73 Comments

1. ForNow:

I’ve opposed gov’t-run health insurance even during the long periods when I’ve been uninsured.

I’m all for everybody’s getting adequate health care, but I wonder what you think expanding gov’t programs, bureaucracies, & cost-hiding (double your FICA to know your real FICA contribution) have to do with that.

Just how much testing do you need in order to believe that gov’t isn’t good at this? There’s been such a fantastic amount of “testing.” I distrust the incentive structures now being set into place. And all such structures are far more resistant to change & reform than is the private sector.

I also wonder what the NY State Supreme Court thinks is the connection between quality public schools and the massively increased funding of them which it has ordered in spite of their already being well funded by any normal standard. Quality public schools require, first of all, quality design (INCENTIVATION) and management. Public schools need to be forced to respond to competitive pressures.

I would think that if courts see a state-constitutional mandate for improvement, and if legislators want improvement, they’d both look to powerful free-market solutions as “mandated” by ethics or constitutional penumbras, in order to “do the right thing.”

Apr 6, 2006 - 8:22 am 2. ForNow:

I should add that the Maryland program is NOT merely a “test,” it is a COMMITMENT with almost zero chance of ever being simply repealed.

Apr 6, 2006 - 8:29 am 3. legion:

Excuse me, Roger, but your comments suggest that you view health care providers as little more than glorified slaves. If you can mandate the services of one particular group of people, why not another? When government is setting the pay rates and services, it is up to the privileged class that runs the government to delineate who will get what.

I am intimately acquainted with the Canadian health care system, and although it is better than most nationalized health care systems, it is lucky to have the private US system close by to act as a safety valve.

This greased slide into socialistic slavery will gain a burst of speed if what you wish actually comes about.

Apr 6, 2006 - 8:44 am 4. Robert Crawford:

Nothing says “intrusive government” like a government that controls your medical records and medical care.

But, hey, now we have a place for all the people who want socialized medicine to go. Knock yourselves out; just leave the rest of us the hell alone.

Apr 6, 2006 - 8:53 am 5. Teresa:

Roger,
Universal Health Care (Hillary’s plan) has already been tried in Tennessee (Tenncare), and it has failed miserably and cost the state, or should I say, the taxpayers, way too much money.

Apr 6, 2006 - 9:00 am 6. Gary Rosen:

Clicking on the link to Hewitt, it sounds like the Mass. plan is far different from the “universal health plan/socialized medicine” as portrayed above by both Roger and those posting in response. People should go to that link before commenting – I’m in over my head on this issue, but you’ve gotta sit up and take notice at a “universal health care” plan supported by many conservatives.

Apr 6, 2006 - 9:12 am 7. Joshua Macy:

What “healthy percentage” of people have health insurance that they don’t pay for? Everyone who has it through their place of employment is paying for it, in the form of reduced wages, if not directly out of their wages in a “cafeteria plan.”

Apr 6, 2006 - 9:13 am 8. PJ:

I don’t understand why employers (or the taxpayers) are tasked with providing health insurance. All of these plans inure to the benefit of (drum roll, please)…insurance carriers! Every plan protects them from insuring people who may be unhealthy and from paying claims. If a law were passed that required carriers to insure all who desired coverage, at least with a major medical policy, the risk would be spread out. Instead, they are cherry picking who they insure and what they pay for, all with the help of their K Street lobbyists and our legislators.

Apr 6, 2006 - 9:14 am 9. markus:

Markets do a lousy, lousy job of providing essential (as opposed to cosmetic) health services at an affordable price. One’s based on third-party insurance payments do even worse. Sick people are no position to comparison shop, non-doctors are in no position to judge what medical procedures they need and don’t need, and insurance companies will always be trying to remove as many sick people from their coverage plans as possible.

We’ll have a possibility for a sane, single-payer system, or some variation thereof, in this country as soon as enough corporations get tired of paying through the nose for health coverage, and decide to ally with unions, many health professionals, and the Democratic Party on this issue. Then the real battle will begin with the elephant in the room — big pharma.

The issue of “rationing” in other countries is a red herring. They spend a lesser portion of their GDP on health care, and their GDP per capita itself is much less than ours. If we put the health insurance industry out of business, expanded Medicare into Medicare for all, and gave it the same budget that we are now spending on overall health expenses — everybody could get “Cadallac-level” health coverage.

Apr 6, 2006 - 9:15 am 10. Steven Mitchell:

Despite popular belief, the big expenses in health care, by far, are long-term care (mainly nursing homes) and hospital costs. Medications are a distant third, and are only “high” compared to the remaining services (e.g. office visits).

Besides the obvious government bureaucracy issue, the problem with “single payer” is that it tries to address the demand side while ignoring where the real problems are–supply. (No matter how cute someone gets with the explanation, all single payer, HMO, traditional insurance, etc. plans attempt to curb demand. The only proven way to actually curb demand short of rationing is education and prevention–and both of those only go so far.)

In turn, the two biggest blocks on supply are legal issues and education/guild impediments to becoming a health care provider. If you want to make health care cheaper, then I suggest a bill that breaks the back of the tort/malpractice groups. In return for this, the doctors have to give up their medieval guild mentality. For example, fund some more medical schools and expand the existing ones. The market “fails” because regulation distorts it. Remove the distortion, and it will work. Getting in bed with the unions only exacerbates this problem. (Doctors would never go for it, anyway. It’s a political non-starter.)

Increase the supply of doctors and nurses while removing most of the legal impediments to them doing their work, the cost of hospital/LTC goes down, while the effectiveness goes up. Nursing homes in particular are immensely dependent on getting good help (which they often do not get). The margins for LTC are tiny, making good help even harder to find.

Do that, and I’ll support single-payer for universal preventive and education measures. These should be strictly limited by statue and not done as an entitlement. The government funds them because it can be empircally shown that they reduce costs and improve health for everyone. By the same logic, I’m willing to support a certain amount of government hospice funding.

Apr 6, 2006 - 10:01 am 11. Knucklehead:

I’d like to hear from people who actually know about the ins and outs of insurance and medical services provisioning about why a government (state or federal) could not be the funding source for a successfully implemented medical insurance plan. I suspect they’ll botch it very badly and do more harm than good, but I don’t know why that should be the case.

Thousands of business of all shapes and sizes go out and negotiate, or team up and negotiate, medical insurance plans that serve people reasonably well. Some of those go the self-insured route with some insurance company administering things – I have no idea what proportion that is or why they chose that route over more “traditional” insurance. Even self-employed people who judge they need it can purchase medical insurance plans that work for them even if they are not all one would wish them to be.

Even the doomsday crowd never make any claim that less than about 60% of Americans are covered by medical insurance.

All that yields what amounts to a pretty darned good medical services payment system that works tolerably well for the majority of us.

I’m struggling to envision why a well-designed and adminstered “huge group” plan wouldn’t work at rougly the same level of quality as the hodge-podge we now have. Intuitively I believe that to be the case but… why?

Apr 6, 2006 - 10:09 am 12. talnik:

The quality of government-run or government-paid health care always declines over time and becomes more expensive than it otherwise would. IMHO, people don’t really want universal health insurance, they want someone else to pay for their medical care. Like daddy did when they were children.

Apr 6, 2006 - 10:13 am 13. aro:

Even though I read this blog daily, I don’t really post. Probably because I agree with Roger about 99.99% of the time, and I don’t have much to add to his words.

This time I would like to make an exception. I generally lean right of Atila the Hun and I strongly believe in the all-healing power of capitalism, free markets and individualism. When it comes to health insurance though, I don’t believe that this issue should be driven by profitability. It is deeply imoral to have fellow Americans who, although working full time, do not have health insurance. I don’t believe that America should adopt the failed European “social net”, but when it comes to the health of fellow human beings I would make a big exception.

I know a family with four children, the husband can not work anymore because of huge health problems. The only person working is his wife, and her workplace doesn’t offer health insurance. She works very hard and is extremely diligent, but it is not enough. When her children get sick (and small children get sick all the time), it is difficult, in some cases imposible, for them to pay the doctor and antibiotics. I bet they are not the only ones in this situation.

I personally have health insurance through my employer but I would willingly pay more so that others can be covered too. However, I am aware that once something is free, it starts being abused heavily.

I know very well a guy who drives a new Mercedes model and doesn’t have health insurance. In the eyes of the world and superior EUnucks he is as pitiful uninsured American. I have little sympathy for someone like him who gets sick. I suspect he is not the only one in this position.

We could talk literally forever about this. What remains is the fact that there are hard working Americans who would want to have health insurance but can not afford it. This is deeply shameful and imoral and only offers ammunition to the stupid argument that America has enough money for wars but not for the health of her people.

America should always have money for wars and should also be able to provide her people with decent care. Health should *never* be measured in stock market gains or losses.

(It’s scary to be on the same side with Markus

Apr 6, 2006 - 10:19 am 14. Knucklehead:

Some thoughts re: Joshua’s and PJ’s comments above.

Insurance companies = greedy bad people isn’t going to help much. They are businesses and every business, whatever their business, looks for ways to offset risk. And competition tends to push all businesses, at least those which survive, to something that roughly approximates efficiency.

I suppose one of the answers to my questions above is that governments are not subject to competition and nothing drives them toward anything that approximates efficiency and much drives them toward inefficiency. Completely OT but that’s one of the reasons our military is reasonably efficient – they have the prospect of death as the price of failure driving them toward something approximating efficiency.

But back to the points made above. Is there any good reason to presume that unemployed people, or people who work for companies without good, or any, medical insurance plans, are less healthy than employed people? When the laws of large numbers are taken into account it would seem to me that much of what difference there is – excepting the retired and aging – would wash.

When we look at population numbers (the “group” in the plan) at the state and even national level) it should be that we could actuarialy predict pretty accurately what outlays and, therefore, necessary income would be.

Just to re-iterate, I’m not advocating for a government medical insurance plan for the entire population. I’m pretty sure we’d make such a botch of it we’d rue the day we did it. I just can’t figure out why it shouldn’t work.

Apr 6, 2006 - 10:21 am 15. Orson2:

I don’t pretend to know enough to judge what to make of Massachusettes new program.

But I am sorry to read this from Roger:
“We all have our lists of what constitute basic human rights that should be mandated or provided by the state and medical care is one of mine.” If centrally planned government can mess up education, medicare, and social security, why do you hav de any faith that government can do anything as complex as health care better than free people?

