Friday, August 07, 2009

Thoughts on Health Care

I'm home, but still on vacation officially; doing a little business today, not much.

We're all talking about health care, and the legislation about it, here are my thoughts:

Why does health care cost so much?

1. It costs a lot because you get a lot. We not only get the best in health care in this country--better than anywhere else--we get the best anyone has ever gotten. It's so amazingly good and it's getting better at an amazing rate--and yet we've gotten so accustomed to that we forget what a wonder it is.

This part of the "problem"--is it really a problem? Every day it seems a new drug or procedure comes out that saves lives; medical advances that simply did not exist not too long ago. What's a "fair price" for something like that? How much did it cost to come up with it? If those who came up with it (and spent a lot on other avenues that didn't bear out--and thus netted little or no return on investment) don't recoup all their costs and then some, what will fund the next advance?

How much do we spend? In this article (biretta-tip to Instapundit) in Popular Mechanics--nothing against Popular Mechanics, but why isn't this sort of discussion happening elsewhere? All we seem to see on the networks is repeating talking points, either from the White House or the opposition. In that article, medical innovator Dean Kamen says we spend $260 billion a year on all pharmaceuticals: "That means all those vaccinations to prevent diseases, all those pills to treat diseases, all those pills to cure them so we don't have to treat them anymore. We spent in all branches of all our pharmaceutical suppliers, $260 billion."

By comparison, on tobacco? $88 billion; alcohol: $90 billion; soft drinks: $121 billion; professional sports: $409 billion.

So are we really spending "too much" on lifesaving technology? And the vast majority of Americans are getting the drugs and vaccinations and procedures they need.


2. It costs more than it should because of lawsuits.

Because of the threat of lawsuits, there is an uncertainty factor built into the cost of almost everything we buy and use. The more uncertain you are about possible, unforeseen liability, or even allegations of the same, the more you must pay in insurance to cover that. Medical malpractice insurance is very expensive. We have lawyers advertising nationwide, with 1-800 numbers, soliciting clients to sue over any and all medical conditions--and if you don't know you have a medical problem that can net you money, the lawyers are helpful enough to suggest them for you, in the ads. We have this advertising all over TV, and you're telling me there's no need to address the lawsuit lottery?

3. It costs more because someone else pays.

If you own a home, you get a bill every month for electricity. What do you do? You look at the bill and see if it's what you expect. If it goes up significantly, you try to find out: was there an increase in rates? Was your killowatt usage up significantly? Why? A heat wave? Too many gadgets and lights left on? If you want to cut your electricity bill, you find ways to do it, even turning your a/c a bit higher, and turning on fans.

Imagine, now, that you had "electricity insurance," and all the bills for your whole neighborhood went to the insurance provider; and then you and all your neighbors got a monthly bill for your "premium." Do you really think that would save you money? When the monthly "premium" began to mount, what would you do? You know that if you turned off your a/c entirely, and turned off the lights and sat in the dark, you'd save at best a little, likely too little to notice. Why? Because only if all your neighbors did the same, would it have a significant effect. Maybe if the government policed everyone's electricity usage--only that means hiring inspectors and administrators...

In fact, what happens now is even worse than this; imagine, instead, the bill for the premium wasn't even sent to you; it was sent to your employer. You never saw it, you only knew, generally, that it was going up. Gee, too bad for the employer--now back to the game.

This is how we do health insurance. And we have other constraints, built in, that are driven by desirable social outcomes, but which work against cost-control. Insurance companies can't price their rates based on whether you are male or female, even though they know one sex costs more to insure than the other. Imagine if automobile insurance were handled that way, but it's not.

My point is not to say we shouldn't have health insurance; or that health insurance shouldn't be handled differently from auto insurance; but that if we want to bring down costs, we might look at ways to have the user have a more personal stake in cost-control. Otherwise, it has to be down top-down, and that is not a terribly good way to do it and it inevitably leads to...

