TCS Daily

The Five Big Questions about Health Care

By Arnold Kling - February 12, 2007 12:00 AM

"...these proposals are like band-aids and fall far short of what our sick health-care system needs.

"They build on what everyone agrees is a broken system. Ultimately, they prop up the sagging employment-based insurance system, with all its inefficiencies and inequities, and preserve the second-class income-tested programs such as Medicaid."
-- Ezekiel J. Emanuel and Victor R. Fuchs

American health care reformers face five key questions.

1. What will we do about the large projected deficit in Medicare?

2. What can we do to reduce government subsidies for extravagant use of medical procedures with high costs and low benefits?

3. What should we do about the health care needs of the very poor?

4. What should we do about the health care needs of the very sick?

5. What should we do about a scenario in which both income inequality and the share of average income devoted to health care rise sharply?

Both the left and the right have offered answers to these five questions that are at best incomplete. In this essay, I want to try to deal with all five of them.

The Incomplete Answers

The prescription from the political left is to expand the government's role in providing health insurance. This would appear to address the fourth problem, of providing for the health care needs of the very sick. However, as I pointed out in the column on insulation vs. insurance, this approach is likely to exacerbate the second problem, of subsidizing over-use of health care services. In general, I find that left-wing health care reformers, particularly those who advocate single-payer health care, lack a compelling solution to over-use, and they have no proposals on the table for the number one policy problem -- the unsustainability of Medicare.

In the book Crisis of Abundance, I suggested using long-term, high-deductible health insurance policies to deal with three of the issues. Medicare would be gradually phased out and replaced with what I call "remaining lifetime catastrophic insurance." High deductibles would give consumers an incentive to be cost-conscious in their choices. And long-term catastrophic policies would better serve the needs of the very sick.

The fifth problem reflects the inevitable increase in demand for health care. As Charles R. Morris put it,

"As a society grows richer, the marginal value of one more toy inevitably pales in comparison with another year of life in which to enjoy all one's toys.

"Without a truly radical adjustment in health care spending patterns, which there is no reason to expect, demographics alone will drive health care's share of GDP—now 16%—to as high as 25% to 30% over the next couple of decades."

Some of the increases in health care spending in the future are likely to go for luxury care, as exemplified by Canyon Ranch Health Spas. No matter what direction health care policy takes, it seems safe to assume that luxury care will be paid for out of personal wealth, and it will be out of reach for low-income consumers.

The potential policy problem would come about from an increase in the cost of essential care. This would come from the development and adoption of new medical treatments, which then come to be regarded as essential. The question of how to ration these treatments might arise, resulting in what Brad DeLong calls a crisis:

"Our irresistible force is our belief that health care should not be rationed by price. Our immovable object is the unwillingness of American taxpayers to be turned into an IV drip bag for the health sector that the health sector itself controls. What happens when these meet is a crisis, which cannot be averted no matter whether we adopt the right-wing prescription, adopt the left-wing prescription, or muddle through."

In a recent conversation, Stanford economist Robert Hall posed for me the problem of this inevitable rise in demand coinciding with increased inequality of income. As long as average health care spending goes up faster than median income, there is bound to be pressure for a greater government role in financing individual health care expenditures.

Social Fetish

I approached the problem of addressing these five issues by asking myself two questions:

1. What sort of health care coverage would I like for myself?

2. What sort of coverage would I like to see others have?

If you ask me what kind of health insurance I would like for my family, my instinct is to answer, "None." The only reason we have health insurance now is to avoid the stigma of being called "uninsured."

Somehow, health insurance has become a social fetish. I could travel to the far reaches of the globe, and almost everywhere I would find merchants where my credit is good and my dollars are welcome. But here at home, trying to enter a local hospital with nothing but a wad of cash and a credit card would be like urinating on the sidewalk.

I give lectures to students where I counsel them against buying extended warranties on cameras, televisions, personal computers, and so on. The companies that sell those warranties make money. In fact, they make a lot of money. The money they make is money that you as a consumer lose. When you buy a product, instead of buying an extended warranty, you should set that same money aside in a savings account. Keep this money in a mental account called "self-insurance against products that break." When something breaks, take money out of this account to repair or replace it. Over many products and many years, this account will most likely accumulate a larger and larger balance, meaning that your "self-insurance" paid off.

I feel similarly about health insurance. In spite of some very serious and expensive illnesses in our family, I think that we could have profitably self-insured over the years. That is, suppose that we had not paid health insurance premiums, but instead put that money into savings under a mental account called "health care self-insurance." In some years, the withdrawals from the account to pay for medical services would have been very high -- there have been years where we were probably in the top 10-20 percent of families in terms of health expenses. But on the whole, averaging over all years, I think we would be ahead of the game. And even if our relatively high health expenses mean that we would have lost a little bit on self-insurance, the loss would not be enough to trouble me.

The risks that I worry about tend to be more extreme than the ones covered by health insurance. I would worry about getting into a bad car accident and becoming paralyzed. As we get older, I would worry about Alzheimer's or other major illnesses. Our children turned out to be normal, but back when we were prospective parents, like everyone else we ran the risk of having a child with birth defects.

The Safety Net

What I want other people to have is a safety net. My idea of a safety net is not a pre-paid plan that covers all health care expenses. The safety net should have two components:

1. The primary component is a health care service that is available to everyone but which no one is required to use, with means-tested cost-sharing.

