Hilzoy is mad at conservatives talking about rationing in the public plan. She says that no one's really rationing care with a public plan; anyone can buy what they want. It's just that the public plan will ration for those in its care in order to make coverage affordable.
I feel a little odd putting the shoe on the other foot, here, since this argument is usually used by liberals arguing against libertarians, but surely the point of worry is that many millions of people will be forced into the public system, because its existence will encourage their employers to dump their health care plans. Since private systems have so far found it virtually impossible to deny many treatments for long, this will mean that millions of budget constrained people will find themselves with less available treatment than before.
(I say this assuming arguendo that we think a public plan can and will control costs by limiting treatment--a thesis of which I am actually pretty skeptical.)
This is not a crazy worry. What America is best at is delivering a lot of complicated care in extremis, and "quality of life" treatments. What European countries are best at is delivering a lot of ordinary care for the sorts of things that afflict people from 0-50, which is why most of the Europhile journalists writing about Europe genuinely have very good experiences to report. I'd rather be here to have a hip replacement, but I might rather be in the Netherlands to have a baby. Doing something moderately ordinary here is a hassle. Doing something extraordinary there is often not possible for the overwhelming majority of citizens, though that depends on what, and in what system.
Option value matters, particularly for the elderly, who tend to get short shrift because they have more, and more extreme, illnesses, and fewer life-years left over which to amortize the cost of their treatments.
That's not to say that there's nothing to gain from a public system: obviously, the peace of mind that comes from not worrying about losing your health care along with your job is also worth some incalculable amount. But the fear that many people will have to permanently trade the option to get access to our frenzied, experimental extreme care is not crazy.
Copyright © 2009 by The Atlantic Monthly Group. All rights reserved.
This is very true. I've had doctors in europe visit my house in 20 minutes notice, no paperwork to fill out, got a check up in the living room and a perscription written and filled within the next 20 minutes. I defy anyone to even see a doctor, let alone get everything taken care of in 40 minutes in the US.
But it was for a regular, basic type of visit. Someone else I know personally was turned out of 3 different hospitals because they didn't want to treat him because it was difficult to figure out what was wrong with him and it wasn't life threatening.
So regular doctors visits/checkups are better. But it would seem more specialized care is worse.
What I really don't understand is why so many doctors have embedded themselves in hospitals or in huge practices rather than just working out of a small home office in the US. This model seems to work much better here in Europe at least.
I'd like to see the US have a better divide in quick/basic care and specialized treatments. I'd also like to see the AMA lose some of their monoply chokehold status over the profession.
ah, not so sure. i've had to go through plenty of bs in german and austrian hospitals for some pretty simple stuff..
i was in and out of an northern va hospital last year with a bacterial infection in about 40 min, and everything was done on computers.
anecdotes!
That's your problem. You went to a hospital for simple stuff. I wouldn't mess with a hospital. I'd look up a doctor near your neighborhood or ask the local pharmacy where a close doctor is.
If I didn't say it, I alluded to it when talking about specialized care and will say it now. Dealing with hospitals is probably a pain everywhere.
On the other hand, calling a doctor at his house is easy in Austria, not sure about Germany. If he's busy or away you have to wait a day or 2. If he's on vacation you call a different doctor a mile or two away. But if its a dire emergency that can't wait that long you need to go to a hospital and deal with the unfortunate BS.
Solo practice for routine sickness issues. Strep, bronchitis, colds, fevers, coughs, etc. seems to be working here at least. So I don't know why it isn't feasible. Obviously it's not feasible 24/7/365 but I don't know who is expecting it to be? On the other hand my neighbor had a different Dr. come by the house for an emergency visit at 2am...
Solo practice is not feasible in primary care and in many specialties because being on call 24/7/365 is unrealistic.
samX,
First, I think one reason a lot of US doctors use hospitals or huge practices is because grouping together reduces malpractice payments, a factor I'm pretty sure most European countries don't have to face (Please correct me if I'm wrong).
Also, in this interview with Atul Gawande by Ezra Klein at his Washington Post blog, I think Gawande makes a good point for the migration toward larger groups of practices:
http://voices.washingtonpost.com/ezra-klein/2009/06/an_interview_with_atul_gawande.html#more
When he talks about 20th vs 21st century science and medicine, and the astounding number of disease states, drugs, and procedures available to combat them (coming from someone in medical school, trust me, it's a lot), I think it makes sense to start moving toward the peer review committees he describes for treating patients. Obviously this wouldn't be necessary for simpler procedures and problems, but I think we can begin to use Nurse Practitioners and Physicians Assistants for these smaller types of problems to which you are referring.
