Will The Real Healthcare Fixer Please Stand Up?

The Republicans appear to find a laissez-faire economic system odious, since it doesn't give enough protection to the wealthy and powerful business interests that provide the backbone of their funding. The poor and the working classes generally don't vote Republican (or at least, traditionally they didn't), so there's less incentive to attend to their issues. The Republicans are for small government only to the extent that they give lip service to the fact that in the long run, government spending must equal government income, and they are loath to give the government much income. But enough Republican bashing... for now!

The arguments commonly made against subsidizing health care usually boil down to moral hazard, which is to say, people will consume more than they need if it doesn't cost them anything; and a philosophical objection to socialization. I can't address the philosophical objection, because it's a worldview thing. You may see the world through individualist eyes or as a communal place, you may be paternalistic or antiauthoritarian. The moral hazard issue, however, is what's been driving the opposition to universal coverage and winning the day, and it has some serious flaws.

Malcolm Gladwell outlined the issues of moral hazard in health carebetter than I ever could. In summary, it turns out that people don't like to go to the doctor if they're not sick, and even if healthcare is effectively free, overconsumption is unlikely. Underconsumption, on the other hand, is an issue with the present system, because the uninsured tend to miss out on preventative checkups and well-baby care and immunizations and dental hygiene, and that turns into very expensive issues with actual disease and disability that has high social costs.

That's not to say that there's not an issue with the healthcare we actually get in America costing too much. The fraction of the US economy devoted to healthcare has gone up much faster than any other over the last sixty years. Americans spend about one dollar in five on healthcare, Over a fifth of the cost of healthcare is in administration and paperwork, with something like 12% going to insurance company overhead (less than four percent is spent on overhead for Medicare, while Canada spends closer to two percent). However, the bigger issue is that there is little holding down what medical providers charge. If you're insured, then you've probably never thought about how much that visit to the doctor actually cost, over and above perhaps a token co-pay of ten or twenty bucks.

I have nifty insurance that doesn't include any co-pays for any normal preventative or needed care. I do get a statement afterward from the insurance company, though. It turns out an office visit is billed at $140 by my doctor, and the insurance company pays a "negotiated" amount around $90, and I'm covered for the rest. If I had no insurance, the steely ladies at the counter would be after me to pay the whole $140 right then and there. Remember the saying, "never pay retail?" It goes in spades for healthcare, or at least for the sort that your insurance company has a hand in paying for.

And yet, there's a kind of healthcare that my insurance company doesn't pay for at all, and as near as I can tell it's bucking the general trend by becoming both better and cheaper at the same time. Check your newspaper for ads touting "Lasik" treatments for vision correction. The price tag is prominently displayed right there, because you'll be paying it out of pocket. Opthalmologists with fancy equipment are competing for your business, and you're better off as a result.

At the same time, I see ads for where to have your baby. One hospital is touting their cushy "birthing center" and another is all about the quality of their doctors. No mention of the price, though, because delivery is one of those things that's usually covered by insurance. You won't be paying for the luxurious digs with a window with a view, the best trained obstetricians and nurses, or at least not directly, so why compete on price? I don't know, but I'd be willing to guess that these places are actually billing the insurance companies rather more for your enhanced perinatal experience, because they are driven by a profit motive and they're not getting the money from you. Otherwise, you might actually go to the regular hospital delivery room and pay $3000, instead of $5000 for the high-end experience, say, because you're busy while you're there with things that keep your mind off of what's out your window, if you even have one, and the difference isn't worth the money to you as long as your baby has a decent apgar score. Or maybe it is, and you're willing to pay, but how would you know?

I've found two excellent treatises on the issues and possible reforms in healthcare. One is from a well-known progressive economist, and one is from a well-known libertarian economist. I'll let you figure out which is which.

The Healthcare Crisis and What to Do About It by Paul Krugman and Robin Wells.

How to Cure Healthcare by Milton Friedman.

Krugman and Wells appear to have misidentified healthcare advances as the largest factor in the expansion of the fraction of the economy spent on healthcare, and appear to underappreciate the effects of third-party payment on rising costs. Friedman is still a little too attached to moral hazard. Both identify the historical accidents that have given rise to the current system, and how those are playing out. Both advocate an end to tax subsidies for employer-paid healthcare. Both would eliminate virtually the entire medical insurance industry in favor of a government-paid system of some kind.

Friedman proposes universal high deductible catastrophic care insurance provided by the government, and paying out of pocket for the rest of your healthcare needs, with Medicare and Medicaid replaced by a voucher system for the elderly and poor. There would be no moral hazard aspect to care you'd pay for out of pocket. This would also eliminate adverse selection, since all would be covered and all would pay taxes, presumably in the current somewhat progressive way, to pay for it. The poor who qualify for Medicaid would still get subsidized care. There would be no particular incentive for getting preventive care, and those with low incomes but not low enough to qualify for subsidies would probably continue to underconsume it. With this system, there would not be any of the monopsony power over pricing that you can get with a single-payer system for everyday healthcare or prescription drugs, but you would get it for the stuff that really runs up the bills, like heart-bypass operations or cancer care. On the other hand, you'd be more inclined to shop around, and like the Lasik outfits, you could expect to see some competition on price and quality for your business, and Consumer Reports-style ratings of hospitals and doctors would be popular. And in this system, the fraction of the economy devoted to healthcare would vary depending on how much people choose to consume.

