2 more: - Add a requirement for doctors to publish their prices for procedures and charge the same price to everybody independent of insurance status. I have a high deductible plan and whenever I ask a doctor about cost I rarely get a straight answer. I am starting to suspect that they are making up their prices based on what they they think a patient can pay. - Publish all available quality numbers. Doctors will complain that they are misleading and confusing but this will be much better than having nothing as we do now. Insurance companies probably have these numbers and all of them should be published IMO.
-- max m, September 9, 2009
COST OF BILLING
If I had been writing that article, I would have emphasized more the high cost of the current billing system.
When I was working in medical computing (the early 1980's), a number people threw around was that every item on a patients bill cost $7 just for the billing. So those $7.50 bandaids people got billed for when they went to the Emergency Room were in fact correctly priced.
I'm sure the number is different now. I would guess higher, for reasons you discuss.
This is related to what your physician reviewers said about how much physician time is spent on billing, but physicians are a small part of the cost of third-party billing.
PATIENTS AS CONSUMERS
One point that nobody seems to make when talking about the idea of patients as consumers is that nobody who actually provides medical services actually has any idea how much they cost the patient. So even if you wanted to have tests done only if they had a reasonable chance of finding something that could be treated at a reasonable cost, you would find it very difficult to find even the cost to you of the proposed test, let alone of theoretical treatments.
-- Laura Conrad, September 9, 2009
i assume you've also seen this Atlantic article by now... many similarities.
I hear many people say that Obama is working against a lot of inertia within the American public on the part of people who are satisfied with their health coverage and think they'll be screwed by their automatic inclusion into an enormous government-run clusterfsck of a system to replace it. These people seem to favour an incremental series of changes to our current system, like covering additional people or reworking the rules so insurance companies can't do scummy things like drop people under false pretence when they get expensive, and making the government prove itself on those before going further.
To address these concerns, I think it's really important to emphasise the amount the average US worker is missing in salary just by passing the cost of their insurance on to their employer. A lot of people pay lip service to the concept and say they take it into account when considering the health care question, but I'm really not sure they're appreciating the gravity of the concept.
Yeah, the government might take some additional cash to get this thing rolling--they aren't known for getting things done on time and under budget, for that matter, and cost overruns come out of the taxpayers pockets. But once this thing is passed, you'll instantly be getting hundreds or even thousands of dollars more from your employer every month, immediately. They'll be giving you most or all of what they're spending on your health insurance without having to pay an additional cent to compensate you. Even if you're taxed on it, that's going to be more than enough to sign yourself up for one of the competitively-priced supplemental plans that insurance companies will certainly begin to offer. Or you can just use the government baseline and spend the rest on airplanes, or vacations, or coke and hookers.
You'll have to put in a little more time each time renewal comes around than you put in considering your auto insurance and shopping around, and you're golden.
Compact Disk should be Compact Disc
$150 million to produce sells on Blu-ray may sell for $9 should be $150 million to produce Blu-ray may sell for $9 on Blu-ray ... also, most movies sell for much more than $9 on Blu-Ray, don't they? I'm sure you could find some low-quality overstocked titles at that price but continuing the analogy to the music industry I could find a copy of Mariah Carey's "Glitter" much cheaper than $18. I just wouldn't really want to
-- Dave Pease, September 9, 2009
Dave: Thanks for the comments. I just checked over at Amazon. On the very first page they are selling a Blu-ray disk of "2001: A Space Odyssey" for $9.99. I believe that it was an expensive productive for its time, 1968, costing $10.5 million at the time.
-- Philip Greenspun, September 9, 2009
The real reason healthcare is expensive is due to the AMA licensing cartel. This restricts the supply of doctors and drives up the price of health insurance.
All you need is a computer and a compiler to write software. So, the supply of software engineers is determined by the free market.
You need a license from the government to work as a doctor. The supply of licenses is not set by the free market, but by Congress. The supply of doctors is restricted, driving up prices.
If I thought "Doctors are overpaid! I'll go work as a doctor!", I have to go to a State-licensed medical school, pay a couple hundred thousand dollars, and take 10+ years. If I get a license, that's just taking one away from someone else.
It's silly to say "The USA free market health care system failed." The USA does not have a free market health care system, due to the AMA licensing cartel.
