the decision will be for the company, rather than upon what's best for the majority of rate payers. They can do this because employers, not the people receiving the care, are their customers, and thus they need not fear the long hand of Adam Smith. The question is this: do we want the American people as a whole to do the rationing, via the government that they elect and install, or do we want an unelected group of insurers unaccountable to the actual patients to do the rationing based on criteria that are solely based on whether they can get away with denying care for a particular case in order to maximize their profits?
Regarding the janitors in greens who took the place of most of the nurses at the HCA hospital I already mentioned: They went to a training course to be called "nurse's aides". However, they were being expected to take temperatures, measure blood pressure and respiration, examine the monitors of those patients on monitors, and do other jobs that are more commonly associated with nurses. The problem is that they had no understanding of all these numbers they were writing on patient charts. They were trained monkeys, basically. If a patient "went bad" in the night, nobody would discover it until the morning when the doctor read the charts and discovered that hey, this patient's temperature spiked to 102 degrees and his respiration increased drastically and blood oxygen decreased alarmingly due to congestion in his lungs (i.e., the pneumonia didn't respond to the drugs), why didn't anybody call me? Well, the trained monkey (aide) had no idea this was a problem! A trained nurse, of course, would have recognized immediately that the patient was in distress, but a janitor with a short training course is not a nurse. The aides did not represent themselves as nurses, but everybody assumes they are, because they're wearing medical garb, and the hospital was not quick to tell patients different. The actual nurse spent all her shift trundling the medicine cart across two floors worth of patients, never having a chance to even glance at the charts to see if something was going wrong with the patients, then spending a couple hours documenting the medicine administered (for defense in the inevitable lawsuits -- hospitals are great at generating paperwork that makes it appear they're providing medical care when they really aren't).
This is modern corporatized medicine brought to its lowest common denominator, and is common nation-wide. It's good business for HCA and it's ilk because it maximizes profits (settlements are cheaper than providing quality care), but lousy for patients. But unless you actually know someone in the business, someone who has been there for the thirty years that the American medical system has been sliding towards the abyss, you have no idea it's happening.
BTW: My HMO rations care the old fashioned way. If you get sick, it's a two week wait to see your primary care physician. They figure you'll either be dead or well by the time two weeks are over. If you complain that you could die if it's a serious illness, they shrug and tell you to go to the emergency room. Hmm, I wonder why the emergency rooms are overcrowded?!
-Badtux the Rationed Penguin
Posted by: BadTux on July 19, 2004 11:58 PMBadTux: What you describe is a failure of the state’s quality assurance program in that it permitted inadequately trained personnel to attend to patients. Why would a single payer (euphemism for nationalized medicine) system necessarily correct this problem? I would be happy to nationalize medicine if I thought it would increase quality. But I have no confidence that it would. It could even get worse. Now I would have an entity I couldn’t sue for malpractice (sovereign immunity). We need to increase the transparency of the medical system so patients would know enough to avoid HCA hospitals and they would reform or go out of business. We don’t need to nationalize medicine in order to increase transparency. On the whole I agree with you. I don’t like the commercial model. I don’t even like physician owned non-profit organizations like Kaiser because they too have incentives to withhold care (aided and abetted by the lack of transparency). I prefer a system like the Mayo Clinic where all the doctors and nurses are employees of the non-profit Mayo Foundation.
Brad’s comment is really on the mark. This is an extremely difficult problem to correct. But we could easily make it worse trying to fix it.
"Decisions about treatment are delegated to the very physicians who also provide and commission medical care. This is why some health economists favour government intervention, so that a powerful single payer can counter the might of medical providers."
Amen---physicians have far too much autonomy. But this won't be corrected merely by moving to nationalized health insurance; much more has to be done to regulate *medicine* itself, not just the price signals.
"Yet this judgment about the inherent weakness of consumer power is increasingly challenged..."
But there's no reason to think that consumers are capable of making "rational" decisions. For example, look at the booming market in soaps that contain antibacterials (when the general consensus is that plain old soap is good enough). Or the number of people who buy Advil, when they could buy generic ibuprofin. Or the number who insist on receiving antibiotics for what often turns out to be a viral infection. Finally, many consumers, like doctors, are going to be biased in favor of intervention, when often the best thing to do (in terms of costs and often benefits) is to do nothing.
Price signals, then, are important but given the information problems involved (which, again, affect doctors, not just consumers) simply not sufficient.
