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Tuesday, July 17, 2007

Health Care reading

At some point in the future I'll post a roundup of ideas and material relevant to the health care debate. Having read many books and articles on the subject, I want to take the time to praise the efforts of Dr. David Gratzer for his outstanding book THE CURE. If you read only one book on the subject, this is it.

We are surrounded by medical miracles: polio has been eradicated; childhood leukemia is now treatable; death by cardiovascular disease has declined by two-thirds in the last fifty years. Yet while American medicine has never been better, angst over American health care has never been greater.

Why is American health care such a mess? In this pathbreaking book—Nobel laureate Milton Friedman calls it "fascinating and thorough"—Dr. David Gratzer goes to the heart of the problem, showing that the crisis in American health care stems largely from its addiction to outmoded and discredited economic ideas.

What needs to be done? Dr. Gratzer mounts a bold and provocative argument, rejecting the conventional wisdom that socialized health care is compassionate and that top-down government agencies like the FDA actually save lives. Instead, he prescribes a strong dose of capitalism.

The Cure offers a detailed overview of American health care, from economics and politics to medical science. Weighing in on the most controversial topics in health care, Dr. Gratzer makes the case that it’s possible to reduce health expenses, insure millions more, and improve quality of care while not growing government or raising taxes.
A book which I have on order is Who Killed Health Care? by Regina Herzlinger. Based upon what I've read by her in the past and this interview, I'm looking forward to a worthwhile read.

So, we will either have a government controlled health care system, as in the UK, or a consumer driven one, as in Switzerland.

A single payer system would kill our health.

We have to move elsewhere, to ourselves. You and I need to control health care: not our employers, not our insurers, not our Congress, but us.

The single-payer, government controlled health care system he advocates is great, except if you are sick.

Moore uses Cuba as a model of a great health care system. Get serious: when it comes to health care, this isn’t just propaganda; people’s lives are at stake.

In Britain, tens of thousands have died from cancer who would have survived under U.S. health care and many are placed on years long waiting lists, enduring excruciating pain from arthritic joints or blocked arteries while they wait for their operation. Sometimes they are placed on waiting lists for the waiting lists. While they wait, their problem gets worse making the operation they may finally receive all the more dangerous.

France, which he also lauds, is not a single payer system: much of the money is paid by the citizens for health care. Moore illustrates a Mother who can get her baby taken care of for a few hours a week for “free” in France; but ignores the fact that those doing the laundry are rioting in the streets and the French are drowning in taxes.

Here is how they make it happen: everyone is required to buy health insurance, the poor are subsidized, so they can buy insurance just like everybody else, the sick pay the same prices as the well. The key is that is the Swiss people who buy the insurance, not employers or governments. The people make sure they get the insurance they want at a price they are willing to pay.

The insurers risk-adjust each other so nobody makes money solely by picking only healthy people to insure. And there is a lot of transparency about insurance prices.

But the system is not perfect. The Swiss government micromanages the prices paid to hospitals and doctors, which deter innovation. And it subsidizes inefficient public hospitals which needlessly inflates the budget.

But we have very little innovation in health services which account for the bulk of health care costs. The reason is that we are not doing the buying. And also the insurers put the suppliers in a straightjacket which punishes innovation.

The most important innovation is in the management of chronic diseases which account for 80% of health care costs. These diseases typically cause lots of different problems which are treated by different doctors. A person with this kind of disease has to run all over town to get complete treatment. This fragmentation imposes costs on the patient and our economy .It is enormously wasteful.

The insurers cause it because they pay providers for procedures—doctor visits or hospital stays and not for the complete bundle of care. So the healthier doctors make the patient, the less money they earn.
My sense is that of the foreign alternatives, the Swiss model is the only one worth a lick, but we can do even better.

1 comment:

Bret said...

I probably won't read the book, but I've read some of the reviews and am delighted that the author pretty much agrees with what I think (am I good or what?).

I think I can put it even more basically, however.

What is absolutely critical is to get the majority of the populace on a high deductible policy (say $5,000 or more). The fact that the majority of the people would then pay for most or all of their healthcare out of pocket for a given year seeds a virtuous cycle. The market demand for quality health care at lower cost (since people are paying for it) will cause huge innovations in all aspects of outpatient care and a little bit of inpatient care. Suddenly, that $5,000 pays for more and more of outpatient care and then more and more inpatient care and those procedures will also become cheaper, more convenient, and of higher quality. The populace will demand the FDA get out of the way of innovations and with the communication of the Internet, the reduction in safety will be mostly mitigated. The healthcare revolution at that point will begin to look much like the computer revolution with increasingly rapid innovation and price reductions.

All we need to do is let the market do its thing.