The shadowy cartel of doctors that controls Medicare
washingtonmonthly.com
washingtonmonthly.com
But I STILL order tons of unnecessary tests. Why? It's not because I get paid more! It's because I am scared of getting sued.
What WILL massively cut costs is doing what New Zealand does, and basically ending the medical malpractice scam that only exists to enrich trial lawyers, whom are a far more insidious lobby than doctors ever will be.
95% of patient injuries have nothing to do with true "malpractice." A doctor cannot promise a good outcome 100% of the time, just like a programmer cannot generate bug-free code 100% of the time.
Instead of the current system, make it so that an injured patient is entitled to compensation from a national "patient injury fund."
The ambulance chasers make zero dollars, doctors don't have to waste money on "defensive medicine," and injured patients get prompt and fair compensation.
And if a physician has too many such episodes, then they can be referred to the licensing board.
Medical malpractice insurance (which is the tort system manifested as a cost to doctors) is not the most expensive part of healthcare though so your point is not really correct.
$250k is still a lot of money.
Wouldn't it make a lot more sense to have those juries staffed with medical practitioners only ? How is such a jury a "jury of peers", as guaranteed by the constitution ?
Of course it'd have to be police officers from far away, who ideally do not know anything about the case other than is presented in the trial.
That would be more fair than taking random people, who will represent the mob a lot better than they'll represent police officers.
https://www.citizen.org/publications/publicationredirect.cfm...
This data from the NPDB (started in 1990) provides some insight into how little discipline is applied to doctors who continue to commit malpractice.
That's a problem.
Malpractice premiums are not correlated to malpractice claim payouts. Period. 2000-2006, the amount collected in premiums rose 120%, while over the same time frame the amount paid out to claims decreased 14%.
"Defensive medicine" is non-reality-based, head-up-ass flat-out expensive crap, and you should stop practicing it and start questioning why your malpractice provider charges what it does.
And neither is correlated to overall healthcare costs. Malpractice limitations are something those who are interested in preventing health security because they want to maintain insecurity in the working class to keep labor costs down use as a distraction from real problems in the health care system.
The fear that one will be sued and possibly lose their license is one that factors into the way many physicians practice, and at the end of the day, the patient's suffer both financially and physically.
For example, appendicitis is largely a clinical diagnosis, meaning that a diagnosis can be made solely on the patient's presenting symptoms and lab values, and subsequently rushed to the OR for surgery. A CT scan is not necessary, and should be used if the patient's presentation is not a typical one. However, at many hospitals, CT scans are performed as part of the routine work-up. CT scans can cost $1500 a pop, and the radiation received from one is at least 10 times the dose you'd get from an x-ray, which increases your risk for cancer.
In 2007, there were 68 million CT scans performed. We perform 5 scans for every 1 in France [1]. We perform the most MRI scans, which range anywhere from $2k to $5k [2][3]. Do you think we're on the whole healthier than those in France? I would hazard a guess and say that we aren't. In fact, with the amount of radiation we're giving our patients, we're likely hurting them quite a bit. Japan, our rivals for the gold medal in imaging volume, recently conducted a study that showed that 3.2 percent of cancer cases were caused by imaging radiation [4].
And I'm talking about just one largely unnecessary test performed to diagnose one condition. You can imagine the bigger, sadder picture.
Many, many physicians don't even think twice about the amount of radiation they're giving to their patients, or how much they're costing the system, or the incentives they're giving companies who are a part of this chain of inflation to continue to sell scanners and charge exorbitant amounts. They order the tests because they don't want a lawsuit at the expense of patients' health and pockets. I don't necessarily blame them. Out of the thousands of patients a doctor sees, all it takes is one minor slip-up to drag them into a legal battle that may very well tarnish their record, cost millions of dollars, and result in losing their license.
[1] http://www.oecd-ilibrary.org/sites/health_glance-2009-en/04/...
[2] http://www.oecd-ilibrary.org/sites/health_glance-2009-en/04/...
(only an observation that seemed funny in my mind, don't bother debating it because it's not 100% serious)
No, no, this is a worthwhile point to make. Whether selling used cars, life-saving surgery or hiring young hackers for awful pay, information asymmetry can you give you a sizable advantage by itself.
