Healthcare, Socialized Medicine, and Free Market Fallacies

[drz-400]

I also found a study about the number of children insured in the US. 59.4% are insured by private/employer based insurance, 28.1% by medicaid/schip, and 12.5% uninsured. Of those that are unisured 27.6% are ineligible for either medicaid or schip, which ends up being about 3.5% of children in this US.

http://www.aap.org/research/cps.pdf

 

[Harry Guerrilla]

True, and I guess the hope is if you have a middle/upper class parent(s) they have a decent job and can get insurance through their employer or their own individual policies, though with the prior pre-existing condition filtering done by insurance companies I am not sure how many could get onto their parents policies. I am sure charity filled some gaps because I always see on the news some story about disabled children being helped out by someone.

I have a lot of personal experience with this.

A family member of mine was born with a disability (born back in the 80's) and at varying times through out their life had to rely on charity hospitals and doctors offering free services for treatment.

It really worked out well.

 

[Cecil James]

Freedom and effectiveness of care aren't a 1:1 ratio. This is a huge oversimplification. When the government removes any free market price incentive (a critical part in calling anything free market) it isn't a free market.



At first glance, yes. However, these plans obscure the cost of insurance. People have no incentive to shop around for the best price. There is very little incentive to control costs.

These answers would make sense if we were talking about marketing hamburgers or toothbrushes. Healthcare is a different animal. The majority of the costs are incurred by a small percentage who need expensive treatments. And once again, the data, if anything, shows that costs are lower when the market is more regulated.

Also, the fact that companies can pool numerous plans into one large pool also brings down insurance. "Shopping around" for the most part would leave people to pay larger amounts into smaller pools. It would especially hurt high risk patients since they would either be denied, or pooled in with other high risk shoppers and pay exorbitant costs.

 

[Cecil James]

Outperforms how?
I'll give you cost but how or where in other ways?

Individuals should be paying more, that's part of the problem now.
You take away pricing and people will run up costs.

In general, I agree with your second statement here. But health insurance is a different animal than typical products. The bulk of the costs come from major treatments like kidney dialysys/chemortherapies, not casual things like check ups. People don't carelessly decide to get cancer treatments because they're not footing the bill. I suppose you could make them foot the bill and let them pay out of pocket and end up losing their mortgage, but that brings its own list of problems.

 

[Cecil James]

In general, I agree with your second statement here. But health insurance is a different animal than typical products. The bulk of the costs come from major treatments like kidney dialysys/chemortherapies, not casual things like check ups. People don't carelessly decide to get cancer treatments because they're not footing the bill. I suppose you could make them foot the bill and let them pay out of pocket and end up losing their mortgage, but that brings its own list of problems.

Whoops...I forgot this was 3 images spliced together. I just meant to show the wait times.

 

[Harry Guerrilla]

The first graph assumes that same day service was necessary.
We can't possibly know if that is true or not.

The second graph takes the misquote life expectancy statistic and uses it as a measure of medical care effectiveness.
Which isn't the whole story in relation to life expectancy.
Of course we pay more but that is a whole different animal, usually it's tied to the degree of how much government subsidized medical care that we have.

Have no idea what the last graph is showing.

In general, I agree with your second statement here. But health insurance is a different animal than typical products. The bulk of the costs come from major treatments like kidney dialysys/chemortherapies, not casual things like check ups. People don't carelessly decide to get cancer treatments because they're not footing the bill. I suppose you could make them foot the bill and let them pay out of pocket and end up losing their mortgage, but that brings its own list of problems.

Costs are incurred for unnecessary treatment with supposed typical check ups.
A lot of people run to their primary care physcian or the ER, when it could have waited.

Why because the price of going to either is heavily masked through the state mandated insurance pre payment system.
Our insurance plans are not really like insurance at all.
Which is supposed to offset unexpected risk.
Getting a cold or the flu is practically a guarantee, getting a physical or immunizations is necessary.

You can't insure against what is going to happen without high costs.