Posted by: liberal on July 20, 2004 04:24 AMBadtux notes that rationing already happens, and submits:
"The question is this: do we want the American people as a whole to do the rationing, via the government that they elect and install, or do we want an unelected group of insurers unaccountable to the actual patients to do the rationing based on criteria that are solely based on whether they can get away with denying care for a particular case in order to maximize their profits?"
It was the intention of my post to make this same point. Rationing by price or by government is still rationing, and we mostly ration by price now. I apologize for the lack of clarity.
The people as a whole means 51% of people, for starters. Functionally, the people in the front of the line are those with the most political clout instead of those with the most financial clout when we replace politics for money. You want to see a public choice experiment in place, make people beg the government for all medical services.
It takes an extraordinary faith in the purity and capabilities of government to grant them the power of life and death. I can't imagine preferring the case of someone who has been a disciplined saver for their own retirement, who is sitting on a nest egg that would allow them to buy a treatment that would give them three more years of life, and having some bureaucrat telling them 'no' thereby stamping their death warrant. Yes, the market will price some treatments out of reach for some people, but in general the system functions to provide medical care at the highest levels to those who can afford it so that everyone else can afford it 10 years later.
Demand for healthcare is infinite. Everyone wants the best possible care all the time. Everyone also wants the best possible house all the time and the best food all the time. We have found value in rationing by willingness to pay for homes and food. I don't want the government snatching the chicken leg out of my mouth when I paid for it - even if they are giving it to someone else, and I certainly don't want them denying anyone the best care they can afford so that someone else more worthy can have it.
Posted by: Jason Ligon on July 20, 2004 06:37 AM"My HMO rations care the old fashioned way. If you get sick, it's a two week wait to see your primary care physician. They figure you'll either be dead or well by the time two weeks are over. If you complain that you could die if it's a serious illness, they shrug and tell you to go to the emergency room."
That is interesting. My HMO doesn't require a primary care physician. I had to go to a general practitioner recently with a completely repulsive poision ivy reaction. I looked up a physician I have never seen before on Monday night and had an appointment on Tuesday afternoon. I filled out one page of paperwork in the waiting room. I was prescribed a generic steroid and was given samples of Zyrtec for free, courtesy of that horrible drug marketing you always hear about. I can't bring myself to complain about my experience.
Posted by: Jason Ligon on July 20, 2004 06:43 AMSince I have cause to become interested, the American health system, which I know only through the internet, is impressive in relation to the quality of information and research conducted into the various forms of cancer. For example, the Multiple Myeloma Rearch Foundation sent me by post a booklet - Multiple Myeloma: a treatment overview. Fortunately, despite earlier suspicions, in the absence of clear indications, perhaps typical of cancer, I do not have myeloma, but I am impressed by this action.
The Australian system has aspects of a universal system, but I do not have medical insurance, and while I have access to very qualified doctors, now that I require a spelnectomy, removal of the spleen, with the suspicion of lymphoma, the sub text, at least talking to my putative surgeon's secretary is that not having such insurance is a problem.
Obviously, JH above knows more about the Australian system than I do. Seeing specialists is never cheap, but I have had no problem in meeting the expenses which to this point are less than a thousand dollars for which I am refunded by the Government system. Socialism is unbeatable when it works.
Posted by: wmmbb on July 20, 2004 06:47 AM"Correction: Rationing *ALREADY* happens. Every day, accountants in the pay of health insurance companies detirmine what care someone will receive based upon criteria of how profitable the decision will be for the company, rather than upon what's best for the majority of rate payers. They can do this because employers, not the people receiving the care, are their customers, and thus they need not fear the long hand of Adam Smith. The question is this: do we want the American people as a whole to do the rationing, via the government that they elect and install, or do we want an unelected group of insurers unaccountable to the actual patients to do the rationing based on criteria that are solely based on whether they can get away with denying care for a particular case in order to maximize their profits?"
I have never witnessed any rationioning other than having to wait to see a doctor because they didn't have any immediate appointments available. This has nothing to do with the insurance company but is a result of too many patients and not enough doctors. Right now, I have a choice. Many people are given several insurance options through their employers. If one company is not satisfactory, I can switch to another. HSA with catastrophic coverage is an even better solution as it allows a patient to see any doctor at anytime without an insurance company. Should the government take over, all choice is gone. It will be healthcare with the same speed, efficiency, and quality as the post office. And tell me BadTux, what incentive would the government have to ensure high quality care? I would argue that they would have an even higher incentive to keep costs down to avoid tax increases. The bottom line is that if I am paying for my healthcare, I want choices and responsiveness, something the government has never been able or willing to provide.
