Wednesday, March 04, 2009

Health Care Mess to Come

Sally Pipes has a good analysis in Monday's New York Post:
President Obama's new budget dedicates $634 billion over the next 10 years to what he calls health reform. He promises - or perhaps threatens - that this vast sum will be a down payment for universal coverage, which could require more than $1 trillion.

Unfortunately, the president intends to spend all this money on the basis of several pernicious myths common in the health-care debate. As a result, his reforms would ultimately hand the health-care system over to the government and lead to rationing.

The president's budget repeats the popular claim that 45.7 million Americans are uninsured. The figure is taken as proof positive that the current system is failing - and that the government must step in to provide a remedy.

But that misleading number includes millions we can hardly call uninsured. About 18 million of the uninsured make more $50,000 a year - and almost 10 million have yearly incomes over $75,000. More than 10 million aren't US citizens. And as many as 14 million are already eligible for government programs like Medicare, Medicaid and SCHIP - but haven't signed up.

For most folks, health insurance is simply too expensive. And ramping up funding for government health programs, as Obama proposes, won't make insurance cheaper. In fact, it could cause private insurance to become more expensive.

After all, the feds reimburse hospitals and doctors at below-market rates for Medicare and Medicaid patients. So those of us with private health plans have to pay more to fill the gap - and that hidden tax is about 10 percent. In California, for example, private payers paid an extra $45 billion to compensate for unpaid Medicare costs in 2004.

Obama's budget also takes aim at prescription-drug costs by forcing manufacturers to give Medicaid a bigger discount, probably 20 percent, on brand-name drug purchases (it already gets a 15 percent break). That might help curb Medicaid's expenses, but it will raise drug prices for everyone else, who will have to make up the difference.

Taken as a whole, Obama's health plan is predicated upon the misguided notion that government can deliver care more efficiently than the private sector. There's ample evidence to the contrary.


Thai said...

Is this was conservative blogs are now posting?

Stuff like this???

"Taken as a whole, Obama's health plan is predicated upon the misguided notion that government can deliver care more efficiently than the private sector".

How does she define efficiently? She doesn't. Instead saying "There's ample evidence to the contrary", she then gives us a few examples of where government care is inefficient.

If you want a few metrics to compare "efficiency" between countries, here are as many as you care to chose from (from a sightly more reliable source than the NYP).

Which metric do you choose? There are a lot we don't do so well on.

And then there is the ringer "In the UK, the government-run health system explicitly rations medical treatments through the publicly chartered National Institute for Health and Clinical Excellence. NICE evaluates data from clinical drug trials to decide if newer medical treatments are more effective than older, cheaper alternatives. It then makes recommendations to Britain's state-run National Health Service about which treatments are worth paying for."

One of the more emotionally honest statement in the whole article (even if the facts are all true, a lot of emotion AND LOGIC is clearly not).

Of course what the article fails to mention is that the big dirty secret in health care is that the issue is, has and will always be be about rationing. It is just people have different views of how to ration depending on their political views.

The article says "In other words, the British government admitted that patients would likely die without these treatments - but refused to pay for them anyway."

Absolultey true. Do we deny care in the US? To claim care is not rationed in the US would be to outright lie?

Is that what this blog is? An outright lie (at least when it comes to health care).

Do you even know what you are saying when you say "agreed" or is it just some kind of general agreement with conservative principles kind of a statement?

Carl said...


I think you have misunderstood me. I agree that all healthcare systems rely on rationing, as I have said:

Not even socialized insurance can escape the long-standing debate over "rationing by price" vs. "rationing by queue" vs. "rationing by technology." But neither governmental fiat nor taxpayer funding sidesteps the need for rationing--and it's brutal consequences.

My objection is that almost no proponents of "universal coverage" and increase public-sector financing will concede that. Reflecting its mixed private/governmental funding, the US today relies on several kinds of rationing, most importantly rationing by price. But the main point of the article--and mine to--is that there's little evidence increased government involvement delivers superior healthcare.

Thai said...

Carl said "My objection is that almost no proponents of "universal coverage" and increase public-sector financing will concede that."

