So whats your guess as to the number of American citizens without healthcare for prolonged periods of time? 25 million? And roughly 1 in 15 people have no health coverage is then not an issue?

I understand in terms of legality - but I dont like how you infer that noncitizens are somehow not as important when it comes to having access to healthcare. They are human, as much as people wish to demonize them. They could buy into a federal/state system if it were more reasonably priced.

What amazes me is that we out spend any other industrialized nation on health care (15% of US GDP) but gain no advantages.

An economic argument could be made that social insurance, available to all, would reduce costs and the amount of money spent on health care.

And roughly 1 in 15 people have no health coverage is then not an issue?

I understand in terms of legality - but I dont like how you infer that noncitizens are somehow not as important when it comes to having access to healthcare. They are human, as much as people wish to demonize them. They could buy into a federal/state system if it were more reasonably priced.

Could you please show/explain where I inferred this is not an issue, or that the non-insured "are somehow not as important"? Thanks.

On top of the number of people without health insurance, then take a look at how much is being paid for insurance premiums by those who are insured. Then, if possible, take a look at what benefits people actually get in return for those premiums.

The media isn't a significant problem here -- even if it turns out to be true the number "47 million" is misleading for whatever reason.

Off the top of my head, I'd suggest these significant issues:

1. Lots of uninsured people.

2. Lots of people on Medicaid.

3. Lots of insured people whose insurance doesn't pay for very much.

4. Very large premiums and deductibles which are growing rapidly. (Since 2000, premiums have increased 78% verus, for example, a 20% increase for wages over the same period.)

5. Opaque pricing for medical procedures.

And it's sort of tough to see where the money is going. It's my understanding that doctors' income has remained pretty much steady over the past 20 years. I don't think nurse pay is anything spectacular. I've read that medical malpractice awards have remained steady over the past 20 years.

Brian and Josh,

Readers/listeners infer. Writers/speakers imply.
Thus, Brian infers that Josh implied that the poor are less/un important.

Josh, sort of, denies this. I think its reasonable to conclude that Josh is making something of numbers, elsewise, why post the figures? No, its not explicitly stated, but its fair to conclude that reporting that numbers are smaller than they are being reported carries with it an implied claim that says: see, the problem isn't as bad as the press makes it seem. I read it as an enthymeme with major premise and conclusion truncated.

I tend to think that numbers are currently irrelevant to this issue given that its scope is clearly quite significant whether it is 47 million or 4.7 million. Even those in the upper middle class can see the tremendous crunch of medical costs. Last year I had a heart stress test and while I'm not digging out the bills to check, I'm pretty sure that the insurance company paid near 6 thousand dollars for the 3 hours I was in the docs office. Add to that that Insurance companies negotiate lower (often significantly) costs for services than is on the docs service schedule, and the un and under insured get doubly whacked, bills that are literally higher than those an insurance company would pay and being burdened with paying them out of pocket. Thus, another advantage for the haves in trying to achieve the US dream. Of course, the uninsured can refuse to pay...I was there in grad school...but then there were the 5 years that my credit was in the dumper and so I paid higher rates or got refused and the cycle continues...

Honestly, given the tremendous costs of health insurance, I'm really shocked that what's left of major US industry hasn't come out in favor of a national plan. I've spoken with economists about this and they tend to agree that it would lower costs for say, the auto industry. Perhaps unions are resisting, I don't know.

Dave

David,

I seem to recall seeing two corporate titans on PBS's NewsHour calling for just that: a national plan.

There's an interesting piece on the history of Health Insurance in the United States in the EH.Net Encyclopedia: why insurers initially refused to offer it, why early attempts at nationalizing it failed, and how the idea of job-based health insurance was birthed by Dallas teachers in 1929 and evolved into Blue Cross Hospital Insurance.

It might help put the issue into perspective.

Obviously, people who are proposing fundamental changes to the health care system (e.g. socialized health care) want the "uninsured" number to be as big as possible to rationalize their proposals, so the number does matter. 4 million uninsured is still a large problem, but people are going to be less likely to disrupt everyone else's health care to cover 1.3% of the population.

