The Mayo clinic is in Rochester, MN, NOT Rochester, NY.
Health care costs are not “out of control”. Rather, we are undergoing a change in consumption patterns from make-work involved with suburbia (granite countertops, McMansions, clothes and automobiles that are discarded for fashion reasons rather than because they don’t serve a useful purpose as protection from the elements or transporation) to make-work associated with the medical-industrial complex. Make-work is essential, because there simply isn’t enough real work to go around and the alternative to make-work is to put the excess workers on the dole, which is bad for morale, or exterminate or jail them, which is obviously not an option anyone in the mainstream is likely to propose. So make-work it is. The great advantage of healthcare makework is that it doesn’t consume a lot of scarce natural resources. It’s almost pure labor. Contrast with the defense-industrial complex (another big source of makework) which is extremely expensive in terms of natural resources compared to labor. Suburbia is also quite resource intensive. Leisure is even less resource intensive than medicine, but the leisure society concept of generating makework was grounded due to our puritanical instincts. There’s also the paper-pushing economy–lawsuits, financial products, edumacation–but Americans are tiring of that. Myself, I’d prefer the R&D makework economy (light on resources for biology and the social sciences, though not for physics) to either the healthcare, leisure or paper-pushing forms of makework. But some form of makework is essential.
Yes, we have a medical cost problem, ours are more than twice as much as the average in the industrialized world with results that are middling. The problem isn’t Medicare or Medicaid or government systems that are generally significantly more administratively efficient than private plans.
The problem is that we’ve created legal and structural frameworks that protect high costs. How about allowing free trade in medical services? A heart bypass operation in Thailand costs about a third of what it does here with results that are actually better than average. Yet our government systems won’t pay for out of country care and our private insurance systems don’t take advantage of those opportunities.
And lets look at patent protections for the pharmaceutical industry and the medical devices industry. The system of rents established by the patent system contributes significantly to our medical bills. The economist Dean Baker has done some significant work in these areas.
Finally, tort reform is necessary, not so much because of out of control malpractice premiums or out of control judgements but because the fallacy of “defensive medicine” gets used to justify a whole lot of testing and procedures that are really just churning for fees. Let’s take away that excuse and work to establish some best practices standards for treatment and we can cut into the inefficiencies of the fee for service model which is a profit model not a care model.
Q: Who deserves this treatment or that enhancement?
What does “deserving” have to do with it? Once you start thinking like that, there are no good answers. So you can’t start thinking like that.
Q: What should a minimum level of care be, regardless of a person’s ability to pay, and who gets to determine that minimum?
Whatever level of minimum care is achievable from charity supported by voluntary contributions.
If you don’t think this is enough, give more (of your own) money to charity, and encourage others to do the same.
Q: If the patient can’t pay, who should—and who gets to determine that?
The aforementioned charities, up to the limits of their funds.
Q: When should the concept of triage consciously kick in for the care of the elderly and terminally ill?
If they can’t pay and neither can the charitable organizations, they don’t get whatever treatment is in question. If they can, their funds (will naturally) go to finance the non-recurring costs of the development of whatever treatments they’re receiving, and eventually the cost of those treatments will drop so that more people can afford them.
This is a financially sustainable health care system. Any other system either a), breaks the bank, or b) puts questions of life and death in the hands of human agents, where that power does not belong.
Fortune and misfortune are better ways of deciding these questions than giving them to power-corruptible humans.
Clue, guys: Making more promises to more people isn’t going to bring costs down. ObamaCare was a mistake, as are all utopian Universal Care plans.
Great Article. Very insightful. I might add that many physicians and mid-level providers have no idea of the charges they incur for the patient . We are as a group undereducated on issues of cost and even on the magnitude of medical benefit and harm. We tend to blame a lot of this on protecting ourselves legally. But we forget that you protect yourself legally by talking (and documenting), not by testing. We would be amazed how how little much of medicine helps and how much is charged for this unnecessary medicine. This is an area we can take ownership and actually change.
It seems to me that a huge part of the problem is that no one in the health industry has to publish prices for procedures. You can’t look up a price list for anything and shop around for the best deal. Go to the hospital and they have every incentive to perform a walletectomy on you because if you have insurance you aren’t going to pay directly for it. I think a great amount of the problem is that providers aren’t required to publish prices for procedures or prices for billable hours. If you can’t price compare, then you can just about guarantee that you will be fleeced.
Great article. While a single payer system would not solve the underlying social causes of healthcare cost increases (awful diets, lethargy, ETC) it would reduce the administrative costs and the paperwork to a massive degree. I keep coming back to the fact that all other wealthy nations spend less (as a % of GDP) on healthcare and get better results. as far as policy goes single payer seems like a logical first step.
One thing that has been eroded over the last ten years is consumer based pricing system. Ever since Medicare began to set prices for various treatments and procedures according to resources consumed, haggling at various committee meetings, and, lately, by edict, there is no true consumer testing of the utility placed on specific medical services. Without this kind of pricing/utility-knowledge the bureaucrats can’t know what the public really wants. Instead the decisions at best are made by doctors and public health officials. At worst and, in reality, they are made by rent seekers and true-believers of various persuasions.
If a significant number of Americans had to pay for medical care out-of-pocket, the resultant “shopping” would force provider price-listing and negotiation, drive down drug prices, eliminate wasteful and unnecessary procedures and tests, and probably reduce the size of the attendant medical care establishment by about 50%. It is the government’s payment for close to 50% of medical care that provides a subsidy to the consumer and forces a phony pricing scheme on the providers.
The government subsidy is badly misapplied. The top 25% should probably receive no subsidy while the bottom 25% would probably need complete subsidy. This kind of approach has the potential reduce the total government subsidy substantially, while using the market based pricing information to allocate services in the subsidized sector in a way that reflects what consumers really want.
What happens if consumers don’t want the right things, e.g., preventive care? This is the province of public health officials. Let them do what they always have done…try to convince people to take better care of themselves and want the right things. Confusing public health issues with treatment of disease sounds like a great idea to policy types, but in practice it makes a mess.