Asymmetrical Information

for startes, stop calling it "insurance" you cant insure against something that is inevitable. you get fire "insurance" at a reasonable rate because it is usualy far from inevitiable that you will experience a fire.

A persons health will always get worse and you and I and everyone else will in the end, die. At the same time asking people to pay 100 dollars for 100,000 dollars of services will simply not work no matter what politician proposes it.

So, lets start by setting expectations. Then lets start by recognizing that the one part of heath costs that as gone down is the part thats been allowed to compete - Lasik eye surgery. Might be worth a chance to try good old fashioned capitalism and markets rather than goold old fashioned socialism and rationing.

When you think of "socialized" medicine, you think of a system where people get "free" healthcare, and doctors' salaries are paid by the government.

Guess what. Under our current system, people get to see the doctor without paying anything (it's prepaid), and how much doctors get paid is for the most decided by medicare, the government. And the government contributes half of the money being paid in the form of tax credits and medicare and medicaid.

We already have socialized medicine. I wrote about this previously at my own blog.

You can have all of those except "Low Cost" and "Equality".

"Low Cost" because prices naturally vary according to supply and demand. Aspirin is cheap, open-heart surgery is expensive. This is not by accident or conspiracy. We need to accept that supply and demand apply just as much to health care services as to any other good, and that if low price-elasiticity of demand prevails, then so be it.

"Equality" because such is neither possible nor desirable. The rich can afford more of anything and everything than the poor. In a market this is obvious, indeed true by definition. Again, prices must be allowed to perform their functions. It may seem cold to say that if you cannot afford some expensive life-saving procedure that you will die, but the alternative is forcibly extracting the necessary resources from your fellow man. Unlike "Low Cost" above this is a moral problem as well as an economic one: it is a matter of belief rather than fact that it is just as bad to let you steal a million dollars to live as to watch you die for the lack of it.

Health care also has the problem that while most of it is relatively cheap, some of it is unaffordable for anyone except billionaires. Get a rare cancer or tangle with the wrong eighteen wheeler, and you can end up on the hook for a bill that runs well into the six figures.

Something that I recall seeing in liberal blogs is the 80-20 problem where 20% of the people (the very sick or very elderly) account for 80% of the expenditures. Or something to that effect; I don't remember exactly what I read. This could probably be said about any form of insurance: it's just a form of redistribution where the money go to the small number of people who have the misfortune of having their house burn down. But the problem with selling this justification, as one of the earlier comments points out, is that health care is not always about insurance. If you get into an accident or suddenly contract a rare disease, then the insurance label applies quite nicely. But if you're old, stuck in a nursing home, and about to kick the bucket (another stat that I've seen tossed around is that some remarkably high percentage of expenditures are used on people who are within six months of dying), the insurance label doesn't really apply, and people become wary of using insurance as a justification for redistributing resources (though compassion often works as a substitute).

No one shops for the best, lowest cost alternative; consumers demand the best, while employers, who are footing the bill, demand the lowest cost.

There are a couple of reasons why you can't "shop" for a physician:
- asymetrical information is one - how do you know a physician is "good" or not? One screen is to see where the doctor went to med school and residency. Obviously, some med schools and residencies are better than others, so that can tell you some data. For example, I won't select a graduate of a medical school outside an English-speaking country, unless they have stellar residency credentials. A reliable way is to ask a nurse or physician who has observed a doctor's work over a period of time. However, physicians are loathe to dispense such advice due to liability concerns. (I'm married to an MD who has some strong opinions on the surgeons she works with, but keeps them close to the vest.) There have been some steps to help consumers in gathering quality of care information, but it is limited and can be deceptive. There is a Medicare-sponsored database that shows how well doctors in each hospital adhere to certain protocols for specific diseases, which can tell you how current the doctors there are. Measuring outcomes can be deceptive, since some hospitals get the sickest patients and have higher adverse outcomes. So, in all, the consumer has limited information on quality.
- Costs tend to be pretty similar, and are set by Medicare and insurance companies. My wife went to a top medical school and residency, passed her boards on the first try (only 10% do in her speciality), and is constantly keeping up with her field. Medicare pays her the same as everyone else in the area, no matter their credentials.
- Government regulation. It is a felony to bill someone less than what you charge Medicare or Medicaid. They have to get your lowest rate. Of course, since they pay really low fees, it's not usually a problem.

Now, I hear the stirrings of a push for national health care rippling through the liberal blogosphere like a rising storm wind.

If this movement actually takes off, I expect that we'll see . . . liberals arguing that conservative people are hardhearted bastards who want the poor to die.

If that's the noise you're hearing in the liberal blogosphere, get your hearing checked. The arguments I'm hearing are more about how to get good health for less money -- i.e., how to best structure a market that already features pervasive governmentment involvement -- and less about how to make sure that the poor get adequate coverage. Not that the latter is irrelevant, but that's not where the action is.

Or maybe you are trying to remind us that any debate about health care will involve dramatic distortions of what liberals are saying.

"governmentment" -- that's a technical term for big government

another stat that I've seen tossed around is that some remarkably high percentage of expenditures are used on people who are within six months of dying

Sure, but how do you know they are going to die?

I've posted about this before, but my father was one of those expensive cases. He was healthy for his age (70s) and still working part-time as a doctor. He missed a day of work with what he thought was a cold coming on. The next day he felt worse, went into the hospital, and spent 6 months there before he died. Through the first 4-5 months he had every hope of getting out and getting back to work. At the end we were in a semi-hospice situation where he died. The bills were over $200k, all to Medicare. Nobody knew, until the end, what the outcome would be. His doctors were uniformly optimistic until multiple organs finally gave out.

Sure, one anecdote is not data, but it's illustrative of the problem. Only in the most obvious cases are the outcomes certain, and we should do a better job of managing the expectations of patients and families, but the crystal ball for predicting who will live and who won't doesn't exist.

Sure, but how do you know they are going to die?

I'm not the one who did the studies (and thus have no idea how they knew; they may have been looking at old data, so they might know what the outcome was *shrug*); I'm just regurgitating what I saw on the web. :)

Here is a link I recommend to an article re: Dr. Peter Kohler, OHSU. The study he proposes would be revealing re: the delivery of quality care.

www.kgw.com/business/stories/ kgw_013106_health_kohler_care.594db4c5.html - 45k -

I read (somewhere) on the Internet that the reason Brits have such bad teeth is because it takes 9 YEARS to get an appointment with a dentist. I'd just as soon pay out of my savings.

Universial, Limited, Base, Health Care Proposal

I am in favor of a single payer, base level, health care and suggest that it be funded through taxes. It would

1. Pay for sufficiently cost/effective procedures,
2. Reward patients for saving money and allow them to purchase luxury addons.
3. Partially pay for less effective treatments.

1) As a society we decide how much health care we want our society afford to provide to every citizen through a single payer government program. This program would pay for treatments that cost less than nnn$-s per "quality" year of life extension.

We know that we can not pay for as much as health care as anyone might want, but it seems to me that I'd like to pay a tax for the society to support some reasonable level of health care. The "level of health care" would be based on the cost per life extension. Of course we also want some measure of quality of life, e.g. also pay for procedures that are reasonably efficient for improving quality of life.

2) There would be a standard, location adjusted, cost for each procedure that the society would pay for a treatment. This would be set as something like the average cost of the treatment. If a person was willing to get the treatment for less, by going to a less expensive doctor, perhaps less expensive location, e.g. India, etc. then they would get, say 50% of the savings, possibly in their health savings account. If a person wanted a more expensive treatment, say in a luxury spa, then they could pay the extra.

3) If a patient wanted a less efficient procedure, i,e, one that cost more per life-year, then I'd suggest that we provide less than 100% of the cost. e.g. if we are willing to pay, say %500/year, then a procedure that costs $1,000/year, we might pay 50% of that procedure and the individual would be "required to pay the other 50%.

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

a) This would provide a reasonably efficient single payment base health care for our citizens while allowing the health care system to be provided by multi suppliers.

b) It would allow the patients to be involved in the cost of the treatment without preventing the poorer from getting the base level of treatment.

c) It would allow the richer to augment the system while still benefiting from the base system.

