universal healthcare

[kandrathe]

The RAND experiment is fascinating, but it seems to show two things that I think are important, and one that I think is obvious. The obvious one is that making people pay directly for their health care decreases use. No kidding. I definitely want my money, no matter what, and I'm sad to lose it.

That is all I'm asking for. Some personal investment in every health care decision, even if it is just a fraction of every cost with some significant deductible (even as low as $3000 per person per year).

What is different is that the commodity itself is not an *incentive*. I only want heart surgery if I have a heart problem. If I don't have that, you can promise me the a thousand of the best-quality heart surgeries in the world, and I won't take any of them. Equally, I don't want insulin, I don't want antidepressants, I don't want a hip replacement, I don't want an MRI, and I definitely don't want a hospital bed. Anyone who does want these things without medical need should be strongly discouraged from "purchasing" them, no matter what the system.

I agree with you. However, for those that do consume, if you are offered option A for $1000 per month, versus option B for $100 per month for a chronic condition you might not care which one if your cost for the more expensive option is $120 per year, as opposed to hitting the deductible cap of $3000. Currently, our insurance system drives the costs of all goods and services down to a small fraction of the true price, where the consumer behavior is skewed. If I'm offered a Cadillac for the price of a Yugo, I'll take the Cadillac every time.

The non-obvious things are: when the price incentive was included, both non-necessary *and necessary* treatment went down. That is to say, people were opting out of important treatment to save money. While in superlibertarianland this is an unmitigated good (people get to choose - their money or their life!), for the rest of us, that means crappier health care.

In superlibertarianland it's this thing I like to call personal responsibility. If you want to drive a motor cycle without a helmet, then I will have less sympathy when your brains are being scooped up off the interstate. No matter how hard you try, you will not be able to legislate away stupidity. Even if we were to all be locked up in rubber padded cells with restraints, some adrenaline junky would figure out how to hurt themselves. Are we going to ban 3 wheelers, big macs, salt, sky diving, speed boats, hockey, snowmobiles, ski racing, surfing, shark diving, para-sailing, hang gliders, rock climbing, spelunking, hunting, mountain climbing, trans fats, ladders, icy sidewalks, sports cars, sun tanning, and listening to radios while bathing? One of the thrills of living is getting very close to dying, and unfortunately some of these dare devils end up permanently damaged, but not dead. Also, until we perfect immortality (which will have other social consequences), we are all chronically doomed to die, and usually our waning years are expensive. Should we trade our freedom of choice for the security of health care on demand?

People aren't good judges of their medical needs, and delay costly examinations and treatment when they shouldn't, resulting in worse, and often less economically efficient, outcomes. What could have been treated with a bottle of pills or a minor surgery today, takes expensive medical firepower tomorrow.

Nothing says "nanny state" more than this last statement. You are offering a world where the government will ensure (by force of law and penalty) that I will be healthy. I agree that many (perhaps most) people do not have much common sense. Perhaps you might be correct that many (some) people will not make the best decisions regarding their health maintenance(but, I can't see how it could get worse). I don't believe that enforcing common sense is a role for our government. This is supposedly done under the guise of compassion for others, which I fear is really a selfish concern for limiting the costs of stupidity incurred by the society as a whole.

I do see a role for government in preventing us from harming others, but if we harm ourselves due to our own lack of common sense, then it should be our own burden. It is the grim reality of Darwin's survival of the fittest expressed into our modern society. Actions have consequences, and to remove them will be to actually encourage the unhealthy behaviors.

As the report says: <blockquote>"On the other hand, the HIE showed that cost sharing can be a blunt tool. It reduced both needed and unneeded health services. Indeed, subsequent RAND work on appropriateness of care found that economic incentives by themselves do not improve appropriateness of care or lead to clinically sensible reductions in service use."</blockquote>

I agree with this as well. I would separate our plans for illness from our plans for health maintenance. Illness can be insured, and works well with actuarial risk. Everyone needs health maintenance, and it should be in your own self interest to become as healthy as is possible. Thus, encouraging the consumer behaviors that will lead to health, such as eating correctly, exercising, and seeing your doctor and dentist for preventive maintenance. So, the product for health maintenance should be a prepaid health plan, where you buy limited access for illness prevention.

Second, once a patient entered into the system for treatment, their costs were about the same. That means that people are not weighing whether or not to get procedures. They're weighing whether or not to see a doctor at all. In addition to the serious problems with self-diagnosis, this does not get at the fundamental cause of health care cost increases. To quote the report again: <blockquote>"In addition, cost sharing may not address the principal causes of cost growth. Cost sharing cuts expenditures by reducing visits but has little effect on the cost of treatment once care is sought. If, as is widely believed, cost increases are driven by treatment expense and new technologies, cost sharing can contribute to reducing costs at each point in time but may have little effect on the overall rate of cost growth."</blockquote>Amen. The problem is that health care is getting more and more expensive, per person, per treatment, per anything. THAT is what needs solving.

Again, I agree. But again, moving to simple economics we know that this is a supply and demand problem, and that the price of a good or service is set by the amount of money that the consumer is willing to pay. Employers typically pay around 60% of the direct costs for the insurance plan, and the employee has the 40% taken from payroll deductions. This is the first way in which costs are masked. I only see the $200 per month missing from my paycheck (whether I consume health care or not).

Second, it's a group plan, so most of us are paying for the consumption of a few chronically, critically ill people. When I end up getting cancer or heart disease, (the leading causes of death), it will be my turn to consume more resources than I (plus my employer) ever contributed into the plan. That is again if... I don't first qualify for Medicare, where the over consumption of resources by a growing number of boomers will be financed by taxing the shrinking pool of income earners. I would direct you to look at the history of cost in the US health care market before and after government intervention in 1965. (source: wpri.org) (source: CBO) From these sources I glean two import important facts; 1) personal contribution to your own health care has steadily decreased since 1970, and 2) from the CBO, innovation and technology have contributed up to 65% of the increase in health care costs.

One answer, which I reject, is the collectivist answer which is to have government take over all health care and remove it from the private economy. They can then determine who needs it and who does not, who will live and who will die. They can set the prices, wages, and set up the limited number of queues for a limited number of services.

I think we are smart enough to determine how a private sector, free market version of health care, health insurance, and health maintenance can be structured which will allow the market to set price.