Medicare Part E
Noted Expert Michael Moore on the Future of Healthcare
By blackhedd Posted in Economy | Health care | Health insurance | Hillary Clinton | Michael Moore | Obama — Comments (30) / Email this page » / Leave a comment »
Both Democratic Presidential candidates have been attacked from the left, regarding their proposals for reforming healthcare in this country. The fire comes from the (substantial) person of Michael Moore, who by virtue of having made a tendentious movie on the subject, is now considered by many to be an important expert.
Not many people actually saw Moore's movie (it only grossed $24 million), but here's a hint for you: if you honestly believe that Cuba has the best healthcare in the world, you'll probably agree with Moore. (Believing the UN's surveys of healthcare around the world doesn't count, because they take the Cuban regime's statistics at face value.)
Moore wants you to know that both Clinton and Obama's health care proposals would be good for the hated health insurance industry. (Heaven forfend!) He intends to withhold his (undoubtedly valuable) endorsement of a Democratic contender until one or both of them change their policy prescriptions to suit him better.
So what might a healthcare proposal that hard-core Lefties could love actually look like? Thanks to Rep. John Conyers of Michigan, we don't need to guess.
Read on...
Here's a link to the text of H.R. 676, which Conyers has introduced in each of the three most recent Congresses. (The long list of co-sponsors have included Ways and Means Chairman Charlie Rangel, a Clinton supporter from her pre-Senate days.)
The basic idea behind this legislation is to extend the current Medicare system to cover every individual in the United States.
I'm going to forgo a detailed examination of the text of H.R. 676 because it obviously won't be taken up seriously until there's a Democrat sitting in the Oval Office, and it'll undergo a lot of changes at that point. Instead, I'll discuss how this proposal and the Clinton/Obama proposals intersect with reality.
People like Michael Moore hate the fact that there are people out there who make a profit. (Moore hasn't convincingly explained why he chooses to make profits from his movies, and to invest those profits in other profit-making businesses.) His canard is that healthcare costs so much in the United States because everyone, from the filthy insurance companies to the murderous pharmaceutical providers to the inhumane owners of large hospital chains, is out to make a buck.
You long to ask, if no one makes a profit, then what about all the people whose jobs are created out of those profits? As near as I can figure, it's ok if the government makes a profit and spends it on a large health-administration bureaucracy but not ok it the private sector does it. I guess we'll just have to keep fighting this battle as long as every boy and girl who goes to government schools and a politically-correct university learns economics from a fundamentally Marxist perspective.
Enacting a "Medicare Part E" and covering every American will, on the surface at least, do away with the large and heavily-regulated health-insurance industry. But this is an industry that showed a strong and capable self-preservation instinct during the HillaryCare episode in 1993.
This year, the health insurance companies are gearing up for the fight early. As Moore points out, they're among the largest donors to the campaigns of both Clinton and Obama. (They don't give so much to Republicans, apparently because they don't expect one of us to win.)
And so it makes a lot of sense that both Clinton and Obama would respond by proposing to force more Americans to buy the insurance industry's products. (Universally in Clinton's case; for every child in Obama's case.)
But as far as I can tell, whether we get forced purchases of health insurance or a Medicare Part E, there would be no difference in the overall level of spending.
Why? Because from what I can see, the health insurance industry doesn't really do insurance in the first place anymore. Rather than underwriting risk and spreading it across large pools, their primary activity is now all about managing health expenses. And a huge part of that activity is navigating around the dense thicket of federal, state and local regulations, not the least of which relate to Medicare's byzantine cost-control procedures. The private health-insurance industry creates economic value primarily by dealing with the inefficiencies created by the Government.
How many times have you heard a doctor complain that her job has become an endless shuffle of paperwork? The future is much more of that, in either a mandated-coverage world or a single-payer world. There's no practical difference between the two approaches.
Ultimately, what I think Michael Moore and his disciples really want is to make healthcare much less of a pain in the tail to buy. I suspect that goals like cost-cutting and equal outcomes (which are the overriding objectives of the National Health Services in Britain and Canada) are secondary to Moore and other Americans. Ordinary people would be thrilled if you could just somehow know that healthcare would always be available and always reasonably affordable.