-- FSK FSK, September 9, 2009
I'm highly skeptical of market solutions to health care, because efficient markets require the participation of well informed rational agents. Beyond basic recommendations (break addictions, exercise, maintain a healthy weight), the general public cannot be sufficiently informed to participate well in a health care market. People who are sick or injured (especially the mentally compromised) do not make optimal choices.
As an example: I should get a colonoscopy in the next couple months; I've no idea what the cost/benefit comparison is between traditional and "virtual" (MRI) colonoscopies, so I'm going to do what my doctor tells me to. Individuals don't have the knowledge or means to appropriately reward or penalize doctors. The incentives for insurance companies are perverse - the faster a sick customer gets dropped or dies, the better for the company. Information about the performance of insurance companies is difficult or impossible to obtain, and they often hold an effective monopoly. At the very least, government needs to be heavily involved as a regulator.
-- Stephen Schaefer, September 10, 2009
There's an interesting article on an alternative payment model in this month's New England Journal of Medicine entitled "Building a Bridge from Fragmentation to Accountability ó The Prometheus Payment Model".
As described by the authors "The model encourages two behaviors that fee for service discourages: collaboration of physicians, hospitals, and other providers involved in a patientís care; and active efforts to reduce avoidable complications of care (and the costs associated with them). It accomplishes these goals by paying for all the care a patient needs over the course of a defined clinical episode or a set period of management of a chronic condition, rather than paying for discrete visits, discharges, or procedures."
Here is the link .
-- Ken Daniszewski, September 13, 2009
Having dealt with the health care system with serious illnesses in myself and both my aging parents I believe that you are underestimating the difficulty of evaluating quality of care.
It is true, as you state, that the incentives currently are skewed in favor of high tech procedures and expensive medications, but once you remove these incentives, you are still left with the problem of defining and delivering quality care.
Most serious medical problems have a technical dimension, a psychological dimension, and a cultural dimension and its difficult to evaluate care on all these levels.
As I think you are very smart, I would like to know your thoughts on how to enhance and maintain high quality medical care.
-- Brian Gulino, September 15, 2009
Brian: "Standard of care" is not "quality of care". The standard of care says whether or not a patient who complains of mild and occasional headaches gets an MRI. Quality of care is something that patients would determine for themselves in a competitive market, perhaps with the assistance of neighbors, magazines, and online communities. Remember that long before insurance companies or Big Government there were some doctors who had good reputations and were sought-after.
The government can help make the market more efficient by collecting and publishing data from all of the clinics/HMOs, but the primary quality control mechanism in my proposal is the market. If people aren't happy with a provider, they will switch for the next year. If a provider kills all of its patients, they won't get their voucher checks for the next year.
-- Philip Greenspun, September 15, 2009
India has Universal Free Health Insurance aka Aarogyasri and it is near perfect system in place. http://tr.im/lKB3
-- Police Officer, September 20, 2009
The current state of the art for government health care (Medicare) electronic submisssion is a 1970s Bulletin Board System, or BBS. A dialup line (no internet) with text, command line, menus.
-- Dana Rink, September 30, 2009
Our healthcare costs are inflated because we have a fourth party payer system. Price signals do not reach the decision makers.
That is, patients and doctors decide on care, with minimal regard to cost but with careful attention to paperwork. The health "insurance" companies have little real incentive to control costs because they pass costs on to their customer, the employer. The employer may switch to another insurance company next year, but some other employer will switch back.
This started with the wage and salary controls set up in WWII. Employers competed with benefits instead of paychecks. Health care is the last vestige of that.
The only way to control costs is for those who pay the bills to make the decisions. There are two ways to do that.
One way is for the government to decide care and pay the bills. That will be like the HMOs of the '80s, only there will be no escape. There will be a tendency to increase the administrative budget while cutting the service budget. Quality of care may well depend upon how well connected you are. The rich will get their care outside the system, as always.
The other way is for patients to pay their own bills.
I suggest healthcare spending accounts tied to banks, not employers. The balance rolls over every year. The debit card won't work at the grocery store or the Las Vegas strip. People spend the money on maintenance plus catastrophic and long term care insurance. Poor people could be subsidised based on their income tax returns *when care is delivered.*
People will make mistakes, and may get inferior care, but at least they will be their own mistakes.
