Transterrestrial Musings

Comments

What is interesting about this post is that it expresses a great deal of irritation with Krugman's column without even trying to refute any of his claims. Instead there is a grab-bag of bits of remarks and counterarguments, some of which fall in Krugman's favor. Well, it takes preparation to argue against someone like Krugman. Which is not to single him out as any lone genius. He's pretty capable, but not more so than Nicholas Kristof, or Jane Meyer, or many other members of the big bad "MSM". It's only on television that almost everyone is a hack.

Somehow I feel less incensed about health care than about Bush's notorious effort to legalize torture, even though Krugman would probably remind me that the former is a much bigger issue. This first comment is worth a remark, maybe:

Total number of covered individuals increased from 243 million to 249 million. From 2000-2005, the number employed rose from 137 million to 142 million. The number unemployed rose from 6 million to 8 million.

The argument here follows a common habit of the Bush administration: taking credit for population expansion. The number of covered individuals rose by 9 million in five years because the total US population rose by 15 million in the same period. That's exactly the problem! If health coverage doesn't keep up with the national population, it will lead to more mortality, more morbidity, and less productivity than the United States would otherwise have.

Meanwhile, the theory that more Americans skip health coverage just because they feel good begs the question of why the United States spends 15% of its GDP on health care, while Canada only spends 10%. (According to http://www.stateofworkingamerica.org/swa06_ch08_international.pdf .)

Posted by Mike Johnson at September 22, 2006 04:17 PM

Sorry, I should have said, the number of covered individuals rose by 6 million, because the US population rose by 15 million.

Posted by Mike Johnson at September 22, 2006 04:25 PM

Mike: Over the period, US average lifespan increased. Your point that decreased coverage should lead to increased morbidity may be true for the individually uncovered, but it is not hurting the nation on average. Perhaps covered care is getting better because of regulations that require coverage of more drugs and more diseases which would naturally cause people to fall out of the safety net.

The argument here follows a common habit of the Bush administration: taking credit for population expansion.

Krugman said "Between 2000 and 2005, the number of Americans with private health insurance coverage fell by 1 percent." This follows a common habit of Krugman. To quote "a grab bag of bits" when the whole picture is more balanced. In particular, our nativist campaign to deny government services to illegals could be the entire explanation for the increase in uninsured. If % employment falls and the labor force falls, we would expect less private health coverage. The number of covered individuals per workers dropped from 1.49 to 1.42 from 2000 to 2005. This mirrors household size falling from 2.7 to 2.6. Could it be that there are more workers with smaller families as that entire explanator for falling coverage?

What is interesting about this post is that it expresses a great deal of irritation with Krugman's column without even trying to refute any of his claims.

Not irritated, just trying to write a case for the opposite conclusion. I.e., more payers instead of less. I can make my own positive case that's better for the opposite conclusion instead of refute his intermediate claims.

We spend $6,300 per capita on health care per person per year (15% of per capita GDP of $42k). Would it cost less with a single payor? Perhaps. Things cost less in Soviet Russia. Unless we can adopt the Canadian model with Canadian doctors, Canadian lifestyles and Canadian demographics, there's no guarantee we will get a Canadian outcome. One thing that's true about Canada is that they have to ration care and there are queues. In particular, if we bought healthcare for the 16% of America that don't have it we would face 20% more demand for service, but the same system capacity. Krugman's hypothesis is that we could take the money that is going to insurers and use it to cover everyone. I presented evidence to show this was false. I argue that we will have shortages and colossal waste under a single payor. Earlier this week, you reminded me that we don't have a "command economy", but here you are arguing in favor of Krugman's proposal to create one.

My hypothesis is that we can cover people by deregulating and having subsidized health savings accounts cover people as a last resort. I contend this would result in covering all people who want to be covered at a price they can afford for about the same 15% of GDP we are paying now with a big increase in the quality of care for the money.

