John Stossel on universal health care: When someone else is paying the bills, the cost of everything goes up.
L.A. taxpayers stuck with $1.4 million tab for Michael Jackson’s funeral.
This week’s Cato podcast interviews Berwyn Heights, Maryland mayor and botched drug raid victim Cheye Calvo.
Speaking of which, criminals in Prince George’s County are catching on. The criminals without the badges, I mean.
Feds shell out $9 million to build the recovery.gov site.
Indianapolis sends SWAT team . . . to mow a man’s lawn.
A late but worthy entry in the most asinine Michael Jackson article competition.
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I had heard recovery.gov was going to cost $12M. I guess I could pretend to be happy we’re saving a few mil…
I hate short grass laws. It looks like crap when it goes brown and it makes it easier for weeds to take over. The only downside is that there can be more bugs.
We’re in a drought with restricted watering in effect. If we cut our lawn, it dies.
I bet if the LA City COntroller had called McDonalds, they could have gotten a quote of $3,500 from the dollar menu.
Isn’t john Stossel supposed to have a segment about health care on 20/20? How many more shows can they dedicate to Michael Jackson?
I would have done the recovery.gov website for only $8 million.
Speaking of which, criminals in Prince George’s County are catching on. The criminals without the badges, I mean.
They haven’t caught them yet, so let’s not go prematurely ruling out cops as the perps.
They haven’t caught them yet, so let’s not go prematurely ruling out cops as the perps.
Cops pretending to be “civilians” pretending to be cops? Brilliant!
@ Dave K # 6
That was my first thought, too.
At the end of the day, SWAT did its job and a misdemeanor charge was leveled against Rhymes and the grass got cut.
Is this a news piece, or the closing line of America’s Most Wanted: HOA edition?
Seriously, I read that line and heard John Walsh in my head.
The Stossel piece is really bad. “When someone else pays, costs always go up.” No, they don’t- if you want to ensure you’ll be charged the greatest amount, go to the hospital as an uninsured individual. We’re one of the few countries that don’t have a public option, our medical spending is one of the highest and we don’t have anywhere near the results to show for it.
@Mojotron: Note that Stossel didn’t say “out-of-pocket costs.” The costs go up when someone else pays because the purchaser doesn’t care about the price.
You see “costs” doesn’t just mean what you pay. If you pay $50.00 and someone else pays $1,000.00 for you, the cost is $1,050.00, not $50.00.
You see “costs” doesn’t just mean what you pay. If you pay $50.00 and someone else pays $1,000.00 for you, the cost is $1,050.00, not $50.00.
And further, to validate Stossel’s point you should be asking if that same uninsured person would be paying more or less if everybody made their own health care purchases directly. Indeed, the uninsured person is paying much more than they should precisely because the current model (which is heavily regulated by the government, by the way) removes market incentives to keep costs down.
(Just to clarify, the “you” in the comment above is referring to Mojotron, not John.)
Well, the guy did pull a shotgun on the worker, so I can understand why the police were called. Yes, it is his property, but I’m not convinced the threat of deadly force is justified against someone cutting your grass against your will.
That is patently untrue. the insurance companies negotiate rates with hospitals and providers to get discounts so that overall costs are lower with a group plan. Groups are able to negotiate cheaper prices in advance.
When I first got out of the Navy, I took a job as an engineer at a commercial radio station that played classical music. Of course, after public radio started playing it without commercials (ie: “for free”), those stations had to switch to other types of music because it was hard to compete with government subsidized stations that didn’t have to earn a profit. So, I propose we do the same thing for all types of music. Make all the money-grubbing commercial radio stations into free public radio stations. Think how much more enjoyable it would be.
Using the same principle, health care should be free for everyone, too. Let the government pay for it. That way we could instantly become the world’s best place to live and have the best health care system in the world. It all seems so simple.
Hell, it would probably pay for itself in economies of scale and paperwork reductions. In fact, we could probably afford a tax cut on top of it.
I should run for office! My slogan could be “Everything free for everyone!” I could be the Huey Long of the 21st century! I hope I can count on your support.
I came home from work once and found my grass had been cut. I had no clue what had happened.
Then about a week later, some guy came knocking on the door and, with big sad eyes, told me he accidentally cut my lawn by accident. I said, “Well, thanks!” After a fairly long pause, he called me an asshole and turned around and stalked off.
Maybe the guy should have just laid down in front of the mower. Then, he could convince the mower operator to lay down in from of it for him while he goes to a bar. Oh wait….
Far be it for me to question Stossel’s intellectual rigor, but the argument for laissez faire health insurance has got to be better than “Go! Free market! Go!”
Aside for his mistaken extrapolation of elective surgery to all of health care, his post is devoid of argument; nothwisthanding his appeals to common sense, all he does is reassert his conclusion alongside random anecdotes.
Opposition to socialized health care has to explain why and how the free market can beneficially govern a distributed risk system in which all parties make regular withdrawals, and why the actual free market rationing of health care (“market incentives to keep costs down”) is more morally acceptable than the theoretical government rationing of health care. That is the challenge.
I’m not too sure I like how that story ends Mike…………………………………………doesn’t the world get destroyed next?
#19 is it more morally acceptable for the govt to force you to take care of yourself or is it more morally acceptable for you to make your own decisions?
Aside from the hateful free market proposals of those annoying single minded simpletons who keep suggesting them, what other methods could be used to put downward pressure on health care costs?
I can think of two possibilities:
1. Price controls.
2. Rationing.
Anyone care to name some more?
Marty, that’s self-evidently a different question, but I’ll play along.