Socialized medicine is slave labor – pure and simple. And Roger is wise enough to know he must be against that.

Apr 6, 2006 - 10:42 am 16. Knucklehead:

Markus,

You’re making some good points but I think they need some fine tuning…

Markets do a lousy, lousy job of providing essential (as opposed to cosmetic) health services at an affordable price.

Please elaborate on this. I hear people grumble about how much of their paycheck goes to their medical insurance all the time – and some of my younger coworkers opt out of as much as they can because they’d rather have the cash – but this is more pissing and moaning than anything. To say that the whatever the market is doing is “unaffordable” or “cosmetic” rather than essential doesn’t seem supportable to me.

One’s based on third-party insurance payments do even worse.

I suspect you are correct, but why?

Sick people are no position to comparison shop, non-doctors are in no position to judge what medical procedures they need and don’t need,

There’s far more to health care than “sick people” but leave that aside for a moment. It’s your second point that makes this true overall point true rather than the actual health (or lack thereof) of the consumer. It is far easier to be an educated consumer for most of the things we consume than it is for medical/health services.

Those delivering medical services are generally more highly educated than the average person, educated and experienced about things most of us have little interest in thinking about at all until we need them, and most are almost certainly above mean intelligence. We select from the top half of the intelligence spectrum and then we educate them and send them off to deal with the stuff we don’t want to think about.

An anecdote that somewhat makes the point I’m shooting at there: my wife works in medical education. She recently got a chuckle from relating they words of one of the students who, after rounds at the hospital, said, “I had no idea there were so many sick people!”

Most people aren’t sick and most of us spend relatively little of our lives – or at least our younger lives – ill. We don’t know diddley about illness or its treatement. We don’t even realize that there are a whole lot of sick people around us.

and insurance companies will always be trying to remove as many sick people from their coverage plans as possible.

Of course. They have to. The question is what methods are available to minimize or eliminate this very natural and understandable behavior and what the costs are and who bears those costs? Give them enough income to cover the costs of everyone regardless of their health AND make a profit doing so and they’ll gladly cover everyone.

Would there be any widespread political support for a plan that taxed people for their statewide or nationalize medical insurance based upon the status of their health?

Apr 6, 2006 - 10:43 am 17. DanM:

As I understand the plan in Mass., their is a tax penalty if you don’t have insurance of $1,000.00. I’m sorry to try to get an education on Roger’s dime, but isn’t this the “Universal Healthcare Plan” of Massachusetts?

Of course, I’ve never been wrong before…..

Apr 6, 2006 - 10:50 am 18. Knucklehead:

Talnik,

There’s certainly some of that – a lot of that – at work here. I’m consistently baffled about people’s attitude regarding medical bills. They even gripe about $20 co-pay plans. Is there any other good or service people consume for which they believe they should never pay a bill of any size?

People drop hundreds, even thousands, of dollars on options for their autos that they could easily live without but their jaw drops when they learn that a particular medical procedure they need is going to cost $400.

“$400! What are going to do that should cost me $400!?!?”

“I’m going to take this expensive collection of testing equipment here, which is housed in this expensive facility, and have that well-trained person who commands $25/hr in wages run you through a series of test which will produce the data I need to discover what, if anything, is wrong with your {heart, lungs, brain, etc}. I couldn’t help noticing the shiney new car you drove up in. How many miles does it have on it?”

“I just passed 30,000. In fact I picked it up from the service department for the 30,000 mile service and checkup.”

“And what did that cost you?”

“Oh, $600 – but they do a full diagnostic check and it needed an oil change and…”

Apr 6, 2006 - 10:54 am 19. DanM:

In other words, it is a Medical Insurance mandate, rather than a plan. Much as the “Universal Auto Insurance” mandate. An end-around to Universal Health Care is to mandate it – therefore subsidizing the Health insurance companies.

Not that I wouldn’t like more requirements on me as a citizen. I appreciate the 5 mile high stack of laws that I can be penalized for – if the government wants to enforce them…

Apr 6, 2006 - 10:55 am 20. DanM:

Sorry, forgot the , tags in the las t paragraph of my post.

Apr 6, 2006 - 11:05 am 21. Knucklehead:

Orson2,

Slave labor? Really? Isn’t that a bit of a stretch? Granted the average American hasn’t the remotest clue how much medical treatment is provide pro-bono, by choice or otherwise, but we’re a long way from “slave labor”. Doctors in socialized systems may not make what their level of skill should demand, but is anyone forcing them to become doctors and then work for a meager and brutal existence?

Apr 6, 2006 - 11:05 am 22. DanM:

I meant the cynicism on/off tags… HTML used to be so easy…

Apr 6, 2006 - 11:07 am 23. Joe Schmoe:

All I know is that our insurance barely covers anything. We have good insurance, but the copayments still eat us alive. When my wife gave birth to our youngest it cost us around $4,000 in copayments. It was well worth it, obviously, but the costs certainly add up fast.

A trip to the hospital will still set you back $600 even when it is nothing serious (i.e. seriuos enough to require a trip to the ER, but not serious enough to require admission)

Any major health crisis would destroy us financially. A car accident? Serious injury? We’re toast.

It’s getting to the point where even health insurance doesn’t provide you with much peace of mind. We are healthy, responsible, and don’t run to the ER for every little ache and pain, but are still dying the death of a thousand cuts thanks to copayments.

I realize this is a huge problem, but the free market approach obviously isn’t working.

We have a free market system, anyone can start an insurnace company and offer affordable health coverage. But no one has.

Apr 6, 2006 - 11:10 am 24. Carl Spackler:

Ah, Massachusetts. The state that turned the 2.5 billion dollar Big Dig into a leaking 14 billion and counting swag rape of the public. Of course though they will be able to handle health care better than digging a hole and pouring concrete for ten miles. Yup. Nothing says love like the force of government. If you love public housing, sweetheart road contractors, and trust the Haliburton of the future, you’re going to love Massachusetts Bulger run, Ted Kennedy overseen hog fest that this is going to become. It will be cheaper and better. Honest. Trust them.

Apr 6, 2006 - 11:14 am 25. Joe Schmoe:

Also, I don’t know that more doctors are actually needed.

These days, your average doctor only makes around $100-$150k after residency. This is your average doctor, mind you, like a pediatrician or an internist, etc., not a heart surgeon. If you start your own successful practice you can make more, but even then you won’t be on easy street.

This is a decent sarly, obviously, but it’s pretty darn low given the difficulty of a doctor’s job.

Doctors aren’t rich any more, not like they used to be. I don’t know that churning out more doctors, and lowering their salaries even further, is a good idea.

Apr 6, 2006 - 11:14 am 26. Steven Mitchell:

Knucklehead:

“I’m struggling to envision why a well-designed and adminstered “huge group” plan wouldn’t work at rougly the same level of quality as the hodge-podge we now have.”

Two reasons: You replace the hodge podge with a government bureaucracy. As said above, this gets worse over time. Morever, “efficient” and “effective” are not synonyms. You said the military was efficient. It isn’t. It’s woefully inefficient. It is very effective. The only way a government administered plan will be effective is if it is similarly unconcerned with efficiency.

But to the larger question, even if “roughly the same level of quality” is what we are going to get, why bother? Especially when there is a great deal of evidence that the quality will deteroriate over time?

We can’t escape this question with mandated insurance either, another panacea that never seems to work. As soon as you have mandated insurance, then everyone has to pay and everyone is covered. This doesn’t even work well for auto insurance, where presumably people are doing everything they can to avoid accidents.

That brings up another problem when talking about such things. We talk about insurance (single payer, existing plans, whatever) as being the way to manage the care. However, the insurance model does not work well for things that most everyone gets. Almost everyone needs a pain killer occasionally (if only aspirin). But insurance works best where relatively few people need the service but the cost of the service is relatively high and the need for the service unpredictable. Office visits, many meds, etc. are the exact opposite of this model.

Generally, routine service should be paid 100% out of pocket, and thus never involve insurance at all. In the interest of political reality (and the preventive/education reasons that I listed in the previous post), I’m willing to support help for the “economically disadvantaged,” though. I’d prefer that help be in the form of tax breaks or direct support (akin to food stamps), where the recipient of said aid still makes the decisions about where and what to purchase, same as someone buying out of pocket. Why involve insurance (of any kind) in something that just involves a lot of paperwork.

In case anyone wants to throw the equivalent of a medical/insurance chickenhawk argument in my face, I’ll also state that my wife and I have had most of our savings wiped out by medical costs, despite the fact that we are insured (also mostly out of our own pocket).

I note that no one addressed my argument about supply. If health care demand increases about 10 to 11% per year, ask yourself why the supply is not similarly increasing.

Finally, I’d also support a univeral (pre-tax) health savings account, that didn’t lose money if you didn’t spend it. Even better, simplify the tax code and merely have a pre-tax savings account that could be spent for any number of things we want to encourage as a society. Roll into it the mortgage payments, projected medical bills, education costs, all that stuff. Heck, use it as a high-tech form of vouchers to build up some savings for those with too low an income to pay taxes.

Apr 6, 2006 - 11:27 am 27. vegetius:

Steve:
“I note that no one addressed my argument about supply. If health care demand increases about 10 to 11% per year, ask yourself why the supply is not similarly increasing?”

Okay, was isn’t it?? I’m stumped.

Apr 6, 2006 - 11:35 am 28. Steven Mitchell:

“Also, I don’t know that more doctors are actually needed.”

The reason your copay was for $4000 was precisely because of the salaries involved. (Or rather, the overall cost to the hospital was because of the salaries involved, and the copay from your insurance reflected that.)

The shortage is not doctors so much, but nurses, nurse practioners (and other levels short of “real doctor”), etc. Also, the big need for doctors is in the relatively low-paid areas (e.g. general practice) but the current regulation and legal situation skews to too many specialists and/or wrong specialists.

For one thing, the artificially limited number of med school slots radically inflates the cost of med school, thus encouraging doctors to go into a higher margin practice. There are plenty of places in this country where there are zero doctors practicing in a given county (even several adjacent counties) because the area will not support enough patients to pay off an MD’s med school bills and malpractice insurance. In fact, this situation is getting worse, not better. (I worked for a long time with federal reports for Medicaid. This is one of the things tracked.) The indirect cost of no readily available doctors is a *huge* drain on treatment resources. Practically speaking, it means that many conditions go untreated until an emergency arises. That drives up overall costs for everyone.

