The Real Reason Capitalism Can’t Fix Health Care

While I agree with Cullen Roche’s headline conclusion, I disagree with his reasoning:

Let’s say we have two pools of people – the Healthcare Heads and the Healthy Heads. The Healthcare Heads are mostly older people and they need the healthcare system a lot. The Healthy Heads are mostly young people who need routine check-ups and basic coverage. Then we have two healthcare providers called Healthy McHealth Provider and McDonalds (not to be confused with the hamburger company) who offer two plans for these pools to compete over. The first plan is called the Hennessey Healthcare Plan and the second plan is called the Honda Healthcare Plan. As its name implies, the Hennessey Plan, named after one of the most awesome (and expensive) cars ever made, has all the best bells and whistles. The Honda plan is just, well, like a Honda. It’s nice, but you’re gonna have to pay extra if you want that CAT scan.

The reasons that “capitalism” (the market system) can’t fix health care are that:

  1. People want care not insurance.
  2. The cost of insurance is proportional to the cost of care.
  3. As long as the cost of care goes up, the cost of insurance will, too, regardless of how insurance is structured.
  4. If you constrain the supply and subsidize the demand, costs will inevitably rise.
  5. If you want competent practitioners, you’ve got to constrain the supply.
  6. If you don’t want anybody to go without the care he or she needs, you’ve got to subsidize demand.
28 comments… add one
  • Jimbino Link

    No, the primary reason health care is unaffordable is that the gummint colludes with the providers to hide pricing essential to a free market. Another is that health insurance can’t be used overseas.

    Not only is the cost of health insurance proportional to the cost of care, it is some 25% higher, on average. The cost of health care could thus be lowered merely by prohibiting insurance to cover it.

  • michael reynolds Link

    Dave:
    Your A, B, C, D, E and F list is about as concise and straightforward an explanation as I’ve seen anywhere. We want good, fast and cheap and usual the best you’re going to get is two of those things. Pretty sure that was Newton’s fourth law.

  • Gray Shambler Link

    Michael Douglas just turned 100 years old, successful man, would not have happened if he were a coal miner, truck driver, reservation Indian, you name it. And that’s the way it SHOULD be. If you need bypass surgery, and cannot afford it, you should accept that this is your time. Don’t complain, beg, whine, just gather your family and say goodbye, happens sooner or later anyway.
    If all Americans could accept this, medical costs would drop like a rock, and many could still not afford to extend their lives, and so what?

  • Gray Shambler Link

    WHOOPS! Kirk Douglas.

  • michael reynolds Link

    Gray:

    Oh, please let that be the GOP platform in 2018.

    Forget all this medicine and science-y stuff, when you get sick just die already!

  • steve Link

    If you have a premie baby, and you cannot afford to care for them, just let them die.

    If you have a car accident, and cannot afford the care, just die.

    Appendicitis and no insurance and can’t afford surgery, just die (or if lucky deal with the abscess and consequences).

    We can have quite a list here. It will keep total spending down a bit. Probably won’t affect costs.

    Steve

  • Gray Shambler Link

    Guys, at what point, or age, in your lives will you agree that the money and effort spent to prolong your life is misspent? Doesn’t this HAVE to be part of this discussion?

  • Guarneri Link

    Point A should be modified to note that they want their neighbor to pay for their care. An impolitic but cold, hard truth.

    I’ve never seen proof that the current restriction of supply is at the required level to preclude incompetent practitioners, as is implicit in E.

    And as for F, what constitutes “needs” and who is to decide? Looks like a serious case of begging the question. When your neighbor is paying the bill you “need” much more than when you are paying the bill. Steak, or hamburger. Both will provide protein and alleviate hunger.

    I once observed that the vast majority of lifetime medical cost could be accounted for in premie babies and end of life issues. I was scolded by Steve with notions of belly surgeries and diabetes. I have no doubt that these are expensive issues, but I’ve never seen anything that didn’t cite end of life as a huge cost. I guess in this post premie babies or appendicitis carry more emotional value to the debate. Better able to sneer “let them die” in high moral tone.

