Cowen on Medicare Spending:

Economist Tyler Cowen of Marginal Revolution has a good piece in today's NYT on medicare spending. It begins:

Medicare expenditures threaten to crush the federal budget, yet the Obama administration is proposing that we start by spending more now so we can spend less later.

This runs the risk of becoming the new voodoo economics. If we can’t realize significant savings in health care costs now, don’t expect savings in the future, either.

It’s not the profits of the drug companies or the overhead of the insurance companies that make American health care so expensive, but the financial incentives for doctors and medical institutions to recommend more procedures, whether or not they are effective. So far, the American people have been unwilling to say no.

Read the whole thing.

Cato The Elder (mail):
I have asked progressives many, many times to give me some sort of facially plausible explanation of how the government intends to hold the line on costs, even if they are correct on all the other substantive points that argue for a national health care system. Everyone is to play blind, deaf, and dumb to the situation occurring in Massachusetts, made of a well-tempered and highly educated populace that takes care of their personal health matters before they grow too serious, and even that program ran $1 billion deficit in its first year alone. The apologists argued in the New York Times that they had to lie to the people about potential cost savings to "bring all the stakeholders to the table." Where is the evidence that the government has ever done what they wish for, or ever will? Where is the evidence that politicians will deny people procedures they feel they need, even if it isn't objectively true?

"Ah, thank you gentlemen, I think this correlation matrix in this RAND study perfectly explains why my grandmother doesn't deserve her $2,000 grand-a-day chemo. May I have another?"
6.14.2009 11:10am
ChrisIowa (mail):
During the 1990's many medical plans changed from an insurance concept to a "health maintenance plan" concept. If preventative care will actually produce savings, there should be evidence of a savings in the many people already covered by HMO's.
6.14.2009 11:49am
Adam J:
"It’s not the profits of the drug companies or the overhead of the insurance companies that make American health care so expensive, but the financial incentives for doctors and medical institutions to recommend more procedures, whether or not they are effective." I'd like to see some proof for this assertion, because it sounds pretty implausible to me.
6.14.2009 12:32pm
Dissenter:
Adam J:

Prescription drugs represent something like 10% of medical costs and are a huge part of preventive medicine. Even insurance company profits are a relatively small percentage of health care costs, and they're not really the problem in the macro sense. That seems to be what Cowen's getting at - sure, we can find small ways to wring savings out of the system, but we haven't figured out how to slow macro cost growth in any politically acceptable way.
6.14.2009 12:46pm
therut (mail):
I do not have much hope for preventive care to save money. What the .gov wants is better control of chronic diseases and you can not force patients to eat right and exercise give up tobacco or drugs. I have been trying for 25 years and seen little to no results. EMR's will not save money either. They are expensive (costs us 5,000 a month for a practive of 5 in Family Medicine and we do not use it). It takes too much time(maybe seeing less patients is what they have in mind for saving money?) and does nothing to increase the bottom line. The notes read like something an impersonal computer prints out and misses the subtle patient-physician interaction and meaning. I would not want to go to court with that mess as my records. Therefore, all that expensive hardware and software is sitting unused. Not one penny saved.
6.14.2009 12:50pm
Brett Bellmore:
If it would really save money to get patients to eat right, exercise, and give up on vices, you could pay them to do it, with part of the savings. People will do an awful lot of things for money they won't do to save their lives.
6.14.2009 12:55pm
therut (mail):
You really belive that!!!! If someone I just extubated and got off the vent from respiratory failure due to their COPD is found outside smoking within 12 hours you think they will quit for money. Sure.
6.14.2009 12:59pm
Oren:

I have asked progressives many, many times to give me some sort of facially plausible explanation of how the government intends to hold the line on costs

A few plausible ideas spring to mind:

(1) Paying GPs for health outcomes (or just paying GPs in general). So much acute trauma and redundant diagnostics can be avoided by experienced GPs with intimate knowledge of the patient's history and lifestyle. The Economist had a great piece on an IBM exec that spent $150k (of his insurers money) and damn near died because he went to a specialist first.

(2) Long term stabilization of indigent chronic illness. Many hospitals in IL are paying (out of pocket) for complete treatment of diabetic indigents because $100k a year (quoted in the article) pays for itself if you avoid 2 ER visits, which is very plausible.
6.14.2009 1:01pm
hagbard:
Or, you could simply apply a behavior tax;

Smoker? Costs you $200 a month
Obese (by body fat, not BMI)? Costs you $200 a month

etc

Garnish that out of wages directly like any other tax and you would see a shift pretty quick for many folks...
6.14.2009 1:03pm
Jmaie (mail):
Oren - which article?
6.14.2009 1:11pm
Pro Natura (mail):
Four days ago I went to the historical statistics of the on-line US Statistical Abstract. I pulled up the tables on GDP and health care expenditures in billions of constant dollars (they go back to 1928 in one case and 1929 in the other). I downloaded the Excel tables with these figures into an Excel spreadsheet and graphed health care expenditures in constant dollars and as as a percent of GDP.

