Health Care: What to Do?

September 15, 2005 | 121 comments
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This from a new report by the Kaiser Family Foundation and the Health Research Educational Trust:

“The average cost of health insurance for a family of four has soared past $10,800 — exceeding the annual income of a minimum-wage earner, according to a survey released Wednesday.”

Ouch. Even for a middle class family, 10K is a chunk of change. Of course, most middle class families have that amount paid by their employer(s), but that may change.

It is clear that we have an obligation to the sick:

And remember in all things the poor and the needy, the sick and the afflicted, for he that doeth not these things, the same is not my disciple.(D & C 52:40)

But how do we enact that when it costs 2.5K per person per year? I have no idea.

UPDATE: I was about to post this when I realized how terribly America-centric it is. Yes, I know that lack of a few pennies’ worth of Vitamin A causes tens of millions of cases of blindness each year (see here).

SIDENOTE: What’s up with insurers covering Viagra, anyway?

121 Responses to Health Care: What to Do?

  1. Greg on September 15, 2005 at 9:07 pm

    The issue is fascinating (to me, at least): why does U.S. per capita health care spending tower over that of other developed nations, even those with older populations, while at the same time not achieving any measurably better results?

    Some recent discussions of the issue were sparked by an interesting piece by Malcolm Gladwell in the New Yorker:
    http://www.newyorker.com/fact/content/articles/050829fa_fact

    And here is the obligatory takedown by an economist (don’t blame them!):
    http://www.techcentralstation.com/082605E.html

    As a personal observation, in the last couple of years my family has switched from a traditional health insurance plan to more of a “single-payor” model (Kaiser Permanente) and we are very satisfied: far less administrative hassle, less waste, and a lot more willingness to do preventative care. We may sing a different tune if one of us contracts a catastrophic disease, but so far it’s been great.

  2. Julie in Austin on September 15, 2005 at 9:11 pm

    Greg-

    Kaiser almost killed me. But other than that, they were great. (grin)

    Thanks for the links; I will read them. This issue fascinates me, too.

  3. Greg on September 15, 2005 at 9:14 pm

    Julie,

    What wrong with a little NDE as long as the copayment is low and you can shop in the Kaiser organic foodstore afterward? ; )

  4. Mike Parker on September 15, 2005 at 9:39 pm

    Why does U.S. per capita health care spending tower over that of other developed nations?

    Simply because our health care and health care expectations are so much higher than other developed nations. We expect MRIs every time we have recurring stomach pain, and we want them in 3 days. You can get an MRI in Canada (single-payer), but it takes 5 months.

    So the choice comes down to quality vs. timeliness vs. cost. When you want all three, it’s going to be expensive.

  5. Greg on September 15, 2005 at 9:48 pm

    Mike,

    I don’t think the data really supports your claims. Here is Gladwell’s summary of the international comparison:

    “Americans have fewer doctors per capita than most Western countries. We go to the doctor less than people in other Western countries. We get admitted to the hospital less frequently than people in other Western countries. We are less satisfied with our health care than our counterparts in other countries. American life expectancy is lower than the Western average. Childhood-immunization rates in the United States are lower than average. Infant-mortality rates are in the nineteenth percentile of industrialized nations. Doctors here perform more high-end medical procedures, such as coronary angioplasties, than in other countries, but most of the wealthier Western countries have more CT scanners than the United States does, and Switzerland, Japan, Austria, and Finland all have more MRI machines per capita.”

  6. JKS on September 15, 2005 at 9:53 pm

    We litigate more than other countries. Ask all the ob/gyn’s who are leaving certain states because that can no longer afford their malpractice insurance premiums. It is their biggest expense, and we as the customer have to pay for it.

  7. Julie in Austin on September 15, 2005 at 9:57 pm

    Any thoughts (or, better, data) on dietary choices and lifestyle (i.e., driving instead of walking) and how that plays in to health care costs in the US compared with other nations?

  8. Greg on September 15, 2005 at 10:02 pm

    (sorry to hog this thread)

    JKS: As I said to Mike, I don’t think the data supports this claim either. From the studies I’ve seen, malpractice insurance premiums are more closely correlated with the performance of the insurance companies’ investment portfolio than with the payouts as a result of litigation. For the most part, tort reform has lined the pockets of the financial entities that own insurers rather than reducing premiums for doctors.

    Here’s an article that discusses a study debunking the “malpractice insurance crisis” (that has apparently been going on for 25 years now): http://www.washingtonpost.com/ac2/wp-dyn/A15752-2003Sep15?language=printer

  9. Sarah on September 15, 2005 at 10:06 pm

    You can’t discount the effect that you not paying for something directly has on the price that someone is able to charge. You pay your doctor a copay ($5-40) and then he charges another amount to your insurance company or Medicare/Medicaid. The hospital charges him for equipment, and knows that there are big pockets behind him, so they charge more than a doctor depending on his patients’ ability to pay could afford to order. The folks in charge of approving payments aren’t the people trying to actually balance a budget (either the doctor or the patient) and don’t have a personal investment in whether or not the treatment is a) necessary or b) effective (they won’t get sued, they won’t lose their jobs, they won’t be disfigured, they won’t have to declare bankruptcy, they won’t lose a child…). The externalities of this kind of systemic inefficiency are obvious and staggering.

    There are secondary issues because we treat paying for medicine like we treat paying for catastrophic car repairs (even for medical needs that are recurring and often regularly scheduled — PAP smears, prostate exams, well baby visits, annual eye exams, annual teeth cleanings…) and sudden death and dismemberment. And, rather than letting either a) the market or b) long delays limit the amount of treatment received (either you pay more for things that take more expertise and are less likely to benefit you — like that MRI — or you sit on a waiting list for a long time) we schedule optional surgeries (paid for by insurance) in a few days, in part because facilities can get a lot of money for that MRI from your insurance company, especially in comparison to the fee for taking your temperature and issuing a prescription for coedine.

    I imagine that the biggest tradeoff is realistically the liability issue — doctors and hospitals have fantastically huge liability insurance costs, which is why they avoid going it alone and really like Medicare patients (steady, lower-risk income.) Heck, they probably also like hypochondriacs who beg for expensive tests; it’d be hard to avoid wanting patients like that, at least on a large scale, to ensure income and avoid lawsuits.

    In any case, my own health care will start in October. It’ll be the first time I’ll have had health insurance since I turned 21. I’ll pay $140 a month for everything (dental, major medical, and vision), and my employer will probably be paying about the same. If I had a husband and/or kids, about half of my monthly salary would go to health insurance (my trainer at this job calculated his hourly wage, after health insurance but before taxes, at $4/hour, to cover his family.) My share of my insurance costs will be about 9% of my $9/hour before taxes; it’ll comprise about 13% of my pre-tithing spending money. I could get pay-for-yourself insurance at about $80/month, but it wouldn’t cover things as much as my employer-supported insurance (my employer saves costs because the average employee lasts 60 days, and you have to be there 90 days for insurance coverage to start… with 600% annual turnover, the costs for long-term employees become much more palatable, I daresay.)

    I worked at Disneyland for 19 months and had just qualified for health insurance for the first time when living in California got too expensive to endure, and I had to move back to Ohio. That was my first job where I qualified for insurance at all; none of my other employers had it available.

  10. Mike Parker on September 15, 2005 at 10:14 pm

    Let me put this another way. There’s a sign on the wall of my cubicle at work:

    You can have it done FAST.
    You can have it done RIGHT.
    You can have it done CHEAP.
    Pick any two.

    It all comes down to supply and demand. The demand for high-end procedures and doctor visits for every sniff and cough is high. The supply of doctors is low. Ergo, prices are high.

  11. Greg on September 15, 2005 at 10:17 pm

    Julie:

    I don’t know that it’s a “lifestyle” choice, and it impinges on difficult moral issues, but I think a big chunk of our per capita spending goes toward trying to keep 94-year-old Grandma alive for another day, week, or month. And who’s going to argue against that? Not me.

  12. Kelly Knight on September 15, 2005 at 10:17 pm

    Greg- You site how awful our medical system seems to be compared to other western countries, and yet, the US still seems to be the country of choice to the wealthy who can afford to fly here for their medical care. We must be doing something better than the others for this to be the case.

    Living in Arizona, I can tell you that medical cost are so high at least in part because of the huge influx of illegal aliens coming across our southern border. Many come for the express purpose of having “anchor babies”. Others, once here and working for cash at minimal wages (yes, minimal, not minimum) overrun the hospitals for every ache and pain that comes along, knowing that they will not be turned away. We are, after all, a compassionate nation. And lest I be deemed a racist of some sort, WOW’s (whites on welfare) are equally to blame. Then, not able to pay for the services, and yet the services still needing to be paid for, the cost of medical care rises, which in turn increases the cost of medical insurance, and the cost paid by the individual or employer.

    For me and my family, even when we do have coverage, we rarely ever use it. Heck, I have 4 cars that have broken windsheilds, all of which are covered with no co-pay, and none of which will raise my rates to have them replaced. And yet, there they sit because I don’t want to seem to be taking advantage of the system. Silly, yeah, I know.

    So, what is the solution? In Arizona, we have passed law that states that you must show proof of citizenship to receive medical assistance OTHER THAN emergency medical due to accident, fire, etc. Tort reform, and the reduction of ridiculously high punitive awards to individuals as a form of punishment to doctors. The use of nurse practitioners for lesser illnesses and annual medical exams.

    Lastly, this is one statistic I am glad to be below. The highest I have ever paid for health insurance is $450 month through my last employer. Out of pocket expenses have never exceeded the amount I actually pay, so at the very most, we would have paid just at the average, but on average have paid very little.

    Whatever the case, it beats compulsary payment through taxation for a national medical system.

  13. Adam Greenwood on September 15, 2005 at 10:28 pm

    Julie in A.,

    In lots of places, states require insurers to cover things like V-iagra and its female equivalents, contraceptives, and other lifestyle ‘medicines.’ Doesn’t make sense to me, but I don’t make the rules.

  14. Greg on September 15, 2005 at 10:28 pm

    Kelly: You’re right, of course, that if you are extremely wealthy the US health system works tremendously for you. But I’m not sure that’s the best way to judge overall quality.

    As for your claim about immigrants, the data does not appear to support you (I’m feeling like a broken record here): http://www.msnbc.msn.com/id/8704136/

    If tort reform noticeably lowers health care costs in Arizona, it would be a first. Please report if you have any data.

  15. Susan M on September 15, 2005 at 10:58 pm

    It would cost me about $11,000 a year to insure my family through my job.

  16. I don't want to say on September 15, 2005 at 11:32 pm

    To insure our generally healthy family of four through my husband’s job would cost us $1000 per month out of his $1900 per month gross salary. Luckily for us, we still qualify for the state medical program. The problem with that is that I won’t use it unless I’m really sick, so the preventive things I would do if we had employer insurance (most notably my yearly exams) aren’t getting done.

  17. Kelly Knight on September 15, 2005 at 11:34 pm

    Greg,

    I am not, by even the largest stretch of the imagination, “extremely wealthy”. For most of the twenty plus years I have been married, my family has lived below the poverty line. And yet, all of my children are healthy, strong, and well taken care of. At those times when bones have been broken, skin split, flu’s contracted, or wisdom teeth pulled, we have somehow managed. My apendic (sp?) ruptured, and thanks to health insurance, my life was spared (I was literally 15 minutes from certain demise), and I live on.