... begs the question of why the United States spends 15% of its GDP on health care, while Canada only spends 10%

Why is paying a higher % of GDP for health care bad? I wanted an extra sonogram of my baby and my doctor wouldn't let me pay for one. I wanted to pay for a both halves of a semi-private room and the hospital wouldn't let me buy them. When someone in my family fell ill in my family, the care was substandard. From now on, I would happily pay for a medical monitor to be a witness the quality of care and be a patient advocate, whenever anyone from the family is in the hospital. I will likely get less value for the money from that than on the rest of care, but so what? I'd prefer that to spending it on a fancy car or the latest HDTV. We will continue to have medical care grow as a % of GDP until there are other cooler goods and services to buy.

without even trying

Last anti-Krugman column, at least you gave me a back-handed compliment for trying, and further complimented my use of evidence. C'est la vie.

You appear to have provided a "grab bag of bits" and not refuted any of my claims.

I am not paid as well as Krugman either. Again, you made an ad hohuminem attack to say that I suck as a columnist and my arguments are not as polished as Krugman's. My basic point is that my case is better than his even in its rough form and that single payor is central planning by a monopolist and doomed. You have not refuted that case.

Posted by Sam Dinkin at September 22, 2006 06:08 PM

Actually, Britain's health care system is a better awful example than Canada's. The real problem here is that a nationalised system collects all the bad habits of government departments.

You might also ask why the health care system in the US is so heavily biased towards "conventional" medicine that kills hundreds of thousands per year with its side effects, and natural medicine is sidelined. Perhaps because there is no profit in it for the pharma-cartel?

Posted by Fletcher Christian at September 22, 2006 06:45 PM

Sam

You miss something very important when you look at the
cost of administration of private insurance vs Medicare.

There are two large government medical programs, Medicare and
VA. Both of these are significantly better then the private sector
at the provision of medical services.

Medicare has very low administrative costs, and is pretty quick
about payment, they pay in less then 30 days. VA has a lower
cost per patient then private insurance, and significantly
better quality of care and error rate then private hospitals.

While you may worship at the altar of the free market,
the fact is the basic assumptions of classical economics
do not apply well to medical services.

You should read your basic textbooks and go back and study this.

As for the cost to employers, medicare is trivial.
I've hired people, it's one little line on the w-2,
and in general, most automatic payroll programs
such as quickbooks, or Great Plains or
a service vendor like ADP or Paychex do this
automatically.

Health care coverage is the single biggest problem
of small employers. I suggest you talk to the
engines of innovation in America and see if they
agree with you.

Posted by anonymous at September 22, 2006 06:45 PM

anonymous: illuminate us as to why economics doesn't work for medical services. The standard assumptions with regard to pooling equilibria in the presence of incomplete information are that people get to keep the money they get from the insurance if they are sick or spend it as they see fit. If participation is compulsory, there is no guarantee of any useful result. You probably mean something else. Be more specific when you call me an ignorant dolt. Make that Dr. Ignorant Dolt.

I agree that medicare processing is cheap--but it's not just 2%--that's false. Clarity of coverage does not mean there is no waste. Payments are either too low (resulting in suboptimal care) or too high (also resulting in suboptimal care). Better to give the customer the $ to make the choice personally as in health savings accounts about value for the $.

New point: I should point out that there ought to be triple reimbursement of premium or something when insurance co's retroactively deny coverage because the insurance companies only kick people off when they have expensive claims, but keep the money when people can be discovered to be ineligible yet healthy. In the latter case, they will not be providing service, yet charging.

Posted by Sam Dinkin at September 22, 2006 07:03 PM

illuminate us as to why economics doesn't work for medical services.

Economics works perfectly well for medical coverage, it just doesn't work for the benefit of patients. There is no law of economics that everyone wins in every private market. For instance, the airline industry works pretty well for consumers, it just sucks to be a shareholder. But in the health care sector, shareholders of the drug companies hold a lot of equity.

Maybe the real question is why libertarian economics doesn't work for medical services. The reason is very simple: libertarianism is an ideology, not a science. Economics may be the dismal science, but it is still science and it works well enough.

Posted by Mike Johnson at September 22, 2006 07:30 PM

Earlier this year, I spent a lot of time researching health care costs. My reasoning is compiled in a series of diaries I wrote on, ahem, another web site. All of them reference extensive PRIMARY DATA from government and philanthropic sources; it's not just one gal's opinion. Click through, and don't be put off by the orange background. If you absolutely feel like you can't, it's also posted under the name AmberJane on TalkingPointsMemo.com

Private health care admin costs are higher for the reasons discussed here.

This diary discusses why physicians and hospitals incur costs under the current patchwork system.

