The niche that I think is appropriate for this blog is that of utilitarian division of resources, focused primarily on US resources and the health and welfare of US citizens. Today I want to draw on the popular media circus of the day as an example of the question we should all ask all the time: how can we best spend our resources to maximize health and welfare?
I have yet to see the bill, but I read that it cost millions of dollars to rescue the 33 miners trapped in Chile, and much aid came from the US. I am going to make up numbers for the math I'm about to do to illustrate a point. Let's say that it cost $3.3 million to rescue the miners. That comes to $100,000 per person. These are Chilean men in the career of mining, so an expected lifespan of 70 would be optimistic. Let's say that the average age of the miners is 35. So, the rescue saved 35 years per person for $100,000 = $2,857.14 per life-year. That's pretty inexpensive in American terms. Heck, that's practically free compared to Avastin and mammograms. Based on the media, it seems that Americans are excited and happy about this rescue, so I doubt there are many who would begrudge the men this cost. What if the real cost of the rescue was $33 million? How would you feel then? There are over 40 million Americans who can't get any help paying for more life-years when they have problems.
Michael Moore, who I'm usually not impressed with, recently wrote a letter to President Obama pointing out that for two months of the cost of the war in Iraq we could dig wells that would provide Africans with clean drinking water. Many areas of Africa suffer from disease related to their water, and many people have to spend so much time getting water that is taken away from time they could be getting educated or working. I have not verified these claims, but they seem plausible, and I'm just trying to illustrate a concept. It seems that a well for 3000 people costs about $30,000. The Water Project says that $10 can give a person clean water for 10 years. Over 2 million children in the world die each year from a lack of clean water.
Let's say that giving these people clean water only lets them live 10 years longer on average because they then die from some other cause. We're looking at $1 per life year. It's almost unbelievably simple. So, a Chilean miner is worth thousands of African children.
Why isn't the US jumping up to save tens of thousands of Africans for the price of a handful of Chilean miners? Let's brainstorm.
1) The Africans are not as useful contributors to the American military-industrial complex.
2) Africans are black.
3) Africa is poorer than Chile.
4) A collapsed mine is an accident that happened to hard-working, blue-collar, Christian folk that Americans can relate to. Living in Africa is perceived as something an African can choose to stop doing. Nevermind that people with no money and no education really can't just up and move to a better place, and nevermind that the miners intentionally chose a dangerous job.
5) Let China do it.
6) There are only a handful of trapped miners, so we can save all of them and look like heroes. Even though we could save tens of thousands of Africans for the same price, there would be millions we did not save, so we wouldn't look as heroic.
7) Saving the miners was exciting and thrilling, with the constant danger of cave-in or other calamity, so it drew lots of attention and people who could capitalize on the attention. Building hundreds of wells is boring, so there would be no media circus out there to draw attention to participants.
This situation mimics the situation inside the US. We have poor, suffering people in America. We have the money to help millions of them easily and inexpensively. Instead, just enough of us are ignorant and hateful enough to say that these millions of people over here are less deserving of living healthy lives than that other handful of people over there. Just enough people lack compassion and humanity and intelligence that we as a country would rather waste billions of dollars on inefficiency and profits for the rich than give basic levels of care to our countrymen in need.
If you really care about life, maximize the life returns on resource investments. Let's spend our money where it will help the most.
Friday, October 15, 2010
Friday, March 26, 2010
Christian Health Collectives
This NPR article has been sitting in my browser so long that the newly passed reform bill may have made it obsolete, but I am finally motivated to discuss it. Only one collective is described. Members pay a modest annual fee to cover administrative expenses, then write monthly checks to other members as directed by the administrators. There is what appears to be a co-pay or per-need deductible of $300 (for lack of more specific terminology), and it is waived after a household pays it three times within 12 months for the remainder of the 12-month period. Members can voluntarily choose to help people whose needs exceed $100,000, or who have been injured in motor vehicle accidents.
This is an interesting experiment. It frighteningly mimics only basic catastrophic coverage, and payments are not assured. Pre-existing conditions are generally not covered, including most pregnancy costs. Is this a good idea?
