The Health Care Thingy
While I'm on a roll, commenting on everything Pythagosaurus posts (I'll get my own brain soon, I promise) I thought I'd throw in my thoughts on the whole health care thingy:
The interesting thing about the prescription drug benefit is that it was intended as leverage to get certain elements of Congress to agree to reform Medicare. There is a certain crunchy political compromise sort of goodness to that - in exchange for enacting a hideously expensive piece of crap legislation, we will excise the worst parts of a grotesquely expensive, double-plus crappy abomination of a legislation. Instead, we now have both, which is more stupendously expensive crappiness than you can shake a stick at, plus the stick.
The prescription drug benefit program's only saving grace is that it might not kill the goose that lays the wonderful, groovy new drugs. In every other way, it is an immoral, bald faced, long term mandate for thievery from the younger generations. But the drug benefits are really a side show in the larger catastrophe.
There are three elements that form the center of my perception of the problem:
- The health "industry" constitutes as much as a seventh of the total US economy.
- Old people represent a growing percentage of the whole population. Not as bad as Europe or Japan, but still
- The Byzantine and corrupt nature of the industry as a whole compromises the effectiveness of the system.
Starting from the bottom, why does it cost $12,000 to get your arm repaired after your neighbor jumps up and down on it? Assuming that your mom drives you to the hospital, what kind of costs are we talking about? A few minutes for the receptionist. A half hour each for a nurse and a doctor, fifteen minutes for the radiologist and the cost of running the x-ray machine, the broken bone kit in the nifty sterile packaging, some overhead costs to keep the nice hospital open, and some powerful narcotics to dull the existential angst of realizing what a dumbass you were to let your neighbor jump on your arm.
I added that up, and came up with about $500. And that was assuming that doctors were charging $300/ hour for their time, and nurses half that. Even assuming that my perception of the costs was off by an order of magnitude, that still leaves you $7,000 short of $12,000. Where does the extra money come from?
Malpractice insurance to protect doctors from the ridiculous lawsuits we as a people are prone to. Also, extra tests as an added safeguard from lawsuits. The bloat of the insurance industries, which encourages doctors to overcharge. And the labyrinthine regulatory hairball that surrounds the entire industry.
I have no problem with doctors making money. They studied far harder and longer than I ever did, and they perform a vital service. I have no problem with drug companies making money - it costs billions to develop and especially get FDA approval for a new medication. They should be able to recoup their costs, and make a little folding money.
I do have a problem with jackholes making millions because they convinced a jury of their jackhole peers that they deserved to get $20 million in punitive damages because of something that no doctor could have prevented, or came up short on the odds. Nothing in life is certain. (Now, if the doctor was drunk, sue away....)
I do have a problem with government setting prices for the whole industry, and for all other kinds of intrusive regulation. My cousin used to work for a hospital, and the nightmare stories he told were unbelievable. The hoops that every part of the industry must jump through are staggering.
There has to be someway to straighten and simplify the whole thing. And tort reform would be a great start, eliminating one of the biggest costs for medical care for everyone.
The second point is the demographic change that will hit full force as the boomers start retiring in large numbers. This single fact dooms every old age entitlement scheme already in existence or merely in the planning stages. Entitlement means that those eligible get their money regardless of whether of any other needs the government or the rest of the country have. When the old reach a certain percentage of the population, the system will as a matter of course bankrupt itself because it will cross the threshold where the working population contributes enough in taxes to fund the outlays to the old.
Unless these programs are fixed, we are screwed. Privatization is one option. Raising the age of eligibility is another idea. Means testing is necessary. But something has to be done, or we will end up by 2050 paying all of our money right into the pockets of the old. Because it is damn certain that the boomers will be there with their hands out.
And we need to do something soon, because of point number one - seeing as the health industry is such a huge part of the economy, if it gets screwed up, the whole effect on the rest of the economy will be, I don't know, large. There are many ways that it could get screwed up: panicky regulation could either regulate it into stagnation or nationalize it. Increasing inefficiency and corruption could bankrupt key parts of it, leaving the system in ruins. Or, there could be piecemeal collapse, for example if malpractice insurance becomes to expensive, there will be no doctors - they will move to where they can practice and make a living.
The health industry must continue to make money in order for it to be the wonderfully effective thing that it is. It must continue to attract the best and brightest. What we need to fix is not the doctors and nurses, or even the drug companies. In principle, health insurance is a viable prospect. What we need to fix is the government side of the beastie, both in terms of regulation and heath related entitlement programs.
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So basically you're saying
So basically you're saying "Blame Government". The current system keeps armies of people at work in doctor's offices whose only job is to chase down insurance companies for payment. A similar army exists on the other side, working at the insurance companies. Their raison-d'etre is to find some way, any way, to avoid paying doctors for as long as possible.
The problem with the free market approach to medicine is that THERE'S NO STABILIZING MARKET FORCES AT WORK. On one hand you're spouting that $12,000 is too much for a busted arm, and on the other hand you're saying that privatization is good! The problem is that no-one in the system makes decisions based on prices. No one except insurance companies, who are in an after the fact situation.
