Obamacare

Better Care is More Expensive Care?

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Last week, I wrote about the problem of cost-cutting in health care. Over the weekend, the Washington Post published an article suggesting one reason why making cuts has historically been so difficult: 

Although inappropriate care, high administrative costs, inflated prices and fraud all add to the country's gigantic medical bill, the biggest driver of the upward curve of health spending has been the discovery of new and better things to do when someone gets sick.

"Money matters in health care as it does in few other industries," wrote Harvard University health economist David Cutler in 2004. "Where we have spent a lot, we have received a lot in return."

 

As Mickey Kaus notes, this cuts rather strongly against what he calls "Orszagism"-the school of thought, led by Obama OMB director Peter Orszag, that says that health-care reform can reduce growth in spending on medical care without sacrificing quality. 

Jacob Sullum argued that health-care reform isn't worth the cost.     

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  1. The argument seems to be that we can reform health care without sacrificing the quality of care we already have. Of course, even if it is true, it suggests that we have to sacrifice potential future advances in quality.

  2. No, no, no, you’ve got it all wrong

    We can:
    -Make health care available at no cost to the consumer at the point of service
    -Increase the overall consumption of health care.
    -Spend less in total
    -Increase taxes only on the rich to pay for it
    -Profit!

  3. We can:
    -Make health care available at no cost to the consumer at the point of service
    -Increase the overall consumption of health care.
    -Spend less in total
    -Increase taxes only on the rich to pay for it
    -Profit!

    You left out the idea that care will actually be of equal or better quality. Without that stipulation all of the above could happen simultaneously, however no one would get anything out of the healthcare system; it would turn out like the public schools.

  4. How dare any of you down the Messiah!! He of the One True Path (TM) on Health Care (for him, it’s all caps)! Obviously, you TELL people they’re getting profits, but you don’t actually let them. I mean, profits are evil and shit.

    Right?

    Right?

  5. “How dare any of you down the Messiah!!”

    No, no, no. You mistook our tone. I’m praising Obama’s proposal to issue IOUs from God for the last few years of your life.

  6. I think I got this thread confused with the California budgetary thread.

  7. You left out the idea that care will actually be of equal or better quality. Without that stipulation all of the above could happen simultaneously, however no one would get anything out of the healthcare system; it would turn out like the public schools.

    I can see it now:

    “Doctor, it hurts when I do this!”
    “Oh, that part? Sorry sir, but that part of your body was not stipulated by the No Physician Left Behind act and as a result, since we weren’t tested on that part, we weren’t taught anything about it.”
    “But, it hurts when I do this!”
    “So don’t do that.”

    Henny Youngman solves the world’s vexing problems once again!

  8. Lamar: You’re probably just ahead of the curve on the national budgetary crisis, so no worries 🙂

  9. Actually, the Rand study proves that most medical care is almost useless. You can take Metformin for diabetes – which is really cheap, or you could take Avandia, which is really, really expensive, and apparently kills you. People pay for it, because if you think you may die, and an expert tells you to do something (and they get paid if you do something) you have nothing but incentive for action.
    Right now, there are medical tourists from America, who even with insurance, are going to India and Thailand for heart surgery. They do this because even with insurance they can’t afford the co-pays. They can afford surgery in India, and they get care that is as good, if not better, than the care they get here.
    In a few years, I expect to have an internet doctor from India. Cheaper and better. Yeah, he doesn’t do surgery (…yet, with robot surgery, expect surgeons from other countries to be doing operations), but my stateside GP doesn’t do surgery either.
    At some point, the system becomes too expensive and too useless. You can buy that GM car, but I get my cars from Asia. We need less central planning, and more inovation and competition.

  10. I say we start reforming healthcare by charging registered Democrats more and by taxing them more.

    Let them put their money where their mouths are before other people have to.

  11. The problem is, there is waste, fraud and abuse in the current system. However, reducing waste, fraud and abuse may not translate to cheaper and more available care for the consumer. It merely means that the government will spend less on it. The real cost of an MRI will still be the real cost of an MRI. ONe might hope that if waste etc. is reduced from the system, that subsidy costs might go down– I wouldn’t bet on it, however.

    My prediction remains the same: A public option will see costs rise faster than before as healthcare organizations jack up the subsidy of private payers to cover the losses from the ‘cost contolling’ government plan.

  12. it would turn out like the public schools.

    The public schools don’t satisfy any of those criteria. Have you seen the per pupil spending in DC school system?

  13. You can buy that GM car, but I get my cars from Asia.

    GM builds cars in Canada and Mexico. Asian cars are built in Kentucky and Alabama.

  14. The biggest driver of costs is that everyone wants to live forever.

    And the market is responding.

    Plus, the fact that nobody actually ever sees the costs of attempting to live forever directly. It’s all covered by insurance, which is paid for by your employer. The relationship between what is spent on your health care, and what you pay out of pocket for it is pretty much negligible.

    So, naturally, wanting to live forever, you are going to consume as much of it as you can.

  15. “GM builds cars in Canada and Mexico. Asian cars are built in Kentucky and Alabama”
    OK. I’ll correct it.
    I buy cars with Asian nameplates, whereever they are built, and not GM cars, whereever they are built.

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