So I leave to go on vacation and we have a long debate about health care! Here's my two cents:
I think we're all in agreement that we want to take care of people who are sick. All of us are compassionate enough human beings that we want see people taken care of. The question is how best to do it. I think Tom's point is we need to focus on Health Care (and how to make sure the best health care is given to the most number of people) versus Health Insurance (which is one tool or one method that can be used to accomplish the above... but not necessarily the only way or even the best way). I tend to agree on that.
The waiting room experience is a symptom of how there are definitely opportunities to improve on the system. It may be the doctor who's not scheduling properly to maximize a patient's time. But a deeper cause may be the doctor needs to because his rates are dictated by the insurance companies. So universal insurance is probably not the best answer here either.
So what's the best way to get the best healthcare to the most number of people? Many of us have bought into economic theory (read the book Naked Economics), which says that if allow market forces to drive it, the most optimal way to use your resources will naturally happen. I'm in the camp that our health care system could use a little more optimizing in this fashion.
For those of you that have read Naked Economics or other books similar to it, they propose solutions where you try to align people's motivations and therefore get the most out of a scarce resource. I'd be interested to see what ideas we can come up with that would improve this system...
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26 comments:
Dale - well said. What I loved about Naked Economics was how it looked at society without a political agenda, slant or biased emotion. It basically said how do you get the best result out of each situation (as didctated by the people and their actions), and to your point, it's aligning goals and motivations. As I said all along a system that would or could encourage misuse or abuse will always end up being more expensive for less quality product.
I think that argument is "good enough for government work" - as the oh so appropriate saying goes.
I really enjoyed Naked Economics, but have some additonal thoughts. Economics is the study of motivation to determine why things are the way they are and what may happen when certain changes are made to the existing system.
Free markets do not exist. If we had truly free markets then brides would not be illegal and I could get my drug approved faster than you because I am willing to pay more. Also, Patents would not exist because I could make more profit off of your product if I can market it better than you.
Naked Economics said it is the role of Governments to set the boundaries in which free markets can operate efficiently (see not kill everyone). Bad governments have too much regulation and paperwork to limit the markets consolidating power. Good ones allow free markets to work within constraints that are good for everyone (or most). In the US we choose to have Patents which restrict free markets for a bit but overall create more incentive to produce new products because you are protected long enough to hopefully recover your R&D costs and more. It is not a truly free market but the economics of the rules encourage the semi free market to want to develop new products which helps everyone.
This brings us to the Super Bowl. Free or semi regulated markets are not black and white, they have trade offs and we can determine which of these trade offs we would rather live in.
It is known that the Super Bowl is not fun to attend because it is mostly corporate execs who attend because they can afford the tickets. They may not care about either team or football but just want to be at the event. This is close to a free market (ebay bidding being the closest).
On the opposite end Packers season tickets are a semi regulated market. There is a limited supply at a controlled price and a first come first serve basis. In this market Dale is locked out until 2090. But those who do have tickets have been in the area the longest and have the tickets passed down through the family. It makes attending games a lot of fun because it is a multi generational commiment to the team and aspect of their life.
Which market do we want to live in and can we handle the tradeoffs?
Should Dale be able to out bid someone for their season tickets next year? If so would Pakcers games end up like the super bowl?
Would Sox / Yankees games be fun if it was all corporate execs (and Ben Affleck) who could pay enough free market money to go to the games?
On the other end is it fair for Dale to have to wait 90 years to get tickets? But these ticket controls would still allow the family of 4 who have tickets to afford going to the games and raise their kids as fans.
Once you set the constraint the market will adjust to optimize within the new contraints.
In a totally free market, over time you'd lose a lot of fans if their parents could not afford super bowl prices to take them to games to understand what it feels like to be at a Sox / Yankees game.
What is the world we want to live in and what are the rules and constraints on the system that would get us there?
This brings me to my comments on Health Care and my latest blog to be created tonight.
here's my answer: Darwinism! Survival of the fittest.
My thoughts on Health Care. Even if you don't agree, seeing Sicko is a prerequisite.
1.Today we have the ability to give the best HEALTH CARE ever seen on earth.
Thanks to great educations and medical advances etc we know way more than ever before and have elminated and treated a lot of things that killed us before.
