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Posted by on Aug 22, 2009 in At TMV | 40 comments

Does anybody really understand the health care debate?

Early this summer as the health care debate began to heat up I recall reading a very smart critique from one of TMV’s sharpest regular commentators – CStanley. She argued that each of the individual goals set out by Obama and advanced in the then-progressing HR3200 attack serious problems with the health care system. But the problem was in reconciling a whole bunch of mutually contradictory elements, namely reduction of health care costs AND expansion of health insurance coverage to those without it. How, she argued, was it really possible to do both at the same time (of course she framed it far more eloquently than this).

As the health care debate has progressed I’ve found myself comforted by partisan and ideological frames, but essentially lost on the substance of the health care debate. I’ve finally come to realize that I don’t know much about this issue. Even worse, I find it nearly impossible to learn about it without running into obviously biased sources one way or another.

Now, as an academic, I pride myself on my ability to sift through subjectively produced texts in order to draw out greater narratives and arguments. I study and teach primarily the American Civil War, which is about as passionately divisive a topic there is. On most subjects outside my field I deliberately seek out the nuances of the debate to find the points of contention and the meta-frameworks for the discussion.

But on health care I must admit: I’m lost.

I know the politics of, say, the public option. But I couldn’t tell you how the public option would actually work, what its effect might be on care for the indigent, private health insurance plans or, well, me. I certainly like the IDEA of “keeping the insurance companies honest.” And I tend to find the hopes on the left – and fears on the right – that the public option will be the Trojan Horse that brings down the private health insurance business to be a bit overblown. If the public option is so limited, as HR3200 has it, how could so many people suddenly launch themselves out of the private market into the new AmeriCare, or whatever it would be called? On the other hand, if government is so awful at running things, WHY would people choose to abandon the private insurance market – presumably the government is too wasteful to actually compete with private insurers, even with the leverage of taxpayers behind it. Do the small-scale public models really show us anything – failures in Maine and here in Tennessee, success in San Francisco, and widespread though imperfect success everywhere else in the industrialized world?

But the public option is really just scratching the surface. If you actually read through the massive HR3200 you discover just how arcane medical law really is. A hodge-podge of public, private, Federal, state and local plans and jurisdictions already overlap in inefficient ways. Is it even possible to alter one piece of the American health care morass and know what will happen to everything else? I understand the frustration voters have with legalese and the prolixity of the legislation. But, just as with tax reform, simplicity does not necessarily mean better.

One of the biggest question marks is cost. Everybody talks about the inefficiencies of the current system. OK, so is it really possible to make it more efficient without completely reshaping it – either on some sort of libertarian model or a single-payer system? And something about this whole cost debate strikes me as dishonest. Health care is expensive because modern medicine relies on expensive new forms of technology and research. Yes, there are all sorts of perverse incentives out there for doctors to waste resources on these newfangled drugs and devices – and all kinds of legal reasons why doctors defensively run MRIs for no good medical reason. But can anybody honestly say that removing all these extraneous services would lower costs over the LONG term? I doubt it’s really that simple.

The only way to cut medical costs is to cut medical care – rationing. But who does the rationing? Right now private insurers ration care by denying service to certain people; the government rations via its Medicare reimbursement rates; and individuals ration care themselves based on increasingly unaffordable deductibles. I gave an example in earlier posting where I was charged $1,400 out of pocket for my son’s two-night stay in the hospital for the croup. What an utter and complete waste of money and care. He could have gotten prednisone for about five bucks and been cured – as he has been for the subsequent times he’s gotten it (including right now). As a result, I will avoid hospitalization or any expensive medical procedure for myself and my family if at all possible. We’re rationing ourselves!

And then there’s the total opacity of medical costs. Is there any other product or service that you buy where you have no idea how much it will cost – not just because the procedure is up in the air, but the byzantine process of insurance reimbursement will leave you with a bill ranging from zero to thousands of dollars? Does anybody really understand how and why they are charged what they are charged after visiting the dentist for a root canal? And is it really such a great thing that insurance companies routinely deny reimbursements until patients call their hotlines with questions?

I can only wonder what millions of other families are thinking. We’ve been blessed with generally good health as a whole. But many people I know have not been so lucky. For some of them a good insurer has posed little financial burden on top of their health problems. For others, a newly discovered medical condition has resulted in bankruptcy. Did one really make responsible choices to get good insurance and other not? Hardly. It seems more dumb luck than anything else. If you have the misfortune of working for a small company with cheap medical care then you are a diagnosis away from financial ruin. If, on the other hand, you are lucky enough to work for some corporate or governmental behemoth then you are probably in luck if the doctor tells you you need expensive medical treatment.

So, I don’t see how we really cut medical costs over the long-term. Most of the plans out there – better recordkeeping, tort reform, bulk purchasing agreements – seem likely to produce short term savings at best. As we live longer, and as medical care becomes increasingly sophisticated, medical expenses will continue to go up and up.

There are a lot of ideological debates surrounding health care, but most of them seem secondary to any actual solution to the problem of access and cost control. The private market serves some very well, and others less well than they realize (which I discovered before the hospital check arrived in the mail). For still others it means the ER is the only source of medical care; the side debate over whether or not health care is a “right” is the silliest of all. Until people are literally kept out of the emergency room, health care in this country is, for all intents and purposes, a right. And yes, the same goes for food and water. Nobody starves in this country because we won’t allow it – even for those who do not work. It’s not part of the Constitution, mind you. But it’s certainly a part of the American social contract shaped over hundreds of years.

Still, that “right” to health care does not necessarily mean the same thing as the “right” to the same health insurance as somebody fortunate to work for a large corporation with a great group health plan. How do we reconcile the two, when “merit” does so little to account for the discrepancy between the coverage offered to the cantankerous and lazy DMV worker and the small-firm software engineer? Is there really some grand defensible principle at work here, the “Don’t Tread On Me” protesters notwithstanding? Access to quality health insurance coverage seems more random than anything else.

