Posted on 05/29/2008 12:24:14 AM PDT by B-Chan
[How to fix health care? When it comes to the current state of heath care services in the United States, there are no easy answers. However, most people I've spoken to — both within and without the industry — agree that the way we are providing health care services in America now just isn't working, and that something must be done. Both Democrat presidential candidates are touting a public/private system of universal health care; the Republican candidate favors tinkering with the current system. Other proposals include getting rid of all government involvement in the health care industry, full-on British/Canadian-style socialized medicine, and the unique quasi-public "social security" mode of healthcare provision as practiced in France. (Ref: Brookings report on the relative merits of the French and U.S. health care service models, and a Business Week article from last year on the French system.)
Which system is right for America? I don't know. It's a complex subject — and one we all need to understand better. Bearing this in mind, I have set out my understanding of how the health care industry in America works, and outlined the most commonly proposed methods of improving it. I urge you all to do your own research on this topic and draw your own conclusions. — BL]
Health care services are expensive. In every country, a static supply of providers has coupled with an exploding demand for services and the constant rise of new technologies available for diagnosis and treatment to drive the cost of health care services into the stratosphere.
Yet health care is different than other high-priced products. In a civilized nation, it is unwise to allow most of the population to go without health care services, lest civil unrest and/or plague result. A nation that allows the sick and injured to "die in a ditch" will not long survive — nor does it deserve to. Therefore, to stay on a "going concern" basis, each civilization must implement some way of forcing those with the means to pay for health care services to cover the costs of those without those means. Historically, this has been accomplished by three institutions: the Church, the State, and the Market.
In Judeo-Christian society, servitude is seen as a duty. In a country with a Judeo-Christian culture, it is unthinkable to allow human beings to suffer illness or injury without caring for them. In pre-modern times, the Church was seen as the guarantor of the human right to health care. To this end, the institution known as the hospital was created by the Church — a charitable organization operated by the Church which provided health care services to those too poor to afford them. This worked so long as the Church was a recognized Estate within the society at large — an Estate with its own lands and other sources of income — and as long as the limitations of pre-industrial food production (and other factors) kept populations small.
Over time, however, the number of poor and indigent patients began to exceed the number than the various religious charities could afford to care for. In modern times, the Church — now stripped of its status and incomes — has neither the resources nor the support to continue in this role. Our world is now secular; the Church has no fixed place among our society's institutions. The Revolution would never tolerate a Church rich and powerful enough to provide for the needs of today's poor.
As the Industrial Age dawned, the State and private industry therefore began to take on this responsibility — the State, with an interest in keeping the peace; private industry, with a eye toward making a profit. Proponents of State-provded "socialized" health care argue that the right to heath care is among the rights of any citizen in a modern society, and that the State should guarantee this right as it guarantees others. In countries with State-run health care systems, the usual form this took was the enactment of some sort of "national insurance" scheme, with the State collecting premiums in the form of taxes or other levies on employers and employees, and rationing health care services to citizens through State-funded (and often State-owned) hospitals and providers. Under national health insurance, the State is generally required by law to provide health care services to all, regardless of their current or potential health status. Sadly, the failure of socialism to guarantee citizens their rights in any form is a matter of historical fact.
The Church no longer has the power and income to provide for the health care of the indigent. State-run health care systems suffer from the same flaws which bedevil all enterprises of the State: mass inefficiencies, thick and cumbersome bureaucracies, impersonal service, and lack of personal vested interest by providers. On the face of things, then, it would seem that the free-market, private-insurance form of health care service is superior. Let us therefore examine how health care services are provided in a market economy.
In a liberal society, servitude is slavery — an intolerable affront to the rights of the atomistic Free Man. In our liberal society, where all forms of coercion are anathema, the free and unregulated exchange of goods and services by independent agents trading in an open market is seen as the only moral form of exchange. Proponents of free-market, cash-and-carry medical care argue that, left to itself, competition between providers in the market for health care services would in time provide everyone services that they could afford. It would therefore seem that the free market should be left to provide health care services the same way it provides soap and toothpaste: by unrestrained competition. Theoretically, medical care providers in a free-market system can compete for customer dollars on a fee-for-service basis until the cost of a given unit of health care service reaches its natural price.