You might want to consider a few other dimensions to the issue as you are creating the all-American single payor system

1. You have to begin with the premiss that what we all want is good health. Absent a few Munchausen-by-proxy folks and serial treatment addicts, very few people really want to interact with the health care system at all. So one of the questions that we need to examine is the elements that go into the good health equation and whether or not we can be providing them more effectively. For example, much is made of the value of health education and the value of an active lifestyle. But how much research has ever been done on the long term value of doing or not doing school-based education in these areas? Have we measured at all the value of providing government support for stretching,Pilates and meditation sessions for citizens. We certainly have made some effort at the negatives: we control alcohol, drug and tobacco consumption in the interest of good health

2. Perhaps you should also consider the relative benefits of government regulatory schemes that are constructed in the interest of good health. Most medical professionals are licensed in the ineterest of a minimum standard of expectation from their work practices. But how effective are these schemes in keeping care from doing harm rather than good? And how do these schemes work to restrict the use of the lowest price/most competent practitioner model? Do we always need a doctor? Or will a nurse practitioner do? Or a pharmacist?

3. You might also examine the implications that wider travel have had on good health and health care. In the simplest issue, there is now much more of a national interest in assuring someone who travels within the United States that the care that they will receive in California will be consistent with the care that they receive in Mississippi. The question is how best to do this.

4. You might also want to examine the changes that will be needed to create a uniform production function in the delivery of health care. In the simplest terms, the lowest cost and most productive health care will be delivered when the delivery professionals are educated about the most successful outcomes models and are then held to adhere to them. If you present with stomach bleeding issues, does the practitioner always test for h.pylori? Sadly, less than 50% do so routinely.

5. When you examine choice, you might consider the areas of choice. Isn't it the case that we really don't want choice? We really want to either know what is the most successful outcomes model and then insist on it or, in the absence of our knowledge, we want every practitioner to know it and deliver it to us. Who would want to be able to choose treatment models that are less than that which produces the most successful outcome?

6. You might also examine carefully the question of where innovation in heralth care comes from in the construct of a single payer model. One of the arguments about the Canadian single payer model is that it is not the payment system that is at issue as much as it is that the delivery system has been forced into a single-delivery model that rations capacity inappropriately. New York State, for example, severely limits the development of for-profit medicine and pushes much of medical control into the hands of the large institutions,just like the Canadians. Do we see much benefit from this?

You have much to ponder in your quest.

Cluck, cluck, cluck goes the tongue.

It's nearly all about moral hazard.

1) Go to the BLS website. Find their data on the costs of medical CARE (not insurance, but care).
Inflation rate for medical care 1980-2006: 6.2%
Inflation rate for total CPI: 4.1%
The costs of medical care are only increasing 2% faster than inflation. Mild service sector disease at most. QED.

2) Insurance, whether private or government, has the third-party moral hazard problem.
Essentially, it becomes a blank check to provide state-of-the-art care. Given that blank check, technological progress has been very very rapid.
Thus more and newer, better scans, drugs, procedures. This is what drives the increase in insurance costs.

An analogy:
The ability to travel from place to place is fundamental to a free society. Indeed, to come and go as one pleases is a fundamental human right.
This being so, imagine we all had transportation insurance provided by our employers. It would pay 80% of the costs of the transportation that our expert transport consultant prescribes to us.

Since we'd pay only $10k for a $50k car or $1 for a $5 subway ride, we'd all be driving very fancy cars or riding on subways with attendants in every car.

Profit seeking entrepreneurs would flood into the transport industry, providing innovative (and expensive) new transport technologies.

For those who had transport insurance, American transportation would be the best in the world. For those who didn't, it would be prohibitively expensive. Since transport is a basic human right, they would be provided transport anyway, but would shift costs... (and now you know the rest of the story.)

As already pointed, the US Healthcare system is already socialized. That is, the US Government already spends more per capita on health care than most other G-15 countries, all of which have some form of "socialized" medicine.

Add in that more private the public money is already spent on the health care industry and one can see that the currrent systems really is the worst of all possible worlds.

My Proposal:

A bizaare public-domain idea combined with a frankly two-tiered system.

Crazy Public Domain Idea: (All specific numbers flexible)
Let all signatory nations to a treaty contribute 0.1% of GDP in excess of $10k per capita to a fund.
This fund may be used to buy out the intellectual property rights to patented medical technologies for 20 times annual profits earned by that medical tech after it's been on the market for 3 years.
This intellectual property then becomes public domain in all member nations.
Member nations agree to not impose price controls on medical products in the first 7 years of their release.

Tier 1:
High Deductible Publicly Provided Insurance that only covers public domain drugs and devices.
+ Forced Saving into a Medical Savings Account (MSA) (can be used for deductibles and copays, user can withdraw as cash any amount over X, where X is like $20k) -- possible gov't contributions for extremely poor.
+ Prohibition on 'gap' insurance

Tier 2:
Give up your Tier 1 coverage, receive a voucher for less, then go buy your own private insurance that will cover the hot new drugs and devices.

This overall plan makes the wealthy and medically savvy the test market for new drugs and devices.
Innovations face a market test of their value with a group of knowledgeable consumers.
It gets around the inefficiency of intellectual property monopolies (esp in drugs).
There is only mild inequality -- poor get medical care that is 3 or 5 years out of date.
High deductibles + pain of spending down your MSA + limited blank check makes for cost containment.

I predict that any cost controls envisioned by a government run single payer plan will be eliminated by the courts. All proceedures, medicine, equipment or personnel will be available to all comers, (citizen or undocumented visitors) under the equal protection clause.

One way to address the kick-you-out symptom is to pay capitation charges for MDs who make a commitment to keeping you healthy.

much like the HMO system, you would pick a primary care physician. He is permitted to carry a total "wellness" patient load of X [several hundred?] He gets paid annually an amount per "wellness" patient. In return he is paid a substantial discount per procedure on wellness patients. Heck, we can even give him a bonus based on the actual improvements in health (as measured by a 3rd party) of his "wellness" patients.

with a guaranteed minimum salary, our good doctor is far less anxious to double- and triple- book his time.

If we had to have a single-payer system perhaps the best way to go would be to have high deductibles based on a percentage of one's yearly income before the government started picking up the tab. The percentage would not be small. I'm sorry, but when health care is free people start abusing the system. I see it where I work, where certain people who experience the slightest pain or trivial ailment must run to see the doctor. I really don't think they would be so prone to do this if it really was going to cost them what the medical services were actually worth. And there would be an upper limit to what the government would pay. I'm sorry, I don't care how wonderful someone is, we as a society can't afford to spend 50 million dollars on them.

And as for the really poor or people who are strapped for cash at the moment? I'd have it so the government would LOAN you the money for that percentage of your income you should have paid. Not a gift, a loan, and it would have the same status as owing back income taxes. Bankruptcy won't get you out of it, and if you don't come up with a satisfactory payment plan they start garnishing your pay check.

And yes, for many people this could deal quite a blow to their lifestyles. But after all, what's more important, buying a new convertible or your health? I'd let the individual decide.

I would replace your "EQUALITY" with a different principle: "UNIVERSALITY." Probably "BASELINE UNIVERSALITY" would be more accurate, because the idea is that everyone, rich or poor, employed or unemployed, should have access to some minimum level of care. "Minimum" doesn't mean "low" -- the baseline should be decent, reliable healthcare -- but it wouldn't especially bother me that rich people could afford to fly to the Mayo Clinic while poor people had to choose a doctor whose office is on their bus line.

Complicating any possible reform of the health care system is the fact that too many people are unwilling to accept any limits whatsoever on end-of-life spending. If it costs $100K to keep a dying person alive for another few weeks, with quality of life and chances of long-term survival both zero, well, most people will demand that amount be spent. The idea of going peacefully and painlessly when one's time has come, without heroic (and hugely expensive) medical intervention, is about as popular in the United States as public funding for child pornography. And don't get me started on the way "preventative care" is a wholly alien concept ...

Of course people want quality healthcare, but not very many people really care what that actually means. Perhaps the loudest example of this is the rampant over-prescription of antibiotics(which is slowly coming to an end) even for viral infections. So it might be better to say that people want to think that their doctor is doing something to make them(or their child) feel better, and aren't real worried about how high tech or late breaking it is.