And if your view is that the whole country is just one great big underwriting pool, you're not really talking about insurance coverage at all (in the sense of underwriting and managing risk in insured pools which have different characteristics from other insured pools). You're just talking about having someone pick up all of the bills.
As free-market advocates, what should we be proposing as an answer to Conyers, Moore, Clinton, and Obama?
Well, we need to start by observing that our current bloated and needlessly expensive system is not a free-market system by any stretch of the imagination. It's a socialist bureaucracy worthy of the Soviet Union or any other regime that ever bore the name.
Why? Because our current healthcare system eliminates the most elementary feature of free-markets: the matching of supply with demand through signals carried by prices.
No one directly pays for their own healthcare anymore. You either fill out a form for your employer-provided insurance and hand over a twenty-dollar bill, or you go to the emergency room for minor ailments, or you fight with a combination of Medicare and your co-payment insurance. You have no clear idea what is being paid or by whom, in return for the service that you consume. So you have neither the ability nor even the opportunity to exert the cost-controlling magic of free-market competition.
If you could directly pay for non-emergency healthcare when and where it's provided, you would make informed and careful economic decisions about what and how much to consume, just as you do with everything else you buy. And the healthcare industry would rapidly transform itself to meet the free-market incentives that would instantaneously appear.
I promise you, people, this would work like magic. This isn't rocket science. Just like welfare reform, it's a case of all the politicians being simply unwilling to take a very simple step that would immediately make everything better.
But what about the argument that by not providing either universal coverage or universal healthcare, our nation suffers because the people who don't provide for themselves will create a social burden anyway?
That's easy. If you really want to, you could provide a national plan to insure against catastrophic health issues. (What used to be called "major-medical insurance.") And you could do it either in the government if you wanted to, or force everyone to buy it from private companies. (Neither approach would be as efficient and cost-effective as a full free-market solution, but I'm trying to compromise here.)
Have either single-payer or mandated coverage to insure against expenses that are larger than some number per person per year. Let's say $10,000 just for fun. And let everyone pay out of pocket or buy private insurance for all other health expenses, in their sole discretion. It's critical to also end the tax-privilege enjoyed by employer-provided insurance. Either eliminate that from the tax code, or else make health-insurance purchases by individuals tax-free as well. I don't care which.
But don't mandate or provide first-dollar coverage. That is the single most destructive feature of our current healthcare system, because by definition it destroys pricing signals and cost-control discipline at the low end of the market. And who do we have to thank for it? Labor unions, of course.
There's even a role for the incumbent health-care industry in my plan. The insurance companies can go back to actually doing the underwriting and risk-spreading they're supposed to be doing in the first place.
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"If we want to take this party back, and I think we can someday, let’s get to work." – Barry Goldwater
Do you forsee Social Security, Medicare, and Medicaid ever going away?
“.....women and minorities hardest hit”
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
Overall an excellent policy recommendation, but be prepared to get anhilated from certain hardcore anti-mandate folks for the blasphemy of suggesting a mandate for high-deductible insurance. I once suggested that as an acceptable tradeoff for getting an otherwise free-market health care system. The unnamed person I suggested it to (who is probably one of the top 10 experts in the country on free-market health care) threw an absolute fit, saying he'd rather live under single payer than have a mandate. The conversation went downhill from there.
Real prices are the key to health care reform. Fortunately, there are a few entities out there already providing real prices, such as "minute clinic" type operations, "cash-only doctors," and overseas hospitals.
The one thing you need to keep in mind is that high-deductible insurance is great for insuring against unexpected expenses (heart attack, car accident) but not very useful for the chronicall ill. What we eventually need is to allow a "Property & Casualty" model for chronic illnesses , where upon diagnosis of a condition that requires treatment over a long period or even a lifetime (think diabetes, severe migraines, etc.) a person is given a lump sum (or an actuarially-determined payout schedule for the rest of their life) that will allow them, at today's prices, to manage/treat their illness with today's medical and pharmaceutical technology.
This is a very rough outline, but eventually the model we need to move towards. Chronic conditions consume the largest amount of health care dollars, and treating them the same as unexpected expenses is a mistake.
