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To the young brilliant minds

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68 pointsgalactus53 comments

Health care is expensive, limited, and must be rationed. Not everyone can have as much as they want. There simply is not enough to go around. In the US, this rationing process is done by price, and by insurance companies. In other countries, this is done by govt bureaucrats.

No rationing system can change this fundamental fact: some people will die because we don't have the resources to save them.

I don't know why the author can't believe it has come to this in the US. Does he feel that the laws of scarcity should not apply, simply by virtue of American Exceptionalism?

It's really not so black and white:

1. The laws of scarcity don't dictate how a scarce resource is distributed. I guess the argument is all about what the most effective means are to distribute this resource.

2. Anyhow, commercial enterprises have strong incentives to produce artificial scarcity. The "laws" of scarcity don't have to apply here.

The "laws" of scarcity don't have to apply here.

The laws don't necessarily apply to digital goods, because we can make infinite copies. However, Space, time, hospitals, and doctors are limited...so these laws apply.

Sure, but they're also not 100% efficiently utilized. Far from it. And the argument is that profit motive in health care may actually drive "efficiency of utilization" the opposite direction. When one person is staying at home with chest pain, afraid of the ER bill, while another person shows up with a soar throat and a headache because they have health insurance, well...that's pretty clearly misdirected utilization of the scarce resources.

> No rationing system can change this fundamental fact: some people will die because we don't have the resources to save them.

Don't agree. If access is free then a lot of preventative care can be done in order to not have to conduct expensive critical and emergency procedures.

People in this country don't go to the doctor because they may or may not end up owing sums of money ranging from $0 to many hundreds of thousands, depending on the combination of provider, doctor, insurance policy, state and federal laws. So people just stay away. Until they have a heart attack, or cancer is in the terminal stages then they are rushed to emergency and then guess what happens -- a very expensive procedure probably needs to be perfomed. So not very surprising that health care is expensive.

But let's take from another point of view. You say it is expensive. But how come Scandinavian and many European countries manage do provide it? Could it be that we just spend everything on defense (well...I personally called it offense but let's keep it official here) -- more than all the countries in the world combined? Do our doctors and medical supplies companies charge insane prices? I don't know the answer, but I know it has been done in other countries, and it is currently better than here. So it seems like it is possible.

Don't agree. If access is free then a lot of preventative care can be done in order to not have to conduct expensive critical and emergency procedures.

Preventative care also consumes resources. A doctor can only perform 8-10 hours worked / (duration of preventative procedure) preventative procedures per day. The number of doctors is limited. Thus, the number of preventative procedures is limited.

You might be right that the US is currently not at the optimum. Insurance companies try very hard to find a better optimum - they stand to gain millions if they can find it. But that doesn't change the fact that doctor hours are limited.

The OP didn't say that the US had a suboptimal system relative to some other. He merely criticized the fact that medical care is a scarce resource and we can't all have as much as we want.

But how come Scandinavian and many European countries manage do provide it?

Scandinavian and European countries provide unlimited medicine to whoever wants it? That's news to me. Do you have evidence for this?

Also, if Scandinavia and Europe have reached the singularity, and now live in a post-scarcity world, how come they are still poorer than the US? How is it possible that their singularity only works for medicine?

...it has been done in other countries, and it is currently better than here.

Do you have evidence for this? So far, in spite of asking this many times, I see very little that is convincing. All I see are life expectancy gaps comparable to the life expectancy gap between people who eat leafy green vegetables and those who don't, and studies from the WHO that give more weight to inequality of marginal costs than to actual medical care provided.

Maybe doctors shouldn't be doing preventative care. Surely you don't need a Ph.D in medicine to perform and interpret blood tests, monitor blood pressure, take some measurements, and conduct an interview. If there are serious symptoms or something that doesn't respond properly to changes in diet, exercise, or simple medication, escalate to a doctor.

Specially trained nurses could be filling these roles much more cheaply, freeing up doctors' time for activities that require their training and experience.

I agree. The only thing standing in the way is state licensing. The AMA lobbied for medical practitioner licensing in the earlier 1900s on the grounds that they would set high standards for future doctors. The end result was different:

"The licensing boards in each state soon began refusing licenses to health professionals who had not been trained at one of the 'approved' medical schools. Only half of the existing medical schools were approved, so most of the others had to close their doors by 1920. By 1932, almost half the medical school applicants had to be turned away. Those who apprenticed, went to unapproved schools, or developed their own therapies were stopped- at gunpoint, if necessary- from healing. As a result, the number of medical doctors per 100,000 people dropped from 157 in 1900 to 125 by 1929. Specialists, such as midwives, were usually forbidden to practice unless they had a full-fledged medical degree."

Source: http://www.ruwart.com/Healing/chap5.html

Scandinavian and European countries provide unlimited medicine to whoever wants it? That's news to me. Do you have evidence for this?