Unfortunately, in the real world, there are costs associated with health care (physicians’ and nurses’ salaries, medical equipment, the costs of providing full-time care to invalid patients, and the ever-increasing price of medicines, et al) that are already at a natural price — a bottom, below which they cannot go. No amount of competition is going to reduce the costs of services, increasingly advanced technology, and new medicines. Due to these fixed costs, the price of medical care has been, is and will continue to be extremely high.
The institution of mutual insurance was extended to the heath care field by private industry as a means of spreading these high costs (and the associated risks) among as many people as possible. In a typical private insurance scheme, the insurer collects money in the form of premiums from subscribers; in return, it pays a certain portion of their health care costs (in the form of claims). Since those who pay premiums without filing claims pay for the care of those who file claims, the insurers must guarantee that those likely to file claims are kept out of the system. By restricting coverage to those groups least likely to file claims, private insurers guarantee that the amount of money gathered from premiums each year exceeds the amount paid out in claims plus operating expenses and taxes; this profit is reinvested, producing income for the owners of the company.
The problem with free-market, private insurance in countries with such a system is that not everyone can get insurance. In the United States, for example, most people are covered by group insurance purchased at bargain-basement group rates through their employer. However, those who are not employed (or who are self-employed) often cannot qualify for insurance coverage at any price — nor can they afford to pay the required premiums.
(Saving for medical care is futile; a person making $50K annually with a realistic savings rate of 20% can save at most $10K per year — the cost of a day or two in a hospital.)
Likewise, many persons who have serious chronic illnesses (e.g. cancer, kidney failure, HIV etc.) or are otherwise high risks (e.g. the aged) cannot get coverage at any price in a private-insurance regime due to the high costs of their care. In the U.S., some people in this situation are provided for by a piecemeal system of socialized medicine (Social Security, Medicare, Medicaid), but not everyone is covered by these programs, and those that are covered often experience lackadaisical care, impersonal treatment, and the other typical problems of socialized medicine when they present for treatment.
For the rest — those outside the world of employer-provided private health insurance and/or the Social Security system — the only health care system to which they have access is the emergency room at the local hospital — an institution spectacularly ill-suited to the task of providing basic health care services. Due to the flood of uninsured patients using the ER as their sole health care provider, the costs of providing emergency room care to the indigent and uninsured — which care is mandated by Federal law — are ballooning out of control, forcing hospitals around the nation into insolvency and closure.
And these problems exist in a society where most people have insurance. What can we expect in a world where most people are without it? As costs rise, the number of employers offering health insurance as a benefit to employees is certain to drop; employers will be faced with the choice of going out of business, eliminating jobs, or cutting insurance benefits. In a situation where most people are without health insurance (whether national or private) to help patients pay these costs, health care would become something like owning a share of a private jet is today — a luxury service available only to those with the means to pay for it. The resulting society would greatly resemble the nineteenth century; like something out of a Charles Dickens novel, top-quality private care would be available for middle-class Lady Estella Havisham, while spotty and inadequate charity care would be the lot of working-class Bob Cratchit and Tiny Tim. Oliver Twist would receive no care at all, and would be reduced to obtaining health care services from unlicensed practitioners, quacks, cuaranderas, and witch doctors. Those with communicable diseases would be imprisoned, quietly murdered, or left to spead their sicknesses among the public; those with chronic illnesses and serious injuries would be left to suffer and/or die in the gutter. A revolution would soon follow, after which Soviet-style State-provided “care” would be implemented by force.
To avoid this grim scenario, therefore, we as a society are going to have to figure out a way to make sure everyone has access to health care services. And, since the private insurance companies have proved themselves unable to do this, it is likely that (barring a revival of Christendom) we as a nation will have to ration health care through some form of private/public national health insurance program.
With this in mind, I think that the only prudent course of action a citizen can take is to make a thorough examination of the various national health insurance systems extant, and compare their various strengths and weaknesses. Only in this way will each of us be able to have an informed opinion on the subject when the time comes for the U.S. to consider such a system of its own.
