Health Care Debate - What is the problem
Friday, July 13, 2007 at 10:55AM I've been watching various discussion about health care with interest even though until now I've been fairly silent on the matter.
Dave Jarvis for instance wrote a couple interesting pieces such as the one found HERE.
The one thing I seem to notice in most of the discussions however intelligent they may be is that they lack one fundamental step... analysis of the problem itself.
Let me diverge from the topic for a moment to share a story with you. I'm a computer programmer by trade and I occasionally have to troubleshoot errors in code. Recently the team I work with was looking at a problem and were so focused on solving what they saw that they didn't step back and look at the whole picture. A process that had been running fine for months suddenly started failing. The reason they saw that the it was trying to pull down a huge file over the network and it only allotted fifteen minutes for the file to copy. The proposed solution was to extend the amount of time it waits to process. I had to put the breaks on this fix and ask everyone to look further at the process with me as it never occurred to them to question why suddenly the file it copied down was so big. It turned out that a previous process in the chain broke causing duplicating in the data and the result was a file much bigger then it should have been. Fixing the problem at the source corrected the resulting problems further down the chain of processes.
Getting back to health care that is what I think we've been missing. Everyone sees little problems here and there and look for solutions to those individual problems but no one is looking at the entire picture.
In trying to determine the over all problems with our health care industry I was able to come up with a list of 7 key problems. A 8th was later suggested to me as well. They are as follows:
1) Prescription drugs sell for more money here then in other countries such as Canada. In looking at this further we find that countries like Canada have government controls which fix the prices. Drug companies as a result need to increase prices in the free markets to help recoup their initial investments into the research and development of these new drugs and treatments. In other words, the actions of other countries create increased costs on us. Now it may be suggested that we simply turn around and enact the same government policies restricting the costs companies can charge for the drugs. I would ask you to think about that one a bit however. Drug companies are no different then any other business in that their goal is to make money for themselves and their investors. If a company after investing millions in research and development is told they have no markets in which they can recoup their investment then I would expect fewer and fewer would even attempt to do the initial research to begin with.
2) FDA restrictions increase the initial cost of a drug making it to the market. It costs millions on top of the research and development costs to get a drug approved for sale in this country. It also takes sometimes years before getting approval through the process. These restrictions our government has put in place is why you often see life saving drugs for sale in other countries long before they become available here in the US.
3) FDA requires us to get prescriptions for many drugs that you can buy over the country in other countries. This leads to higher costs because instead of being able to simply walk into a drug store and buying the pills you need you must see a doctor (added cost), then the doctor must file the correct paperwork, you then need to go to the pharmacy with that paperwork for a pharmacist to process and fulfill (additional added costs).
4) Government programs grossly over pay wasting money and increasing costs. A friend of mine with a severely disabled child turned to the government for assistance with some of the costs associated with treatments and care of her child. During which she began looking at the amounts they would cover for things like his wheelchair and other medical devices and then she priced how much it would cost her if she purchased the items herself directly. In many cases she found she could get the items cheaper then what the government was paying. As a result she started a group which monitors spending of Medicaid and Medicare programs to make sure they don't over spend. Her reasoning was that if they spend $100 when they could have only spent $50 then that additional $50 isn't going to be available for someone else who many need it. In reality we know when it comes to government they'll just take that additional $50 needed for someone else out of the pockets of the tax payers without much though.
5) Drug companies after finding new life saving drugs apply and receive patents which prevent other companies from reverse engineering and selling cheaper generic versions of those same drugs. This is a protection granted by Article 1 Section 8 of the US Constitution which states "To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;" Due to this clause in the Constitution we would be left with only two options to solve this. Either lessen the amount of time drug companies are given exclusive rights or amend the Constitution.
6) Americans as a whole lead unhealthy life styles compared to most other countries. We don't eat as well. Our kids sit inside playing games instead of taking part in sports or other physical fitness activities. Our obese society leads to more health problems.
7) Is an extension of 6, since fat unhealthy people have higher health risks they also have higher health costs. The problem with this is that we don't want to discriminate so insurance companies rather then charging fat unhealthy people higher rates, instead spread the costs out to all of us. Those of us who do eat well and do try to stay physically fit pay more.
