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Why We Must Ration Health Care
July 19, 2009 12:16 PM   Subscribe

Why We Must Ration Health Care by Peter Singer.
posted by grouse (93 comments total) 12 users marked this as a favorite

 
Health care is rationed by the market. There's no escaping it. What is being proposed is a situation where those less fortunate get a bigger piece of the pie of total available health care. In otherwords, reduce the impact of market forces on the availability of health care.

What will be hard at first will be the fact that any system of distribution of healthcare will produce sometimes bad and unfair outcomes.

But its the only way to go.
posted by Ironmouth at 12:30 PM on July 19, 2009 [1 favorite]


"It's the only way to go"... really?

I hate it when people make statements like that.
posted by Spacelegoman at 12:39 PM on July 19, 2009 [5 favorites]


I am struggling to see how the US system does not already ration medical care, any insurance company would respond to rising costs by increasing premiums to limit access or simply disallow use surely. Simply, since resources are not infinite any system will involve rationing in some form. How is that really any different from having something like the UK's NICE setting a limit on spencing on the basis of value for money? And why is there any barrier to having both a minimum quality of coverage leavened with continued access to private health care for those who can afford it/desire it?
posted by biffa at 12:41 PM on July 19, 2009 [1 favorite]


This bit, "It’s easy to say, 'What if the teenager is a violent criminal and the 85-year-old is still working productively?' But just as emergency rooms should leave criminal justice to the courts and treat assailants and victims alike, so decisions about the allocation of health care resources should be kept separate from judgments about the moral character or social value of individuals." entirely contradicts the thrust of his argument. If we are to end up consciously rationing medical care (and, to be fair, either we ration it or the Universe does, we don't have infinite anything at hand), then, once you start down the path of judgments about who gets it based on age, one can hardly turn aside from the question productivity and not be regarded as a complete flake.

It's as if the real idea is, "We should let the math decide for us, so long as we consider only handy data with which we can look up the appropriate payoff in easy to follow actuarial tables." I call this argument from insurance.

This is an interesting article, though. We simply have not collectively faced up to the fact that we do not have an unlimited supply of medicine, equipment, doctors, nurses, etc. And we do want to have that discussion before we throw the "Whee! Healthcare for everyone!" bash.

However, it should come far, far after the question "Why does this drug cost $54,000" is answered.
posted by adipocere at 12:55 PM on July 19, 2009 [14 favorites]


Actually, "rationing" is a poor word to use for what Singer is talking about--though it's certainly the right one to get attention to his argument. When we have talked of "government imposed rationing" in the past we have talked of government regulations that denied everybody more than a certain quantity of some good (e.g., so many ounces of butter per week). There's absolutely no need for a sensible government health plan to require that nobody over age N is allowed, say, a hip replacement. What it will say is "we won't pay for anybody over age N to get a hip replacement." If they want to pay for it themselves, though, they're perfectly free to do so.

That isn't "rationing," it's simply saying that some things are covered and some things aren't. Caviar isn't "rationed" because you can't buy it with food stamps.
posted by yoink at 1:00 PM on July 19, 2009 [12 favorites]


Reminds me of Oregon's triage system. designed by a doctor who eventually became Oregon's governor.
posted by eye of newt at 1:07 PM on July 19, 2009 [1 favorite]


Add this fact to your repetoire: profit-seeking promotes innovation which leads to improved outcomes. Drug research, clinical trials for new surgeries, new medical equipment: these are all very, very expensive. When they pay off, they pay off with drastically improved patient outcomes. Thus, the increased costs and profits associated with the US health care system are not the results of rent-seeking or lack of regulatory oversight, they’re not the result of health care professionals repeatedly mugging us with “Your money or your life” price gouging. Instead, it’s the result of people paying more to get more: specifically, more health, more quality adjusted life years, better outcomes and capacities than they could have hoped for before the expensive innovations. People today survive illnesses that would have killed the thirty years ago because of markets and profits, because someone in the eighties was priced out of the market which diverted its resources to research rather than care.

Economists have long recognized that part of the increase in health care spending is due to improved quality. Yet of course they also acknowledge the innovation and inequality of outcomes go hand-in-hand. The improved outcomes of the rich aren’t available to the poor, and they’re frequently financially devestating to the middle class. Though improved health care quality eventually ‘trickles down,’ it’s hard to accept this present inequality when the promise of future health care improvements is going to be achieved by someone else. In short, future sick people are benefitting at the expense of present poor people.

