Thursday, July 23, 2009

In Defense of Our Much Maligned Healthcare System 

Why does it seem that our government is intent upon destroying the most extraordinary system of healthcare development, innovation and delivery ever created?

Because we live in a world of limited resources, we have to allocate those resources according to certain rules. In a capitalist system, you do it through the price system. That is how you prevent shortages of goods relative to demand. The price system matches supply and demand. In something other than that, the only way you ration demand is queuing. That is, people have to line up for goods and services (which invariably are underproduced). The most abject example of this was people lining up for bread in the USSR.

So what is the gripe about our system? There are several, but very few are legitimate. For instance, there is a tendency to grouse about the third party payment system (insurance, HMOs) because payers seem to be in business to deny services. For the vast majority of situations, that gripe is frankly nonsense. If people had to pay for things themselves, they would deny themselves services constantly that made little economic sense. It's only with healthcare that people overutilize the insurance system because they will always maximize the spending of somebody else's money if there is even the remotest possibility of a cure for their ailment.

The third party payment system has been augmented by the government over time to address what are perceived to be imbalances in the system for the indigent (because they can't afford even basic care and may be unemployed) and the aged (because they are heavy users of the system and therefore are perceived to need subsidization. That's what Medicaid and Medicare accomplish.

The political raison d'etre for the conversation about universal healthcare is the perception that a large number (how many is hotly debated) of citizens don't have coverage via their employer, Medicaid or Medicare and can't afford private insurance on their own, thus they are uninsured. Let's leave alone the fact that there are many young and healthy people who may elect not to pay for coverage for the simple reason that they don't want to spend the money. There will be some who fail to get coverage and want it. Ok. So what? Is it worth it to change the system for the 260-275mm people for whom it basically works well to help out the 25-40mm for whom maybe it doesn't?

How about this? That's stupid.

If we want to enact some new transfer or insurance product for those people, let's create a public HSA - an insurance product with a low premium and high deductible but which gives people catastrophic coverage. That innovation happens to be rapidly moving through corporations because it is an economically sensible way to motivate people to treat healthcare dollars as though its there money, not somebody else's, and therefore make sensible economic choices about what services to use and which ones to self-deny. In effect, that exists today, it's just inefficiently delivered via the Emergency Room.

Ok, so this piece started out as a defense of our system. Why do I like it so much? Well, let me first say that my parents were both physicians. They were immigrants from Argentina, and they lived in Europe. So I have some perspective on the healthcare payment and delivery systems in Latin America and Europe. As an investor, I have invested with regularity in our healthcare economy.

I like the system because the US has essentially developed the largest and most robust healthcare innovation machine anywhere, ever. From procedures, to medical devices to pharmaceuticals and everything else imaginable, no nation or people anywhere has ever applied chemistry and engineering and biology and medical practice to such productive development in so many areas. We also have an enormous medical delivery infrastructure with which to deliver all of that technology and care.

Do we overproduce healthcare? Probably. The price system does lead to some peculiar things. We develop cures for orphan diseases which are tiny problems in the overall population, though deadly to the patient, because we are willing to pay large sums for those cures. That leads to overspending and some real lack of bang for buck in some instances. On the other hand, we save people from otherwise certain death from conditions like Gaucher's disease. We value every individual life, including those at risk from orpahn diseases.

By contrast, we could save great sums of money if we demanded every citizen maintain an appropriate weight, not smoke or drink. But as a society, we have opted to give people free choice to overeat and smoke.

That's why the debate about the uninsured is BS. Universal healthcare is intended to stop the spending - and that in turn will stop innovation and development. We will underproduce healthcare products and services, and while more people will have "coverage", they will queue for these underproduced services which in turn will also be denied far more regularly than is the case with insurance. Count on it. Americans don't go to the UK and Canada to get healthcare; it's the other way around. Now they may go to Canada to get certain products available in both places more cheaply. But I promise you that product is only available in the first place because it was developed here. The rate of healthcare innovation in the UK and Canada is dwarfed by that of the US. And furthermore, if the US market didn't exist, the rate of innovation around the world would collapse.

We have a great healthcare system. It works for most of our 300 million people, and works pretty well by any sensible historical measure. Yes, it's expensive. Yes, it promotes overutilization via something called moral hazard. We need to develop insurance products and benefits which sensibly allocate economic cost to the consumer of that healthcare so they make intelligent choices (self denial!), just like we do with every other product or service we consume. We should work to provide insurance products as well which provide coverage for those who want it. But let's not kill our system. It cares for us very well and encourages extraordinary innovation. It also employs a huge number of people in generally high quality, well paying jobs. Entrusting the development of a whole new healthcare delivery and payment system to a group of politicians would be insanity.


