Healthy male 47 ... just me ... rates from $369 to $439 a month in one shot.

[ASH]

Re: Healthy male 47 ... just me ... rates from $369 to $439 a month in one shot.

In the 66 years since my grandfather was in the hospital, we've had fantastic innovations that have dramatically reduced the costs of other high-technology goods and services. Take computers, for example. In just the 16 years since I paid $4,000 for a top-of-the-line 66mhz 486 computer with 16 meg of memory in 1994, I can now get a laptop that is a fraction of the size of that tower machine and that is 40 times faster and has 250 times as much memory for less than 25% of the price - and that's without considering inflation.

One thing that must be going on is the difference between cost inflation of traded manufactured goods, versus cost inflation of local services. Your example of the computer, and the particular time span you cite, has benefited from the growth of low-cost overseas manufacturing. Those products and services which aren't traded as easily can't tap into lower labor costs overseas as efficiently (the growth of "medical tourism" notwithstanding), nor can they benefit from the artificial strength of the US dollar for foreign exchange. This isn't the whole picture, but by-and-large, the pattern has been for internationally traded goods to experience low cost inflation, while non-traded goods and services (education, medical care, housing, etc.) have experienced much higher cost inflation. Another ingredient is probably the availability of money to support demand (easy credit for education and housing; employer- and state-funded health insurance; tax write-offs for certain education, housing, and medical expenses). Various regulations which are supposed to protect consumers from malpractice or abuse (e.g. restricting access to prescription drugs; strict licensing standards for medical care providers) also raise costs by necessitating that specially certified workers provide healthcare-related services. Another factor that is often cited is the expense of providing medical intervention at any cost, based upon how medical care is funded, as opposed to a cost-vs-benefit analysis. I think some pretty complete discussions of the cost issues were posted on iTulip about the time of the debate over the national healthcare bill. I'm not an expert; I think c1ue and several others had a lot of insight into the nature of the problem.

[sunskyfan]

Re: Healthy male 47 ... just me ... rates from $369 to $439 a month in one shot.

I also think we correlate complexity with capability. This might work for an airplane measured against a specific metric such as speed but it doesn't work for systems. Complexity brings increased risk. Seems like a race condition. In a situation like health care we spend money to increase capability, we then spend money to reduce risk, we then spend money to cope with the failure or realized risk and look to technology to cope with the failure which increases complexity and on an on ...

[Mn_Mark]

Re: Healthy male 47 ... just me ... rates from $369 to $439 a month in one shot.

One thing that must be going on is the difference between cost inflation of traded manufactured goods, versus cost inflation of local services. Your example of the computer, and the particular time span you cite, has benefited from the growth of low-cost overseas manufacturing. Those products and services which aren't traded as easily can't tap into lower labor costs overseas as efficiently (the growth of "medical tourism" notwithstanding), nor can they benefit from the artificial strength of the US dollar for foreign exchange. This isn't the whole picture, but by-and-large, the pattern has been for internationally traded goods to experience low cost inflation, while non-traded goods and services (education, medical care, housing, etc.) have experienced much higher cost inflation. Another ingredient is probably the availability of money to support demand (easy credit for education and housing; employer- and state-funded health insurance; tax write-offs for certain education, housing, and medical expenses). Various regulations which are supposed to protect consumers from malpractice or abuse (e.g. restricting access to prescription drugs; strict licensing standards for medical care providers) also raise costs by necessitating that specially certified workers provide healthcare-related services. Another factor that is often cited is the expense of providing medical intervention at any cost, based upon how medical care is funded, as opposed to a cost-vs-benefit analysis. I think some pretty complete discussions of the cost issues were posted on iTulip about the time of the debate over the national healthcare bill. I'm not an expert; I think c1ue and several others had a lot of insight into the nature of the problem.

Yes, it seems true that the health care industry can't tap into the cheap overseas wages as easily as the computer industry (though you would think they could for production of medical equipment and supplies, if not labor).

But have the wage costs of other local services increased as much as the wage costs of the health care industry? We're talking about something on the order of a 30-fold increase in the real cost of a stay in the hospital for a surgery. That is astounding - 30 times as expensive as in 1944! Plumbers, roofers, waitresses, and other service personnel are, I think, making something like twice what they made just after WWII - nothing like 30 times as much. How come so much more for medical service workers?

As you point out, it may be more expensive to become a health care service worker now (in real terms) than it was in 1944. But surely not 30 times as expensive.

So I don't think the advantages of cheap overseas labor for manufactured products compared to services explains very much of the 30-fold real increase in the price.