2. The secondary component is a compensation fund for the victims of tragic medical circumstances, including families dealing with birth defects, Alzheimer's and so forth -- the types of risks that worry me the most. The compensation fund would not be related to health services obtained; it would make lump-some payments that vary by the condition being compensated.

Both of these components require collective action. In Crisis of Abundance, I pointed out that today more than 85 percent of health care spending in the United States comes from collective action, primarily government and private health insurance. Instead, I showed that we could increase the share of health care spending paid for by consumers out of pocket from 15 percent today to about 50 percent by shifting in the direction of catastrophic health insurance. My guess is that a similar 50-50 split between individual payments and collective payments would be possible under the safety net that I am proposing here. However, as we look at the decades ahead, with the exception of luxury care we are likely to see that the rising demand for health care is going to increase the share that is paid for collectively.

It is easiest to imagine the safety net for the poor being provided by government. This will be a relatively small part of the safety net, accounting for much less than 10 percent of health care spending, with that percentage dropping over time as economic growth continues to lift people out of poverty.

The largest and growing part of the safety net will be the portion that covers the victims of tragic medical circumstances. For this part of the safety net, one can envision new forms of health insurance and much-expanded networks of charitable organizations and mutual aid societies addressing the needs.

This safety net would supercede Medicaid and Medicare, which would be phased out or ended. With health care available from the government on a means-tested basis, everyone would be assured of access to medical services. With a compensation fund for the victims of tragic medical circumstances, everyone would have protection from the most serious risks.

The Government Health Service

The first component of the safety net would be a government health service that is available for everyone but mandatory for no one. If somebody does not want to take advantage of the government health care, they can buy their own, and I imagine that most people would. If somebody wants to pay for a health insurance policy like the ones that exist today, that would be fine, although I would choose to be uninsured. If employers want to provide health policies, that would be fine, although I would discontinue the tax exemption for employer-provided health benefits.

The government health service would be run by a Board appointed by the President. Conceivably, it could be placed under the Veterans' Administration, which seems to be in good repute these days.

The Board would make a broad determination of which treatments are approved. In this regard, the Board would be expected to be a slow adopter of expensive medical technology. Before approving a costly innovative treatment, the Board would wait until its use in the private sector has been proven and the price has started to come down.

When consumers use the government health service, they do not get to pick their own doctor. The government picks the doctor, from a list of qualified physicians whose fees are on the low end of the range commonly charged.

The Board would be responsible for issuing guidelines that promote quality in services. The Board's mandate would be to provide a service that affluent Americans could feel all right about using, even if most of the government's clientele turn out to be poor.

The government health service would include emergency-room care. The government would contract with hospitals for this, but it would charge consumers for using the service.

Consumers who choose to use the government health care service would pay for services on a means-tested basis. The poorest individuals might have to pay only five percent of the cost of the service. This percentage would rise with income, until a family is earning more than, say, 20 percent above the median family income. Families with incomes at or above this upper bound would pay 100 percent of the cost of any government health services that they use.

The Compensation Funds

Compensation for tragic medical conditions would come from two sources. One source would be private insurance; the other source would be charity. As I envision it, people who purchase private insurance would enjoy better protection than people who rely on charity, but the latter would not be bereft. If government intervention is needed to boost the funds available to people who rely on charity, then I believe it would be better to do so by creating charitable-deduction tax credits that channel more money into this sector. This idea, which I am borrowing from Marvin Olasky, deserves a separate essay for discussion.

Regardless of whether the compensation fund consists of private insurance or charity, money would be paid out in the same fashion. Each year, individuals with expensive medical conditions would apply for payments from the compensation fund. The compensation fund would give money to recipients in the form of lump sums. Someone with a long-term illness would get a new payment each year.

In determining the size of the lump-sum payment, the compensation fund would take into account the typical cost of treating such a person. However, other factors also would come into play.

One factor that might be taken into account is personal responsibility. Compensation might be lower for patients who were careless about preventing or treating their illness. Charities might be more generous to those with low lifetime incomes and less generous to those who squandered money that might have been used to buy insurance policies or save for the medical expenses of old age.

Another important factor would be the expected duration of the illness. A broken arm brings with it fewer long-term expenses than juvenile diabetes or early-stage Alzheimer's.

People would not be required to equate their spending on medical services to the amount received in compensation funds. A person might obtain relatively minimal healthcare services and instead spend money on other things. Someone else might spend all of the compensation on health care and then spend his or her own money to obtain additional medical services that go beyond what is typical for the condition.

Answering the Five Questions

This approach to health care reform could address all five major issues. Medicare could be phased out, as I suggested years ago. Everyone would be paying for at least some portion of their medical services, which should restrain over-use. The poor would have access to the plan provided by the government, which would meet essential needs and require low co-pays. The very sick would receive compensation funds. If the share of income that can be spent on useful health care services continues to rise relative to median income, the rationing of health care would be handled mostly by price, but with the poor able to purchase services at a discount (by paying less than 100 percent of the cost). In addition, the policy of having the government health service be a "slow adopter" of expensive medical technology would serve as a form of rationing.

We are going to see many health care proposals over the next several years. As you evaluate them, keep in mind the five big questions.