By Blogger SR, at Thu Jul 23, 05:22:00 PM:

Well put CP.
President Obama is highly disingenuous when he claims that the major problem is the overall expense
of healthcare in this country. It is expensive because Americans choose to pay forthe greatest health care in history warts and all.
I'm waiting for a reporter or a questioner at a town hall meeting to ask the President how he thinks we can add 47 million patients to a system where the number of providers is not growing. Ask him what feature of his system is meant to cause or even allow providers to deliver the additional care these patients will require. He won't answer this of course except with obfuscation.
The only way to significantly reduce the cost of health care is to deliver less of it, just as every other country does.  

By Anonymous SouthernRoots, at Thu Jul 23, 05:26:00 PM:

"Insurance companies deny payment for some treatments!" OMG - so do government run systems.

"Insurance companies limit payment for some procedures!" OMG - so do government run systems.

"Insurance companies make profits!" OMG. Those profits pay shareholders and make individual retirement investing possible.

The government only takes away profits and frivously spends them, or increases the deficit.

None of the arguments I have heard pro government run insurance improves health care or reduces the costs - it only appears to address reducing the cost to the individual of the insurance premiums.

MRI machines won't be less expensive. CAT scans won't be cheaper. Defib machines won't cost less. Where will the "savings" come from?

Salaries. Price controls on services. Heavy government subsidies. Maybe some volume purchase discounts, but probaly not. Will governments stop mandating the coverage insurance companies must provide? Some people are paying for potential services they will never use - because of government mandates, not their own choices.

Government should make sure that the services we choose to receive are safe. The hospitals are clean and safe. Doctors are trained and licensed. Drugs are tested and without impurities.

Other than that, butt-out!  

By Blogger Neil Sinhababu, at Thu Jul 23, 06:32:00 PM:

Well, here's the problem that I'd like to see you grapple with -- we spend 15.3% of GDP on health care. That's much more than any other country. (2nd is Switzerland at 11.3%). This will eventually bankrupt us if it isn't held in check

How do we hold costs down? Countries with government-run systems have been successful in giving everybody health care and at the same time holding costs lower than we do. Basically every market failure you've ever heard of -- adverse selection, principle/agent problems, etc... takes a big bite out of our health care system at some point or another.

You can fix this with a bare-bones system that has some waiting lines (The UK, which spends 8.4% or GDP) or with a more lavish system where people generally get care faster than they do in the USA (France, which spends 11% of GDP). Both of these systems manage to cover all their people, for less than Americans pay to leave 47 million uninsured.

Charts of national health spending based on the OECD data are here.  

By Blogger Elijah, at Thu Jul 23, 07:00:00 PM:

47 million?

and how many million of that 47 million are actually not U.S. citizens (12-20)? This is one difference between the U.S. and European countries. Will the taxpayer pick up the cost of individuals who are not citizens?

In 1965, hospitalization coverage under Medicare was projected to cost $9 billion by 1990. The actual price tag was $66 billion.

We spent 15.3 % of GDP on health care?
It is an assumption that the percentage will not increase, or conversely, access could be rationed to control costs.

Mr. Sinhababu would have one believe that a group of politicians and bureaucrats have the expertise to
plan for the rest of us.

What Adam Smith said about the economic planner applies here, too: The politician who tries to design the medical marketplace would "assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it."

it is folly beyond belief that a matter as complicated as health care restructuring would be rushed to meet political timetables.  

By Anonymous Anonymous, at Thu Jul 23, 07:32:00 PM:

Is Elijah aware that we have always spent 100.0% of our GDP on something or other, yet have always managed to avoid bankruptcy up to now?  

By Blogger Christopher Chambers, at Thu Jul 23, 07:36:00 PM:

Sorry for side stepping your interesting healthcare post, but I wanted you, TH to look at yet another looney tunes wingnut cause: whether Obama is legally president, due to his "foreigness." LOL


By Blogger Elijah, at Thu Jul 23, 08:06:00 PM:

Is Mr. Zrimsek aware that when liabilities exceed assets by an amount that cannot be serviced by any conceivable future revenue stream, then one (an entity-the U.S.) is said to be insolvent.

When current revenue flow cannot service current debt payments, then an entity is technically bankrupt.

Finally, when a debt payment is missed, then a default has occurred and the entity is actually bankrupt.

So, is the U.S. national debt growing or being reduced?

Keep those printing presses running, full speed ahead...  

By Anonymous Anonymous, at Thu Jul 23, 08:11:00 PM:

Ok. So usually I write 100 word comments, but for this one I say, I agree. Yup.  

By Anonymous Anonymous, at Thu Jul 23, 08:21:00 PM:

Sorry about that, Elijah, my first should have been directed at Neil. Anyway, how we divvy up our consumer spending has bugger-all to do with the requirements of debt service.  

By Anonymous Anonymous, at Thu Jul 23, 08:21:00 PM:

Well, here's the problem that I'd like to see you grapple with -- we spend 15.3% of GDP on health care. That's much more than any other country. (2nd is Switzerland at 11.3%). This will eventually bankrupt us if it isn't held in check.

I bet you have no idea what will "bankrupt us", or why. None at all. You are simply repeating something someone, probably the president, said on TV. You don't even know what industries are being discussed in this number- you just pulled it from some talking point or other at a pundit site.