As you can see, legal reform would help, but not entirely solve the problem. (Ambulance chasers are a catalyst that seriously undermines a broken model, but they aren’t who broke the model in the first place.)

Look, there are really three kinds of medical costs (or maybe four at the extreme end). I’ve only talked about two of them directly, so far:

A. Things that everyone should have done, even if it requires a government mandate–vaccinations are obvious, but there are plenty more.

B. Things that work best when left as much as possible between patient and doctor. “Am I sick enough to go the doc? Or do I need to eat some chicken soup and whether it out? I’ll pay out of my own pocket, but the prices aren’t to bad and I have a fund for that. So I am a rational actor.” Some are less obvious. “Do I really need allergy medicine?”

C. Things that fit the insurance model. Not everyone needs an appendectomy, but anyone might need one.

D. I’m terminal, and I need something to help me through the end without totally destroying my finances.

The line between C and D is arguable.

Apr 6, 2006 - 11:48 am 29. Steven:

Roger:

Just curious. Besides medical care, what else is on your list of basic human rights that should be “madated or provided by the state”?

Apr 6, 2006 - 11:52 am 30. JBR:

I read recently that the five year survival rate for people suffering from prostate cancer was significantly higher in the U.S. than in several European countries that have universal “health care.” Do we really want to be going down this road?

Apr 6, 2006 - 12:00 pm 31. Joe Schmoe:

This whole argument is sort of intellectually dishonest. 99% of us are actually in favor of socialized medicine.

First, in the US, anyone who is uninsured for whatever reason still has access to all needed medical care. An uninsured person can alwauys go to the county hospital or to the ER and wait in line. The government will eventually foot the bill for your care.

I venture to say that no one here wants to REPEAL the patchwork system of laws that allow everyone to have access to medical care. If you don’t, then you are in favor of socialized medicine whether you realize it or not.

Second, we already have socialized medicine, thanks to Medicare and Medicaid. It is possible to take a long, hard look at these programs and rationally assess their effectiveness. To me, they seem reasonably effective. Hardly ideal, but not horrible, either. The doctors are trained, the hospitals are equipped — we’re not talking Cuba or Eastern Europe here, where hospitals don’t even have things like sutures, banadages, etc.

What the universal health care proposals do is try to bring some kind of order to the system. It really does seem possible ot make things more efficeint. For instance, when my dad was at the end of his days, he was uninsured (mostly due to irresponsiblity.) Every time he went into the hospital, a social worker would ahve to fill out a vast array of forms in order to get the state to foot his bill. Each admission required a whole new set of duplicative paperwork that took the social worker several hours to complete. If he’d simply been able to hand over his national health insurance card, none of this would be necessary.

I am very leery of entrusting health care to the governemnt, but the fact is that we already have. What, 70% all medical costs are incurred in the last year of life? That means Medicare is already responsible for 70% of our health costs. Any discussion about universal health care should admit this fact before the discussion begins.

Apr 6, 2006 - 12:11 pm 32. Bostonian:

It seems to me that the big mistake was in using insurance to cover routine costs.

With cars, houses, etc., you don’t run to the insurance company when you need new brake pads, storm windows, etc. Covering such costs is not what that insurance is for.

If an insurance company were to step into that area, the actuaries would take a serious look at how much people spend on those routine costs, and they would factor that into their pricing structure, to ensure that the insurance company did not lose money.

And the net effect on the car owner or home owner would be to pay more than he or she did without insurance.

***
“Insurance” for routine costs is a sucker’s bet, one that we’re all playing, unfortunately.

Apr 6, 2006 - 12:31 pm 33. Steven Mitchell:

“Second, we already have socialized medicine, thanks to Medicare and Medicaid. It is possible to take a long, hard look at these programs and rationally assess their effectiveness. To me, they seem reasonably effective.”

For seven years, I worked for a private company involved in writing and maintaining software for Medicaid. Because of the area I worked in, I came in contact with all the players. Medicaid touches federal and state government, private insurance, medicare, patients, and private and semi-private providers of care.

Without breaking any confidentiality requirements, I can state that Medicaid is nowhere near effective or efficient–even when the state employees try really hard to do so. (And some of them do.) The impediments to effective and efficient administration of Medicaid are outside the authority of Medicaid employees to fix. The one exception is preventive care, where Medicaid is incredibly effective.

In part, I agree with your larger point, though not the conclusion (I think). The big problems with our health care systems stem from the degree that they are socialized. Or in a few places, where they are positively medieval (from an economics perspective, not medical perspective).

I’m sure most of you are familiar with Milton Friedman’s four kinds of payments, but I’ll list them anyway: 1. You use your money to buy something for you. 2. You use your money to buy something for someone else. 3. You use someone else’s money to buy something for you. 4. You use someone else’s money to buy something for someone else.

An efficient market system maximizes #1 and avoids #4 like the plague. The further down the list you go, the less efficient and effective the market. (#2 and #3 have some odd spikes, though.) The government as single payer push says, in essense, “To hell with it. Our system is so mired across all four categories, no one can make sense of it. Let’s just simplify everything an embrace a pure #4.” Before we do that, I’d think it would be a good idea to examine which aspects of the current system are causing the trouble.

Apr 6, 2006 - 12:47 pm 34. Sandy P:

This isn’t going to work.

Via Bros. Judd:

http://www.brothersjudd.com/blog/archives/2006/04/if_the_foundati.html#comments

If it’s based on how they handle their auto insurance, they’re doomed.

Plus, if you choose not to have coverage, you are fined and you don’t get any tax refunds until you have savings account worth $10K.

——-

Blue state/old Euro response.

HSAs are red state response.

Apr 6, 2006 - 12:59 pm 35. Sandy P:

Should have added this and we’re going to bail out their massive, massive failure. They’re losing population already because they’re taxed too high.

Basic Econ 101.

“There are two things the Post story doesn’t mention — micromanagement by the state has ruined both auto and health insurance policy in the Commonwealth. Massachusetts does not have anything approaching a competitive auto insurance market. Both the terms of the policy and the rates that can be charged are set by the Commissioner of Insurance. No competition is allowed. As a result, aggressive competitors such as Geico or Progressive avoid the state and Massachusetts has the fourth highest auto insurance rates in the nation. Although auto insurance is required, compliance is nowhere near 100%…..”

And as I noted at Bros Judd – Progressive donates to dems and lib causes and they won’t touch what they want the country to be cos there’s no profit there.

Apr 6, 2006 - 1:04 pm 36. Sandy P:

If I am young and healthy – why do I need to have insurance?

If I’m not going to have more kids and my kid’s too young to get pregnant, why should I pay for that?

We’re going to be able to finally select which channels we want to pay for, we should be able to select coverage we want.

But we want it all on everyone else’s dime.

Apr 6, 2006 - 1:05 pm 37. Sandy P:

–The issue of “rationing” in other countries is a red herring. They spend a lesser portion of their GDP on health care, and their GDP per capita itself is much less than ours.–

Partially because they let the very young and those over 60 die.

You want lower costs? At what age do we start Logan’s Running?

Apr 6, 2006 - 1:07 pm 38. Steven Mitchell:

Vegetius, I didn’t mean to ignore your direct question. Did the later posts by me and others indirectly answer it?

Apr 6, 2006 - 1:16 pm 39. Knucklehead:

Steve,

Thanks for replying.

Two reasons: You replace the hodge podge with a government bureaucracy. As said above, this gets worse over time.

OK, maybe we come back to this later.

Morever, “efficient” and “effective” are not synonyms. You said the military was efficient. It isn’t. It’s woefully inefficient. It is very effective. The only way a government administered plan will be effective is if it is similarly unconcerned with efficiency.

I accept this point. I know this distinction well and have made this point several times. When talking about something like militaries “effectiveness” is essential, “efficiency” is “nice to have”.

That said, there are examples of goverment deciding that the nation needed something and finding ways to achieve it within adequate levels of both effectiveness and effieciency.

Consider, for a moment, the notion of “regulated monopoly”. Once upon a time the nation came to the conclusion that we needed to make telephone service available and affordable. We accomplished that largely regulated monopoly. Once upon a time the nation decided that vast swaths of our rural areas needed available and affordable electrical service. We accomplished that through regulated monopoly. None of it was done perfectly either in terms of effectiveness or efficiency, but the results didn’t suck either.

I realize that medical insurance, or medical services, are EXTREMELY different than telephone or electrical service, but…

There are ways to be effective and choke down on inefficiency. Our current health/medical services system is effective, but just not available to some portion of the population beyond the level of emergency services.

That seems like it should be a repairable problem.

But to the larger question, even if “roughly the same level of quality” is what we are going to get, why bother? Especially when there is a great deal of evidence that the quality will deteroriate over time?

I don’t understand what you mean by this. The quality of health/medical services those of us who have decent insurance get doesn’t seem to be open to much attack. If it can be paid for, quality service is available. The rich will always have access to some form of uber-services and I’m interested in entering any envy catfight that says the Vanderbilts and Gates shouldn’t be able to have access to physicians and procedures that are too expensive for ordinary folks.

Another issue is that “quality” when it comes to medical services is subject to a wide range of subjectivity. Somebody who gets a liver transplant and is living 8 years beyond what they could have expected without it might judge they received very high quality and another person in an absolutely identical situation might piss and moan that they’ve never felt all that well and it wasn’t quality.

I’m exaggerating here but clearly the definition of “quality” has to be defined by fiat to some extent. There is just way too much vaguery in the spectrum of what individuals demand as far as health/medical services and what they judge as acceptable quality.

And the painful fact of the matter is that we make more services available to more people – increase demand significantly – we’re going to have to increase supply of those providing the services. There’s no good reason the quality of the goods needs to decrease (although cost might). We don’t have to accept lesser quality machines simply because we need more of them UNLESS we demand a lower price point and accept reduced quality to meet it.