Both series showed a dramatic acceleration in the mid-1960s that has continued to the present. I Googled Kerr-Mills and voila--all this acceleration in medical expenditures began within a year or two of Kerr-Mills implementation (Kerr-Mills is the bill starting Medicare for those not in the know).

I live in Massachusetts. As has been noted, the State's attempt to provide universal health care coverage -- one not dis-similar from that proposed by Obama -- has been a fiscal disaster from the getgo. That it has not destroyed the state's medical system entirely is probably because the financial difficulties associated with Governor Patrick's "plan" have as of yet prevented its full implementation.

Anyone who claims that further government intervention in this country's system of medical care will not result in increased expenditures (or rationing) is either insane or lying or both.
6.14.2009 1:13pm
Jmaie (mail):
Pro Natura- like anything else, if you subsidize something, you get more of it. When something is made "free" there is zero incentive for the receiver to limit their use of the system. Likewise, there is no incentive for medical providers to limit services either.

That leaves Uncle Sam as the bad guy. Since no politician will stand up and tell grandma no, unchecked growth is guaranteed.
6.14.2009 1:28pm
Ari Taz:
Oren,

Regarding (1): wouldn't that encourage GPs to always "play it safe," even if that meant avoiding a potentially beneficial treatment that just happens to be new? The problem with suggestions for government holding the line on costs is that it is so darn difficult for government to properly incentivize health providers to accomplish what the government wants - and efforts to do so become progressively more complex, inefficient and expensive.

I'm an historian, so here's an analogue from my field: when the first scrolls and scroll fragments (eventually known as the "Dead Sea Scrolls") were being discovered in the Judean Desert, scholars were faced with the following problem: the Bedouin living/working in the area discovered ancient material on a much more frequent basis than trained archaeologists (and archaeologists didn't even begin to canvass the region extensively until later anyway).

Academics would pay the Bedouin for their finds, but the problem was that initially they would pay PER FIND. As you may have guessed, this provided a strong incentive for the Bedouin shepherds to produce more finds...even if that meant destroying larger finds by cutting them up into smaller pieces.

In order to correct this, academics began to pay for finds by square meter (i.e. the larger amount intact, the more a find would be worth). What the Bedouin ended up doing, as a result, was to find as many scroll fragments as possible and just tape them together. So now, not only were scrolls being damaged through the application of tape, but they were also being jumbled up so that fragments that had nothing to do with each other were being stuck together.

This is always the problem with trying to calibrate incentives. I can't imagine that government is somehow better at this than everyone else...
6.14.2009 1:28pm
/:
1. All human concerns are concerns of all humans. (Collectivism is a fact, not a belief.)

2. Collective action is moral.

3. Humans have a physical presence whose danger can be mitigated by collective action. (Material existence is suffering.)

4. Democratic government is the natural form of collective action. (The only way to impose collective thought is with force.)

5. All things are of politics. (Collective governance implies social will equals political will.)

Given these five indisputible columns of totalitarianism, arguing costs of the right of medical care is a thing which both distracts from our goal and which confuses the undecided by appealing to their greed. You know very well what's good for you -- and if you don't, I do -- so don't be evil.
6.14.2009 1:31pm
Jmaie (mail):
Hagbard has the right idea - there's a reason auto insurance costs more for an 18 year old.
6.14.2009 1:35pm
Brett Bellmore:

You really belive that!!!! If someone I just extubated and got off the vent from respiratory failure due to their COPD is found outside smoking within 12 hours you think they will quit for money. Sure.


What I think is that the people that far gone aren't the primary target of preventative medicine.


Anyone who claims that further government intervention in this country's system of medical care will not result in increased expenditures (or rationing) is either insane or lying or both.


Obama might be insane, (A sociopath, it's common enough among politicians.) but he's certainly a liar. And if his economic policies are any guide, his MO is to transfer as much power from the private sector to government, as fast and irreversibly as possible, as he can get away with. And then count on his being a clever guy to figure out what to do with it.

So, yeah, I expect him to try to destroy the private sector in health care, as an opening move, and only try to figure out a replacement once there's no going back.
6.14.2009 1:40pm
Buckland:
The problem with our medical system is that it's so successful at what it does. Contrary to what several folks here have said, preventative care does not save money (possibly prenatal and early childhood excepted).

Preventative care costs the system huge amounts, and the actual cost of the preventative procedures is not the driver. The assumption that most people make is that if someone with a chronic disease treats that disease the medical expenditures will be less. A diabetic that spends less to stay healthy will still go through the end of life medical expenses -- hip replacement, knee replacement, heart bypass, nursing home care, etc. These are helpful at extending life and increasing the quality of life, but are very expensive. The diabetic with no control of blood sugar will probably die much earlier, and therefore be much cheaper to service medically over their lives.