Some element of the economy at a particular level or other has absolutely nothing to do with success or failure, or "bankruptcy". In fact, usually, a successful part of the economy cannot be distinguished from an unsuccessful part merely by it's share of GDP. Wouldn't you guess that "technology" businesses occupy an even larger share of the economy and yet no one says that collection of industries will bankrupt us.  

By Anonymous Anonymous, at Thu Jul 23, 08:24:00 PM:


Back in my days studying Public Administration, there was a concept that I came across that all my professors thought important. It was called "fundamentalism vs incrementalism". Fundamentalism referred to policy that began "de novo" as when Social Security was first started. Incrementalism would refer to minor changes in a program already in operation, such as subsequent rate increases. It seems to me that the current legislative action ignores the opportunity to present two different alternatives to the American people. Instead of only focusing on band-aiding the present melange, why is there no proposal about if we had to invent a new system today what would we want it to do?

My second thought is a car insurance analogy. Almost no employers provide car insurance to their employees and yet most of them drive. This makes me question the employer-health insurance connection. Is it wise, necessary or just convenient. Similarly, I am intrigued by what I call the maintenance vs catastrophe question. Again, our car insurance does not cover vehicle maintenance, just some catastrophic events. Yet, the current political activity does not seem interested in this
aspect. Why are we accepting the implicit idea that all medical expenditures should/must be insured against? Do people really need to involve a third party (insurers) in every medical service provision? What did Americans do before there was health insurance? And, finally, has health insurance turned into some kind of subliminal medical lottery?  

By Blogger Revere, at Thu Jul 23, 08:32:00 PM:

Why does it seem that our government is intent upon destroying the most extraordinary system of healthcare development, innovation and delivery ever created

Since I've been a physician in this "great" health care system and also am familiar with many other systems, you make me laugh. Exactly what evidence do you have for the "extraordinary" nature of this system which is clearly broken. Well, clear to those of us who know it and work in it anyway. Apparently not to everyone.  

By Blogger Elijah, at Thu Jul 23, 08:53:00 PM:

Could you speak a little less in generalities and be somewhat more specific Revere?

Are you a primary care physician or a specialist for starters?  

By Anonymous Anonymous, at Thu Jul 23, 09:40:00 PM:

Neil ... take the 20 or more million illegals from the 47M, then take off all the children, who ARE insured under State plans. Lastly, take out those who're eligible for Medicaid or Medicare but refuse to pay for it. What's left are able bodied people that I personally could give two shits about. If they don't value their health, we can't value it for them.

Our system works better than any other on this planet. It's expensive, but giving all of us less so we can make it equal for everyone is not a solution, and the vast majority of Americans are with me.  

By Anonymous Mr. Ed, at Thu Jul 23, 10:41:00 PM:

I think the President is pushing something he knows little about. The public's move to that point of view has passed the tipping point. H.C. Anderson has cast a wide net.


By Blogger SR, at Thu Jul 23, 10:58:00 PM:

To Revere and all the other physicians who have Obama bumper stickers in our parking lot, if our system is so broken, why don't we have streams of patients heading for other systems which must not be "broken" by your definition.
The Quebec Justice said it best when she wrote: "Access to a waiting list is not access to health care."  

By Anonymous Squealer, at Thu Jul 23, 11:08:00 PM:

I'm sorry. Having experienced the medical system in a foreign country over a long period of time, I can say unequivocally the American system is poor in nearly all respects. You simply don't know what you don't know. I would much rather deal with a used-car salesman than a hospital billing office, who at least has a little accountability. I mean every friggin' time, they try to rip me off!

Whenever I go to the doctor, I feel like saying "just tell me how much I have to pay to get decent care, and I'll write the check." But no, I have to plan any illness I might get in advance, so I can book an appointment to see a doctor weeks ahead. It's insane. And I'm just a guy talking to himself in a lunatic asylum.

That said, I pray the President gets some sense wacked into his head and allows health benefits to be taxed. McCain was right on that one. Businesses should not be responsible for providing healthcare.  

By Blogger Neil Sinhababu, at Thu Jul 23, 11:15:00 PM:

Even if you don't care to cover the 47 million uninsured, it's a pretty striking point about the wastefulness of our current system that we pay 15.3% of GDP to not cover everybody while other countries pay less for universal coverage.

As for us going bankrupt, you've already seen lots of the things I'm talking about. Look at GM (which admittedly was also making bad cars, but health care costs were still a huge part of their fate). I don't want most American companies to end up like that. But with health care at 15.3% of GDP and rising, that's where we're going. It's one of the reasons why corporate America isn't fighting Obama too hard on this one, apart from the insurance lobby and a couple other groups. Wal-Mart even joined the labor unions to support universal health care. They know what's going to happen if we don't fix the system.  