Experimental care is not covered by insurance. It happens in clinical trials, which are funded by research dollars, both public and private.
We're talking about two different kinds of experimentalism. America is much more willing to tolerate expensive treatments of marginal value. Over time, some emerge as useful incremental improvements, and doctors work the kinks out of the treatment.
Thank you for the clarification.
Unfortunately, over time, others emerge as expensive, dangerous, or both. Finding a balance between medical advances and cost so that health care can be sustainable probably needs to be a more explicit research goal than has historically been the case.
Indeed, experimentation has risks. But without it, we stagnate.
So Megan, I watched this Network TV special a few months ago about Farrah Fawcett's fight with cancer. The doctors here weren't into trying experimental treatments so Fawcett flew to the socialist hellhole of Germany and tried out some experimental treatment. I imagine Fawcett, in the big actor's guild in the sky, might say you don't know what you are talking about.
Forgive me for the long question, but:
Many years ago, for complicated historical reasons, employers gave their employees health and pension benefits. This left the employers with long term liabilities of uncertain size, which sometimes did not work out so well. So some genius came out with a 401k plan. Employee saved their own money, employer contributed some small amount, and there is no long term liability for the employer. Theoretically, at least, wages should have gone up by about the same amount as the liabilities of the employer. Lets assume that this system works well.
Is there a reason the same cannot be done with health insurance? Assume it costs the employer $300/mo to insure an employee (via some third party most of the time). Why not raise the employee's wage by $200, in exchange for allowing him to pay for his own plan (from the same third party) with the employer contributing contributing the last $100 to the plan (for psychological reasons). Or the employer could use the last $100 to set up a system that helps employees file claims and generally deal with the paperwork (which is a great deal easier for one specialized person to do right than for every one person to figure out).
On the face of it, nothing has changed, the employer costs are exactly the same, the employee costs are exactly the same, and he/she still has the same coverage as before.
The difference being, is that the insurance company now has to please its customer the employee rather than the employer. If the employee is unhappy with his insurance, he can drop it and move to a competitor, without having to change his/her job. This would give the insurance people incentive to please employees, and give the employees some idea of how much this is actually costing them (rather than hiding the costs behind complicated accounting).
Is there some obvious error with this thinking? Is there a law that would prohibit some employer from doing this right now?
Is there some obvious error with this thinking?
Yes. It's that, in the absence of laws requiring the employer to raise the wage to cover the cost to the employee, the employer just cuts health insurance, sets up a Health Savings Plan, and leaves the employee to cover all the costs himself. Oh, and the employee now has to manage a 401k AND a HSP, in competition with firms like Goldman Sachs which use computers and volume. Plus, the employee, being gainfully employed, doesn't really have the time (or possibly inclination) to learn how to manage investments.
As Peartlstein notes in today's WaPo
I'd like to disagree on both points.
The easy one first. I do not have the time nor the expertise to evaluate the performance of all the different mutual funds that make up my 401k portfolio. This is not a problem since there are professionals doing this for me. If I'm unhappy with what they are doing, I fire them and hire someone else. There is nothing unusual about this, my plan has been managed by 4 different companies in the past 10 years.
The same can be done with the HSP.
Now to the second point. Assume all the employers care not at all about the political fallout from just cutting insurance and letting employees finance their own HSP. Even if that's the case, the cost of hiring employees still went down for the employers. Thus they will either hire more people, or they will start paying their employees more in order to compete for the best talent. In other words, if my employer does not raise my wage, his competitor can afford to offer me a higher salary for the same cost that it took for it to hire an engineer earlier.
Or, should that not happen, than as labor expanses drop, the cost of goods will drop accordingly, thereby reducing the cost of living. One way or another, the cost savings will get distributed, assuming no monopoly can stand in their way.
I agree with wiredog that individuals probably do not have the time or ability to compete with investment firms in managing their own portfolios. However, I do think health insurance should be detached from employment. Is there any reason to think people can't research and purchase their own health insurance? Or that wages wouldn't rise if companies were no longer forced to provide health care?
Not only is there no reason to expect they wouldn't, there's no reason the changeover event couldn't include a regulation requiring it.
The biggest reason is "risk pools".
If I join my employer plan, with some exceptions, there are no checkups, no screening, maybe a little health care history paperwork. Diabetics don't get charged more, people with thyroid problems pay the going rate etc.
My wife has never had to pay extra nor was denied treatment for her condition(s).
Heck, women between the ages of about 13 and 50 (or higher) are considerably more expensive to cover than men in that category (we as a class don't have the same degree of reproductive health issues, and our problems (in that age range) tend to be acute rather than chronic).