Reading about a system like the RUC is a really good demo of this. To an outsider it might seem the strict confidentiality could be excused for preventing lobbyist influence - yet it also gives free rein to avoid media and public scrutiny in the light of day.
I love doctors who say, "I charge $X. If you have an insurance policy, that's great, tell me where to send the invoice, but YOU are my customer and you are responsible for making sure it gets paid."
http://watchdog.org/64814/ok-surgery-centers-cash-only-appro...
I'd really like to work at a place that attacks some of the flaws in the current system, but most healthcare companies are too invested and/or dependent on the current system to challenge it.
I'm not really sure they're going to disrupt too much because of that.
It's extremely difficult to disrupt hospital controlled medicine, in part because groups of buyers control what hospitals purchase and they are for the most part extremely conservative.
We should work towards making healthcare cheap in absolute sense - if we could make healthcare cost on average 1000$ per person per year than the question who should foot the bill is moot - it will be such a small sum it won't matter.
> No sane person will buy brain surgery if he has no problems even if it 1$ and he has no choice but to buy one at whatever cost if he has.
So what? Also, if there are multiple methods to treat his conditions, he may choose more expensive(or more cheap) method. Also, he may choose not to have brain surgery -- and sadly suffer or die. Socialism is hardly a solution here, if state will fail to provide necessary amount of surgeons to fulfill demand for them, then people will die too(not mentioning that there always be better methods and better qualified surgeons, so you won't be able to achieve the same level of healthcare anyway).
A choice is when I have insurance and refuse chemo because the side effects outweigh the benefits.
I am not talking about socialism. I am talking that we should treat the healthcare system the same way that we treat power plants and energy distribution utilities. A system of grants and loans that ensures long term supply of goods. So you pay your bills each month but the government takes care of you not being price gouged (except in California)
In the US (disclaimer - most I know for the healthcare is from the media, non US citizen) a good starting point will be forfeiting and subsidizing medical education so the graduates will be loan free. Also the government should not leave R&D to the private sector but create human health Manhattan project - this will have the benefits of everything that comes out of it entering public domain so no royalties patents and other shit to take care of.
A good healthcare system should be like interstate etc. It is there it is low margin but enables the society to move faster towards the future.
The same is true in your system, substituting "afford" for whatever verb is better suited for your proposed system.
> Also the government should not leave R&D
Government leaving R&D to private sector(which is major source of funding even now, at least in the USA) would be the great decision. It will stop crowding out resources from private R&D, thus making R&D more effective and more beneficial to economy.
Patents are the separate issue. There is the flaw in your logic. Patents are government granted. You view them as undesirable, but your solution is even more government. However, the logical solution would be abolishing patents.
The only people who claim this are those who have no idea what constitutes anything near blue skies research. Anything worth looking into for the mid to long term is going to have questionable profit potential and therefore not conducive to profit seeking.
There's a reason why most research uni's are public and the results are dumped out for industry to exploit, and it's not because it steals the talent by paying so well.
> You view them as undesirable, but your solution is even more government. However, the logical solution would be abolishing patents.
So your plan is to incentivize private R&D by abolishing IP. Hahahahahaha.
Particularly since the drug must clear the FDA and there is potential for recall.
This is simply untrue, there is a great book by Terence Kealey: "Sex, science and profits", you should check it: http://amzn.com/B0045JKEQ2
> So your plan is to incentivize private R&D by abolishing IP. Hahahahahaha.
No, private R&D do not require additional incentives beyond those arising naturally by market forces.
Even though every other OECD country save Mexico provides more socialized medicine with essentially universal coverage, produces equal or better overall health outcomes than the US, and spends far less per capita and per GDP on health care than the US. But, yeah, sure, "socialism is no help here", because if it was, that would require people to reconsider their laissez-faire religion.
False. The RAND experiment shows that people's consumption of medicine is dependent on it's marginal cost to them. Higher levels of cost sharing induce people to reduce consumption of medicine by 30% (with no adverse health effects).
http://www.rand.org/health/projects/hie.html
The Oregon health study got similar results, although it demonstrated one adverse health effect of consuming less medicine, namely increased rates of depression.
By my friend that is on dialysis cannot use it 30% less in the long term without endangering her life or degrading her quality of life to the point of not worth living.
Fracture a bone - you can go without professional help - risking all kinds of nasty stuff that will get you into ER or limping for the rest of your life.