    It is a grave misnomer that “extreme wealth” is necessary for quality health care.

    To your second point, I did not state that Arizona has enacted tort reform. Rather, that Arizona has enacted reform in to whom care is given, making citizenship a requirement. While the law is fairly new, I don’t know that I can provide you any historical statistical data yet as to the cost savings.

    On the other hand, it seems only logical that tort reform will correct at least some of the financing of health care.

    Mary goes to the hospital to have a minor surgery performed. Like any other “practice” in life, the potential for something to go wrong exists. In this case, the surgery is botched, for whatever reason that accidents occur. Mary finds a great lawyer that takes the doctor, the hospital, the insurance company, and any other potential defendant to court. The jury sides with the woman and awards her an amount for expenses, lost wages, etc. equal to her actual out of pocket costs. Then, because everyone hates doctors and insurance companies, the jury decides that the woman should get millions of dollars in punitive damages. “I’ll show you, doc” says the jury.

    Then, they go to work the next day (payday) and pick up their check. All the way home they complain because their insurance rates have gone up year after year, and they can’t figure out why.

    What, does the cost of the insurance settlement come from some majical tree in the backyard, like my dad used to say? Nope, it comes from the insured in the form of increased cost.

    Let me see if another scenario works for you. You like apples. The orchardsman grows the apples you eat. Because you like worm free apples, he sprays them with pesticide. The tree-huggers come to the orchard and say “hey man, you can’t use that pesticide, it might cause some illness in someone”, and they take him to court. The court says “yeah, man, you can’t use that pesticide, it might cause some illness in someone”. The orchardsman goes home and thows out his entire year’s crop because he can no longer sell it. So, next year, you go to the store and buy apples, only this time the price is 50% higher than last year. “What? How can this be? Inflation was only 3%!”

    So, what? Is the orchardsman supposed to subsidize your cost because some idiot with “liberal” tatooed on his head made him throw out a year’s income? Nope, he is simply going to pass the cost along.

    Logic alone stands sufficient to say that tort reform will work. A reduction in the cost of awards will equate to a reduction in the cost of insurance. The problem is, no one in congress has the intestinal fortitude to stand up the the legal lobby, with all of the money they throw at campaigns on both sides of the isle. A cap on the amount of punitive damages that juries and judges are allowed to inflict will be a good first step in reducing the cost of health insurance.

    Now, I realize that the whole of the health care industry and its associated financing are far too complex for you or me to settle here. Now will anything you or I have to say have any affect on the issue. Unless, of course, one of us is a lawyer, and has the scrupple to stand up and say “No, I will not defend the practice of exhorbitant awards for punitive damages”, and starts a grassroots effort amoung their closest associates.

  18. Kelly Knight on September 15, 2005 at 11:37 pm

    Susan and “I don’t want to say”-

    I am mortified that you are paying so much for insurance. The most I have ever paid for family coverage was $450 per month. When my wife was working, and her company covered our health insurance, our cost was $65 per paycheck, or $130 month, for full coverage.

    Ouch!

  19. Kelly Knight on September 15, 2005 at 11:48 pm

    Wow, this is interesting.

    I went to an article in the LA Times that sites the study from which Julie makes her assertions. While it is true that healthcare insurance costs were $10,800, what was left out of the original blog post was this-

    “For family coverage, the average worker paid $2,713 toward premiums for family coverage in 2005, or 26% of the total health premium, the Kaiser survey found. Workers are now paying on average $1,094 more in premiums for family coverage than they did in 2002.”

    In other words, of the total cost of $10,880 for premiums, the employer is picking up more than $8,000 of that cost.

    In all honesty, the word “ingratitude” comes to mind. Rather than focusing on the rising cost of insurance (which I realize cannot be disputed) to the individual, us, shouldn’t there be some focusing on the gratitude we should express to our employers for picking up the other 74%?

    If you had to make a car payment this month, and your father offered to pay 74% of it, what would you do? “Gee, dad, why do I have to pay so much of the cost? Can’t you pick up more of it?” Or would you be more likely to say “Thanks, dad. You’re the best!”

  20. Kelly Knight on September 16, 2005 at 12:04 am

    Okay, I have to admit, my posts have been slightly acidic.

    I guess I have grown weary of the news reports on Katrina, and they have tainted my normal generous attitude.

    I am tired of the complaining against the federal government for not taking care of the people in a timely enough manner. Shouts of “Who’s gonna give me diapers for my baby?” have rubbed my usually compassionate skin a little thin.

    You know, it wasn’t until the early 60′s that health care through an employer was even an issue. Then, when there was a drought of well qualified, skilled employees, employers had to start enticing them through “benefits” above and beyond the wage or salary for the work they did. Healthcare insurance became one of the biggest draws, and pretty soon everyone was expecting their employer to cover the cost of insurance.

    Heck, why have we stopped with health insurance? Why not cover our car insurance as well? The fact is, we have been taught for generations to be self-sufficient, not to rely on others or the government for our well-being.

    While I agree that health insurance is sure a necessity, and that costs are spiraling at a rate nearly 10 times that of inflation, are we not somehow complisit (sp?)? When we go to the hospital emergency room for a runny nose, or to the doctor with a muscle ache, are we not contributing to the increased cost of insurance?

    Let’s face it, insurance companies are in busy to make money. If you spend more in doctors’ fees and hospital expenses than the insurer takes in in premiums, he loses money, and will soon go out of business.

    There is a Christian group out there that “takes care of their own” so to speak. You join their group, and if you need health care, everyone pitches in. Then, when someone else needs medical attention, you pitch in. Don’t know how well it works, but maybe non-profit insurance co-ops are a viable option.

    Anyway, sorry for the acrid remarks, and I will try and repent and be more palatable.

  21. Julie in Austin on September 16, 2005 at 12:10 am

    Greg, thanks for the New Yorker link. Very interesting stuff. The article makes me wonder what the impact would be if we had universal preventative health care (in other words, all the well child visits, mammograms, dental exams, etc.) There seems to be no ‘moral hazard’ for this type of care. Based on his article, it almost seems this could result in a net savings.

    My example for ‘lifestyle choice’ was a poor one as most people cannot choose to walk instead of drive to work. Let’s use choosing to exercise instead: Do Americans do this less than other countries (where, say, people may walk or bike to work) and is this (and diet) related to our health care expenses?

  22. Greg on September 16, 2005 at 12:11 am

    Kelly wrote: “It is a grave misnomer that ?extreme wealth? is necessary for quality health care.”

    I don’t know who you are arguing against here. I didn’t say that one cannot get good healthcare in the US without extreme wealth. I was simply responding to your suggestion that since the wealthy come to the US for health care, we must have a great system. That doesn’t follow.

    I misunderstood your comments about Arizona: I thought you were saying they’ve enacted all the measures in the paragraph. In any event, there are very good reasons to doubt that tort reform will reduce health care costs to consumers. It isn’t a logical issue, it’s an empirical one. You saying it is so does not make it so. Did you read the WaPo article I linked? It discusses studies that show that there has NOT been a significant increase in malpractice premiums in the last 30 years.

    Your story about Mary is bunk. Her damages award comes out of all the premiums the insurance company has been collecting in anticipation of a damages award. I’ll repeat: studies show that the size of premiums is less correlated to damages awards than to the performance of the insurance companies’ portfolios. In any event, your story stops short. In real life, Mary’s award would be be in the court system for a few years, get appealed, and the appellate court would slash the punitives. Then she gives her lawyer a third of the award, and keeps what’s left over. Good for her, except that she had to suffer a medical catastrophe to get there. (Not that I don’t think there is abuse of the system, just that I think it is blown way out of proportion by tort-reform advocates. EVERYONE heard about the hot-coffee-on-the-lap woman, but not many heard about reduction of her award, or the skin graft treatments that the accident necessitated.)

    I don’t get your apple story. Are you arguing we should increase our use of DDT to lower the cost of produce?

    I agree with you that the issue is complex. But this thread makes clear that some people are misinformed about the sources of the problems in the health care industry. We can’t figure out what the problem is until we clear away all the hearsay, rumors, and red herrings.

  23. Greg on September 16, 2005 at 12:20 am

    Speaking of the McDonald’s-hot-coffee lady, I just found this very interesting summary: http://www.lectlaw.com/files/cur78.htm
    McDonald’s got off easy if you ask me!

  24. Julie in Austin on September 16, 2005 at 12:26 am

    “I think a big chunk of our per capita spending goes toward trying to keep 94-year-old Grandma alive for another day, week, or month. And who’s going to argue against that? Not me.”

    I read somewhere–sorry I cannot cite it–that on average, half of the money spent on you for health care for your entire life will be spent during the last two weeks of your life. How you solve that, I don’t know, unless we can figure out in advance that these are your last two weeks (grin).

  25. Julie in Austin on September 16, 2005 at 12:29 am

    Re #23–

    Fascinating. Greg, you are the king of links. Keep ‘em coming.

  26. Greg on September 16, 2005 at 12:31 am

    Julie:

    Here a link that suggests that a much higher percentage of Americans exercise regularly than Europeans. Of course, this doesn’t establish that the average American is more active than the average European.

    http://www.euractiv.com/Article?tcmuri=tcm:29-128657-16&type=News

  27. Kelly Knight on September 16, 2005 at 12:40 am

    Greg, first the easy one- The example of pesticide on the apple had nothing to do with the pesticide, and everything to do with the farmer having to dump and entire years’ income in the hole he dug at the back of the orchard, and his need to raise prices on the following year’s crop to make it up. Interesting, however, that you assumed DDT. I was actually thinking Alamar, which has shown in recent studies to have little health concerns.

    As for Mary, and the years of appeals the insurance company will go through- Who pays for the cost of the appeals? The insurance company. Perhaps the cost will be less than paying the award out to begin with, but there is cost nonetheless.

    Lastly, what are the sources of the problems in the health care industry? From my point of view, I see the following:

    1. Greedy lawyers who do everything they can to win huge settlements and up their personal wealth
    2. Greedy victims who do everything they can to win huge settlements and up their personal wealth
    3. A congress that is gutless in enacting some sort of limitation on the ridiculously high awards that are given
    4. An insurance industry that is interested in creating obnoxcious wealth for their stockholders
    5. A society that has come to say “it’s not your fault, sue the doctor and all of his friends”. My wife and I were watching a news report today of a lady that lost her son to a tragic freak accident on a roller coaster. The first of it’s kind on this coaster in it’s eighty-year life. But by gollie, she is suing the amusement park to make sure it never happens again.

    And so on and so forth. The sources are many, and there is plenty of blame to be taken. But in this “I’m gonna get me some of that” society in which we live, it will never go away, no matter how much talking you and I do at this silly little blog.

    It is, however, great therapy, and the price is certainly right.

  28. Matt Evans on September 16, 2005 at 12:40 am

    Much of the difference in health care costs between the US and Western Europe are due to the herculean costs of exceptional care in the US that are done with less frequency elsewhere. There are more million dollar babies, and million dollar seniors , in the US than anywhere else, and they drive up the average.

    Another difference is in the number of specialists. America has slightly fewer doctors, but far more pediatric gastrointestinal specialists (and all other specialties). And it’s no coincidence that Gladwell cherry-picked one expensive machine (MRI), and small number of countries, when trying to suggest that America doesn’t have far newer and better equipment than the rest of the world, which it does.

