Monday, July 14, 2008

Elaborating

OK. I realized after some lengthy comments on my last post that I wan't exactly clear in getting my point across. There were definitely some holes in my statements as I read them again. So this is the advanced version of why centralized healthcare in the US will fail:

1. Cost shifting- As was rightly pointed out to me, cost shifting doesn't bankrupt the economy in and of itself. It really is always less efficient, but there is much cost shifting in the modern US, and its mere existance hasn't destroyed the economy. However, what it doesn't do is lower the cost. People occasionally bring up administrative costs or duplicate tests. Compared to a government system (which largely shifts the costs to physicians as opposed to eliminating them), there is no reason to believe that these will change that dramatically. The problem with healthcare is simply that it costs too much. As healthcare approaches 20% of all US dollars, shifting the cost to "the rich" or subsidizing "the poor" will do little to stop it from running the rest of the economy over like a bulldozer. Giving the government the money first will simply mean that the money will spend more time out of the economy and then inefficiently be spent.

2. The US is not Europe. Europe is actually a conglomeration of numerous different types of universal healthcare systems. Here is the truth. Most European countries ration care. Some services aren't provided, they don't have enough equipment, or people who meet certain criteria are excluded. This is how their systems stay afloat. This rationing is somehow seen as more moral because it is more "equitable," but I doubt that people who can't get lifesaving cancer drugs or wait long periods for imaging agree. More importantly, Americans wouldn't stand for it. We can't let 95 year old ventilator dependent with advanced dementia granny die after she becomes septic from one of a million bedsores. We're a long way from rationing.

3. Without rationing, prices escalate. That's already what happens now. If we could spend $1 billion dollars to keep someone alive for 1 extra minute, is it worth it? Most would say no. The use of finite resources involves the constant weighing of cost and benefit. Our current system doesn't do that. We essentially expect everyone to be entitled to everything. Using other people's money, everyone wants everything done. This is actually bad for society. Using the example from number 2, a family that wants everything done for granny may have second thougths if they were presented with the $5000/day bill. As an example, many people in my area are being priced out of housing by the cost of property taxes. This is the equivalent of taking all of those taxes for an entire year from a family each day to keep granny on the ventilator. Without rationing, prices will continue to climb. If someone else is always buying dinner, everyone's always at the steakhouse. This puts Subway out of business, and the low cost options disappear in a sea of ever rising steak prices, due to the unlimited demand driven by people who's personal stake in the rising prices is trying to get as much steak as possible until the system collapses. Every double read film or "just in case" CT scan that comes along to avoid a lawsuit adds to this misery.

4. Americans will not accept government rationing, and it will not be feasable for the government to ration as a political point. Americans only can't afford healthcare now, because they expect everything. They will still expect it in any kind of universal system. We will thus see a system in which the government will cut payments, trying to spread out the money over an ever increasing sea of people. With cut payments, will come a reduced supply of hospitals, doctors, technology, etc... There will be no "rationing," but the waits will grow. Physicians, who will be largely the vicitims in this system, will be blamed for caring about money (ie keeping the business open and making an actual profit). The government will point the finger. Meanwhile, costs will continue to rise as everyone tries to become more (not less) expensive in order to claim that they deserve a larger percentage of the money. This is sort of the same concept that always drives beauracracies to grow.

5. If we are going to ration anyway, we might as well use the market, as the market atleast promotes efficient resource utilization. May some people be excluded? Yes. Will some people also be excluded in the universal system? Yes. People who's treatments are not covered exist all over the place. The government simply adds inefficiency. They will either ration less efficiently than the market or go bankrupt for lack of rationing.

Our resources are finite. We can't give everyone everything. It doesn't matter whether we have a single payer, a socialized system, a subsidized system, a mixed system, etc... Without changing the entitelements and spending less money, we will go bankrupt. Centralizing the system will not fix the problem.

17 Comments:

Anonymous Jose A. said...

Glad to see the clarification. Now that your definition of centralized care is more understandable,I'm inclined to agree with a good portion of your arguments.

A. The centralized health systems of Europe would not work in the U.S. because our culture is highly averse to rationing (which is necessary in such a system) and, quite frankly, I'd hate to see what kind of centralized system would emerge from our interest-group driven government. Indeed every system has its own method of rationing, but most Americans are more comfortable with having prices determine what they can and can't do instead of a government body.
Although certainly not everyone in this country would identify as a libertarian, we as a whole are far more libertarian than our european counterparts.

B. Nevertheless, I'm still inclined to say that SOME form of cost-shifting is necessary in any system that aspires to be ethical on top of being 'efficient' in an economic sense. For example, eliminating the ability of health insurers to discriminate based on medical history would, on top of eliminating burdensome administrative costs, ensure that people are not forced to carry the full expense of diseases for which they are not responsible. This, coupled with high-deductible plans, would ensure that those whose medical burden really is beyond their resources can obtain care, while forcing the average consumer to spend his/her medical dollars more wisely. There is plenty of room in that suggestion for ensuring that the costs of aging and those of conditions for which individuals are responsible (like smoking) do not fall on the public's bill.

