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Friday, November 08, 2013

The $317,000 Question

With the rollout of Obamacare being such an epic fiasco that using the term risks libeling epic fiascos, it's easy to lose sight of the problems Obamacare was meant to address in the first place.

Perhaps that is too generous.  That the healthcare system in the US is a shambolic contraption is an assertion that can probably be made without fear of contradiction, even on the internet.  But nothing I read in the run-up to Obamacare's passage, or since, has seemed to this glorified heavy equipment operator of even coming close to properly conceiving the problem, never mind the inherent tradeoffs in any conceivable "solution".  

(In the following, I am going to make notional assertions, most of which I'm not going to source, as a basis to conceptualize what is in play.  Which is kind of like saying I'm making it all up; keep in mind that since my argument is conceptual, it does not rely upon numerical exactitude.)

In the developed world, 21st Century edition, almost everybody dies from disease or decrepitude, rather than misadventure. To simplify things, assume that everyone dies from illness or old age.  To simplify even further, so far as healthcare goes, the difference between the two is without distinction.

As a first approximation, all people have, from the point of view of the health care system, a bathtub shaped lifecycle:  significant involvement in the beginning, quickly dropping to very little involvement, until shortly before the end, roughly two years, when the demand for health care resources quickly rises.

Oddly, that healthcare lifecycle cost doesn't vary a heck of a lot with lifespan: it is the sides of the bathtub that matter, not how wide it is.  The proximate cause of our ultimate demise isn't particularly germane to its cost.  Non-smokers live longer than smokers, but they die no more cheaply.

Time for a hard fact: on average, the lifecycle cost to the healthcare system of a human is $317,000.

Already, the first conceptual hurdle is staring us in the face:  anyone using the words "health" and "insurance" next to each other is to demonstrate for all to see a comprehensive inability to grasp what insurance is about.  To wit, insurance pools risk.  A great many homeowners buy fire insurance, very few of them have their homes go up in smoke.  But if all houses were built knowing in advance that they would eventually burn down, there would be nobody around to take the other side of that bet.  As David Cohen, a longtime member of the PJA, memorably put it, the fire insurance market consists of bets by homeowners that their houses will burn down, and counter bets by insurance companies that they won't.  

Clearly, when it comes to healthcare costs, that doesn't apply, because all the houses, or near enough as makes no difference, burn down.  So what healthcare "coverage" really amounts to is cost shifting.

That is what poses the question at the top of this post.  Assume everyone lives to 75, and the average per-capita lifecycle cost is $317,000.  The simplest answer to that $317,000 question is to leave it up to the individual.  Ignoring troublesome things like inflation and interest return, all good libertarians will start self-funding their own life cycle costs from the git-go, to the tune of $4300 per year.  

That doesn't sound like much, except that for a good libertarian family of four that ends up at close as darnnit to $17,000 a year.  For some of us libertarians, while that is indeed a chunk o' cash, it is manageable.  However, not everyone is above average, and $17,000 per year would go some considerable way towards crowding out some of the luxuries in life. Like food and clothing.  

To make an expensive problem worse, healthcare is not merely a commodity. If my neighbor's house burns down, and they neglected to bet that it would, tough.  In my travels, I have been places (socialist, oddly enough) where that is apparently the attitude to the physically afflicted.  That simply isn't on the cards here in the US.  We will not tolerate the prospect of people with gaping, oozing, chest wounds panhandling.  

Looking at this problem from a life-cycle cost point of view has already led to a couple inescapable conclusions.  Paying for healthcare requires cost-shifting from the healthy to the sick, from the young to the old.  

Viewed through the prism of an insurance bet, it makes sense for a healthy mid-20s male to forego health care "insurance" altogether, or go with a high deductible catastrophic policy and self-insure up to the deductible.  Similarly, it doesn't seem to make much sense for me, having some time ago undergone that special operation, to nonetheless be required to pay for maternity coverage. 

But that is making the mistake of parsing a lifecycle into discreet events, then not checking to see if the sums add. Virtually all women have children, virtually all men become fathers, and essentially everyone living in the high-clover that precedes middle age will find themselves elderly.

Thus far, it sounds like I am making an argument for a single-payer system.  That is the seemingly obvious solution.  After all, if lifecycle costs are largely invariant, and are too high for the less well off, then those considerations pose a powerful moral argument for a system of redistributive taxation and cost shifting.

Unfortunately, single payer systems suffer the same problems to which socialist solutions seem prone: rationing, and pervasive shabbiness.  Moreover, single-payer systems free ride on the US healthcare market for innovation.

Instead, we first need to look at the US healthcare system posing two problems:  cost and affordability.  

Obamacare's fundamental problem, leaving aside the rampant fraud required for its passage, and then the staggering effort to first find, then harness, all the universe's incompetence for its implementation, was in taking a fiendishly difficult problem and trying to solve it all at once (as opposed to the GOP, which, SFAIK, has been entirely missing in action on this).

Instead, the better approach would have been to first address cost.  A great deal of the healthcare we consume does no good.  What is useful is almost always (except in more competitive realms such as elective plastic surgery and orthodontia) far more expensive than other activities that seemingly require similar skills and resources.  Even though healthcare isn't simply a commodity, it isn't immune from supply and demand; healthcare policies seem designed to shield the consumer from cost, leading to overconsumption.  The medical profession is decades behind aviation in adopting standardized procedures; inevitably there are more medical errors, more litigation, and less defense against litigation due to the absence of standards.  End defensive medicine.  The scope of healthcare is (thanks to some truly goofy court decisions) far too wide; infertility isn't fair, and I am sure that to some it comes as a crushing disappointment, but that may not be, to others, sufficient cause for having their wallets lightened.  None of this requires a massive federal bureaucracy, or thousands of pages of incomprehensible legislations, or truckloads of regulations to implement legislation.

Oh, and end the tax code's insane preference for employer purchased healthcare (Full disclosure:  this is an admission against interest.)

Yet even if we managed all that, and entered that nirvana where we purchased only what was useful, and its cost stood nearish to reality, it would still be too expensive for many to find affordable.  

Which is where the nut gets really hard to crack.  No one, not even the Rethuglicans and Teahadists, (who, as we all know, are eternally disappointed because we don't have enough poor people, and the ones we do have don't suffer nearly enough) is the least bit interested in people foregoing useful medical treatment due to lack of money.  Yet it is just as clear that given the scope of modern medicine, the cost of delivery will never be low enough for the affordability problem to disappear.

What then?  

IMHO, the least worst option is something akin to the Earned Income Tax Credit.  A per capita amount that is deemed (note the passive voice here -- it hides a great deal) sufficient to purchase adequate health coverage.  Obviously, this would require increasing taxes on the well off, but this amounts to making explicit that which is already the case -- cost shifting to those with extensive coverage.  Then I would pair that with a Health Savings Account that would be allowed to accrue indefinitely.  The consequence would be allowing more people over time to effectively self-insure, while exposing providers to price sensitivity.

By failing, for whatever reasons, to outline the problem President Obama certainly sold a bill of goods to Americans, and may well have done so to himself, as well.  He squandered an opportunity to make a systematic approach to a fiendishly difficult problem, instead succumbing to the curse of Progressives: a fetish for process and bureaucracy.  The result in the short term, has been a website that makes the Costa Concordia seem brilliant, and, in the long term, an adverse selection problem that will leave Obamacare with a far bigger hole below the water line.

Unfortunately, the Republican contribution to dealing with this ongoing sucking chest wound has proceeded no further than blank stares and slack, drooling, jaws.

The choice between Obamacare and [crickets], gives new meaning to the phrase "Stuck between the devil and the deep blue sea."

[Apologies for any disorganized thinking and writing, or offenses against grammar and clarity.  There is no time left for any of that high-falutin proof reading stuff.]



128 comments:

Bret said...

Hey Skipper wrote: "...anyone using the words "health" and "insurance" next to each other is to demonstrate for all to see a comprehensive inability to grasp what insurance is about. To wit, insurance pools risk."

I still don't understand your aversion to calling it insurance. We all die, is life insurance not insurance. Pretty much everybody either gets in an accident or suffers damage to their car at some point - is auto insurance not insurance. Healthcare insurance is insurance because the timing and total amount of healthcare required is unknown - i.e. there is a timing risk and an amount risk and healthcare insurance pools risk just like any other insurance. For some, the total life time is $317,000, for others maybe only a few thousand, for still others, millions of dollars. But this is only a definitional argument anyway.

Hey Skipper wrote: "Instead, we first need to look at the US healthcare system posing two problems: cost and affordability."

I think that costs would be cut hugely using an approach I've written about previously here at great guys:

"I don't have a big problem with government (possibly even the federal government) covering at least some classes of catastrophic health expenses. My wife (who works in health care administration) calls this the "doughnut" approach where the government covers some preventative care (the "hole" of the doughnut), each individual is responsible for routine expenses up to some maximum (somewhere between $5k - $20k per year and this is the main part of the doughnut) that can be either paid directly out of pocket or covered by auxiliary private insurance purchased by the individual, and the government covers expenses beyond that (the "outside" of the doughnut). It's as if everybody has one of the high-deductible plans with some preventative care (e.g. vaccinations and the like) thrown in."

Since the doughnut part would often be paid out-of-pocket, people would shop around and healthcare providers would compete on cost and quality just like they do in any other industry. Since there is SO much room for improvement in healthcare, prices would plummet pulling ever more into the doughnut/market portion of the equation.

Hey Skipper wrote: "That doesn't sound like much, except that for a good libertarian family of four that ends up at close as darnnit to $17,000 a year."

But the variance is huge. For some families, the average annual cost would be a few hundred a year, for some, hundreds of thousands a year.

Hey Skipper wrote: "...until shortly before the end, roughly two years, when the demand for health care resources quickly rises."

Here's a thought experiment (which I think I've proposed here before as well). Let's say you're 80ish-years-old and you have some disease state and the doctors estimate it will cost $200,000 to prolong your life 12 months and you have the "insurance" (or whatever-you-want-to-call-it) to cover it. But let's say the insurance company (or the government if it's medicare) gives you the following options. Either you can get the treatment (you're entitled to it after all) or if you refuse treatment and just allow yourself to die (perhaps with hospice support) they'll add $100,000 to your estate to will to your children.

Which would you choose?

Peter said...

Skipper, I salute you. That was very, very good. As a Canadian, I am throughly sick of this debate in both countries being stuck in sweeping generalizations based on gruesome anecdotes supposedly typical of the other country. I note that our system is regularly described in the States as either the last word in cutting-edged efficient and socially just modern medical care or a decrepit and cold surrender to Soviet health and hygiene standards. It is neither, of course, but it is very hard to get a badly-needed pragmatic discussion on strengths and weaknesses going in either country when so many in both are screaming that Hell starts at the border. One would think waiting rooms in both are full of corpses because they couldn't wait in one country or pay in the other.

Clovis made a very interesting point over at AOG's, which is that the American visceral aversion to government healthcare or "socialism"* (see below) seems to have bought you a very expensive and byzantine dependence on the private insurance industry with astronomical administrative costs. That the States pays more per capita for medical care than anywhere else in the world by a large margin can be explained by a number of factors, but even before Obamacare, the U.S. Government spent more per capita on healthcare than the Canadian government, which will give you an idea of just how costly American healthcare is. I really don't think comparative health levels gave you a justifiable return on that investment. You have quite correctly (and refreshingly) allowed that the public will not accept even one untreated sick person. Whatever system is best, it has to take this baseline political reality into account in an era of rapid demographic and technological change.