Both of your alternatives are dependant on false premises. Publicly run health care doesn’t force you to take care of yourself (at least not any I’ve seen). You can die in the woods just the same. And “making your own decisions” appears to imply that people are choosing not to have health care. And if it doesn’t, I am not sure what you are saying.
So, uh, try again please.
Note that Stossel didn’t say “out-of-pocket costs.” The costs go up when someone else pays because the purchaser doesn’t care about the price.
What on Earth would ever give you the impression that insurance companies don’t care about price? They’re obsessed with price. They’re so obsessed with it that they’re rather let people die than pay.
John Stossel is a barking moonbat. He really thinks that the problem with health care right now is that not enough people care about how much it costs? What a moron.
Oh, I have another one!
3. The government can start making people take better care of themselves. Smoking, drinking too much, over eating, drug use, failure to get your flu shot, etc could all be grounds for punishment of some kind. Higher premiums would be the logical choice, but that would tend to be regressive, so that probably wouldn’t fly.
Anyone care to name some more?
Disease avoidance? You’ve never heard “an ounce of prevention is worth a pound of cure”? Less people actually getting sick would produce a downward pressure on health care costs.
Just a mention on what I naturally assume to be a complaint of sorts that the city of Los Angeles had to pay $1.4 million for ancillary costs of the Michael Jackson funeral.
In the end it is an example of the tragedy of the commons where costs are incurred but nobody is required to pay for them. The solution should be to stop offering services without charging for them.
Wait. Isn’t the war on smoking at least partially justified by the costs to both medicare (publicly run health care) and the economy in general?
Dave,
I am not hostile to free market proposals. I just haven’t seen one.
First, you appear to commit the same error I am complaining of: assert “free market,” declare it an argument, and walk away. That’s just not enough, in addition to being unpersuasive in the extreme. Insurance is a distributed risk system, and unlike most other insurance, health care is one area in which everyone makes regularly withdrawals. That causes serious problems for a laissez faire solution, provided you do not think unrestrained capitalism is a priori best in all circumstances, to solve all problems.
As to your implied consequences-based theory, the problem is that its too true – as in thats what the “free market” does now, and as far as i can tell, all it can do. That’s what I am getting at. On the one hand you have a shitty system in which huge numbers are uninsured, and on the other hand you have a shitty system.
Reasonable point Dave, and one with whcih I have much sympathy, but a) thats not the same thing as a socialized health care, and b) i understood “force” to mean physical coercion.
@Chet: The purchaser to which I am referring is the customer, the insurance company is the payor. I am pointing out their different incentives (the customer doesn’t care about the price if he’s not paying it).
Also, your comment in #26 is incorrect. There is good evidence that so-called “preventative care” isn’t worth the money spent on it (check out Robin Hanson’s blog for cites).
Also, Stossel’s point isn’t that not enough people care about what health care actually costs, it’s that the people in position to do something about it (the customers) don’t have any incentive to care about what it costs overall, because they pay only a small portion of those costs (co-pay or deductible). The natural consequence of this is over-consumption (excess demand), which leads to higher overall costs.
We’d be better off if there were no health insurance at all from a costs standpoint (medical providers would have to compete on price without the distortions of third party payers and government subsidies).
I’m not comfortable with the description “L.A. taxpayers stuck with $1.4 million tab for Michael Jackson’s funeral.” The city didn’t pay anything for the funeral itself; it paid for increased services due to the people travelling to the area (most of whom weren’t even attending the funeral, but just wanted to hang out in front of it).
If a bunch of random strangers just suddenly decided to start hanging out on the street in front of your house without your request, I don’t think we’d say it’s fair for the city to want to start charging you personally for them being their.
Those criticizing our current “free market” healthcare industry are akin to those criticizing the “free market” financial industry for the Real Estate bubble (hint: both are highly and excessively regulated). A true free market system would not look like what we have now. It would feature cost/feature competition and a real insurance market that had relatively high deductibles and only paid out on catastrophic claims (e.g., you pay for your own physical or when you go to the doctor for the flu, but if you get cancer the insurance kicks in and pays).
What we have is not remotely a free market and it’s dishonest to call it that.
@chet, the purchaser in this case is the patient, not the insurance company. It’s tough to control costs when the insurance company is the only player with an incentive to reduce costs, neither the doctor nor the patient care about them.
The purchaser to which I am referring is the customer, the insurance company is the payor.
The insurance company is the customer, because they’re making the decisions about what care you receive. There’s no meaningful way in which the patient is the customer in our system, unless they’re paying their own way, in which case contra John Stossel they pay way more.
(the customer doesn’t care about the price if he’s not paying it
He’s also not deciding what care he gets – that’s his doctor and his insurance company – so basically it doesn’t matter whether he cares about the price or not. It has zero effect on price.
There is good evidence that so-called “preventative care” isn’t worth the money spent on it (check out Robin Hanson’s blog for cites).
Citation fail. Robin who?
Also, Stossel’s point isn’t that not enough people care about what health care actually costs, it’s that the people in position to do something about it (the customers)
Don’t say “customer” when what you mean is “patient”, and again, the idea that it’s the patients who are “in a position to do something about it” is patently stupid. For one thing, they don’t have the choice – that’s determined by their insurance company. For another, they don’t have the expertise to determine appropriate care – that’s what their doctor is supposed to do. For another, they’re often not conscious at the precise moment that they’re a health care “customer”, and despite being asked in four different threads so far, none of you free market-skateers have explained how an unconscious person is supposed to exercise their due diligence and free market choice.
Costs are high because we incentivise providing treatment, not improving health outcomes. Not because we don’t make people with zero medical training make medical decisions about appropriate treatment when their lives are on the line. The health care system where it’s you, and not your doctor, who is supposed to determine what is medically necessary is, I think, the only possible health care system that could be worse than what we have now. Of course, it’s the one that libertarians dream of. What on Earth is wrong with you guys?