It is so sad...
to read such great ideas and know that they're stillborn.
1. How do politicans get votes and money from any of this?
2. How do crises-creating groups(e.g. MSM) make money from the implementation of these proposals?
3. How do you ever convince an illiterate society to the soundness to these proposals? (Few people have even a basic idea of supply and demand.)
Society is like a person. An individual is conceived, grows in the womb, is born and continues to grow for a time. But we all know that growth pre- and post-birth is also a step towards death. So our society, conceived and birthed in the 18th century, by the first few years of the 19th century was already giving evidence of death. (Recall the Supreme Court's non-constitutional decision in the first decade of the 19th century that it was the aribiter of what is constitutional.) Watching society is like watching an ebb tide. At certain moments the tide will appear to be rising but in reality it is falling. Unfortunately for society, unlike the sea, there is no neap tide to follow.

It is regretable that Dr. Kling's ideas fit 18th century America rather than the 21st century where the irreversible tide is socialism.

There some insurance programs moving like that now.
Some you have to cover 3K before you get any benifit. There is always critical care, but you still pay for 3 k over a time period. If you are healthy it costs no more money.

If you have a chronic problem, like bad knees you do pay more. This is still a good sollution.

I like this article. To bad the advice will be ignored.

No Offense. . .
. . .but given the Supreme Court was specifically created as the highest court in the land, and given adjudicating situations in accordance to the law is the whole point of courts. . .

. . .who *else* was supposed to adjudicate constitutional law, exactly?

Complain about the SC reading into the Constitution stuff that isn't there if you wish ( I certainly do ), but don't pretend that without Marbury vs Madison, we would live in a happy magic land where there is never any ambiguity over the relevance of the Constitution to any given situation.

"Overuse" of health care
Arnold, you paint a picture of a nation of hypochondriacs, just waiting for the single-payer plan to arrive so they can rush out and start getting treatment for all sorts of exotic, expensive and nonexistent diseases. Excuse me, but I don't think that's a serious hazard.

If use of medical services goes up once a more viable plan is implemented, it can only be due to patients who are getting inadequate care now. For the poor, the typical pattern is to wait until the need for care becomes critical-- then they go to the emergency room to wait in line all day, in a crowd of mostly indigent coughing and groaning disease carriers. An increase in early detection and treatment, for them, would result in less costly overall bills because their conditions would be managed-- and more rarely reach the crisis stage.

It would particularly save us billions in the case of the most prevalent conditions, such as diabetes. Poor patients coming under the care of one physician early on would cost the system far less than the usual pattern, of coming into the system repeatedly whenever their conditions became critical.

If you want to address the issue of actual overuse of services, do something about the malpractise situation. Half the tests in the country are unnecessary, and are only ordered to cover the doctor's behind, in the rarest of events when a patient presenting with ordinary age-related aches and pains turns out to have contracted dengue fever.

One serious problem presently that a unified health plan would address is that it would increase the avalability of new treatments. Most private insurors find it to be an easy out to deny payment for any new treatment under the catchall category of "experimental" services.

Such services save lives. To wait until many years of evidence are compiled before reluctantly determining they have become the standard treatment is to give us two tiered medicine-- state of the art treatment for those who pay out of pocket, and third rate service for those who merely possess an insurance card.

Agreement with poster on the non-issue of over-treatment
I have friends, family, former employees, and current co-workers who have been un-insured or under-insured. For them, that means they don't go to the dr when their kids have strep throat because they can't afford to, then the kid spreads it to its sibling(s), then they take it to school with them (can't miss school, since both parents work and school serves the dual purpose of education/daycare). The minute a family member steps in and gives them a hundred bucks to go see a dr and get some antibiotics, they head to the dr. It kills anyone to see their sick kids not getting treated, but since they have to pay such a high amount for medical care due to their lack of insurance, they have no choice but to go untreated. And this leads to even greater costs to the population at large with diseases spreading that could have been contained with basic health care.

Healthcare won't make/break this election, though I wish it would. The single most important factor may be what part of the country the candidate represents (as evidenced in every single Presidential election from 1964-2004), as a post in my own blog details. It's in the Election2008 heading at if anyone's interested.

How to reduce costs.
It is interesting that the issue of cost on treatment of the uninsured comes up. The challenge to doctors is that if they know that they may get sued if they don't run all of the available test the cost of treatment goes up. If the drug companies know that they will get sued for any 1% drug side effect the cost of drugs goes up.
The flip side, however, is that there are a lot of things that could be done by Nurse Practitioners, Physician's Assistants, or even a medical technician. There are a number of areas of medicine where technology can remove the need for a doctor to diagnose. Doctors, however, control the licensing procedures and so want to protect thier turf. Doctors did it yesterday, and you can be sure they will do it tomorrow.
NPs and PAs know that if they practice under a doctor the doctor's malpractice insurance covers them, so they don't want to strike out on their own.
The grand bargin should be for malpractice reform as well as licensing reform to allow certain procedulres (strep throat) to be treated by lower cost providers (NPs and PAs). This of course raises the question of if the cost of treatment dropped from $100 to $20 would the above posters relatives go out and get treatment? Is the hurdle the cost or a sense of entitlement?