Alas, our health care system is both costly and unfair in any meaningful sense. What’s worse, it seems to get even more costly, more inefficient and more unfair with each passing year. My premiums go up faster every year than my salary – in absolute dollars! Like tens of millions of other Americans, the increasing cost of health care is making me poorer – even though I and my family eat healthily, exercise and keep ourselves in generally good health.

Will “health care reform” or “health insurance reform” (as it’s occasionally framed) really make things better? Or worse? Can anybody thinking outside ideological and partisan lenses really know the answer? I can see why people are afraid of reform. But I can also see why failure to reform things will make things even worse than they are now.

I suppose the best and most fruitful way to approach health care reform is as a process. Some sort of reform bill will almost undoubtedly be passed and signed by President Obama. It almost certainly will neither solve all the problems of cost and access that Democrats promise, nor create the Soviet dystopia of rationed death care so feared by those on the right. So then what? Will this process mean that the next Congress will keep tweaking away as emerging issues make the older system falter? Or will Congresses in the future leave this domestic third rail alone for the foreseeable future?

My hope is that this bill will be the first of an ongoing process of reform, examination, experimentation, and more reform. Ideological debates are perfectly appropriate, but political leaders should use them to clarify and not to obfuscate. There is no perfect “free market” for health care. And there is no National Health Service. There is a hybrid. We should expend our energy on making that hybrid work the best for the most people and leave all the maximalist rhetoric from both sides out.

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  • Dr J

    A lot to bite off there, Elrod. I will note that if health care is getting more expensive because of fancier technology, that’s quite a paradox. Technology has made everything else cheaper, often dramatically so.

    Your claim that the only way to make care cheaper is rationing echoes what Malthus said about food. He was wrong, and not just a little. Bad news for him, I guess, but good news for humanity.

  • elrod

    Good point re: Malthus and food. The answer was commercialization of agriculture, which drove most of humanity off the farms and into the cities where food could be purchased cheaply. It costs a lot less to grow one ear of corn today than it did in 1760.

    If you could make and deliver MRI services more cheaply than we would see the efficiencies there too. But I suspect that medical care is not scalable in the way that food is.

    • Dr J

      “If you could make and deliver MRI services more cheaply than we would see the efficiencies there too. But I suspect that medical care is not scalable in the way that food is.”

      Dr. J prescribes a bigger dose of impatience with the status quo. Cars and computers and TV sets and dishwashers and electron microscopes get better and cheaper over time; why shouldn’t MRI machines? Interpreting their results takes the services of a skilled human for 10 minutes; why must this cost $1000?

      Why indeed are my insurance premiums going up 5% a year? I’m not getting 5% healthier every year, and my life expectancy isn’t getting 5% longer. If fancier technology is the reason, either I’m not using it or it’s not helping.

      • mikkel

        “Cars and computers and TV sets and dishwashers and electron microscopes get better and cheaper over time; why shouldn’t MRI machines? Interpreting their results takes the services of a skilled human for 10 minutes; why must this cost $1000?”

        Dr J, in a previous thread I said that I didn’t think we valued things correctly at the current time, and that’s why there were some market failures where they may not be otherwise (I also responded to your reply, but it didn’t go through for some reason). This is the exact same example I’ve used with technically oriented friends when complaining about this. Knowing full well how these things work, I can only conclude that the reason why advanced health and science machines don’t get cheaper is because it’s ingrained in the industry that they shouldn’t.

        Medical device manufacturing is more akin to rival gangs that mutually agree to areas where they will have full control and then compete at the edges rather than any traditional competitive structure. Similarly, all medical oriented companies don’t really have much pressure to increase efficiency, and if their costs rise from bad business practices then they just raise the price. The reason I believe that this is possible is because on the whole people don’t understand exactly how the medical industry operates or what is involved in manufacturing these devices. The whole thing is treated as a magic black box where things cost that much because that’s what they cost.

        I think that if we asked your question as a society — and changed the regulations and expectations (this is important, just allowing more players without changed expectations won’t necessarily reduce price because they won’t necessarily compete, just all take smaller market share and charge more) to reflect this, then a market solution will work better.

        I also don’t think it’ll take that much competition. Look at IBM or Intel before they had any competition, and then look at them after they had only one credible alternative. The quantity is not nearly as important as the quality.

        * Also cs has an important corollary about the cartel behavior on the provider side too. The system is a symbiotic sludge of wasteful spending.

  • pacatrue

    I share much of the confusion, though in a different way. I’ve had a nice health care plan from a corporate job and I’ve been uninsured. Some countries that seem to be fine places to live use single payer insurance; others use health care directly paid for by the government; others use a hybrid of private insurance and government clinics. The health care seems to be basically fine in all of these places. I’d be happy to live in Japan or the UK or Canada or Korea without feeling their method of health care destroyed my freedom. I’d only not live in those places because I like my home — the U.S.

    The only system that I know that sucks is having no coverage at all. During that one-year period, I had a bike wreck that only required 6 stitches in my chin in the end. I paid over $4,000 for that at a time when, as a grad student, I only earned $600 a month.

    Anyway, I just can’t get my bee in a bonnet over most of the ideas out there. And so my response to the health care debates is entirely practical: I’m not ideologically set against anything as long as it works. Generally, I like less government and more local control, but if local solutions like co-ops don’t work, I can live with more government. But then, on the question of what works, no one seems to really know, as you’ve eloquently put here.

    And so I’ve sat almost entirely on the sidelines.

  • Don Quijote

    Looking at the rest of the world, the solution seems pretty obvious:

    Americare – a defined basic health insurance package paid for through general taxes, and for those who can afford it and want it, a regulated market that offers supplemental insurance.

    Now that would be the rational solution to our problem, and all we would be left to argue about would be what is to be included in the Americare package, what should the co-pays and deductibles be.

  • Don Quijote

    the cantankerous and lazy DMV worker

    Nice job stereotyping…

    Lets see how pleasant you will be after you have had to work in customer service for a while. (no one is ever happy, 80% of the time there is nothing you can do to resolve their problems due to a lack of authority and have to forward them up to your supervisor.)

