patrick.net

Both Health-care and insurance/finance are two of the most regulated industries. Any wonder why things are thoroughly broken where the two converge?

Kevin says

government run, like China

Countries like China and Russia have government-run health-care, in theory, if you want to die in the hall ways of hospitals. If you want to get real medical service, you can either

(1) Go to a private practice in those countries (not cheap) or fly yourself out of there to seek medical service in other countries, including the US.

(2) Bribe the doctors and nurses to give you actual medical service. Heck, they'd even un-suture you right on the operating table if cash payment is not forthcoming.

In other words, medicine in those countries is cash-and-carry; what's included in those countries' free government health-care is your luck and death.

Almost correct! What you meant to say was "The vast majority of human beings die without health insurance."

Vast majority of human beings do die. Actually, ALL human beings eventually die. There is no such thing as "health insurance" except as a scam, because as desirable as "health"is it can not be insured. Insurance is for unexpected events; getting sick at some point, and especially preventive medicine, is not an unexpected event.

Insurance against getting mugged (getting hit by a huge medical bill), when the mugging is organized to induce insurance purchase . . . that's called a protection racket, aka taxation.

gromitmpl says

You can have health care without health insurance.

Without health insurance, don't expect a round of more sophisticated tests if screening tests are less than certain.

That new chest pain? That suspicious lump? Why bother an uninsured patient with expensive follow-ups? Hey, the screening tests get it wrong less than half the time.

HousingWatcher says

Who required that hospitals treat peopel regardless of whether they can afford to pay? Let's see, the law was enacted in 1986. If only I can remember who was president then. Was it St. Reagan?

Presidents do not legislate. There was no Line Item Veto in 1986. Stop the silly political game.

bob2356 says

FortWayne says

In olden days we had only catastrophic insurance and healthcare was much more affordable.

That would be the olden days when life expectancy was 40 and virtually none of the major health problems could be treated other than with comfort and sympathy? It was a hell of a lot more affordable in the olden days where people simply died of things like cancer, heart disease, stroke, lung disease, diabetes, etc. without having to spend any money actually treating them.

As opposed to now, doctors cut people's breasts off and prostates out because there is a potential for cancer. Everyone is a ticking time bomb for cancer development. DNA replication being a somewhat Markov Process, replication error is certainty if the coin toss is repeated enough times.

After spending all that trillions of dollars, the average life expectancy of an old person has improved by only a few months. The life expectancy improvement is mostly due to lower infant mortality, not older people living longer.

corntrollio says

HousingWatcher says

Why don't you just get it over with and say "death panels"?

Exactly. Apparently these "death panels" that cause early death result in those countries having higher life expectancies. It's actually quite impressive, if you think about it.

Life expectancy is mostly a function of three factors:

1. Infant mortality (which is very low among typical Americans but relatively high among some sections of new immigrants who are not yet integrated into our society)

2. The reporting of infant mortality (government statstics issue; in Cuba, a person is not officially born until he/she is 10 months old, as a way of keeping infant mortality statistics down)

3. Genetics and diet. Japanese have very high elderly longevity expectancy with fish and rice diet; French have relatively high elderly longevity expectancy while living on wine, cheese and butter. Don't expect a Japanese to live long if put on a diet of wine, cheese and butter.

corntrollio says

Every sane plan involves rationing. There are cost-benefit analyses that must be made in all plans. It is not cost effective to spend $1M to give a 20% chance of extending someone's life 1 day. That's how it goes. If you can afford the $1M yourself, godspeed, but please explain to me why a government plan or any other plan would sensibly pay it.

Which is why the decision should be left to the individual instead in the hands of monopolistic bureaucrats. Do you honestly think a monopolistic bureaucrat would refrain from spending $1M of your money to get a 20% chance of extending the life of his mother or his son for 1 day at your expense?

The would-be central planners still suffer from the gov=god delusion. . . aka god-delusion imagining themselves would be in charge in a new dictatorship instead of being trampled upon at the bottom of a human pyramid

How about roads? Water supply? Police? Elementary school education? Fire department? Libraries? Courts? Sanitation?
What have the Romans (government) ever done for us?

