Originally posted by jonb@Aug 5 2004, 04:51 AM
Trust me, BB: You don't want an HMO. They make IHS look competent. Hell, they make these fake "medicine men" with a plastic tarp over the sweat house look competent.
Taxes wouldn't rise as much as you think; if the government regulated medicine, medicine wouldn't cost as much. As it is, a lot of American health care dollars are ultimately spent on marketing and raises for CEOs. (Hard to tell which is more useless.)
jonb,
Definitely on the money when you point to CEO salaries, management inefficiency and the profit motive as major contributors to Americas needlessly expensive healthcare.
Theres an interesting paper from the University of Maine (
http://dll.umaine.edu/ble/U.S.%20HCweb.pdf ) which suggests current piecemeal system would benefit from more central control. The hodgepodge of employer insurance, managed care, government funding and personal out-of-pocket payments is a nightmare to administer. Management costs account for somewhere between 19% and 24% of total US health care expenditure. By comparison, my employer (a British professional services firm) spends 8% of revenue on finance, administration and management.
The Center for Medicare and Medicaid Services
http://www.cms.hhs.gov/charts/healthcaresystem/chapter1.asp quotes some alarming statistics. In the two decades since 1983, the number of managers and administrators working in US healthcare increased seven-fold, quadrupling in the last decade alone. There are now more managers than doctors. To quote the late David Ogilvy, if you owned a farm, would you have more milkers than cows?
year 1983 /1990 /2000
physicians: 519,000 /577,000 /719,000
managers/admin 91,000 /174,000 /752,000
The lack of a central watchdog over US healthcare costs plenty. The system needs some intelligence and organization. But who should provide it? Many believe government to be incapable of such vision, and argue that the inefficiencies would be even worse if the public sector ran the whole thing.
But then again, maybe not.
Some Americans believe (naïvely, I think) that private enterprise always performs better than government enterprise. Even after we see the Enrons, Tycos, WorldComs, and sundry dotcom cowboys piss billions against the wall in the virtual casino that modern business has become. Auditors like Arthur Anderson and its ilk sanctioned horrific corporate waste. And the pageant of underperforming fat-cat CEOs continues unabated. Physicians for a national Health Plan report that when US Healthcare merged with Aetna in 1996, the $967 million received by CEO Leonard Abramson could have provided healthcare for every uninsured child in the state of Massachusetts until they reached puberty.
http://www.systoc.com/newscomments/news/april98/cp040298.htm
The U. of Maine paper quotes some vivid evidence. Lets look at how much different kinds of hospitals spend on administration and management
Private, for profit hospitals---34% of turnover
Private, non-profit hospitals---24.5%
Public hospitals---22.9%
Medicare, the most thoroughly governmental part of the healthcare system, spends only 2% of its turnover on administration.
The competitiveness and efficiency of the private sector brings rewards to many aspects of life. But maybe medicine isnt one of them.
It strikes me that the benefits of free enterprise flow most abundantly in a market where purchases are discretionary. Companies can offer better (or cheaper) goods and services which spur people to choose to spend more money, causing the company and the broader economy to grow. Healthcare doesntnay,
shouldnt work that way
If youre sick, you simply dont shop around; when run over by a bus, youre in no position to ask the ambulance driver to take you to the cheapest hospital.
Nor should one need to ask for a
better hospital. We expect that there should be one high standard to which all practitioners adhere. Not much room to differentiate on quality in order to attract more custom, and thus to grow.
Healthcare companies cant develop their own market through the usual commercial methods. Honey, Kaiser Permanente is having a sale on colonoscopies. I think Ill stop in on the way home for a quick look up the wazoo. Humana makes being sick such a pleasure that I just want to run out and catch pneumonia! Yeah, right.
That leaves two ways for a healthcare company to grow its profits: cut corners or raise prices. Not a pleasant prospect for us customers, is it?
The dynamics of a free market simply dont give Americans better health. Market forces cannot regulate the quality and cost of healthcare--it's not like boxes of cereal or bars of soap. Few consumers have the technical skill to evaluate what they're buying. They're simply not in a position to exercise choice at point of purchase (or choose not to make a purchase at all), which is how competition works in the broader economy.
Betterand cheaperto pay not through the cash register, but through the tax collector.
In the developed world, only the United States and South Africa dont provide their citizens with some level of basic health care as a right. There is overwhelming empirical evidence from around the globe that universal, government-funded health insurance (accompanied by government policing of standards, service levels and costs) just plain works. The outcomes are often better than in the United States, and vastly more economical. Yes, most of these systems have some drawbacks, but let's not overlook their virtues.
These words may prove anathema to many. Americans let government into their lives reluctantlyas a last resort, when all else has failed. Given the performance of the US government on some occasions, they may have good reason. But do I want the government telling me what to do, or an HMO? On both their records, I'll take my chances with the government.
Which raises another question, even more pertinent. That question is not whether the richest nation on the planet can afford the best healthcare in the worldif it could just get its act together. But rather, why is it that the richest nation on the planet cannot afford (or doesnt choose to buy) the best public governance in the world?
Sorry to post at such length, but it's a pet peeve.