    As a society we have done a terrible job of dealing with end of life and other health care tradeoffs. We understand that some cars are less safe than others, yet understand it would be ridiculous to subsidize everyone so they could buy a tank equipped with a 20 mph governor to reduce traffic deaths to countable on one hand. Yet in how many hospitals today how many families will have told a doctor “do whatever you can, doc.” On someone else’s nickel.

    In some debates people are chastised with the notion that health care is “different” and not consistent with market forces………..while in other debates, told by the very same people “we’ve never had a market system.” Well, so how do you know?

    I can’t take any of this seriously as long as the very same marketsthat work so well in other venues aren’t given a chance, as long as the realities of end of life are off the table, and as long as all the progressives have is faux moralizing about bloodthirsty Republicans who just want people to die. The only bright spot is that with the current cost trajectory this is soon to be a problem that is unavoidable. Bug, meet windshield.

    Two great progressive ideas reaching their logical result: Bankrupt pensions and health care systems at the same time. Get out the popcorn.

  • CStanley Link

    My 82 year old mother recently moved to a retirement complex. For some time now she’s been adamant that she doesn’t want treatments to extend her life (of course there has been some gray area- she decided to say yes to one heart cath procedure, won’t agree to any more.)

    From her telling, this is the attitude of most of the folks there. They want to live out their natural lives in peace.

  • I’ve never seen proof that the current restriction of supply is at the required level to preclude incompetent practitioners, as is implicit in E.

    That’s an interesting question. We could establish quotas and have competitive examinations that enforced them. It’s possible that wouldn’t ensure competence, either. I’m open to suggestions. What I’m confident of is that the old system in which anyone who said they were a doctor was a doctor frequently resulted in poor care.

    And as for F, what constitutes “needs” and who is to decide? Looks like a serious case of begging the question.

    It doesn’t make any difference. Since courses of treatment are decided by practitioners rather than by patients, what people need is whatever their health care practitioners say they need or what they can convince their practitioners to say they need. The built in assumption of our system is that more care is always better.

  • I think I’m probably the real cynic here since I believe that if we were subsidizing the health care of teenagers rather than the elderly the U. S. would have the costliest acne treatments in the known world.

  • michael reynolds Link

    Gray:

    Guys, at what point, or age, in your lives will you agree that the money and effort spent to prolong your life is misspent? Doesn’t this HAVE to be part of this discussion?

    Oh, I completely agree. But good luck to the party that proposes it.

    This isn’t something for government to decide, this needs to be a change in attitude and philosophy. Possibly in religion. I am always struck by the fact that people who claim to believe they are on the verge of checking into heaven, there to live an eternity of bliss, nevertheless fight to their children’s last dollar to hold onto another six weeks of life of wet diaper smell and tapioca in an old folks home.

    People forced at the end of their days to cling to something they know in their hearts is bullshit are not dealing rationally with death. I’m not afraid of death because it’s a logical impossibility. You really shouldn’t be concerned about something you cannot by definition experience. I’m certainly afraid of illness and pain and dependency, which is why I’m glad that we in California now have a death with dignity law. I am a book I’m writing. It had a first page, it will need a last page, and insofar as possible I intend to write the final sentence.

  • michael reynolds Link

    Since courses of treatment are decided by practitioners rather than by patients, what people need is whatever their health care practitioners say they need…

    That may be the case with many people, but not all. The four people in my family consult with Dr. Google before any new med or test or procedure. I can think of two meds I unilaterally took myself off because the literature had them as largely useless. The resource is right there if people use it.

    I think the problem for most people is this aura of godhood that still lingers over doctors. People need to understand that their doctor should be treated with as much skepticism as they treat lawyers or waiters or teachers.

  • steve Link

    “From her telling, this is the attitude of most of the folks there. They want to live out their natural lives in peace.”

    I think this is probably true, but let me tell you what happens over and over. (To be clear, I have close to a dozen critical care docs working for us now, so this is something we are familiar with.) The elderly person tells their friends or any number of people that they don’t want futile, life extending care. However, they never talk it over with the close family who will actually have to make the decision. Something bad happens, then the family making the decision, often in their 80s themselves don’t know what to do, so they just say do everything. We need people to talk over end of life decisions. In the original ACA they were going to pay docs to do that. Palin and co made sure it was taken out.