To see why prescription drugs cost more, an explanation is offered here.

Here's where to read about cost savings from avoidable ER visits and hospitalizations.

Minor savings in the sofa cushions are detailed here.

FInally, I have a full-up single payer health care plan, with I think realistic assessments of what the costs are. That's discussed in this diary.

In a nutshell, I can't justify overall reductions in total health care spending beyond about five percent or so. In very broad terms, prescription drug savings and durable medical equipment savings, coupled with reduced admin costs because of a lack of underwriting decisions and simplified paperwork (I'm fond of the VA's pattern here) generates about enough savings to cover all the uninsured. But this is a first-dollar coverage plan for absolutely everything from medical care to vision, dental, orthodontics, and mental health. If people still wanted to screw around with co-pays and all that nonsense, then the tax rates I outline below (and there's a chart in the last diary so you can fiddle with the numbers yourself if you want) could come down a bit.

Here's what it'll cost:

1. Individual income tax rates would go up three percent. Ask if your current out of pocket and insurance payment costs, including all your dental and vision care, total 3% of your AGI.

2. A new payroll tax would be instituted for a bit over 7%, paid by the employer. This is a relative bargain, too: Median family income at 48K/per year would have a levy of around 3400, which is way cheaper than a typical family policy.

3. The employer tax deduction for health insurance premiums paid, implicitly, would go away.

4. Everyone would be covered. Current revenues and expenditures on health care would be maintained.

My plan still has some bugs that I'm working out. I haven't come up with a good plan yet for insisting that doctors take at least some cases in the system, so that there isn't a flight to quality by those who can afford to pay totally private fees (consider the analogy of public and private schooling.. you pay for the latter even if you opt for the former, as a public good).

It is commonly said that "America has the best health care system in the world." Objectively, this is not so. Our infant mortality is higher than Canada's, and our life expectancy is lower. Interestingly, if you exclude the poorest twenty percent of our population, our stats and Canada's stats are the same.

And I think it's time to stop excluding one in five of us. I think it's wrong.

Posted by Jane Bernstein at September 22, 2006 08:08 PM

Over the period, US average lifespan increased. Your point that decreased coverage should lead to increased morbidity may be true for the individually uncovered, but it is not hurting the nation on average.

The most important insight is that actual health is something significantly different from medical services. Life expectancy is a medical yardstick, not directly an economic one. One reason that it rose is simply that fewer people smoke. Cigarettes are a medical bad even though they are an economic good.

Moreover, in your comment you confuse morbidity with mortality. You can live just as long or almost as long with a broken leg as without one, you just won't get as much done.

Why is paying a higher % of GDP for health care bad?

Again, it is an economic objective, just as cigarettes are by definition. But no measurable extra health is coming from it, as compared with other developed nations. Personally I would rather live longer and live healthy than to have a jackpot of sonograms. Money isn't everything, and neither is consumerism.

On that note, you asked whether I would rather live two years longer or be 25% wealthier in the United States, assuming that my income is average. But that isn't an even-handed assumption. My income is more like to be median than average, and as it happens, median income in the US and Canada is about the same. But hey, I'm happy enough in the US, for one reason because I have group medical coverage.

Last anti-Krugman column, at least you gave me a back-handed compliment for trying, and further complimented my use of evidence.

You shouldn't take it personally. I said that you didn't try to refute Krugman's claimed facts, which is to your credit, because I doubt that any of them are wrong or even misleading.

I also said that your argument was a grab-bag of parts of arguments, which seems hard to deny. You have offered a lot of hypothetical counterpoints which you haven't checked, like that the rise in the uninsured is due to illegal aliens. I think that you should pick your battles more carefully. But even that is not meant as a characterization of you as a person, only your particular argument this time.

If you don't want to write any more response to Krugman, that's your choice of course. I thought that it showed intellectual courage that you didn't just bad-mouth him and pick recycled nits, but rather discussed his columns head-on. I just think that it takes more practice and that you also shouldn't commit yourself to antogonism. "Anti-Krugman" is not the best title.