I'm not speaking from a moral point of view. Morally it may very be the correct thing to provide preventative care to all. But don't confuse that with the very real economics of health care. Preventative care extends life, and keeping older folks alive and active is expensive. As the article said, something has to give in medicare spending.
6.14.2009 1:49pm
Borris (mail):
The great thing about government health care is ... you can start denying coverage for demographics that don't vote for you.

Also, you'll get Constitutionally protected health care. Why let doctors decide health issues when you can sue for your equal protection health care benefits and let a judge decide?
6.14.2009 2:15pm
Bruce Hayden (mail):
I think that there are a couple of things involved. First, and foremost, because Medicare is mostly not paid for by its recipients (they pass the cost on to the rest of us, both through our Medicare payments, and by cross-subsidization due to their reimbursement levels that are often well below cost), the system has no price signals. What happens there is what happens whenever you have that situation - demand greatly exceeding supply, but no market mechanism to bring the two into balance. So, I had a 90 year old uncle get a hip replacement. A lot of money for almost no gain (I don't think he lived even two years after that). He wasn't paying for it, so what the heck.

The only rational solution to the problems caused by separating demand from supply by mostly eliminating price signals is rationing. Sure, as a Baby Boomer looking to be covered by Medicare in the next decade, I would like, for my own selfish reasons to have infinite care paid for mostly by everyone else. But I realize that that is not economically feasible. It has only worked in the past because we have had so many others subsidizing the recipients of the program. But as those numbers shift, the result is both foreseeable and inevitable.

The problem is that the Democrats (at least their leadership) seem bound and determined to replicate the problem on a national basis. They are asking those of us who work hard and pay for our insurance to give up on getting all the health care that we need, in order to cover a small number of people who are uninsured for one reason or another.

And one thing that they seem to fail to take into account here is that one of the big reasons that health care costs rise faster than inflation is the leveraging effect of government reimbursement rates. Every time that a government reimburses below cost, someone else has to pay for that. This is invariably through cross-subsidization by other payers, and mostly through those with private insurance.

Let us assume that health care costs rise 5%, and half the patients that a health care provider is treating are covered by some government program with fixed reimbursement rates. Those don't go up, and so the net effect on everyone else is that their costs go up 10% to cover the fact that government reimbursements didn't rise accordingly. But then, Medicare, etc. need to cut costs some more, and actually cut their reimbursement rates, while actual costs are going up. So, everyone else is paying more than 10% more, while the government is paying even less.

Overall, I don't know what percentage of health care is government funded, but if we assume 25% now, the principal Democratic proposal seems to be to crank this up significantly, even if a private option is left open. But, as should be obvious, the more people covered by government funding of their health care, the fewer left to cross-subsidize them, and the higher their costs are, forcing more and more people into the government system. The leverage I mentioned above is tolerable when there aren't that many free-riders, but it becomes prohibitive when they start to predominate.
6.14.2009 2:29pm
Brian K (mail):
A diabetic that spends less to stay healthy will still go through the end of life medical expenses -- hip replacement, knee replacement, heart bypass, nursing home care, etc.

the point of preventative care in this example would be to prevent diabetes in the first place, thus avoiding the costly long term complications. it could be through routine blood glucose screening of at risk populations followed therapy and lifestyle interventions when a person is discovered to be prediabetic. minimizing and eliminating risk factors would be a complimentary strategy. and once a person has diabetes attempt to avoid costly complications that for the most part are not life threatening. losing a foot to diabetes most of the time doesn't kill you but it does make you disabled and cost huge amounts of money in extra care.

and the data on preventative care is actually much more mixed than you portray. some costs more money and some saves money. blanket statements do not give the whole picture.
6.14.2009 2:30pm
Libertarian1 (mail):
Brian K:

the point of preventative care in this example would be to prevent diabetes in the first place



I would be very interested in how you would have organized medicine or our society in general prevent Type I diabetes? The kind that Judge Sotomayor has.
6.14.2009 2:45pm
Oren:

The problem with suggestions for government holding the line on costs is that it is so darn difficult for government to properly incentivize health providers to accomplish what the government wants - and efforts to do so become progressively more complex, inefficient and expensive.