Rationing. As far as I can see, that is the only way this massive proposal President Obama, Congress, and the interest groups are all talking about, can meaningfully reduce costs. Because as far as I know, their proposal isn't addressing causes 2 and 3, above; therefore it can only reduce costs of care by giving less care.

I know, the President and his allies say they can wring out "waste, fraud and abuse." Hahaha. The government spends between $3-4 trillion a year; if that's all it takes, why can't the President and Congress come up with significant savings in the operation they, themselves, are responsible for? How is that working out?

Rationing means more people will suffer and it will mean more older people will die sooner. This is the sound basis for what the Administration's apologists in the media are deriding as "myth" and unfounded rumor. Is there any question that end-of-life care is extraordinarily expensive? And there's no question, many times they are doing too much. Why? Remember the lawyers? What the doctors and hospitals spend on extra care that has marginal value is cheaper than what they'll spend when the grieving relatives sue because they callously didn't do enough for grandma. That's what's at work with all those unnecessary tests President Obama lamented, rightly; he needs to talk to his trial-lawyer allies about that one.

But given the march toward euthanasia already, the extension of government micromanagement over the entire health care system is a recipe for a lot more of it, quietly and behind the scenes. How long before drugs that hasten death are deemed "treatment" because the patient chooses it? Of course, such choices can be..."encouraged"... That "choice" will certainly be cheaper, vastly so.

What about abortion?

This is the point that is now getting more mention; it's obvious the President's pro-abortion allies will insist on it, in the name of "choice." The pro-abortion faction isn't talking about it, and won't, until and unless there is a move to remove that from any eventual legislation. The prolife forces are talking about it, but it won't become a major thing until the legislation gets a little further along. It's coming, have no doubt of that.

So what's my answer?

As indicated, the lawsuit lottery and the problems inherent in billing a third-party have to be addressed; that would help. I suspect some legal reform would make a modest improvement, where the bigger savings would come from having actual users of health care pay more directly.

How? I'm sure others can think of better ideas, but it seems to me you continue to have users pay copays, you have users pay the more ordinary costs out of pocket, keeping "insurance" for the really big-ticket items. These things are happening now, but they aren't across-the-board. I've thought that health insurance might be better if it were more like life insurance: you build up equity over time. If it were portable, that might be worthwhile; that means changing the tax laws so tax benefits go to the individual, rather than his or her employer, as is the case now.

But as the article I linked above points out, paying more to get miracles is hardly a "crisis"; and in any case, the answer is an economy that is growing robustly and generating lots of good jobs. If real wealth goes up, we can afford more such miracles.

Our economy isn't growing, and the sorts of things President Obama has advocated have never been known to foster robust growth. Someone will accuse me of being partisan, but one can point to both Reagan (R) and Clinton (D) as periods of strong economic growth; that sort of growth would serve us well today. Unfortunately, Bush and (thus far) Obama have pursued policies that are weighing down the economy, and worse, creating uncertainty for investors.

What about the uninsured?

Well, my guess is that all those who are uninsured are uninsured for different reasons: many because of no work, or they work in jobs that don't provide health insurance. Again, a stronger economy, with more jobs, is key here; on the other hand, how can we provide folks insurance, at someone else's expense, in our present situation? Speaking most broadly, if you need to buy something you don't have, and can't presently afford, you need more wealth. That's where we are: we need the wealth of our entire society and economy to increase, and we'll be better able to afford more health insurance.

Supposedly, many who are uninsured are so by choice: they are young and healthy and figure it's worth the risk. I don't know if the facts bear that out, but it's likely to be true. I didn't care much about health insurance in my teens and 20s, and to the present, my health is great, so everyone else is getting his or her health care paid for by the premiums paid in my behalf.

I suppose one could enact a law, similar to what we do with automobile liability: if you drive, you must have proof of insurance or liability protection, so that in the event you cause harm, you can pay. But where I'd like to know more is real, carefully examined data on just how much such uninsured people actually "cost the system"--we're told this accounts for lots of built-in costs.