I'm not sure about the "expense of medical intervention at any cost" explanation. Are things really any different in that respect from 1944? I pay for the insurance to cover my medical care expenses, just as I pay for auto insurance and homeowner insurance. Why haven't the real costs of auto and homeowner insurance gone up by a factor of 30?

My guess is that it's the combination of huge lawsuit awards driving up malpractice insurance costs and the availability of money to support demand (government subsidies). To my mind, it is crystal clear that college educations now cost many tens of thousands of dollars instead of the several thousand that mine cost in the early 1980s because the government has provided vast pools of money for the purpose and the colleges have soaked that up. When I ask myself what happened in the medical field between 1944 and now along those lines, the obvious answer is: Medicare and Medicaid. Provide "free" government payment for a service and the cost of the service will skyrocket.

It looks to me like our path is towards a centrally-planned government healthcare system in this country, with the federal government paying the cost of services that will be rationed and will gradually drop in quality. And people will say, as they do with public education, "well if the government didn't pay for it, nobody but the very rich could afford medical care!"

Which, as the invoices I posted prove, is not true. It should not be allowed to drop down the memory hole that in 1944 a working man like my grandfather could have a surgery and stay in the hospital for 12 days for the cost of about a week and half's wages. No insurance was needed for catastrophic medical costs because the costs of medical procedures were not catastrophically high.

[c1ue]

Re: Healthy male 47 ... just me ... rates from $369 to $439 a month in one shot.

What has been so skewing the normal free-market incentives to lower price and improve quality in the health care marketplace?

If we don't answer that first, how can we possibly come up with policies that will actually fix healthcare?

I think the best explanation is this:

* runaway malpractice awards driving up doctors' insurance premiums (the health care bill does nothing to address this)

* "free" government healthcare provided to a huge number of people who did not get it in 1944, allowing health care providers to massively increase what they charge. Just like free government money for college has driven the cost of a college education through the roof since the 1970s before the big government student loan programs got started.

I think some pretty complete discussions of the cost issues were posted on iTulip about the time of the debate over the national healthcare bill. I'm not an expert; I think c1ue and several others had a lot of insight into the nature of the problem.

Check out the update to the Health Care Anecdote thread I posted in Reports from the Front to see how a hospital stay in Australia compares with an OR visit in the US.

Obviously this is just a snapshot, but it seems to me that it reveals one core aspect of the problem:

the monopoly nature of hospitals

Unlike doctors/nurses/equipment, an operating room and hospital bed aren't easily portable. Secondly the equipment in the OR is equally very capital intensive.

The question therefore is this: irrespective of whether the medical practitioners and/or medical supplies are nationalized (i.e. work directly for government/are directly bought by government), is it possible to have certain capital intensive portions of health care like hospitals/ORs be nationalized - or more correctly provided/controlled/paid for like utilities?

How is a hospital (building, real estate, equipment) different than an army regiment? Or an electricity generating plant? Or a dam?

To me, actuarially it seems there should not be a major difference.

As the anecdote shows: the cost of my overnight hospital stay in Sydney was 1400%+ less than my 5 hour total hospital visit in SF. There was actually no cost difference to staying overnight or "just visiting" the Sydney Eye Hospital - one of the premier eye surgery centers in the New South Wales part of Australia.

To be fair I don't think that the capital expense issue is the primary one - but I do think the monopoly nature of an OR means that it is used as a profit center to subsidize other parts of the hospital as a corporation.

In turn this points a finger directly at the insurance companies: as mentioned previously in the Atlantic article posted on iTulip, the 2 health care insurance company employees per doctor in the US thus constitute the other side of an arms race between health care providers (hospitals as corporations in this case) vs. health insurance adjustors with the consumer as the loser.

As I've mentioned many times before: the only way to break this logjam is to have a government sponsored public option both on the actuarial side as well as the health care provision side.

But this recent experience makes me wonder if in fact there might be some benefits to carving out specific segments of health care provision - specifically hospital ORs/equipment - as public utilities.

Another anecdote - and something you'll possibly NEVER see in the US until a change is made: I saw a number of advertisements where the local governments were offering free goodies for Australians to visit their clinics for checkups.

Begging people to use health care.

Imagine that.

[oddlots]

Re: Healthy male 47 ... just me ... rates from $369 to $439 a month in one shot.

Perspective is a funny thing. (BTW it's called a gastroscopy)

In Canada about 50% of the taxes you pay now go into our "free" healthcare system. For easy math - on a $100K salary you'd be paying roughly $20-25K into healthcare every year.

