Matt says Britain can spend so little on health care because its system really is socialized:
Be that as it may, I think Hanson's observation that "humans long ago evolved a tendency to use medicine to 'show that we care,' rather than just to get healthy" partially explains why things like the UK's National Health Service generate so much bang for the buck. In effect, a highly centralized state run health care system is able to put a cap on how much demonstrative caring can be done through the health care system. Nobody's going to say to his or her spouse, "well, sure we could afford the procedure, but it doesn't really stand up to cost-benefit analysis compared to spending the money on organic produce for the kids" but if bureaucrats stand in your way well, then, that's hardly your fault.
That doesn't actually strike me as a very good model of how American government services work. It is, to be sure, how they used to work; American public goods in the 1950's look a lot like British ones, except nicer, because we were richer. People largely accepted what they got at the pleasure of the government.
But after the legal revolution of the 1970's, American public services look, well, like American ones: unable to deny anything to anyone. What would actually happen in the case Matt describes is that the patient would form an activist group, sue, get the treatment, and use the government settlement to buy the kids organic fruit and a trip to Disneyland.
And, all we have to do is to look north where Canadians denied treatment (aka, put on waiting lists) have sued their governments, and won, on 'human rights' grounds.
Um, Patrick, Canadian care still costs about half what American care costs. So what are the harms you're envisioning here? Apparently, even with whatever lawsuits you're referring to, their system still achieves the same kind of enormous cost savings Yglesias is citing in the UK. Megan is trying to claim that the savings wouldn't materialize because Americans are litigious; if Canada is your example, then the savings still would.
For curiosity, how do things work in the US armed forces? The medical system closely resembles the one used in the UK, and presumably treatments are denied under certain circumstances. Do people sue, as Megan says they will? Do they contact their representatives in Congress? Also, I've been told that the level of medical care in the US armed forces system is excellent, and not just for battlefield wounds. Is it? Does anybody know anything about this?
I'm the product of military healthcare (from birth in a military hospital until retirement from active duty at age 43) and I have to say, I thought it was excellent. I was never denied care for anything - though I never had to spend in a night any hospital (well, since the aforementioned birth) which I attribute to good genes and a (relatively) healthy lifestyle, and yes, I did my share of deploying to unhealthy places.
There is the little matter of the "Feres Doctrine" which prevents military members from suing the government. Freed from the litigious public, the system survives and is efficient but you don't get the "choice" that is a constant refrain in the debate. Since the system is highly regulated, quality was (IMHO) high, and thus, the lack of choice was never a big deal.
I've now been foisted, suddenly, into the maddening world of US healthcare. I've spent two hours on the phone just trying to determine what optometrist I'm allowed to see, and whether they'll accept my insurance (those that never call back presumably won't...?). I've given up on that and decided it just isn't worth it and will pay the relatively modest cost of a bi-annual eye exam out of pocket. This is one small example, but, unfortunately, there are others. I'd gladly throw myself on the mercy of Walter Reed than go through this. I know it doesn't fit with the rest of my libertarian tendencies, but that's the real-world for you......
What would actually happen in the case Matt describes is that the patient would form an activist group, sue, get the treatment, and use the government settlement to buy the kids organic fruit and a trip to Disneyland.
Exactly. That's what destroyed TennCare.
My 11 years of active military service was a while ago, but the care was generally good. One of the things that makes it work is the screening process--you go to your unit corpsman first, and only after that are you referred to one of the clinics, where you might only see a PA instead of a doctor. For this sort of visit, everything is handled on a walk-in basis, so you could be waiting all morning to see someone. Appointments were reserved for follow-on checkups, or referrals to specialists, or diagnostic or surgical procedures.
For dependents, the process took longer, typically equivalent to going to an emergency room nowadays (for the initial visit). And if you wanted to see a particular doctor, you could, but you might have to wait all day for that privilege. Follow-up visits were scheduled. During the great reductions in military strength of the 1990's, dependent care got to be too much for the system, so the old CHAMPUS system evolved into TriCare, which also covers retirees. Dependents rarely see military doctors anymore, except for some specialists, e.g., at Bethesda or Walter Reed.
I have no idea how much it all costs. Doctors's expenses are kept artifically low, because they are costing active duty wages and not market wages.
The VA also keeps doctors' expenses artifically low, because they use a lot of foreign doctors who are in the process of qualifying for their licenses to practice in the U.S.
