Healthcare expenses

ruffian1April 29, 2009

Healthcare has been on my mind lately. First, there was the buzz about how Americans are getting less for their healthcare $ than other countries. No kidding. If I start with a better product (ie. a healthier person), I will end up with a better product even if I spend less money. Then, all of that buzz stopped abruptly. Then I have been reading so many posts about job losses and medical expenses, and inability to pay for insurance or medical care/needs.

No one ever says that they want to pay more for healthcare - only less. I was wondering what people thought was a fair amount. A percentage of pay? A fixed dollar amount? Based on age? And assuming that all deadbeats can be thrown out of the pool, how much are you willing to pay for the people who can't? No matter which system we use, it will still cost money. IMHO, national vs private healthcare is like cavorting with the devil you know, vs the one you don't. While I was trying in vain to come up with population demographics vs. healthcare expendetures to arrive at some magical number, it hit me. I feel like Pollyanna. It doesn't matter what is fair, it doesn't matter how much you can or are willing to pay - it's about how much they can squeeze you for. With roughly 20% GDP being spent on healthcare, that's a huge pot of gold. There are lots of winners in that game. The politicians are acting serious about reform because with the number of uninsured growing, it is very likely to garner them added job security (aka votes).

Whatever the outcome of our current healthcare crisis, I feel as though the consumer is just a pawn in this big ugly game. Thoughts?

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I don't understand what you're saying about starting with a better product.

Universal health care works in all the other industrialized nations of the world. That tells me that it is doable here. So far, political will has not aligned with public sentiment to get it done, but it seems we are closer than we have been, when I believe even the AMA is now in favor of it (they have always been a powerful lobby against it).

I don't think it's so much "national" vs. "private." The issue is how it gets paid for, not how it is provided, although that ties into it. What has to happen is that the profit element needs to be removed from the system as much as possible. Insurance companies are taking a huge amount of resources and not offering much in return. How that gets done -- I don't know.

    Bookmark   April 29, 2009 at 1:46PM
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The Economist magazine of April 18th-24th has a good survey of health care and technology.
From what the Economist articles it would appear that many of the more interesting developments in delivering health care are coming from developing countries. The point about developing countries is that they have limited resources and at least in the case of India plenty of well educated and clever people. The developing world also doesn't have the same vested interests which would lose if there is change in the way health care is delivered.

Health care only becomes a priority once the basics such as food and shelter are taken care of. The more that one has beyond the basics the higher priority is given to health care. That the US is willing to spend such a high proportion of it's income on health care is a reflection of it's high standard of living.

In Canada, where I live, the the vested interests are not the same as in the US but they are certainly there nonetheless. The ultimate difficulty seems to be in taking power away from the deliverers of health care and putting that power in the hands of the patients.

As to the US moving to some form of universal health care, I am of the opinion that it is more likely to work well if it develops from the state level up rather than from the national level down. A bottom up approach is likely to try various models and the less successful models are likely to fall by the wayside. A flawed top down approach is very hard to change. That has been Canada's experience. Canada adopted a government monopoly model which has been abandoned as unworkable by every other country which has tried it other than Cuba and North Korea.

Sweden is an interesting county to follow largely because it is the developed country with the longest history of delivering many services by the government. Sweden managed to largely miss out on the second world war. Sweden has been moving to more competition in the delivery of government services. Competition is detested by those delivering mediocre results as it threatens them directly.

    Bookmark   April 29, 2009 at 10:55PM
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Unfortunately, leaving it up to the states is not a good idea in the US. It is one of the reasons the Feds established minimum welfare levels, for instance, because some states cut funding levels to ridiculous lows and tightened requirements so that hardly anyone qualified. The result was that poor people flooded into states with better benefits.

For that same reason, there is a huge debate about Section 5 of the Voting Act. For decades some local voting laws were shaped to deliberately exclude rural black voters. Not until Section 5 was passed, was the Justice Dept. given the "teeth" to enforce fair voting rights across the country, regardless of state or local attempts to block such.

Expecting every municipality in the US to treat everyone fairly is a nice pipe dream that reality has shown does not happen without some sort of enforceable federal mandate making it possible.

Many national health services are moving to a two-tier approach. It's inevitable if you are in a capitalist system. You either nationalize all the drug companies everywhere, or accept that some drugs/treatments are going to cost a whopping amount because they're (a) new or (b) useful for only a small percentage of people able to pay for it.

This means several changes to how the US approaches healthcare. The insurance lobby is a lot stronger than the AMA. So basic healthcare, especially for underage children, is going to pass quickly and be expanded. This is a good thing that has a fair amount of bipartisan support.

The second is to decouple healthcare from one's job. This is a lot trickier and because of the failing financial health of our Medicare system, soemthing that will be eased in over time. Again, the emphasis will be on basic care. Even today you can buy catastrophic health insurance at a reasonable cost, albeit with limited total caps on benefits.

People who can afford better healthcare, will pay for supplemental insurance that covers more. IOW, similar to how Medicare Part D is handled.

The basic change needed for Medicare is for Congress to allow it to demand price competition. Medicare is legally barred from doing so.

Where states can offer use is to encourage programs that tie together existing resources in a manner that works best locally, such as San Francisco's innovative PACE/On Lok program, which is so successful it was recognized by Congress as authorized Medicare providers (providing better care at lower cost, yet with higher satisfaction ratings).

The fastest growing area of healthcare is home health services. This is a critical area where cost savings elsewhere could be utilized to help ill/disabled people stay in their homes longer and thus ease the need for institutional care.

There will always be waste, but if we could even reduce 30% of that waste and redirect that money into areas that are truly needed, it would be worth the effort.

    Bookmark   April 30, 2009 at 12:24PM
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What I meant by a "better product" is that overall our country is less healthy to start with than other countries. Our obesity rates outshine most, if not all. With obesity comes lifelong health problems that are controlled, not eliminated.

Ian, thanks for the reference to the magazine. It is hard to find info on different healthcare models. It is an emotionally charged issue, and when emotions are fired up, it's real hard to be objective. Our countries model will change. It's already changed significantly in the 27 years that I have been paying for myself. I find it unfortuante that we can't thoughtfully look at the issue and decide what is best for our country. Yes, other countries have universal coverage. Yet we fail to analyze these systems, looking at both pros and cons. Instead it comes down to hot button words and heated emotions - "Healthcare Rationing" and "Skyrocketing Taxes" quickly come to mind. Once emotions are fired up, it's hard to have a rational discussion.

America's middle class is finding it hard to keep up with the every increasing medical expenses. IMHO, that's why the AMA, insurance companies and even hospitals, seem to have had a change of heart.

    Bookmark   April 30, 2009 at 12:49PM
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