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How to debate health care policy
Health care policy should be debated through micro-facts. Let's consider a few:
1. American health care outcomes look much better once we adjust for race and other demographic factors, including violence and car crashes. Some groups -- such as Asian-American women -- have remarkably good health care outcomes.
2. Some of the health care savings of other systems occur through price effects (e.g., doctors are paid an average of $60,000 in France) and do not involve real resource savings.
3. American's high expenditures, however wasteful they may be, nonetheless drive much of the world's medical innovation. Medical innovation is also a public good to some extent and no the pharmaceutical companies are not simply parasites on the NIH and universities.
4. America has a different structure of interest groups. and therefore a single payer system in the United States would not operate as does a single payer system in other countries. It would more likely favor the interests of doctors and insurance companies, for a start.
5. If we take the international health results/expenditures data at face value (and we shouldn't), they imply that greater access to medical care does not itself improve health outcomes. So we should be careful in how we use and cite such results.
6. Health care outcomes improve with income even under single-payer systems. Our best estimates suggest that this gradient is no steeper in the United States than it is in Canada.
7. Having health insurance does improve your health care outcomes, but not to an amazing degree. The largest benefits are arguably the alleviation of financial risk, and no I am not meaning to slight that factor.
8. Pharmaceuticals, unlike many forms of health care, have large and noticeably positive effects on individual health.
9. The major Democratic health care plans on the table all, one way or another, admit they will spend more money on health care. The fact that other countries spend less therefore does not help predict the change in spending that would result from these plans.
(Sorry for the lack of links, I am on the road, google back to previous MR posts for documentations.)
Now here is how to debate health care policy. Ask a defender of single payer systems (or other possible reforms) how many of these points he or she accepts. Settle on that list, noting that residual disagreements may well remain. Then debate what the list means for what America should do about health care policy today.
Here's how not to debate health care policy. When you hear one point on that list, bring up in response that other countries spend less and produce better health care outcomes and that therefore we should copy the systems of those countries.
But libertarians, I am not letting you off the hook either: Isn't there some form of further government intervention into health care that could help somebody? And if your basic model is that governments steal as much money as they can, and then waste it all, shouldn't we then jump at the chance to institute health care subsidies of this at least partially helpful nature? The alternative is simply that the money gets wasted some other and worse way.
Posted by Tyler Cowen on October 16, 2007 at 05:12 AM in Medicine | Permalink
Comments
I'd say that rather than focusing on how health care is provided or payed for, the focus should be on how doctors are licensed. That whole system needs to be opened up, one way or another, so that the number of doctors that come to the market is more directly pegged to the demand for them.
One way this could be done without doing away with licensing entirely would be to allow people to get their licenses if they spend a certain amount of time training under doctors who already do--so that in those hospitals where the ratio of patients to doctors was especially high, pressure would be put to train new ones.
Allowing the supply of doctors to more closely mirror the demand for them would make medicine on the whole more affordable. Another way to go about lowering the cost would be to pass laws limiting the circumstances under which a patient may sue a doctor; and putting a cap on the amount of money that can be paid should the patient win.
Posted by: Adam at Oct 16, 2007 6:06:01 AM
Adam,
Though your suggestion may seem to make economic sense, I do not believe American voters will ever accept unlicensed physicians.
An alternative they have accepted is to increase the amount of medical care provided by licensed nurses. That's the solution that Walmart is pursuing.
Posted by: John Dewey at Oct 16, 2007 6:32:36 AM
Some of the health care savings of other systems occur through price effects (e.g., doctors are paid an average of $60,000 in France) and do not involve real resource savings.
One reason for this is that licensing of doctors in France is far less onerous than in the U.S. The increased supply of doctors may not be a "resource saving" strictly speaking, but surely it is economically meaningful.
Posted by: anon at Oct 16, 2007 6:36:19 AM
Another way to go about lowering the cost would be to pass laws limiting the circumstances under which a patient may sue a doctor; and putting a cap on the amount of money that can be paid should the patient win.
This is a very bad idea. Allowing malpractice lawsuits incents better quality control by private actors, thus obviating the need for strict professional licensure.
Posted by: anon at Oct 16, 2007 6:48:03 AM
'American health care outcomes look much better once we adjust for race and other demographic factors'
Ah, the last defense used when defending America's health care system, one which is sadly no more tenable than any of the other excuses for a system which sets world standards in how much is spent on it while returning results that would not make Italy or Portugal envious.
'The researchers who were funded by several US and UK government agencies, set out to look at the social and economic factors affecting health but shifted emphasis when large differences emerged between the two countries. The study looked both at the way people reported their own health and – to guard against any bias from self-reporting – at objective biological markers of disease from blood tests. Altogether there were about 15,000 participants.
Samples in both countries were limited to whites and excluded recent immigrants, so as to control for racial and ethnic factors.
“This study challenges the theory that the greater heterogeneity of the US population is the major reason the US is behind other industrialised nations in some important health measures,” said Richard Suzman, programme director at the US National Institute on Ageing, which co-funded the research.
http://www.ft.com/cms/s/0/6c9dee06-d9ff-11da-b7de-0000779e2340.html?nclick_check=1
To keep quoting from that bastion of British socialism, the Financial Times -
'The researchers are struggling to explain their findings. Their analysis shows that lifestyle factors – particularly the fact that Americans are more obese and take less exercise – cannot account for the whole discrepancy. though they may provide a partial explanation.
Different health systems may also be part of the story. The researchers note that the US spends $5,274 per head on medical care while the UK spends $2,164, adjusted for purchasing power. But Britain’s National Health Service provides publicly funded medicine for everyone, while Americans under the age of 65 have to rely on private insurance.
Prof Marmot suggested that, while the healthcare provided by the British state health service was not superior to the private US system, it provided important psychological reassurance.
As the researchers say in the journal paper: “To a much greater extent England has set up programmes whose goal is to isolate individuals from the economic consequences of poor health in terms of their medical expenditure and especially earnings and wealth reduction.”'
Why let facts intrude on popularly held American beliefs, since as we all know, America has the best health care system in the world, as long as you ignore actually being healthy - shockingly, the British system, the sick man of Europe, so to speak, is returning empirically better results for lower cost.
But just keep tweaking those figures to get the right demographic - I bet the health outcomes for those earning more than 100 million dollars a year and their families are fantastic in the U.S.
Posted by: at Oct 16, 2007 6:59:58 AM
The trouble with #1 is #6. To adjust for race is to bias your comparison by ignoring a relatively less well-off segment of the US population.
Posted by: Bernard Yomtov at Oct 16, 2007 7:19:57 AM
Socialize the whole goddamn thing country right away and be done with it. Why drag out the inevitable? Freedom and liberty is dead as principles of government.
Posted by: Erik at Oct 16, 2007 7:21:44 AM
Dewey: "Though your suggestion may seem to make economic sense, I do not believe American voters will ever accept unlicensed physicians."
I worked at a doctors office which had a physician assistant. the physician assistant could nearly do everything the doctor could do (needed approval on some stuff).
and patients were more than willing to see the physician assistant (who was more likable).
We need more physician assistants. but of course, the AMA is fighting the whole concept of a physician assistant to increase demand for doctors.
Posted by: thehova at Oct 16, 2007 7:27:28 AM
Interesting point about not including car deaths or violence - sort of like how American unemployment statistics simply skip over the fact that the world's largest prison population (America Number 1, all the way) doesn't count as being employed or unemployed - out of sight, out of mind, it seems.
Though it remains open by what is meant by 'adjust' - for example, since much of the inner city gun violence is paid for from public funds (amazingly, a shot drug dealer is likely to receive more public money in care in a few hours than the total amount spent on his public education), do you mean that eliminating this subsidy from the picture would make America's private health care system look better?
Or do you mean that if we excluded the amount of money spent on health care due to gun injuries (freedom has its price, but why include it when talking about health care), America would look better? Sort of like if the Russians could exclude alcohol, their health care system would also look better in various rankings?
Or do you mean that because Americans drive a lot, and thus not only suffer a higher rate of accidents, but also suffer from obesity in part due to their lack of physical activity, the adjustment for car driving should be a minor one - sort of like the number of Asian-American women in the total population - roughly 2.5%. (I think Catholic nuns have a fairly decent health outcome too, by the way - why not mention them when 'adjusting' the numbers?)
Posted by: happiness at Oct 16, 2007 7:31:55 AM
I can't understand 2. Are you saying that bringing prices down to marginal costs isnt't welfare enhancing?
Posted by: Nicola at Oct 16, 2007 7:33:14 AM
I think Tyler's restrictions on the debate make sense from the standpoint of trying to determine if/how to alter our system.
However, I still am very curious about the debate he specifically abrogates:
How and why can Canada, for example, deliver equal or better health care outcomes for half the price?