As for illegal immigrants and other noncitizens, of course they are just as human as citizens, but I think we can all agree that it's at least misleading to include them in a tally of uninsured *Americans*. Furthermore, what standard of health care to the citizens of their country of origin receive? If we include illegal immigrants in a universal health care scheme, that will create even more incentive for people to break the immigration laws.

As for the steady increase in health care costs, I think part of it is that the current system of insurance doesn't create a genuine free market, because prices are pretty much hidden from consumers. Another major part of it is all the overhead costs required to meet regulations and fend off malpractice lawsuits.

"As for the steady increase in health care costs, I think part of it is that the current system of insurance doesn't create a genuine free market, because prices are pretty much hidden from consumers. Another major part of it is all the overhead costs required to meet regulations and fend off malpractice lawsuits."

Nope. These are all minor factors in health care spending increases.

The price issue is basically a red herring, because the vast majority of the expenses are in parts of spending where demand is really, really inelastic -- you're just not going to comparison shop for, say, what cancer treatment to get, or for your post-heart-attack hospital care, and so on.

There are large administrative costs in health care, and I agree that they are part of the problem. But most of that is due to fighting with insurance companies, not government regulations.

And Ezra Klein -- and there's really no point in blogging about health care costs if you aren't reading his blog; see, e.g., his recent
http://ezraklein.typepad.com/blog/2007/02/why_does_americ.html
-- takes on malpractice as a cost driver here:
http://ezraklein.typepad.com/blog/2005/07/malpractice_in_.html

you're just not going to comparison shop for, say, what cancer treatment to get, or for your post-heart-attack hospital care, and so on.

I don't see why not. People comparison shop for other very expensive and/or very important goods, like houses or college educations. As in those cases, if you were selecting a hospital or medical specialist, you wouldn't just choose the cheapest, nor necessarily the most expensive. You'd try to find the best quality at a reasonable price.

Granted, most people aren't well-qualified to evaluate their medical options on their own, so they'd need assistance in the form of some kind of rating or evaluation system. But I don't think the idea of making price considerations more transparent and relevant to the patient can be so easily dismissed.

It's not the size, nor the importance, but the inelasticity of the demand. For example, you can temporarily forego a house or a college education, and take the time to comparison shop; and there are clear limits to the amount of housing and/or education that will be economically rational for you to consume, given your needs, values, income, etc.

But if your life is on the line -- or that of your child, or your elderly parent -- I rather doubt you're going to be thinking too much in terms of "best quality at a reasonable price". And you aren't going to take the time to drive from hospital to hospital. You'll be saying, "Doctor, please, whatever it takes -- save my/my daughter's/my father's life!" And who is going to be far and away your most important advisor in this process? That same doctor, of course. (Who will tell you, and who you will trust, if he or she says that the rating system in question doesn't apply, or can't be trusted, or whatever.) People facing these decision don't want to think about costs, don't want to have to second-guess their trusted physicians, and _really_ don't want to have to feel like they are trading off a loved one's life for, well, anything else. The emotional factors here are vast, and all point away from people acting like _Homines oeconomici_ in the way that you'd require.

Now, I have no big objections to trying to do what you say, and making the basics of a market more available in health care. Every little bit helps, etc. But let's try to stay minimally realistic here, and recognize that whatever effect it might have will, indeed, be a little bit.

It's worth bringing in the comparisons to other countries here. Pretty much everyone else in our comparison class has cheaper, and in many ways, better, healthcare than we do. And none of them have anything like the kind of market that you're talking about.

phil,

Of course, I'm not suggesting anyone would actually opt not to have something like an angioplasty because the price was currently too high. But I don't think the idea of taking price into consideration is as unrealistic as you think it is.

Many expensive, important, but non-emergency procedures are planned weeks in advance. Let's say there are two equally skilled surgeons in the area, but one charges 25% more. Why shouldn't there be a cost incentive for the patient to choose the one who charges less--instead of the doctor choosing the one he golfs with? And once that cost incentive is established, physicians and hospitals have incentives to keep costs down while maintaining quality.