Doesn't seem hard -- incetivize by outcome.
6.14.2009 2:56pm
Brian K (mail):
I would be very interested in how you would have organized medicine or our society in general prevent Type I diabetes?

i figured you would have had the basic intelligence necessary to realize that i was talking about type 2 especially since it is by far more common. and that it is becoming increasingly more common in younger and younger age groups...groups where prevention would have a significant impact.
6.14.2009 2:59pm
Bruce Hayden (mail):
The problem with suggestions for government holding the line on costs is that it is so darn difficult for government to properly incentivize health providers to accomplish what the government wants - and efforts to do so become progressively more complex, inefficient and expensive.
Doesn't seem hard -- incetivize by outcome.
What you need to always keep in mind is that the people gaming a government system are always much smarter than those who set it up. Even if the people designing the system are the smartest in the world (and they typically aren't), the cumulative intelligence of those gaming it far outstrip that of those creating it.
6.14.2009 3:04pm
cboldt (mail):
-- First, and foremost, because Medicare is mostly not paid for by its recipients (they pass the cost on to the rest of us, both through our Medicare payments, and by cross-subsidization due to their reimbursement levels that are often well below cost), the system has no price signals. --
.
The same is true for insurance recipients in general. I've personally had multiple experiences, telling health care providers that I pay all costs out of pocket, where certain "optional" procedures are removed from the protocol, at no risk to the patient.
.
The more financially successful doctors also own or participate in ownership of diagnostic clinics (imaging, blood work) in order to benefit from ordering procedures. My wife was urged to obtain numerous "optional" imaging procedures during pregnancy. In part, the doctors justify the abundance of caution as necessary in order to cut-off malpractice claims.
.
Anyway, the larger point is that as long as the patient can get the care under some insurance plan, the patient is totally indifferent about the cost. "It's covered" is all they need to hear.
6.14.2009 3:16pm
DerHahn (mail):
Brian K

the point of preventative care in this example would be to prevent diabetes in the first place, thus avoiding the costly long term complications.

Read Buckland's post again.

We're not talking complications from chronic disease, we're talking *simply growing old*. Our bodies wear out, so unless you are going to establish age limits for procedures like heart bypass, stents, joint replacements, cancer treatment, etc, keeping people alive longer will mean that more of these procedures will be desired.

Even a relatively healthy man like my father (never smoked, no chronic health issues) who is still alive at 85+ has obtained prostate cancer treatment, a heart bypass, a hip replacement, and still faces whatever end-of-life care will be required before his death. He would have consumed a lot less health care if he had dropped dead from a heart attack at 65.
6.14.2009 3:33pm
Art Eclectic:
People will do an awful lot of things for money they won't do to save their lives.


This is why HSA accounts work. When you are paying for your own medical care, suddenly there is a big incentive to eat right, exercise and NOT need a bunch of expensive medications and treatments.

Until people start paying for their own health care, there will be no savings realized from any of these programs. People will only care when it is on their dime.

I also want to dispute the notion that prescription drugs are preventive health care. Sorry, but this is crap. NOT needing prescription drugs in the first place is preventative health care. Prescription drugs are exactly what is wrong with the way we approach health care. There are cases where they are necessary, but for the most part they mask symptoms and don't cure a damn thing. Prescription drugs allow people to continue to disregard taking care of themselves because they can just pop a pill. Start making people pay full price for their prescriptions and see how fast they get religion when it comes to exercise and eating right.
6.14.2009 3:53pm
LarryA (mail) (www):
If it would really save money to get patients to eat right, exercise, and give up on vices, you could pay them to do it, with part of the savings.
But it won’t. It isn’t the overweight person who smokes, drinks, and never exercises that cost the most. They die early, before the big expenses kick in. It’s the granola folks who live to be a hundred and five that spend ten or fifteen years in long-term care.
Anyway, the larger point is that as long as the patient can get the care under some insurance plan, the patient is totally indifferent about the cost. "It's covered" is all they need to hear.
Not quite. Your statement is absolutely true if someone else is paying for the insurance. Like the patient’s employer.* If patients could pick out their own plans, and had to write checks to cover them, then there’s an incentive to save. (*Yes, employees ultimately pay in reduced wages, but they don’t directly make payments or pick the plan.)
6.14.2009 3:56pm
Libertarian1 (mail):
Brian K: i figured you would have had the basic intelligence necessary to realize that i was talking about type 2 especially since it is by far more common. and that it is becoming increasingly more common in younger and younger age groups...groups where prevention would have a significant impact.





Not certain the need for such an ad hominem attack.

I know you are aware that many of the diseases you wish to eliminate or at least decrease are to a great extent genetic in origin including Type 2 Diabetes, hypertension, alcoholism etc. We go back to my first question, how do you prevent genetic conditions in a free society?

In addition if you think modifying human nature is going to be easy even by bribe I think you will be disappointed. I still regret my failure to convince my promiscuous gay patients that the penalty they could be facing would be death. Nevertheless I was unable to change their behavior.

I suggest you go to our heartland and tell the 162 pound women and 220 pound men they should diet. Especially now that all health care is free.
6.14.2009 4:03pm
Brian K (mail):
DerHahn

reread my post again.

end of life care is going to be spent no matter what as everyone dies. or do you think that all 65 year olds die of a sudden heart attack and all 85 year olds slowly die for 10-15 years?

What am saying is that preventive medicine can help limit costs before getting to the end of life care. losing a foot to diabetes is unlikely to kill you and with current medical technology is not going to significantly shorten your life but it is very expensive. so why not try to prevent as many amputations as possible?


