Redstate

And Fran, to answer your question, NO, we are not getting a very good bang for our buck.

I rural areas such as I live, one nearly has to have some medical training to ensure that things go as planned. I have the benefit of having been part of a volunteer rescue squad and thus I was trained as an EMT.

My wife had some chest pains, so we went to the local ER. They hooked her up to a monitor, checked vitals etc and walked away [the doctor and nurse]. I continued to watch the monitor and notice that she was throwing PVC's, so I hit the print button and printed out a strip. I tore it off and showed it to the Doctor, he called in a cardiologist and she was helped.

So, I have to say especially in rural areas, the level of care is poor at best, and always has been. Yet, our insurance rates are the same as anyone else in the state.

The consumer has been removed and replaced with a patient with basically no say to price. When nobody is watching the register, disaster happens (just like mortgage fiasco).

Try to charge a senior citizen an extra 25 cents for a bag of coffee and they will hit you with their cane! That same consumer goes to lunch and brags about his new $20,000 hip replacement paid by insurance.

HSA's are a good attempt to restore consumerism (fosters competition) to health care but Dems don't like them because it takes money and control away from government.

Is the ER the most cost effective place to give routine medical care? I'd think it would be the most expensive.

HSA's

Ask not what I can do for my country, ask what my country can do for me. Washington Elected Elite

There are opportunities for the consumer to say no to price. The doctor is quite willing to discuss the pros and cons of each treatment option--including its cost--if you ask about it.

For example, prescription medicines that are available in generic form can save lots of money, and typically the doctor will prescribe the generic form or the pharmacist will give you the generic as the default.

But we have elderly who spend their last dollar on expensive prescription medicines to stay alive, for which generics are not yet available. If there were cheaper alternatives, they would choose them. But often there are not.

Circa 1990, I had a bleeding ulcer. My blood count was dropping steadily. In the old days, I would have needed risky stomach surgery. The doctor prescribed Prilosec, which at the time was brand new, state of the art, and VERY expensive. And I had to pay for it because my insurer only paid part of the cost of it.

What was I supposed to do? Say "That's too expensive, I would rather just chew some Tums instead?" I spent the money, took the med and got cured.

To stay alive, and keep the diseases at bay in the best possible way, sometimes there is no alternative to the expensive treatment. Fred Thompson had lymphoma. The cost of treating lymphoma is $100,000 a year these days. There are no cheap alternatives. Except death.

And that's what is driving up the cost of health care--we have an insatiable drive to stay alive, no matter how much it costs. We'll pay thousands, tens of thousands, of dollars, to extend life just a few years.

Life is priceless. Hence there is no "market" in which you can trade it off against health care.

No one questions that life is precious, and no one questions that every individual has the right to spend his very last dollar on even an attempt to live for a short amount of additional time.

However, there is scope to question whether society as a whole should make this determination a priori, on everyone's behalf.

It seems to me that this question has already been answered politically in the affirmative, and there is no possibility of returning to free markets in either health care or health insurance.

So far, so good. (Well, not so good, but it is what it is.)

The reason I wrote this piece in the first place is to point out the ramifications of this political and social choice on the economy as a whole.

You've eloquently argued the morality of this choice. But without considering the morality of the issue in the slightest degree, my objective here is to point out that extending life through heroic means, while perfectly unobjectionable as an individual choice, still produces less economic utility than other uses for the same resources.

This is going to have a powerful impact on the material well-being of every American, and it's important to make the choice with our eyes open.

You prove my point. Medicine is NOT competitve and it is tough for consumer choice right now as you point out. The goal is to put some power back into consumers hands to have millions of watchdogs out there. At least for routine health care.

In my example of trying to charge a senior citizen an extra 25 cents for a bag of coffee, he could go to any number of places for a competitive offer. What would happen to the price of coffee if it was available from one supplier only?

Restrict healthcare to one supplier, the federal government, and will it become more affordable or more expensive?

I can't believe how two separate things are being combined into one in the same by politicians and the media. Universal free health care and health care insurance. They are separate and distinct.

Ask not what I can do for my country, ask what my country can do for me. Washington Elected Elite

He is not saying that health care IS a luxury. He is saying that people spend on healthcare in a similar way that some people spend on luxuries.

