11/08/2009

11-08-09 - Health Care

Well health care reform is moving forward, and it's a huge pointless disaster as predicted. We're going to basically wind up covering more people within the same current broken system. I actually think things like not letting health insurers refuse to cover certain people is a very negative development, as is mandatory coverage and forcing employers to cover people. (I've written before about why I think the whole connection of employers and health care is very negative for our economy and personal liberty in general).

I was thinking about what we really should do for health care, and it occurred to me that it's really even a larger problem. Health care is definitely the biggest single manifestation of this issue, but at the bottom the problem is manipulative binding contracts, exclusionary pricing that forces you into contracts, closed networks, and collusive oligopolies. These same issues are afflicting people in bank accounts, cell phone contracts, cable networks, etc.

The real solution is to find a way to force all of these things to open up to consumer choice. The big problem with health care really is : consumers have no realistic choice options - all health insurances are basically the same ; consumers have no access to information to choose doctors based on prior performance or based on cost ; doctors have no ability to charge different amounts and are not rewarded for charging less or doing less ; specialists are rewarded heavily for doing unnecessary work ; consumers can never make a cost/benefit choice to opt out of care for the elderly or very ill ; consumers can't change plans or opt out of plans because of the collusionary pricing that forces you to have health insurance and not pay cash ; etc. etc.

Basically there is no capitalist competitive market at work in health care at all. Doctors/hospitals are not motivated to do better cheaper more efficient service to attract more clients. Health insurance is not motivated to charge rates that are competitive with cash rack rates because that option does not exist. Health insurance is not really "insurance" at all for most people, but rather just a huge fee that you have to pay simply to be allowed to get care.

With all of these things - bank accounts, cell phones, credit cards, health care, cable networks - I'd like to see a few major overhauls. 1) legal requirement to provide reasonable cash "rack rates". That is, consumer should be able to choose not to sign a binding contract for services, and instead just pay-per-use at a reasonable rate. 2) networks should be required to be opened to other companies at reasonable rates; eg. credit card point of sale networks, ATM's, cable wires, health care providers, etc. should all be required to allow third party companies access. 3) requirement to provide quick clear reports of past performance and disclosure of billing and furthermore notificiation of billing. For example, cell phones and banks should have to disclose how much the average consumer actually pays for bills; eg. when they advertise "$29 a month" cell phone contract, but without including all kinds of surcharges and fees and extra charges, they should be required to disclose "average consumer actually pays $63 a month". Also, when an unexpected bill arises they should be required to notify you *immediately* and even get permission, not just send you a bill months later. eg. if you make some roaming call they should have to say "this will cost $1 do you want to proceed?" not just send you a bill for $1000 at the end of the month. Similarly banks with overdraft, health care with out-of-network anaesthesiologists, etc. There's absolutely no reason not to provide warning these days with computerized everything and automatic email & SMS warnings.

You can't have working capitalism without informed consumers, and you can't have working capitalism without consumers being free to change services. Currently all of these industries are completely broken and are doing nothing but intentionally suckering people into contracts where they pay outrageous fees with very little ability to avoid it or get better treatment.

Really I'd like to avoid a lot of federal regulation, what I'd love to see is for it just to open up to competition, but in some cases the best option may be regulation. For example with cell networks, I think a good argument could be made for just nationalizing the networks and making them open at auction rates to 3rd party service providers. Another option would be to make it illegal to tie a phone to a given network, which would allow consumers to change provider at any time, which would make network bandwidth and quality a commodity and greatly improve the market.

Many of these services have also basically become "utilities" that a human must have to function decently in this society. You can't really choose not to have a bank account or health insurance or a cell phone, and that argues for the government providing them, or mandating some basic availability by law. For example cell providers could be required to provide a $10/month text & voice only contract for the poor.

Banks in particular make me angry because even without the recent TARP disaster, they get massive amounts of public support through the free money from the Fed and the insurance from the FDIC. I think it's perfectly reasonable to have very high requirements on any bank that takes Fed money. For example, they should be required to provide a very basic checking account with zero fees, and most importantly no line or credit or overdraft account, which are extremely predatory practices forced on the poor (and no NSF fees either up to 3 bounces or something; and of course automated warnings).