By Anonymous Mr. Ed, at Fri Jul 24, 12:09:00 AM:

The reason health care is so expensive in this country is that the care we provide for older people is light years more sophisticated than what countries with socialized medicine do. And, it is the wealthy that are covering the cost of the advanced technology that offers a better life in the future for less fortunate elderly Americans.

Furthermore, the only areas where countries with socialized medicine provide equal or better service is infant and child care which is fundamentally less expensive and less time critical.

When you get right down to it, the age group that gets the big downgrade under OBama care in this country is not the children, but the elderly. Obama has in effect said as much, that we can't keep providing expensive care to those who do not have a long life to live.

Now is the time to examine and debate the alternatives. Now is not the time to force through legislation that is too complex for the country to understand, and too lengthy for representatives to read in a rushed time frame.


By Anonymous tyree, at Fri Jul 24, 01:24:00 AM:

If we can get comprehensive tort reform passed it will be a lot easier to fix our health care system

Let's stop the lawyers and encourage the doctors and nurses.  

By Anonymous Anonymous, at Fri Jul 24, 07:25:00 AM:

Ed, exactly. Squeeler ... we were just in the UK a few weeks ago. Our guide waited a year for an ultrasound. I respectfully disagree on the quality or access to healthcare in Europe.

Neil ... a percentage of GDP is a BS metric. My insurance costs a lot, sure too much, but I'm not paying with GDP, I'm paying with my money plus my 'work', the secret formula that clears poverty. We pay too much because our premiums and fees COVER the uninsured, layers of bureacracy, fraud, waste, vulture lawyers, and insurance executives. "Savings" on that waste should show up in the premium paid by those who do pay, not to fund more for those who don't provide for themselves.

Your health is a virtue, and your personal responsibility. It is not a right, anymore than owning a luxury car, a widescreen TV, a 4BR house, or a pair of Nike Airs. If you don't have the means, that's life in the bigs.

The poorest, hungriest, most relatively needful person in America is rich by the world's standard. What he lacks is motivation, not opportunity.

Cutting medicare reimbursements to find budget will not incent the finest doctors to continue practicing, nor will it incent new doctors to enter the system. Likewise nurses. Our system IS broken, but not because illegals and poor. They get healthcare, just not the same as the guy who can pay for it. Screwing the 90% of us who have coverage to give them more is simply unAmerican.  

By Anonymous Anonymous, at Fri Jul 24, 09:03:00 AM:

As for us going bankrupt, you've already seen lots of the things I'm talking about. Look at GM (which admittedly was also making bad cars, but health care costs were still a huge part of their fate).

GM is no metaphor for the country, and the fact that fifty years of company leaders got railroaded by union negotiators is not my problem.

As I thought, you equate "large part of the economy" with "bad". The Democrats have convinced the country of this premise uncritically. Pretty gullible for a philosopher.

Here's an issue for you: in most parts of the economy we can agree that Americans prefer lots of market participants rather than few. That's why we have antitrust law, why TR busted the Trusts, and why we tolerated our government going after IBM twenty five years ago. Why then are you in such a rush to have only one market participant in setting prices and deciding appropriate care in the hospital business?

You are confused, that's why. The Democrats have convinced you and others like you that building a huge new medical bureaucracy somehow will yield "cost containment". It's bizarro-world! Alice in wonderland stuff.  

By Anonymous Anonymous, at Fri Jul 24, 10:25:00 AM:

For the first time, Rasmussen has the President's polling showing more Americans disapprove of his performance than approve. All presidents have political approval problems, but this is very early in his term.  

By Blogger Pyrus, at Fri Jul 24, 10:34:00 AM:

DennisEugeneSullivan made several points that I strongly agree with and almost never hear in discussions about healthcare policy.

1. "My second thought is a car insurance analogy. Almost no employers provide car insurance to their employees ..." Exactly. Since I believe that market forces not only work but are morally just, I can't understand why patients don't pay directly for their healthcare needs. Healthcare insurance provided by employers creates an unnecessary coupling between employment and coverage.

2. "Similarly, I am intrigued by what I call the maintenance vs catastrophe question. Again, our car insurance does not cover vehicle maintenance, just some catastrophic events ..." Exactly right. Insurance is a sensible mechanism for distributing risk among participants all of whom can afford an annual premium but none of whom can afford the cost of an improbable catastrophe. What is called healthcare insurance today is just pooled purchasing and the discounting that HC providers give bulk buyers causes the providers to subsidize it by charging higher prices to "private payers" who are not part of the bulk buying plan.

3. The usual rebuttal I hear to #1 and #2 is that if you don't provide universal healthcare then a poor person will show up at an Emergency Room at death's door and the cost of treating him at that point far exceeds what it would have cost to provide care before he became desperately ill. The implication is that we would never choose a public policy that would have us withhold life-saving care to someone who cannot afford to pay for it. Heartless bastard that I am, I would. Partially that's because I see no upper bound on how much to spend (so doctor's would start triaging and rationing) and partially because I think it would mean less care for those who *can* afford to pay. And partially because it pisses me off that there's this kind of extortion applied to those of us who would have to pay for the service: "I dare you to let me die. I double dare you. Ha, I knew you didn't have the nerve."  