8) As health care improves people are able to live longer resulting in more of a need for health care. Where as a stroke or cancer would more likely have killed someone 50 years ago more people survive but in surviving need more treatments and rehabilitation.
But instead of looking at these core problems we look at offshoot problems such as the increasing medical insurance costs impacting our town budgets (which is a topic in and of itself that I will try to dive into over the next week or two) etc. And solutions being proposed such as the communistic approach of HR 676 which is being sponsored by Kucinich among others do not truly look at all the problems. It pushes to have the government seize all medical businesses in this country and convert them to non profit government entities. Since the US government continues to prove it cannot handle education in this country I shiver to think of what it will do the the health care industry. Not to mention that if I were the stock holder in a drug company I would be very concerned that the government could just strip me of my investment.
Look at the problems and really take a moment to think about them. Government is the CAUSE not the solution for many issues we see here. I'd be interested in hearing others thoughts on this as well as any additional root problems you may think I missed.
*NOTE: I worked in the Health care industry doing risk management and Medicaid and Medicare data analysis prior to moving to New Hampshire in the late 1990s.
Reader Comments (28)
Great job. I think if conservatives attack the health care debate with any kind of vigor they will find themselves quickly outpacing our liberal counterparts.
I have a very simplistic way of attempting to analyze the issue as well. And although I am not a software engineer I work on VoIP telephony solutions and do quite a bit of analysis work myself.
I think we need to begin with the consumer. This is one area where Newt Gingrich is leading the entire healthcare debate. In everything he writes you can tell he is imagining a consumer out there making important healthcare decisions. I think we should assume that any decisions that can be made by the end consumer should be. Only when it becomes cost prohibitive for the consumer themselves to make a particular healthcare decision should the idea of an institutional payer come up.
We have the consumer, buying a product... good general health which decades of capitalism have shown us should be as deregulated as possible, and which should entertain vigorous competition which as we know creates miracles in developing efficient business systems. We should consider creating incentives to better health even to the point of tax breaks for healthy living.
The next level of medical care are the one time procedures that pop up in our lives. Different people experience different issues that might require a minor surgery, or more serious treatment but which isn't life threatening. Again we want to keep these decisions in the hands of the consumer but people don't generally save up to have a corn removed or get braces, have surgery for cataracts or for C-Sections, etc. But those things happen and they are necessary. I still think that if we can we should find a way to keep those decisions in the hands of the consumer including the process of comparing prices, not just service. That's where I think healthcare savings accounts can really be useful.
If not, the people will still have to be treated and if we are not careful we could make things much more expensive by putting the decisions in the hands of those who can just raise premiums.
The last group of procedures are the extremely expensive ones that absolutely require insurance. There is no way to save up for a triple bipass or brain surgey or long term care. That is why we have insurance in the first place, because there may be a risk of calamity that may or may not happen and we need to minimize the potential financial costs of potential health calamity.
This is where greater competition either between institutions within a single payer system, or where greater competition between a medicare type system and free market health insurance companies can produce lower prices and better service. But the keyword has to be competition for both prices and outcomes/service.
I think we will need to deregulate a bit with prescription drugs. Obviously, we need to watch that because some medication could be dangerous or habit forming.
As for drug patents, I think we should give as much incentive as possible for drug companies to create new medications, and to do it here.
Anyway, just some responses. And thanks for the article. Conservatives can win the healtcare debate. I don't think it would be that difficult, but we have to step up to the plate. Great job.
Compare prices! That's a biggie right there. For non emergency/ optional procedures we should be able to shop around.
We have dozens of places to buy nick naks and whatevers and with websites like Shopzilla.com we can compare prices and find the best place to shop. When we have work done to our homes or hire a contractor we often times call 3 or 4 different ones. But when it comes to as you point out having a corn removed or getting braces we go to our regular doctor or dentist who meanwhile may be charging twice that of someone else. We SHOULD shop around. Find out what each place charges and shop accordingly.
The only thing I can think of that would do that is a health savings account. To make the system universal we could include both debit and credit functions on the accounts so that if the account went under 0$ the person could use still use the account to go to the doctor's office and get medicine etc. even pay for health insurance if needed. And we could take it out of salaries as a percentage of wages. Basically instead of a tax, you are collecting for an investment account that can only be used for medical purposes (or when you reach a certain threshold of funds private investment in traditionally conservative investment products) until say a certain age when you can take some of your money out like from a retirement account.