I'm normally not big on looking outside the Anglosphere for political or social inspiration, but this subject may be an exception. There are a number of comparatively successful and quite different systems in Europe and places like Singapore that seem to at least temper the Achilles Heels of the American system (cost) and the Canadian system (accessibility). As with both the States and Canada, their standards of medical care are very high and they rely on some mix of public and private in different interesting ways. They just seem to do it better. What the issue needs is a little gritty empiricism and a lot fewer shibboleths.

* Whatever the problems of the Canadian system, and they are increasingly serious, it is simply wrong to describe it as "socialist". Outside of the military, Canadian governments do not employ doctors or medical professionals, or own and operate hospitals or clinics. Civil servants do not prescribe or direct treatment or regulate hospital stays. What they are is a monopolisitic public HMO that forbids private contributions of any kind, and all our problems stem from socialized insurance, not socialized medicine. The quality of medical care is very high, but timely access to certain aspects of it (not crises or critical care, which junps the queue, more chronic conditions that are serious but never an emergency at any one moment) is a growing worry. It's about the monopoly, stupid! Also, Canadians pay for about 22% of their total health costs directly because a lot isn't covered.

Harry Eagar said...

I don't get why Skipper keeps harping on rationing. Does he think rationing does not occur in the US system?

Weird.

Well, I understand that the rightwingers have sold this bill of goods for over 50 years now, but that does not explain why Skipper, with experience with US and UK, does not get that it's fake.

Peter said...

Harry:

a) 4--18hrs wait in hospital emergency clinics, sometimes in medium distress;

b) 4-8 mo. to see a specialist;

c) 3 mo. for an MRI, mammogram, etc,

d) long waits for dialysis:

e) very long waits for non-critical surgery;

f) waits measured in years for certain kinds of cognitive therapies like for autism in children.

That's just for starters. Canada is a great place to be for family medicine, walk-in clinics, cancer, strokes and heart attacks, but it's approaching barbaric for a lot of wait times in between. Rationing isn't some relative ideological abstract, it means waiting far too long to get the care you need. We've got it and you don't. Don't play games with peoples' health for political advantage.

Bret said...

Scarce resources are always rationed. The choices for rationing are:

1. Price
2. Queuing
3. Lottery
4. Fiat
5. Coercion
6. Some combination of the above.

Each has its advantages and disadvantages and each person has their own subjective preference. A rich person dying of a heart attack prefers price, a poor person dying of kidney failure probably prefers nearly everything to price.

Hey Skipper said...

[Bret:] We all die, is life insurance not insurance.

Yes, in the classic sense. The number of people who collect on life insurance is very small compared to those paying for it. Term life insurance is cheap for the young; the term gets shorter, and the price higher, as the years go by. And, speaking from personal experience, if you have a high risk occupation, that is going to cost, too.

Same for auto insurance. The market works because the risk pool is very large, and more people lose the bet than win it. The average driver does not wrack up anything like $300,000 in losses over a driving lifetime.

Life insurance and car insurance are both true insurance markets because the loss risk is low compared to the size of the pool.

Healthcare is different — the average loss is equal to the total replacement cost of a 3,000 square foot house. The fire insurance market wouldn't exist if the average loss was a house.

So, no, it isn't definitional. Insurance only exists where there it is possible to hedge against risk. The more risk turns into certainty, the less possible a hedge becomes.

But the variance is huge. For some families, the average annual cost would be a few hundred a year, for some, hundreds of thousands a year.

That is no help. The variation is around a very high mean. Another way of looking at it is that, as things stand, the average healthcare life cycle is very expensive, and there are millions of life cycles. That is the nut that needs cracking. There is simply no finessing the fact that whatever solution we come up with must involve cost shifting from the healthy and well off to those who aren't.

BTW, I must admit to some mild shock here. In my first draft of this post, I used a SWAG for the life cycle cost — $200,000. Then I decided to make Google my friend, and discovered I was off by almost a factor of two.

Here's a thought experiment (which I think I've proposed here before as well). Let's say you're 80ish-years-old and you have some disease state and the doctors estimate it will cost $200,000 to prolong your life …

Which would you choose?


Interesting thought experiment, but it oversimplifies reality. For example, when my grandmother was in her mid-80s, she needed a new hip. That wasn't $200,000, but it wasn't cheap either. We could have asked that question of her: is the cost worth it to you for an extra year, or would you rather add to your estate?

I have no way of knowing what her answer would have been, but just because the question is askable doesn't mean it is answerable.

In my grandmother's case, and who could have known, she lived with that hip for another 13 years.

We do spend way too much for too little, both in terms of quantity and quality. Unfortunately, there doesn't seem to be any clear line. I hope, should it come to that for me, that I am brave enough to choose sooner, rather than a little bit later.

Harry Eagar said...

I and my wife experience a, b & e (or worse) in America, and I have gold-plated insurance, so Canadian wait times don't scare me.

If you want to experience really looong wait times, try being a dependent of an active duty serviceman or -woman in America.

Annoying Old Guy said...

Mr. Eagar;

My wife and I don't experience a,b, or e and we don't have a "gold plated" plan. Or we haven't - we'll see how it changes with POR-care. Whose experience trumps whose here?

As for service men and women, and their dependents, who runs that system again? And you want them to run everyone's health care? I honestly have never understood how you can look point out a failure like that and turn around and say "Yeah, let's do that for every one else!".

Harry Eagar said...

My daughter's experience as an AirForce dependent has improved greatly since we got Bush-Chaney out and reasonable resources were directed toward civilians.

My concern is not government but incompetence. Bush was not the best we are capable of.

Annoying Old Guy said...

And clearly the best way to encourage competence is to have a monopoly backed by force which has no escape. Proven by Eagar's personal anecdotes, so who can doubt it?

P.S. You may be fine with having your health care quality irrevocably tied to whatever doofus was elected President, but I prefer more flexibility. Clearly, competence is not the current Administration's strong suit, or something with which they have even passing acquaintance. When you admit "we don't know what this legislation says, but we're going to pass it anyway" you're not working with high quality people.

Harry Eagar said...

I took the trouble (and it was a little trouble; the statistic I was looking for was not easy to find so I had to extrapolate) to find out how many doctors you have in your town:

50% more per capita than the national average, no wonder you don't have to wait as long as most Americans.

I hope you and your wife are properly thankful to upstate taxpayers.

While looking around, I noticed that the UK has a much larger supply of doctors per capita than the US; and that -- surprise! -- Hawaii with nearly universal health insurance has almost as many doctors per capita as Massachusetts with its many medical schools. Or -- surprise! again -- Texas with the biggest population of uninsured has hardly any doctors.

The maps at:

https://www.aamc.org/download/263512/data

give the general idea: don't get sick in a red state.


And before you jump to any unwarranted conclusions, while Hawaii has many, many physicians they concentrate on Oahu; it is hard to get them to practice on the small islands.

erp said...

Harry, easy fix. Get Obama to issue a fiat aka EO to force more doctors to move to Oahu.

Hey Skipper said...

[Peter:] Clovis made a very interesting point over at AOG's, which is that the American visceral aversion to government healthcare or "socialism"* (see below) seems to have bought you a very expensive and byzantine dependence on the private insurance industry with astronomical administrative costs.

IMHO, the root of, it not all evil, at least a goodly part of it, lies in post-WWII wage controls: that is what inflicted upon us the insanity of employer purchased health coverage, and with it the nearly complete separation of consumer from cost.

Had that not happened — had we not relied upon our governmental overlords to decide something properly left to the market — then the cost side of the cost/affordability duopoly would have been far less severe and entrenched.

Clearly, that can't possibly solve the affordability problem, but anything reducing the scope of that problem makes advocating inevitable cost shifting easier.

The issue of astronomical costs isn't as quite straightforward as it seems. It is true that the US spends about 4 times as much as the UK's NHS, but simply attributing that to an inevitable consequence of a private insurance industry seems like it is missing something. After all, given a competitive environment, reducing a significant hit on the bottom line would be the very first thing a profit making health coverage company would do. Instead of a conclusion, that should be posed as a question. After all, the US auto insurance industry is completely private, and administrative costs are so low that they don't show up on a google search.

This seems a decent summary — and devoid of the sound of axes being ground — of why US health care is so expensive. Administrative costs take a big hit.

The New England Journal of Medicine agrees, and offers solutions.

None of them require massive government intervention.

And both substantiate my point: fix the cost side first.

Hey Skipper said...

[Harry:] Well, I understand that the rightwingers have sold this [rationing] bill of goods for over 50 years now, but that does not explain why Skipper, with experience with US and UK, does not get that it's fake.

It is precisely because I lived in the UK that I know it isn't fake. When I lived in England, my grandmother slipped and fell on our gravel driveway, breaking her wrist.

We spent three and a half hours in the ER waiting for her to be seen.

We were the only ones there.

I clearly remember newspaper articles about how long waiting periods were for routine operations — want that hernia fixed? How about the 12th of a year and a half from now?

Of course, that was 25 years ago. Things are obviously much better now. Unless they aren't.

(And please do us the favor of dismissing the report because you don't approve of the source, dismiss that dismissal, and then addressing the link's content. And if that doesn't work, then read what a UK medical organization has to say. )

As Bret noted above, the demand for healthcare, just like everything else within the realm of economics, is rationed in some manner.

In the UK, it is rationed by availability. Of course, the NHS could decrease this form of rationing, but only by making health care more expensive.

It does no good whatsoever to engage in magical thinking with regard to to healthcare (or much else, for that matter, unless it is required to sit through a Thor movie.)

erp said...

Skipper, nowhere in this argument is the fact we already have forced socialism in healthcare in the form of Medicare and Medicaid. Add to that the legal vultures, see John Edwards et al., and the rules and regs dreamed up by bureaucrats that force doctors to use "guidelines" in ordering tests, etc. and it's no surprise costs are so high.

It really is hard for you youngsters to understand that before the feds got into our medical care, it was a manageable commodity.

And even with all that, the quality of the people who go into medicine are among the best we got from the local level to the very top of their fields we met in Boston taking care of our kids after their accident.

I'm not so sure that will continue to be the case in the future.

Annoying Old Guy said...

Mr. Eagar;

Presuming that was directed at me, why should I thank upstate taxpayers?

I also find it stunning that you use your personal experience about health care waiting times to indict the national health care system, and then point out that your bad experiences are based primarily on the unique geography of Hawaii. What, then, is your point? That you're happy to destroy other people's health care even though it won't fix the problems you've had? Do you have any motivation other that pure spite?

Peter said...

Skipper, thanks for those links. It's interesting how the greater U.S. investment in state-of-the-art surgical facilities results in much more surgery. Build it and they will come? The same is true about the myriad of tests that seem to attend even the most routine consultations. I understand defensive medicine and the tort bar is a big part of it, but it's also the march of technological progress, I think, because our doctors have much less reason to fear lawyers and they're into it too. That plus the elephant in the room nobody wants to confront--demographic shift.

A lot of these problems seem intractable, but not all are. Sweden, of all countries, found their hosptal wait times decreased substantially when they instituted an almost nominal user fee (about $20, if I recall, roughly the cost of a case of beer). But we can't seem to even talk about such things without the idealogues surfacing to scream about destroying healthcare by a thousand cuts or cutting loose the poor. To be fair, the more fervent on our side jump in with language that seems to substantiate their fears. A bloody user fee! As they square off in the realm of ideas, elderly folks in distress nod off fitfully in cold waiting rooms at 3:00am.