I don’t have an answer but I do know part of the solution will be to recouple the costs to those who receive the care. I can’t tell you how many of my patient DO NOT CARE what the cost of a test or treatment is since they DON’T pay for it. Either their boss or insurance or the government or the hospital eats the cost. THATS got to change.
Thanks for the input.
How would a patient know what their care costs? Is there a list of prices? Is the price even the same for everyone? The answers, of course, are no and no.
IBM (my employer) has started to do just what you suggest. I now pay a percentage of the cost of care rather than the traditional copay. The problem is I can’t shop around or decide if I even want to buy a service because no one will tell me the price of anything.
There is no reason that prices couldn’t be available for all to see. Of course everyone including Uncle Sam should be paying the same for the same service.
I have a link to a movie from the NL ministry explaining&advertising the whole thing: http://www.minvws.nl/en/themes/health-insurance-system/the-new-health-care-system-in-the-Netherlands-video/
Actually to use the example of an uninsured service, laser vision correction, prices have gone way down at the same time that demand and quality have gone way up. The market works when third party payers are removed.
Well, I’m originally from Vancouver, BC, Canada and now work/reside in L.A.
You want socialized medicine? Prep yourself to wait WEEKS for a simple MRI (as an example) and this actually happened to my aunt. Well, I;m too tired to type but there are countless examples of what happened to me as well.
The illegals in L.A. have a program called ORSA, where as long as you don;t have any insurance, and don;t work (well, they’re illegal, right?) you’re home free.
Knew about this the hard way when I went for a flu shot at Mid valley in van Nuys, when almost nobody spoke English.
Very good analysis. I appreciate the historical background - which seems well though out.
Looking at some other country’s systems, it should be noted that one of the biggest myths is that European systems “ration” healthcare and that America’s system must be the best because so many people travel overseas to receive state-of-the-art treatment.
The measurement for a “good” healthcare system however is best done by focusing on the macro-economics. That means Percentage of GDP in cost versus percentage of population covered and the life-expectancy of the population. In other words, what results are achieved for the money spent.
The US spends more of GDP than any country (16% compared to Germany at 13%) and covers only 85-95% of the population compared to 100% covered. The US life expectancy is also 3-5 years lower.
By most measures in touch with reality that is not the “best” system.
The German system combines a requirement for basic coverage as well as an option for private coverage. The private costs more and brings more and better services. But, the basic is fine as well. Thus, the “rationing” is done in so far as everyone gets at least a portion and those who care to purchase more are welcome to do so.(By the way Germany also has more doctors per capita than the US and they don’t get paid quite so much).
However, you cannot sue your doctor for everything and anything. The tort system in Germany does not allow it. Doctors don’t make more mistakes as a result, it is just that the whole system is cheaper. The lawyers are not quite as rich though (I feel bad for them because they only have small yachts).
The “best” system myth is not fully untrue. The US has the best UNVERSITY system in the world. Since cutting edge medicine is essentially cutting edge science and education, that university system creates the best innovations in medicine which attracts wealthy people with exotic problems. Reforming health care will not change the university system.
But, health care will not be reformed properly in the US. It requires a grand political bargain that no politician has an interest in making. The GOP would have to sell out the pharmaceutical companies and HMOs. The DEMs would have to sell out the Trial Lawyers. Only then could a funcitoning system be put into place. Since this compromise will not happen (only the GOP could have made it when they were in power), the DEMs will shove down a disfunctional system that is costly and terrible. Then the cycle will begin again.
Have fun.
There are enormous demographic differences between Germany and the US that make such comparisons meaningless.
Now we just have to make it happen.
For instance that Germany has an older population?
You throw a statement out there without really giving me evidence.
I will make you a bet: just take the American population of German decent and I will bet whatever you want that the German system is still cheaper and better.
You can even keep the Turks and other immigrants in the system in Germany if you like.
Costs to the Medicare recipient is not cheap.
My part A costs me right at $100/month, taken out of my SS check. That takes care of 80% of my medical bills. The remaining 20% can be covered by private insurance for an additional $50 (I think). That is $1800 for one person, even if they did not see a doctor all year.