You can ignore the dermatitis but if a mole starts bleeding you MUST go to the dermatologist to check yourself for skin cancer. 30 percent less of the later checkups and you have a few corpses on your hand.
Socialists can say for example, if healthcare is left up to the market then monopolies would rise, the quality would become abysmal, the primary goal of hospitals, doctors and insurance companies is now profit as opposed to keeping people healthy. They might claim government is not doing enough. There should be a single payer option or price control options etc etc.
Libertarians and those who like to extol the virtues of free markets and hate government intervention can blame all the brokenness on government bureaucracy and regulation. If only companies could just handle everything themselves it would all be very clear and easy, kind of like with car insurance. There would be competition etc etc.
See, one can defend either position. So it is not 100% clear cut and obvious which is which.
Similarly, Socialists can point to most European countries that get superior service for much less cost, while Capitalists (I lean this way) point to amazing efficiency innovations that happen in countries with less regulated systems like India's[0]
What's clear is that our system has somehow found a way to be the worst of both worlds, very expensive, bad service, not universal.
And some other low cost services are offered to some of the poor in India like heart surgeries, artificial ankles, ambulances, eyeglasses, psychiatric services. With some money and growth they could theoretically be offered to everyone in India.
Do you have any proof that charity is close-to-infinitely scalable and dependable to a point that a society can reasonably depend on it for something as basic a need as healthcare?
Or is it that you think that funnelling Government money through a for-profit company to treat people will somehow reduce costs?
While it's great that India has managed to get surgeries down to the sub-$1000 mark in many cases, the fact of the matter is that the Indian poor literally live on about a dollar a day, if not less - for an entire family.
And i said india is good at low cost healthcare DELIVERY.
Financing and delivery are seperate parts and shouldn't be mixed thogheter in such dicsuossions.
The situation in India is still such that the majority of people cannot afford any significant, additional outgoings in the case of medical emergency. You're therefore implicitly talking about a healthcare system that provides everything you're imagining at zero cost at the point of delivery, which means that the entire cost needs to be taken up elsewhere. In countries where this approach is actually taken, it requires considerable tax income and a relatively wealthy population to provide it, and India simply isn't anywhere near there yet.
Assuming you manage to get enough money into healthcare, what then? Solving that particular issue doesn't mean that the level of regulation will be automatically appropriate - it's regulation that determines where the money ends up, and whether you spend everything on extending the lives of those who can afford to pay you back, or broadly improve quality of life for everyone. There are still massive regulatory issues in the Indian system (particularly around safety standards), and the odd interesting advancement doesn't change that - nor is increased spending going to fix it. They're separate issues that need to be tackled in tandem.
Those "amazing efficiency innovations" though are not doing any good to the 95% of the population there, that die even in the streets.
I'd rather have less "efficiency innovations" and more universal health care.
See the logical fallacy? The fact that India has many problems (GDP/capita < 1 lakh/year, rampant horrible sexism) doesn't mean their medical system isn't highly efficient.
Which yeah - is actually pretty damn capitalist.
So the solution to our costs being higher than every other first world country is to make our system less like any of them?
Health care will never be a free market, it is too complex a good (it is a whole set of complicated products that take a life time to consume), and is packed with externalities relating to insurance premiums and emergency care.
There is no simple answer for high-quality health care.
Capitalism ain't nothing like a free market either, that's the point of those people.
Capitalism is large private interests, big corporations, elites, and government in bed together to milk the population.
As for the "free market", that's an impossible unicorn and ponies fantasy, formulated in the 18th century and perpetuated as a myth by economists who should know better afterwards.
1. Relatively low barrier of entry 2. Non essential goods 3. Comoditization/semi comoditization of the products 4. Price, demand and supply elasticity
The android phone/ tablet marked in the developing world right now is perfect example. Cheap PCs in the 80s/90s.
Sadly in the developed world the business models with carrier subsidization is quite evil and hostile towards the consumers. We should really make the wireless and wired assholes dumb pipes.
I don't see how all those are possible.
They presuposse a place where:
1) There is no government intervention.
2) Private interests play nice to each other and never take advantage of their position to skew the market.
That might happen temporarily in some sub-market (e.g cheap PCs in the 80s/90s) but it absolutely cannot happen in the overall market. Even something like "patents" and "copyright" is enough to fuck this up. Not to mention the issues of raw materials, infrastructure (roads, etc), foreign dependencies, etc.
