How would *you* reform health care in USA?

[mike777]

Speaking of incentives I saw a wonderful little article in the paper the other day.

I do not remember the precise numbers.

 

Nevada passed, without opposition, a bill to "green" the Nevada construction industry.

These tax incentives were expected to cost 250,000$ over ten years which the state would make up to the counties. Nevada has no income tax.

 

Well in very short time the cost zoomed to 974$ million and counting. :) Note this is 2 years into the ten year program. :huh:

 

MGM got 274$ million alone. Hmm is this an example of rent seeking? :D

 

The governer is quoted as saying "NEVER OFFER A HELPING HAND TO ANYBODY EVERY AGAIN."

[mike777]

Btw we have a spirted discussion of reforming health care but never really defined our goal.

I will give it a shot.

 

The goal is to:

1) Delivery more health care( quantity) than now.

2) At an average lower cost than now.

3) HIgher quality than now.

 

The only way I can think of is to scale health care somehow or way which is why I harp on that word so much.

 

When I think of scaling I think of Moore's  law and computers/software.

You are confusing a number of different issues:

 

In general, when Economists use the expression "Scale" they are discussing "Increasing Returns to Scale" or "Decreasing Returns to Scale".

 

Lets assume that you have some production process where widgets production is a function of Capital (K) and Labor (L).

 

Widgets = F(K, L).

 

Lets assume that we increase the amount of Capital and Labor used in the rpduction process by some value X. (X > 1)

 

Increasing returns to scale occurs when

 

X * F(K, L) < F(X*K, X*L)

 

Constant Returns to Scale occurs when

 

X * F(K, L) = F(X*K, X*L)

 

Decreasing Returns to Scale occurs when

 

X * F(K, L) > F(X*K, X*L)

 

There is also a notion of the Minimum Efficient Scale of Production. The MES defines the quantity of widgets that one should produce in order to minimize average total cost per widget.

 

In the business world, folks often talk about "scaling problems". Here, they are using the expression in a slightly different manner. Scaling problems occur when the institutional processes that work well for a small firm don't carry over to a large company.

 

None of this has anything to do with Moore's Law which is an observation that the number of transistors on an integrated circuit doubles (roughly) every 24 months. For what its worth, when I was at MIT my class visited Intel and some of their R+D bigwigs gave a presentation on Moore's Law. Their main point was the Moore's Law has become a self fulfilling prophecy. Companies like Intel and AMD need to publish roadmaps years in advance. Their customers have come to expect that Moor's Law holds true. Accordingly, Intel's R+D budget is based on a requirement that they achieve these types of improvements in chip density.

As I said I think of Moore's law...and computers and software. If Moores law is not applicable I can live with that. I am no expert in that field at all. I still cannot even pull up your site but..that is probably me. :) Even through google they keep asking for stuff from me it seems. But I do not want to bother you, as I said thanks and I bet it is me. :huh:

 

I hope my main point on scaling is not lost here, sigh. :D

 

I see no one disagreeing at least.

[hrothgar]

As I said I think of Moore's law...and computers and software. If Moores law is not applicable I can live with that. I am no expert in that field at all. I still cannot even pull up your site but..that is probably me. :)

Go to www.google.com

 

enter the words

 

new republic health care debate day 1

 

into the search engine

 

Click on the first link. It will send you to the first page of the debate. To get the next page, substitute the number "2" for "1".

 

And so on

[pbleighton]

Peter if you claim your plan does:

1) increase 40 million units of health coverage.

2) at an average per person lower cost, I assume the overall cost goes up yes?

 

Yes, but not by much, as the average cost per unit will go down.

 

3) quality stays the same.

 

Sign me up.

 

You are now an honorary member of the Socialized Health Insurance Society. And best of all, there are no dues! Everything is free!

 

a couple of more questions.

1) I assume the overall cost goes up alot. 40 million times average cost per person. Where does that money come from?

 

2% non-claims cost versus 15%-40% will cover the majority of it.