 

[DrunkenAsparagus]

These answers would make sense if we were talking about marketing hamburgers or toothbrushes. Healthcare is a different animal. The majority of the costs are incurred by a small percentage who need expensive treatments. And once again, the data, if anything, shows that costs are lower when the market is more regulated.

And even expensive things like heart surgery vary in price, if you're willing to look.

Also, the fact that companies can pool numerous plans into one large pool also brings down insurance. "Shopping around" for the most part would leave people to pay larger amounts into smaller pools. It would especially hurt high risk patients since they would either be denied, or pooled in with other high risk shoppers and pay exorbitant costs.

Of course, there's no incentive to lower costs. So why do it. Healthcare has been made into a system with public loss, and private payouts. Of course this system isn't going to foster cost restraint.

 

[Cecil James]

The first graph assumes that same day service was necessary.
We can't possibly know if that is true or not.

The second graph takes the misquote life expectancy statistic and uses it as a measure of medical care effectiveness.
Which isn't the whole story in relation to life expectancy.
Of course we pay more but that is a whole different animal, usually it's tied to the degree of how much government subsidized medical care that we have.

Have no idea what the last graph is showing.



Costs are incurred for unnecessary treatment with supposed typical check ups.
A lot of people run to their primary care physcian or the ER, when it could have waited.

Why because the price of going to either is heavily masked through the state mandated insurance pre payment system.
Our insurance plans are not really like insurance at all.
Which is supposed to offset unexpected risk.
Getting a cold or the flu is practically a guarantee, getting a physical or immunizations is necessary.

You can't insure against what is going to happen without high costs.

I doubt it's possible to have perfect data. We can only go off the data that does exist, otherwise we just debate hypotheticals based on our own POVs. Most of the available data shows we pay more and get less. I don't have time to find the Commonwealth Fund study where I got the 1st graph from, but here's one of their newer publishings;

Key findings include:

On measures of quality the United States ranked 6th out of 7 countries. On two of four measures of quality—effective care and patient-centered care—the U.S. ranks in the middle (4th out of 7 countries). However, the U.S. ranks last when it comes to providing safe care, and next to last on coordinated care. U.S. patients with chronic conditions are the most likely to report being given the wrong medication or the wrong dose of their medication, and experiencing delays in being notified about an abnormal test result.

On measures of efficiency, the U.S ranked last due to low marks when it comes to spending on administrative costs, use of information technology, re-hospitalization, and duplicative medical testing. Nineteen percent of U.S. adults with chronic conditions reported they visited an emergency department for a condition that could have been treated by a regular doctor, had one been available, more than three times the rate of patients in Germany or the Netherlands (6%).

On measures of access to care, people in the U.S. have the hardest time affording the health care they need—with the U.S. ranking last on every measure of cost-related access problems. For example, 54 percent of adults with chronic conditions reported problems getting a recommended test, treatment or follow-up care because of cost. In the Netherlands, which ranked first on this measure, only 7 percent of adults with chronic conditions reported this problem.

On measures of healthy lives, the U.S. does poorly, ranking last when it comes to infant mortality and deaths before age 75 that were potentially preventable with timely access to effective health care, and second to last on healthy life expectancy at age 60.

On measures of equity, the U.S. ranks last. Among adults with chronic conditions almost half (45%) with below average incomes in the U.S. reported they went without needed care in the past year because of costs, compared with just 4 percent in the Netherlands. Lower-income U.S. adults with chronic conditions were significantly more likely than those in the six other countries surveyed to report not going to the doctor when they're sick, not filling a prescription, or not getting recommended follow-up care because of costs.

U.S. Ranks Last Among Seven Countries on Health System Performance Based on Measures of Quality, Efficiency, Access, Equity, and Healthy Lives - The Commonwealth Fund

 

[Cecil James]

And even expensive things like heart surgery vary in price, if you're willing to look.



Of course, there's no incentive to lower costs. So why do it. Healthcare has been made into a system with public loss, and private payouts. Of course this system isn't going to foster cost restraint.