Mysteriously absent from most politicians free market tirades.
Of course, there's no reason to believe the consequences of this are optimal or even desirable, though they're not necessarily worse than what exists now.
The complaints about how "free markets" unfairly get blamed for market failures sounds exactly like communists bemoaning the fact that "pure communism" has never been tried in the real world, just corrupted versions of it.
You find them in small villages all around the world, someone needs something that someone else has in abundance, they make a deal. I buy quality lentils, rice, milk, cows, ... this way, as I live in Europe. In the US you can't even buy natural milk, they have germs paranoia, and lots of big corps's interests.
Any person on the village could sell you anything, without any control, and that works, believe it or not.
A free market is as simple as a market that meets certain criteria, like existence of competition. Regulated markets use to destroy competition. In the US competition in healthcare is not so good in this regard, but don't tell any American, they believe they live in the best country in the world, specially those that had never lived abroad.
You could argue that perfect "free markets" do not exist, like a perfect "cube" or "rectangle" or "sphere" do not either. And that is true, because in the end atoms are just discrete approximations of a perfect shape, but cubes are very useful as a reference.
First free market is an illusion that probably never existed unless you count the really rudimentary communities. The laws that make a free market a non-free market aren't bad, like banning child labor or reducing work hours to 40, etc.
Second even in free market you can get monopolies, once all players consolidate or make deals. Then you lose any benefits of free market if paying to hush your competitors is lower than R&D.
Financial sector, energy, car manufacturing, IT, education, news, health care, law, home buying, defense - those are all in one or more ways deeply subsidized or maintain such close relationship with government that it's difficult to say whether they are part of the government.
Take Google: A single company that somehow manages to sit on almost all searches, most of the online add market, a good chunk of the email market. Yet it avoids being split up in antitrust cases.
Google started as a government sponsored research project that was spun out from a government subsidized institution (Stanford). Then it raised tax subsidized financing (venture capital). It has what seems to be a free flow of information with different government institutions such as the NSA.
Google doesn't really pay tax on most of its world wide income and it has some 20,000 government granted monopolies (also known as "patents").
Is Google a private company in a free market?
Exactly what US industry should health care emulate?
At least they don't control subtraction and multiplication.
The best available answer is capitation, where care providers are rewarded for keeping people healthy, not treating disease.
http://en.wikipedia.org/wiki/Capitation_(healthcare)
In practice, people live longer and costs go down.
Too many people confuse prices (set by a market) with incentives. In the mythical future perfect "free market", competition would drive prices down and all would be "good". Alas, there are no free markets. Further, the desired outcomes is healthy people, not cheap healthcare.
However, if we were really honest we'd acknowledge that aquihires, and the process of killing products when they could have been spun off and sold for a nonzero sum involve rent-seeking considerations as part of the equation. It's a good strategy to stop developing something that erodes the net value of all of your products, but how you do that gets complicated when you try to define what is and is not anti-competitive behavior.
Are there any free market industries in the US?
In other news, Guinness also does not pay taxes to the US for beer sold in Ireland. It only pays taxes on profits made from beer sales in the US. Those green fiends!
I know it's shocking, but there is a world outside America, and the US government does not get to collect taxes on all of it.
Diageo, which owns Guinness, is a British corporation. Thus, it is hardly surprising that the US government does not tax it on sales in Ireland.
Google, on the other hand, is an American corporation.
Yes, and Google was very much involved in the recent controversy in Britain over taxation of multinationals.
The British are very much aware that they have a tax haven right next door. And they're no happier about it than we are.
Now, I doubt that it's the government of Bermuda or the mighty army of Ireland or the important trade with Isle of Man that scares off the US government from closing those loopholes to American tech companies. Obviously, the US government uses its influence in such way that international tax law allows American tech companies to transfer their international income to tax havens. After all, the US government could quickly use its influence to close those gaps if it felt any real need for it. Ergo - another subsidy.
source: I worked at msft when it was convicted of antitrust violations.
Would it be wrong to settle for a system that covers everyone and is 1/2 to 2/3 the price of the current US system, like other developed nations have figured out?
What people are complaining about is that US healthcare is subject to a free market logic. I.e. the hospitals are profit centers and the insurance agencies are profit centers.