2.Access to that great HEALTH CARE can be limited by HEALTH INSURANCE.
Those who do not have jobs that offer affordable Health Care are obvious examples of limited access.
But also the need for profits of Health Care Companies limits access to Health Care for those of us which have Health Insurance.
I remember talking to Dale about his Lasik surgery. It seemed to really improve his quality of life (and softball status). I even remember wondering if he deserved that quality enough that some of his surgery should have been covered by insurance.
It'd be great to choose to opt into or out of Health Insurance plans that did offer coverage for Lasik if everyone in that plan felt the quality of life improvement was worth the extra shared costs among policy holders.
Luckily (see unluckily) we live in a country where we don't get to make those decisions. Neither do your doctors who have access to the greatest Healt Care ever seen.
When Nixon allowed HMOs etc he put all of those decisions into the hands of Insurance Comapnies. But their "free market" economics do not optimize our care, the optimize profits while providing the minimum care they can get away with.
(Doesn't this sound similar to Corporations offering us minimal pay before we quit for maximum work? One of the main reasons we are like minded in supporting Entreprenuers?)
Here are some of the decisions made for us that we don't get a vote in (unlike the Super Bowl debate).
1.You only need 1 eye. If you get macular degeneration and are going blind, your Insurance company may only pay for the vision saving surgery for 1 eye. Because 1 eye is all you need to see and a second eye is a luxury and therefore elective surgery. You could pay out of pocket for a second eye if you wanted it more than the next few years of rent, but not everyone can afford that decision.
And should we really lump who should be able to afford 2 eyes with who should be able to afford superbowl tickets?
2.You don't have the right to the cancer drug shown to extend your life. We are all lucky that we do not have cancer. If you get cancer I bet you would want your doctor to precribe the most current, advanced treatment available. But the Insurance company can choose to deny coverage of that drug because they can claim that the benefits "are not fully proven yet".
Luckily we get access to the best shampoo technology even before some claims support/clinical tests are done or repeated enough times to validate.
Do we want to be in a regulated system where the optimization models include profts as a factor w/ care?
If America was 100% self insured and we eliminated all the profits, Health Insurance costs would be significantly lower. And probably more than enough to pay for the uninsured AND determine what additonal care we consider important to life quality. Certainly 2 eyes and cancer drugs and maybe even lasik surgery.
Self Insurance would have to involve the government but it does not mean that it is government run which can be inefficient.
The government is inefficient because the best needs of citizens is one factor in a model that includes "how do I get re-elected".
Survival of the fittest is a choice we could make if that is the world we want to be in. We'd save a lot of money on hospitals not needing to help deliver healthy babies.
We'd also improve traffic by not being held up by ambulances for heart attacks / strokes etc.
Back to waiting at the Doctors.
It is supply / demand. We have so many doctors with so much time to give to each patient.
We can choose to limit the number of people they see a day, which would reduce our waits. But that will make it harder to get in and see the docrotr when we or our feverish babies have the flu. It may also motivate doctors to provide less quality care to help catch up their schedule.
I don't have a problem waiting if it means I get quality care and am available to sneak inbetween people if I have an emergency and need to see him TODAY.
We are also decreasing the supply of doctors. As we have more lawsuits, we end up with more lawyers and fewer doctors coming out of school. What percent of surgeons come from outside the US now?
As for waiting being an issue it is going to be an issue ongoing at grocery stores or anywhere we interact with people (since they are more expensive). Grocery stores used to have all the lanes open but now I have walked out at 10pm when only 1 lane is open. Best Buy is bad too, as soon as you choose to spend a lot of money there it takes a lot of time and effort to actually give them the money before they let you go.
So waiting is going to be an issue when the value of profits (limiting employees) comes before the value of your time (infinte to a company).
Of all those places it is an issue I see the Doctor being lower on the list.
See my blog coming soon on profit companies.