Whether or not we can realistically create such a system here, I think it would be fascinating and important(kinda in the
mechanism v application way) to understand.
I am also tired of working and interested in embarking on a life of crime. I don't want to directly physically hurt someone or
end up in prison, and am only looking to pull in approximately 50K per year. Anyone with a suggestion that is used will be
rewarded with 50% of the first 15K I pull in with your method. Please ust click the comment sig and email so as not to interfere with the
discussion here. Thanks.
with
Posted by: Different Jeff at Oct 16, 2007 7:38:12 AM
Anon,
It does no good to increase the supply of doctors in France. They still fall under the French labor laws, and thus they all go on vacation in August, just like the rest of France and only work, what is it now, 35 hours a week.
http://query.nytimes.com/gst/fullpage.html?res=9C02E6D71030F93AA2575BC0A9659C8B63
France will also shut down hospital, force mandatory holidays on doctors, and take other cost saving measures to save money. Oh yeah, most French hospitals don't have air conditioning, which means that they don't have modern environmental controls.
Posted by: Xmas at Oct 16, 2007 7:55:54 AM
Could anyone shed some light upon the 45+ million uninsured Americans? How many of them are young and healthy people who prefer paying 40 USD a year for treatments and drugs they need to shelling out hundreds of dollars for insurance?
Posted by: J at Oct 16, 2007 8:18:29 AM
So you suggest we subsidize the research for the rest of the world, that unlicensed practitioners would not harm medical care, that it does not matter that people are uninsured, and that it is okay that we spend twice as much as the UK? That is an interesting world you live in. And sadly not the real one.
Posted by: akatsuki at Oct 16, 2007 8:31:48 AM
This post, like so much else in the debate about "health care policy" is more usefully thought of as two debates: a debate about health care economics, and a debate about health care policy. I appreciate that Tyler has a lot to say about both, but it still muddies the waters to not consider these items separately.
I don't think one can have a sensible discussion about health care economics if both parties don't understand or acknowledge the inherent trade-off between access, innovation, and cost. Anyone who thinks we can have full access (which doesn't exist even in countries with "universal coverage"), the American pace of innovation, and Canadian costs is simply delusional. Assuming that Americans can improve on all three via non-market mechanisms is very likely assuming away scarcity of some resource or other.
The policy argument is different. It must answer questions like, "For a given economic result, under what conditions is it acceptable for the government to intervene on personal decisions about treatments," or "Even if the economic results might be better under a government-controlled system, to what extent do we want the allocation of scarce societal resources to be distributed via political rather than market mechanisms?"
The tendency today is to assume that if one can show that Canadian or French style systems produce better economic results that one should automatically accept their policies. As a practical matter, people's policy positions tend to color their view of the data. People biased in favor of "universal health care" ignore that access in Canada or France is far from universal. People biased in favor of less governmental involvement are unwilling to admit that they don't care if children die because their parents were too poor to afford decent care, and the private charities weren't enough to make up for that.
Posted by: M. Hodak at Oct 16, 2007 8:39:25 AM
The problem with the debate about health care is that it too often tries to treat a couple symptoms (health insurance coverage and high costs) while not even attempting to diagnose the reasons for those symptoms. As Tyler notes, America's quality of care is tops in the world. As a side note, if you are going to cite the WHO rankings, it would be wise to be aware that an important element in those rankings is essentially the degree of socialization. In other words, the rankings pre-suppose socialized medicine is superior.
The cost of healthcare in the US is far higher than anywhere else in the world, and this is worth addressing. But instead of just trying to reduce these costs by government dictate, we should be asking why they are so high in the first place. A lot (though not all) of what McCain proposed the other day strikes me as looking for th root of the problems.
The most important source of our problem, of course is the placing of incentives for health insurance on the employer rather than the employee; this makes no sense, and results in people receiving coverage that provides far too much coverage in some areas and far too little in other areas. Removing responsibility for health insurance from the employer to the individual will have a positive long-term effect on wages, and more to the point will also decrease overall health care costs as people actually get to choose the health insurance appropriate to them. For example, most people currently would be best off with high deductible insurance would be appropriate, but the employer based system discourages purchase of high deductible insurance (since high deductible insurance shifts costs to the employee).
Other problems include the fact that we are effectively subsidizing pharmaceutical price controls in the rest of the developed world- this would, I think, be alleviated if we allowed re-importation of drugs into the US; it would cause the drug companies some short term pain, but in the long run they would wind up better for it since it would place tremendous pressure on single payer systems to pay a fair market value for their drugs.
Another huge problem is the wide discrepancy in health insurance requirements from state to state - there is no rational reason for this. Individuals in one state shouldn't be prevented from purchasing insurance that is tailored for their needs just because their state prohibits that type of insurance or considers that type of insurance to be insufficient.
Posted by: Mark at Oct 16, 2007 8:51:17 AM
Why are we talking about ''Canadian'' health care when we should be talking about ''Ontario'' or ''Quebec'' or ''B.C.'' health care?
Our federal government has no power to run a health care system. Only our states do. So we should be talking about the MN or CA or NY health care systems.
Posted by: Russ Nelson at Oct 16, 2007 8:55:36 AM
But libertarians, I am not letting you off the hook either Isn't there some form of further government intervention into health care that could help somebody?
Sure. I don't know any libertarian who would dispute that. The problem is not that government is unable to help anyone, it's that it has no right.
And if your basic model is that governments steal as much money as they can, and then waste it all, shouldn't we then jump at the chance to institute health care subsidies of this at least partially helpful nature?
I don't know any libertarian who thinks that the basic model of government is that it steals as much as it can and wastes it all, either. I certainly do think it takes what is politically feasible, but the political feasibility constrains its spending as well as its taxation.
Who is this libertarian that you're arguing with?
Posted by: Joshua Holmes at Oct 16, 2007 9:09:35 AM
As apparently one of the apparently few libertarians to respond, let me say that if government MUST intervene (more than it already has), then the only intervention should be across the board cash distribution of some amount which should not explicitly earmarked for health care/insurance, but its use for health care should be strongly encouraged. Encouragement should be read as PSAs. I would agree to an opt-out program if it weren't for slippery slopes (for a relevant example see the SS reform of 1983)
As far as those doubting the facts, given similar inputs, the US health care system really does produce superior results. See survival post-cancer diagnosis, or how Canada handles its a significant fraction of its premature births.
Posted by: Jody at Oct 16, 2007 9:14:27 AM
Just to clarify- as a libertarian, it's worth my pointing out that most of what I argued for above is really the pushing of government out of the health care industry. Re-importation of drugs means an elimination of current prohibitions against such; removal of tax incentives from employers in favor of individuals reduces government intervention, and so forth. So what I'm saying is that the libertarian position is more that the problem, properly diagnosed, is primarily too much government intervention rather than too little.
Posted by: Mark at Oct 16, 2007 9:30:44 AM
I think we should spend less for health and get more. The fact that other societies manage this buy such a large margine means that we are making some mistakes. The type of mistakes we are making is that we are buying things that aren't really health care and calling them health care. The left often characterizes the mistake we are making as making HMOs rich and the right even more absurdly claims that the mistake we are making is making trial lawyers rich. Really the mistake is in thinking that health care can do far more than it can. We want to believe that we have achieved more mastery over life and death than we have. In america we spend a great deal on things that work relatively poorly like cancer treatments, and far less on things that work relatively well like pre-natal care. If our nation's consumption of food was like our consumption of health care we would spend far more on escargots than on potatos.
Posted by: Michael Foody at Oct 16, 2007 10:02:25 AM
Different Jeff asked:
How and why can Canada, for example, deliver equal or better health care outcomes for half the price?
First, consider this: the median amount of time Canadians wait to see a specialist after being referred to one by a general (or family) practitioner has gone from 3.7 weeks in 1993 to 8.8 weeks in 2006 [these figures are from the Fraser Institute]. This more than double increase in the time delay to receive treatment has come despite there being almost no change in the proportion of GPs and specialists with respect to the total Canadian population.
In other words, the increase in median wait time to receive medical treatment over these years is not driven by a shortage of specialists.
By contrast, the total number of doctors in the U.S. has increased with respect to the population from 1993 to 2006, including the number of both GPs and specialists.
Now consider this: the Canadian health care system has systematically underfunded investments in new medical technology for years, including for well-established devices such as MRIs, which have become a primary means for specialists to diagnose and monitor various medical conditions. According to OECD data, in 1993 Canada had 1 MRI for every one million Canadians. By 2005, the Canadian health care system had increased that to 5.5 MRIs for every one million Canadians.
By contrast, the U.S. had 11.5 MRIs for every one million Americans in 1993, which increased to 26.6 MRIs for every one million Americans in 2005.