By Anonymous Anonymous, at Fri Jul 24, 10:37:00 AM:

My second thought is a car insurance analogy. Almost no employers provide car insurance to their employees and yet most of them drive. This makes me question the employer-health insurance connection.

I couldn't agree more. Why should my health insurance be tied to my employment? Or lack of employment?

I was laid off two months ago. I was "allowed" to continue health coverage for my family under my former's employers plan at a cost of $1,300 per month! We can afford this now--barely--but if I don't find a job soon we may have to let it lapse.

What do you say about that CardinalPark? Should my family go without health insurance because I lost my job?

P.S. Please don't tell me that I can find individual insurance that is cheaper than my firm's group policy because you can't. In fact, with a pre-existing condition you can't even find an insurance company who will sell you insurance at an price.  

By Blogger The Game, at Fri Jul 24, 10:52:00 AM:

Last two nights I have been out at bars with friends, mostly teachers, some conservative, most slightly liberals and one or two hard core liberals.
Both nights the topic of Obamacare came up and NO ONE...yes NO ONE defended it...even the hard core liberals jumped in.
One friend has a wife who does accounting for a hospital. She says anytime anyone comes to the hospital with govt health care (medicade or badgercare) the hospital loses money.
We are in a world of hurt people. This health care plan will end our countries way of operating and living as we know it.
The only people defending this are hard core liberals and very young people who have not learned anything about life yet.
The only people who even raised a question or two were a 23 and 25 year old girl. They just had no idea how bad it was because they are not that far removed from their super-liberal college experience.
Keep fighting conservatives, we need to save the country from Comrade Obama

come check out my blog and help me fight the liberals there!!!  

By Blogger Dawnfire82, at Fri Jul 24, 11:22:00 AM:

Squealer and others: Visiting an un-named 'foreign country' and passing judgment does not mean that US health-care is poor, and it's disingenuous for you to say so. If it were so damned terrible, rich foreigners (including the king of Iran, in his day, numberless Canadians, and recently one of the Crown Princes of Saudi Arabia) would not flock here for treatment.

I've been in a socialized medical system: the military. It sucks. It is inefficient, overworked, and utterly without vision. I used to walk with a cane, thanks to injuries. 18 months of military medicine (my last 18 months in) couldn't help me. At all. It got worse, actually. They told me I'd never run again.

After I got out of the Army, the VERY first guess by the VERY first private sector doctor was a correct diagnosis and treatment. Now, I can run. I kept the cane, though. I may need it again when our system is socialized.

You get what you pay for.

"What do you say about that CardinalPark? Should my family go without health insurance because I lost my job?"

Um, yeah. Such is life.

If you can't pay for a service, you don't receive the service. Ought the government supply your automobile insurance too? How about home owner's insurance? Let's toss in life insurance as well, with garbage disposal, water and sewage services, and electricity so we can all be coddled cradle to grave thanks to someone else who has a job and is taxed (read: robbed) to pay for it.

Just because something is nice doesn't mean you have a right to it. You have to save for the lean times and prioritize.

And aside, (unless there is an extant need to maintain it, of course) shelling out $1,300 a month for health insurance 'just in case' when you have no income and don't know when you might find another job is... not smart. Depending on the details, that could be a whole other month's worth of rent.

Maybe the real question is would you rather have health insurance while unemployed, or become homeless?  

By Blogger Fritz, at Fri Jul 24, 11:49:00 AM:

"Maybe the real question is would you rather have health insurance while unemployed, or become homeless?"

Compassionate conservatism at its finest. I hope that soon, we'll live in a country where no one has to make that choice, even if it means less access to premium care services, and (horrors!) even waiting lists for elective procedures.

If Obama manages to accomplish that, it will be the greatest domestic accomplishment by a president in 50 years.  

By Anonymous vicki pasadena ca, at Fri Jul 24, 12:13:00 PM:

Ok, here goes... I am a liberal, which you all know. I am all for healthcare reform but having the government involved makes me queasy. However, for anyone who says that we have the best healthcare in the world has never been in an emergency room in the USA or a foreign hospital. I broke my ankle on vacation in Brussels 3 years ago and I was in and out x-rays, cast, medication and follow up in less than 3 hours. This was also on a weekend when they are the busiest. I never had to pay one cent for anything. When I returned to the USA a week later i went to a Orthopedist and he said the set and the cast were perfect, couldn't have done better himself (and he is the orthopedist for the Lakers).

My healthcare plan is a joke, and I pay big bucks for it.

It is or responsibility as human beings to care for those less fortunate than we are. Even, maybe especially in these hard times.

Do I know what the answer is, absolutely not. I have about as much faith in the insurance companies as I do in the government. And the "noble" "selfless" doctors, please, for the most part they are only interested in padding their coffers.

A conundrum to be sure.  