Agreed- there is plenty of dishonesty to go around on ALL sides of the political isle and the simple truth is no one wants to talk about rationing. Proponents of universal coverage are clearly dishonest in their "something for nothing" mantra used to enroll those with little to their cause.

But the comments of many of your readers (such as OBloodyHell), AND the fact that I am new to this blog suggests to me there is a lot of fundamental misunderstandings on it as to where our actual difficulties reside and in what ways EITHER a public OR a private health care system can or cannot solve our nation's health care problems... Indeed, the idea that someone can stiff the hospital for services rendered and then complain about socialized medicine seems like planet bizarro to say the least.

As for this rationing by technology issue you bring up, I am a little unclear as to whether you are being honest with it or not. You are still fundamentally refusing to acknowledge that Americans spend nearly 18% of their money on health care while other countries spend a lot less. If ANY other socialized country was given (say) a 50+% increase in its budget so that it was allowed to spend 18% as opposed to (say) 9-12%, I think you have to acknowledge that they too might have a whole lot more technology.

The fact the US has the best cancer stats as you so allude is simply proof of "the more you spend on the most expensive illnesses, the better the outcomes will be on those most expensive illnesses".

Of course spending most of the money in your system to keep people alive after they have fulfilled their greatest utility to the economy is a question no one seems to want to ask either?

Is this really the best way for an economy to spend its money vs. (say) more research and development on ways to prevent illness in the first place, or genetics to live longer to keep working, etc...

It does begs the question: "how much do you want to spend on health care?"

And I might remind you that some people (particularly the healthy) are sick of spending so much of their money on health care whether they are conservative or liberal.

And picking on the UK's NICE (which is exactly what your article did) seems a little unfair as well as a potentially a little misleading- and to boot you said you "agreed" at the end of your posting.

Whatever you might think of health care spending and government vs. private, it is clear that FOR THE MONEY THEY HAVE (and the % of GDP), they clearly have the best results in the world FOR THAT AMOUNT OF MONEY (even if it does not get them in first place on an absolute outcome scale). And NICE has radically increased CT scanners, etc... in the UK forcing dramatic increases in spending where their data clearly showed it (if you have forgotten or where unaware).

I certainly agree with those who criticized NICE and the NHS for throwing those who "topped up" on their cancer care out of the system. It was a clear example of liberals pressing their political agenda to the point of committing murder, but in all fairness the NHS and NICE, they did just override the liberal zealots a few months ago. The system is now AGAIN permitting "topping up".

NICE is back to doing the right thing.

Carl said...


I haven't researched the technology rationing point for a while. But, surely you agree that US heathcare has more access to more advanced medicine and diagnostic technology as compared with some socialized systems. I note that the CRS study (and OECD data) you cite do not adjust for other factors that would change the outcome.

In particular, I'm not impressed with UK heathcare--one never hears about Americans traveling to the UK for treatment, as opposed to the opposite. I know NICE and the National Health, have improved recently. And topping up is welcome.

And I don't agree that the US necessarily is over-spending on healthcare. The US simply may value health more.

If you have more data, I'd like to see.

Thai said...

If you are saying the US has better access, you are clearly wrong. When it comes to drug and technology companies, Euros and pounds are as good as American dollars and tech/drug companies will sell them tech/drugs whenever they are willing to purchase them.

If you are saying THE PEOPLE IN THOSE FOREIGN COUNTRIES don't have access, you are correct, but again you are making an apples to oranges argument and somehow saying it is public vs. private that explains the difference between an apple and an orange when there are a lot bigger forces at work- most importantly the simple basic point: "who spends the most money?"

To quote Jack Nicholson ""Nine times out of ten, if you follow the money you will get to the truth"

Your belief that it is this private vs. public difference that explains THE BIGGEST PART of the distinctive differences between countries is to so badly miss the point as to be almost embarrassing IMHO.

America spends nearly 18% of its GDP when we already have the highest GDP/person in the world. Most "socialized medicine" countries spend 9-12% of their GDP when they already have a LOWER GDP/person than Americans.

To say you prefer our system to theirs is fine, but you might as well simply rephrase your statement another way: "I prefer being rich to being poor". Because the only consistent them in any national health care data is that the richer you are, the better your care, whether it is delivered in a socialized OR private system.