A couple of thoughts about this one. First, to a first approximation, EVERYONE eventually has a chronic illness of some sort. The number of people in their 60's and 70's who take no medication and have no diagnoses (leaving out those who choose not to seek care, of whom there are a few) is vanishingly small. There's no way to spread the risk over a pool to take advantage of infrequent incidence.
The second problem is that the future costs for chronic conditions are not fixed and not easily determined.
Take mild to moderate high blood pressure (hypertension). Hypertension used to be very cheap - it was "benign essential hypertension" and if you didn't have symptoms, you hardly needed anything. Then we realized that you died younger if you didn't control it, and then we started to realize how much we could achieve in reduced morbidity and longer life if we aggressively controlled it. The drugs started cheap - diuretics, mostly, and became staggeringly more expensive as we added categories. ACE inhibitors, then ARBs. Calcium channel blockers, first short- and then long-acting. Beta blockers, and then cardioselective beta blockers. The new categories really did help - side effects are markedly reduced and control is infinitely easier. People live longer and better, but there's a price.
Depending on the meds involved, hypertension now costs north of a thousand of dollars per year per patient just to keep the pressure controlled. Add in surveillance labs and physician visits, and you're solidly in four figures per patient for what twenty years ago was something we more or less ignored.
You can't lump-sum or predict the payout stream for a chronic condition over the next thirty years unless you can accurately predict the actual costs over the next thirty years, and you can't.
I just had to throw that out there.
It seems you can't really distinguish between "man-made"
and other. Have you read the book "The Tree of Man" by Patrick White? Permanence is inherently fleeting ... I guess for the inherent quality that it is fleeting.
This is borderline religion though, and it's probably best not to go there.
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Pre-tax H&W and retirement go back to WWII wage and price controls. The War Labor Board essentially mandated union contracts with no-strike provisions for War Production contracts. The pre-tax, employer paid benefit schemes were a way to get around government mandated wage controls. Yes, unions liked them and insisted on continuing them after the controls were lifted and unionized and non-union employers, especially public employers, alike adopted them wholesale after the War.
I blame employers for the total lack of price signals in many plans. Unions can be very reasonable when confronted with the simple choice of money in H%W or money on the pay check. Employers that wanted to were quite successful in getting co-pays, deductibles, stop-loss limit changes, ER disincentives, etc. as prices began to spiral in the '80s. It just takes conscientious plan administration and, sometimes, tough bargaining. Tough bargaining is inconcievable in Blue States.
What we are seeing now is an unholy alliance, a symbiosis even, between unions, notably SEIU, providers, unionized governments, and the Democrat Party. In the Blue States particularly, the providers are doing mutual recognition deals with the unions so that they can combine with the unions for greater political muscle in adopting more lucrative coverages from government sponsored plans which set the standard for all others in the market.
In Vino Veritas
One big step that could be easily taken right now is to end the annual limitations on Medical Savings Accounts. Under current law you must either spend their entirety or forfeit the balance to the government at the end of the year. Without that limitation a person could actually save up against either catastrophic or chronical illness events. How much saving-up can a person actually do in a single year? A person could actually plan some of his/her medical strategies, or could easily be in a position to self-insure in his/her later years. We could even make them inheritable ala IRAs.
One little change in the law to make MSAs open-ended would take a big bite out of the current medical financing situation.
Medical Savings accounts. WItha a medical spending account, you can contribute pre-tax and spend it on any medical expenditure. You can have a medical spending account with traditional healh insurance. With a Medical Savings account, you also contribute pre-tax, but keep anything left at the end of the year. The medical savings account is also associated with high deductable insurance policies.
1) Flexible Spending Account - where you have the use-it-or-lose-it provision. These come in medical and dependent care flavors.
2) Health Savings Accounts - where you can invest the principal and keep everything at the end of the year, but have to be on a qualified high deductible plan to contribute anything. These have only been around for a few years but seem to be getting popular.
3) Medical Savings Accounts - the precursor to the Health Savings Accounts. These have been around for 10 years now. I don't know much about these, but I don't think they got a whole lot of use... at least not as much as Congress wanted.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
Ask any senior who pays supplemental health insurance premiums to cover what Medicare does not, which is a great deal.
