I really like the writer's points about transparent pricing, decoupling insurance from care, etc. I do have a couple of issues with at least two of his points.
The trade-off for lower drug prices is less innovation. We may decide we're happy to get cheaper drugs now in exchange for fewer meds for our old age, our kids, etc., but we need to be aware that's what we're doing. (For discussions of this, do a search for: mcardle prescription drug innovation.)
I understand his point about not paying for health care that would be unnecessary if lifestyle changes were made but I see some problems with this approach. One is that the role of lifestyle versus genetics and/or bad luck is not always clear and may change over time. The cause of ulcers is, of course, the classic example of this. The extent to which various cancers are the result of lifestyle versus genetics versus bad luck seems to be a matter of dispute.
Another is that those lifestyle changes may not be a matter of "being pigheaded and refusing to do things." In a post I wrote in 2011, I did some quick research and found the success rates for recovery from alcoholism (<=35%), heroin addiction (<=32%), meth addiction (<=15%), and obesity (<=20% if success is defined as permanently losing 10% of body weight, a pretty low bar). In other words, depending on the lifestyle issue, 65% to 85% of people with these problems do not recover when they attempt to do so. It's difficult to believe that the vast majority of people who make an effort to recover and fail are simply "refusing" to stop drinking, drugging, and over-eating.
Finally, what are we going to do about people with lifestyle-caused ailments? Are we willing to let someone with Type II diabetes or alcohol-induced liver failure simply die in misery? Not even palliative care? That's going to be a tough sell.
I wonder if a partial answer might be a stealth repayment of costs. Then one still has to come up with the money up front, but the government could quietly repay those costs as documented. That way, you don't have the inflationary effect because (a) people still have to front the money, so they can only pursue services they really need, and (b) nobody doing the billing knows who has access to an effectively unlimited pool of cash.
My goal is not that anyone should suffer, but it is that we should get these costs under control while not ceding another layer of authority over our lives to a distant, centralized government.
Type 2 diabetes isn't life-style caused; it's genetic. More precisely, most people with Type 2 can control it with exercise and a low-carb diet, but 1) that doesn't cure it, and 2) people have been told for decades to instead calorie-restrict and eat a high-carb low-fat diet, so it's hard for me to see the resultant health issues as being their fault when they only did what everyone from doctors to the government to the "health" page in the newspaper told them to.
Having now read the provision... he's exaggerating considerably about the immediacy of the benefits, and also about the degree of carbohydrate reduction that's necessary. Someone with even severe Type 2 diabetes can eat a carrot or a tomato slice or use garlic, for heaven's sake. (And what if the "lifestyle modification" is something it's not reasonable to demand, like say "never getting out of bed again"?)
Overall, most of his provisions seem to me to be too focused on controlling and prohibiting, and too little focused on removing controls and prohibitions that prevent the medical care market from operating functionally. If we've learned nothing else, we should have learned that trying to "shape" medical care by forbidding this and requiring that is like pushing string.
Somewhere around here, I have a list of provisions which can be enacted (theoretically) one by one, each one improving matters somewhat. I should try to find it.
In the meantime, my main desideratum is that if we're going to subsize, do it directly, rather than imposing mandates and requirements that force the cost on some subset of the population. Much of my outrage at the ACA is the fact that its indirect subsidies almost all fall on the 5% of the population that buys insurance directly. Direct subsidy is more transparent (we can see how much we're paying), fairer (since it comes out of the general fund rather than out of the pockets of whoever is out of favor politically), and more honest.
Also, if we subsidize directly via an HSA or something similar, the people we're subsidizing become part of the market and help impose market discipline by their shopping around for bargains, instead of being deadweight in a non-market.
It's also true, re: lifestyle issues, that some of them are tradeoffs. Everyone knows that alcohol can cause liver disease and even some kinds of cancers; less well-known is how dramatic its effect is on lowering heart disease death rates. Even the heaviest drinkers have better health outcomes than non-drinkers because of the fact that heart disease is the #1 killer in America, and it's heavily affected by alcohol consumption.
Exercise, by contrast, is almost always good for you -- but a small number of people die or are injured doing it. Riding motorcycles is much more dangerous than not riding them, and yet it provides numerous benefits in terms of getting outside, being with friends, traveling in beautiful places, and other things that are all correlated with better health.
Smoking, just to round out the picture, appears to be 100% negative in its effects.