  29. Julie in Austin on September 16, 2005 at 12:48 am

    Kelly Knight–

    Greg wrote to you, “In any event, there are very good reasons to doubt that tort reform will reduce health care costs to consumers. It isn’t a logical issue, it’s an empirical one. You saying it is so does not make it so. Did you read the WaPo article I linked? It discusses studies that show that there has NOT been a significant increase in malpractice premiums in the last 30 years.”

    I’d like you to respond to this.

  30. Julie in Austin on September 16, 2005 at 12:49 am

    Matt–

    I wonder how you feel about those ‘million dollar babies’ given the extreme respect for life that you have. (This isn’t a snark. I’m really curious.)

  31. ed on September 16, 2005 at 12:56 am

    How to fix the health care system is a very, very complicated topic. I have a Ph.D. in economics and I’ve dabbled in researching health economics issues, and I don’t pretend to understand it. If anyone claims to have all the answers, don’t believe them.

    I don’t much like the tone Gladwell’s article. I think he dismisses the problems of moral hazard much too quickly. I also think he describes the results of the RAND health insurance experiment in a misleading way. Most researchers have interpreted the results of this important study to show that in general people with full insurance used more services but didn’t have significantly better health outcomes, exactly the problem of moral hazard that Gladwell is so eager to dismiss. He references one difference in blood pressure treatment rather than looking at the overall picture. It may be that moral hazard is over-emphasized by some, but I think it’s silly to say it’s a “myth.”

    Still, I think Gladwell makes one very important point: that the primary goal of the health insurance system should be to insure against lifetime health risk, not just year-to-year risk. When we jack up rates or cancel policies for people who get sick, we defeat the purpose of insurance. This leaves us with no way to insure against lifetime health risk (or at best we are precariously and partially insured). (This was a point that I felt was underemphasized in the undergraduate health economics courses I’m familiar with.)

    To me the biggest risk we need to think about in reforming the system is that we don’t want to inhibit the progress of medical technology. Over time the lost opportunities would indeed be immense if we did.

    BTW, Julie, that factoid about the last two weeks of life is a big exageration. A better guess is that about one fourth of total Medicare expenditures come during the last year of life. (See for example here: http://www.cms.hhs.gov/statistics/lyol/exec-summ.asp).

  32. Frank McIntyre on September 16, 2005 at 12:58 am

    In addition to what has already been mentioned (that medical costs are wildly skewed towars a few people), there is the issue that the U.S., by paying more, makes research far more worthwhile. Thus the Europeans and others piggy-back on our expensive system as tag-alongs who do not have to pay the full cost of new research. To the extent that this is true, there could be no Europe without the U.S., because they are parasites on our creating profits for health research.

    As one example, Europeans pay about half the price for their drugs as we do (Japan pays a fourth, and we all know the Canadians are getting cheap drugs). Thus, if the U.S. market were to disappear, the incentive to make new drugs would tank. Sure, if we went to single-payer we could lower the price of drugs by bargaining as a monopolist, but if you kill the profits you kill the goose that lays the golden eggs of future research. The potential to get those profits are what drive medical research by pharmaceutical companies.

  33. Frank McIntyre on September 16, 2005 at 1:01 am

    Oh, and I agree with Ed and Julie. The health care market is an extremely hard nut to crack. There are very serious problems with trying to make it work like a regular competitive market (which it isn’t) and the regulatory alternatives are not very appetizing either.

  34. Julie in Austin on September 16, 2005 at 1:05 am

    ed–

    Thank you for the correction!

    Frank–

    So what do you think might work?

    all–

    Is the problem that we are looking for one solution (Blame the doctors! Blame the consumers! Blame the drug companies!)? Does solving the problem mean blaming everyone a little?

    But let’s acknowledge that the US isn’t going to solve its health care problems any time soon. Where does that leave us as Saints trying to follow the admonition in the D & C about caring for the sick?

  35. Kelly Knight on September 16, 2005 at 1:13 am

    Real quick, before I forget, and then I will go back and read the recent posts-

    I have scanned a few articles, including the one Greg pointed to on MSNBC, and found the following. Approximately 10 percent of the US population seems to be “undocumented”. Yet, according to the GAO, it appears that 25 percent of re-imbursement to hospitals for services rendered but not paid for comes from the “undocumented”. A huge disparity to me, anyway.

    Also, I found this article-

    “Immigrants Represent Most of Rise in Numbers of Uninsured
    By Ricardo Alonso-Zaldivar, Los Angeles Times, Dateline Washington, June 14, 2005
    Immigrants account for most of the increases in U.S. residents without health insurance, according to a study by the Employee Benefit Research Institute. While the study did not distinguish between illegal and legal immigrants, estimates are that at least a quarter of all immigrants are undocumented, most from Mexico. According to Paul Fronstin, director of health research at the Employee Benefit Research Institute, immigrants are likely to be uninsured because ‘they are disproportionately employed by small businesses. They are uninsured because they have service and agricultural jobs that are less likely to come with benefits.’ U.S. hospitals often end up absorbing the costs of caring for uninsured immigrants, because they are required to provide emergency room care to all.”

  36. Kelly Knight on September 16, 2005 at 1:18 am

    Juile,

    Glad to respond. However, it is late and I will have to do a little research. Is tomorrow alright with you?

    Thanks

  37. Kelly Knight on September 16, 2005 at 1:29 am

    Julie,

    Just real quick, I found the following article that may shed some light on the matter:

    “Injury Lawyer – BETHESDA, MD — Medical malpractice insurance premiums are 17.1 percent lower in states that have capped court awards, although the lack of such tort reform measures in other states does not fully explain recent jumps in what physicians pay to cover the cost of malpractice suits, according to a new analysis published on the Health Affairs Web site, http://www.healthaffairs.org.

    Kenneth E. Thorpe, chairman of the health policy and management department at the Emory University Rollins School of Public Health, examines the effects of recent sharp increases in malpractice premiums in many states and states’ efforts to keep malpractice premiums down. Malpractice premiums increased by 23.2 percent in 2002, although the increases varied by state and specialty.

    Awards caps exist in 24 states and are the only malpractice reform efforts that have affected physicians’ premiums, reducing them 17.1 percent. While Thorpe says that such measures extended to other states or nationally through a federal law “would ultimately result in lower premiums,” he questions whether taking that step would accomplish the goals of the liability system.”

    You can find the whole article at http://www.tax-attorney-injury-lawyer.com/article-display/435.html

    My argument goes something like this. Award caps reduce physician’s premiums by 17.1 percent. Physicians’ costs of doing business go down. Cost to patient and health insurance companies goes down. Ergo, tort reform reduces cost of healthcare to consumers.

    Hope this helps…

  38. Kelly Knight on September 16, 2005 at 1:37 am

    Julie,

    Just one more for consideration-

    “New York, New York, January 5, 2005—Financially troubled hospitals in the metropolitan New York area have experienced annual malpractice premium increases of 27% per year from 1999 through 2004, and a cumulative percentage increase of 147% over that five-year period, according to a new study by the Greater New York Hospital Association (GNYHA). These alarming increases, coupled with a decrease in the number of malpractice carriers that are willing or able to provide this type of insurance, are contributing to the serious financial deterioration of New York’s not-for-profit hospitals and more limited access to certain types of patient care services such as obstetrics. These and other findings are in GNYHA’s new report, Medical Malpractice Insurance Costs and Coverage, which includes the results of a recent survey of GNYHA member hospitals and a comprehensive medical malpractice literature review.

    “The increasing cost of malpractice insurance has become a pressing burden for New York’s financially fragile hospitals, which have experienced four consecutive years of bottom-line losses,” said GNYHA President Kenneth E. Raske. “A collaborative group—composed of hospital management, consumers and consumer advocates, health care unions, physicians, the legal community, and our legislators—must work together to institute reforms that will ensure that our hospitals, physicians and other providers are able to continue providing access to the high quality services that New Yorkers need and now enjoy, a goal that is very much threatened by the skyrocketing cost of malpractice coverage.” ” http://www.gnyha.org/press/2005/pr20050105.html

  39. Mike Parker on September 16, 2005 at 2:24 am

    Kelly Knight: In other words, of the total cost of $10,880 for premiums, the employer is picking up more than $8,000 of that cost. In all honesty, the word “ingratitude” comes to mind. Rather than focusing on the rising cost of insurance (which I realize cannot be disputed) to the individual, us, shouldn’t there be some focusing on the gratitude we should express to our employers for picking up the other 74%?

    I don’t think gratitidue is really the issue here. Those costs are simply paid to health insurers rather than given to the employee as part of his/her salary. Instead of grateful, we should be concerned that so much of our salary is going to health care costs.

    (The same, BTW, applies to Social Security. Under the current model, the employee pays half and the employer pays half. But this is bunk — the whole amount, both halves, come out of what the employer would have paid the employee.)

  40. John W. Redelfs on September 16, 2005 at 2:50 am

    Administrative costs eat up one third of every health care dollar spent in the USA. In other countries the figure is one tenth. Go figure.

  41. Russell Arben Fox on September 16, 2005 at 8:08 am

    Ed said: “To me the biggest risk we need to think about in reforming the system is that we don?t want to inhibit the progress of medical technology. Over time the lost opportunities would indeed be immense if we did.”

    Frank said: “[T]he U.S., by paying more, makes research far more worthwhile. Thus the Europeans and others piggy-back on our expensive system as tag-alongs who do not have to pay the full cost of new research.”

    No doubt much of this is true. I don’t deny that the U.S., for many reasons, leads the world in medical technology and experimentation. But practical and ethical questions need to asked about that nonetheless; there is no reason to accept that fact as some sort of automatic good. What is the rate of success–that is, in terms of actually having results which trickle-down to impact the long-term health needs of the majority of the population–of that experimentation? Is such experimentation really dependent upon high upfront costs–would it really stall entirely, or even stall in a meaningful way, without America leading the way? Is the low cost of prescription drugs in Canada entirely a consequence of the fact that Canadian pharmaceutical companies do not have huge R&D programs (and thus huge liabilities)? Or is it only partly a consequence of that? What has been the impact upon nursing and other “low-tech” caregiving professions in the U.S.–in terms of hospital budgets, the tracking of students in medical school, etc.–because of our prioritizing of high-end experimentation?

    More broadly, how does a focus upon ever advancing technological and pharmaceutical remedies reframe the debate, forcing a contrast between “heath” and the more humble concept of “wellness”? Or is “wellness” a sham, a half-baked idea ginned up by frustrated malcontents who refuse to recognize that health must (of course!) be an expensive science, as opposed to a practical art? Paging Ivan Illich…

  42. GeorgeD on September 16, 2005 at 8:26 am

    Sometimes I think that “health” or ” the medical establishment” is our modern Tower of Babel — man’s attempt to buy immortality. It will likely come to a bad end if the trend continues.

  43. Matt Evans on September 16, 2005 at 8:48 am

    Julie,

    Regarding million dollar babies. While I do value life tremendously, I don’t believe herculean efforts to preserve life in any condition are morally necessary.

    About 10 years ago, a new mother in a ward we visited bore her testimony and spoke a lot about their new baby who had been born with severe heart problems. Their doctors had told them their baby would need multiple surgeries in the first few months, and a total of 6 or 7 surgeries in the first few years, his life would be in constant jeopardy, and even after the surgeries he’d still have severe health problems. They’d been told that the cost for his care could exceed $1 million. She said that after thinking and praying about what to do, they decided “it was worth it.” Her choice of words surprised me, and made me uncomfortable, as they seemed to focus on the expense, which I knew they wouldn’t be paying. It’s tricky knowing how to handle such situations, and knowing whether parents should have a blank check to save their children at other people’s expense. Would $10 million be okay? $100 million? Very very tricky.