By Blogger Elijah, at Fri Jul 24, 12:44:00 PM:

"It is or responsibility as human beings to care for those less fortunate than we are."

there is a difference between freely giving and being forced to give

If it's virtuous to give, isn't it then selfish to take?  

By Blogger Escort81, at Fri Jul 24, 12:48:00 PM:

Anon 10:37 - I seem to recall that you can continue to exercise your rights under COBRA to maintain health insurance coverage for 18 months following separation from your firm. If you contact the insurance company that carries your former employer's policy, it might be willing to offer you a cheaper alternative with less coverage. Hang in there, and good luck in the job hunt.

To vicki's point (and perhaps you should send the taxpayers in Belgium a thank you card, or maybe some roses from Pasadena, for the free treatment), my sister is an ER nurse in northern NJ, so I hear many stories about the overburdened nature of the delivery of health care in an ER. I am fortunate that my local suburban hospital in PA is quite good and has a strong ER. Suffice it to say that there is a big difference in the quality of ERs from hospital to hospital, and that management, equipment, staffing and training matters a great deal (kind of like delivering any other type of service).

Whether or not you believe that the U.S. has the best health care delivery system in the world, I think that one of the key points that I infer that Cardinalpark makes is that suppliers to the system have been engines of innovation, driving developments in new technologies that the rest of the world enjoys. In fairness, many good technologies have been developed elsewhere, primarily in Europe and Israel, but most of the investment capital has flowed here, because, yes, there is a buck to be made. If there is less of a buck to be made because reimbursement rates will be capped at lower figures under some new legislation, it follows that there will be less capital available to develop new technologies and new treatments. There is always a trade-off along that spectrum -- current economic and budget constraints vs. future needs -- but it is interesting that the consequences of reduced health care R&D in the U.S. might be felt around the world. Or, maybe the capital will flow elsewhere to fund development. Perhaps it is quite easy to run human clinical trials in China, though I would worry about patients with "adverse events" somehow getting lost.  

By Blogger Georg Felis, at Fri Jul 24, 01:29:00 PM:

It boils down to one word in your article: Choice.

For being the party of pro-choice, the Dems seem to be dead set against us exhibiting any choice in this.

Free people make choices. Those have consequences.
You smoke/drink. You pay taxes on the cigs/booze and have worse life/health insurance rates, and may die earlier.
You drive stupidly. You collect tickets, your auto insurance goes up.
You get fat. Your risk for diabetes/joint failure/heart problems goes up. You pay more insurance.

If the Government takes over mandatory insurance, the normal rules do not apply. Well, the consequences of death remain, even congress cannot pass a law to stop the Grim Reaper. But the amount we pay for insurance will not be directly coupled to the product we purchase. And we people of small minds (and without Harvard/Yale educations) have some problems with that. If we buy a Snickers bar, we expect to get a Snickers bar. We do not expect to be asked how much we earn, so the price can be properly “adjusted” for us. We do not expect to receive only half a bar, because we have exceeded our fat and sugar allowance for the day. We do not expect a box of peanuts, because somebody has determined they are cheaper than a Snickers, besides there were only so many of them authorized to be given out and we ran out. Darn it, we put our money in the machine, we pushed the button, and we want that Snickers!

There are only three ways to get the Universal Health Care the liberals so desire. Rationing, forcing people to buy it, and differential pricing. Free people given a choice will reject all three of those. Obama does not plan on allowing us that choice.  

By Anonymous v, at Fri Jul 24, 01:56:00 PM:

I don't know Elijah, why is abortion murder and executions not?  

By Anonymous vigilocanis, at Fri Jul 24, 02:20:00 PM:

Top 10 Facts To Know About Obamacare

1. Those with insurance now will pay more than their present insurance plan

2. Those with no insurance will be paying the same

3. Illegal aliens who were not covered before be covered

4. Your doctor who is easily accessible to you now will be difficult to see in the future because of the 46,000,000 new patients with government insurance coming into the system

5. You will share doctors' waiting rooms with 46,000,000 new patients

6. There is no money to pay for it

7. If you love the "turtlebahn" and the Stimulus bill, you will love Obamacare

8. If you love the bailouts, you will love Obamacare

9. If you like standing in line at the post office, you will love standing in line at the doctor’s office

10. If you think that a new 1000 page bill that has not been read by a single congressman that proposes a new trillion dollar government Obamacare program that insures 46,000,000 new patients including 10,000,000 illegal aliens, that cannot afford insurance now and must be paid for by some one else, will not affect you, who is already having trouble paying for your own insurance, let alone pay for additional coverage for others............will not affect you; then you might need to see a Obamachiatrist.  

By Blogger Elijah, at Fri Jul 24, 03:47:00 PM:

"I don't know Elijah, why is abortion murder and executions not?"

perhaps in the case of executions, your definition of murder is another individuals (say a victim's family) definition of justice

i doubt the same analogy could be made for abortion  

By Anonymous Koolau, at Fri Jul 24, 04:20:00 PM:

Execution is a murder...however, what makes murder legal or illegal is simply human laws. Personally, I feel that execution is good and abortion is tolerable since I can live with the fact that hundreds of thousands of people are suffering, dying in much worse ways.