That was too much to read, but NET we all agree that we want everyone to have the best health care money can buy, and we all want to share the costs (INSURANCE) and no one wants to wait 1-2 hours to see a doctor. I have never said we should prevent people from having HEALTH INSURANCE, however I don't think a whole country can ever agree on how much of our HEALTH INSURANCE pie people should get if they can't afford to buy it on their own. What do we do if someone decides to NOT buy insurance but then needs expensive treatment? Do we charge eneryone else MORE? You'll see gov't will never agree on where to draw the line between the "you get something for free (free pie)" and the "you pay more than your costs so other get it free (over priced pie)" and that is the age old question of politics and big government (democrats) versus small government (republicans). Obviously your opions on this will be based on your experience, how you were raised, and your station in life, your confidence in supporting yourself versus relying on others etc etc. I think everyone has a different opinion and it's just important to be tolerant of everyone's opinions. That's what intelectual debate is all about.
no, i don't agree with wanting "everyone to get the best health care money can buy." i want everyone to have the best health care available, regardless of money. quite a difference.
:) That's my point... someone has to pay for it, it's not free. That's what my whole comment was about, drawing the line of who has to pay more is where policy changes get stuck because no one here will agree, let alone the gov't.
And lastly for me on this one - while I don't think the country as a whole will agree, I personall don't mind paying more so others who can't afford health insurance can get it (that's what part of sharing the cost is all about) I have just been saying since my 1st post on this that in that case there needs to be checks in the system to avoid abuse or waste in such a system that is pulled out of market forces.
Tom, one thing interesting point that the book I'm currently reading poses that may help us all out... The book is called "More sex is safer sex" (don't judge me on the title, it's a book on economics). The point the author makes is we actually benefit by having more people in the world. He says by not having a 3rd child, he might be depriving a future person from the love of his life. Taking that further, by paying a little more so some people we never met can be saved, we never know when this person might turn out to be the genius scientist who finds the cure for cancer. So, we can have our cake and eat it too... pay a little more to help the world, and it's also in our best interest because the person we save may turn around and save us in the future.
Dale - your sucking me back into this blog - interesting points, but more interesting book title. I thought the whole medica industry was a self fulfilling industry (like lawyers) where the more we prolong people's lives and the more children they can have, and the more crowded the planet becomes, the more medical treatment will be needed. Also diseases have been shown to increase with population density, so I think exponentially the more medicine the more over-population, the more medicine needed. f course on an individual basis we all want to live longer and healthier! I'll hold out hope that the people we help become Red Sox pitchers or something!
I guess we all agree we want the best care for everyone and money should not be a factor in care.
Rachel's main point is everyone should be covered regardless of jobs that do or do not provide insurance or moeny available.
Right now that's about 20% of the US, so we would and it sounds like Tom is willing to pay an extra 20% in premiums for others to be covered.
My main point is the best way to save on insurance and improve care is to eliminate the profits in that industry. The only vehicle to do that is have it run independantly and have the government oversee it (not totally run it).
That would also reduce the cost enough to offset paying extra for those currently uncovered.
I know Clinton has a plan for this and Romney is claiming doing the same in Mass, so it will be interesting to see how their plans match with what we think is the right solution.
I'm not arguing a side but I want to raise the points that will come up in a proposal like that. If we decide to "elimate the profits" of an industry, how do we decide where to do that. Should we eliminate the profits in big oil? Everyone including the environment might benefit from that but how can we justify it? Not sure we can justify it in the medical industry, and if we do - I bet someone starts a private "pay as you go" medical care for those that want better care.
I am also concerned that if the government runs it the quality will suffer, and we probably can't afford that because many people since the HMO age aren't too pleased wiht their care or waiting 1-2 hours like some sort of bread lines.
As I said before I think there is risk in making it a gov't thing because we all know the DMV and other places independant of market forces don't compete with service.
I think one way to do this is you'd have to keep some competition and have everyone have money at stake, even those who couldn't afford their own coverage could pay a little (it would still be meaningful money at risk for them so they would demand good care) and then market forces work for the whole system.
Do we have bad health care?
Our company made that decision by not having insurance companies and by being self insured. The only choice we get is who we want to administer our plan.
whatevs, yo. i prefer no gov't. but, if we must have government, i would prefer it to be a socialism.
i believe that health care should be entirely free for every human. there's no reason why antibiotics should be such a financial burden. nor should immunizations. why did my hep b series cost me over $200? what?!?! but, i am insured! being healthy is a human right... and this should all be regardless of productivity.
