Stossel Solves the Health Crisis with Capitalism

[Rolfe]

Many of those systems do not permit the basic health coverage part to be profitable to the company. The company makes its money on selling suplemental insurance. So you can be sure if you are hospitalized you will get a private room for example.

Well, if it works, it works.

If the US system worked, we wouldn't be having this conversation.

Rolfe.

 

[Francesca R]

This seems to be a good comparison of different models of healthcare:

http://www.amsa.org/uhc/IHSprimer.pdf

That's pretty good.

 

[Chaos]

Look, guys, which is it? I'm very familiar with insurance companies mitigating their liability. When I was burgled, it was obviously worth their while to send one of their employees to visit me and quibble over every detail of my claim, than simply to pay it.

Speaking as a former tight-fisted bastard insurance employee, I can assure you that this is indeed standard practice judging from my experience.

If an insurance company deems the potential reduction of the claim to be worth the cost of sending a claims adjuster, they will do so. That´s just heartless greed sound business practice. I usually try to explain that as just being careful with what is also your insurance premiums, but that doesn´t help much when you´re on the receiving end.

That´s also why I don´t believe Dan´s tall tale about the $3,000 tail light. Last time I broke the car, the insurance paid the garage bill, minus the deductible, and nothing else. That´s, among other things, because people at the insurance company are no morons, and they have the experience to judge what certain kinds of damages tend to cost most of the time. (Somebody, once, almost succeeded in getting a $1,000 waffle iron past me, but that was in my first month on the job) Insurance companies also usually aren´t afraid of fighting a lawsuit to the bitter end, especially when they feel they´re being tricked, and especially with someone who is not their own customer.

 

[Rolfe]

This link is full of crappy WHO statistics that have already been shown to be out of wack with reality. Remember, these are the same people who think COLUMBIA has better HC than the US.

Hold on, Dan. That link is to a 39-page dissertation by an American post-grad student. I've only started to read it, but it's enormously informative. She certainly cites WHO statistics, however it does not appear to me so far that she is basing any arguments on these statistics.

Now I don't think we ever really demonstrated that the WHO statistics were "crappy" or "out of whack with reality". One particular number was agreed to look implausible, and posters generally agreed not to base their arguments on them because it was too much work to try to figure out how well-founded they were. That's a long way from agreeing with what you just said.

You cannot have read the dissertation in the FOUR MINUTES it took you to make that reply. The best you can have done is scanned the first page or two, and noted the citation of these statistics. I'm learning a lot from reading it in detail, and maybe you could too.

Rolfe.

 

[Professor Yaffle]

And it actually mentions some of the criticisms of the WHO figures.

 

[Professor Yaffle]

There are some other good resources linked to from this page of the same website:
http://www.amsa.org/uhc/

 

[Rolfe]

Here is the SSI homepage link. They have an FAQ section that you'll understand better than I will: http://www.ssa.gov/

I'mma go take a Zeitgeist and then go to sleep.

Looks pretty grim.

Supplemental Security Income (SSI) is a Federal income supplement program funded by general tax revenues (not Social Security taxes):

• It is designed to help aged, blind, and disabled people, who have little or no income; and
• It provides cash to meet basic needs for food, clothing, and shelter.

I find this insistence that anyone who has the misfortune to develop a chronic health problem should have to beggar themselves before being eligible for any assistance quite disturbing.

Rolfe.

 

[lomiller]

Occasional?? Try 600 billion dollars worth of occasional.

Please back up your claim of $600 billion in unnecessary heart transplants (or other medical treatment that simply wasn’t needed)

 

[Rolfe]

He got that figure from somewhere, but it appears that it's talking about "defensive medicine" procedures, where physicians undertake expenditure for fear of being liable for litigation of they don't, and possibly unnecessary procedures being carried out by the health provider to increase income.

Dan seems to think it's all about either healthy Americans running off to their doctor just because they want to get something for nothing, or people with genuine needs demanding extra procedures and more expensive care than necessary, again "just because it's free".

As I pointed out, this excessive spend on unnecessary procedures, for whatever reason, is a feature of the current US system, not of the universal-access systems. Why anyone thinks it adds up to any sort of argument against a universal-access system, God alone knows. What it does add up to is the need for the purchaser to ensure that their money is spent cost-effectively. Centrally-funded systems tend to be relatively good at this. There's no reason really why insurance companies couldn't be fairly good at it too. It just seems as if the US companies aren't doing it.

Which is why Dan wants to stay with the current US system, and not to move to a different system where this problem is self-evidently much less.

No, I don't understand him either.

Rolfe.