Posted by Mike Johnson at September 22, 2006 08:16 PM

Jane: I haven't read your info yet, but first dollar coverage surely results in overprovision. Unless people are paying somewhere approaching marginal cost for non-catastrophic care, they will buy/use more of it than they would buy at market prices. There are other, better, cheaper ways to make this happen. As for underwriting standards, that could be legislated away by having a legal limit to the questions asked and a subsidized high risk pool for those who still don't qualify like state car insurance pools.

Health savings accounts are pretty straightforward and if they are tied to a debit card only good for medical, then cheap to administer. 100% copay from funds you otherwise keep up to X (above median, but below average), Y dollars out of your own pocket, then everything covered in the case of catastrophe. I can't see why there wouldn't be substantial increase in value provided across the board with a lower burden to provide subsidized care for gappers.

I haven't come up with a good plan yet for insisting that doctors take at least some cases in the system, so that there isn't a flight to quality by those who can afford to pay totally private fees (consider the analogy of public and private schooling.. you pay for the latter even if you opt for the former, as a public good).

What's wrong with doctors exiting? The money will equilibrate in the private and public system; as more doctors and patients exit, $ per patient for public goes up. We are not a slave State. Tax people enough to make it worth doctors while or live with unequal (but better) care. Enforcing absolute equality on health care is saying it is illegal to spend your own money on health care. Why would we want to outlaw that sort of pursuit of happiness?

And I think it's time to stop excluding one in five of us. I think it's wrong.

I'll read the details of your plan to stop excluding one in 6 of us. Probably people would start paying more at $100k or so in income for 3% AGI. Clearly many of those who would pay more in income tax than they receive in benefits will balk. If a system is more efficient, there should be a benefit and cost structure that results in all being better off. E.g., those in income brackets where almost everyone is covered now should only be asked to pay a little less than what their employer and they are paying now. The rich should only be asked to pay for the benefit of greater public health, lower absenteeism and less hassle at emergency rooms. The poor should be asked to pay something approaching what they would be willing to pay for the benefit if it were offered at arms length (granted, still far below cost). Otherwise no coalition can be put together to approve the expense.

Mike: "Anti-Krugman" is not the best title.

I don't think "Krugman Truth Squad" is better which was published for a while. Thanks for the suggestion to pick a new title.

For instance, the airline industry works pretty well for consumers, it just sucks to be a shareholder.

This is a market distortion preventing mergers to get us down to 3 major carriers.

My income is more like to be median than average, and as it happens, median income in the US and Canada is about the same.

Touché. The US population of Canadian born is only about 2% of Canada's population--for those folks it may be closer to the average than the median.

Posted by Sam Dinkin at September 22, 2006 10:28 PM

I don't know how these statistics are being tracked, or how accurate they are, but when the current push for a government health-care monopoly first began I was miscounted. At the time the statistic for "people without coverage" was extrapolated from a count of "people who paid for their own medical care". At the time we had a private major-medical policy because the package my employer offered would not include maternity coverage when I was the only worker seeking to father a child. We had coverage, but paid for some minor routine stuff out of our own pockets, and had my wee wifey been able to carry another child to term we would have come out way ahead of where we would have been with the coverage available thru work.

Posted by triticale at September 23, 2006 08:34 AM

Sam, this link discusses my experience with my own HSA. My bottom line is that while it's a great deal for me personally (I actually make a tiny profit on my health care expenses), it's bad policy generally for the country in my view.

While economic orthodoxy argues that when the marginal cost of a good is zero that it will be overconsumed, I don't think that's actually the case in health care to the extent it would be for say, beer. This is, in my view, because apart from Munchausen's patients and hypochondriacs, no one actually likes going to the doctor. If we implemented first-dollar coverage (and I'm not necessarily suggesting that's what we should do, just exploring what it'd cost if we moved 100% of spending to a publicly financed system), there would be greater utilization but I believe the overwhelming percentage of it would be from people who currently have untreated diseases, and I accounted for those numbers in my lengthy article referenced above.

Ask yourself this: Do the marginal costs of a health care visit really play into your decision making? Do you ever say, "Well, I have the sniffles but I don't want to pay for the ten dollar co-pay so I'll just endure it?" I think if you're like me what deters you from getting an excess of health care is the hassle of dropping everything to go see the doctor and reading a crappy magazine in the waiting room and all that stuff.

Posted by Jane Bernstein at September 23, 2006 08:47 AM

I don't think "Krugman Truth Squad" is better which was published for a while.

