Health care - administrative incompetence

[Ivor the Engineer]

xjx388,

Please answer my questions. Here they are again:

Do you select which apples to buy in a supermarket? Do you feel confident you can determine which are the good apples from the bad? What's the cost to you if you make a mistake?

Do you debate the diagnosis and recommended treatment with your doctor? If you're feeling like crap and a doctor says you need X, Y and Z to make you feel better do you ask for a second opinion? What's the cost to you if you make a mistake?

 

[Ducky]

Food is much more of a universal need than healthcare is. Government regulation is not the best way to distribute food. Your last sentence is exactly my point. Medicine in the US is nowhere near a free market. We should make it more privatized.

If healthcare is so much of a universal need, then why don't individuals prioritize it in their budgets? I hear a lot about how uninsured people struggle to pay their health bills. Well, let me ask you this: How many of those uninsured (or even insured) people are saving anything towards their future health care needs? If it's such an important universal need, why do they spend so much money on cigarettes, HD TV, sporting events, alcohol -all the luxuries? Until we tell people that "Your own healthcare is your own financial responsibility," things will never get better. Individual budgets should prioritize Food, Shelter and Healthcare, everything else is disposable.

As for the New Yorker article, I've not only read it, I live it. Dr. Gawande makes some good points that line up with my views on overutilization. However, I can't support his conclusions that doctors are the primary contributors. One simple example is Home Health services. I'm pretty sure that the Rio Grande Valley is the only place in the country where HH is utilized so highly. The reason for this overutilization is outright fraud on the part of HH agencies. I've reported it many times, but nothing ever happens. Doctors are not the only problem, it's also the direct-to-patient marketing that these agencies do. It creates a demand that must be filled and if one doctor won't sign off on it, another will to please the patient. Another good example is Durable Medical Equipement companies. They visit patient's homes and convince them that they "need" diapers, walkers, scooters, hospital beds, etc. This creates the demand from patients for these mostly unnecessary items. Visit a flea market in the RGV and you will find these supplies on sale by the people who supposedly "needed" the equipment.

I've reported these companies to Medicare and nothing is ever done. It seems to me there is no interest in fixing the problem. Oh, but my clinic has gotten audited by Medicare twice. We passed with flying colors of course, but things like that just add to costs.

However, if we just told patients that they are financially responsible for their care, these companies would disappear overnight. Wal-Mart could stock most of that stuff and provide it at much reduced costs. Instead of hiring nurses to do simple things like glucose blood checks, people would get their family members to help out instead. So much cost-savings is available if the governments and insurance companies would just get out of the way.

How, exactly, would you have had me budget for 1.2 million dollars in healthcare costs for cancer over the past 7 years (a significant amount of which wasn't covered under insurance?)

 

[Ivor the Engineer]

How, exactly, would you have had me budget for 1.2 million dollars in healthcare costs for cancer over the past 7 years (a significant amount of which wasn't covered under insurance?)

Don't you understand Ducky? If it wasn't for the damn government interfering the cost of your medical treatment would be much, much lower. You'd have been able to hobble from surgeon to surgeon and find the least expensive treatment. Heck, if the market in healthcare were truly free, you may have even been able to find a doctor who'd have diagnosed you with a much less expensive condition with similar symptoms and saved a packet.

I blame the Democrats and Obama.

 

[Ducky]

Don't you understand Ducky? If it wasn't for the damn government interfering the cost of your medical treatment would be much, much lower. You'd have been able to hobble from surgeon to surgeon and find the least expensive treatment. Heck, if the market in healthcare were truly free, you may have even been able to find a doctor who'd have diagnosed you with a much less expensive condition with similar symptoms and saved a packet.

I blame the Democrats and Obama.

I lol'ed.

But seriously, let's take 1.2 mil and divide it by 7. that's roughly what, 171 grand a year in costs? in order to budget that and still afford rent and food and living costs let's bump it by another 50 grand a year (conservatively.)

Sorry, rather few people make that much. This is why you spread cost risk over the largest population possible.

 

[xjx388]

How, exactly, would you have had me budget for 1.2 million dollars in healthcare costs for cancer over the past 7 years (a significant amount of which wasn't covered under insurance?)

In our current system, I wouldn't. 1.2 million is a crap-ton of money and there's no way it should cost so much. You indicated that the insurance didn't cover much of that figure. Are you saying that your out-of-pocket is 1.2 mil or that the total bill was 1.2 mil, the insurance paid a chunk and you are left with a chunk? If so, what was your chunk?

It's hard to argue when the argument becomes personalized in this way. I'm not trying to offend you and I apologize if I did so, sincerely.