  • elrod

    The stereotyping was deliberate – many Americans – particularly those with a strong distaste for the government – think the DMV worker (or other bureaucrat) is a pampered and spoiled martinet. By playing up that stereotype I’m juxtaposing how unfair it seems – amidst all the talk about “merit” and “freedom” – for the bureaucrat to get wonderful care while the more “productive” and “creative” worker gets shafted. In other words, I’m using a conservative stereotype against conservatism.

  • adelinesdad

    Elrod, yes, it is very complex. I’ll jump into the confessional as well and admit that I don’t understand all of the complexities. I’ve tried, however, to understand at least the general questions being asked, and answered, and then dive into a few of the details.

    As Dr. J said, there’s a lot in your post. I wish I could respond to more of your points, but I’ll just choose a few:

    “We’re rationing ourselves!”

    I think there’s a pretty good argument that that’s the way it should be. That’s how it is in all of the other consumption that we do, which helps keep costs in check by limiting demand.

    As for the point about technology. Dr J, technology doesn’t always lower cost. Sometimes it improves quality, and sometimes both if we’re lucky. I think in the health care world, technology has improved quality, thereby increasing demand. It might also have decreased some costs. But it seems clear to me that part of the cost problem is that with so many new treatments (due to new technology and research) that simply weren’t available before, consumers rationally are demanding those new treatments (in addition to the more mundane things they’ve always wanted). This logically means we’re paying more of our money on health care, despite some efficiencies that we might obtain from various technologies like electronic health records. It’s a moral dilemma. If a hypothetical drug that can prevent cancer is found, but it costs $1,000,000 a pill, does everyone have a right to that? That might be an extreme example, but so might much of our advanced and expensive treatment look to a 19th century doctor.

    So, I agree with you that maybe rationing is the only real answer to cost control, as it is with every other industry. But as much as possible that rationing should be done by the consumer (in which case I’m not sure you can really call it rationing).

  • CStanley

    I recall reading a very smart critique from one of TMV’s sharpest regular commentators – CStanley.Elrod- I am flattered, but even more importantly, I’m really glad that my commentary was at least partly responsible for you reflecting more seriously on the issues beyond the partisan talking points. This post spurs the kind of discussion I think everyone should have been having all along. We may not all understand the intracacies of our current system or the proposed reforms, but I think that most people can understand broad concepts about it if they just stop assuming that the advocates of one type of reform are all 100% correct and truthful while the people on the other side of the debate are completely dishonest or wrong.

    Anyway- a couple of responses to points you’ve raised here:

    And I tend to find the hopes on the left – and fears on the right – that the public option will be the Trojan Horse that brings down the private health insurance business to be a bit overblown. If the public option is so limited, as HR3200 has it, how could so many people suddenly launch themselves out of the private market into the new AmeriCare, or whatever it would be called?

    I think that those with a conservative perspective who’ve analyzed the bill feel that there are a few triggers written into the bill that will result in, not necessarily people voluntarily launching themselves out of the private market, but being coerced into the public one. Once the exchanges are set up, many current private policies will no longer fit the mandates that the exchange requires. While I think existing policies will be grandfathered in, it still remains that if you drop a current policy for some reason in the future (change of jobs, for instance), your new policy will have to be quite different, according to the rules of the exchanges. I’m not clear on what those rules are going to be (I guess one of these days I really should try to sift through that section of the bill.) But if the mandates are similar to some of the states that currently require a lot of coverage- like NJ, for instance, where every policy has to include coverage for full dental, vision, chiropractic, mental health, etc…then the insurers are not going to be able to offer that at the same price that some people currently pay for a more standard care plan. The govt option may well be able to offer such a product at a lower price because of subsidization (there’s some subsidization built into the model, because of the startup investment that’s put into the public option and because that public provider entity won’t have to keep cash reserves, show profit, or even necessarily operate in the black.)

    So, while everyone might be able to keep their plan in the short term, it’s far more questionable whether our current plans will all be available in the future. In addition to people who have to purchase a new policy which will be under new terms, it’s also questionable whether employers will begin dumping coverage which would also force a lot of people to pick up the new public option because of the cost differential (they can’t necessarily afford to pay for their current policy without being able to have it paid for out of pretax dollars, and it’s unlikely that the same group plan rate would be available to the individuals anyway.)

    A second group of people who might be ‘forced’ into the public option are those who are currently uninsured now, who will face the individual mandate to buy insurance. Presumably, since those folks currently haven’t bought private coverage, they feel that the current options are unaffordable and presumably the public option plan is going to undercut current private offerings which will lead most of the uninsured to go with that option.

    On the other hand, if government is so awful at running things, WHY would people choose to abandon the private insurance market – presumably the government is too wasteful to actually compete with private insurers, even with the leverage of taxpayers behind it.

    Aside from the points I already made above (that not all of the customers of the public option are necessarily going to be choosing that as their personal best option, but rather being coerced to take it because of the pricing), there’s also some fundamental misunderstanding of what is meant by the govt being “so awful at running things.”

    Sometimes that does refer to poor service (DMV tends to be a frequent example of that, but even in that example there are local offices that perform well and those that perform atrociously, so it’s not a universal example of lousy service.) More often, or at least when I think of govt being awful at running things, it’s the efficiency that is awful and it means that there’s tons of waste (corruption is also a big part of that- think defense contracts.) So to me at least, the argument is about whether or not the govt option is the correct route toward reducing inefficiency and saving costs- and my reading of the situation is that it’s likely to make costs become higher rather than lower. It may also be that that’s the short term and then we reach the point where politically the costs are unsustainable and that forces rationing mechanisms into place (which seems to be what has occurred in some of the countries with single payer systems, and we see now that some like Canada are thinking of reintroducing some private options since people aren’t happy with the rationing.)

    I think the example Obama used, USPS, is an apt one, and like he said, in that public/private model, it’s the USPS that’s always struggling. Bear in mind though, that this impacts us all as taxpayers. USPS service isn’t awful (well, it is pretty bad if you have to go to the post office, but they certainly provides other options for routine mailing of letters, and they do a pretty good job of getting things delivered.) The problem is that in order to subsidize the costs of mailing those letters, our public debt is raised.

