How health reform may help ... or hurt

[DblDoc]

Well this may change the debate: Poll finds wide support for healthcare changes | Reuters

Seventy-two percent of those questioned said they backed a government-administered insurance plan similar to Medicare for those under 65 that would compete for customers with the private sector. Twenty percent said they were opposed.

DD

 

[REWahoo]

Well this may change the debate: Poll finds wide support for healthcare changes | Reuters

Results weren't exactly black and white:

The poll found that people were uneasy about heightened government involvement in the healthcare sector, with 77 percent saying they were very or somewhat satisfied with the quality of their own care.

 

[DblDoc]

Results weren't exactly black and white:

This is an interesting, recurring finding in studies on health care that has been present for decades. Individuals will state that the system is broken and needs to be fixed, but are satisfied with their own care and do not want you to mess with their plan. That is why I think Obama and others clearly state they will not get rid of existing plans as part of the restructuring as that would not be palatable.

DD

 

[RDamien]

Eliminating these negative lifestyle choices would be the greatest factor in reducing health costs
Safeway Health Plan Reduces Company Costs, Promotes Preventive Health

Safeway CEO Steve Burd, who has spoken about the plan to more than 300 executives during the past three months, said, "What is the revelation Safeway had two years ago that completely transformed our thinking? That 50 [%] to 60% of all health care costs are driven by behavior," adding, "If you design a health care plan that rewards good behavior, you will drive costs down."

A system like that really would be fantastic. Rewarding the behavior of the insured.

 

[Gone4Good]

Subsidies for lower income families might work out really well for many FIRE'd folks that have low incomes.

The problem they seem to be running into is the cost of the subsidies. Stay tuned.

 

[Gone4Good]

Well this may change the debate: Poll finds wide support for healthcare changes | Reuters

The New York Times also picked this up (their story has some additional details about the poll results) http://www.nytimes.com/2009/06/21/health/policy/21poll.html?scp=1&sq=poll health care&st=cse

What I found really surprising was this . . .

Nearly 6 in 10 said they would be willing to pay higher taxes to make sure that all were insured.

Normally poll results reflect a certain amount of cognitive dissonance in the populace where people want the government to fix something but don't want to pay for it in any way.

Another noteworthy finding for those who are afraid that any change in the status quo will result in health care rationing . . .

One in four said that in the last 12 months they or someone in their household had cut back on medications because of the expense, and one in five said someone had skipped a recommended test or treatment.

The status quo already rations care, and it will only get worse.

 

[DblDoc]

Rationing is a given if you truly want to control costs. The challenge will be in finding a way to do it that is acceptable to us. As pointed out earlier if it costs us $150,000 per year of life saved to prescribe statins for those with elevated cholesterol is this worthwhile? Would we want to be footing the bill for even more expensive statins that drug companies want to develope?

DD

 

[deserat]

"That is why I think Obama and others clearly state they will not get rid of existing plans as part of the restructuring as that would not be palatable."

I believe the problem is if the government becomes one of the larger players in the market, the others will go by the wayside with the end state being only a government plan - if one looks at Medicaid/Medicare, the private options are limited where they play. Why should an employer administer or deal with a private healthcare mechanism or healthcare choices if the government will do it? If they could get rid of yet another program to manage, they will. Now some might argue that's great for 'portability,' but the possible unintended (and I don't know if it is unintended or not) consequence is one plan for all Americans....oh except for our congresscritters - don't they use a private plan?

 

[dex]

Rationing is a given if you truly want to control costs. The challenge will be in finding a way to do it that is acceptable to us. As pointed out earlier if it costs us $150,000 per year of life saved to prescribe statins for those with elevated cholesterol is this worthwhile? Would we want to be footing the bill for even more expensive statins that drug companies want to develope?

DD

You bring up a good point.

Will companies want to pay for research and development if the return on investment does not justify it?

 

[chinaco]

I believe inflation of health care cost will eventually drive us to a government controlled system. If it doesn't happen now, it will in the next 5-10 years.

Here is an interesting slide show that provides and overview of the problem from McKinsey & Company.

Accounting for the Cost of Health Care in the United States

I have read similar reports. We spend more per capita, die sooner, have higher infant mortality than the average of other developed nations.

The report indicates that the US has a higher volume of surgical procedures.

It appears Americans are often advised for unnecessary surgical procedures.

Many Stent Procedures Unnecessary

The average cost of having an angioplasty was $38,000 in 2003, according to the American Heart Association.

Drug costs appear to be 50% to 70% higher than other developed nations.

 

[Martha]

I know high costs and savings involve many things. One helpful thing to look at is different parts of the US and different medical centers that have a lower cost with better outcomes. This all goes to the evidence based medicine that Rich and Meadbh talk about. For example, the Mayo Clinic, which is often cited as an example of excellent medical care and attracts people from other countries, does this a far lower cost than many other medical clinics. for example, clinics in Texas. Obama is pushing using best practices to save money. When making the calculation for the costs of health care reform the GAO does not count any savings from these types of practices.

Is using best practices rationing? Is sayig that you should not have a stent denying you choice? Maybe, but maybe the choice is reasonable.

 

[clifp]

It's pretty clear there's increasingly a "war" on fat people going on today, and increased public funding exposure to health issues will only make that worse. I think fat people and smokers are the only two classes of people against whom bigotry and discrimination are still socially acceptable.

