Thursday, July 30, 2009

Is it Nuts in Here or is it Just Me?

American political dialog (for public consumption) and reality are conveniently shielded from one another by a wall of fear. That fear is composed of the politician's fear of election (power) loss and the voter's fear of hearing about entitlement loss. What follows is an example of what is said and heard versus what is real but not heard.

I will paraphrase the Obama health care dialog: "We need to reform the system so that everyone can be covered by affordable insurance and can receive affordable care and no one will have to sacrifice if we do it right."

Here is a shortened version of reality: "The health care cost crocodile is eating the American way of life, currently it has swallowed an entire leg and is going for the other, so we must cut the first leg off at the hip to save our entitled ass."

Here's another example: Senator Lamar Alexander of Tennessee said on The News Hour last week that "the entire country should look to the examples of the Mayo and Cleveland Clinics where costs are relatively low and the outcomes good and replicate those models as a way to moderate health care cost inflation."

Here's the reality that he didn't mention: Both of those facilities pay their doctors--not for procedures--a salary. It's the primary reason that the care in those facilities is less invasive and less expensive. The day that Senator Alexander introduces Republican-sponsored legislation that puts all American doctors on salary is the day that Nancy Pelosi and Jim DeMint are caught in a compromising embrace in the Senate cloakroom.

You want more examples? No? Well too bad.

Here's a paraphrased version of the conservative push-back on reforming anything about American health care: "We have the greatest health care system in the world and if we change it there will be.....wait for it......wait for it, rationing!"

Here's the reality: America has great health care if you can afford it, otherwise it's mediocre at best and non-existent at worst. We already ration health care in America; we do it through cost and it's rapidly slipping out of the reach of even those with basic health insurance.

Speaking of rationing, let's do a little exercise inspired by a recent op-ed column by Peter Singer, professor of bioethics at Princeton, a small university in New Jersey (not that there is anything wrong with that).

Suppose that there is patient in your insurance pool who has aggressive liver cancer that will kill him in 12 to 24 months. There is a drug called Sutent that slows the spread of the cancer and could give this patient an extra six months of life if he starts taking it now. Whatever the insurance pool pays for this patient and others like him in the pool will impact future premiums for all pool members. Please answer "yes" or "no" to the following questions.

1. The Sutent costs $50 per month, should your insurance pool pay?
2. The Sutent costs $1,000 per month, should your insurance pool pay?
3. The Sutent costs $10,000 per month, should your insurance pool pay?
4. The Sutent costs $100,000 per month, should your insurance pool pay?
5. The Sutent costs $1 million per month, should your insurance pool pay?

If you answered "no" at any point in this continuum, you believe in rationing; you must be a realist and therefore, according to the conservative right, a leftist "socialized medicine" pinko. Otherwise, you are a strict non-rationer; you can march with Glen and Rush, gasbags who never take the "no rationing" argument to a thoughtful conclusion. You can beat the drum and argue that all life, regardless of circumstances and cost, must be paid for with everyone's last dollar. Frankly, I'm not willing to go down, along with my children and grandchildren, on that flawed fiscal ship.

The political will to do the things that would truly moderate health care cost inflation in America is not to be found in D.C. because the message contains news of change and sacrifice for most Americans and the entire health care industry. Try getting elected or re-elected on that platform.

Here's another reality,the necessary sacrifices, if designed and distributed fairly, would not ruin our lives nor wreck the balance sheets of the health care industry. However, the legislative sausage that is currently being packaged in Washington does little or nothing to curb health care cost inflation and a whole lot to place the economic sacrifice on future generations, in spite of Obama's message to the contrary. If the Republicans had a better solution than, "do nuttin' honey", we could turn to them.

Where's Ross Perot when you really need a short Texas nut case to lead a third party?


Observoid of the Day: A martini may quench many things but one of them is not thirst.


  1. Saying the Republicans' alternative is "do nothing" is extremely disingenuous - and in fact, completely untrue. Please see this article from the WSJ on one such plan, introduced back in May by Wisconsin GOP'er Paul Ryan, and since supported by many others. While you and I will disagree on parts of it (though different parts and for very different reasons), it is much more than "do nothing."