Krugman and Wells propose universal coverage for all preventative and medically necessary care provided by the government, and ideally full socialization of the provision of that care as well - hospitals and clinics run by the government, with doctors in government employ, as in the Veterans Administration hospital system. Cosmetic and elective procedures could probably be purchased from the public system or from private providers, as in the British system. Once again adverse selection is eliminated, since all pay for the system through taxes and all are covered. Moral hazard is not a huge issue since it's tough to consume much more preventive and necessary care than you can use anyway, and preventive care and disease management are cost-effective when the provider is also the payer who reaps the benefits of lowered long-term costs. As a result, there would probably not be much underconsumption. Monopsony power, whether providers are private or public, would control pricing at every level and keep costs in line, but might lead to reduced incentives for medical or pharmaceutical research. No telling what choice you might have in medical providers with this system, or what reporting there might be on quality. And in this system, the fraction of the economy devoted to healthcare would basically be by government fiat, which could be too small and lead to delays and rationing a la Britain, or arguably too large as in France, leading to some gold-plating and other economic distortions.

Both systems have plusses and minuses, but both can be reasonably expected to be much less expensive and provide far broader coverage than our current hodge-podge. Think of it - more economical, and more humane! And no candidate is proposing anything remotely like these systems.

Pity.

It Takes One to Know One

The Delightful Spousal Unit had a party in celebration of her birthday just passed on Saturday, with a turnout of several friends of random connection. It seems everyone had a connection of some kind with someone else there that they might not have known about otherwise. And of course, cake. Good times.

And here's a bit more retroblogging, this time on the subject of IQ, from maybe a year ago:

I've only taken two psychologist-administered IQ tests, the first when I was five. The circumstances are telling: I was referred for testing when I was five because my kindergarten teachers were concerned that I might have a learning disability. I wasn't paying attention in class, was a little disruptive, and had difficulty completing tasks. I remember the test, since I remember my parents being a little apprehensive and telling me not to worry about it, which of course makes five year olds sit up and take notice. I was initially concerned, but found out that the testing was a heck of a lot more interesting than kindergarten; plus they gave me a toy to keep. Of course, no one told me what the test was for or why I was there or how I did until much later. Based on some clues in my school records, I believe it was the Wechsler Intelligence Scale for Children, and I did pretty well. Roughly 99.9th percentile well. I think my parents were happy that I didn't have a notable learning disability, because it was entirely plausible that I would, since my father is severely dyslexic. The kindergarten teachers had to adopt a new theory. Mostly, I think they just let me be.

My parents had me tested again the summer I turned fifteen on the recommendation of a teacher in a summer school class for "gifted and talented" students. Apparently I was a standout among the standouts, but the score I got on this test (The Wechsler Adult Intelligence Scale) wasn't quite so ridiculously high, around the 99.5th percentile, although I was younger than the 16-year-old minimum for the scaling factor, so it may have been understated slightly.

And what did I do with this knowledge of my relatively high intelligence quotient? I kept it to myself. It's too bizarre a thing to relate, really, and I was both obvious nerd and social outcast already, and IQ didn't exactly equal bragging material even in my circle of fellow brainy outcasts. It seemed like being proud of having brown hair. After all, what could you do about it? And as the saying goes, "if you're so smart, why aren't you rich?" My take on it was, it was clear I was good at something, but it wasn't that clear that what I was good at was good for much in the real world.

I just did the Tickle test and got a 142, not out of line with the other scores. I've taken the various unofficial test yourself tests for grins and gotten scores ranging from 130-odd to 178 (woot!) and clearly, the only common thread here is that people who have high IQs are the people who do well on these tests. If you've ever been to a Mensa meeting, you quickly learn that IQ correlates poorly with success in life by many standards, but it does seem to correlate well with idiosyncratic behavior, sci-fi and fantasy convention attendance, SCA membership, weird hobbies, and sadly a certain sort of immaturity in interpersonal relations. I joined in college, went to a couple of meetings, then let my membership lapse. I remain interested in IQ tests and the subject of IQ, of "g" or whatever it's being labeled these days, but not in a very serious way; more akin to how I like to do puzzles. For the fun of it.

Taking the Long View

If I haven't been to bed yet, it still counts as whatever day it was when I got up, right? (Not counting the times I've taken Provigil and found myself still awake thirty hours later.) So in some sense it's still my lovely wife's birthday. There was cake. Sadly, my present for her has been slightly delayed, but there will be a big party Saturday and hopefully it will be here by then. We will party like it's 2007.