Here are some links:
http://www.canadafreepress.com/2004/klaus071204.htm
http://www.larryelder.com/economics/healthcare.htm
http://www.csmonitor.com/2002/0828/p01s04-wogi.html
http://www.pacificresearch.org/press/opd/2003/opd_03-10-17sp.html
http://www.cbc.ca/news/background/healthcare/medicaltourism2.html
http://www.burtonreport.com/InfHealthCare/CanadaNatHlthNYtimes.htm
http://www.managedcaremag.com/archives/0204/0204.canadapart2.html
So, tell me why all of these Canadians are coming here?
Posted by: wtf on July 20, 2004 06:56 AMThis post is exactly right:
http://www.techcentralstation.com/072004D.html
Posted by: wtf on July 20, 2004 07:05 AMThe comments about Health Care being constitutionally guaranteed are very problematic. Once you say that it is a Right there is no real way to draw a line on what that means. Is chiropractic care a Right? how about aroma therapy? In my earlier personal example should I have the Right to the more expensive surgery option as opposed to having my leg in a cast for six weeks and then going through difficult rehab? If you remove any responsibility for making reasonable cost control decisions from the Doctor and Patient, then you by default put it in to the hands of some third party whether it be a profit hungry insurance stooge or an uncaring budget obssesed civil servant. A choice between two potentially equal evils.
As for liberal's (sorry if thats confusing, but I am refering to the participant in this discusion not the class of people who reffer to themselves as liberals) comment about whether I am too "irrational" to come to a reasonable decision with the help of my physician, I would like to formarally protest on behalf of the 140 million people in this country who are of above average intelligence.
Posted by: Dex on July 20, 2004 08:18 AMWTF - if individual choice is so important, why don't we go straight to a cash-and-carry model for everything, and ditch the whole highly-regulated health insurance system? You are instead arguing about minimal degrees of choice with an entirely government-constrained system, which makes no sense. And the health insurance market needs to be regulated and manipulated, otherwise it almost certainly wouldn't exist. For comparison, think about the markets for flood insurance or nuclear power-plant insurance for a bit. (Hint: you can't.)
Given that our current health care system - that of private health insurance - is already regulated to the nth degree, misallocates resources away from preventative care (especially for infants and children, where it is very cost-effective), pays for very little of the research it profits from, and costs substantially more than other types of systems with similar levels of care, what is to recommend it beyond choice for those who are covered?
Posted by: Tom DC/VA on July 20, 2004 09:08 AM"why don't we go straight to a cash-and-carry model for everything, and ditch the whole highly-regulated health insurance system?"
This is exactly what is needed. If we moved away from the current system to only HSA's with catastrophic coverage we would eliminate a number of negative things now present in the system:
1) Excess beauracracy
2) Insurance company's making decisions for people
3) Paperwork for doctors
4) People being tied into jobs they don't want to maintain coverage
5) The burden of healthcare on small business
6) Steep annual cost increases because people will choose on cost
7) Having to change doctors if your company changes health plans
8) Reimbursement cuts that force providers to focus on profitable diseases (like bypass surgery) while ignoring diseases that are under reimbursed.
On the other hand, moving to a single payor system will:
1) Create more beauacracy
2) the government will make medical decision for people
3) Paperwork for doctors and patients and everyone involved
4) People will no longer have any choices or freedom with reagrds to their healthcare
5) The cost of the plan will cripple all businesses and citizens because of the tax rate needed to pay for it
6) People will have no incentive to utilize cost effective care since they don't directly bear the costs, therefore prices will skyrocket every year leading to strict rationing
7) A shortage of doctors will develop just like Canada
8) Reimbursements will be cut across the board making medical care scare for the majority while a few will pay for private care out of pocket (probably in another country, Mexico perhaps???)
> http://www.techcentralstation.com/072004D.html
Ah, yes: FlackCentralStation, funded by Merck and PhRMA among others. No agenda there whatsoever.
My guess is that more Americans buy medication from Canada than Canadians get clinical care in the US.
Posted by: nick on July 20, 2004 09:23 AMRe: Single payer vs. state systems:
A. Zarkov appears to be utterly unknowing of the difference. A single payer system is a state-owned insurance company, funded via payroll deductions and employer contributions the way Medicare currently is funded. I proposed expanding Medicare to all Americans, not just the elderly. I did not propose nationalizing the hospitals and doctors. They would remain private businesses, free to compete based on quality and service.