Probably true actually old people also are still acceptable discrimination class. Especially by our fellow old folks.

Still looking at those charts and the US ranking on smoking and obesity can you imagine what our health situation would be if we didn't have a such a strong (and ultimately effective) anti-smoking campaigns.

 

[clifp]

In Nords and my Angel investing group we often get presentation by startup companies in the medical industry.

Almost invariably the presentation goes like this.
Here at AppleADay we were working on device/procedure that revolutionize the treatment of this disease. Currently we spend X billion on the US for treatment and 3x billion for the rest of the world.
Our widget provides better care and speeds up treatment and will save the need to do these tests and procedures.
An Angel member will ask to do you authorization from Medicare and Insurance companies. The see will generally say yes we are very close yada yada.
After the entrepreneur leaves one of the Doctors in the group will comment on the technology which is often encouragin. He then will throw a ice bucket of water on investing in the company, as explains while all of the ways that new widget will cost the doctor and the hospital money and how hard it would be to get doctors to accept the new procedure.

Unless we redesign the system to encourage paying for results and not for activity, we are in continued trouble.

 

[Nords]

After the entrepreneur leaves one of the Doctors in the group will comment on the technology which is often encouragin. He then will throw a ice bucket of water on investing in the company, as explains while all of the ways that new widget will cost the doctor and the hospital money and how hard it would be to get doctors to accept the new procedure.
Unless we redesign the system to encourage paying for results and not for activity, we are in continued trouble.

There's a reason they do all those human trials using a subcontractor in the Philippines...

 

[HFWR]

I guess a way to look at it is there is some very expensive equipment siting idle and not making money.

YouTube - Monty Python - Hospital Sketch

 

[Independent]

You bring up a good point.

Will companies want to pay for research and development if the return on investment does not justify it?

No, they won't do the R&D.

But, if the best they can do is a maintenance drug that costs $150,000 per year of life extension, I don't think that I want them doing that R&D.

 

[ziggy29]

No, they won't do the R&D.

But, if the best they can do is a maintenance drug that costs $150,000 per year of life extension, I don't think that I want them doing that R&D.

This, I think, is part of the reason why all the new "blockbuster" drugs for chronic conditions are medications that only "maintain" rather than cure.

Finding a cure means you take it once for some time period, and never need it again. Where's the profit in that? I mean, I respect that the profit motive might lead to medications that substantially help the quality of life for many people suffering some pretty bad conditions. But I think that same profit motive means few (if any) curative medicines are being developed.

Had antibiotics only been a recent development, would the drug makers actually bother researching something like penicillin which only has to be taken for a very short time? Or would they need to invest to find drugs that only prevent infections from getting worse, but not actually cure them?

I hate that I'm this cynical, but I'm not convinced it's a coincidence that almost nothing developed today *cures* anything. When it comes to developing medicines, the profit motive is both a blessing and a curse.

 

[Martha]

That is why I like having the NIH provide grants for research. But that has its own problems. Lot of wasted money went into one of its centers, the center for alternative and complementary medicine, for research on stuff that does not have any good theoretical foundation and is just psuedoscience. All due to lobbying from a senator that thought he was cured by bee pollen.

 

[REWahoo]

All due to lobbying from a senator that thought he was cured by bee pollen.

The taxpayer's get stung once again...

 

[Rich_by_the_Bay]

Pharmaceutical companies always trot out the "blockbuster drug" that their R&D has discovered and, indeed, it does happen once in a great while. But more common is the introduction of a "me, too" drug to compete against a competitor's version of a simiilar drug; motrin v. naprosyn; nexium v prilosec; ambien v. lorazepam; lovenox v. fragmin, etc.

Our fantastic federal research resources (NIH et al) combined with grants to universities if properly funded can be a world leader in drug discovery, and intellectual property can be handled appropriately.

Private companies should feel free to do all the R&D they wish but I don't think we do or should depend on their view of what is important to research. Those decisions are profit-motivated.

 

[Independent]

The thing is, the bean counters who rip into smokers and the overweight for "costing them more" in health care almost never account for the fact that on average, they live several years less -- and therefore collect several years less from Social Security and Medicare. So from a pure bean-counter standpoint, it would be intellectually dishonest to only look at the added public health care costs of smoking and obesity while ignoring the cost savings in Social Security (and perhaps Medicare in the long run).

Smokers and the obese could just as easily say they are subsidizing Social Security for the physically fit.

I've always wondered if anyone has done a study. I saw this today (via Mankiw's blog). It seems to support your point, but I have to admit that I haven't read the whole thing.

Governments save on the costs of old-age medical care, social security, and nursing

home care due to the earlier death of smokers. (This result does not mean that it is
desirable that people die early; it means that in determining financial cost, if that is the
justification for a payment, a correct measure of the loss will only be calculated if these
effects are included.) Smoking has apparently brought financial gain to both the federal
and state governments, especially when tobacco taxes are taken into account. In general,
smokers do not appear to currently impose net financial costs on the rest of society. The
tobacco settlement will increase the transfer of resources from the smoking to the​

nonsmoking public.

http://www.law.umaryland.edu/marshall/crsreports/crsdocuments/97-1053_E.pdf