I think it's fair to say, given your original post, that the focus is in the FEDERAL government, not *ALL* or *ANY* government. Do you think that roads, water supply, police, elementary school, fire department, libraries, etc. etc., should all be federalized?

I know this to be true from painful first-hand experience with Patrick.net. It is very hard to start a small business in America unless you're already rich, because Republicans have blocked every attempt at a national health insurance option.

Sure... And discussion about increasing competition by allowing people to purchase insurance plans across state lines (i.e., someone purchase coverage from a company based in another state where that state allows further flexibilty in plans offered) is just a "talking point" that has no relevance, right?

Paralithodes says

I know this to be true from painful first-hand experience with Patrick.net. It is very hard to start a small business in America unless you're already rich, because Republicans have blocked every attempt at a national health insurance option.

Sure... And discussion about increasing competition by allowing people to purchase insurance plans across state lines (i.e., someone purchase coverage from a company based in another state where that state allows further flexibilty in plans offered) is just a "talking point" that has no relevance, right?

Yes, it is.

tatupu70 says

Yes, it is.

Awesome retort! And I guess this is because of some reason other than you (and others specifically for the position of a nationally run program) simply declare it to be so?

gromitmpl says

Furthermore if you want health insurance you can get it for your family for under $400 per month.

I demand to see a link to a quote.

I just returned from Germany after a two month stay and wanted to share my experiences there with the medical system and general attitudes to healthcare in Germany. (It goes without saying that Germany has a universal healthcare system like the rest of Europe.) I should add that I have been in Germany in 2009 for 7 months and last summer as well.

My direct experience with the German health system was in 2009. While playing soccer, I managed to smack my toe on another players ankle. I kept playing but afterwards I knew it was broken. I have Kaiser here in California, but it was really only good for emergencies (hospitalization) and this wasn't that bad. After hobbling around for a week, I decided to see a doctor.

I had no idea how much it would cost out of pocket and no one could tell me - they were all covered! So I took out 500 Euros, brought along my credit card and hoped for the best. I was sweating the price - I mean, consultation, x-rays, this could really add up! I was also thinking, long waits (you know like they say in Canada) and bad service..etc.

So I get to the office and wait about 30 minutes (I didn't have an appointment). The doctor comes to see me and we discuss my injury. He orders an Xray (total takes about 30 minutes). They I get a second consultation with the Xray in hand (crap, this is starting to add up). Indeed, I have a broken toe - a hairline fracture that, luckily, needs no surgery and I can just walk around with tight shoes.

Feeling better, but now dreading the bill, I limp over to the counter to pay, hoping I have enough. Guess how much? 50 Euros. Total. Are you kidding me? No insurance?

I celebrated by limping over to my favorite beer shop and buying a Jever Pils for 80 cents. To dull the pain of course. That was my interaction with the German healthcare system.

My other anecdote from the Italian healthcare system. My brother and sister in law took their baby to Italy for a vacation. We came along with our little son (2 years). Before we got there, apparently, their kid started to hyperventilate! They freaked out. Was it an allergy? Was he going to die? My brother in law is a surgeon so you think he would be able to diagnose something, but he may be more of a worry-wort because he is a physician. At any rate, they call the ambulance and go to the emergency room. It turns out that the baby was probably just upset at the brand new travel crib they brought along and felt claustrophobic.

Wow, emergency room, ambulance ride...how much would that cost in the US uninsured? AND they have a doctor in the ambulance, not just the EMTs! This is going to cost THOUSANDS OF DOLLARS (Euros)! What a insurance nightmare with the reimbursement.

The total cost: "No problem sir. Don't worry about it." 0 Euros. Although my brother in law is pretty conservative and a surgeon ($$$) this really changed his tune about universal healthcare. He was a straight Republican voter, even signed up as a reservist after 2001. But after this experience, he was really impressed with the care and really thinks our system is crap, despite his $400K/year salary.

I also note that my father in law is English, has almost no money and works in a pub. But he gets free dental care and free checkups with the doctor. Otherwise, WE would be stuck with the bill...