This is a straw man. Nobody is claiming that Scandinavian (or any countries) provide "unlimited" heathcare. Only that they distribute it more effectively to a larger proportion of the population.

From the post I was responding to:

> No rationing system can change this fundamental fact: some people will die because we don't have the resources to save them.

Don't agree. If access is free then a lot of preventative care...

If you want to argue that Scandinavia distributes health care more effectively, make that argument. The OP doesn't. It merely complains about scarcity.

Norway, Denmark and Sweden are all richer (per capita) than the U.S. (http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomin...).

I should have been more careful with the term "rich". Most of those countries are a lot more expensive than the US, so the higher nominal GDP doesn't buy you anywhere near as much as it does in the US.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_...

You are right about Norway, however. (Luxembourg is also substantially richer.)

> Scandinavian and European countries provide unlimited medicine to whoever wants it?

I didn't say that. I just pointed out that they have free public health care and to me it seems they are spending less and are a healthier country. Now yes, I don't have hard evidence for you but is just my general impression. The point was that it is possible in theory and in practice to provide it.

> how come they are still poorer than the US?

Disagree with that. Look at the income distribution across the population. Look at other social indicators not just GDP. What is the life expectancy, crime, general health, and happiness of the population.

> I see very little that is convincing.

Sorry. It is just my personal oponion and impressions. Take it for what it's worth (probably nothing for you). Maybe someone else has a pointer to some hard data...

But how come Scandinavian and many European countries manage do provide it?

The simple answer is we don't.

England has a body called NICE (National Institute for Health and Clinical Evidence) who assess each and every treatment. They're a body of experts who look at all the evidence on a particular treatment and work out how much it will cost and how much of an improvement it will bring to a persons life. It it doesn't reach a certain threshold - measured in cost per QUALYs (quality adjusted life years) - the government won't pay.

It comes in for criticism every so often (usually when it won't fund a new, very expensive cancer drug) but in the physicians (and government's) eyes it does a very good job for something so hard.

This. I was born in the UK, and I still have family there. They all have private insurance for this very reason.

The preventitive care thing, sounds a little soundbite-ish to me. Most people have health insurance that covers preventitive care. There may be some people that just prefer not to go to the doctor, but that's more of a cultural thing than a purely rational economic decision. People do preventitive maintenance on their cars, even though insurance doesn't cover it.

Bottom line, if we provided preventative care only up to a certain low ceiling. You'd call it good? Everyone else can die? Or does everyone need all encompassing care?

In other countries it is very often done by doctors.

Denmark has recently had a big "scandal" because doctors used "codes" in the patients journal when the patient should not receive emergency care if they had e.g. a heart attack while at the hospital. They doctors added this code when such care would kill the patient anyway because the patient was too weak to survive such intensive treatment.

In the end, the "super secret code" was just the phone number of the intensive care unit, with a minus sign in front of it, meaning "don't call the unit if this patient has a heart attack".

I think you're too facile in comparing health care with economic goods such as crude oil, for which the laws of scarcity ordinarily apply. Compare this statement:

"Chemotherapy is expensive, limited, and must be rationed. Not everyone can have as much as they want. There simply is not enough to go around." Certainly this sounds silly to your ears?

If you were to say that some treatments are very expensive, and must be rationed, then I'd agree with you. But I believe that there are many treatments that our society can afford to offer to anyone who needs them, without rationing.

some people will die because we don't have the resources to save them.

Except for organs, which are "rationed" by transplant committees of doctors and not health-insurance scumbags, I don't think this is true. And if it is true, health-insurance executives need to be the first ones to go.

Also, yes, the American health care system is terrible. It's not only unfair, but it's extremely expensive and just doesn't work very well. Even upper-middle-class people would be better off under a European-style system. You're mean-spirited or an idiot if you think American-style health coverage is a good thing.

There are perverse effects in the market which make health care more expensive than it needs to be, and there are advantages to universal coverage. Atul Gawande's piece on McAllen, Texas is recommended every time this subject comes up, as well it should be. It is also enlightening to read up on and understand the major moving parts of the recent health care reform bill - namely, 1) the universal mandate/subsidies, 2) coverage requirement and pricing reform, and 3) health insurance exchanges. Each has a reason to exist, and it's hard to make it work without the others.

Health care is not a widget. It is not a resource. It is a service, a service that directly affects the quality of life of your average citizen, that directly affects how well put together your work force is, that directly affects the likelihood that you or your business will be pushed around by something completely beyond your control.

We are currently running that service extremely inefficiently.

Rubbish.

America is the only country in the Western World paying these astronomical prices. The only reason health care is so expensive in the US is because "for-profit" health care costs twice as much as single payer heath care.

It doesn't matter how often I come across it or from which direction: I'm just flabbergasted that the USA doesn't have universal health care.