I found this whole discussion fascinating. I have been swayed both ways by both sides of this debate. I would love for everyone to have health insurance, but not sure if that is 100% feasible. A good plan would sway me though.
Thanks to everyone for being so well written and sharing so many thoughts and their knowledge on this topic.
Rachel, to add to your comment about your $200 hep B shot...
First, you didn't hafta pay for most (all?) of it because you're insured... but someone paid to make the vaccine, the costs of researching and developing the vaccine, and getting it administered. Maybe it's the insurance company that paid for it, but they got the money from somewhere too. One can also argue that the vaccine may not need to cost $200, but the supplier is charging it because that's what they can. Ideally the price of that vaccine is as low as possible so the greatest number of people can get it. One way to get that is to allow market forces to make it happen (if you believe in economics).
tell me why these shots would have been free in canada. universal health care. this is an argument that we will continue to have because we have very fundamentally different beliefs. i find it all very humorous because i don't value the dollar... i can burn it, crumple it up, and throw it away. it is a piece of paper--nothing. dollars have value because humans give it to them.
my whole point from the very beginning: health care should not be dictated by this market that american society has created. all of these economics-based books that you and your colleagues are reading are fabulous for understanding the american market. but, is this how humans should live? you decide. and then maybe pick up a book like "into the wild" or "live in a better way" to understand that life has very little to do with what we have made it into be.
but, as i said, we are very fundamentally different people.
We all need to remember, nothing is free, the canadian gov't (though covering health insurance costs) doesn't have any money, it comes from somewhere and that's the people.
As for holding the canadian system as a standard, as I warned, it sounds like the quality has suffered vs. the US.
Read ahead to hear how President and CEO of University Health Network, Toronto, said that Michael Moore's film Sicko "exaggerated the performance of the Canadian health system."
Here's some wikipedia FOOD OFR THOUGHT:
"The health care system in Canada is largely government-funded, with most services provided by private enterprises. Waiting times for major non-emergency surgery have been longer in Canada, and Canada has been slightly slower to adopt expensive technology and medicines. Consequently, Canada has had higher mortality rates for some conditions, such as heart attacks.[8] Canadian health administrators say that these problems are improving. [9]
One of the major complaints about the Canadian health care system is waiting times, whether for a specialist, major elective surgery, such as hip replacement, or specialized treatments, such as radiation for breast cancer. Studies by the Commonwealth Fund found that 24% of Canadians waited 4 hours or more in the emergency room, vs. 12% in the U.S.; 57% waited 4 weeks or more to see a specialist, vs. 23% in the U.S.[39]
In a 2003 survey of hospital administrators conducted in Canada, the U.S., and three other countries, 21% of Canadian hospital administrators, but less than 1% of American administrators, said that it would take over three weeks to do a biopsy for possible breast cancer on a 50-year-old woman; 50% of Canadian administrators versus none of their American counterparts said that it would take over six months for a 65-year-old to undergo a routine hip replacement surgery.
Canadians concede that waiting time is a problem that stems from the country's lower costs and commitment to universal coverage. In a letter to the Wall Street Journal, Robert S. Bell, M.D., President and CEO of University Health Network, Toronto, said that Michael Moore's film Sicko "exaggerated the performance of the Canadian health system — there is no doubt that too many patients still stay in our emergency departments waiting for admission to scarce hospital beds." However, "Canadians spend about 55% of what Americans spend on health care and have longer life expectancy, and lower infant mortality rates. Many Americans have access to quality health care. All Canadians have access to similar care at a considerably lower cost." Canadians pay 9% of GDP to insure 100% of citizens, compared with 14% of GDP to insure 85% of Americans. The Kaiser Family Foundation found that 63% of Americans were worried about not being able to afford health-care services. There is "no question" that the lower cost has come at the cost of "restriction of supply with sub-optimal access to services," said Bell. A new approach is targeting waiting times, which are reported on public web sites[42][43][44]"
So of course there are always trade-offs in quality! That's why I think there will always be a demand for private care, even if the gov't would pay for your surgery, if you can't wait months for something improtant, you'd be willing to pay to have it done sooner.