Now, here is my indirect experience with the European system:

Number of German friends complaining about their healthcare system: 0
Number of people I talked to who even mention healthcare or dentistry (also covered) in daily conversation: 0
Number of friends there with no health insurance (incl. students, kids, coffee shop workers): 0

And on a broader scale, the costs are lower for healthcare in Germany (and everywhere else per capita), they live longer even though everyone smokes and eats pork all the time, and the number of bankruptcies due to medical bills: 0.

I hear and read all sorts of comments by Americans about other systems, how we have it better, how "socialized" medicine is so bad..etc. So I figured I'd give my personal perspective as an American in Europe. BTW, making sure my son can speak German so he has a few more opportunities elsewhere....with health insurance!

Paralithodes says

tatupu70 says

Yes, it is.

Awesome retort! And I guess this is because of some reason other than you (and others specifically for the position of a nationally run program) simply declare it to be so?

Hey, you asked.

OK--here's what I think. Insurers can sell health care plans in any state they want right now. There is no restriction against a health care company operating in all 50 states. They do have to follow the laws governing each state, however.

So what you are proposing is a way to circumvent state laws that some insurance companies find objectionable. And as such, you would not reduce health care costs per service but rather simply reduce services.

It wouldn't be more efficient--it would just be crappier coverage. That's not the direction I'd like to go in...

skully says

Feeling better, but now dreading the bill, I limp over to the counter to pay, hoping I have enough. Guess how much? 50 Euros. Total. Are you kidding me? No insurance?

Well you feel ashamed of your self, not paying over 500 euros, I mean how can all of the 401K pensioners make their nest egg for wall street to skim from?

skully says

The total cost: "No problem sir. Don't worry about it." 0 Euros. Although my brother in law is pretty conservative and a surgeon ($$$) this really changed his tune about universal healthcare. He was a straight Republican voter, even signed up as a reservist after 2001. But after this experience, he was really impressed with the care and really thinks our system is crap, despite his $400K/year salary.

So how much does Doctor like his counterpart in Germany get paid? Where's the money coming from? obviously not from the patients paying 0 Euro.

BTW, a "0" fee system is probably not sustainable with highly mobile population like in the US. I'm sure you have heard of the racist anti-immigrant politics in Germany; it's only a prelude to accusations of "free-loading" between the regions like the north-south difference in Italy. When something is free of charge, people would cross regional borders to get it.

Patrick... I love your site, but let's keep the political op eds out of housing... We are BROKE as a country and cannot afford European style WELFARE! LOOK how good it is working for them!

Healthcare prices really went nuts when the government got into the business with Medicare/Medicaid. We need to go back to fee for service, but it will never happen. All these politicians (esp. Liberals) want is MORE CONTROL!! Get the government OUT OF MY LIFE! They only care about keeping their jobs and making their friends rich (Nancy Pelosi).

Also, ALL the USELESS regulations and EPA requirements also squash small business and keep them from forming (ala Obama)!

guruoracle says

Patrick... I love your site, but let's keep the political op eds out of housing... We are BROKE as a country and cannot afford European style WELFARE! LOOK how good it is working for them!

Actually, we can't afford not to go to a European style system. It's much, much cheaper than ours...

Maybe health services fall into the same category as food. Food is an absolute necessity. We largely let the free market regulate prices and supply. We also have food stamp programs to ensure no one goes hungry. We have the FDA to make sure the food is safe. Could heath services follow a similar model?

I know the analogy isn't perfect, but i figure it's food for thought (no pun intended).

wthrfrk80 says

Maybe health services fall into the same category as food. Food is an absolute necessity. We largely let the free market regulate prices and supply.

No, health services are nothing like food:

1. You cannot shop for critical health care, and you cannot walk away. You MUST have treatment for your heart attack NOW. If you shop or walk away, you die. Even for long-term critical care like cancer treatment, it's very hard to shop and you still can't walk away.

2. Food is cheap. If you had to, you could be perfectly well nourished in America on $5/day. And it is at least possible to grow your own food, but try to treat your own heart attack or cancer and you'll die.

3. Medical care is insanely expensive in the US compared to "socialized" countries like Germany described above. And they have a longer life expectancy, even with all that beer and sausage. And they smoke like fiends. I lived in Germany for 2 years, and they definitely have a better medical system than we do, and cheaper.

