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2008-12-24 Home Front: Politix

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Posted by Deacon Blues 2008-12-24 00:00|| || Front Page|| [11130 views ] Top

#1 This is all bull. The only thing that will reduce health care costs is increased supply. That means doubling the number of nurses, nurse practitioners and doctors graduated from our colleges for the next decade or two. That we import medical professionals is absurd, and degrades other nation's health care systems.

Posted by rammer">rammer 2008-12-24 00:34|| www.blogoram.com]">[www.blogoram.com] 2008-12-24 00:34|| Front Page Top

#2 Well, rammer, you're definitely at least half right - supply, as in supply and demand, holds the key, as almost always. But I think the supply of trained personnel is not the key driver of the excess cost increases.

Health is not a public good, but a private good. Supply and demand rule in creation, pricing, and allocation of private goods. Departures from outcomes driven by supply/demand almost always create distortions and imbalances (robust ones, that, by definition, are not unwound by market action). In "health care", the three greatest distortions seem to be lack of competition, subsidies, and administrative inefficiency. Each of these is a direct result of non-market interference/intervention.

Trim here, tweak there, reform dis and dat, and see a tiny return. Allow common sense and market dynamics to drive the cost of, and demand for, "health care", and witness what's happened in every other situation in human history (without exception) where private goods were at issue.

Posted by Verlaine 2008-12-24 01:13|| 2008-12-24 01:13|| Front Page Top

#3 And lawyers. Kill 95% of 'em and ya'll see.

Posted by Spike Uniter 2008-12-24 02:24|| 2008-12-24 02:24|| Front Page Top

#4 This is how health rationing is justified here in Canada, and probably elsewhere too. If a treatment is twice as good, but three times more expensive, you're not allowed to get it.

And I literally mean "not allowed", unless you fly to the US and pay cash. Either your drug/treatment is on the list, or it isn't. Private care is illegal, although some provinces have been fighting that battle (citing human rights legislation) for years now, with limited success.

Posted by Vanc 2008-12-24 02:40|| 2008-12-24 02:40|| Front Page Top

#5 That's scary.

"socialised health care" AKA state treatment rationing is always the nationalisation of the whole countries bodies, the complete antithesis to self ownership (the basis of civilisation).

Posted by Bright Pebbles 2008-12-24 03:51|| 2008-12-24 03:51|| Front Page Top

Posted by GolfBravoUSMC 2008-12-24 05:27|| 2008-12-24 05:27|| Front Page Top

#7 The NHS already rations Aricept.

Posted by Clem Thavise3054 2008-12-24 05:31|| 2008-12-24 05:31|| Front Page Top

#8 We're from the government and we're here to help you.

Posted by g(r)omgoru 2008-12-24 06:45|| 2008-12-24 06:45|| Front Page Top

#9 It's an immortality crisis not a health care crisis. Look back fifty years ago and see what medical care the wealthiest could afford. Most of the procedures, protocols, and pharmaceuticals we the average enjoy as common practice couldn't be had by any of them - because they didn't exist. Look at the Census data, every decade for the last hundred years, we as a people are living longer and longer. We probably have the single largest population of people over 80, 90, and even 100. There is no real health care crisis, but a perception that we're entitled to immortality. Like the Pharaohs trying to obtain immortality, we'll consume the GDP of an entire civilization playing that game.

Posted by P2k on holiday 2008-12-24 07:07|| 2008-12-24 07:07|| Front Page Top

#10 Agree completely, P2K. It is an interesting time of year to contemplate why, when so many have so much health care there should be an immortality crisis.

What human agency formerly dealt with immortality? What happened to it? What seeks to supercede it? Why?

And while we're thinking about the immortality crisis it might be useful to consider what relationship it has to the immorality crisis that threatens us even more so.

What human agency formerly dealt with immorality? What happened to it? What seeks to supercede it? Why?

Are you starting to notice a patern?

Felicitous Festivus.

Posted by Nimble Spemble 2008-12-24 07:50|| 2008-12-24 07:50|| Front Page Top

#11 "Why are you astonished? I will explain to you the mystery of the woman and of the beast she rides....."