  44. Matt Evans on September 16, 2005 at 9:02 am

    Oh, I forgot another important cause of the US’s relatively high medical care costs. (Ed and Frank will probably know the elegant term for this phenomenon, but I don’t remember it.) When people are forced to pay for low-quality products, such as public schooling or public health care, the per-person expenditure drops because more people opt for the “free” low-quality product rather than pay twice (pay for the free public product they don’t use, plus the higher-quality private product they prefer).

  45. Michael Towns on September 16, 2005 at 9:11 am

    “Whatever the case, it beats compulsary payment through taxation for a national medical system.”

    I agree.

    Lots of thoughts have been expressed here. Let me add my brief but sincere two cents: the reason we are having a health care crisis in America is quite simple. GOVERNMENT IS ALREADY DEEPLY INVOLVED IN HEALTH CARE.

    Take out the middle man—-government and their insurance co-conspirators. Go back to the model that was the norm before Medicare and Medicaid, the model of the 1950s, back when health care costs were affordable and you simply paid your doctor directly for service. Make doctors compete for your business, and you will see prices go down. It’s actually very simple. Ever since government got into the game starting in the 1960s, the costs of health care have steadily increased until now they have skyrocketed.

    The free market—-and that means FREE of government fiat and control—–is the only true “solution” to the issues that plague our nation in this area.

  46. Kelly Knight on September 16, 2005 at 9:21 am

    Mike Parker, you commented “I don’t think gratitidue is really the issue here. Those costs are simply paid to health insurers rather than given to the employee as part of his/her salary. Instead of grateful, we should be concerned that so much of our salary is going to health care costs.

    (The same, BTW, applies to Social Security. Under the current model, the employee pays half and the employer pays half. But this is bunk – the whole amount, both halves, come out of what the employer would have paid the employee.)”

    The cost for an individual to obtain insurance on one’s own is significantly higher than through group rates. For instance, through my employer, I paid $450 per month for insurance. Were I to go to State Farm, through which I have all of my other insurance, it would cost me upwards of $700 per month, for lessor coverage. So, rather than my employer paying a portion of my cost, added to my cost, he gives me the money in my paycheck, and I go out and get my own. Overall, the total cost would be more, so my net income would be less.

    As for Social Security, the same holds true. Were the employer to give me the half they pay, I would have to add that to the half I pay, and the net is a zero sum gain.

  47. Michael Towns on September 16, 2005 at 9:24 am

    “There are very serious problems with trying to make it work like a regular competitive market (which it isn’t)”

    No there isn’t. A free market model worked just fine in health care up until the government started getting involved back in the 1960s. Free markets can work in any field that is free of government intrusion.

  48. Kelly Knight on September 16, 2005 at 9:29 am

    Michael Towns-

    Not only health care, but every other industry.

  49. Jesse on September 16, 2005 at 9:56 am

    I work in health care policy and as I’ve read this a couple of things occur to me.

    First, with regard to malpractice, the premiums themselves are not the real problem in terms of costs. Overall, those premiums make up a relatively small percentage of total health care costs. The real killer in our current liability system is defensive medicine. Docs are almost universally on edge about the possibilities of legal problems, so they tend to order more tests, or do more procedures than are justified by clinically proven research, or simply because their patients ask for it. They do this so that if they’re ever hauled into court, they can say that they did everything possible. And the costs of defensive medicine far outstrip those of premiums. There is some good research out there to show that physicians in states with a cap on non-economic damages (that means pain and suffering, loss of companionship, etc. as opposed to economic damages such as inability to work or cost of on-going care) tend to engage in less defensive medicine. Take a look at this for some more discussion on that point: http://www.cms.hhs.gov/media/press/testimony.asp?Counter=1434

    With regard to end of life care. I don’t have the stats in front of me, but it is true that a very large portion of our costs are incurred in the last year or so of life. A hospitalization, with multiple intense procedures is very costly. Whether that sort of thing can be resolved by policy makers, though, is something I seriously doubt. I can’t think of many politicians out there who are going to get up on the floor of the House or Senate and talk about how much money we’re wasting to make sure that poor Mrs. Jones, who has metastatic cancer, lives for another week and how our budget would be oh so much peachier if we just admitted that she’s going to croak and yanked out all the tubes and machines.

    Another really large cost stems from chronic diseases, such as diabetes, heart disease and chronic pulmonary obstructive disease. A lot of those problems can be helped with lifestyle changes. But it’s tough to legislate weight loss and smoking cessation. I suppose we could raise the tax on cigarettes to $5/pack and ban twinkies, though that’d be a tough one for lots of lawmakers to swallow (sorry, couldn’t resist the pun).

    In terms of where we’re going, there are a bunch of ideas that are gaining a lot of traction in policy making circles.

    1. Disease management. People with chronic conditions are given periodic (sometimes daily) calls by nurses to make sure they’re taking their meds, weigh themselves, not subsiting on a diet of beer and pizza, measuring their blood sugar, walking (or other exercise), etc. etc. The idea is that if you spend $ on the nurses, but prevent acute episodes and inpatient admissions, you save overall. CMS (the Medicare/Medicaid agency) is engaging in a pretty extensive project with that right now and we’ll see how it goes. Lots of private insurers are working on these types of programs, some with pretty impressive results.

    2. Pay-for-performance. Pay docs and hospitals based on established quality measures. Do heart attack patients get aspirin and beta blockers? Do people in nursing homes get rotated regularly so they don’t get compression sores? Do pediatricians make sure their patients get their immunizations? If this happens, then the provider gets more money. CMS started a voluntary quality measures reporting program with hospitals a while back. Less than 400 hospitals participated. Then Congress gave permission to pay participants 0.4% (yep, that’s less than a half percent) more. Shockingly, there is now over 99% participation and you can go on-line and see those measures here: http://www.hospitalcompare.hhs.gov/hospital/home2.asp You can get similar info on nursing homes and home health agencies and work is in progress to do the same for individual docs.

    3. Administrative efficiency and standardization. Things are well along the way toward standardizing a lot of electronic transactions, health records, prescription ordering etc. Right now HHS is working on standards for e-prescribing and health records. Would be good to see standardized medical records that can be shared, instantly, too. Privacy is an issue there, of course, but frankly, I’d rather that my provider be able to access all of the needed information quickly, particulary if I’m involved in some sort of emergent event.

    4. Consumer driven health care. These are high deductible plans, coupled with interest bearing savings accounts. You can go anywhere you want and get any IRS approved health care procedure (including things like therapeutic massage and accupuncture) from anyone you like, until you hit your deductible (typically a few thousand bucks for a family). After that, your plan takes over, usually covering 80-100% of your costs. The beauty of this plan is that consumers get to choose a lot more freely, AND they will limit the amount of care on their own, without some HMO interceding, because they have to cover that high deductible. Lots more to this. Look up Health Savings Accounts if you’re interested. I am a big fan, personally.

    Whether these things will save us money, or even reduce the rate of growth, in the long run, is yet to be seen.

    I like to keep in mind that when LBJ signed the Medicare law in 1965, his aides told him that the total program costs would not exceed $8 billion by 1990. They were off by just a teensy. This year I think we’re going to be pushing $300 billion (and that’s just for Medicare – Medicaid spending is now larger than Medicare).

    I personally have a strip of paper pinned outside my door that says: “There is no problem in Medicare that will not be fully resolved once the sun explodes.”

  50. Kelly Knight on September 16, 2005 at 10:03 am

    Jesse,

    One more option that was discussed by a panel of doctors in conjunction with Kaiser Family Foundation is the idea of a “no-fault” coverage for insureds. That is, my insurance premium would include line items such as primary care, emergency care, malpractice coverage, and so on. I can choose to lower my premiums by reducing the number of types of care I select.

  51. Last Lemming on September 16, 2005 at 10:27 am

    A free market model worked just fine in health care up until the government started getting involved back in the 1960s

    Ahh yes, the good old days (say 1960). When life expectancy was about 8 years less and infant mortality over 3.5 times as high as it is today. It worked just great!

  52. Jesse on September 16, 2005 at 10:50 am

    If you think about it, health care insurance is completely different than any other. I mean, if my auto insurance covered tire changes, oil changes, spark plugs and most of the costs of my gasoline, it would be astronomically expensive. Health care coverage is like that, though.

    One of the real problems with health insurance, as it’s structured in the U.S., is that the consumer has minimal price sensitivity. Once you have insurance, you don’t worry about costs so much, in the same way, for instance, that I worry about getting regular, versus premium gas.

    The whole thing really started during World War II. Wage caps were put in place because there were so few workers and the gov’t didn’t want employers to compete with each other through their wages and thus drive inflation through the roof. So employers started doing things like offering life insurance and then health insurance as a way of attracting workers because technically those benefits weren’t wages and thus gave the workers something extra, even though their wages couldn’t be increased very much. Then the IRS ruled that employer expenditures on health insurance were tax deductible and it then became an expected/standard part of employment. And the richer the health insurance benefit, the more attractive the job became. And the richer the insurance, the less sensitive the beneficiary is to costs and the less reason they have to ask their doc exactly WHY they should be getting this test or that service. It created some really messed up dynamics in health care, but here we are.

    I really think a lot of the answer is in more consumer directed care. But that requires that consumers have access to a lot of data on their docs. Good quality measures, put into context with the type of patients that doc sees. How many times they’ve been sued/disciplined/lost hospital priviledges etc. And frankly, hospitals and docs should be a lot more up front about what their charges are so that consumers can compare them, just like they would when purchasing the services of, for instance, an HVAC repairman. The internet is starting to make this kind of thing possible and it will be very interesting to see how things progress in that direction.

  53. b bell on September 16, 2005 at 10:59 am

    This thread could last for the rest of our lives.

  54. Emily on September 16, 2005 at 10:59 am

    I’ve heard often from my physician father that the high cost of health care has to do with the exorbitant increase in mal practice coverage costs by insurance companies due to the….hmmm…overuse…of the suing power? So maybe, if people would stop suing because your child has a small deformity but is actually alive because your Dr. used forceps to save the childs life, maybe we wouldn’t be in the situation we are in? I tend to side with the physicians on the issue of health care because of my family experiences. My father experienced a 60% raise in his mal practice coverage over 5 years, so of course he has to raise his fees to cover that cost – supply and demand as someone has mentioned earlier. What else is interesting in the apparent lack of physicians someone else brought up – my father will tell everyone and their dog not to go into medicine because the payoff is less and less – it’s taking longer and longer for you to recoup the costs of your education, as well as the lack of gratitude from the patients and their children whose lives he saves every single day.

  55. Michael Towns on September 16, 2005 at 11:29 am

    “Ahh yes, the good old days (say 1960). When life expectancy was about 8 years less and infant mortality over 3.5 times as high as it is today. It worked just great!”

    Very cute. Once health care costs climb to where only the super-rich can afford them, life expectancy will start dropping. Technology has helped us live longer, not government intervention.

  56. lyle on September 16, 2005 at 11:30 am

    Emily: If your father doesn’t like his insurance, then he should start his own med-mal insurance company. Surely a 60% increase would make it profitable for new companies to enter the market? Esp. Doctor owned ones? Med-Mal, like all other insurance, is based on statistics and the likelihood/risk of having to pay. If a small group of doctors self-insures, they can also police/pressure each other so that they don’t commit malpractice and injure their patients.

