Tuesday, October 27, 2009

Insurance Monopolies/Oligopolies

I feel sometimes that I fell asleep and woke up in an alternate universe. The Republicans are trying to protect Medicare Advantage, which is wasteful of taxpayers' money. The Republicans are blocking efforts to establish a public health insurance marketplace that would foster free competition. It is the Democrats that are trying to facilitate free market competition by de-exempting insurance companies from anti-trust laws.

The Republicans violently oppose a public health insurance option on the grounds that it would unfairly compete with private companies. If they care so much about fair competition, will they follow the Democrats' lead and fight the unfair private insurance monopolies? I doubt it. The Republicans have abandoned their values and all reason, and act now only to cripple the current administration and regain power. They don't care about the citizens or economy of this country. They care about themselves.

Competition among insurance providers will reduce the prices of insurance. Let us see that competition. Start by stripping insurance companies of protection from anti-trust laws. A public marketplace would be another great step towards increasing competition and providing the American citizens more insurance options at lower prices.

Wednesday, October 7, 2009

Unsustainable Resource Allocation

Yesterday I wrote that our elderly are getting 2-4 times the money out of social services as they put in, as hard working taxpayers and their children are deprived of valuable services that would strengthen our country now and for the future. This recent MSNBC interview with crazy Betsy McCaughey gives the CBO citation and shows how the approximately 3:1 ratio was found.

There are two valid drivers for how we allocate money. The more deontological driver is to spend money to give people what they deserve. Benefits to soldiers, for example, or temporary unemployment benefits, or funds to support poor children. People who have a raw deal through no fault of their own, or who made sacrifices for the rest of us, deserve care. The more utilitarian driver is spend money on whatever will net the greatest good. What sets us up to have the best future? Military benefits are driven by this, also, as they are often calculated incentives to attract needed recruits so that we can even have a military. Public works projects that improve our infrastructure so we can continue trade and growth. Investing in research. Paying such vast amounts of money on social services to the elderly is more than they deserve and is not an investment in the future. At least McCaughey wants to raise the Medicare age to 70, even if she opposes making the system more efficient.

The major invalid driver of money allocation is greed. Special interests want their money. Politicians want votes and campaign contributions. Politicians make allocations (corn subsidies, no-bid contracts, F-22s, bridges to nowhere, etc...) that will get them votes and contributions, even though it hurts most people. Old people vote. Old people vote more often than young people. Politicians make policies that benefit old people at everyone else's (and the country's overall) expense. We are in a death spiral of increasing social security and Medicare expenses because politicians pacify the elderly now for votes instead of looking at the big picture and our country's needs for the future.

The interview also helpfully shows that a public option, or the public marketplace option that Obama talked about, would greatly reduce health care costs by eliminating the widespread occurance of localized insurance monopolies. I have two real choices for insurance provision in my area, and that is not competition that benefits consumers. When did Republicans start hating competition? Was it when insurance lobbyists handed them goodies, or are they just stubbornly trying to shoot down at any cost everything Obama tries to do?

Also, tort reform, which I've strongly advocated, seems to be a very low priority as far as cost controls go. It's still a good idea, and the special interest most opposed is the lawyers who take half the money, but it can go on the back burner.

Tuesday, October 6, 2009

Prevention - Is It Worth It?

I've already mentioned my skepticism of the cost-effectiveness of prostate cancer tests as a preventative measure, since they have notoriously high false positive rates and lead to much unnecessary cancer treatment that results in many side-effects and iatrogenic consequences. I have a vague memory of an issue in California a while back in which gonorrhea tests or treatments were mandatory at birth because gonorrhea can lead to blindness, but the processes were very expensive and only found such a tiny incidence that the requirement was not worth while. Remember, we have finite resources, and they have to be used where they do the most good. If we had infinite resources, we could test and treat everyone for everything.

Many preventative measures are easily worth their costs. Vaccines, obviously. How much has the US had to spend on polio over the last few decades? This CBO letter describes a few other good preventions, but points out that about 20% are not worth doing. Again, very obviously, don't smoke and don't be fat. Get even a modest amount of exercise.

There are some issues with how cost-effectiveness is evaluated. Different projective models come up with different results. (The Health Affairs article linked to by that blog costs money)

One of the most controversial issues in determining the cost-effectiveness of preventative measures is that they can result in increasing people's life spans so that they end up using more health care than they would have if they died earlier. There is also the argument that the elderly worked hard to pay into the system during their lives and deserve to be kept alive as long as technologically possible. Well, they're actually sucking out 2-4 times as much money from social security and Medicare as they ever put in, so that argument is junk. They should definitely get what they deserve, but not more than that at everyone else's expense. This is the reason those social services are unsustainable and threatening to bankrupt our country in less than ten years. We spend great amounts of money to keep people alive past the point of function. To state that we should reduce what we spend on that outcome incites revolt from hillbillies who throw around accusations of trying to kill their grandmothers. Remember, we have finite resources. Keeping someone alive in a bed at great cost takes away money that could help children and workers be more productive and contribute to our whole system. It is not heartless of me to deprive an aged person of expensive care. It is selfish to demand that expensive care at everyone else's expense. The utilitarian ethic is the most compassionate. England realizes this. If we stop spending great amounts of resources on end-of-life care, we change the models that calculate the cost-effectiveness of preventative measures, making more preventative measures worth using that will increase the overall health and productivity of the population of the United States. It is good for the whole country.

Health care is an investment. We pay up front so that we have better outcomes for the future. Make sure that we get the best outcomes we can for our investment. Pay to maximize function for us overall. This will help the system grow strong and be sustainable.