    As we live longer, and as medical care becomes increasingly sophisticated, medical expenses will continue to go up and up.
    I’ve seen you mention this before and I wholeheartedly concur. When people talk about the price inflation of medical care, it’s like comparing the cost of a Big Mac a decade or two ago to a Ruth’s Chris Porterhouse today. How much increased innovation and knowledge and technology is too much? That’s hard to say, and there’s really no market force in place to determine the rate of change.

    If you could make and deliver MRI services more cheaply than we would see the efficiencies there too
    Interesting though that where there are a few examples of real free market medical procedures, sometimes we see those efficiencies and downward price pressure. Lasik surgery is one example- the procedure has, within a few short years, become better and more affordable. Another much less well known example is cardiac imaging for calcium scoring. Not covered by most insurance, but an excellent tool for preventative cardiology. Since people have to pay out of pocket, apparently the providers decided to try to capture a market by making it reasonably priced- here in Atlanta you can get one done for $125 and know what your actual risk of a heart attack is, and then monitor your efforts to reduce cardiac vessel plaque by repeating it every year or two. I’m getting off on a tangent and on a soapbox a bit because a lot of people don’t know about this testing procedure and I strongly believe in it (No financial interest, I promise) but it does seem to be an example of how the markets can work when there’s no middleman involved. We can’t completely remove the middleman, but this is why I do believe that reforms that increase price transparency and force people to ‘ration themselves’ as you mention, Elrod, are probably among the best long term methods of really getting costs under control and having some equilibrium in tech/research advances so that the market decides on how fast progress occurs, instead of a top down rationing of innovation.

    And the only proposals I’ve seen that would lead to more transparency and self-rationing, are the moves toward a HSA/HDHP model which is what the few conservative reformers in Congress are trying to do.

    • mikkel

      Good point about Lasik. Personally that is an anecdote that supports my theory that one of the major drivers of health care costs has to do with elasticity of demand. Lasik is the example of a high tech product that is entirely optional, and that choice to do without is what I think is the key ingredient. Similarly, a lot of the preventative scans are not covered — but more importantly not seen as a necessity yet — and so they have to compete to convince people that it is beneficial at all, and price is a major variable in that.

      • CStanley

        Good point, mikkel. I don’t mean to ignore the issues of price elasticity, which surely would affect the functioning of healthcare markets even if we didn’t have the middleman and price opacity problems. I don’t think that all costs would be market responsive, but I think it’s a shame we haven’t tried to adjust the system to at least see how much could be accomplished that way. Maybe combining those kinds of approaches along with other measures like IT reform, mandates to streamline forms and reporting, and tort reform would all work together to make the system at least sustainable (it’ll never be cheap without sacrificing quality.)

        I just think that all true cost saving methods need to be on the table- and the best part is that most of them can be combined without one factor interfering with the other. There would be at least an additive effect on cost, if not a synergistic one.

  • CStanley

    Dr. J, I’m not sure why the percentages of cost increase and percentages of life expectancy increase should match up, but I think it’s worth noting that life expectancy has gone up recently. One of the best pieces of news in this is that for the first time, African American males’ life expectancy has reached 70, and life expectancy has increased for all groups, with the average for all of us now at about 78 years.

    So, how much price inflation is that worth? And who decides?

    • Dr J

      CStanley, what should match up better are bills paid and benefits received. Great that we have better treatments available for a bunch of conditions, but why should that cause general price inflation? Car makers can launch fancy new models without driving the price at the low end up.

  • CStanley

    Americare – a defined basic health insurance package paid for through general taxes, and for those who can afford it and want it, a regulated market that offers supplemental insurance.

    That’s actually a model I might support, depending on how it’s structured.

    Like most conservatives, I think that our current system which prevents hospitals from turning away poor/uninsured people is responding to a true public obligation. I don’t think that giving everyone a publicly subsidized, gold plated healthcare plan is a good method of reducing costs and in fact will add to it by increasing demand for routine care.

    But having everyone covered by a basic, bare bones plan- particularly if it were along the lines of HSA/HDHP structure which encourages people to think about how the dollars are being spent- would allow people to get routine care without going to the ER. If it had that kind of individual accountability built into it, but also allowed for a sliding scale according to people’s means- then it might work to reduce costs and keep demand under control. The sliding scale could be implemented in one of two ways- either by having the actual price for the policy adjusted to income, or by giving tax credits for people to purchase the policy and fund their HSA.

    There should also be some focus on increasing supply, so that it’s not so mismatched to the demand which will still increase somewhat under that scenario.

    There could probably also be a gradual dissolution of Medicare and SCHIP, if the new system could accommodate those needs.

    • From CStanley:

      Americare – a defined basic health insurance package paid for through general taxes, and for those who can afford it and want it, a regulated market that offers supplemental insurance.

      That’s actually a model I might support, depending on how it’s structured.

      Interestingly enough, that’s one of the solutions I had in the back of my mind when I introduced the re-thinking of health care that’s based on insurance. Yupyup.

      • pacatrue

        Hi Polimom,

        Not being snarky. How does this idea differ from either the fabled “public option” or a single payer insurance plan? I don’t think I have a clear idea yet what you and C Stanley have in mind with “Americare”. Is it the split between catastrophic care and maintenance with Americare only covering the latter?

  • CStanley

    I agree with that, Dr. J. I think that there’s a ton of price shifting that goes on in our current system, and that’s partly because there isn’t enough pressure for them to keep the lower end costs low. In addition, there’s the cartel system which prevents providers from responding to demand for the fancy new equipment by building new facilities. If car companies could only offer a new luxury car to a fixed number of customers, the price of that car would be automatically inflated and wouldn’t follow the economic trend that we see with other luxury goods (things like HDTVs and flatscreens, for which the price comes down pretty quickly when the market opens up.)

    So, there’s pressure at the top end for high prices, but then presumably the insurance companies are negotiating those prices down below what the real market will support and the cost gets shifted down the line.