    Do the crime, injure another, pay the price. Don’t do it…and be your own insurance company, and reap the otherwise lost reward.

  57. Mike Parker on September 16, 2005 at 11:32 am

    Kelley Knight: The cost for an individual to obtain insurance on one’s own is significantly higher than through group rates…. So, rather than my employer paying a portion of my cost, added to my cost, he gives me the money in my paycheck, and I go out and get my own. Overall, the total cost would be more, so my net income would be less.

    What your employer is doing is (a) giving you a discounted group rate along with (b) taking care of the administration, and for that, I suppose there should be gratitude.

    As for Social Security, the same holds true. Were the employer to give me the half they pay, I would have to add that to the half I pay, and the net is a zero sum gain.

    Not true. If I received both halves of my Social Security contribution, I could invest them myself, earning a better rate of return and building equity that can be willed to heirs. You don’t get that with Social Security.

  58. Frank McIntyre on September 16, 2005 at 11:38 am

    Julie,

    I have no panacea answers obviously, but the first thing to decide is, is it worth it? Is it worth $10,000/yr for the added life expectancy we get from access to the medical system? How much would you give up in income now for a so-so year of life towards the end or access to care that would save an infants’ life? Life is pretty valuable stuff, so maybe we actually are better off paying all that money. Also, we must pay for the default on care for the uninsured, since no one is denied treatment in U.S. hospitals.

    Michael,

    Free market efficiency rests on a set of well defined assumptions which usually get defined in the priniciples of economics classes. The health care market violates several of those assumptions in important and egregious ways, thus the efficiency of the health care market does not follow from the standard economic model. Some obvious ones include– patients lack good information about prices and the value of services they receive, the market has, and probably needs to have due to its skewed usage, a tremendous amount of insurance, which creates information problems called adverse selection and moral hazard (meaning that sick people over-insure and people over-use medicine because they do not face the full cost of their decision). Also, the costs in the market have a lot to do with innovation, which tends to violate the assumption of diminishing returns. Lastly, even if the market were efficient, we may not like the distribution of services due to income inequality.

  59. ed on September 16, 2005 at 11:57 am

    I would add that one important thing we want from the health insurance system is redistribution: we would like to redistribute resources from those lucky enough to have healthy bodies to those who, through no fault of their own, are beset by health problems. Private health insurance markets are not able to effectively accomplish this redistribution, for a number of reasons (particularly adverse selection), at least not without a lot of regulations. This problem would persist even in the absense of income inequality.

  60. JrL on September 16, 2005 at 12:07 pm

    “Lastly, what are the sources of the problems in the health care industry? From my point of view, I see the following: … 3. A congress that is gutless in enacting some sort of limitation on the ridiculously high awards … Comment by Kelly Knight — 9/16/2005 : 12:40 am ”

    Kelly, thanks for representing those who believe in the extension of federal power and the diminution of state power. Odd — that used to be what “liberals” were accused of…. Some of us still retain the old “conservative” view that Congress should keep its hands out of the states’ (and, often, the peoples’) business.

  61. ed on September 16, 2005 at 12:10 pm

    Designing a health insurance system requires you to grapple with three main problems:

    1) Overuse of care (because those who order the care don’t have to pay for it, and perhaps because of defensive medicine and other bad incentives.)

    2) Adverse selection and related problems: (Private insurance companies try to cherry pick the healthy people and get rid of the sick people, and the sick people try to buy more insurance while the healthy people might just opt out (and some of these then suddenly become sick), etc.)

    3) Public choice problems: (The political and legal system may respond in all sorts of stupid and inefficient ways, too numerous to list here. Legislatures/courts/bureaucracies may underinvest in research, may require expensive treatments of limited use, may respond primarily to entrenched interest groups at the expense of the majority, etc.)

    Problem 1 is endemic whether the insurance system is private or public, and the solutions (co-payments, gatekeepers, guidelines, etc.) will probably be similar in both systems.

    Problems 2 and 3 are a bit of a tradeoff: we can use government to lessen problem 2, but then we get more problems of type 3, and vise versa.

  62. Mike Wilson on September 16, 2005 at 12:13 pm

    Being on the front line of this issue, I had to comment. I work as an emergency physician. We have to take care of whomever comes in to the ER. This has its pros and cons. I like the fact that I can give quality healthcare to those who are in need, regardless of their ability to pay. However, I also see the abuses of the system that some have mentioned. Government programs that encourage ER visits over going to the primary care physician (i.e. Medicaid which requires a co-pay for an office visit, but none for an ER visit induces patients to wait to come to the ER where the care is “free”) are problematic.

    Jesse makes an important point regarding defensive medicine. All physicians practice it. Emergency physicians perhaps more than any others have to make potential life-and-death decisions based on limited information and in a limited length of time. Because of the potential (yet very unlikely at times) bad outcomes, I order more CT scans and more Xrays and more lab tests than are prudent due to the fear of litigation.

    With regards to pharmaceutical costs: yes the industry does need profits for R&D. However, the amount the industry spends (at least 2-3 years ago) on marketing and gifts to physicians (free pens, mugs, etc.) was near $11 billion, exceeding the amount spent on R&D. Additionally, the profit margin in the pharmaceutical industry is the highest of any industry (~20%). This occurs because they can charge that much because people feel they have to have the medication.

    I don’t believe the answer is to cut off coverage for the poor and needy. However, as this entire thread indicates, the problem is complex and not easily resolved.

    Just my two cents.

  63. Bryce I on September 16, 2005 at 12:30 pm

    Jesse, you’re making good sense to me. I’m of the consumer-driven health care school of thought too, although I’m not nearly as knowledgable on the subject as you.

    An anecdote: My two-year old son had an ear infection. He was suffering, we took him in to the pediatrician, and she prescribed antibiotics. A few days later, my seven-year old daughter came down with an ear infection as well. Had we not just had a similar incident, I probably would not have taken her in to see the doctor, but would have told her to wait a few days to see if it cleared up on its own. Since the precedent had been set, and recently, however, it was hard to tell her we weren’t going to do anything to relieve her pain.

    The pediatrician confirmed that my daughter had an ear infection and prescribed antibiotics. I asked her what she thought I should have done. She gave me the standard speech: ear infections usually clear up on their own; antibiotics only work for bacterial infections; since we can’t tell if the infection is viral or bacterial, we treat them all.

    I left feeling quite upset at the medical system. What the triage nurse should have told me is, “Ear infections usually clear up on their own, and sometimes we can’t do anything about it anyway. If she’s not suffering too much, you might wait a couple of days before you come in. After all, we don’t want to use antibiotics any more than we have to.” I imagine that if the majority of patients had to pay out of pocket for such visits, I might actually have heard this speech, as more people would be interested in not wasting a trip to the doctor than getting possibly unneccessary treatment.

    Our regular pediatrician (who we really like) did this to us as well right after our newest baby was born. He was slightly jaundiced shortly after he was born and he didn’t make a messy diaper for a day or two. The pediatrican was mildly concerned, and told us to come in the next day to get another check. The next morning the baby made diaper and looked much pinker. We brought him in, and the pediatrican confirmed that everything looked good. I left that visit slightly grumpy as well. Why not just send us home and tell us that we should come back in case the baby didn’t pink up and make a diaper? According to the doctor, the bilirubin levels were only very slightly elevated — she was just being careful. Why waste an office visit when common sense would have served?

    Caveat: I’m not a doctor of anything.

  64. Michael Towns on September 16, 2005 at 12:36 pm

    “Free market efficiency rests on a set of well defined assumptions which usually get defined in the priniciples of economics classes.”

    Your premise rests upon the assumption that what is taught in modern economics classes are the principles of a true free market economy. Please see http://www.mises.org for more details.

    But more to the point, health care was a free market, with no government involvement, for many decades prior to the 1960s. People could afford their health care then; they cannot do so now. Clearly, the dynamics have changed. Clearly, the government is DEEPLY involved in the health care issue. To me, the problem is very crystal clear.

  65. Michael Towns on September 16, 2005 at 12:41 pm

    “I don’t believe the answer is to cut off coverage for the poor and needy.”

    Well, we cut welfare coverage of a lot of poor and “needy” people back when Clinton signed the Welfare Reform Act. And guess what happened? People got jobs and started taking responsibility for their own lives instead of depending on the government. That reform bill was an enormous success.

  66. Mike Wilson on September 16, 2005 at 12:57 pm

    So, Michael: a 45 year old Mexican male (illegal immigrant) has a heart attack. If he responds to the chest pain quickly and comes to the ER and is treated appropriately and has the blockage in his heart opened and presereves heart function, he is still able to care for his family of 6. If there exists no safety net, he stays home because he can afford the visit and his heart goes into cardiac arrest and he dies. What costs more to society? Providing care for the man during his heart attack or for his family for the next 18 years? I know the argument coming back will be it shouldn’t cost the government anything at all (which is true, it shouldn’t) but it will cost society in a multiplicity of ways. If you were invited along with 45 others to contibute $1000 dollars to this man’s health care, would you do it? It is easy to say that the government shouldn’t be involved, but will society pick up the costs?

  67. Greg on September 16, 2005 at 1:03 pm

    Frank wrote: “Is it worth $10,000/yr for the added life expectancy we get from access to the medical system? How much would you give up in income now for a so-so year of life towards the end or access to care that would save an infants’ life? Life is pretty valuable stuff, so maybe we actually are better off paying all that money. Also, we must pay for the default on care for the uninsured, since no one is denied treatment in U.S. hospitals.”

    From the data I’ve seen, western Europe has better life expectancy, and better infant mortality rates, but pays far less for it than we do. No one is denied treatment in European hospitals, either. To me this is the big issue, rather than the absolute question of whether it’s all worth it.

  68. Frank McIntyre on September 16, 2005 at 1:07 pm

    Michael,

    You take two data points (today and 1960) and one observable (government involvement) and you think your answer is crystal clear? Now you wish to have two variables (technology and government involvement) and two time periods. Your statistics are not even well defined much less capable of providing answers. Is that what passes for empirical work in Austrian economics?

    Answer: yes.

    You have not explained how you are going to get around the problems outlined by Ed and I above. I’ve done the math, and I’ve worked thorugh the issues. These are not just “government problems”. They are well recognized problems in modern economics, whether the Austrians know it or not. Shouting about the government is not going to solve adverse selection, moral hazard, increasing returns to scale, imperfect information, or health and income inequality. You can say that the government is so bad that you are willing to put up with these problems, but that is completely different than the government being the problem.

  69. Frank McIntyre on September 16, 2005 at 1:10 pm

    Greg,

    See my earlier comment on how the European system piggybacks on our research. Thus, there is no European medical system independent of the U.S. They would face far higher costs if they had to foot the bill themselves.

    And, of course, infant mortality and life expectancy are not just a function of money spent. Lots of things (such as demographics) affect them besides health care quality.

  70. Clark on September 16, 2005 at 1:11 pm

    I think the regional differences really are interesting. You can get IHC insurance for about $1500 a year with pretty good coverage. Yeah you’ll have to pay the deductible plus minor fees. But that’s simply a wise aspect of insurance. Of course not everything is covered with that. If you want pregnancy coverage it’ll double.

    What is covered is of course a big deal. I understand that people want everything to be covered, but I’m not sure that’s wise nor do I think it problematic that people be able to pay a little extra to get extra features.