@chet, the purchaser in this case is the patient, not the insurance company.
But they’re not the purchaser, that’s the point. They’ll never be the purchaser, and moreover, only a great idiot would want them to be the purchaser.
1: Increase supply
2: Reduce demand
3: Create shortages
All proposals that would, in fact, reduce the price would do one or both of these things. Price controls -> Create shortages. Rationing -> reduce demand/create shortages, depending implementation. Enforce healthiness -> Reduce demand.
Extra prevention -> Increases and reduces demand in different ways. Which is the larger effect the other depends on who you ask.
Universal Healthcare -> Increases demand and/or creates shortages and/or reduces supply, depending on implementation.
Our current system features high demand (relatively unhealthy lifestyles, entitlement mindset, medicare), low supply (have to go to university for a decade, then work for free for a year or two in most places to diagnose the flu to prescribe something for it, and doctors are understood to have incredibly bad working conditions, despite the high pay), and rather few shortage situations (with an exception for organ transplants, due to the low supply there for obvious reasons). Thus, anybody who wonders why we pay through the nose for health care needs to pay closer attention.
Interestingly (or not, if you’re cynical/realistic enough), nobody seems to pay any thought to increasing supply.
John, good point, but your shield is also the sword against you. After all, if there isn’t a free market for health care (I didn’t mean to pretend there was), how can you make credible claims as to what the free market would be like?
We’d be better off if there were no health insurance at all from a costs standpoint (medical providers would have to compete on price without the distortions of third party payers and government subsidies).
And yet no one who doesn’t have health insurance is better off. In fact, they all pay way more for the same health care. That’s what’s going on here in the real world. The idea that no health insurance would lower prices is what happens only in Imagination Land.
La Rana, I suppose I’ve seen the free market explained on here so often that repeating it yet again seems unproductive.
The free market only works when people are sensitive to the costs of what they’re buying. If you describe health care as a distributed cost system precludes that, so nothing further need be said.
The question, “How can the free market reduce health care costs when people don’t spend their own money on it?” is non-sensical.
And, yes, there have been free market proposals on this site and I believe Stossel himself proposed one way to get free market pressures into the system is to return health insurance to the realm of assisting only for serious medical problems instead of picking up the tab for every doctor visit and every prescription. Drop insurance costs by raising deductibles into the thousands to give health care customers a reason to shop around for routine visits. Allow medical providers to advertise and aggressively promote their services and their prices. Allow real competition instead of just caving into the idiocy that health care is “too important” to trust to the free market.
Everyone wants health care to cost less but no one wants to change the way it’s dispensed. If you can’t imagine how the free market could help reduce costs, you’re not trying. Think Walmart. Start thinking in terms of not having to go to someone with twelve years of post graduate education for a hangnail. Start thinking in terms of consumer driven ratings organization (like the review system on Amazon.com). Start thinking of eliminating the artificial restriction on supply by phasing out government licensing. Start thinking in terms of actually allowing people to make their own medical decisions instead of just giving them the choice of going to doctor A or doctor B who are both almost identical because the rules under which they operate are essentially predetermined by the people who financially benefit the most from them.
Start thinking outside the tiny politically comfortable box.
Chet: I won’t do your googling for you (if you search for “Robin Hanson” you’ll find his blog and you can search for health care within that if you really want to be informed about the issue I raise. I know you don’t, because facts would complicate your lack of reasoning).
Also, not having health insurance is not the right metric. It’s not receiving medical care you need that’s the right metric. Plenty of people don’t have medical insurance by choice because they would rather spend the money on other things. That’s a rational tradeoff for them, but it messes up your neat little categories.
@la Rana: I don’t think your argument is apt. We understand that regulation of a market increases costs (because of compliance costs and increased transaction costs). We understand how incentives affect markets (when the consumer and the payor are separated, price becomes more noise and less signal). It follows that reforms that align incentives and reduce regulatory burden would reduce prices.
By the same logic, competition fosters advances in technology and improvements in processes so that competitors can gain an advantage over one another. So if we had less regulation in the health care industry, I don’t think it’s a stretch to conclude we’d see more innovation and lower prices. I could be wrong, but so could the advocates of other systems (fully socialized medicine, single payor, “public option”), the evidence for which is not good if our metric is actually delivering care to people who need it.
I concede that all of those systems would offer “coverage” to more people, or even to everyone in a fully socialized system, but I would vigorously dispute whether “coverage” is the right metric. I think even a basic understanding of scarcity requires one to conclude that such systems would reduce access to medical care by (1) constraining supply (fewer people would want to become doctors if it is less lucrative); and (2) increasing demand (if you don’t have to pay anything for medical care or your medical care is subsidized, then you will seek more medical care than you otherwise would).
The free market only works when people are sensitive to the costs of what they’re buying.
Regardless of whether or not they’re paying out of pocket, that can never be patients, because they don’t have the expertise to judge the health costs of one treatment over another or treatment vs. no treatment.
The free market, by your formulation, can never efficiently provide health care, except to doctors.
Everyone wants health care to cost less but no one wants to change the way it’s dispensed.
Don’t be stupid. We all want to change the way it’s dispensed.
Start thinking in terms of consumer driven ratings organization (like the review system on Amazon.com).
Maybe you could just start thinking, Dave. Rating medical procedures like Amazon? Just plain fucking stupid. Why is it that everybody understands that health care isn’t at all like buying books and Snausages, except for libertarians?
the free market cannot fail health care, health care has failed the free market.
