Sunday, March 21. 2010
Once again, my life has conspired to give me a real-world example of how consumer-driven healthcare saves money.
At five o'clock on a sunny spring Friday afternoon, my six-year-old begged me to go outside and ride Razor scooters. We went to the top of our enormous hill (wearing helmets and biking gloves, or course) and came speeding down again. Right at the end of the ride, as I was stepping on the brakes to come to a stop, I found the scooter wasn't slowing down. I pressed down harder, and suddenly the whole scooter kicked out from under me to the side. I flopped sidewise and landed smack on the pavement. I sat up, feeling a little stunned but not too bad. "Am I hurt?" I ask Malcolm. "You're bleeding!" he shouts. I looked down and saw quarter-size drops of blood on my jeans and gloves. I walked about twenty yards into the house and look in the bathroom mirror. My left cheek is covered with blood. After gently wiping it away, though, I find I have only one injury: a cut under my left eye, about an inch long. Later on I figured out that the cut had come from the edge of my rimless glasses.
I wrapped ice in a wet washcloth and held it on my face while I contemplated what to do. My wife Janet, juggling an infant and two other sons, called a neighbor to drive me into the emergency room. I briefly considered going to an urgent care clinic, but at that point I wasn't quite sure what I was going to need. I figured I'd be better off going to the emergency room, in case the cut called for a plastic surgeon.
I sat for three hours in various waiting rooms at UNC Hospital, ice clutched to my face. After the first two hours I decided that I wasn't concussed and hadn't broken anything, and I started to wonder if I'd made the right decision to come here. After a few text messages to my wife, I found out I didn't have any other option; all the urgent care clinics closed at 8 pm. I paged my regular physician, who advised me to stay put; "Since it's your face, you're probably in the best possible place." Ok. Fine.
After another hour in the examining room, the doctor finally arrived: a young, calm, conscientious resident. I had had lots of time to prepare my speech. "Hi!" I said. "I'm really, really glad to see you. Before we get started, though, I have one small request. I have a high-deductible insurance plan. That means everything you do for me tonight, I will be paying for entirely out-of-pocket. So, as you do your work, I would appreciate it if you tell me what services I can expect to be billed for, and what they might cost, if you know." The doctor was very sympathetic: "To be honest, I know absolutely nothing about what you will be charged. I just write down what I do, and someone else figures out the charges. But I will keep that in mind as we discuss your options for treatment."
I was very glad we started with that conversation, because here's what the doctor said next after examining me: "Because you have a laceration on your face, ordinarily we would call in the 'face team,' which would include a plastic surgeon as well as an experienced EMD. However, looking at that cut, I can tell it's really clean and would come together with just two or three sutures. I could do that for you right now."
"In your professional opinion," I asked, "How much difference would there be between you doing the stitching, and what the 'face team' would do?"
The doctor shrugged. "Not much . . . none, really."
"Ok, then! Stitch me up!" It only took about 20 minutes for him to do the job. There was no mirror in the examining room, but he led me to a bathroom around the corner so I could look at his work. As promised, the wound was closed completely, with three sutures. A nurse gave me a tentanus shot and I walked out, a satisfied customer.
What are the morals of this story?
Tuesday, March 2. 2010
Now that the health care reform debate has gone into overtime, I feel like I need to make one more last-ditch argument. Fortunately, at least one person has made all my arguments for me: David Goldhill's cover story in the September 2009 issue of The Atlantic ("How American Healthcare Killed My Father") says practically everything that needs to be said.
Goldhill is extremely forthright with his motivations, which I especially like – he lets you know right away that his study of healthcare is the result of seeing his father die of a preventable hospital-borne infection. But despite the personal tragedy, his article is remarkably free of emotional charge. He doesn't attack anyone, or blame anyone, but rather lets his critique rush unerringly to the glaring absurdities of the business structure of American medicine:
Goldhill's entire analysis would fit nicely into one of the Freakonomics books, since he is merely pointing out what Levitt and Dubner took as the central thesis of their pop-econ books: "People respond to incentives." Everything that has happened to American healthcare is clearly the consequence of distorted economic incentives. From this perspective, it should be clear that ObamaCare will only give us more of the same distorted incentives, cementing in place the illusion that "someone else" is paying for our healthcare, while letting the healthcare beast continue to devour our national economy.
