Healthcare reform

[Brock Beauchamp]

 

I'm sorry, but the market won't be price sensitive (something I've argued with our product and network strategists about, to little avail).

 

1. Less than 30% of US adults have a college education. You want them to argue with docs about procedures? You want them to shop around for the best deal, or the best healthcare?

 

2. This isn't an elastic product. It also is just the opposite, as the need/cost escalates, we need the product more. When we actually need the product, it is most expensive, and you can't just decide to not take drugs and be healthy if you need them.

 

3. This isn't some optional thing, like cheetos or twinkies. We can't just decide not to do it.

 

4. Because it effects everyone, because it is so expensive, and because it is unpredictable, we need to share the costs. That means healthy people will be annoyed they aren't getting their money's worth, and sick people will constantly be fighting to get everything they need (because the healthy people don't want their money wasted). This creates HORRIBLE incentives for every single party in the transaction.

Thank you for pointing out why the free market is not the cure for everything 100% of the time.

 

The free market doesn't apply to some issues and that's okay. The free market is great at loads of things, most things... but like everything else in the world, nothing works 100% of the time across all situations.

[drjim]

Public goods and inelastic demand will always distort a free market.

 

Econ 101 is great, but there is also Econ 201, 301, 401, 501....

[Mike Sixel]

 

Public goods and inelastic demand will always distort a free market.

 

Econ 101 is great, but there is also Econ 201, 301, 401, 501....

 

You'd think at some point, someone in DC would realize it is not an elastic marketplace....

[drjim]

 

You'd think at some point, someone in DC would realize it is not an elastic marketplace....

 

Screaming free market is much easier than actually thinking about something.

[Mike Sixel]

 

Screaming free market is much easier than actually thinking about something.

 

At most companies, if all you do is say why every idea is bad without offering an alternative, you get fired. In Congress, you get re-elected.

[TheLeviathan]

Some good stuff in here, I appreciate all the thoughts.  This isn't an area I know nearly enough about, so it's cool to hear all the thoughts.

 

It's also abundantly clear our system is a complicated ****-show.

[Mike Sixel]

I'm no expert, I just have a bit of knowledge from both the regulator and insurer side. I'm certainly open to ideas at this point.

 

I see at least 2 more states will expand Medicaid now...probably another 5 more.

[drjim]

 

Some good stuff in here, I appreciate all the thoughts.  This isn't an area I know nearly enough about, so it's cool to hear all the thoughts.

 

It's also abundantly clear our system is a complicated ****-show.

 

The other thing that doesn't get enough play (in my mind) is the insanity of linking health insurance with an employer. Not to say there is an easy alternative, but the consequences of that are huge, including keeping people locked into bad jobs and stifling human capital investments (especially mid-life), discouraging entrepreneurship, causing huge harm to small businesses, creating additional problems with layoffs and unemployment, encouraging disability claims.

 

The disability claims is a massive issue. To maintain insurance, people will claim disability. It may be legit for a short time, but it is extended indefinitely, and provides a disincentive to find work, as a new job will cause the insurance to be dropped, often resulting in worse coverage.

 

There are continual rabbit trails to go down to find out how much of a ****-show our system is. About twice as much GDP per person for worse outcomes.

[Brock Beauchamp]

The other thing that doesn't get enough play (in my mind) is the insanity of linking health insurance with an employer. Not to say there is an easy alternative, but the consequences of that are huge, including keeping people locked into bad jobs and stifling human capital investments (especially mid-life), discouraging entrepreneurship, causing huge harm to small businesses, creating additional problems with layoffs and unemployment, encouraging disability claims.

 

The disability claims is a massive issue. To maintain insurance, people will claim disability. It may be legit for a short time, but it is extended indefinitely, and provides a disincentive to find work, as a new job will cause the insurance to be dropped, often resulting in worse coverage.

 

There are continual rabbit trails to go down to find out how much of a ****-show our system is. About twice as much GDP per person for worse outcomes.

Yes to all of this. So much.