If medicare doesn’t constitute a form of socialized health care, then I would have a hard time visualizing what socialized health care would look like.
Perhaps I should have used the drug war as an example.
Chet: I won’t do your googling for you
And I won’t provide your evidence for you. If you have evidence you’d like to provide for your claims, you actually have to provide it, you know. It’s not my job to prove your arguments.
Plenty of people don’t have medical insurance by choice because they would rather spend the money on other things.
Gosh, then covering them with a public option shouldn’t cost too much more than some paperwork. Oops, so much for “it costs too much to cover the uninsured!”
(1) constraining supply (fewer people would want to become doctors if it is less lucrative);
There’s zero evidence of that. Being a doctor is lucrative under every system, public and private; there’s no evidence in any profession that the millionth dollar of salary is any more valuable to doctors, engineers, CEO’s, accountants, etc. than the nine-hundred-ninty-nine-thousand nine hundred and ninty-ninth. There’s no evidence, for instance, that companies based in Scandanavia or Europe have difficulty hiring competent CEO’s, even if CEO compensation in those countries is a tenth or a hundredth of what it is here. The salaries of the top ten oil companies worldwide vary by hundreds of millions of dollars with no relationship to the success of the company.
Once you reach doctor-levels of compensation under even the stingiest system it’s unlikely that additional compensation makes anyone a doctor who wasn’t, already. It’s probably too hard to be a doctor to do it for the money, anyway.
I would have a hard time visualizing what socialized health care would look like.
Find a 6-year-old child and ask him about the boogeyman, then. That should give you an idea.
We’d be better off if there were no health insurance at all from a costs standpoint (medical providers would have to compete on price without the distortions of third party payers and government subsidies).
You know, I don’t disagree with such analysis, I just don’t know how relevant it is.
1) Even if competition brings costs down, it’s still not going to bring it within the reach of everyone. Maybe you’re okay with that, but I’m not.
2) Even the fairly well-off are going to have trouble paying for chronic illnesses, surgery, end of life care, emergency services, etc, which leads right back to insurance.
3) How does competition come into play with emergency service providers?
4) There’s already millions of uninsured whose business health care providers could be competing for, but these people actually seem to pay more for services than do insurance companies.
I think even a basic understanding of scarcity requires one to conclude that such systems would reduce access to medical care by (1) constraining supply (fewer people would want to become doctors if it is less lucrative); and (2) increasing demand (if you don’t have to pay anything for medical care or your medical care is subsidized, then you will seek more medical care than you otherwise would).
#1 is probably true to an extent but there’s other factors at work too. I think even now doctors have a wide range of options in how they practice, some of which are far more lucrative than others, and yet not everyone entering medical school ends up being a plastic surgeon.
#2 is… well, speaking for myself only, I’ve had insurance for most of the last decade and I think the only time I’ve used it was when I had a bad cold and actually needed a doctor’s note for my employer. I guess maybe I’m the exception, but it seems to me that most people don’t actually like going to the doctor, regardless of the cost.
Chet, I think we’re probably too far apart for argument to be worthwhile. Your repeated use of the word “stupid” doesn’t really offer much encouragement to continue it in any case.
I also don’t much appreciate your quoting a sentence fragment conveniently excluding the context in order to justify an insult.
The complete sentence was: “If medicare doesn’t constitute a form of socialized health care, then I would have a hard time visualizing what socialized health care would look like.”
Federal Appeals Court (DC Circuit) unanimously ruled the DC neighborhood checkpoints are unconstitutional:
http://legaltimes.typepad.com/blt/2009/07/court-dc-police-checkpoints-unconstitutional.html
oopsie. quote ended at the end of that first paragraph
Shazzam!
I would prefer a market based solution to health care insurance.
You have offered me the market-based solution to health care insurance of . . . eliminating health care insurance. Great. You propose we use Walmart as a model, cuz, ya know, what we really need are more business models centered on cheap crap from china which will enable us to assert anti-competitive market control and incluence political entities to provide unwarranted concessions. Awesome. Then you suggest we eliminate doctors, i.e the screening process for people who know what they are talking about. The “free market” you envision is an endless loop of a 2 am infomercial with Hugh Downs selling diuretics and laxatives as the “secret cure that the pharmaceutical companies don’t want you to know about!”
If you have any solutions that do not involve destroying health care in order to save it, lemme know.
@Matt D:
(1): Then let’s talk about that then, instead of the absurdity of “universal coverage.” Direct payments to help those who can’t afford medical care are relatively non-distortive and a MUCH better idea than universal coverage.
(2): That’s real insurance rather than pre-paid care, which is what passes for insurance in the health-care industry. That’s a totally different animal. I support that kind of insurance.
(3): What about it? In emergencies, your choices are constrained by outside forces, just like they would be now. If, in the overall market, health care is cheaper, you will pay a premium for emergency care (like you pay a premium for diapers you buy at 7-11 at 3:00 a.m.).
(4): They are. This particular group is the reason for the proliferation of “clinics” inside drug stores and other retail health care locations.
Chet: Read this:
http://www.washingtonpost.com/wp-dyn/content/article/2008/04/04/AR2008040403803.html?sid=ST2008040601449
That’s in the reliably libertarian Washington Post.
Dr. Russel’s monograph was published by the also reliably libertarian Brookings Institution. You can preview it here:
http://books.google.com/books?id=9S5bDPZy6j0C&dq=Is+prevention+better+than+cure&printsec=frontcover&source=bn&hl=en&ei=K65XSrjaOpDasgOp8unWBg&sa=X&oi=book_result&ct=result&resnum=4
Chet,
You might be the biggest asshole I have seen post on this site. You don’t argue or make good points. You just call people retarded and stupid. Did you go the the Rush Limbaugh school of debate? Being a completely snide fuck doesn’t make you right or cause you to win the argument. Be polite or fuck off.