The big hit, though, was the book of things we love about Sam. Here's my contribution:


Those twinkling blue eyes
Cool name
Infectious beaming smile
Loving Mommy
Smarter than she thinks
Tolerant of hubby foibles
Remembers the important things
Likes to snuggle up close
Humility
Blankets in front of fireplaces
Watching the Japanese drama shows
Properly ironic when called for
Ultimate quilt mastery
Always has another idea for a project
Emotionally supportive
Dares to cook new things regularly
Takes the initiative
Got a graduate degree in a year
Stays on top of the little things
Dogged about getting the best school and nanny and experiences for Max
Willing to get dirty in the garden
Bike rides through the greenbelts and around Lake Sammamish
Quick on the uptake
Compatible tastes
A good friend
Gets my obscure cultural references
Likes walks on the beach and kite flying
Never tears anyone down
Expresses displeasure gently
Writes lovely prose
Shares the tough chores
Tactful honesty
Willing to try something new and scary at least once
People just like her right away
Saves the snarky comments for a private moment
Breaks out the steely glare only rarely
Sings along to good tunes
Chooses fun vacation spots
Makes me try to be a better person
The Spiffiest

Evil Mad Scientists have all the fun

I did this a while back, but it was fun, so I'm reposting it:

I was reading Boing Boing, and it pointed at a post on the Evil Mad Scientist Laboratories website (motto: Making the World a Better Place, One Evil Mad Scientist at a Time) on How To Make an Electric Motor in 30 Seconds.
Materials needed picture from the website:

Time it actually took me to find these materials in my office: about two minutes, the supermagnets were hiding beneath a spindle of DVD-Rs.
My motor materials:

Here's their picture of the assembly, with the motor in action:

And here's me with my instant spinning motor:

Pretty cool, huh?

Scatter my ashes to the wind, but let some land in Idaho

Here's another post I made elsewhere, that I feel like quoting...

At my grandfather's funeral a couple of years ago this month, I was wandering around the cemetery in the small Idaho town he was born in and would shortly be buried in, and just by looking at the tombstones I could tell I was probably related to about half the people whose names I read. I hadn't been there for a decade, since my grandmother died and was buried there. They were returned to their roots, buried in a town that they were both born and raised in, but hadn't actually lived in since the 1930s. He died a couple of weeks shy of his 94th birthday. He'd been away for over seventy years, but it remained his psychic home, even as they'd lived in far away places like Washington D.C. or Managua, Nicaragua or Bogota, Colombia. In reflecting on that, I realized that I don't share that kind of connection to the place I was born, or the place I was raised. In some ways I'm envious.

I don't expect I will make many trips in my lifetime to visit grave sites. That's not the sort of place that matters to me when it comes to remembering family or friends that are gone. I tend to make trips instead to the places we lived, or the places we visited and had fun together, to have more fun and to enjoy some reminiscences, when my travels take me nearby. Remembering is part of living, and I prefer to do my remembering when it happens and not on some schedule of holidays or anniversaries.

Then again, there are things I wouldn't do for love nor money

I've been posting elsewhere on occasion, and thought I'd repost some of my more interesting work here. This is from some time back, in response to someone who opined that money was evil, and couldn't we all just get along on love, instead?

Money is one of the greatest inventions in human history, ranking right up there with fire and irrigation and textiles.

Money lets you store value over time in a way that isn't subject to going bad or being consumed like some commodity might.

Money lets you do your bartering half a transaction at a time, and in a fractional way. That is, instead of having to amass enough bread loaves to trade for a whole cow or some such silly thing, you can do just half the barter with one set of people, trading your bread loaves for money, and then later doing another half-barter with some other people, trading your money for just the part of a cow you care about, say, enough to make burgers with. Money is required for there to be a market. In simple terms, without money, there would be no grocery stores.

Money lets you take part in transactions that are far away, without having to worry about schlepping your stuff back and forth. Money makes it so you don't have to keep mental track of an encyclopedia's worth of exchange rates from one kind of good to another.

Money lets you express the amount you value something very precisely, letting you keep the amount of value you might have to round by in a barter exchange in your wallet instead. As a result, money makes you wealthier.

Money lets you engage in complicated transactions that take place over extended periods, like mortgages and bonds, and makes it possible to be a fractional owner of a business and be paid a proportional dividend from the profits. That means lots of people can live in houses while paying for them, instead of trying to come up with some way of amassing enough stuff to trade for a house all at once, and people can join together to make a really big business, say, building ships or skyscrapers or something, that no individuals could pull off by themselves.

Money makes large public works possible, because it's impractical to turn a tax collected in labor or goods into the kinds of labor and goods needed for roads and bridges and canals. Money makes tax collection fairer, since it can be figured in the same terms for everyone.

You may do the work you do for love, and you may love the people you know, but love is a pretty poor substitute for money, especially when most people can't love you because they don't even know you and don't have the time or the emotional wherewithal to care about every person they come in contact with. Love doesn't let you express how what you value compares to what someone else values, whereas money does that perfectly. And when it comes to a material exchange, money is the perfect medium and measure for that comparison of values.

Is that enough material for your essay for class?

This blogging thing: Everybody's doing it, so I figured I'd better join in.