Another problem is that the amount of research going on is so huge that specialists are hard pressed to keep up with what is actually the latest-n-greatest, even in thier own fields. This is why looking it up on the intarweb is, for the most part, a good thing. No one cares more than you about your condition, and hey, maybe your good ol' family doctor hasn't even heard of your problem.

After the government took over with a single payer system, how long do you think it would take for a parallel, much higher quality system to arise for those who could, you know, afford it? Which of those systems would a doctor rather work in?

Christopher M writes:[T]he idea is that everyone, [...] should have access to some minimum level of care. [T]he baseline should be decent, reliable healthcare[...] but it wouldn't especially bother me that rich people could afford to fly to the Mayo Clinic while poor people had to choose a doctor whose office is on their bus line.

Can you give some better examples than 'fly[ing] to the Mayo Clinic' of things that the new health care regime wouldn't cover so as to reduce costs? Too often, people wanting single-payer national care say that only 'basic' health care should be provided for 'free', and then turn around and define 'basic' as 'everything that a person could possibly need to have the maximum possible life span at the greatest possible comfort'.

Defeating a "nationalized health care" plan is about the young.

Anyone under 40 buying health insurance who isn't suffering from a congenital defect is being robbed.

I learned this early enough...

I quit a job at age 29 entirely due to the health plan!

This was 1993... The company was trying to save on their health insurance- the "new plan" had a 'employee contribution' for 'singles' at $15/wk, "employee and spouse" at $25/wk, with all kids added at an extra $5/wk.(at the time, I'm single- no kids)

At the next 'employee meeting', I cornered 'the Owner'- I said, "This 'new' health plan seems to outrageously favor families... You have a lot of 'single w/ no kids' employees, is there a possibility of getting more of a "cafeteria coverage"- type plan?(I was just hoping to get some vision/dental bennies that I could have actually used at the time...)

He whined about the $2500/person/yr cost to the company for this plan(which didn't include the $15/wk "co-pay"!) and said, "If we didn't help married people with a break like that, we wouldn't be able to attract that kind of people!"

I quit two weeks later.

I got a new job that didn't offer 'health insurance'- but with an hourly rate that I felt made up the difference.

I quickly bought a "catastrophic care plan"($5000.00 deductible) that, at the time, cost $252.00/yr- and put the other $3000.00/yr a "typical plan" would have cost into a mutual fund.(Hint: '1993')

Repeat this for the next 7 years-upping my contribution in line with the increases in the cost of insurance(eventualy increasing to $6000.00/yr--during one of the best 'bull markets' of history!). My total "out-of-pocket" health expenses during this entire period were about $3k in dental(which even my old plan would not have paid even $0.01 for...) and a $3000.00 "lasik" operation in 1998.

I also got smart(ed.-lucky?)! I pulled 80% of my money from the market between March 1999 and Feb 2000...

I sat in "cash" til the war started in 2003(while watching the Dow lose 30% and the NASDAC lose 75%).

I went "strong" into FSESX(Fidelity Select Energy Services) in April, 2003(War for Oil!). I sold in August 2005 when I bought my new ($150k)condo--- "cash!"

...ENTIRELY on the same money I would have "spent"(actually, "would have been spent for me") on "employer-provided" health insurance over the last 12 years!

Now, I'll be 42 in October(dad died at 43-pancreatic cancer-big money!, grandpa died at 53-stroke-complications from diabetes-mo' money!)- how many of you 20-something yr olds want to subsidize my health insurance in your "company plan"?

"for startes, stop calling it "insurance" you cant insure against something that is inevitable. you get fire "insurance" at a reasonable rate because it is usualy far from inevitiable that you will experience a fire."

When I was in the insurance business, we called it marking up dollars. When you covered inevitable losses you paid for the loss, which you would do anyway, and you paid for all of the intermediary costs of the insurance system. The result was that it would cost you $1.60 to pay for a dollar of losses. Marking up dollars.

Thus, doctors and nurses have to be paid the kinds of salaries that bright, scientifically literate college graduates would attract if they chose some other field.

What kind of salary will a nursing candidate attract in other fields, unless s/he has additional talents not directly related to nursing? There's vetinary medicince, physical therapy, and a handful of biology-related research sciences that might be plausible options, but nursing attracts a certain kind of personality which seeks the career for reasons which are not strictly money-driven. I say this with a sister who is a nurse, three other friends in the profession, and a fifth person presently in nursing school.

In this area of the country nurses are often starting in the range of $40-50k/year, or for comparison, roughly $4-9k/year more than an entry-level engineer or programmer. Because of competition from other jobs? I doubt it, considering we have a national shortage of nurses: the general public is demanding professional healthcare services faster than the education market can add nurses to the system, so every area of the country must keep salaries high, and competitive -- else any new graduates willing to relocate will get a noticably sweeter deal somewhere eles.

Meaning, the current salaries appear to be a basic supply-and-demand problem.

Great blog post. I went to share peer reviewed literature, my experiences on Geodon at a general med office today, and yes I should get more than 'this lousy plastic pen.' The bankrupting of pharmacies by the unanticipatable, lagged shortfall from Medicare part D was on topic after lunch. One of the hosts went on to tell of a prominent speaker, academic whose wife had MS, estimated cost of recombinant DNA meds, $2500 a day, his cost. Meanwhile drink a half a fith of your favorite, stumble into any ER, clutch your chest and say 'Que me duellae!,' my best Spanish FOR 'HOW IT HURTS.' (Example chosen to inflame the xenomiscalcula, an aberrant structure lately found in Republican brains). See if you don't get a quick EKG, blood for troponin, indicative of MI, reservations made for ICU faster than you can say 'I lost my Matricula.' Medicare rules require stabilizarion for ANYONE, otherwise no Medicare dollars, period. What part do you want to change first?

anonymouse
What kind of salary will a nursing candidate attract in other fields, unless s/he has additional talents not directly related to nursing?

Meaning, the current salaries appear to be a basic supply-and-demand problem.

Yup...

I know 'more than one' (basically unskilled) persons essentially gettin' paid $15.00/hr for their willingness to wipe some old people's asses 8-10 times/shift.

(Hint to the "yunguns"- this is a 'growth industry' that can't be 'outsourced'!)

I have a question. Why is medical care distinctly different than food or shelter?

We don't have 'food insurance' from our employers. We pay for it out of pocket. As a result we have cheap abundant food. Cheap abundant food to the point of the ludicrous. I can buy fresh fruit and vegetables year round that are flown in from around the world, cheap. I can buy meat, cheap. The variety, quality, and price of food is absolutely un-frikken believable. *That* is where we would be without government intervention in the health care market.

There is nothing magically more expensive about providing medical care than providing food, it's just that the market has been systematically destroyed. Look at health care services that are *not* covered by medical insurance or medicare/medicaid (like LASIK). Prices have dropped, quality of proceedure has improved. In short, it's acted just like everything else with a healthy market.

*This* is why HSAs are so important. Once you start reintroducing markets into health care you will start to see declines in cost. Until then, prices will spiral up, and quality will spiral down, just as it does in every system where the government has broken the market (like education).

Geez, what foolishness on the part of some. The markets will save us. It's that rotten third party payer system. No one shops for less expensive alternatives. Introduce good old fashioned real capitalism into this equation and the problems will go away. One poster even compares what happens with a voluntary procedure that insurance has never covered (Lasik Eye Surgery) when the problem that the procedure has a much less expensive alternative that everyone knows about (Eyeglasses, anyone?). Very few if any other things in health care are as simple to choose from. That is probably what makes competition work in that area where it won't in so many others.

quadropole makes one of the silliest arguments I see here. How in heaven's name can health care be compared with food? Where is the health care equivalent of the Green Revolution? Answer: It hasn't happened yet and is no where in sight. Where is the device or devices that will do for productivity in health care what combines, fertilizers, selective breeding of food crops and refrigeration has done for the food industry? Probably even further away.

What comes to mind when I hear the blind market worship come into these arguments about health care is a picture of a guy clutching his chest and then his arm and then staggering to his computer to do that extensive research that your free market ideals think he should be doing before considering the more expensive alternatives to that visit to the cardiologist. Health care can't always represent a known quantity to shop for that is effectively cost controlled by market forces. You don't know if you're going to get sick at any given time and you can't know what might go wrong with you. So what exactly are you going to be shopping for in those situations? I don't "shop" for my prescription medicines when I need them, which is rarely. I go to the doctor when necessary and like most people most of the time I don't know what is causing my symptoms. If he says that I need a treatment or medicine I hope he's right and take the plunge. And if the pharmacist asks if generics are all right I say of course they are.

