A Weblog of Centrist Voices in American Politics
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A Weblog of Centrist Voices in American Politics | |
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March 20, 2005Healthcare #1. Our aging population and healthcare costsI promised some posts on healthcare issues in America. I figured I start with a tough one: healthcare and the elderly. As Jim Lovell put it, “Houston we have a problem”. We’ve debated and disagreed about whether social security is in a “crisis”. No one disagrees that Medicare is soon to be in crisis. According to the Medicare Trustees report the part of the program that pays for hospital care “will become insolvent in 2019, seven years earlier than projected in their 2003 annual report. This earlier insolvency date is the result of significantly lower projected payroll tax income, higher than anticipated expenditures for inpatient hospital care, and increased payments to rural hospitals and private health plans as a result of provisions in the Medicare Modernization Act”. Comments
My gut instinct is that this problem won't be solved until more people are forced to face it in a concrete way. Basically, at the end of life, every extra day of life bought comes at a higher price. More people living longer at higher cost. That's cost growth in all 3 factors of the basic equation... Sooner or later, probably later, as costs continue to rise, we'll eventually have to acknowledge that there is a point at which healthcare is not a right, but a privilege. Current trends are far from sustainable and trending towards greater unsustainability... Posted by: bk at March 21, 2005 12:22 PMCuts in Medicaid won't magically make the health problems of the people currently covered by Medicaid go away. What it will do is offload the costs onto health care providers (doctors and hospitals). Doctors and hospitals will respond by raising their rates. Insurance companies will respond by raising their rates. So these cuts will tend to transfer health care costs from tax payers to health care insurance buyers i.e. the paying customers. Raising insurance rates will make more employers drop employee health care insurance or raise the employee contribution. Eventually a tipping point will be reached and the paying customers will demand relief. As I see it the alteratives are not between socialized medicine and a market in health care but between smart socialized medicine and dumb socialized medicine. We're on course right now for dumb socialized medicine. Posted by: Dave Schuler at March 21, 2005 12:46 PMWe're on course right now for dumb socialized medicine.Dave; Please elaborate. What about our system indicates "dumb socialized medicine". Remeber both Medicare and Medicaid are governmentaly run healthcare coverage programs. In addition, Medicare has been relatively shielded from Market forces. Only recently have the feds tried to get insurers to propose plans for the elderly that would save dollars. (That's the Medicare+ Choice programs). In general the HMO's have shied away from these since its hard to make a profit given the present funding. Posted by: c3 at March 21, 2005 03:11 PM Does anyone see a connection between the Shiavo case and the future medicare problems? If healthcare becomes a privilege reserved only for those who can pay, will this happen because the voters choose to take away the health care safety net due to economics? If that happens, won't a lot of people die for lack of health care? Posted by: tim at March 21, 2005 05:49 PMI'm not talking about dumb things in our current system (although there are plenty of them). What I'm talking about is the plan that will be put into place by the pols when our current 50/50 system collapses. Quick fixes put into place in haste by guys primarily interested in getting re-elected aren't likely to be the most prudent. Posted by: Dave Schuler at March 21, 2005 06:15 PMTim; c3: That's why I have very mixed feelings about the Schiavo case. I'm not a supporter of assisted suicide although I do support a person's right to die if they make the appropriate legal provisions in advance. I have an elderly mom in very poor health who won't do this. From my point of view she has an irrational belief in the health care system's ability to save her. But that's her right to keep fighting the inevitable; I have no right to interfere or intervene. Of course, if she survives another year the taxpayers will pick up much of the tab for her medication bill, currently about 10k per year. My only reason for linking the two is it's obvious that at some point there will have to be a public policy debate about who gets health care, how much they get and who pays for it. Whatever decisions are made, some people are going to lose out as a result. That means we as a nation will have in essence decided who lives and who dies. That decision will have been made because of economics and political ideology. We all know there is enough money to give everyone health care, but it would require forced redistribution of assets beyond that which is politically possible. There is an ideological limit that will be reached long before everyone gets to see a doctor. Posted by: tim at March 22, 2005 09:43 AMMy only reason for linking the two is it's obvious that at some point there will have to be a public policy debate about who gets health care, how much they get and who pays for it. Whatever decisions are made, some people are going to lose out as a result. That means we as a nation will have in essence decided who lives and who dies....We all know there is enough money to give everyone health care, but it would require forced redistribution of assets beyond that which is politically possible. Yup. Right