Tim Harford has an excellent article, A brilliant (and doomed) template for healthcare reform:
Yet in one vital way, the systems are exactly the same: at no point during my interactions with either system did I ever have to wonder about whether a procedure was worth the price. Large sums were spent on me and my family, but I never had to ask myself whether my doctors and I were treading the path of cost-effectiveness, straying off into wasteful indulgence, or indulging in dangerous penny-pinching. Someone else always picked up the bill.
There is an obvious alternative. We could pay for our medical treatment the same way that we pay for our cars or our food or a roof over our heads: out of our own pockets. Before rejecting the idea out of hand, at least acknowledge that it would encourage us to ask a very different set of questions, including: “is there a cheaper way that would work?”, “can I get better value treatment elsewhere?”, and even “would I save money if I drank less and exercised more?” The effect on cost and quality would be bracing.
We do pay for healthcare. If you have an individual plan, you can see the rapid inflation before your very eyes. If you don’t, your employer provided plan has probably decreased in quality, and there is an argument that the cost of the plan to the employer is one main reason for wage stagnation (in other words, the cost of the employee included healthcare). There are issues with assuming that purchasing healthcare is analogous to purchasing food. But it is true that people do not as individuals (the doctor and the patient) make decisions which minimize costs because there are no incentives to do so.
Whether we like it or not, rationing is coming. It is not if, but who.
Like it or not?
I am not giving up. Keep calling senators and tell them what you think.
Another question: When will the huge cost of US healthcare begin to induce people to emigrate out of the US to more affordable and equitable pastures? (Before long we could be looking at an entirely different kind of market force.)
@sg
The population is aging. Costs are going way up. The only way to avoid forced rationing will be to (1) massively reduce the cost of healthcare (which can be done, though at the expense of some insurance companies) or (2) simply accept a system where poor and middle class people–who increasingly cannot afford coverage–will be left to die as a result of their financial misfortune.
Unfortunately, none of the proposed “reforms” will do much, if anything, to correct the problem of soaring costs. Doing nothing will produce a similar bad result.
“We could pay for our medical treatment the same way that we pay for our cars or our food or a roof over our heads: out of our own pockets.”
Isn’t that the system we already have?
People are allowed to pool their resources into emergency funds (insurance) if they so choose. When they are very sick, people will often pay whatever it costs to get fixed. The combination of these two things plays havoc with the prices. As long as some people are willing to pay huge prices for a procedure, charging any less would devalue the product. Just being responsible yourself doesn’t lower the market prices. Relying on the masses to do so is doomed from the start.
The biggest bang for the buck in rationing is limiting treatments in the last six months of life. Almost all countries do this. Instead of favoring such cost controls in medicare Republicans have fearmongered “death panels” simply to have a wedge against Obama. Yet Republicans ought be the very ones seeking to control the growth of medicare and social security which really means they ought favor cost controls!
BTW many health insurance programs (like my own from IHC) have an 80/20 fee schedule up to a deductable limit. That’s fairly good to inquire about prices. The problem is that the insurance companies all have such different prices that inquiring about prices is sometimes impossible because there isn’t a fixed price. Each insurance company negotiates their own price and hospitals and doctors often jack up other prices (say for that glass of orange juice or aspirin) to make up for prices in other proceedures. Standardized pricing for all insurance companies ought to have been one reform both Republicans and Democrats could get behind but which I’ve heard nothing about.
Republicans lost their stomach for end of life health rationing around the time they realized most of their base was on Social Security.
Part of the problem is that most people buy insurance out of fear of catastrophe. Buying it to cover the stuff they can already afford would just be adding a middleman and increasing the cost. They are buying it specifically to cover the things, like end of life procedures, that they wouldn’t be willing to pay for themselves. The joke is usually on them in the end, when they die of a sudden stroke, or the insurance company refuses to pay. Had they just saved their money, they would at least have something to pass on to their families.
I often wonder how many of the people who write or comment here have ever been seriously ill or seen the life of someone who is chronically and incurably ill. I strongly suspect very few. A little contact with such a reality in America is a good teacher of the following fact: both health care and health insurance [they are not the same thing] are inherently seller’s markets. The demand is inelastic. The very notion of the people I meet every time I go to get blood drawn actually being able to search the coupons for the Buy One Get One Free CAT Scan is so laughable that it is a positive danger to my health.
The insurance business is simple: the healthy many pay for much, if not for most, of the care of the sick few. The larger the coverage pool, the easier it is to accomplish this with a minimum of expense. Unfortunately, the greatest profit for the insurers [who can search for the BOGO CAT Scan, or its genuine medical equivalent and slip it into their PPO] comes from fragmenting the coverage pool into as many policies as possible, each covering as few people as possible, for the maximum cost and the same % of profit.
This insurance profit is also enhanced by transferring as much of the real cost of care as possible back onto the provider’s write off sheet. Whatever the corporate fictional persona of a given provider consortium, the individual doctors are forced to swear an oath to care for the sick. The insurers are not forced to swear an oath to pay for the procedure. The dilemmas of this for everybody should be obvious.
If you live by the market, you die by the market. And in the health care business this is far more literal than anyone with a little bit of imagination [or experience] of what it means to be truly ill should find comfortable.
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Sure, I’ve been deathly ill (failing kidneys, colapsing lungs, septic, etc.).
There are a lot of different ways to deal with health care, from paying your own way to fully socialized medicine. Some are better than others. The worst one I can think of is where we are headed: government mandated purchase of private insurance.
There is a big argument going on between the right and the left as to whether the problems of today are caused by political corruption or corporate greed. If you look closely at the worst offenders, you will see that they are actually the partnerships between the two.
This debate is not about health care and how we pay for it. The left is not altruistic, they don’t give a damn about the quality or availability of health care, they care about power. The entire Democrat project has been an effort to restrict choice and competition, undermining the inherent efficiencies of the market, driving up costs and creating a sense of “crisis” and urgency. The end game is a complete government take over of the health care sector, the unionization of all health care workers and the further expansion and entrenchment of the unionized federal bureaucracy. This is a political effort.