Olbermann on healthcare

[Stark]

It is a consistent lol how absurd it is that patients in the US have to pay thousands of dollars for radiology. Best health care system in the world!

[Darth Wong]

It is a consistent lol how absurd it is that patients in the US have to pay thousands of dollars for radiology. Best health care system in the world!

You know, if you're making $250,000 per year, you can probably convince yourself that it is a really good health care system. Dropping a few thousand dollars for a procedure here or there seems like a perfectly reasonable and moderate price, and you know you'll get good service because it is a "consumer-driven" system, ie- when you flash your money, you'll get service.

The picture looks considerably different for people making less money, of course. But as a $250,000/yr man, especially if you have good insurance, you would not concern yourself about that. In fact, you would secretly applaud it, because it means quicker service for you.

It's really rather easy for someone like this to say "Hey, only $3500 for a procedure? That's totally worth it! That's not excessive at all! What a great health-care system!" and it might genuinely feel that way, from his perspective. You tend to become acclimatized to your own level of income, particularly if you make a point of living in a community where everyone else has the same kind of income.

[Stark]

I just mentally picture the radiology lab my mum used to run, in a crappy neighbourhood of housing commission places, poor minorities etc with what passes for high crime in Brisbane... and legions of eople come get all kinds of radiology (and ultrasound which is apparently even more expensive) every day. There is literally no way in hell any of them could afford $2,000 (or the AUD equivalent) to get an MRI or whatever, ever. If they needed it they'd either be bankrupt or dead.

[whackadoodle]

Where do you think insurance organizations get money?

Om average, an employer-based insurance plan costs $12,000 per family. That's not really at issue, though. Unless your insurance is absolute shit (in which case you might as well say you're uninsured), the deductible/copay will be reasonable enough.

Even then, unnecessary systemic costs would raise the premium for any given level of coverage, making it a financial concern for everyone covered, even without any personal medical procedures.

Although it varies from state-to-state, their are limits on how much an insurance company may raise their premiums on group plans due to claims by people covered in that group. Georgia regulations.

The thing is, because the premium is deducted from their pay, or they pay monthly, there is a disconnect between what they pay in insurance, and what they pay for health care. From the patient's point of view, the visit to the doctor costs whatever their copay is.

[Qwerty 42]

After having just needed to pay an 80% copay for dental work, I'm even less pleased with the current system than I was a week ago. Some insurance. I know that particular procedure (root canal removal) is my own stupid fault, but I'd almost rather not have to pay for insurance and just stomach the 20%.

[Vympel]

You know, if you're making $250,000 per year, you can probably convince yourself that it is a really good health care system. Dropping a few thousand dollars for a procedure here or there seems like a perfectly reasonable and moderate price, and you know you'll get good service because it is a "consumer-driven" system, ie- when you flash your money, you'll get service.

The picture looks considerably different for people making less money, of course. But as a $250,000/yr man, especially if you have good insurance, you would not concern yourself about that. In fact, you would secretly applaud it, because it means quicker service for you.

It's really rather easy for someone like this to say "Hey, only $3500 for a procedure? That's totally worth it! That's not excessive at all! What a great health-care system!" and it might genuinely feel that way, from his perspective. You tend to become acclimatized to your own level of income, particularly if you make a point of living in a community where everyone else has the same kind of income.

Ah, but the genius of the American system is that they've somehow convinced large swathes of the population who are dirt poor that some day they might make $250,000 a year (just look at Joe the Plumber, the fuckwit) so they agree it's a great system too.

[BR7]

Where do you think insurance organizations get money?

Om average, an employer-based insurance plan costs $12,000 per family. That's not really at issue, though. Unless your insurance is absolute shit (in which case you might as well say you're uninsured), the deductible/copay will be reasonable enough.

What I was getting at is that premium payers pay. Insurance organizations do pay, but they're middlemen that get their money from premium payers. If the systemic cost of health care goes up, insurance organizations pay more, so they charge more for insurance. Systemic costs are not not free for people with insurance, as you seemed to be saying.

Even then, unnecessary systemic costs would raise the premium for any given level of coverage, making it a financial concern for everyone covered, even without any personal medical procedures.

Although it varies from state-to-state, their are limits on how much an insurance company may raise their premiums on group plans due to claims by people covered in that group. Georgia regulations.

