But the overall scheme has merit and should be a part of the national discussion.

Most of Judy Dugan’s arguments hold very little water.

Now, if “the premise that people are stupid and need to be told how to spend
their money” is false, then why is so much money spent on advertising in our
culture? A liberal, elitist idea? Liberal, perhaps, but hardly elitist. I
think rather because it has proven very profitable!

Thanks for your thoughtful post. My apologies for not adding more of my own
comment to my original post, rather than just posting Judy’s blog post in its
entirety. I hope you realized that is where this post originated. I thought
that it might inspire thought and comment and appreciate the effort that you
put into yours.

Your comment about Singapore is an interesting one. I lived there for a year
in 1993 and found it to be a Rebublican utopia in its user payment approach to
both social security and health care. It is interesting that it is the
opposite of a libertarian utopia politically, however, where the opposition
candidates get one hour per election cycle of TV time and other media are
totally controlled by the government. It is interesting that as Singapore has
developed, the percentage of health care expenses paid by government has gone
from 42% in 1995 to 34% in 2006, while general adult mortality has dropped
from 123 per 1000 per year to 67/1000/year. Over the same period the
government percentage of the health care system for the United States has
remained constant at 45% while mortality has gone from 132 to 109/1000/year.
For the UK the government percentage has stayed at around 80-85% and mortality
has gone from 104 to 80/1000/year over the same period. Also interesting that
the total expense on health care per capita in 2006 was $6700 in the US, $3400
in the UK, and only $1035 in Singapore. So the UK gets much better outcomes at
half the price of the US with more government sponsorship, but Singapore gets
even better outcomes at a dramatically lower price and much less government
participation. These data from the WHO website.

It is really not fair to compare Singapore, which is a single city, to the UK
and the United States which have so much more diversity in geography,
populations, and climate. But the comparison is interesting. It is also good
to note that 45% of health care in the US is already government funded
(medicare, medicaid, military, veterans administration). So our high cost and
poor outcomes seem to be part of our unique system, rather than who pays for
it.

I would prefer to see a system in which doctors worked on salary rather being
paid per procedure. Clearly we have created a system with an unseemly
percentage of “administrative” expense. Should we go towards Singapore’s model
or towards England’s?

muirgeo – The ideas that you have already memorized, I am sure are readily accessible. I sympathize with you, though, as far as the ones you have to go look up.

Since I have read a number of your posts and not yet found an independent thought, I will save myself the trouble in future.

Goldhill raises several good points. I agree that catostrophic insurance premiums and medical care payments would need to be subsidized for the poor under his plan. Sure, I would love a libertarian paradise, but do not ever think we will get there and I am personally satisfied getting closer to there.

I do However disagree with his proposed limits. Goldhill proposes a $50,000 catastrophic medical insurance premium mandated by the government, but I think that this is unrealistically high.

Change $50,000 to $25,000 and I am on board! It would take me forever to save up to 50,000 in a HSA, in addition to saving for a home and saving for retirement. That is a figure that is just not obtainable by most people.

I am also entertained by how much medical insurance is available to me by my current employer but I never use. I am a healthy 29 year old and pay 600 in annual co-pays on my insurance. From what I understand, my employer’s share is around $8,000. I recently looked at my explanation of benefits for all my claims over the last three years. Including the one emergecy room visit, they barely add up to $6,000, and between me and my employer, nearly $26,000 has been spent on premiums. Now I understand that it is this imbalance that allows group plans to work, but it just seems a little silly to me.

We should also carefully consider that the vast majority of all medical innovation came from Europe before European countries adopted the single payer system.

What I’d like to know is if research and development in biotech and pharmaceuticals has picked up in Europe since European countries began to privatize their health care systems. Anyone know?

That’s what Singapore does.

The country spends 4% of GDP on health care and gets as good or better health care outcomes than even the U.S. (to say nothing of European countries and Canada).

sudden illness like a heart attack or stroke or a serious accident, patients get taken to the nearest major hospital, no arguing with EMTs over the price/quality quotient.