As for the notion that this would not work: Are you saying that America's elderly receive second-class medical care today?! While the AARP is quick to moan and groan about how aweful Medicare is (they can't get more benefits for their members if they admit that Medicare is "good enough", after all), I suggest you walk onto the AARP convention floor and advocate eliminating Medicare. Just have your running shoes on, because the chairs, walkers, and canes are going to come flying at you and you'll be lucky to escape that hoard of angry old people with your life.
As for WTF never experiencing rationing: Lucky man. During my entire adult life, my medical care has been rationed by the HMO. This is because our current medical care system penalizes innovators in order to subsidize the big megacorporations. I have never worked for a company with more than 120 employees, thus I have never had a choice of medical providers. Instead, I've been stuck with whatever coverage insurers sneeringly condenscended to sell to my employers at twice the price that they charged IBM.
Which brings up another point: Our current medical system is a disaster for innovation, to the point where it's cheaper for a computer startup in Seattle to move across the border to Vancouver BC because the payroll deductions for BC Health are cheaper than what they'd pay for health insurance in the United States. (Not to mention the 80% tax credit they'd get for creating new jobs in BC for that first year, which would make $4M stretch as far as $20M here in America during that critical first year when there's no revenue because the product is still being engineered). The only thing stopping this from happening more is the friction of the border (even with NAFTA, moving across the border to work is non-trivial). By penalizing innovators in order to subsidize the megacorps (who have the clout to bully insurers), are we acting in the national interest? I think not...
- Badtux the Innovative Penguin
Oops, one other thing. A. Zarkov is apparently ALSO unaware that you cannot sue your insurance company if health insurance is provided as an employee benefit rather than purchased on the open market. This was a recent Supreme Court decision overturning several state's laws. The notion "you can't sue a single government provider!" is irrelevant -- you can't sue your insurance company today, so what's the difference? I will point out that if you're having problems with a state-owned insurance company, your legislator's constituent service office can help (it's amazing how quickly bureaucrats act when they hear, "Do right by my constituent or I'll make sure your entire office is eliminated in the next budget"). If a private insurer is causing problems... well, you can't sue them, so...
BadTux: Medicare is funded by a tax on all employees, so it amounts to an income transference program were younger workers are paying the medical costs for the older retirees. If we expand Medicare to cover everyone, who pays for it? A thing cannot subsidize itself. Then who is “everyone?” Does this include people who don’t (or can’t) work and pay SS tax? Does it include people who live off passive income and don’t pay SS tax? Finally does it include the elder parents of immigrants who get sponsored by their children to come live in the US? Then we come to the quality of medical care under this expanded Medicare system. You are assuming that everything would simply scale up. This is far from obvious. Medicare reimbursements to doctors and hospitals are relatively small. A lot of doctors could (and already do) simply opt out of the system (especially the better ones who are in demand) by simply making their patients pay the difference between Medicare reimbursement and their fee. A universal Medicare system would accelerate this effect because now there would be no younger patients paying full fare. The obvious fix would be to require doctors to accept the Medicare reimbursement as payment in full for services, or otherwise force them into the system. This really starts to look like nationalization. Your distinction between single-payer and state-owned is more apparent than real. This is why I equate the two, single-payer ultimately means a form of de facto nationalization.
Posted by: A. Zarkov on July 20, 2004 10:07 AMwtf writes "So, tell me why all of these Canadians are coming here?"
You have a few links, mostly to right wing think tanks, and a few anecdotes. There are plenty of academic studies comparing consumer satisfaction with health care systems in different countries. You ought to check them out.
By the way, what about U.S. citizens who sneak into Canada to try to get care because they're uninsured here?
Posted by: SteveH on July 20, 2004 01:03 PMI found 8 links in about 5 minutes. I have read consumer satisfaction surveys. Canadians and Americans are not happy for different reasons. Americans are not happy primarily because of high costs. Will they be happier with higher taxes? Canadians are not happy about long waits for specialists. Americans are not exactly the type to be happy waiting either. Plus, the majority of people here have health insurance and they will scream bloody murder when they realize that they will pay higher taxes and get worse coverage with longer waits. National healthcare is a liberal's wet dream.
Posted by: wtf on July 20, 2004 01:38 PMwtf, every nation with a single-payer insurance system spends less than we do here in America. The payroll deduction would be less than what is currently deducted for health insurance for any business with under 1,000 employees. As for waits, I will gladly sacrifice being able to see a specialist within minutes in order to be able to see an emergency room physician within minutes. At the moment, there are times when not a single emergency room in a 50 mile radius is open to ambulances, leading to people dying who should not be dying. This doesn't happen under single-payer systems, because single payer systems allow people to see their doctor rather than clogging the emergency rooms after they get so sick they need emergency care. I'd rather be alive and frustrated by a lengthy wait to see a specialist than dead.