 

[blutoski]

Food is much more of a universal need than healthcare is. Government regulation is not the best way to distribute food.

It does seem to be important to the supply end. The US has one of the most complex, interlocking subsidy systems for food production, plus the subsidized rail network for wholesale grain, dairy, and meat.

Not surprisingly... the US also has very affordable food. It's because of national policy to protect the stability of the food supply.

Your last sentence is exactly my point. Medicine in the US is nowhere near a free market. We should make it more privatized.

If healthcare is so much of a universal need, then why don't individuals prioritize it in their budgets?

Because it is something that cannot be budgeted for. It is an unpredictable expense often exceeds accumulated savings anyway.

I hear a lot about how uninsured people struggle to pay their health bills.

Actually, the majority of the people who struggle to pay their health bills are insured. I believe something like 95% of those who declared bankuptcy for medical expenses were on a plan.

Well, let me ask you this: How many of those uninsured (or even insured) people are saving anything towards their future health care needs?

Probably none of the insured: that's why they paid for insurance.

If it's such an important universal need, why do they spend so much money on cigarettes, HD TV, sporting events, alcohol -all the luxuries? Until we tell people that "Your own healthcare is your own financial responsibility," things will never get better. Individual budgets should prioritize Food, Shelter and Healthcare, everything else is disposable.

This is a fantasy, and makes some unrealistic assumptions about household resource allocation. Healthcare expenses can often exceed entire life savings.

The benefit of single payer is that it is a gestalt approach to reducing costs, instead of shifting them to somebody else.

As for the New Yorker article, I've not only read it, I live it. Dr. Gawande makes some good points that line up with my views on overutilization. However, I can't support his conclusions that doctors are the primary contributors. One simple example is Home Health services. I'm pretty sure that the Rio Grande Valley is the only place in the country where HH is utilized so highly. The reason for this overutilization is outright fraud on the part of HH agencies. I've reported it many times, but nothing ever happens. Doctors are not the only problem, it's also the direct-to-patient marketing that these agencies do. It creates a demand that must be filled and if one doctor won't sign off on it, another will to please the patient. Another good example is Durable Medical Equipement companies. They visit patient's homes and convince them that they "need" diapers, walkers, scooters, hospital beds, etc. This creates the demand from patients for these mostly unnecessary items. Visit a flea market in the RGV and you will find these supplies on sale by the people who supposedly "needed" the equipment.

It sounds like you're saying the UK and Canadian approach might have some merit in restricting direct-to-consumer advertising?

I've reported these companies to Medicare and nothing is ever done. It seems to me there is no interest in fixing the problem. Oh, but my clinic has gotten audited by Medicare twice. We passed with flying colors of course, but things like that just add to costs.

However, if we just told patients that they are financially responsible for their care, these companies would disappear overnight. Wal-Mart could stock most of that stuff and provide it at much reduced costs. Instead of hiring nurses to do simple things like glucose blood checks, people would get their family members to help out instead. So much cost-savings is available if the governments and insurance companies would just get out of the way.

Do you seriously believe that?

 

[xjx388]

xjx388,

Please answer my questions. Here they are again:

Do you select which apples to buy in a supermarket? Do you feel confident you can determine which are the good apples from the bad? What's the cost to you if you make a mistake?

Do you debate the diagnosis and recommended treatment with your doctor? If you're feeling like crap and a doctor says you need X, Y and Z to make you feel better do you ask for a second opinion? What's the cost to you if you make a mistake?

Sorry but you are comparing apples to healthcare. That's a straw man. I'm talking about delivery systems here. If you are saying that free markets only work when people can make educated choices about what the market provides, then I respectfully disagree with you.

 

[Ivor the Engineer]

Sorry but you are comparing apples to healthcare. That's a straw man. I'm talking about delivery systems here. If you are saying that free markets only work when people can make educated choices about what the market provides, then I respectfully disagree with you.

I am saying that and it isn't just me who you disagree with, it's practically every economist on the planet.

 

[Ducky]

In our current system, I wouldn't. 1.2 million is a crap-ton of money and there's no way it should cost so much. You indicated that the insurance didn't cover much of that figure. Are you saying that your out-of-pocket is 1.2 mil or that the total bill was 1.2 mil, the insurance paid a chunk and you are left with a chunk? If so, what was your chunk?

It's hard to argue when the argument becomes personalized in this way. I'm not trying to offend you and I apologize if I did so, sincerely.

It doesn't matter. even if 50% is covered it's still a yearly income level to budget for it that is well above 75% of american incomes.