You can request the Ambulance take you to a particular hospital. I know exactly the hospital I want to be taken to and so does my family. Sometimes, you’re taken to the hospital that can deal with your particular problem best – but there you aren’t going to be able to haggle much, emergency or no emergency.

What he’s missing is that laser eye surgery is elective and not insurance-covered because it’s so wildly different from a mastectomy. Or even a hip replacement.

No, Goldhill is not missing anything. It’s not in any way “wildly different” than a mastectomy or a hip replacement. Surgery is surgery. It’s precisely the point that since neither insurance nor Medicaid and Medicare distort the market that the market is able to adjust properly.

Even if self-pay did drive down ridiculous initial hospital bills, the price would not go below current Medicare rates.

He knows this because he’s clairvoyant?

A high school student has sudden flu symptoms–maybe swine flu?–hard for Mom to tell. The kid is having a little trouble breathing, but let’s give it some time and see if she gets better on her own. (Maybe she’ll get better, or maybe she’ll get much worse and end up on a respirator, since swine flu appears to be deadliest among young people and pregnant women.)

A young wife trips and falls and her quckly swelling wrist hurts like heck. She wraps it up, ices it and pops some painkillers. Why pay for the doctor and x-rays if it’s just a bad sprain? And since the couple is trying to save enough in their HSA to have a baby… (Maybe it’s a sprain. But if delicate wrist bones are broken, days of delay can mean permanent harm or at least a more expensive surgery)

Well, let’s put both on a single-payer system and have them wait for 6 weeks for an appointment to see their primary care physician instead. Oh, but the outcome would be the same as the one implied in the blogpost, wouldn’t it?

Or they end up doing exactly what both the insured and uninsured would do here with such symptoms – head to the emergency room! Those aren’t symptoms to screw around with. Of course, in Canada, a lady who started peeing blood spent all day in the emergency room only to be told they couldn’t diagnose her because they couldn’t do an ultrasound and didn’t know when they would be able to. It could have been a kidney stone or cancer. Hard to tell without an ultrasound, which they couldn’t do. In Toronto. I’m sure this lady took comfort in the knowledge that in Canada, she had a RIGHT to health care and that no private imaging facility can be opened to take advantage of her by providing the ultrasound she needed for a diagnosis.

Of course, Le Miserable in the blogpost could also pick up the extra shift at work or economize elsewhere – no dinner out this week or put off buying that new I-pod to pay for the X-ray.

Really. People think absolutely nothing of paying hundreds of dollars for cable service to their HD TVs and thousands in car payments for their luxury cars, hundreds of dollars for a single pair of women’s stilettos but become absolutely incensed when they are asked to shell out $30 for an X-ray.

Goldhill is a (sincere) crackpot, and The Atlantic is his enabler
Posted by Judy Dugan

I shouldn’t have read the Atlantic magazine cover story just before bedtime last night, just like I shouldn’t watch “Saw” before hitting the pillow. It’s a radical and repulsive health care proposal by media executive David Goldhill, who, after a year of pondering health care, is trumpeting his “Eureka!” idea: Make patients pay more–up to $50,000 a year–of the direct cost of care, to drive down prices. It’s like consumer resistance on DVD prices, he says, and look how cheap DVDs are now!

Atlantic, like all magazines in the current economic climate, is suffering. Its editors certainly knew the article would create shock, if not awe, and drive traffic to the Web and the newsstand. But is this a contribution to serious debate? No. It’s the typical product of an autodidact–the obsessively self-taught expert who believes he’s reinvented the wheel. I also wonder why NPR did an uncritical “Gee whiz” interview with Goldhill, who is CEO of what used to be known as the Game Show Network.

Here’s the gist of his new consumer-directed plan.

To fix both healthcare costs and hospital errors, we should:

Make patients, ultimately including people on Medicare, pay about the first $50,000 of the cost of their yearly “noncatastrophic” health care (unless they’re poor, in which case government will help).
Require everyone, including those on Medicare, to buy a catastrophic care insurance policy to cover anything over the $50,000 in a year.

