Both the private health insurance industry and the music industry are operating business models that to me appear to be unsustainable and anachronistic. The music industry developed in a world of vinyl records. Our health insurance industry and Medicare developed in an environment in which most major diseases were untreatable and the most exotic diagnostic tool was the X-ray. Now, we do 50 million CT scans and 25 million MRIs per year. Now, people with cancer or heart disease expect to survive. As weekend athletes, we expect our knees, shoulders, and hips to be reconstructed by the same technologies that keep Tiger and A-Rod playing.

Should we?  Could be buy an insurance policy that pays up to a certain amount, and save money to pay for the higher-quality service ourselves?  I’m not sure what insurance policies currently cover in these types of cases, that is, procedures on knees, shoulders, and hips.  I could imagine insurers offering different plans to cater to different consumer preferences.

the median wait time for patients requiring an inpatient bed-that is, from the time the patient presented at the ED [emergency department] to the time they were admitted to an inpatient bed-was 19 hours (average is 23.5 hours or nearly one full day), which is substantially higher than the CTAS thresholds (e.g., more than three times the 6 hour guideline for high-level acuity patients). The longer wait for patients to be admitted is often due to the inability to find an available hospital inpatient bed

The report has wait time data for other conditions including cancer.

John Stossel’s recent article cited this study. Here’s a quotable part:

Shirley Healy, like many sick Canadians, came to America for surgery. Her doctor in British Columbia told her she had only a few weeks to live because a blocked artery kept her from digesting food. Yet Canadian officials called her surgery “elective.”

“The only thing elective about this surgery was I elected to live,” she said.

Each of us, at the end of the day, has more control over the size of our bank accounts than we have over politically influenced bureaucrats. — Donald Boudreaux

Keep this in mind when considering if it’s a good idea to let politicians decide who gets medical care. This is not a defense of the status quo, as government gives insurers too much power by discounting their products with the tax code.  Here’s the context of the quote — it concludes a fine article about why medical costs are increasing:

Some proponents of the idea that medical care differs so much from other products that it cannot be compared to things like accounting or food say that “in matters of life and death, people aren’t willing to make the trade-offs that they make when deciding how much of other things to buy.” The idea is that a person on his or her deathbed will not care about the price of the costly medical procedure required to prolong life.

This “deathbed” tale is likely true. But it’s difficult to see how it counsels that we socialize medical-care payments. Does anyone seriously suppose that decisions by government bureaucrats over who will get, and who will be denied, some expensive lifesaving procedure would be better than having such decisions made according to each patient’s willingness and ability to pay?

In either case, some people will be denied care. I’d prefer that the impersonal forces of the market direct such decisions than to have them made by bureaucrats. Each of us, at the end of the day, has more control over the size of our bank accounts than we have over politically influenced bureaucrats.

1. Administrative costs serve a purpose.  For example, an insurance company or Medicare could pay every claim, fraudulent or not. That would lower administrative costs.  (Check out this post on Medicaid fraud, for example)

2. If government can do it better, then these people who run the program should start their own insurance company to compete with other insurers in the unfree market. Why do they need to force everyone to fund their organization?

For more, see healthcare.cato.org.

[Via John LaPlante]

An employer mandate that requires both retail giants to spend $9,000 per worker would have no effect on Wal-Mart.  But it would cripple one of Wal-Mart’s chief competitors. …

Wal-Mart has gone native.  That great symbol of the benefits of free-market competition now joins its erstwhile enemies among the legions of rent-seeking weasels who would rather run to government for protection than earn their keep by making people’s lives better.

Read his post here.  Also see the post at Reason magazine.

(via Health Care BS)

The Obama administration is bent on becoming a major player in — if not taking over entirely — America’s health-care, automobile and banking industries. Before that happens, it might be a good idea to look at the government’s track record in running economic enterprises. It is terrible. …

There are a number of reasons why this is inherently so. Among them are:

1) Governments are run by politicians, not businessmen. Politicians can only make political decisions, not economic ones. They are, after all, first and foremost in the re-election business. Because of the need to be re-elected, politicians are always likely to have a short-term bias. What looks good right now is more important to politicians than long-term consequences even when those consequences can be easily foreseen. The gathering disaster of Social Security has been obvious for years, but politics has prevented needed reforms. …

2) Politicians need headlines. And this means they have a deep need to do something (”Sen. Snoot Moves on Widget Crisis!”), even when doing nothing would be the better option. Markets will always deal efficiently with gluts and shortages, but letting the market work doesn’t produce favorable headlines and, indeed, often produces the opposite (”Sen. Snoot Fails to Move on Widget Crisis!”).