Please.
And since when does our government do anything cheaply or for the most optimal price? This is the same organization that buy $200 hammers for the army and goes over budget on ever project it gets involved in.
I’ve never gotten any health care that I couldn’t have said no to or asked for other options, different providers, etc. Much of the health care that people receive isn’t the result of being hit by a bus or having a heart attack. When you pay for your own health care, you call the doctor’s office and ask what an office visit costs. When he wants to prescribe a medication, you ask how much faster it will make you better (because you might decide to wait it out) and whether or not there are alternatives or generics. That is a far different approach than someone who always asks for a prescription, who doesn’t even know what an office visit costs, and who doesn’t care about pharmaceutical costs because he’s only paying the same $10 co-pay anyway.
I want to be able to buy the insurance that suits my situation and acceptance or risk. I want coverage if I need cancer treatment or get hit by a meteor. I don’t need insurance to pay for flu shots. If an out-of-state insurance program offers the coverage I want but my state’s legislators don’t like it because it doesn’t cover things I don’t need covered, the politicians should butt out and keep their well-intended, moron hands (and the lobbyists who want mandated coverage for the services they provide) out of my business.
And, I want to get my flu shots at Wall-Mart (or wherever) and the person who gives them to me doesn’t need an MD or need to be supervised by someone with one. People who want the extra peace-of-mind are welcome to it, but I don’t want to be forced into buying the same service they are.
BTW, it’s true that you aren’t always in the position to be a savvy consumer when you need treatment, but that’s a red herring. The market pressures to innovate to keep costs down will foster savings and some of that will spill over to health care that we get when we aren’t able to make choices. And, not being able to choose among options at the moment I’m hit by a bus doesn’t mean that I can’t make decisions about my treatment (which doctor or hospital is preferred, etc.) beforehand to be respected provisionally (when possible) that will have an influence on costs. Free market auditing of hospital costs and quality (e.g. Consumer Reports for hospitals) would definitely have an influence of where I seek treatment and I would be willing to sign an agreement with my insurance company to take a longer ambulance ride to a better-priced facility when it didn’t affect health outcomes, as long as my insurance costs reflect that.
Let’s be clear about the Jackson funeral: the Jackson family didn’t stick LA taxpayers with the bill, the LA government did.
The city government chose to incur those costs.
Chet, You might be the biggest asshole I have seen post on this site. You don’t argue or make good points. You just call people retarded and stupid. Did you go the the Rush Limbaugh school of debate? Being a completely snide fuck doesn’t make you right or cause you to win the argument. Be polite or fuck off. Please.
LMAO. Oh, now you’re the etiquette police.
“L.A. taxpayers stuck with $1.4 million tab for Michael Jackson’s funeral.”
Michael Jackson, the white elephant.
I’ve never gotten any health care that I couldn’t have said no to or asked for other options, different providers, etc.
Well, fair enough. You’ve never, say, gone into a diabetic coma and been airlifted to a hospital (which one? you don’t get to pick) or been in a car accident and taken to the emergency room (which one? they won’t wake you up to ask) or been in any other situation where you needed medical care and weren’t conscious at the time. Lucky you.
As for other options – what’s your qualifications to weight those options? Chemotherapy costs X, treatment with apricot pit extract costs way less. But does it work? Do you even have the training in statistics to interpret the evidence that it does or doesn’t? Do you have the training in medicine to recognize fraudulent medical claims or pseudoscience?
Should we expect you to? What’s the point of even having doctors, then, if everyone is just supposed to be their own doctor?
That is a far different approach than someone who always asks for a prescription, who doesn’t even know what an office visit costs, and who doesn’t care about pharmaceutical costs because he’s only paying the same $10 co-pay anyway.
And he gets the prescription not because he asked for it, but because we’ve made it in the doctor’s financial interest to give it to him. It’s not a matter of patients not paying their own bills, because a lot of them are and it hasn’t made their health care any cheaper for them. It’s a matter of doctors being paid for the wrong thing.
They don’t get paid to make people healthier, they get paid to prescribe tests and treatments for diseases. How about we just stop doing that? The advantage is that we don’t basically throw everyone to the wolves.
Free market auditing of hospital costs and quality (e.g. Consumer Reports for hospitals)
Consumer Reports works for vacuum cleaners because Consumer Reports can buy all the vacuum cleaners and test them. They can’t send enough sick people to all the different hospitals, which means your “Consumer Reports”-type system relies on hospitals self-reporting data, which they have no incentive to do and every incentive not to do. There won’t be, cannot be, any “free market auditing” of hospital costs and quality, because the free market itself rewards efforts to misinform consumers and patients. Or it’ll work like bond ratings work for investments, where the rating agencies were paid by those they were supposed to be rating. “Give our hospital a four-star rating or we’ll hire your competitors, instead.” What an incredibly stupid idea.
John Stossel on universal health care: When someone else is paying the bills, the cost of everything goes up.
Correlation does not equal causation.
One of the major functions of a properly-working marketplace is to allow scarce resources to be supplied by those who can do so most efficiently and allocated to those who would find them most valuable. In general, the people who are willing to pay the most for things are the people to whom those things are most valuable. Not a perfect measure of need, but a relatively accurate one, and one which encourages people to minimize their needs.