What do you think?
Thanks. I think with your help I just hit a personal intellectual breakthrough. Healthcare savings accounts mandated almost like a privatized social security and which can be invested in conservative financial products and which can go into the negative/credit side, charging the consumer a small interest rate, (possibly even subsidizing the interest rate if the plan does well).
And if the consumer stays healthy, invests right, and most importantly uses their good consumer sense while making their healthcare decisions, can expect a sizeable reward at retirement time.
Here's the big picture. The US Spends 2.7 trillion dollars a year on health care. Per capita that is way more than the rest of the industrialized world.
Yet we don't have the best healthcare delivery in the world. All of the old systems we've relied on ( employer programs) are falling apart.
Everyone agrees our system is broken.
Universal Healthcare is the only solution.
It is also an inevitibility now that industry is onbaord.
The only question is what form will it take.
Less expensive healthcare is the solution, a system where everyone in our nation is covered I believe will be a less expensive option for our country than our current system. If it was more expensive than our current system and if it didn't directly provide relief for our trade deficit it would be a different picture.
I think the question of what form it will take is the most important question of the day because we can either save money with streamlining administrative costs and with economies of scale or we could do both of them and also inject greater competition in our healthcare markets by finding a system that puts purchasing power in the hands of the end consumer. That last part is what would really take what we all consider to be a problem and turn it into an opportunity to radically alter healthcare and how it is delivered.
I agree with you, but I just wanted to clarify that it is not a system that is most important but the economic benefits that system could provide us. I think the expansion of medicare into a single payer system has a lot of merit, and I definitely believe every American should have ready access to healthcare. But the how is an important part of this discussion. We have a lot of work to do because it seems most of us are caught up in either fears of privatization or in socialization. To have an effective healthcare system we will need the best social programs and the best private programs working together.
Anyway, it's just my opinion. Chances are good though that most people will disagree with me like in most other things but I am getting closer to a general idea of how I think things should work.
You and I are in very close agreement. The Democratic Candidates are proposing many cost cutting measures including much better computerized records, much more prevention and negotiating with drug companies to control medications costs.
Other than Iraq Health Care is at the top of the agenda for candidates. Some, like John Edwards have very well developed plans already.
I think the best and most practical solution would be a single payer system like Dennis Kucinich proposes, but I don't think the people of the US are willing to go that far.
So a system that allows our delivery of services to be private and payment public is the best solution.
Its also the capitalist solution.Pooling resources and streamlining is a capitalist tool.
But when we as a people use a capitalist tool the chorus goes bonkers.
You are right about the chorus going bonkers and I think it is because they confuse individualism for capitalism. Pooling resources and streamlining is about as conservative as it gets.
Jeremy,
I think drug/alcohol rehab should be considered very different from infertility treatments and circumcision. Generally, I agree with you on removing some mandates on group health insurance but we have to be careful because even in your small list you can see two treatments, rehab and gastric bypass, that in some cases are absolutely necessary to someone's survival on this earth.
As for tort reform, I just see it as something that has been obvious for decades. It is necessary and you are right that they do pose a threat to the whole system.
Good comments.
Chaz you are doing exactly what I pointed out.. leaping to a solution without first questioning WHY it is broken. Look at the 8 problems I've pointed out. Feel free to add any additional ones you know of. Nearly every one is BECAUSE of government interference and I fail to see how a single socialized system would solve the problems.
Jeremy, you raise a good point which I think should be added at problem #9... out of control lawsuits. Human error is unavoidable, likewise problems do occur. Should a doctor have his career ended because of one single mistake? Should someone be entitled to millions over simple honest blunders? It would be one thing if a doctor is grossly incompetent but suing for millions over a single error... and we live in a society where we sue at the drop of a hat. I may look up how many lawsuits we have here vs other countries.
The things you wrote about were mostly regulatory. You do understand that private group health insurance is already socialized medicine, right? Just because it isn't a national health insurance doesn't mean it isn't socialistic. In fact, all insurance is socialistic or it just wouldn't work. Are you against insurance?