3) Governments use other people’s money. Corporations play with their own money. They are wealth-creating machines in which various people (investors, managers and labor) come together under a defined set of rules in hopes of creating more wealth collectively than they can create separately.

So a labor negotiation in a corporation is a negotiation over how to divide the wealth that is created between stockholders and workers. Each side knows that if they drive too hard a bargain they risk killing the goose that lays golden eggs for both sides. Just ask General Motors and the United Auto Workers. …

5) Government enterprises are almost always monopolies and thus do not face competition at all. But competition is exactly what makes capitalism so successful an economic system. The lack of it has always doomed socialist economies.

Read the whole piece here.

Both George Will and Greg Mankiw basically argue that we don’t need a government role because we can trust the market to work — hey, we do it for groceries, right?

Um, economists have known for 45 years — ever since Kenneth Arrow’s seminal paper — that the standard competitive market model just doesn’t work for health care: adverse selection and moral hazard are so central to the enterprise that nobody, nobody expects free-market principles to be enough. To act all wide-eyed and innocent about these problems at this late date is either remarkably ignorant or simply disingenuous.

Check out Brian Caplan’s response here. After making good points in response (government controls make the problems worse & that there’s advantageous selection), Caplan adds:

Unlike Krugman, I not going to dismiss everyone who doesn’t know these facts as “remarkably ignorant or simply disingenuous.”  What I will say, though, is that if you don’t know them, you have a lot to learn from nobody.

Thank you, Brian for demonstrating the class that Dr. Krugman does not.

Also check out David Henderson’s post: Krugman Misstates Arrow.  Here’s part of it:

if by “standard competitive model” you mean “perfect competition,” doesn’t work well even with gasoline stations and repair shops. When a company can invest in reputation, what Ben Klein called “brand name capital,” the perfectly competitive model goes out the window. But if you read just Krugman’s short post, you might think that Arrow is arguing for a government role in health care, as Krugman is, right? And I would bet that Krugman wants you to think that. Yet, nowhere in Arrow’s article can I find such an argument.

The debate we should be having is over whether restraint in our use of medical services should be initiated by government officials or left to consumers. The Democrats want to avoid that debate. Instead, they make it sound as if they can make excess health-care spending disappear by magic. But even if we were to stipulate for the sake of argument that all of the supposed savings from preventive care, electronic medical records, and eliminating the waste and greed supposedly inflicted by insurance companies and doctors will actually materialize, the excessive use of medical procedures would still be the main problem with our health-care system.

OK, I’ll quote more. I like these parts especially:

Our health-care system is wasteful. … That would be of little concern if individuals were wasting their own money. However, because close to 90 percent of personal health-care spending is paid for by third parties, we are wasting each other’s money.

And:

…private health insurance should be deregulated. Affordable health insurance requires radical changes to the way health-insurance policies are designed today. In order to get there, we need less regulation of health insurance, not more. My hope is that the industry would come up with plans that pay claims to only those who fall within the top 2 or 3 percent in terms of health-care needs; those who need basic care would pay out of pocket. Health insurance would look like fire insurance. Few of us would make claims, and premiums would be affordable.

Read the whole thing, and tell Arnold what you think of it (hopefully positive) here.

Did you know that about 300 million Americans went without food, water and shelter at some point last year?

I am a survivor.

If you were blessed with the prodigiously creative and cunning mind of a politician, that kind of statistic — meaningless but technically true — could be put to good use.

In the entertaining 1954 classic “How To Lie With Statistics,” Darrell Huff writes, “Misinforming people by the use of statistical material might be called statistical manipulation… (or) statisticulation.”

One of the most persistent examples of modern-day statisticulation is the sufficiently true claim that 46 million (it becomes 50 million when senators really get keyed up) Americans don’t have health insurance.

…

It is true that the 46 million figure is based on unreliable Census Bureau data. But even the less unreliable Congressional Budget Office puts the number at about 31 million. And even that number, former CBO Director Douglas Holtz-Eakin claims, is an “incomplete and potentially misleading picture of the uninsured population.”

…

In a study for the National Bureau of Economic Research called “Is Health Insurance Affordable for the Uninsured?,” [summary] Stanford economists say, “Based on a plausible range of definitions and assumptions health insurance is affordable for between one quarter and three quarters of adults who are not insured.”

Turns out that 8.4 million uninsured Americans are making $50,000 to $74,999, and 9.1 million more are making more than $75,000. Health insurance is just incompatible with their lifestyles, I guess.

…

These facts do not undermine the argument for nationalized health care. (History and common sense do that already.) They do, however, point out that many statistics, to quote Huff again, get by “only because the magic of numbers brings about a suspension of common sense.”

Read the whole article here.