Clovis e Adri said...

Peter,

---
It's interesting how the greater U.S. investment in state-of-the-art surgical facilities results in much more surgery. Build it and they will come?
---

Yes, you nailed it. It even has a name: epidemics of overtreatment. Some history and summary of it:

http://dartmed.dartmouth.edu/fall13/html/from_pariah_to_pioneer/

http://www.amazon.com/Overdiagnosed-ebook/dp/B004C43EW6

And a great place for data:

http://www.dartmouthatlas.org/

It certainly plays a role in the excessive costs of US Health system. But anyone suggesting solutions to it will receive death panel accusations.

And before anyone thinks I am plucking more feathers from that Eagle, let me say this is not only a US problem - they only happen to have better data to make it clear.

Annoying Old Guy said...

Peter;

If you build it, someone will use it.

An insider joke - once a small group of people created a computer language called "INTERCAL" with the express purpose of making it hard to use, as a kind of parody of other languages. The goal was to leave no doubt as to which programming language was the worst ever. Despite this, people still write code in the language.

More seriously, part of it is also the cost disconnect - even if a test adds only 0.00001% of improvement, why not, if it has no marginal cost for you?

Peter said...

More seriously, part of it is also the cost disconnect - even if a test adds only 0.00001% of improvement, why not, if it has no marginal cost for you?

Yup, but also because your doctor likely will either refuse to give you a prognosis or scare the crap out of you if you decline the test.

Harry Eagar said...

Guy, where did I say my experience with health care was only in Hawaii?

Our last visit to an emergency room was last year in Florida.

As it happened, Tricia was referred from a walk-in clinic as urgent, so the wait was zero, but she was held in the ER for a long time; long enough for me to observe the waiting room.

A drunk who had hurt her foot waited about 12 hours; others more or less. It was one of the busiest ERs I've been in, and I've been in a lot.

Why do you think your county has such an oversupply of doctors? Because it has a big medical school is my surmise. Who pays for that?

Skipper may have a point about providing medical payments through employment, but why don't we change that? Opposition to government backed insurance predates 1942.



Harry Eagar said...

Markets operate in th4 medical field and not always to hold down unnecessary investment.

When CT scanners came out, the estimated demand where I then lived (Des Moines) was 1.

Des Moines is a curious place for hospitals, because back when Iowa was rural and in those happy days when erp imagines that medicine was cheap and widely available, each sect had its hospital and they were all in the capital.

Thus, DM has way to many beds ut none of those sects will close or merge its hospital. There are 2 ig ones, for Catholic (where Tricia worked), and Methodist; and they fight expensively for market share.

They calculated that whoever the needs certificate for the CT scanner would end up dominant, so they spent at least hundreds of thousands, if not millions to see the other guy didn't get one.

Before the state could decide, a small practice just ignored the Certificate of Need process and bought a CT scanner. Then everybody bought one.

They do not stand idle, although the net contribution to overall Iowans' health of having so many as opposed to one or two is likely negligible.

Annoying Old Guy said...

Why do you think your county has such an oversupply of doctors? Because it has a big medical school is my surmise.

That would be typical of your surmises, as there is no big medical school here.

As for why we don't change the employment / health insurance link, it's because the Democratic Party opposes it. It's been a staple of GOP / conservative health care reform for decades. Just another government problem that is a legacy of the New Deal.

Hey Skipper said...

Ouch.

In the NYT, no less.

Harry Eagar said...

You need to check a little deeper into that one, Skipper. Turns out it's another bogus one.

There isn't a big med school there? Unless you've moved, there used to be.

Well, if conservatives want a change, they've had plenty pf time to introduce legislation, including periods when they controlled Congress and the presidency.

Annoying Old Guy said...

I've lived in this area for close to 40 years of the last 45 years and I don't remember there ever being a large medical school in the area. The local university has a medical college, but it's not particularly large, even for a being a university medical school.

I lived in Pittsburg at one time, but that was long before I started hanging out in weblogs like this. There's no really large medical school there, but there are a number of medium sized ones and it was becoming a major hub for medical research and training. I don't think I ever went to a doctor while I was there, though.

Annoying Old Guy said...

How is Skipper's NYT link bogus? Because it is against the Narrative? There are others who don't find it <a href="http://justoneminute.typepad.com/main/2013/11/well-score-this-as-not-a-like.html>bogus</a>. It's certainly right in line with my personal experience.

Oh, wait, <b>my</b> personal anecdotes don't count. After all, others know my home town better than I do.

Hey Skipper said...

[Harry:] You need to check a little deeper into that one, Skipper. Turns out it's another bogus one.

Please illuminate us.

Skipper may have a point about providing medical payments through employment, but why don't we change that?

Unions, such as the one I belong to, with their "I'm alright, Jack" mentality.

That, along with the way practice has embedded the notion that healthcare is free, one of Progressives' favorite words.

[Peter:] It's interesting how the greater U.S. investment in state-of-the-art surgical facilities results in much more surgery. Build it and they will come?

Undoubtedly. Some anecdotal experience:

Twice my daughter has suffered symptoms consistent with a stroke. To the ER, stat.

Each time, they gave her an MRI. Cost: $13,000. Yes, you are reading that right, and no that isn't the total.

Turns out that each time she was suffering what the doctor people call a "complex migraine". I strongly suspect that if you were to run that through Google translate, out would come "we have no fricking idea what it is, but it isn't a stroke."

How is this pertinent to what Peter said?

Let's say she had suffered a stroke, then what would the doctors do? (blood thinners, I think)

Instead of giving her an MRI, they could have treated the worst case, then waited, since that is all that could be done in any event.

But since there is an MRI, then it will get used, despite the fact that the information would likely have been of no clinical value at all.

And that is before getting to wondering just how 30 minutes in an MRI could possibly cost as much to operate as a medium sized airliner.

But since I wasn't paying for it, then it never occurred to me to ask what the point of the exercise was.

(Well, that and I happened to be on trips both times.)

Left out of the discussion about why US healthcare is so expensive is that the US is wealthy enough to spend a lot on healthcare, and are willing to take the precautionary principle to an extreme.

Harry Eagar said...

Unions, representing 16% of workers, can stop changes in health care that you think would benefit 54% (84% minus the 30% who don't get to play in this backyard)?

Seems improbable.

Skipper, I had seen the debunking of that report even before you linked to it. But since I saw it at Wonkette (which linked through to the original takedown) and you guys don't go there, I guess I'm stymied.

Harry Eagar said...

Skipper, was that $13,000 the billed or the agreed-with-the-payor amount?

The publisher I used to work for could be eloquent about what he considered the racket of medical, especially hospital billing. I tend to agree with him.

The outrageous sticker prices allow hospitals to show losses that are not real.

My wife had a hospital bill a few weeks ago with a sticker price of $86,000. The hospital 'agreed' to accept what Medicare would pay. I forget what that was but way less than half.

Her share apparently will be $0.00.

It is nigh impossible to figure out the reality, especially since the hospital and the admitting physician refused her request for a detailed bill. Funny thing, though, she asked one of the supplementary physicians' office manager for a photocopy of the statement of his charges, and she included the secret hospital statement along with it.

It might be interesting to analyze it but I haven't tried.



Annoying Old Guy said...

since I saw it at Wonkette (which linked through to the original takedown) and you guys don't go there, I guess I'm stymied.

Because, as a professional writer, it is simply not possible for you to summarize or paraphrase that debunking, to find another source, or to even hint at the basis for the claim that it's bogus.

Harry Eagar said...

I could but I suspect you'd just shoot the messenger again, like last time.

Annoying Old Guy said...

It's not a messenger if there's no message.

Clovis e Adri said...

Harry,

One thing one must agree, independent of being for or against ACA, is that it plays really ugly when the President is so blatantly wrong about his own policies.

To declare, up front and with no conditions, that everyone could maintain its former insurance, just to tell them later on they could not, looks like a Monty Python joke.

Were Mr. Bush playing one like that - and he did, with respect to WMD in Iraq - people would hold it against him for years to come. I expect no different treatment for Mr. Obama.

Annoying Old Guy said...

and he [Bush] did, with respect to WMD in Iraq

No, that's another rewrite of history, which has been debated heavily here in the past, so I'll leave it at that. But you've certainly bought in to the current MAList talking point.

Clovis e Adri said...

AOG,

We did discuss WMD and Bush here before, and as far as I can remember, apart from Erp, no one defended Bush on this point.

Could you please iluminate me as to what talking point I've bought? Do you think Obama was right in his affirmation that anyone could keep his insurance? You of all people, complaining here many times you can not keep yours...

Bret said...

Clovis wrote: "...people would hold it against him for years to come. I expect no different treatment for Mr. Obama."

That's an interesting observation.

I think that you're correct that "people" will hold many of Obama's policies and statements against him for years to come just like other "people" hold many of Bush's policies and statements against him. But that's just partisan, ideological wrangling, and doesn't really mean much (other than the trend toward Angry America).

However, my guess is that the MSM will NOT be covering that particular misstatement by Obama or reporting on negative aspects of the ACA even a mere year from now, whereas they laid into Bush each and every day of his presidency and a fair amount of time after he left office as well (there's still an occasional strongly anti-Bush article).

If, a year from now, the MSM is covering negative details of the ACA and Obama, if any, I will be surprised and will somewhat lessen the skepticism I have of the MSM.

If the MSM (for example, the NY Times) seems to have forgotten to cover the ACA and its flaws (if any) by October, what impact will that have on you and your trust of the MSM?

Annoying Old Guy said...

Clovis;

That's not what I remember, feel free to point it out to improve my memory. I would definitely defend Bush on that point.

The talking point is "Bush lied about WMD in Iraq".

Let's see if we can set some criteria for this. My starting set would be

1) The politician actually said it.
2) It must be a clear and unequivocal statement
3) The politician knew it was untrue or had no good basis to believe it was true at the time of the statement.
4) The consequences of the lie must be substantial.

Obama's claim about health insurance passes all these tests. For Bush, frequently the claim doesn't even pass (1) and sometimes (2) but in some cases you can argue about (3) or even (4). Without you being more specific about the "lie", I can't tell which on of these points I would disagree.

But let me be unequivocal - my view is that Bush did not lie about WMD in Iraq. Obama lied about keeping your health insurance.

But I don't want to open that can of worms on this thread - as I said, feel free to point out any previous discussion on this. I simply want to put down the marker in the preceding paragraph in case your "no one defended Bush" was simply oversight or avoidance of derailing a thread.

Bret said...

aog,

I think (3) is too harsh. I think you have to stop after "...knew it was untrue."

"Good basis" is very subjective, in which case the receiver of the statement can always claim it was a lie. And, indeed, that's what those who hate Bush claim - that there was no good basis, in their opinion, for Bush's statement about Iraqi WMDs. Therefore it was a lie (to them) by your criteria.

Annoying Old Guy said...

Bret;

I actually rewrote that part a couple of times because of that. I'll accept your edit :-) but would point out the converse problem, which is that you can protect a politician from lying by keeping him ignorant, which IMHO is what is actually being done with Obama. Count up the number of times he has said he found out about something being done by his Administration that he found out about on the news. You could make a good argument, I think, that even though Obama's Administration knew that was a completely bogus claim, Obama didn't know that because no one got around to telling him.