Even if that link explained regulations of that sort (That page doesn't. Did you mean to link somewhere else on that site?), that would only address increases over time, not the increase from a hypothetical efficient system to the status quo.

The thing is, because the premium is deducted from their pay, or they pay monthly, there is a disconnect between what they pay in insurance, and what they pay for health care. From the patient's point of view, the visit to the doctor costs whatever their copay is.

...But they still pay. That visit still costs copay plus premium. And the total is a problem, whether certain individuals acknowledge it or not.

[D.Turtle]

Don't slander neo-classical economics so effortlessly. He's assuming perfect competition, which is an assumption that is often used in neo-classical economics, but no where near always.

Is what I said wrong? If so, show it. If not, how is it slander?

[whackadoodle]

What I was getting at is that premium payers pay. Insurance organizations do pay, but they're middlemen that get their money from premium payers. If the systemic cost of health care goes up, insurance organizations pay more, so they charge more for insurance. Systemic costs are not not free for people with insurance, as you seemed to be saying.

Of course it's not free, and of course people with insurance pay, in co-pays, deductibles, and in their premiums. Even if their employer pays part or all of the premium, the employees still pay in the form of lost bonuses and raises that instead goes toward their insurance.

The reason that the insured patient isn't the customer is because, unless he asks for an itemized bill of services rendered, he will have no idea of just how much health care in the U.S. costs. Moreover, because he pays the insurance company away from the point-of-sale, he doesn't think, "Hey, do I really need this test done, and how much will it cost". He thinks, "Oh, well, better safe than sorry." And why shouldn't he? After all, will continue to pay the same amount for his medical care no matter how much the visit costs.

[Darth Wong]

What I was getting at is that premium payers pay. Insurance organizations do pay, but they're middlemen that get their money from premium payers. If the systemic cost of health care goes up, insurance organizations pay more, so they charge more for insurance. Systemic costs are not not free for people with insurance, as you seemed to be saying.

Of course it's not free, and of course people with insurance pay, in co-pays, deductibles, and in their premiums. Even if their employer pays part or all of the premium, the employees still pay in the form of lost bonuses and raises that instead goes toward their insurance.

The reason that the insured patient isn't the customer is because, unless he asks for an itemized bill of services rendered, he will have no idea of just how much health care in the U.S. costs. Moreover, because he pays the insurance company away from the point-of-sale, he doesn't think, "Hey, do I really need this test done, and how much will it cost". He thinks, "Oh, well, better safe than sorry." And why shouldn't he? After all, will continue to pay the same amount for his medical care no matter how much the visit costs.

So long as he has a gold-plated insurance plan, that is. The people with crappy high-deductible and high-copay plans obviously don't fall into this category, and I have to wonder how many zero-copay and zero-deductible plans there are out there. How common are they?

[BR7]

The reason that the insured patient isn't the customer is because, unless he asks for an itemized bill of services rendered, he will have no idea of just how much health care in the U.S. costs.

Since when does being a customer require knowledge of the overall state of the system?

The consumer is the one who pays.

To be fair, you could have intended to convey a nuanced difference between customers and consumers. However, the following exchange leads me to doubt that.

What mechanism is there to allow them to pass these costs on to consumers?

Well, it really depends on who we mean by customer. You seem to be working on the assumption that the patient is the customer. For 47 million or so Americans, that is true. As for everybody else, they are not the consumer. The consumer is the one who pays. Medicare, Medicaid, insurance - they are the real consumers.

Semantics aside, you seem to be contending that insurance premium payers don't bear the cost of systemic inefficiency. Is that the case?

[RedImperator]

Is he saying they don't bear it, or they don't know they bear it? I'd imagine most people wouldn't make the connection between "Shit, my premiums went up again," and "I guess I shouldn't have gotten MRI'd for a sprained ankle two years ago".

And Mike, there are plenty of plans with a fixed (low) copay for relatively common procedures. If the majority of people with insurance actually had the kind of shitty insurance where you have to pay a 20% copay for all procedures (instead of the kind of shitty insurance which pays for your broken wrist and drops you the minute you're diagnosed with cancer), health care reform wouldn't be in the mess it's in right now.

