Controlling rising health care costs

[Biochemist]

Hypothesis A: American health care costs are high because individuals overutilize care.

 

Hypothesis B: Individual overutilize because:

1) Consumers do not generally pay for the vast majority of their care cost

2) Consumers that do pay for their care

2a) do not know what they are buying (there are no understandable product characteristics) and

2b) cannot buy products that are priced in advance

Hypothesis C:

1) Hypothesis B1 can be addressed by getting consumers to buy high-deductible/high coinsurance health benefits, and

2) B2a and B2b can be substantially addressed by arranging for care providers to price

understandable

bundles of their services in advance

 

Thoughts?

 

(non-US note) I know that the payment mechanisms are different in the US than in most non-US countries, but the care delivery cost problems are similar.

[Fishteacher73]

Actually one of the biggest expenitures in health care is the section of our population that only gets medical care when it is urgently needed. A big chunk of expenditure comes from those that do not recieve preventive care.

[Biochemist]

Actually one of the biggest expenitures in health care is the section of our population that only gets medical care when it is urgently needed. A big chunk of expenditure comes from those that do not recieve preventive care.

Although this is a commonly held view, most preventative care does not save money (notable exception- prenatal care). The vast majority of preventative care (annual health exams, mammograms, cancer screening, flu shots, smoking cessation, etc) are net costs to the system.

 

The urgency "cost" problem is usually related to inappropriate choice of clinical setting. Patients go to ER instead of seeing a doctor in an office

[Fishteacher73]

I often have to go to the ER instead of my kid's doctor. It is a problem of booking. When a child has bloody diarrhea it really can not wait until a week from thursday. Prior to that I had an incodent that I called my son's doctor and he had closed down and could not be found. The only option at that point (because no one would see my son w/o a reffereal from the original doctor) was the ER. I know the ER doctors better than my kids PCP because of this.

[Biochemist]

I often have to go to the ER instead of my kid's doctor.... When a child has bloody diarrhea it really can not wait until a week from thursday. Prior to that I had an incodent that I called my son's doctor and he had closed down and could not be found. The only option at that point (because no one would see my son w/o a reffereal from the original doctor) was the ER....

Your diarrhea example is not inappropriate utilization. Bloody diarrhea can be serious (sometimes quickly), and is a reasonable ER visit. It sounds like your physician is not particularly responsive. If physicians actually competed for consumer service, this would be an unemployed physician.

[Fishteacher73]

Perhaps this is why he is no longer to be found.... (Although I have recently found a new PCP that both my kids do like and they seem to have been able to get in to see that past couple of times).

 

I think that (to actually get a bit more back to the thread) as many controls as the gov't imposes that some pricing restrictions would be a wise idea. Most excessive charges are linked to pharmaceuticals. Many of these are outrageously priced and not fully understood. The only option for many is an expensive inferior product.

[UncleAl]

The simple solution to budget hemorrhaging is not to provide the service at all. Central management of anything is an expensive abusive idiot. Don't do it. People are not motivated to make rational choices unless they bear the consequences of their acts.

 

Government at all levels is not a giant bag of free goodies. Public health innoculations should be free and mandatory in the interests of densely populated societies. If you are not a citizen that is where it ends. If you pay into Social Security you should be allowed to draw against what has been compassionately stolen from you for emergencies, with repayment (or not - get screwed later). That is where it all ends. No government subsidies, no public safety nets at any level in any form. If you cannot be bothered to cover your own butt, die.

 

Exercise personal responsiblity or die. Think of it as evolution in action. The whole idea of insurance is abusive. When price and cost are decoupled there will be abuse. What one man receives without effort is confiscated from another who labors. Production belongs to the productive. Be productive and rational or die. If this offends you, join 4 billion others who act otherwise - the Third World.

[Biochemist]

...I think that (to actually get a bit more back to the thread) as many controls as the gov't imposes that some pricing restrictions would be a wise idea.

Actually, I was not suggesting price restrictions. Merely that informed consumers could demand that packages of services could be priced in advance by a physician or a hospital. Then consumers could select between two or more similar priced products. Imagine that.

Most excessive charges are linked to pharmaceuticals. Many of these are outrageously priced and not fully understood. The only option for many is an expensive inferior product.

Pharmaceuticals are priced at market. They typically price at or near the cost of the therapy that they are replacing. US prices are generally higher than other countries, because other countries control prices. The US essentially subsidizes the pharma costs of Europe and Canada.

 

Pharmaceuticals are about 20% of the US healthcare dollar. Older pharmaceuticals are often pretty good values (since they are off patent) and are not necessarily inferior. Ibuprofen is a great, inexpensive NSAID, and it theraputically equal to Vioxx and Celebrex, it just may have a different side effect profile.

[bumab]

While a governmental controlled pricing system may solve some of the problems, what aobut the additional cost of the departments to over see the doctors and pharmacutical companies? Health care has the same cost problems as drug use- people will pay anything at the time to get better. As such, the market can hardly be trusted to keep the prices in check, and the industry can hardly be trusted to police their own prices.