What will almost certainly decrease is the quality of the people delivering services if we demand an sharp increase in supply. I don’t believe for a moment that our current system for training doctors, nurses, and all the other myriad service providers will support, say, a 33% increase in the number of people put through it successfully without accepting some degrading of quality. Then again, given how unhappy the German medical professionals are with their level of compensation, perhaps we could steal their medical staff

We can’t escape this question with mandated insurance either, another panacea that never seems to work. As soon as you have mandated insurance, then everyone has to pay and everyone is covered. This doesn’t even work well for auto insurance, where presumably people are doing everything they can to avoid accidents.

This is an interesting point. What are the flaws of these programs? One is that you have to have insurance and it costs more than it theoretically could or should because, well, nobody can opt out of being an insurance customer. But…

Nobody, other than those engaged in fraud, wants to be in an auto wreck. Each driver does what they THINK is necessary to avoid accidents. Yet we all see aggressive drivers and, if you regularly drive in rush-hour traffic you’ll see some of the most incomprehensible behavior you can imagine. People driving while applying makeup, shaving, reading, talking on the phone with both hands going, and so on is astonishingly common.

Being an alert and attentive and defensive driver will help keep one from auto wrecks but it is not guarantee. The guy shaving behind you might run up your butt when you slow for traffic. Happens every day.

And auto insurance isn’t just about wrecks. Its also about covering theft and damage that occurs other ways (my wife once got a huge kick – after she’d calmed down – out of calling me to tell me that “a tree just ran into my car!” She was driving to work during a storm and a limb fell from a tree and smashed her windshield).

So mandatory auto insurance is basically a way to severely restrict the amount of risk individuals choose to accept (risk is limited, basically, to deductibles) AND to make certain that in those cases where costs baloon beyond some thresholds, insurance companies can reach into one another’s pockets to extract some of the money we were forced to give them in them in first place. Oh, yeah, and they serve the purpose of ensuring full employment for everyone who can pass the bar but that’s another matter.

To net it out, what the vast majority of us are paying for with mandatory auto insurance is other people’s repairs, medical bills, and stolen cars. I’ve collected far less than 10% of what I’ve paid out in auto insurance these many years. I’d like to have the excess returned to me or, better yet, to never have paid it out in the first place, but the cost hasn’t been unsustainable. We’re spreading those costs across the full (or approximately so) population of drivers.

Insurance that covers medical/health services would have some nasty little “demand multipliers” in it that would be very difficult to control, but why can’t they be reasonably controlled? Some people run to doctors for every sniffle and others of us won’t go near one unless we become seriously afraid we’re going to die. But how large an issue would that really be? I don’t pretend to know but surely there would be some way to place some of that cost back upon the people consuming the service. Deductibles and co-pays would deal with some of it. If you’re subject to paying the first $500 or whatever out of pocket, and have to cough up $20 every time you wanna see a doctor just because you’ve got a chest cold…

That brings up another problem when talking about such things. We talk about insurance (single payer, existing plans, whatever) as being the way to manage the care. However, the insurance model does not work well for things that most everyone gets. Almost everyone needs a pain killer occasionally (if only aspirin). But insurance works best where relatively few people need the service but the cost of the service is relatively high and the need for the service unpredictable. Office visits, many meds, etc. are the exact opposite of this model.

I’m not sure that bolded part of your statement is particularly true. Do a large percentage of people go to doctors just for the heck of it? People with infants and very young children tend to overuse services. And people who are minor “hypochondriacs” do also. But is that a large enough portion of us to make a plan unworkable? I’m not so sure. I know an awful lot of people who don’t go near a doctor unless they need to. And some of the most fastidious I know are the “checkup every year, no matter what!” sorts.

It’s easy to imagine an explosion in demand but would we really see one? I can’t imagine me running to the doctor with every sniffle or boo-boo simply because of “universal medical insurance”. I’m still going to think, “It’s just a cold, in 10 minutes for $5 I can have an over-the-counter cold prep popped down my gullet. I ain’t calling a doctor and spending a couple hours, tomorrow or the next day, for the sake of saving $5.” And I’m still gonna look at the gash I just put into my finger or arm or whatever and decide whether it needs a simple bandaid and some anti-bacterial salve or whether I better go get a few stitches.

All that endless blathering was, basically, this windbag’s way of saying that I’m coming to the conclusion that it just might be time we looked at some portion of health/medical care – facilities & equipment are what I have in mind – as “public infrastructure” similar to how we treat roads, bridges, etc. and (never thought I’d say these words!) mandating some level of insurance regardless of the fact that the net result is, essentially, to tax those who don’t consume much to pay for other people’s consumption.

Generally, routine service should be paid 100% out of pocket, and thus never involve insurance at all.

I have no problem with this. You pay for your own oil change and haircuts, you can pay for your own flu shots and such.

I’m not entirely convinced that the family of four example someone gave above is particularly representative or even entirely true. I have a sister who raised five children and, from time to time, her economic condition was not good (especially when her husband was very ill). A while back the “Poor People Can’t Afford Childhood Vaccines For Their Kids” meme was making the rounds and my sister was sitting there hearing this on TV and said, basically, “What a fat load of BS! None of my five ever went without their vaccines, or any other basic care, whether I could afford it or not. There are always clinics and programs for that stuff. You just need to get off your ass and go find them!”

In the interest of political reality (and the preventive/education reasons that I listed in the previous post), I’m willing to support help for the “economically disadvantaged,” though. I’d prefer that help be in the form of tax breaks or direct support (akin to food stamps), where the recipient of said aid still makes the decisions about where and what to purchase, same as someone buying out of pocket. Why involve insurance (of any kind) in something that just involves a lot of paperwork.

In case anyone wants to throw the equivalent of a medical/insurance chickenhawk argument in my face, I’ll also state that my wife and I have had most of our savings wiped out by medical costs, despite the fact that we are insured (also mostly out of our own pocket).

I note that no one addressed my argument about supply. If health care demand increases about 10 to 11% per year, ask yourself why the supply is not similarly increasing.

I think I addressed at least some of that above. I’m convinced that the AMA keeps supply lower than it could be by making the costs and difficulty of entry so high. Does it really require four years of med school (which follows 4 years of college with some pretty solid attention to science) and two years of residency to provide basic pediatric care? Or could basic pediatric care be provided by reasonably intelligent people with a mere 5 or 6 years of rigorous higher education and a year of residency? Do we really believe that the fully qualified and experienced nurse who takes vital signs and such can’t also peer into an ear, or a throat, and tell if it is infected or not?

It doesn’t take 6 years of surgical training to suture a simple wound. It seems to me that a whole lot of basic medical services could potentially be provided by “lesser physicians” who haven’t been rung through the the ringer five ways, put $200K into educational debt, and therefore can command $250K/yr compensation. Just about every darned school in the nation has a nurse. Why can’t we glue a little clinic onto those schools and staff them with reasonalby well trained people who can handle the basic stuff at significantly lower cost? BTW, that’s where I’m coming from with the “public infrastructure” stuff. Adequate facilities (meeting some set of standards) staffed by people who also meet some set of standards, perhaps at public expense, perhaps subject to letting public contracts, whatever makes sense, to provide the basics at defined costs. We do this sort of thing for public roads (see service areas on toll roads), why not for public health? What is so horrible about the notion of clinics?

And why not basic hospitals handling the standard stuff as public plant infrastructure. Doctor Thusensuch can then lease his access to the facilities and be paid directly by those who can afford and by some government plan for those who can’t. If Dr. Thusensuch doesn’t want to work under those terms and conditions he can take a job with the private, for profit hospital down the road.

Finally, I’d also support a univeral (pre-tax) health savings account, that didn’t lose money if you didn’t spend it. Even better, simplify the tax code and merely have a pre-tax savings account that could be spent for any number of things we want to encourage as a society. Roll into it the mortgage payments, projected medical bills, education costs, all that stuff. Heck, use it as a high-tech form of vouchers to build up some savings for those with too low an income to pay taxes.

Apr 6, 2006 - 1:27 pm 40. vegetius:

STEVEN:
Vegetius, I didn’t mean to ignore your direct question. Did the later posts by me and others indirectly answer it?

YEP!! THANK YOU

Apr 6, 2006 - 1:42 pm 41. Knucklehead:

BTW, Steve, in that never ending blather above I missed tagging some of your words with italics. Sorry.

I think pre-tax medical savings plans are a good idea also. We have such plans for retirement savings. We have tax free accumulation plans for college saving (529s). Why not allow people to stash money that they can use sometime down the road to defray medical costs? These things are basically just methods for the government to forego small income now to avoid potentially large costs later while we citizens get small savings now with the hope of being able to cover frightening costs later.

With a “universal” plan there’s no point to those, probably, but I don’t see why a plan has to be “universal”. I guess I’m looking for a different hodge-podge than we have now that will provide some level of less expensive services (the basic, ordinary ones) and cover the folks who can’t afford to cover themselves while leaving those of us who are covered, and would prefer not to be at the mercy of a gubmint program, to try and save our way out of it.

Apr 6, 2006 - 1:45 pm 42. vegetius:

Roger:

Just curious. Besides medical care, what else is on your list of basic human rights that should be “madated or provided by the state”?

Posted by: Steven

MAYBE THIS SHOULD BE ADDRESSED FIRST.

I’ve recently heard that braod-band access is fundamental right. No?? Why not??

Apr 6, 2006 - 1:47 pm 43. Richard Aubrey:

Roger. By your observations, you already know this isn’t going to work. Or you could look at Britain, or Canada’s mounting troubles with the issue.

So it won’t work. Hasn’t. The best its supporters can do is pretend that some costs–taxes–don’t exist because they’re not readily identifiable as medical care costs.

Is there any chance that yet another demonstration that it doesn’t work, and in fact, is worse, will actually slow down the spread of this idea? There aren’t many issues whose proponents act without or in spite of evidence to a greater extent than this one.

But, as nobody has yet mentioned, you can always buy individual health insurance policies. Yes, they can be pricey, especially if you think you’re entitled to wave a card at the billing desk and pay nothing.

Is this expensive? Yes, for somebody. Maybe we need means-tested vouchers for individuals buying health insurance. Other than the politicians moving the bar up to about a quarter million of AGI–under that, they’re too poor and aren’t getting Roger’s Rights–this would seem to leave the present system alone.

But isn’t screwing up the present system in order to feel good about oneself the point?

Apr 6, 2006 - 1:53 pm 44. Jamie Irons:

We had a discussion here along these general lines a year or so ago and at that time I introduced my (truly brilliant!) Jamie Irons’ Three Iron Laws of the Medical Marketplace:

(1) Everybody wants everything.

