Americans need to work longer...

[samclem]

Could it be that the reason the US medical care system is messed up is that the way it is provided distorts the market forces that are so vital to assuring the effective, efficient delivery of every other product and service at the best price?

Nobody is compalining about a shortage of cars--because people make informed decisions about what they want to spend, and producers compete to sell the best product at the lowest price. The same for essentials--food and shelter. It is available and generally affordable due to market forces.

Adam Smith . . . invisible hand . . . all that. It really works.

But in our system of medical delivery, somebody pays, but it's not the guy receiving the service. The link between the consumer of the service and the provider of the service is broken. That's a prescription for runaway prices, gold plating, inefficiency.

Is government provided care better? Not if you believe the free market is the best way to get the best product at lowest expense. If the govt was forced to buy everyone a car--would the manufacturers sell to the govt at low price? Do we think think the govt would pay for the kind of car we'd buy for ourselves? Once the govt established a max price they'd pay for a car, do we think the engineering would ever improve?

There is one silver lining to the bloated, inefficient US health care system--it is the most important engine for medical advancement in the world. Most of the pharmaceuticals, advanced diagnostics equip, etc available worldwide (eventually at low prices) were developed for the US market because innovation is still rewarded (though, as noted above, the market forces are distorted). The US market subsidizes the R&D costs for these things for the rest of the world--another reason costs are higher here.

samclem

 

[Cut-Throat]

Could it be that the reason the US medical care system is messed up is that the way it is provided distorts the market forces that are so vital to assuring the effective, efficient delivery of every other product and service at the best price?

Sam,

Not even close! - free market doesn't work here.

Example: - Car companies decide the latest and greatest car will cost you $250,000 - simple you don't buy it - cause you can live without it!

Hospital needs $250,000 to save your wife's life from a debilitating disease - No choice ! - She cannot live without it!

I think we've about used up the free market chips. China and India are gonna be playing them from now on!

 

[samclem]

Cut-Throat,

- It won't be easy to re-establish the consumer-producer link for the very reason you identify--the costs can be astronomical and the forces of demand (at the time) are huge (she needs the surgery).

- BUT- the costs are high in large part because of the present way we pay for these things. Is there any true market force of competition to get the best outcome in heart surgery at the lowest price?

- I don't have an answer, but here are some thoughts:
-- Insurance: Low cost, High deductible plans. This way you're using insurance for it's best purpose--to cover you against a huge risk you can't afford to absorb. I think the government >>might<< have a riole to play here in standardizing the packages offered so that consumer confusion is minimized and competition is most efficient (I don't know if it has worked in the Medicare supplement biz, but the idea does appear to be worth exploring).

- Interesting that you should bring up India and China. Countries with high social services costs (whether borne by the government of their industries) will be at a big competitive disadvantage in the world market. Only improvements in productivity can produce long term improvements in the standard of living.

- Scenario: You have no insurance and must pay for the heart surgery yourself. It's $250,000 in Florida, and it is $15,000 (incl air fare) at a legit private hospital Singapore, and their success rate has been the same. Where would you go for the surgery? How long do you think it would still cost $250,000 in the US?

samclem

 

[Cut-Throat]

- Scenario: You have no insurance and must pay for the heart surgery yourself. It's $250,000 in Florida, and it is $15,000 (incl air fare) at a legit private hospital Singapore, and their success rate has been the same. Where would you go for the surgery? How long do you think it would still cost $250,000 in the US?

Well, that was basically my point. Until foreign companies lead the way, it ain't gonna happen here in the U.S.A.

Hmo's were supposed to provide us with better medical care in the early 80's and any cost improvement was passed on to the CEO of the Medical Insurance Company. - That is how the free market seems to work here.

 

[ESRBob]

Re: what's wrong with our healthcare system: I think our costs are so high because American doctors, fearful of malpractice suits, conduct medicine in an entirely different way than they would otherwise. A far more expensive and 'CYA' way, which runs the costs up essentially limitlessly.

Once you tune into how far the cancer of suing and liability has infiltrated the thinking of anybody who does anything in this country, not just medicine, you start to get depressed about the long-term prospects for the American economy. The Tort Tax is a way to describe the drag on the US. Culturally it is emasculating us from being the bold risk-taking innovators or simply sensible decision-makers to necessarily becoming cautious, risk-avoiders who spend enormous sums (insurance, redundant procedures and tests) and mental effort trying to ensure that we never do something that could get us sued.

In the medical arena, this translates into no end in sight for higher costs.