Advantages:
It's easy to understand. There are about 30 pages of straightforward rules and instructions. There is one deductible rule. There is only one type of plan (not counting the two optional add-ons for motor vehicles and >$100,000 needs). The organization is compassionate. Membership in the collective is not exclusive of having other insurance, so the collective may end up being helpful to someone who is "underinsured".
Disadvantages:
With about 14,000 households spread across the United States, the collective lacks strong negotiating leverage to demand lower prices from care providers. Members who rely on the collective are self-pay patients, so they will be charged much more money than a large insurance company would be charged, increasing the burden to members via premiums (the premium to need ratio is less efficient for a small collective than a large insurance company, which is also why single-payer systems are so good at keeping costs low).
Payments are not assured, and would become less likely as needs increase. Small groups are more likely than larger groups to experience significant variance in needs from time to time. Large companies tend to have reserves that they can tap if there is a spike in health care consumption, but the collective is set up rigidly. The NPR article mentions that a vote of the membership is needed to increase premiums, reducing flexibility and security.
Health economics studies have consistently shown that people tend to gravitate towards plans with the lowest premiums, despite their risks or needs. Neuroeconomics has shown us that most people are terrible at making decisions when there is a lot of confusing information and a lot of choices, and they tend to focus on select pieces of information to the exclusion of other important factors. Keep that in mind: more choice is not necessarily better, and is often very bad, especially for the more ignorant and less intelligent who are also at higher risk for other problems in their lives. When shopping for health insurance, with all the many complicated plans, people tend to focus on premiums to make the decision easier. The collective has such a low premium (2/3 of what I pay for my bare bones plan) that it may attract people for whom joining is a terrible decision, and who are more likely to incur greater costs for the collective.
Finally, what are the effects of only including devout Christians? Very generally, when you ignore factors like church attendance, self-identified Christians are more likely to have health problems and engage in dangerous or criminal behaviors than atheists. Samaritan Ministries seems to have some decent safeguards up to protect itself, though. Members' pastors are involved in their membership, and the collective simply does not cover many things (substance abuse, STDs may be difficult) that are out of line with their stated values. I wonder if there are also impacts due to changes in the age composition of devout church-attenders. I wonder if the collective attracts a disproportionate number of elderly who use it to supplement Medicare, and how that affects the risks.
Summary:
I like experimentation and innovation. I am curious to see how a project like this works over time. I also think it is very risky, and may need additional safeguards. Ideally, risk would be shared in a national plan that assures some basic levels of coverage to everyone, and collectives like this or private companies would sell supplemental plans.
This is an interesting experiment. It frighteningly mimics only basic catastrophic coverage, and payments are not assured. Pre-existing conditions are generally not covered, including most pregnancy costs. Is this a good idea?
Advantages:
It's easy to understand. There are about 30 pages of straightforward rules and instructions. There is one deductible rule. There is only one type of plan (not counting the two optional add-ons for motor vehicles and >$100,000 needs). The organization is compassionate. Membership in the collective is not exclusive of having other insurance, so the collective may end up being helpful to someone who is "underinsured".
Disadvantages:
With about 14,000 households spread across the United States, the collective lacks strong negotiating leverage to demand lower prices from care providers. Members who rely on the collective are self-pay patients, so they will be charged much more money than a large insurance company would be charged, increasing the burden to members via premiums (the premium to need ratio is less efficient for a small collective than a large insurance company, which is also why single-payer systems are so good at keeping costs low).
Payments are not assured, and would become less likely as needs increase. Small groups are more likely than larger groups to experience significant variance in needs from time to time. Large companies tend to have reserves that they can tap if there is a spike in health care consumption, but the collective is set up rigidly. The NPR article mentions that a vote of the membership is needed to increase premiums, reducing flexibility and security.
Health economics studies have consistently shown that people tend to gravitate towards plans with the lowest premiums, despite their risks or needs. Neuroeconomics has shown us that most people are terrible at making decisions when there is a lot of confusing information and a lot of choices, and they tend to focus on select pieces of information to the exclusion of other important factors. Keep that in mind: more choice is not necessarily better, and is often very bad, especially for the more ignorant and less intelligent who are also at higher risk for other problems in their lives. When shopping for health insurance, with all the many complicated plans, people tend to focus on premiums to make the decision easier. The collective has such a low premium (2/3 of what I pay for my bare bones plan) that it may attract people for whom joining is a terrible decision, and who are more likely to incur greater costs for the collective.