But is that actually true? Inquiring minds want to know. I have a suspicion it's less than is usually thought, because while individual stories are memorable, of someone with no insurance getting into an accident, or needing a life-saving operation, costing a fortune, I also suspect that simply doesn't happen frequently enough to represent that large a share of overall costs.

I'm sure there's more to say: now it's your turn.

10 comments:

Greta said...

Anytime you are dealing with 1/6th of the economy, answers are never simple. Having spent 40 years in healthcare, I will say that our biggest issue is how it all started and continued to evolve over time. Father has hit very key points, but to fix it, you have to go back to the very basic one point and that is we all need to have our own healthcare insurance and it seems reasonable that this would start with a test run of all those in congress, their staffs, and all federal workers. Let them devise a system of care that will work effectively for all of us and after clearly demonstrating it working well, begin to expand the opportunity for the uninsured to buy in cheaply. From my expereience with friends who are on these plans, there does not seem to be a twice that they do not get care for or any form of illness that the most expensive care is refused. Medicare or other federal programs are not anywhere close in benefits and the amount paid in is often higher. However, the real danger to the reform is the shortage of primary care doctors. Over years, with Medicare setting standards, there has been a clear move to reward the specialist much better and to pay for the things that Obama hits on, but does not fix. If we have more with insurance and seeking doctors, and doctors refusing to take patients whose payments are less than their costs (something every other successful business must do to survive)there is going to be a major crisis and our costs as a result will explode.

marleythedog said...

Father, this is one of the most intelligent commentaries I've heard about the healthcare debate so far. My biggest additional thoughts are that Americans have lost touch with the purpose of health insurance, and that maybe these new-fangled expensive modern advances in medicine don't have to be used all the time.

I recently visited an exhibit in Cincinnati about Catholic sisters in America, and was interested to discover that sisters developed one of the earliest forms of health insurance. For a few dollars a year, you received a voucher that covered the cost of your care in the case of a personal medical catastrophe. Health insurance was designed -- like life, auto, or house insurance -- to be a supplement in the case of catastrophe. Now, my medical insurance chips in toward physical exams, teeth cleanings at the dentist, tune-ups at the chiropractor to keep my back limber, et cetera. None of those things are catastrophes, just preventative maintenance, a sort of personal "investment".

But I can't afford to pay for these things outright; as long as millions are abusing insurance, the need for malpractice protection exists, and hospitals have to compensate for people who can't afford health care, the administrative overhead in "paying your own darned bill" will make it too expensive. Single-payer advocates make a point in stating that it increases overhead when a hospital has to bill and fight with numerous insurance companies followed by collection from patients of whatever the insurance won't pay -- but the phone, electric, credit card, and every other bill comes straight to me, and I pay it. And it works. For doctors offices -- no catastrophic services, just routine procedures -- this cuts out insurance assessment completely. For hospitals -- ERs, ICUs, other severe matters -- this cuts insurance claims down to maybe a few hundred per week, certainly less chaotic than tens of thousands otherwise.* And it doesn't involve the government paying for the same broken system.

My second point is that while there have been some great advances in modern medicine, in many cases we've had prior treatments that worked reasonably, if not as quickly or thoroughly, and maybe to get health care costs down, we need to have "tiered" health care options. Get the flu? If you can afford it, you get the FluKiller3000 injection and feel great in 24 hours. If you can't, you get an affordable, century-old remedy that doesn't really relieve your misery and leaves you bedridden for a week but does keep you from dying or suffering long-term damage. It falls in line with Catholic Social Justice in that you take reasonable care to heal the sick; nowhere in CST does it say you have to use the latest and greatest all the time, though some use it as their argument that we're all entitled to the most sophisticated healthcare possible at a government-subsidized cost.

The fact is, medical technology and medicine are goods produced by innovators and entrepreneurs. If we want good medicine to continue, we must have policies that foster protection of and incentive for entrepreneurialship. And, like cars, new TVs, homes, and any other good, there will always be some product of acceptable quality that is within the reach of anyone who bothers to seek out a source of income, and that more sophisticated option that a lot of people will have to really work at to afford. If it's an emergency, you have insurance so that you don't have to refinance after a heart attack. Do you want the Feds to take over an industry that's not really flawed except in how people use it?