There is one problem with making the claim: "the U.S may value health care data more", Americans are allowed to spend money on health care however and whenever they want regardless of cost. They may have better data but they also have a more expensive system than anyone else's. And the fact of the matter is this system has become our single largest entitlement problem. I am sure I needn't remind you that while europeans may have decided to make explicit rationing limits, it is America's system that has a 55 Trillion unfunded liability coming due.

Saying " I'm not impressed with UK heathcare--one never hears about Americans traveling to the UK for treatment, as opposed to the opposite" is more than a little disingenuous.

For a conservative to say: "America love it or leave it, our health care system is the best in the world" and then in the same breath say "I hate big government spending" and "the US simply may value care more" is the ultimate non-sequitur as 1. bog government spending IS most heath care and and 2. If we cut government and gave consumers their money back to choose to spend however they wanted, they would probably spend A LOT LESS on health care.

You can't play it both ways.

For those who are simply interested in bang for the buck, NICE is nice and you have not been able to deny this point (and you can't as most physicians in the world with a a financial I.Q over 100 clearly respect their data- my stethoscope is off to them). Double their budget to American spending levels and I think you might be VERY impressed.

But sure, who can deny that it is always better to be rich than to be poor?

Thai said...

By the way, I agree with all your links. None of them are in any way in conflict with what I am saying.

What I am also saying (which you do not address), is that money spent is more important than public vs. private and none of your links address this.

And while the rich may want to spend it in their old age, is that really the best investment for all of us?

Fine if it is really your own money, but the reality is that almost 50% of the money spend belongs to the collective (you and I).

If I have only 1 dollar to spend, who do I want to spend it on?

Think about it and remember Americans are borrowing in order to do this.

Thai said...

Correction, I did not mean to say "If I have only 1 dollar to spend, who do I want to spend it on?" (though in truth this is a fair question, especially when one is explicitly rationing as they do in England)

I meant to say "If I only have $1 to spend, HOW do I want to spend it?"

Carl said...


I'm confused by your statement that "If you are saying the US has better access, you are clearly wrong. When it comes to drug and technology companies, Euros and pounds are as good as American dollars and tech/drug companies will sell them tech/drugs whenever they are willing to purchase them."

The issue isn't what a rich person can do outside his healthcare/health insurance plan. The question is what drugs and technologies those plans pay for, and most of the evidence of which I'm aware says that U.S. insurance will cover more new diagnostic techniques and pharmaceuticals than European state-provided healthcare.

Thai said...

Carl, "yes", absolutely true. And this is because socialized systems spend less money.

My point is that it is the amount of money people spend on health care that is most significant, not public vs. private.

The VERY large differences in money spent completely overwhelms the small but very real differences in whether care is delivered by a public or a private system.

This issue tends to get lost by BOTH sides of the debate.

A private system with no money still has no money.

A socialized system with lots of money does have the ability to by all the nifty technology it wants.
Canada and the UK does have less technology than we do, but again, they spend a lot less than we do. If they spent as much- you get the idea.

Don't miss the forest for the trees, even if tree observation is very real/important.

Carl said...


I guess we do agree. Socialized systems do spend less money. Which isn't necessarily the decision that any individual, and a market, free to choose, would make.

Thai said...

Yet your own posting notes that government is now spending almost 50% of all the money. Government in America now spends more in absolute dollars than almost any other socialized country spends in absolute dollars.

To the extent these dollars are the property of all American citizens, the citizens could argue that just those "socialized" dollars are not spent as well as other country's socialized dollars.

Your posting have a certain logic gap to them.

Again, I am not saying a socialist health care system with resources of 100 would be better than a free market system with resources of 100 (we don't have a free market system in this country anyway, as your posting again notes).

Even assume for the point of argument that the free market system is better. But better by what?? By 10? By 20? I would argue the difference is probably 5 but that is another matter.

10 or 20 (or 5) is still much less than 50 and yet 50 is the difference between the resources of the American system and every other system.

Don't miss the forest for the trees.

Anonymous said...

Let them eat aspirin and go on diets.

Carl said...


I'll be posting about the Massachusetts policy in a few days.

Thai said...

I look forward to it. I assume you looked at my own posting?