-- Bob Wakefield, November 25, 2009
I read this article a few months ago and read it again today as health care reform nears passage. I thought it was brilliant then and still think so. Rather than ask about some minor details, my question to Phil is why don't you run for Congress? I'm quite serious. You have money from your own hard work, intelligence, and the ability to communicate your ideas well. You live in the Northeast, I think, and I believe you would be an ideal candidate from that region.
-- Todd Ramming, March 20, 2010
I would have to confess that you lost me when you said, as your first step, "We need to have government take over health care completely." My eyes glazed over, and I didn't read anything else.
As you stated, government already pays for half of our current system. My is the "solution" is to finish the Government take-over, when it's likely that the take-over is a big portion of what's causing so many problems right now? Why not try reversing course, and having government spend less rather than more?
That, and we need to be free to choose our own health insurance. Senior Citizens, in particular, are practically forced onto Medicare, by requiring doctors to either only treat senior citizens on Medicare, or to treat no Medicare patients at all. This removes incentives for Senior Citizens to search out alternative health plans.
Similarly, by putting tax incentives in place to have employers provide insurance, rather than to have individuals pay for it themselves, this takes out yet another step where individuals could look to for cutting costs.
We need a free market. Over the past decades, however, we have done a lot to undermine that free market. Why would having government take over everything fix things?
-- Alpheus Madsen, April 14, 2010
Todd: Thanks for the vote of confidence. Why wouldn't I run for Congress? The most important skill for a politician is being able to get votes, which is typically done by promising to spend tax dollars on behalf of an interest group, e.g., public employees. Having a good idea for making the country a better place is not very helpful in getting elected. The successful politicians seem to outsource the generation of ideas when necessary for rare occasions such as debates. I'm not sure that politicians even pretend that the ideas they espouse during debates are their own. They might credit "my team of economic advisors", for example, when talking about what they would do regarding restrictions on imports.
Government is now so vast and powerful, spending nearly half of all dollars earned by Americans, that the most sensible course of action is to vote for the politician who promises to spend money on stuff that will benefit the particular voter. For example, if you can't afford health insurance (partly because the government has taxed away nearly half of your income via sales tax, payroll tax, property tax, excise tax, and income tax), vote for a politician who promises to buy you health insurance. It was your money to begin with.
It has become kind of like choosing a spouse. You're going to marry someone who is going to spend roughly half of your income. Do you want to marry a person who is going to spend it on things that have no value to you?
[Yes, I know that in theory there are politicians who promise to cut the percentage that government confiscates from citizens, but in practice none have succeeded in shrinking government (even if some have succeeded in implementing temporary tax cuts).]
-- Philip Greenspun, April 18, 2010
No, you should have a government run healthcare system like we have in Britain. It's much better. It works here. I really don't see why it shouldn't work in America. A Private companies, people tend to cut corners. They're not trying to provide a public service, they're trying to make money. Cost doesn't really matter, (since this is to do with someone's life/death or at least quality of life) but it'll be cheaper if there is a system where there is more focus on prevention, and people don't have to pay every time they see a doctor, meaning that they will be able to go even when it hasn't got to serious. like... going to a doctor when you find a lump somewhere, rather than when- if it is cancer- it starts seriously affecting you (preventative care is cheaper). Anyway, if people lived more healthily, it would be less expensive. Maybe that should be encouraged more.
-- Charlotte M, May 22, 2010
I generally agree with your points. However, your comment with regard to working hours does not in-fact hold up to scrutiny. The number of hours someone works a week is, on a national level, not the deciding factor of health. Over work, lack of sleep, stress and so forth all contribute to ill-health, but if you actually perform some statistics(which I have - feel free to do the same!), you'll find that there is very little relationship between the number of hours people in a nation work, and their health. The effect is completely swamped by other things, like local violence, and quality of health care(which tend to go with high work loads, but among comparable countries there is no effect). Otherwise a nice article, but the first 4 paragraphs are simply not very true(on average). There are lots of other societal problems which account for this.
-- simon hastings, June 14, 2010
Anyone (doctors, potential patients, lab techs etc) for starting a medical co-op service that avoids insurance and government subsidies, bureaucracy as much as legally possible?
-- Torben Brosten, April 8, 2012