Because medicine is a life or death matter, we should just face facts and recognize that our system as it stands simply does not work.
I advocate the following (and I am completely, unassailably right). First, end health insurance programs as we know them. Gone. Catastrophic insurance is then extended to all citizens, by the government. Use accounting rules to fix the profit percentage for this, giving them a fair margin, and rewarding them for comparative fiscal efficiency. Day to day visits are now the responsibility of individual citizens. For low income earners, graduated assistance programs are available to help with wellness care...
Vast amounts of cash are spent within the current system on extremely expensive drug therapies and machinery. Those will become the domain of the private medicine system. If, on a cost-benefit basis, a given therapy does not yield sufficient benefit (lives saved), those dollars can and will be redirected to where they'll do the most good. Society can then argue about what percentage of GDP they'd like to spend on health care, and be reasonably assured that it is going to the right places.
The reason that the Insurance
The reason that the Insurance companies can act as they do is because of the benign and protected (for them) regulatory/legal environment that the government has provided them, at the instigation of insurance and other lobbies. In any market, market pressures will exist unless outside factors intervene.
Jesus, Ross, remember that we are creating a market model for policy analysis, don't you think that markets might actually work where money is changing hands?
Price fixing and more government regulation will solve the crisis? Where have I heard that before? People will have an even easier time arguing with bureacrats in the federal government than they do now with private HMOs that can at least be sued. Federal bureaucrats will introduce efficiency and fairness? Are you on crack?
The purpose of government is not to manage these things. It is to provide a framework of law that permits redress of grievance, punishment of negligence, establishment of standards, and a free market for health services and insurance services. Just as it does for other industries.
Sorry, you just pushed a button. I love you, Ross, thank you for posting comments on my blog...
HMOs can't be sued. Only the
HMOs can't be sued. Only the doctor can be sued. The thing is, health decisions don't get made by beureaucrats - they need to be made by doctors.
The truly large $$$ in today's health care system go to a very few places -- extremely expensive tests that are done to avoid lawsuits, insurance to avoid lawsuits, and extremely expensive drug therapies, which are very profitable for the monopoly-holding drug companies that own them.
The $$$ do not get put into things that matter, like all of the low-leve wellness care and mid-level procedures that are by far the most efficient way of spending health money.
Unless you think that today's system is just peachy, I think you should produce your list of fixes. Until then, you're just whining on general principles because you don't think government should do _anything_, ever, that might tread on someone's business.
Why do you think I think the
Why do you think I think the system is peachy?
I mentioned one fix already - tort reform. HMOs should be able to be sued. Two of the three places large money goes that you mention in your last comment would be greatly minimized by real tort reform. As for the third, companies should have exclusive rights to their inventions for some period of time. And, it's in the constitution.
If we could do one thing to help the health system, that's what I would pick. As for other fixes, some would depend on reducing government regulation - or at the very least simplifying it. Leaning on the government for solutions is risky at best. Government bureaucracies are very resistant to change, to improvement or even criticism. Given a changed legal/regulatory environment, and lower bar for entry, we could see new solutions created as individuals try to make money by meeting needs.
Your characterization of my pro-business philosophy is inaccurate. I don't believe that government should stay out of things completely. I feel that they should be limited to the proper sphere - adjudication, being the referee for the game, so to speak. This also means setting safety standards, so that the rules are understood by everyone. But when you start talking about the government running things - it makes my skin crawl. Think of your experiences with the INS, or the Post Office even, and try and translate that into getting attention for your medical needs.
Also, business is not an entity or lifeform separate from people. People create businesses. People have liberty, and some of that liberty should properly apply to how they conduct their business. Unless there is a really compelling government need, the government should not be interfering. Many types of regulation, viewed in this light, could be considered discrimination.
Buckethead,
Buckethead,
Business IS a separate entity from people, legally, financially, and politically. As early as the 1840s US law recognized corporations as being equivalent to yet separate from individuals. Incidentially, this was around the time of the Dred Scott decision (!), so we can see a conscious effort all the way back then to atomize the mass of legal and tax paying entities into classes.
That's not to argue that government has any "right" to interfere in business-- quite the contrary. But I don't think it's correct to argue from the premise that the liberty of people who work for a business has that much to do with the liberty of the business as its own entity, assuming it's a corporation of some kind.
Business has its own body of statutes governing its actions and accountability, and though I'm not overly familiar with it, it's pretty clear that government has had a pretty heavy hand in limiting corporate liberty for a long time.
I should look into this further-- now I'm curious what major statues (aside from Sherman) rule on the right of government to regulate corporations, and what they decided.
Damn my cultural history background! I learned NO PRACTICAL information at all!
I wasn't saying that business
I wasn't saying that business entities are identical to people. Or at least I didn't mean to say that. I was just making a general point that a lot of the anti-business and anti-corporate rhetoric is misplaced, since businesses are founded and owned by people, who have clear rights to do that kind of thing.
In my understanding, most of business law is contract law - how to manage the relations between people are partaking in business relationships.
According to the constitution, the federal government has some clearly defined powers for regulating business. Of course, it has grossly overstepped those bounds, and used the interstate commerce clause as a carte blanche to pass damn near any law it wants.