It's just not as clear cut as either a completely centralized U.K. style system or one that is 'every man for himself'. Some form of measuring cost-effectiveness, such as an independent medical board that issues 'recommendations' without any political force, might also help deal with our BIG problem of utilizing procedures and technology whose marginal cost far exceed their marginal benefit. Let's just not lose our souls in the process of finding a way to get costs down. I'd be happy to see a system that prevents well-to-do seniors from obtaining spinal fusion surgeries on the government's bill, but if it means leaving the 25-year old with kidney cancer to fend for himself in a marketplace that denies him insurance coverage, I'm not so sure.

12:14 PM  
Blogger MiamiMed said...

I don't believe that I ever said that we should let every 25 year old with kidney cancer fend for himself. I also never said that cost shifting couldn't occur outside of the government. The problem is the FORCED cost shifting that a centralized system inevitably imposes, along with the inefficiency of the shift.

Physicians had a LONG history of providing charity care. In fact, when Medicare was originally put through in the sixties, the argument was that we didn't want the elderly to be charity cases. No one ever claimed that they weren't treated.

Cost shifting and charity are great, when their implementation is determined by the people providing the care. This provides a safety net for the genuinely innocent infirm without all of the entitlement. You see, as a physician, I really don't have a problem with dedicating some of my time to charity. I do it as a medical student, and I am mostly poorer than my charity cases.

I will probably make another post at some point. The goal will be to point out that the government doesn't have to provide all charity. In fact, it's the worse way to provide charity, because it creates an entitlement.

7:10 PM  
Anonymous Jose A. said...

I'm skeptical of claims that all 'charity' care should be left up to the decisions of individuals on a case-by-case basis. Such a scheme would probably work in a small, homogeneous society, but in a country of 300 million people I find it a bit unrealistic to expect that the needs of the poor will be adequately met. Once again, I think that beneath this view lies a philosophical objection to government itself, rather than a pragmatic position that such a scheme would ACTUALLY get the job done better.

After all, supporting policies that provide a more systematic method of caring for the poor and unlucky is just charity by another name; at least to someone who views government as one option among many in the provision of resources, instead of something that should be avoided in principle.

No doubt, the present system is screwed ten times over, but I see that as reason for modification, not elimination. The Government doesn't need to be directly involved in the provision or payment of care in the way that the U.K. has it (VERY few people view that as a viable option in the U.S.), but it can regulate the private market in a way that would mitigate some of the moral problems that emerge from the present system. Leaving ALL care for the poor up to individuals isn't a safety net at all, and we all know that providing charity care in the 60s was a whole different ball game in terms of complexity and costs than what it would mean now.

I applaud your charity work, as I would of anyone else, but government policies to ensure that the poor and unlucky are cared for don't preclude personal charity. They simply provide security (a safety net) against its precariousness.

Means-testing for medicare, higher-deductible consumer-driven plans, risk-spreading, pay-for-performance, these are all great ideas being thrown around for how to fix our system, but they ALL involve modification of the role of the government, not for it to simply remove itself from the picture. As to which ones will work, that's an empirical question and we'll just have to wait and find out. I'm far more comfortable with that than simply saying that government inevitably leads to entitlement/bankruptcy of the system and thus we should leave it all up to individuals. We need a system that is cost-effective and yet also morally sound. I think right now we have neither, and we shouldn't let dogma, whether it be in economics or philosophy, keep us from trying different ways of getting there.

10:03 AM  
Blogger MiamiMed said...

By having the government provide charity, you are automatically creating an entitlement. The government really cannot discriminate. The problem with means testing, is that it creates a system which inevitably punishes people for success. I don't agree with Medicare, but I also don't agree that you should pay into the system your whole in order to be denied what you paid for because you made too much. It paradoxically removes the benefit from those who actually pay for it.

Now in the end, everything comes down to philosophy. I just believe that we should make room for many different philosophies. To state that we must make the system "moral" is a highly philosophical statement. The conviction by which you argue that statement could equally be given to the counterargument that it isn't right to take money from people who don't want to give it. You believe that this redistribution is a moral high ground, whereas I think that taking money from people is stealing. The implementation of a centralized health system is simply a political victory of your philosophy over mine.

I am not opposed to government in the role that I believe that it should exist. There are certain things that are necessary for the function of society. National defense, maintenance of public roadways and other public space, etc... I don't even have a problem with basic public health services that control the spread of contagious disease. However, it really cannot be argued that paying for someone's cancer treatment or Cardiac stenting is any more than a personal benefit.

All of that being said. Every government, ever, in any circumstance, has always, and lacking better evidence will always put its own advancement first. That is not only supported by historical evidence, but it is the foundation for American law. If we let only one group of people carry the big guns, we better damn well limit what we let them do.

At the end of the day, we probably both agree that medical care is not the be all, end all good. There is a cost to provide it, and the arguments about how to justify that cost and how much to allow are inevitably in part philosophical.

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