Goldhill's article is refreshingly full of common sense, especially when you compare it to other popular studies of American healthcare, like Atul Gawande's high-profile article in the New Yorker ("The Cost Conundrum", June 1, 2009) which Obama publically praised. Gawande confronted overwhelming evidence that high costs of health care were driven by doctors' and hospitals' financial incentives to overtreat and overcharge . . . and still he is utterly dismissive of the power of competition. "Any plan that relies on the sheep to negotiate with the wolves is doomed to failure," he quotes one doctor. I see it as a sign of doctors' arrogance that they find it impossible to think of themselves as a commodity that can be shopped. Consumers might not "haggle over the price as if he were selling a rug in a souk," as Gawande puts it . . . but if a hospital down the road offers the same surgery for $20,000 less, don't you think that's going to influence the patient's choice? Especially if it's $20,000 of the patient's own money?
Gawande had another New Yorker article ("Testing, Testing", December 14, 2009) that compared the healthcare industry to agriculture, and suggested that healthcare might undergo a revolutionary change similar to the "green revolution" through government sponsored experimentation similar to what the USDA did for farms. The article was a lengthy apology for the Democratic health reform proposal, which did not have a clear plan for cutting costs but did have lots of pilot programs that would hopefully find new ways to cut costs. I find it utterly disingenuous to suggest ObamaCare is a set of experiments, when the core elements of the plan – guaranteed issue, mandated levels of coverage, wimpy personal mandates – have already been tried in several states, and were colossal failures in every instance, driving up costs and exhausting state budgets, while hardly making a dent in the number of uninsured. You can't position yourself as an experimenter when you ignore the results of the experiments.
Speaking of experiments, I have run the high-deductible insurance and Health Savings Account experiment for myself and my family . . . and it works. I protect myself from debilitating debt from medical emergencies, but I also function as a smart consumer. I spend half of what I used to on insurance, and lower overall medical costs by at least 20% by questioning bills, tests, and procedures. And all of it – insurance and medical costs – could be entirely covered by my FICA taxes, if the government only let me keep that money.
Saturday, July 4. 2009
In response to my rant about government-run health insurance being positioned as a "competitor" to private health plans, Kenny writes:
I suppose I should be comforted by the fact that Obama's rhetoric is rigorously moderate. But actually the opposite is happening; it is only making me more cynical. Obama made some very moderate statements about the auto industry, as well. Here was his position on March 30:
Ah, good. Sounds very moderate and responsible. But, a few months later, the government winds up acquiring a 60% stake in General Motors. I guess the United States government was interested in running GM.
When Obama was running for president, he was widely lauded as the sign of a "post-racial America." His "more perfect union" speech on race was an eloquent statement of how we can move past identity politics and embrace a common good. But then his first Supreme Court nominee is Sonya Sotomayor, who, no matter what you think of her relative merits, is not winning any prizes for being a "post-racial" icon. Were she not a Latina woman, would she have gotten that nomination? The best that people can say of her is that she is merely competent.
Then there's the banking bailout. On February 20 White House press secretary Robert Gibbs, when asked if the Obama administration would seek to nationalize CitiGroup and Bank of America, he responded that the administration continues to "strongly believe that a privately held banking system is the correct way to go." But in the following months, the administration proceeded to put the banks in a headlock, forcing them to take aid that is worth more than double the banks' own capitalization, whether they want it or not, regulating their compensation, secretly pressuring executives to make certain acquisitions and not complain about it, either. Now most pundits seem to agree that CitiGroup and BofA are essentially nationalized in effect if not in name.
Do you see the pattern here? Moderate rhetoric, followed by extremely liberal action. Some people on the left see this as merely masterful politics -- after all, the winning strategy has always been to make your own position appear to be the middle of the road. But how much longer can you say one thing, and do another, before it stops being politics and starts being hypocrisy?
Wednesday, July 1. 2009
On the big call-out quotes page in Newsweek this week, I saw the following quote :
Normally, I can stay calm about politics. But this sort of flagrant attack on common sense makes me angry. The president is insulting my intelligence.
Here's an analogy for you:
Let's say all the umpires in Major League Baseball got together and decided that they would form their own baseball team, and compete against the other Major League teams. They are going to play -- AND officiate -- all the games. Who do you think is going to win in a match-up between the Yankees and the Umpires? The Umpires can't hit 90 mph fastballs . . . but they don't have to. They just call them balls, and every single player up gets a walk to first. The Umpires can't pitch a ball over the plate to save their life . . . but that won't stop them from calling them strikes anyway. Every game is no-hitter, and the Umpires cruise to a World Series victory.