Since anecdotes are always popular in these threads here's one for you. Divorced mother of three barely scraping by has a daughter who begins displaying really disturbing symptoms of a personality disorder of some kind. It is entirely possible that this 7 year old could hurt herself if not kill herself, intentionally or not. Yes, I said a 7 year old. She takes her daughter to a doctor in network for her insurance plan. Someone the insurance company presumably has confidence in him or else they wouldn't let him in their network. He examines her thoroughly, no quicky 5 minute chat here. He runs many tests. He then prescribes an anti-psychotic drug that he very firmly informs her is the only one that has a chance of helping her daughter. This same insurance company that supposedly trusts this doctor's expertise says that she has to pay for it herself because it's not in their formulary and who cares if it is the only thing that will help. Not their problem in their world view. Her out of pocket expense for this medicine will be $300. I meant it when I said she's just scraping by. She does not have that kind of money to spare out of her very limited budget. But her daughter does not want this medicine, like she might want a toy that is seen in a television ad that mom can just say "No, we can't afford this toy.". It is a matter of knowing that this treatment exists and just might save her daughter's life if only she could afford it. I told her all the things to check out to work around this that I know of. But no one should be as terrified as she was when this was sprung on her. And that is what our current system does best.

A comment from Europe, where the American Left sometimes gets its inspiration from:

There are two majors models here in Europe: the British one (Canada and Portugal have similar systems), and the Continental one. There are variations amoungst these, of course, but roughly it goes like:

British: (think Soviet Union) Centralized decisions, you get the doctor that has been assigned to you by the state (or at least the hospital) with no choice. There are great doctors and good clinics and there are awful (three hours behind schedule to not even examine you properly and send you away with a generic anti-biotic every time) doctors in some there-are-rats-here clinics. It's a lottery: if you lose, you might die. Doctors get paid on a fixed per-speciality salary, hospitals cost-plus. The result is that state system sucks, and a private parallel system develops (in Canada, that means that people are forced to go abroad). India, for example, has hospitals catering almost exclusively to patients from these countries.

Have absolutely no doubt about one thing: this system in no way remotely approaches equality of care. There is a state-run system for poorer people and a private-care system for the middle classes (one young doctor once told me: "they had prepared me for the horrible deceases I would see on my job, but not for the poverty I see everyday. No one who is not poor comes to this hospital [state-run in a middle class neighborhood]."). Most people mix "free" state-care with "I really am sick" private one.

Continental: (closer to USA than to UK) Privately run facilities (or at least many of them), with doctors getting paid directly by patients most of the time, but there is a web of insurance systems based ultimately on the state which guarantees universal coverage (as if USA made health insurance mandatory, but you could choose any provider you wanted). Normally, you pay the doctor (which you choose), he keeps the money, you present the receipt and get (most of) the money back. Although costs are ballooning, the system works way better. Just don't tell a French guy that you think you want your country (Portugal, in my case) to adopt their system which work so much better because it is more market-based.

As for the problem of doctors wanting you out of their office: Last time I went to one of our cosy, socially-sensitive, Soviet-style, hospitals it was because I felt I was so bad I needed a throat specialist and not just a GP, but guess what?, in August, throat specialists were all on vacation!

Do you know what the GP who looked at me said? "Go and see a doctor, you are very sick" (I kid you not). I did, I went to a private doctor and paid 100USD for 15 minute time, but he did examine me and gave me what I felt (and still do) to be correct advice (which finally led to a minor "intervention" on my throat).

"it still takes as many people to play Beethoven's Fifth as it did when he wrote it, but symphonies are now competing with Microsoft for workers, instead of medieval peasant agriculture."
Symphony orchestras are the same as in Beethoven's time only because they have chosen to use virtually none of the technological advances since then. Beethoven had no way to make the violin score audible in the back row but have about a dozen violinists playing it together. We could put a microphone in front of one violinist. We could replace about a dozen of the less common instruments with one Moog synthesizer keyboard. We can and do record music and play it back where it isn't convenient to have an orchestra playing live. I doubt that most of Beethoven's contemporaries could afford a symphony orchestra ticket even when musicians were paid little, and the only cheaper alternatives back then were church services and playing it yourself. We're much better off now: We get professional music of as good quality as we want (don't ask me why so many people want crap played loudly) for pennies per "performance". But if you want to experience a symphony the same way Beethoven did, you've got to pay the very high cost of doing things the same way as they did back then.

By contrast, health care adopts new technology as fast as it can be proven safe and effective - but unlike other fields, new technology is mostly used to give better care at higher cost rather than for reducing the cost of leeches and herbal teas. That's the real challenge in financing health care: costs can grow beyond what any society can afford no matter how the money is collected, with a provable although sometimes tiny increment of less sickness for every huge increase of cost. You have to limit it somehow.

Ideally, we'd set the limits by the expected cost-effectiveness of a treatment on a case by case basis: a $10 vaccination that will save the lives of hundreds of children gets financed first, the million dollar treatment that keeps some octogenarian breathing (but hardly living) for six more months gets canceled unless someone has the money and doesn't know what else they could do with it. But neither a profit-driven insurance company nor a government agency can do a reasonably effective job of sorting out the cases in between. I've seen so many government decisions that make crackheads seem reasonable that I'd trust a private insurance company more, even though the profit incentives are all wrong...

So, my vote is for the free market. It works poorly in this case, but the alternatives are even worse.

Another absurd failing of the American health care system:
We spend many billions of dollars each year on organ transplants, but nobody seems to care about medical research to prevent organs from failing in the first place!
I'm thinking of that old expression, a stitch in time, saves nine ...

The key to solving the problem is to understand what the problem is;

Some people cannot afford to obtain health care through the current system.

The possible solutions, therefore, are to give these people money so they can afford the current system, or to create a system they can afford.

I would eliminate the first option, giving people money. The current system was designed for people who can afford it. As what these people can afford will most likely rise (and we want it to rise), there is no way that we will be able to continue to give those who cannot afford it enough money to keep up. Further, as most people can afford the current system, holding it back to keep it affordable will be impossible.

Which leaves the second option, create a system of basic health care for those who cannot afford the current system. The primary advantage of this approach is that costs can be contained. The primary disadvantage is that it is anti-egalitarian, so the political battle will be ugly.

I experienced military health care for over a decade. I never had the impression that I was dealing with the best and brightest, but they were certainly very capable. With liberal use made of nurse practitioners and physician's assistants.

We (me, wife, two children) had no control over which doctor we saw, but if my wife wanted the kids to see a particular doctor, she could wait all day in the waiting room until he had time for them. Otherwise you took whoever was available when they were available. Sort of like a walk-in clinic combined with appointments for follow-up visits.

And it worked. We had adequate care but no choice of doctor. So what? And the nuisance of taking the time necessary to go through the waiting procedure was enough of a "charge" that it screened out most of the trivial nose-snuffling complaints.

I have no idea whether this would work with a normal population--the military is typically only the upper half of the normal distribution curve (100 IQ is the minimum in the military, probably including dependents; not the mean).

> There would be a standard, location adjusted, cost for each procedure

Why should it be location adjusted?

Where you live is a choice. Folks who live in expensive places do so for the benefits that they get by living in those places. Why shouldn't they pay the costs as well? Or rather, why should someone who isn't getting the benefits pay the costs?

Note that the "It's where they can get a job." response pretty much concedes my argument.

Measurement of a medical system is not one dimensional, and pretending there is one system that is optimal over all measures is ridiculous.

Here are some measures that people might use:

• Best care for a specified and low budget. Socialized health care *without* private insurace provides that by allowing experts to ration health care.


• Best care available for any price. Obviously the American system has developed effective, but expensive procedures to address the segment of the population that can afford such measures.


• Universal coverage. Normally provided by a socialized (or at least national) health care system. Considered by many as non-negotiable in their definition of a "successful" health care system. This *can* be provided by either an American-style system, but the cost and tax environment makes it near prohibitive.