(2) Nobody wants to pay for anything or, what is equivalent, everyone wants somebody else to pay for everything.

(3) If you are under thirty and do not yet have a family of your own, you believe you are immortal and will never require medical care.

Now, obviously these are baldly stated to make their points.

But I defy anyone to truly refute them.

As to Roger (whom I deeply respect and nearly always entirely agree with) and anyone else who thinks this Massachusetts program will “work,” I invite you to take a trip to your local DMV to see what medical care in this environment will be like (thank G_d they don’t issue those DMV characters scalpels and syringes!).

By the way, there is no “right” to medical care. I say this as a practitioner who devotes way more time to his patients than he is compensated for. To assert such a “right” is basically to make a claim on another party’s time and expertise; unless you are truly willing to back up that time with adequate compensation for the services rendered, you are setting up the same kind of system that failed in the Soviet Union and (in the field of health care) is now failing in Canada. And people are not truly willing to back up this claim with adequate compensation (see Law #2).

One cannot simply open up a lot of new medical schools to increase the supply of physicians, either. Such efforts in the past were one of the things that led to the Flexner reforms of the 1920s. There are only so many people who are intellectually and morally equipped to become physicians (I say this with full appreciation of my own moral and intellectual shortcomings). One may as well print money to make us all richer.

Jamie Irons

Apr 6, 2006 - 2:04 pm 45. Joe Schmoe:

Richard, I recently shopped for health insurance.

It became immediately apparent that none of the policies offered by Blue Cross of CA provided very good coverage. Even the most expensive ones would still not prevent a serious accident or illness from destroying us financially. It doesn’t matter whether you pay $400 per month for a family of four, or $1,600 — if your health problems are serious enough, you will be ruined.

The HMO’s are a little better, but that means you are basically paying for socialized medicine out of your own pocket, so what is the point?

This is why I just can’t muster up much enthusiasm for our private health insurance system. I CAN’T buy coverage that will truly protect me. The whole point of insurance is to protect you from bankruptcy, but the insurance that is currently available doesn’t do that. It DOESN’T MATTER how much money I spend, which carrier I choose — it’s simply not available.

This means that a government insurance system doesn’t sound so awful. I mean, if I get sick enough under our current system, I am screwed anyway.

And under the present system, even if I don’t get seriously injured or ill I am still paying thousands of dollars per year in copayments.

Maybe the current system is the best of many bad choices. But it sure doesn’t seem that great. I am all for a little experimentation.

Apr 6, 2006 - 2:07 pm 46. Pat Curley:

My favorite bit:

Those who do not have insurance and refuse to subsribe (sic) to health insurance will face mounting tax penalties.

This reminds me of an article on “diversity training” at a college, where a young woman who declined to participate was alternately told that it was mandatory, and that it would be fun.

Universal health care coverage is good for you, and if you don’t buy it, we’ll start fining you.

Apr 6, 2006 - 2:08 pm 47. Steven Mitchell:

“I don’t understand what you mean by this. The quality of health/medical services those of us who have decent insurance get doesn’t seem to be open to much attack.”

Well, I was using quality in the overall sense, which includes people who get nothing (and thus very low quality). The point is that the proponents of single payer say that it will give everyone quality service. I’m saying that isn’t possible unless you solve the issues that interfere with overall quality. Administration is not even close to the biggest issue (except insomuch as over regulation drives up costs). So even if you ignore the potential side effects of single-payer, the drive is merely rearranging the deck chairs of the Titanic.

“I don’t believe for a moment that our current system for training doctors, nurses, and all the other myriad service providers will support, say, a 33% increase in the number of people put through it successfully without accepting some degrading of quality.”

Not as currently constituted, no. Which is why it is one of the big bottlenecks to real improvement. The *people* capable of being useful health care providers could easily see a 333% increase, if the training system were changed. (It might not go that high in practice, but the people are there if the artificial brakes on demand are removed.)

For contrast, consider how laws have changed to give EMTs and paramedics more options and training. This is a direct push of emergency response workers recognizing that time to response is critical. The need was too great for the AMA to completely stall, and they knew it. So they gave quite a bit to still have a (considerable) say. Once the impediments were out of the way, fire fighters and police responded by embracing the extra training.

“Or could basic pediatric care be provided by reasonably intelligent people with a mere 5 or 6 years of rigorous higher education and a year of residency?”

What you describe is not far from a nurse practicioner. Despite civic-minded noise to the contrary, the AMA fights NP expansion tooth and nail.

“…Just about every darned school in the nation has a nurse. Why can’t we glue a little clinic onto those schools and staff them with reasonalby well trained people who can handle the basic stuff at significantly lower cost? BTW, that’s where I’m coming from with the “public infrastructure” stuff…”

Yet hospitals and nursing homes are woefully short of nurses. So short, that it is not rare for a drug addict nurse to get hired 5 or 6 times after getting caught stealing meds from patients.
Remove the training bottlenecks, you don’t need a public infrastructure to get what you want, and you solve the more glaring problems of hospital and LTC shortages.

Since most of my numerous relatives work with either health care or the phone company, I have some insight into the “infrastructure” argument angle, as well. (Between them, my dad, mom, and uncle have worked in just about every phone company position short of upper management, with a combined over 100 year experience. And that doesn’t even include all the cousins and friends. Let me just say that the phone company sort of works despite being a publically regulated private utility. (As luck would have it, the next biggest employer in my extended family is insurance. You should see the family arguments.)

There are doctors chomping at the bit to move out into the countryside and run a sedate practice. Unfortunately, the current situation won’t let them. Infrastructure *is* the problem. Instead of the government telling people where to build a clinic, maybe we should let the Docs figure it out unimpeded?

As for insurance, I’ll stand by that bolded statement you quoted. Sandy already discussed the trajectory of mandated auto insurance. In a nutshell, the reason why 100% mandated insurance does not work is that it skews the price mechanism. An open insurance market takes into account that there are people who cannot afford insurance (for a variety of reasons), and builds that into the rates. The 100% mandate pretends that the problem doesn’t exist by legislating it out of existence. It’s the equivalent of legislating that people not get sick.

What did you think of my four categories of medical needs, A – D? I’d say that any proposed solution that does not address all four is doomed to failure. That’s why there is no single thing that we can do that will fix the system.

Apr 6, 2006 - 2:10 pm 48. Kevin Peters:

Roger:

I posted this on the wrong thread so I will try to be brief.Sorry Roger. The medical payment situation in this country is a mess but I am very wary about government takeover of the medical field. We don’t have a free market system today because cost does not drive what clients use or don’t use. If they are covered, private or public or a combination, they use it without regards to price. The providers and the clients don’t haggle over price, they only care if it is covered or not covewred. So the traditional market forces are distorted.
But I am very scared when a service is spoken as a “right.” If a proper system is developed a government model may be the thing to do. But if Medical care is considered a right, like free speech, then the people willnever want any restriction on their right, no matter what the costs. “It’s my right as a citizen. Give it to me. Now or I’ll vote your ass out.”
I watch the weekly Prime Ministers question time on C-Span from the U.K. and they show Canada’s around election time. And in both countries health care is always a primary topic and it is always a problem for the party in power, right or left. “It’s not enough, waiting lists, your killing old people and babies, your not spending enough, it doesn’t work, there are not enough Doctors and nurses, they don’t get paid paid enough, they do a crap job, We will spend more then you because we care more then you, blah, blah, blah. They have had their plans for years but the political pandering is endless and if a party is in trouble it becomes the quick fix for a troubled administration, spend more on health care.
The current system is politicized but if it becomes a “right” and the government takes over we will have this as a political football for the rest of our lives and it will become the primary issue for everyone, just as Social Security has become the third rail for elderly voters.Nothing ever gets done, the price tag just keeps rising.
A government plan could be the answer, but you better get it right the first time because if it needs serious changing it won’t get done. “Don’t **** with my God given right. Or else”

Apr 6, 2006 - 2:11 pm 49. ahem:

With all due respect to Roger and the rest, Bostonian is the only one in the room emitting even a whiff of rationality on this issue.

What do you think universal healthcare is other than another form of managed care? Only, this time, operated by the government. Ponder that thought well.

They can’t even run the goddam post office.

I, too, was once in favor of universal healthcare. On the face of it, the idea is equitable, good, rational. It seems so obvious and sensible. And, besides, it gives one a warm, heady feeling…

But if you want to know what it reaps, I’d advise you to read the Health and Legal sections of the papers in the UK and the Netherlands over the last five years–all of ‘em, Left to Right. When the cost of an expensive procedure is on the taxpayer’s dime, it’s amazing how fast otherwise kind and ethical healthcare professionals can mesmerize themselves into withholding it. Ostensibly, for the Greater Good but, in fact, only to keep costs in line. Yet, the wealthy always manage to be the exception, and the misery of the poorest among us is lessened not one bit. We are amazingly quick studies when it comes to self-deception.

Do we really want to follow the Europeans down the path of what is already a well-documented folly? I should have thought we would consider their example as a portent and thank our lucky stars for the opportunity to do better.

Yes, let’s get out from under the thrall of the healthcare insurance industry and get more creative, shall we? Surely someone in the United States can come up with a more humane and truly equitable idea than that of ‘universal’ healthcare.

Full disclosure: I have no health insurance.

Apr 6, 2006 - 2:13 pm 50. Steven Mitchell:

“One cannot simply open up a lot of new medical schools to increase the supply of physicians, either. ”

I want to emphasize that this is not what I am advocating. Or rather, that is only a tiny piece of it. (I think the supply of actual physicians is *artificially* limited.) However, the huge gap between physician and lesser health care professionals is a gaping wound in the system. A lot of people incapable or uninterested in being a physician could be 70% or 80% of a physician without any trouble. There is plenty of demand for such a licensed person to work effectively–if the system would let him.

Apr 6, 2006 - 2:19 pm 51. Terrye:

I don’t know waht the answer is but the costs of health care is so ridiculous that it makes people poor and poor people do get help from government. My mother’s bills were in the hundreds of thousands of dollars. No one can pay that out of pocket and after she went blind and could not work she lost her health insurance.