So it's not as simple as saying, "lifestyle caused this!" Even when that's true, not all lifestyle choices are equally worthy of punishment. Some of them were reasonable wagers, all things considered; you just got unlucky when the numbers came up.
". Riding motorcycles is much more dangerous than not riding them, and yet it provides numerous benefits in terms of getting outside, being with friends, traveling in beautiful places, and other things that are all correlated with better health."
Almost everything fun has danger involved. Especially love.
Exercise, by contrast, is almost always good for you
Well, sort of. Megan Mcardle has done a lot of good work on these questions over the course of the ACA debate. Even if you disagree with her ultimate conclusions she's got a lot of good material as Elise referenced up above.
Most research shows that living a healthy lifestyle does little to control overall health care expenditures. If you smoke you will likely die at a younger age, possibly after expensive treatment for cancer, than a non-smoker. But the non-smoker is likely to die of or be afflicted with an illness (RA or other joint deterioration, to pick one) that's just as expensive to treat, in part because they'll live longer with whatever chronic condition afflicts them.
It's trade-offs all the way down.
I tend to favor jaed's proposals. The guiding light should be transparency - getting third party payors (either government or insurance companies) out of the mix, especially for routine, recurring, low dollar transactions. If people need help paying for medical costs, do it through direct subsidy rather than stealth taxation via mandatory health insurance premiums. Get insurance back to being a backstop for catastrophic losses rather than pre-paid health care.
I read an interesting book last week about saturated fat ("The Great Big Fat Surprise") and the possibility that the received wisdom of the last 50 years about its effect on heart health is just so much hooey. I'm just awfully skeptical that we know nearly as much as we think we do about the lifestyle "causes" of lots of our more expensive diseases. I agree with Christopher that we should subsidize people directly if we subsidize them at all, as the best means of controlling prices. As for whether it's unkind to refuse subsidies to people we perceive to be self-destructive, well, it doesn't bother me in principle, though as a practical matter I question whether we know as much about the cause and effect as we think we do.
I will say that my Type II diabetes resolved 100% in the last 18 months with weight loss, along with my rising blood pressure and all symptoms of GERD and even ulcerative colitis. I make no attempt whatever to eat high-carb, low-carb, high-fat, or low-fat. I just put a cap on calories. If you eat more than you need, nothing good comes of it.
I agree with the transparency imperative put forward by Christopher and jaed--direct subsidies at least let you know who's getting what, and, as pointed out, assist with market forces dictating price, rather than indirect subsidies/redistribution distorting the market.
I think that Mr. Denninger is correct to try and decouple insurance (as currently defined) from the provision of care. I also very much like the requirement to post a price list. I do wonder if that's one thing that doesn't need to be legislated, though. If you make the patient responsible for payment, rather than an insurance company, there's much more of an incentive to ask about prices; as people start to shop around, market imperatives would lead to publicized price lists. The danger might be that the price list would be more of a suggested price, like a car, and you might get a better price if you negotiate. I wouldn't relish the idea of having to negotiate the cost while being rolled in for an appendectomy.
1) Repeal Obamacare effective, say, Jan 1 2019. Accept that the Federal government is going to have to make the insurance companies whole for the next year and a half plus. (We passed a lousy bill, it's going to cost to get out of it. Kind of like a divorce after marrying that person everybody warned you not to run off to Vegas with.)
2) Bill about access to health insurance. There are some simple ways to make sure everyone can buy health insurance that have some hope of avoiding a death spiral.
3) Bill about subsidizing people who can't afford to buy their own health insurance. Accept that if we keep insisting this not cost anything we're going to end up with another mess. If we want everyone to get health insurance (or health care) we're going to have to pay for it.
These are three different issues. It's horribly messy to address them all in one piece of legislation.
If we want everyone to get health insurance (or health care) we're going to have to pay for it.
This strikes me as at the core of the problem. It's not a matter of everyone getting health insurance or health care, it's a matter of everyone having access to health care.
And, no nor health care nor access to it is a right, at least in the FDR sense. Access is derivative of the natural rights we already have; if those rights--and duties--are properly protected and enforced, the derivatives follow closely (albeit not quite perfectly) without further government intervention.
But that requires more virtuous people in government. And that requires a more virtuous population--the sort that Adams was on about some years ago--to do the selection.
I really like the writer's points about transparent pricing, decoupling insurance from care, etc. I do have a couple of issues with at least two of his points.