Eventually, people are going to have to say we don't want a system this hidebound, collectively renounce our rights to lawsuit lotto earnings, and put meaningful caps on (in medicine) malpractice payouts for board certified or otherwise screened and certified physicians.

ESRBob

 

[John Galt]

Damn, ESRBob, that was a very thoughtful post, and I agree with all of it except the "eventually" part. Being
the confirmed cynic that I am, I don't see the problem
ever getting solved, certainly not by our government.
And..............I feel sorry for doctors and people who work in healthcare, almost as much as I feel sorry for
people who have to cope with a lousy system.

An aside. I don't think we can ever return to being
risk-takers and innovators. Rugged individualism I call it.
Too many people clamoring for cradle to grave support
from the state (for everything) and too many politicians
willing to promise to give it to them. A sad state of
affairs.

John Galt

 

[charlie]

Amen!, Brother Bob.

Charlie

 

[otako]

Could it be that the reason the US medical care system is messed up is that the way it is provided distorts the market forces that are so vital to assuring the effective, efficient delivery of every other product and service at the best price?

Nobody is compalining about a shortage of cars--because people make informed decisions about what they want to spend, and producers compete to sell the best product at the lowest price.  The same for essentials--food and shelter.  It is available and generally affordable due to market forces.

Adam Smith . . . invisible hand . . . all that.  It really works.

But in our system of medical delivery, somebody pays, but it's not the guy receiving the service.  The link between the consumer of the service and the provider of the service is broken.  That's a prescription for runaway prices, gold plating, inefficiency.

Is government provided care better?  Not if you believe the free market is the best way to get the best product at lowest expense.   If the govt was forced to buy everyone a car--would the manufacturers sell to the govt at low price?  Do we think think the govt would pay for the kind of car we'd buy for ourselves?  Once the govt established a max price they'd pay for a car, do we think the engineering would ever improve?  

There is one silver lining to the bloated, inefficient US health care system--it is the most important engine for medical advancement in the world.  Most of the pharmaceuticals, advanced diagnostics equip, etc available worldwide (eventually at low prices) were developed for the US market because innovation is still rewarded (though, as noted above, the market forces are distorted).   The US market subsidizes the R&D costs for these things for the rest of the world--another reason costs are higher here.

samclem  

Samclem,
I don't believe you can apply economics to healthcare. You are talking about people who need medical services to live. Now unless your cold heart bastard who doesn't value human lives, I don't see how you deny someone a life saving procedure based on price. We aren't talking about whether gets a car or some other superfical toy! We addressing whether somebody gets to live another day.

You can't apply theory economics to every single situation in life.

 

[cute fuzzy bunny]

We're pretty far afield of the original topic, but nothing new here!

If I may shed some light on the healthcare/costs issues, as my wife works in healthcare.

There is some cost issue in lawsuits. There is some cost issue in excess profitability.

I'm afraid we have to take the majority of it into our own hands though.

The vast majority of healthcare costs, usually insured, are spent in the final year, and usually, the final months of life. In other words, heroic efforts made to keep someone alive a little bit longer that as a function of having been 'in the last year' or 'in the last months', were not effective for very long. These are usually efforts made to someone who is unconscious, or would like to be.

Sometimes these efforts are made by lawsuit wary doctors afraid they might be sued for not doing everything possible, but most of the time the culprit is the family or in some cases the individual themselves who have specified that they are to be kept alive as long as possible regardless of the situation.

We're just unable to "pull the plug" on ourselves or our family members, even when the outcome is fairly obvious. At least not when the cost doesnt come out of our own pockets.

Every day she cares for people who are mangled, irreversably brain damaged, or a bazillion years old and suffering from multiple terminal ailments. (By the way, she's my hero for being able to do what she does).

A lot of other cultures dont appear to have the same problems. Cheaper drugs, lower lawsuit concerns, and the willingness to let people go when its time seem to make a big difference.

 

[trumpeting_angel]

TH wrote:

Sometimes these efforts are made by lawsuit wary doctors afraid they might be sued for not doing everything possible, but most of the time the culprit is the family or in some cases the individual themselves who have specified that they are to be kept alive as long as possible regardless of the situation.

Or, I think more likely, because the individual (or the individual's family) has been unable to take the (very simple) steps toward making sure this doesn't happen, with a living will/advanced directives.

I think we are so scared of the realities of life (death among them) that we don't face up to things in this country.  Instead of spending time alone, thinking and reflecting to know ourselves better, building relationships by giving them the time they require, etc., we work way too much to pay for mindless, passive recreation.  Most of it on an ever-larger screen in the living room.  Americans are afraid to be alone, afraid not to be busy, and are running away from themselves, chasing an ever-increasing "standard of living."