[PainRack]

Returning to our long-standing example, if you have enough MRI machines such that there is excess capacity over people whose MRI's are a legitimate medical necessity, then you can start reducing the medical benefit an individual patient has to receive from an MRI in order to put them in a machine. If you have a situation like the one in the US, where there are plenty of essentially idle MRI's, then you can cut down the expected benefit from having an MRI, eventually to the marginal cost of running the machine. That is precisely the situation that Darth Wong observed when he saw advertisements for discounted MRI's. Given the number of MRI's machines available in the US, it seems totally reasonable to test people "just to be safe," because the marginal cost of running a machine are reasonably low, and so even when a doctor in a country with more constrained access to MRI's wouldn't ask for a scan it seems reasonable for an American doctor to recommend one. If the system were, in fact, to cut MRI's to the level where only "medically necessary" procedures could be run, that would strike me as significantly compromising patient care.

I leave it to the doctor to really argue this, but why would you argue that if only "medically necessary" procedures are done, this would compromise patient care? The advantages of MRI over CT scans rests purely in the ream of image resolution. In many cases, a CT scan with contrast can do the job just as well, although I understand there are areas such as the brain which would omit significant details.

[whackadoodle]

Is he saying they don't bear it, or they don't know they bear it? I'd imagine most people wouldn't make the connection between "Shit, my premiums went up again," and "I guess I shouldn't have gotten MRI'd for a sprained ankle two years ago".

Bingo.

[Darth Wong]

I leave it to the doctor to really argue this, but why would you argue that if only "medically necessary" procedures are done, this would compromise patient care?

tharkun made the same argument many years ago. The gist of it is that "just to be safe", we might as well run all sorts of unnecessary tests because you never know, one of them might catch something. That's how someone like (for example) the President of the United States is treated.

The problem is that you cannot possibly treat everyone like this without making the cost of the health care system spiral to completely absurd heights. So this is a highly class-based way of looking at health-care: the people who can afford it will get gold-plated care where they run expensive unnecessary tests "just in case" while everyone else gets nothing but the right to drag themselves into an emergency room when they're on death's door.

In essence, the upper class opposes universal health care because they want the lower classes to be locked out, so that there will be more room inside. In a universal health care system where tests are given to those who most need them rather than those who can most afford to pay for them, they might not be able to snap their fingers and get whatever tests they want, "just in case". This would slightly reduce the quality of their care, while greatly increasing it for the poor. This is totally unacceptable to them.

[TheKwas]

Don't slander neo-classical economics so effortlessly. He's assuming perfect competition, which is an assumption that is often used in neo-classical economics, but no where near always.

Is what I said wrong? If so, show it. If not, how is it slander?

I explained why you were wrong. There's plenty of neo-classical models used to describe situations of imperfect competition, such as a situation where firms have market power (which would apply to health insurance companies). In such models, the costs get passed on to the consumer if demand is inelastic (which healthcare certainly is). What you were calling 'neo-classical' was really the assumption of 'perfect competition'.

[BR7]

The problem is that you cannot possibly treat everyone like this without making the cost of the health care system spiral to completely absurd heights.

Small nitpick. You could if the price of performing the tests is small, between zero and whatever the average benefit from "just in case" testing is, in which it would be more cost-effective to do "just in case" tests. Not that it's remotely likely, just not impossible in principle.

[Simon_Jester]

Some tests might actually be that cheap. For example, routinely screening people for HIV even if they don't seriously think they've got it might be cost-effective. They already do it to blood donors, not that it's hard to see why they'd make the effort.

But time on a piece of equipment that cost a million dollars to build and hundreds of dollars an hour to run? Not so much.

[D.Turtle]

This might be relevant on this topic:



from PricewaterhouseCoopers’ Health Research Institute (HRI)

Key Findings

Our research found that wasteful spending in the health system has been calculated at up to $1.2 trillion of the $2.2 trillion spent in the United States, more than half of all health spending. Defensive medicine, such as redundant, inappropriate or unnecessary tests and procedures, was identified as the biggest area of excess, followed by inefficient healthcare administration and the cost of care necessitated by conditions such as obesity, which can be considered preventable by lifestyle changes. PricewaterhouseCoopers’ paper classified health system inefficiencies into three “wastebaskets” that are driving up costs:

* Behavioral where individual behaviors are shown to lead to health problems, and have potential opportunities for earlier, non-medical interventions.
* Clinical where medical care itself is considered inappropriate, entailing overuse, misuse or under-use of particular interventions, missed opportunities for earlier interventions, and overt errors leading to quality problems for the patient, plus cost and rework.
* Operational where administrative or other business processes appear to add costs without creating value.