• Introduction of medical technologies. American-style systems will introduce new costly medical technologies that eventually drop down in cost, allowing cost-rationed systems to use them.


• Universality of quality of health care. Socialized health care systems will tend to produce *more* universal health care results (for identical illnesses). Of course, it's nonsense to think care will be exactly identical for the same illnesses, but it's the philosophy rather than the exact results that are more important here. Many people believe it is acceptable that quality of life should improve with increased wealth, but find do not accept that *amount* of life should depend upon one's wealth (i.e. there are some things money *shouldn't* be able to buy). This is a very common view among those in counties with socialized health care systems.

Personally, I am happy to be under the Canadian health care system, and even happier that the American system is close by. Since American levels of health care spending would be catastophic to Canada (America is much wealther), I suspect that we optimized properly for the vast majority of our population given our budget. (And yes, universality is a prerequisite for me). However, having the American system nearby does act as a second, fairly inaccessible tier. This allows the ultra-wealthy to obtain the health care they seek (reducing pressure to allow a second tier in Canada), and allows development of new technologies that can be used when they become affordable.

Free-riding? Nonsense. Simply extracting the maximum benefit from a nearby resource.

Universal single-payer healthcare is, in the end, about health-care rationing and cost containment. However, the universal nature of it tends to have some advantages over simply adding a medicare system to private insurance.

• It lessens the tendency to compare outcomes with someone paying four times as much. (Those others are in a foreign country.)


• It removes the responsibility for not trying expensive but relatively ineffective medical treatments from individuals. Nobody wants to say "it not worth trying to save Grandma's life". However, we're willing to have a doctor say "there's nothing that we can do".

Tom, did you ever wonder why the USA is much wealthier than Canada? Do you suppose it's the result of socialist policies, of which Canadian health care is a prime example?

Jim,

'Where is the health care equivalent of the Green Revolution?'

You haven't seen it yet because due to the lack of a functioning market, there is no incentive for it. There are myriad places to reduce costs (and improve quality) in health care. For example, there is absolutely no reason why basic family doctors haven't been replaced by much less expensive nurse practitioners plus expert systems except for 99% of us, except for lack of a decent market. Why can't I schedule an appointment online (thus eliminating at least one staffer). Why do I have to schedule an appointment to go see my doctor over things that I could very well email a nurse practitioner for, if that were an option.

There is a lot of demand for 24/7 clinics, and right now that flows into the much more expensive emergency rooms. How many mothers would be both better and more cheaply served if they could take their child to a 24/7 doc in a box rather than having to go to the emergency room at 3am (and sit waiting till 9am) because it's the only thing open?

Markets are how systems match what people want with what can be supplied. Competition in them drives down prices and drives up quality. I see no reason at all why medicine should magically be any different.

Let me put this differently. If my food insurance, when determining 'reasonable and ordinary' for the price of a bag of flour decided to reimburse for the individual elements of labor that went into it (the mule driver plowing the field, the cost of the sythe wielder, the cost of three days of the wagon driver to bring it to market, etc) and payed the billed cost of each of these, do you honestly think we would have seen the green revolution? No, we'd still be paying all of those people, and leaking all of that productivity.

Medicine, more than the green revolution, involves an interesting set of trade-offs and ideals. Quadrupole writes of 'nurse practitioners.' That means regulation; surely it would be cheaper just to have somebody hired in a doctor's office 'that seemed to do well at the job' like a Mexican pharmacist; they may actually do as well (and as poorly) as the nurse. Don't regulate the doctors but then doctors have sex with patients and 'we can't have that.' 'Social justice' demands that the person with the MI be treated per my post above but then 'surgery centers' are set up without emergency rooms; so the insitution doesn't bare the cost of unpaid care. Having 'insurance' amounts to a forced savings for medical care; a classic theme of Britsh nineteeth century novels I understand was the doctor's struggle over not getting paid. You will end up getting less of the 'good' of medical care then. For the insured one of the directly realized benefits is having a negotiated rate for services that amounts to a discount from the posted price. Even politically, there may be trade-offs. The night John Kennedy was elected a man on a gurney at Parkland Hosptial in Dallas announed to my father, "I'll have my free medical care at the big Baylor (private hosptial)." Now, under Medicare rules, people who never correspond with Medicare do 'get their free medical care at big Baylor.' Would they be as inclined really to demand a nationalised system feeling that the 'juice,' as Jeffrey Skilling puts it, might be taken out of the system. The Medicare part D is designed to go in the direction of supporting people by providing a bridge out of the hospital, which may reduce then unnecessary hospitalizations, and also to reduce the push for an NHS. So, in the present sytem, the actual design is to give it enough 'juice' to get people included and have incentives for production yet leave tiers of care.

Aric--

Can you give some better examples than 'fly[ing] to the Mayo Clinic' of things that the new health care regime wouldn't cover so as to reduce costs?

No, because I haven't studied the modern medical and insurance worlds enough to have a considered opinion on your question. But you're missing my point, which is that whatever level of care our hypothetical univeral insurance system provides, I and most liberals will not object to rich people spending more of their own money to get better, faster, or more customized care. So "baseline universality" is a more accurate statement of what we want from the system than Jane's proposed "equality."

Michael,

The food industry is also regulated to a fair thee well, but not to the point of breaking the market. Do we get less of the 'good' of food now, when the costs have been driven down by the market place.

This is what folks simply don't seem to get. Markets increase productivity. As productivity increases, rationing eases. The only way we are going to be able to afford to give everyone the amount of health care 'good' they want, is to increase the productivity of healthcare. Markets increase productivity. Governments reduce productivity.

Here are my thoughts, some echoing what has already been said...

Nurse Practitioners: We don't need a doctor to tell us that we have the flu that is going around town nor to provide the prescription or flu shot. While a license and accountability are necessary for the basics, a title is not.

Preventative Care: I would prefer to pay a health care professional for keeping me well rather than paying insurance companies when I am sick.

Options: We should have the ability to opt in and out of group plans. Not that it is wise, but the decision should not be made by the government or a motivated group of liberals.

Mobility: An idea I believe I read here first, we should be able to take our insurance plans from job to job.

I would like to see some sort of competition in the medical arena. Anything. We read about gluts of professionals in many fields including my own (technology), but I've never seen where there have been too many doctors and prices have been driven down.

I think fletch makes the most relevant point. Any universal healthcare, and even the similar-costs-for-all insurance plans that employers provide, amount to a vast transfer of wealth from the young to the old. Mind you, companies can and do find ways to beat the system (firing older employees on false pretexts to reduce their health care costs, for example). I imagine that changes in demographics and the aging of the baby boom generation will eventually make some sort of universal care a reality, but that doesn't make such an intergenerational subsidy right.

Current employer provided health insurance is also a vast transfer of wealth from singles to families.

An employer I am aware of recently started offering to allow those who retire after age 50 access to the employer sponsored plan, but with the employee paying the full cost. This effectively published the employers cost for employee health care. That employer spends almost $1600 a month more to cover an employee with a wife and kids as it does to cover a single person. Think about that. Thats $1600 a month in extra tax free compensation. $80 extra a day.

He examines her thoroughly, no quicky 5 minute chat here. He runs many tests. He then prescribes an anti-psychotic drug that he very firmly informs her is the only one that has a chance of helping her daughter. This same insurance company that supposedly trusts this doctor's expertise says that she has to pay for it herself because it's not in their formulary and who cares if it is the only thing that will help.

This is an important issue to consider, but the understanding of this anecdote is modified by a couple important considerations (even aside from asking how it is that a woman "just scraping by" does have health insurance, yet no liquid assets and apparently doesn't qualify for Medicare/Medicaid program instead?):

1.) Where was the majority of the research funded, which makes the accurate diagnosis of this condition and corresponding treatment, possible?

If the answer is "the US", score +1; if the answer is "UK or Canada", score -1; if the answer is "anywhere else", score 0.

2.) In how many first-world healthcare systems would this girl's condition have been correctly diagnosed, and the mother supplied with the drugs at little or no cost?

If the answer is "few or none," score +1; if the answer is "some," score 0; if the answer is "most," score -1.

----- Interpreting the results: -----

The final score tells us that in this case, the US healthcare system has...