Does anyone have the audacity to call this a "competition?" If the Yankees give up in disgust, does that mean the Umpires are a better baseball team?
The federal "public option" for health care does not have to worry about making a profit . . . unlike every other insurance provider. It's easy to win market share on price, when you can give the product away. The government does not have to persuade people to pay for its products -- they compel payment, through taxes. Or just print more money. The government does not have to persuade doctors to participate in their insurance plan -- they can mandate that they do, or not practice medicine at all. The government does not have to negotiate with pharmaceutical companies -- they mandate drug prices, regardless of market value. Oh, yeah, and they can't get sued.
Let's get this straight. The Obama administration does not intend to fix healthcare by "competing" with private companies, in any meaningful sense of the world. They are doing just the opposite: using monopolist power to kill all competition. If they want to nationalize the healthcare industry, fine, I can understand why they might want to do that. But don't try to dress it up as a "competitor" in a free marketplace.
Tuesday, May 26. 2009
I just read a great New Yorker article on factors that influence medical system costs ("The Cost Conundrum," by Atul Gawande, June 1, 2009") I have written about health care finance in the past, largely because I'm a participant and enthusiastic fan of one of the alternatives currently available, Health Savings Accounts.
In the article, Gawande examines a particular small town in Texas in which Medicare costs are nearly twice the national average, to see if it gives any indications of what causes health care costs to grow. He systematically rules out various popular explanations – people are sicker, care is better, malpractice suits are driving up costs, etc. – and hones in on the motives of the doctors themselves. Hospitals that have the highest level of care (and, surprisingly, the lowest costs) are those which make improving patient care the number one priority, and deliberately structure the financial and social incentives for doctors to stay focused on patient care. The costliest hospitals (which, ironically, often have the lowest quality of care) are those in which doctors focus on maximizing their profits rather than making people well.
I'm glad that someone has named the elephant in the parlor. You would think that it would be obvious that health care providers have every incentive to inflate costs, at least until someone puts on the brakes and refuses to pay. I was disappointed, though, in how quickly the author dismisses the notion that changing who pays for the system (private insurers, the government, or the individual) would change the dynamic in spiraling costs. He quotes a doctor who contemptuously dismisses the thought that an individual could control the costs of their health care: "They discuss the blockages in her heart, the operation, the risks. And now they're supposed to haggle over price as if he were selling a rug in souk?"
Well, no, they probably won't haggle. But don't you think that if hospitals had to publish their price lists, and a well-rated hospital offered to do the same procedure at half the price, that an individual might decide to go to another provider? The internet has empowered patients more than ever to be informed about their conditions, their options, and (if the health-care system allowed it) the costs.
I have lots of first-hand experience of this sort of thing. When I was a young man, unemployed and uninsured and doing my Walden thing in West Virginia, I found a suspicious lump on my testicle. I saw a GP, who said it was 95% not cancerous, but referred me to a urologist to check it out. The urologist did an ultrasound, and confirmed it was a spermatocoel, a mostly-harmless blockage, which wouldn't be a problem unless it caused me pain. So far, so good. But then the urologist tried to schedule me for another ultrasound a month later. "Why do you need to do that?" I asked. "Well, it's good if we can keep an eye on these things," he said. "What do you expect might be different in a month's time? And why do we need an ultrasound to know if it's a problem?" The urologist, blustering, just kept repeating himself. "It's good to keep an eye on these things." I did not make another appointment. I didn't feel like spending $250 just to "keep an eye on things." I also noticed that I the bill had a charge for a urinalysis lab work-up, which I knew had not been done because I never gave them a urine sample. I paid my bill, minus the bogus lab fee.
This is not an isolated incident. I have had things like this come up with nearly every single health-care provider I've ever used . . . even the ones who I loved dearly and thought were the best doctors in the world. I've been asked to make an extra appointment, just to have the doctor read lab results to me, and give me the same diet advice he gave me the first time. (He could have done the same thing over the phone, or even just put it in the mail with a pre-printed explanation of the results, but then he wouldn't have been able to charge $80 for an appointment.) I have had emergency rooms and doctors try to charge me for the exactly the same service. In most instances, I have challenged the unnecessary or bogus costs and paid less . . . all because I'm the one paying for them.