So how, exactly, do you think I should have budgeted for this?

 

[xjx388]

It does seem to be important to the supply end. The US has one of the most complex, interlocking subsidy systems for food production, plus the subsidized rail network for wholesale grain, dairy, and meat.

Not surprisingly... the US also has very affordable food. It's because of national policy to protect the stability of the food supply.

Nope. Subsidies do nothing but line the pockets of corporate farmers.

Because it is something that cannot be budgeted for. It is an unpredictable expense often exceeds accumulated savings anyway.

In our current system. What about a system in which people are mostly responsible for their healthcare but must purchase a catastrophic insurance plan that kicks in once their expenses reach a certain level, which the person can choose.

Actually, the majority of the people who struggle to pay their health bills are insured. I believe something like 95% of those who declared bankuptcy for medical expenses were on a plan.

If your numbers are correct, then maybe people shouldn't rely totally on insurance. This is where a catastrophic plan makes sense.

This is a fantasy, and makes some unrealistic assumptions about household resource allocation. Healthcare expenses can often exceed entire life savings.

It's not a fantasy. The average person spends about $2100 on entertainment, alcohol and tobacco and about $2010 on healthcare.

It sounds like you're saying the UK and Canadian approach might have some merit in restricting direct-to-consumer advertising?

Absolutely!

Do you seriously believe that?

Yes. More personal responsibility = less utilization = lower costs for all.

 

[Ivor the Engineer]

<snip>

More personal responsibility = less utilization = lower costs for all.

Increased discretional costs for individual = disincentive to seek health care early = increased costs for all.

 

[xjx388]

Increased discretional costs for individual = disincentive to seek health care early = increased costs for all.

How so? In a free market, if enough people choose not to buy commodity x because it's too expensive, then the price of commodity x has to come down.

 

[Ducky]

Nope. Subsidies do nothing but line the pockets of corporate farmers.

In our current system. What about a system in which people are mostly responsible for their healthcare but must purchase a catastrophic insurance plan that kicks in once their expenses reach a certain level, which the person can choose.

If your numbers are correct, then maybe people shouldn't rely totally on insurance. This is where a catastrophic plan makes sense.

It's not a fantasy. The average person spends about $2100 on entertainment, alcohol and tobacco and about $2010 on healthcare.

Absolutely!

Yes. More personal responsibility = less utilization = lower costs for all.

How exactly would having more personal responsibility prevent multiple myeloma and a metric tonne of cost leading me to the brink of bankruptcy?

How exactly would any choice I made have made a difference? How exactly am I to budget for such an immense pile of cost so far beyond my income which, I would point out, would be more had I been able to return to the business I had to shut down over health care costs and yet still not have been enough?

 

[Tatyana]

How so? In a free market, if enough people choose not to buy commodity x because it's too expensive, then the price of commodity x has to come down.

Ok, break your leg and choose not to get it mended.

 

[Emet]

How so? In a free market, if enough people choose not to buy commodity x because it's too expensive, then the price of commodity x has to come down.

July 25, 2009, 5:07 PM
Why markets can’t cure healthcare


There are two strongly distinctive aspects of health care. One is that you don’t know when or whether you’ll need care — but if you do, the care can be extremely expensive. The big bucks are in triple coronary bypass surgery, not routine visits to the doctor’s office; and very, very few people can afford to pay major medical costs out of pocket.

This tells you right away that health care can’t be sold like bread. It must be largely paid for by some kind of insurance. And this in turn means that someone other than the patient ends up making decisions about what to buy. Consumer choice is nonsense when it comes to health care. And you can’t just trust insurance companies either — they’re not in business for their health, or yours.
(...)
... health care just doesn’t work as a standard market story.

http://krugman.blogs.nytimes.com/2009/07/25/why-markets-cant-cure-healthcare/

 

[Architect]

I've just browsed guidance material from the Australian healthcare system, which is a UHC type. Their practitioner advice takes a similar (dashed near identical) view to that given by the UK NHS authorities quoted earlier and the French system (at least inasmuch as I can translate the material).

One would have to examine the minutae of reporting data in order to see whether this difference in treatment between the UK/France/Australia and the US led to more adverse outcomes. I don't have the medical knowledge to do so, nor do I have access to that level of data (if it's available).



Can you provide us with more accurate data than news reports, because I'm having trouble finding anything online.



Let's break that down.

Firstly we need to consider whether there are, statistically, underlying health issues that would contribute to the massivley higher expenditure in the US - and remember that we're talking double the cost here, not 10-20%. If you have data on this - and I assume the reference to Hispanic people comes from somewhere - then I'd very much like to see it. You in turn might wish to look at heart disease rates in the Celtic countries, especially Scotland.