Our bodies wear out, so unless you are going to establish age limits for procedures like heart bypass, stents, joint replacements, cancer treatment, etc,

and yes, this is exactly what we should do. there are reams of literature saying that past a certain age the risk to benefit ratio of mammographies, prostate surgeries, pap smears (just to name a few) are no longer favorable. no one in our current medical system has the balls to tell patients that a procedure is unnecessary and is more likely to harm them than it is to help them. in fact, physicians are incentivized to tell you the opposite...they don't get paid for procedures they don't perform.
6.14.2009 4:25pm
Bruce Hayden (mail):
Anyway, the larger point is that as long as the patient can get the care under some insurance plan, the patient is totally indifferent about the cost. "It's covered" is all they need to hear.
Let me suggest that this is less so every year. I moved to an HSA this year, with the firm putting in $1,000, that presumably came from money it paid the insurance company for non-HSA employees. Because of the way that the deductibles work, I do have an incentive to not over-utilize.

I think that a lot of even non-HSA non-high deductible plans have moved towards more and more insured participation in paying for health care. I would suggest that it is really only the more "gold plated" health plans, probably like the UAW at Chrysler and GM, or those in Congress, have, that you see almost no shared price vulnerability between insurer and insured.
6.14.2009 4:38pm
EvilDave (mail):
One thing we have learned from the NHS in Britain is ...
the ability to control what someone does in the name of "preventative medicine", which as the sole health care provider the state now has an interest in, is the ability to dictate how everyone will live their lives.

"Eat your vegetables" ... or you lose medical coverage
"Don't eat meat" ... or you lose medical coverage
"Don't smoke" ... or you lose medical coverage
"Don't drink" ... or you lose medical coverage
"Exercise" ... or you lose medical coverage
and so on, and so on.


The paternal responsibility to keep its citizens healthy is a wonderful hook for the totalitarian state.
6.14.2009 4:46pm
Ari Taz:
"Doesn't seem hard -- incetivize by outcome."

Did you even read the rest of what I wrote? Sounds nice in theory but never works (...hard to enough to do it in the private sector). Having government incentivize by outcome for health care is especially "pie in the sky"-ish because it makes the potential upside to innovation much less likely to be actualized, and therefore discourages innovation.
6.14.2009 4:51pm
Buckland:
DerHahn sez:

Brian K

the point of preventative care in this example would be to prevent diabetes in the first place, thus avoiding the costly long term complications.

Read Buckland's post again.

We're not talking complications from chronic disease, we're talking *simply growing old*. Our bodies wear out, so unless you are going to establish age limits for procedures like heart bypass, stents, joint replacements, cancer treatment, etc, keeping people alive longer will mean that more of these procedures will be desired.



Exactly, though DerHahn said it better than I.

From a personal perspective as someone who recently crossed the half century mark, I'm a relatively healthy, slightly overweight white male with well controlled blood pressure only due to my reliance on pharmaceuticals. I will probably spend more on keeping active over the next 30 years or so than would my (non existent) twin that didn't control his blood pressure. I'm more likely to survive long enough to have a rotator cuff surgery (probably in the next 5 years), more likely to need knee replacement due to the slightly expanded waistline, more likely to need expensive cancer treatment since it tends prefer the old folks.

From a medical expense vantage, I could save my family and country medical money by stopping exercise and bp medicine, beginning a smoking habit, and greatly expanding my 1 drink a day habit. But from a personal point of view that's not a particularly enticing option. That's why this debate is so vexing.
6.14.2009 4:54pm
Gabriel McCall (mail):
The economics are unavoidable. Medical care requires resources- labor, capital, etc. On average, nobody can consume more resources in his lifetime than he has produced: this rule can be violated in the short term, but only by consuming wealth that had previously been accumulated and saved by others.

If we try to prolong failing lives indefinitely, and if we're successful at rooting out many of the sudden-death phenomena such as obesity-inspired heart attacks, then we will rapidly reach a point where the average individual consumes more resources in end-of-life care than his entire lifetime economic output. This is simply untenable.

I don't see any sustainable way to handle the question of end-of-life care other than to say that you are entitled to no more care than you can pay for from your own accumulated wealth. For those with productive years still ahead of them, private health-care loans against future earnings would be reasonable. But for those who no longer offer goods or services from which others can benefit, once their own accumulated economic output has been exhausted the only way to provide further care is by depriving others of resources they've earned through their own efforts, and which might otherwise be used to pay for their care.
6.14.2009 7:47pm
vicneo (mail):
Buckland:

"possibly prenatal and early childhood excepted
)

Sorry for a fact check - but prenatal care is one of the most usless interventions to date, no rigorously performed study has ever shown the independant benefit of prenatal care. Prenatal care seekers generally tend to be relatively well off people who do not indulge in the same lifestyle choices that people with no prenatal care often make. Consequently prenatal care is a proxy for a healthy pregnacy rather than the cause of a healthy pregnacy. I think you may want to take this at face value - I practice neonatal- perinatal medicine and have more than a passing interest in the epidemilogical isssues related to pregnacy and beyond.

brian k

the point of preventative care in this example would be to prevent diabetes in the first place,


again sorry about breaking a bubble
type I Diabetes is likely not preventable at least by current technology.
type II: obesity contributes but genetic predispositions are equally if not more important.