Whenever one is educated enough on the issues, and spends more than a minute or two thinking through the implications, the choice is obvious.  Nobody should be kept alive just to put off death.  It's a trite phrase, but "quality of life" really means something when you witness a person whose life is being pointlessly prolonged.  It's simply not an existence that anyone would choose.

Hospitals have come far in asking EVERYONE about a living will/advanced directive upon admission.  But during admission to a hospital, when you're sick and frightened, is a terrible time to consider these issues.  Maybe we should make people put it in writing when they get a drivers' license, or marriage license, or apply for SS. They could choose whatever they liked, but they would have to put it in writing.

Enough ranting.

Anne

 

[samclem]

otako,

But we >>do<< "deny people life saving care based on price"--every day. And, that's not just in the U.S.--it is every culture in the world. Everybody cannot have everything.

Which brings us to the present discussion of how to keep prices down, keep new services coming, and effectively allocate the services presently available--and the free-market is unsurpassed in these areas in most every other facet of our lives.

I agree with you that health care is different in many ways from most every other service, so applying market forces will require some unique approaches.

I think it's also likely that a public "safety net" will be part of any system.

samclem

 

[otako]

otako,

 But we >>do<< "deny people life saving care based on price"--every day.  And, that's not just in the U.S.--it is every culture in the world.  Everybody cannot have everything.  

  Which brings us to the present discussion of how to keep prices down, keep new services coming, and effectively allocate the services presently available--and the free-market is unsurpassed in these areas in most every other facet of our lives.

  I agree with you that health care is different in many ways from most every other service, so applying market forces will require some unique approaches.    

 I think it's also likely that a public "safety net" will be part of any system.    

samclem

Why not just apply free market forces to everything?  Let's put a price on human life too?  In fact, we can go back to owning slaves since according to free market theory the rich are only ones that deserve freedom.  

You just can't apply free market economic theory to everything in life.  There was period back in the late 18th century - 19 century in this country when the free market system reigned supreme without any government interference.  It was disaster for much of U.S. population.  A very select elite group of people accumalted vast amounts of power/wealth while much of the rest of America became dirt poor and used as economic slaves for the elite.  These elite robber barrons could have you killed if looked at them the wrong way while working.

I hate to go back to living in truly free market system.

 

[John Galt]

Hello okato! Your post seems a bit "over the top" to me
but then, a lot of mine are also.

I disagree about the "Free Market System". It's gone, but I would much prefer if we had it back. I believe it cures more ills than it causes and that your picture
of exploited masses, starving in the streets is somewhat
overblown.

John Galt

 

[johnblake]

Hey John Galt,

I don't understand your philosophy. You claim to be libertarian, and objectivist, but then support government intervention and republican views. Passing laws which limit lawsuits, define marriage, ban abortion, or funnel tax payers money to private interests, run contrary to libertarian philosophy.

Stay well, JB.

 

[samclem]

(Realizing that we're WAY off topic"

otako,
 - We have a commodity that is in high demand--not enough of it to go to all who desire it.  Using a market-based distribution system has a number of advantages, not the least of which is that it will contribute to medical progress (by assuring those who innovate are rewarded.)   So, it won't be a "fixed pie" to be divided up, but a growing one.

I wouldn't advocate the free market as the answer to everything--but it should be the presumed answer in almost all cases.   Some of the things you attribute to free market excesses had root causes elsewhwere.

What's your preferred method of medical care distribution?

 If you're going to trot out government and centralized health planning as the answer, be prepared to defend the record of centrally planned, top-down decisionmaking over the last hundred years--the robber barrons were pikers when compared to the centralized planners/institutions responsible for killing millions with schemes aimed at producing the greatest good for the greatest number.  


JohnBlake,
 - I know John Galt can defend his views more eloquently than I, but I don't think the cap on lawsuits is truly anti-libertarian.  In the case of these civil suits, one group (the injured party) is attempting to use the power of the state to seize the property of another party (the accused physician, etc).   It seems consistent with libertarian  philospohy to put constraints on the degree to which this government power can be used to seize the assets of another party.  

 - Libertarians agree that the state should defend the rights of individuals against other individuals who would take these rights. Not to open the abortion debate here--but if an individual believes that a fetus is a human with all the rights of any other human,  then he would also likely believe that the state should defend the rights of that individual--including the right to be alive.   I took a quick look at the web site of the Libertarian Party, and the party seems divided on the abortion issue--I suspect party members differ on whether the rights of the fetus should be equal to those of more developed humans.
 
samclem