If we want to control health care costs, somebody has to have a stake in controlling costs. We have a magic way of doing that. It's called a market economy. I'm perfectly happy to let the physicians have a profit motive . . . as long as I get to exercise my profit motive, too.
Wednesday, March 25. 2009
I have continued chipping away at Atlas Shrugged while on the elliptical machine. It has made for timely reading, since during the period I was reading it the financial system melted down. Lots of Ayn Rand fans have commented on the fact that current events somewhat parallel the events of Atlas Shrugged – government efforts to serve the needs of the unproductive leads to economic failure, which leads to more government interventions, which leads to more failure, etc. I must admit, Congress' platitudes about helping out the little guy by pushing Fannie and Freddie into ludicrous loans, and then the Wall Street rush to exploit this unsustainable generosity, looks an awful lot like the "looters" of Ayn Rand's magnus opus.
If current events made Rand's philosophy look more plausible, though, it was counteracted by the fact that I was also reading Steven Pinker's How the Mind Works at the same time. Evolutionary psychology blows a lot of big holes in Rand's philosophy, and it looks like the critics of Objectivism have noticed. It was screamingly obvious to me that Rand's view on sexuality – that people are sexually attracted to those who manifest their highest ideals – was perfectly consistent with what evolutionary psychology would predict for a woman. Females' genetic interests are best served by mating with the most fit male, i.e. the wealthiest, most productive one, and since they have such a high investment in having a baby, they will tend to be very selective of their mates. That same formula doesn't quite work for the males, though – males get much more genetic, ahem, bang for the buck by being promiscuous, since the have to invest much less than the female in generating offspring. Rand concocts a contorted theory that only men who hate themselves could be promiscuous, and that promiscuity is antithetical to their true nature. I didn't buy it. Even men who are profoundly committed to monogamy (such as yours truly) will admit that it is not the natural state of affairs – if commitment was natural, why would we have to make vows to stick to it? Evolutionary psychology presented a cleaner explanation than Rand, in this case.
The gaps were even more noticeable in Rand's notion of the virtue of selfishness, and the sin of altruism. Evolutionary biology points out that people are self-interested, but not exclusively self-interested. We are also predisposed to helping our relatives, since they share our genes, and helping our mates, since their genetic interests are mostly identical to ours. Rand would have us believe that altruism is nothing but an illusion and a sham, but in fact our inmost nature tells us otherwise. There are no children in Rand's books, because love for one's children blows apart most of her ideas. Nearly all parents do believe in sacrificing their own interests for the sake of their children's interests – and no amount of arguing will make us think otherwise. Again, evolutionary biology perfectly explains what Objectivism strains to cover.
If she was so wrong about human nature, then, why does her philosophy appeal so strongly to so many? The world-view in Atlas Shrugged is not implausible – I often find myself seeing life as a war between the competent producers and the incompetent freeloaders. There still may be some truth to be mined from it.
Thursday, January 29. 2009
Since the House passed the nearly $900 billion stimulus package yesterday, I've been trying to figure out what constitutes an "economic stimulus." Here's what I've learned so far:
Saturday, January 24. 2009
Gender pay equity has been back in the news lately, as the Senate passed the Lilly Ledbetter Fair Pay Act, which starts the clock on the statute of limitations on inequitable treatment at the time of the last paycheck. I include the link to original text, because it does turn out that the Wall Street Journal's warnings of a trial-lawyer bonanza are somewhat exaggerated – under the law, someone could recover for back pay for up to two years, instead of twenty or more. But the Paycheck Fairness Act, which supposedly seeks to revive the notion of "comparable worth" and set wage guidelines on abstract notions instead of market demand, does seem to me to be a little more disturbing.
Pay equity is one of the most vexing social issues ever to plague a policy wonk. It's thornier than even healthcare. Everyone agrees they want a level playing field and equal opportunity for all. But knowing whether particular outcomes are fair challenges every other principle that supports a free economy. In the real world, wages are not set by bureaucrats but by a labor market – that is, negotiations between buyer and seller. Research suggests that the wage gap may not be due to sinister employers trying to keep women down, but rather the fact that men are more aggressive than women when it comes to negotiating pay. The U.S. General Accounting Office research demonstrates that the majority of pay discrepancies between men and women are due to what they cautiously refer to as "work patterns" – namely, women are more likely than men to place their family obligations ahead of their career ambitions, which inevitably leads them to make decisions that diminish their earnings. As a general rule, the people who care more about money get more of it . . . and those who care about other things, get less. That might be frustrating, but is it unfair?