on target. We can't ignore economics, one of the most fundamental precepts of which is this: Human resources are limited, human wants are not. That's a simple but profound truth. Politics is one of the major mechanisms by which we decide as a society how to carve up the pie. Every single major nation is facing the exact same healthcare dilemma we are to varying degrees. The science and technology involved in health care has advanced beyond our ability to pay for unlimited provision on a universal basis. The cost of services is increasing faster than national income, and the demand for services is also rising faster than the ability of the system to provide them. IOW, the demand outstrips the supply, and demand is rising faster than supply. In a market economy, services are rationed by the price system. Which means that cost can go nowhere but up. Changing to a strictly socialized system won't increase the overall amount of health care resources available, and might reduce it. All it can do is impose a different form of distributional rationing via mandate. Without the profit motive, the rate of technological advance slows considerably and the quality of provision will either become static or decline. We can have universal stadardized health care, at the cost of technological advancement and high-end cutting-edge care. We can have a lower "basic" level of universal health care with less impact. Note that this still won't do a thing to change the demographic bulges and bumps that affect demand for geriatric high-tech, which is the most expensive end of the stick. There are some efficiencies that could be imposed on the system, but that's still not a cure for the basic problem. It's a breathing space. Human resources are limited, human wants are not. Without a price mechanism, demand for services will always be greater than supply. Which means that them that got the money will always get better than them that don't. Analysis of the uninsured segment shows that there are a large number of the young and heatlhy who have opted out for financial reasons. Insurance for a family of 4 runs about $10K/yr right now with some hefty deducibles. That's a BIG damn bite for a family with a couple of $20-$30K jobs, or for the self-employed, and they're in the "healthy person" end of the market where their ordinary annual healthcare expenses don't even meet their deductibles. To them, medical insurance is another bill to pay AFTER they pay for their ordinary medical care. They opt out because the odds are excellent they're saving that $10k/yr free and clear, money they would be paying for nothing. Money they can use for savings and housing and.... But the insurance system requires that "free" money to subsidize the ill. Which long digression brings me to the point that the increase in the uninsured is driven by cost, which in turn drives up cost even more on the insured. "Vicious cycle." Unless something changes radically, healthcare costs will continue to spiral and the number of uninsured will continue to grow. Posted by: Tully at March 22, 2005 11:57 AMI don't think they are saving that 10k/year. They are spending it on other things, like food, rent and transportation. Unless of course, the definition of "saving" is like the late Mike Royko's wife. He earned $100, put $10 in the bank; he "saved" $10. She bought a mink coat marked down from 10k to 5k. She "saved" 5k. Posted by: tim at March 22, 2005 03:38 PMLOL, tim! Yes, many are probably "saving" that money by spending on non-essentials like food and shelter and clothing. And some may be "saving" it at the dog track on the cheap trifectas. (Royko has my total sympathy...) Of course my point is that they have more immediate uses for the cash than insuring against remote-odds catastrophe. Posted by: Tully at March 22, 2005 04:27 PMTim; Whatever decisions are made, some people are going to lose out as a result. That means we as a nation will have in essence decided who lives and who dies. Would you rather have one year's worth of care for a patient in a permanent vegitative state or twenty pregnancies cared for by good prenatal care. (The math may actually 40 or more prenatal courses) One has a known outcome unchanged and the other has known significant benefits with better pregnancy outcomes and healthier kids AND a savings to the system.) Posted by: c3 at March 22, 2005 06:09 PM Hey, you don't have to convince me. I have a living will and I at least like to think I will use my own free will to die rather than pop 30 or 40 pills a day when I'm old, if I'm lucky enough to live to be old. But where do you draw the line? Do you not put a stent in someone's artery after the second heart attack? Or if they are past 75 you don't insert one even after the first heart attack? Refuse to pay for PT for stroke victims past a certain age? The Schiavo case is primarily interesting to me from a constitutional perspective. From a public policy perspective I think it's merely a sideshow. The debate isn't going to be about keeping people alive who are in a vegetative state. The dabate is going to be about access to routine, but increasingly expensive drugs and procedures that we know will add years of life, perhaps productive years of life. It's not as easy as you suggest. Posted by: tim at March 23, 2005 09:10 AMBut where do you draw the line? Do you not put a stent in someone's artery after the second heart attack? Or if they are past 75 you don't insert one even after the first heart attack? Refuse to pay for PT for stroke victims past a certain age? That's why it SO important we address these budget issues now so that our kids won't have to face questions like that.... |
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