So the question that economists can’t answer is: how much inequality is innovation worth? That’s a public policy question, but also a justice question. John Rawls asked it this way: what is the just savings rate? What do we owe our children and their children rather than our own least advantaged? The answer depends on how we expect populations to grow and how we rate the suffering due to unsupplied medical care, which is to say, how we rate premature and avoidable morbidity and mortality, and how we discount future benefits.

One last thing: innovation can happen at the level of distribution and institutional design as well as drug treatments and surgical techniques. For instance, many proponents of single-payer site the gains to be had by emphasizing preventative care. Since most poor people still get treated, albeit through emergency rooms where the treatment is most costly, improving our services to these groups seems likely to improve outcomes throughout the system, taking the strain off emergency rooms and treating conditions early, before they become acute and require major interventions. Similarly, disconnecting coverage from employment might suppy other goods, like allowing entrepreneurs to take more financial risks without also risking their families’ safety and health because they are uninsured. These are questions economists can answer, and we ought to be paying more attention to their responses in the public debate.
posted by anotherpanacea at 1:09 PM on July 19, 2009 [7 favorites]


Innovation can also occur due to government recognition and funding of priorities.

For example, one of the big costs is X. Solving this may not result in the creation of a highly profitable product. Thus, there may be next to no private research into the creation of a solution. If this is the case, the government should be investing in development of tools that reduce the cost of X. It might only save a few percent, but over the lifetime of a civilization, the investment pays off in multiples.
posted by five fresh fish at 1:28 PM on July 19, 2009 [2 favorites]


profit-seeking promotes innovation which leads to improved outcomes

Profit alone doesn't drive medical innovation; government funding through the NIH plays a key role. The NIH does research that isn't immediately profitable, buts lays the groundwork for future medical breakthroughs. Profit driven companies don't have the incentive to do this general research, even though its a crucial part of developing healthcare.

I also don't think there is a clear trade-off between inequality and innovation. Decreasing the role of profit driven drug companies might lead to more innovation. Developing generics or advertising Viagra doesn't contribute to improved health outcomes of future generations. Perhaps more govt. funded general research would lead to more innovation in the long run.
posted by Hume at 1:45 PM on July 19, 2009 [7 favorites]


Oh, yuck. Why would someone who ought to know what he's talking about use a drug in his opening example? Unlike a physician's time, or the use of an MRI, a near-zero-marginal-cost drug needn't be rationed. All "we" (producers and consumers of pharmaceuticals) need is successful price discrimination. Pfizer would love to sell Sutent for $5/pill, as long as doing so wouldn't cannibalize the $54,000 sales. Solving this problem wouldn't be easy, but it would be far easier than creating hundreds of millions of hours per year of physician time out of thin air, which seems to be what the loonier fringe of the nationalized healthcare movement thinks it can costlessly achieve.
posted by Kwantsar at 1:56 PM on July 19, 2009 [2 favorites]


profit-seeking promotes innovation which leads to improved outcomes

Only for people above a certain income bracket.
posted by lumpenprole at 1:57 PM on July 19, 2009


profit-seeking promotes innovation which leads to improved outcomes

Outmoded health care is a guaranteed profit, because innovation is also risk to their income because it tends towards curing or reducing the problem, possibly eliminating treatment altogether. Therefore, health care is a notable exception to the innovation rule based on profit seeking.

The best way to reduce treatment is early detection, which is increased monitoring.
posted by Brian B. at 1:58 PM on July 19, 2009 [3 favorites]


Hey, this is Peter Singer, people. We have to ration health care for people so our animal, vegetable, and mineral brothers can get their fair share. (FWIW, fuller agrees totally.)
posted by jfuller at 2:02 PM on July 19, 2009


advertising Viagra doesn't contribute to improved health outcomes

Ah... Viagra. People just love picking on old men who can't get it up. I can always hear the titter in a person's voice when they protest against the research outlays and advertising expenses that went into Viagra, because what they're really thinking is how emasculating it must be to have erectile dysfunction. If you need a pill to get it up, you can't be a real man, right?

As a matter of fact, Viagra does improve health outcomes. Frequent orgasms reduces the incidence of coronary heart disease by HALF. Coronary heart disease is the number one killer of Americans: more than AIDS or terrorism or swine flu or whatever it is you're scared of. Yet precisely because most Americans associate erectile dysfunction with emasculation and weakness, many will forgo treatment. The advertising campaigns are designed to break through those stereotypes and the culture of macho silence that pervades our parents' generation. In that sense, it's money well spent.
posted by anotherpanacea at 2:03 PM on July 19, 2009 [2 favorites]


Solving this problem wouldn't be easy, but it would be far easier than creating hundreds of millions of hours per year of physician time out of thin air

Actually this would be pretty easy. The AMA restricts the number of accredited medical schools to keep the supply of doctors low and the salaries of doctors high. All we would need to do is convince them to expand the number of medical schools, and we would have more doctors.

