Comparisons to auto insurance are not too meaningful, since not everyone needs automobile insurance, there is no certainty that those who have it will ever have an accident, and indeed the fraction who experience a large dollar loss is fairly low overall.  Whereas essentially everyone will have a medical claim, and a very large percentage will require large-dollar services at some point in their lives (usually, but not often, later).  So the marketing strategies and cost differentiators which characterize auto insurance don't really apply to health care cost leveling.

In any case, no liberal that I am aware of is advocating a single-provider ala National Health.  They are advocating a single  _payer_ similar to France's.  To the best of my knowledge there is plenty of competition in France among doctors and hospitals, although there as here most people choose one doctor and stick with him/her and his set of hospitals for long periods of time.

sPh 

bluebell

Presumably, however, the purpose of having a national health care policy is specifically to help sick people.

I had a conversation with a Catholic, Republican, Vietnam Veteran, MBA, budget analyst the other day who simply put it this way:

"I think it is morally wrong to deny health care to anyone".

We should start with the moral value.  Start with the goal.  Courageously assert the premise.  Stand with the rest of the Western world in declaring health care a human right. 

Then figure out how to deliver it. 

The fiduciary responsibility of CEO's of health care companies is not to provide good care but to maximize profits.  What we need is a system that aligns goals and incentives to provide the best quality care at reasonable cost. 

How in the world can people pay costs that can reach $100,000/year for one drug much less the costs of providers and diagnostics?  Parenthetically, the above drug is one whose research costs were largely borne by taxpayers. 

We need a single payer system whose goal is quality affordable care for all citizens.  One that will bargain with providers, big pharma and medical technology companies to assure their pricing is realistic and reasonable. 

I acknowledge that we can"t do everything and that difficult decisions regarding the extent of coverage need to be made.  This form of triage, would assure the best use of resources.  What we have now is  economic rationing without any rationale except that if you have money you can get care--a system that leaves out most of our population.

Would I be correct in assuming that you like the idea of Consumer-Directed Health Plans, which are still multipayer competitive group, but with the major difference being that the "customers" are group buyers representing the insured themselves, not employers?

This is, to a large extent, the way the Federal Employees Health Plans work.

Indeed, that $100,000 drug may have an artificially inflated price, due to a wide range of factors. You are correct, though, that cost-benefit decisions do need to be made.

Even if resources were effectively infinite, the decisions are hard. For example, I can think of several drugs that, at best, defer death or irreversible dementia by just a few months. I also think of these drugs as really not true market drugs, but as a wider research study -- in some cases, they turned out to be prototypes for drugs that had longer benefit and were more cost-effective.

I'm not convinced, however, that single-payor is the only answer. Multipayor consumer-directed health plans (CDHP), as long as the consumer groups are large enough to have market leverage, do offer potential benefits of a market approach. What is clear, however, is that employer-based is irrevocably broken, due to the increasing cost and capability of medicine, the fiduciary responsibilities of the employer CEO as well as the healthcare CEO, and the trend away from traditional employment and benefits to domestic and foreign outsourcing/contracting/offshoring.

With the employer-based system, even if one can afford to pay insurance, it often simply is not available to individuals that do not meet healthcare companies' risk models. Either single-payor or CDHP are large enough to spread risk over the population and avoid the peaks and valleys that disincentivize maintenance care until catastrophe strikes.

Having some fairly extensive experiene both in engineering and medicine -- and programmer doesn't equate to engineer -- the barriers to entry are legitimate. There's a surprising consensus among physicians that it takes about seven years to make some diagnostic and therapeutic techniques reflexive, including the physical skills. I have just enough of some of those reflexes to know limits -- and also to have some physicians trust me to do them in field situations, outside the US, when there's no one else with aclue.

I don't know where you get this $500,000 figure for programmers, since US primary care physicians run about $160,000 a year. Some procedure-oriented specialties, in major cities, can run a million a year. And yes, I know programmers that got -- and were worth -- $500,000, or even better in stock options.

Exactly what are the barriers to entry that you contend are inappropriate? For that matter, are you saying physician fees and availability are the core of medical costs in the US?

Shouldn't the first purpose of a national heathcare policy be to prevent people from getting sick and keeping people healthier as well as helping sick people?  Incentives need to be changed so that healthcare providers monitor healthy people and those with chronic illnesses.

Daniel A. Greenbaum

Under the employer-based system, the lack of such incentives is financially understandable. Employers constantly look for lower cost, so they may change plans fairly frequently, or what the industry calls "churn".