I'd rather have either of the deals above

Not me. I am with the majority of Canadians who identify public healthcare as one of the fundamental values of the country. All things considered, I am very happy with the health care available to my family. (Disclosure: I live in a major population centre.) Ditto public education. My only question is why Germany and France are so much our superiors on the health-care front. (We are just above the US in the "standings" as I understand it, a poor result all told. But I don't see this as an argument for the US model in the least. How could it be?)

I always liked Hudson's comment: "The one choice you aren't given is higher taxes / lower asset prices / better services versus lower taxes / higher asset prices / worsening services." (Very paraphrased.) The "worsening" in services really comes to the fore with the debt overhang that is the inevitable outcome of the asset price bubbles. (The only really "good" news in choice number 2.) Sound familiar?

The argument for privatisation of services - i.e., the private sector is always most efficient - has surely had its day, no?

If you still disagree, consider this: investment is ultimately a conversation between generations. We are at the point of having that nasty conversation about inheritance that is going to be very humiliating to the baby boomers (i.e., the "elders.") In such a context, given the extreme stresses involved, I don't think the proposition that the obvious revenue streams that might alleviate the public (read tax) burden should be sold off to the stock-holders of private corporations will go down to well.

But maybe I have too much faith in people's common sense.

[Fiat Currency]

Re: Healthy male 47 ... just me ... rates from $369 to $439 a month in one shot.

Not me. I am with the majority of Canadians who identify public healthcare as one of the fundamental values of the country. All things considered, I am very happy with the health care available to my family. (Disclosure: I live in a major population centre.) Ditto public education. My only question is why Germany and France are so much our superiors on the health-care front. (We are just above the US in the "standings" as I understand it, a poor result all told. But I don't see this as an argument for the US model in the least. How could it be?)

I didn't say it couldn't be a core National value. I'm not overly dissatisfied with the service, I'm not happy with the cost vs. the service level - which is what you highlight with France/Germany.

The argument for privatisation of services - i.e., the private sector is always most efficient - has surely had its day, no?

I didn't argue for a US system. France has the mixed model and as you highlighted - delivers a better service at a better cost.

But maybe I have too much faith in people's common sense.

Unfortunately, as I age, that nerve ending gets more cauterized by the day

[oddlots]

Re: Healthy male 47 ... just me ... rates from $369 to $439 a month in one shot.

Errrr... if we agree on these things then what was the point of your original post? Surely by saying you are envious of the choices down south you are extolling the model. Or are we to take this as an arch reference to the French "mixed" model that you now favour over the Canadian, prompted by myself as you admit? Perhaps you could explain the volte-face? What you were really saying was that everyone should look to France? If so I demand a foot-note.

[Fiat Currency]

Re: Healthy male 47 ... just me ... rates from $369 to $439 a month in one shot.

Errrr... if we agree on these things then what was the point of your original post? Surely by saying you are envious of the choices down south you are extolling the model. Or are we to take this as an arch reference to the French "mixed" model that you now favour over the Canadian, prompted by myself as you admit? Perhaps you could explain the volte-face? What you were really saying was that everyone should look to France? If so I demand a foot-note.

Sorry. I thought I was being clear. No volte-face.

1) In Canada we are taxed way higher than the USA
2) A lot of people in Canada think Healthcare is "free"
3) In my view - all the rates cited above are in line, or lower than our cost structure
4) Healthcare eats a huge portion of our Tax base and it continues to increase
5) The service level - for the price - is out of whack
6) Americans have choices for Healthcare
7) France (since you had brought it up) delivers better service at a lower price

So - by example. Let's say I needed an operation and there is an 18 month waiting time. This has happened to friends of mine. Your choice is to wait - or go elsewhere and pay. I know several people who went elsewhere to pay - so something's wrong. You are taxed way higher - but have no choice in how your dollars are spent, and you can be told to wait. The consumer/payer is held hostage by the Gov't, and they are essentially denied a service that they have already paid for. I favour choice in my consumer purchases. It seems criminal to me that I cannot use my hard-earned after-tax dollars to buy a medical procedure in my birth country. Freedom, eh?

Most Americans would not realize that our "free" Healthcare does not include prescription drugs (without an employer plan you'll pay 100% and most likely 20% with a plan), most dental procedures are so expensive that you'll pay 20-50% of them, Orthodontics are often not covered well by employer's plans, eye-exams are not covered in several Provinces etc. To be fair, we are probably better off for people with chronic illnesses.

I'm not qualified to say which model works best. What I do know - is that there is much to study and learn about better delivery models around the world - but we never seem to learn from them. I am tired of my Gov't taking my money and denying me services I've paid for - that goes for Healthcare as equally as it does to not getting the snow on my street plowed in the Winter.