The lack of investment in implementing medical technologies into the Canadian health care system acts as a bottleneck for Canadians in receiving treatment. This underinvestment keeps costs down, as nothing saves more money than not spending it, but these savings come at the price to patients of serious delays in receiving advanced medical treatment. Once Canadians make it to the specialist, the outcomes are similar to those in the U.S. for many conditions, but not for those conditions (such as cancer) for which early treatment is an essential element in obtaining substantially better outcomes.
We should note that the OECD indicates that U.S. patients do not have a significant wait time between getting a referral from a GP to receiving treatment from a specialist.
Posted by: Ironman at Oct 16, 2007 10:13:27 AM
Yawn. Unless we address America's monstrously high spending on futile end-of-life care, any discussion of health care reform is just rearranging the deck chairs on the Titanic.
Posted by: Peter at Oct 16, 2007 10:20:32 AM
I don't get the argument over point 1. If you're debating a health care system, you can't include things that aren't affected by the system. If Americans drive more or have more gun violence which lowers the life expectancy, you can't turn around and use the lower life expectancy as evidence that America's healthcare system is broken. If different ethnic groups have different life expectancies based on diet and other factors, you can't assume the healthcare system is the problem.
Why not just have a two-tiered system? Free healthcare for anyone who wants it. Specify the level of GDP the government gets to spend based on how many people join the system, maxing out at 8% of GDP if everyone joins the system. With a maximum amount of GDP, the government will be forced to cut service if it cannot generate efficiencies. The only restriction on government is that it cannot set any prices. The non-government system should be almost completely unregulated. Then see what happens. If the market works, people will shift from government to market plans. If it doesn't work, people will quit the private system for the government.
Posted by: 8 at Oct 16, 2007 10:22:57 AM
Unfortunately, the AMA is opposed to measures that would increase the supply of physicans or others that can do their job. The AMA is perhaps the most effective union in this country.
Posted by: M at Oct 16, 2007 10:32:32 AM
What does America get for all those health care dollars? The best cancer survival rates in the world, for one thing (breast cancer mortality is 30% lower for American women than for French women, for example). Also, the shortest waiting times for medical procedures (in the US, waiting times are usually measured in days rather than in months or even years, ala the UK and Canada). And the AMA plays no role in regulating the supply or licensure of physicians - that role belongs to the states.
Posted by: Ned at Oct 16, 2007 10:49:14 AM
"Having health insurance does improve your health care outcomes, but not to an amazing degree. The largest benefits are arguably the alleviation of financial risk, and no I am not meaning to slight that factor."
This factor that you are not slighting should not perhaps be factor 7. It should be factor 1 or 2 or 3. If you have a serious medical condition in this country, your only hope of getting insurance is through your employer. If your employer does not offer insurance, or if you are self employed, or if you lose your job, your medical condition will make it impossible to get insurance on your own - on any terms. Without insurance, your medical problem will likely lead to financial ruin. This doesn't seem fair or socially desirable.
Posted by: Jeffrey Miller at Oct 16, 2007 11:11:25 AM
"Having health insurance does improve your health care outcomes, but not to an amazing degree. The largest benefits are arguably the alleviation of financial risk, and no I am not meaning to slight that factor."
This factor that you are not slighting should not perhaps be factor 7. It should be factor 1 or 2 or 3. If you have a serious medical condition in this country, your only hope of getting insurance is through your employer. If your employer does not offer insurance, or if you are self employed, or if you lose your job, your medical condition will make it impossible to get insurance on your own - on any terms. Without insurance, your medical problem will likely lead to financial ruin. This doesn't seem fair or socially desirable.
Posted by: Jeffrey Miller at Oct 16, 2007 11:13:08 AM
Ned - sorry, if you want the shortest waiting times, you need to fly to Germany. Germany has a system which has many features of the American system - high costs, for-profit medical care provided by doctors, hospitals, drug companies, etc.. It also has some elements that Americans still fondly think they have - such as being able to choose any doctor they wish (a true AMA fairy tale, worth all the billions spent on promoting it). And it has a few things which Americans of a certain age might remember - for example, a local doctor in walking distance, or even doctors that make regular house calls.
And I don't think Germany is importing too much in the way of American medical technology - at least, I have never seen any American names on any the equipment here.
As an interesting side note - on the radio news was a report about researchers (Heidelberg, most likely) growing heart valves - they should last ten years, and be available in a couple of years. But don't worry, if it comforts you, I'm sure that somewhere, you can find enough 'American' science to say that the work is completely and utterly derivative or banal, depending on your mood.
Posted by: not at Oct 16, 2007 11:23:31 AM
I once heard the AMA referred to as a modern replacement for the old masonic guilds of old...the holders of highly prized, technical information that only a privileged few possess--after a rigorous, lengthy, and arduous initiation.
I have to go to the Nobel prize winners this year to even frame the current health care problem. What's the mechanism? You have doctors, skilled nurses, institutions (hospitals, medical centers, medical school, pharm companies, etc.), intermediaries (insurance companies and their shareholders, pharmacies), sick people of varying degrees of health and wealth, non-sick people who could reduce future costs through prevention...it's an intricate game they play with the current systems and laws in place. The government wants to come in to tweak the game/system to achieve better health outcomes at a lower cost, or at least interject efficiency by creating the right system of incentives for all players.
Answer: not easy, and I don't know. Is access to health care a right? Or at least should we be embarrassed to call ourselves the greatest country in the world if a lot of us and a lot of our children can't afford to get the best health care (by choice or not...)? Isn't safeguarding our future labor force (and investments in human capital) important enough to force the government to step in?
But I do know that the US has some of the highest quality care--most people in most countries, if given an infinite amount of resources, would fly to US for critical care, cancer treatments, and even regular stuff. We attract the top talent from all over the world with our high salaries for doctors--and despite the annoyance of dealing with HMO's and insurance and lawsuits--they keep coming!
Posted by: V at Oct 16, 2007 11:27:54 AM
I see a lot of people mention that the US does a better job treating cancer. This is bunk. It is true, as you say, that the survival rate is much higher in the United States than in any European country. However, the mortality rate is paradoxically at pretty much the same level across all industrialized countries. (Ezra Klein has a graph that shows this on http://ezraklein.typepad.com/blog/2006/05/i_wonk_because_.html , The New Republic has a long article on this, but it is subscription only: http://www.tnr.com/doc.mhtml?i=w070409&s=cohn041007) The reason is that for several reasons, partially different traditions, partially the fear of malpractice suits, the United States health care system diagnoses and treats a lot of tumors as malignant even though they are essentialy benign. Compared to Europe, this inflates both the incidence level and the survival rate, but it does not actually produce better results in terms of the mortality rate. Moreover, it wastes a lot of resources on invasive treatment of patients who do not actually need treatment.
Posted by: Virgule at Oct 16, 2007 11:44:09 AM
V: "Or at least should we be embarrassed to call ourselves the greatest country in the world if a lot of us and a lot of our children can't afford to get the best health care (by choice or not...)? "
I disagree with your assertion. Every fulltime working parent can afford to get excellent health insurance for their children. They simply have different priorities. If health insurance for their children were important enough, these parents could reduce other expenditures or move to lower cost regions or work a second job.
In the U.S. we usually leave it to parents to make decisions about the welfare of their children. As long as parents are not immediately endangering the lives of those children, I think we have to live with the consequences of empowering parents.
Children of parents who choose not to work can usually qualify for SCHIPS.
Posted by: John Dewey at Oct 16, 2007 11:44:15 AM
Moreover, regarding the waiting lists, you might want to check out this Businessweek article http://www.businessweek.com/magazine/content/07_28/b4042072.htm Waiting times in the US are in fact often as bad or worse than in Europe. Additionally, patients often have to wait for a long time for approval from insurance companies before treatment.
Posted by: Virgule at Oct 16, 2007 11:46:29 AM
Virgule: "partially the fear of malpractice suits"
I agree that lawyers and foolish juries have driven up the cost of healthcare in the U.S. Physicians and hospitals and insurance providers have no rational choice but to protect themselves through unnecessary but legally unchallengable practices.
Sadly, we continue to elect lawyers to key governmental positions. It is not surprising we cannot rein them in.
Posted by: John Dewey at Oct 16, 2007 11:51:39 AM
Just to correct Xmas on French system:
- most French Doctors work to the point of exhaustion, especially if they are in a hospital; I don't know if the 60k figure includes the students (five years of close to full-time activity with almost no pay), but this might lower the average; from the figures you are giving, free medical education has a multiplied effect on total health costs -- all other heath statistics being equal;
- the 35h rule has been a concern since the beginning for nurses and medical assistants, and is currently under revision; safety seems to be a strong opposing argument (you do not want an tired nurse to do injections); the consequence has been an even greater burden on MD students: has this selected even more altruist people, and isn't that good? Young people seem to cope with exhaustion better, and future MDs appear more reasonable, and delegate when they feel dizzy.