+2: Achieved something unique.
+1: Done something useful, although there may be room for improvement.
>0: Fallen short; there is room for improvement.
-1: Failed due to outright inadequacies.
-2: Failed beyond excuse. Something must be done now.

In all seriousness, if you begin applying that test to every healthcare case you can think of, my gut feeling is that you will frequently come up with a 1 or a 2 every time an exceptionally powerful tear-jerker anecdote is raised, and probably somewhere between -1 and +1 for most general healthcare problems.

If so, then we ought to tread cautiously before going ape in renovating the system -- not because better wouldn't be nicer (better is always nicer) -- but because of the real risk of breaking something substantial, possibly irrpairably.

quadropole, you state as an absolute that "Markets increase productivity." in all instances and all circumstances. This is not true. For a market to function it relies on certain conditions. One of them is the rational actor. People must be truly able to shop around for the product they are buying and have the knowledge necessary to make an informed purchase. There are many reasons in our country that people don't have that information including there currently not being a centralized source for it that's easy to use and understand, another being that it can often be quite technical in nature to really evaluate properly and we have lots of people who just don't understand technical issues and jargon. You're an ideologue and an idealist within your libertarian belief system, quadropole and neither of those attributes from any belief system will ever contribute to actual solutions.

Jim,

Funny, people seem to do OK buying computers, plasma TVs, and a whole assortment of very technical things for which there is not central and easy to use and understand source of information.

Additionally, the current system is no great shakes for that either. I've known folks who went for *years* with BP of 150/100 with their physicians saying 'well, that's a little high, better keep an eye on it' only to go to another physician who immediately starts treatment for their dangerously elevated BP. Or a friend of mine who for years had wondered *why* it was he was always tired. Finally, upon changing physicians he was refered for a sleep study. He has severe sleep apnea, and that was his problem.

By the way, please name *one* healthy market that hasn't experienced dramatic productivity growth in the last 50 years. Just one.

Jim,

I am quite sympathetic to the lack of information argument, that people who are about to have a heart attack don't go find the best cardiologist who is also the cheapest before calling 911. Having said that, however, aside from emergency care, I think that people _are_ taking it upon themselves to find the best cost-effective treatment. Look at WebMD and its popularity. Before I make an appointment to see a doctor, I first look up what my condition might be on WebMD. Many people seek second opinions. Others read medical books themselves. Certainly, this demonstrates a failure of our current system: that it drives people to doing their doctor's job. But at the same time, I think that it has lowered the information hurdle.

One other point: I know numerous old people who go to their doctor about once a week asking him to measure their blood pressure. To them, the costs are zilch, since many of them are poor and thus on Medicaid. But this is exactly what happened in the Soviet Union. Healthcare was free, but young people couldn't get doctor's appointments and waits at walk-in clinics were in the hours because hypochondriac old people would waste all of the doctors' time during the day.

Tom, did you ever wonder why the USA is much wealthier than Canada? Do you suppose it's the result of socialist policies, of which Canadian health care is a prime example?

It's a result of a number of factors, such as geography, population, and, indeed, more socialistic policies.

Would I exchange more redistributionist policies for greater wealth? Nope. At this point, I feel that the extra happiness bought by the greater wealth is more or less completely outweighed by the decrease in happiness as a result of greater inequity.

Likewise, I might be able to afford better health care than I can get out of the Canadian system in an American style system, but I'm willing to exchange marginally better health care for universality of coverage of my fellow Canadians.

I run a non-profit organization that works with people all over the world suffering from a particular disease.

Let me say first that I hate our medical system, it is bloated and inefficient.

Let me also say that if Canada and the UK are the models we are looking at, count me out. I talk with patients in those countries every day and let me tell you the reality: the quality of the care is a travesty. It may be free, but it is a care system that dumbs down its doctors and nurses. Both of those countries are light years behind the US in terms of knowledge about new treatments and techniques. I rate the medical care providers of our system at 80% competent and 20% incompetent. In Canada and the UK the ratio is 40% competent and 60% incompetent.

In both Canada and the UK there are a set of government issue guidelines (and we all know what that means) that spell out what types of operations can be done, what drugs can be prescribed and what dressings can be used. Experimental surgeries and ground breaking techniques? Not happening out of Canada or the UK, I can tell you that.

I truly hate our system but there has to be a way to do this without turning our health care into the great sea of mediocrity.

quadropole, if you are a videophile you might dig into the technical details of the technical devices you use. But the overwhelming majority of people just go as deep into the details as they need to and no further. The highly technical discussion concerning the great new TV almost always consists solely of "WOW! Look at that picture. Here, look at this one and see the difference. How much is it versus that one right there 4 feet away from it?" or something similar. There is not necessarily huge amounts of technobabble though there are certainly those people who use Consumer Reports and carefully consider all the details but they are the minority. In addition there is no purposefully obfuscating legalese or escape clauses that will suddenly change the performance of your purchased item at the will of the manufacturer (Referring to insurance, not medical care.). I do pretty much everything to do with computers and anything technical for my employers and I am constantly amazed at how very little most people know about the PCs they buy and use daily. Your analogy is immensely faulty.

As far as a healthy market, my point is that healthy markets require a set of pre-conditions and that health care is one area in which your version just doesn't work. You want a simple, one-size-fits-all answer to everything. In service to that desire you have chosen to believe that free market capitalism is the answer for pretty much everything. Sorry, but I don't buy hyper-simplistic answers.

I agree healthy markets require preconditions. Absolutely. Please name a precondition to a healthy market in healthcare that can't be met by moving the third party payers out of the way?

Yevgeny, now and even more in the future people don't actually see a doctor to have their blood pressure checked. We can and should move even further in that direction, having trained and certified people do many tests that simply don't require a doctor's expertise. This is one direction that health care will inevitably take.

Jim,

My analogy to computers and TVs is apt. If people care, they seek (and usually pay for) advise.

Consulting a healthcare practitioner (like a doctor) for treatment advise in a healthy market system is exactly the same as the current system, except that *you* get to weigh the pros and cons of his advice, not some nameless faceless bureaucrat in your insurance company or government who may or may not have had cases like yours occur to them. The only difference between the current system, and one involving HSAs and catastrophic insurance is that cost becomes one of the factors they can choose to consider. Maybe if going to the doctors office once a week to have my blood pressure checked because I'm old and lonely means fewer nights out playing bingo, I'll decide not to do it. On the other hand, if I'm a woman who is going through a high risk pregnancy, perhaps it makes a lot more sense to forgo going out for dinner and a movie once a week, or cable tv, to pay to see my physician once a week.

In terms of blood pressure monitoring, there are machines that can do it now, although there are some issues around calibration for the less expensive versions.

The point Yevgeny is making is that there is *no* disincentive to a patient with government paid health care going to see their doctor once a week 'because they feel like their blood pressure is a little high, could you check it?' even when the real reason is that they are lonely and seeking attention.

That sure is a nice wish list. I'd say I want the same for video games. Where do I go to get my free video games, now?

Artgal, why do you even bring that up? Seriously. I don't know anyone who plans on going with a U.K./Canadian system. Why can't anyone try to look past this BS argument from the political right that the only system that we could come up with would be something like those two?

Jim,

What system would your propose?

quadropole says "My analogy to computers and TVs is apt. If people care, they seek (and usually pay for) advise.". No, it's not. Say it as often as you like but that won't make it true. For one thing, what about those who can't afford it? There are lots of them and their numbers are only going to grow in the future. Your fantasies about people being able to afford doctor's visits, lab tests, medicine and hospital stays with no third party other than catastrophic insurance is exactly that, a fantasy. You make claims with no proof to back them up whatsoever.

I will repeat that one of the primary differences that can't be wished away between health care and almost all other purchases is its inherent unpredictability. HSAs won't cut it for millions of people because they don't make enough to set aside enough money in the savings accounts to cover even moderately expensive incidents too inexpensive to have the catastrophic insurance kick in but enough to destroy their monthly living budgets.

Jim,

I think I see a part of our central misunderstanding. I see the issue of how we structure our medical market as being orthoganol to the question of how we deal with those who can't afford to pay.

What I maintain is that many, many people *could* afford to pay if the market structure where in place to encourage increased medical productivity.
What to do with those who legitimately can't pay is as seperate question.