    The GOP's Health-Care Alternative"

  2. Thanks, Paul. I read the WSJ piece and I still stand behind my statement. The Republican legislation has to to do with who pays and how universal coverage will be financed. It's the same objective as the Democrats, just a different road. I'm open to both alternatives. My point re: "doing nothing" is about reigning in health care cost inflation. Conflating those two issues is a big part of the doublespeak problem.

  3. Bruce,

    I disagree with you that it doesn't address rising costs. Their proposal involves moving $300B that companies already get annually, to individuals, who can spend the money on their insurance choice, whether it's through their employer or somewhere else. Giving them line of sight into what they're spending (especially considering they can roll a large portion of it into the following year) will encourage them to spend wiser. Couple this with more choices of health plans (since they're not restricted to those offered by their employer), and you have yourself a healthy dose of competition, and thus, lower costs.

    I also think competition could handle the independent doctor problem (which was largely created by Medicare's fee-for-service payments system anyways). As I said, competition leads to lower costs. To handle their lower margins, hospitals have to cut costs. As salaried doctors will surely be cheaper than independent ones, this is a great area for them to focus on.

    As you can tell, my point is healthcare can be improved through increased competition (and the government is no competitor, mind you). A sure way to do the opposite and increase costs is to increase government spending on it.

    The plans are very similar in that they want to try and cover everyone. But I don't believe everyone needs to be covered, though this is a separate discussion. So I agree that there's definitely room for improvement of both plans in that area.

    However, you've said before you think this is all theory. But the concepts of supply and demand and competition work in all other industries; there's no reason they can't work for healthcare, if only we'll allow it.

  4. "the health care cost crocodile is eating the American way of life..."

    In the late 1950's Americans spent 53% of all consumer spending on housing, food, energy, and health care. In 2008 that figure was 55%. Taking a more macro-view I would not consider that "an entire leg".

    Also, I don't think because you personally don't agree that someone's health care plan will lower costs that it is a "do nuttin' honey" scenario. That is a clever political "straw man" maneuver but is better served for a hand-picked town hall teleprompter recital, and would not hold up in a debate.

    Most people feel we need to make some changes, but its not a "now or never" scenario despite what you might read in a major newspaper op-ed. I would rather take the time to really crunch the numbers and debate the topic than try to push thousand page legislature through in a matter of days. That's the kind of bush league political crap that I was told on the campaign trail we were moving past. Barry could fix social security with ease by moving back the retirement age by a few years and health care wouldn't be a blip on the deficit radar for the near future. But I do understand a crisis is a terrible thing to waste.

    Keep in mind that France's health care system is busting apart at the seams and inflating at an unsettling level. Not sure that going in their direction would immediately help a country that subsidizes most of the world's drugs and has an obesity and poverty rate that is unmatched by most Euro area countries. Those are real factors that I haven't seen anyone tackle in their cost analysis yet.

  5. My, my, Washington, there seems to be no small amount of condescension in your reply regarding my post, the major point of which indicates that I'm alarmed by the nature and speed of current legislation. So, we would seem to be on the same page on that, although it is hard to tell from your response.

    The 53% vs. 55% statistic is interesting but it fails to indicate how the slices in those comparable pies are divided up, then vs. now and that's the real story behind the "the entire leg". One should realize--especially when arguing with a reformed statitician--that such details matter. Healthcare currently accounts for 16% of America's GDP which, being quite general about what percentage of an entire human body a leg represents, is about right. It was nowhere near that in 1950.

    Although "moving the retirement age back a few years" is already being done (66 for me, 67 for those who follow) as regards Social Security (something about which my post said nothing), it is the kind of solution that appeals to a 30 something. However, as your birthdays begin to pile up and the realities of full-time work sink in, it loses much of its luster. Ask your parents. There are other and better solutions about which I have written but won't bore you with right now.

    It's telling that both you and Paul zeroed in on the one negative comment in my post about the Republicans. "Me thinks thou dost protest too much". I've held both parties up for being hypocritical in my post. Read it slower next time.

    As for effectively debating the issue in a town hall meeting, with or without a hand-picked audience, I'm ready, without a telepromter. You?
    I'm surprised that you take me for a cheap shot artists who takes a stand without really understanding the basics. I try not to resort to "straw men" unless I'm writing about the Wizard of OZ. The Republicans are depending on the "free market" part of their solution to bring down costs. Sorry, Wash, but the "free market" part is the very reason that American subsidizes drugs around the world (as you so generously pointed out, thanks). It's also the reason that a group of orthopedics doctors can all pull down $1 million a year each, whether all of the procedures were warranted or not (who knows? someone should.). The free market in the health care sector has been a financial disaster.