- the link you provide is more then two years old: more people died in other countries because that heat wave was not detected as early there, but it only was properly measured here thanks to a state-of-the-art epidemiological alert system; cooling equipment was promptly installed, up to the point that a month after, newspapers were mentioning over-reaction.
I would consider that social role explains both the French & the German system: being a doctor means a lot there, and this non-monetary benefit seems to help. Technology (mostly pharmaceutical) transfer is certainly true, but probably more so with other countries, for similar reason.
Posted by: Bertil at Oct 16, 2007 12:43:33 PM
Now, some questions:
M. Hodak wrote:
> access in Canada or France is far from universal
Apart from administrative issues, who would be refused a universal health care? Note that in both cases, not only it is reimbursed, but it is cheap for everyone else, e.g. foreigners.
There is no easy way to ask this:
> American health care outcomes look much better once we adjust for race
> America's quality of care is tops in the world
Are you considering African-American as citizens with full civil rights?
Putting aside the fact that what you are saying is probably so patently racist that it would be illegal to publish it in France & Germany, isn't that the worst example of lack of intellectual honesty? You sound like someone who ran 150m and claims he just won the 200m race, because he was faster on the first three quarters, and strolled the rest of the race.
> I do know that the US has some of the highest quality care--most people in most countries, if given an infinite amount of resources, would fly to US for critical care, cancer treatments, and even regular stuff.
Then why heads-of-state fly to France? I don't know how many go to the USA, but it's a regular feature in news here to have unofficial diplomatic visit including check-ups.
> Every full-time working parent can afford to get excellent health insurance for their children. [. . .] Children of parents who choose not to work can usually qualify for SCHIPS.
That is only true if the children are sane: as soon has they have a critical problem, insurance goes off the roof. Goes along the same line of: we are very good at keeping sane people alive--don't bother looking at those who actually need medical attention: move on, move on to admire our shinning clinic for the sane, with amazing chrome and statistics off the roof (anyone getting anything is transferred elsewhere).
What about the amazing number of children with parents in jail? Part-time workers, self-employed people who are trying to make it, but it can sometimes take a year or two for a risky business to take-off, people recently fired or from bankrupted companies: don't they exist in the USA? Are you all under some form of life-long job contract in a gigantic State-company that cannot fail?
Posted by: Bertil at Oct 16, 2007 1:15:51 PM
Bertil, I think you mean "healthy" (=sain in french), not sane (=pas fou) ;)
Posted by: Virgule at Oct 16, 2007 1:21:20 PM
If you think US longevity is dragged down by non-white ethnicities, take a look at Cuba's racial makeup and longevity, as compared with the US. (All figures from CIA Factbook at: https://www.cia.gov/library/publications/the-world-factbook/index.html)
Cuba ethnic makeup: mulatto 51%, white 37%, black 11%
Cuba life expectancy: 77 years
Cuba GDP per capita: $4,100
USA ethnic makeup: white 81.7%, black 12.9%, Asian 4.2%
USA life expectancy: 78 years
USA GDP per capita: $43,800
Posted by: hjt at Oct 16, 2007 1:44:30 PM
Is anyone else amused by how much this thread has illustrated Tyler's suggestion on how NOT to have a health care discussion?
Posted by: Jody at Oct 16, 2007 1:48:11 PM
The simpler question is - do you support social, political and financial structures which create significant infant mortality and deny health care to a significant proportion of the population?
The debate starts when the answer to that is an honest 'no' - otherwise moral positions have to be made explicit before economic constructions start to become relevant.
Posted by: Richard Leon at Oct 16, 2007 1:52:50 PM
The barriers to entry into the medical profession could be reduced by eliminating the requirement that doctors go to medical school. What is currently taught in the first two years of medical school, mostly textbook medicine, could be taught as a Medicine major in colleges. The last two years of medical school, which are mostly devoted to clinical training, could be incorporated into the current residency programs, which cost doctors nothing, and actually pay a living wage.
A program such as this would drastically reduce the cost of a medical education and make such an education available to many more people. Without the high cost of a medical education, and the consequent indebtedness of beginning doctors, the need for high doctor fees would be substantially reduced.
Posted by: henry10 at Oct 16, 2007 2:18:14 PM
do you support social, political and financial structures which create significant infant mortality and deny health care to a significant proportion of the population?
The debate starts when the answer to that is an honest 'no' - otherwise moral positions have to be made explicit before economic constructions start to become relevant.
I for one don't support government sanctioned theft to satisfy the moral preenings of others. As that's the explicit tradeoff, my answer is 'yes' to Richard's question.
Posted by: Jody at Oct 16, 2007 2:23:49 PM
Tyler's last statement is puzzling:
"And if your basic model is that governments steal as much money as they can, and then waste it all, shouldn't we then jump at the chance to institute health care subsidies of this at least partially helpful nature? The alternative is simply that the money gets wasted some other and worse way."
Unlike other commenters I will cop to this being, in fact, my basic model. However that does not imply we should try to get the government to waste money on health care. It does not matter what government wastes money on, that's what [b]WASTE[/b] means. To imply that it will be effective somehow is to state that it is not wasted and thus contradict the aforementioned basic model.
In effect you're suggesting that if I believe government wastes the resources it steals, I should try to get it to... not waste them. Why yes, I certainly would like that, but it doesn't seem any likelier here than anywhere else. The best case alternative isn't that they waste the money elsewhere, that's simply equivalent. It would be better if they just burned the money.
Posted by: Noah Yetter at Oct 16, 2007 2:31:21 PM
Isn't there some form of further government intervention into health care that could help somebody?
Sure. The government could take huge sums of money and spend it on intensive interventions for a small subset of the population. That might help them, but it would clearly be inefficient. If the question is whether there's something the government could do to improve efficiency over pure market outcomes, then sure, that it's probably possible, too. But I don't think it's reasonable to expect that those are the kind of interventions we'll get.
Posted by: Brandon Berg at Oct 16, 2007 2:50:03 PM
There are a couple of big arguments that I've found helpful in opposing government run health care:
1) There scarcely an industry more regulated than healthcare. Who can practice is regulated, what they can do is regulated, who can pay them is regulated, how much you you can pay them is regulated, what you can injest is regulated... How is more regulation going to solve the problem?
2) Health care is too important to leave to politicians. Do you really want Larry Craig deciding what medical treatment you can have?
Posted by: Mark Addleman at Oct 16, 2007 3:02:13 PM
Mark: As you pointed out, he already was deciding what medical treatment I could have, so I'm not sure what your point is. Do you suppose there is any lack of unprincipled, buffoonish people in the ranks of insurance companies or hospitals?
Posted by: albatross at Oct 16, 2007 3:31:14 PM
Richard leon: "do you support social, political and financial structures which create significant infant mortality and deny health care to a significant proportion of the population?"
Are you implying that social, political, and financial structures in the U.S. "create significant infant mortality and deny health care"? Neither happens in the U.S., of course.
In the first place, infant mortality is driven by lifestyle choices. Furthermore, the true infant mortality rate in the U.S. is comparable to that of other nations.
Health care is available for everyone. Health insurance is available to those who deem it important enough to pay for it. A very small percentage of Americans who do not possess health insurance are actually legally uninsurable in most - bit not all - states.
Posted by: John Dewey at Oct 16, 2007 4:05:50 PM
^No but when there are too many buffoons in an insurance company or hospital I can go to a different one. Particularly if the government would give me the insurance tax exemption to me instead of my employer.
When there are too many buffoons in government what do I do? Move countries I guess. That is the problem with Federal govt. programs they are one giant monopoly and IMO monopolies public or private are bad for consumer welfare.
I am not totally against providing some form of government health care, but not at the federal level.
1) There are too many uncertainties to try one solution on a national level, Better to try several solution at the state level and see what works.
2) With a state program there is at least some check and balance in that you can more easily move states if the program becomes too onerous/costly without adding promised benefits.
Posted by: Eccdogg at Oct 16, 2007 4:07:33 PM
Lets start with just 2 facts:
Combined personal and governmental expenditure on healthcare is higher in the US than in any G8 nation (i.e. nations with comparable wealth)
Health results are lower, weather it be life expectancy, infant mortality, availability of care, etc.
Higher cost and lower returns. All other facts you bring up are incidental.
Posted by: nelziq at Oct 16, 2007 4:41:21 PM
When discussing the Canadian health care system, instead of focusing on the lower cost and better outcomes it produces, and instead of focusing on the fact that all Canadians are insured, kep the following in mind:
That despite intense lobbying year after year by American companies and interests trying to convince Canadians to adopt an American-style system, Canadians continue to support their system in poll after poll, at levels around 85-90 percent support.