When added together, the opportunities for eliminating wasteful spending add up to as much as $1.2 trillion. The impact of issues such as non-adherence to medical advice and prescriptions, alcohol abuse, smoking and obesity are exponential, and fall into all three baskets.

[Knife]

It is a consistent lol how absurd it is that patients in the US have to pay thousands of dollars for radiology. Best health care system in the world!

You know, if you're making $250,000 per year, you can probably convince yourself that it is a really good health care system. Dropping a few thousand dollars for a procedure here or there seems like a perfectly reasonable and moderate price, and you know you'll get good service because it is a "consumer-driven" system, ie- when you flash your money, you'll get service.

The picture looks considerably different for people making less money, of course. But as a $250,000/yr man, especially if you have good insurance, you would not concern yourself about that. In fact, you would secretly applaud it, because it means quicker service for you.

It's really rather easy for someone like this to say "Hey, only $3500 for a procedure? That's totally worth it! That's not excessive at all! What a great health-care system!" and it might genuinely feel that way, from his perspective. You tend to become acclimatized to your own level of income, particularly if you make a point of living in a community where everyone else has the same kind of income.

Here is the problem. People making ~35k a year have been duped into thinking if they bust their ass, someday (unknown) they to, can make 250k a year. These are the 'soldiers' being used by these assholes.

[Knife]

Out of all of that, I'd say over testing is an acceptable cost. Processing claims should be cheaper, not over testing. That's just rolling the dice and coming up wrong. Rather that than not rolling the dice. Admin costs are what needs to come down.

[Serafina]

I would be interested in their definition of "overtesting".
If it involves every test that it negative, its idiotic to label it as "unneccessary".
If it involves every test that is made without apparent symptoms, those have good sides, too - they are absolutly necessary to detect some long-term diseases, such as aids, cancer and various others.
If it involves only blatantly hypchondric tests (tests for diseases that are neither long-term without any symptoms and possible infections) then the U.S. health care system is even more inefficient than i thought.

[D.Turtle]

The "Overtesting" in the graph (which is not from the study itself, but made by someone based on the study) is actually so-called "Defensive medicine". What do they define as Defensive Medicine?

From the study that they cite:

As malpractice premiums continue to rise, particularly in states that have not taken any action to contain the cost of the medical liability system, providers have responded in a number of ways, including the practice of defensive medicine (e.g., where doctors, in order to mitigate the threat of lawsuits, order tests and procedures they believe are not medically necessary). A recent survey of Pennsylvania providers in six specialties revealed that 93 percent reported practicing defensive medicine.2 Defensive tests and treatment can pose unnecessary medical risks and add unnecessary costs to healthcare.

And where does the $210 Billion come from? Its based on being 10% from the total spending on Health Care:

The 10 percent was adapted from Kessler and McClellan as sourced in Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, “Addressing the New Health Care Crisis: Reforming the Medical Litigation System to Improve the Quality of Health Care,” March 2003 and CMS’ Medical Economic Indices. Kessler and McClellan estimate that the cost of defensive medicine was in the range of 5% to 9% of medical costs. The direct cost of medical liability insurance is roughly 2%. This suggests that total medical liability costs are in the 7% to 11% range.

Both of those quotes are from The Factors Fueling Rising Healthcare Costs 2006 for AHIP (pdf)

So its a combination of litigation costs + additional tests trying to be safe from litigation.

Our resident nuke enthusiast apparently is right about litigation being a major problem.

[Stark]

I wonder how this compares to AU, where I can get a doctor to send me for all kinds of diagnostics or bloodwork 'just because' for free whenever I want. Surely this would generate heaps of basically wasted 'overtesting' in the system too?

[Serafina]

I wonder how this compares to AU, where I can get a doctor to send me for all kinds of diagnostics or bloodwork 'just because' for free whenever I want. Surely this would generate heaps of basically wasted 'overtesting' in the system too?

I can do that over here too. In fact, i do a general checkup at least annualy. in fact, it is required by a lot of insurances to do something like this.
A friend of mine did not have these annual screenings, which led to undiagnosed lyme disease - which created some 10.000€ of medical costs, not including decreased ability to work for about two years.