Bret said...

Well, that makes Obama either lying or incompetent, take your pick. And from the Left, the same would be said for Bush.

Lying is malicious and a sin of higher magnitude in my book than mere incompetence.

Human nature's a bitch. I'm glad I'm perfect! :-)

Annoying Old Guy said...

Let's remember that, according to the MAL, Bush was personally responsible for anything done by any one under his authority, even if Bush didn't know and didn't approve (e.g., Abu Ghraib). Obama, on the other hand, is not responsible for anything, including things he says himself. In fact, it's likely that whatever the problem, that's Bush's fault too.

Clovis e Adri said...

Bret,

---
But that's just partisan, ideological wrangling, and doesn't really mean much (other than the trend toward Angry America).
---
I beg to disagree here, Bret. This should not be about ideology at all.

---
If the MSM (for example, the NY Times) seems to have forgotten to cover the ACA and its flaws (if any) by October, what impact will that have on you and your trust of the MSM?
---
My trust on the NYT has been severely shaken already. I do not need to wait one more year to conclude yet again they are following an agenda.

When I say people will hold Obama for that statement in future, I do not expect those people to be necessarily the NYT. I do expect them to be, in many cases, Republicans. The same with WMD and Bush: it is the Dems who usually touch that error, while many conservatives - AOG is here to prove me right - keep their eyes shut to this day.

But elections are decided not by the partisan types, but by the middle, and those usually take notice of their leaders errors. I think they voted the GOP out in 2008 because they recognized the error of the wars, among other things.

Clovis e Adri said...

AOG,

Among your definitions, I only care for the number (4).

It really makes no difference, in my opinion, if Bush was acting in good faith based on bad intel, or if he purposedly advanced the notion of WMD dangers from Iraq knowing his intel could not afford that.

The same goes for Obama. I do not care if he really thought everyone could maintain their insurance, or if he was misled by his advisors.

Both acts carried consequences, and both need to be accountable ultimately as failures of the leader who enabled them.


You need to be truly naive if you think that Bush, or Obama, being in the position they are, can not judge by themselves their acts. They can - and when they do not come to clean the mess themselves enabled, that's the ultimate judgment of character that matters here.

Annoying Old Guy said...

Clovis;

Why bother asking me, since I "keep my eyes closed" based on ideology? Although some may believe that an "error" is different than a "lie".

It really makes no difference, in my opinion, if Bush was acting in good faith based on bad intel, or if he purposedly advanced the notion of WMD dangers from Iraq knowing his intel could not afford that.

I think it makes an enormous difference. A person making a mistake based on bad information can be persuaded to change policies by better information. That's not a possibility for someone who lies, because he's already decided facts do not matter.

You need to be truly naive if you think that Bush, or Obama, being in the position they are, can not judge by themselves their acts

I have no idea how this relates to anything I've written. Judgement, if it is to mean anything, is ultimately based on facts, which makes it very different for those who try to get good information and fail, vs. those who already know and disregard.

You need to be truly naive if you expect our leaders to always have perfect and complete information on which to act.

Clovis e Adri said...

AOG,

---
Why bother asking me, since I "keep my eyes closed" based on ideology?
---
Two reasons, (i) I am not sure this is the case (only it looks to be), so to certify myself, and (ii) even if I conclude you are blinded, it is still worth the effort to see how you shape things so they fit your moral standards.


---
[on honest mistakes or lies] I think it makes an enormous difference.
---
I was sloppy in not making myself clearer: usually I do think it makes a huge difference too, but only when this is an observable fact. Most of the time, the complexity, distance and fog over all things political make it impossible to judge if the mistake was an honest or deliberate one - so in these cases, I can only judge the outcome.


---
You need to be truly naive if you expect our leaders to always have perfect and complete information on which to act.
---
You think so because you miss my point: I am not judging them by how well they delivered based on the information they had at hand, but by how well they correct those errors after information is abundant.


I am still waiting for Bush to say "We did wrong by justifying the Iraq war on WMDs". He can follow it with an "I believe the war was right for X, Y and Z reasons, but I deeply apologize for the people of Iraq for that episode where my representant went to the UN and wrongly accused them of pursuing nuclear bombs when they barely had food to eat".

Bret said...

Clovis wrote: "This should not be about ideology at all."

Why? It sure looks like it is to me. I don't think all that many republicans much care anymore about Bush's statements about WMDs and Iraq and I rather doubt many democrats will much care about Obama's statement about keeping insurance after a few more weeks.

It's all about scoring points with the middle.

Clovis wrote: "I think they voted the GOP out in 2008 because they recognized the error of the wars, among other things."

That's not my observation. I'd put the following three things WAY ahead of the war as far as getting Obama elected:

1. Financial crisis was reasonably blamed on Bush.

2. Obama seemed really, really cool.

3. McCain was uninspiring and in questionable health and his running mate was scary to a lot of people.

Annoying Old Guy said...

Clovis;

I am still waiting for Bush to say "We did wrong by justifying the Iraq war on WMDs. He can follow it with an "I believe the war was right for X, Y and Z reasons"

Bush didn't do the first part, because he already did the latter. He did before before the invasion of Iraq. For instance, go read his speech to the UN which, I note, predates the invasion. Who, exactly, is closing his eyes here?

Bret;

If you want a good comparison of Old Media in this regard, simply consider the debate and investigation of Bush's pre-invasion claims, specifically the WMD claims, vs. how Obama's ACA claims were "investigated". None of this insurance cancellation is a surprise to any one who looked in to the subject, but how much was that covered, especially leading up to the 2012 elections?

As for the 2008 election, I agree with your three points, although I would put (2) as the primary reason. You can see a similar hang over with foreigners who are now recovering from being Obama cult members :-).

P.S. And there's another Old Media shift - compare coverage of the military situation in Iraq and Afghanistan pre and post 2008. Or even the "dissent is patriotic" meme.

Clovis e Adri said...

Bret,

---
It's all about scoring points with the middle.
---
You disagree with me, just to agree at the end. Yes, the middle is the kingmaker, and I guess many in the middle are less worried about partisanship and more worried about results. In this context, weak results due to ill informed (or ill motivated) leaders are penalized.

If the Iraq war had no been a prolongated failure, no one would remember much of Bush's WMD mistake.

If ACA turns out to be a success, in a few years no one will pay much attention to Obama's mistake too.

And I am being coherent here, for I emphasized my judgment on AOG's number (4) requirement.

---
That's not my observation. I'd put the following three things WAY ahead of the war as far as getting Obama elected:
---
I'll not argue over this one, for sure your inside experience counts more than mine. From my far away location, I did have the impression that war's fatigue played a role too, but I can not say how it compares to your points.

Clovis e Adri said...

AOG,

---
Who, exactly, is closing his eyes here?
---
You, who conveniently choose to ignore Powell's speech, among many other things.

Annoying Old Guy said...

Um, I thought we talking about Bush and what he said.

Clovis e Adri said...

That's because your eyes are closed and you ain't paying much attention, buddy.

Harry Eagar said...

'None of this insurance cancellation is a surprise to any one who looked in to the subject,'

Really, you knew the companies would illegally cancel policies? I'd like to see the clause that mandated that.

Annoying Old Guy said...

Clovis;

Got tired of moving the goal posts, eh?

Mr. Eagar;

You have an amazing ability to be incoherent. If a clause of the ACA mandates cancelling policies, it's not illegal, it's the law.

Are you seriously claiming this wave of cancellations is illegal?

Hey Skipper said...

[Harry:] Unions, representing 16% of workers, can stop changes in health care that you think would benefit 54% (84% minus the 30% who don't get to play in this backyard)?

Yes, they did, and still do. They made sure that treating healthcare in lieu of salary was not part of the ACA.

It stinks. There is no practical or moral argument for excluding the cost of employer purchased healthcare from taxation, while those who have to get the same thing on their own are using after tax dollars to do so.

My union is vociferously in favor of keeping it that way.

Hey Skipper said...

Somehow I failed to hit the Publish button on this, from upthread a ways:

[Harry:] While looking around, I noticed that the UK has a much larger supply of doctors per capita than the US;

While looking around, I found that your notion of "much larger" differs significantly from mine (and, I suspect, most others). The UK has 27.7 physicians per 10,000 people, the US, 24.2.

Larger, yes. But much larger, no. Also unanswered, because you didn't ask, is how many Physician Assistant's the US has, compared to the UK. That is worthwhile knowing, because PAs take on many of the tasks primary care physicians used to do.

Without some context, that 10% difference, small to begin with, doesn't really mean much.

Peter said...

Well, you may have a few more doctors than the UK, but you more than make up for it by having way more lawyers. Lucky people.

Clovis e Adri said...

AOG,

---
Got tired of moving the goal posts, eh?
---
Not at all, Sir. If you read me again you'll see I was clear on making the point that big mistakes rest on the Leader's shoulder (for example, I said "Both acts carried consequences, and both need to be accountable ultimately as failures of the leader who enabled them").

Were you paying attention, this makes Powell's speech, and all other fake intel used to justify the war, Bush's failure. In similar conditions, you would be crediting such failures to Obama too, you just can't admit that right now, in order to preserve your double standards.

Annoying Old Guy said...

Clovis;

OK, let's read you again -

To declare, up front and with no conditions, that everyone could maintain its former insurance, just to tell them later on they could not, looks like a Monty Python joke.

Were Mr. Bush playing one like that - and he did, with respect to WMD in Iraq


Now it's "Bush's policy was a mistake". I disagree, but one can make a reasonable argument for that. But, reading you again, you said he hadn't made the case against Iraq other than on WMD. When I pointed out he had, you shifted to "Powell didn't!", although no specifics were provided for that, either (e.g., exactly what Powell's lie was).

Let us also note the context of your remark was Obama's direct and personal lies on the subject. Would you like a YouTube video of some of them?

Beyond that, you claimed that direct lying by a politician was distinct from policy mistakes, but I guess that's inoperative now as well.

erp said...

If everyone knew there were no WMD in Iraq, why was the UN which as we all know is incapable of duplicity, employing inspectors to look for them. I can't remember the name of the head guy and can't take the time to look it up now, who was later found to be some sort of pervert. Bubba was also all over the WMD meme.

You may disagree with how Bush governed, but he was one of the most decent people ever to sit in the Oval Office and nothing would convince me he did anything other than what he thought best for us, not for himself.

Hey Skipper said...

[AOG:] None of this insurance cancellation is a surprise to any one who looked in to the subject, but how much was that covered, especially leading up to the 2012 elections?

When Obama was directly stating people would have the choice of keeping their plans, I believed him.

But I have to admit I didn't think much about it -- I'm not in that market, and the statement wasn't facially farcical.

There's one big problem, and it goes beyond voters' rational ignorance.

Journalists, who are in the business of informing the rationally ignorant, completely failed to understand that the whole thrust of the ACA is completely inconsistent with individual risk pricing.

There are serious arguments that healthcare economics aren't consistent with such pricing. But since journalists, en masse, failed to investigate the actual law, or comprehend in general terms what it must entail, Obama's assertions went completely unchallenged.

On Obama's part, there are only two explanations. Either he himself was too stupid, incurious, or both, to take on board that what he said would happen couldn't possibly. He desired the cake and its eating, and didn't spot the glaring contradiction.

Alternatively, he knew full well that what he was saying was wrong in detail, that it was a complete contradiction of the ACA's fundamental premises. That makes him a blatant liar of the very first stripe, telling such glaring whoppers that if was a corporate executive, he'd be wearing prison orange by now.