Moral hazard and the left
Regarding point 2 and "In general, I find that left-wing health care reformers, particularly those who advocate single-payer health care, lack a compelling solution to over-use"

For much of the left, including some of the otherwise brightest people I know, who hold degrees from the country's top engineering and science programs, moral hazard is by and large dismissed as a non-issue or is outright denied. To them "THE MORAL-HAZARD MYTH
The bad idea behind our failed health-care system." by MALCOLM GLADWELL is nigh gospel ( -- currently hanging, so see Google cache at ).

Not only do they not address it, they honestly believe that it is so small a problem that it doesn't warrant concern and that the right is blowing it out of proportion. Rather than accept that moral hazard is a fact of life they argue that healthcare is different and cite anecdotes/platitudes that amount to "no one goes to the doctor unless they have to" while dismissing out of hand those situations (like prescription drugs and diagnostic testing once someone is already at a healthcare facility) that evince that any lost income/time, or discomfort are merely unenumerated costs in the equation.

The Elephant in the Living Room
TO: Arnold Kling, et al.
RE: The Problem Noone Wants to Discuss

I've been following this topic for almost 20 years now. Ever since I left active military service. And I notice there is ONE thing that NOBODY wants to discuss.

It is a serious factor in the overall problem and yet nearly everyone is afraid to touch it. What is it?

It's the monopoly of medicine in this country.

We've watched as medicine went from the healing art to the money industry over the last 40 years. The rise of medical costs rose with the implementation of the "major medical" insurance policies.

Now, the medical industry waits, like a vulture, to devour the life-savings of people as they enter their final medical 'condition'.

The AMA has a stranglehold on medical practice here. It controls all the colleges that teach medicine and it regulates all those who would practice medicine, via the various state medical boards.

We've seen their desire to maintain their lucritive monopoly in their struggles prevent chiropracty and accupuncture being accepted.

In the face of Supply and Demand, they have a monopoly that no government or other agency is willing to control, let alone break.

Sure. There are problems in many different parts, amongst all the players, in this travesty; politicians, insurance companies, hospitals, drug companies, bureaucrats, etc., etc., etc.

But NO ONE discusses the AMA and their contribution to this.

Why is that?


[Diagnosis: A doctor's forecast of disease based on a patient's pulse & purse. -- Ambrose Beirce]

Studies, studies.
I have read a few studies on this, and health care, and it isn't realy definate that people us anymore healthcare when it is free or not.

There are enough negativies to going to a Dr. I would think. It takes time, you have to wait, anon anon. It is interesting to not the most efficient country is Japan. They have a VERY low Infant mortality, high average life expectance, and very low per capity health care cost. And compleatly socialized.

It is the cheepest way to offer health care, that can not be denied.

Is it the best? debate away.

it is an elephant
It's not just doctors, but all medical professionals, who keep tightening licensing requirements and putting restrictions on who can practice what. This is indeed a major obstacle to efficiency and cost reduction in medicine.

TO: Arnold
RE: ....and It Is a 'Rogue' Elephant at That

"It's not just doctors, but all medical professionals, who keep tightening licensing requirements and putting restrictions on who can practice what. This is indeed a major obstacle to efficiency and cost reduction in medicine." -- Arnold

Yes. I'd forgotten about the other 'medical professionals', who are not worthy of being addressed by the high accolade of "Doctor". Those that tend the alter of medicine are the high priests and get the title. The rest, those who tend the hallowed instruments, MRIs, X-Rays, knock-out gasses, etc., etc., etc. are also part of the established 'religion'.

And make no mistake about it, they will defend their position in society much the same way the Roman Catholic church did during the Renaissance....and the Wars of Reformation that followed. Tooth and nail. Rack and gibbet.

I know a retired MD who practiced homeopathy in Denver. The state board TRIED to excommunicate HIM for his heresy. Several times.

I was a volunteer lobbyist in Denver for alternative medical treatment and watched as, what appeared to me, the 'establishment' subbourned an effort to allow naturalpaths to practice in the state.

I have to admit that they were VERY 'clever' at it, as they torpedoed the bill in a committee hearing. Then to see their reps congratulating the committee members who fired the torpedo, afterwards.

They are invasive and pernicious.


[A doctor's reputation is made by the number of eminent men who die under his care. -- George Bernard Shaw]

"Health insurance" is NOT insurance
"Health insurance" is NOT insurance because it does not conform to insurance principles. It is a prepaid medical service. For example, one can not buy fire insurance while the fire department is putting out the fire. Bad drivers pay more for car insurance. Why are sick people given health "insurance" that covers pre-existing conditions?

This mess started out during the Big War to attract employees during a wage/price freeze. It was "major medical" that only covered accidents and hospital admissions. Companies were offered group plans because the sub set of companies was generally healthier than the general population. For example, it didn't include retired people, winos, or dopers. An AIDS organization probably would not have been offered a group hospital plan.

Bull Pucky
TO: roy_bean
RE: What a Jamoke

"If use of medical services goes up once a more viable plan is implemented, it can only be due to patients who are getting inadequate care now." -- roy_bean

Doctors perscribe tests to (1) cover-their-a** and (2) line their establishment pockets.

Personal case in point....

I did not react well to Lipitor. I started losing my ability to concentrate. I was forgetting the names of common items about the house. I was transposing phrases in conversations....e.g., I spoke like Yoda.

I researched these things on the web and noticed that a number of others were reporting similar symptoms after being put on Lipitor.

I stopped taking the Lipitor. And I recovered, slowly.