Posted by Besoeker 2008-12-24 07:56|| 2008-12-24 07:56|| Front Page Top

#12 The NHS already rations Aricept.

Since Aricept is for the elderly I'm not surprised. For decades the UK has rationed dialysis for kidney patients and simply did not provide them for people over 65 (if I remember the age correctly - corrections welcome on the number).

Posted by lotp 2008-12-24 08:28|| 2008-12-24 08:28|| Front Page Top

#13 You know it'll be _real_ cost effective if people over 85 80 75 simply were -er- taken care of (permanently - as in euthanasia). Unless of course they are important like congresscritters or [the right kind of] journalists.

After all the elderly really doesn't contribute to society anymore and consume an awful lot of healthcare. They are a drain on a precious resource.

/SARC

Posted by CrazyFool 2008-12-24 09:49|| 2008-12-24 09:49|| Front Page Top

#14 Let's address the canard of administrative costs as a driver of heathcare expenses. Administrative costs are only 3% of the healthcare dollar. What really drives costs are medical/technology advances and people "living too long." In the U.S. we foster medical advances and engage in medical "heroics" to keep gramma alive -- and that's a problem for the socialized medicine crowd.

Posted by regular joe 2008-12-24 09:54|| 2008-12-24 09:54|| Front Page Top

#15 Agree Joe up to a point.

A major driver of cost is insurance.

We do NOT have a health care crisis we have a health care COST crisis.

The amounts awarded for malpractice suits have driven the cost of insurance through the roof and even driven many doctor's out of business. The whole malpractice / tort system has to be reworked.

Posted by AlanC">AlanC 2008-12-24 10:10|| 2008-12-24 10:10|| Front Page Top

#16 Verlaine, you may be right but miss my point. Supply and demand set the price for any good freely traded. With health care the demand side of the equation can not be regulated downwards. People are going to avoid being sick or dead with great intensity. Thus the only side of the problem that can be affected by policy is the supply side.

Buying health care is no different from buying a haircut. The primary reason that health care visits cost more is because there are many fewer trained nurses than beauticians.

A smaller but not negligible additional cost is the cost of capital that pays for the more expensive tools that health care workers use, x-ray machines or pharmaceuticals for example verses scissors and combs. These costs are real
but are shared across all the customers and goes asymtotically to zero over time.

Insurance costs are also higher in medicine than cosmetology. But the total cost of insurance is simply the sum of the cost of mistakes. Much like automotive insurance is priced based on the expected number of thefts or accidents in the population, so is medical insurance priced by expected costs of mistakes. If we don't want to pay those costs, then we can regulate what is defined to be a mistake or cap how expensive mistakes are judged to be, which is what we are doing now. Or we can better train medical professionals so they make fewer mistakes, which brings me back to my initial point.

Health care costs can best be managed by investing in our medical educational system to make more supply and get government off our backs.

Posted by rammer">rammer 2008-12-24 11:00|| www.blogoram.com]">[www.blogoram.com] 2008-12-24 11:00|| Front Page Top

#17 In a free market, extreme health care for the elderly (imitation immortality) would only be available to the very wealthy, and it would serve as a means of transferring that wealth back to the society at large. Everyone else would reap the benefit of sharing (a few years later) in the medical advances paid for by the immortality-seeking super-wealthy. (Sort of like how only a few years ago only rich fools would buy the big flat screen tvs, and now they are all that is available, even in WalMart.)
The philosphical questions then become: Is everyone entitled to extreme health care, and if so, is it even possible for society to pay for it? If everyone is not entitled, or it is not possible to pay for everyone, then who gets to choose the lucky recipients? And how? Auction? Lottery? Political connections? Enlightened bureaucrats?

Posted by Glenmore">Glenmore 2008-12-24 11:45|| 2008-12-24 11:45|| Front Page Top

#18 Just for my own edification....let's say that Obamacare is instituted around 2010. Some treatment that I want/need is not covered, but has a reasonable chance of working the way I would like to ameliorate/cure some condition. I can somehow scrape up some dollars to pay for a treatment....somewhere.