Which leaves Obama's worshippers in something of a pickle. Obama: dumber than Bush, or more mendacious than Madoff?

The real shame here is that there is a real chance that the outcome will be such a fiasco that there won't be another chance to deal with the very real problems of the US healthcare system for another generation.

(BTW, the proof that Bush wasn't lying about WMD is that none was found. Think about it.)

Harry Eagar said...

Why, yes, I am claiming that some (but not all) cancellations were illegal.

Skipper, unions may have had influence on the very close vote on ACA, but what about all those other years when nothing was done?

Boehner said day before yesterday the the he didn't want to see any changes in the finest health care delivery system the world has ever seen? Apparently not everybody agrees with you that it needs fixing.

Harry Eagar said...

http://www.poynter.org/latest-news/creating-a-framework-for-ethical-decision-making-among-journalists-and-those-who-care-about-democracy/229413/gloves-come-off-as-journalists-debunk-each-others-obamacare-horror-stories/

Annoying Old Guy said...

As usual, I fail to see any point to your claims, that "some" cancellations were illegal (2? 17?) or your Poynter link. The latter is hardly new, it's been standard to Old Media to do whatever it takes to defend Obama and his policies, as we've noted above. So attacks on critical reports is simply the hunting the heretics.

Harry Eagar said...

Shooting the messenger again instead of dealing with the issue, I see. I am not surprised.

Annoying Old Guy said...

Yes, that's quite typical of you. But I read your comments anyway.

Harry Eagar said...

Speaking of finding stuff in the Act, I recall that Guy (prompted by Palin) found those death panels. Now that the Act is in effect, do those go into operation on Jan. 1, or do we have to wait a while before the tribunals start shuffling decrepit pensioners off to the extermination camps?

Or can we now agree that was just another rightwing maneuver to terrify and cow a vulnerable population into acting in the interests of the rightwing and not their own?

Annoying Old Guy said...

Mr. Eagar;

Look up "IPAB". Even The Hill and others as well.

So, no, we do not agree. I think Palin was correct and many others (from across the political spectrum) are realizing it.

Hey Skipper said...

[Harry:] Skipper, unions may have had influence on the very close vote on ACA, but what about all those other years when nothing was done?

Either misunderstood my point, or I gooned it up. As the dogs breakfast known as the ACA was being written, unions were very insistent that the money spent by companies in lieu of salary to purchase healthcare coverage remain untaxed.

That is nonsense economically, and indefensible morally.

As for all the years when nothing was done, I blame Progressives for advancing byzantine plans — Progressives seem to like nothing more than process and convoluted policies — remember Hillarycare?

I blame every politician for failing to either make the cost of healthcare coverage up to a certain amount 100% deductible, or making the in lieu of salary costs a line item on the W-2. The consequence was hiding from most people the true cost of healthcare, which meant they bought more of it than they needed, or did any good.

And it ensured so many entrenched beneficiaries that the existing system would be very hard to change in any event.

But I suppose I blame Obama the most. If he was as smart as he thinks he is, and even have as good a communicator, he could have made a case similar to the one I did in the post: define the problem first, then look for ways to minimize its scope before deciding on a solution, and be quite honest that there is no such thing as a free answer. He could have engaged Republicans, he could have created some commission to propose measures.

He did none of these things. Instead we got a gargantuan bill that no one read, and even fewer understood.

Including the President.

I read your link, and noticed this para:

Browsing on Covered California, the state’s new online insurance exchange, Hiltzik found little basis for Cavallaro’s fear – unchallenged in most of the news stories — that she’ll be forced to pay sharply higher premiums or be left without insurance at all. In fact, Hiltzik found that Cavallaro can choose among several health plans, including at least one with similar benefits and lower premiums than her current policy.

Now, not having Cavallero's details, I'm not sure he can know that. But let's assume it is true as written. Hiltzik has thereby succeeded in proving the general case must be true by showing the exception. Even the most innumerate Progressive must know by now that by eliminating risk pricing, a great many people MUST see their premiums go up significantly while getting plans they don't want.

There's no such thing as free.

Hey Skipper said...

Boehner said day before yesterday the the he didn't want to see any changes in the finest health care delivery system the world has ever seen? Apparently not everybody agrees with you that it needs fixing.

Link? It is hard to respond to something other than his exact words.

The point I was trying to get at in this post is that there probably isn't any such thing as "fixing" healthcare.

It is likely we pay too much for too much; there are ways the market could solve both problems.

But there is no way to realize the morally attractive goal of making healthcare equally accessible to everyone without making many, perhaps most, worse off in some way.

Single payer seems like the obvious answer, certainly to Progressives, because it (like warmenism) puts them in charge. But just because something is obvious doesn't make it right. Healthcare throughout the world is likely better because the US's system is not government run.

Maybe the best thing isn't to kill the Golden Goose.

Clovis e Adri said...

H. Skipper,

For what the rest of the world opinion is worth (and I know it is not for most Americans), I give you mine: this Golden Goose talk is nuts. We are not getting anything from you for free.

Annoying Old Guy said...

it’s also true that the United States, with less than 5 percent of the world’s population, buys more than 50 percent of its prescription drugs. And it buys them at prices designed to subsidize the rest of the industrial world

Given the price disparity, I think we can presume that the USA population spends significantly more on prescription drugs (which funds the research) than all of the rest of the world combined.

Annoying Old Guy said...

Skipper;

Let me say that whether the higher premiums are true for Cavallero, they are certainly true for me. SWIPIAW managed to hold the premium increase down to about double (+100%) in exchange for a higher (~50% more) deductible and fewer in network options. So I will be (1) paying more and (2) getting worse health insurance due to POR-care. This remains true despite all of Eagar's links and claims.

Clovis e Adri said...

AOG,


Let me see your logic here.

Suppose China eat up 50% of the world's rice.

Then, when you buy one pound of rice in your supermarket, you should thank them for it?

Annoying Old Guy said...

Clovis;

If

1) Chinese pay a much higher price for their rice

and

2) Because of that, new, improved rice strains are developed on a regular basis

then, yes, I should.

Clovis e Adri said...

AOG,

OK, you are free to thank anyone you want.

IMO, those Chinese are kind of weird if they accept to pay so much higher prices for their rice. But it's their money, after all, what do I care? I prefer to keep my thanks for things with a more definitive causal link. Otherwise, I would be thanking you for generating CO2 molecules that may, one day, be the ones my tree happen to absorb.

Harry Eagar said...

Those are Boehner's exact words.

2, 17, 900,000, but who's counting?

The lawsuit just got filed but the revelations came out a week ago, for anyone paying attention:

http://www.ibtimes.com/anthem-blue-cross-wellpoint-wlp-unit-sued-allegedly-tricking-tens-thousands-dropping-grandfathered

Bret said...

I'll assume Harry places 100% of the blame on Anthem and 0% of the blame on Obamacare.

I place the blame for Anthem's very likely unethical and allegedly illegal sales pitches on both. In other words, without the incentives associated with Obamacare, Anthem's words and actions would likely have been different.

erp said...

Here's how the Golden Goose aka Capitalism works:

The goose lays golden eggs and the workers are productive and prosperous. All is well. Greedy lefties take over and want more and more eggs from the goose. The goose says, "Hasta la vista, baby."

The workers despair, but they are outnumbered by the shirkers whom the fascists have bought off with shiny beads and colored lights. All has gone to Hades, but the lefty elites are rich and that's what counts.

Clovis, please explain why you believe that the foreign aid Brazil receives from U.S. workers isn't free to you?

Annoying Old Guy said...

Is it not the case that absent the ACA, there would have been no cancellations at all?

Let's check the official website for California

"[Health Care] Contractor agrees to promote ways to offer, market and sell or otherwise transition its current members into plans or policies which meet the applicable Affordable Care Act requirements"

2, 17, 900,000, but who's counting?

Not you, clearly, as the article states "tens of thousands", not "hundreds of thousands". Based on that, it sounds like 90+% strictly due to the ACA.

Clovis e Adri said...

Erp,

Could you please detail wich aid you are talking about?

Notice also that I was dismissing AOG's claim that the rest of the world is free riding on US health system.

I was *not* dismissing the very pronounced philantropic role the US, and many of its citizens, has in so many parts of the world - and any help my own country gets from it will sure have my appreciation.

My point is, after all, that Thanks should go to direct and tangible help. Not to obscure claims like this golden goose talk.

Harry Eagar said...

Here ya go, Skipper:

http://www.nbcnews.com/health/best-health-care-system-really-john-boehner-2D11598594

California isn't the only place. Some even occurred in -- wait for it! -- Illinois.

Let's see if I get this argument right: a law is passed making X illegal. Y violates the law. The blame is on the legislators who passed X.

Got it.

Annoying Old Guy said...

That's certainly not my argument.

Bret said...

It's my argument, sort of, ignoring some points and nuances, and having a different perspective.

Here's what Harry wrote: "Let's see if I get this argument right: a law is passed making X illegal. Y violates the law. The blame is on the legislators who passed X."

First nuance. X is illegal, but Z is what Y is alleged to have violated, not X. I'll come back to this.

Second nuance. At this point Y is alleged to have violated the law. When it comes to folks like Harry, businesses are always guilty until, well, until always. Guilty of every actual, alleged, imagined, or even just potentially possible crimes. Some of the rest of us still have this silly and romantic notion of innocent until proven guilty beyond a reasonable doubt. It was a nice ideal, too bad it's long gone here in Angry America. My bet is that the "alleged" will be settled out-of-court so we'll never really know if they're guilty beyond reasonable doubt or not. A second point is that I can sure imagine that Obama and supporters would sure like to beat up on companies like Anthem in order to distract everyone from the fiasco that is Obamacare so far. Because of this, even if they are found "guilty," I won't be convinced of their guilt. This may or may not be a witch hunt, but there's no way to tell one way or the other.

Third nuance. I didn't write "The blame is on the legislators," I wrote, "I place the blame ... on both." I agree that the folks at Anthem are not angels.

Everybody breaks the law. As an example, in the last 5 hours, I drove faster than the speed limit on several roads and didn't come to a complete stop at least twice.

Because the government does not have my consent, I have absolutely no compunction regarding not following laws. My calculus is simple: (1) if a law aligns with my morality, then I follow the law; otherwise, (2) if the risk of getting caught coupled with the associated punishment is greater than that I'm willing to bear, then I follow the law; if neither (1) nor (2), then I break a law when it benefits me.

Business owners are no different. Most of us are pretty moral and generally try to avoid hurting others including employees, customers, and investors (probably in that order). Large corporations are more impersonal, and the owners are fairly insulated from the morality of the corporation's actions, so that applies somewhat less.

So Anthem, because of new law X, had huge incentive to skirt law Z (or allegedly break law Z). Any legislator who causes a law X to be passed should be held responsible for foreseeing the incentives they're creating, realize that not everybody's an angel, understand that it WILL cause numerous laws Z to be skirted or broken, causing disruption to the lives of a huge number of people, and possibly killing some of them. If they can't figure that out, they have no business passing X in the first place.

Anthem deserves blame, and in my book, the government deserves blame. Anthem may or may not be guilty, but the government is very clearly guilty of severe negligence.

Annoying Old Guy said...

Bret;

You mean "attractive nuisance"? Private citizens get hit with that, why not the government too?

Hey Skipper said...