I want to know what you feel about the insurance aspect of healthcare. Do you feel the system of employer paid health insurance is somehow essentially different from a national health insurance? As far as I can see the only difference would be size. And scale is something that can provide added economic advantage to any insurance program. That is why big insurance companies do better than small ones.
Keep in mind, employer paid health insurance is an enormous expense for our labor market. It makes labor in nations with socialized medicine much less expensive than in ours, especially considering that it is the good paying jobs, ones where we are more likely to be in direct competition with foreign workers, where the bulk of our healthcare expenses end up. Don't you think that might have something to do with that trillion dollar trade deficit we are working up to?
Healthcare reform should help two problems, in my opinion. It should help to lower the trade deficit and it should help to lower the cost of living for all Americans. Healthcare for everyone, strangely enough, is a tertiary benefit.
My common senses tell me that I want the government as far away from my health care as possible. The closer they get, the closer we come to totalitarianism.
We've all seen Moe, Larry and Curly at the DMV fumbling with a simiple button to take your license picture. Two hours in line and you're one of four people in the joint. Inept is a word that comes to mind. Inept because there is not the incentive to excel. Inept because ineptitude is rewarded. Efficiency results in less spending, hence the need for less funding which clearly is a disincentive within government as they do not make their own money, they simply take ours. God forbid they take less of it.
We've got nearly 100 years to look back on the failures of socialized medicine efforts. This recent push isn't really about helping people, it's about control.
When I think of government, a few words that come to mind are inadequacy, inefficiency, wastefulness and corruption just to name a few..
Not to mention, universal health care is not a relegated constitutional function of our government.
It seems the health care argument has been misrepresented in order to make people who aren't well informed feel as though there is some kind of a health care crisis. A fear mongering to promote a universal health care agenda is as much in play as a fear mongering to scare people into jumping on the global warming bandwagon.
Facts, such as, a percentage of people who are uninsured are between jobs and only remain uninsured for a small period of time, others are people who are drug addicts or alcoholics who are homeless and have chosen to be so. People who already receive Medicare or aid, young 20 somethings who choose to risk being uninsured as a personal choice which they are very much entitled to make. How many of you out there chose insurance as a young 20 something? Not I.
It seems as though there is a very small percentage of people who are actually, legitimately, uninsured. I'd very much like to consider helping those who truly need help and addressing the problem from that angle. Not from the angle of compelling everyone to jump on the same bandwagon that is hightailing its way straight to hell.
My gut and my logic tell me it is a very bad idea to compel everyone to sign on to a universal system when the overwhelming majority are fine as they are and as they choose to be.
I think of SS and the terrible mess that has become. Roosevelt's own mother didn't' want anything to do with the program. Mama knows best!!
The government is in terrible debt, has a miles long track record of leaving a wake of destruction and horror wherever and whenever they offer to "help" an industry or business.
If your son, daughter, husband or wife was diagnosed with brain cancer tomorrow, god forbid, can you imagine trusting his care to the government?
It is striking to me that those who have such contempt for our current administration, who criticize the free market and conservatism are aiding and abetting in the building of an empire ready for collapse as much as any "neocon" is.
I advocate looking for balance. Looking for a real solution to problems, not fear driven solutions, not politically motivated solutions. They will not help, only hinder.
Also, I just have to add, this is a non partisan observation.
I have noticed liberals and leftits outraged at the medical treatment of our veterans in the VA hospitals....hint, those are government run hospitals and for the most part, they suck.
I mention specifically liberals and leftists because they are who I hear advocating for universal healthcare, not so much conservatives or right ilked folks.
The hospitals don't suck becuase we think the vets ought to be subjected to substandard medical care, they suck because they are operated by the federal government which is prone to running things that suck.
While I might agree with you that the government running healtcare would be a bad thing nobody has suggested that. And I don't see anybody in the political spectrum suggesting that we use the VA as our model for the next generation healthcare. What people are talking about is public insurance. Medicare has a one percent overhead, and I am pretty sure that in anyone's book that doesn't constitute sucking.
I agree with you that we should keep the government out of it as much as possible, but we also need healthcare that won't bankrupt our nation. I would welcome your idea of what we should do.
The efficiency of Medicaid is very high.
Anyone have the real numbers? That's where the truth lies.
Efficiency in the private sector is horrible unless you believe that taking 30% of the 2.7 trillion dollars we spend out of actual care and into someones stock portfolio.