ReplyDeleteThe trade-off for lower drug prices is less innovation. We may decide we're happy to get cheaper drugs now in exchange for fewer meds for our old age, our kids, etc., but we need to be aware that's what we're doing. (For discussions of this, do a search for: mcardle prescription drug innovation.)
I understand his point about not paying for health care that would be unnecessary if lifestyle changes were made but I see some problems with this approach. One is that the role of lifestyle versus genetics and/or bad luck is not always clear and may change over time. The cause of ulcers is, of course, the classic example of this. The extent to which various cancers are the result of lifestyle versus genetics versus bad luck seems to be a matter of dispute.
Another is that those lifestyle changes may not be a matter of "being pigheaded and refusing to do things." In a post I wrote in 2011, I did some quick research and found the success rates for recovery from alcoholism (<=35%), heroin addiction (<=32%), meth addiction (<=15%), and obesity (<=20% if success is defined as permanently losing 10% of body weight, a pretty low bar). In other words, depending on the lifestyle issue, 65% to 85% of people with these problems do not recover when they attempt to do so. It's difficult to believe that the vast majority of people who make an effort to recover and fail are simply "refusing" to stop drinking, drugging, and over-eating.
Finally, what are we going to do about people with lifestyle-caused ailments? Are we willing to let someone with Type II diabetes or alcohol-induced liver failure simply die in misery? Not even palliative care? That's going to be a tough sell.
I wonder if a partial answer might be a stealth repayment of costs. Then one still has to come up with the money up front, but the government could quietly repay those costs as documented. That way, you don't have the inflationary effect because (a) people still have to front the money, so they can only pursue services they really need, and (b) nobody doing the billing knows who has access to an effectively unlimited pool of cash.
ReplyDeleteMy goal is not that anyone should suffer, but it is that we should get these costs under control while not ceding another layer of authority over our lives to a distant, centralized government.
Type 2 diabetes isn't life-style caused; it's genetic. More precisely, most people with Type 2 can control it with exercise and a low-carb diet, but 1) that doesn't cure it, and 2) people have been told for decades to instead calorie-restrict and eat a high-carb low-fat diet, so it's hard for me to see the resultant health issues as being their fault when they only did what everyone from doctors to the government to the "health" page in the newspaper told them to.
ReplyDeleteHaving now read the provision... he's exaggerating considerably about the immediacy of the benefits, and also about the degree of carbohydrate reduction that's necessary. Someone with even severe Type 2 diabetes can eat a carrot or a tomato slice or use garlic, for heaven's sake. (And what if the "lifestyle modification" is something it's not reasonable to demand, like say "never getting out of bed again"?)
Overall, most of his provisions seem to me to be too focused on controlling and prohibiting, and too little focused on removing controls and prohibitions that prevent the medical care market from operating functionally. If we've learned nothing else, we should have learned that trying to "shape" medical care by forbidding this and requiring that is like pushing string.
Somewhere around here, I have a list of provisions which can be enacted (theoretically) one by one, each one improving matters somewhat. I should try to find it.
In the meantime, my main desideratum is that if we're going to subsize, do it directly, rather than imposing mandates and requirements that force the cost on some subset of the population. Much of my outrage at the ACA is the fact that its indirect subsidies almost all fall on the 5% of the population that buys insurance directly. Direct subsidy is more transparent (we can see how much we're paying), fairer (since it comes out of the general fund rather than out of the pockets of whoever is out of favor politically), and more honest.
Also, if we subsidize directly via an HSA or something similar, the people we're subsidizing become part of the market and help impose market discipline by their shopping around for bargains, instead of being deadweight in a non-market.
It's also true, re: lifestyle issues, that some of them are tradeoffs. Everyone knows that alcohol can cause liver disease and even some kinds of cancers; less well-known is how dramatic its effect is on lowering heart disease death rates. Even the heaviest drinkers have better health outcomes than non-drinkers because of the fact that heart disease is the #1 killer in America, and it's heavily affected by alcohol consumption.
ReplyDeleteExercise, by contrast, is almost always good for you -- but a small number of people die or are injured doing it. Riding motorcycles is much more dangerous than not riding them, and yet it provides numerous benefits in terms of getting outside, being with friends, traveling in beautiful places, and other things that are all correlated with better health.
Smoking, just to round out the picture, appears to be 100% negative in its effects.