[Clovis:] For what the rest of the world opinion is worth (and I know it is not for most Americans), I give you mine: this Golden Goose talk is nuts. We are not getting anything from you for free.

Really?

Sequencing the human genome for the first time cost somewhere between $1B and $3B. All of that paid for by Americans. I think the cost is now down to around $1,500.

It is early days yet, but I think there is at least a decent chance that being easy and cheap sequencing will lead to effective therapies that wouldn't have been possible, otherwise.

The entire rest of the world will have gotten that for free.

A couple more examples. There has been a lot of innovation in corrective eye surgery and orthodontia — practically all of it in the US, and explainable by the profit motive. That is the Golden Goose, and Americans are primarily the ones feeding it.

But we aren't the only ones getting the benefits.

Which is the largely unacknowledged problem at the heart of Obamacare and all other forms of socialized medicine. They do provide an answer to the affordability problem, but it always comes at the cost of innovation.

What is the best answer to that moral dilemma?

Hey Skipper said...

[Harry:] [Here is Boehner's quote asserting the US has the world's best health care system]

Maggie Fox, the author of that story (carried under a NBC News banner, but the sound of axe grinding is so loud it can't possibly be news) is both innumerate and immune to even the most basic applications of logic.

Yes we spend more for health care — we also have more to spend. There just might be a cause and effect relationship there, but you won't find a syllable about the latter part of that sentence.

Then she makes the classic, endlessly repeated Progressive mistake: confusing characteristic with composition. Americans, as a whole, do die younger. But the composition of Americans is not the same as the composition of British, or Japanese, or New Zealanders.

It is either in sheer ignorance of the screamingly obvious, or in service of an agenda, that she ignores the composition difference. How do the health parameters of Norwegian-Americans compare with Norwegians?

She then asserts that Americans also wait longer to see primary care doctors. Heck, that could possibly be true. (Left completely unmentioned was how long it took to see a specialist.) Being curious about that statement, I did some o' that fancy Googling stuff: [average wait time to see a primary care physician]. The top hits were all about how hard it is to get a primary care physician in the U.S. Well, to be specific, because characteristic and composition are, after all, different, the part of the U.S. called Massachusetts.

Hmmm.

Here is some data Ms. Fox could have used, except that it would have taken nearly two minutes to find, and fifteen to understand, and probably an hour or so to integrate with similar data for other OECD countries.

Similarly left untouched is any evidence contradicting Boehner's claim. In what way, specifically, is Britain's health care system better than the US's? Or Norway's?

Cheaper doesn't necessarily mean better, nor do worse health parameters necessarily mean worse healthcare.

IMHO, as I hope I made clear in the post, the US healthcare system has serious problems with cost and affordability. And while it does have quality problems (lack of standardization that I cited being a primary cause), I think Boehner is on firm ground in saying that, in general, the quality of healthcare in the US is the best in the world.

Peter said...

the quality of healthcare in the US is the best in the world.

Not only would such a sweeping claim be impossible to substantiate empirically, you probably wouldn't get general agreement on the markers. You might establish that the U.S. is a world leader in medical research and state-of-the-art high-end care (but not without a lot of competition), but "healthcare" encompasses a lot more than that. Just ask Cubans.

I don't think analogies to theoretical or experimental science will take you as far as you want to go. I can't remember the last time my wife told me our child was quite sick and needed to see an expert in genome sequencing.

In what way, specifically, is Britain's health care system better than the US's? Or Norway's?

Seeing as you have readily allowed that cost and affordability are serious and very divisive problems for American healthcare, isn't it obvious that Britain and Norway are better on cost and affordability?


erp said...

The reason health is so expensive is a massive beaucracy, intrusive regulations inposed by non-health professionals and ambulance chasing lawyers abetted by the courts.

Harry Eagar said...

Skipper, I didn't even read the commentary. You asked for Boehner's eact words. That was the first hit that had them.

Please address Boehner. He has the vote.

Guy, I recall you announced your insurance cost were going way up some time ago; before the exchanges were opened, I believe. Have you looked into the exchanges?

Annoying Old Guy said...

Mr. Eagar;

Have you looked into the exchanges?

Yes. SWIPIAW spent literally *days* looking at all our options and she is about as tech savvy and smart as they come.

You know, you might want to talk to Senator Gillibrand whose position is "of course the middle class is going to get screwed by POR-care, how could anyone have thought differently?". As Skipper keeps pointing out, and you keep ignoring, POR-care absolutely requires this kind of rate hike, it can not work without such. It is baked in at a fundamental level. Anthem was doing exactly what the federal government wanted, and the fact that it was illegal seems irrelevant after Obama's last press conference in which he openly recommended insurance companies violate the law. For our current President, it's not about whether corporate actions are against the law, but whether those actions are against him.

Clovis e Adri said...

AOG,

---
[...] and the fact that it was illegal seems irrelevant after Obama's last press conference in which he openly recommended insurance companies violate the law.
---
What are you talking about? You do enjoy making strong affirmations without any regard for links, don't you?

Hey Skipper said...

[Hey Skipper:] In what way, specifically, is Britain's health care system better than the US's? Or Norway's?

[Peter:] Seeing as you have readily allowed that cost and affordability are serious and very divisive problems for American healthcare, isn't it obvious that Britain and Norway are better on cost and affordability?


You know I think argument via analogy almost always fails, but I'm going to take the risk anyway.

I'm going to recast my question: In what way, specifically, is a Ford Focus better than a BMW, or a Mercedes?

Asked in that way, then there is no question that BMWs or Mercedes qua cars are better than a Ford Focus.

Similarly, my assertion is that qua healthcare, there is no area where Britain or Canada et al are better than the US. Clearly, it is possible to argue that while US healthcare may be better qualitatively, the difference isn't worth the cost. That would be the same as agreeing that a BMW is a better car than a Ford, but it isn't anywhere near two and a half times better.

This is where Harry's criticism of Boehner's assertion, and the cite, went wide of the mark. I couldn't help but notice the complete absence of statistics on actual healthcare — cancer survival rates, say. I don't mean to say I agree with Boehner -- I don't know enough to say whether the healthcare delivered in the US is better than elsewhere -- only that the familiar stats trotted out are either irrelevant to assessing quality, or statistically meaningless.

Clearly, other OECD countries' healthcare systems are better in terms of cost and affordability, but that doesn't mean they are better in terms of the healthcare delivered, now, or in the future.

Hey Skipper said...

[AOG:] ... and the fact that it was illegal seems irrelevant after Obama's last press conference in which he openly recommended insurance companies violate the law.
---
[Clovis:] What are you talking about? You do enjoy making strong affirmations without any regard for links, don't you?


Here is an excellent discussion on Obama's backpedaling and its grotesque illegality.

Clovis e Adri said...

H. Skipper,

---
Really?
---
Really. Unless, of course, you keep moving the target in order to prove your point, even though your last affirmations are quite different from the prior ones. Please follow me below.

---
Sequencing the human genome for the first time cost somewhere between $1B and $3B. All of that paid for by Americans [...]
---
First, a few corrections: the Human Genome Project was not a sole US program, it was an international collaboraton. Almost half of the centers used to execute it were abroad. About $2.7 Billions (in dollars of 1991) was the cost for US taxpayers. I did not look for how much Germany, UK, China, among others, spent - although I do expect the US financed more than all others. But it shows that yours "The entire rest of the world will have gotten that for free" line is not quite correct.

Now for the moving target: don't you realize this example has nothing to do with the original claim, please?

The idea you and AOG propagate is that US citizens, by buying and eating their tons of (sometimes overpriced) medicine, and paying up an overpriced health system, are subsidizing the health care of other nations. It was a claim that *private* US spending was driving *private* companies to research new technologies that, by their hreat heart and compassion, they would be giving freely to the rest of the world.

Then you come up with... an example of *publicly* financed research project in fundamental science. Really?

Let me tell you, dear Skipper, a lot of nations out there are spending from 1 to 3% of their GPD in basic science, all of it going to public academic journals. I never got a penny for publishing my own papers. So in this sense everybody is subsidizing research for other nations. You may, and should be, proud of the large role the US has in this kind of global subsidy - but to declare everyone out there is a free rider is simply not true, not kind and not humble.


Now for eye surgery... gosh, you live in a bubble of intense light (the US research and tech establishment), with the downside that you get blind to other light bubbles around. Eye surgery has contributions from so many people from all over the world, I have no idea what you mean here.

I have a quite successful uncle who is a M.D., and his doctorate in the 70's was in Germany, with the (German) pioneer of laser eye surgery. Have you flown your Heavy Machine to Germany already, H. Skipper? It is Not in the USA.

Annoying Old Guy said...

It was a claim that *private* US spending was driving *private* companies to research new technologies that, by their hreat heart and compassion, they would be giving freely to the rest of the world

I don't remember that "giving freely" part. Your previous objection to this claim was that it wasn't clear how much of pharmaceutical revenue was from the USA vs. the rest of the world. I've now provided evidence that, in fact, most of it is from the USA. If we simply presume the research is funded in proportion to that revenue, that validates this claim.

Hey Skipper said...

[Clovis:] But [the Human Genome Project] shows that your "The entire rest of the world will have gotten that for free" line is not quite correct.

You are right, it was not entirely a US effort. I should have checked first. And you are also right that I wasn't helping my case by citing a publicly funded program.

Now for eye surgery... gosh, you live in a bubble of intense light (the US research and tech establishment), with the downside that you get blind to other light bubbles around. Eye surgery has contributions from so many people from all over the world, I have no idea what you mean here.

Yes laser eye surgery has contributions from all over the world, but its commercialization happened primarily, if not exclusively, in the US.

It is trickle down economics in action. When it first became available in the late 1990s, it cost $4500; now it is down to about $1000.

It was Americans who were paying the $4500 bill, and the competitive US market that drove down the price. The rest of the world reaped the benefit.

Also worth noting is that price trajectory. While the rest of healthcare has gotten more expensive, laser eye surgery has gone the other direction.

It isn't covered by insurance, so the cost isn't hidden from consumers. (And, to be completely fair, it is a form of therapy that is more amenable to shopping around.)

The idea you and AOG propagate is that US citizens, by buying and eating their tons of (sometimes overpriced) medicine, and paying up an overpriced health system, are subsidizing the health care of other nations.

That's not quite my point (nor AOG's, if I may be so bold as to speak for him).

The only reason there is drug development is that there is money to be made on the the successful medicines. Since the US is by far the greatest source of that profit -- due to most other countries regulating far lower prices -- then the rest of the world is free riding on the US consumer. Who paid for the development of AIDS anti-retroviral medications? Sure wasn't Africa, or Russia.

---

There is no doubt the US pays more for healthcare, but it isn't nearly as clear just what healthcare encompasses.

For example, many US states require insurance companies to cover infertility treatment, including IVF. UK's NHS covers infertility treatment, but rations it, both in terms of quantity and wait times.

I don't have time to find specific numbers, but it sounds very much as if some of the cost difference is due to differences in the scope of healthcare. People in the US have more disposable income, so will more often be able to pay for LASIK. If that is considered a healthcare expenditure, then the portion of the US GDP to healthcare is greater simply because we have more money to spend.

Clearly these examples don't make up the entire difference, but my guess is that comparing like-to-like, and fully accounting for the huge burdens of litigation, would make the differences far smaller.