And, after the legal reforms here in Texas in the 90's (yes, we've dealt with Dubya longer than any of you), tort cases like that are no longer possible. Of course, neither are any other kinds of tort cases, even those where class-action is truly justified...but that's all really trivial. brooksfoe and MichaelW both make the correct points here - while legal costs in American health care are truly out-of-control, we're currently paying for it already, through ridiculously expensive malpractice insurance policies for doctors. And while those policies cost us all a lot, I don't think you'll find anyone knowledgeable on the subject who thinks that's the sole reason health care in America is expensive. There's some deep market failure involved beyond malpractice costs, and given the cost savings in healthcare overseas, there's some reason to believe that substantially reorganizing the system would create benefits that far outweigh malpractice costs. And a reorganization of healthcare - especially a reorganization that helps ensure doctors and insurers don't have the ability and profit motive to deny patients *necessary* services - would create room for something like a limited Feres doctrine in healthcare, cutting back on malpractice costs.
The real question, from a skeptical-of-government-programs perspective, is whether Congress would be able to pass a healthcare bill that doesn't go a million directions at once, spending billions handing out little favors while accomplishing nothing. Show me that can be avoided and I could be convinced to go along.
James Tanner,
I think you are thinking of a different kind of suit than I am.
The suits in TN that bankrupted TennCare were not tort suits--they were non-discrimination suits. The resulting injunctions made it impossible to limit what care TennCare provided, converting a program that was intended to provide cheap, basic care into one that had to provide expensive specialty care.
The real question, from a skeptical-of-government-programs perspective, is whether Congress would be able to pass a healthcare bill that doesn't go a million directions at once, spending billions handing out little favors while accomplishing nothing. Show me that can be avoided and I could be convinced to go along.
Posted by James Tanner | September 12, 2007 11:01 AM
--------------------
Yup.
IMHO the deep market failure in this country is the insurance companies. It is their interests to extract as much profit as possible out of the system. They do this by collecting premiums and trying hard not to ever have to pay for medical care. They avoid paying by either screening out people who are likely to get sick and by trying to deny payment and shift the costs to any other party. Doing this requires high administrative costs to cover the screening and the billing shuffle. They also contribute heavily to overall administrative deadweight losses due to trying to deal with all of the forms required by all of the different companies.
I have heard some horror stories with military medicine, particularly in connection with Feres. There was a case a few years ago where one service had to drop a Doctor when it found out he was not licensed to practice in any state.
As for the VA, it is the best large scale healthcare organization in the US. They have the highest patrient satisfaction rate, despite lower spending per patient. It was a disaster in the 1980s and early 90s, but Clinton put competent people in charge and it really improved. See Longman:
http://www.washingtonmonthly.com/features/2005/0501.longman.html
Donald Clarke
There's an interesting article on the Dutch health care system in the September 6 Wall Street Journal. Basically, the Dutch government requires everybody to purchase private health insurance, either individually or through their employers, and it subsidizes the insurance using a sliding scale based on income. Similar systems are used in Singapore and elsewhere. The difficulty is that this type of health care system requires close monitoring of insurance companies to eliminate unethical practices. I'm not sure if this is possible in the US because of the political power of the insurance industry.
I had Dutch health insurance for a year and half, in 1999-2000. It cost about a quarter what my US HMO had. The copay stuff was similar, but I could see any doctor I wanted to. Dutch care is not noticeably different from what I've experienced in the US, except that doctors are less rushed and will take somewhat more time with patients, and the whole paperwork element is vastly simpler. Also, the very low cost of a visit means you access primary care more often and more easily than you might in the US, where you might hesitate because of cost. And some services, like post-natal and toddler checkups and vaccinations, are integrated into municipal health services in a very clean and upscale way, so that everyone accesses them, partially eliminating class barriers.
Ronald Clarke makes a good point, but doesn't every business try to maximize what they are paid and minimize what they provide the customer. The reason most business provide good quality for good prices is that competition will put them out of business if they don't. Is there something about the medical insurace business that prevents competition?
Regarding the VA hospitals, I have heard that one of the reasons they improved so much in the mid nineties is that WW2 veterans started dying off instead of just being sick. I do not know if this is true, but it makes sense to me as both my grandfathers died in VA hospitals in the early nineties.
So what are the primary cost drivers for health care in this country? I find it difficult to get a good answer on this. Many of the above comments above tout the Dutch or Canadian systems as twice as good at half the price which immediately sets off my BS meter.
Is the cost difference solely due to insurance company administrative overhead? I just can't buy that. I'm sure the dollar value is substantial but on a percentage basis my guess is it is relatively small.
So Dutch doctors can take their time and give more personalized care, at lower cost to boot. Do American doctors make too much money?
American insurance companies endeavor to deny care while European systems provide more care at lower cost to boot. Something doesn't compute.
Is it end of life care where the lion's share of health costs are concentrated in the final months of life? Do European systems deny this care?
Non-poor, old, sick, people experience less rationing in the U.S. that that demographic experiences just about anywhere else on earth. Given that non-poor old people are the most politically powerful group in this country, that is unlikely to change.