  • elrod

    Good points C – as I suspected:) One of the big problems unique to health care is the opacity issue. Does anybody really know how much a particular medical procedure costs? There are all sorts of cost-shifts going on that help explain why the sticker price for a medical procedure looks so outrageous – and IS outrageous if you don’t have a good insurance plan to bear that burden. With new consumer technologies like HDTV and fancy new cars we all know that new products cost a ton until producers are willing enough to take the big plunge, massively increase the supply of the new technology and thus drive the price down. This “experimental surplus” price has, as you said, already led to Lasik surgery’s drop in price. And it may apply to other medical technologies here and there.

    But is that principle really applicable to most medical procedures? The most expensive care, as most people recognize, comes at the end of life. Thus, the kerfuffle surrounding “death panels” and other geriatric rationing. Living wills really WOULD lower end-of-life care and, consequently, reduce medical costs to a great degree. Betsy McCaughey and Sarah Palin have made sure, however, that we will not be seeing any large-scale cost savings on that end in the near future.

    Then there’s preventive health – good habits – that so many Americans fail to follow. This is especially a problem in lower-middle income areas, and it crosses racial/ethnic lines. Here in East Tennessee where the population is almost unanimously white, the prevalence of obesity and its related conditions is epidemic. Why are people here so fat? Do they just not exercise? Is it the regional diet? Is it the cheap price of a 10-pack of burgers at Krystal (the Tennessee version of White Castle)? Is it cultural – people just get fat because mom and dad are fat too…? All of the above?

    Honestly, aside from the religiosity of the area, the belly size is the biggest thing separates the average East Tennessean from, say, the suburban Atlantan or northern Virginian. And having traveled the country a bit I know that far more of America resembles the obese than the wealthy and fit.

    If self-rationing is the best way to cut costs, the best place to start would be encouraging better eating and more exercise. But that’s not exactly a new discovery. Why do lower-middle class Americans keep getting fatter, and more prone to diabetes (a MASSIVE health care cost drain itself) and heart disease? I’m sure the effect of Big Agriculture on the absurd “Food Pyramid” is a contributor; if Americans really ate the amount of grains in the Food Pyramid we would average 250 pounds per man. The low-carb revolution may have had its idiosyncracies (especially Atkins), but there was a core of truth in there: too many carbs make most people fat. Still, I don’t think the negative marketing of Big Ag is really the culprit.

    Maybe if we adjusted our ag subsidy plan (or even better: eliminated it!) and made the production of vegetables much cheaper relative to enriched-flour starches we’d help encourage the budget-conscious consumer to get healthy. Let’s face it: eating healthy is more expensive than eating crap. Surely that has some effect on our nation’s health. But, again, I’m not sure how far-reaching those savings would be.

    If the HSA model really made people more aware of actual medical costs and encouraged proper self-rationing then I’m all for it. I just don’t see how it answers the great conundrum at the heart of our health care debate: for reasons of education, class, access and culture, those with less money in America typically NEED more health care than those with more money.

    • elrod, I think you’re right that due to a number of reasons, those with less $ often need more health care. But solving that issue is a separate question (imho). It needs to be solved (or at least greatly reduced), but knowing that doesn’t remove the reality of today’s need.

      Also — about HSA’s and self-rationing. There are people who zip into the dr (or ER) with colds, or viral infections. Sometimes, those folks are simply not well-informed about health, generally, and/or have picked up some misinformation and need reassurance from a medical authority.

      I agree that initially, there would be a big influx on the system at this routine care point. But I also think it would eventually subside — in part because people would be receiving information they don’t currently have.

    • mikkel

      I agree Elrod. I’ve long said that if there was one major thing that all sides should agree upon, it should be to eliminate agricultural subsidies. I am personally for eliminating them entirely and then using 1/3 – 1/2 of the money to give out in food stamps that are only valuable for fruits/veggies at either the grocery store or farmer’s markets. In a prior post I talked about how I believe that the major reform needed in health care is for the culture in the industry to change. While I focused on that (because it is a more targeted goal) it is entirely true that many of the problems are ingrained in general culture as well. [FYI, I’m not sure if you’ve heard, but obesity is “contagious” as in there is a very strong correlation between someone’s weight and their social network…and as their social network changes so does their weight.]

      I’ll even go as far as to say that a lot of that culture has been cultivated by government programs due to unintended (and increasingly corrupt) consequences.

  • CStanley

    All of the above?

    I think it is all of the above, and the way that each thing feeds into the other (Mom and Dad take the kids out for Krystal burgers, the chain flourishes and opens more stores and the added access means more family trips there, etc.)

    And I completely agree with your comments about the food pyramid and low carb diet- Atkins is faulty but South Beach is a huge improvement. I think it’s an atrocity that the AMA is still pushing low fat instead of ‘good fat, lower carb and good carb’ based thinking.

    Along with the education aspect and the Ag subsidies and marketing, there’s the addictive quality of the poorer quality foods. So again, you have a feedback cycle that’s really destructive.

  • elrod

    The argument about when to call the doctor is one that many families argue over to no end. This is especially true with children – thus the example of my 5-year old with croup. The best care seems to be over the phone with the Nurse Practitioner. If s/he says to do X and Y then that saves us from a costly trip to the doctor. A win-win! But many conditions (like croup) require a prescription. That means a doctor’s visit to confirm what we already know – and wasted money. If we’re lucky the NP can call in the scrip based on the phone conversation. But it rarely works that easily.

    This is a personal example, obviously. But so many other well-intentioned and often well-educated Americans have no idea what to do if the kids get sick. Calling the doctor is probably the right thing to do, but it means a good chance of wasted time hearing what you already know.

    Also, I think the class issue is actually at the heart of this debate – and is the reason why we are talking about universal access at the same time we discuss cost (despite the contradictory pressures). The elderly and the poor/working class have more health care needs than anybody else. How can we expect to control costs over time without dealing with this salient fact?

    There’s another issue that may be confined here to Southern Appalachia but I suspect is more widespread among the working class – a suspicion of doctors. There have been a lot of studies here on the kin-based system of health care. I’m not talking about “traditional recipes” based on tree bark in the Smokies. I’m talking about talking to Aunt X, Mamaw, Aunt Y, Sister Z, Papaw and 10 other people before going to the doctor. The culture of communal self-reliance often means that people don’t seek professional medical care until conditions have gotten too bad. I know this is true for many African American communities too. But how widespread is this phenomenon? Maybe not much. It ironically keeps preventive health care costs down – but jacks up catastrophic care for needless cases of Type II Diabetes and heart disease. It was definitely one of the contributors to the demise of TennCare – lots of people had access to medical care for the first time but had no idea when and how to use it.