This is in all areas of the country - including Alberta, where they have the best public health care system even though it is Canada's most conservative province, and even in Atlantic Canada, where I now live, because people here know what hospitals would look like in this poor region without it.
Canadians live right next to the United States and can see for themselves the 'benefits' of the private health care system, and vow to never ever adopt such a system. Even th most conservative governments, no matter how large their majorities, have not dared touch this.
Focusing on micro-facts may fool Americans. But Canadians know the micro-facts for what they are.
Posted by: Stephen Downes at Oct 16, 2007 4:57:51 PM
Two weeks ago, I wrote a detailed analysis of the Quebec health care system. Here are the main lessons learned (you can read the whole article by clicking on my name below):
Lesson #1: limiting the supply of medical services is not a fair or efficient way to limit costs.
Lesson #2: markets should set the wages of medical professionals, otherwise they are not getting fair compensation.
Lesson #3: privately run facilities deliver better service at a lower cost.
Lesson #4: keep medical malpractice insurance costs low. Perhaps insurance against malpractice should be abolished altogether.
Lesson #5: immigrants should cover their health insurance costs.
Lesson #6: the government should be conservative in the size of the baseline insurance package to avoiding defaulting.
Lesson #7: information used by the insurer and insuree to enter in an insurance contract must be identical.
Lesson #8: achieving downwards pressure on price of a medical act is not possible without cash compensation paid directly to the patient.
Lesson #9: private insurance contracts must be limited to short periods.
Lesson #10: there is no good way for private insurance to provide universal health coverage.
Posted by: Martin at Oct 16, 2007 5:26:04 PM
Canadians live right next to the United States and can see for themselves the 'benefits' of the private health care system, and vow to never ever adopt such a system.
It would seem to follow that Americans live right next to Canada. But for one reason or another, our equally persistent rejection of the Canadian system doesn't seem to prove much of anything.
Posted by: Paul Zrimsek at Oct 16, 2007 7:51:00 PM
IMO you should add this to the list of debating points:
Most Americans are buying more healthcare than they would if they had more control over the packages that they can buy. E.G. I think that if people could buy insurance that would not cover the least economic care (highest cost per average year of life saved), they would. Doctors seem to look at hopeless cases and try this or that expensive thing.
Posted by: Floccina at Oct 16, 2007 8:46:42 PM
I see a lot of people mention that the US does a better job treating cancer. This is bunk. It is true, as you say, that the survival rate is much higher in the United States than in any European country. However, the mortality rate is paradoxically at pretty much the same level across all industrialized countries. (Ezra Klein has a graph that shows this on http://ezraklein.typepad.com/blog/2006/05/i_wonk_because_.html , The New Republic has a long article on this, but it is subscription only: http://www.tnr.com/doc.mhtml?i=w070409&s=cohn041007) The reason is that for several reasons, partially different traditions, partially the fear of malpractice suits, the United States health care system diagnoses and treats a lot of tumors as malignant even though they are essentialy benign.
I don't know about the tnr article, since I can't access it, but the Ezra Klein chart you cite does not support your claim at all. First, it's only about prostate cancer, not all cancer, or cancer in general. On the face of it, the chart suggests that the U.S. does indeed do a much better job of treating prostate cancer than most of the other countries represented on the chart (because the U.S. mortality is rate is about the same, but the U.S. incidence is much higher). Even if the variation in incidence is much lower than the chart indicates (because the U.S. is better at detecting prostate cancer) that still would not mean the U.S. is not better at treatment. The benefits of treatment consist of more than just preventing mortality. And surely the diagnosis of disease is itself one of the functions of a health care system.
Posted by: JasonR at Oct 16, 2007 9:00:11 PM
For those who feel compelled to object to Tyler's points.
http://www.guardian.co.uk/australia/story/0,,1802705,00.html
“The damning figures also show that 70% of the Aboriginal population, who number almost 500,000, die before the age of 65, compared with 20% of non-indigenous Australians. The average life expectancy for Aboriginal men is 59, compared with 77 for non-indigenous males, according to the report by the Australian Institute of Health and Welfare.”
http://www.cbc.ca/story/canada/national/2005/04/11/UNNatives-050411.html
“Life expectancy among the Inuit is 10 years lower than the rest of Canada.”
http://findarticles.com/p/articles/mi_m0PCG/is_2002_Sept/ai_105657385/pg_4
“In New Zealand the difference between Maori and non-Maori life expectancy was 8.1 years for males and 9.0 years for females. The situation in Australia, even allowing for some variability in the reliability of the estimated life expectancies, was dramatically worse, with differences of 21.5 years for males and 20.0 years for females. Indigenous Australians can expect to live only around three-quarters as long as all Australians. Maori, on the other hand, have an expectation of life about 90 per cent of that of non-Maori.”
http://www.guardian.co.uk/medicine/story/0,,1691741,00.html
“For here in this multi-deprived inner city area, the average life expectancy of a male is just 53.9 years. In Iraq, after 10 years of sanctions, a war and a continuing conflict, suicide bombs and insurgency, the average man has a good chance of making it into his 60s; the life expectancy of a male there is 67.49. In Iran it is 69.96, in North Korea, 71.37 and in the Gaza Strip it is 70.5.
Statistics recently revealed that the Calton ward has not just the lowest life expectancy in the United Kingdom and Europe but of many areas of the world. A child born in the Calton - locals always prefix a "the" to Calton - arrives into an environment saturated by drink, drugs, smoking and poor diet. A baby girl has more of a chance of survival - her life expectancy at birth 74.8.”
http://www.theage.com.au/articles/2004/04/27/1082831568285.html
http://www.encyclopedia.com/doc/1G1-105657385.html
To compare infant mortality because of differences in live births in case with complications you need to add infant mortality rates and rates still birth. Then you need to adjust for fertility treatments which product higher levels of multiple births and infant mortality. Then you need to compare by race and ethnic group because differences in groups are significant for example people from African decent have twice the rate of multiple birth as those from Chinese decent and have a much higher rate of infant mortality. Interestingly Americans of Mexican descent have a lower rate of infant mortality than other Caucasian Americans. You also need to adjust of the age of the mother. If you control for all the above the USA does a little better than Great Britain in infant mortality.
But... Socialized medicine might benefit us by bring down the cost. I would like to see the target set at 5% of GDP. From what I understand the Dutch set it at 10% of GDP. Quality of medical care and even access to medical care in the USA is not likely to change a great deal in net if medicine is socialized but it could, if it is done right, save us a lot of money.
Why because IMO people buy much more healthcare than they want.
Bernard Yomtov look at the eight Americas study
Posted by: Floccina at Oct 16, 2007 9:33:37 PM
To throw another argument on the fire maybe Robin Hanson is right and healthcare beyond cheap stuff like Vaccinations and Antibiotics has almost no affect on health.
http://www.econtalk.org/archives/2007/05/hanson_on_healt.html
Posted by: Floccina at Oct 16, 2007 9:50:39 PM
Nothing in the Constitution permits the federal gov't to provide healthcare.
Posted by: Rpche at Oct 17, 2007 12:16:52 AM
I'm not sure I follow -- the Constitution doesn't explicitly permit an Air Force either, but it's pretty clearly implied that the Federal Government has a general responsibility toward defense. Similarly, it's pretty clearly implied by, um, the first sentence of the document, that the general welfare is explicitly in the domain of the Federal Government.
Posted by: Kimmitt at Oct 17, 2007 2:02:53 AM
Secondly, I'm not convinced of (3), (5), and (9). In particular (9) -- I'm currently paying $500 a month for insurance; is it the expectation that taxes will increase by more than this amount?
Posted by: Kimmitt at Oct 17, 2007 2:04:51 AM
I think that if people could buy insurance that would not cover the least economic care (highest cost per average year of life saved), they would. Doctors seem to look at hopeless cases and try this or that expensive thing.
You may be right that people would not buy insurance that would cover the least economic care.
But there is a fair bit of evidence that when they are facing death, their calculations would change and people do want medical treatments that give them a chance, however remote.
Posted by: Tracy W at Oct 17, 2007 5:01:52 AM
Not -
I hate to rain on your parade, but an OECD study (http://www.oecd.org/dataoecd/31/10/17256025.pdf) shows that 19% of Germans wait three months or more for elective procedures or consultations versus 5% of Americans - and that means all Americans, including those with no insurance. Actually, the German health care system has a lot of advantages, but waiting times, though relatively short by European standards, are much longer than in the USA.
Posted by: Ned at Oct 17, 2007 8:56:29 AM
Not -
I hate to rain on your parade, but an OECD study (http://www.oecd.org/dataoecd/31/10/17256025.pdf) shows that 19% of Germans wait three months or more for elective procedures or consultations versus 5% of Americans - and that means all Americans, including those with no insurance. Actually, the German health care system has a lot of advantages, but waiting times, though relatively short by European standards, are much longer than in the USA.