I think people are confused with medical treatments and the payment/cost mechanism. American medical techniques, equipment and facilities rank at the best in the world when looking at averages. Also, American medical treatment is the best in the world when looking at individual facilities.

The problem is one of cost and payments, not the treatment technique or standard of facilities. Don't say American treatments are bad.

The ideal is where people pay for what they receive.

Obviously, not all can pay the amount charged. Thus, insurance was created to allow willing participants to share the risk of medical costs.

The federal gov't wants to create an insurance system of unwilling participants. That is the cause of resistance.

The goal is not to allow everyone to have insurance. The goal is to achieve the ideal where you pay for what you get. Poor people should not get insurance for free. I am not compassionate but I find that life is tough and you must struggle.  

By Anonymous vicki pasadena ca, at Fri Jul 24, 04:37:00 PM:

Dear, dear Elijah, execution has nothing to do with justice. Believe me, from experience, no execution has ever brought a victim's family any closure or any sense of justice.Excuses, excuses.  

By Blogger Elijah, at Fri Jul 24, 05:55:00 PM:

dear, dear vicki, you speak for yourself only
as yours is an opinion, and everyone has their own

how about a consequence of action, as opposed to justice

but that analogy does hold either when comparing the two, another difference

- as to giving, it's surprising your not pro-choice  

By Blogger Elijah, at Fri Jul 24, 05:58:00 PM:

but that analogy does ...not...hold either  

By Anonymous vicki pasadena ca, at Fri Jul 24, 06:51:00 PM:

Actually, I am pro-choice. And proud of it.  

By Anonymous vicki pasadena ca, at Fri Jul 24, 06:52:00 PM:

An eye for an eye, Elijah, how barbaric.  

By Blogger Elijah, at Fri Jul 24, 07:28:00 PM:

with your own rationale
...two eyes for choice, how barbaric  

By Blogger Elise, at Fri Jul 24, 09:09:00 PM:

Expenditures on health care costs eating up a larger percent of GDP is usually offered as an unarguable reason to control costs. But it may be that we as a nation prefer to spend more and more money on health care and less on other areas. Assuming we want the benefits this will give us, that would be a perfectly rational decision. You can check out Greg Mankiw for some thoughts on this.

As for the maintenance vs catastrophe issue and the question of preventive care, why not a policy with a “doughnut”? Insurance would pay partially for some basic care each year or perhaps pay x amount each year then stop paying until some catastrophic limit is reached.

I do think most people view health care as more akin to food and shelter than to less basic services. Thus they are comfortable with the idea that government will provide a safety net for health care just as they do for food and shelter via welfare, food stamps, and so on. Assuming that programs like Medicaid are not enough of a safety net - and I don’t know whether that is the case - I would have no problem providing a better one. The House health care bill, however, does not provide a safety net in the way that welfare and food stamps do. Rather it’s more as if the government is going to restrict my salary to the amount someone on welfare gets and my grocery bill to the amount allowed by food stamps.

(horrors!) even waiting lists for elective procedures.

Most people would probably define, say, hip replacements as elective. The people who would not are those who have lived with the agony of having a disintegrating hip.

Finally, it seems to me that one thing conservatives, liberals, and everyone in between agrees on is that we would all prefer to uncouple health insurance from employment. Assuming, of course, we can buy it somewhere else.  

By Anonymous Anonymous, at Sat Jul 25, 10:14:00 AM:

The amount of disinformation profligated by the right about the health care reform proposlas is staggering beginning with the fallacy that under the bill private health insurance will be banned. In the words of Politifact Liar, Liar, Pants on Fire

Listen carefullY: if you like your current health care you can KEEP it.

For people who claim to be so smart, you sure do have problems with your reading comprehension skills.  

By Blogger JPMcT, at Sat Jul 25, 12:11:00 PM:

Hmmm...tell me again how Obama's Plan to "fix the broken health care system" will do ANY of the following:

1. "Fix" anything!
2. Mystically be more efficient than Medicare, Social Security, Amtrack, the Postal Service or, hell, the US government in general!
3. With doctor shortages looming over the next 20 years, encourage young, bright students to enter a field dominated by checklists, bureaucrats, a declining payscale and no tort reform.
4. Encourage Research and Development by Pharmaceutical and other Medical Technology companies that depend on the capitalist system to get a return on investment.

There's only one way to describe the Obama Plan...it is a LIE. There is NO WAY ON EARTH that money will not be saved at the expense of health.

The ONLY reason that the rabid interest in healthcare "reforn" is now considered urgent is because they MUST do something before the voting public wakes up and realized what exactly it is that they are doing...disguised as healthcare reform.

It is all about FURTHER assumption by the government of the workproduct of the populace. Control, Control and more Control.

