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mivadar

Listed below are comments made by mivadar between Tuesday, 29th April 2008 and Monday, 9th November 2009.

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The hard fact of healthcare costs 11:03am on 09 Nov 2009 On the one hand, yes, health care costs will increase across the board as we get older.
On the other hand, the US health care system currently is immensely wasteful and overpriced - it delivers essentially the same service as the one in France, the Netherlands, or for that matter the UK, at about twice the price.

If I remember correctly from college health economics class, the major reasons American health care is so much more expensive on a per capita basis include:

1. More frequent use of expensive technology (such as MRI machines, operations instead of medication, etc.).
There is not much evidence that this has resulted in a greater quality of care, though due to demographic and measurement differences between populations in different countries it is hard to directly compare health care systems. It is in fact a general trend that the more a country relies on fee for service, the more costly its health care system is. This is a huge contributor to why the US is more costly than Germany and Canada which have global budgets for hospitals and lower incentives for costly procedures, and why Germany and Canada are more costly than the UK which puts physicians on salaries and tightly controls budgets.
In the 90's, when HMO's used extremely restrictive networks and refused care and put physicians on capitation instead of fee for service and used primary care physicians as gatekeepers to prevent (what they considered) overutilization, health care costs leveled out relative to GDP.
When highly restrictive HMO's were largely replaced with PPO and POS plans, cost growth resumed. There was enormous public backlash because of the lack of transparency and lack of patient choice, but there are elements of these sorts of policies in countries (such as the UK) where health care costs are extremely low. The NHS is very much like a giant but politically accountable HMO.

2. Lack of monopsonistic buying power, or lack of utilization thereof.
Pharmaceuticals and hospitals drain much more money in the US than other countries on a per service basis.
Physicians earn more in the United States than any other country in the world. Part of this has to do with expenses incurred in medical training, part of it has to do with the power of the AMA, and part of it has to do with the relative bargaining power between physicians and insurers.

3. On a much smaller scale, administrative inefficiencies. American insurance claims filing is generally pretty costly, and the individual insurance market itself is extraordinarily inefficient.

4. The American population incurs high rates of expensive chronic illnesses than the populations of most European countries do, partly due to unhealthier lifestyles.

If the US wants to decrease health care cost growth to put it more in line with other developed countries, then it should institute reforms to transition away from fee for service reimbursements while emphasizing group-based care organized around primary care physicians.

It also very much needs a monopsonistic buyer, either by strong state regulation or a single insurer.

The new bill does neither of these things, at least properly - so it doesn't really address the core problem from which all others derive, the cost inefficiency.
Given recent protests, the US electorate would probably not stand for the "horror" of state-controlled insurance, even though on the long run it would give them much better value.

It is very well established in economics that because of lack of information and time for choice in necessary treatment on the part of the consumer (patient), there is a failure of the free market in the health care sector showing an effective provider monopoly - and the only way to keep prices down is to institute and effective monopsony.
While the US has anti-trust legislation, I imagine it would be difficult to convince Americans that in some sectors, provider competition simply doesn't work.
Exile on Main Street 1:36pm on 30 Sep 2008 worldwideryan - I'm not sure what You have experienced, but so far my experience with continental European health service has largely been positive.

"The reasons why costs are high is because they have to cover expensive malpractice insurance because idiots can sue for millions of dollars. If you cap the money people can squeeze from doctors who mess up, that will reduce real costs."
Well, this is only part of the problem.
Another part that is independent of how the health service is organized is that health insurance costs are going up as new and more expensive treatments are discovered and the population is aging.
However - private sector health insurances (e.g. USA) have some serious problems that drive prices up, and malpractice insurance is the least of these.
Health insurance is the textbook example of a market failure scenario - there is an inherent lack of information and transparency, and a lack of choice. Because of geographical limitations and the "emergency" nature of medical care, demand for most services is highly inelastic. An individual is incapable of making informed choice in a medical emergency scenario, and an insurance company is usually incapable of monitoring the necessity of procedures conducted and the price charged - and puts the cost of uncertainty back on the consumer. This drives prices up significantly (the USA is paying more than twice per patient than Europe for what might be "friendlier", but is in effectiveness about equal care).
There is at least some degree of consensus that the most cost-efficient way to counteract this market failure / monopoly scenario is a monopsony - either a single (state or state controlled) insurer (e.g. UK), or strong state regulation of both insurers that are private companies and the medical sector (e.g. Germany). This can be coupled with free competition in sectors where information is more available and market failure not complete (e.g. competition of companies providing blood tests), but also this needs to be heavily monitored.
You can also see the effect of mono/oligo-psonistic agreements with the lower prices big insurers can negotiate in the US compared to private individuals paying for their care.
Oud awakening 5:24pm on 20 Sep 2008 lochravin: "Yes they all hate us until they need us. Meanwhile, they're breaking down the doors to get in- go figure."

Well - this is not entirely true.

Europe, and much of the rest of the world has been extremely grateful to the US after WW II.

US foreign policy, and the personal behaviour of some US citizens who were very visible in Europe (mostly soldiers stationed here), has gone a very long way to destroy this gratefulness; and the original positive feeling was so strong that this took generations.

I've lived next to a US army base, and I know a lot of other people who have - there is a reason that there were "Ami go home" signs all the way from the '60s to now.
A lot of the troops were behaving to a large extent like an occupying force - unchecked, often outrageous, getting away with anything both individually and as an institution.

The US government in the meantime has propped up a large number of bloody dictatorships all over the world, behaved agressively, and US foreign policy during the cold war is to a greater or lesser extent responsible for most of the international mess right now (wholly responsible for what happened in Iraq, Iran and Afghanistan since the '70s ... choosing the wrong allies is not good for you).

A similar thing happened after 2001 - a great rush of international sympathy and military and material aid, agreement over involvement in Afghanistan, etc. turned into summary hatred over the way US foreign policy was shaped later.

As to breaking down the doors - by now I am hard pressed to find anyone here who actually wants to live in the US even for a limited period of time, and I work in a field where some "US experience" used to be a must.
Very qualified people are leaving the US in droves.

As to needing - by now we have reached the point where a number of world leaders are looking to authoritarian Russia and communist China for economic and military cooperation and stability. They might not be too savoury, but at least they are predictable.

tiptoplisamich - :-) good on You for spending some of Your holiday abroad.
I really hope that most people won't go as far in "anti-Americanism" as to dislike individuals before getting to know them.
This kind of generatlization is just a bit silly.

But, yes, the international behaviour of the country's leadership has been a shambles for some time ...
Biofuels: bad for the environment? 09:58am on 29 Apr 2008 Not all biofuels are created equal - for example there is a huge difference between the carbon footprint of bioethanol (a petrol substitute) and biodiesel (diesel substitute), biodiesel consistently scoring much better.

Biofuel will only be a viable option when technologies now only in development, like economically extracting fuel from cellulose (the much-anticipated grass- and agricultural waste-conversion) will mature - the only positive thing I'm hoping from the EU biofuel programme is to give a serious financial incentive for this research to be pushed forward and be commercially available in a few years.

This technology has, at the moment, a better chance of commercially succeeding soon than either long-range batteries or hydrogen-powered vehicles (where we shouldn't forget that the power to create the hydrogen or charge the battery still needs to be produced somewhere - and we haven't found a solution for large scale green power-generation either).

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