Suppose two people would both benefit from some particular treatment, but there are only sufficient resources to treat one. Each is given the choice between receiving the treatment, or having $500 more in their pocket than they would have if they’d taken the treatment. Person #1 would rather have the $500 (indeed, he’d rather have even $250). Person #2 would rather have the treatment (indeed, he’d prefer that to even $1,000). Clearly, it would make sense to have the treatment go to person #2, and in a free market that’s precisely what would happen. Unfortunately, socialized medical systems eliminate the market forces that would ensure that result.
Rather, such systems end up allocating resources to people who don’t value them the most. This increases the scarcity of resources for people who would value them more. Unfortunately, a common reaction to this scarcity is for governments to step up the programs that mis-allocate resources, thus increasing their scarcity further.
John Stossel on universal health care: When someone else is paying the bills, the cost of everything goes up.
Correlation does not equal causation.
Correlation does not in all cases imply causation, however cost-shifting eliminates market forces that would normally keep costs down, and thus causes prices to rise, just as surely as gravity causes objects to fall.
Free market enhancements for health care:
1. Allow the dispensing of health care by people with less than the educational requirements of an MD. (increases supply)
2. Allow more mass marketing and dispensing of health care services (the Walmart example). (increases supply)
3. Reduce state control over who can dispense health care. (increases supply)
4. Make consumers bear a larger percentage of the cost especially for routine care (this does not eliminate health insurance, but could increase copay and/or deductibles). (decreases demand)
5. Allow suppliers to market their services and openly compete on the basis of cost. (increases competition)
6. Put more control in the consumer’s hands about what treatments they want and give them the option to accept some of the risk in exchange for lower costs. A lot of health care decisions are now based on potential liability. (reduces demand)
7. Allow more consumer based evaluation. Medical boards are wonderful, but hardly known for their willingness to control malpractice or poor service. (the amazon.com example). (improves consumer control over quality)
8. Allow insurance companies to charge higher premiums for customers likely to use more care because of their lifestyle (smokers, drug users, over-eaters, people who engage in risky sports, etc). (reduces demand by encouraging healthier living).
9. Move to limit the government’s mission of supplying unlimited free health care to those who can’t work and encourage charities to get back into it. (reduces demand)
Understand that when I use examples like Walmart and Amazon.com, I’m suggesting the implementation of certain principles, not an exact duplication. Consumer evaluation, dispensing of some forms of care through retail centers, establishing co-ops, etc can be accomplished in more ways than anyone can imagine, so to just reject them out of hand, while simple and definitive, only exemplifies a closed mind.
With regard to the idea that only doctors should be allowed to make decisions about our health care “because our lives are at stake” is preposterous. People make life and death decisions throughout their entire lives and those are their decisions to make. The internet by itself makes people an order of magnitude more capable of making smart decisions about health care (and everything else) than they were before.
The rich will always have better health care than the poor, either by an open market or a black market, or by simply travelling to other countries. When I was a kid, doctors still made house calls. They don’t do that for people in that income bracket anymore, but the sky didn’t come crashing down. People used to stay in the hospital for days for minor surgery. They don’t do that anymore, but the streets aren’t littered with bodies from those who were discharged the same day.
I don’t think the goal should be to give everyone the best health care at an affordable price. It’s not possible and attempting it will only further inflate costs, not to mention the country doesn’t have the money to do it anyway. The goal should be to make good health care available to everyone, and the more people are willing to pay, the better it will be.
And yet, at the end of the day, we find that there’s still not enough supply for everyone to get everything. And our feelings aren’t going to change that.
Oh please. There’s plenty of supply. If you don’t want to pay for it, fine–say so. But don’t pretend that your hands are tied because health care is some scarce resource.
In general, the people who are willing to pay the most for things are the people to whom those things are most valuable. Not a perfect measure of need, but a relatively accurate one, and one which encourages people to minimize their needs.
Well that’s nice. You let me know when “willing to pay” equals “able to pay.”
No, actually, I have never been unconscious when I went to an emergency room, though I have been hit by a car and been under the knife for other reasons on more than one occasion. Was that lucky? I don’t have any reason to believe that most people have been sent to the hospital in a coma or knocked out. But, it’s irrelevant because the argument doesn’t turn on whether every medical decision is one in which we have some choice. The fact is that many decisions aren’t of such an urgent nature and a buffet-style health payment system removes the incentive to make cost conscious decisions even when we do have the opportunity.
Once again, this is a red herring. Certainly there are situations when the patient is going to rely solely on the advice of one expert to make a decision. But, it’s a false choice between taking a single recommendation and flying totally blind. Why shouldn’t the patient ask about the efficacy of other treatments? And, chemotherapy only costs a fixed amount when the providers have no incentive to compete on cost. Why shouldn’t he call around and see if someone offers the same or an equivalent treatment for less? Why shouldn’t he be able to see what hospital A typically charges for a common surgery versus hospital B? He should, and the reason that information isn’t there now isn’t only because providers don’t like to provide costs (they provide it anyway; that’s how the insurance companies know), but also because most individuals have no incentive to ask.
I don’t know what you mean there. Most states have rules that prohibit doctors from selling the pharmaceuticals they prescribe. Ditto for lab work, etc. And, I would agree that there is often too much of that, but I think doctors are therein largely motivated by liability issues as much as anything else. In a very litigious field, extra tests and referrals are a way of covering one’s ass.
Meanwhile, ask doctors and they will tell you that many patients do come in expecting to leave with a prescription. And many aren’t happy if you send them away without one, even if you’ve explained that the available medications won’t make any noticeable difference in their outcomes.