If you're out buying your own insurance you fill out questionares at minimum, and may have to have a medical screening. With the increase in genetic screening capabilities, and interconnected databases it's going to get harder and harder to hide from this.
We (the people) already buy auto and home/renters insurance (well, not so much renters), we could *handle* buying our own health insurance, and it would probably be good for us--as people transitioned out of hte traditional employer based risk pools and were dumped in to age/lifestyle based pools we would be forced to face real economic ramifications of our decisions--you're too fat, you pay. Too skinny, you pay. Smoke, drink etc. all fair game now.
The masses *will* *not* stand for that, nor will their panderers in the processed food/marketing industry.
There is no way to solve this problem. People *cannot* eat what ever they want, indulge in random unhealthy lifestyles (including promiscuous sex, MMA training, downhill skiing/snowboarding, triatholons, dumpster diving, veganism etc.) and expect reasonably priced health care from cradle to grave.
Then again, I'm probably the only person in America who's ever hurt himself running IN A DREAM. Yeah, I was dreaming that I was running stairs and tweaked my knee. The pain woke me up.
That was three days ago.
It STILL hurts.
I have dislocated 3 to 4 ribs while asleep once. That was in the year 2000 and it STILL hurts sometimes.
I also did a shoulder, but that was more recently.
When awake, it takes something like a Russian judo blackbelt to dislocate something on me. Actually, that was years ago and it still hurts too. :(
It's reasonable to assume rationing under a public system as that's the only real way to achieve the advertised benefit (reduced costs). If, as is likely, the public option doesn't ration, then there will be no cost savings (and probably higher costs).
I would love to see a real market for individual policies and eliminate employers as mass buyers (with changed or removed tax incentives).
I'd consider that a good alternative to a "public option," but I'd also want a strong regulatory mechanism and probably some kind of way to deal with catastrophic illness.
Definitely agree with you. I think the best form of rationing is self-rationing, which doesn't occur now because of the huge buffer between the health care the public desires and it's cost. Also, individual health care might allow increases or decreases in policy costs and premiums based on healthier living (eg exercise, healthy food choices, etc.) that seems near impossible under the current system. Obviously this would have to be strongly regulated as well, so as to not punish genetics, but I don't think that's an insurmountable obstacle.
Yes public plans ration to save costs. For an example look at the recent death http://en.wikipedia.org/wiki/Jade_Goody of Jane Goody in England from cervical cancer. Jane was a reality TV star that became an overnight sensation in Britain after an appearance on their version of Big Brother. I was in London in February during her wedding to Jack Tweed. It was major front page and TV coverage 24x7. Bigger even than the US coverage of Michael Jackson.
Jane died of cervical cancer at age 28. In England PAP smears are not authorized by their national health plan until age 25. In the US I'm told most women start in their teens. Herein lies the problem with socialized medicine, some health bureaucrat looked at the expense for "early" pap smears and weighed it against the risk of a few missed cervical cancers and decided to save some money.
Health ministers bowed to the Jade Goody effect yesterday, announcing a review of the age at which cervical cancer screening should start in England. Pressure from medical charities and the media has prompted ministers to look again at whether screening should start at 20 instead of 25.
England, where screening starts at 25, is out of line with the rest of the UK where the starting age is 20. But the Government's cancer tsar, Professor Mike Richards, said people should not anticipate the review's outcome, "Lets be clear, we have said we will undertake a formal review of the evidence. We are not committing ourselves to a change in policy," he said yesterday.
Nice to know the cancer tsar is saving a few quid.
And many millions more will get insurance from employers who aren't now able to provide it.
Health insurance creates a huge drag on our business climate; something businesses who compete in the global marketplace have to consider as we look at a public option.
excuse -- that "from employers" should be "who work for employers"
According to Wiki 15% of the population is uninsured, presumably that leaves 85% insured.
So how do you concluded "millions more" will get insurance? If 85% of the population is at risk of having their plans change and 15% will get some kind of coverage, it's not unfair to wonder if changing the rules of the game for 85% of us to benefit 15% of us is appropriate.
There's a difference between "insured" and "adequately insured."
An insurance plan that has a$5,000 to $10,000 deductible is still disincentive to someone getting proper health care; still likely to force a financial emergency; and those plans still cost folks upwards of $10,000/year.
When I lived in the US I had a 5k deductible plan for 4 people for 2.5k a year. I also had a 1k deductible for 4 for 4k a year. I was happy with both and used them both at different points in my life as it suited my needs and predictions of the future. I don't know where your 10k/year guess comes from, but I suppose it's possible in states with legislatures that have completely screwed up their health care system and are now offering the fix the national one?