 

2) Quality stays the same, for how long and what incentives are there for future quality improvements in your plan?

 

Indefinitely. Incentives are the same as now.

 

3) Who determines price and how?

 

Providers determines the prices, the same as now.

 

The government provides the reimbursement levels. There will be no bar to people buying supplemental policies (as happens commonly now), and/or paying for services and products whose cost exceeds Medicare guidelines.

 

I think you have not understood this. It is crucial.

 

4) How do you handle the overusage issues?

 

Overusage depends on benefit levels. I'm proposing a basic polcy, no more and in some cases less than current employer based group policies.

 

Peter

[mike777]

I wish others would step into this discussion.

 

I am getting lost in the details.

 

1) All or almost all of the total costs for the 40 million comes from savings from decreased overhead in medicaid.

 

I hope someone can discuss this with some detailed informed facts, :)

 

 

2) and 3)combined.

 

Ya I am not getting your point here in full.

 

Ok you lost me if the goverment sets reimbursement rates is that not setting price?

 

How do they set reimbursement rates and do they not act as a distortion, huge distortion of market based incentives?

 

 

4) If 40 million more people, more sicker people are seeing the doctor, clinic and hospital, how? You are not increasing, doctors, nurses, clinics, computers, hospitals, janitors, etc?

[mike777]

As I said I think of Moore's law...and computers and software.  If Moores law is not applicable I can live with that. I am no expert in that field at all. I still cannot even pull up your site but..that is probably me. :)

Go to www.google.com

 

enter the words

 

new republic health care debate day 1

 

into the search engine

 

Click on the first link. It will send you to the first page of the debate. To get the next page, substitute the number "2" for "1".

 

And so on

ok got it, It just wants me to register and stuff to see the article for free I guess. thank you.

[mike777]

Speaking of reforming health care, has anyone been following this TB guy flying all over the world.

 

We flagged his passport but he still just drove over the border from Canada into the USA. Thank God for Homeland security. :)

 

Guess no worries about some Bio/Virus attack. :)

[jtfanclub]

Speaking of reforming health care, has anyone been following this TB guy flying all over the world.

 

We flagged his passport but he still just drove over the border from Canada into the USA. Thank God for Homeland security. :)

 

Guess no worries about some Bio/Virus attack. :)

Ayup. If he'd had a more virulent strain, we'd probably lose 10% of the population over a generation, and Europe would be even worse off.

 

But since his wife never got it, this seemed like a test.

[Winstonm]

Mike, it looks like TheOnion.com has found you out. :)

 

Study: 38 Percent Of People Not Actually Entitled To Their Opinion

May 23, 2007 | Issue 43•21

 

CHICAGO—In a surprising refutation of the conventional wisdom on opinion entitlement, a study conducted by the University of Chicago's School for Behavioral Science concluded that more than one-third of the U.S. population is neither entitled nor qualified to have opinions.

 

I figured if it was Chicago, well..... :)

[helene_t]

Just wondered - could the reason for the enormous overhead costs of private health insurance be that tax reductions are related to the price of the insurance, rather than to the actual health expenses?

 

In Denmark, all interest rates (not only mortgages) used to be tax deductible. This has been thinned a little in recent years. But I remember when I lived there until 11 years ago, the impact of having dept was, typically:

Dept: 1,000,000

Nominal interests: 150,000 (15%)

Tax rebate: 100,000 (67% of nominal interests)

Inflation: 60,000 (6%)

Net interests: -10% (150,000-100,000-60,000)

 

So the government actually payed you for borrowing money, and they payed you more than the bank charged you. No wonder that banks (and other institutions, such as supermarkets, schools, trade unions, landlords etc etc) were very creative in creating funny loans and charging excessive interest rates. All kind of financial services (and some non-financial commodities such as watches, flight tickets, even lottery tickets (no joke)) were offered for "free" and charged via the interests. Because if you buy some service for 300 DKR and pay for it in the form of interests. the government pays the 200 DKR of it. For example, as a child I went to a private school that did not charge any tuition money but my parrents had to sign a fictive dept certificate so that they could pay interests to the school.