I used to take care of my mother's finances. Her Blue Cross premiums were about $250 per quarter in 1990. The year she passed away, in 2005, they had climbed to $550. Of course there was no prescription drug benefit under Medicare then, either. (Unlike many on RS, I consider GWB's Medicare Part D a critical requirement to modernize Medicare.)
An increasing number of providers balked at the cumbersome and ever more skimpy Medicare reimbursements and simply stopped accepting Medicare patients. Those that continue, especially those that treat patients who have Medicare only, make it up on volume, with the attendant depersonalization of care.
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medicine (aka waiting, rationing and death). I'm sure that's where they want to go, but politically, they can't start there.
I hinted at this in passing in my piece.
It's definitely true that in other countries, the goal is to equalize outcomes. You remember the Avastin story from England a few days ago, and in Canada it's strictly forbidden for doctors to take money from patients.
The key good that is being pursued in these foreign systems is to ensure that no one gets better health care than anyone else by virtue of having more money.
Since this is the true goal of socialized medicine in much of the world, they accept evils like rationing quite willingly.
I don't think that will happen in America. The number of people for whom true social equality is their wettest dream is actually very small. Pretty much the readership of DailyKos and the Democratic Underground, and anybody who thinks Dennis Kucinich is a fine example of a political leader. Most Americans think it's a perfectly fine idea for people who are smarter and work harder to get more of life's material benefits, up to a point.
So I don't think a full socialization of medicine will ever happen here. It will always be possible to access alternative therapies by paying for them yourself.
I think the thing that makes now a propitious time for a significant socialization is the welter of distortions that come with our third-party payer systems, combined with the employer tax-privilege.
It's a total pain in the neck to get insurance if you don't work for a big company or have pre-existing conditions, and healthcare is prohibitively expensive if you don't have insurance. Solve those problems, and most Americans probably won't care if trillionaires can get private rooms at the Mayo Clinic.
It's a measure of our political failure that everyone thinks that only socialization can solve this much more-constrained view of the problem. A free-market solution would solve it overnight.
To the people who point out the problems with Medicare: I don't think we should attempt to change Medicare. Leave it as it is. It's a total mess, and it will eventually need to be re-done. But let's transition the other half of the health industry to a direct-pay model, instead of trying to reform the whole system in one go.
After a decade or so, the free-market half of the system will have proved itself brilliantly, and it will be obvious how to destroy reform Medicare.
...having to use the same crappy government system as everyone else.
“.....women and minorities hardest hit”
semi-socialized system to drive for more socialism. A classic case has been the issue of pre-existing conditions, where liberals were loathe to compromise on common sense reforms in hopes of utilizing frustration with the lack of portability to be the catalyst for single payer.
The GOP revolution of 1994 and Newt Gingrich frustrated this strategy. Insurance is now, due to 1990's legislation, much more portable. But not perfectly so.
...but too much. As you point out, people need to be sensitive to economic costs. Anything that has zero cost is consumed indiscriminately.
Another idea that might help control overall medical costs would be to loosen up the doctors' grip on the system. Why it's necessary to visit a $500,000/yr specialist with 12 years of education beyond college to get a snotty-nosed kid a scrip for amoxicillin is beyond me. We need more seats in medical schools, more physicians' assistants, and more nurse practitioners, and more authority for them to dispense medicines in routine situations.
There is more stupidity than hydrogen in the universe, and it has a longer shelf life. - Frank Zappa
You have a good point Vlad. Some medical cost would decrease if there were a greater doctor supply. We don't have to decrease quality to get there. There are lots of people with perfect grades getting turned down by medical schools.
MDs, bless 'em, have a stranglehold on the "health" system in this country. Of the five areas of health support, nutrition, psychology, manipulation, medication and surgery, the pill-pushers and cutters have a lock on the third-payer systems. This means that the other three would-be competitors for health services must compete with market-based pricing against the subsidized medical/surgical professions.