* 98% of statistics are made up on the spot. No exception here.

Anonymous said...

Father, an excellent discussion.

May I add a couple of little things that few think about but which are a terrible drain on national healthcare expense over time?

One is, in the past two weeks I've seen reports in the media about several procedures which have been medically declared useless or yielding results only via the placebo effect. One example was spinal fusion and the other was knee arthroscopy. These are extremely common procedures so their costs add up over time. I am sure there are many, many more.

Another fundwaster would be giant medical institutions built to look impressive. What patient is benefited by 100 ft tall atria that cost a fortune to maintain,illuminate, heat, clean, etc? Same goes for glitzy landscaping. It's nice but it's very expensive to keep up and does not help patients.

A third concerns personal responsibility and self-injury.
Why are people not discouraged from participation in extreme sports, use of motorcycles on interstate highways, use of distractions like eating and cellphoning while driving? Fat people ate generally the poster people for self-induced ill health but there are plenty of other guilty parties out there doing risky stuff that all too often ends up with a lifetime of draining medical treatment & maintenance, to say nothing of their own suffering. I won't even go into the effects of drugs, drinking,and STDs.

Why not work harder at educating people about a healthier lifestyle, so they can make better choices and prevent at least some illness and injury?

Finally, why can't hospitals maintain more no-frills primary care walk-in clinics to deflect ER traffic for simple matters like colds and sprains, and reserve the ER for real emergencies?

Just a few random thoughts. I don't have solutions for the overall picture, but just a little practicality would be a useful bandaid.

I agree we have excellent healthcare and medical research going on in this country. But we ALL need to pitch in to try to control some of the waste, redundancy, and misdirection practiced today.

Annie

PS and off-topic. . .there is a popular book called The Shack and in the latest mailing from Maria Stein Retreat Center it is reviewed in glowing terms. I myself have no idea what this book is all about as I haven't read it but would be curious to know your opinion whenever you get around to it.

Afro Seminarian said...

Fr. Who are we trying to protect here. The insureance companies? There are no easy answers in this debate, however, the first person that should be part of the debate is the consumer.
Just talk to people that have insurance, and see how well they have been taken care of.
Get sick, and we will see how far the insurance will go out of thier way to not pay.
We can talk about alot of things in this debate hwoever, what we do know is that the "current system" is not working;Let me correct myself, the current system is working..... for the Insurance companies.

Greta said...

Few really understand the negative impact that the government has on healthcare today. It comes in many forms from regulations and mandates to the support of the trial lawyers. Each year a new 1000 plus pages are produced that change reimbursment for thousands of procedures. Most insurance companies utilize this government set up of conditions and charges to establish how they handle these conditions. The government often has prohibitied insurance companies from offering various plans that cross state lines that would allow companies to form insurance pools that could lower costs.

Now the government is proposing a new Fannie Med which will create a Fannie and Freddie type of organization with special funding and rules that would allow it to drive insurance companies under. They will not mandate you have to switch but the end will be the same. And when all that is left to us is FannieMed, we will see the same mess that Fannie and Freddie caused to our national economy. Lets get government out of healthcare to stop the diagnosis from grave moving to fatal. If the democrats do not end their dream of government run healthcare and taking over 1/6th of the economy along with their takeover of auto and energy, we will soon have a total socialist state.

TerryC said...