    As for why the US fees are more expensive, I think part of that are a lot of inefficiencies in the system (which really ought be addressed) but an other part is that foreign states artificially keep prices down with pharmaceuticals and the like. Those companies often, in my view, make up the difference in the US. You could see that in the debate over importing drugs from Canada. Personally I thought it was a good idea if only to get such countries to stop having the US subsidize their health care.

  71. annegb on September 16, 2005 at 1:20 pm

    My husband had to go to the hospital in Canada a few years ago when we were on vacation and now we love American health care. You get what you pay for and believe me, Canada’s health care sucks.

  72. Greg on September 16, 2005 at 1:38 pm

    By the way, here’s another interesting Gladwell article; this on on the pharmaceutical industry and drug prices: http://www.newyorker.com/critics/atlarge/?041025crat_atlarge

    Here’s one of his points, which nuances an oft-repeated fact: “It is not accurate to say, then, that the United States has higher prescription-drug prices than other countries. It is accurate to say only that the United States has a different pricing system from that of other countries. Americans pay more for drugs when they first come out and less as the drugs get older, while the rest of the world pays less in the beginning and more later.”

  73. Jesse on September 16, 2005 at 1:39 pm

    Just to throw in another fun variable, look at the fact that per-beneficiary annual spending in Medicare in Iowa is about double what it is in Louisiana. Why?

    Fact is, that cultural characteristics have an influence on how often people decide to see a physician. Maybe the farmers in Iowa like to reattach limbs with bailing wire or something rather than take a break from harvesting the corn to drive all the way to the ER.

    The other thing about this is that, in some ways, communal norms of medical practice differ geographically. Sometimes it’s not about clinical data and studies, but what the other docs around you are doing/recommending. Lots of research out there on this.

    But for Senator Grassley (from Iowa) it sure gives him lots of ammunitition to go to the Senate floor and talk about how Iowa taxes are subisdizing those bums in Louisiana and how his state’s not getting its fair share. (Perhaps he should be glad that his constituents aren’t so sick that they’re having to go see the doctor every other week). And given that he and Max Baucus (another rural state Senator) are the chair and ranking member of the Finance committee, you’ve got billions of dollars more going for health care in rural areas (I think it was something like $25 billion over ten years) provided for in the latest and greatest piece of Medicare legislation (the MMA).

    Another thing to think about is how the density of specialists in a given area affects costs. More specialists=more services and higher costs. Is that necessarily a bad/good thing? Are people getting the specialized care they need, or are they just going because they can and not necessarily because their primary care doc can’t fix things? Don’t know, but I’m sure some academics have looked at it.

    Frankly, when you look at the budgetary outlooks for Medicare/Medicaid and Social Security, it’s REALLY REALLY scary. Sorta like a bad horror film: “The Monster that Ate the U.S. Economy.” I personally plan to buy a small farm, a few tons of food storage and a couple of automatic rifles to keep the neighbors off so that when, in fifteen years or so, our economy completely collapses, my family won’t starve to death.

    Just kidding.

    But only a little bit.

  74. ed on September 16, 2005 at 1:40 pm

    Once again I agree with Frank’s comments.

    Comparing health care systems between countries on the basis of aggregate outcomes can be problematic. Differences in health between countries are more driven by differences in life style than by differences in the health care systems. Measurement may also be an issue…according to Wikipedia “comparing statistics for IMR [infant mortality rate] across countries can be a useful indicator of their level of health and development, but the method for calculating IMR often varies widely between countries based on the way they define a live birth.”

    On the other hand, comparing systems based on anecdotes like that offered by annegb can also be misleading.

  75. Michael Towns on September 16, 2005 at 1:44 pm

    “Is that what passes for empirical work in Austrian economics?”

    Austrian economics is based on the analysis of human action, which itself is based on human imponderables. Thus, Austrian economics doesn’t resort to statistics, which can be easily manipulated anyway. “Lies, damn lies, and statistics” is a refrain that carries quite a bit of truth to it.

    Austrian economics is nothing more or less than the classical liberalism of the age of our Founding Fathers. It’s based on liberty, which itself is not quantifiable. Numbers don’t mean anything here. Either you’re for liberty or you are for government planning. You cannot have both. And this perfectly applies to every field of human endeavor, including health care.

    I realize there are probably some of you here that rejects such a “black and white” view, but the universe is full of “black and white”.

    —Proud to belond to the Austrian School

  76. Michael Towns on September 16, 2005 at 1:46 pm

    “You have not explained how you are going to get around the problems outlined by Ed and I above.”

    The answer lies in an untrammelled, complete free market. Until we actually have one, it’s rather hard to provide you with “empirical data” on whether or not it would work.

    However, if you take a good, hard look at history, you’ll see that humans flourish in freedom and can be quite innovative when they have an incentive to be so.

  77. Clark on September 16, 2005 at 2:14 pm

    Anne, how good Canadian health care is varies (as it does in the US) depending upon where you live. Inner cities, despite what Canadians like to think, are not good places to go to the doctor. Also Canadian technology available to patients is far behind the US. (In the 90′s when all US hospitals had and frequently used MRIs only a few Canadian hospitals used them and there were long waiting lists) Also for non-essential surgery they put you on often long waiting lists.

    The fact of the matter is that for health care to work you have to ration it in some way. The US solution isn’t ideal, but neither is the Canadian one.

  78. Jay S on September 16, 2005 at 2:46 pm

    Some of the most significant problems I see are
    1) too low a copay raising drug costs from 10-20 and doctors from 10-30 would go a long way if spread across the board
    2) Lack of preventative care, especially for the uninsured. If you say M Spurlock’s 30 days, where he goes on Min wage, you would see a great example of this. If you are working minimum wage, with no insurance, how do you get medical care? There is no regular care available, so you go to the ER (which because of its nature, is more expensive to provide). And you can’t get time off work to go to any programs available, so you put it off. Then your cut gets infected requiring further treatment. Or your genetic diabetes which would cost 50 per month to treat leads to severe problems that requires $10,000 worth of procedures (that is a lot of prevenative care!)
    3) Overuse of elective care – IE the little blue pill problem
    4) Expensive end of life procedures
    5) No accountability for medical costs – patients don’t know what the procedures cost and have no burden to go with the lowest cost provider. One program (can’t recall where) recent started showing costs for procedures at the different doctors to the insured, and allowing them to choose (they pay a percentage). YEAH FREE MARKET!
    6) The CYA problem – I get to see this from multiple perspectives. My dad is a family physician in Arizona, and worked for a CMO for a while and now works for a health group providing care to low income families. I am an attorney working in insurance defense. Both he and I have been on the plaintiff end of things. The tort reform is usually a cover for the insurance companies to reduce costs, it doesn’t really impact the physicians that much and is usually a bad idea (just like the 3 strikes your out – it is bad to reduce judicial flexibility). But doctors have to order more tests to cover themselves against malpractice, and generally assume their parents lie to them (ask my dad who asked the patient if he had any heart problems before giving a scrip for viagra). CMOs want to reduce costs so don’t necessarily do tests they need to. And patients sometimes get hurt. It is basically a mess, and no one change is going to solve the problem

  79. Frank McIntyre on September 16, 2005 at 3:51 pm

    Greg,

    He is comparing the patented price with the later price of generics. That does not answer my concern at all because generics do not drive new research.

    Michael,

    Thanks but I’ve already got a religion :).

    As for the manipulation of statistics, I can see how this might be a problem for you if you haven’t studied stats and so don’t know how to critique them. Certainly that is a common problem. Empirical analysis is not such a mystery to me and so I get tremendous benefit from it, as do many other people around here. And it is silly to condemn “statistics” and then turn around and try to do empirical work by talking of “history” and comparing today and 1960. This is just a kind of untrained empirical work that is no better and often worse than other forms of statistical inquiry.

  80. greg on September 16, 2005 at 3:59 pm

    Frank: The article link was not meant to address your concern at all, but rather to add context to the oft-repeated complaint about the comparative cost of prescription drugs.

  81. Frank McIntyre on September 16, 2005 at 4:05 pm

    Oh. Well I fully agree with him that our competitive generics market is a wonderful thing.

  82. Michael Towns on September 16, 2005 at 4:19 pm

    “And it is silly to condemn “statistics” and then turn around and try to do empirical work by talking of “history” and comparing today and 1960. This is just a kind of untrained empirical work that is no better and often worse than other forms of statistical inquiry.”

    So any history book that doesn’t contain empirical statistics is pure bunk?

    We can’t learn from the lessons of history unless it’s all been quantified?

    And for the record, I wasn’t “condemning” statistics, merely pointing out that because humans use statistical analysis, it’s very hard to generate completely objective, unbiases statistical information. Indeed, even a lack of bias is itself, a bias.

    Economics used to be called “political economy”, way back when it was actually understandable via common sense. Modern economists have turned into a great Mystery School, where only the elite statisticians can “appropriately” divine the secrets.

    Pure bunk! Economics is very easy to understand, simply because it’s based on human action. Ludwig von Mises was absolutely right to reject economic analysis using only empirical data. Until you can quantify liberty, hard work, and freedom to act, your numbers are meaningless and can easily be refuted by playing a numbers game.

    And finally, if a human can’t compare today and 1960 and make some rather intuitive judgments without resorting to complex statistical models, then I suggest we all pack up our bags and go home.

  83. Nate Oman on September 16, 2005 at 4:21 pm

    Frank, In your response to Michael you write:

    “Some obvious ones include– patients lack good information about prices and the value of services they receive, the market has, and probably needs to have due to its skewed usage, a tremendous amount of insurance, which creates information problems called adverse selection and moral hazard (meaning that sick people over-insure and people over-use medicine because they do not face the full cost of their decision)”

    This is a reference to an issue in economics that confuses me. There are two strands of economic argument that I am not quite sure how to fit together. First, there is the argument that information in society is too dispersed for effectice central planning, but not to worry because market institutions aggregate information and transmit it through society via the prie mechanism. So under this scenario, prices are a substitute for information. Second, there is the argument that the price mechanism is efficient, but only so long as their is perfect information. So under this scenario, efficent prices are a product of information. Thus, it seems to me that we have a schitzoid attiitude toward prices, vieing them either as a solution to information problems or as a produce of a solution to information problems.

  84. Michael Towns on September 16, 2005 at 4:30 pm

    The following article by the only libertarian in Congress, Ron Paul from Texas (who is also an MD), may be very instructive to people reading this debate.

    http://www.lewrockwell.com/paul/paul175.html

    One excerpt: “We can hardly expect more government to cure our current health care woes. As with all goods and services, medical care is best delivered by the free market, with competition and financial incentives keeping costs down. When patients spend their own money for health care, they have a direct incentive to negotiate lower costs with their doctor. When government controls health care, all cost incentives are lost. Dr. Berry and others like him may one day be seen as consumer heroes who challenged the third-party health care system and resisted the trend toward socialized medicine in America.”

    It also showcases just how socialized our medicine is in the USA today.

  85. Michael Towns on September 16, 2005 at 4:33 pm

    Another article, this one entitled “Fun With Numbers”:

    http://www.lewrockwell.com/orig/klassen7.html

    He even cites empirical figures, so perhaps his opinion is worth something here.

  86. Frank McIntyre on September 16, 2005 at 4:42 pm

    Michael,

    “And finally, if a human can’t compare today and 1960 and make some rather intuitive judgments without resorting to complex statistical models, then I suggest we all pack up our bags and go home.”