A government health insurance OPTION could do wonders to bring down the cost of medical care in the US. If you're worried about over-use, just have a 10% co-pay on everything. That small cost will stop most of the frivolous usage.

Paralithodes says

Sure... And discussion about increasing competition by allowing people to purchase insurance plans across state lines (i.e., someone purchase coverage from a company based in another state where that state allows further flexibilty in plans offered) is just a "talking point" that has no relevance, right?

Insurance has to have a network in the state, these rates are negotiated pet network basis, otherwise no one will accept the insurance.

Patrick,

It's hard to argue against your actual experience. I didn't realize you lived in Germany for 2 years. I've never actually lived in a country with "socialized" medicine so I don't know if it's better or not. Obviously "free" healthcare is very attractive, but aren't the taxes in Germany a lot higher to pay for it?

I'm open to any ideas to make things better. Obviously the current system here in the USA sucks and seems like a huge racket involving both "big government" and "big business."

A government health insurance OPTION could do wonders to bring down the cost of medical care in the US.

Isn't it amazing that the supposedly left wing media wasn't able to help us have this debate? This is something that is a popular idea, and would have only been more popular had we been able to hear a good debate on it.

I wish people could fathom what happened with this issue.

tatupu70 says

Actually, we can't afford not to go to a European style system. It's much, much cheaper than ours...

True. It's sort of like balancing the budget. You have to do that in good times not when you're in the all time worst recession. Health care is what, 1/6th of our GDP?

A government health insurance OPTION could do wonders to bring down the cost of medical care in the US. If you're worried about over-use, just have a 10% co-pay on everything. That small cost will stop most of the frivolous usage.

Like medicare co-pays that do not exist that are the primary driver for the constant increase in medicare costs?

Patrick, I have a bridge to sell you. Interested? It's got granite. Interested? It's got stainless steel appliances too.

Washington can't even pass a bill with co-pays for Medicare. "co-pay" in washington is "killing grandma" in campaign advertisements.

Germany also has clubs of 80 year old men that climbs hills on weekends for fun. It's a different culture Patrick.

wthrfrk80 says

Patrick,

It's hard to argue against your actual experience. I didn't realize you lived in Germany for 2 years. I've never actually lived in a country with "socialized" medicine so I don't know if it's better or not. Obviously "free" healthcare is very attractive, but aren't the taxes in Germany a lot higher to pay for it?

I'm open to any ideas to make things better. Obviously the current system here in the USA sucks and seems like a huge racket involving both "big government" and "big business."

Being open to ideas to make things better makes you a liberal, so watch out! You will now be attacked. Conservatives by definition do not want change:

Conservative con·serv·a·tive adjective
1. disposed to preserve existing conditions, institutions, etc., or to restore traditional ones, and to limit change.

Big government and big business are currently the exact same thing in America. The corporations are running the government, and they're not running it for our benefit, only for their profits. This is why campaign finance reform is so important. Publicly financed campaigns would let congressmen be independent of corporate campaign money.

BTW, the Germans have a hybrid system, with a government option that most people take, but they also have private insurers:

http://en.wikipedia.org/wiki/Health_in_Germany

Their taxes are higher, but that's for a lot of reasons and they get a lot for it, not just health insurance. They have a ton of small businesses, and you don't have to pay insane health insurance premiums to be on your own either.

Could heath services follow a similar model?

The USDA handles food. The FDA is medicine.

Both of these organizations mostly do a good job with what they are asked to do. But, they're just like any regulatory agency. They can be captured by the interests they regulate. Surprise!

wtfcapinv says

Germany also has clubs of 80 year old men that climbs hills on weekends for fun. It's a different culture Patrick.

Right, because there are no senior citizens that stay active in the US...

Government involvement in anything, whether it be as the regulators, or the dispensers, always benefits the friends of said government. Nationalized healthcare would just create a more centralized monopoly for the few "buddy" companies who would be given exclusive rights to gam... I mean "operate" the system.

I still say decentralized healthcare using basically the same structure Patrick is proposing, but on a much smaller scale(think city or community) would be much more efficient because the business would go more to locals, and the plan would be overseen by those most concerned with it's effectiveness, the people actually receiving the care.

Unfortunately, most of us are in the sad state of believing we need central government to do everything short of wiping our asses.