    Still, the whole end of life thing isn’t that easy. When someone presents it often isn’t that easy to know they are going to die.

    Michael- It is occasionally a godhood issue, but from where I sit mostly a lack of knowledge issue. Most people don’t go Google stuff. Hell, most people don’t even know their own health history very well. I kept track of the following for years, thinking it might be interesting to publish. I asked everyone who had a valve replacement which valve they had replaced. Fewer than half knew which one it was. Really, there are only 4, and for all practical purposes we only ever replace 2 of the 4. It isn’t something you have done every day. Wouldn’t a life threatening surgery that required weeks of recovery be something you might want to remember?

    To be fair, I think a lot of people just don’t want to know stuff, are afraid of facing their own mortality or loss of function. Sure, be skeptical, but people who are afraid don’t do that well. (I am writing from a biased POV to be sure as everything I do is OR related or ICU related, and a lot of it is high risk.)

    Drew- They say do whatever you can even when they are paying. When I had a nationally syndicated libertarian writer’s wife as a patient, nary a question about cost. So disappointing as I had buffed up on our costs.

    Steve

  • My siblings and I had had these discussions with my mom many, many times before she entered her final decline and we knew her wishes–palliative care only, no heroic measures. Nonetheless as her health care proxy it was still extremely tough to do the right thing. I can see how people who aren’t informed or who don’t know their principle’s wishes can frequently opt for alternatives that aren’t what the person would want.

  • sam Link

    Perhaps there’s a fundamental, philosophical reason why capitalism can’t fix health care: In a market system, human beings are treated as means and not ends (libertarian mouthings about the dignity of the individual notwithstanding). Non-psychotic persons naturally recoil from this idea.

  • That would be a stronger argument if practitioners didn’t accept pay for their work.

  • Ben Wolf Link

    Payment isn’t a product of a market, it’s a means of satisfying social obligations which makes markets possible.

  • CStanley Link

    The distinction between palliative care and life extension isn’t so easy. In my Mom’s case, shortness of breath was debilitating so after exhausting some of the simpler, noninvasive and not too expensive screenings for lung function and such, it was recommended that she have the heart cath done. Sure enough they found blockages and put in a stent. Helped a bit but the symptoms returned and they wanted to do more but she drew the line and decided to live with it as best she can. It’s just not always clear whether or not a procedure might reasonable to improve quality of life even when life extension isn’t the goal.

    For providing information to patients, I think that it would be less politically volatile if there was a push in ALL of medicine to require discussions about the likely outcomes in a simple, easy to understand form. Some docs are pretty good about this, others not. The conversations would be most salient for elderly patients but really this applies for all ages when procedures are recommended for ailments that are not life threatening. I’m sure there are already directives about informed consent that apply but I think they could be strengthened because generally it still seems that doctors feel obliged to do something when a patient presents with a problem rather than presenting the various options including nonintervention. I think physicians could do more to shift toward the patients’ receiving recommendations as a list of options which all have various cost:benefit (cost in all senses of the word including financial, time, temporary loss of productivity, pain, and side effects.)

  • michael reynolds Link

    Steve:

    I like my GP but on the basis of PSA tests she’s sent me in for three – count ’em, three – prostate biopsies over the course of six years. Since I can afford it I did them at UCLA, Hopkins and Stanford, which I’m sure you’ll agree, are competent institutions. All three 100% negative.

    But because the PSA numbers continue to be X, she is essentially programmed to consider more. If X then Y. This despite the fact that Stanford said, “Yeah, just stop now.” So I have tell her no, I don’t want more PSA testing and no, we’re not doing more biopsies, talk to me again in ten years.

    I suspect there will be more of this. It is not always easy to push back on doctors who aren’t necessarily offering advice that will enrich them (she’s not getting paid – I’m not using her in-practice guys) but are offering advice to some formula, whether set by the profession or just by the practice. Those standards will always favor ass-covering and profit, hence more procedures, more money, more pain and risk to the patient.

  • jan Link

    “The distinction between palliative care and life extension isn’t so easy.”

