Taking The Patient's Wallet Out Of The Equation
In my 20s, I choose to have adequate but not Cadillac health care -- the Kaiser HMO -- because I chose to go into a profession I love rather than choosing what I do based on the ability to earn lots of money.
That said, as an American, I feel I have a charmed life: I have food in my refrigerator, a small but very cute house I rent, a car to drive, and a washing machine and dryer I share with my neighbors. All of these things are luxuries, really, to people in other places and certainly to people in other times -- and I do remember to be grateful, and kind of in awe that I get to live this way.
But, back to health insurance, say you remove from the equation the fact that I'm paying for my health care, and how the care I choose is directly connected to the fact that I can't afford to have health care like Blue Cross that may go up if I get sick or for some other reason. (Kaiser's cost is fixed by age -- and you can choose lesser or more comprehensive plans.) Well, if I weren't paying, then I'd have little reason to be fiscally prudent. Just give me whatever I can squeeze out of that nebulous entity called "the government," aka "other taxpayers," aka, "This is a stickup. I don't care that you have to work 10 hours a day as an accountant -- I have a cool job that doesn't pay so much, so I'm going to bleed the money out of you."
Of course, I don't think that way. I think people should pay for and be responsible for their own costs, unless they are mentally incompetent, physically disabled, or otherwise wildly out of commission to be working, self-supporting humans. A Spanish proverb I like: "Take what you need, but pay for it."
Well, it seems that being able to rely on "other people's money" for medical bills is what's killing the family doctor, according to Blue Cross exec and brother to a primary care doctor Richard M. Hannon. He writes in the WSJ:
Medicare introduced a whole new dynamic in the delivery of health care. Gone were the days when physicians were paid based on the value of their services. With payment coming directly from Medicare and the federal government, patients who used to pay the bill themselves no longer cared about the cost of services.Eventually, that disconnect (and subsequent program expansions) resulted in significant strain on the federal budget. In 1966, the House Ways and Means Committee estimated that by 1990 the Medicare budget would quadruple to $12 billion from $3 billion. In fact, by 1990 it was $107 billion.
To fix the cost problem, Medicare in 1992 began using the "resource based relative value system" (RBRVS), a way of evaluating doctors based on factors such as education, effort and specialized training. But the system didn't consider factors such as outcomes, quality of service, severity or demand.
Today most insurance companies use the Medicare RBRVS because it is perceived as objective. As a result of RBRVS, specialists--especially those who perform a lot of procedures--do extremely well. Primary-care doctors do not.
The primary-care doctor has become a piece-rate worker focused on the volume of patients seen every day. As Medicare and insurers focused on trimming the costs of the most common procedures, the income and job satisfaction of primary-care doctors eroded.
...So who really killed primary care? The idea that a centrally planned system with the right formulas and lots of data could replace the art of practicing medicine; that the human dynamics of market demand and the patient-physician relationship could be ignored. Politicians and mathematicians in ivory towers have placed primary care last in line for respect, resources and prestige--and we all paid an enormous price.







And here is the way to fix that!
Unless you pay, you won't have a say in the new government plans. Sick? The clerk is not sick. Fill out this form. No, you are not being denied health care service - it's just not available. Go home and wait. We'll call you when it is your turn.
Radwaste at November 8, 2010 2:40 AM
"To fix the cost problem, Medicare in 1992 began using the 'resource based relative value system' (RBRVS), a way of evaluating doctors based on factors such as education, effort and specialized training."
Let me edit: "To [worsen things], Medicare in 1992 began using [price controls], a way of [reducing economic efficiency for political reasons].
Spartee at November 8, 2010 4:52 AM
Instead of or along with the medical VISA card concept we could have a medical Debit card. It could work something like the flexible spending account that my company currently offers. You get to put tax-free dollars into the account and invest the outstanding balance (with funds similar to a 401K account.)
I agree that if people had to pay directly for their own medical costs, the prices of procedures would drop. I always point to the two good examples of this happening today. Cosmetic surgery and Lasik surgery are both elective treatments. Yet the prices of these procedures has dropped drastically in the last 30 years while the quality has risen significantly at the same time.
If we leave medicine to the free markets ... something between a doctor and their patients, we would have excellent care at affordable prices.
AllenS at November 8, 2010 7:06 AM
How about throwing wads of cash into educating people about all the crap they eat that is killing them so they don't get sick in the first place?!
And I mean really educating them from the top down. Start with the dietitians and the doctors! People need to start getting educated about all the bullsh** being spewed by registered dietitians and doctors everywhere which, to be fair, is not their fault since this is what they are taught in school. The science is out there very clear and very succinct. I suggest people start acquainting themselves with it especially if you are overweight or have overweight children.
Start with Robb Wolf's Paleo Solution and read Professor Loren Cordain and read Gary Taubes' Good Calories, Bad Calories. The internet is FULL of excellent scientists with nothing to sell you and nothing to gain for themselves or big corporate interests like wheat producers and drug manufacturers that have vested interests in keeping people sick. Google Dr. Stephan Guyenet and Dr. Kurt Harris and start reading the Healthy Skeptic (.org) and Dr. Michael Eades.