But of course we'll never see any of that, because the government *wants* corporations to rape consumers, and doesn't actually want to see better competition that will improve services.

34 comments:

Jon Olick said...

Thats exactly right, its in the politicians best interest to give control of the government to companies as that is how they get elected, and its in companies best interest to 1) not allow smaller companies to be competition which is reflected in higher small business tax rates (yes small business get taxed more than big ones, which is opposite to how individuals are taxed) and 2) to confuse the customer and keep him in the dark and then rape him. Its a shame really, but it won't stay this way forever. I see another recession likely coming sometimes in the next 5 to 7 years which will hopefully pop these bloated pimples and there is very little the big corporations or anybody else can do about it. My hope, is that a real recession will change companies views on how they need to treat people. IE, they are not people to be taken advantage of anymore, as doing so will only hurt themselves more. Afterall, what good is being king of the hill when the hill is made of shit?

Aaron said...

I don't really see any current health care proposals as really helping the overall state of health care quality or cost. No one seems to actually want that (otherwise we'd be doing some single payer bad-assery with some heavy duty top down quality control measures and transparency). We will, however, get out from the 4th world position than poor people aren't able to receive health care. So now we'll just have a 3rd world system instead. I agree with all the comments about non-health care modifications. And... maybe if you did that stuff with health care it would help but I'm not convinced it would do much. There is very little a consumer can do with health care to distinguish good from bad care until it's too late. "Damn you doc you fucked up my knee!!! Now I'll almost completely randomly select some other hack doctor!" It needs to just work. Paying more for good care doesn't make sense. It all needs to be good. Perhaps thats why the vast majority of functional health care systems don't bother with trying to artificially wrap health care around capitalism as we have. I think that's the root of the problem. Trying to shoehorn something that isn't, and can't be, a market into a market system is just silly. It's like what we'd get if we tried to do railway or highway construction in a market system. There is a slight (albeit small) chance though that getting the government in on the hook for more of the health care pie over time will lead to more government cost controls. Listen to all the whining from hospitals about how they're getting screwed by having to give people care for the lower Medicare rates. That is government forcing prices down. Currently providers tend to shift those costs onto non-medicare insurers, but if the pool of non-government sponsored insurees were to shrink significantly that option would go away and they'd have to actually figure out how to reduce costs. Probably a pipe dream, but it is a possibility.

cbloom said...

[ There is very little a consumer can do with health care to distinguish good from bad care until it's too late. "Damn you doc you fucked up my knee!!! Now I'll almost completely randomly select some other hack doctor!" It needs to just work. ]

I don't agree with that. If all medical records were made public (anonymized) there could easily be grading services like consumer reports and you could pick people by past performance. Also in a more free market doctors would be able to charge variable prices and would have to attract patients which would motivate them to be better.

cbloom said...

In practice maybe the best thing we could do realistically in the US would be to just let everyone opt in to Medicare if they want.

Let people choose Medicare at $100/month if they so choose.

That not only gives people a nice fallback if insurers reject them, it also puts a lot of pressure on insurers/doctors to provide better service because they have to actually compete with that pricing and quality of care.

Aaron said...

[If all medical records were made public (anonymized) there could easily be grading services like consumer reports and you could pick people by past performance]

But that's like saying if we had this totally impossible to get thing, it would work. There is no private industry where such a thing is done. Not even consumer reports can do that. Consumer reports just tests things after a fact. They don't give you access to internal corporate data on product failure rates. What CR does for doctors could totally be done externally. You just pay people a few bucks to report back to you on how their care went. You could do it in the current system. You could do it BBB style too, with complaints that could be arbitrated to be resolved etc. That said, both those systems end up being pretty shitty. Rrcommendations from a knowledgeable source turn out much better. CR doesn't know shit about cars (and cars is one of the things they do best). BBB doesn't cover even nearly enough of the bad cases.

Don't get me wrong, I'd love to have that data. But getting it is pretty close to an impossibility unless you're doing everything government run. And even then there'd be huge resistance to it, if only because patients are complicated. Some patient groups are weaker than others and won't recover as well, or just have generally more problems to start with, making complications more likely and dragging their ratings down unless you correct for it. And once you allow for correction, everything has the potential to get all jacked up. I agree it would be good, but it would be crazily hard to actually get done.