I don’t know what fraction of medical expenses in this country are paid for out of pocket by patients. I suspect that it is low. I know that I have called up doctors’ offices to inquire about prices and the office staff acted as though I was a wack-job for wanting to know what an office visit cost. “Your insurance company determines your co-pay.” There is no co-pay. If I decide to come in, I’ll be paying you directly. “It’ll depend on what’s wrong with you.” I know, but assume it’s a standard office visit. “Well, give me a minute…” Such nonsense. Seems like that wouldn’t be the case if everyone were paying out of pocket. Then again, maybe people have gotten so used to not questioning medical costs that they really don’t ask…
Plenty of people go to different hospital for the same treatment. A company providing cost information to patients could (as CR already does for its product ratings) query a pool of patients about the costs of their care at various facilities. There certainly isn’t a shortage of data, I suspect there just isn’t consumer demand for it.
And, similarly, hospitals have little incentive to self-report presently because they don’t compete on price, since most patients don’t pay their own bills. If they did, then hospitals who kept their prices secret would be assumed to be expensive and would lose business. If I call my mechanic and he won’t tell me the price for a brake job, then he is going to lose business. Bear in mind, the mechanic has the same incentive the hospital does to hide the cost of his service, but he can’t do it because people would go elsewhere rather than sign him a blank check whenever they needed his expertise.
As tempting as it is to defer to your expertise on what’s “incredibly stupid”, plenty of ratings agencies do a decent job of rating this or that product, even when manufacturer’s pay for the ratings. Why? Because, though there are incentives to misreport, the free market also rewards accurate information. The ratings wouldn’t be worth anything when it became clear they weren’t based on reasonable criteria. Moreover, things like reported costs can be verified by the people who pay them, not just the health care providers. The payers have an incentive to participate in keeping accurate data on this so that they know when they are overpaying.
I’ve been on over 15,000 911 ambulance calls. anyone who doesn’t think ‘free’ healthcare doesn’t get abused should hang out in any busy emergency room. I’ve been on so many calls where people with medicaid call an ambulance for a ride to the hospital to get a prescription refilled or a minor issue (headache, menstrual cramps, etc) addressed that we call them ‘cabulance rides’. People would be more apt to learn to make appropriate decisions if they were exposed to consequences.
I dread expanding free healthcare- my experience is that it’s a disaster.
It’s interesting to note that we’ve almost had a real debate here on the internet. Keep going guys :D.
My take is that the issue is more complex than “give everyone free stoofs” and “free market roolz! yaaay!”. We need something in between that recognizes the benefit of an informed patient in control of their own care and the benefit..nay, necessity, of highly educated persons doing the informing.
It doesn’t take a lot to see that the current system sucks and that the extremes of both sides have historically had horrifying results, so let’s hope no one is actually arguing for any of those cases eh?
I’m not sure what the implication is for the Jackson story, but why should the family have to shoulder the costs?
#55 Matt,
I gave you a thumbs up but chance is right. Irony.
Oh, and it’s nice to see a swat team doing something useful for a change. If only I could get them to do my laundry.
Do you have the expertise to judge washing machine repair? HVAC? Roofing? Drywall? Plumbing? How about auto repair? Can you tell if you really need that hose replaced or are they just screwing you? Do you know if repair or replace is the better option? Are you a veterinarian? Can you tell what animal treatments are best? Most cost effective? Fraudulent?
If not, how can you purchase those services? Why aren’t you arguing for government-provided third-party expert payers for all services?
For that matter, do you know if your TV really has the best picture? Studies have repeatedly shown that people simply buy the brightest TV, not the sharpest, most color-faithful, with the best off-axis viewing. So nobody should buy their own TVs unless you’re a TV-ologist, right?
Even if you somehow still believe that medicine is inherently different all the time (as opposed to, say, when you’re wheeled in unconscious, which is a rare event and not the source of the greatest costs in medicine–chronic conditions like cancer are), your infantilization of the patient means that the informed consent that has been a cornerstone of medical ethics for decades is a complete sham. If you aren’t able to purchase medical procedures because you’re not a doctor, then you should never question a doctor, because you aren’t a doctor. If you can’t purchase them, how can you give any consent?
Saying “if you’re not an expert, you can’t be trusted to purchase something” has implications you haven’t considered.
Sandy, all of those items can be learned from Sally Struthers and don’t require a 6 year degree from an accredited med school. Not that diagnosing the flu does either, but that’s what triage and walk-in clinics are for.
Guys, no one is proposing getting rid of your precious Wal-mart clinics and pharmacies (though FYI Costco’s pharmacy prices are better and are open to non-members…) but if you want to argue that fewer regulations and less government intervention in the healthcare market leads to better outcomes you’re going to have to pony up some evidence because right now we’re the country with fewer regulations and less government intervention and from the metrics, outcomes appear to be worse. Matt D summed up a lot of the issues that I have with the “deregulate healthcare” side that have yet to be addressed.
Gosh, if only there was a free market example of health care without government funding or safety nets to use as a comparative example.
Oh wait! There is! Well sort of… there IS a government safety net for this industry, but it’s pathetic. People are routinely incarcerated for long periods of time due to incompetence / indifference of their overworked advocates.
I speak, of course… of Defense Attorneys.
Where is the “Free Market” for people in desperate need of competent attorneys? Oh, that’s right. They have no money. I don’t care how you slice it up… if you can’t afford it’s services, the “free market” will let you rot.
There is a free market for attorneys… they advertise on TV, they advertise on the radio. They chase ambulances and pharmaceutical companies, they reach out to anyone who can afford their services.
And yet, people still rot in prison because they could not pay for adequate legal representation.
If the ‘free market’ worked like you people seem to think is does, then it wouldn’t matter how complex the law is, (So don’t use that strawman.) it would innovate a way to reach it’s customers.