It is easy for people who are healthy to assume they will always remain so, it is easy to believe we will always have that job and the health insurance that goes with it, but with health care costs outpacing the rate of inflation, it is becoming more and more difficult for middle class people to remain middle class. In fact the reason for the drug bill is to make sure that people with diseases like diabetes and high blood pressure will get their medication because if they get sick the government pays the bill.

So maybe a group plan for people who have no other way to get health insurance which is administered by the state but is paid for by users would work.

Apr 6, 2006 - 2:49 pm 52. DanM:

Pat Curley,

re: your 2:06 post

Seems like we are the only 2 who have noticed this. Once again folks – this is an insurance mandate, not government health insurance. The state tax addition of $1,000.00 is a penalty for anyone that does not have health insurance.

Apr 6, 2006 - 3:09 pm 53. Steven Mitchell:

“My mother’s bills were in the hundreds of thousands of dollars. No one can pay that out of pocket and after she went blind and could not work she lost her health insurance.”

Everyone cannot pay out of pocket “their share” of all the money necessary to pay all the N x thousand bills potentially incurred by all Americans. A group health plan will not change that fact, it merely changes the parameters of “their share”.

There are only four ways out of that immediate situation:

1. Grow GNP faster than health care costs.
2. Reduce the cost of the health care.
3. Government mandated transfer of money from other functions to pay for health care.
4. Rationing (imposed, defacto; doesn’t matter).

For #2 to help, it has to be a real reduction, not a shifting. All talk about shifting does is avoid the issue. #3 is a killer. Not only are we thus talking about massive tax increases (with resultant loss in GNP, thus exacerbating the problem) but also a similar dynamic with social security. We all know how sound that is.

I think the elephant in the living room here is that there are always going to be people that will not get certain care. You can’t have an innovative, forward looking system and get any other result. The talk of health care as a “right” tries to sidestep that issue.

My friend that has leukemia, diagnosed in the late 80s, got some treatments that saved about 50%of the people in his condition. Pretty much everyone diagnosed a decade earlier was dead before those treatments arrived. He is still alive, but will be lucky to make 50. It’s a race between his body and the pace of technology. Somewhere between the 70s and 80s, that technology was given to some leukemia patients, but not all.

You can’t say that those left out had their rights trampled, though. Before someone experimented, they *all* died. Now that someone experimented, some live. Now that those experiments have gone on long enough, even more live. Eventually, it may get to the point that the procedures and medications become common enough that we can easily afford them for everyone. Until such time, they are competing with all the other demands on the system. Your “right” to mind boggling expensive procedure is in direct conflict with my “right” to equally mind boggling but different expensive procedure. You must draw the line somewhere. Ergo, it isn’t a “right”.

Apr 6, 2006 - 3:24 pm 54. Richard Aubrey:

Joe Schmoe,

Insurance varies from state to state and I don’t know about California except that people I know who live there say it’s pretty flaky.

In Michigan, where I live, it is possible to get an individual policy with an upper limit of $5 million. That’s just the plain-vanilla major med.

Could be pricey. The question is whether a means-tested voucher for individual coverage or some kind of government run plan would be better. Keep in mind that most folks with good insurance do pretty well, as opposed to those in Britain and Canada.

As to why CA doesn’t have better policies…. Either you could look further, or you could look to state law which may, directly or indirectly, restrict or discourage their availability.

Apr 6, 2006 - 3:38 pm 55. Kevin Peters:

Roger:

I have not studied the specifics of the plan so I can’t say whether it is good or not. But I do have a couple of questions. If they can’t afford private Insurance how are they going to pay the fine. With mandatory car insurance if you don’t comply they take away your driving rights. If you don’t buy the Insurance or pay the fine are they going to refuse medical care? I am not trying to rip the plan, I just wonder how they are going to handle those problems. If they don’t get full participation how much more will the costs be. And this doesn’t seem to address the cost increase issue. Does every physician have to participate? I will examine the issue eventually but does anyone out there know already?

Apr 6, 2006 - 4:17 pm 56. Tim:

A single payer system would be a disaster for Americans, and everyone else.

How? Take the profits out of medicine; you stop the advancement of new treatments and therapies for ailments. Don’t believe me? The Europeans used to lead the world in medical and pharmaceutical research – not any more – due to price caps making R&D into new products nothing more than a waste of money. The US is now the world leader in medical and pharmaceutical research – all because of profitability and return on investment. Kill profits in advancements in medical treatments, you’ll stop the advancements. If you like the current death rates due to AIDS, cancers, Parkinson?s, Alzheimer?s, MS, Lupus, etc, taking profits out of medicine through a single payer systems is probably an acceptable policy outcome for you.

Take the profit out of medicine, and you’ll have a shortage of doctors. Don’t believe me? The Canadians send us 20 twenty doctors and nurses for every single American doctor and nurse who emigrates to Canada. Why? Because they can make money here they cannot make there. Kill the profits in medicine; you’ll have fewer medical professionals. If you think we have too many doctors and nurses, taking profits out of medicine through a single payer system is probably an acceptable policy outcome for you.

Take the profit out of medicine, and you’ll have a shortage of medical providers. Don’t believe me? The federal and state governments cap reimbursements to providers for both Medicare and Medicaid programs. Ask your doctor how satisfied s/he is with her/his reimbursements for Medicare or Medicaid patients. Kill the profits in medicine by capping provider rates, and you’ll have fewer medical providers. If you think we have too many medical providers, taking profits out of medicine through a single payer system is probably an acceptable policy outcome for you.

Take the profit out of medicine, and you’ll have a shortage of hospitals. Don’t believe me? The British have virtually no private hospitals to speak of, relative to the US, because there is no profit in it. Publicly owned hospitals, like so many publicly owned facilities, were neglected to the point of utter disrepair. The Blair government had to enact a massive tax increase just to pay for capital improvements to their substandard, deteriorating hospitals. So, if you think we have too many hospitals, taking profits out of medicine through a single payer system is probably an acceptable policy outcome for you.

And I haven’t even begun to write about rationing or tax increases yet. But if you think we have too much medicine and pay too few taxes, a single payer system is probably an acceptable policy outcome for you.

Apr 6, 2006 - 5:31 pm 57. Charlie (Colorado):

Markets do a lousy, lousy job of providing essential (as opposed to cosmetic) health services at an affordable price.

Markus, do you have any actual evidence of that? I’m not aware of any non-market countries that do as good a a job as the US market-driven system — and don’t even think you’ll be able to sell me on, say, Canada or Germany, as I’ve lived both places and know better. (And with Canada, in particular, don’t forget that the Supreme Court of Quebec just voided the no-private-healthcare laws on the basis that the Federal system wasn’t adequate.)

I’m afraid that, like democracy, the actual evidence seems to suggest that the US system is the worst possible system — except for the others.

Now, I’ll be interested to see what Romney’s idea does; as Roger says, that’s part of what Federalism should be for — a laboratory for experiments.

And in the interests of science, here’s my prediction: Massachusetts’ unemployment will go up and businesses will relocate to Maine, New Hampshire, and Connecticut — or even Nevada and Texas.

Apr 6, 2006 - 5:56 pm 58. sirpatrick:

….(And a healthy percentage of them probably didn’t pay for it.)

I think you are WAY off base with this comment.It is actually counter-intutive. The healthy percentage of people who have their premiuns paid for by their employer are probably the ones who are most favorable towards universal heathcare. It is the people who pay a large portion of their own monthly premiums( my wife and myself) who are most against universal healthcare as it would be like anything else that is free :used , abused and then rationed.

Has any entity ever given away something for free and NOT run out of it?

Apr 6, 2006 - 7:58 pm 59. syn:

Since life without art means death it is therefore our basic human right to have free entertainment.

We demand Univeral Entertainment Care because all us suffering poor slobs cannot afford to pay for vitally important art like $350 for a 2 hour Madonna show, $20 for CD’s/DVD’s, $50 for games, $30 for a book etc etc etc which feed our souls while poetically influencing public opinion, history and pollitical policy.

If we all received Universal Entertainment Care then we could spend all our hard earned dollars on purchasing our own personal health care.

We demand Universal Entertainment Care Now!

Like the famous artist John Lenin sang: Imagine.

Apr 7, 2006 - 5:07 am 60. rosignol:

No new taxes are planned but employers with more than 10 staff — who do not provide health insurance — will have to make a contribution of about 295 dollars per worker. The plan will cost about 1.2 billion dollars over three years.

ROFLMAO!!!

Does anyone care to make a small wager as to the % by which this program will overrun?

Remember- this is Massachusetts, land of the Big Dig.

Apr 7, 2006 - 6:35 am 61. Sandy P:

Well, Investor’s Biz Daily likes it.

Brings those nasty healthy uninsureds into the system and brings some market orientation to the process.

Apr 7, 2006 - 6:50 am 62. RogerA:

As some have noted, the MA plan is actually pretty basic and, at least to me, seeks increase the insurance pool by bringing in the healthy uninsured, and setting up (negative) incentives to mandate minimal insurance coverage for some employers–that really isnt universal health care, IMHO.

A few commenters have sketched out what I think are some good ideas–perhaps the government could provide universal coverage for low cost health care strategies: annual exams, mammography, psa screening, chilhood and adult vaccinations etc–When you look at the 10 leading causes of death in this country, the death rate could be cut in half by non-medical interventions (reduce drinking, stop smoking, lose weight etc)–So overall health could be improved with prevention rather than intervention. And Prevention is relative cheap (how many of us over 65 get pneumonia vaccinations? not enough and take a look at the demographics of pnemonia)

So I guess what I am advocating is some sore of national level, basic prevention program and then let the other markets work for secondary and tertiary care issues. Of course, as someone noted, end of life care is what raises the real cost of health care–And I dont think there’s an easy answer to that.

Good thread! Great comments!

Apr 7, 2006 - 7:57 am 63. Knucklehead:

Steve,

Re: your 4 points…

There are only four ways out of that immediate situation:

1. Grow GNP faster than health care costs.
2. Reduce the cost of the health care.
3. Government mandated transfer of money from other functions to pay for health care.
4. Rationing (imposed, defacto; doesn’t matter).

#’s 1, 2, & 4 are extremely problematic because there’s no way to even define, let alone restrict, what we consider to be “health care”. Our expectations regarding our “health care” have grown nearly beyond comprehension. As you and others have pointed out what was unimaginable a human lifetime ago is possible now. What was barely imaginable a few short decades ago is common now. What is experimental today will be common a decade down the road.