Once these changes are made it is amazing how good one feels and one quickly realizes that FOOD IS MEDICINE! And then get mad like the rest of us that we've been fed a ill-advised bill of goods about what constitutes a healthy diet. The first thing that needs to go: the BIG FAT LIE that is the Canadian and American Food Pyramids!
Rosemary at November 8, 2010 9:37 AM
In Israel they have national medicine, and excellent results, for much less expense than in America. In many European nations too.
The free market does fail in some areas; pollution is obviously one.
Medical care may be another. Oddly enough, it is Republicans who want to keep people alive past their expiration dates (remember Terri Schiavo, the special session of the Republican Congress, and Presdient Bush cutting short his vacation (!) to fly back to DC to keep the vegetable "alive"?
Kaiser has it right: It pulls the plug, sooner, arther than later. Not soon enough, but close.
It will interesting to listen to Alkon in 10 years when she hits 55. She will find Kaiser raising her rates hard and fast, every year. Because she will be in a higher risk group every year. And at 55, Alkon will face 10 more years to Medicare, yet a fading writing career (newspapers will be dead by then).
Maybe it will be back to sleeping on cardboard boxes for Alkon, hopefully not in the alley. Or maybe family money will help.
Why not just wipe out Medicare, if free markets are the solution?
BOTU at November 8, 2010 4:11 PM
"In Israel they have national medicine, and excellent results, for much less expense than in America. In many European nations too."
And this has what to do with us? We are so much larger than israel and european countries as to be noncomparable. We have a nonhomogenous population, a large illegal population, and a very large difference in lifestyles. What works for an ant isn't going to work for an elephant.
momof4 at November 9, 2010 6:24 AM
OK, I'll feed the troll.
We provide a good amount of Israel's national defense money. If we take that away as you so often advocate, their socialized medicine program goes away.
The socialized medicine programs in England, Canada, and Australia are collapsing, already offer a far worse experience on average than the American system, and are unsustainable absent (once again) American defense spending.
And your understanding of Medicare is blinkered. Medicare is a payment scheme, not a health care provisioning scheme like the NHS in England.
And if we're going to use tax dollars to fund medical care for oldsters, I'd rather that the money go to vouchers to purchase individual health-insurance plans rather than let a government with no incentive to be reasonable be in charge of it.
@mom: it's not the size, it's the principle. Socialism just fails more slowly in a smaller nation. But it still inevitably fails.
brian at November 9, 2010 6:32 AM
Amy Alkon
http://www.advicegoddess.com/archives/2010/11/08/taking_the_pati.html#comment-1779250">comment from momof4a large illegal population,
And de facto open borders.
Milton Friedman said you can't have open borders in a welfare state, and he's exactly right.
As a small and sort of related example of how the honor system doesn't work:
My assistant put out a huge bowl of candy -- apparently, she spent about $18 on candy for Halloween, and heard from inside her courtyard apartment, parents encouraging their children to load up. (If my parents saw me taking TWO I'd be chastised for being piggy. They sure wouldn't encourage it!)
Amy Alkon
at November 9, 2010 6:35 AM
Amy Alkon
http://www.advicegoddess.com/archives/2010/11/08/taking_the_pati.html#comment-1779251">comment from brianOur funding of our military also means European countries can go budget on theirs.
Amy Alkon
at November 9, 2010 6:40 AM
No, our funding for military means we pour money into Red states. Get real.
BOTU at November 9, 2010 11:43 AM
Momo-
Such countries as diverse as Thailand, Great Britian and Israel have nationalized medicine, and the results are always the same: Much lower expenditures, roughly same results.
Frankly, I do not like Obamocare, as it does not either go to free markets nor single payer.
Single payer seems to result in lowest costs--but you have to cut people off the hoses at the expiration date.
The R-Party has built a plank around the sanctity of life, based on some sort of psuedo-religious principles (that benefit the health care industry). That means you keep grandma alive on tubes for two moths, and $200k, then she dies.
We are simply have not advanced to the point of an Israel or Thailand when we can say, "You gotta go; you cost too much to keep alive, your life is crappy anyway, and you already lived your life."
Remember Terri Schiavo and ask yourself how that situation, multiplied by millions of examples every year (usually aged) is going to impact your health care expenses.
BOTU at November 9, 2010 2:03 PM
We are simply have not advanced to the point of an Israel or Thailand when we can say, "You gotta go; you cost too much to keep alive, your life is crappy anyway, and you already lived your life."
This is a usage of "advanced" I have not previously encountered, and I hope never to see it again.
CGHill at November 10, 2010 9:17 AM
Our funding of our military also means European countries can go budget on theirs.
If we mothballed a large amount of our foreign bases (especially Europe)-- i.e. they have a local cache of beans and bullets, such as tanks, hummers and ammunition, have about 500-1000 troops to make sure everything is there and in running condition -- then withdrew back to the U.S. and then downsized the military through attrition -- over time we could save millions.
The idea the founders had -- we would have a small professional core of soldiers -- but a limited standing force. We now have a large standing force that aren't combatants -- they are support troops. IIRC -- we now have about 1 shooter for 8+ support troops. That is unsustainable.
Jim P. at November 11, 2010 11:16 PM
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