One of the problems in US healthcare is the incentive structure. The average American spends about 7 years with an insurance company. So if a mitigation treatment for say, diabetes, costs $1,000 now, and saves $20,000 20 years from now, they are not interested. As one executive put it, "Why should I subsidize my competition's bottomline".
A national system would not have that disincentive, because it could expect to treat its customers for their entire lives, not just for 7 years and as a result would receive and value the $20 K in savings for its $1 K investment. Since a good chunk of that $20 K would be from fewer amputations, the customers would be better off as well.
"But after the legal revolution of the 1970's, American public services look, well, like American ones: unable to deny anything to anyone."
You are woefully ignorant about what is involved in attaining public services. I doubt you have ever done so. It is work. I have two severly handicapped children. Getting the services they require and are entitled to by law requires significant effort. If those services were not necessary, my wife and I would certainly not go to the measures we do to get them. People working with very tight budgets are beseiged by applicants who all want a piece of their pie. While I believe that the bureaucrats we badger would gladly give away all the services available to anyone who asks, they can't. They don't act like they have an infinite budget because they don't have an infinite budget. When I argue for services, it isn't a choice between helping my child or not helping my child, it is a choice of helping my child or helping somebody else's.
There are a wide array of services that we could qualify for that we certainly will not bother aquiring. We don't bother because we don't want the hassle, we don't need the service and we know we'd be denying someone who does need it. I don't think we're that unusual. People just are not going to pester their doctors to get that nifty spinal tap they've always wanted. I don't see universal health care being that different. The biggest difference is that there would be far fewer individual judgements about benefits, so it would be more standardized and efficient than providing services to the severely handicapped.
While a national health insurance system would not have an incentive to deny care because it would subsidize his competitors bottom line, he might have an incentive to deny care now because it would make his personal bottom line look better at the cost of some other bureaucrat's bottom line looking worse down the road.
A system where medical insurance was treated like car or house insurance might work better. If you didn't have to change providors when you changed jobs, there would be a chance you'd stil with one providor for 20 years. Also, high-risk and/or poor people could be doled out to the providors on some sort of ratio of customers basis so they wouldn't be left out in the cold.
All we have to do is give a full tax deduction for the entire cost of health insurance to anyone and remove any benefits companies get for providing insurance. Right now, if I choose not to get health insurance from my company, I lose the amount of the subsidy they pay as well as the group discount they get. I then have to pay the entire amount myself. I'd love to be able to get insurance from someone else, possibly even bundling it with my car and house insurance.
To change this system, you'd not only have to deal with the elderly, but with unions who have negotiated insurance as part of their compensation contracts.
EI
dix: I think the understandable BS meter issue here is a really major problem. And that's really what Michael Moore was trying to get past in "Sicko", by having Americans abroad talk about the quality and cheapness of care in Europe. The thing is, the US health care system really is extraordinarily screwed up, and if you're in the US it's hard to recognize just how screwed up it is. You have to actually go to other countries and get treated, get a sense of how it works, to start to realize just how ineptly the American system is structured.
BTW, I wouldn't say Dutch care is "twice as good at half the price". It's just about as good, at half the price. On some things they're better, on some they're worse. And some Dutch docs tend to move to the US to make a lot more money. But most people don't like to leave their homeland.
Do American doctors make too much money?
In a sense. I think American doctors, because of the greater inequality in American society, feel they need a higher income level to assure themselves of some kinds of public goods, like good schools for their kids, which you can only get if you live in expensive neighborhoods. Holland has a more egalitarian society with generally better public schools, and pays higher taxes for it; but this means doctors don't feel they need to make a zillion dollars a year to assure their kids of decent schools. Also, medical school in Holland is a 6-year degree that's integrated with undergrad study, not a separate post-grad degree, and it costs...I dunno, maybe a few thousand dollars a year at most -- something negligible by American standards.
So there are obviously aspects of this which would look different in an American adaptation -- no two countries have exactly the same health system. But the basic structure, I think, really is something that could work in the US and could get us to universal coverage with dramatically lower costs, without completely eliminating the private health insurance industry. The costs might not go as low as they are in Holland, but they'd be lower.
Also, while the French system sounds like it's probably the best in the world, the Dutch, like the Americans, drink lots of beer, eat lots of fatty and fried foods, and have a high rate of obesity. So it may be easier to get past the cultural-differences argument.
Can we make a deal? Let's decide how much to spend per person on health-care. Everyone that wants a national single payer health care can have whatever they get in the system. The rest of us get half the per person spending in a no strings attached check and we get a completely unregulated medical market in return. No insurance mandates, no state insurance commissioners, no FDA, no prescription laws, etc. Let's even ditch state licensing of medical professionals for us crazies. Just contract and tort law as protections.
Please?
I mean if the system you want really is nirvana, we'll all end up joining you eventually.
(And speaking of switching - you can slap a no preexisting conditions clause on us crazies since we're so morally hazardous.)
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