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Comments on: American Medicine: Free Market? http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/ New Address is http://distractible.org Mon, 08 Sep 2008 12:42:49 +0000 http://wordpress.org/?v=2.2.2 By: Robert http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7611 Robert Wed, 01 Aug 2007 22:49:51 +0000 http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7611 Agreed. Modern medicine is a marvel in the relief of much suffering, to the point that we often expect more of it than it can deliver. We can relieve suffering, which we are called to do. But we are not good at extending life, which only God can do. Medicine's net benefit there may well be negative. Agreed. Modern medicine is a marvel in the relief of much suffering, to the point that we often expect more of it than it can deliver.

We can relieve suffering, which we are called to do. But we are not good at extending life, which only God can do. Medicine’s net benefit there may well be negative.

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By: Rob http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7606 Rob Wed, 01 Aug 2007 20:25:58 +0000 http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7606 Very good points, Robert. I especially like the last paragraph of your first comment. Quality is part of the idea of Value, but value is an economic term, where quality is independent of economics (although still important). This whole discussion is mainly economic, as the idea of "free market" is regarding the payment structure of healthcare. My main complaint has been that people look at care and somehow say that you can make the payment system to be a "free market one." The problem is that the value to society goes beyond a regular commodity, and hits more important issues (as you touched on) regarding the meaning of suffering and the dignity of addressing it. That is why people look at the importance of giving healthcare to the poor and elderly while not feeling society owes these groups a free plasma screen TV. I would be careful saying that the efficacy of healthcare is an "illusion." Again, it depends what the end you are trying to accomplish. Do we reduce suffering in certain circumstances? Obviously we do. Do we decrease the overall suffering in the world? I am not sure of that. Very good points, Robert. I especially like the last paragraph of your first comment.

Quality is part of the idea of Value, but value is an economic term, where quality is independent of economics (although still important).

This whole discussion is mainly economic, as the idea of “free market” is regarding the payment structure of healthcare. My main complaint has been that people look at care and somehow say that you can make the payment system to be a “free market one.” The problem is that the value to society goes beyond a regular commodity, and hits more important issues (as you touched on) regarding the meaning of suffering and the dignity of addressing it. That is why people look at the importance of giving healthcare to the poor and elderly while not feeling society owes these groups a free plasma screen TV.

I would be careful saying that the efficacy of healthcare is an “illusion.” Again, it depends what the end you are trying to accomplish. Do we reduce suffering in certain circumstances? Obviously we do. Do we decrease the overall suffering in the world? I am not sure of that.

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By: Robert http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7604 Robert Wed, 01 Aug 2007 17:57:33 +0000 http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7604 I should also point out that Starr dealt with these issues (free market and medicine) in his excellent historical discussion, The Social Transformation of Medicine. But all this talk of free market value assumes the efficacy of modern medicine, which is an illusion, as many have demonstrated well (particularly Leonard Sagan and Ivan Illich, but more recently Kaufmann, Donald Miller, etc.). Not that I don't see value in what you and I do. But that value is in the relationship with the suffering person, utilizing our skill and sometimes our knowledge. I should also point out that Starr dealt with these issues (free market and medicine) in his excellent historical discussion, The Social Transformation of Medicine.

But all this talk of free market value assumes the efficacy of modern medicine, which is an illusion, as many have demonstrated well (particularly Leonard Sagan and Ivan Illich, but more recently Kaufmann, Donald Miller, etc.).

Not that I don’t see value in what you and I do. But that value is in the relationship with the suffering person, utilizing our skill and sometimes our knowledge.

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By: Robert http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7602 Robert Wed, 01 Aug 2007 17:29:41 +0000 http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7602 What are the issues that are really killing healthcare? You indicate that it is the high and spiraling cost, and then mention some root causes of the cost: the incredible waste, lack of accountability, and profiteering by third-parties. You ask some great questions about the poor, about value, about quality. (Are these last two distinquishable?) Doesn't this all boil down to who gets to answer these questions and how--by what standard? An useful article on "The Unfreedom of the Free Market" http://tinyurl.com/2dbwez discusses these issues in a general way. I am not yet sure how it applies to medicine. You assume that we cannot have a free market in medicine. Though in the fullest sense you are right, an increasing number of doctors in AAPS are practicing private medicine, free of coercion from third parties. But the main issue still is whether we really know what we think we know. Are we prepared to submit to God's revelation, or to man's fallen reason? That will help as we determine value and quality, and as we practice compassion on the poor and needy. What are the issues that are really killing healthcare? You indicate that it is the high and spiraling cost, and then mention some root causes of the cost: the incredible waste, lack of accountability, and profiteering by third-parties.
You ask some great questions about the poor, about value, about quality. (Are these last two distinquishable?)