We're not talking complications from chronic disease, we're talking *simply growing old*. Our bodies wear out, so unless you are going to establish age limits for procedures like heart bypass, stents, joint replacements, cancer treatment, etc, keeping people alive longer will mean that more of these procedures will be desired.

Exactly- the two biggest drivers of healthcare costs are a population that is living a lot longer than anyone had anticipated and medical innovation. Aging is in some ways unnatural, systems fail. Which brings us to the second leg of the debate- medical innovation constantly keeps taking care of these sysytem failures, albeit in a piecemeal manner- allowing old folks to live longer and more discomfort and disease free lives. But at a cost. So- who wants to euthanize dad and mom ( or yourself) when they hit 70, 75 , 80 - pick a number.
So Brian K - I hope this doesnt happen to you- but put yourself in the situation where you geta cancer that has a 10 % chance of cure and then only with some very very expensive treatments - hundreds of thousands- what are you going to do- spend the money or die. Will there be a difference in your decision tree if a third party is paying the 100,000 or if you have to sell your house to pay for Rx.

There are no easy / ethical/ politically appropriate solutions.

Offhand the solutions that come to my mind are:

1. People need to keep working for a few more years - you cannot retire at 65 (having paid into the system for 30-40 years) and then expect society to fund you for the next 25-30.

2. I am much less comfortable with a state mandated rationing of end of life care, than i am of the implicit rationing that comes when you have to sell your house to buy a chance at an extra 2 years of living. But really this is not an ethically feasible solution either. I just feel that the second option is marginally better.


But it won’t. It isn’t the overweight person who smokes, drinks, and never exercises that cost the most. They die early, before the big expenses kick in. It’s the granola folks who live to be a hundred and five that spend ten or fifteen years in long-term care.



so true

and yes, this is exactly what we should do. there are reams of literature saying that past a certain age the risk to benefit ratio of mammographies, prostate surgeries, pap smears (just to name a few) are no longer favorable. no one in our current medical system has the balls to tell patients that a procedure is unnecessary and is more likely to harm them than it is to help them. in fact, physicians are incentivized to tell you the opposite...they don't get paid for procedures they don't perform.

My 80 year lod mother had a breast cancer picked up on mammography. was treated with a surgical procedure that necessitated an overnight hospitalization. she will take some medication for the rest of her life most likely but she is now 1 year out in the best of health. Why would you want a different outcome.
6.14.2009 8:03pm
Alan P (mail):
Senator McConnell said on Meet the Press today that we should go slow on Health Care in light of the fact that we have the best medical care in the world.

We don't. As noted in the CIA factbook, the US ranks 50th in life expectancy, the figure the CIA describes as being the most significant measure of overall quality of life in a country.

We are the country that spends the most per capita for health care. The latest figures ( World Bank 2002 using figures from around 2000) show the US spending $4,271 per capita per year on health care. The next highest is Switzerland at $3,857. Canada, the system we love to denigrate, spent $1,939 per capita.

Canada is 8th in life expectancy at 81.23 year. Switzerland is 11th at 80.85. US is 50th 78.11.

Can all of the differences be attributed to the quality or efficiency of health care. Of course not. I believe we do have a wonderful healthcare system for some but one which overdoes it terms of providing care beyond what is reasonable or beneficial. Meanwhile, the lack of coverage for 40 million or more certainly drags down life expectancy and drives up the cost for the care that is still provided, covered or not.

The belief that we have the best system in the world as we now stand is just not true.
6.14.2009 8:16pm
Bartemis (mail):
Meanwhile, the lack of coverage for 40 million or more certainly drags down life expectancy and drives up the cost for the care that is still provided, covered or not.

Everyone knows that statistic is bogus. Many of that number choose not to have insurance. Others are transitioning jobs and insurance plans. Still others are illegal aliens. Most of the rest are covered by various state and federal programs.

Canada is 8th in life expectancy at 81.23 year. Switzerland is 11th at 80.85. US is 50th 78.11.

There are many variables which go into overall life expectancy other than available medical care, and these differences are not large in an aggregate measure. When you look at specific measures of controlled variables which are directly affected by available medical care, e.g., cancer survivability, the US is at or near the top.
6.14.2009 9:09pm
John Skookum (mail):
As noted in the CIA factbook, the US ranks 50th in life expectancy, the figure the CIA describes as being the most significant measure of overall quality of life in a country. . .

Meanwhile, the lack of coverage for 40 million or more certainly drags down life expectancy and drives up the cost for the care that is still provided, covered or not. . . .