 

Now I'm not so sure it's a good idea to subsidize insurance companies at all (it doesn't target expenses payed directly by the patients) and I'm strongly opposed to tax rebates unless there is a flat-tax system with full negative tax, but that's a different discussion. Suppose we agree that the government somehow should subsidize health insurance.

 

Then I propose that only the claim-part of the insurance costs get subsidized. So if a given insurance company spends 75% of its income on claims and you pay $400 for your insurance, you subsidy is related to the 75% of $400 = $300, and you could get the same subsidy by paying $300 directly to the care provider (assuming that you cover the risk yourself) or by paying $306 to Medicare.

[cherdano]

Now I understand the problems of health care in the US a little better. I just received 3 coupons for 20$ each for every prescription I buy at my local grocery store.

[mycroft]

From what I can see here on the 51st parallel, here are my serious problems:

 

1) the 90-90 rule applies to the U.S. Health care - which I will admit, if your name is Rockefeller or equivalent, is the best in the world. The problem is that the best-of-the-best costs hundreds of thousands of dollars for a small chance of gaining a small extension of life for a small number of people - *and* takes away the room and providers for many, many smaller cases for each one.

 

I am with Peter here - I don't want the best health care in the world. I'll settle for 10th or so - provided I can get it, at a reasonable price. The survival opportunity loss from the chance I will need something in the top 9 is far outweighed by the gain I get from being able to go to the doctor or hospital when I need to for a problem.

 

2) One of the problems with uninsured citizens is that they don't go get little niggling things seen to. Sure, most of them will go away (and part of the craziness in Canada is that they will get everything looked at, even nothing); but those that don't blossom from $100 problems to $15000+ problems by the time the "general insurance" of the U.S. kicks in. There's an opportunity cost for you - you can fix 100 "false alarms" for every one of these you prevent and still make money.

 

3) It is very interesting how companies are concerned about the "grey market" - that is, legal, branded copies of something sold to a non-U.S. country at much lower prices brought back into the U.S. See: region coding, lockout chips, official importers, ... (Yet those same companies have no problems outsourcing the construction of those products to the same places to take advantage of the lower labour costs and importing them back into the U.S. I wonder why?) How this affects the health care industry - see how the pharmaceutical companies have been bringing in their strongarm FDA to cripple the ability of Americans to buy their products at rates those same companies are willing to sell their stuff to Canadians at.

 

4) The high non-medical cost of health care. In particular, the legal cost (and the associated insurance overhead). Yes, there needs to be a cost of screwing up. But currently there's a potentially crippling cost even if you don't screw up; and the cost of screwing up gets paid by the insurance companies, so the doctor doesn't get that effected (and everybody else does). Sure, she might get premiumed out of the business, but using a side effect to solve a problem is never a great strategy.

 

In other words, yeah, the U.S. has the best health care in the world, but you and I won't receive it. What the general population receives is of lower, or at least no better, quality than what I get in Socialist Canada for "free" (well, this is Northern GOPland, so we pay premiums); and the cost of using it, even if one is insured, is much higher. Those that are uninsured don't go to the doctor for even important things, thus causing larger problems, especially if their problem is contagious or transmittable. It could very easily be that OB/GYNs, in particular, will be a non-existent commodity in several states in 5-10 years. And maybe it's because my medical condition was such that I wouldn't be here had I lived in the U.S., and my value of life is still significantly less than "normal", but the extreme measures - and costs - of marginal utility end-of-life extension techniques seem almost cannibalistic to me.

 

Why, yes, I have a no-resuscitation, no extreme measures clause in my documents, and am a full organ donor/feel free to use my entire body if you can. And with one of my relatives dying a madness-inducing, torturous, 20+year death even without the use of extreme measures, I feel more strongly about this daily.

 

Answers? No idea. And nobody has the political clout to fix it anyway, because the medical profession, and in particular, the feeders on the medical profession, are large, powerful, and profitable.

 

Michael.