Later, I mentioned this to my GP. He said, "Maybe you've had a stroke." So he sent me to a neurologist.

I had to wait TWO MONTHS to see the neurologist.

In 30 minutes of motor, balance, memory test discussion, the neurologist pronouced that I had not symptoms of a stroke. This is something I KNEW. But following my doctor's advice I'd done it.

That 30 minutes cost ME $250.

Your bogus claim that the only reason medical care useage would go up was to cover all those who had not had such coverage before, is so full of merde it is utterly ridiculous.

It is more certain that with the government backing up all medical care, vis-a-vis Hillarycare, the medical industry would pillage the accounts faster than I could say, "I told you so."

Or have you thoroughly forgotten all the Medicare and Medicaid fraud, waste and abuse going on?


[Taking all the round of professions and occupations, you will find that every man is the worse for being poor; and the doctor is a specially dangerous man when poor. -- George Bernard Shaw]

yes it can
"It is the cheepest way to offer health care, that can not be denied."

the 'price' the government pays is not the end sum of health care costs in a socialized system. you have to factor in changes in the quality of the care, changes in the wait times, and most importantly the distortion loss that comes when the government imposes taxes. you can't simply ignore most of the costs of a socialized system that don't even exist in the open market and call it the 'undenyably cheepest way' to supply health care.

Exqueeze Me?
TO: billwald
RE: Major Misconception about Major Medical

"It was "major medical" that only covered accidents and hospital admissions." -- billwald

Major Medical insurance policies came into vogue during the 70s. Not during the 40s. And their proliferation correlates well with the rise in healthcare costs—in all areas; property, equipment, care, etc., etc.

Before then, I doubt if it cost several hundred dollars for a one-liter bag of physiological saline. But when i spent a night in the hospital for observation after having a pacemaker installed, THAT'S what they wanted for a bag of pure water with some salt in it.

Before then Hospital-Surgical policies were the big items. H-S policies would cover accidents and hospital admissions.

Like I said, in another part of this thread, theirs blame enough for EVERYBODY to have a good portion thereof. But what Kling did NOT address, and no one else seems willing to do so, is the high priests of medicine's strangle-hold on medical practice in this country.

Hope that helps....


[A doctor's reputation is made by the number of eminent men who die under his care. -- George Bernard Shaw]

naive and wrong
the moral hazard of 'free' health care is not embodied by those that cannot afford basic medical care for simple ailments like streep throught. the moral hazard is for those that CAN currently afford 'adequate' care now. obviously if the can afford it they do not need more care then they currently enjoy but when the cost of care is reduced or removed suddenly the threshhold for what warrents a visit to the hospital and what doesn't is lowered significantly.

the idea that the only thing that changes when health care prices are reduced or removed is the number of people recieving inadequate care goes down is simply naive and demonstrates a completely lack of understanding of economics and human behaviour in general. people don't suddenly feel like they need something more when it is free they think, 'i don't really need this but it's free.'

"To wait until many years of evidence are compiled before reluctantly determining they have become the standard treatment is to give us two tiered medicine-- state of the art treatment for those who pay out of pocket, and third rate service for those who merely possess an insurance card."

i agree, it would be so much better if it were socilaized and we could all enjoy the state of merely possing insurance and be afford third rate service...

What such studies miss is the end of life sort of stuff where the benefits are very small.
What such studies miss is the end of life sort of stuff where the benefits are very small. Most people might, if they had to pay for insurance for just that stuff, would opt to forgo the treatment. Some might even forgo the treatment at the time if it meant a larger inheritance for their children but if it is paid for and they feel compelled to accept the treatment.

Nationalize the Health Care Industry
Problem solved.

How to get $100 worth of value for $250....
I have a friend (BTW he is not poor) who is a big proponent of nationalized healthcare but he once had a job where his employer offered health insurance with a $300 deductible but the employees would have to contribute $100 a month. He opted to forgo the insurance. That unambiguously means the insurance was worth less than $100 a month to him. He is recently became unemployed and so he reapplied to the state of Florida their free health insurance for the poor. I must assume that the state pays about $250 to provide him with something that is not worth $100/moth. In fact I am sure that if you offered him $150/month for his health insurance that he would take the $150/month and go without insurance. The problem you will say is that I he gets cancer he will be sorry that he made the choice that he made but conversely if one pays for the insurance and does not get cancer he will also regret his choice.

Remember that people tend to discount both the future and the past so when calamity happens where they should have been prepared it is still their fault.

Now I am a big believer in charity but I also am a big believer that the amount and nature of the charity should up to the discretion of the giver rather than the recipient. When you put charity up to a vote where the majority are recipients you put the discretion in the hands of recipients. This I disagree with.

Roy so that we are not talking past one another look at my post above for a moral hazard.

TO: All
RE: ...a Maroon

"Nationalize the Health Care Industry...Problem solved." -- acougar

There is hardly anything about 'nationalizing' ANY industry that 'solves' the perceived problems, therein.

Show me a nationalized industry that does well....ANYWHERE, acougar. And by 'well', I mean, operates efficiently, effectively, changes readily to adopt new technology, saves money, etc., etc., etc.

I defy you.

Then again, we could adopt Communist China's approach.

In the 50s, after they took over, they swore they'd eliminate STDs. So everyone was told to go see a doctor. Those who had STDs were taken out and shot.