Posted by: Ned at Oct 17, 2007 8:58:12 AM
I spend a great deal of time reading on health policy and finance and this is an immensely thoughtful outline - not for complete agreement or disagreement but as a discussion template.
Posted by: save_the_rustbelt at Oct 17, 2007 9:03:59 AM
Tracy W. "But there is a fair bit of evidence that when they are facing death, their calculations would change and people do want medical treatments that give them a chance, however remote. "
And he who does not plant in spring is not happy in the fall. Smokers regret all that smoking when they get lung cancer, Obese people forget the enjoyment that they had eating if they latter get sick. We tend to discount the past please and future but this does not make it net better to live an ascetic life.
Posted by: Floccina at Oct 17, 2007 9:33:52 AM
By the bye, where are y'all getting your insurance such that you aren't waiting months for elective procedures? Seriously, I've got family scattered across a half-dozen states, and all of them -- even the ones who work for insurance companies -- have horror stories.
Posted by: Kimmitt at Oct 17, 2007 1:50:27 PM
Thanks for pointing out that :
1) Outcomes in the US are race-based. If you compare the life expectancy of whites in the US to whites in France, Canada, or Britain, the US will come out favorably.
2) Doctors salaries in the US are higher. If Doctors in teh US were paid just $60,000 or even $100,000, far fewer of the best and brightest would pursue medicine. The number of years to become a physician are too many, and the tuition costs are too high, for their earnings at age 40 to be any less than they are now.
3) The very richest in other countries still come to the US for top-notch work. Indian movie stars and atheletes come to the US for specialized surgeries, rather than go anywhere else in the world. These are people who make $10-$20M a year.
Posted by: GK at Oct 17, 2007 2:19:39 PM
Also, to those who attack the legitimate point of adjusting health care outcome for race :
Grow up. Note that Asians in the US have higher incomes than whites, and that Asians in the US will have better life expectancies than Asians in Britain, Canada, or Japan.
Show me a country with a large black population, where blacks have a higher life expectancy than in the US. Show me one.
Thus, you cannot discredit the point of adjusting for race.
Posted by: GK at Oct 17, 2007 2:23:56 PM
Trying to address health care without reforming the lawsuit industry just moves that part of the problem to other areas. John Edwards made $20 million dollars in 4 years suing doctors. As long as a system allows that kind of forced wealth redistribution we are going to have trouble. Lets stop the lawsuits in four states for 4 years and see what that does to insurance rates. Yeah, I know it can't be done, but it would be interesting to see what would happen.
Posted by: at Oct 17, 2007 2:48:06 PM
Those arguing against point one miss the a fundamental of epidemiology: you have to compare like denominators and numerators to have valid comparisons. Fact: the US is a multi-ethnic society; fact: different ethnic groups have different morbidity and mortality rates; eg sickle cell among blacks, tay-sachs among Ashkenazim. Does economic status play a factor? most definitely and results of morbidity and mortality should also be adjusted for SES. But SES cuts across ethnic lines, thus the need to consider ethnicity in doing epi comparisons.
Cure rate is one way to measure the effectiveness of the medical intervention as some have suggested; but, a better way, IMO, is use survival rates after 10 years. When that is used as a measure the US does very well indeed being surpassed only by Japan with respect to its treatment of diabetes.
It is also worthwhile to be specific as what aspects of health care we are discussing: access to health care? effectiveness of the intervention? cost benefit of the intervention? Health care is a costly part of our GDP, but the precision inherent in the list under discussion is valuable indeed. Thanks for posting it.
Posted by: Roger at Oct 17, 2007 3:18:36 PM
Apologies: name/email did not come thru for some reason.
Posted by: Roger at Oct 17, 2007 3:22:37 PM
A hospital is just a lousy hotel in which you have to share your room with someone else. Baseline cost of Motel 6-style accomodations is about $35 a night, or $17.50/night when one room is shared between two people.
If you have $20,000 worth of expensive stuff in the room to monitor you, and it has a lifetime of 10 years, fine. $20,000/10/365 is $5.48 a day.
Nurses make something like $50,000 a year. You have about 10 patients per nurse. You'll need four shifts to cover 24 hours. Two of those shifts might require 50% higher rates to attract someone. So we have $13.60 per day per nurse for day shift, $20.40 for night. Let's sum that up and get $68 a day
.
Therefore, a hospital room should cost roughly $90.90 a day. Add in miscellaneous stuff and say it's a round $100.
I was rather alarmed to see a medical bill where I was charged $680 a day for a semi-private (read: not private at all) hospital room. TV and phone calls would have been billed extra; both are free at Motel 6.
Doctors fees, tests and other stuff were billed separately and the final bill was over $8,000. The insurance company negotiated it down to $3,000. Still, that sounds like way, way, way too much given the amount and quality of services I received. (I received numerous tests, none of which I was informed about; if I'd known their costs I probably would have declined them. I also had my hand pricked numerous times; why not just do it once and get all the blood you need then?)
I would really like to know why this is and how it can change. I don't want medical insurance because I don't want to feed this insanely expensive and wasteful system.
I vote for a new type of medical service, ones we can afford to pay for out of pocket without horrendously expensive intermediataries like insurance companies.
While the costs of surgery have ballooned out of all proportion, I can't help but notice that LAZIK eye surgery, requiring extremely expensive equipment and skilled labor, has declined in price by over 50% over the last few years. That's what happens when people actually pay directly for services - costs go down over time, not up.
Let's see more like that, please?
D
Posted by: David H Dennis at Oct 17, 2007 3:24:45 PM
David: If Motel 6s had the latest in imaging equipment, say 64 slice MRIs (which require a radiologist to spend 4 times a long reading an MRI) plus the equipment required for accredition; plus the physical plant of a hospital, plus the need to subsidize emergency departments--you might have a point. You are, correct, however in your point about subsidizing insurance companies (but what mostly drives Ususal and Customary Rates is: MEDICARE).
Posted by: Roger at Oct 17, 2007 3:34:18 PM
How we should debate health care is irrelevant. Most voters pay no attention to such debates. They notice only brief snippets referring to health care, such as ads featuring children demanding that health care be "fixed." Until rational analysts of health care join the debate in kind, they will have no listeners.
Posted by: willis at Oct 17, 2007 3:49:33 PM
I'd add a couple of other facts to the list...
1) This is a simple tautology. The various systems that exist in other countries exist on the same planet where the US has it's current system. If the US were to adopt one of those other systems, then the US would no longer have the current system -- so the planet would not have a US with the current system on it. Don't underestimate the effect created when non-poor (=politically influential) people from outside the US can hop on an airplane (or in their cars, if Canadians) and come to the US for medical treatment when their own counties' systems don't meet their needs. And Americans go to foreign countries for medical treatment, too. There is a simple value to having different systems -- the value of any particular system is not independent of the other systems that exist.
2) Don't underestimate human nature's unwillingness to pay a market price for insurance and then turn around and demand coverage be provided after the casualty has occured. Homeowners insurance does not include flood coverage, and the vast majority of homeowners exercise their free choice not to pay national flood insurance premiums -- secure in the knowledge that if there is a hurricane or other flood, then they will get their elected officials to simply expropriate coverage from somebody else. In order to have true free choice in insurance decision-making, you have to exclude people who opt out of insurance from getting their casualties paid for. Even private charity is a moral hazard. If everyone gets health care paid for by some 3rd party, whether they pay for the insurance or not, then rational people will all want to be free riders.
3) Comments about how our level of health care spending is not sustainable are simply silly. One of the products of a functioning economic system is that commodities go down in price over time, as providing them becomes more and more efficient. The best innovations are the ones that get adopted. As real goods and services fall in price, people become richer and richer. Look, "it ain't money til you spend it" -- why do you assume that it is some dire emergency that people with money to burn are spending it on health care? I mean how many iPods can you buy when you've only got two ears? Certainly we can only spend what we've got on health care. But spending on health care is money that we didn't spend on something else. We have a long way to go before health care spending really pinches us. People talk like we are choosing between health care and buying groceries, when in fact we can fund an enormous amount of additional health care spending by eating at home rather than restaurants.
Posted by: cathyf at Oct 17, 2007 4:00:02 PM
Healthcare spending in the U.S. averages $6,102 per person and in Canada, $4,932 per person.
Posted by: Enlighten-NewJersey at Oct 17, 2007 4:28:02 PM
david: "A hospital is just a lousy hotel in which you have to share your room with someone else"
Hardly. Hospitals must be built to withstand the worst catastrophic conditions and to support very heavy loads. Construction costs are much higher.
david: "Nurses make something like $50,000 a year. You have about 10 patients per nurse."
Nurses total compensation, including benefits is probably closer to $80,000 a year. I think 10 patients per nurse is too high. One study I saw showed a median load of 5.5 patients per nurse.