The current situation punishes innovation by making health care expensive or unobtainable for small entrepeneurs, is dangerous to patients, and has much poorer outcomes on all measures of health care quality than other Western nations -- who, mind you, all have either a single-payer system or some other nationalized health care system. If this is a "wet dream", it is a "wet dream" being lived by every nation other than the United States. Deny reality all you want. Reality is that French medical care is every bit as good as American medical care -- and is less expensive to the French people. If you say American can't do something as good as what the French do when it comes to a national health care system, I have only one question for you: Why do you hate America?
- Badtux the Realistic Penguin
Posted by: BadTux on July 20, 2004 02:30 PMThe majority of people here are very unhappy with their experiences with the health care system.
For example: Comparison of Health Care System Views and Experience in Five Nations, 2001
Findings from The Commonwealth Fund 2001 International Health Policy Survey
"U.S. adults were the most likely in the survey to say that the health care system should be completely rebuilt: 28 percent believed this, compared with about one-fifth of adults in Australia, Canada, New Zealand, and the United Kingdom."
http://www.cmwf.org/programs/international/schoen_fivenation_ib_542.pdf
18% of Canadians said their system needed to be completely rebuilt compared to 28% of U.S. citizens.
U.S. citizens would scream bloody murder, but only if they don't understand that they will pay less in taxes than they spend on health insurance premiums. Far less.
Posted by: SteveH on July 20, 2004 02:30 PMThe majority of people here are very unhappy with their experiences with the health care system.
For example: Comparison of Health Care System Views and Experience in Five Nations, 2001
Findings from The Commonwealth Fund 2001 International Health Policy Survey
"U.S. adults were the most likely in the survey to say that the health care system should be completely rebuilt: 28 percent believed this, compared with about one-fifth of adults in Australia, Canada, New Zealand, and the United Kingdom."
http://www.cmwf.org/programs/international/schoen_fivenation_ib_542.pdf
18% of Canadians said their system needed to be completely rebuilt compared to 28% of U.S. citizens.
U.S. citizens would scream bloody murder, but only if they don't understand that they will pay less in taxes than they spend on health insurance premiums. Far less.
Posted by: SteveH on July 20, 2004 02:30 PMI am sorry for dropping another rejoinder on BadTux, but he seems to have a real passion and I appreciate the time he has put into this discussion.
I have been thinking about your scenario on nurses aides. Many of the tasks you mentioned drawing blood, taking blood pressures and temperatures have traditionally been the domain of RN's. Might I also note that other such traditional tasks were sponge baths, cleaning of bed pans, and the delivery of jello. Having come from a multi-generational medical family, the biggest complaint from nurses in the past was that doctors treated RN's like glorified maids (janitors) and did not rely on there knowledge of the patients.
Todays nurses receive lots more education are even that much more too valuable to be wasted doing these kinds of menial and or non-skilled tasks. When I mean non-skilled tasks I am including tasks like taking temperatures and blood pressure and drawing blood. I have done all three of these with no more than I couple hours of training, and by no means does someone need 2 years of nursing school. Your example of people dieing because a nurses aide did not react to a high temp sounds like, well BS. It is nearly impossible to believe that even a basic training course of a few hours would not include what a normal and an abnormal temperature (gee I hope they would know this as a breathing member of the human race). The procedure would be of course to notify the central nursing station wich is present on every floor. The RN would then verify the condition and then page the attending or resident. The design of that system is perfectly sound. Mind you I am not saying that people did not die, but just that it was failure of management to ensure that the system was working not a failure of the methodology. People have already pointed out that this is criminal negligence on someones part and the hospital should be held responsible.
If your point is that, if an RN had been taking the temps, then there would have been no breakdown, thats obviously true. But go one step further, why not have a MD check the temps, that way she could note it in chart and take action right away, bang zoom! The reason is obvious, its a waste of resources and there are not enough doctors already. Well there are not enough RN's either and their wages have gone up to reflect this. Medicare paid procedures rarely cover total costs of hospitals, so how would expanding it to cover everyone allow hospitals the luxury of hiring RN's to replace nurses aides or med techs?
Simple, cut back on total procedures ( dont get sick just before the end of the fiscal year) and cut out luxury items like MRI's, cataract surgeries and heart surgery on anyone over 70. Or you can simply have the government unilaterly lower the wages of RN's ( like the Britsh system) but that does not address the supply problem.