I'm trying to envision what a variable priced doctor scheme would look like. I go to the federal doctor database and filter by docs in my area. Then I filter by the condition I have. Then maybe I read a bunch of those to get an idea how the doc is doing in general. The the prices are on there, and I get to choose between an expensive doc that does well and a cheap doc that scores less well. Couldn't hurt to have patient reviews on there too. Yeah that'd be awesome. I'm not sure there's any country anywhere (even those with pretty good, efficient and cheap health care systems) that can do that. So it's definitely not necessary for being cheap and good, but it sure would be nice.

Aaron said...

Opting into medicare would be pretty damn good. That was one of the early proposals, but it's too good and the centrists (read: insurance lobby whores) nuked it quickly. I think it was proposed as the public option at medicare rates +5% or something during ammedments to the Baucus senate bill. I know Pelosi floated it explicitly as "Medicare +5" in the house bill but they couldn't get votes for it so they fell back onto the shitter negotiated rates. Plus none of the current bills (or even the medicare +5 proposals) let average people buy into the public options, they're all fallbacks for people who are uninsurable in the private sector, so it wouldn't help contain costs at all and is a giant clusterfuck.

Health care costs are gonna continue to spiral out of control though. Getting the government in on the paying end of that is a very good thing at this stage (via the subsidies and public options). It means that government will have to be part of the cost solution down the road when things get really bad. And in the meantime, poor people will be a little less fucked.

cbloom said...

"Health care costs are gonna continue to spiral out of control though. Getting the government in on the paying end of that is a very good thing at this stage (via the subsidies and public options). It means that government will have to be part of the cost solution down the road when things get really bad."

This is my big problem. I don't think getting our government involved will do much to control cost. Maybe a tiny bit, but not as much as we need. Because congress is so in the pocket of insurance/doctors/pharma, medical costs will continue rising out of hand, and having the government pay for it will just mean more government debt and more taxes being pumped into private profit.

A fully public system with controls on how much we pay for drugs, salaries, etc. is one thing. But that's not what we'll ever have. Instead we'll have government money subsidizing private pockets.

"And in the meantime, poor people will be a little less fucked."

Yeah this is clearly the small win that we will get.

cbloom said...

[But that's like saying if we had this totally impossible to get thing, it would work. ...]

I just think that going to a mechanic is actually better than going to a doctor. When I go to a mechanic, I can read reviews online and get some idea. I can check the BBB. I can go to a Honda Certified guy and pay a lot more, or go to the Mexican on the corner if I'm willing to take a risk. I have no options and very little information with doctors.

Part of the reason is that people aren't reviewing doctors online, and I'm not quite sure why that is.

Aaron said...

It's a pretty big win if you're poor :) And there are a lot of poor people these days. I agree on balance it is pretty crappy. But I think pretty crappy is a huge step up from where we are, and pretty much the only thing possible at this point. Not that Americans really deserve anything better, we're all such little corporate whores, we deserve to get screwed by corporations.

cbloom said...

Meh, as I've said before, mandatory care without strong cost controls will actually make things *worse*. At least now the insurance companies have a tiny bit of motivation to offer decent prices because you can just opt out of coverage completely (even though it sucks), but when that goes away they have very little motivation to control cost at all.

Aaron said...

The Mexican on the corner is probably better than the certified honda guy though :)

Finding a good mechanic for me has been almost entirely luck... as in, I've never had a good one until I finally got a good recommendation and followed it and he's been outstanding so far. Online reviews and BBB are a good basic step but for services they're still pretty shitty except for maybe weeding out the grossly incompetent. Granted, we can't even do that with health care.

What would be much better of course is if mechanics re-failure (not sure what to call it) rates and prices were available. But, we don't really believe in capitalism, so all that data is hidden.

cbloom said...

"What would be much better of course is if mechanics re-failure (not sure what to call it) rates and prices were available. But, we don't really believe in capitalism, so all that data is hidden."

Right - what I'm arguing for is that services which are a public necessity could have extra structure imposed on them to force them to disclose more and behave in a way that benefits consumers more.