The opposite is also bad (like in Denmark) with the hospitals being 100% state owned and the insurer being the state.
In my mind what we need is a combination where one part needs to take care of making a profit and the other needs to be frugal about how it spends it's money.
Have no idea how that would work, but somethings gotta give.
Even if you ignore the cruelty of not providing healthcare to people who can't afford it. How does the free market deal with community impact of untreated health problems? For example, highly infectious diseases which are relatively easy to treat but people may not be able to afford treatment for (post-exposure treatment for rabies, scarlet fever, etc)? Do we just quarantine these people until they die or someone pays for treatment? If we treat these people for free, we're now subsidizing health care. Where do you draw the line?
Why don't we apply free market principles to law enforcement, fire services, and utilities?
Some utilities are starting to do this actually. Where I live Gas is provided by multiple servicers who setup contracts with the gas provided(sort of like a commodities market). There's been some talk about doing something similar with water as there's been some serious corruption uncovered with water billing in my area. Some fire departments are a combination of private and volunteer efforts. There's not many issues with this AFAIK. I used to live in a town like this and no one ever complained. Regarding the police, for better or worse, they are more or less treated as part of the judicial branch of government. I don't think many people would argue the police(as it exists today) should be private. That said, the system as it exists today is corrupt and resembles more of a military than a group dedicated to "protecting and serving." There are private police types in Texas and AFAIK, it works fine. Same goes for private bounty hunters.
That said, most of the above aren't for profit services, so it's hard to compare them with medical, which is an industry that must sustain a profit to progress. When governments become profit centers, you will have problems. Considering the problems we have now with medical, less regulation around competition would certainly be a good thing. For example, I should be able to call and get prices for common services so that I can compare doctors. Not my employer(nor the government) should be allowed to provide me with subsidized insurance(except in welfare cases). I should be able to buy insurance from a provider anywhere in the country. I should be able to negotiate rates on my own behalf instead of the insurance provider doing it for me. Insurance providers should not get preferential treatment from doctors and/or hospitals. Fix these and things will get better. There will still be issues, but at least the market would be more efficient and prices would start going down.
Note that some of your proposals are actually asking for more regulation. For example, employer provided insurance is "subsidized" from your paycheck. It's part of the total cost of your employment. I completely agree with you though. If employers just paid you an extra $20k/year (conservative estimate of group health insurance for a single employee with a wife and a kid) and let you shop around for insurance, it would lead to cheaper health care costs. However, you would have to interfere with the labor market to achieve it by introducing laws that prevented employers from offering group health insurance plans as a fringe benefit. If you did this, who says they would then pass the savings on to their employees as a raise unless you also included that requirement in the new regulations.
The point of all this being that free markets are unicorns. It's really all a balancing act and there are so many ripple effects from anything we change about the system, there is no way to predict the outcome beforehand.
> If you did this, who says they would then pass the savings on to their employees as a raise unless you also included that requirement in the new regulations.
No one. It's a tough pill to swallow, but it's one we need to take ASAP.
> The point of all this being that free markets are unicorns.
They are when a "free market" country fails to recognize that it's really ran by crony capitalism and corporatism. I firmly believe at this point that corporations and the laws surrounding them(e.g. the ones that treat them the same as an individual, or better) undermines the whole concept of a free market.
Why do you think the free market is the best device for getting me a fair price on my ambulance ride? After all, I might be unconscious, so I won't even be able to compare ambulance rates beforehand.
We (as paramedics and EMTs) are also required to document the medical necessity of transport, without which Medicare, and insurance providers will likely not cover the bill, and (at least in my company, and others) is a good way for you to waiver your bill.
As a general aside, though, treatment of unconscious persons is done on the presumption that they would want the most expedient and appropriate emergent treatment.
Every other OECD country except Mexico has similar or better outcomes than the US, at lower cost (per capita and per GDP) than the US, so its pretty ridiculous to claim that the only possible way for the US to reduce prices is to convert the healthcare market into an unregulated free market, which is far from what any of the countries that achieve equal or better results at lower than the US have.
The US pays more in healthcare in its public healthcare systems -- as a share of GDP or in $/capita -- than many countries do in their public systems that provide virtually everything through those public systems, and then pays about the same amount again in nonpublic healthcare expenditures. From all evidence, the biggest problem with healthcare costs in the US is the high degree of privatization, not the lack of a free market.