(Perhaps OT, but in the US, personal injury lawyers nearly destroyed the light aircraft industry. Until legislative reform in the early 1990's, product liability insurance was 50% of the cost of a new airplane. Even now, 30% of the cost of an engine is down to product liability insurance. Obamacare resolutely failed to do anything about the impact of tort costs on medicine.)


Peter said...

Skipper:

If you wish to make the argument that universal public healthcare insurance would negatively affect the quality of medical research or state-of-the-art experimental care, go ahead, although it's much too complex an issue to be dealt with in one sweeping rheorical sentence. You can't pretend the rest of the OECD scorns research and just goes with Mao-style barefoot doctors in village clinics. My authority for dissing your Ford/BMW analogy is that famous sage, Hey Skipper, who once wisely said To make an expensive problem worse, healthcare is not merely a commodity... We will not tolerate the prospect of people with gaping, oozing, chest wounds panhandling. That's just not true about cars or other comsummables. That's why we call it a healthcare system--the scope and nature of its delivery is an integral component. We don't talk about automobile systems, do we?

I have no idea what you can or should do, but rousing rhetorical cheers about how the US is best doesn't sound to me like someone dealing from strength or even confidence.

Hey Skipper said...

I have no idea what you can or should do, but rousing rhetorical cheers about how the US is best doesn't sound to me like someone dealing from strength or even confidence.

There are probably four or five characteristics unique to Progressives, foremost among them is assuming their conclusion without having made the argument. (To be absolutely clear, I'm talking about Progressives, not you.)

To a Progressive, Best means everyone has equal access to healthcare. En route to Best is lower cost. So, to a Progressive, a healthcare system that consumes a smaller proportion of GDP is better than one that consumes a larger percentage, particularly if certain parameters that are at least notionally correlated with healthcare are no better, or even worse.

If those are the bases upon which to rank healthcare systems, then the US is not going to fare well.

Which means I can't refute the Progressive premises, because not only are they axiomatic, they are also very defensible.

But they aren't the only criteria. And an unacknowledged problem (IMHO) with the Progressive approach is that it suffers from static analysis -- it is a variation of the lump of labor fallacy.

There is a moral value to be assigned to the state of healthcare in the future. One of the reasons I used the Ford/BMW analogy is time. Let's assume we decided that everyone had to have equal access to cars, and that they would all be priced the same, and the price would be set at a point where everyone could afford them, with subsidies where required.

The moment that happens, automobile innovation will come to a dead halt.

Without a 2006 BMW, there will never be a 2013 Ford that is as good. Think about all the things that a new Ford has -- dynamic stability control, airbags where you didn't think there were places, automatic tensioning seat belts, adaptive cruise control, never mind all the frills.

That list came about because there was profit to be made on the innovations, which then became cheap enough for wide adoption. Every one of them (and there are many more) provide incredible value to the Ford purchaser.

So when it comes to the transportation system which, like it or not, is based upon personal vehicles, a competitive market where not everyone had equal access to the latest safety features created personal vehicles where everyone ultimately has access to all of them. This has saved thousands of lives.

At this instant, a Ford Focus is a better car than a BMW in all the similar respects that one might compare OECD countries with the US healthcare system.

The open -- and almost impossible to answer -- question is whether, if US healthcare became European tomorrow, whether we would all be better off in 20 years.

Because I feel (not "believe", because I'm not knowledgable enough) the answer to that is "no", then I have to advocate a system that retains risk pricing and the profit motive, even though I know that some people today will be worse off than others, often through no fault of their own.

I am fairly certain that the healthcare I enjoy is unparalleled anywhere in the world; in that regard the US system is the best. I also drive a BMW.

Which is why, the more I think about it, the more furious I am with Pres Obama. He had a once in a century chance to find an honorable opponent -- Paul Ryan, say -- with whom to come to agreement on the scope of the problem, then, and only then, chop it up into digestible bits.

Some of those bits are inherently collective, others individualist. Progressives have to take that on board, and so does everyone else.

Instead, with the hubris which is Progressives' most prominent feature, Obama concocted (or agreed with) a grand scheme that collapsed on minute one of day one, and was sold with flagrant lies.

Which means the US is going to be stuck with all the gooned up parts of its healthcare system for another generation.


Harry Eagar said...

A system that doesn't deliver even basic care to a large fraction of its people can hardly be 'the best.' If you think Boehner meant 'best system for rich people,' and I thik that is exactly what he meant, then I will not disagree.

Clovis e Adri said...

H. Skipper,

I think your Ford/BMW example can illustrate too my puzzling with your line of reasoning: your fear that inovation in medicine will be damped by ACA, makes as much sense IMHO as to fear that a similar government change for car insurance markets would make BMW or Ford lazy to improve cars.


Annoying Old Guy said...

Clovis;

A better analogy would be that such a government change for car insurance would also

1) Require insurance

and

2) Explicitly list which features a car must have to be insured

and

3) Inflict punitive taxes on any "luxury" car that is better than in (2).

Hey Skipper said...

[Harry:] A system that doesn't deliver even basic care to a large fraction of its people can hardly be 'the best.'

There is a lot in that sentence that seems declarative but really isn't. What do you mean by "basic care"? What is a large fraction?

Regardless, I'll take the sentence as meaning no care to nearly a plurality of the US population.

It is worth remembering that one of the major criticisms of the US healthcare system is that it costs a lot more than the rest, while delivering essentially the same outcomes.

So if I take your statement at face value, There are two possibilities. Either half the US population lives far longer than the other half, but that isn't true (absent the M-F difference, but that isn't relevant here).

Or, a large fraction of healthcare spending is utterly useless, no matter how it is paid for.

(Also, you neglect to consider how many of the excess costs and barriers to availability of the US healthcare system are exogenous to it. After all, it isn't responsible for the insanity of employer purchased coverage, or a tort system gone mad.)


Hey Skipper said...

[Clovis:] I think your Ford/BMW example can illustrate too my puzzling with your line of reasoning: your fear that inovation in medicine will be damped by ACA, makes as much sense IMHO as to fear that a similar government change for car insurance markets would make BMW or Ford lazy to improve cars.

AOG's response was on the money.

Obamacare isn't just about insurance, but the product delivered: everybody pays the same, and gets the same.

Which is like saying that every car manufacturer will build the Ford Focus, and that is the only car available to buyers.

Six years ago, heads-up displays were newly available, but only on cars in the $60K plus range.

The 2014 Mini, which will be in the low-20s, will have one.

The market for cars is "unfair". Which would you rather have, a "fair" one, or what we have now?

I don't want to push that analogy too far, though.

The point I wish to illustrate with it is merely that "fair" can be looked at a lot of ways, and also that "fair" has consequences over time.

Which makes solving healthcare the devil's own problem.

Harry pungently describes the US system. How would he make it better? What are the tradeoffs?

We traded a healthcare system riddled with problems of access and excess cost for chaos and absolutely jaw-dropping incompetence sold with blatant lies and bought wholesale by Progressive dupes.

Clovis e Adri said...

AOG,

Even taking for granted your version of the analogy, I still do not see how it would lead to stagnation in car technology.

Your prescription is the equivalent of making the different car (the "luxury" ones) a little bit more expensive. It can have effects on their sales, but to say it would make the companies to give up on them makes no sense.

Do you think BMWs a few per cent more expensive wouldn't sell? You must not have paid attention to car markets your whole life to think so.



H. Skipper,


---
Obamacare isn't just about insurance, but the product delivered: everybody pays the same, and gets the same.
---
Maybe I grossly misunderstand your point, but I can not conciliate this affirmation with anything I've read so far. Are you and AOG paying the same, and having the same? If it was a one option only system, how can it be that everybody is confused about their new possibilities within ACA?

You look to be oversimplifying matters here to a point it is no longer connected to reality.

Clovis e Adri said...

AOG & H. Skipper,

I was forgetting to answer this one:

---
[AOG] Your previous objection to this claim was that it wasn't clear how much of pharmaceutical revenue was from the USA vs. the rest of the world. I've now provided evidence that, in fact, most of it is from the USA.
---
I do not know why you believe my point was the lack of information on that. My point was that I do not see - and was not presented to - any economic model that justifies why your money is so much more valuable than mine (and I am not talking about currency, of course), to make my contribution to the market negligible. Because that's what you are effectively arguing here, as far as I understand it.



---
[H. Skipper] The only reason there is drug development is that there is money to be made on the the successful medicines. Since the US is by far the greatest source of that profit -- due to most other countries regulating far lower prices -- then the rest of the world is free riding on the US consumer.
---

Maybe, Mr. Skipper, you can only weak up to the weaknesses of this argument by the example you like most: a Ford Focus.

The Brazilian branch of Ford is producing it here in Brazil too. Do you know how much is the cheapest model? Near $31.000. The equivalent one in US is near $16.000.

Now, Skipper, am I subsidizing that nice Ford Focus of yours?

[A little background: the mystery of why cars are more expensive in Brazil is a long one, and of course - as you may have guessed - it has a lot to do with taxes and government. But not only that: all the serious research I've read point to the ultimate fact that the Brazilian market simply accepted to operate with higher prices, which is very welcomed by the companies]

Simply put: people pay more for that Ford Focus because they want it, kind of the same way people pay more for medicine in US because they want it too.

It is very complex to describe the dynamics and incentives for new technologies, Skipper, but to make it short: the level of incentive provided by the US is not necessarily optimal. It may very well be that innovation keeps on even if that incentive lowers. And for the very same reason it is bogus to claim that other countries are free riding on it.

Hey Skipper said...

[Clovis:] Maybe I grossly misunderstand your point, but I can not conciliate this affirmation with anything I've read so far. Are you and AOG paying the same, and having the same? If it was a one option only system, how can it be that everybody is confused about their new possibilities within ACA?

No, AOG and I aren't paying the same. Since my employer purchases my healthcare coverage on my behalf in lieu of salary, I get much more for less -- my effective cost is at least 30% lower than AOG's.

Also, my employer is a very large company, so it self-insures, which means its insured pool is in the bottom of the life-cycle cost curve. And since my employer has mandatory drug testing to get hired, and random testing to remain employed, I'll bet its loss profile due to substance abuse is much lower than insurers in the individual market.

That is now.

The goal of Obamacare is to essentially eliminate risk pricing. That is why people who have absolutely no chance of having a baby will have to pay for maternity care. That is also why Obamacare is eliminating high-deductible plans, because a healthy and smart young person could bank the premium difference vs. a low-deductible plan, and within a few years would stand better than a 95% chance of being self-insured for the high deductible.

Obamacare takes as true a certain definition of "fair". For it to achieve its definition of fairness its ultimate goal must be mandatory participation for universal coverage.

Its first steps in that direction were directed, by necessity, at the individual market, because that is the only place to increase the size of the pool (by imposing penalties -- nope, sorry, taxes -- on those who don't participate), and where it was politically possible to eliminate risk pricing.

That was inevitable, and anyone with half a brain, which must exclude every journalist at the NYT, and the President himself, had to know this.

What else is inevitable is the adverse selection problem, about which you are going a great deal over the next couple months.

Because risk pricing is eliminated, young healthy people who aren't currently covered still won't, because of the cost. Yet to keep Obamacare from sinking like a greased safe, their participation is essential.

Hey Skipper said...

The Brazilian branch of Ford is producing it here in Brazil too. Do you know how much is the cheapest model? Near $31.000. The equivalent one in US is near $16.000.

Now, Skipper, am I subsidizing that nice Ford Focus of yours?