Sly said...

[I don't agree with that. If all medical records were made public (anonymized) there could easily be grading services like consumer reports and you could pick people by past performance.]

Saying which doctor one have seen is the best is quite subjective, each patient will measure differently ("wow, this doctor gave me 20 kind of pills at the same time, wonderful!"). Also looking at how "well" doctors cure their patients is hard to rate (How to measure? How to take into account biases caused by different population - ages, sexes, poverty/wealthy, risk-population, kind of work, gene-pools...?).

Being European, I'm used and I've enjoyed and I quite like (so I'm biased) good public health-care. I don't want to be cheap on such a critical issue.

Ok for private corporations to try to do the same as the public services in a cheaper way if they can (as long as they don't refuse expensive operations nor risky clients - they can on the other hand offer more services if they want to). But you don't have that at all in the USA currently.

cbloom said...

"Saying which doctor one have seen is the best is quite subjective, each patient will measure differently"

Yes absolutely, but I completely deny the viewpoint that just because the data is hard to interpret we should just close our eyes and operate with no data.

("wow, this doctor gave me 20 kind of pills at the same time, wonderful!").

BTW in a more free market system this kind of abuse might be reduced, because patients would have to pay for their pills, or insurers would just kick them off the rolls for being abusers. Also ideally if you could measure doctor's performance, they would be paid more for doing less.

"Being European, I'm used and I've enjoyed and I quite like (so I'm biased) good public health-care. I don't want to be cheap on such a critical issue."

I believe that being cheap is crucial for the future sustainability of health care all across the world. Rather than having regulated enforced cheapness that will cut care in bad ways, I'd like to see consumer market-driven cheapness where people can wisely choose to cut care in better ways.

"(as long as they don't refuse expensive operations nor risky clients - they can on the other hand offer more services if they want to)."

I believe that well run insurance is not possible unless they specifically *DO* refuse expensive operations and risky clients. We currently spend some ridiculous percent of our total health care budget on elderly people in the last year of their life and on people with very severe terminal illnesses. This is clearly not wise in terms of cost/benefit and if consumers had more choice they would not choose for this vast amount of money to be flushed down the tubes in that way.

Jon Olick said...

http://www.redbeacon.com/

Sly said...

[Yes absolutely, but I completely deny the viewpoint that just because the data is hard to interpret we should just close our eyes and operate with no data.]

It's quite similar to auto-medication: lots of people think they can read medicine description as good as a doctor can. That's incorrect: one can't do in a few minutes nor hours what a doctor learned for more than 8 years. It's simply not that easy.


[BTW in a more free market system this kind of abuse might be reduced, because patients would have to pay for their pills]
Some illness requires hugely expensive medicine - like hundreds or thousands of dollars a month. Which makes these people highly costly. Will you decide they don't deserve to live? And no, this is not a marginal case.
The only people who could do the difference between expensive and well used medicine, and wasted medicine, would be fully trained doctors ; aka very expensive people (in terms of cost of education and salaries) ; not sure we'd save a lot here.


[I believe that being cheap is crucial for the future sustainability of health care]
Not compulsory. A communist way of seeing this would be: "health-care will be handled completely by public service, from labs to production to test ; all costs - except salaries - will be canceled: we'll have our own raw materials production, our own transport, our own tool factories...".
That's obviously utopian ; only to show the capitalist way is not the only one ;)


[I'd like to see consumer market-driven cheapness where people can wisely choose to cut care in better ways.]
People cannot take such decision responsively until they're almost as educated as a doctor, or maybe a nurse.

Jon Olick said...

[People cannot take such decision responsively until they're almost as educated as a doctor, or maybe a nurse.]
Sounds like the heart of the problem. I wonder if there are any statistics though that are general enough for people to understand. For example, like how much money spent for similar symptoms.

Sly said...

[For example, like how much money spent for similar symptoms]
But often "similar symptoms" = "different illness". Symptoms vary hugely along population. Same symptoms can be caused by different illness (perfect current example: A-H1N1-flu versus classic flues versus cold).

Sly said...

On a side note: I really don't understand why some medicine like antibiotics (ie: Tamiflu) can be bought freely, without ordinance, in some countries.

