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1 hour ago
Friday, October 23, 2009
Ideas on health care costs
Here Tim Harford argues for catastrophic coverage and health care savings accounts. This argument appears in a longer version in one of his excellent books. Ezra Klein notes (yesterday's blog at 11:55 a.m.) some troubling findings for those who believe that exchanges which allow consumer choice will lower premium costs. Tyler Cowen makes a good point about the availability of health care outcomes (as Atul Gawande has done). These raise some questions for me. Suppose we gave a tax break for medical savings accounts and let people choose only catastrophic coverage on the exchanges. What are unintended consequences? Why hasn't competition between insurers worked? As to the former, would this not affect the power of the mandate that everyone be covered? On the other hand, doesn't the problem of those free-riding on the current health care system really come in when they have a catastrophe? Regarding competition between insurers, isn't the place where we are likely to see the most gains competition between providers? Giving people a choice of plans is good in itself. And further, shouldn't we expect health care costs to increase? We not only have new expensive technology, but more treatments. For instance, 100 years ago my exaccerbation of ulcerative colitis probably would have led to death, which is much cheaper than treatment. 30 years ago they would have just taken the colon out right away, which also would have been more likely to result in death. Four years ago, when I got sick, they tried to treat me with drugs for quite some time, allowing me to at least improve enough to lessen the risks of surgery. Some of these drugs were expensive. For instance, Remicaid was $4000 a dose. Because we have more possible treatments for more medical conditions, costs rise. This leads me to a point a friend made some time ago: the discussion really needs to get to what the basic level of care we are going to give those who get treatment relatively free of charge, like the old or the poor. We cannot afford to pay for everything they may want at any given time. As it is, Medicare and Medicaid are going to swallow up the federal budget.
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Check out the Newsweek article linked to in Tyler Cowen's piece. I am still pondering the implications.
ReplyDeleteWard, I have no hard facts nor a list of references, but one of the reasons the cost of health care has risen so greatly is the cost of health care insurance as well as the cost to the health care providers in filing claims, then following up and then arguing and refiling. It is well-established that the number of doctors and nurses has remained relatively flat over the last 20+ years and yet the number of people in the health care field has increased several fold...all due to people that handle the paperwork. Let's be done with this folly and have Medicare for everyone. As a country we are now paying more for health care than any other industrialized nation. And the people that take advantage of the system are few and far between.
ReplyDeleteAnd yes, we should expect health care costs to increase at some reasonable rate and it should be due to breakthroughs as you mention..not due to insurance companies and the many people required to handle the paper work. There is not one single health care benefit provided by insurance companies..not one!
And recall that this is a business decision...companies that manufacture goods in the USA and then compete in the global marketplace are at a disadvantage because most other countries have single-payer plans such as medicare. And yet it is widely known that the single largest cost item in a GM auto is/was the health care benefits given to employees.
I don't think that it is true that most countries have single-payer plans like Medicare. Canada is the only one that I know of that is really like Medicare, where government pays but the providers are not employess of the government. In Britain, everyone but primary care physicians are employees. In other rich demcracies there is some form of the social insurance oringally created by Bismark in Germany.
ReplyDeleteI am also a ittle confused about the relevance of the fact that insurance companies do not provide health care benefits. Insurance commpanies exist to allow people to manage risk. I am willing to pay $5000 a year so that I don't have a year when I have to pay $500,000, which I may have and which may result in serious harm to myself or death. If you get a serious illness, the insurance company may make it possible for you to get treatment. If that is not a health care benefit, then what is?
As the following post shows, there are items on which I agree with you. Your solution gets at the access problem with health care, but I don't see how it address the cost problem.