I don't doubt one could shop around and find cheaper heart surgery, but generally one still couldn't afford to pay out of pocket and I'm not sure that someone in need of heart surgery would have time to research before deciding on their purchase. Besides, it's in the Insurance company's best interest to work with providers who give them a discount in order to stay competitive.

 

[Harry Guerrilla]

I doubt it's possible to have perfect data. We can only go off the data that does exist, otherwise we just debate hypotheticals based on our own POVs. Most of the available data shows we pay more and get less. I don't have time to find the Commonwealth Fund study where I got the 1st graph from, but here's one of their newer publishings;

Key findings include:

On measures of quality the United States ranked 6th out of 7 countries. On two of four measures of quality—effective care and patient-centered care—the U.S. ranks in the middle (4th out of 7 countries). However, the U.S. ranks last when it comes to providing safe care, and next to last on coordinated care. U.S. patients with chronic conditions are the most likely to report being given the wrong medication or the wrong dose of their medication, and experiencing delays in being notified about an abnormal test result.

On measures of efficiency, the U.S ranked last due to low marks when it comes to spending on administrative costs, use of information technology, re-hospitalization, and duplicative medical testing. Nineteen percent of U.S. adults with chronic conditions reported they visited an emergency department for a condition that could have been treated by a regular doctor, had one been available, more than three times the rate of patients in Germany or the Netherlands (6%).

On measures of access to care, people in the U.S. have the hardest time affording the health care they need—with the U.S. ranking last on every measure of cost-related access problems. For example, 54 percent of adults with chronic conditions reported problems getting a recommended test, treatment or follow-up care because of cost. In the Netherlands, which ranked first on this measure, only 7 percent of adults with chronic conditions reported this problem.

On measures of healthy lives, the U.S. does poorly, ranking last when it comes to infant mortality and deaths before age 75 that were potentially preventable with timely access to effective health care, and second to last on healthy life expectancy at age 60.

On measures of equity, the U.S. ranks last. Among adults with chronic conditions almost half (45%) with below average incomes in the U.S. reported they went without needed care in the past year because of costs, compared with just 4 percent in the Netherlands. Lower-income U.S. adults with chronic conditions were significantly more likely than those in the six other countries surveyed to report not going to the doctor when they're sick, not filling a prescription, or not getting recommended follow-up care because of costs.

U.S. Ranks Last Among Seven Countries on Health System Performance Based on Measures of Quality, Efficiency, Access, Equity, and Healthy Lives - The Commonwealth Fund

Some of those things are certainly problems but I wouldn't necessarily associate those with the need to implement a UHC system.
They have come to statistical conclusions via phone survey, now lets see what their answers are.

Also, they used the unadjusted WHO life expectancy statistics.
Those aren't valid, unless they are adjusted to remove deaths not related to medical care.

 

[Alvin T. Grey]

Individuals should be paying more, that's part of the problem now.
You take away pricing and people will run up costs.

How does that work when most people who are insured are insured through their jobs....How can they effect the price if they have no part in the choice?

 

[PeteEU]

Also, they used the unadjusted WHO life expectancy statistics.
Those aren't valid, unless they are adjusted to remove deaths not related to medical care.

And you continue to push this debunked idiotic theory.. gezz.. are you paid by the anti-UHC crowd in the US for ever time you push this idiotic comment?

 

[Harry Guerrilla]

How does that work when most people who are insured are insured through their jobs....How can they effect the price if they have no part in the choice?

Remove the tax incentive to include this as a part of compensation and remove state/federal mandates on what should be covered by an insurance company.

 

[Harry Guerrilla]

And you continue to push this debunked idiotic theory.. gezz.. are you paid by the anti-UHC crowd in the US for ever time you push this idiotic comment?

When did this happen?

 

[Solidus]

"These answers would make sense if we were talking about marketing hamburgers or toothbrushes. Healthcare is a different animal."

Health care is no different than any other professional service (CPA, Lawyer, Mechanic, etc.). There is nothing special about health care provision that somehow makes it "immune" to market forces. If you care to try to identify the economic qualities that make health care provision different, I'm all ears.