Require everyone (again, except the poor) to put a percentage of income into a tax-free “Health Savings Account” and use that money for most health care. If the cost of care is more than what’s in the account, the care will be financed by deductions on the next several years of the consumers’ payment into the HSA.
People would save up over a period of years to, for instance, pay for the delivery of a child. Or a hip replacement.
Once the HSA reaches a certain unspecified size in unspent funds, the consumer can spend the tax-free money as he or she wishes. Or the kids can inherit it.
This, says Goldhill, will turn patients into savvy shoppers, make people live healthier, force the adoption of cutting-edge medical technology and seriously drive down prices. He uses the DVD example and also certain elective health procedures to support his point. Laser eye surgery, he notes, has gotten more competitive and cheaper because it’s not covered by insurance. What he’s missing is that laser eye surgery is elective and not insurance-covered because it’s so wildly different from a mastectomy. Or even a hip replacement.

The title of the article, “How American Health Care Killed My Father,” gets off to a gripping start–how Goldhill’s father died of hospital-acquired infections after walking into the hospital with pneumonia. Goldhill had a right to be furious–these infections and other medical errors are rampant in some hospitals that don’t follow well-proven anti-infection practices and patient-tracking.

But Goldhill’s assertion that if patients had to pay their own bills hospitals would have to fix the problems is wildly off the mark. For one thing, numerous attempts in Congress to strengthen publicly available hospital error reporting have failed under heavy lobbying. State laws vary wildly and depend on self-reporting. Hospitals would certainly not be more forthcoming with the truth if patients were picking and choosing on price.

Goldhill says:

Accidentally, but relentlessly, America has built a health-care system with incentives that inexorably generate terrible and perverse results. Incentives that emphasize health care over any other aspect of health and well-being. That emphasize treatment over prevention. That disguise true costs. That favor complexity, and discourage transparent competition based on price or quality. That result in a generational pyramid scheme rather than sustainable financing. And that—most important—remove consumers from our irreplaceable role as the ultimate ensurer of value.

Goldhill sounds sane until the part about consumers as “the ultimate ensurers of value,” which is the heart of his proposal–if “ensuring value” means being on the hook for everything short of a week in intensive care.

Yes, something is seriously askew in the vast gap between hospitals’ hugely inflated official bills and what insurance pays. He’s also right in saying that hospitals and doctors should publish their prices for common procedures and that patients should have the right to know the price of a hospitalization before they check in. And that hospitals and doctors have a financial incentive to over-treat. But in cases of emergency, sudden illness like a heart attack or stroke or a serious accident, patients get taken to the nearest major hospital, no arguing with EMTs over the price/quality quotient. Even for the most voluntary hospitalization, patients want to go where their trusted doctor practices.

Goldhill also asserts that shame would likely prevent a hospital from presenting a big bill to an individual for a stay that involved a serious error or infection. As most of us know, a heartless billing department would still be a heartless billing department, several steps removed from the error. Auto mechanics often have more shame.

Even if self-pay did drive down ridiculous initial hospital bills, the price would not go below current Medicare rates. Goldhill is udoubtedly right that there would be less use of medical care, as families carefully hoard their health savings accounts for “a real emergency.” It would go something like this:

A high school student has sudden flu symptoms–maybe swine flu?–hard for Mom to tell. The kid is having a little trouble breathing, but let’s give it some time and see if she gets better on her own. (Maybe she’ll get better, or maybe she’ll get much worse and end up on a respirator, since swine flu appears to be deadliest among young people and pregnant women.)