    OK :)

    Nate,

    The difference is in what the information is about. The agent must know the price and they must know how they will be affected by what they are buying. Neoclassically, they know this perfectly. But they do not need to know anything about other people’s likes and dislikes or about how firms produce things or what inputs they use. It is symmetric for the firms. Health care defies this because insurance contracts have asymmetric information about what exactly is being bought (the agent knows more about the risk than the firm). The firm takes steps to deal with those problems, but the outcome is never as good as the one where the thing being bought and sold (risk) is understood to be the same by both parties.

    A central planner must know pretty much everything.

  87. Mike Wilson on September 16, 2005 at 4:42 pm

    The most cost effective way to have a healthy populace is prevention. However, there is no market drive to accomplish this. In the world of Hayek and Mises, what motivates an individual to start a preventative health care system?

  88. Michael Towns on September 16, 2005 at 4:47 pm

    “A central planner must know pretty much everything.”

    This is why government by bureaucracy, aka socialism, or any other -ism you prefer, is doomed to failure. Central planning simply doesn’t work.

  89. Michael Towns on September 16, 2005 at 4:49 pm

    “In the world of Hayek and Mises, what motivates an individual to start a preventative health care system?”

    A simple desire to avoid paying money to a doctor or a third-party insurance bureaucracy.

  90. Jeff on September 16, 2005 at 4:55 pm

    Bryce: “Why waste an office visit when common sense would have served?”

    It is difficult over the phone to assess a baby that may or may not be sick. However I agree with you that we do a poor job at triaging outpatient problems. During training the older pediatricians used to tell stories of being on call 24 hours a day and answering parents calls every night. Nursing triage systems have made physician’s lifestyle better but I am sure they have added to uneccesary office visits as well.

    As a pediatrician I have strong feelings about the problems with our healthcare system. I want all children to get great health care and have access to all of the advances we have made over the last few decades, advances that have made the major problems in pediatrics shift from infectious diseases that killed kids to social and behavioral problems.

    I guess I have become disillusioned over the last few years as I have taken care of asthmatic after asthmatic in the ER who would not be making trips to the ER if they had a primary care physician who they could afford to see so their chronic diseased could be managed. But because they can’t afford an office visit (no insurance, no access to a pediatrician, or “can’t” afford their Medicaid co-payment) they wait until they are sick and come to the ER. They now are sick and require hospitalization, a bigger bill, more time for her parents to miss work, and reinforcement that this system works for them. Of course the bill comes and they cannot pay it so the hospital writes it off.

    I read one author who was writing about health care reform and wrote that the US health care system is not a system at all but rather is “a series of ad hoc crisis-initiated programs” (see Medicare, Medicaid, SCHIP, Mediare Reform Act.) I don’t know what the answer is but I am sure it will take a group of gutsy politicians who are willing to recreate a system instead of continuing to adjust the broken system that we already have.

  91. ed on September 16, 2005 at 5:04 pm

    Frank says: “Health care defies this because insurance contracts have asymmetric information about what exactly is being bought (the agent knows more about the risk than the firm). The firm takes steps to deal with those problems, but the outcome is never as good as the one where the thing being bought and sold (risk) is understood to be the same by both parties.”

    This is the standard treatment of adverse selection, but I think it misses something very important.

    As I’ve said before, an important goal of an insurance system is to redistribute from the healthy to the sick. The better information the insurance company has the more perfectly it can identify the sick and jack up their rates. In the limit, if the insurance companies can perfectly predict who will get sick, then there is no more risk and no more need for “insurance” in the classic sense at all. The system is more “efficient” in the sense that classic adverse selection is gone, but the lifetime health risk falls entirely on the individual. Considered from a Rawlsian behind-the-veil-of-ignorance perspective, everyone is worse off.

    So in this strange case better information can actually make things worse (assuming you care about helping those who are unlucky enough to be sick.) The first best would be if we could keep both the insurance companies AND the individuals ignorant of their health outcomes.

  92. Clark on September 16, 2005 at 5:13 pm

    One big problem are how many stupid things require a prescription. And prescriptions require expensive doctor visits. I wish the FDA would make more things over the counter and up to us?

  93. Ryan Bell on September 16, 2005 at 5:15 pm

    Greg, did you note who wrote that little piece on the MdDonald’s hot coffee case? I would expect someone with your job not to trust ATLA to be objective in summarizing the evidence in a high-profile personal injury case. Don’t you think McDonalds managed to get any mitigating evidence in there somewhere? Why wasn’t it mentioned in the article?

  94. Talon on September 16, 2005 at 5:17 pm

    “we all know the Canadians are getting cheap drugs”

    We grow our own.

    These health care expenses you all speak of are foreign to me, we get “free” health care in Canada. Oh, wait, I pay approx. 45% of my salary in taxes (income taxes + 7% national sales tax)…….but yes, free none the less.

    This post reminds me of the Simpsons episode where Ned Flanders wife explains to Homer that “Neddy doesn’t believe in insurance, he thinks its a form of gambling”.

  95. ed on September 16, 2005 at 5:31 pm

    Amen, Clark, amen.

    I have hay fever, and I used to sometimes take Actifed and similar OTC products. A doctor told me I should stop taking Actifed because it is less safe and more damaging than something like Claritin, which in turn is worse than steroidal sprays like Fl*nase. My question for the Doctor: then why the heck can I get Actifed over the counter but I can’t buy the others without coming to the Doctor and getting a permission slip?

    I’m really glad that Claritin is now finally available OTC. Fl*nase is still not (although it IS in Europe). The only reason Claritin went OTC is because the patent was expiring and the drug company wanted it. Very similar drugs (that work better for some people) are still only available by perscription, again following the wishes of the drug companies. Welcome to the wonderful world of government regulation!

    I’ve always liked the clever idea proposed by Michael Kremer allowing the government to efficiently buy drug patents and put them in the public domain. http://rider.wharton.upenn.edu/~faulhabe/790/patent_cure-all.html

    (Aparently you can’t make a comment that contains the word Fl*nase).

  96. Greg on September 16, 2005 at 5:42 pm

    Ryan,

    I honestly didn’t look too carefully. I have read several “the rest of the story” pieces on the McDonalds case. This one seems pretty accurate compared to everything else I read, though it definitely is told from the perspective of an advocate of the plaintiffs’ bar. The article does report McDonald’s defense: that coffee is served hot because consumers want it to stay hot once they arrive at their destination, etc. It also makes clear that McDonald’s argued that there was an adequate warning on the cup. Also, the jury found the victim to be 20% at fault for her own injury, so it’s clear McDonald’s made that argument as well. I don’t know about other “mitigating evidence,” but in general strict liability makes these kinds of cases pretty simple once a defect, or failure to warn, is shown. The issue become simply apportionment of fault, and damages.

    In any event, you must admit that the general public understanding of the case (received as a result of tort reform advocates telling the story ad nauseum a few years ago) goes something like this: “Some stupid woman spilled some coffee on her lap and won millions of dollars! Didn’t she know coffee is hot? Lawyers suck!”

  97. Greg on September 16, 2005 at 5:47 pm

    And here is a more objective description of the case that basically supports the ATLA description:
    http://en.wikipedia.org/wiki/McDonald%27s_coffee_case

  98. Clark on September 16, 2005 at 6:57 pm

    Ed, in Canada I know several allergy medicines are available over the counter that aren’t in the states. I used to load up on All*gra for my wife. (Although I find Claritin or one of the generic equivalents works better for me) I was listening on the radio the other day to the scientists at the FDA who wished to make Plan B over the counter. (That’s the morning after pill) It was simply inconceivable to me that they’d make something like that over the counter but *not* All*gra, Fl*nase and other such things. There’s a long litany of drugs that one has to wonder why they require prescriptions.

  99. ed on September 16, 2005 at 7:44 pm

    This whole issue points out two of the stupid features of our system. (1) You’d think that drug companies would want their products to be OTC, because then they could sell more. But because insurance won’t (for some reason) cover OTC medicines, they wouldn’t be able to charge as much and they would lose money. (2) You’d think the FDA would decide on making a drug OTC based on the risks and benefits for consumers. But instead they seem to do what the drug companies tell them.

  100. Julie in Austin on September 16, 2005 at 7:49 pm

    Michael Towns–

    You seem to be missing that there was just much less health care (surgeries, drugs, specialists, etc.) that one could buy in the 1950s. My numbers may be off, but I wouldn’t be surprised if a car accident or major illness cost our family 250K in a year, but I don’t think you could have possibly spent (the 1950s equivalent) of that sum in 1950 if you tried!

    I’d like to thank those with professional expertise (docs, economists, health policy people) who have commented. I wish someone would addess (this is the third time I am asking) the gospel angle on this. I think we can all agree that the US system won’t be fixed in this decade–so how do we as Saints fulfill the injunction in the D & C that I began the post with?

  101. Kelly Knight on September 16, 2005 at 8:40 pm

    #57 Mike- If you got both halves of your SS $’s, you would only have to turn around and give them to the fed directly. You would not get to keep them, SS is a federally mandated tax.

    #59 Ed- The whole idea of insurance is to take a large group of people, calculate the average cost of medical expenses for that group, charge each member of the group a rate that would cover medical expenses, overhead, and provide a profit to the company. In other words, a re-distribution of the premiums from all payors to those that need help. The market economy is the best at doing this, not the government and all of its regulations.

    #60 JrL- Fine, if you want the states to control or cap awards, no problem. Whatever the case, it is up to government to take the issue in hand and deal with it.

  102. Ryan Bell on September 16, 2005 at 9:43 pm

    Greg, you’re right about the common telling of the story. I hate both sides of it– it makes everyone think there are millions of lawsuits that are just plain easy, obvious, ludicrous cases, where in reality such cases almost never go to trial. The legal system is far from as stupid as people like to imagine. But now back to how stupid the healthcare system is . . .

  103. annegb on September 16, 2005 at 10:46 pm

    Clark, you’re right–about the difference of care based upon areas (although I have only the one experience in Canada), and I also agree with you about the need for many medications to be available OTC.

    I have been in Vegas hospitals and they also suck. I think Utah has better medical care than a lot of places and much better pain management.

    But you know, Buttgold was in the ER of Bellevue twice, once for an entire day, when we were in New York and she got really good care. Their accounting office sucks, but the hospital was pleasant surprise, because I was really scared to death.

  104. Mike Wilson on September 17, 2005 at 5:08 am

    Julie,

    To attempt to re-direct the thread: The Church owned many hospitals in Utah until the 1970′s when IHC took them over. The LDS Foundation still contributes very heavily to the IHC system and provides significant charity care. However, just because the Church does it doesn’t mean that we have been absolved of our individual responsibility to care for the sick.

    We do it through home and visiting teaching, priesthood blessings, fasting and prayer. However, is that still enough? Are we caring for our elderly parents as we should? Do we try to provide happy, healthy loving homes for adoptee children with health problems? While working at Primary Children’s in SLC in the ER I took care of an African-American infant who was born premature and had multiple health problems who had been adopted by a Caucasian couple who were well aware of his difficulties. I saw this as such a great example of love, sacrifice, and a profound way to remember the sick and afflicted. I think that most often we hope that others will do these difficult things.

  105. lyle on September 17, 2005 at 8:30 am

    Ed/Ed. all: :)

    It might be that the FDA requires prescriptions because:
    1. so many drugs carry risks of complications on their own
    2. so many more can’t be taken with other drugs

    or:
    It might be that the Pharmacies & Pharmacists are a big lobby who also defend their turf.

