Healthcare Reform: Two Extremes, Neither Focusing on Health 12 comments
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"Healthcare" a.k.a. sickcare is not about health at all, it's about profit and power. The State and the sickcare cartels have partnered to transfer more of the nation's wealth to their Power Elites.
One of the primary themes of Survival+ is that the State and the Plutocracy are partners, and their joint goal is to divert an ever-greater share of the nation's income into their own pockets.
From the Survival+ point of view, all the ideological positions on "healthcare" which are being sold like commodities are laughably detached from reality. "Healthcare reform" has nothing to do with either socialism or capitalism. Socialism is the Veterans Administration system (owned lock, stock and barrel by the government and run by the government) which offers remarkably cost-effective if basic care to millions of vets, and capitalism is cash-only clinics like those offered in Mexico, India and Thailand and in some Wal-Mart (WMT) walk-in clinics.
The entire "healthcare reform" enterprise is not about providing care to all -- that is the sales pitch. It is about milking the entire populace so more of the national income is transferred to the "healthcare" cartels and State (central government) Elites.
Here are the three key realities which are not addressed by "healthcare reform":
1. The "healthcare" cartel (and thus its partner the State) is not interested in health because health is horribly unprofitable. People who eat well and are mentally and physically fit have no need for costly procedures, treatments, tests and pharmaceuticals, hence they cannot generate revenues or profits.
Managing diseases is what's profitable, so the system is oriented not at prevention or nurturing health but at enabling chronic disease which is very profitably managed with pharmaceutcals, surgeries, etc.
2. Once the connection between service and customer is broken and the money to pay for all products and services is printed or borrowed in essentially unlimited quantities, ontologically (inherently) there are no possible price controls. This is why an elderly gent like my friend's father can enter the hospital with a non-life threating issue (gallstone), receive treatment which didn't really resolve his health issue and then Medicare is billed $120,000 for one week of "care" regardless of the efficacy.
When the service is "free" (that is, payment is borrowed/printed in unlimited quantities), then the cost of care will necessarily push up to the ultimate limit of the system's ability to pay. Medicare and Medicaid already exceed the Pentagon's budget, and they are growing three times faster than the long-term trend rate of the U.S. economy.
3. There is no "fair" way to ration care; the U.S. simply rations it by essentially random "legal lottery" payouts/jackpots/penalties and other regulatory means. The bottom line is "healthcare for all" without limits is unaffordable everywhere -- it is simply more unaffordable in the U.S. system. The wealthy in rationed-care systems simply opt out and go buy "unrationed care" elsewhere, cash on the barrelhead.
The dirty little secret of supposedly "model" State healthcare plans in Europe and Japan is that they are running up against the limits of what those economies can afford. If you disagree, go ask the State finance ministries of France, the U.K., Germany and Japan for their 10 and 20-year projections of national healthcare costs.
No nation can increase healthcare spending 6% while its underlying economy grows 2%. In a mere 8 years, healthcare costs will rise over 50% while the GDP will rise (at best) 15-20%. That is the essence of unsustainability.
Medical Care Prices Are Rising Faster Than Overall Inflation (BusinessWeek)
The U.S. spent an estimated $2.4 trillion on health care in 2008, about 16.5% of gross domestic product and a 6% increase from a year earlier. Medical care prices are rising faster than overall inflation, and the burden on consumers continues to grow.
When everything is "free to all" then technologies and medications quickly reach marginal returns: yes, this drug is only effective in 15% of the case, and yes, it costs $10,000 a month, and might actually hurt some patients; but since the State is paying for everything, why not give it to everyone who might be helped? And if it's restricted, then isn't that rationed?
The "healthcare" cartels' goal is to carve off a greater share of national income for themselves. This isn't capitalism; it's monopoly capital-crony capitalism, the very opposite of free-market capitalism. The State's political class is a willing partner in this transfer of wealth to Elites because it welcomes the hundreds of millions of dollars in donations offered up by tort attorneys, Big Pharma, and all the other players milking the "healthcare" system for billions.
So who ultimately pays for "free" "sickcare"? The productive middle class and working poor. Healthcare which doesn't actually improve health but simply profitably manages chronic illnesses is in essence a stupendous tax on the productive class of the nation. The healthcare cartels are delighted that "healthcare" has climbed from 6% of GDP to 17%, and they will be delighted to see it rise to 20%, then 25% and 30%, until at some point it bankrupts the nation, as it most certainly will for the above reasons.
Until the State collapses in insolvency, "healthcare" acts as a giant machine which diverts money from the middle class and working poor into the coffers of the sickcare cartels and their State-Elites partners.