Today, we hear reports of their converting convicts into involuntary human organ transplant donors.

I'm reminded of a series of tales by Larry Niven, written in the 70s, about this sort of thing.

Go ahead. Nationalize health care. I'm certain that Hillarycare will come up with a way to turn jaywalkers into 'involuntary organ donors'.


[For the rest of us who are not politicians, the less power a politician has, the better—the less we have to fear from him. -- Gyorgy Konrad]

Very true cbpelto...
...they also work to prevent some self care where the diagnosis known and the treatment could be done at home by trained family members etc.

Over regulation
Over regulation – when I was a kid and we went to our family doctor (Dr Motta) would come into the waiting room and say who is next. After seeing the patient he would pullout his big fat wallet (with enough money to make change) and my dad (a fireman) would pay him cash. You cannot find a doctor like that today it is not only AMA it is also the IRS etc. that has made this sort of practice impossible. Also in that day it was much easier to get into medical school so many families had a doctor. Now it is only the very brainy elite that can get into medical school. They don’t even have to make house calls anymore.

Also missing
Is the effects of mandated benefits- once pregnancy started being treated as an "illness" the cost skyrocketed-and what are we paying for? In my less than 5 decades on this marble delivery has gone from being something your Gen'l Practicioner would do- to being something that requires a specialist. But a good deal of the cost increase lies with the parasites in the medical liability bar-who foment the naturally raw emotions of parents who suffer the loss or disability of a newborn-into unbridled rage at the physician who can't perform miracles.

Of course nothing's free and when the brave soul that risks those years of training by traversing the litigation minefield sets up shop, they buy liability insurance that costs 6 figures to obtain in my state-until there's a claim and then it goes up.

On being brainwashed.

The pucky of the bull
Dear Chuck-- We're right on it. If you had read a bit further down the page you'd have seen where I said much the same thing:

"If you want to address the issue of actual overuse of services, do something about the malpractise situation. Half the tests in the country are unnecessary, and are only ordered to cover the doctor's behind," etc.

We also agree there is a lot of Medicare fraud and waste. Better regs plus more enforcement money would save money in the long run. Every government program has that problem where large sums of money are involved.

That's something the voters could demand of their candidates.

Regarding poor doctors, I think we have as much to fear from the rich, successful practises. The bottom third out of medical school generally end up in the free clinics, or VA hospitals.

Medicare mills should be located and put out of business. There are a lot of crappy orthopedists who make millions on Medicare, treating indigent patients with arthritis or carpal tunnel, who never get better and who cost us a thousand a month each in maintenance.

As I Commented Earlier....
TO: Floccina
RE: There's Blame Enough for EVERYONE!

And the government has much blame to bear as eveyrone else in this sorry state of affairs. But it IS nice to hear something specific that can be charged against the government, in terms of over-regulation and, as I prefer to put it, over-criminalization. As I am certain that the government, vis-a-vis the IRS considers it a crime to pay doctors in cash.



Reducing overall costs is a priority
There's a big difference between "nationalized healthcare" and a comprehensive federal insurance plan. We could perform much needed alterations to our existing Medicare-Medicaid and get a lot for our money. Then as we would all pay to the degree that we earned pay checks, the question of whether or not to join would not arise.

What a sensible plan would cover would be some bare bones insurance, with a co-pay, medicines, with a co-pay, and catastrophic coverage for those who get savings-destroying illnesses or injuries.

For anyone wanting better coverage, the existing health insurors would certainly be able to offer supplemental plans. And there are ways to save many billions against what we are spending now-- in paperwork reduction, for instance.

That paperworkis necessary to the setting of rational prices
Roy wrote:
‘And there are ways to save many billions against what we are spending now-- in paperwork reduction, for instance.”

Your argument about reducing paperwork sounds much like those of the socialists near the turn of the 20th century. They argued that it was so inefficient to have more than one car company, more than on steel company etc. They argued that redundancy was waste. Even recently I heard it estimated if all the car companies where consolidated and made just a few models of cars that they could make a profit selling the average family sedan for $4,000 instead of $20,000. but you and I know that government making all the cars would be a disaster (and who would you sue if the car blew up, can’t sue the federal government).

Government as health insurer would have too much market power to negotiate price, creating shortages or surpluses. That paperwork, that always seems so unnecessary to the outsider is necessary to the setting of rational prices

Agree and disagree
I completely agree with "Half the tests in the country are unnecessary, and are only ordered to cover the doctor's behind..." and I think that's the "overuse" the author was talking about rather than "a nation of hypochondriacs" that you mentioned. Although it does seem to me that "half" might be understating how many unnecessary tests are ordered. After all, from the doctor's perspective there is no downside to useless diagnostic tests.

A great deal of our health care is over-specialized. We don't have nearly enough GPs and those we have are being squeezed by Medicare and Malpractice insurance. In fact, a lot of GPs will no longer accept new Medicare patients because the Medicare reimbursement won't cover the office cost so the patient ends up in the Emergency Room - which isn't a very cost effective solution.

I'm not sure how you conclude that a unified health plan would provide easier, and presumably greater, access to new (and experimental) treatments. I've seen no evidence that a unified health plan wouldn't ration health care expenditures even more severely than an HMO (aren't you really just talking about an enormous HMO?). After all, you can sue the HMO if you don't get the treatment - I'm not sure you'd have the same recourse in a unified health plan. Besides, if your conclusion is correct, greater access to experimental services will just drive the costs up which was one of the author's conclusions.