Let's start calling the plan a Health Savings Account instead of an MSA, and open the consumer up to choosing chiropracty or accupuncture for his back problems, Vit C for his colds, and counseling for his depression. Lots more providers, often much less expensive. Give the consumer a greater choice. I suspect the competition would drive even the medicos and surgeons to greater efficiencies.
as well as responses. As a physician, allow me to add my $.02
Blackhedd, while I associate myself with most all of your remarks, I would take exception with one of your broader points, and one that seems to be somewhat missed in conservative circles in this debate (and let me say up front I am strongly opposed to "universal coverage" or mandates, so I'm not a troll!). Unfortunately, I don't believe it is realistic to view health care delivery from a "classic" supply-demand standpoint. To do so in effect says that people could simply decide that, if costs were to high, they would not get sick, or somehow inherently limited the cost of their illness. To be sure, there are many ways that people could limit the extent of chronic illness, such as weight reduction, regular exercise, not using tobacco/drugs or alcohol excessively, and paitents should be held accountable for these. But the 7 year old who develops diabetes is stuck with it.
In addition, unlike many industries, advancements in medicine tend to increase cost as opposed to reduce it, as Bartlett nicely described. A great example is implantable defibrillators, which cost on average somewhere around $25,000 a pop. These once had a narrow indication, but now just about anyone whose had a heart attack and reduced heart function (in laymen's terms) is eligible for one.
So where the real problem comes in is as follows: How does the government, which has far and away the greatest influence on what gets paid for, and how much deal with this scenario of a fixed, high demand and ever increasing costs? They decide to pay less for it. And it doesn't work. Look around the country, and you'll see increasing numbers of physicians who won't take Medicare, and those that do cap it at low numbers. And medicaid? Nobody wants to take medicaid. Worse still, this short sighted, penny-wise-pound-foolish rationale drives costs to where they are highest and most easily reimbursed - emergency rooms and intensive care units.
I believe the goal should be a system where patients have universal access, as well as acountability. We absoultely need more transparency in costs, and espcially for simple problems in healthy people, the "Wal Mart clinics" are a step in the right direction (my opinion on this is heavily caveated, but I'll spare ya). There has to be a fundemental agreement, however, that health care costs money, and attempts by the government to not pay for it only makes it more expensive in the long run. The best role for state and federal governments, if there is one, would be in the realm of catastrophic insurance as described above. I support ending the employer tax advantage as well as deregulation aimed at allowing insurers and patients to share risk across state lines. The private sector is far more adept at (and accountable for) responding to changes in this extremely dynamic industry. Safety net programs have a role, but they would be much better for everyone (patients, providers, taxpayers) if they focused on getting patients into private plans as opposed to acting as payers themselves.
I am certain that expanding Medicare or creating some other government-based payer program will increase costs while creating a lot people with insurance and no where to use it. Except, of course, you local emergency room.
You're making the broad point that healthcare is not amenable to economic efficiency for fundamental reasons arising from the nature of healthcare itself. You say that since people don't choose to get sick, therefore they can't discern ways of demanding less-costly care. This implicitly assumes that the way we provide healthcare now is the most efficient possible way. I'm much more willing than you are to see what would happen if your business were exposed to the discipline of free-market pricing signals. We could do it by discarding third-party payment schemes (apart from Medicare, which is not reformable, for political rather than economic reasons).
In regard to the often-heard point that healthcare improvements, unlike nearly every other technology known to man, increases rather than reduces costs:
The cold-hearted economic thinker in me asks the following question (and note that I wouldn't be uncouth enough to ask this question in the context of any individual's situation, but only across the economy as a whole):
What is the economic utility of continually increasing our spending on healthcare as a proportion of total output?
I can see that from both a self-interested and a humanitarian point of view, you as a healthcare provider would be in favor of this expansion, which is currently an unquestionable fact. Again I ask you not to let your knee jerk and say "it's immoral to choose not to provide healthcare on an economic basis." But if it should turn out that the increased utility from increased spending does not match the utility that such spending displaces, then we'll fall behind our global competitors.
A crude way to ask this question (and I have no clue how to answer it) would be: Compare the material benefit of providing a $25,000 implantable defibrillator in every cardiac patient as opposed to what we do now. Do you really get your money's worth? If you answer the question in terms of the patient's quality of life and the reduced incidence of life-threatening complications, etc, I would ask exactly how you're valuing those improvements.
To give a quite different example: What about the explosion in imaging technology? It's been argued that imaging is grossly overutilized compared to its true therapeutic and diagnostic value.