You want a system that works? Then depoliticize and de-cartel the system entirely. Jettison the entire sickcare system and revert to cash-only for every product and service, and offer a voluntary VA-type system which people can opt into if they choose to pay the insurance and co-payments (which VA does not have) and live with the defacto rationing of long waits and basic care which is limited by the budget alloted. There is no "entitlement," only whatever care which can be distributed for a given amount of money. Thus it's not the budget which can rise but the efficiency of the system in doing the most possible with a set sum of money.
This is the only sustainable way to provide care without bankrupting the nation.
These two systems -- "pure socialism" and "pure free-market capitalism" -- can co-exist quite amicably as long as people get to choose from a range of imperfect choices. If health were more profitable (to providers and to consumers) than managing disease, then entirely different choices and incentives would arise.
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This article has 12 comments:
This is the first article I've read that has a clue as to how to fix our health care system. With 20 years of ER experience and 2 years of owning an Urgent Care I've developed a very similar view of what is happening and what needs to be done. Unfortunately, you are the only other person I've come across who shares my views.
The paucity of comments shows how little interest there is in actually trying to do something productive.
Still, it's missing an important point.
In the US we pay about twice as much for healthcare as other developed countries do, with poorer results. We don't live as long or as healthily as Europeans and Japanese with their government-paid care, BUT WE PAY TWICE AS MUCH. That's collectively, not individually; that includes people who can't even get insurance Most of the difference can be accounted for by the 30+% sucked out of the system by insurance companies; most the rest is probably increased administrative costs to doctors and hospitals who have to deal with complicated and recalcitrant insurers.
IOW, eliminating private, for-profit insurance (or making it a much smaller part of the picture) is probably the best thing we could do for the good of the country. When the 15% of GDP that currently goes to disease-management is brought down to 8-9% and applied to actual health, we will have less burden on the payrolls (employers and/or employees and/or taxpayers will save $$, and from the macro point of view it doesn't really matter who gets it—it will help the rest of the economy recover). Plus, a (potentially) healthier population. Win-win.
But the problem embedded into the American health care non-system is the inability of Big Pharma, health care professionals, patients and especially the politicians to step back, get the big picture, then do what's needed to provide affordable, dependable and efficient health care to the nation.
On Nov 09 03:07 PM Alan Young wrote:
> Good article! You've made some excellent bulls-eyes on aspects of
> the problem. If the term "blood sucking vampire squid" weren't already
> taken, I'd suggest using it for the "healthcare" industry.
>
> Still, it's missing an important point.
>
> In the US we pay about twice as much for healthcare as other developed
> countries do, with poorer results. We don't live as long or as healthily
> as Europeans and Japanese with their government-paid care, BUT WE
> PAY TWICE AS MUCH. That's collectively, not individually; that includes
> people who can't even get insurance Most of the difference can be
> accounted for by the 30+% sucked out of the system by insurance companies;
> most the rest is probably increased administrative costs to doctors
> and hospitals who have to deal with complicated and recalcitrant
> insurers.
>
> IOW, eliminating private, for-profit insurance (or making it a much
> smaller part of the picture) is probably the best thing we could
> do for the good of the country. When the 15% of GDP that currently
> goes to disease-management is brought down to 8-9% and applied to
> actual health, we will have less burden on the payrolls (employers
> and/or employees and/or taxpayers will save $$, and from the macro
> point of view it doesn't really matter who gets it—it will help the
> rest of the economy recover). Plus, a (potentially) healthier population.
> Win-win.
On Nov 09 03:31 PM Snitzer wrote:
> The VA (I'm enrolled) supplies basic, no frills health care at reasonable
> or, depending on status, no cost, with some waiting time if the treatment
> required is non-urgent. For instance, it took three months from inquiry
> to exam for new eye glasses. But it was the VA that discovered my
> potential onset of diabetes, and the VA clinic that provided the
> education and motivation that drove me to change a lifetime's bad
> eating habits and lose some serious weight. If we were to use a model
> for national health care then the VA system would be a good starting
> point.
>
> But the problem embedded into the American health care non-system
> is the inability of Big Pharma, health care professionals, patients
> and especially the politicians to step back, get the big picture,
> then do what's needed to provide affordable, dependable and efficient
> health care to the nation.