If one is a middle-aged person today the difference between what one’s grandparents and what one’s parents expect as “health” is downright astonishing. Grandma and grandpa had no real expectation of living a particularly active old age – if they lasted into their seventies they were pretty much old people with severe limitations. Our moms and dads, on the other hand, expect to do things like golf, play tennis, travel… The hip, knee, shoulder replacements they can get now just flat out were unimaginable to Grandma and Grandpa. $300 or $400 per month in prescriptions to deal with some variety of ailments was not a matter of “how can we afford this?” for Grandma and Grandpa – it was not available.

So #1, growing the economy faster than health care costs rise seems an impossibility. Health care costs will continue to grow incredibly fast because what we expect and demand is ballooning at an incredible rate. I’m struggling to find an analogy here… consider “housing” or “transportation” costs. We can grow and plan our way along to meeting those sorts of costs because there’s some natural containment of those things. We don’t really expect that in the next two decades we’ll all be living in Oil-Shiek palaces or flying around in our own personal inter-gallactic spaceships. Our expectations for housing and transport grow, of course, but in pretty ordinary and measurable ways. That just isn’t true of “health care”.

#2, it seems, you and I have some vague agreement about although I think you are wildly over-optimistic about how big an increase is potentially available through redefining the jobs and training required to produce the sorts of quasi or lesser physicians we envision. I have some visibility into health professionals education and even for these “lesser physicians” types it still requires an educational rigor that is beyond the bulk of the people we are graduating from our public schools. We’re down somewhere near 10 or 15% (tops) who can manage the stinking gas laws and units conversions fercrying out loud. It is a sad state of affairs but there it is.

A fair bit of our ordinary health care services could be handled adequately by the likes of nurse practitioners and physicians assistants and respiratory therapists and such who don’t command anywhere near the compensation that physicians do but this nation is not prepared to double or triple the number of people who can get through the training necessary to do those jobs adequately. Build all the schools you want – you can’t fill them with qualified students.

#3 has some potential. Notfuhnuttin’ but between fed and state budgets we’re spending about $10K per capita. Politics being what it is anymore we’re unlikely to ever agree on how to resort our priorities but it must be at least theoretically possible that $1000 or $1500 or that spending could be redirected from whatever the heck it is currently spent on and put toward “health care” in some fashion or other. But man, would there be some nasty political catfights!

#4, rationing, is unavoidable if we are ever going to have any sort of “universal” anything whether it is insurance or services. There’s just no way on earth we can give everything to everybody on everyone else’s dime. It just cannot happen. There has to be rationing in various ways. Means testing – “You can afford to pay x% of this out of your own pocket, Mr. Smith.” And even outright denial of services, “Sorry, Mrs. Jones, but your fellow citizens refuse to spend $400K to keep you kinda-sorta more-or-less alive another 4 months.”

Apr 7, 2006 - 8:02 am 64. markus:

Knucklehead, Charlie — I will elaborate on what I said and respond directly to your questions, but I’m busy today so it’ll take me a little while.

In the meantime, for those with the time or interest to wade through a long article, Krugman here sums up the liberal view on “the health care crisis”, and also tries to address most of the standard conservative objections: http://www.nybooks.com/articles/18802

Apr 7, 2006 - 8:08 am 65. Sandy P:

Actually – pneumonia shots may not be required.

I have a friend who works for Sage Products in IL — believe it or not, brushing teeth more often seems to help – you’re not letting the bacteria stay in your mouth and get in your lungs. Or something like that.

Apr 7, 2006 - 8:11 am 66. Knucklehead:

Somebody above mentioned that the current “health insurance” model is not really insurance – it is a distributed, front loaded, payment plan.

IMO we, the people, need to get over our expectation of paying some amount awful close to $0 for basic medical services. Getting the wart or mole or whatever removed costs $200, you’re just gonna have to pay for that the same as if some part in your auto needed replacing. Nobody expects the rest of us to pay for a new set of tires or an oil-change and expecting the rest of us to pay for a flu-shot or Viagra strikes me as unreasonable. We need to stop believing we have some right to dig into each other’s pockets to pay for that kind of service.

On the other hand, we are far too wealthy a society to demand that people chose between death and bankruptcy or penury.

Apr 7, 2006 - 8:18 am 67. Steven Mitchell:

Knucklehead,

I’d say my expectations for saving with idea #3 (government transfer) are about in line with your expectations for idea #2 (reduce health care costs). I don’t think there is much there that can be done, short of getting the government more out of the loop.

I agree that we can’t really expect GNP to outgrow health care at the current rate. What we can do is bring health care costs down enough that we are at least in the ballpark.

“On the other hand, we are far too wealthy a society to demand that people chose between death and bankruptcy or penury.”

We are all gonna die someday. Let’s assume (making all kinds of generalizations), that there are procedures/meds available that will do the following: A. $1 to expand life expectancy and general health (LE&GH) by 1 year. (Never mind the difficulty of such a measurement, we are assuming.) B. $10 to expand LE&GH by six months. C. $100 to expand LE&GH by 18 months. D. $1000 to expand LE&GH by 2 year, but only works on 50% of the population. And so on. Since those are just made up examples, feel free to add any additional ones you want.

Now, let us further assume that there is broad agreement to make certain procedures universially available; others only if people want to pay out of pocket; and the rest not worth it. (Or assume that Roger has been made dictator for life, if that makes more sense in the example. Either way, the politics are settled. Furthermore, assume that the prices above (and in any that you add yourself) already reflect the volume.

Problem is, there is *always* another procedure. If your chances of heart disease go way down, and you avoid the heart attack, your chances of living long enough to get cancer are much greater. Find a cure for cancer, there will be something else. No matter what, a society *will* demand that people chose between death and bankruptcy or penury, unless that society removes the choice altogether by saying that no one gets the procedure. This will remain true until someone finds a cure for all diseases and old age. I’m not holding my breathe.

As long as one talks about health care in particular, or “rights” to basic health care, one runs into this issue. As soon as one drops talk about “rights”, moral issues, etc. and focuses on a particular procedure, then you can get on much more solid ground. For example, even the most rabid libertarian will seldom insist that we relax government mandated treatments of tuberculosis. The costs of not treating it are simply too great, regardless of what you think about the patient. Likewise, I think most people are unwilling to say that injured people can be denied blood replacement, regardless of ability to pay.

Apr 7, 2006 - 9:54 am 68. Knucklehead:

Steve,

It looks like we may be the only ones left playing in this thread

I don’t think there is any magic bullet for any of the things we’re talking about. As far as I can figure it we need some serious rethinking and restructuting in several areas of “health care”.

- insurance. We need to stop “insuring” small and normal costs. Insurance is supposed to protect against the big and, hopefully, unusual stuff. When it comes to health the big stuff is nearly inevitable but more on that later.

- liability. If we as a nation ever decide that we want whatever portion of medical/health care costs removed from the individual and placed upon society then we need to deal with where we place the liabilty for non-negligence/incompetence types of mistakes. Medical care is not a precise type of science and the human body is not a thoroughly known machine – it ain’t mechanics and it ain’t perfect. We cannot continue to try and rectify people’s misfortune wrt their health and treatment thereof by awarding them large sums of money from somebody else’s pockets. “We’re so sorry, Uncle Albert, that you had some medical problem that qualified and non-negligent medical service providers failed to detect and treat until you suffered permanent damage. That doesn’t entitle you to $15M from some doctor’s insurance company.”

- services delivery: not everything we need needs to cost as much as it does. We’ve covered some of this above but there’s some room for some other stuff such as lab work. Do we really need physicians involved in the periodic dropping off of poop, piss, and blood to be run through some analysis equipment? I don’t think so. I’m going to come back to this later.

- prevention and rehabilitation: our “health care system” is downright dumb when it comes to some of this. I have no idea how to deal with prevention in any way that isn’t going to have the general populaton blowing gaskets about government interference into life choices. Perhaps some sort of “rewards” for “good behavior” rather than penalties for bad or whatever. Particularly in the rehabilitation areas there’s tons of room for costs savings over time by outlays now. There is so much room for improving the health (and reducing the health care needs) of people through rehabilitation and therapy that it is astonishing. People with Chronic Obstructive Pulminary Disease, for example, often require hospitializaton roughly once per year at costs that quickly run to thousands of dollars. Half or more of those people, when put into rehab training, can be taught to manage their disease and avoid at least half of their hospitalizations. Insurance companies refuse to pay the $1000/yr cost of the rehab and, instead, wind up paying several times that much for the hospitalizations. That just one example.

If such things were made a standard and accepted form of care we’d be able to switch some of that cost onto people as per the first point above. I know of a doctor who tried to go this route and set up a program where COPD patients came in every other week for breathing rehab training at a cost of ~$30/session. The results were apparently very good. Not only were the patients being hospitalized significantly less frequently but they were marveling at how much more they could do in the daily course of their lives. But – my lord people can be absurd! – the insurance companies and medicaire (or whatever it is) stopped paying for the rehab and the people wouldn’t pay for it themselves. They’d rather wind up in the freakin’ hospital and pay those costs! Whassupwitdat?

If somebody wrecks a leg or a hip or whatever, spend the money to teach them how to live with that WITHOUT wrecking their other freakin’ leg or hip and needing MORE expensive care later. We don’t do that stuff and its just dumb not to.

- end of life care: anybody who works in or around intensive care facilities can vouch for the enormous costs incurred to keep people alive (if we want to call it “alive”) for a few more weeks, or days, or even hours. At what point do we just say no and tell the sons and daughters and spouses that no amount of heroic effort is going to anything but cost a ton of money? Unfortunately doctors and hospitals make a lot of money here. Keeping Grandma on that respirator with the morphine drip and a half-dozen 10 second dropins from specialists is profitable business.

None of us are getting out of this alive. Sooner or later something fatal is going to get every one of us.

What about stuff that costs a fortune that people can’t pay for? Well, I sure don’t know what to do about that. But let’s just say that the next time you jump into your auto to go somewhere you get blasted by some truck with failed brakes. Some bunch of people is going to jump to it to try and get you to a trauma center pronto. They’ll close the road and get a helicopter in there if they need to. When you get to the emergency room they’re going to do everything they can to save your life and Humpty Dumpty back together again. And nobody is going to demand your insurance card. If you can’t pay those thousands of dollars in services, well… nobody is going to remove the services. You’re going to get at least the immediate medical attention you need and nobody is going to force you to sell your home or whatever to pay for it.