Finally, what are the effects of only including devout Christians? Very generally, when you ignore factors like church attendance, self-identified Christians are more likely to have health problems and engage in dangerous or criminal behaviors than atheists. Samaritan Ministries seems to have some decent safeguards up to protect itself, though. Members' pastors are involved in their membership, and the collective simply does not cover many things (substance abuse, STDs may be difficult) that are out of line with their stated values. I wonder if there are also impacts due to changes in the age composition of devout church-attenders. I wonder if the collective attracts a disproportionate number of elderly who use it to supplement Medicare, and how that affects the risks.
Summary:
I like experimentation and innovation. I am curious to see how a project like this works over time. I also think it is very risky, and may need additional safeguards. Ideally, risk would be shared in a national plan that assures some basic levels of coverage to everyone, and collectives like this or private companies would sell supplemental plans.
Saturday, January 16, 2010
Grab Bag 2
Scorecards on state health care performance.
Not surprisingly, this shows that the south and Nevada are relatively bad at caring for their citizens. If the those states acted more like the best performing states, they would help a lot more of their people with better quality care at lower prices. They don't, though, because they have a predominant culture of blind belief in their superiority and refusal to engage in progressive change.
CT scans cause about 30,000 cancers per year, half of which will be fatal. This is not to say that we should never use CT scans. We do need to be more vigilant about the overprescription of tests and procedures, and this is a great example of that need. CT scans are typically overpriced and overprescribed because too many hospitals bought CT scanners by issuing debt and have to pay off those debts by increasing the prices to consumers and performing more tests than the population needs. Doctors with financial stakes in their clinics are especially prone to prescribing unnecessary tests and procedures because they profit from them. People will unnecessarily die early from expensively-treated cancer caused by unnecessary tests ordered for personal and hospital profit, as well as for the sake of defensive medicine. We need more oversight, more restrictions on the purchases of expensive equipment (some states restrict, but the outcomes are mixed because of the different standards used), and an absolute ban on doctors being in conflict-of-interest situations. "First, do no harm," right?
Speaking of defensive medicine, it is one component of the Congressional Budget Office's estimation that tort reform could effectively save America over $50,000,000,000 over ten years. The report suggests that the measures would also result in better health outcomes, perhaps due to a reduction in unnecessary tests and procedures that carry health consequences. Reform is of course heavily opposed by the deep, deep pockets of the lawyers who make piles of money no matter which side of the lawsuits they're on. Politicians are getting lobbied by the greedy lawyers who profit from the policies that hurt real people in our country.
Not surprisingly, this shows that the south and Nevada are relatively bad at caring for their citizens. If the those states acted more like the best performing states, they would help a lot more of their people with better quality care at lower prices. They don't, though, because they have a predominant culture of blind belief in their superiority and refusal to engage in progressive change.
CT scans cause about 30,000 cancers per year, half of which will be fatal. This is not to say that we should never use CT scans. We do need to be more vigilant about the overprescription of tests and procedures, and this is a great example of that need. CT scans are typically overpriced and overprescribed because too many hospitals bought CT scanners by issuing debt and have to pay off those debts by increasing the prices to consumers and performing more tests than the population needs. Doctors with financial stakes in their clinics are especially prone to prescribing unnecessary tests and procedures because they profit from them. People will unnecessarily die early from expensively-treated cancer caused by unnecessary tests ordered for personal and hospital profit, as well as for the sake of defensive medicine. We need more oversight, more restrictions on the purchases of expensive equipment (some states restrict, but the outcomes are mixed because of the different standards used), and an absolute ban on doctors being in conflict-of-interest situations. "First, do no harm," right?
Speaking of defensive medicine, it is one component of the Congressional Budget Office's estimation that tort reform could effectively save America over $50,000,000,000 over ten years. The report suggests that the measures would also result in better health outcomes, perhaps due to a reduction in unnecessary tests and procedures that carry health consequences. Reform is of course heavily opposed by the deep, deep pockets of the lawyers who make piles of money no matter which side of the lawsuits they're on. Politicians are getting lobbied by the greedy lawyers who profit from the policies that hurt real people in our country.
Subscribe to:
Posts (Atom)