One of things we should do about Medicare is to start means testing it. Make people who can afford private insurance pay for it or atleast tax the benefits. I am definately for extending Medicade to cover all people under a certain income level, but above that people should be required to buy their own insurance. We as a society are already paying for the uninsured through emergency room vists, which are exceedingly more costly both in loss of life, productivity as well as in direct dollars.
Posted by: Dex on July 20, 2004 02:33 PMThe single-payer proposal amounts to a kind of Trojan horse to provide universal medical services. We are supposed to save so much money as compared to the current system that this surplus will provide enough to give full medical services to those who are currently uncovered by any kind of medical plan. Most likely the single payer system would result in significant extra costs to those currently covered. If we institute such a system we will be stuck with it because a benefit once granted is virtually impossible to rescind. If made complicated enough (see Hillary Care) people will be unsure of exactly how much extra it actually costs them. In the alternative, we could set up a separate medical system for the indigent (something like a VA). But then people will know how much it really costs because it will be a line item in the federal budget. Of course such a system will get sniped at as providing second-class medicine for the poor. A Rawlsian would rather everyone have mediocre medicine than only 80% have good medicine.
Posted by: A. Zarkov on July 20, 2004 02:36 PMA. Zarkov wrote: "we could set up a separate medical system for the indigent (something like a VA). But then people will know how much it really costs because it will be a line item in the federal budget."
We already have it. It's called the Community Health Center program and Pres. Bush has poured a lot of money into it. See the out of date info at: http://bphc.hrsa.gov/chc/
FY2002 appropriation was $1.3 billion
The only problem is this program will never have enough sites to provide access to all the uninsured, or even a significant portion of them. It's a joke, to anyone who knows anything about it, to pretend that CHCs will be able to solve the uninsured problem.
Single payer would not result in higher costs. The U.S. system is the most expensive in the world, without covering over 40 million people. Every other industrialized country does it better for less money. The reason Hillarycare was so complex was because it was not a single payer. It kept the wasteful insurance industry.
Posted by: SteveH on July 20, 2004 03:04 PMI'll point out that the Canadian payroll deduction for health care is less than what my employer pays for my monthly health insurance. This is not an unusual experience. The cost of health insurance is an enormous percentage of personnel expenses for any company with under 1,000 employees that must provide health insurance due to competitiveness reasons (because their best employees would leave and go to other companies if they did not). I.e., pretty much any technology startup.
The problem is that not only am I paying for my own medical care, but I'm also paying for the medical care of those people who do not have access to employer-paid health insurance, such as Wal-Mart employees. These people end up going to the emergency room when they get so sick that they're at risk of dying, and the result is higher costs for me whenever I need hospitalization or emergency care, since the hospital hikes rates on paying customers in order to subsidize Wal-Mart.
Finally, regarding patient care standards: The problem is not that aides are charting patients. The problem is that RN's are not even being given time to review those charts in any reasonable fashion. At best they may give a glance to the chart when they come by to give meds, but that may be hours after things go bad. There is a reason why my mother (an RN) hired someone to look after her mother when her mother was in the hospital. The reason is that she knows all too well what kind of care (or lack thereof) people receive in hospitals today.
- Badtux the Medical Penguin
"The problem is that not only am I paying for my own medical care, but I'm also paying for the medical care of those people who do not have access to employer-paid health insurance, such as Wal-Mart employees. These people end up going to the emergency room when they get so sick that they're at risk of dying, and the result is higher costs for me whenever I need hospitalization or emergency care, since the hospital hikes rates on paying customers in order to subsidize Wal-Mart."
If a single payor system is adopted, you will still be paying for other people's healthcare. Unless the government charges everyone a premium based on their risk profile. But that would never happen. Instead, it would likely take the form of a payroll tax which would basically tell the "wealthy" (who is anyone making more than about 50k according to liberals) that they need to shoulder the burden of everyone's healthcare. Also, I highly doubt that expanded coverage would seriously reduce ER use. I will try to find a link, but I have read a number of studies showing that people who have full coverage still don't utilize most preventative care or routine doctor's visits. Most people wait until they are sick and then want to be seen immediately, hence the high use of ER's. Plus, how does a single payor system force anyone to take any responsibility for their own health? Why should someone who is healthy, safe, exercises, and eats an appropriate diet pay just as much as someone who drinks too much, smokes, rides a motorcycle, never exercises, and eats junk food? A large part of our population is overweight, I really fail to see why I should pay the same as them for health coverage.