I don't see that you have included all the support staff required: supervisors, janitorial, dieticians, security, personnel, purchasing, legal, accounting, cafeteria workers, etc. etc. Non-labor costs you seem to have omitted include:
- insurance, both catastrophic and malpractice;
- pharmacy, including inventory for emergencies above what individual patient may be charged;
- radiology, the costs for availability above what is charged to patients who actually use the services;
- "crash carts" and other very expensive, infrequently-used equipment, the costs of which must be spread to all patients;
- blood bank, the inventory for non-routine events.
That "miscellaneous stuff" is much, much higher than $9.00 a day. It's not at all a "stay at Motel 6".
Posted by: John Dewey at Oct 17, 2007 4:37:42 PM
John Dewey: Your nurse to patient ratio median is about right. And to be licensed, Hospitals have no choice as these ratios are directed by state or other accrediting bodies. And in many cases, the nurses are scheduled and work irrespective of the hospital's daily census.
Posted by: Roger at Oct 17, 2007 4:57:01 PM
With all due respect, David, you have no idea what goes into healthcare.
Your hospital stay costs are pretty reasonable. Consider that the average hospital has six employees for every inpatient, including nursing, technicians, cleaning staff, support personnel. They need to be paid, and receive benefits. The hospital has a capital budget which pays for new equipment; I'm assuming that you would prefer to have monitors and surgical equipment which is in good repair, clean, and reasonably up to date. It carries insurance. It has to be ready to accomodate natural disasters, sick and complicated patients, and do so quickly. Basically, you paid 30 bucks/hour for all that.
As far as your expensive tests are concerned, I have no idea why you were admitted, and frankly don't care. The reason tests are repeated is to insure that you are not getting worse, that you are responding to care, and that you do not have an uncommon problem masquerading as a common one. You should be relieved to know that someone is working at all hours to keep an eye on your condition. I assume that the clerk at Motel 6 isn't doing that for you.
Lastly, the reason that LASIK can be done cheaply is because it is a limited procedure which can be repeated many times per day, with a limited application in terms of patient problems (uncomplicated myopia), and which involves a very high one time cost for equipment. Once that cost is realized, the cost per procedure can be lower.
For you to complain because your bill was too high is asinine.
Posted by: orthodoc at Oct 17, 2007 6:09:51 PM
Some very good points above on how socialized medicine should be compared with the current US system. The first step in any discussion is to compare apples to apples. The data should be adjusted to compare similar polulation groups with the outcomes, not to skew the data for your personal political preference ie not manipulated.
Many proponents of single payer systems point out the significant differences in health care costs in US vs single payer countries - not realizing that the single biggest cost difference is the funds spend for "end of life treatment" ie to prolong life just a few extra days. (I am not advocating euthanasia)
An axample of needing to compare apples with apples is the often cited comparison of cuba's lif expectancy with the US life expectancy:
Cuba ethnic makeup: mulatto 51%, white 37%, black 11%
Cuba life expectancy: 77 years
Cuba GDP per capita: $4,100
USA ethnic makeup: white 81.7%, black 12.9%, Asian 4.2%
USA life expectancy: 78 years
USA GDP per capita: $43,800
Have these numbers been adjusted for premature deaths - car crashes, gang violnce, etc?
Are the cuban numbers even reliable? the USA ethnic makeup is off - only 1.2% hispanic?
In summary - make an honest effort to debate based on comparable data points.
Posted by: Joe - Dallas at Oct 17, 2007 7:15:22 PM
Some very good points above on how socialized medicine should be compared with the current US system. The first step in any discussion is to compare apples to apples. The data should be adjusted to compare similar polulation groups with the outcomes, not to skew the data for your personal political preference ie not manipulated.
Many proponents of single payer systems point out the significant differences in health care costs in US vs single payer countries - not realizing that the single biggest cost difference is the funds spend for "end of life treatment" ie to prolong life just a few extra days. (I am not advocating euthanasia)
An axample of needing to compare apples with apples is the often cited comparison of cuba's lif expectancy with the US life expectancy:
Cuba ethnic makeup: mulatto 51%, white 37%, black 11%
Cuba life expectancy: 77 years
Cuba GDP per capita: $4,100
USA ethnic makeup: white 81.7%, black 12.9%, Asian 4.2%
USA life expectancy: 78 years
USA GDP per capita: $43,800
Have these numbers been adjusted for premature deaths - car crashes, gang violnce, etc?
Are the cuban numbers even reliable? the USA ethnic makeup is off - only 1.2% hispanic?
In summary - make an honest effort to debate based on comparable data points.
Posted by: Joe - Dallas at Oct 17, 2007 7:32:04 PM
Here's my 2 cents:
1) We need to break the link between employment and insurance:
1a) Employer paid insurance, Individual paid insurance, and out-of-pocket spending should all receive the same tax advantages.
1b) For the employer to get the tax break, they must offer the employees the option of a voucher to buy their own insurance
2) We need to break the link between insurance and routine healthcare expenses.
2a) Insurance should pay for serious expenses such as cancer, stroke, or a serious car accident.
2b) The per-visit ( not annual ) deductable should be higher than the cost of a routine visit.
2c) Insurers would have an incentive to subsidize preventative care because it would save them money over the long run.
3) We need to create a link between lifestyle choices and costs.
3a) Insurers can charge more for smokers, people who are obese, or people who don't maintain cardiovascular fitness
3b) High deductables ( see 2b ) will also add to this link
4) We need to reduce the costs related to lawsuits
4a) We should give people the right to waive their right to sue for punative damages, pain and suffering, and similar damages in exchange for lower doctor's fees.
4b) Patients could still sue to recover the costs of future medical care caused by a doctor's mistake, and could sue to get a doctor's medical license revoked.
Posted by: Ignorance is Bliss at Oct 17, 2007 7:53:38 PM
The simple fact is, health care is not a right, it's a commodity, like cars, or soap, or a good meal at your favorite restaurant. "Rights" are things like life, liberty, pursuit of happiness, freedom of speech, etc. Since health care is a commodity, it is not the government's business to distribute it, or even to make sure everybody has some. Otherwise, it should do so with even more basic needs, like food or water. Can you imagine what a horrible system it would be to have the government in charge of food production and distribution?
Posted by: John S. at Oct 17, 2007 8:05:38 PM
Debate limitations may or may not work, for some people are very passionate about this particular social policy. I am a semi-liberterian, so here are some of my thoughts:
1. Doctors and hospitals render a lot of free care. They don't get a bit of governmental recognition for this. SOLUTION: Let them post their prices twice a year, binding on them for six months per listing, then give them a 50% tax credit for the care they render. So a $4,000 ACL knee surgery gives the doctor a $2,000 tax credit. If the hospital gives away $5,000 of care helping them render care for the same patient, they get a $2,500 tax credit, which they could sell on the open market. Who determines who qualifies for free care, which must be decided inh advance? Any government agency dealing with social services and any 501(c)(3) NGO. The IRS audits the doctors and the hospitals. Believe it or not, it should be cheaper than the expensive federal / state agency costs administering Medicare, Medicaid, and all other "free" health care.
2. I don't want the government to pay my medical bills for a disease or sickness which has a cure just over the horizon, while I die from the disease. Freeze bill paying for two decades, and increase the heck out of medical research. My mother died of an incurable, irreversible, inoperable cancer - been there, seen that, over that. Find more cures.
3. Every 5 years, at 40, 45, 50, 55, 60, 65 and more frequently than that after 65, offer very complete and comprehensive physical exams, head to toe, with MRIs, cat scans, X-rays, tradmill tests and the like to find everything wrong, even when people feel fine and think they are disease free. Find the silent killers before they kill. This would be free, and it would be voluntary.
Posted by: Jim at Oct 17, 2007 8:38:56 PM
I'm liberal, and as you might expect, I have a quibble with all nine...
1. Unfortunately, Asian-American women tend to be affluent Californians, and make up perhaps a single percent of American Heartlanders... Yes, america's heart attack rate does much better once conditioned on all the crap food we eat, although I don't know whether that should make us feel better or worse. And America's health outcomes still aren't anything to write home about. Are you trying to say we don't have a problem?
2. This point is muddled. I don't care if Canadians save on health care b/c of the "price effect" i.e., Canadians pay less than half as much and still have better outcomes. So, you're saying, "well, that's just the price effect..." No shit it's the price effect!
3. 20 year old hunter-gatherers during the paleolithic era were expected to live to be 60, so cut the crap about how Pharmaceutical companies need fat profits for all these great new life-lengthening inventions. Fact: Drug co.'s spend more money on Marketing (w/ debatable social benefit) then they do on R&D.
4. I thought we were debating health care policy, not whether Hillary can get the right-wing to sign on to Single-Payer...