    So true…

    During my nursing program Elizabeth Kubler Ross’s book “On Death and Dying” was required reading. It opened up a life-long awareness regarding the switch back complexities and misgivings that are so often associated with the inevitability of death. Intellectually most people acknowledge we are mortal beings. But, it’s the raw emotional acceptance of this reality that bites, making it so difficult for so many as to how to act and interact with a dying friend/relative, as well as how to proceed ahead with our own acts, interactions and medical choices when the day arrives for us to do so.

    I’ve been on medical/surg floors where down one hallway an elderly person was pleading to die, while down another corridor a patient was crying out they wanted to live. It was a symphony of pain from two patients crying out for completely different life-versus-death outcomes. Each stricken person, IMO, needed a different level of care and comfort. Other incidents have found me trying to convince a patient to live, but finding that the will to die was a much greater master, despite my words or any life-saving procedures that western medicine offered. I’ve held a sobbing woman in my arms, who, when her children visited, was cheery and motherly. When they left she would seek me out to air her fears, as she said her children just didn’t want to talk about her terminal diagnosis. I’ve had a brain tumor patient who would ask me not to medicate him, as he wanted to engage with life and his family for as long as possible, despite the pain. His family would then confront me that his pain medication was due, and why wasn’t I promptly giving it to him.

    Unfortunately, this country’s culture has few meaningful or comforting rituals attached to the process of dying, as are practiced in other primitive or spiritual societies. Instead, we focus on and treat patients’ symptoms, their physical distress, while often distancing ourselves from their qualms, fears, concerns and general uncertainties surrounding the future. Basically, the subject of death remains one of those uncomfortable mysteries which, all too often, is unconsciously kept at bay, rather than embracing it gently, with dignity, as simply the second bookend to a completed life.

    Finally, while there are no quick answers or fixes to end-of-life care, I have seen how incorporating personal touches into patient care, informing them of options, encouraging open dialogues between not only medical personal but within the entire family helps fill what sometimes is a vacuum of emotional support that is so important at these end stages. While hospice programs do provide much needed care and intervention for both the dying and their family members, greater care consideration still needs to be implemented within the confines of a hospital and between the interwoven interactions of medical practitioners, their patients, and core members of a patient’s life.

    I might add that way too many tests are imposed on the elderly and/or very sick that do little good except to ratchet up costs and deplete what little energy a patient struggling with a major illness usually has.

  • jan Link

    As a chaser to this topic I’m adding a Rumi wisdom:

    “Life is a balance between holding on and letting go.”

  • Gray Shambler Link

    Unfortunately, this country’s culture has few meaningful or comforting rituals attached to the process of dying, as are practiced in other primitive or spiritual societies.

    Jan, loved your post, and as I’m tired of this dying talk, …. Rituals, western societies need rituals for initiation into adulthood. We don’t know when we are grown, so we keep living for our own pleasure, instead of taking charge. We need rituals.

  • Janis Gore Link

    Before so many young people went to college, high school graduation was a pretty clear demarcation for adulthood. I’d suppose in many blue-collar communities it still is.

  • steve Link

    michael- It gets hard to separate out how much is driven by money. Most docs would like to think money doesn’t influence them at all, they just coincidentally tend to choose the option that benefits them the most more often than expected. Yet, while money is clearly a factor, and the main driving factor for many entrepreneurial doctors, I think for most docs they just learn a style of practice and stick to it. The wife went to med school in Texas at a place where they were fairly non-aggressive. When she did her internship here in the NE, you never left any stone unturned (you had to be complete), and this was driven by her fellow interns and residents who didn’t make a penny more for doing so. In fact, it just caused them more work and lost sleep.

    Steve

  • steve Link

    For those interested, Aaron Carroll has a nice presentation on how physician preference drives utilization.

    http://theincidentaleconomist.com/wordpress/healthcare-triage-regional-difference-in-procedures-and-prices/

    Steve

  • Janis Gore Link

    The mention of McAllen, TX in the article mentioned by Steve reminded me of this one about medical cost drivers in McAllen:

    http://www.newyorker.com/magazine/2009/06/01/the-cost-conundrum

  • Janis Gore Link

    Dr. Atul Gawande wrote again about McAllen as part ofthis article from 2015. There Medicare costs had decreased about $3000 per patient by then:
    http://www.newyorker.com/magazine/2015/05/11/overkill-atul-gawande

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