Posted by: wtf on July 21, 2004 07:44 AMGo to http://news.google.com and type in "health care reform". Summary: A coalition of corporations, labor, and consumer advocacy groups released a report today showing that our health care system is in a state of total meltdown, with service quality dramatically plumetting, costs dramatically rising, etc.
As for the rest of your arguments, they all boil down to "okay, I know France equals our quality without equaling our price by using a single-payer system, but that contradicts my faith in my ideology, so I can't hear you, la la la la la I can't hear you!"
I challenge you once more: Are you saying that the United States is incapable of doing something that *FRANCE* has successfully done? Why do you hate America?
- Badtux the Patriotic Realist Penguin
Also found on google:
"France healthcare: Critically ill
May 20, 2004
On May 17th the French health minister, Philippe Douste-Blazy, presented long-awaited plans to curb healthcare spending and raise additional revenue in a bid to save the healthcare system from eventual bankruptcy. Although the reforms are likely to prove deeply unpopular, the government has little choice but to press ahead despite the threat of social unrest: the rising deficit on the health budget has played an important part in the deterioration of France's public finances in recent years. That said, for the time being the government appears to have shied away from more controversial changes that will probably be necessary in the long run."
"the problem facing the French government is that the system of health insurance that funds all these services is nearly bankrupt. Figures from the French health ministry show that the deficit of the health system has risen from around Euro2bn in 2001 to an estimated Euro11bn last year, with the result that the system is already Euro32bn in the red. Earlier this year a government-commissioned report by the Haut conseil pour l'avenir de l'assurance maladie on the future of the French health insurance system estimated that, in the absence of reforms, the annual deficit would rise to between Euro27bn-39bn by 2010, and Euro66bn-100bn by 2020, a trend that is clearly unsustainable.
In part the shortfall in revenue for the healthcare system stems from the recent economic slowdown. Most of the population are covered by statutory non-profitmaking health insurance funds that are financed by both employer and employee contributions, and these have fallen since the start of the downturn in 2001. At the same time, healthcare spending has been rising in the form of reimbursements to patients (who first pay medical bills) and payments to healthcare providers.
Increasing demand for healthcare services is a familiar story throughout the developed world, as advances in medical technology and demographic changes place a huge strain on healthcare budgets. Where France stands out is the high expectations its citizens have of the health system: the French visit their doctors more often than their European neighbours and stay in hospital for longer. France also consumes more drugs per head of population than any other nation in the world bar the US: a product of a culture of over-prescription among doctors and a healthcare system that has traditionally reimbursed much of the cost of drugs."
See for yourself:
http://home.aigonline.com/content/0,1109,17298-650-ceo,00.html
Posted by: wtf on July 21, 2004 01:08 PMSo BadTux, the American government seems perfectly capable and willing to piss away money just as fast as the French and suprise, it doesn't work for either country. It just goes to show you that the more you insulate people from the true cost of their consumption, the harder it is to make it work in the long term. It becomes way too expensive as we will soon see with the looming Medicare defecits.
The only long term solution is to give people incentives to make smart cost/benefit decisions.
Posted by: wtf on July 21, 2004 01:12 PMThe doctors have lost control of their profession. Theirs is a profession in decline, morale is dropping along with salaries and public esteem.
How did it happen? I want to see pie charts from
1954 and today, showing the allocation of health care dollars: what proportion of each health care dollar spent ends up in who's pocket (Dr, hospital administrator, insurance company profit margin, pharma corp profit)how much is spent in constant dollars, and
who does the spending (what percent is insurance, what is patients themselves).
I don't know who has such data. I wonder if the
"good old days" of medicine really were because more poor people just didnt see doctors, so the caseload was just much less, allowing higher quality, paitient paying instead of 3rd party, etc.
I do suspect that one thing that happened was the
commoditization of medicine in the form of pills. Once the thing you were paying for was a human skill; now you are paying for access to drugs.
Shorter wtf: "Way too much money is being spent on other people's healthcare."
But maybe part of that is that people have "incentives" to make the "smart choice" of not seeing the doctor so often in their younger and middle-age years, and become substantially sicker in their old days as a consequence. Then they have to be kept alive expensively, and money is "pissed away" on Medicare.
Another thing I could suspect is lifestyle (or, as some would point out, "lifestyle choices") in the US, working too much, commuting too much, etc., and as a consequence not spending enough time and attention on proper nutrition, exercise, relaxation, and happiness. Who knows how many medical (or simply life quality reducing) conditions are simply the consequence of too little sleep and eating unhealthy food with too high levels of toxins, hormones, etc.