"The majority of the costs are incurred by a small percentage who need expensive treatments."

This is true, but keep in mind we're generally not talking surgeries here. We're talking chronic conditions; heart disease, cancer, diabetes, hypertension, etc., that require constant medication or professional monitoring. [1] Both medication and professional care are things that can be efficiently "shopped around" for in a private market.

"And once again, the data, if anything, shows that costs are lower when the market is more regulated."

The data does not show that costs are lower. The data shows that spending is lower. The famous RAND Health Insurance Experiment also showed that when consumers shoulder more out-of-pocket expenses (i.e. perform cost benefit analysis themselves) they spend 30% less with statistically insignificant changes to health outcomes. [1] Moving to a more market oriented approach to insurance and health care will lower both spending and costs.

"People don't carelessly decide to get cancer treatments because they're not footing the bill. I suppose you could make them foot the bill and let them pay out of pocket and end up losing their mortgage, but that brings its own list of problems."

No one carelessly decides to get cancer treatments, but they also don't perform any cost benefit analysis on the types of treatments they receive. The "latest and greatest" doesn't always pass a cost-benefit analysis compared to the "older but still effective" treatment. Also keep in mind that private insurance would continue to cover rare unforeseen expenses like cancer. Additionally, people with chronic pre-existing conditions would be able to get private insurance that covers "everything but" in order to have emergency coverage as an alternative to high premium for high risk coverage.

"Also, the fact that companies can pool numerous plans into one large pool also brings down insurance. "Shopping around" for the most part would leave people to pay larger amounts into smaller pools. It would especially hurt high risk patients since they would either be denied, or pooled in with other high risk shoppers and pay exorbitant costs. "

Un-tethering health insurance to employment would indeed see high risk patients pay more for premiums, and low risk patients paying less for premiums. Keep in mind that the very nature of insurance is risk pooling, and insurance agencies strive to cover the most people while maintaining a manageable risk profile. Thus the more healthy people in a plan the more high risk people the insurer can accommodate. Consider those auto insurance commercials that advertise directly to high risk drivers. If health insurance was more like auto insurance this would happen as well. In the extreme cases a direct subsidy to the high risk individual (perhaps in the form of vouchers) could be used to offset the high premiums associated with the high risk.

"I don't doubt one could shop around and find cheaper heart surgery, but generally one still couldn't afford to pay out of pocket and I'm not sure that someone in need of heart surgery would have time to research before deciding on their purchase. Besides, it's in theInsurance company's best interest to work with providers who give them a discount in order to stay competitive. "

They may not shop around for heart surgery per se, but they certainly would shop around for insurers who covered their prefered hospital. Again, private health insurance would still be covering heart surgery as an unexpected occurrence.

J

[1] http://www.ahrq.gov/research/ria19/expendria.pdf
[2] http://www.rand.org/pubs/research_briefs/2006/RAND_RB9174.pdf

 

[Cecil James]

Health care is no different than any other professional service (CPA, Lawyer, Mechanic, etc.). There is nothing special about health care provision that somehow makes it "immune" to market forces. If you care to try to identify the economic qualities that make health care provision different, I'm all ears.

As I pointed out in the initial post: the cost has risen due to technological advancements. Healthcare has gotten better but that improvement also brings about higher costs. These costs far outpace the costs of overall inflation. What's more is that those who need it the most have to pay the highest. The demand for something like "hamburgers" is elastic. There are other things to eat besides hamburgers. However, a complicated neurosurgery can't be replaced with botox.

 

[darkskeptic]

My $300 bill to get a doctors note to miss work for a day for the flu tells me all I need to know. Instead of saying "OK it's the flu, here's a note", I see 4 people, then the doctor for 5 min. She tells me I need to test for the flu on the machine. Everything took 2.5 hours. Waste of money and time.

 

[Boo Radley]

I know very little about this sector, but I do know SSI does fund some poorer families with disabled children. Plus, you have to figure that some are covered by chip or medicaid. However, how many I do not know.