This would lower salaries, but US doctors are already paid much more in comparison to doctors from other countries. We could have more doctors doing more work at more reasonable salaries, all achieved by the relatively small cost of opening more medical schools.
posted by Hume at 2:11 PM on July 19, 2009 [4 favorites]


easier than creating hundreds of millions of hours per year of physician time out of thin air, which seems to be what the loonier fringe of the nationalized healthcare movement thinks it can costlessly achieve.

I think most single-payer advocates believe that we don't need more physician time, but more nurse and physician's assistant time. People like Singer might add that we need less specialist physicians, and more general practitioners.
posted by anotherpanacea at 2:12 PM on July 19, 2009 [1 favorite]


Spacelegoman I hate it when people make statements like that.
Apparently a lot of humans would rather have their egos stroked than their lives saved, which further complicates the argument.
posted by aeschenkarnos at 2:18 PM on July 19, 2009 [2 favorites]


I agree with what Adipocere said, when he decided to ignore criminal records he undermined the whole thrust of his argument about overall societal value. I understand that he doesn't want to sound ghoulish but it does seem like that sort of discussion is inevitably where this line of reasoning will go. (And now to sound ghoulish), suppose we all had our own 1 year of life $ amount, to be reviewed, say, biannually by a committee?

I don't oppose what Obama is trying to do with Health Care, but I also don't know how you sell it. The problem to me is that nobody I've ever met desires rational compromising solutions, they just tolerate them. (This thought has been rattling around in my head since the end of college and thru all the jobs I've bounced around in since then. People ask me what I want and I can't ever think of a rational answer). And the higher the stakes the more horrifying a realistic approach seems to me.

I mean, intuitively I much prefer the notion that we should leave people free to develop any crazy medical private program they want, and that American Ingenuity will somehow produce drugs that obliterate cancer which would paradoxically be available to everybody through a free market system. I've gone through the unpleasant process of subjecting that to my rational knowledge of the world and begrudgingly admitted to supporting some sort of more ethically run healthcare, but I don't like it. Reading something like that article still made my skin crawl though.
posted by SomeOneElse at 2:23 PM on July 19, 2009 [1 favorite]


Thought provoking, as always. Thanks for posting this.
posted by voltairemodern at 2:23 PM on July 19, 2009 [1 favorite]


The advertising campaigns are designed to break through those stereotypes and the culture of macho silence that pervades our parents' generation.

How many ads do American males have to see to break the stereotypes? 20? 100? 300? I've probably seen about 500 in my life. Viagra/Levitra/Cialis campaigns are designed to do more that just help us with our macho attitudes.

But you are right that there is no need to pick on Viagra. Advertising prescription drugs in general is odd. The point of a prescription is that doctors make the decision about issuing the drug. Not the patient. Spending millions on ad campaigns to get patients to bother their doctors about drugs the doctors already know about isn't efficient.
posted by Hume at 2:30 PM on July 19, 2009 [5 favorites]


I liked the argument, and am happy to say I live in a country where NICE and QALYs have a good grip on health care spending. In another recent thread I found that the author didn't really deal with the arguments surrounding rationing properly. Most of what I've read regarding health care reform in the US seems to be a back and forth of each side accusing the other of rationing, but neither making the case of why controlling what is spent on health in a rational manner is both necessary and good. Health costs per capita in the US are already very high, moreso when you factor out the millions who forgo substantial health care due to lack of insurance. No system in that condition can really be sustainable in the long term if taken up by the state, especially when the US does not claim to be a welfare state.

Controlling health care costs through something like QALYs allows the most expensive and least effective treatments to be weeded out of the system, but it needn't end there. Though many treatments may be acceptable within a QALY-driven framework where a life year has X value, there is always going to be a smaller subset of treatments which offer the very best cost to benefit for a given condition. This is a good because it establishes a best practice which all doctors can be expected to use, bringing down costs by preventing overtreatment. Doctors and patients can be trusted to make decisions, but with neither directly bearing the financial costs of treatment, the payer has the moral right to express their desire for rationality.

In Britain, everyone has health insurance.

Even though it's pretty irrelevant, I don't think that's an entirely accurate statement. It's more like a public education system, with universal access, not specific entitlement.
posted by Sova at 2:36 PM on July 19, 2009 [1 favorite]


Free Markets, Health Care, and Innovation
posted by homunculus at 2:43 PM on July 19, 2009 [3 favorites]


profit-seeking promotes innovation which leads to improved outcomes

It can, yes. This is of course canon of the free-marketeers that originated with Adam Smith (pbuh).