1) they must not be taken rashly
2) they can help only for certain illness
3) they're to be taken carefully: too shortly and one will only train viruses to be stronger ; too long and one will also damage his own body and he'll weaken his immune defense system.
3) some people took Tamiflu preventively for A-H1N1. Which is the most retarded thing ever done. Speaking CB-like: these people should actually be shot on sight for helping creating more dangerous viruses.

Sly said...

s/ordinance/prescription in previous message...

Jon Olick said...

[But often "similar symptoms" = "different illness". ]
Is that a bad thing? In a perfectly random world (which admittedly doesn't exist) then the doctors who charge for unnecessary expenditures, give too much medication (or too expensive) will show up as outliers. As each doctor will over time get roughly the same amount statistically of very sick and not so sick patients. So, the doctors who are better at diagnosing will have better looking numbers. Average, median, standard deviation, whatever metric.

Aaron said...

Let's lay out some things that should not be controversial:
1. More information for the consumer would be good.
2. An informed consumer is not a necessary or sufficient condition for cheap, good care (case in point, basically every health care system but ours (since they all work)).

One could try to build some sort of market for health care. But, why bother trying to do some interesting new thing when there are so many totally functional models to just use? Sure more data is good, and I'd want it in any system, from pure single payer to crazy cowboy fake markets like we have.

At a gut level I just don't think competition would work for health care. I guess I really cannot quite put my finger on why. But the complete lack of any existing functional market based health care system is part of it. Krugman (don't yell at me!) makes a similar argument (and links to a pdf of some 60's study that breaks it down in more detail (actually that pdf is significantly better than the Krugamn article). Krugman basically just sez 'consumer info doesn't help with health care decisions because the choices are too complicated' which is weak, though probably fairly true. I think it's possible there's a split in that some medical things are marketable and some are not. Big emergency crazy expensive things are probably not. Your family doctor... probably not expensive enough to matter so who cares. Elective procedures, and non-emergencies that you really have time to sit around and dick about trying to find some specialist, maybe those could be marketed. But then again, for many of those the costs are simply something you cannot do out of pocket. And once you involve insurance with the other factors involved in health care, it starts degrading the ability of a market to function.

Aaron said...

Actually probably only my point #1 above was un-controversial. Poor editing on my part :)

cbloom said...

" 2. An informed consumer is not a necessary or sufficient condition for cheap, good care (case in point, basically every health care system but ours (since they all work)). "

Yeah, totally disagree with this. Western European style health care is fucked in the next 50 years or so due to rising costs and increasing elderly. Yes it's way way better than what we have now, but it's not a solution, it's just delaying the problem a bit longer. It's still a massive drain on their economies and hugely inefficient and corrupt.

[ 'consumer info doesn't help with health care decisions because the choices are too complicated' which is weak ]

Yeah a lot of people say this and I don't buy it. Consumers make decisions all the time that are too complicated for most of them to understand. But by reading advice from informed sources and using other ways of judging they can still make decent decisions. Obviously the #1 person advising them would be their own doctor. The doctors could say "I recommend this procedure but it costs X and has this chance". Most doctors I've been to talk pretty honestly about your options.

Also the market can drive health care even if consumers don't actually make the micro decisions about their care. They could choose from different plans that have different levels of care, different coops of doctors, etc.

cbloom said...

A key point for me is that people in general need to have *less* health care going forward to be economically viable. Yes we need to fill some gaps mainly in the current US system of people getting screwed. But beyond that the bigger problem is that we are paying way too much money for a small percentage of the population to get way too much care.

We need to find a way to make the population okay with having less care. Nobody will ever accept the government denying people care (eg. "death panels") and people have been very resistant to the idea of HMO's denying care.

I think the only viable way is to make consumers pay for more of their own care so they have a realization that care costs money and they should use as little as possible. (of course you don't want to discourage them from good preventative care, but you can fix that by reimbursing the first few thousand spent or something; it's all very complicated when you get into the details).

Jon Olick said...