Somehow, someway, those costs are covered. The reality is that those who can pay are covering the costs for those who can’t. The people with insurance are paying inflated prices to cover the emergency services of those without insurance.

Now take a different example. By some method you discover you’ve got cancer. It is a treatable form with excellent success and prognosis following treatment but the treatment but the treatment is expensive and you can’t afford it. How does this really, fundamentally differ from the accident scenario? The only real difference, at least as far as getting the services you need, is that everyone in the chain now has the time to stop and think about who is going to pay for it. Now the “luxury” exists to withold services.

Now take our two examples and, instead of a middle-aged or young victim make it an old person. Your not 30 or 40 or 50 but, instead, 75 or 80 or 85. Now what? I’m aware of a study done by a trauma center that showed that for people over 65 years old the success for dealing with the typical traumas starts dropping off the cliff and the costs start climbing. (The study wasn’t able, I don’t know why, to look at what the differences are in even managing to get the older patients to the trauma center alive in the first place, but that would seem material to me.) I don’t doubt for a minute that this is similarly true for other medical situations – cancers or whatever. Do we start withholding services based upon age?

There’s a lot of nasty little questions running around in this “health care” business.

Apr 7, 2006 - 11:23 am 69. Knucklehead:

Steve,

Re: your LE&GH examples above, that’s basically what we’re doing constantly. It is more in the GH than the LE right now. LE is creeping higher and higher (provided you ain’t in Russia!) but what we define as GH, especially in the later parts of LE, is MUCH higher. A lot of the wildly rising costs we are seeing are in that GH bit at the tail end of LE and a lot of them are in squeezing out a few moments more from LE regardless of GH.

Except for big injury and unusual illness, between about 15 and 55 or so people – taken as a whole – aren’t really all that expensive as far as medical care goes. I don’t believe the huge and expanding costs are being incurred by that segment of the population. Yeah, there are diseases that get treated now that had no treatement once upon a time but there are also diseases that don’t afflict people that were once common. We aren’t incurring the costs of polio or malaria or yellow fever or smallpox and such anymore either. I don’t know if any data exists to look at how that washes out but I suspect there’s some equaling out in there. We aren’t dealing with nearly as many auto accident injuries per passenger mile as we once were. There are costs that seem to disappear. At some point some of what the enviro-whackos and public health activists have wrought will start paying some dividends. Eventually there’ll be no more asbestosis, fewer smokers will eventually mean retreats in the number of lungers, etc.

Oh, and yeah, let’s not forget that the rat in the snake’s belly – the aging baby-boomers – isn’t gonna be there forever. Some of what we’re seeing and screaming about is going to settle down a bit just with the passing of time. Of course just about then 10 or 12 million illegal aliens will start getting old on us…

Apr 7, 2006 - 11:44 am 70. timmah!:

I’m not worried because I’ll be rolling in the dough once I set up my new practice using:

http://www.lasikathome.com

Y’all mention Roger to get a 10% discount!

Semi-seriously, I think it would be great to test market-driven health care sometime. We’re certainly not doing it in the U.S., where the government heavily regulates every aspect of health care in collusion with big pharma and the AMA.

On top of that, our sense of “I should get health care for free” noted by others here is heavily fueled by our messed up tax system. Bonus foul-up: anybody who survives a serious illness becomes unemployable for life. Get rid of the tax distortions that make health care an employment perk, and a lot of common sense reform will happen.

Apr 7, 2006 - 12:13 pm 71. Bostonian:

Knuck: “Somebody above mentioned that the current “health insurance” model is not really insurance – it is a distributed, front loaded, payment plan. ”

Well, that’s what I meant to say, but you put it better than I did.

And that indeed does describe our “health insurance” as it stands.

My gripes with this are two. First, I am obviously paying more for my routine exams because I am also supporting the insurance company, not just my doctor. Second, and more importantly, this system prevents the market from having a say, because the agents paying the costs are not the same as the consumers incurring the costs.

I hear that more companies are offering catastrophic-only coverage to those who want it. (The open question is whether the same companies offer higher wages to those who choose this.) I do not know how much this is catching on, but it ought to, unless I’m all wrong.

***
And I am not saying that switching to a true insurance model will get us all out of the water either. But it would go some ways to making health care competitive, which it manifestly is not.

Apr 7, 2006 - 12:31 pm 72. Steven Mitchell:

“There’s a lot of nasty little questions running around in this “health care” business. ”

Right. And when someone faces those facts squarely, as you are in those later posts, the discussion is useful.

“Re: your LE&GH examples above, that’s basically what we’re doing constantly.”

Yes. And as the old saying goes, once we agree that X can be bought, the quibble is merely over the price. Rationing of some kind *will* happen, if only by individual market and quality of life decisions. A person proposing a plan that assumes rationing will not occur hasn’t considered the basic immutable facts.

“Get rid of the tax distortions that make health care an employment perk, and a lot of common sense reform will happen.”

This would indeed help a lot.

Apr 7, 2006 - 12:46 pm 73. John Moore ( Useful Fools ):

Okay, this thread is almost dead, which is too bad because I have a substantial interest in the subject.

First, there is an elephant (or at least a pig) in the room that nobody seems to talk about (and I have yet to find out what Mass. does about it): uninsurable people.

If you go out and try to buy health insurance, you had better be healthy. If not, you either aren’t gonna get it, it’s going to be exceedingly expensive, or it won’t cover anything that might be a result of your “pre-existing condition.”

At one time (and maybe still), the local Blue Cross would not cover anyone who had ever taken Prozac! Think about that!

There are a whole lot of people (with the number to expand dramatically) who are going to fall into this category but don’t know it yet – boomers who retire early or try to start their own businesses. A lot will have a medical problem (high blood pressure, diabetes type II, some sort of psychiatric history – perhaps very minor, etc). And they are going to discover, when they leave the cocoon of their employers, that they won’t be able to get insurance.

I’m not talking about the pay-everything plans so popular today, which are really a combination of insurance and pre-paid health care – a really dumb idea. I’m talking about insurance that prevents them from loosing all their savings to one medical event.

This issue is almost invisible in almost every policy discussion or plan I have ever seen. And it is a real problem!

—————

Here’s a bit about the industry (which I used to be in)…

Health insurance makes money by balancing risk and premiums. Employers (of a large enough size) tend to have a lot of healthy people working for them. Hence the risk is relatively low (and many will lay off older workers because they know that insurance costs are lower if they do so).

Insurers are loath to insure sick people because it often is a case of reverse cherry picking (they call it “adverse selection”). People want to wait until they get sick (which they don’t expect) before they shell out the dough for insurance. Obviously you cannot have an insurance market that works this way.

Hence the private (as opposed to corporate or government) health insurance market is basically dead – of market failure. Medical underwriting means a whole lot of people don’t qualify, and those who do are more likely to not bother. This is a case of serious market failure.

So our current system takes people who should be able to afford insurance, and leaves them with none. It doesn’t make any difference if you want a PPO co-pay type of policy or a $10,000 deductible one – you just can’t buy it.

So these people either have to work until they die (with the everpresent threat of age-discrimination and “lasering”), or put their savings at great risk. This is hardly conducive to a sound capitalist system. If people knew what risk they were running, they’d either buy insurance when healthy (and hope they NEVER miss a month of payments) or just not bother to save.

Does the Mass. system help with this? Or does it penalize people for not buying insurance, when in fact they cannot get it due to pre-existing conditions? I have yet to see an article that says.

——————————–

Moving on… as a long-time computer systems designer, I am sure that our medical care and medical payments systems are woefully under-automated. This significantly increases costs while significantly reducing the quality of care. If you want to see high quality care, go to Mayo and watch how well automated they are. It means prescription errors are way down. It means that the providers and patients both avoid wasted time. It means that insurance overhead is greatly reduced.

Now go to your family doctor’s office and ask how they submit insurance claims. Probably by hand. How do they create prescriptions? They either scribble them illegibly on a pad, or call a pharmacy where again there is a waste of time a higher probability of error. How about medical records? When New Zealand introduced a centralized medical records system, they discovered that the rate of Munschausen Syndrom (people who fake illness or make themselves sick due to psychopathology) was much higher than previously thought. The records system made it visible. You can imagine what other things this could do.

————————-

As to increasing supply, I must disagree with the usually very wise Jamie Irons on this one. The medical schools are so tight at rationing positions that their selection process uses hidden randomizing in the MCAT to screen out qualified people. Some of the sections of that test would defeat a prodigy in the field they are testing – they are clearly designed to cause random score variation. As a mathematician with a good background in physics, I looked at some of these (which are given under extreme time pressure) and was amazed.

No, there are LOTS of qualified people. When you have a population of 300,000,000 and you also allow people from all over the world to compete, the number of qualified people is extremely large. Hence the med schools are very arbitrary in their selection – because it IS a guild system and is designed to reduce competition. The numbmer of newly accredited med schools in the last 50 years is nowhere near equivalent to the population growth.

——————-

For those who feel save with their employer provided insurance, you need to know about “lasering.” This is a relatively new practice, but I already have a friend (in the health insurance industry, ironically) who was nailed by it.

No longer satisfied with the statistics of employer groups, insurers will now identify, to employers, those employees who have very high costs, and tell the employers that if those people are removed from the pool, their costs will go down significantly.

Anybody care to guess what this results in?

===============

Employer provided health care is an artifact. It is unreasonable and has all sorts of externalities. It is one of the reasons that the individual health insurance markets don’t work at all. It resulted from demands for increased compensation during World War II when price controls were in effect.

It should be illegal.

——————-

Finally, people need to understand, and accept that the only workable health insurance system involves generational transfer. Young people need to buy insurance to subsidize older people with higher expected medical costs.

At first glance, this would seem unfair. After all, why should the young subsidize the old, in yet one more way.

But consider…

1) The young will be old someday. How are they going to get health care.

2) Historically, the young have cared for their elders. They didn’t do it using complex bureaucracies, but they did (if they were responsible) take care of parents, elderly aunts, etc.

Apr 7, 2006 - 6:00 pm

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