As a non-healthcare provider, I have to at least question whether the correct value is being applied to marginal improvements in health outcomes that are available from new and far more expensive technologies. We know that the utility curve for luxury consumer goods like Tiffany diamond bracelets and private-jet travel is S-shaped. But should it be in healthcare as well?
This is not a neutral choice. As a physician, you know as well as anyone that material prosperity is one of the most powerful factors in long-term good health.
The problem with denying a role for the free market in making the relevant value determinations, as you have done, is that you're now working with a minuscule proportion of the available information. And you're left asking a handful of learned but not-disinterested experts to make the decision for 300 million people.
blackhedd:
It's critical to also end the tax-privilege enjoyed by employer-provided insurance. Either eliminate that from the tax code, or else make health-insurance purchases by individuals tax-free as well. I don't care which.
You really should care. Right now, the vast majority of people that have insurance are on employer sponsored programs. [Wish I could find that statistic again] If you end the tax advantage of compensating employees with health care, you may very well force many companies (mostly small businesses) to decide that health care is too expensive. I know this to be true from personal experience (I work in insurance sales). This would push a large number of individuals into the uninsured column. I would certainly favor extending the tax advantages to the individual. That way, those that do not get coverage at work will be able to find a way to make insurance premiums more affordable.
One alternative that I know of is the Section 125 (or Cafeteria Plan). Many businesses, especially small businesses, are exceedingly responsive to switching to Section 125 Plans where they employer is simply a conduit for payment. This method does still give tax advantages, only to the employee this time. The employee is allowed to pay for the benefits(health, accident, dental, disability, group term life, critical illness, vision, and possibly others) on a pre-tax basis. For the individual, this is a less favorable method, but it seems to be a good compromise considering the alternative is to have no tax advantages.
A second alternative, that has been discussed on RedState before, is the expansion of the Health Savings Account(HSA) program. President Bush has proposed this the last two years. Under his proposal, families would be allowed to pay their health insurance premiums through their HSA. [For those who don't know, an HSA is an account that is coupled with a qualified high deductible insurace plan. The participant is allowed to contribute up to a maximum amount (in 2008 it is $2,900 for individuals and $5,800 for families) into a tax deferred account, similar to a Roth IRA. The money contributed for the account can be used to pay for qualifying expenses. If used to pay for qualifying expenses, the money becomes tax free.
Either, or both, of these would be far favorable to ending the tax advantage given to employers.
Fighting for conservatism one day at a time.
I agree with you that the current system is horrendously, and in fact dangerously, econimcally ineffecient. Free market principles, applied at the proper target, would have a tremendous positive effect. But I feel it is important to realize the differences between a consumer chosing between whether or not they are willing to pay for a Mercedes over a Chevy for the extra value, compared to making similar decisions in obtaining healthcare, and what effect that what have on the society as a whole.
If the sole aim is to reduce spending, especially by the government, I would spot you that making people pay for it on their own would do that; initially. People would simply access the health care system less. A cheaper route, albeit less healthy nation. It seems as though you suggest essentially a fee-for-service arrangement for everything expect emergency care. This would invariable skew the system to those with higher incomes / ability to pay. My own opinions aside, while that may be an alternative, and less costly to the nation as a whole, I'm not sure that fixes the problem. And what this would eventually do is shift people to emergency rooms, which is already what happens when people who can't afford or choose not to have health insurance get sick (trust me I see this everyday).
Also, and believe me I'm a free market kinda guy, just how is the average consumer supposed to make informed choices? It is EXTREMELY difficult to define quality in healthcare, even for those of us in the field, let alone the non-medical consumer. A simple example - the doctor you go to has less diabetics who are under control than the one down the street - does that mean he is worse at treating diabetes? What if he takes on higher risk patients? What if his patients are less compliant or cannot afford the medication, so don't buy it. But he takes them anyway, and does almost as good. To whom would you go?
As to your remark about the quality versus quantity of life debate, it's one of the oldest ones out there, and believe me it is one we all struggle with on a daily basis. But I believe your method would simply substitute cost to the patient as the rationing factor - is that any better than the Britian breast cancer case (where the issue is cost to the government)? I agree we spend way too much on healthcare at the end of life for increasingly marginal returns, and that is an issue we as a society need to continue to address.