To argue that profit-seeking is necessary for innovation and the greatest efficiency is another kettle of fish, with contra-examples like law enforcement, WW2, the Manhattan Project, the Apollo Missions, and the eventual commercial success of the internet over the balkanized profit-seeking alternatives that are presently consigned to the dustbin of e-history.

I'm in the midst of watching PBS's Carrier series, wherein a floating city of 5,000 labor 16 hours a day to blow up brown people in areas within the F/A-18's operational radius.

I think of the capital investment that went into CVNs 68 ~ 77, the amount of labor all these navy people are doing, the duplication of effort among the USAF and Army, and compare this to the amount of unmet needs here at home, and become sliently sad.

We are largely a nation of morons, imbeciles, and idiots and deserve the misgovernance we get thereby.

We could be perfectly safe with a $200B/yr defense budget. This would trim about three-quarters of our capability and staffing but in turn open up funding five million jobs (each paying $100K/yr) dedicated to more productive ends, like health care and education.
posted by @troy at 2:43 PM on July 19, 2009 [11 favorites]


Add this fact to your repetoire: profit-seeking promotes innovation which leads to improved outcomes.

Hmm, but if the money saved from pharmaceutical spending was diverted to preventative or public health, then outcomes would improve even more substantially. The present and future economic and social benefits might outweigh those of a new drug in a decade's time. The %age of our economy needed to research new drugs now is higher than the same %age needed when the economy is no longer damaged by the effects of inadequate health care.
posted by Sova at 2:52 PM on July 19, 2009 [1 favorite]


Instead, it’s the result of people paying more to get more: specifically, more health, more quality adjusted life years, better outcomes and capacities than they could have hoped for before the expensive innovations. People today survive illnesses that would have killed the thirty years ago because of markets and profits, because someone in the eighties was priced out of the market which diverted its resources to research rather than care.

I must disagree. The intellectual property system provides an incentive for companies to push drugs that provide a barely marginal increase or no increase at all in health to solve problems that other drug companies have already designed a drug for. Thus the capitalist system creates incentives towards certain solutions because of their ability to provide profits to the providers of the solutions, not because those solutions are inherently better.
posted by Ironmouth at 3:13 PM on July 19, 2009 [3 favorites]


Why are people more afraid to fly in planes than drive in cars? The answer will determine the fate of health care reform.

On NOR and in today's Times are pieces today on why Americans should support National Health Care. (http://marketplace.publicradio.org/display/web/2009/07/15/pm_wealthytax/)(http://www.nytimes.com/2009/07/19/magazine/19healthcare-t.html?_r=1&em).

The battle ground has come to be over "rationing" of health care. Apparently those who supported the so-called "Hillarycare" of the Clinton era have been trying to prevent the notion of rationing from entering the national debate, as they believe it was largely responsible for the demise of the plan. Because detractors from the latest Health Care proposals have nevertheless made rationing a central component of dissent, proponents are trying to flip the debate and explain why "rationing" already takes place.

The argument is as follows: There are only so many doctors, nurses, hospital beds, and drugs. Therefore the sum total of these resources--called "health care" in shorthand--is a limited resource. As with all limited resources, the demand exceeds the supply, so health care is expensive. Because it is expensive, only those who can afford health care have access to it. Therefore, health care is "rationed" first to the rich and lastly to the poor.

Supporters of health care reform must believe that the time is right for legislation because more people feel "poor" than ever before. They believe they can turn hatred of rationing on its head. Capitalizing on populist outrage, the sentiment goes, will lead to the desired reform. "Hate rationing?" they ask. "Its already happening--and you're losing."

But here's a brief encapsulation of why Americans won't be persuaded by that argument: the free-market economy and government-controlled rationing cannot be compared.

The argument can be made that ALL goods and services are rationed according to wealth. Houses, cars, Margaritaville Frozen Concoction machines, and health care are all allocated largely according to a consumer's ability to pay for them. If the scales on health care reform are tipped, it will occur because people come to regard health care as more than a mere commodity to be bought and sold. The onus of change rests on that distinction, and the present economic debate merely distracts from it. Why? Because people naturally prefer the blind, market-driven "rationing" of economics to the politically-influenced, bureaucratic "rationing" that health care reform will offer. They want to believe their access to the resource is controlled by their own decisions, not by the whims of fate and the inefficiencies of government employees. This is precisely why people are less frightened by driving than by flying--even though their chances of dying are significantly higher in a car than on a plane. The feeling of control. A person is apt to believe he can steer his car or brace his body to avoid harm in a way he cannot when 20,000 feet above the earth. Human nature craves control.