Granted, I am not nearly expert enough to be able to say how many situations like this might come up, and it's certainly no panacea. But I think the principle is realistic.

Sure, for optional procedures there might be an effect, as there might be with, say, basic laboratory procedures. But, again, these aren't the sorts of things that are the primary cost drivers. And for cases where people really see their fundamental well-being on the line, what do you think they'll do when their main doctor says, "Yes, Dr. Cutrate is a bit cheaper, but in my professional opinion, Dr. Putterdriver is the better surgeon"?

And there's basically no chance of having some sort of independent rating agency that will produce any sort of easily-consumed ratings for people to follow, such that they'd have confidence in going against their doctor's recommendation. E.g., if Dr. Putterdriver really is the superior surgeon, she might have a _higher_ mortality rate, because the really challenging cases will be more likely to be thrown her way. And do we really want doctors gaming rating systems the way that, say, universities game the USN&WR ratings? Continuing the example I just gave: do we want good doctors having an incentive to refuse difficult cases, because it will impact their 'effectiveness' rating? I doubt it. So I don't expect anything like that ever to materialize.

Like I said, there might be some small effect to be gotten here, and where it can be pursued without creating perverse incentives for the physicians, then sure, let's do it. But we need to keep in mind that selling the market as anything like a _solution_ to the health care funding crisis is fundamentally like selling ANWAR drilling as a solution to energy independence: it's basically a non-serious proposal.

And for cases where people really see their fundamental well-being on the line, what do you think they'll do when their main doctor says, "Yes, Dr. Cutrate is a bit cheaper, but in my professional opinion, Dr. Putterdriver is the better surgeon"?

Of course, they'll go with the pricier, but supposedly better surgeon. Meaning the outcome would be the same as it is now--whether the primary care doctor is telling the truth or just helping out his buddy.

But you seem to assume that this will be the case most of the time, while I think it's just as likely that the less costly surgeon will be just as good, or better, than the expensive guy. In those cases, health care cost is reduced. And, in fact, in such a system all providers are incentivized to reduce costs.

And consider this: right now, both Dr. Cutrate and Dr. Putterdriver are out there practicing, and their fees are not indicative of their skill. Dr. Cutrate is still getting patients, because of his relationships with primary care doctors and HMO's, etc. But those patients (and/or their insurance companies) are paying just as much as Dr. Putterdriver's patients. How is that any better?

Granted, there are many other issues to be addressed for market-based reforms to work. But there are issues with every proposal.

"But you seem to assume that this will be the case most of the time, while I think it's just as likely that the less costly surgeon will be just as good, or better, than the expensive guy." But there's no reason to think that this is the case!

Look at it this way. The basic premise here is that people will, in the relevant sorts of healthcare decisions, be very unwilling to choose low price over high quality. So there will be no incentive for the best surgeons to cut their prices. They are, in a very real sense, just not competing with anyone who would have lower prices. They would be able to charge whatever they could get away with (since of course people won't pay more than they actually _can_ pay).

But now note that there's really no reason for the second-best surgeons to cut their prices, either. The best surgeons will get all the patients they want, and then the patients who can't get on their service will end up with the next-best one that they can land; and they can charge these patients as much as the patients can manage to pay, too. The only reason to cut prices compared to the best would be to attract away the patients from the best. But, by hypothesis, that won't happen. So, no price pressure on the second-best guys.

And so on down the quality chain. There's just no reason to expect anyone's prices to go down in any significant degree, except as one exhausts the pocketbooks of those higher up on the clinical food chain. If anything, this looks like a proposal for costs to go up!

What complicates the market approach all the more is that we, as a society, are unwilling to accept the likely consequence of vast numbers of people just getting priced right out of key parts of the health care market. There will be important life-saving treatments that many, many people, with their working-class salaries, just won't be able to afford on a market-based system. So even if a market could be (economically) attained, it could not be (politically) sustained.