If, in some bizarre parallel universe, buggywhips were 15% of GDP in the USA, then the parallel Obama whould be hawking "Urgent Buggywhip Reform...NOW!!!"

Doesn't the fact that he clearly has no idea what is even in the bill that is before Congress tell us anything???

For Obama, it isn't about the details that will affect our lives...it is simply about the grand concept of CONTROL.

Thank God some of us are waking up.  

By Blogger dr kill, at Sat Jul 25, 01:15:00 PM:

There is no problem with health care. A problem is not a problem if it can be solved with money. All citizens of our planet with the means have access to the world's best care- and it is in the States, and that is where they turn when in need.

There is a popular idea on the Left that health care INSURANCE costs too much. And also an idea that employers should provide some sort of health care insurance to their workers.

This last para is bullshit. Instead of de-linking the employer-supplied insurance by passing it to the Feds, de-link by insisting that insurance should be an individual responsibility.

Pay up the difference in cash, get out of the way and allow groups to form and self-insure, the Feds have no business messing in the insurance industry.

I have always felt abused by the IRS, no more so than by not being allowed to deduct the total of my personal family health insurance payments. When our kids were small we spent over 30k a year on health insurance, but damn, was it worth it.

Now we have increased our deductible to lower our annual to about 13k.

I believe in American medicine, and in individual choice in health options. I believe there is fraud in all business, including insurance and health, but what about the fraud in government? Woof.

Can anyone really believe there will be less fraud in a Federal program than in the current for-profit system?

Health care is a business- do good work, have more clients, make more money. Easy to understand, and true for MD's as well as anyone else.  

By Blogger Elise, at Sat Jul 25, 01:19:00 PM:

Anonymous at 10:14am -

First, thank you for the link. It contains a link to the Kaiser Foundation's round-up of all the proposals. I haven't taken a close look at this yet but it sounds like it would be very useful.

For people who claim to be so smart, you sure do have problems with your reading comprehension skills.

You are quite correct that HR3200 does not prohibit individuals from buying health insurance outside the public option. However, your comment about reading comprehension skills is simply nonsense. The reason people don't understand what the heck is in HR3200 is because it is is so huge and so complicated and cross-references the SSA to such an extent that it takes an incredible amount of time and effort to figure out what's really being proposed.

On the substance, while HR3200 will not prohibit the purchase of private insurance, the concern that the public option will drive either private insurance or a significant number of health care providers out of business is still a valid one. The public option in combination with Medicare and Medicaid will almost certainly have enough market share to drastically reduce payouts to health care providers and force most of them to accept it. This in turn will allow the government to charge far less for the public option than private insurers can charge for their policies.

Private insurers could, of course, reduce their own payments so as to reduce their own premiums. Whether that would be feasible requires a long dissertation on overhead, profit, and so on but for the sake of this discussion let's assume it would be feasible.

If the public option is subsidized by tax dollars (and I don't know if it is - do you?), the private insurers could never keep up. There is simply no way they could go as low as the government without going bankrupt.

If the public option is not subsidized by tax dollars, then private insurance companies can race the government down in payouts. I believe our supply of doctors and nurses will decline in an environment where the colossi who bestride the health insurance landscape are engaged in a ferocious battle to see who can pay them the least.  

By Blogger JPMcT, at Sat Jul 25, 07:40:00 PM:

"I believe our supply of doctors and nurses will decline in an environment where the colossi who bestride the health insurance landscape are engaged in a ferocious battle to see who can pay them the least"

Actually, Elise, that process has already started...first with HMO's and now with Medicare. The current private practice of medicine sees either stagnation or decline in average income, and this has been happening for a few years.

The only way to get ahead of the game is to join "The Dark Side" and offer the public some service OUTSIDE the scope of insurance that they will pay for in cash.

Thus we have liposuction, Botox, Vein sclerotherapy, Screening Doppler Vans, etc.

Also, docs can make more money by owning private outpatient clinics for which an institutional charge can be billed as well as the professional charge.

Both these options will likely disappear under the current proposals.

I'm lucky. My practice is composed of major oncologic and vascular procedures that prompt referrals from other communities. If I were the average surgeon serving his community with ER attendance, office practice and routine procedures, it's a pretty bleak outlook...and if one is near retirement age, it is VERY, VERY tempting to chuck it all and watch from the sidelines.

As a good friend of mine once said (a doc who I admire as a person and a professional): "I haven't lost my love of medicine...I've just had it slowly beaten out of me!!"  

By Anonymous Anonymous, at Mon Jul 27, 03:15:00 AM:

Well, here's the problem that I'd like to see you grapple with -- we spend 15.3% of GDP on health care. That's much more than any other country.

So what? We're wealthier than every other country. It's hardly irrational to spend that excess wealth on quality of life, including great health care.  

By Blogger Cargosquid, at Mon Jul 27, 10:45:00 AM:

The point being missed is this:

What part of the Constitution gives Congress and the Executive the authority and power to do ANY of this?  

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