    • Elrod, the phenomenon you describe is very familiar to me, and I think it’s mostly cultural. It’s not limited to Appalachia, as you guessed.

      There’s another aspect of this debate, though, that’s not really being discussed much (or if it is, I’ve missed it). All doctors do not approach care in the same way.

      A tale from my recent life: I broke my foot pretty badly on a hiking trip in late June. A nasty break, and one that commonly requires surgery and pins to repair. As it happens, though, I have an orthopedic specialist (sometimes it feels like he’s our ‘on call’ ortho-dude) who strives for conservative treatments.

      He put me (actually left me) in a soft surgical boot and an ace bandage, and he told me that I could start walking on it as it became possible (it wasn’t immediate). I was thrilled but skeptical. When I asked him whether I should cancel another hiking trip already planned in less than a month, he thought that might work out okay as long as I wore sturdy hiking boots.


      This looked impossible. The bone was gapped and out of line (picture of the x-ray is here, for anybody who is medical and interested). The pain was constant, and occasionally intense. He recommended that if I could live with the pain, the break would heal faster if I didn’t take anti-inflammatories (because they’d retard calcium regeneration I think).

      Craziness. Yet I wanted it to work and went with his plan. A month later I was hiking again in the northeast. It’s now been approx 2 months (8 weeks) since the injury, and I’m fine. This ortho-dude is regarded as one of the best in the area — an area that’s chock-full of excellent medical specialists. But I suspect his approach (it’s not our first interaction with him) is not the norm. In the weeks since I got hurt, I’ve met many people who had the same (and even lesser) injury. Every one of them had surgery and pins; the healing process took longer, and the costs were vastly higher.

      Thus far, total bills for this injury have been roughly $1900, of which nearly $1600 was the initial emergency room visit. I have one more follow-up visit / x-ray scheduled, which will add $90 to the total costs and includes the radiology. There is absolutely no comparison to what the costs would have been with surgery.

      I share this story not because I think every situation is the same, but because I’ve learned over the years that every *doctor* is not the same… and some of those differences are at the heart of this debate.

      • mikkel

        Based on what I’ve heard orthopedics is by far the most varied in treatment, and is the primary area where a lot of times it’s very unclear whether surgery is better than no surgery. This is true for all sorts of joint, back, neck and shoulder injuries as well. My dad had a “frozen shoulder” because he injured it and immobilized it too long so scar tissue formed, and he did research and found that the 2 year success rate was nearly the same with surgery + PT or more intensive PT alone. Of course it’s more painful for a longer period of time without the surgery (the tradeoff being that the surgery has a time period where there is nearly no functionality) but he chose to go without because he wanted to avoid it, even though the doctor would normally recommend otherwise. It did take him about 2 years to recover, but he did.

        Of course he’s also a social security disability judge, so his day job is to make rulings about whether people can work and has extensive experience with determining what can be done while suffering from various musculoskeltal issues, so it was easier for him to push back.

        Similarly, chiropractic treatments seem to be as effective for treating chronic lower back pain as back surgery, at a fraction of the price and recovery time. I think that we too often turn to drugs/surgery as treatments rather than letting the body heal itself. Even something as simply as the flu or colds — I seem to recover significantly faster when I get sick by not taking anything to limit my symptoms unless it’s interfering with my ability to eat or sleep. I’ve had several friends who have stuffed symptom relieving drugs into their systems for colds, stayed sick for weeks and eventually developed more serious infections that took hold because of their compromised immune system.

      • Dr J

        Very true, Polimom. A few years ago the New Yorker published another eye-opening article about doctors’ relative performance treating Cystic Fibrosis:

        The [Cincinnati Children’s Hospital] CF staff was skilled, energetic, and dedicated. They had just completed a flu-vaccination campaign that had reached more than ninety per cent of their patients. Patients were being sent questionnaires before their clinic visits so that the team would be better prepared for the questions they would have and the services (such as X-rays, tests, and specialist consultations) they would need. Before patients went home, the doctors gave them a written summary of their visit and a complete copy of their record, something that I had never thought to do in my own practice.

        I joined Cori Daines, one of the seven CF-care specialists, in her clinic one morning. Among the patients we saw was Alyssa. She was fifteen years old, freckled, skinny, with nails painted loud red, straight sandy-blond hair tied in a ponytail, a soda in one hand, legs crossed, foot bouncing constantly. Every few minutes, she gave a short, throaty cough. Her parents sat to one side. All the questions were directed to her. How had she been doing? How was school going? Any breathing difficulties? Trouble keeping up with her calories? Her answers were monosyllabic at first. But Daines had known Alyssa for years, and slowly she opened up. Things had mostly been going all right, she said. She had been sticking with her treatment regimen—twice-a-day manual chest therapy by one of her parents, inhaled medications using a nebulizer immediately afterward, and vitamins. Her lung function had been measured that morning, and it was sixty-seven per cent of normal—slightly down from her usual eighty per cent. Her cough had got a little worse the day before, and this was thought to be the reason for the dip. Daines was concerned about stomach pains that Alyssa had been having for several months. The pains came on unpredictably, Alyssa said—before meals, after meals, in the middle of the night. They were sharp, and persisted for up to a couple of hours. Examinations, tests, and X-rays had found no abnormalities, but she’d stayed home from school for the past five weeks. Her parents, exasperated because she seemed fine most of the time, wondered if the pain could be just in her head. Daines wasn’t sure. She asked a staff nurse to check in with Alyssa at home, arranged for a consultation with a gastroenterologist and with a pain specialist, and scheduled an earlier return visit than the usual three months.

        This was, it seemed to me, real medicine: untidy, human, but practiced carefully and conscientiously—as well as anyone could ask for.