At a certain point this is understandable. Who wouldn't spend everything they have on an experimental treatment that has only a slight chance of curing a loved one? The problem comes when everyone demands that the government spends this way. It is not just one family, buts lots of families with lots of sick loved ones. Money is spent on a lot of experimental treatments when only one out of a thousand loved ones lives. The other 999 die in spite of the treatment. Now they are dead and the money is wasted. It could have saved a lot more lives spent on simple things like vaccinations or more conventional treatments.

...but the piece was too long as it is.

Let me tell you exactly why I made the comparison.

With luxury goods, affluent consumers are relatively unaffected by the strict value-for-money comparison. Since money is relatively unconstrained for them, they're able to spend a large additional amount in order to get a comparatively small amount of incremental utility. Perhaps surprisingly, it turns out that they're also willing to do so.

Your comment precisely exemplifies this dynamic in regard to health care. To you (and many others), the utility of healthcare is to be valued at an extremely high level, regardless of economics.

Now when you remove the discipline of pricing signals from the purchasing process (which happens in today's third-party payer system, and would happen even more in a universal system), and combine that with a perceived high value for the good, you get the same behavior as with luxury-goods purchases: the S-curve.

With many people, this logic chain actually surfaces as part of a moral computation. You'll hear "it's cruel/inhumane/un-American/evil/whatever for any person to get anything less than the very best healthcare available."

I don't disagree with this, but I think that there is a big difference between the "best" healthcare (defined as an enhanced ability to enjoy life) and the "most expensive" healthcare. That disconnect is where the true source of the problem lies.

You said "Your comment precisely exemplifies this dynamic in regard to health care. To you (and many others), the utility of healthcare is to be valued at an extremely high level, regardless of economics."

But in fact, the utility of health care varies greatly. Right now, I feel pretty good, and the utility of health care is in fact negative. I should probably go for a physical (and I think my insurance plan allows me 1 free one a year) but I can't really be bothered right now. If I won the lottery, I doubt the first think I would do would go for one of those first class physicals the President gets.

The utility function varies with need. And I agree that it's most likely unnecessary for someone with a typical ankle sprain to get an MRI. Price would surely discourage that, precisely because the utility of the additional treatment is close to zero.

In short, while I think some rationalization of consumption could be encouraged through pricing (I find the nurse practitioner at my workplace to be both helpful and far more convenient that going to the Doctor's office) I am not sure it's a panacea.

You're taking issue with the idea that connecting consumers to the consumed product results in more efficient consumption.

Do you believe that healthcare spending is optimal today? Do you think under a more government-controlled regime that it would become more optimal?

As an aside (you didn't make this point), I know that there are people who are in favor of full government control of the health industry, because they think it will save money. The mechanism for this would be to eliminate the profits that accrue to people who invest in the industry. That of course is irrational because it assumes the government can efficiently allocate healthcare simply by wishing it so. Hundreds of millions of people making individual, self-interested decisions will always operate more efficiently in the aggregate, because (axiomatically) they have far more information.

I think you'd have to be insane to believe that health care spending in the US is allocated efficiently.

And as far as government control of the health industry, to a large extent, with Medicare and Medicaid, we're already there. Add in the 3rd party system, and you add to the inefficiencies. To make matters worse, you have enormous information asymmetries, with doctors knowing a lot more about things than patients, not to mention the lack of pricing disclosure.

I think what needs to happen is that people need to recognize a distinction between health care and health insurance. Health insurance should be reserved for catastrophic losses, things few families could afford to pay for, and I'm enough of a leftist to say that we should socialize that piece of health care. At this level, price isn't going to have much of an impact on demand.

The rest of health care, on the other hand, would probably be responsive to pricing signals. Here, for the most part, people should be on their own, other than the very poorest. I think at this level, pricing mechanisms would work very well in distributing care. Maybe everyone gets a free physical every year, to avoid the catastrophic stuff.

...every American a high-deductible insurance policy for catastrophic conditions and emergencies, and leave everything else untouched?

But more or less that sounds reasonable to me. I wouldn't leave everything else untouched, I'd just more or less keep government out of it. I wouldn't differentiate between medical procedures and prescription drugs.

but a big help; people do all too frequently make stupid decisions even when they know the price. That said, government and the plantiffs' bar are the two biggest causes of high costs and inefficient delivery. The 800 pound gorillas are Medicare/Medicaid and their State analogs and public employee health insurance, in many states the largest single pool. Between the government provided health care and the government paid healthcare for employees, you have the biggest pool in almost every state. In all of these systems, benefit levels and costs are set by political processes, not market processes.