Basic racial politics. Welfare queens and all that jazz.

Agreed.

Even the ex-"Evil Empire" managed to provide decent basic health care for its citizens.

Yeah, they couldn't graft a human ear onto a mouse (http://en.wikipedia.org/wiki/Vacanti_mouse), but at least when I broke my arm or busted my teeth on a bike they never asked my mom how she is going to pay for it, or some insurance company did have to decide to only replace 2 out of 4 of my teeth, because the other 2 would be considered "cosmetic surgergy" or "experimental procedure".

I think it's been an issue, but not that big of an issue (in voter's minds) until recently.

Many of the voting blocks are already covered. Low income people have medicaid, seniors have medicare. Many people working a full time job have employer sponsored health plans.

Health insurance costs are rising. It's harder to find a cheap plan. Pre-existing conditions really screw you as far as decent coverage.

I'm not sure what the answer is at this point. The US is almost broke, we might not have a choice. http://esr.ibiblio.org/?p=3035

Yeah, and it's brilliant, because the gov't is on the hook for poor people and old people, aka unprofitable insurance subjects, while the private industry scoops up profits on the rest. And before some conservative comes in telling me that insurance profits aren't that high as a % of revenue, % profits on a pass-thru payment system are not the same thing as % profits on actually building something.

I saw a statistic (can't place it now and don't feel like googling, so grain of salt) that we actually have comparable government spending per capita on healthcare to some western european countries, and that's just for medicare/medicaid, without even covering everyone. No generic drugs + byzantine public/private payment systems + highest-risk populations = lots of money.

% profits on a pass-thru payment system are not the same thing as % profits on actually building something.

Could you explain this claim?

In one sentence, IMO of course, passing something through should be much cheaper than actually building something or adding value unless you're bilking people. In another sentence, insurance companies don't administer care, they just move money around.

Compare to the overhead as a % of revenue for the social security administration, for example. They're a simpler passthru so it's not a completely fair comparison but insurance is closer to SS than it is to manufacturing.

passing something through should be much cheaper than actually building something or adding value unless you're bilking people.

The amount someone gets paid for doing something depends on how much value they capture, not how much they add. In most cases where all parties contract freely, you can't capture more than you add, but anyway

_Value added and paid are often wildly out of whack_

"Bilked" is a moral judgement. If you're saying you think insurance is unjustly fair then since that's a fact about you not about insurance, sure it can be true. But it's like "profiteering", a moral/political statement, with no economic content.

Adam Smith would differ with you, in the ideal case.

Value capture and rent seeking aren't how capitalism are supposed to work. Heck, if that was the best capitalism could do, I'd be inclined to try communism.

Military spending.

I'm flabbergasted that Europeans won't admit that it's a failing system. Both France and Sweden need to scale back their systems because it's just not efficient or cost effective.

I know it's just anecdotal evidence, but everyone I know from Canada that has had to get any major surgery has come over to the US. The reason? the waiting list is too long (in the years). Most universal health care advocates will deny this, but I just can't ignore it when I've seen it happen so many times.

I would rather have a system with no insurance companies that we paid for ourselves. This way, Doctors would be forced to charge affordable rates.

> Both France and Sweden need to scale back their systems > because it's just not efficient or cost effective.

What? Both countries have amazingly cost effective health care systems!

And now that both sides have made mutually contradictory and equally unsupported statements, I believe the first round is a draw. Galactus will have the honors in the second round. Proceed, gentlemen.

It's fairly easy to find supporting information for the galactus view e.g.:

http://ucatlas.ucsc.edu/spend.php

And frankly, it should be common knowledge that western europe has better/equivalent outcomes at less than half of our cost (very round figures to sidestep the nitpicking), meaning, at minimum, they're getting at least twice the value per cost that we are, and that's rounding every number in the direction that's unfavorable to europe. I could argue that let's just copy the system within europe that works best and we can go for 3x.

Unfortunately, doing things that have been empirically borne out to work doesn't seem to be on the agenda these days.

Great point. Right now, doctor's have to charge twice what they expect to be reimbursed by insurance companies. So, an individual who chooses to buy health care without a health insurance provider has to pay twice what doctor's even expect to get. I don't even think doctors get any reduction in transaction costs when dealing with large insurance companies over individual patients. In a lot of ways, it seems like doctors have to deal with the large insurance company and the individual patient.

Health insurance in the US is more like a payment plan to join a health-care purchasing group than health insurance. What's worse is that your purchasing group choice is chosen by your employer.

I think there's a serious reduction in job mobility because the US has chosen to provide tax incentives when health insurance is provided by the employer, but not when an individual purchases those.

Right now, doctor's have to charge twice what they expect to be reimbursed by insurance companies. So, an individual who chooses to buy health care without a health insurance provider has to pay twice what doctor's even expect to get.