        A real success story…except that it turned out that in terms of results, Cincinnati Children’s cystic fibrosis center was one of the poorer ones in the country. And the author’s subsequent visit to the top performers in Minneapolis revealed why.

        The gist of the story, though, is how hard it is for anyone–even the doctors themselves–to find good data on how they’re doing and how they might do better, and how much benefit we can see from more open performance disclosure.

        • mikkel

          “The gist of the story, though, is how hard it is for anyone–even the doctors themselves–to find good data on how they’re doing and how they might do better, and how much benefit we can see from more open performance disclosure.”

          And that’s what’s so frustrating about good reforms being twisted for political aims. The “living will” provision gets turned into “death panels” and the increased funding and establishment of a department to collect, research and give information about what seems to work and what doesn’t gets turned into “government will have a panel that has approved treatments that then forces doctors to do things.”

  • Silhouette

    “Does Anyone Really Understand The Health Care Debate?”

    Yes, it’s about MedMob keeping it’s money in spite of 70% of the public wanting fair coverage. That number is probably actually much higher since unless someone is insane, they would want to pay less premiums and less taxes for the ER-option currently in place than to pay more and be denied care.

    It’s very simple. It’s why MedMob hired people to show up at presidential health rallies wearing guns. The mob uses fear to get its way and death threats. Those appearances were nothing but Chicago hit men showing up at a warehouse where competition threatened in order to scare their way into preserving a monopoly.

    It is simple. Keeping it “confusing” though is MedMob’s way of saying “this is way too confusing for you guys or even Uncle Sam to understand, best just leave it up to us to continue to take care of business.”

    If some of these knucklehead insurerers can handle the ball, I’m sure a team of government-hired college educated people who really understand the Hippocratic Oath can wrap their heads around it just fine.

  • And right on cue, there’s Sil, ever-ready to spike the discussion. Sigh…

  • Dr J

    Good comments all (well, almost all). My insurance increases are certainly subsidizing something, but I have no idea what, and the opacity is a big problem. These are all symptoms of an ailing market.

    More consumer engagement/choice/responsibility seems like the answer all the way around. Consumers will tend to punish opaque systems by gravitating toward offers they understand. End-of-life agreements are much more palatable if they’re linked directly and explicitly to big personal cost savings. Making people feel more responsible for their own health seems the only conceivable way to get them to eat better. Publish info about square meals and food pyramids and nutrition trapezoids all you like, but the horse needs to want to drink the water.

  • mikkel

    Hooray! People with different ideological sympathies have agreed on possible solutions to the problem…and it only entails tens of millions of people changing their behavior, cutting off the third most powerful lobby in the US and massively simplifying the most complex bureaucratic system in history.

  • jeff2009a

    I appreciate your comments on the reform debate.

    One area i am focused on is the pricing transparency. There is no way to get a good value for our dollars if we don’t know what things will cost in advance and what price differences there are between providers.

    We have developed the Healthcare Blue Book at to help consumers start to solve this challenge. Would welcome your thoughts on our project.


  • “Americare – a defined basic health insurance package paid for through general taxes, and for those who can afford it and want it, a regulated market that offers supplemental insurance.”

    I’m glad to see you’re all on board with the single payer system liberals have been touting for years.

  • Leonidas

    @ Don Q

    ” Lets see how pleasant you will be after you have had to work in customer service for a while”

    I have worked in customer service before, for quite a while 13 years to be exact. There is no way some of the folks at the DMV or at other government agencies that I’ve encountered, could have held their job working in customer service in the private sector. They would have been easily fired.

    • elrod

      To be fair, there are lots of folks in customer service in the private sector who perform atrociously. Ever been to a fast food restaurant where the cashier has no freaking clue what he’s doing? And then you notice he’s still there weeks later – still screwing up?

      Depending on the business in question – and the economy – private sector customer service personnel can be just as problematic as a public sector worker.

  • Leonidas

    @ CStanley

    I think the example Obama used, USPS, is an apt one, and like he said, in that public/private model, it’s the USPS that’s always struggling. Bear in mind though, that this impacts us all as taxpayers. USPS service isn’t awful (well, it is pretty bad if you have to go to the post office, but they certainly provides other options for routine mailing of letters, and they do a pretty good job of getting things delivered.) The problem is that in order to subsidize the costs of mailing those letters, our public debt is raised”

    If I’m not mistaken the USPS is required by law to be self-sufficient and not allowed to touch tax dollars.

    Also the Post Office has a guarenteed monopoly on standard mail and its illegal for private companies to compete in that area. They charge 44 cents for a standard envelope being mailed, but only charge 11.2-17.2 cents for non-profits. This suggests that priatve competition offerring lower prices may be viable if it were allowed.

    sidenote: Doing happydance for figuring out how to do quote boxes on this blog =D

  • Leonidas

    To be fair, there are lots of folks in customer service in the private sector who perform atrociously. Ever been to a fast food restaurant where the cashier has no freaking clue what he’s doing? And then you notice he’s still there weeks later – still screwing up?

    And thats why he will likely still be in fast food 10 years later.

  • CStanley

    To be fair, there are lots of folks in customer service in the private sector who perform atrociously. Ever been to a fast food restaurant where the cashier has no freaking clue what he’s doing? And then you notice he’s still there weeks later – still screwing up?

    Sure, but the customer has the choice of not visiting that restaurant again if that pattern persists. Not so with public sector services- there’s no competing DMV down the road if your local one is the type where you have to wait 3 hours (that was my experience in getting a driver’s permit for my daughter.)

  • cholliet

    All the confusion may simply be caused by an incorrect premise. Understanding the health care reform debate is a lost cause when everyone assumes rising health insurance premiums equal rising health care costs. It is, and has always been, the other way around. What really drives the rising insurance premiums is the high cost of health care. Health insurance does not equal health care. Why is health insurance even at the center of a debate about health care? Why do we want to pay for health care in this manner? Why not talk about fee for service payments? That is how the system is structured now and that is EXACTLY what is driving the costs higher and higher.