[TheLeviathan]

 

The other thing that doesn't get enough play (in my mind) is the insanity of linking health insurance with an employer. Not to say there is an easy alternative, but the consequences of that are huge, including keeping people locked into bad jobs and stifling human capital investments (especially mid-life), discouraging entrepreneurship, causing huge harm to small businesses, creating additional problems with layoffs and unemployment, encouraging disability claims.

 

The disability claims is a massive issue. To maintain insurance, people will claim disability. It may be legit for a short time, but it is extended indefinitely, and provides a disincentive to find work, as a new job will cause the insurance to be dropped, often resulting in worse coverage.

 

I'm going through this right now as a teacher.  To leave the terrible district I'm in means leaving my family of four without insurance for three months.  (Previous employer stops June 1, new doesn't start until Sept. 1)  And taking Cobra might as well cost me an actual arm or leg.  

 

It's stupid and companies/employers use it as leverage to do exactly what you say.

[Mike Sixel]

 

The other thing that doesn't get enough play (in my mind) is the insanity of linking health insurance with an employer. Not to say there is an easy alternative, but the consequences of that are huge, including keeping people locked into bad jobs and stifling human capital investments (especially mid-life), discouraging entrepreneurship, causing huge harm to small businesses, creating additional problems with layoffs and unemployment, encouraging disability claims.

 

The disability claims is a massive issue. To maintain insurance, people will claim disability. It may be legit for a short time, but it is extended indefinitely, and provides a disincentive to find work, as a new job will cause the insurance to be dropped, often resulting in worse coverage.

 

There are continual rabbit trails to go down to find out how much of a ****-show our system is. About twice as much GDP per person for worse outcomes.

 

Linking it to employment is a disaster, it locks you into ***** jobs for sure.

[kab21]

Some parts of healthcare are certainly elastic. No, this doesn't mean that patients will be arguing with their doctor with regards to treatment but doctors can provide alternative treatments and medications that might be just as effective especially for minor issues (like the scar tissue in my ankle). If it is just covered then people are going to opt for the surgery/whatever no matter the costs.

And in many cases the doctors themselves have no idea what the costs are of the exams, drugs and treatment. There are certainly extraneous exams done and medications given because the patient expects something or the doctor is protecting himself from malpractice. Or they recommend certain products/medications instead of cheaper alternatives. As long as insurance is paying and consumers/doctors aren't asking about alternatives medical care in the US will remain expensive. It doesn't matter what kind of system you come up.

[Mike Sixel]

 

Some parts of healthcare are certainly elastic. No, this doesn't mean that patients will be arguing with their doctor with regards to treatment but doctors can provide alternative treatments and medications that might be just as effective especially for minor issues (like the scar tissue in my ankle). If it is just covered then people are going to opt for the surgery/whatever no matter the costs.

And in many cases the doctors themselves have no idea what the costs are of the exams, drugs and treatment. There are certainly extraneous exams done and medications given because the patient expects something or the doctor is protecting himself from malpractice. Or they recommend certain products/medications instead of cheaper alternatives. As long as insurance is paying and consumers/doctors aren't asking about alternatives medical care in the US will remain expensive. It doesn't matter what kind of system you come up.

 

You think other nations spend half of what we do because they have a market economy that makes docs and patients think differently? Of course not, because they just don't worry about it over there, because it's covered. It's not about insurance, it's about the incentives and lack of controls here.

[kab21]

 

You think other nations spend half of what we do because they have a market economy that makes docs and patients think differently? Of course not, because they just don't worry about it over there, because it's covered. It's not about insurance, it's about the incentives and lack of controls here.

Making an argument that other countries are doing better than the current US system (a trainwreck) isn't the same as disproving a system with some price sensitivity built into it.

 

I live in a country with very affordable single payer national health insurance. I routinely get blasted by pointing out some issues that exist while at the same time heaping praise on it.

 

I would gladly trade deal with these issues compared to the current US system (neither affordable nor accessible but high quality if have good insurance) but I won't pretend that these issues don't exist nor will I think that a better system is impossible.