With churn, the preventative medicine care dollars spent by the first company may result in savings to its replacement company, when the insured doesn't get seriously ill. As long as the benefit managers are rated by short-term stock value, avoiding spending makes their stock look better.

Perhaps one transitional approach would be to give tax incentives to preventive care. You give me an interesting idea to think how it might work.

In point of fact, the number of medical school seats is not set by the AMA, but by the American Association of Medical College. Am I correct in understanding that you believe that a lack of physicians is a major part of the healthcare economics problem -- as opposed to physician debt, geographic distribution of specialists, and number of specialists?

The number of graduate medical education [GME] (internships, residencies, and fellowships) are set by the 24 constituent organization of the American Board of Medical Specialties, such as the American College of Surgeons. The final decision on number of seats per GME program, however, is up to the societies, not the ABME.

Medical students have long hours, but it is the GME participants that have the hellish hours. In some cases, especially in surgical specialties, there is a distinct relationship between their workload and work in their specialties. This is definitely not true for every specialty, and, indeed, some specialty programs rarely work extreme hours.

Canada's equivalent oversight organization, incidentally, cut by 10% the number of medical school seats. In Canada, the number and type of GME seats are set globally, and their policy is that at least 50% will be primary care. For an assortment of reasons, the US system favors GME for specialists and subspecialists. If desired, we can go into those reasons.

Matt, you misunderstand how insurance works. Essentially you say that:

Claims = Premiums - Administrative Costs - Profits

In reality, (well-run) insurance companies make much of their income by investing a portion of the premiums they collect. The equation is therefore:

Claims = Premiums + Investment Returns - Administrative Costs - Profits

For government programs, the equation would be:

Claims = Premiums (i.e., Taxes Dedicated to the Program) - Administrative Costs

Insurance companies could have an advantage over the government if their investment returns exceed their profits (and any administrative costs they have in excess of the government's administrative costs). It's also worth pointing out that insurance companies do not necessarily have to be for-profit--or, if they are for profit, they can be organized as mutual insruance companies, which distribute their profits to the policy holders rather than to outside shareholders.

It seems to me that in deciding whether private insurance companies should be involved in a universal health plan, the issue to consider is whether the investment function of insurance companies is worth preserving. One could design a government program with an investment component, but we've generally been reluctant to allow the government to make investment decisions.

Schemes such as the one you recommend citing Kilgore are a mess.  American experience with means tested benefit programs is that they become stigmatized, fail to reach the intended population, and become second class services.

The private markets demonstrate that they are willing to undermine the population's interests while generating growth salaries for corparate health care and medical specialists.

Hodge-podge systems will never fix the problem.  It is time for serious consideration of single payer systems.  The reason that legislators won't go for it is not fear, it is because they are all susceptible to the influnce of the lobbyist environment.  These are not separate issues. 

If its good for me it must be Good 4 A Merica

Actually, the whole analogy sucks.  Cavities just aren't as potentially damaging as an number of medical conditions and most people do not expect the same level of care for pets as for temselves and their families.

Compared to human medicine, both dentistry and veternary medicine provide better service without skyrocketing costs (my wife is on staff at a major university medical center -- they show new hires a training video contrasting the quick friendly efficient service "john" receives when he takes his dog to the vet

I'm sorry, but the analogy is disastrously bad. Pet owners are routinely faced with medical expenses that are beyond their means (e.g., chemotherapy, spinal surgery, etc.) and the most common outcome in these cases is euthanasia. It certainly places a nice upper-bound on veterinary health spending, but try implementing a similar solution in a human medical establishment: for example, give a parent the choice between their child's bone-marrow transpant and a painless death.

Furthermore, the technology and R&D investment made by veterinary health care practice is far below what's necessary to keep human beings alive in the comfort that we're used to. The vast majority of veterinary medicines were either developed for human beings (e.g., phenobarbitol, various antibiotics, surgical techniques), or are unexpected offshoots of human medical research. Despite this enormous funding advantage, many of the medicines that are available to vets are those that have been widely abandoned for human treatment due to side-effects, but since there's so little spending on adapting modern human medications to pet care, vets stick with them. Finally, veterinary practices rarely provide the advanced medical procedures that have contributed to our explosive health care spending (e.g., routine CAT scans, MRIs.) So given comparatively primitive medical care and a largely human-funded research bank, of course spending is lower.

All that said, veterinary costs are still _very_ high. For aged pets, you can spend thousands per year on care. The insurance industry that's sprung up around veterinary practices has largely survived by minimizing payouts based on age and pre-conditions (and by not being very reliable)-- partly because there is a small, select pool of individuals who purchase insurance, and it's very easy to get in and out of the market: thus limiting companies' ability to pool risk. Any human health insurance company which provided similar service would be rapidly put out of business.