In my former life, I did a lot of negotiating with unions and indirectly with plan administrators and HI companies. The unions were easier! They understood that money that went to HI couldn't go on paychecks. The bureaucrats in plan administration were acutely attuned to the wants and "needs" of lobbyists and legislators (who were acting for lobbyists) and you first had to fight them to do any cost containment. Then there's the game of how the UCR (usual, customary, and reasonable) costs get set, again the province of lobbyists. Add to that a lot of stupid rules by plan administrators who have no real incentive to control costs, e.g., my wife continued working after I retired, but by operation of plan rules, I became the automatic primary notwithstanding the fact that she was still contributing and I'll never contribute another dime. However, that rule allows costs to be shifted to the retiree plan which runs off its own funds whereas active employee HI comes from the operating budget and has to be appropriated every year - 'crat games. Also, since we travel a good bit, we can get some services where they are much, much cheaper, e.g., dental and vision, but rather than comparing the cost against the Alaska UCR, they compare against the local UCR, and it costs me more out of pocket to get the cheaper service; guess which I do now.

And then there's the added costs imposed by the plaintiffs' bar. A huge percentage of medical costs are either defensive medicine or unproductive "end of life" care provided to avoid litigation. Allowing twelve morons with drivers licenses to decide what practices were warranted and whether they were effectively provided is simple insanity, but it makes John Edwards and those of his ilk very rich.

In Vino Veritas

I've been looking for an excuse to make this point for a very long time.

The large, well-known private schools (and increasingly the state schools as well) have become some of the most successful investors you'll find anywhere in the world. And as their endowments swell with profits from venture capital and private equity limited partnerships, they have become some of the most powerful entities in America.

That's the reason they're undertaking capital projects like libraries, dorms, huge computer networks and football stadiums while every state and local government out there is pinching pennies. Yale has even started partnering up with the city of New Haven (a serious [excrement]-hole if ever there was one), to start replacing some off-campus infrastructure with Yale's endowment dollars.

And how did these universities get so rich? Not because of tuition hikes.

It's because their investments are tax-free.

And that tells you the one simple thing that will solve every economic problem this country has: CUT THE DAMNED CAPITAL-GAINS TAX TO ZERO, ALREADY!

...tuitions increase 8-10% per year, driven by what, the cost of ivy?

Tuitions have nothing to do with the cost of education. They have everything to do with what the market will bear.

It is worth it because people are willing to pay it.

Many of the elite schools have sufficient income off their endowments that they could make the tuition $0 if they wanted.

There is more stupidity than hydrogen in the universe, and it has a longer shelf life. - Frank Zappa

You're saying that as a matter of morality, we may neither permit any individual to go without healthcare, nor may we allow anyone to go without the very best care that is available.

And you're quite clear that this moral imperative applies to us as a society.

Are you then prepared to accept whatever it would cost to do this?

You use the emotionally-charged example of euthanasia, and illustrate your point by reference to a dystopic movie.

But if you take a step back and look at Britain and Canada, they have made precisely the choice you recommend. And they have found that costs must indeed be restrained. They do it by paying medical practitioners the very smallest possible amount of money; by not purchasing up-to-date equipment; by not making capital investments in new facilities; and by rationing expensive medical procedures.

The effect is similar to euthanasia in kind, if not in degree.

not everyone's.

No matter how expensive the treatments and medicines get, I will NEVER get to the point that I tell the doctor "Forget it, I would rather just die instead."

I can't tell you how many people tell me that they would rather die. I'm not joking. It shocks the hell out of me when they say it, but there are people who would rather die than pay for what they define as "extraordinary".

rather than face "end of life" treatments that are ultimately futile, prolonging a life of pain and even greater illness and saddling the estate with enormous bills. That's why everyone should have a living will that will keep the Docs from working over the family with the "he deserves every chance" line. It's the doctor equivalent of "innocent until proven broke."

In Vino Veritas

I don't know how to explain it, because shock at the sentiment usually takes over, but it seems to me that these people don't want any care because they would see that as "overly heroic". There are people out there that have such a negative view of their own life that they are willing to throw it away for some things that are curable.

While it is true that technology is expensive up front, I believe that in the long run technology will actually help reduce costs. That is, at least for that specific procedure.

What is conversely the "problem" (I don't see it as one) is that under the current system we are seeing new technology coming out all the time.

I wish I could flesh out this notion better, but I can't seem to find what I'm looking for to support or reject this notion.