    It is not luck to acquire adequate insurance coverage. Read the contract. A customer can request a copy of the insurance policy to review before entering the agreement. If one does not understand the policy, get some help or ask some questions. If one does not understand what a root canal costs, one is not asking the right people the right questions. So many people are uninvolved in their own health care.

    In this country, everyone is free to buy as much health care as they can afford. What’s the big deal? That is each ctizens choice. One should not simply complain about the cost of the service one chooses. If the service is unacceptable, do something about it. Negotiate the cost. Boycott the provider. Report the business to everyone, everywhere. The providers are the source of the cost.

    When health insurance first began in this country, no one bought it because there was no expensive care. The only reason anyone wants health insurance now is BECAUSE health care is so expensive. When people attack health insurance as the cause of rising health care costs, it is impossible to list all the fallacies with this line of reasoning. Basically, all the well intentioned purveyors of this argument have it backwards.

  • RALeeBoston

    It is very refreshing to see a sincere, conscientious and inquisitive mind comment on this issue. For thirty years, I’ve found no one open to an analysis of the problem, and during that time I had to watch this cancer grow, knowing full well the misery it portended. I did what I could to throw rocks at the beast, but I was alone. And to this day, I see little from the talking heads that indicates the problem has been identified. The only thing that has changed is that the cancer has grown so large that even the dumbest of the dumb considers it worth addressing. As with most public issues, there is little connection between the identified problematic symptoms and the popularly proposed and repeatedly attempted solutions. Now that everyone is willing to agree that high health care costs are ‘a’ problem, let’s take the next baby step and analyze their basis. That sounds practical, but, in fact, has largely been skipped, mostly out of ignorance. Perhaps half of the population, or those who give opinion on the subject, assume that the costs are the costs, and that a shifting of who pays is needed; perhaps to a rich uncle. That popular political position grossly impedes discovering and resolving the true problem.To be fair, embedded in the aim of the ‘shifters’, or some of them, is an egalitarian notion of compassion, which is not to be dismissed and certainly should be on our agenda. But, wasting financial resources, which could be used to provide health care for all, is antithetical to that goal. Stop, think. Shifting a much used service/function from the private sector to the public sector can be efficient, appropriate and effective, and may, or may not, be so in the case of health care, however, it is an issue separate from the current problem. If, today, every health care expense of any kind could be cut by 50%, would we be in such a crisis? Would caring for the indigent be seen as such an overwhelming burden? I think not. Look back thirty, thirty-five, forty years: What portion of our wealth was spent on health care services? That is just a primer to begin analyzing the issue. What is health care? A stethoscope, an exam table, x-ray and EKG machinery? Who is health care? Your doctor, a nurse, a technician? Producing health care services and products entails expenses such as labor, capital equipment and facilities, supplies, etc. And there are revenues to cover those expenses; in other words, there exists a business. As in any business there are lots of expense decisions to be made, and in most businesses those decisions are made in an environment of competitive pressures. A shoe store owner must be prudent in their expenditures, else they will exceed their revenues and become unprofitable, and the business will fail. Businesses in a competitive market know that their revenues are limited by the quality of their products, the actions of competitors, and the value judgments of consumers in that market. In the United States, the first half of the twentieth century saw consumer value judgments in the market of health care services gradually removed. That occurred as the trend of companies providing health care benefits grew into a nationally established structure for the funding of health care. The shifting of health care payments from individual responsibility to an expense item for business, while providing much comfort to working class Americans at the time, was the seed that grew into the preposterously expensive care we now endure. Once someone else is paying for a service or commodity, our incentive for being knowledgeable as to the value of the entity is eliminated. Thus, not only do we no longer have to make a value judgment, our ability to do so is impaired. The payments of health care services (revenue for the health care services business), in this newly developed system, were being blithely absorbed onto the balance sheet as a labor expense by American businesses. At the time, it was not a problem, as health care expenditures amounted to less than 5% of the Gross Domestic Product (the total of all of our expenditures on goods and services). It is to be expected that as more of the public received health care services, either through private or public means, health care expenditures would rise as a percentage of our overall expenditures. However, a more insidious effect from this new payment structure began to appear mid-century. As this nation is so firmly entrenched in the notion that a competitive/capitalistic economy is a good thing, relative to the alternatives, it baffles one (or, at least, me) as to how the fundamental laws of such an economy have commanded such limited attention vis-à-vis the pricing of health care. On this topic, the word competition has only been raised in discussing the business of the insurance industry. The last I checked, no one went to the insurance company office to have their prostrate examined, kidney replaced, chemo-therapy, or any other medical procedure. The growth of the health insurance industry and its emergence into a fixture of our health care system were additional ill side-effects of the movement to employer provided health care. Current generations of Americans have no perspective on and thus no appreciation of the concept of insurance, pertaining to health care. For so many, for so long, the ‘cost’ of health care was, perhaps, $20, and they never saw a bill for the health insurance payments. As the word insurance became synonymous with health, the two have been, to our detriment, intrinsically linked. That was/is a development helped along by the insurance and health care industries; that disconnect of consumption and payment has been the goose that laid their golden eggs for almost six decades. To some degree, there has always been competition among health insurers, much more so than amongst health care providers. But, competition among insurers didn’t become a serious impediment to rising prices until the proverbial ‘shit’ hit the fan, or actually backed up in the pipeline, in the late 1980’s. It was only after uninhibited rises in health care prices reached a ‘red flag’ point on the balance sheets of American businesses that they, as consumers of large scale health insurance policies, began to more acutely eye those expenditures. Up until then, insurers largely were simply insurers of losses/outlays to their clients, typical of any other type of insurance model; not the medical costs inhibitor that they became. But, limiting the competitive argument to the insurance industry is the critical error of those who are charged with addressing this crisis. As most are willing to acknowledge, the price of health care is too high. Unfortunately, steering everyone away from the real problem is the popular belief that health care and health insurance are one in the same. Health care is a monstrously large industry totally apart from the insurance industry, which simply acts as a transferor of our wealth to the health care industry. Without addressing the economy of health care, sans insurance, the real culprit, high costs will never be alleviated. I would like to expound on this next step, but I must stop, as I imagine I have already exceeded the tolerable limits of this venue.

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