Tuesday, August 18, 2009

A comment over on Roger Ebert's Journal

I'm not done on this, but this is too good a post to just leave as a comment somewhere else.

Ebert: The government woudn't run the health care system. It would make insurance more affordable.

The dirty little secret of "health care reform" is that there are only three ways to decrease costs (Adam Smith 101): increase supply, decrease demand, and remove overhead. Let's take on each one individually.

Milady and I have talked to doctors about overhead. For the birth of Number 1 Son, her ob/gyn was barely clearing enough to order a pizza after the delivery. He ended up retiring to take care of his ailing father. Why? Insurance paperwork and liability insurance. I would like to see a pseudo-criminal system completely replace the current tort liability system. If a doctor commits malpractice, he is criminally liable to losing his license for X number of years. Allow private prosecution (as England does some still), but institute loser pays for them. Make the doctor liable for consequences without opening up unending financial liabilities onto the entire system. The Democratic plans make no tort reform, and do nothing to lower Medicare overhead (which are running doctors out of the system).

We are also making no steps to increase the number of doctors out there. There are less medical schools now than in 1900, and less doctors per capita than in 1900. Most medical schools are turning away 4 or 5 equally-qualified students for every 1 admitted. Allow doctors a path through to where they aren't crushed by debt, and make a bunch more of them.

As an aside, make doctors publish price lists, and make insurance companies publish their payment lists. One price for everyone. I shouldn't pay $200 for what Humana pays $40. Instead, the doctor charges $50, and Humana pays up to $60, so I'm happy. Or maybe Humana pays $40, but the doctor charges $50, and I have to cough up $10. Most other people would face jail time for what is called business as usual in the insurance field.

The third step is lowering demand, aka rationing. No one wants to say "you can't have it", but we need to say so. We want to tell the lazy poor "get out of the ER, go to the free clinic in the morning". 90% of the people who get cholesterol medicine don't really need it; it's just that the 10% who do need it need it desperately. We just can't tell right now who the 10% are. Most areas of the country don't have enough need of a medical helicopter to justify it. They also don't need a trauma center enough to justify it either.

The British and the Canadians have made those choices, and most of the time they work. If you have something simple, you get a treatment, and it works. But the edges are where the cost savings hit the road. If Natasha Richardson had been in the US, she would have been in range of a medical helicopter and a Grade 1 trauma center. Only God knows if she'd have lived, but because she was stuck with ground transportation and multiple hours from any trauma center, she didn't have a chance. Canada works because the US back-stops it. The really bad cases (troubled pregnancies, denied claims, etc.) can cross the border.

The real question: who pays for the really expensive stuff? I've heard some claims that 80% of Medicare costs are for caring for the last year of life. Number 1 Son cost our insurance $100k from pneumonia that destroyed half a lung, and then another 100K or so with pericarditis. That chopper, that trauma unit, that second MRI, that extra doctor in the ER, all those things cost a lot of money. The British and Canadians are saying no to the "extras", and it's starting to show.

Our health care providers currently have to compete on service, and it shows. They can do the 20% chance of success treatments enough times to convert them to 50% or 75%. They can drive the $50000 MRIs to $500. But, all that costs money.
There won't be "death panels" deciding individuals. That will be too gaudy. There may be appeal panels, but not often. Most of the time, there will be faceless groups making actuary tables, deciding that the chance of you living doesn't pay off, so you won't get the knee replacement, or the speech restoration surgery, or that quad bypass.

As a libertarian, I want a real market. Most people don't pay for car care insurance; it costs more than the actual work. Most health insurance is really health care plans. We pay the insurance X+Y dollars to spend X dollars on our behalf, when X is usually a well-defined minimum amount each year. 80% of the people in the US (under 65) would be better off having a plan that had a $4000 out of pocket minimum and paid 100% of everything else, and be able to put that $4000 back pre-tax. If you can't afford that plan or can't afford the $4000, then provide that money as charity or welfare, not by hiding the costs as health care overhead.

Push the spending decisions back onto the consumer. If it's important to do, then you spend the money, and pay for it.

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