A young wife trips and falls and her quckly swelling wrist hurts like heck. She wraps it up, ices it and pops some painkillers. Why pay for the doctor and x-rays if it’s just a bad sprain? And since the couple is trying to save enough in their HSA to have a baby… (Maybe it’s a sprain. But if delicate wrist bones are broken, days of delay can mean permanent harm or at least a more expensive surgery)

Junior takes a hard fastball to the head in summer league. He might have been knocked out for a few seconds, but seems OK, if a little woozy, in a few minutes. The coach wants him to go to the hospital, but the family is already saddled with several thousand in medical bills this year. They’ll take him home and watch him closely. (Maybe he’s his chipper self the next day. Maybe he has a light concussion, making him unknowingly more vulnerable to the next head hit. Or maybe he passes out in agonizing pain from brain swelling a few hours later, and spends weeks in intensive care
Hmm. Grandma’s 76 and needs a hip replacement. Can we talk her out of it? (The incentives of inheritability of the health savings account would be far more effective than supposed government “death panels” in pushing heirs to pull the plug before the HSA is siphoned off.)
I’m sure everyone can see their own scenario in the commoditization of health care. A heart attack dismissed for too long as a muscle pull or indigestion. A small stroke ignored as a passing faintness. Spiking blood pressure self-treated with “extra” medication.

There’s a reason that Goldhill’s singular solution is so singular. No other industrialized nation has tried anything like it, no matter how relatively privatized its health care. Dealing with a medical emergency or frightening illness is very little like buying a DVD, or doing without one.

If we want better public health, we need better public education, better parental and even government controls on junk food, bigger taxes on cigarettes and liquor. How about free exercise classes?

To reduce overconsumption of health care,

Curb the medical and pharmaceutical advertising that Goldhill points at, but then blames consumers for responding to it.

Use research to determine best practices and make it all public. Pay primary care doctors more so they can manage common illnesses on their own, instead of dumping time-consuming cases onto specialists, who are vastly more expensive.
Require payment, as Goldhill himself endorses, to be based on treating a whole illness or surgery, beginning to end, rather than reimbursing every test and visit.

There are lots of other good ideas endorsed by multiple thoughtful experts. Goldhill isn’t one of them. What he’s proposing is far worse for Americans than what Whole Foods CEO John Mackey laid out in the Wall Street Journal OpEd that prompted a boycott of his foodie emporiums. An economic Sophie’s Choice isn’t a solution that helps struggling families.

Everyone has this right to lobby the govt. As long as the government has so much power over our lives, you will have those with wealth seeking to influence govt. power. This is a simple fact your small brain can’t or refuses to comprehend.

“They control people like you so much they even have you defending them while they steal you blind.”

The old socialist “you must be forced to be free” argument. It’s a good one.

They control people like you so much they even have you defending them while they steal you blind.

A reform of the FDA (its elimination is too much to ask, I suppose) could go along way toward both reducing R& D costs and making new drugs available a lot sooner, improving lives.

There would be no lobbyists were it not for the corrupt politicians. How do we do away with corrupt politicians, then? Exactly — take away their power. Let free individuals arrange their affairs according to their own needs and preferences.

It’s the simple principle of Spending Other People’s Money. When you are under the illusion that someone else is picking up the tab, you don’t shop and the market signal isn’t reflected in prices.

The costs of various procedures vary greatly from hospital to hospital in the same town, at times reaching an order of magnitude. When so few people have an incentive to bother to check costs, costs go unchecked.

The premise of Health Savings Accounts is that if more people behaved as though they were spending their own money, they would ask questions and do a little comparison shopping. True, when you are in an emergency you don’t have time to shop, BUT if there were more public comparisons about prices after-the-fact facilities that did over-charge would get a reputation for doing so.

The other factor is individual portability. Right now the market is conveniently constrained in most states, locking out potential competitors for insurance. Also, there is a dearth of “options” in picking the level of insurance/risk that is appropriate for you on the individual level.

The Red Herring is chasing this insurance reform, because it’s easy to pick on those “greedy companies” for making administrative profit. Institute a real market to bring down prices, and the costs for EVERYONE go down, whether they pay through administrative plans, out of pocket, or charity cases.

According to a 2004 report, eight out of the ten most important medical innovations in recent history were developed in the United States.

http://www.thedcwriteup.com/2009/07/public-option-will-pull-the-plug-on-medical-innovation/

http://www.nytimes.com/2006/10/05/business/05scene.html

An analysis by the CBO attributes about half the increase in medical spending over the past few decades to changes in treatment made possible by technological advances.