On a more immediately practical note, if your friends live in the San Diego area Patrick, tell them to go for it, and I'll help hook them up with good healthcare south of the border at a fraction of the cost.

"Big government and big business are currently the exact same thing in America. The corporations are running the government, and they're not running it for our benefit, only for their profits."

I woke up to that fact when the government bailed out the banks. "Too big to fail" is socialism. Or maybe "corporate welfare" is a better term.

Here's the thing. I still consider myself fairly conservative in the sense that I think markets work and government interference often does more harm than good, no matter how well the intentions. Not true in all cases of course, but in many cases.

But bailing out banks that should have failed because of irresponsible behavior is NOT free-market capitalism. That's crony capitalism...privitizing the profits and socializing the losses. That's what we have in contemporary America, it seems to me. I think America is a kleptocracy, with an unholy alliance between Big Business and Big Government.

Bribery has to stop, I agree. But how can it be stopped? Couldn't people still bribe government officials "under the table"? I'm not saying we shouldn't even try to stop it...but it seems like it would be difficult to completely eliminate.

We couldn't completely eliminate bribery of congressmen, but it's not necessary either. Just making it possible for someone to get elected without taking any lobbyist or corporate money would be a huge improvement.

You could call me conservative in some ways too. I think there should be no subsidies for anything, because it just drives up costs (housing, education). I think that the free market should be used when it works to benefit the public.

But the free market fails very badly in many cases. Take roads. Would you want toll roads everywhere? Critical health care is kind of like that. Everyone really needs it, and our "free market" cartel has completely failed to provide it at a reasonable cost, because there is no real ability to shop or walk away.

What's really needed is basic health insurance coverage at a reasonable premium for everyone, with a 10% copay to limit overuse.

But that would interfere with giant insurance company profits, and health conglomerate profits, so there is no way any Republican congressman would vote for it. It violates the prime Republican directive of redistributing income from the middle class to the ultra-rich.

NuttBoxer says

Unfortunately, most of us are in the sad state of believing we need central government to do everything short of wiping our asses.

False dichotomy! http://en.wikipedia.org/wiki/False_dilemma

As Roberto put it for housing:

Why do the buy side idiots ALWAYS fall for the FALSE CHOICE FALLACY????
Choice 1: Buy today, right now, this second.
Choice 2: Rent until you die.
Um, I'll take door #3: let prices fall another couple hundred $K on a home
like this, and buy it in a year or two. What did I win?
--Roberto Aribas

Same for health care. It's not "government do everything" vs "government do nothing".

I'll take door number three: "government do what private market fails to do".

But the free market fails very badly in many cases. Take roads. Would you want toll roads everywhere?

Agree with your point. Roads are an example of a "natural monopoly." It's most cost-effective to just have one road network rather than multiple competing road networks. Same can be said for water/sewer systems, electrical transmission lines, etc. Maybe health services are a natural monopoly?

Critical health care is kind of like that. Everyone really needs it, and our "free market" cartel has completely failed to provide it at a reasonable cost, because there is no real ability to shop or walk away.

That's a compelling point, I think. That was one of the flaws in my "is health service like food?" question.

It's true...in an emergency, you just need to get to the nearest hospital. The hospital, in a sense, has a "captive market". They can charge $50 for a piece of toast just like a sports stadium can charge $10 for a hot dog.

I was recently in the hospital for a sudden bout of uncontrollable shivering and chills. It was probably just a virus, they said. But because the symptoms were so strange, they did test after test. And those tests were really expensive. I have a high-deductible insurance plan with an HSA, and the bills cleaned out my HSA completely and then some. Ouch. No chance to "shop around" obviously.

1. You cannot shop for critical health care, and you cannot walk away. You MUST have treatment for your heart attack NOW. If you shop or walk away, you die. Even for long-term critical care like cancer treatment, it's very hard to shop and you still can't walk away.

That means the government has to provide free housing to people so that they can all live within 10min drive of an emergency room with top-flight heart treatment facilities.

Let's face it, people make all sorts of choices that may have detrimental effect should an emergency strike. The idea that the government or anyone else can insure a person's health is quite absurd . . . because we are born to die some day! Being alive is the leading cause of death!