It's certainly worse. It makes an a priori claim to the truth when, actually, Krugman usually checks his facts pretty well. Most of the so-called "Krugman Truth Squad" columns simply heaped scorn on Krugman's conclusions, or their own distorted versions of his conclusions, without disputing any of his facts. I'm sure that they were eager to pounce on factual errors, but most of the time they hardly even looked for them. It takes work to look for real mistakes.

Posted by Mike Johnson at September 23, 2006 09:08 AM

Sam,

I read several people taking you to task as to whether or not single payer would be cheaper for the average consumer. They site concepts of tax rates, increased potential of medical visits, and at least one outright lie about Medicare paying quickly. I get the sense that none of these people have been on the otherside of the administration, that of the doctors and nurses trying to get paid.

We are currently experiencing a shortage of doctors in this nation, and we have had only slight improvement to the number of nurses. The general problem is that their careers are heavily regulated such that one mistake can end their career immediately. Now many would agree that life and death scenarios should come with such harsh penalties, but how many would then sign up for such a job, if they could make the same income elsewhere (and in many cases requiring less education). Indeed, that is exactly what is happening. Many people, who otherwise would be doctors or nurses, are choosing to work elsewhere.

The solution is not to compound this situation with government programs that add even more regulation. My friend just opened her practice. Within one year, she is considering the step of refusing medicare patients, because it costs her personally 30% more in administrative costs to get Medicare to pay. This has causes a cash flow problem that more than once has threatened her business. At the sametime, Medicare requires additional procedures that tie up more of her assets than patients with insurance.

I'm sure many of the cheerleaders for single payer have little sympathy for the plight of medical workers. After all, it is economics, and the consumers want to pay less. However, the industry is already in a correction phase of trying to offer better saleries which is driving up costs. If that correction doesn't occur and the industry is regulated more, we may end up paying less for a constantly deminishing supply. I'm uncertain where Krugman learned his economics, but that seems bass-ackwards to me.

Posted by Leland at September 24, 2006 05:15 AM

Leland, I think you misprepresent me. I can't speak to the background of the other posters on this thread, but I'm a surgeon, board certified in general and facial reconstructive surgery, and as a partner in my medical practice I have to employ a significant number of health care workers. So I will assert that it is unfair to characterize me as devoid of sympathy for medical workers.

Personally, I do think that billing is a problem but in my experience Medicare pays faster than most insurance companies. Perhaps it varies by procedure. I don't appreciate having to employ a couple of people who do nothing all day but call around to insurers and verify coverage. If I were going to characterize the mechanism I'd like billing to work under, it'd be immediate EFT payment combined with subpoena powers to beat the inevitable fraud down to a manageable level (something like what the IRS does)

Posted by Jane Bernstein at September 24, 2006 09:08 AM

It is certainly a widely repeated anecdote in ideological Republican circles that some friend who is a doctor is refusing Medicare patients because of all of the extra paperwork. Or if he or she isn't yet refusing them, is considering it. It is difficult to argue against anecdotes that involve unnamed people. What is missing from the story is any real quantitative comparison of just how much paperwork there is in the doctor's office in Medicare versus private insurance.

But the story sounds fishy, for two reasons. First, there is clearly tons more paperwork in private insurance than in Medicare for both the average patient and for the insurer itself. So how likely is it that all of this extra paperwork skips over the doctor's office? Second, everyone knows that Medicare drives a hard bargain on prices; it treats hospitals the way that Wal-Mart treats suppliers. These anecdotes portray doctors as noble people who don't care that much about money, only that they resent paperwork. In reality, doctors are no more noble than other people and would rather be paid more than less. They also understand that time and money are equivalent, and that if the office is paid more, they can hire more staff to handle the paperwork. Even if the total paperwork with Medicare is less, the real complaint, from the sound of it, is that there isn't enough fat in Medicare's compensation to pay for extra secretaries.

When Medicare drives a hard bargain, that's a good thing, for the same reason that it's good when Wal-Mart does it. About half of all health care dollars that are spent anywhere in the world are spent in the United States. The system is incredibly, outrageously expensive without making Americans particularly healthy. If Medicare can force price cuts, so much the better.