  106. ss on September 17, 2005 at 9:50 am

    Quiz: How much does a day in the NICU cost for a four week early infant with no significant health problems besides prematurity (so that care consists primarily of a low-tech pulse/oxygenation/breathing monitor, feedings and changings by a nurse every three hours, and a visit by the doctor once a day)?

    Answer: Over $8000 day in a metropolitan area.

    Quiz: How much does it cost for the same infant to spend ten hours in day care, with feedings and diaper changes every two hours and lots more individual attention?

    Answer: About $80 a day.

    Explaining this factor of 100 that appears even for the most low-tech and routine care (similar factors crop up in adult critical care, and really any kind of hospitalization) is one of the great puzzles of the American health care system (another being why we are all so willing to put up with it).

    There are of course many things (having to have resources on hand for worst case scenarios, high doctor and nurse salaries, bureaucratic inefficiency, the need to pay nighttime nursing staff, the fact that most insurance companies have negotiated discounts and uninsured patients rarely pay) that can each account for a chunk. But the numbers are still insane. The bottom line is that there is no market incentive to reduce this $8000 per day to $4000 per day or to $2000 per day. If there were, it would almost certainly be done–and it could be done comfortably without reducing the doctor/nurse headcount or cutting doctor/nurse salaries. (You can be certain that nurses are not making 100 times or 50 times or even 10 times what day care workers make.)

  107. Michael Towns on September 17, 2005 at 11:01 am

    “You seem to be missing that there was just much less health care (surgeries, drugs, specialists, etc.) that one could buy in the 1950s.”

    Ah, perhaps that is the real issue after all: we have too many ‘specialists’. But people still got into car wrecks in the 1950s, and it didn’t bankrupt them then like it does today.

    “so how do we as Saints fulfill the injunction in the D & C that I began the post with?”

    A good start would be to stop pretending that the government can provide all of our needs. Service to the poor and needy needs to be done out of free choice and not governmentally forced.

  108. Daylan Darby on September 17, 2005 at 2:31 pm

    “We” do NOT have an obligation to the poor. I, because I want to be His disciple, have an obligation to the poor. I will not force (though laws or taxation) others to care for the poor. I hope all others have and/or gain this attitude.

    Remember the war in heaven. Christ fought to give us a choice to follow him. Satan wanted to force us to be good. Who do you follow?

  109. Jonathan Green on September 17, 2005 at 3:36 pm

    Ahem, Daylan, I don’t mean to be critical, but a quick glance at the condition of the poor and afflicted seems to indicate that you’re doing a really lousy job with that obligation of yours. Could you pick up the pace a bit? At least until the whole Katrina mess is taken care of. After that, why don’t you take a little time off, and then we’ll re-evaluate your performance goals for the year, see if maybe you need some time to grow into your new responsibilities.

  110. Russell Arben Fox on September 17, 2005 at 4:28 pm

    “I, because I want to be His disciple, have an obligation to the poor.”

    There is no “I,” Daylan. Never has been, never will be:

    But, verily I say unto you, teach one another according to the office wherewith I have appointed you;

    And let every man esteem his brother as himself, and practise virtue and holiness before me.

    And again I say unto you, let every man esteem his brother as himself.

    For what man among you having twelve sons, and is no respecter of them, and they serve him obediently, and he saith unto the one: Be thou clothed in robes and sit thou here; and to the other: Be thou clothed in rags and sit thou there?and looketh upon his sons and saith I am just?

    Behold, this I have given unto you as a parable, and it is even as I am. I say unto you, be one; and if ye are not one ye are not mine.

  111. Frank McIntyre on September 17, 2005 at 6:16 pm

    Yeah Russell, so quit contradicting me and get on the unity train!

  112. Kelly Knight on September 17, 2005 at 6:54 pm

    Here’s a thought on caring for the poor- Double your fast offerings! Helps the poor, and brings more blessing to you.

    BTW, one-hundred percent of all fast offerings are used in the care of the poor and suffering to which the funds are applied. Experts say that an organization that uses anywhere from 85-92% is worth contributing to. Imagine the “worth” of contributing to a 100 percenter!

  113. Stephen M (Ethesis) on September 18, 2005 at 12:25 am

    I was about to post this when I realized how terribly America-centric it is

    That was brought home to me when Robin was born and, upon diagnosis, the ethesist gave me an essay suggesting we should just let her die because some people did not have access to the health care that gave her a 60% chance of living.

    Frankly, I hope to see the ethesist and the author of the essay lifting up their eyes….

    On the other hand, on our 20th, in Paris, I sat next to a recruiter. She recruits doctors to move to England where a good surgeon, at the top if the heap, who works a lot of overtime, might make as much as 100,000 euros a year.

    No end of people willing to move.

    Interesting, all in all.

    Oh, I honestly didn’t look too carefully. I have read several “the rest of the story” pieces on the McDonalds case. This one seems pretty accurate compared to everything else I read, though it definitely is told from the perspective of an advocate of the plaintiffs’ bar. The article does report McDonald’s defense: that coffee is served hot because consumers want it to stay hot once they arrive at their destination, etc. It also makes clear that McDonald’s argued that there was an adequate warning on the cup. Also, the jury found the victim to be 20% at fault for her own injury, so it’s clear McDonald’s made that argument as well. I don’t know about other “mitigating evidence,” but in general strict liability makes these kinds of cases pretty simple once a defect, or failure to warn, is shown. The issue become simply apportionment of fault, and damages.

    I read the inside article in the Wall Street Journal, the one that discussed what happened rather than editorialized …

    Mc’s used to burn the genitals off about 100 people a year with dropped hot coffee. They knew the safety standard and knew they were much hotter. They put on witnesses that basically said “yeah, we burn em off all the time, so what?” If I had a corporate rep that acted like that, I’d drag him out in the hall and … well, we don’t want to talk about it here.

    Mc’s also knew that ‘too hot to drink = perception of quality’ — and that it was a marketing advantage, even if they did not feel like paying for better cups and lids that weren’t going to pop off.

    With regard to end of life care. I don’t have the stats in front of me, but it is true that a very large portion of our costs are incurred in the last year or so of life.

    50%. 50% in the last six months. At least if you use the Medicare/Medicaid statistics. You can calculate that directly against your tax bill. (And yes, it did lead to one of the better H. Clinton comments …)

    As for annegb’s comments, look at childbirth and availability of anesthesia in Canada.

    Enough said.

  114. Stephen M (Ethesis) on September 18, 2005 at 1:06 am

    BTW, the guest posters are ideologues of the most severe types, but the latest post is on health care in Canada.

    Postive, btw,

    http://leiterreports.typepad.com/blog/

  115. Julie in Austin on September 18, 2005 at 10:51 am

    Stephen M–

    You wrote, “That was brought home to me when Robin was born and, upon diagnosis, the ethesist gave me an essay suggesting we should just let her die because some people did not have access to the health care that gave her a 60% chance of living.”

    I hate to work with this example because it is obviously very personal for you and any normal person would want every possible thing done to save their own child, but let’s pretend that you are an ER administrator. Let’s say you can spend 250K to get a 60% chance of saving one child or use that 250K to, say, provide prenatal care to something like 200 poor women, which will result in saving the hospital another 1M in the costs associated with sick newborns, not to mention saving a life or two among those babies. What would you do? (I made all those numbers up, of course. If anyone has better numbers, I’d like to know them.)

    (That said, an ethicist trying to persuade distraught parents about cost arguments should be taken out back and put out of his misery.)

  116. annegb on September 18, 2005 at 11:15 am

    Stephen, what are we looking at in Canada re childbirth and anesthesia? Is it more available? What did you mean?

    One conclusion I am coming to is that, although medicine is far advanced compared to say, the 1800′s, there is still so much we don’t know. The doctors are still learning. What we consider advanced now may be considered barbaric in l00 years, God forbid we should still be here.

    I always listen to my doctor, then make my own decisions. We deify our doctors too much, maybe that’s just America. How I look at it is I am in charge, and the doctor is helping me take care of myself and I am paying him and if he doesn’t do his job, he’s fired. Sorry for the sexist “he” but he is a he.

  117. sb on September 19, 2005 at 3:23 pm

    as a physician, one thing i notice is the huge difference between rich and poor. if you are rich, you will get absolutely fantastic medical care, and that single stratum _has_ the healthcare outcomes we are hoping for in terms of improvement beyond the health that is expected based on their habits. the people who bring down the statistics are the poor who are increasingly left behind by our system. that’s how we can be so technically (and technologically) accomplished but still have terrible statistics. That, and most of the doctors I interact with (both here and abroad) aren’t sufficiently skilled that I would ever refer a family member to see them. but don’t let that get around.

  118. Michael Towns on September 19, 2005 at 4:16 pm

    “the guest posters are ideologues of the most severe types”

    Thank you. I enjoy being called a ‘severe ideologue’. ;)

  119. Stephen M (Ethesis) on September 19, 2005 at 7:15 pm

    the guest posters are ideologues of the most severe types”

    Thank you. I enjoy being called a ’severe ideologue’. ;)

    ;) Glad to do something useful. Still, your posts were worth reading.

    I hate to work with this example because it is obviously very personal for you and any normal person would want every possible thing done to save their own child, but let’s pretend that you are an ER administrator. Let’s say you can spend 250K to get a 60% chance of saving one child or use that 250K to, say, provide prenatal care to something like 200 poor women, which will result in saving the hospital another 1M in the costs associated with sick newborns, not to mention saving a life or two among those babies. What would you do? (I made all those numbers up, of course. If anyone has better numbers, I’d like to know them.)

    Ah, you are talking about what Oregon did with their Medicare/Medicaid program. All in all, social calculus is well undertaken.

    You’ve got the wrong numbers.

    Lets say $600k which would, if proper nurse practitioners are used, give good prenatal to 1200 women and might save 2-3 babies. It seems that the public health resolution is obvious.

    some provinces and anesthesia for a variety of reasons, in some places in eastern Canada, the availability of anesthesia during childbirth has been severely limited from time to time. It is an interesting concept and topic.

    rich and poor and … the real issue that is building in America is the time waiting in line in order to maximize incomes. Some places don’t have the problem, and the rich do not, but the merely middle class (as Rockefeller said, in his infamous example, the family with only $100k a year that can barely make ends meet) end up with hideous waits in line.

    As the “severe” individual noted, he did not experience that in Canada.

  120. Stephen M (Ethesis) on September 19, 2005 at 7:19 pm

    #

    My husband had to go to the hospital in Canada a few years ago when we were on vacation and now we love American health care. You get what you pay for and believe me, Canada’s health care sucks.

    Was what I was referring to about annegb’s comments.

  121. Walnut Valley on October 4, 2005 at 3:19 pm

    Julie wrote:

    (That said, an ethicist trying to persuade distraught parents about cost arguments should be taken out back and put out of his misery.)

    Cost is not irrelevant to ethics. As a few other posters have noted, costs incurred by one individual often impact other individuals. Ethics as a dicipline is concerned about how an individual’s actions will impact others. Therefore, cost is an important ethical consideration consideration.

    As for how we can fulfill our obligation to the sick, St. Judes Medical Center in Memphis, TN provides care to children free of charge from all over the world. Donate generously. Do so in person and I guarantee you’ll find room in your family budget for the sacrifice.