Thursday, November 24, 2011

Solving the Healthcare Cost Puzzle

Republican solution: Block-grant Medicaid (limits federal costs), voucherize Medicare (again, Feds get to set limits on their contribution).

Democrat solution: um, decrease reimbursement to doctors, a bunch of other nips and tucks.

The Republicans have the solution that is simpler to understand, that's for sure. Of course that's not the best way to judge a policy proposal, but when it's put up against a complicated, incoherent plan, it does pretty well.

 Truth squad
But in many ways, the whole political debate about providing healthcare is incoherent because there are many competing interests, and not all of them are openly declared. Here is a sampling of some of the objectives in the debate:
  • Provide healthcare to as many people as possible.
  • Provide healthcare to as many Americans as possible, but not to immigrants.
  • Provide healthcare to productive members of society (and retired productive members of society).
  • Eliminate the problem that some people don't have health insurance.
  • Provide enough healthcare to the uninsured so that it's not embarrassing or unchristian, but also minimize taxpayer expense.
  • Allow patients and doctors to make healthcare choices without interference from bureaucrats.
  • Protect individuals from the high cost of healthcare by spreading the cost to larger groups.
  • Slow down the growth of healthcare costs dramatically.
  • Demonstrate that life is the most important consideration no matter what.
  • Cast doubt on the motives of your opponents regarding healthcare availability, cost, and who shoulders the bill.
I probably missed some goals, but it does paint the picture. There are goals for healthcare coverage, goals for handling healthcare expenses, and goals for winning elections.
  • Too much of the political debate is centered on electoral goals where it's important to cast doubt on your opponent and insulate your side. Clarity, not surprisingly, is sacrificed. 
  • When it comes to individuals deciding how to vote or what to advocate for, often the issue is fear of losing access to needed healthcare, plus the desire to shift costs. Cost prevention or cost containment may not register.
 A goal we can agree on?
In the all debate, fear, and sniping, something that is often lost is whether we should try to make our medical spending more efficient and how. Efficient really means not doing the low value or no value procedures. If we don't want to cut the number of procedures, we have to squeeze what we pay for them. That means not passing the Doc Fix every year, and hoping the people doing the work won't resent performing the same job for a lot less money.

Rather than simply squeezing the providers, I'd prefer to cut the number of procedures. But no one  seems to want to talk about making do with less medical care. I can easily do it as a personal choice (sure-I'll wait five years for my next colonoscopy!), but how can we get large numbers of people to sign on? And make the right decisions about what to trim?

 Doctor's advice
Really, the doctors should start this revolution. We have more trust in them than in having our insurance companies or government panels make the recommendations. Doctors could save the entire country a lot of money by cutting back on the testing they recommend. I saw an article (now irretrievably lost in the web) that Americans spend 40% more on outpatient testing than other advanced countries, so this is one area we can definitely trim back.

Unfortunately, doctors often have a business interest in recommending testing, since GE has sold them a bunch of expensive medical equipment, and the docs need to make those payments. There is also malpractice fear. I think someone is going to have to persuade and guide our medical professionals, but that brings us back to the hated insurance companies or government bureaucrats. Oh what a mess. Still, I hope it would be possible for some of our larger medical groups, like Kaiser Permanente and the Mayo Clinic, to study what treatments and testing are effective and cost-efficient. If we can save enough money by stripping out inefficient medical spending, we may not have to touch that third rail: rationing of medical care.

I'll break the taboo, just a bit, and talk about rationing. But to some people, any management of healthcare choices is rationing. In one way I agree, but I see it as good rationing. (Similarly, there is good discrimination, which is what you use if you date only sane, responsible people.) In the future, we may need to ration medical care on a variety of criteria including: odds of survival, odds of recovery to productive status, cost of care, citizenship, etc. This is where the arguments really heat up, and I don't want to go there yet. Let's remove inefficient spending from our system, and see how much breathing space that gives us.

Maybe we can pay with play money...

Extra: Explore some detailed data on healthcare spending with this nifty/easy tool.


Anonymous said...

Republican solution: Block-grant Medicaid (limits federal costs), voucherize Medicare (again, Feds get to set limits on their contribution).

Democrat solution: um, decrease reimbursement to doctors, a bunch of other nips and tucks.

Um, oversimplification in both cases. The GOP plan does NOTHING about the healthcare cost for underinsured and even those with insurance, which is the majority of the country.

I agree, both parties aren't making any attempt to deal with the rapidly rising cost for the insured, figuring -- perhaps correctly -- that other issues are a more immediate concern such as the cost of healthcare to the government.

But healthcare now for all and in all its forms constitute a HUGE portion of the economy. I suspect it's roughly equal to housing in most people's budgets, and in many cases it is probably more. The insured may not see that cost, particularly if the employer pays most or all of it, but as it takes an ever larger share of an employer's employee cost, that translates to lower paid wages (even if "wages + benefits" value increases) and less room for growth and expansion. Why didn't Fred get a raise this year? He did, but it was in the form of higher insurance premiums that his employer paid. But Fred is even more upset because he has to pay more for healthcare, too, as a higher deduction from his paycheck and higher copays, etc. And this is despite his employer picking up the majority of the annual 12% (or higher) incurease.

Caring for old people is VERY expensive for the government, which means the taxpayers. They get sick more and need more care. Few can afford it even after a lifetime of work. How much care to we give them? If we give them less, then don't we also get less when we grow old? Not a pleasant discussion to undertake.

So of course, the politicians avoid and lay blame. Taking care of the old is expensive and someone has to pay. And taking care of a regular family costs a lot, too.

Efficiency? Which is more efficient: an elderly person living at home with regular in-home care, or in a nursing home. Answer: Nursing home by wide margin. Which is more expensive to the government: nursing home.

Efficiency and expensive don't necessarily go hand in hand, and neither do compassion and cost.

But if you are talking about efficiency of administration of healthcare, the USA has created a highly-profitable-for-some clusterf*** which drives rates ever higher.

The Dem's much maligned HCR did try to make adjustments in that, weak as it is. Insurance companies can and will litigate and loophole their way out of the provisions they don't like, charge others extra for those they can't avoid, and repeal whatever they can once they get their loyalists in charge of the government again.

The misnamed "single-payer" is far more efficient but for those who are prejudiced against government adminstration (probably because they don't know better) having private companies in competition with a government collective offering the same sevice will do for me. The "public option" was the whole ballgame, but it was defeated by insurance-industry-lackey on both sides of the aisle (with a huge bias toward the GOP).

And by the way, the Dem's (partial) solution is much more extensive than that, as laid out the bill that passed. But the only real way to cut healthcare costs with the medical knowledge available today is to let people get sick and die unless they can pay the highly-trained professionals needed to prevent nature from taking its course. I doubt there are many votes for that program.

ModeratePoli said...

When I wrote "Republican solution... Democratic solution..." it was an intentional simplification based on how the electorate in general might perceive it.

Most of what you say I agree with, at least well enough... until this:

"But the only real way to cut healthcare costs with the medical knowledge available today is to let people get sick and die unless they can pay the highly-trained professionals..."

Goddammit, WRONG, WRONG, WRONG. A huge false choice: All our technical whizz-bang interventions or NOTHING. There are many gradations between 0 and 100%, so let's explore some, OK?