Back on WS Atticus (a college professor) covered this. He was a conservative leaning poster who found himself with a need for help with a child with disabilities. He reported that he was mostly wrong, and the government did proven much needed services and help. I know others who would say the same. But, I'd welcome any evidence anyone has either way.

 

[Lorenz]

Hello all,
i think the main think is that,
Actually, the point was mainly to show that all this extra money we spend doesn't translate to better care......

 

[Boo Radley]

Hello all,
i think the main think is that,
Actually, the point was mainly to show that all this extra money we spend doesn't translate to better care......

That we spend now?

 

[Tubub]

Back on WS Atticus (a college professor) covered this. He was a conservative leaning poster who found himself with a need for help with a child with disabilities. He reported that he was mostly wrong, and the government did proven much needed services and help. I know others who would say the same. But, I'd welcome any evidence anyone has either way.

I'm confused exactly what you're talking about here, but I think you're saying government-controlled healthcare or a public option works better than private alternatives

There's a few reasons your wrong: One, what is a doctor's incentive to do good work? Obviously, a lot of people talk about the relationship between the patient and doctor, and while that is important I don't believe it is as important as the profit incentive. It's pretty simple: When someone doesn't have an incentive to do good work, they aren't going to be as effective as they would with real incentives. It's been my experience that people on the left just wag their fingers at this proposition, claiming doctors should work out of their good will. You can't rely on people just working out of their good will, you need them to have real incentives for their work. That's what works

Price controls is a great policy in theory. Take something like apartments, for which a government may begin to control prices because they may be getting too expensive so working class people can no longer afford to live there. The program sounds great, and in its theory it is hard to poke holes in it. Most people don't want to sound like cold, un-compassionate ***holes. But, in practice, price controls lead to overbearing demand, huge declines in maintenance, and the absence of competitive markets.

Single-payer or massive government-controlled healthcare is basically price controls on a blown up scale

 

[Boo Radley]

I'm confused exactly what you're talking about here, but I think you're saying government-controlled healthcare or a public option works better than private alternatives

There's a few reasons your wrong: One, what is a doctor's incentive to do good work? Obviously, a lot of people talk about the relationship between the patient and doctor, and while that is important I don't believe it is as important as the profit incentive. It's pretty simple: When someone doesn't have an incentive to do good work, they aren't going to be as effective as they would with real incentives. It's been my experience that people on the left just wag their fingers at this proposition, claiming doctors should work out of their good will. You can't rely on people just working out of their good will, you need them to have real incentives for their work. That's what works

Price controls is a great policy in theory. Take something like apartments, for which a government may begin to control prices because they may be getting too expensive so working class people can no longer afford to live there. The program sounds great, and in its theory it is hard to poke holes in it. Most people don't want to sound like cold, un-compassionate ***holes. But, in practice, price controls lead to overbearing demand, huge declines in maintenance, and the absence of competitive markets.

Single-payer or massive government-controlled healthcare is basically price controls on a blown up scale

Not exactly what I was saying, but I will answer you any way. Doctors, like anyone else, have all kinds of things that motivate them. Beware someone who is ONLY motivated by money or profit. It can be one incentive. But there has to be others.

Secondly, What I propose doesn't change the market the way you suggest. The same incentives would still be there. A single payer, which would be two tiered here, would not be as you describe. I think you have a misconception of how it would operate. While you would have patients who have their care paid for from government coffers, the physician would also have other payers for those who could afford more (the two teired). As Atticus found out, there are services that we can need that we cannot afford. It is good to work together to find ways to be able to see that care given when needed.

As for price controls, you do know your insurance company works hard at controlling price?

However, image the difference I charging if hospitals didn't have to worry about treating people who could not pay, and passing that cost on to those of us who can? Wonder if they mopre than make up for the copst, or run short? Do we kow?

The fact of the matter is this, we pay more on health care than nearly anyone, and we rank rather low in terms of access. How could we do worse?