Doesn’t this all boil down to who gets to answer these questions and how–by what standard?

An useful article on “The Unfreedom of the Free Market” http://tinyurl.com/2dbwez discusses these issues in a general way. I am not yet sure how it applies to medicine.

You assume that we cannot have a free market in medicine. Though in the fullest sense you are right, an increasing number of doctors in AAPS are practicing private medicine, free of coercion from third parties.

But the main issue still is whether we really know what we think we know. Are we prepared to submit to God’s revelation, or to man’s fallen reason? That will help as we determine value and quality, and as we practice compassion on the poor and needy.

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By: Sid Schwab http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7586 Sid Schwab Tue, 31 Jul 2007 16:53:18 +0000 http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7586 Rob: this is an excellent summary. As one who has argued for single-payer, I also find the comment by Val very interesting, pointing out things I'd not thought of. I suppose that the ability to lay things out in a clear-headed way, as you have done, is a needed first step. But, despite having "proposed" solutions myself, I think the reality is that nothing will really happen until the system collapses under its own weight, and by then it'll be too late. On the other hand, I think the last few years have headed the whole country toward ruin, so it'll be moot before we have to get around to health care. Good news. Rob: this is an excellent summary. As one who has argued for single-payer, I also find the comment by Val very interesting, pointing out things I’d not thought of. I suppose that the ability to lay things out in a clear-headed way, as you have done, is a needed first step. But, despite having “proposed” solutions myself, I think the reality is that nothing will really happen until the system collapses under its own weight, and by then it’ll be too late. On the other hand, I think the last few years have headed the whole country toward ruin, so it’ll be moot before we have to get around to health care. Good news.

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By: Rob http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7574 Rob Mon, 30 Jul 2007 22:05:16 +0000 http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7574 Val: Charlie hits the nail on the head. I have honestly always suspected that the numbers quoted about Medicare were somehow inaccurate. It never made sense to me that the government was better at something than private industry. Val: Charlie hits the nail on the head. I have honestly always suspected that the numbers quoted about Medicare were somehow inaccurate. It never made sense to me that the government was better at something than private industry.

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By: Val Jones http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7569 Val Jones Mon, 30 Jul 2007 14:49:41 +0000 http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7569 Great post, Rob. One small point of interest. Charlie Baker had some interesting things to say about whether or not Medicare actually does have lower overhead costs: "The two things I always hear about why it’s a good idea are — Medicare has lower Administrative costs than private health plans and they’re a “better” payer than the private plans. Hmmm…Let’s take the first one. What I’ve heard before is that Medicare only spends 4% of its money on a per beneficiary basis on administration, while the plans spend 14% per member on administration — a big difference. This is interesting, but misleading. Medicare beneficiaries are over the age of 65. They spend almost three times as much money on health care as a typical private plan member — most of whom are under the age of 65. If the Medicare member typically spends $800 per month on health care, and 4% of that is spent on administration, that’s $32 a month on administration. If the private health plan member typically spends $300 per month on health care, and 14% of that is spent on administration, that’s $42 a month — a much smaller difference. But we’re not done yet. Medicare is part of the federal government, so its capital costs (buildings, IT, etc.) and benefit costs (health insurance for its employees and retirees (!), pension benefits, etc.) are funded somewhere else in the federal budget, not in the Medicare administrative budget. Private plans have to pay for these items themselves. That’s worth about $5-6 per member per month, and needs to come out of the health plan number for a fair comparison. Now we’re almost even. And finally, Medicare doesn’t actually process and pay claims for all of its beneficiaries. It contracts with health plans around the country to do much of this for them. That’s not in their administrative number, either — and it is, needless to say, in the private health plan number. People push and pull these numbers all the time, and there may be “some” difference between Medicare and the private health plans on administrative spending as a percent of total spending. But it’s not huge, if you try to compare apples to apples." http://www.letstalkhealthcare.org/?p=105 Great post, Rob. One small point of interest. Charlie Baker had some interesting things to say about whether or not Medicare actually does have lower overhead costs:

“The two things I always hear about why it’s a good idea are — Medicare has lower Administrative costs than private health plans and they’re a “better” payer than the private plans. Hmmm…Let’s take the first one. What I’ve heard before is that Medicare only spends 4% of its money on a per beneficiary basis on administration, while the plans spend 14% per member on administration — a big difference. This is interesting, but misleading. Medicare beneficiaries are over the age of 65. They spend almost three times as much money on health care as a typical private plan member — most of whom are under the age of 65. If the Medicare member typically spends $800 per month on health care, and 4% of that is spent on administration, that’s $32 a month on administration. If the private health plan member typically spends $300 per month on health care, and 14% of that is spent on administration, that’s $42 a month — a much smaller difference. But we’re not done yet. Medicare is part of the federal government, so its capital costs (buildings, IT, etc.) and benefit costs (health insurance for its employees and retirees (!), pension benefits, etc.) are funded somewhere else in the federal budget, not in the Medicare administrative budget. Private plans have to pay for these items themselves. That’s worth about $5-6 per member per month, and needs to come out of the health plan number for a fair comparison. Now we’re almost even. And finally, Medicare doesn’t actually process and pay claims for all of its beneficiaries. It contracts with health plans around the country to do much of this for them. That’s not in their administrative number, either — and it is, needless to say, in the private health plan number.

People push and pull these numbers all the time, and there may be “some” difference between Medicare and the private health plans on administrative spending as a percent of total spending. But it’s not huge, if you try to compare apples to apples.”

http://www.letstalkhealthcare.org/?p=105

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By: Rob http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7568 Rob Mon, 30 Jul 2007 14:00:10 +0000 http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7568 REM (a good band, by the way): The point of the post was that the system in the US makes it impossible to have a truly "free market" approach (as widespread use of HSA's would cause). Singapore may be a great system, but the demographics and politics of Singapore are vastly different from the US. Most studies on HSA's say that they encourage under-utilization - especially of preventive services. Perhaps taxing the benefit would change things some, but I don't think you escape the shell-game of moving money from here to there without addressing the root causes of the problems within the healthcare system. Any way you finance a bad system, it is still bad. rlbates: Agree 100% REM (a good band, by the way):
The point of the post was that the system in the US makes it impossible to have a truly “free market” approach (as widespread use of HSA’s would cause). Singapore may be a great system, but the demographics and politics of Singapore are vastly different from the US. Most studies on HSA’s say that they encourage under-utilization - especially of preventive services.

Perhaps taxing the benefit would change things some, but I don’t think you escape the shell-game of moving money from here to there without addressing the root causes of the problems within the healthcare system. Any way you finance a bad system, it is still bad.

rlbates: Agree 100%

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By: rlbates http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7565 rlbates Mon, 30 Jul 2007 12:41:26 +0000 http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7565 Dr Rob, Not even sure how much influence the patient (insurance consumer) has anymore, as they (insurance companies) often "cherry pick" or place riders on pre-exising conditions leaving patients unwilling or unable to go looking for another policy/insurance company. Nice post. Dr Rob,
Not even sure how much influence the patient (insurance consumer) has anymore, as they (insurance companies) often “cherry pick” or place riders on pre-exising conditions leaving patients unwilling or unable to go looking for another policy/insurance company.

Nice post.

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By: REM http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7560 REM Mon, 30 Jul 2007 05:45:33 +0000 http://distractiblemind.ambulatorycomputing.com/2007/07/29/american-medicine-free-market/#comment-7560 I recommend doing some research on Singapore's health care system. Over 70% of health care expenses are paid out of pocket in Singapore and it has led to impressive results. I'd consider it the best health care system in the world. \ The U.S. government has crippled the health care market by not taxing health insurance as normal income. If this did not occur consumers would likely purchase HSA's causing the consumer to be more concerned with the price of treatment. This would then force the health care market to provide more cost effective treatments. I recommend doing some research on Singapore’s health care system. Over 70% of health care expenses are paid out of pocket in Singapore and it has led to impressive results. I’d consider it the best health care system in the world. \

The U.S. government has crippled the health care market by not taxing health insurance as normal income. If this did not occur consumers would likely purchase HSA’s causing the consumer to be more concerned with the price of treatment. This would then force the health care market to provide more cost effective treatments.

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