I agree that imaging is over utilized. But I am not sure that the corrolary point is true that if patients had a greater finacial stake in the cost of it that it would necessarily decrease that overutilization, and further that somehow that it would not adversely affect outcomes. Probably those least able to afford it would be inclined to get less, and may have worse outcomes, and thereby rack up costs in catastrophic coverage.
Again, I do not deny the power of the free market and think a lot more of it needs to be injected into healthcare. If your goal is simply to cut costs, espcially to the taxpayer, making patients pay more out of pocket will do that. I just do know that it will lead to a better health care delivery system.
that isn't being addressed is the cost of advanced practices administered purely for defensive purposes. Our system of allowing 12 morons with drivers' licenses to decide what a provider "should" have done and what an insurer "should" have covered causes all sorts of tests, imaging, extraordinary care for chronic or end-of-life conditions, etc. The lawyers certainly don't tolerate the heathen masses deciding what they "should" have done. We desperately need both fundamental tort reform in medical treatment cases and a more competent way of deciding negligence and liability than the current lay jury trial system; a special masters system or something of the like so that provider practices can be assessed with some competence rather than simple emotion.
I can tell you from experience that the big insurers aren't much interested in cost containment; they like expensive medical care so long as someone is paying the premium. Plan administrators and labor negotiators in collective bargaining situations can take meaningful steps to contain costs. The last time I was involved in negotiating plan structure with a union, it was impossible for any member of the union's bargaining team to buy a meal or a drink; the lobbyists were hanging around the hotel where we were meeting like vultures. Thankfully, the union's officers weren't so susceptible to the lobbyists entreaties and understood the monetary equation: more on H&W = less on paychecks. I don't know that individual consumers can or will be able to make the choices or that the insurers will provide the sort of product that is really needed. I can easily visualize the sorts of evocative appeals that Aetna and Blue Cross will use to try to sell their "best" products. So, I side with the Docs on this insofar as I don't believe that medical care really is or can be truly a free market situation. I don't believe that society will tolerate ability to pay being the dediding factor in whether or not Grandpa gets that expensive cancer treatment at age 75 regardless of the odds of success or the quality of life Grandpa might have as he endures the "treatment." Right now, if Grandpa doesn't get it, somebody will sue, probably successfully. Government having the final say gives the Providers and Insurers an out. Government being the "insurer" is the ultimate out for both. It then is easy for government to say it won't pay for the extraordinary treatment and won't allow it to be purchased privately. Then, if the family has the money, Grandpa goes abroad or Grandpa is just made as comfortable as possible as his days end and it's nobody's "fault."
In Vino Veritas
blackhedd, I salute you for jumping into this topic. I'd love to see a section of RS just for this discussion. It may be the most important topic of this election season and the right is really ignoring it.
Two comments. Free markets economics don't apply to monopolies. The current health care system is full of monopolies and oligopies. I live in an urban / suburban area with a very large population. Recently, my doctor recommended a very expensive test. Having a high deductible health insurance policy, I've become more sensitive to the costs, so I asked questions. As it turns out, there is only one medical group in our area that provides that test -- in a population of almost one million. Also, this is the only provider that is in-network. If I wanted to go out of area to find another provider, a smaller portion of the expense would count toward my deductible. The medical system of today in the USA often does not provide choice, at least not without serious consequence.
Secondly, the laws of supply and demand only work if demand is elastic. Demand for health care is very inelastic.
We need to work on these areas if we expect a free market system to function.
Will turn into a gold plated pay-for-everything plan in short order. The $10,000 turns to $1,000, then $100, then we are paying $5 copays for drugs. HSAs are the best solution, but they are too little, too late. We needed them 30 or 40 years ago. I am very pessimistic about health care. I think we end up with a completely socialized system eventually... we are already more than half way there today.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
...is going to be one of the definitive struggles of our time. Once it's in, folks, it's there for good. There's no getting rid of it. This is one of the specific issues John Shadegg cited in his decision to "un-retire".
For all his faults, John McCain at least does have a solid health care proposal that embraces free market principles and empowers the doctors and patients, not insurance companies or the government.
“.....women and minorities hardest hit”