 

[blutoski]

He got that figure from somewhere, but it appears that it's talking about "defensive medicine" procedures, where physicians undertake expenditure for fear of being liable for litigation of they don't, and possibly unnecessary procedures being carried out by the health provider to increase income.

Dan seems to think it's all about either healthy Americans running off to their doctor just because they want to get something for nothing, or people with genuine needs demanding extra procedures and more expensive care than necessary, again "just because it's free".

As I pointed out, this excessive spend on unnecessary procedures, for whatever reason, is a feature of the current US system, not of the universal-access systems. Why anyone thinks it adds up to any sort of argument against a universal-access system, God alone knows. What it does add up to is the need for the purchaser to ensure that their money is spent cost-effectively. Centrally-funded systems tend to be relatively good at this. There's no reason really why insurance companies couldn't be fairly good at it too. It just seems as if the US companies aren't doing it.

Which is why Dan wants to stay with the current US system, and not to move to a different system where this problem is self-evidently much less.

And the mechanism is pretty straightforward. That's why I was doubly disappointed by Stossel's ice cream demonstration. Stossel knows enough about economics to be aware of something called 'plasticity'. Price influences the demand curve, but the shape of the demand curve varies a great deal from product-to-product, and market-to-market for the same product. The plasticity curve of ice cream is different for the general population versus the lactose intolerant.

More to the point: the plasticity for children-customers of ice cream versus colonoscopies is obviously different.

Stossel either doesn't know this (doubtful) or he's decided to just misinform his viewers. I'm guessing the latter, but neither explanation is an endorsement. This may be why I stopped watching his programs years ago. The only thing worse than not learning about a topic is learning falsehoods about a topic.

What we find is that medical services are either needs or wants, and single-payer systems tend to refuse to pay for wants. Within the category of needs, a patient either needs it or he doesn't, so there's a very unresponsive demand curve for necessary medical services.

The way you distort the demand curve is with advertising, which is another factor that distinguishes the US and Canada: direct-to-consumer advertising inflates demand for unnecessary services (and also creates demand for unnecessary services), as it sidesteps medical reasoning.

 

[Earthborn]

There is just one problem, what purpose does the insurance company then serve?

To pay for stuff.

Because it is all ridiculously overpriced – and stays that way because of the lack of real competition. The only thing an insurance company could do now would be refuse to pay – they don't have cheaper strips to pick from.

I think that's rubbish. Even if it was true for those strips, an insurance company could always try to order them directly from the factory in China and offer them for free to its clients -- but you explicitly said that while it may be true for the strips, it isn't true for the insulin meters themselves; those do come with a variety of prices. If there are meters that work for $15, why would it cover the expenses of an $80 one without any indication that it is medically necessary?

So clearly it must be possible to run a profitable insurance company and still not inflate costs unacceptably, though I'm still a but hazy how it's done.

Those insurance companies are not necessarily for-profit businesses.

I still don't understand what advantage there might be in choosing to go down that route.

One possible advantage is that it shuts up free-marketeers whining about taxation. Another might be that with a bit of competition between insurance companies, premiums are kept low.

... and I can't see how having an insurance company between me and the NHS would improve my choices.

It would give you choice which organisation you want to be insured by. It would give you the choice between getting the lowest premium for a standard coverage which includes pretty much everything you might need, or a higher premium for coverage that includes quackopathy or a pilgrimage to Lourdes.

 

[kellyb]

Looks pretty grim.




I find this insistence that anyone who has the misfortune to develop a chronic health problem should have to beggar themselves before being eligible for any assistance quite disturbing.

Rolfe.

Being impoverished and ill with a potentially fatal condition isn't even enough to qualify for SSI. You have to be elderly, blind, or disabled, in addition. Stossel's woman with breast cancer, for example, wouldn't qualify.

 

[Toke]

There is just one problem, what purpose does the insurance company then serve?

To pay for stuff.

That is just added administration?

Guess that if you really hate taxes you could call it mandatory insurance instead.
And rename part of your health administration as a non-profit insurance company.

If you had only a few different policies there might not be that much extra administration on figuring out who were entitled to what.

Would the hospital still have to cover their buget through writing bills, and how much work would that take?

 

[Toke]

Being impoverished and ill with a potentially fatal condition isn't even enough to qualify for SSI. You have to be elderly, blind, or disabled, in addition. Stossel's woman with breast cancer, for example, wouldn't qualify.

Don´t be that hasty.
The breast cancer will surely disable her at some point.

 

[Ivor the Engineer]

<snip>

I'm learning a lot from reading it in detail, and maybe you could too.

Rolfe.

Just remember that the NHS is under yet another transformation, with the government getting into bed with US private healthcare companies to provide services under the NHS logo, which is all it will be in a few decades (no doubt when I'll be needing most of my healthcare. The kids can forget about the house and savings).