$1000 a head
The last I saw (a couple of years ago) the Liability Insurance cost the OB/GYN $1000 for each delivery.

The Government as Insurer
TO: Floccina
RE: Who Trusts the Gov?

"Government as health insurer would have too much market power to negotiate price, creating shortages or surpluses. That paperwork, that always seems so unnecessary to the outsider is necessary to the setting of rational prices" -- Floccina

We'd end up as so many involuntary organ donors. Just like things are happening in Communist China.



Insurance was never intended to cover runny noses and colds. I have long advocated that people purchase their own insurance instead of employer provided plans, a holdover from WW2. Insurance is for catastrophic care and the HSA allows pre-tax contribution to a fund to offset the deductible. Being self employed this is about the only way to afford insurance, inurance to cover what is intended, a major illness. Pink eye is out of pocket.

If users want total coverage then let them buy it. In any case your already paying for it. If you employer has to buy a expensive policy then he is reducing your wages. It is called the burdened rate.

If the employer is freed from this obligation then wages can rise, possibly a lot. Low risk healthy employees can then purchase cost effective plans instead of paying for care levels they do not need.

I also suspect, like taxes, if most people actually wrote the check every month, like I do, that cost, or tax rates, would become a really big issue.

The Psychological Angle
to this discussion is; paying for Health Care is paying for the removal of a negative, as opposite to paying for the latest gadget which is paying for the acquisition of a positive.

The Lawyer's Itch
Lawyers got an itch in them they gotta scratch - greed. So as I read through Kling's scheme, I just couldn't help but picture a health-care lawyer jerking and drooling in ecstasy. Let's list some of the likely legal claims all taxpayers will be paying out at ruinous expense, shall we?

1. Claims against the Compensation Fund (disease x ought be covered but isn't yet; the payouts aren't enough to cover care and other costs; decisions to discount payouts for comparative negligence were arbitrary; etc.)

2. Medical malpractice claims against the Public Health Service: Hiring the cheapest, least experienced and least entrepreneurial doctors to provide public health care is like writing ever member of the med-mal bar a blank check.

3. Claims against the Board (Board dragging feet on treatment that will save poor little Heather’s life: the case goes before Supreme Court, who awards poor little Heather and everyone else the positive right to life, obligation to the state with costs to the taxpayers; claims against the Board for authorizing treatments that cause other diseases.)

I’m just getting started. It would only take a foursome of experienced med-mal shysters half a round to fully plot out the demise of Kling’s scheme and their ascendance (or descent, as you will) to the realm of the billionaires. And that’s just the shysters who work more than two days a week for a living – I haven’t even begun to reckon the Congressional shenanigans that would cripple the scheme along with America's economy before it even emerged from the relevant committee's cloakroom.

In our system of government, relying on Congress to facilitate the rational, efficient and moral provision of health-care solutions is like hiring NAMBLA to operate a program for abused orphans.

This foolishness is just shocking: Grab hold of power and ride the burn, baby.

Health costs
If you know anyone who is a doctor, ask him or her about the paperwork involved in processing insurance claims. It has turned into a nightmare, and is responsible for a significant percentage of health cost increases.

Also it is the absence of a single large payer able to limit prices that is responsible for the present mess in uncontrolled increases. No one has any clout in the marketplace because they are unable to present a united front.

That it is the cheapest can easily be denied, just look at the facts
The health of a country depends primarily on the personal habits of the citizens. It is these habits that determine what health care costs, not what form of insurance the govt uses.

pls clarify the scope/operation of the GovernmentHealthService
It's really more like an HMO than a Service, right? There are no government-owned offices, hospitals, services. Just a big Payer with a conservative approval mentality.

Am I interpreting that right?

To Mr. Kling
Sir, there is no better answer than for America to forsake complete the evils of Government impossed Socialism/Communism and for once, act like a Democracy should as envisioned by the Founding Fathers, guided by God himself and let people take care of themselves.

As a legal immigrant from a despotic Socialistic,Communist regime, of 50 years as of 3/26/06 and now a Staunch Conservative Christian Republican, one thing that keeps amazing me everday and has not changed from the very beginning, as to how immense gracious and kind the average American is, provided the Federal Government keeps his big and bigger ever more corrupt nose out of where it has absolutely no business to be in. Mind you, get rid of the public schools which are nothing but creators of Socialists/Communists, in as much as they are unconstituional to begin with, and truly demeaning to fathers and mothers and ending up to be the main destroyer of the American homes, becoming and insult to God himself.

As I read things like this for example, from none other than what Dwight D. Eisenhower said: "Every gund tha is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, from those who are cold and not clothed". And going way back to the very Founder of this nation he said these words: "Overgrown military establishments are under any form inauspicious to liberty and are to be regarded as particularly hostile to Republican liberty". Dwight D. Eisenhower, the president whose decencey influenced me to become a Republican repeated the same concers in his farewell address as George Washington did.

Summarizing my comments, lets stop cold this insame horrendous war machinery which is nothing but anti-Americanism immitating even worse regime than all other depotic regimes put together. Just let the private sector, for instance spend, let say 25% of the 400+ Billions America spends on its military and you will see the whole world melt in adoration for this country in as much as it has truly taken up the work of the one who is constantly asked to bless America? Right now, America is actually pleasing the Devil himself while asking God to bless its evil actions the world, especially really in the interest of oil.