  6. If you think of basic human needs (items which must be had, therefore must be purchased) as one basket then it does not matter what the size of each pie slice is, in terms of the overall costs. If health care increases at a 200% clip over the next 10 years and food and shelter decrease at 200% (assuming the same volume's spent) over the next 10 years - we are not any worse off in terms of costs. That was more my point.

    It makes sense to me that the social security retirement age would be raised at some point since it has been raised by only two years since 1935 - while life expectancy in the U.S. has increased 14 years during the same period. But I can appreciate why you would think of that as a 30-something thought, luckily I'm not one of those yet.

    You did use a straw-man argument based on your type, you may not feel that way personally but it was written in that manner and that is my objection to it. If the Republican plan was
    "no change is needed, keep the status quo" - then that would be a "do nuttin honey plan". Whether you feel that their plan would decrease costs or not, dismissing it as "doing nothing" is setting up a false adversary. It irks me when Barry uses the "do nothing" line when discussing Republicans because a plan very obviously exists, whether or not he wants to debate its merits I don't know.

    Sorry, the condescension was meant to be directed at the politicians who are in charge, not yourself. I know you understand the basics, and because of this I would like to know what your thoughts are in how France will deal with their rising cost of health care, since they are already out of the fee-for-service biz and why we would not face a similar fate, especially considering our huge population (increased potential for waste) and exponentially more unhealthy population.

  7. Do I understand you correctly Bruce? Rationed care by a centralized Government and a (50%) free market cost of services rationing are the same?

    Are you at all worried that if Rush became President he might use this enormous power (Life & Death) to political advantage?

    In Atlanta they had an overload of new dentist and nurses from large enrollment and graduation at several local universities. The working dentist and nurses complained bitterly because it was driving prices down, causing a loss of income for working dentist and nurses. The point being that if reduce the number of doctors, hospitals and medical practices the prices will go up. If we increase the number of doctors, hospitals and medical practices the prices will go down.

    Can we treat our economy with the same care an environmentalist would assist a reducing species within complex echo-system? Can we nudge it without stomping out the good?

    Average Ed

  8. Boots-- Your illustrations about the realities of rationing in our current system are both true and chilling. Several years ago I was involved with a patient at my hospital who needed a medication that cost $100,000 for the treatment course. I'm not kidding--$100,000. It was manufactured by one pharmaceutical company in the world. But it was the only medication that gave this young man (he was in his twenties, if I remember correctly) a chance to live. He had insurance, but they wouldn't pay for it. But in a move that stunned us all, the insurance company worked with the hospital to find a research foundation that was looking for patients with his particular condition. Yes, it meant he and his family had to move to another state, but it saved his life.

    Despite the happy ending, this was an example of rationing. Had that particular research group not been working on that disease, the patient would not have received the medication. And he would have died leaving a young widow and a couple of little kids with hospital bills in the hundreds of thousands of dollars.

    More often rationing is much more straight forward. Our medication budget has, say, $250,000 to cover a certain range of diseases. The average cost per dose is, say, $250, and will treat 1000 patients. But if just one patient come in and needs a medication in that class of diseases that costs $1000, and needs ten doses, that eats up $10,000 of your budget. That means ten fewer people are going to be able to get that medicine, or if you administer it to those ten,and they don't have insurance to cover the drug, you have to write off the cost and pass it on as uncompensated care. This kind of thing happens every day in hospitals throughout the country. And I didn't make this up. This illustration was presented by the Director of our Pharmaceutical Services at a talk less than five years ago!

    And could I ask a favor? I'm supporting Children's Miracle Network on my blog. When someone goes to the blog and clicks on the "Social Vibe" widget in the right column, Sprint makes a contribution. I've set a goal of 1000 clicks by the end of September. My hospital is a CMN institution (we have both NICU and Pediatrics Units, but I'm doing this just because. It's not a part of a campaign or contest. If you would put in a good word for it to your readers, I'd appreciate it! The kids get the benefit!

    All my best,