Yes, that's right, the British government (all the main parties as far as I'm aware) want us to believe US companies will provide us with value for money healthcare.

The older I get the more I believe human nature is rotten to the core.

 

[kellyb]

Don´t be that hasty.
The breast cancer will surely disable her at some point.

True.

 

[kellyb]

Just remember that the NHS is under yet another transformation, with the government getting into bed with US private healthcare companies to provide services under the NHS logo, which is all it will be in a few decades (no doubt when I'll be needing most of my healthcare. The kids can forget about the house and savings).

Yes, that's right, the British government (all the main parties as far as I'm aware) want us to believe US companies will provide us with value for money healthcare.

The older I get the more I believe human nature is rotten to the core.

Are you serious?


what in the world can be the rationalization there?

 

[Ivor the Engineer]

Are you serious?

Yes.

http://www.bmj.com/cgi/content/extract/336/7641/400

The involvement of private companies in the National Health Service always generates controversy. Some people believe that only commercial interests can bring innovation and efficiency to modernise the NHS. Others assume that the profit motive is incompatible with the pursuit of excellence in health care.

This debate has been reignited by the announcement that United Health Europe, a subsidiary of a large American health company, has won a contract to run three NHS general practices in London. This is the latest in a series of similar acquisitions by commercial companies throughout England. The government is also investing £250m ({euro}335m; $487m) in establishing at least 150 new health centres, many of which will probably be run by private companies.1

These developments are meant to increase access to primary health care in areas where existing contractual arrangements have not provided adequate services.2

what in the world can be the rationalization there?

Probably because by using private companies it avoids the cost going on the governments' balance sheet for a while, and a belief that "the market" always provides better services than the public sector.

 

[Toke]

Are you serious?

We have an recent epidemic of health insurances in Denmark.
I just checked one.
Cost is 2100Kr a year with a max cover of 1.200.000 Kr a year or twice during your life.
There is a long list of what it does not cover.
It does seem to cover minor operations to get you back to work.
Guess the idea is some kind of insurance light, with the public system for backup.

There were a recent article about it, the problem were that it was too succesfull. People are using it and that cost too much for the insurance companies.

The private hospitals are also in trouble.
After the nurse strike the treatment garantie* have been abolished. So the public hospitals are no longer forced to pay whatever is demanded. They can now go for the lowest bidder. Some of the private hospitals will likely go bankrupt before they adapt to free marked.

*A cap on waiting time

I have no problem with people wanting to pay for their own fast healthcare.

The problem arises when waiting lists are due to lack of doctors and nurses.
Private hospitals do not get staff out of thin air, they get them from the public system because they can offer a higher pay.
A private hospital can specialice in specific operations, a public one need to be able to treat everything, and have to train the new doctors.

It will be interesting to see how it pans out.
What will the insurance end up costing?
Will private hospitals get much public buisness?
What will happen to waiting times?

 

[Rolfe]

Even if it was true for those strips, an insurance company could always try to order them directly from the factory in China and offer them for free to its clients -- but you explicitly said that while it may be true for the strips, it isn't true for the insulin meters themselves; those do come with a variety of prices. If there are meters that work for $15, why would it cover the expenses of an $80 one without any indication that it is medically necessary?

Actually the meters themselves are spectaculary cheap. Mostly less than £20 even over the counter in the chemist's shop.

This conversation reminded me that I'd meant to recommend the purchase of one where I now work; for some reason we don't have one. One of my students last term was a type I diabetic and I'd asked him to bring his meter to class to discuss the methodology of the reflectance meter. Rather apologetically he reached in his pocket and produced his meter, saying it wasn't a reflectance meter.

It was the spiffiest miniaturised, non-optical (potentiometry, I think) toy I have ever seen. Obviously not species sensitive, and valid on haemolysed and lipaemic samples. WANT! I thought I'd seen £17 on the web page we looked at in class. I decided we needed one, and went shopping online this morning.

£5.99

For a piece of really, really cool instrumentation using methodology that needed something about the size of a small TV and cost £3,000 in the 1970s. I feel really old!

Competition and modern technology have performed a miracle on the price of the actual meters. I fear the increasing prevalence of diabetes has also affected the price by increasing demand.

But the strips are still about 50p a pop, and the strips for the reflectance meters are about the same so it's not the potentiometry. I suspect that to some extent the sale of the strips is subsidising the cheap meters. (Like inkjet printer cartridges.) Nevertheless, there is certainly enough competition in the system to drive these prices lower if there really was a lot of slack in the pricing.

Rolfe.