Anyone know anywhere to go once that happens with a decent health care system?

(Sorry, I don't think Cuba's an option but are there other places the more medically minded here might recommend as backups?)

Posted by Cornsilk Blondie 2008-12-24 12:12|| 2008-12-24 12:12|| Front Page Top

#19 regular joe, I'm not intending to promote a canard. My point about administrative costs was based entirely on two personal experieces; these may be aberations, or they may not be properly termed "administrative" costs in the system. I received a 40% reduction in charges from a major medical care outfit (FORTY), got about the same from a small-group specialist - for paying up-front w/ credit card vs. the insurance billing dance. I am indeed taking enormous license to just deem that administrative burden - but what else explains such a gigantic discount, unlike anything encountered in any other kind of transaction in my entire life? I don't claim to understand just how such an enormous mysterious cost element enters the picture - I do claim that it has nothing to do with actual medical care, or even with actual administration thereof.

Rammer, I don't think I miss your point, and I agree with most of your observations. But by supply-demand I don't mean reducing people's health care needs, but making it more likely people will judge such needs more seriously (e.g., not "going to the doctor" when "you don't feel well" - what % of that widespread behavior could/should be almost entirely eliminated?) To the extent American "health care" has become more like typical consumption - I think a significant extent - pricing can and would reduce demand, i.e. medical intervention for true needs.

But the larger effect would come from competition and pricing effects within the system, between the various players/suppliers/specialists/insurers. I'm talking the whole gamut. Specialists in cities 500 miles apart can't compete, but insurance companies can ..... and in time, groups of specialists with branches in cities 500 miles apart can. When a private good is being produced, there simply is no mechanism nearly as cost-effective and free competition in producing and providing it (even though there are usually market segments where it is less effective than others). And so on.

Increasing the supply of doctors and nurses is fine, but I don't think that would be a major cost-reducer for some time, nor would it wring most of the excess costs out of the system. Getting more competition between the current players would, and faster. Both are good, they're not mutually exclusive.

As to insurance and mistakes, I take it you are referring to the liability component of providers' insurance, not health care insurance? If so, your model is the legitimate one, not the actual one (in any area of liability): providers must insure against a predicted level of shake-downs, not just against actual mistakes. The problem here lies in the law, and the courts (as gatekeepers), well outside the health care cost area.

As commented above we have a health care COST crisis, nothing else. That's why I've focused just on cost-generating and cost-controlling elements, almost all of which in all cases are amenable to market amelioration through proper incentives and choice.

But I'm truly just stumbling around fairly blindly here, applying principles known to be reliable and some dribs and drabs of data from personal experience or observation. Sort of the analytical level we typically get about national security issues from, say, Beltway politicians and pundits, goofy academics, arrogant activists, and too many intel community "professionals". But, I hope, not all of it THAT bad!

Merry Christmas (and good health!) to all 'burgers, and thanks for your collective wisdom and insights and humor.

Posted by Verlaine 2008-12-24 12:13|| 2008-12-24 12:13|| Front Page Top

#20 Malpractice insurance and the CYA redundant and/or unnecessary procedures malpractice threats cause also contribute to costs, but not as much as end-of-life treatments.

Here's how it works: politicians cut or curtail Medicare increases, by say, 10%. Physicians and hospitals then tack on 10% or more to every non-Medicare procedure.

The pols then pat themselves on the back for containing Medicare costs and deplore greedy insurers for increasing premiums so that physicians can make up for the shortfall.

As far as shellgames go, Maddaff has nothing on our healthcare system.

Posted by regular joe 2008-12-24 12:14|| 2008-12-24 12:14|| Front Page Top

#21 NS nails it. We have an immortality crisis. The demographic meltdown in Europe and East Asia is based on somewhat realistic expectations that immortality is at hand. That's the point that Spengler, Wretchard, Steyn and all of the other commentators on the issue miss. NS nails it a second time by tying the demographic piece to the spiritual piece. Well done... An immortal doesn't need God. He is a god.

Posted by fresa 2008-12-24 15:41|| 2008-12-24 15:41|| Front Page Top

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