So it's not as simple as saying, "lifestyle caused this!" Even when that's true, not all lifestyle choices are equally worthy of punishment. Some of them were reasonable wagers, all things considered; you just got unlucky when the numbers came up.
". Riding motorcycles is much more dangerous than not riding them, and yet it provides numerous benefits in terms of getting outside, being with friends, traveling in beautiful places, and other things that are all correlated with better health."
ReplyDeleteAlmost everything fun has danger involved. Especially love.
Yes, especially love.
ReplyDeleteExercise, by contrast, is almost always good for you
ReplyDeleteWell, sort of. Megan Mcardle has done a lot of good work on these questions over the course of the ACA debate. Even if you disagree with her ultimate conclusions she's got a lot of good material as Elise referenced up above.
Most research shows that living a healthy lifestyle does little to control overall health care expenditures. If you smoke you will likely die at a younger age, possibly after expensive treatment for cancer, than a non-smoker. But the non-smoker is likely to die of or be afflicted with an illness (RA or other joint deterioration, to pick one) that's just as expensive to treat, in part because they'll live longer with whatever chronic condition afflicts them.
It's trade-offs all the way down.
I tend to favor jaed's proposals. The guiding light should be transparency - getting third party payors (either government or insurance companies) out of the mix, especially for routine, recurring, low dollar transactions. If people need help paying for medical costs, do it through direct subsidy rather than stealth taxation via mandatory health insurance premiums. Get insurance back to being a backstop for catastrophic losses rather than pre-paid health care.
I read an interesting book last week about saturated fat ("The Great Big Fat Surprise") and the possibility that the received wisdom of the last 50 years about its effect on heart health is just so much hooey. I'm just awfully skeptical that we know nearly as much as we think we do about the lifestyle "causes" of lots of our more expensive diseases. I agree with Christopher that we should subsidize people directly if we subsidize them at all, as the best means of controlling prices. As for whether it's unkind to refuse subsidies to people we perceive to be self-destructive, well, it doesn't bother me in principle, though as a practical matter I question whether we know as much about the cause and effect as we think we do.
ReplyDeleteI will say that my Type II diabetes resolved 100% in the last 18 months with weight loss, along with my rising blood pressure and all symptoms of GERD and even ulcerative colitis. I make no attempt whatever to eat high-carb, low-carb, high-fat, or low-fat. I just put a cap on calories. If you eat more than you need, nothing good comes of it.
I agree with the transparency imperative put forward by Christopher and jaed--direct subsidies at least let you know who's getting what, and, as pointed out, assist with market forces dictating price, rather than indirect subsidies/redistribution distorting the market.
ReplyDeleteI think that Mr. Denninger is correct to try and decouple insurance (as currently defined) from the provision of care. I also very much like the requirement to post a price list. I do wonder if that's one thing that doesn't need to be legislated, though. If you make the patient responsible for payment, rather than an insurance company, there's much more of an incentive to ask about prices; as people start to shop around, market imperatives would lead to publicized price lists. The danger might be that the price list would be more of a suggested price, like a car, and you might get a better price if you negotiate. I wouldn't relish the idea of having to negotiate the cost while being rolled in for an appendectomy.
I'd like to see three separate bills.
ReplyDelete1) Repeal Obamacare effective, say, Jan 1 2019. Accept that the Federal government is going to have to make the insurance companies whole for the next year and a half plus. (We passed a lousy bill, it's going to cost to get out of it. Kind of like a divorce after marrying that person everybody warned you not to run off to Vegas with.)
2) Bill about access to health insurance. There are some simple ways to make sure everyone can buy health insurance that have some hope of avoiding a death spiral.
3) Bill about subsidizing people who can't afford to buy their own health insurance. Accept that if we keep insisting this not cost anything we're going to end up with another mess. If we want everyone to get health insurance (or health care) we're going to have to pay for it.
These are three different issues. It's horribly messy to address them all in one piece of legislation.
If we want everyone to get health insurance (or health care) we're going to have to pay for it.
ReplyDeleteThis strikes me as at the core of the problem. It's not a matter of everyone getting health insurance or health care, it's a matter of everyone having access to health care.
And, no nor health care nor access to it is a right, at least in the FDR sense. Access is derivative of the natural rights we already have; if those rights--and duties--are properly protected and enforced, the derivatives follow closely (albeit not quite perfectly) without further government intervention.
But that requires more virtuous people in government. And that requires a more virtuous population--the sort that Adams was on about some years ago--to do the selection.
Eric Hines