Health care has issues. We should start with the things that make it difficult to supply and produce health care. What troubles affect doctors? What makes the supply of doctors small? Are their laws/regulations in existence now that get in the way?
Why not try to reform the system that does a heck of a lot of good rather than upend it simply because its expensive and has some gaps.
On the contrary, high deductibles are an excellent incentive for people to consume *only* proper health care. This in turn lowers health costs.
The RAND experiment shows that low deductibles cause people to consume more health care, but does not increase health levels.
I love my high deductible coverage plan. The big benefit of my plan is that once you have covered the deductible you get 100% coverage from that point on. $2500 is the most I will pay in a year regardless of what happens to me. That is nice to know.
Drew, I've got one of those plans, too. And it cost me about $8,000 a year for family coverage. We'll have to pay $5,000/individual, 10 for the family, and then they'll pay 80%. And that's about the best I can do, given our health care costs and the choice of plans available to us.
I don't mind paying for insurance, but at that cost, I think I deserve a little bit more than I've gotten -- a lot of grief over what kind of tests I can have, prescribed treatments denied, and not one single penny of my health care costs ever paid for for the insurer.
I can afford to pay; but a lot of my neighbors have this insurance because they can't afford anything else. And for them, it's a disaster; a financial crisis in the making.
What you see here - the difference between you and me, is in part geographical. Different areas have different problems. And each state has different laws. Each state is a different risk pool; even areas within a state vary.
I also see the difference in way I'm treated; the assumption always seems to be that I cannot afford to pay, compared to the days when I had that nice, pay for everything with a cheap copay insurance seven years ago. Which leads me to wonder if the kind of insurance you have can provoke treatment discrimination of sorts.
Is there some obvious error with this thinking?
Risk pooling. The great benefit of employer insurance is that it forces the healthy to subsidize the sick. The major problem with individual insurance is that unless you buy a life-long policy at a young age (as you can do with life insurance, for example), the actuaries will price you out of it or write up exceptions for pre-existing conditions.
This problem can be solved with regulation, but it's easy for regulation to be done very badly in such a way as to drive costs through the roof.
Risk pooling also has it's problems. A business I wrote about several times self-insured its employees. Than one worker's spouse developed an expensive medical condition, and the entire company was put at risk.
By law, the company could not lay the worker off; yet the increases in premiums from a single catastrophic illness put it on edge, eventually leading to the loss of 50 jobs. (There were, of course other factors, including cheap imports, etc., I'm not blaming insurance completely. But it played a huge role, and the company would likely have survived without the premium increase.)
I know this is anecdotal, a one-company, one-sick-person story. Yet I wonder how many times it's repeated; leading to decreased benefits or no insurance benefits; a slow nibbling away at what we used to take for granted.
I played the part of the ill spouse myself, when I was younger, and learning how to live with a chronic disability while caring for two toddlers. Caused my husband's company to switch insurance, to a plan that wouldn't cover the physical therapy I needed to function productively. (I had an accident as a teen, with severe damage to my jaw/neck, and now live very, very carefully. At 27, I got a letter from Blue Cross saying they would not cover me if I went sky diving, bungee jumping, or rode the rides at the carnival, etc.) We paid out-of-pocket, and I've been diligent about maintaing my health since. But I'm one bad fall, one rear-end away from a physical disaster, too.
Is risk pooling only done through employers? I understand the benefits (to the insurers) but just wonder why you couldn't set up risk pools for people who are unemployed to make coverage less expensive.
This will be governed by state law, and will be all over the map. In my state, it's currently illegal to set up a risk pool; unless you're an employer or a trade association, you simply can't do it. And then they make it tough, with a high bar to participation.
Insurers always pool risks. It's just that ERISA forces insurers of employer-provided plans to put all employees in the same pool. Break the employment-insurance link, and all you've accomplished is creating a big adverse selection problem which will be the next "crisis" requiring a solution.
I'll post this in a few places, but my companies health plan just renewed (under 100 people in the company). The cost to my employer went up 18%. They increased the employee contribution very slightly, as well as new co-pays for in-patient care and prescriptions.
My employer stated that they now pay about $600 per person/month covered under the plan (blended rate, so a husband and wife would equal $1200/month.
And the broker used a great example:
"How much does a 46" flat panel TV cost at Wal-mart? How much does an appendectomy at X hospital cost? How much does an appendectomy at Y hospital cost? Don't know? Would you even compare the prices and the ratings of each hospital prior to getting that surgery? These are the things that will help keep costs lower in subsequent years"
Personally, as long as individual out-of-pocket immediate expenses are low and the money just goes "into a black hole", I don't think we have a chance of wrangling the system back into order.