And the public servants in NH that I deal with are courteous and efficient. I get my plates in Epping and they are a pleasure to deal with.
I meant to write:
...unless..into someones stock portfolio is a good thing.
Suzanne--you argue that state workers have no incentive, but I would argue that there is a flip side to that coin. In our for profit health care system the HMO's and so on want to turn a profit.
That gives them an incentive to cut benefits.
Eveyone knows that we are now at the beck and call of a rationing system rather than won who's highest priority is delivering the most health care to the most people.
And by not subsidizing health care as ALL civilized countries doo, we are cutting our industries and small business off at the knees.
Everyone would benefit by expanding medicaid to cover all Americans.
And who cares if your taxes go up if they eliminate premiums. What's the difference?
But that said, my point here isn't to debate solutions but to analyze the actual problems we see which are causing so many people in this nation to say our system is broken. If it's broken then lets start talking about WHAT is broken about it.
Chaz, if government is the solution and government run facilities etc would solve our broken system then answer me this... why are we failing so badly with government run education?
And as someone who worked for years analyzing Medicaid and Medicare data for a living I can tell you those systems are flawed. In order to keep the numbers up they single out hospitals that keep patients longer then other hospitals forcing people to be turned out faster to keep rates low (even if they may need more time to heal). I know this because I was the one writing the reports used to do just this. They focus on the big picture looking at which hospitals have highest return rates of patients, highest mortality rates etc but they don't look at the individual cases. Sure a hospital may have a higher rate of morality then another but the average age of the population near that hospital may be much higher for instance. Without looking at the entire picture they take wild swings to correct what they see as problems. Again, that is why I say we need to look first at the problems before swinging wildly with "solutions".
Chaz, I'm glad your public employee experiences have been pleasant. Mine have been overwhelmingly poor in numerous towns statewide. Mainly town clerk offices and the DMV. Police and fire have always been great. Oh, and not to be a complainer but I've had bad library experiences too. The general problem I have is inefficiency, ineptitude and poor attitude.
I agree, health care is a profit driven industry like anything else.
You use the example that the HMO's will cut bennies for pennies.
I say, let the consumer make the choice. Let the market work the problem out.
I don't think that our interventionist government policies allow the market to do its job.
There are always ups and downs. It's no need for alarm, it is an opportunity for adjustments which the market is perfectly capable of making.
Instead, the government views any market vulnerability as an opportunity for predation, the politicians politicize health care, raise the alarm when there is no crisis and prevent the market from working properly through imposed, onerous regulation.
great comments. And I agree that discussing what is actually broken about health care is the more important than jumping to any conclusions about solutions. I think the one conclusion that is clear to me is that employer paid healthcare, especially with the rising cost of healthcare, will continue to drive jobs offshore. It is only natural in a global economy with the free markets we both enjoy for companies to not want to get clobbered with the entire healthcare cost of an entire nation by hiring Americans.
You are wrong when you say we can opt out of socialized medicine. Every time a person goes to the emergency room, which they have every right to do, and get needed medical care that they can't pay for and that they are not insured for the costs get passed on. That is socialism and nobody decided on it, it just happened.
There is no way of avoiding some kind of socialism whether private or public with regard to healthcare unless we are willing to let people bleed to death in emergency rooms because they don't have health insurance. The best thing we can do for ourselves is to choose the least painful and MOST capitalistic option. And strangely enough, single payer healthcare would be more capitalistic than what we are experiencing now. We would be protecting our economy from foreign competition, cutting costs, and we would be protecting our overall healthcare system from potential destruction when and if we are ever attacked again by terrorists on any greater scale.
I think many conservatives are confused by the idea that everything public is socialistic and everything private is capitalistic. There can actually, in very few cases be more socialistic tendencies in private economic systems than in public.
For evidence just think that a hundred years ago one company owned Manchester. They controlled the stores, the churches, the hospitals, and the train stations. Government intervention by men like Teddy Roosevelt busting the actions of monopolies put an end to private socialism. Insurance companies are not monopolies, but try not using one and see what happens. If it is a scary thought to you to live without the help of a private insurance company then it might be time for some new ideas.
"I think the one conclusion that is clear to me is that employer paid healthcare, especially with the rising cost of healthcare, will continue to drive jobs offshore."