[Biochemist]

While a governmental controlled pricing system may solve some of the problems,

I was certainly NOT suggesting any govenrmental controllled system. Just that sets of private providers could price care in pre-priced packages. Why did you assume the government had to do it?

... the market can hardly be trusted to keep the prices in check, and the industry can hardly be trusted to police their own prices.

Competition should provide the policing.

 

It works now reasonably well for the services that are already consumer oriented. Corrective eye surgery is usually not covered by insurance. As a result, surgeons bundle the package of services into a fixed price and consumers select between competing providers based on experince and outcomes. The real-dollar cost of eye surgery has fallen over the last 10 years. What a surprise. This model could apply to over half of all US healthcare utilization.

 

But for competiton to work, consumers have to know 1) what they are buying and 2) what is costs. Then they could compare. The government could not officiate this.

[Fishteacher73]

We have consistantly seen the wonders of de-regulation. From the air-line industry to the power providers there have been great results from letting the "free-market" police the industry. In something that involves the irational decision making of a crittical patient or a distressed spouse, there will be very little careful planned though outside of save them/me.

[Biochemist]

We have consistantly seen the wonders of de-regulation. From the air-line industry to the power providers there have been great results from letting the "free-market" police the industry. In something that involves the irational decision making of a crittical patient or a distressed spouse, there will be very little careful planned though outside of save them/me.

Sure, but most health care decisions are not made on a critical timetable. Even most major surgeries (coronary artery bypass (CABG) grafts, stents, total hips, total knees, ) are planned significantly in advance. The surgeons could be compared on outcomes and price.

 

Further, for those instances where patients do not have time to price in advance (like urgent cardiac bypass grafts) those patients would still get the package price, because SOME patients shop in advance. BMWs are priced to compete with Volvos and Saabs, whether or not the buyers are actually comparing to those vehicles. And selecting a CABG surgeon is LESS complicated than comparing a BMW to a Volvo.

 

...And this does not require any deregulation. All it requires is for consumers to demand it. And they will only demand it if they are paying for it, or at least part of it.

[bumab]

I was certainly NOT suggesting any govenrmental controllled system.

 

Sorry, I wrote that and missed your previous post addressing that subject.

 

It works now reasonably well for the services that are already consumer oriented. Corrective eye surgery is usually not covered by insurance. As a result, surgeons bundle the package of services into a fixed price and consumers select between competing providers based on experince and outcomes. The real-dollar cost of eye surgery has fallen over the last 10 years. What a surprise. This model could apply to over half of all US healthcare utilization.

 

True, but that's a relativally minor, one-time deal where people know what they are getting and they have a perfectly viable alternative- not having the surgury. It's not that industry that's the problem, it's non-elective medication (pain meds, cancer meds, etc.) where there is no alternative. Calm, reasoned decisions are less likely in that case, and the companies can charge what they will, because no alternative exists.

 

But for competiton to work, consumers have to know 1) what they are buying and 2) what is costs. Then they could compare. The government could not officiate this.

 

Is that possible? The current TV ads for pharmacuticals shows how deceptive the companies can be. While I agree competition in theory could control prices, I'm a little curious how you think the companies could be made to fully explain what they are selling and getting the consumer to fully understand what they are buying.

[bumab]

...And this deos not require any deregulation. All it requires is for consumers to demand it. And they will only demand it if they are paying for it, or at least part of it.

 

This is a great point, although as someone who must pay for their own insurance (and it's pricey), I'm still strugglin' ;)

[Fishteacher73]

The "kits" used for a particular surgery are the same. Pre-packaged and sterilized. The specific cost of a kit is dependent upon the supplier. Most of these have reasonably stable prices and give larger buyers price breaks. This discount does not seem to trickle down though. Pehaps standardization of procedural costs w/ variances added in or subtracted due to doctor performance.

 

Socialized medicine has been demonstrated as quite effective in other countries and I just do not understand the fear of moving to such a system in the states.

[bumab]

Socialized medicine has been demonstrated as quite effective in other countries and I just do not understand the fear of moving to such a system in the states.

 

Me either, although the message that "it's lower quality, thus you will all suffer" has been drummed into the collective conciousness pretty hard.

[Biochemist]

True, but that's a relativally minor, one-time deal where people know what they are getting and they have a perfectly viable alternative- not having the surgury.

Now we are getting somewhere. Do you have a choice not to have a car? You still shop for them, and they are reasonably complicated products.,

it's non-elective medication (pain meds, cancer meds, etc.) where there is no alternative.

This is getting better. Let me suggest a novel notion. Health consumers are looking for one of two things: a diagnosis and/or a treatment. They do NOT buy a drug. They hope it is a treatment. If a physician gave you a fixed price for a treatment, the treatments would get a)better and ;) less expensive. Right now, most of the delivery system is not organized to do this. But they could be, and it would NOT require any regulation. It requires consumers to act like it matters.

Is that possible? The current TV ads for pharmacuticals shows how deceptive the companies can be.

That is because the current state of the market is for consumers to assemble their own care. It would be like asking you to select the correct brake line or fuel injection for your car. That is not what you should be buying. You are buying a car.