For both the current system AND proposed government systems, there is a lack of market fundamentals: natural price controls, competition, and consumer choice.
Just my .02
Joe
Yep. As John Stossel says, insurance is no answer:
http://townhall.com/columnists/JohnStossel/2009/07/08/insurance_is_no_answer
"I'd rather be here to have a hip replacement, but I might rather be in the Netherlands to have a baby."
According to that NY Magazine article recently by an American ex-pat on the Dutch health care system, the S.O.P. in the Netherlands is for you to have your baby at home, with the assistance of a midwife. Is that the way you'd want to have a baby in your mid-thirties? What if it turned out that there was a complication?
The article did say that one perk of the Dutch system was that they send over someone to help with cooking and cleaning after you have the baby, I forget for how long they do this.
My sister moved to Holland a few years ago and had a baby there.
Whilst the custom is to have the baby at home she asked for a hospital delivery and it was granted with no trouble.
My wife and I practiced as physicians in the Netherlands, and now we practice here in the US. We had two children in the Netherlands, born in a hospital because we chose to. There was no epidural for pain, even though we were colleagues, and asked for it repeatedly. Obviously, being a physician I am biased, but there are large differences between the Netherlands and US standards of care.
I forgot to add:
The above is not about the debate about public vs private: The Netherlands decided to move away from a fully socialized system years ago, and now has a hybrid reimbursement system. McArdle can ask me for details if she is interested...
no one's really rationing care with a public plan; anyone can buy what they want
Two comments:
1. That is not true in Canada, unless you add "Buy what they want ... in Buffalo"
2. It is not true today with Medicare. I recently sought treatment from a doctor who told me that he would not see me because I was enrolled in Medicare. It did not matter that I was offering to pay cash: treating someone who was enrolled would 'taint' his practice and he couldn't afford that.
And I've had doctors who were unwilling to take my private insurance, telling me I'd have to pay out of pocket and hope they would reimburse me.
My last job was with a Colorado oil and gas firm. I worked in the gas fields of Wyoming and lived up there. There were no network providers in Wyoming, so for medical or dental treatment I had to go to Colorado, New Mexico, Arizona, etc.
Is this rationing?
Risk pooling also has it's problems. A business I wrote about several times self-insured its employees...
Yes, the pool has to be large enough to spread the risk around, so small businesses do struggle with it. But spreading it across 50 people is easier than spreading it across 1.
Because we won't let people die in the street, the healthy are going to pay for the sick one way or another. Better to do it systematically than haphazardly.
The current employer-based system does it, after a fashion, and we can't discard that valuable function without thinking about how we're going to replace it.
Also, we need to have insurance stop paying for routine care. It's ridiculous. Car insurance pays for crashes, not oil changes.
The article did say that one perk of the Dutch system was that they send over someone to help with cooking and cleaning after you have the baby, I forget for how long they do this.
You can hire a postpartum doula in the US for like $50/hr or $200/night. It's well within the reach of many US families to buy a bit of help if grandma lives on the other coast. But in a country the size of the Netherlands, how far away can grandma really be?
Megan's later post posses the question of health care vs. stimulus.
Since stimulus of jobs supposedly takes place at the small business level; don't you think linking the two discussions might be of some benefit? That removing the burden of employer-based health insurance form small biz might actually lead a faster economic recovery?
Rationing is the elephant in the room. What most people don't seem to realize, though, is that our system is already rationing in favor of the elderly.
I am not a policy wonk, but I can say this with confidence because I have been in the trenches of health care for several years, first as an aide in a nursing home, and now as a nurse at an inner city free clinic.
I've force fed completely demented hospice patients in order to keep them alive for their next dental appointment. I've seen bedridden, demented, completely disoriented nursing home patients get routinely shipped off to the ICU for $50,000 month long visits for routine bouts of pneumonia. I've witnessed frail 96 year women go through horrifying rounds of chemo because their family will not let up treatment (hey its free, why not?) Think this is the exception to the rule? No - it is the rule. Medicare has almost no cost containment measures.
Now at the free clinic I see young otherwise healthy people get laid off with no safety net. They have to wait for months to get a damn tooth pulled. They end up in the ER with asthma attacks because they can't afford expensive inhalers. There is no Medicare Part D for these people. The 65+ crowd gets every damn treatment and drug they want without stipulation.
Since the Wal-Marts of the world can't be counted on to hold up their end of the social contract, a public plan is the moral option. In order to be affordable though, we must introduce stringent cost containment.