Father, one of the best statements on the health care debate I've seen.
I agree with Greta that we need to back to the beginning, but the beginning isn't 40 years ago and it didn't start on these shores.
Hospitals in their present form were created by the great Byzantine religious orders and migrated to Europe. They were staffed by nuns and monks and their purpose was not to create profit.
Care of the sick is one of the Corporal Works of Mercy (unless one thinks that to "visit" doesn't include care.) It is a duty imposed upon us by virtue of our call to Christianity. We will never solve the "Health Care problem" until we realize that there is something fundamentally wrong with treating care of the sick as a revenue stream.
With so many Catholic hospitals in the United States no one should be without health care, because no one should be turned away from a Catholic hospital because they cannot pay. But if you look at the books of most Catholic hospitals you would see little to distinguish them from their secular counterparts.
That is way I fear that all that will happen if abortion become a mandatory procedure for a hospital is that the boards of directors of Catholic hospitals will simply ignore the bishops (as did Notre Dame) who will then admit they have no real authority of them, as the bishop of South Bend admitted he didn't have over UND.

Greta said...

Terry, putting healthcare into some kind of a charity will never work today. I have worked with the boards of too many hospitals and have seen the costs of operating hospitals today. 50 years in todays technology is like what happened in the previous 2000 years.

Government is the issue and until people really understand that and work to get them out, not in more, the cost will continue to go up.

Today, Obama was critical of the US Postal Service in comparison to Fedex and UPS. He was trying to say that the government could never drive the insurance companies out. It depends on who makes the rules. There is no doubt in my mind that the democrats want to control peoples lives and healthcare has been a 60 year old dream. That is not to say the republicans have done the best job in improving the situation when they had power, but I will say that when they tried to tackle social security, they were demonized not only be democrats, but the media. When they tried to fix fannie and freddie they were stopped. The differences between the parties is that one loves government everything and the other does not in most cases. When republicans try to act and spend like democrats, they do it badly and lose focus.

The big need in healthcare is in information technology done the right way and with the support of the payers and the people. Microsoft and Google are spending over a billion dollars each and they are not doing it for charity reasons to get into the healthcare information arena.

Anonymous said...

This is an interesting debate, some have good points and others are a bit out there. The one lady talks about education and things that up the risk of injuries. However, government isn't the education system of choice. Motorcycles on the interstate? Sorry to interject that there, I just don't see how a type of transportation matters, when it is a smart way to travel, saves on gas. I guess there are some stupid people out there that have given it a bad name, perhaps we should ban trucks, for when they hit, it really does damage.

We do not want big brother coming in telling us what we can and cannot do, if people used common sense we wouldn't be in this mess. I have worked several places and it is amazing talking to people about their families and how often they take their kids to the Doctor, and for what ridiculous things. I honestly think that parents use injuries as a way to spend time with their children and the children complain so much to go to the Doctor in order to gain attention from parents.

My step son, went to the doctor so much when living with his mom and missed so much school it was insane, he began telling people that he was a sick kid. Well, in order to get an excused absent from School you have to have a doctor's slip, so therefore you have to go to the Doctor. A poor way to not lay down the law with your child and make him go to school. He has lived with us for a year and has missed one day during that year, and that was the most boring day of his life, and he didn't try it again.

I heard one parent had their child get an MRI for falling off his bike going very slow, amazingly they didn't find anything wrong, but I am sure the insurance company had to pay a lot for that woman's extreme error in judgment, and crap like that happens all the time.

Maybe there should be tiers, one much higher for stupid people that go to the doctor every week, another for those that use it for extreme cases, and another for those that do preventive things.

I also think that people have become so spoiled over time, and want that magic pill that cures their symptoms that day, instead of using safe and effective homeopathic remedies that allow your body to take care of itself, naturally, without side effects.

AP

Anonymous said...

Father: I can shed some light on two areas you touched upon: gender based rating and health insurance building equity. I don't want to participate in a blog discussion, but if you would like to call me at your convenience I would be glad to give you my perspective.
Your parishoner,
Rich K.

Father Martin Fox said...

Rich:

Thanks, I'll try to catch you sometime and we can talk.

Actually, re-reading my original post, I think I was mistaken on at least one point: the issue of insurance differentiating between men and women. From what I'm reading, that's a proposal now before Congress--i.e., insurance carriers may, indeed, be able to make such distinctions currently.

I suppose some will say it's unfair, and I am not saying insurance companies are paragons of virtue. But I am skeptical of government's motives in this, and ability to make a sound judgment.