2. Food is cheap. If you had to, you could be perfectly well nourished in America on $5/day. And it is at least possible to grow your own food, but try to treat your own heart attack or cancer and you'll die.

Food is only cheap because there is a semblance of free market in food production and distribution, despite FDA's effort to undermine the free market process. Medicine used to be cheap too, that is, before the government regulations limited supplies with licensing requirement and FDA approvals, while artificially goosed demand through subsidies to the overwhelming majority of medical expenses in this country. Medicine is not a free market at all when the people most likely to get sick (the sick and elderly) are heavily subsidized.

The free market place can take care of the sick and the elderly far better than Plantation Health-care can: just like free market has made computers and cell phones far more accessible to the poor in the past 30+ years than any scheme of government buying computers for families with children could have done. When people spend their own money, they drive price down and encourage innovation; when bureaucrats spend someone else' money, they drive prices up and buy IBM mainframes and workstations!

3. Medical care is insanely expensive in the US compared to "socialized" countries like Germany described above. And they have a longer life expectancy, even with all that beer and sausage. And they smoke like fiends. I lived in Germany for 2 years, and they definitely have a better medical system than we do, and cheaper.

The life expectancy issue is a red herring. That of the US is weighed down by recent immigrants and poor families that have theoretical access to free health-care but do not or can not actually use them, especially in pre-natal care. That leads to higher infant mortality among particular groups. Infant mortality is the biggest factor in "average life expectation," not longevity of the elderly per se.

But the free market fails very badly in many cases. Take roads. Would you want toll roads everywhere?

Why would there be toll roads everywhere? When was the last time we had to pay toll when we leave our drive way and enter the development? There are numerous ways to road maintenance that does not have to involve the federal government.

Critical health care is kind of like that. Everyone really needs it, and our "free market" cartel has completely failed to provide it at a reasonable cost, because there is no real ability to shop or walk away.

That's because numerous market options and would-be providers are banned by the governments.

What's really needed is basic health insurance coverage at a reasonable premium for everyone, with a 10% copay to limit overuse.

What is a "reasonable premium"? Considering that health insurance coverage have gone up more than 10x in the last 20 years alone . . . what's to prevent the cost go up another ten-fold to make the 10% co-pay the same amount as the current bill? BTW, the average reimbursement rate of hospital bills is just over 10% the amount billed . . . so the 10-fold bill padding is already there.

But that would interfere with giant insurance company profits, and health conglomerate profits, so there is no way any Republican congressman would vote for it. It violates the prime Republican directive of redistributing income from the middle class to the ultra-rich.

It's not just the Republicans. Democrats are on the same bandwagon. Limited supply and government subsidy help goose up medical bills, so that the banks can charge enormous interest fees on hospital buildings, equipment and doctors' education. The banking cartel is overwhelmingly Democrat in their contributions, simply because all those government programs have to be financed . . . i.e. another excuse for the banks to levy interest from the taxpayers via taxation (and the scam called "public debt").

I'll take door number three: "government do what private market fails to do".

What ostensibly look to some like "what private market fails to do" is actually the result of government intervention: such as banning people from offering medical and insurance options that are priced lower.

The European health care system, while better run, has less funding. Expensive medical equipment is scarce in comparison with the US where expensive equipment and drugs are almost too common. Health care in the US is run like a business. Medical equipment suppliers and drug companies make deals with health providers. The drawback is more expensive care. The benefit is access to higher technology procedures.

One such expensive machine detected early stage cancer in my grandmother while she was visiting the US on a short vacation. I don't know what type of machine this was. It is so expensive that there are only one or two such machines in all of the Netherlands. She would have NEVER been granted access to this equipment in the EU. Luckily this equipment is common in the US. Unfortunately, we discovered some bad news.

At the same time, the productization of healthcare in the US has resulted in a reduction of expertise and common sense in the medical practitioners themselves.

Neither system is perfect but I would choose a 100% privatized, market driven system over socialized/private hybrid. I want the choice of visiting the $5 witch doctor on the corner or spending $10K to get access to the expensive equipment, or both! I don't think health care is a right. Universal access to health care presents a moral hazard in that it encourages unhealthy lifestyles.