So, it's not a matter of the proposal having 'issues'. It's a matter of whether the basic conditions for the success of the proposal even come approximately close to obtaining. Something more along the lines of a well-designed (and that modifier is very important here!) nationalized health care system can work to bring health costs down _and_ results up. This is something that we actually _know_. It's not mere speculation, but it's based on seeing what has worked & what hasn't in other countries. For market-based approaches, however, the best we have is speculation, and the best evidence we have about how people make these sorts of decisions indicates that it is empty speculation at that.

Look, markets don't work by magic. They work when they do -- and it's wonderful when they do -- only when very particular sets of conditions obtain. And sometimes those conditions just don't obtain, and other structures would yield better results. Liberals learned the first part of this basic truth a few decades ago. But I don't know why conservatives keep having such trouble really learning the second part.

phil,

We obviously have very different points of view on this subject, and I don't want to drag this debate on indefinitely, but you keep making a certain assumption which I find doubtful.

Your assumption seems to be that in any given geographic area, there is a clear-cut pecking order in the quality of surgeons. My assumption is that there is a large pool of skilled surgeons of practically indistinguishable competence--just as most skilled workers in any field are on a fairly even plane. Of course, there are superstar surgeons and surgeons who are on the verge of losing their medical licenses, but in general they are interchangeable.

Now, I admit that my assumption is only from my own (limited and non-expert) observation. I'm interested in whether you have anything else underlying your assumption.

Ever try to get a price list from various hospitals? You can't get a straight answer. I read recently about a newspaper's efforts to comparison shop for a few procedures, one as common as delivering a baby. The prices were all over the board and, as it turned out, not accurate. Wish I could remember the story and get a cite.

You can't really have market forces engaged where prices aren't transparent.

(Doug, that's why Eric's proposal included _making prices transparent_.)

The question of differences in physician quality surely is a tractable empirical question, I agree; but 15 minutes of hard googling has not turned up anything particularly useful on it. Now, partly I'm drawing on my own experiences, including those of having worked in a medical setting, in which there was (at least in my community) a significant sense of a rough pecking order in different specialties. The doctors themselves had clear preferences about who or where they would want to be treated, or have their children treated. This seems to me to be pretty good evidence for the existence of real quality differentials.

But also, it would also be extremely surprising if an activity as talent-, training-, and intelligence-dependent as surgery _didn't_ display significant variation in quality among its practitioners. After all, brain surgery ain't not brain surgery!

And it's also enough that there be differences in _perceived_ quality. So long as people check the name of the schools on the degrees on the doctor's office wall, the guy from Hopkins will be perceived as higher quality than the guy from West Texas Regional Medical College.

But we can put all that aside, anyway. The existence of such quality differentials (or perceived quality differentials), would only serve to make a small tilt _towards_ the possibility of price competition, since it would provide something in principle rational to use as a basis for such discrimination. However, if we assume that we can just treat the medical procedures in question as a commodity, then the picture is much simpler. The relevant facts are: (i) high and growing demand; (ii) an inelastic demand curve; and (iii) relatively limited supply. Those three factors together are going to predict high-and-getting-higher prices. Nothing about price transparency, etc., will do anything about any of these three factors. (And I should note that if you want to really do something about (iii), you'll have to take on the entire AMA/medical schools/licensing & boards complex, which is a political nonstarter, even if it might overall be beneficial in some ways.)

To put it differently: high and fast-growing prices for care aren't a result of market failure -- they are a result of the market forces themselves.

Nothing will get resolved with health care reform, until politicians are not the decision maker, because Politics is the major factor for the inflation.Health care funding,has run aground because of mandates, hundreds of bill have been passed, attaching liability to health care funding. The major one is financing socialized medicine through the private sector. Mandating providers to provide health care on demand to everyone regardless of the means to pay. Medicare is the next major factor,a socialized program that has expanded expeditiously,beyond health care for those over 65, putting an enormous strain on the funding, therefor by passing another mandate , Medicare payments to providers are reduced up to 60-80%, the cost shifting by the political cowards
is the major reason for the fix the Nation is in.