This is the elephant in the room, ladies and gentlemen. No I don't want to drown grandma in the bathtub. I'm just realistic about the fact that health care is a limited resource that must be allocated democratically. We can't have the cake and eat it too.
So I will add, policy wise, I don't believe anything realistic will get done with a public plan until Medicare is reformed. Medicare is a huge budgetary black hole as it stands, and now we want to add more people to the dole?
I'm just sayin . . . for the cost of one heroic ICU stay for a 95 year old, you could treat 10 people's asthma for a year. You do the math.
MJ, as an avid Wal-Mart shopper I can attest to the fact that Wal-Mart's sole function is to provide low cost goods to consumers. They are not obligated to provide health insurance. Since employer paid health insurance is becoming more and more of a luxury,
"Let people control their own policies."
So really what are the people without jobs supposed to do? People who can barely afford to shop at Aldi's, let alone Wal-Mart. Do you really expect them to afford a health insurance policy?
Please I would like an answer. How do they get their $180 inhalers so they don't die of an asthma attack? How do they get their medications for MS?
1. Subsidize low income purchasers at the state level.
2. Do what they do now, which is likely to go to the emergency room.
"Since the Wal-Marts of the world can't be counted on to hold up their end of the social contract, a public plan is the moral option."
Of course a business can't be counted on for this, it isn't a charity. Trying to set up a society that only functions if businesses are sufficiently "moral" is a fools errand (as is one which only works if charities or governments are sufficiently moral). Luckily, we don't have to.
Secondly, just because businesses won't act for the best interests of others doesn't mean we have to run to a different third party which will suffer from the same weakness. Let people control their own policies.
Don't want to drown Grandma in the bathtub
In the animated TV series "Dinosaur" the
husband had the time-honored right to
throw Grandma into the Volcano when
she got old. But this is reality.
That removing the burden of employer-based health insurance form small biz might actually lead a faster economic recovery?
Maybe, but the pooling problem is HUGE, at least if you care at all about the number of people uninsured (if you're an anarcho-capitalist, it's not so huge). The individual market will be tougher on everybody except the young an healthy than the employer market is. Regulations can mitigate this, but what are the odds they'll be properly structured?
Also, the employer-health care link isn't JUST a tax policy issue, it's a cultural issue. We expect our employers to pay for our health care. There will be a lot of people who are nervous about the idea of an employer who offers no health care, even if a higher wage is available. So the link can't necessarily be broken by government action.
Culture is an underappreciated influence. The US officially went to the metric system at roughly the same time as Canada, after all.
People are leery of employers who don't offer health care because there isn't an alternative unless you're young and healthy. That seem less like culture and more like self-preservation to me.
That's my argument; breaking that link would benefit entrepreneurial business. But it would also give the worker more freedom to change jobs; to accept a job in a small, growing company and help build something without the risk to family's health and fortune.
Right now, a lot of people are stuck in holes, tied to a job because of health insurance and/or mortgage. Some basic level of health insurance that did not depend on an employer would solve a some of the problems on both employer and employee sides of the equation.
For those businesses that are so marginal or cyclical that they cannot afford to offer health insurance, there would be the hope of attracting a higher-skilled workforce, perhaps helping to improve their margins to something closer to sustainability. A lot of the light manufacturing we do in this country fits here.
When I see a small wood-products business in my state go under, it makes me sad. And it's happening a lot, because the companies can't compete with Canadian companies. We're cutting just as many trees as ever, we're just shipping them across the border to process. And each and every one of those business owners will tell you that the cost of providing insurance to his/her employees was a major factor in their failure; something their Canadian competitors did not have to provide.
For having a baby you might try the Parkland system in Dallas. The rate of prematurity and infant mortality is quite low, I would think it compares favorably with the Netherlands. In the last generation, it's even got the advantage that a lot of people seem to be practicing Spanish (if you don't insist on Dutch); so you can learn a, maybe, foreign language or at least un poquito.
More generally, the government or other nonprofit could help out by funding ombudsman that could help people match peoples needs and, in a sense, deficiencies, e.g. lack of insurance with available public services. This came up in the question to Obama in the public forum when a lady reporting cancer didn't know were to turn. Considering Parkland example again, in a way it depends on a poor population to train the medical students and residents thus it is less socially 'costly' to have someone treated there.
Currently an intern in internal medicine (the proverbial front lines). Gotta say that some of the people here have an overly rosy view of American health care.