Leveling the tax playing field (ie, making the tax laws uniform across both employer paid for and individual paid for health care spending), encouraging HSAs and high deductible policies, etc move a long way towards fixing the market place for healthcare. I expect it to move most people into a direct cash relationship for their healthcare for most of their lives.

If there are people who can't afford to fund an HSA and pay a catastrophic insurance premium, one can reasonably discuss subsidizing them. Right now medicaid spends an average of abotu $4k per patient nationally. You can buy an HDHP (high deductible health care plan) for a family with a $2200 deductible for about $1200 a year. So for $3400 in subsidies per family with HSAs plus HDHP you could provide health care for families that are really to poor to afford it. For everybody else they can buy it out of pocket (preferably with pre-tax dollars).

quadropole,

In addition we disagree on whether or not the efficiencies you envision would be enough to make a big enough difference to make it affordable for people to simply pay for their care. I don't think so. In addition to the poor what about those who get caught in the middle? They save their money in their HSAs but something happens to them before there's enough to cover expenses. Or what about those for whom the nature of their problem produces multiple moderately expensive bills, thus not triggering their catastrophic coverage but being more than enough money to ruin their finances?

In addition to the poor what about those who get caught in the middle? They save their money in their HSAs but something happens to them before there's enough to cover expenses. Or what about those for whom the nature of their problem produces multiple moderately expensive bills, thus not triggering their catastrophic coverage but being more than enough money to ruin their finances?

Now it's your turn to provide evidence, specifically, a reliable estimate of how many people realistically would fall into this category. You have yet to tolerate a "but they're out there, really, they are!" from anyone else, so: how many? Could the proposed fallback plan for the poor be structured to further absorb the needs of these special case types without creating a destructive level of moral hazard?

Also, just to be sure we're speaking the same language here, what is the definition of "ruined finances" in this context? Do note that as a taxpayer, I do NOT wish to subsidize someone's expensive healthcare needs if what I am really doing, in effect, is supporting a lifestyle that has not responded appropriately to the effective loss of disposable income.

Ok ...

The arguments I'm hearing are more about how to get good health for less money -- i.e., how to best structure a market that already features pervasive governmentment involvement -- and less about how to make sure that the poor get adequate coverage. Not that the latter is irrelevant, but that's not where the action is.

The real issue going on right now is that people look at how much we pay for "free" (indigent) health care, right now and how much other countries pay for their entire health care systems and conclude that for the same money we could pay for basic health care for everyone.

I suspect that they are wrong, having eaten lunch with an American ex-pat whose profession is hiring doctors from the continent to go work in England where they make "much" more money (a specialist surgeon willing to work overtime can make as much as 100k euros a year. Over at "Big Baylor" referred to above, a starting trauma surgeon will make 2-3 million dollars a year -- which I know from deposing them).

It is a complex area, especially when you realize that half of the "free" health care expenses go to pay for the care of those in the last six months of life.

Determined looking backwards, looking forward we can't tell. Which is the rub. But also why many socialist systems tend to dramatically limit or attempt to limit health care options for the elderly.

Having said all of this, from some complexity studies I reviewed and some complex issue fasciliations I tracked, the take-away lesson I got was that no initial position is likely to be correct.

It never hurts to review and think. Kind of what markets do.

Anybody ever try looking at Singapore's healthcare system? There're several tiers of funding for various needs, and there're both public and private institutions for choice.
http://www.watsonwyatt.com/europe/pubs/healthcare/render2.asp?ID=13850

Jim,

Given that HSAs require by law HDHP that have deductibles of between $2-5k, after which all is covered, how exactly is this going to be financially ruinous. If I opt for a $2k plan, even if I don't fund my HSA at all, my max liability is $2k. Can this be uncomfortable, absolutely, but try finding a reliable used car for less than $2k. If you can afford a car, you can afford the liability an HSA exposes you to. And by being able to funnel that money through your HSA when you do pay it, you effectively get to pay that $2k with pretax dollars.

By way of comparison, that $2k exposure is only slightly higher than three times the $600 per annum cost of cable tv, which is paid with post tax dollars.

$2k a year is around $40 a week, or $8 a work day? If someone buys their lunch at work, they are spending around of $2k a year on that luxury (after figuring the tax benefits of the HSA in).

Who exactly are these mythical folks in the middle who can't afford the gap again? I suspect it would be truer to say that there are folks who'd rather eat out for lunch, get cable, go to a movie now and again, drive a nicer car, etc and have someone else pay for their health care.

Right now medicaid spends an average of abotu $4k per patient nationally.

Only by paying below-market prices. In some cases, below cost prices. Medicaid reimbursemnet for in-office X-rays was less than cost of film as of three years ago.

Imagine a system where food stamps meant that the store had to sell at government mandated prices. You and I pay $3 for a gallon of milk, the food stamp recipient has their account charged $1.

Another component to driving costs up is the cost to hospitals and physicians of caring for those without the ability to pay. Health care is one market where you can demand (and must be provided) goods services even if you know (and the provider knows) you can't pay for them.

You can buy an HDHP (high deductible health care plan) for a family with a $2200 deductible for about $1200 a year.

From what company? I pay over $60/week to my employer (a Fortune 50 company) for such a plan.

"Your fantasies about people being able to afford doctor's visits, lab tests, medicine and hospital stays with no third party other than catastrophic insurance is exactly that, a fantasy." You seem to be saying that a family with an average income cannot handle average medical expenses without getting money from a third party - but where in heck does this money come from???

As for unpredictability, life contains lots of other unpredictable expenses: cars and appliances break down, roofs start leaking, you get laid off... A financially responsible person builds up a bank account to have the money to handle such events. All major medical plans that I've ever seen limited the out of pocket expenses for one illness to $5,000 or less. Medical providers are willing to stretch out payments for your share of the expenses. Anyone who cannot manage to pay $2,000 up front and pay off another $3,000 over six months to a year is either spending irresponsibly, or has such a low income that it won't take much to qualify for Medicaid.

Of course, it would be considerably easier to accumulate that emergency fund if you also had the 40% or so of your paycheck that goes out in taxes...

Ruining your finances refers to the fact that like any other business modern medical practices use collection agencies and turn you over to the credit reporting agencies, often even if you think you've made a deal on payments with them.

Some quick research shows that HDHPs use the same caveats and gotchas that traditional insurance uses. Psychiatric care has caps so low they're a joke. Physical therapy has limits on number of visits that can easily be exceeded by any number of problems such as a car accident or major replacement surgery. Unrealistically low number of days covered at extended care facilities. How extended is the care if coverage is (even after deductible) limited to 12 days in a year as one plan I've seen has? Read the fine print, folks. It's not that different than regular insurance in so many ways.

We should be able to do better.

What if we were to break this into a two tiered system?

As mentioned a few times upthread, a national system of 24/7 free clinics that will cover basic health care might be the way to go. This gets our ER's out of the basic care business and stops our hospitals from going broke. It also gets the basic level of care necessary to the masses.

Let everything beyond that be covered by insurance plans that range from high deductible to no deductible depending on what premium level the customer wants to pay. You want to spend $100k on grandma's final 6 months it is your choice and your dime, not the burden of the taxpayers. Is this going to equitable? No, but there is no way we can economically provide high technology for free to everyone in the country. There is never going to be equality unless you go to socialized medicine, which is something we are all pretty sure we don't want. Those with money are always going to be able to afford better care, what we are discussing here is how to deliver a basic level of care to our nation.

So, like it or not, that is my solution here. Provide a basic level of health care to all, get employers out of the health care loop and let people insure themselves for advanced health care needs. Frankly, I just don't see any way for an economically viable system that provides every single man, woman and child in this country with an all-you-can-use buffet of the most advanced medicine possible. We, as a nation, are just not willing to stomach that level of taxation.

I have both US and Canadian citizenship as I was born in the US to Canadian parents. I've lived extensively in both countries. The American left often attempts to use the Canadian system as an example of what the US should aim for. The vast majority of these people have never lived in Canada, and most have never even been there.

The facts are that very few Americans would tolerate the Canadian health care system for very long. Hospitals are extremely overcrowded, people literally have died in ambulances parked outside thronged ER wards waiting hours to even get through the door. Access to things like MRI machines is far, far below US levels (3.8 MRI machines in Canada per 100K versus 14 or so in the US, if I recall correctly).