Ok, time out for mandatory PC disclaimers. Yes, bona fide cases of unfair gender discrimination in pay exist. Yes, women should have legal protections against such abuses. I do think, however, it is flat-out wrong to assume that differences in pay are automatically a moral offense. A difference in outcome does not necessarily mean a difference in opportunity.
Tuesday, January 20. 2009
I had commented on the selection of Pastor Rick Warren to do the invocation at President Obama's inauguration, so it seemed only right to also comment on how it turned out. It turned out just fine. (You can see it here, or read the full text here.)
Many media outlets (U.S News & World Report and Newsweek, among others) had commented on the obvious gestures of inclusion: opening with the Jewish Shema ("Hear, O Israel, the Lord is our God, the Lord is One.") and echoing the Koran ("compassionate and merciful"). I say "obvious," but actually it was subtle enough that the average rank-and-file Christian probably wouldn't even have noticed. (Heck, the average American Christian can't even list the Ten Commandments, much less recognize key phrases of other faiths.)
And most commentators congratulated Warren for navigating the trickiest bit of his prayer: invoking the name of Jesus, but in the most inclusive way possible. "I humbly ask this in the name of the one who changed my life: Yeshua, Essa (ph), Jesus, Jesus, who taught us to pray, "Our Father …" His invocation is clearly given as a personal testimony, rather than speaking for all present, and he names Jesus in the languages of the major religions, which all recognize him to some degree. Warren knew clearly that not to mention Jesus would be wussing out, and would lose the respect of his evangelical followers. But since Obama had set the tone of inclusion by inviting him in the first place, Warren was wise enough to keep the love-fest going.
Also notice that he invoked Jesus, not as the object of the prayer, but as the one "who taught us to pray, 'Our Father . . .'" This emphasizes Jesus' role as a teacher, rather than a divine being; a prophet rather than a Messiah. Most religious people are willing to acknowledge Jesus' status as a teacher of peace and humility. Thus, Warren stays true to his evangelical roots while staying within the bounds of the most universal aspects of his faith.
I was a little surprised to hear Warren roll into the Lord's Prayer at the end. The Lord's Prayer is pretty universal among all kinds of Christians, but it is also absolutely, undeniably Christian. No universalism here. Or is there? Stop and think about the text of that prayer. Maybe you said it in Sunday school a bazillion times, and you've come to think of it as uniquely Christian, but the actual text is about as inclusive as they come. It acknowledges the authority of a supreme being, asks for his blessing and guidance, and humbly acknowledges our sins and limitations. That's the essence of nearly every prayer. All the rest of Warren's prayer is just a gloss. So, again, Warren manages to be solidly Christian, not by subduing his Christianity, but by highlighting the inclusiveness of his faith.
Wednesday, January 14. 2009
Well, it looks like my cheers of victory are a little premature. While UNC Chancellor Thorp issued a statement saying the university would not pursue an airport in rural Orange County, he didn't close the door to eventually starting the process again. He said he would not support the repeal of the legislation that gave the university the power to form an airport authority. Everyone is saying that the "process" was flawed, but nobody has backed down from the assertion that the university still needs an airport.
Ok, let me get this straight. The legislation that started this mess explicitly states that in order to create an airport authority, the Board of Governors must "'find that the authority is essential to support the missions of The University of North Carolina" and that "the sole purpose of the authority is to resite Horace Williams Airport." And Chancellor Thorp has already stated what's going to happen to Horace Williams: "While we will keep Horace Williams Airport as long as we can, to realize the full potential of Carolina North, we must close the airport. When that happens, we will still need an airport. It's essential to our AHEC program. But we have an acceptable option – RDU."
That sounds like a pretty tight case. Thorp has said RDU is an "acceptable" replacement for Horace Williams. If there is an "acceptable" replacement for Horace Williams, how could the BOG consider building a new airport "essential"? At ten times the cost, I might add?
I have a few questions I wish local journalists would extract from the University:
[1-16-09 Update: I found in another article on the Thorp's announcement that some AHEC doctors had testified before the legislature that the closing of Horace Williams would "cost them valuable clinic time." So someone did step forward . . . which I suppose is good, though I would still want to grill them if the airport question is reopened. I was told by a well-informed faculty member at UNC that it was most unlikely that an airport would be pursued again during Thorp's tenure as Chancellor, so that probably buys us at least five or ten years.]
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