The idea that we tolerate expensive treatments is definitely true. I might take issue, however, with the marginally effective formulation. The prostate cancer article in the times today (http://www.nytimes.com/2009/07/08/business/economy/08leonhardt.html?_r=1&hp), for example, did a pretty good job at getting at this idea. My father works in a rad/onc (radiation oncology) department, so I have some insight into the economics of this and I think the reported did a really good job explaining how much money is being spent on prostate cancer with so little evidence behind it. Not just prostate cancer, either. Back surgery for chronic back pain-- the number two most lucrative surgery in the country-- has shockingly little evidence behind it. The last time I looked through the literature, there had been five head-to-head trials with conservative therapy (physical therapy, etc.). Four showed no benefit and one was equivocal. Yet everyone and their brother has had a back surgery (diskectomy, laminectomy, fusion, etc.) and it is a huge, huge drain on medicare/medicaid.
The data behind the idea that we are good at providing "a lot of complicated care in extremis" simply isn't there, either; critical care success rates (a reasonable proxy for "complicated care") don't differ that much across national boundaries.
One major cost driver I have been thinking about recently is that I, as a physician, have NO idea what anything costs. I had to fill out a "fee basis request form recently" for an out-of-service CT scan. My usual rule-of-thumb is to take what I think something should cost and multiply it by a factor of 10. I was still off by another factor of ten. That means that there was a two order of magnitude difference between what I thought the CT scan should cost and what it ended up costing. Still at the end of the (very-hurried) day, when I order a test, not once do I think of costs. "Routine labs" that I order on almost every patient in the hospital every single day cost close to $400 if you are uninsured and pay full price. Obviously, insurance companies negotiate the price down. Nowhere is the price listed. I recently learned that the median cost for a hospital admission in my institution is $14,000. I admit and discharge 4-5 patients per day.
I was recently out in the Pacific Northwest for interviews. The fast-food joints out there had the number of calories of various options on the menu. This successfully dissuaded me from ordering the fried chicken sandwich I was thinking of ordering. I wonder if actually giving doctors the price of the various tests they are ordering might have a similar effect.
"Currently an intern in internal medicine (the proverbial front lines). Gotta say that some of the people here have an overly rosy view of American health care."
I think most people posting on this blog have no experience with the medical field, so - no offense - a lot of the ideas tossed around are very academic. For instance, when people say computerized medical records are going to save boatloads of money, I laugh. Hard. I was on a tech support team that serviced one of these CRM systems. Transitioning to CRM is extremely costly, and unanticipated problems made maintaining it more expensive than originally anticipated. Small hospitals will have a hard time paying for a 24/7 tech support team.
Also, most of cost cutting measures people are talking about like increasing efficiency and whatnot just nibble around the edges of the problem. The "meat" of the issue is that a lot of medical care is simply expensive. MRI machines are expensive. Training Doctors and Nurses is expensive. No amount of efficiency will solve this.
The only real solution I see is rigorous cost containment like they do in the UK and Canada. Sorry America, you can't have a socialized medical system and keep all the frills we enjoy now. My best advice for keeping costs low is to take care of yourself. Less fast food, more exercise.
Great comment.
Sounds like a great idea, and relatively simple and cheap to implement.
The question naturally follows - why do you think people do back surgery for chronic back pain?
"The question naturally follows - why do you think people do back surgery for chronic back pain?"
The surgeon tells the patient they need it and then the surgeon gets paid. Its all about who gets reimbursed and for what. Go to a carpenter and the solution will likely involve a hammer and a nail.
A couple of years ago, I spent a few months trying to understand how different procedures/treatments, etc. were priced; to no avail. (This was on the suggestion of a doctor I'd interviewed who'd gone into business doing house calls.)
As far as I could tell, medical facilities took their costs, and then averaged them out over the services the typically performed; there was no actual relationship between this particular test/treatment/visit and the actual cost of the test/treatment/visit. Instead, there were negotiated prices with insurance that varied, with the uninsured paying the highest price (unless they qualified for some sort of low-income discount.)
So are the most lucrative patients are the young, uninsured who aren't healthy?
And does the five minute visit to get a throat swab and perhaps a prescription for antibiotics subsidizes the 50-minute visit to diagnose an unknown ailment?
That lack of real cost information, while it might be out there, is not something either the doctor or the patient ever deal with in any realistic way. It's rather like a grocery store that didn't price any of the foods stocked on the shelves, so that you had no notion of the price difference between the imported parmesan and the kraft. When you add in any quantifiable measure of outcome, as with back surgery or anti-depressants vs. exercise, the analysis becomes even murkier.
So are the most lucrative patients are the young, uninsured who aren't healthy?
No, many of them are deadbeats who won't pay in the end. That's part of why they cost so much: it's a risk premium.