Also - a $200 shot is NOT free in canada - you just wouldn't have had to pay for it (directly). The shot still cost someone $200 even if it''s distributed among everyone in the country and the government makes you think it was "free". I think taking profits out of the medical industry will significantly reduce the research into new and better care or drugs. That's what economics studies, not just the US markets, but how programs and policies change people's habits and motivations globally. Fortunately the US is a good model of a "free market" and I think there are certainly advantages and disadvantages to this.
This will be my last wiki reference, I'd encourage you all to do your own research, but it is interesting to point out that the US gov't pays more per person for healthcare than canada:
"Health care is one of the most expensive items of both nations’ budgets. The U.S. government spends more per capita on health care than the government does in Canada. In 2004, the government of Canada spent $2,120 (in US dollars) per person on health care, while the United States government spent $2,724.[5]
However, U.S. government spending covers less than half of all health care costs. Private spending for health care is also far greater in the U.S. than in Canada. In Canada, an average of $917 was spent annually by individuals or private insurance companies for health care, including dental, eye care, and drugs. In the U.S., this number is $3,372.[5] In 2004, health care consumed 15.4% of U.S. annual GDP. In Canada, only 9.8% of GDP was spent on health care.[5]
"
So I guess if you are willing to accept less medical treatment or lower quality of coverage and cheaper EVERYTHING, then we can already pay for everyone's health care costs since the US gov't already spends more per person than Canada.
BUT if you "want everyone to have the best health care available, regardless of money" then not sure either the US or Canada look like they are doing that.
Quick search of articles to read for fun:
"Michael Moore’s new documentary is an uninformed caricature."
http://www.city-journal.org/html/rev2007-06-29dg.html
The Ugly Truth About Canadian Health Care
http://www.city-journal.org/html/17_3_canadian_healthcare.html
Canadian Health Care In Crisis
http://www.cbsnews.com/stories/2005/03/20/health/main681801.shtml?cmp=EM8705
I guess the NET of it there is no simple model, no free handouts and no free party that we are missing out on. All of the models are complex, require the citizens to pay for it in one way or another. I didn't realize how much money the Canadian gov't took from the working class:
"The average Canadian family pays about 48 percent of its income in taxes each year, partly to fund the health care system. Rates vary from province to province, but Ontario, the most populous, spends roughly 40 percent of every tax dollar on health care, according to the Canadian Taxpayers Federation. "
So imagine if we raised are taxes across the board, people might have health care but would have to significantly cut back on their living expenses like food, rent, utilities etc. I'm not saying it's all dire-straights, but I am saying everything we decide with sweeping statements of this should be free comes with consequences because there really is no free lunch.
I'm not saying Canada is the be all of Health Care.
But they do spend less %GDP than us on Health Care and thier life expectancy is higher than ours.
http://en.wikipedia.org/wiki/
Image:Life_expectancy_world_map2.png
(wikipedia "life expectancy")
I think profits should be removed from Health Insurance. We can still have free markets to encourage new medicines and have patents to protect them for a while but should there be profits of the drugs and profits made on who pays for them (insurance vs you)?
Also, 50% of bankruptcies are due to medical payments. How can you plan for long tern retirement if you don't know if you will get cancer or not? And if you'll have to choose keeping your house or extending your life by a few years of drugs?
I'm not sure if Canada's life expectancy is related to their health care, especially when they have higher mortality rates for heart disease etc vs. the US. I think it's more related to the fact that Americans are fat and lazy, but that's another story all together (plus our violent deaths are really high - see Bowling for Columbine).
I think health insurance should be available to everyone to buy, unrelated to your job. Not sure the US gov't should just cover the cost for everyone's insurance through taxes because I deffinately don't think that will be an effecient process for funneling the money. Too much gov't corruption IMHO, though the line-item veto seems to be too powerful and avoids the checks and balances of the 3 branch system.
I think if everyone felt health insurance was as important as we do, then everyone would make it a priority in their lives to save something for health insurance. I think you could use some of the existing US tax dollars spent on heath care / insurance to off set some of the cost based on people's ability to pay, but I don't think it should be based on people's unwillingness to make their health insurance savings a priority. That goes back to the abuse and waste points I made earlier.
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