With no apology to anyone, especially no apology to George W. the American Emperor, not as behooves that of a USA President. In very simple terms, if America does not quickly wake up, it will go to hell like all other Empires did, including the British Empire, which is nothing now but an appendix to America.

By fearnot a comment on my comment
I apologize for spelling mistakes in my previous comments. I paid no attention to where it urges me to "preview comments". I will never do this again until I do it again, as things sometime develop, after one vouches to never do it again. I did preview this comment!

Sure no one likes paperwork...

"If you know anyone who is a doctor, ask him or her about the paperwork involved in processing insurance claims. It has turned into a nightmare, and is responsible for a significant percentage of health cost increases."

No one likes paperwork and yes it cost money to do paperwork. Could there be less paperwork, yes but there all kinds of redundancies and inefficiency’s in a free economy but it still works better than the alternative. With your logic one would also have to say why have two auto companies all that engineering and those ads could all be eliminated if only one auto comapany existed.

"Also it is the absence of a single large payer able to limit prices that is responsible for the present mess in uncontrolled increases. No one has any clout in the marketplace because they are unable to present a united front. "

You cannot control prices by command without creating imbalance. To decrease price you need to allow more people to do medicine and or opt out of some very top end expensive care in thier Insurence policies.

Systems analysis
It sounds like what you're saying is that there's nothing anyone can do to reduce paperwork, because that's the price we pay for a free society.

I might remind you that there's plenty we can do to increase the efficiency of the system, by reducing redundancies in the paper flow. The art of doing this is called systems analysis.

Let me illustrate through the use of an analogy. Each of the nation's many insurance carriers have different limitations, co-pays, deductibles, terms of eligibility, etc etc in a bewildering maze of different rules and guidelines. The physician can't get by with merely a receptionist who, among other duties, sends the bills off for payment. Instead one needs to hire a specialist, whose job it is to master the rules of each insuror and to file bills in the proper format, on their form, and track the progress of each payment request.

It's a little like having to have a full time translator on staff, in an office where your clientele may speak English, Spanish, German, Urdu or possibly Greek or Chinese. The need to carry someone like this on your payroll increases your overhead-- and multiplies the number of occasions when mistakes can occur-- mistakes that need trouble shooting.

The down time spent in processing the minimum necessary paperwork is reduced considerably by going to a single payer format, where all requests are in English and are submitted on one easy form. The physician can even do this himself once he closes the office to patients. And he doesn't even need to take continuing ed every couple of months just to keep up with rule changes.

Auto repair would also be a lot easier if we only had Fords. Every dealer could just carry Ford parts, and teach his kid brother how to repair Fords. We could have our cars repaired at a fraction of the cost, in a fraction of the time. At present, mechanics have to go to tech schools and learn computer diagnoses, etc. Plus, specialized equipment is needed. So billable time for repairs is triple what it has to be.

With cars, we don't seem to mind the high insurance bills for these extra expenses. We can still afford the costs. But with health care we have already gone beyond the point where we can no longer afford to carry the existing system. So we need to be searching for fresh economies, to slim down a system grown far too complex.

I do not how you got that out of what I said
Roy wrote:

'It sounds like what you're saying is that there's nothing anyone can do to reduce paperwork, because that's the price we pay for a free society.'

I do not how you got that out of what I said. The point is that if you choose to reduce paperwork by having a single payer you will not be better off. This sort of thing was tried in other areas and it failed to reduce costs.

I think it ought to be whatever is most efficient. If the HMO model is best, fine. If something closer to the VA model works, that is fine, too. My guess is that there will be at least some HMO aspects--it won't be efficient for the government to set up a clinic in every zip code in the country.

And you think this would be improved with the government why?

Think one giant insulator (not insurer) with NO COMPETITION and all of the compassion and commonsense of the IRS.

None of the Above
TO: Arnold
RE: No One [Option] Is Good

"I think it ought to be whatever is most efficient. If the HMO model is best, fine. If something closer to the VA model works, that is fine, too. My guess is that there will be at least some HMO aspects--it won't be efficient for the government to set up a clinic in every zip code in the country." -- Arnold

I know people who can pick some serious bones with HMOs.

On the other hand, I can attest to the detestible practices of the VA.

I'd recommend the marketplace sort it out, instead of some bureaucratic, politically motivated—and likely subbourned—committee dictates what we'll do.

What the government ought to be doing is identifying the failings of the system, as it exists today, and making it so that the marketplace can come up with competetive models.

We've done a bit of identification of the problem areas on this thread. What we need is the government to pick-up the ball and run with it; clearing the playing field so there is more competition and, thusly, better efficiencies.


[There are only two qualities in the world: efficiency and inefficiency; and only two sorts of people: the efficient and the inefficient. -- George Bernard Shaw]

Just stupid?

does big discounting to govt (and other big payers) crowd out new players?
When you self-pay, you pay a hideous fee for service compared to what the government or big insurance companies pay the same provider for the same service. And Oligopsony.

Doesn't this reduce innovation in the market?

Should the government, as a large purchaser, consider forcing a more level playing field? Or does that become price controls?

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