Arguably too much current advocacy concerning health related policy issues consists of trying to destroy the credibility of either a current state of affairs or of some proposal for reform by comparing that which is to be discredited with some image of an unattainable perfection. The truth we all have trouble facing is that we each (and our current state of health and physical wellbeing) are imperfect and certain to decline over sufficient time. The goal as individuals is therefore to seek a reasonable balance between trying too much or too little to improve health wellbeing for the short run and preserve a tolerable life experience in the longer run for a reasonable period. The goal of the society is to allow our individual efforts to achieve that individual goal to be more efficient and effective at a cost that is reasonable to both the individual and the society collectively. Two competing mechanisms exist for mediating between these individual and societal goals: the market place and social institutions. What this all means, arguably, is that we can never as individuals or as a society achieve these individual or collective goals to perfection and we will, especially at times of crisis in our lives, have great difficulty accepting this and deciding what a is a reasonable attainment of these goals in the circumstances. In short, there is a strong urge to seek the unattainable, discomfort at the need to face our physical and financial limits and a natural tendency to feel dissatisfied with the choices we end up making; the fact that there many other needs that demand our attention and resources besides those that are health related compounds all this. The forgoing is not a reason to through up our hands; only that the intractable nature of the demand and supply of health care needs to be kept in the back of our minds as we decide what is practical and reasonable to be attempted. We need to take pleasure in striving for the best that is reasonable.
The term ‘rationing’ is used too often in a loaded way that serves to cloud rather than illuminate discussion of public health care provision. Arguably the more accurate description is that public plans allocate resources to optimize utilization across the population they serve. Put another way, to talk of the foregoing as suggesting that public plans “ration health care” is like saying that the fire or police department rations the services it provides in a community. In other words, as an individual a person doesn’t receive a limited health benefit equal to the provision other individuals receive; he or she draws on the pool of resources allocated by the plan to treat the need the person requires. This is not to say that these public plans always allocate sufficiently for a particular service in a particular community annually to fully treat demand that actually arises during the year. Patients may face delays for a service and certain specialized services may be in short supply or not available. Where delay is an issue, priority is given to one individual over another on the basis of comparative risk to life or future health.
The term ‘insurance’ in the context of health care funding also requires clarity of interpretation. There is a spectrum of plan types to which the term ‘health insurance’ is commonly put in public discussion and these range between two poles: universal public plans and private plans broadly similar to term life insurance. The one common feature across this spectrum is that there is a pooling of risk. One of the most important distinguishing features as one moves from the universal public model to the term life insurance like model is the narrowing of the pool by exclusion of individuals based on their perceived pre-existing risk. Of course, some persons are philosophically opposed to the public funding of the provision of any health care and for them the following observation does not apply. For most people the debate about the public as opposed to private provision of health care centres around the issue of whether the pool of persons to be covered by entitlement should be limited and if so by what measures. The point being made here is that the real debate is about the exclusion from risk pools; not insurance per se. Further, too casual a focus on insurance undefined leads into premature debates by analogy with term life insurance on whether plans should allow individuals to opt in or out and if so on what terms; premature because the earlier question to be answered is what range of plans are needed.
The preceding discussion of insurance leads to three concluding observations about the distribution of the burden of funding health care. This is a very broad topic so these observations will be limited to important but rarely discussed matters. The first is that it is somewhat artificial to focus on the cost to government to provide health care to the exclusion of the total cost to the nation of the necessary health care its citizens receive. In other words, once one has addressed the difficult questions of what services people need, how these services should be delivered and whether the state should be involved in funding the delivery of each of these services, the remaining question would appear to be what form and extent of public funding consistent with the answers to those questions minimizes the total cost to the nation.
The second observation relates to avoidance of inefficient use of services that a patient sees to be free. This is an important issue under both public and private plans. While it is self evident that most of will not choose to undergo painful or unpleasant tests or treatments that are unnecessary but free, there are other costly items of service that aren’t so constrained. On the other hand, the difficulty is that the economic circumstances of people range considerably from individual to individual and these differences don’t correlate directly with income to a sufficient degree to form the basis of a user fee or copayment formula along the lines often suggested. A number of the public health insurance plans outside the US have attempted to address the issue by the detail of the fee schedule for doctor’s and other service providers and by making it necessary for a patient to be referred to a specialist before the specialist’s fee is covered. Doctors are generally busy and would be short-changing patients requiring services if they over-serve other patients. The objective is not to place a barrier before a patient seeking service but to create a disincentive for doctors to provide redundant services. While always a work in progress, these efforts help significantly to address the ‘no cost to patient’ problem.
The third observation is that the issue of basing health insurance funding on an employment model or on a general citizenship model deserves a more dispassionate debate. It’s not a simple issue of free market vs. socialism. US employers face a special burden in compared to many of their foreign competitors in the form of the cost of their health care insurance costs for employees and retirees. Small and medium sized employers are often at a disadvantage in competition with large scale employees in seeking health insurance coverage for their employees and retirees or in competing for employees against larger employers with better plans. Employment mobility within the US is impeded because employees don’t want to lose current coverage. Hospitals are not routinely reimbursed for emergency services rendered to uninsured patients. This list is not exhaustive.
Hopefully those who plowed through this long posting found parts of it interesting.
The most intelligent piece on healthcare policy/reform that I have read to date. Unfortunately very few people will agree with this, to many just want something for nothing.