Why doesn’t that work? Why don’t law firms innovate and find ways to extend effective, comprehensive legal services to broke people? Oh that’s right, They’re broke. It’s far more effective to offer services to people who can pay for them. Sure, they’ll throw in a pro bono now and then… that’s just good business.
Bob,
Indigent criminal defense is not an example of a failed free market. Law mandates that defendants be represented by a lawyer before they can be tried and the government has taken over that responsibility for the indigent. Are you really expecting a free market to compete against something the government gives away for free?
Or are you just complaining that poor clients don’t get the cream of the crop representing them? I suppose the solution for that would be the same as what is being demanded of the health care system: the best possible service at a price everyone can afford. I too have that on my Christmas list right below the harem (and equally as likely).
Also, I think you’re missing the target when you lay the prison population at the feet of defense attorneys. The justice system is designed to crank out convictions for the indigent because nobody gives a shit about them. The defense bar isn’t the boogieman. The real boogieman is a population who cares less about guilt or innocence than it does about electing those who wave the tough-on-crime flag harder and higher than the other guy.
The solution isn’t to give everyone a high-end lawyer sharp enough to beat the corrupt system, but to eliminate the corruption and many of the laws that result in the unnecessary prosecution of indigents to begin with.
But, you have a point with regard to both health care and indigent defense. The free market is for those who can pay. The free market is not about giving away stuff for free. That falls under the category of charity or welfare (charity at gunpoint).
The deeper I get into this debate the more I realize that it’s really more about expanding welfare than it is about reducing costs.
Dave,
The product the government gives away for free in the case of legal representation is crap.
There’s a huge gap for the ‘free market’ to swoop in. It doesn’t because there’s no incentive for it to do so. The ‘customer’ (defendant) wants desperately to avoid jail time… but the service provider (Attorney) requires a fee for his services. No pay, no play. That’s not the Attorney’s fault, he or she should not be compelled to provide services for free.
If you can’t pay, there is no ‘free market’ for you. That works in health care or legal representation. The ‘free market’ cannot and will not find a solution for those that cannot pay.
As you say:
Likewise, the ‘real boogieman’ in health care is a population that believes they have a total right to the best health care for little or no cost.
And so, the public foots the bill. Jails cost big money. Welfare based health care costs big money. There is charity in both fields, but it’s a drop in the bucket.
Philosophically? I’m with you. I want catastrophic medical coverage with a 5000 dollar yearly deductible, with zero coverage of any kind until I spend the entire 5K. I want to go to whatever doctor I want and negotiate for the little stuff like flu shots or hang nails. I’d go for Attorney insurance like that as well, but I would expect it to be cheaper because of my low risk factors.
But that doesn’t work because the world isn’t made up of people like me.
That is the reality. Technology has made it possible to keep babies that would have died at birth alive, but at a high cost. Technology has made it possible to transplant organs and limbs, extend the lives of the terminally ill. All at high cost. There are people that opt out, and just let their elderly die with dignity. There are also those who, for whatever reason, yell for “Life at any cost”. All of these people have an equal say as you or I.
The ‘solution’ of “Let the free market sort it out” is simply naive. I may want to reduce costs, but someone that believes babies should be saved at any cost does not. There is a balance that has to be met.
That doesn’t mean there isn’t room for improvement, but calling for an end to all regulations as if society was a solipsistic extension of myself is not going to work.
I’d do recovery.org for a million dollars and a copy of MS FrontPage. I’m sure it wouldn’t be any less functional than what we’ll eventually get.
Bob, I’ve always held your opinions in the highest regard and there is clearly a lot we agree on. I don’t think that the answer is necessarily to “let the free market sort it out”, but I think the medical industry has, to their own advantage, studiously been eliminating free market elements of the system for decades and at least some free market incentives need to be restored. I think open and aggressive competition is the only way we’re likely to see real cost reductions that aren’t just shifting of costs from one place to another or rationing of services. But, there are a lot of ways to introduce incentives beyond the ones on my rather limited list of suggestions.
As for providing health care to those who can’t afford it, the free market is not charity and won’t provide that function. In general, I am not much of an advocate of welfare except to say that cost reductions benefit welfare programs, too. Given our financial condition, I think cost reduction has to be a major part of any plan to overhaul health care and I don’t see that happening in any of the proposals current being discussed.
Dave,
In a sane world, yes… cost reduction would be paramount. Our biggest fundamental flaw at the moment (As I see it) is the societal belief that we DESERVE the ultimate in health care simply because of our technological prowess.
Obviously, that isn’t true. Yes, we have the technological prowess to provide astonishing health care solutions… but not the resources to pay for it.
What has to happen… before we can move on… is that people have to realize that they are going to die and that it might not be appropriate for the medical community to keep them alive.
A hundred years ago, this was a no brainer. But then… a hundred years ago medical science couldn’t induce septuplets and then… against all odds… and with outrageous cost, keep all of them alive.
As such… the way forward (I believe) is to leverage the concept of rationing. If you can make the precept of rationed care (Where only some are saved) acceptable.. (And I think we can) you will start to move public opinion towards the free market.
Freakishly, this leads to a situation where the only way out is through… with through being the kind of health care system Obama is championing… with all people paying the same premium.
I hate it too, but the world doesn’t do what I want.
Clearly, it would make sense to have the treatment go to person #2, and in a free market that’s precisely what would happen.
Really? The free market system is the one where people are paid not to go to the doctor? How does that make any sense?
I don’t know what you mean there.
I thought my meaning was pretty clear. Doctors prescribe treatments because they get paid to do so, not because they get paid to improve health outcomes.
Gosh, I think I’ve only said that ten times now. We incentivise providing tests and treatment, not improving health outcomes. Why don’t we stop doing that, if you want to control costs?