The belief that we have the best system in the world as we now stand is just not true.


I think other factors besides health insurance (or lack of it) have a great deal to do with our comparatively lower life expectancy.

We have a much more heterogeneous population than practically any other developed nation, with more immigrants bringing their own genetic predispositions and endemic diseases with them.

We have a larger underclass with a more violent way of life than most other developed nations. The low life expectancy in the urban African-American community has as much to do with young men being shot as it does with old men dying a year or two earlier because of diabetes or hypertension.

Our incidence of HIV and alcohol & drug abuse may also play a much greater role here than in some other societies, and I think the medical community vastly overestimates the positive effect it can have in the prevention of such behavior-driven illness, insurance coverage or no.

Socio-cultural and geographic factors are also important, such as the number of people walking and biking in the compact cities of Europe vs. the people who by necessity drive door to door in the sprawling American heartland with its lack of public transport. While this may be a model for us to consider emulating, it's got nothing to do with health insurance.

It should also be noted that the statistics between different countries are not necessarily comparable. The most obvious example is in how stillbirths vs. perinatal deaths are counted. Here in the US we count pretty much any baby delivered after 24 weeks or so as live born and do our best to save it. When we fail, as we frequently do, this knocks down both our infant mortality and overall life expectancy figures. In other countries, obviously non-viable infants are counted as stillborn and do not affect either statistic.

Moreover, even highly developed countries are known to "cook the books" for reasons of national pride or political expediency. Many observers think the crime rates reported by the UK police forces, for example, are laughably lower than the actual real-life incidence.

When such factors are taken into account, the difference between 78 years life expectancy here and 81 years in, say, Japan is down in the statistical noise.

It may prove to be the case that a majority of people wish to extend the privilege of nationalized health care to themselves at our collective expense. But pointing to differences in life expectancy to convince people of the desirability of this course of action seems of tenuous legitimacy at best.

I predict that even if we adopt Canadian or UK style single-payer national health care, any resulting directly-attributable change in life expectancy will be measured in weeks or months rather than years.
6.14.2009 9:38pm
/:
We don't.


First, break it down into States, so the geography and population are somewhat comparable. Then break it down by ethnicity or unusual medical histories (eg, no first-world health care for the first 40 years of life) in whatever ways the medical actuaries say makes the most sense.

After you're done telling me the average doesn't mean what you implied, then you can indict the system for its failures, like allowing people to choose how to live their lives and not being regulated enough to kill the millions that Communism does elsewhere.
6.14.2009 9:40pm
luagha:
As per stats on health care:

You will find that when you factor out per capita automobile accidents and their effects, the US has the best health care in the world.

The problem is that our country has such a size and our automobiles are so prevalent in our society and so critical and convenient in taking us where we need to go that everyone has them and uses them a lot. Do a websearch on it, and I'm sure you will find some interesting links on how that changes the worldwide statistics on health care.
6.14.2009 9:47pm
Brian K (mail):
type I Diabetes is likely not preventable at least by current technology.
type II: obesity contributes but genetic predispositions are equally if not more important.


1) i was talking about type 2 diabetes as i made clear earlier.
2) diabetes is not like some autosomal dominant disease. lifestyle factors do have a major impact. like you said, genes can predispose you to diabetes...they do not give you diabetes. i've seen quite a few people in the FM clinic i was at who have stayed in the prediabetic stage for 10-15 years or returned to normal with lifestyle changes. numerous studies bear this out too.


So Brian K - I hope this doesnt happen to you- but put yourself in the situation where you geta cancer that has a 10 % chance of cure and then only with some very very expensive treatments - hundreds of thousands- what are you going to do- spend the money or die. Will there be a difference in your decision tree if a third party is paying the 100,000 or if you have to sell your house to pay for Rx.

this is no longer preventive care and is not what i was talking about in my previous posts. preventive care in this example would be minimizing risk factors for the cancer before you get it or minimizing complications after you get it.


My 80 year lod mother had a breast cancer picked up on mammography. was treated with a surgical procedure that necessitated an overnight hospitalization. she will take some medication for the rest of her life most likely but she is now 1 year out in the best of health. Why would you want a different outcome.

the plural of anecdote is not data. if you're a neonatologist you should know that. and if someone wants to undergo a procedure knowing the potential risks and benefits i'm not going to tell them no...i'll even do it myself. on the other hand, at some point the government should no longer have to pay for it.
6.14.2009 9:59pm
GatoRat:
What am saying is that preventive medicine can help limit costs before getting to the end of life care.

This sounds great in theory, but well constructed scientific studies haven't found preventive medicine to be all that effective. The problem is we really don't know what to look for beyond a very few things, like smoking (though even smoking isn't nearly as fatal as many people believe.) For example, overweight people are healthier and live longer than any other group. The end result is that preventive medicine largely consists of the medical equivalent of throwing darts at a dart board.