... all the serious research I've read point to the ultimate fact that the Brazilian market simply accepted to operate with higher prices, which is very welcomed by the companies


That can't possibly be true, unless the companies are colluding, which itself is extremely unlikely, because the benefits accruing to a defector.

I think you should look in the direction of import taxes, which I will bet are extremely high. Otherwise, it would be well worth the cost of shipping to bring in used cars and arbitrage that $11,000 per unit delta right out of existence.

... the level of incentive provided by the US is not necessarily optimal.

Absolutely. Far too much money is spent on defensive medicine and deadweight administrative costs.

It may very well be that innovation keeps on even if that incentive lowers.

I disagree. I think that as with cars, most medical innovation starts out extremely expensive, then competition starts driving down prices and increasing economies of scale.

With pharmaceuticals, the problem is worse, because of the high failure rate between inception and product.

I just don't see how single-payer systems can provide anywhere near the same innovation incentive. How could they?

And for the very same reason it is bogus to claim that other countries are free riding on it.

With regard to pharmaceuticals, I don't see how you get to that conclusion.

Without profit, pharmaceutical development stops dead in its tracks.

Where does the industry's profit come from? Where do the benefits go?

The difference between those two questions is where the free-riding lies.

Annoying Old Guy said...

Clovis;

My point was that I do not see - and was not presented to - any economic model that justifies why your money is so much more valuable than mine

I don't either. What I have argued is that $90 of my money is more valuable than $10 of your money. That difference is precisely the information I claimed we lacked at the time.

Your prescription is the equivalent of making the different car (the "luxury" ones) a little bit more expensive

No. I am utterly mystified as to how you read "punitive taxes" as "a little bit more expensive". You also seem to have passed right by point (2). And you accuse me of not paying attention ...

how can it be that everybody is confused about their new possibilities within ACA?

What are you talking about? You do enjoy making strong affirmations without any regard for links, don't you?

As for paying the same, it would be closer had not Obama illegally delayed ACA requirements for corporate plans. It was politically inconvenient so he just announced it wouldn't be enforced for another year. There are places where one would use the term "caudillo" to describe such an executive...

Also it turns out that the ACA will, by government fiat, divide the nation in to regions in which the pricing is the same, but it can vary between regions. As Skipper and I live in different states, that would have an effect as well. Of course, it could well have a bad effect on worker mobility, but what's one more drag on our economy?

You look to be oversimplifying matters here to a point it is no longer connected to reality.

That's what I think about you. You seem to have very little knowledge about the ACA, to the point that your view of it seems disconnected from reality.

Peter said...

I simply have to wade in here to object in principle to this "free-ride" talk, which strikes me as the kind of rhetoric the left loves and exploits. I'm sure Clovis could share a few trenchant comments about the profits North American businesses make in South America and how the left loves to preach they are free-riding on Latin American resources and labour. The case for free markets, free trade and free access to research lies in the promise of overall general--not universal, as the U.S. Mid-West manufacturing worker will tell you-- prosperity. I'm not convinced that's an open-ended truth, but countries who regulate markets and prices heavily are supposed to be shooting themselves in the foot, not free-riding. To suddenly shift gears churlishly and accuse them of sucking out precious American bodily fluids is dangerous, inflammatory rhetoric. I understand the U.S. takes a lot of crap and it's natural to defend onself, but zeroing in on one industry and crying "No fair" inverts the whole economic theory. I suppose we could make the argument that the subsidized basic foodstuffs in Cuba means the Cuban peasant is free-riding on U.S. agricultural research, but I'd feel pretty silly doing so.

The same is true about some of erp's rhetoric, which can sound a lot like a compliment to those she claims to hate. Foreign aid to Brazil is a gift of the American worker? That sounds like something out of the old Soviet Union.

I once took a day to try to research the ins and outs of pricing and regulation in the American and Canadian pharmaceutical industries and I was defeated by both the complexities and moral ambiguities. I hope nobody is going to suggest all those drugs are just responses to real objective consumer demand by a diverse competitive industry. Anyway, it's far too complicated to be the subject of one-sentence declarations about who is screwing whom.

However, if any of my American friends here can point to one quote in the Congressional Record that says something like "Mr. Speaker, while I agree the proposed price regulations and price supports would benefit Americans, we would be free-riding on the rest of the world, and that would be wrong.", I will consider eating crow.

erp said...

Peter, if U.S. foreign aid isn't a gift from U.S. workers, what is it?

BYW my "enflamed, grossly exaggerated" rhetoric is to reduce the question from "high-minded" semantics to its basic components.

I don't hate anybody. I hate what's being done to my country and its citizens in the name of fairness. We were only promised "Life, Liberty and the Pursuit of Happiness." The rest is up to us. Those wishing to inflict their failed uptopian model on us are the worst kind of hypocrites. Living the life of unparalleled luxury white lecturing the rest of us for being uncaring.

The results of the Focus Groups must be in and the message nailed down because Michelle Obama is being dispatched across the land to speak to the folk about "If but for the grace of God, go I" as the reason to implement socialized medicine. To paraphrase one of their own, "Have you no shame, madam?"

Skipper, your comment about used cars, reminded me of one of the fascists in the White House's first moves almost immediately after taking over -- remember they got people to turn their used cars into scrap metal. Their arrogance was immediately on display, but people thought they were getting something for nothing, so they walked right into the trap. Now there is far less inventory of used cars, so people are forced into buying cars that are admixtures of corn-fed and battery powered ... or whatever other nonsense Obama's crony capitalists can dream up to drain the resources of us workers.

The left is wrong, but they're not stupid and they are single minded.

Clovis, you are wrong. Unwed mothers was not the reason we moved to Florida.

erp said...

Harry, Note: Freudian slip above.

Peter said...

if U.S. foreign aid isn't a gift from U.S. workers, what is it?

It's an intergovernmental subsidy with objectives ranging from humanitarian charity to diplomatic leverage to geo-strategic advantage. Would you ever say that American workers invaded Iraq?

Harry Eagar said...

More vital research funded by the National Health. According to erp, this cannot happen.

Most of the most important medical research advances of the last 65 years came from socialized medicine.

"Frederick Sanger, a British biochemist whose discoveries about the chemistry of life led to the decoding of the human genome and to the development of new drugs like human growth hormone and earned him two Nobel Prizes, a distinction held by only three other scientists, died on Tuesday in Cambridge, England. He was 95."

Harry Eagar said...

Skipper, you should think deeply about your remark about life-cycle effects. It was more profound than you think.

Particularly think about it in terms of 'free riding.'

I would like Guy to explain to me why he thinks his insurance costs have doubled. Was he paying too little before? Is he being gouged now?

Skipper thinks the ACA's goal is the same coverage for all. Maybe that's what should happen -- I think so -- but that's not the ACA.

Annoying Old Guy said...

I would like Guy to explain to me why he thinks his insurance costs have doubled. Was he paying too little before? Is he being gouged now?

As if the newspapers are not filled with explanations of precisely why that is, and if Skipper and I haven't explained it here multiple times. (Or even the government)

Actually, my family's health insurance costs have more than doubled because of the higher deductible. Yes, I am getting gouged, entirely because of the federal government via the ACA. It, among other things, mandates many types of coverage for which I have no use or would prefer to not pay for (e.g., maternity care).

The bottom line is the ACA, by design, needs me to pay for other people's health care and rather than passing a real tax to do that, the ACA creates mandates which raise the price of insurance to cover those additional costs.

Annoying Old Guy said...

Sanger, who did his work in the 1950s and 1960s, the very early years of the NHS? That seems quite in line with erp's claim, that the research ran on momentum after the NHS was founded and has by now trailed off, or you would have found something more recent.

erp said...

Blogger erp said...

Peter, if U.S. foreign aid isn't a gift from U.S. workers, what is it?


You didn't answer the question.

Annoying Old Guy said...

Mr. Eagar;

Here is another facet of the answer to your question.

Peter said...

Yes, erp, I did. Very specifically

Annoying Old Guy said...

Mr. Eagar;

President Obama agrees, he just thinks that we're "going to have give up paying for things that don't make [us] healthier".

Over at the New York Times there is Thomas Edsall explaining the real problem isn't that POR-care is redistributive but that "white people" have become tired of spending more on to benefit minorities. That is, I am paying more because that's fundamental to the design and purpose of POR-care.

Have I explained it enough yet? I'll keep an eye out for more data, just in case.

Clovis e Adri said...

H. Skipper,

----
[Clovis] Now, Skipper, am I subsidizing that nice Ford Focus of yours?

That can't possibly be true, unless the companies are colluding, which itself is extremely unlikely, because the benefits accruing to a defector.
----
It is true, H. Skipper. You may not believe the reasons I gave you, but the prices I've quoted remain true and you can check that for yourself. So you still did not answer me: by your logic with health care, is it true that I subsidize you Ford Focus?


----
I think you should look in the direction of import taxes, which I will bet are extremely high. Otherwise, it would be well worth the cost of shipping to bring in used cars and arbitrage that $11,000 per unit delta right out of existence.
----
Yes, import taxes are extremely high for new cars. For used cars, there are no taxes, for it is forbidden. Yes, you read me right. Only used cars older than 30 years, and if you can prove it is for collection reasons, are allowed.

But I will give you a few bits more: the very same cars produced here are exported and sold to other markets (Latin America, US, Europe) for the smaller prices you know well.

The argument of the companies is that our local taxes make the same car sold here more expensive. Than you go and calculate those taxes, and you see they are telling, literally, a half truth. Only half of the difference of prices can be explained by taxes. The other half is purely extra profits - that, according to your economic theory, subsidize car technology for all those lazy Americans and Europeans, right?

As for your defector theory, it is naive to think it always work, dear Skipper. Game theory provides, sometimes, many possible solutions to a market game. We have witnessed it recently, with the arrival of the cheap Chinese cars. The first year they were being sold really cheap, but then the Chinese realized the market was used to pay much more and they could make more money, simply because the relationship between acceptable prices and number of cars sold would give optimal profits in a higher price. The result: the next year they elevated prices, hence sold less cars but still made more money.

Notice I made no mention of companies colluding. It is not needed if the right combination of their control over the market and the acceptance of the consumers natureally led to a higher accepted price. I believe a similar effect happens in your pharmaceutical market.


----
[Clovis] And for the very same reason it is bogus to claim that other countries are free riding on it.
[AOG] With regard to pharmaceuticals, I don't see how you get to that conclusion.
Without profit, pharmaceutical development stops dead in its tracks.
Where does the industry's profit come from? Where do the benefits go?
----
I don't think you got my point, Skipper. Very simply put: if you make 1 trillion of profits, it is easy to allocate 50 billion to research. If suddenly you make only 800 billion of profit, well, you curse all those damn socialists, but you still can put 50 billion to research, you'll only need to buy one island less next year for your holidays.

Harry Eagar said...

Well, excuse me for not arranging for a younger researcher to die this week.

Annoying Old Guy said...

You can't find any contributors who haven't died?

erp said...

Peter, you specifically did not tell me why foreign aid is not a gift from U.S. workers. Bringing in soldiers, etc. is pretty much last century doncha know.

Harry Eagar said...

I was not looking for any. I happened to notice Sanger's obit.

It is true that the most important advances in medicine during my lifetime were paid for by the National Health. Sanger was not alone.

Peter said...

Harry, we can forgive you being wrong, but not being incoherent.

Harry Eagar said...

The $50 a month question:

http://www.courthousenews.com/2013/11/22/63147.htm