And does the five minute visit to get a throat swab and perhaps a prescription for antibiotics subsidizes the 50-minute visit to diagnose an unknown ailment?
Almost certainly.
Remember Megan's graduation advice? They can't afford to do this. Are we creating a generation of unemployable people who have to suck off the system or live in the black market economy?
One of the scarier aspects of rationed care when comparing US and Europeans is cancer treatment. The reasons why the US has significantly higher survival rates is pretty simple. In the U.S., we conduct far more tests, which turn up many more cancers. That in turn leads to higher survival rates because we wind up treating some cancers at an earlier stage. This saves some lives that otherwise may have been lost to the disease. Speaking from family experience, the same breast cancer that killed my grandmother when my mom was 13 was detected much earlier in my mom so that she survived the cancer, beat it, and is now enjoying her retirement. It appears that Europeans are less likely to screen for cancer-related issues in the first place. Whether this is intended or not is open for discussion, but there is no doubt that the reason why the survival rates are higher is due to earlier detection.
I agree with Megan in regards to the basic care versus the extremist care argument, and I'll take the system where the little stuff is on me, and I depend on the market to innovate and produce solutions for the big stuff.
One issue for you.
We used to put little $ signs next to the antibiotics on the antibiogram to indicate which ones were the cheapest. The hope was that if the bacteria was susceptible to 5 out of 10 antibiotics, the provider would chose the least expensive one.
This practice fell out of favor when, during malpractice trials, it was pointed out that the provider chose the least expensive antibiotic rather than the "best", resulting in huge judgments.
Its called defensive medicine and yes, its very expensive.
I keep seeing stated that employer funded health insurance puts US industry or those domestic companies that offer it at a competitive disadvantage. This is not true. These are payments in kind and come out of the total PT&B cost envelope. Employers do not have different business models where these are independent. The total cost envelope is constrained by the health of the industry and the competition for labor. The reason that health benefits are so large is that these benefits are not taxed, so dollar for dollar it is an advantage for the employee to receive an incremental $1 of insurance over $1 of wages. But to an employer, it is a wash.
"But to an employer, it is a wash."
To employers as a whole compared to foreign employers there's no difference. But this is not true (a) among employers, or (b) to an economy.
Employers compete for employees on total value. But the value of a health insurance policy doesn't change between employers just because a small company pays more. If two companies, one large one small, offer the same benefits, the employee values them the same even though the small company probably pays more. Since the small company must pay the same cash wage to compete evenly the benefits premium difference increases their total comp.
In addition, the indirect burden of employment based benefits is a major economic dislocation. Just a few examples:
1. A company cannot possibly take into consideration the preferences of all its employees. Most if not virtually all will end up with sub-optimal plans for their needs.
2. The administrative burden is considerable. The vast majority is duplicative compared to individual purchase.
3. Healthcare costs can force businesses and employees to make decisions not in their long term best interests.
The recent published report which says employer based HI is not a competitive disadvantage applies to a limited range of circumstances and does not support the statement that American businesses would be no better off if we had national or single payer insurance.
"Doing something extraordinary there is often not possible for the overwhelming majority of citizens, though that depends on what, and in what system."
And your proof of this contention is what Megan? Do you have a study to point to that shows that people needing extraordinary care are not getting it in other countries vs. the US?
“I'd rather be here to have a hip replacement, but I might rather be in the Netherlands to have a baby. “
I would rather be in Spain for my hip replacement.
78 year old acquaintance hip replacement. Week in the hospital. Full home care upon discharge. Full physical therapy. All covered under the Government health plan.
I have many other stories similar. Much better care and compassion than US system.
Spain doesn’t get talked about much because of the language barrier, maybe. But they have an excellent public/private system. Might be worth looking into.
What is with all this consternation about "rationing?" This is a fool's excuse to do nothing. What do you think your employer's health insurance company does? My son has a birth defect that is becoming more pronounced as he goes through puberty, and causes him great pain when competing at maximum effort in running and swimming. The insurance company rejected the medical opinion of the head of pediatric surgery at UCSF because the defect measured 2.9 instead of their arbitrary threshhold of 3.25. The specialist said he would in fact measure 3.25 within the year, and that the delay would have several adverse affects: (1) the deformity would cause other skeletal regions to become deformed as the condition worsened, (2) the efficacy of surgery would be lessened by waiting for the deformity to become more extreme, and (3) the post operative pain and length of recovery will be greater because we waited for the severity to be more pronounced. Maybe my child would face the same frustration within the public option being discussed, but the difference is MILLIONS more Americans would have health insurance.