Lack of timely access to specialists can cost you your life (especially when fast-growing cancers are concered), as can having the bad luck to get a disease that the government deigns not to cover (you have no alternatives to the government system in Canada--private care is illegal) -- see Woman's last hope tied up in medical red tape for a horrifying example.

Fewer and fewer Canadians are defending the colossal failure that is their health care system. It is gradually dawning on them that there is something after all to this whole "abject failure of socialism in the 20th century" thing.

There are still people like Jack Layton, the leader of the left-wing NDP party, who said that he would allow his wife to die (she almost did) before he would sacrifice his sacred ideological belief in universal socialist health care.

That's getting a tad too close to plain old commie evil for my tastes.

So, no matter how bad you think things are (they aren't by the way, I love my Blue Cross/Blue Shield) they could be far worse. Just ask anyone who has experienced both systems first hand for extended periods. There is no contest; socialist health care would mean disaster here just as it does everywhere else.

Oddly enough, I've never heard someone say that the Canadian system is something to aim for. I think Jessica's idea quite possibly has some merit.

So, no matter how bad you think things are (they aren't by the way, I love my Blue Cross/Blue Shield) they could be far worse.

Indeed, you could be one of the many Americans *without* Blue Cross/Blue Shield or any other medical insurance.

As for comparing with Canada - perhaps it might make more sense to compare what you get for similar expenditures per person. Sort of like comparing airlines, except buying cattle class on one, and business class on the other (and leaving a bunch of people on the tarmac).

As for evil, I'm not certain that preventing the top 20% from obtaining extraordinary healthcare is much more evil than letting the bottom 20% suffer from lack of decent healthcare. It's all about what you want to optimize for. More to the point, I think that each country tends to have a system that matches their national character. In Canada, universality is very important to most of its citizens. Grousing about medical systems is pretty much universal to every country.

OK...the question is what should we do and in part it must be asked why we should do it. Well, there isn't just one thing to do or one approach to take in my opinion. First, I do agree that the ability to have affordable health care should be separated from employment. Think about the potential positives for the economy from creating this disconnect. The amount of time that would be saved by executives not having to worry about this issue, especially for small businesses, that could be used to focus on more core worries would be tremendous. Small businesses would benefit tremendously by having this burden removed from them. I know the company I work for certainly would. People could be more mobile between companies and feel safer in taking the gamble to create their own small business or consultancy if they felt that their family wouldn't suffer because of it should anything happen to them. It's still a gamble but at least not one concerning the actual physical health of yourself or your family.

But how can this be achieved? Is there a solution that would quite probably not completely please both sides but still offer a realistic proposal that unlike some of the hyper-ideological hopes can actually provide a relatively smooth transition?

Think of the U.S. Post Office. People whine about it. Libertarians rant that it should be completely privatized since UPS and FedEx make a go of it (Conveniently ignoring the lack of a requirement for universal delivery on their part.) but it does an amazing job when you consider the massive undertaking they are called upon to achieve. Could we create a quasi-governmental not-for-profit agency with separate divisions for differing needs, much as many large corporations have different divisions to provide and/or insure health care in the United States? Eliminate Medicaid, Medicare and the system of V.A. hospitals as separate entities but have divisions within this corporation where necessary, as I would consider especially the V.A. to be because of the often unique needs of veterans. There would be an operations division that could run the health clinics to take the load off of hospital E.R.s and the Veterans Division would have their operations section to manage the hospitals. Premiums and fees would be on a sliding scale according to ability to pay. Employers would be able to offer the paying of your premiums as a benefit if they so choose. Depending on what this system would cover private insurers would find a new role as some kind of premium service. One of my large gripes is that dental health is treated so differently than general health. I would hope that this could be improved upon. I am not speaking of cosmetic things, but aspects of dental health and hygiene that impact your general health and have been proven to do so. This should also change as well as improved treatment of psychiatric disorders even if the operations units have to open their own clinics and in-patient facilities.

Let the criticisms begin.

I like the Postal Service analogy; IMO it represents about the best compromise possible between universality of basic government service, and "privatesque" market-competitiveness against alternate services.

The USPS is limited in some respects: in large-city locations there are invetiably lines during peak hours, "Delivery Confirmation" is an extra-price service and does not compare to the daily tracking automatically included by UPS/FedEx, and large packages are either more expensive or, in the extreme, unshippable via USPS.

But the service is everywhere and sometimes more convenient, the prices on letters and smaller envelopes/packages are reasonable, and (so far) I've never had the Post Office mangle a package even though I have used them a number of times for eBay and other private sales/purchases/trades on relatively fragile items.

If a social healthcare market could be made to look like that -- a universal and partially-publicly-funded service available, competing against same/similar + specialty services available from private providers, AND with no anticompetitive or other onerous regulations placed on those private providers in a misguided effort toward extreme "social justice" -- I don't think many people, beyond the fringe types who will always be screaming from the periphery, would object to it. I'm not sure either party has the foresight and political will to propose, vote positive, and install such a system, though.

The twin elephants in the room that no one wants to discuss are 1) rationing and 2) end of life care. Our current insurance system already rations, whether we call it that or not. My insurer is pretty darn specific about what it will and won’t pay for. The more people we move into a universal-care type system, the more rationing there is going to have to be. Rationing is going to be the most contentious in the area of end of life care. We don’t like to talk about this because it places number values on a human life, but reforming our current system leads us down this road whether we want to talk about it or not. Where do you draw the line at taxpayer financed care? At what point to you acknowledge the reality that the 75 year old patient who can’t remember his name isn’t going to “recover” and the best we can do is prolong the inevitable. This is going to be a huge divide in our nation, just look at Schiavo, but also remember that hers was privately financed care. Would we have had the same debate if it was a Medicaid or Medicare case costing hundreds of thousands of dollars in taxpayer money? How much are we as taxpayers willing to spend on a single human life? These are the hard questions that no one wants to deal with.

Jim S. asked:
"Where is the health care equivalent of the Green Revolution? Answer: It hasn't happened yet and is no where in sight. Where is the device or devices that will do for productivity in health care what combines, fertilizers, selective breeding of food crops and refrigeration has done for the food industry? Probably even further away."

First, please recognize that the human body and the medical treatments we demand represent an almost infinitely more complex problem than trying to obtain maxiumum yield from an acre of wheat. If we wished to build the largest, strongest, most disease-resistant human beings, we probably have the science available to do so. I think we've done that with livestock, and even made them more tasty.

My wife, an operating room nurse for 27 years, has seen numerous improvements in quality and efficiency in the OR. She pointed out just today that the average heart surgery patient now spends a few days rather than a few weeks recovering in the hospital. She also explained how endoscopy now allows most surgical treatments to be performed in outpatient surgery centers rather than in full service operating rooms. Furthermore, she is always telling me about medications now available, such as those for high cholesterol, that reduce the number of surgeries from what was formerly required.

My answer about the "green revolution" in healthcare is that it has been happening. That revolution is a product of a number of free markets: medical equipment markets; drug markets; surgical center and hospital markets in competition for surgeons' cases; and the very tight market for nurses that drives hospitals to improve productivity.

Socialized medicine would, of course, screw the whole thing up.

One more thing to consider is how research into better medical treatments is financed. Currently most of the medical research for the entire world is paid for by Americans in privately funded health plans. Drug and medical equipment companies make back their research costs with high prices in the USA and sell to the rest of the world at lower prices that only pay for drug and device production, not drug discovery or device research, development, and safety and efficacy testing - so our health expenditures look higher and the Canadians' lower even when we get the same treatments. New surgical techniques start as "experimental" procedures paid for by rich people out of pocket, gradually become acceptable to American insurance companies, and many years later become available in government-paid health plans in the UK and Canada.

Of course, most Canadians can take a short trip and enjoy American health care - if they somehow have enough money to pay for it after the government taxes away more than half their earnings. Don't these border-crossers also inflate "American" health care cost statistics?

I wonder which country's health care costs those border-crossing Canadians are counte

There are approximately 30 million citizens of Canada as compared to 290-ish million US citizens, and the US probably has at least a few hundred thousand illegals besides...so I doubt healthcare border-crossers from the Great White North are much more than an artifact in the statistics.

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