* * *

As for life expectancy; one thing that drives the US numbers down is how we measure infant mortality (if you are born and die, we measure that in the US--not so in many countries [to be counted in many countries, the infant has to be considered viable.])

Another big factor is the dismal health statistics on Indian reservations and lower life expectancy amongst poor blacks.
Once you examine life expectancy by state, the picture quickly changes.
6.14.2009 10:02pm
RPT (mail):
Perhaps Sen McConnell meant:

"Senator McConnell said on Meet the Press today that we should go slow on Health Care in light of the fact that [he has the best government funded] best medical care in the world."
6.14.2009 11:12pm
Bartemis (mail):
"You will find that when you factor out per capita automobile accidents and their effects, the US has the best health care in the world."

I do not know where to find the statistics that would either confirm or deny this assertion. But, it wouldn't surprise me. We lose something like 50K people a year on our highways. And, that's just deaths. We have had one death and two major accidents with permanent injuries in my immediate family alone in the last 30 years. Nationwide, this is almost like replaying the Vietnam War every single year.
6.14.2009 11:18pm
Cato The Elder (mail):
That's pretty interesting actually, Bartemis, that you compared car accidents to the effects of war; I think that means there should be some strong natural selection there. I wonder what's changing.
6.15.2009 12:59am
Andrew J. Lazarus (mail):
Sorry for a fact check - but prenatal care is one of the most usless interventions to date, no rigorously performed study has ever shown the independant benefit of prenatal care. Prenatal care seekers generally tend to be relatively well off people who do not indulge in the same lifestyle choices that people with no prenatal care often make. Consequently prenatal care is a proxy for a healthy pregnacy rather than the cause of a healthy pregnacy. I think you may want to take this at face value - I practice neonatal- perinatal medicine and have more than a passing interest in the epidemilogical isssues related to pregnacy and beyond.
I'm a little shocked that someone who practices neonatal and perinatal medicine misspells 'pregnancy' every time. More to the point, while I realize data is not the plural of anecdote, prenatal ultrasound picked up a defect in my second child. The result was surgery when he was 1½. Without intervention, kidney failure in early adulthood would have been likely. I have little doubt that is much more expensive. Now, we would have paid for ultrasound even if it had been less subsidized by our good insurance. The value in he general case looks clear to me.
6.15.2009 1:13am
anotherpsychdoc (mail):
About 45 years ago, my father told me that 'someone had done a study' and 'if we just made one car,' we could anyone we wanted for $800. I think a median car was about $3000 then. If I recall correctly, the '64 Continental was a pretty nice car. For obvious reasons, we'd probably have transitioned to the '64 Ford Falcon by now in our National Car Assurance Plan. Probably not bad but then the automobile has been a a mature technology for a while. I'd hate it though if they came up with the catch that you couldn't get a new one after '55 as they do in Britain though (for the NHS scheme).

Anyway those life expectancy tables should begin to make the Russians if not exactly proud at least eliminate any lingering worry in the statistics office that the workers are going to be shot for producing valid statistics (as they were in the thirties under Stalin).
6.15.2009 1:28am
rarango (mail):
Re aggregate measures of health care such as life expectancy and infant mortality. From an epi standpoint, gross measures have not much signficance--data has to be disaggregated and compare like groups against like groups; eg, mexican americans versus mexicans to make any valid comparisons; infant mortality stats depend primarily on the correct use of World Health Organization definitions. The more diverse a country is, the more subgroups. Comparisons of diverse nations against homogenous nations is really apples and oranges. Thus the need for disaggregated comparisons. Basic rule of epidemiology: Have compare like numerators and denominators.

Since health outcomes were mentioned as a reward incentive, let me suggest a good measure of the effectiveness of the health care system is to look at survivability rates following medical intervention. 5 year and 10 year rates. These data are available. But since health interventions are in large part ideosyncratic and rely on patients following medical advice--that is something that the doctor cannot enforce.
6.15.2009 9:09am
Trouble (mail):
It's always amusing to see people defend "preventive care" as a cost-containment measure.

The vanBaal study (Netherlands, 2008) demonstrated that healthy-lifestyle people cost the most, because they sink more slowly, consume more resources as they go, and don't die any cheaper. In fact, the healthy-lifestyle crowd was more likely to die from a stroke or some other illness which required long-term care at the end of life.

If you're looking for an excuse to control peoples' lives or raise their insurance premiums, lifestyle modification is a wonderful canard. As a cost-containment measure, not so much.

We had a whole unit on this back in pharmacy school in 1985, and came to the same conclusion, BTW.
6.15.2009 1:20pm
Dan Weber (www):
If preventative care will actually produce savings, there should be evidence of a savings in the many people already covered by HMO's.

Robin Hanson went over this last week. You can check out the graph showing that medical costs stayed flat while HMOs were prominent.

link

Be sure to read the comments for some confounding factors.
6.15.2009 2:59pm

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