Why is this clear, what examples do you have to verify this conclusion. I'm curious, I've never heard of this before but am curious. If you're inclined to answer, thanks.
"It is only natural in a global economy with the free markets we both enjoy for companies to not want to get clobbered with the entire healthcare cost of an entire nation by hiring Americans."
What does this mean? Wouldn't it be natural for ANY business operating under a free market, anywhere, national or global to not want to incur costs not necessary to their operation?
"You are wrong when you say we can opt out of socialized medicine. Every time a person goes to the emergency room, which they have every right to do, and get needed medical care that they can't pay for and that they are not insured for the costs get passed on. That is socialism and nobody decided on it, it just happened."
That argument can be used to impose any tyranny. Remember that.
Also, people are mistaken if they believe they have every right to free medical care. Not to sound callous, I'm just stating the truth.
Mr. Franklin wisely observed that the sting in any rebuke was the truth.
Also, it didn't "just happen". It was legislated which isn't an event which spontaneously occurs rights out of thin air. It's a considerable, involved, time lengthy process.
"There is no way of avoiding some kind of socialism whether private or public with regard to healthcare unless we are willing to let people bleed to death in emergency rooms because they don't have health insurance. The best thing we can do for ourselves is to choose the least painful and MOST capitalistic option. And strangely enough, single payer healthcare would be more capitalistic than what we are experiencing now. "
Do you honestly believe that your fellow human is so unkind as to allow the bleeding to death of another individual, right in front of them in an emergency room?? Holy smokes, if people are that heartless, left, right or in-between, we're all up the creek.
When in US history has there ever been a period or a notable occurrence of such an incident. I'd be shocked to learn of it. Americans are by and far the most compassionate and generous people on the earth.
The single payer healthcare system would be more capitalistic except for the private part of capitalism.
"We would be protecting our economy from foreign competition, cutting costs, and we would be protecting our overall healthcare system from potential destruction when and if we are ever attacked again by terrorists on any greater scale.
I think many conservatives are confused by the idea that everything public is socialistic and everything private is capitalistic. There can actually, in very few cases be more socialistic tendencies in private economic systems than in public."
You begin by justifying your favor for socialized healthcare with a global economy you state you enjoy.
Now you state we'd be PROTECTING our economy from COMPETITION and terror threats by adopting socialized healthcare. This clearly shows you aren't fully arguing that the free market IS competition. You don't need protection from competition, you need more competition.
I'll tell you what I think is scary.
Not having a choice.
That scares the the heck out of me.
I am impressed by the amount of work you are putting into this. Thank you very much. It is very important to debate these topics thoroughly.
This is what Newt Gingrich says about our current situation..."However, if Americans are to enjoy all the benefits of an ideal health system, we must all be willing to invest a genuine, concerted effort into its design and implementation. We must build what we at the Center for Health Transformation call a 21st Century Intelligent Health System. Such a system will save lives and save money for every American — and is absolutely vital to ensuring our nation's long-term prosperity."
"How urgent is the need for a comprehensive transformation of our health system? Consider the American manufacturing sector, particularly the pain of the automakers, where they spend more dollars per car in healthcare than they do in steel."
I understand that Gingrich doesn't actually say that healthcare costs are leading to a loss of competitiveness in the global economy, but I am sure you can see the insinuation in his words.
Automakers are paying more per car in healthcare than they are paying in steel. That should be sign enough that our system is costing us dearly.
As for you saying my argument could be used to impose any tyranny. You are right, and if you look closely enough so can't yours. Whether we are conserned about privatization or greater government involvement we always have to be concerned about the potential for tyranny. Capitalism does have its own brand of tyranny, we saw that clearest in the late 1800s, but it is always a threat just like socialism is.
I don't believe my fellow man is that heartless. That is my point. The compassion we feel in the emergency room costs a lot more than the compassion we might feel in setting up a universal healthcare system.
Do you think it should cost a thousand dollars to flush earwax out of someone's ears? Ask me how I know the cost.
Lastly, I don't think you really understand the kinds of proposals that are being made to offer all americans healthcare and which offers them choices and which stimulates competition. I think if you studied the matter a bit more you would see we are much closer to agreement than you might think.
And thanks again for the comments. I really appreciate the discussion.