Secondly, we need to look at how we measure clinical performance. Infant mortality and life expectancy are often used as key indicators, but are a clumsy tool. Cancer diagnosis and recovery rates are perhaps more helpful, but there are difficult differences in reporting regimes.

What we know from other threads, however, is that Europe and Canada tend to come out on a par with, and in many areas ahead of, the US. BaC here, for example, has been desparate to prove that us Europeans drop dead earlier but is having great difficulty proving it - he's debunked himself several times IIRC.




Your problem here is that countries such as the UK deliver a perfectly adequate system, at least on a par with yours, without the profit motive and at generally much lower cost. Remember, we're talking about 50% here. This could, of course, be due to massive maladministration on the part of the US healthcare bodies. In reality it could be both. Either way, it's not serving the US people very well.

Bump for XJX

 

[blutoski]

Nope. Subsidies do nothing but line the pockets of corporate farmers.

Mm. So, you're saying they should be scrapped?

In our current system. What about a system in which people are mostly responsible for their healthcare but must purchase a catastrophic insurance plan that kicks in once their expenses reach a certain level, which the person can choose.

I didn't understand that.

That's what the HMOs claim to be doing.

The "once their expenses reach a certain level" part is the copays and deductibles that many plans use. As pointed out: these seem to increase costs by distorting medical need vs immediate cashflow.

If your numbers are correct,

I stand corrected. 77.9% had insurance (2007 data), not the 95% I quoted.

then maybe people shouldn't rely totally on insurance.

They may not be able to: 3% of those bankrupted with medical expenses in 2007 were rejected by private insurers due to being ill and also did not qualify for public programs (too high an income).

This is where a catastrophic plan makes sense.

What do you mean by 'catastrophic plan'?

I would normally assume you meant insurance policy, but you're saying above that HMOs and insurance are not the way to go.

So, I'm not sure what this 'catastrophic plan' would look like.

It's not a fantasy. The average person spends about $2100 on entertainment, alcohol and tobacco and about $2010 on healthcare.

Yep. But your claim is that reallocating this money will prepare for a catastrophe. So, here's the math question: is $2100 annually redirected to, say, a savings account over a normal period of time, going to cover the typical US health-caused bankruptcy debt?

Be mindful that many of these bankruptcies are young parents (in their 20s) with sick children. So, they would have had maybe 5 years to save.

Does this work mathematically?

Yes. More personal responsibility = less utilization = lower costs for all.

That's a valid hypothesis. We can test that! We're skeptics, we love testing an hypotheses. Let's compare countries with public vs private models to see whether there's a difference in costs.

Oh, wait. We did that, and the model with no public option has higher costs.

Also be aware that the HMOs were filling a need - medicine in the US and Canada used to be paid for out of savings or debt. But it didn't work well, so people started getting insurance. The HMOs were an offshoot of insurance.

 

[Architect]

You know, Xjx could do worse then to read about the problems which Travis has in securing medical coverage and affordable treatment. But I suspect she might claim it's because he blew $2k pa on entertainment, alcohol, and tobacco. Which obviously would cover the cost of his treatment.

 

[blutoski]

How so? In a free market, if enough people choose not to buy commodity x because it's too expensive, then the price of commodity x has to come down.

Exactly: "In a free market."

Health needs are not a free market: customers cannot choose not to buy unless they want to be (or watch their family be) ill or die (or be ill and then die).

They can only negotiate price.

There is no reason for a price to 'come down'.

Please read the link to price discrimination^WP. Price in captive markets is proportional to the cudstomer's ability to pay, not to cost of service. There is no incentive to decrease costs in these markets.

 

[blutoski]

You know, Xjx could do worse then to read about the problems which Travis has in securing medical coverage and affordable treatment. But I suspect she might claim it's because he blew $2k pa on entertainment, alcohol, and tobacco. Which obviously would cover the cost of his treatment.

Yes, I don't think he's taking the unpredictable nature of illness into account.

Just as an example... my first wife had cancer when she was a child, and her parents were 20 and 21 years old.

It's just unrealistic to hand-waive and say they should have saved up for 30 years until they could afford catastrophic expenses before deciding to have a kid.


Similar example is my cousin whose kid was born with a heart defect and she's had about eleven surgeries in her first year. He's 21 and just graduated with an MBA and was able to pay off his student loans (he's Mr. Responsible), but there's no way he'd have saved the hundreds of thousands of dollars this would have cost in a US cash billing this soon.