When I was working (not too long ago), My employer and I together never paid $1800 total for just my medical care. (I did, however, pay more when I added my family to the insurance.)
Veterans medical care, once the vet reaches age 65, comes right out of the limited Medicare budget.
I do not have an answer to the medical cost problems, but from personal experience, I can say that not all Medicare recipients are on the public dole. Veterans, military, and a significant number of seniors are paying their way up to the limit the government will allow them to pay.
Private industry is getting out of the medical care business by letting their employees go into the medicare system at age 65.
......Bob
Our life expectancy is dragged down by 1) too many fat people, 2) disease-ridden illegal immigrants, 3) high rates of drug abuse, and 4) very premature/defective babies who are counted as "stillborn" in other countries' statistics, and "born alive, died in infancy" in ours. It is wrong to blame it on a poor health care system.
-ccm
Thanks.
1. clearly true.
2. how can illegals affect the stats of legals?
3. not sure about this. Europeans take lots of drugs too.
4. interesting. I never heard that one.
The USA has 12% African-American population. They have an average life expectancy years less than “whites” which includes Hispanics.
http://www.infoplease.com/ipa/A0005148.html
BTW, Germany’s life expectancy is 78.95 while the USA’s is 78.06. Hardly an overwhelming difference.
Agreed, but Germany spend 3% of GDP LESS per year. If the US were getting better results that would be another story. But Germany spends less.
Moreover, Turks don't live as long as Germans, so there is a fairly good counter-weight.
Lastly, do African Americans live shorter lives due to genetics or are the other factors at work that have to do with their particular American way of life?
I don’t have much current familiarity with our civilian health care system. I’ve used the military system since 1965
On a Friday night I broke my wrist in an accident up in Richmond and saw a doctor at the emergency room. He was suppose to a great orthopedist - he even taught at the local medical collage. After my wrist was X-rayed he put the cast on himself. I was surprised he didn’t have an orderly do it. It still hurt. I’m no doctor, but have a lot of experience with broken bones. I’ve never had one still hurt bad after being set and cast. As I stood to leave he handed me his card and told me I’d have to come back once a week so he could treat it.
On Monday morning I went on sick call. It was X-rayed. The Colonel went off and asked me who the idiot was who treated me. He told an orderly how to set and cast it. The private told me to make like I was holding a beer can and quickly had it recast. The pain went away.
I still think the doc in Richmond was looking for repeat business.
My other experience was when my wife had torn tendons in her knee. The orthopedist was supposed to be one of the best in the business. He gave her a brace and orders to come back in a week. Again, I’m no doctor - but I do have experience. Every week for a month he bent her leg, said it would soon heal and sent us home. I couldn’t handle her tears of pain - and Sheryl was a stoic woman. I finally mentioned to his nurse that I was getting mad and might lose it and beat the snot out of the doc if he didn’t do something. She ran to the doc, he came back and told us he’d set her up for surgery that afternoon.
After surgery he apologized to us and told me it was torn tendons.
In the military medical system doctors get paid the same no matter how many people they treat. If they do it right the first time their workload is reduced. No so with civilians.
So much for my rant.
Let patients shop for doctors and drugs.
Establish a fair price co-pay and if the patient can find a less expensive medical provider, or drugs at a lower price, then share the savings with the patient. Right now there is no incentive to shop or bargain. Whatever it costs, the system pays and the consumer only receives the healthcare itself without regard to price. If the patient had a monetary incentive to fight for lower costs then the costs will go down. Also, make it harder to sue for nuisance malpractice.
Another thing, the AMA should be broken up as a labor/trade monopoly.
Get the government out. Abolish the FDA.
A riotous politically free market would crash prices.
What you would see.
Wall Mart selling drugs.
Sales Days.
Loss leaders offered.
0 percent financing.
Shuttered hospitals.
McDonlaized care for common and popular procedures.
Vast increases in innovation and the speed of innovations.
Losts of scoundrels taking advantage of the stupid( Our present system depends upon scoundrels entering government).
Lots of procedures only done at a few centers.
As it is now, any change into a politically free medical market would cause a post-Soviet type meltdown as our ‘system’ is presently 80 percent socialism.
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