Which reminds me that I have to go to bed now!
A. Zarkov: "A Rawlsian would rather everyone have mediocre medicine than only 80% have good medicine."
Before I do go to bed, the latter should be all fine as long you are part of the 80%, right? But I doubt it is even 80%. It's probably much less. Employment-based healthcare figures may be misleading -- you may technically be covered, but still have copayments so high as to discourage you from seeking treatment. But then maybe that's one of the "smart choices" that wtf talks about.
Perhaps some folks here need lessons in propoganda vs. facts. Statistics are facts. Statistics say that the U.S. medical system is exhorbitantly expensive for what we get -- a medical system that is in melt-down, with emergency room closings in every major city despite rising populations, long waits for primary care physicians in every major city outside the Rust Belt, and large numbers of premature deaths caused by lack of medical care. Statistics say that every other Western nation except Britain does better than the United States on both cost and health care -- and all have some form of government-sponsored health care system for all of their citizens.
Now, it's easy to read propoganda articles by government ministers saying something's "in meltdown" or whatever. Remember, most of what you read in the newspaper is propoganda, put out either by government propogandists or corporate propogandists. Reporters rarely do any actual reporting nowdays in the sense of trying to uncover the truth, they view their job as being that of stenographers, faithfully scribing down whatever they're told without regard for whether it's true or not. In a sea of lies, what is a mathematician (or economist) to do? Going back to the fundamental statistics is pretty much the only thing left to do. For example, by going back to the fundamentals on California's "out-of-control spending", combining statistics from state budget documents, the federal inflation index, and California's population growth over the past 15 years, I find that, adjusted for inflation and population growth, per-capita state discretionary spending is less today than it was in 1990. So it's no surprise that the Governator can't rein in "out of control spending by the Legislature", there isn't any there to rein in, the whole notion of "out-of-control spending by liberal legislators" was pure propoganda! Similarly, going back to the numbers on the U.S. health care system, they show a system whose quality is declining rapidly, where access to emergency medical care is in serious danger as the entire emergency care system slowly collapses under the weight of too many specialists and not enough primary care physicians and too many uninsured forcing people into emergency rooms, where far too many people get no primary care at all and the result is fatality rates for easily-treated illnesses that are a disgrace.
You can spin all you want, but the numbers don't lie. Politicians and the newspapers who report their word as the gospel truth, on the other hand...
- Badtux the Statistical Penguin
"Statistics say that the U.S. medical system is exhorbitantly expensive for what we get -- a medical system that is in melt-down, with emergency room closings in every major city despite rising populations, long waits for primary care physicians in every major city outside the Rust Belt, and large numbers of premature deaths caused by lack of medical care."
Really? According to who? Sounds like liberal propoganda to me. I only have to pay $10 when I see a doctor and I can usually get an appointment within a week or so. Contrast that to when I get my hair cut or clothes dry cleaned or the tip for a nice dinner. So really, as a consumer insulated from the true costs, I pay basically nothing. Especially when you consider that relative to other professions, doctors spend more time in school paying tuition. I read a statistic that said the average person spends more per year on alcohol and tobacco purchases then they do on healthcare. So really, BadTux, you keep complaining about the lack of doctors and the waits, none of which I have experienced, but I fail to see how a single payor system would create more doctors. If anything it would create less as the government would be forced to reduce reimbursement to cut costs and would in turn reduce the income of a doctor and cause people to choose other professions.
Also, your comments about California prove you are in denial or la la land or both.
Posted by: wtf on July 22, 2004 10:29 AMBadTux: "... Statistics say that every other Western nation except Britain does better than the United States on both cost and health care ..."
That's actually an interesting observation -- the UK, for European purposes, is as close to the US as it gets. I don't want to get into the fallacy of "common culture", etc., which I don't believe holds up to inspection despite being intuitively plausible, but would rather blame it on Thatcherism, which unfortunately is being copied elsewhere in Europe these days (Germany being the place where I'm looking most closely).
Regarding propaganda & stenography, I can add little to it, although you have to be careful to not be unfair to quite a number of journalists who happen not to work for the major mainstream outfits.
As for the CA budget, I believe around 80% or so of it supposedly go into education, prisons, and healtcare, in that order. Now if that's true I'd say there is too little to show for it.
Otherwise, keep it up, dude.
wtf: I think you acronym may not be so badly chosen after all. Let me respond to your points in sequence.
"Really? According to who? Sounds like liberal propoganda to me."
According to somebody who has a perspective different from yours, and based on prior comments I saw from the person, wider than yours in some ways. You