Posted by Mike Johnson at September 24, 2006 09:43 AM

Ugh. I wish people would stop bringing Britain into this. We've a perfect example of a badly run national health service. OTOH - you can pay for your own care and we get what we pay for, paying, as a proportion of GDP pretty less than any serious industrial country.

Sure their are queues. You can jump queues if you can pay.

Is it better or worse to have queues that you can jump with cash or insurance than to have queues based purely on ability to pay.

Having had to take a (US) co-worker to ER in May in Vegas, I can't say that having insurance means all much in comparison to the dire NHS service. He took 5 hours to be seen...

Posted by Daveon at September 24, 2006 09:36 PM

On the subject of poor health workers under Single Payer systems. I understand the "basic" pay of a British GP is now up over £200,000 ($375,000) or so. That's a pretty reasonable wage, especially given that the British taxpayer underwrites their training.

Posted by Daveon at September 24, 2006 09:40 PM

Dr Dinkins

Why I believe classical economics does not work well for Medicine.

1) Imperfect information : MD's have years of experience, and training, while, I as a consumer, even a bright consumer do not.
If a doctor says I need a test, it's really hard for me to say
"Nah, I think i'll just watch my fever curve instead". If the
MD wants a CBC, a chem and an IG panel, well, I'm whipping out
my arm and letting them stick me.

Sure the Internet lets me tap info like MEDLine and DRKOOP.com
et al, but, if i am in the ER, with a concussion, i'm in no shape
to get data from the Matrix.

2) Price-quality curves. : Economics assumes that people
will pay along a price quality curve. I can $5 for a latte at
starbucks, or a Buck for a cup of joe at the diner,
or 75 cents for a coffee from the machine in the canteen.
Well that don't work for pennicillin If i am sick,
i want USDA-FDA- top of the line stuff, And if it's
a dollar a pill, it's a dollar a pill. I may want to pay less,
but i'm not getting cheap drugs if i think there is a 1%
chance it's contaminated, diluted, expired or mishandled.

Would you like to conduct an experiment on pharmaceuticals?
I will provide you with a months supply of a drug free, but,
you will have no knowledge of it's handling, origin
or quality?

The truly desperate may have no choice, but middle class
types, will opt for top of the line.

essentially i believe subtitution does not work well in medicine.

Who goes to a discount brain surgeon?

as for leland, well, my doctor likes medicare but is dumping
participation in all insurance provider networks.

Posted by anonymous at September 25, 2006 03:00 PM

Anonymous: imperfect information is not a reason to delegate provision to a government agency. The new non-market mechanism has to work better than the one it replaced. Folks take decisions on imperfect information about safety and risk all the time. Do I get the brakes fixed? Do I drink the 8-day old orange juice? Do I buy term life insurance?

Should we nationalize all of those industries?

To the extent we go to the doctor as uninformed consumers, we are really just giving them license to treat us according to the most expensive treatment that we will agree to.

Perhaps people stay uninformed about medical care versus car repair because they only have to pay a small fraction of medical care costs versus 100% of car repair costs.

I hope the person with medical power of attorney does well by me after I get hit in the head.

So if we don't want to go to a discount brain surgeon, can we get detailed outcome records from the doctors? Fertilization clinics offer that information freely because they have to compete for the last dollar like mutual funds in Morningstar Ratings. Brain surgeons hold that information much more closely.

Jane and Leland: whenever the government sets prices it will either set them too high in which case we will see entry and competition on non-price factors. We have a plush new heart hospital in Austin. I hypothesize that heart surgery reimbursements are generous, we get nicer rooms, etc. If the prices are set too low, we get stingy brief service. I saw Dr. Moran who used to see the Bush children. He has to hurry so much due to collective bargaining on behalf of patients that I left him and went to see someone else who does not take insurance.

There is a third way that involves neither insurance nor medicare. People just pay. Health insurance accounts can be set up so co-pays are 100% through an annual cap. The first dollar comes out of a health savings account that turns into a retirement account if it isn't exhausted. When that's exhausted it comes out of pocket for a few thousand dollars, then from the catastrophy provider.

By the market setting the price, there is neither inefficient competition on services nor undue curtailment of services.

Mike: Wal*mart works because it is private and people can exit if they want. Unless there is a private health insurance option, there would be no market check or balance against Medicare becoming a tyranny.

