Yet another cold shower; more depressing data on the medical cost explosion

[Torie]

I was chatting off topic with another poster who was landing a blow or two on me before I retreated saying hey, we need some data here, about the business of whether a modest revenue increase course correction would let the medical subsidy thing continue its laissez les bon temps roulez approach just keep  going and going on and on. But I am back now, and yes, I know it sucks that I am back. The bon temps are ending, and ending soon. The chart below says it all - medical costs are going up so rapidly (like doubling in real dollars in but one decade) that the meltdown is seemingly almost right across the street now, and soon will be on your lawn, en route to your living room, and then bedroom. I mean, 20K per family in medical costs?  How much does the median family make?  60K?  Crazy man, just way, way out there beyond the looking glass crazy.



So what to do? The Princeton economics professor author of the article from which I pinched the chart says basically, the rich get no more subsidies, the middle class pays more and gets less, and the poor get less. Deal with it. Even assuming some reforms were implemented ASAP about which I have been ranting about (computers, HMO's, telephone consults, less CYA medicine, most favored nation drug pricing, making illegal drug company subsidies for co-pays, etc.), the idea that more revenue in any reasonable zone anyone responsible who knows anything about economics would find practicable, given these kinds of numbers, is almost rounding error it seems to me.

Why don't you start hounding your representatives to start studying, sweating, and truth telling about what lies ahead, and just where within the zone, they think the circle can be squared, or at least out themselves as outside the zone, and just useless potholes in the road who should be filled in?  Think about it.

[Simfan34]

"laissez les bon temps roulez"

I am not worthy. I will also need more time to formulate a response.

[anvi]

I know what I'm about to say is purely "academic," but, just for waste and smiles...Rationing care by income levels was one of the forks in the road Reinhardt cited in the linked article.  The other was this:

"First, if we wish to continue with even the semblance of the idea that our health care system offers rich and poor patients roughly the same kind of health care experience in case of illness – that is, that we do not ration health care by income class in this country – then we will have to enlist government somehow to impose on total health spending an annual budget that cannot grow faster than ability to pay – say, the rate of growth of gross domestic product per capita."

It appears to me that Reinhardt is suggesting here what goes on in lots of other countries.  Governments hold down costs by holding down costs.  They annually negotiate price caps on treatments and medicine with the industry, and ration from there.  Depending on what kind of system is in place, they ration time, quality, medical supplies, and often give providers the short end, but they do it to create broad-based access to care.  There is indeed no free lunch, and people have to pay on some end.  Reinhardt has been talking about this for a long time, and ever since the early '90's has been dubbed a "socialist" by the AMA.  Obviously, Reinhardt knows, and so do I, that nothing of the kind will ever happen here.  That's why, Reinhardt argues, the only other fork in the road is to ration by income level, and, I agree, the numbers do seem to back that up.  The more ill the patient, the more chronic care is required, the higher the costs in an environment where costs are spiraling upward, and that puts poor patients in an especially vulnerable position, now of course, and even more so in the future.

[Torie]

One reason some of those governments are able to "hold down costs," is the US subsidizes so much of it all with research and the price discrimination with drugs. That isn't all of it of course - there are other trade offs that reasonable people can agree or disagree about - but it is a fair amount of it. Do you understand better now just why I am not a fan of the status quo medical care regime in the US? F, I am maybe its harshest critic!

[greenforest32]

So what to do?

Ideally, we would adopt some structural reforms like the following to reduce total cost and expand basic coverage:

1. Restrict government funding of healthcare to government-run facilities and nationalize health insurance (also repeal employer health insurance tax deduction) to remove the profit abuses of private industry
2. Abolish pharmaceutical drug patents and replace with a prize-incentive system
3. Fold Medicaid/CHIP/FEHB/etc into expanded national Medicare-for-all following #1, 2
4. Liberalize medical professional licensing restrictions that exist solely to create false shortages

What we're going to get from our private profit at the expense of the public good political system? More legalized theft and death.

[patrick1]

I'd think that serious tort reform would have to be involved in any attempt at fixing health care. We've come to expect doctors to be miracle workers but they are human, make mistakes and people die.

Also there has to be a better system to get new drugs into the system. The patents and high costs are there because it costs over a billion dollars to bring a drug to market.

[© tweed]

nationalizing health care, making doctors employees of the state and extending a form of sovereign immunity to the doctors clears up the torts problem and a whole host of others.