The second does not follow from the first. What usually happens is doctors try to rip off the insurance companies as best they can (and the insurance company does the same to them), but prices magically become reasonable when you mention you don't have insurance.

Doctor bill: $100 splint (her finger taped to a piece of wood), total bill $350.

My uninsured mom: "This is ridiculous. You can keep it, I'll just have my son duct tape me to a dowel."

Billing girl: "Oh, you don't have insurance? I'm so sorry, my mistake. It'll be $75, let me print you a correct bill."

(I don't recall exact numbers, but that was the rough flavor of the interaction.)

your biased assumption is that under the $350 bill that the middle party that has to bill the insurer does not get paid..

Part of the bill inflation is the multiple payor billing system costs itself..non-insurance bills do not have that costs.

What would bring it down instead of universal insurance universal payor billing..it was one of Mrs Clinton's HealthCare reform bullet points..form years ago..

Talk with some private practice doctors some time. They often spend about as much time dealing with patents as they do with the insurance company. As to the initial bill, they need to inflate it because the insurance company will always try and drop the price on something. It's the same game purchasing departments at large company's play where it's easier to buy something for 75$ after the 25% discount than 500$ without a discount.

Ops, 750$

It's not "ancedotal evidence", it's just an ancedote. Every Canadian I know prefers their healthcare to the US one. Now that you and I have equally canceling ancedotes, look at some evidence.

http://theincidentaleconomist.com/wordpress/how-do-we-rate-t...

I'm flabbergasted you're still peddling the ridiclous notion that the single payer health care system that is working for every other nation in the Western World is broken.

I'm curious: you are aware that a universal health care law passed in the U.S. last year, right? Its goal was to make this statement no longer true in the U.S.:

>If you have the wrong medical profile, you could be simply uninsurable. That’s how a free market works.

by January 1, 2014.

Given that health insurance systems similar to the one the Affordable Care Act sets up do provide universal insurance in other countries, it seems that the ACA has a good chance of doing what it's promised to (though I'm sure it will require tweaks and adjustments in the years to come).

But regardless, a conversation about health care in the U.S. that doesn't even mention the ACA seems to be rather pointless.

The reason is race: http://www.kff.org/healthreform/upload/7871.pdf and many others. Search for "Truman health care reform". As in many other democracies, America's right wing party is a coalition of the military, established business, the religiously observant, and what you might call resentful rural folks (who unlike the other factions exist in enough numbers to make an electoral difference). But uniquely among rich democracies, apartheid is a living memory here and still a core political differentiator. That means that anytime established business opposing something, they can get traction by implying that it's a plot to help "them". Those who mocked the grandfather who demanded that his Congressman "keep your government hands off my Medicare" for ignorance miss the point. He meant "keep Obama's black hands off my Medicare."

Taking everything this article says at 100% face value:

1. You will get expensively sick when you get old

2. Insurance carrier will try to kick you out and not pay for hospital stays.

If getting old and having $500k operations are certain for everyone, then wouldn't a better bet be for everyone to save their money? If all of this is a certainty why have the insurance as the middle man? Save your own money, and then don't deny yourself coverage.

More realistically, what alternatives exist? There is nothing that changes the cost of the expensive operation. A single payer NHS doesn't change the amount of money operations cost.

A single payer NHS actually does change the overall cost of healthcare: the UK pays about half as much per person as the US does for its healthcare system as a whole with no noticeable difference in measured effects.

The reason is simply market forces: people import drugs to the US from Canada because the power of single payer there changes what pharmaceutical companies can charge Canadians for drugs. The UK pays less for drugs, doctors, the whole shebang. Operations are cheaper in the UK and Canada (not to mention the rest of the world, which is more extreme in general), period.

The takehome point is simple: pretending that consumers must be price-takers for any good as vital as healthcare entitles producers to arbitrary profit. I hope not to spend all my savings on healthcare and my best hope is to get some kind of market power, be that from an insurance company or the government.

I don't believe adding more layers of bureaucracy between me and the person/company providing my care will ever result in better treatment net.

Countries that do use the Walmart approach to healthcare are piggybacking on innovations that wouldn't happen otherwise. Pfizer may not fund a new drug if every government in the world thinks it should sell at 10% above costs.

Additionaly there are other regional differences in pricing between the US/UK. A better comparsion would be the performance of the federal health programs we have now. What kind of treatment are patients at the VA hospitals getting?

Anyone who bills himself as "the father of blogging" really ought to figure out how to make their blog available under high load.

I think this might be a mirror:http://scriptingecho.wordpress.com/2011/04/11/to-the-young-b...

There is also: http://s3.scripting.com/stories/2011/04/11/toTheYoungBrillia...

To the brilliant young Americans.

Thank God. I thought this would be another condescending post about how kids these days think they know everything and just need to learn how to listen to their elders because they know everything.

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