I do not have much idea why medical costs are so high in the US - I think it is correct that currently per capita spending is somewhere between 50-100% more than that in the other advanced economies, without a significantly better outcome or better availability (actually, on both counts, probably worse).

If we do not want to impose price controls, then we have to use free market mechanisms to drive down the cost. Now, one may argue that medical care is intrinsically expensive, there is no way to be profitable or self-sustaining at less than a certain unit cost. I want that assumption examined. The cost of doctors is just one of many things that needs to be examined.

The goal has to be that except for catastrophic events, the average American can afford to pay for health care out of his/her own pocket. I also believe that just as automobile insurance is for accidents and not for routine maintenance and gasoline and so on. health insurance should be only for major problems. We should not socialize or subsidize the cost of routine stuff except for the poorest people.

BTW, there are other professions - e.g., science post-docs and assistant professors - who are as bright, work long hours, and as far as I know, at a pittance compared to the medical profession.

I don't know what you think typical physician income is, but the gap between the high and low ends are widening. Even in primary care, 70 hour workweeks are not uncommon, and medicine has a number of hazards that indeed, some science post-docs face -- I remember being very, very respectful in a hot virology lab. Researchers can spend the time being fascinated by their work. Do you think clinicians have no stress when telling someone they will die, unpleasantly, and soon?

If your analogy was to firefighters, I might consider it more fair, both in workweek and danger. Not all physicians, of course, do dangerous things.

My concern over your argument, however, is that you say you don't understand the cost factors, but go ahead and offer policies based on intuition. The cost models are complex, but not inaccessible. In this subthread, for example, Digamma made some incorrect statements about who decides on the factors governing physician supply. You and others seem to assume that the most important cost issue, since it's the first thing you address, is physician income. I have tried to offer specifics, although I don't really care to go out and develop a tutorial to type in here. Please do a bit more research, such that you can go into a discussion of healthcare knowing why it is more expensive in the US.

The other side of the coin here is that part of the reason health insurance costs have risen so much since 2000 is the poor performance of the investments made by the insurance companies (which of course was true of the larger investment community as well).

I guess I'm not a great believer in entangling these two streams of finance.  As another poster pointed out, the consumer could presumably have achieved similar returns if he'd been allowed to pay lower premiums and keep the money himself.  Once again, conflict of interest enters the picture.  The insurer now needs to decide whether it should put the money into better care or investing for return. 

For the sake of clarity, you need to provide some dollar numbers with your performance data.  For example, the physician who works 70 hours a week has how much pre-tax income?  Is this at age 32 when s/he may still have considerable medical school debt, or at at 45, when its just associated with lifestyle objectives?  How much public funding did s/he have for his education?  How does his/her medical school debt compare with the debt of other professional graduate school graduates?

Typically, these stories selectively leave out information such as that physicians are earning anywhere from 50% to 200% more than other people in comparable stage of life, that only a small part of this goes to paying things like medical school debt, partly because medical education is highly subsidized, and that the supply side of health care service is restricted (otherwise, where would all those physicians find 70 hours a week of work?) supposedly for quality reasons, but incidentally having a substantial economic benefit for physicians. 

Still, to be fair, it is the health care corporations, not the physicians, who are the real hogs in this business.  These include the insurance companies, but also include nursing homes, hospitals, manufacturers of health care technology (including, but not only, drugs), and .. oh yeah.. insurance companies.  Physicians are merely the privleged elite that make the whole thing go.

*Update* 

 You may be intending to associate that $160,000 per year with those 70 hours a week, I am not sure.  That still doesn't answer the other questions.

Here, however, is some information that might be of interest.  The median individual income of all males over 15 in the United States in 2004 was $30,000, it was not that much for females.  To get to that $160,000 that median person is going to have to work not 70 hours a week, but 210+ (for reference, the whole week contains 168 hours).

However, you may consider that an unfair comparison, so lets look at the highest paid group, people with professional degrees (including physicians, by the way).  The MEDIAN pay for this group is $90,000 (males).  Now, we can assume that these median MBA, MD, JD, etc., holders are already working 55 + weeks, in many cases, so to get to $160,000 they are going to work up around 100 hours.

Now, my point is that I would like to never again see any defense of physician salary on the view that they earn it.  They are privleged in this society because they have joined a privleged niche that the rest of us don't like but cannot do without.  They use monopoly like power to keep their pay up. 

If its good for me it must be Good 4 A Merica