Posted by Sam Dinkin at September 26, 2006 06:33 PM

Dr Dinkins

what about the "pre-existing condition" game.

Insurance companies have a strong incentive to never cover
anyone with a condition that could be expensive.

Is it reasonable for insurance companies to pre-exclude?
At what point does it stop? Should this be regulated?

Posted by anonymous at September 26, 2006 06:47 PM

We need not require insurers to have their healthier customers subsidize their less healthy customers. As a society, we can vote taxes to care for people with pre-existing conditions and compensate caregivers to do so. I just held an auction for who would be the "supplier of last resort" for electricity customers in case there were no electricity companies that would take them.

Posted by Sam Dinkin at September 26, 2006 11:46 PM

Jane, honestly, you are the first doctor I've heard state a preference for Medicare. Maybe its the environment, but I just haven't heard claims like yours before. However, I still stand by my claim that part of the missing argument here is that single payer, as in government health care, will likely convince would-be doctors and nurses to pursue careers elsewhere.

Sam, I agree with the third way being best. The problem is that doesn't fit the scenario of caring for the weak and helpless, who may not be able to pay. That scenario is the foundation of the national health care argument. Yet, your arguments for handling this scenario (and pre-condition scenarios) are well stated. A mechanism exists in other industries.

Posted by Leland at September 27, 2006 06:10 AM

Sam

Why hasn't the pre-existing conditon problem been solved?

If it's as easy as you say, why hasn't it been taken on?

Posted by at September 27, 2006 09:42 AM

blank: We have not solved poverty. Our medical system bankrupts people with certain expensive conditions who then qualify for Medicare. Our medical system breaks up families; divorce allows the non-sick spouse to escape the financial devastation. Our system requires that hospitals give care to people without insurance. Self-pay rates are low for expensive claims. This patchwork system keeps people cared for at great financial and personal costs.

So the system says, "If you have a pre-existing condition, you pay for it, then we'll pay for it after you go broke."

This is a solution. Requiring the healthy insured to subsidize the sick is another. Requiring the society at large to subsidize the sick is another. The broadest tax is the fairest. I do not see a moral case for requiring poor healthy people to subsidize rich sick people--that is, I do not see a case for barring screening for pre-existing conditions. The cost of the pre-screening can be avoided by pooling everyone in the country, but that also results in monopoly, tyranny, impaired pursuit of happiness and sclerosis. There is a middle ground with some expensive screening for inexpensive conditions barred, must-cover requirements and a smaller rump of people who cannot obtain private coverage.

Posted by Sam Dinkin at September 27, 2006 12:28 PM

The problem is that Private insurance companies impose
from 22% to 80% drag on the system. They impose internal
adminstrative costs they impose costs on providers and they
impose costs on patients, it's really the worst system in the
world. Really what value is Aetna adding to health care
provision?

Posted by anonymous at September 28, 2006 03:10 PM

anonymous:

Private insurance companies impose extra costs for healthcare; these include their administration costs and their profit. Of course true.

However, any Government involvement would involve extra costs as well, and does anyone at all really think that a government department would do a better (read cheaper) job?

A good example: UK health spending has increased nearly 50%, £22 billion, in the last five years. Essentially all the extra money has been spent on bureaucrats' salaries and associated expenses.

Posted by Fletcher Christian at September 29, 2006 02:36 AM

Aetna figures out how to stay healthier with cheaper care and subsidize people so they are happier with their employers. Centrally planned utopias rarely turn out well.

Posted by Sam Dinkin at September 29, 2006 09:04 AM

i lived in the UK i always thought the nayional health worked ok.
not great but fairly well.

and medicare and VA worl really well, why is it VA is better
then Aetna at healthcare for less money.

Posted by anonymous at October 1, 2006 01:41 PM

Veterans have to be pretty fit to start with. Maybe if Aetna served only veterans it would be more profitable.

Posted by Sam Dinkin at October 1, 2006 01:50 PM

Dr Dinkin

I hate to inform you but, actually veterans are a pretty lousy
group of people to insure. Many of them are medically disabled
from the service, 80% of them are geriatric patients,
lots of them are psychiatric patients which are very
expensive to treat.

What's amazing is that given the challenges of this population,
VA spends less on health care, then private insurers do.

Posted by anonymous at October 4, 2006 06:29 PM

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