5. I'd like to see the research on this baby, b/c I suspect you're misguided.
6. I'd like to see the research on this baby, b/c I suspect you're misguided.
7. This contradicts your point #5 -- Logically, if having insurance improves health outcomes, but greater access to health care doesn't, then we should just sign people up for insurance but don't actually give them any health care. Problem solved on the cheap.
8. I agree with this point, but don't know why we should debate this, and aren't sure why it's in the list.
9. Can't quite see what you're getting at here either...
Posted by: Thorstein Veblen at Oct 17, 2007 9:53:51 PM
The reason healthcare is in disarray in the US is cost shifting. Mediaid and Medicare do not pay their cost of service, so hospitals and doctors shift the cost to people who have insurance. In addition, hospitals are required to take in patients that do not have insurance and cannot pay at all. Some of this cost is borne by local governments, but, again, much of it is shifted to people that have insurance. It is hard to find a doctor that will take medicare or medicad patients for the simple reason that they cannot cover their cost of service at current reimbursement rates.
It should be no surprise that the cost of insurance is escalating faster than inflation and the inflation of medical costs. Each year, marginal buyers of insurance give up and drop their insurance because it is too expensive.
Doctors are in a weak postion compared to drug companies, insurance companies and hospitals. If you look at the cost of a procedure or hospital visit, you'll find that the doctor cost is always under 10% of the bill. Often it is under 5% of the bill. Focusing on doctor cost does little to change that bill...if you quit paying them you'd reduce the bill 10%.
It has been a good game...politicians have been able to buy votes by supplying medical services and pushing the costs onto those that buy insurance...unfortunately the horse is about dead. The only hope is to force people to buy insurance...then the government can ration medicine as they do in most of the single payer systems.
Posted by: ezag at Oct 17, 2007 10:33:01 PM
Reading Tyler's comments I felt like I was reading what I've been writing for 30 years.
1. Take employers out of the health care business. They're the dishonest brokers.
2. Give big tax incentives to buy insurance to those who pay taxes; subsidize those under the 100% poverty level.
3. Breakup oligopolies in the medical, hospital and health insurance industries.
4. Make it easier for new entrants to compete in the pharma and medical devices industries.
5. Federally require all states to allow no mandate health insurance policies that only cover catastrophic financial losses, including HSAs, etc.
6. Allow national insurers to compete nationally as long as they offer community rating for everyone they insure in a given state or region. No medical ratings.
7. Allow people with existing medical conditions who haven't been buying insurance despite the ability to do so to buy insurance when they have accidents, provided that they sell their homes and cars to pay for their immediate needs. No free lunches.
8. Require insurance education in high schools and colleges (for the remedials). Everyone should understand the difference between insurance and prepaid preventive care.
9. Reform the education system so more people will be functionally literate and able to navigate the complex health insurance and health care industries.
10. Recognize that there is no health care system nor a health insurance system, and we don't want one.
11. If the Feds can deal with a Katrina, win a small war in Iraq or take care of our Irag vets, how can we expect them to run health care?
Posted by: Don at Oct 18, 2007 12:38:03 AM
ignorance is bliss: "For the employer to get the tax break"
It is the employee who gets the tax break on employer-provided health insurance. An employer rightfully can deduct labor cost expenses. The employer can choose to pay the employee all cash. Or the employer can offer some combination of cash and health insurance benefits.
An employee who receives all cash pays income tax on his entire compensation. An employee who receives cash and helath insurance is taxed only on the cash portion.
Why would those employees who now receive tax-free health insurance - negotiated for them using large group buying clout - ever choose to give up that tax break? Americans who enjoy employer-supplied health insurance do not want to change. Their elected representatives know this.
Posted by: John Dewey at Oct 18, 2007 4:00:08 AM
Don: "Take employers out of the health care business. They're the dishonest brokers."
How are employers "dishonest brokers"? I'm an employer who pays employees' health insurance premiums. How am I being dishonest?
Don: "subsidize those under the 100% poverty level."
We are already taxed to pay for their food and housing. We pay them EITC just for showing up at a job. They get loads of government benefits such as national defense, food inspections, environmental monitoring, etc. without having to pay a dime for any of it. What next? Should all taxpayers take turns driving them to the supermarket?
Don: "Make it easier for new entrants to compete in the pharma and medical devices industries."
How would you accomplish this? through government subsidies?
Posted by: John Dewey at Oct 18, 2007 4:27:01 AM
John: "Why would those employees who now receive tax-free health insurance - negotiated for them using large group buying clout - ever choose to give up that tax break? "
As I explained, they would not give up the tax break because they would get the same tax break on the money they spend themselves, either on insurance or out of pocket medical expenses.
As far as the large group buying clout, if a large number of individuals were able to choose their insurance for themselves, other means of aggregation would be possible. The AARP, AAA, NRA, NAACP and many church denominations would offer group rates to their member. However, if your employer negotiated plan is the best, you are certainly welcome to stick with that.
Why would people want this? So that they can make rational choices about where they work independantly from their rational choices about what health insurance they need.
Employers are not 'dishonest brokers', but their interests are not the same as their employees' interests.
Rational decisions about healthcare spending will never happen as long as the people consuming healthcare are not the same as the people paying for healthcare.
Posted by: Ignorance is Bliss at Oct 18, 2007 7:32:43 AM
ignorance is bliss: "Why would people want this? So that they can make rational choices about where they work independantly from their rational choices about what health insurance they need."
I'm perfectly satisfied with my employer-provided health insurance plan. I have neither the time nor the desire to investigate the thousands of potential health care providers. I have no desire to pay anyone other than my employer to research and negotiate on my behalf. Millions of employees in the U.S. feel the same way. What right do you or anyone else have to change the arrangements we have with our employer?
ignorance is bliss: "Employers are not 'dishonest brokers', but their interests are not the same as their employees' interests. "
Please explain this. How is my interest in providing health benefits for my employees different from their interest in having me provide that benefit? I want my employees to be healthy and available for work. They want exactly the same thing. Certainly they would be happier if their deductible were lower, but that's an item we negotiated when we determined their total compensation.
ignorance is bliss: "Rational decisions about healthcare spending will never happen as long as the people consuming healthcare are not the same as the people paying for healthcare."
Employees pay for their health care when they negotiate health insurance benefits as part of their compensation.
I agree that Medicaid and Medicare patients are not paying for all of their health care. I would prefer to see both prorgrams totally privatized, but I know that won't happen.
Posted by: John Dewey at Oct 18, 2007 9:08:45 AM
I'm perfectly satisfied with my employer-provided health insurance plan."
Good for you. Mine is acceptable, but it's not what I would choose if I had the money to spend myself, and it's not so bad that I would change jobs to get something better.
I have neither the time nor the desire to investigate the thousands of potential health care providers.
Then don't.
I have no desire to pay anyone other than my employer to research and negotiate on my behalf.
Then don't.
Millions of employees in the U.S. feel the same way.
Good for them.
What right do you or anyone else have to change the arrangements we have with our employer?
None. What right do you have to insist that I pay taxes on my individual healthcare spending while avoiding taxes on your employer provided healthcare spending?
How is my interest in providing health benefits for my employees different from their interest in having me provide that benefit?
You have an interest in having your employees remain in your employment to maintain their benifits. Many employees would like to be able to change jobs without having to change insurance policies. If I change jobs in the middle of the year, even to another company whose insurance is exactly the same coverage through the same provider, I still have to pay a whole second year's worth of deductable out of my pocket, using already taxed dollars.
Employees pay for their health care when they negotiate health insurance benefits as part of their compensation.
Yes, they do. And sometimes employees turn down what would otherwise be the best job because they don't like the healthcare package, and sometimes they accept a job with a healthcare package they otherwise would not choose just because the overall job is better. My question is why do we want to bundle these two unrelated decisions into one choice, forcing many to compromise on one or the other? If we seperate them, then I can choose the best job and the best insurance for my needs.
Posted by: at Oct 18, 2007 10:31:00 AM
The "single-payer" systems in Canada's provinces do not succeed in providing universally accessible health care. When costs exceed funding, among the mitigation measures are:
1) Wait queues.
2) Delisting of insured services.
People either wait, do without, buy private insurance (it's called an "extended health care plan"), or buy health care directly (sometimes out of provincial jurisdiction) to make up the difference.
The prevailing view of health care in Canada - with which I disagree - is that it is a public good, not a package of services and supplies. Resources are finite; therefore there is rationing by need. If the type of health care you need happens not to be insured, your taxes and (in some provinces) public health care premiums pay for someone else's health care while you either do without or pony up more money.
Posted by: lrC at Oct 18, 2007 10:42:04 AM
"What right do you have to insist that I pay taxes on my individual healthcare spending while avoiding taxes on your employer provided healthcare spending?