In other news, my daughter was recently in the hospital for 1 week. The cost for the room (not including any medicine or procedures) was $35,000. They had horrible couches which were horribly uncomfortable to sleep on (probably by design so people don't want to be in there). The food was lousy (but better than Mc Donalds). And people woke you up every 4 hours to do tests to a baby who doesn't speak so you can't really explain to her when they are going to do something painful and when they are not. So she just cries all the time. Not very fun, but back to the original statement. $35,000 is the most expensive hotel I've ever been in.

Brian said...

One problem with the market based approach to choosing doctors is that it assumes that you have time to shop. If you have a stroke, heart attack, or any serious condition, you really don't have the ability to make a reasonable choice.

Aaron said...

"Western European style health care is fucked in the next 50 years or so due to rising costs and increasing elderly"

I don't see how. Everyone freaks out about those systems now, you'll read some sensational article with a headline like 'french health care is collapsing!!!' then you go read the actual text and it's like 'the economic downturn has affected french health care. They are tweaking the system to handle it'. They can just adjust provision of services as needed, and it's all government, so it can be sensitive to the needs of the people, as opposed to market driven where it's sensitive only to the needs of stockholders. It's very clear how much it is all costing and where it's going because it's one system. Inefficiency is very easy to track down.

That said, people seem to be willing to have a noticeable drag on their economy to keep the elderly alive for a couple extra months at the end of their lives and a pretty large bulk of the cost comes from there. Not sure how to square that circle. If people want to hang on and there are means to do so, it's pretty nasty to say see-ya for cost reasons. Maybe we give people a tax break if they're willing to sign a
DNR? Maybe a DNR lottery (if you sign a binding DNR before age 40 you get entered in a yearly drawing to win a million dollars! A massive public education campaign about how aggressive end of life care is probably worse than death in a many cases (though clearly not all, my grandma had several ridiculous heart surgeries and got a couple more decent years out of it (with periods of sheer hell thrown in)). Or you could shift the cost onto the individual. In which case basically only the wealthy get end of life care.

cbloom said...

""Western European style health care is fucked in the next 50 years or so due to rising costs and increasing elderly"

I don't see how. [...]

That said, people seem to be willing to have a noticeable drag on their economy to keep the elderly alive for a couple extra months at the end of their lives and a pretty large bulk of the cost comes from there."

Yeah, that's the death of European style health care.

The cost per person is already rising faster than inflation, and those populations are severely skewing towards elderly and retired. If trends continue they'll be more fucked than Japan is now.

Also the reality is that the European health care systems already do economic denial of care (through simply having much shittier care than they could) and discouragement from care (through things like long wait lists and general pain in the ass).

castano said...

"people seem to be willing to have a noticeable drag on their economy to keep the elderly alive for a couple extra months"

I don't know about other European countries, but I'm certain that's not the way it is in Spain, since I had family members in that situation. Hospitals have fixed budgets, so they have to make cuts somewhere. If you don't like that, then you can always go to a private clinic.

Spain is the European country with one of the most aged populations, and despite of that they have been able to keep costs down: Health care costs are just 7.5% of the GDP, of which public health care is just a 5.7%.

This is primarily due to public management targeted to keep costs down: Strict hospital budgets, regulated pricing of pharmaceuticals, very low bureaucratic costs (only a 3-4% vs. +20% in the US).

I've referenced this paper a few times in the past, it's getting old, but it's the best analysis that I've found in English:

http://www.health.alberta.ca/documents/Sustainable-system-CBC-2004.pdf

That's not to say that public health care doesn't have its problems, for a critical analysis see for example:

http://www.fadsp.org/pdf/Reflexion4.doc


"through things like long wait lists and general pain in the ass"

In my experience the US is actually much worse in these two aspects.

Jon Olick said...

[Maybe a DNR lottery]
OMG, feels like were in an episode of Sliders.

Jon Olick said...

nobody appreciates my bad jokes apparently. lol :)

sly-id said...

""Western European style health care is fucked in the next 50 years or so due to rising costs and increasing elderly"

Actually the main reason why France health-care is getting more and more in debt, is because the government is keeping more and more of the taxes that should pay it for other business (basically: because we've one of the worst president ever).

Aaron said...

[OMG, feels like were in an episode of Sliders.]

Heheh, no, it was funny :) I just got distracted by shiny things in other threads :)

old rants