In the same vein, then, people believe that a free-market-driven, economic model of health care means that those who have the best coverage have it because they have "earned" it. They have allocated their resources in such a manner as to prioritize health care and they therefore deserve to have it. Those who do not have coverage have somehow failed to earn it and therefore do not deserve it. Furthermore, the popular belief is that one who needs health care will get it, because access to a resource is dependent only upon effort to attain the goal, and effort to attain a goal is dependent upon perception of need.

Personal experiences with this model of course vary, and the balance could be tipped by those who have attempted to "earn" health care and failed in the effort. Obviously, those most desperately in need of coverage are precisely those who are least likely to attain it; no insurance manager worth his salt--however human his heart may be--would make coverage affordable to a terminally ill patient. Precisely for this reason, then, people may begin to regard health care as more than a commodity; business interest and human interest are fundamentally and irreconcilably in conflict over the matter, so humans don't want business to control access.

Ironically, one is reminded of the words spoken regarding Jefferson Davis when considering Barack Obama's uncanny ability to marry populist sentiment to agenda: "The man and the hour have met." The Democrats presently have the votes to push National Health Care through Congress and will likely do so.

Attempting to convince people that one form of rationing equals another is foolhardy, though, as so doing pits the natural instinct to fight and earn one's own survival against a cerebral notion that placing survival in the hands of another will reap the maximum benefit for the maximum number of people. The latter statement may be accurate, but the former is ingrained in the human heart, and no vote can override it.
posted by jefficator at 3:23 PM on July 19, 2009 [4 favorites]


The intellectual property system provides an incentive for companies to push drugs that provide a barely marginal increase or no increase at all in health to solve problems that other drug companies have already designed a drug for.

Yes, they push them. But why do we buy more expensive like-outcome substitutes?
posted by anotherpanacea at 3:55 PM on July 19, 2009 [1 favorite]


But why do we buy more expensive like-outcome substitutes?

In the scheme of things, as seen by the insurance companies, drug costs are marginal compared to major hospitalization events and ongoing care for chronic diseases.

The private insurers hand off seniors to Medicare/Medicaid, and that's where the major cost center is, $18T of Medicare's $70T in unfunded liabilities is the drug costs embedded in Medicare Part D. Dunno how much of these are generics, prolly a lot already.
posted by @troy at 4:26 PM on July 19, 2009


Yes, profit-seeking has potential to spur innovation, but what about all the rent-seeking that actually goes on in medicine? That doesn't exactly benefit all of us.
posted by borges at 4:32 PM on July 19, 2009


profit-seeking promotes innovation which leads to improved outcomes

Unless those that need improved outcomes are poor. Then, fuck'em.
posted by YoBananaBoy at 4:45 PM on July 19, 2009


anotherpanacea: Thus, the increased costs and profits associated with the US health care system are not the results of rent-seeking or lack of regulatory oversight, they’re not the result of health care professionals repeatedly mugging us with “Your money or your life” price gouging. Instead, it’s the result of people paying more to get more: specifically, more health, more quality adjusted life years, better outcomes and capacities than they could have hoped for before the expensive innovations.

This isn't precisely correct, in the sense that it's not "Your money or your life!" Rather, it's "Your insurance company's money or your life!", and nearly anyone will opt for spending insurance company money. This won't change if it's the government issuing the insurance.

What we are doing here is collectively being fuzzy-thought into doing something that's orthogonal to the problem. At first blush, it looks like the problem is that we're spending too much on healthcare, and we're not getting good enough outcomes. But when you look closer, even though he percentage is high and we're not getting outcomes as good as we should, it's not a complete disaster. The TRUE problem is that the cost of healthcare is increasing so quickly. It's going up something like 6-8% year. That is the real problem, inflation in health care. And that's the thing we need to fix before it eats us.

So, a significant fraction of the population wants socialized healthcare, and they're using these problems as leverage to sell their solution, government-backed insurance. They claim that because government-run programs are more efficient, we'll save a ton of money, and the healthcare fairy will descend and everything will be good.

Now, we might save some significant money over the short term, if we're willing to take the (very large!) economic cost of destroying the existing healthcare system and nationalizing it. With the high profits of health insurance companies, saving 30% on our total bill is entirely possible. But it's also completely irrelevant to the real problem, which is the GROWTH in health care costs, not the total amount we're spending today.

If government is indeed 30% more efficient over the short term than private insurance, all that buys you is five years at 6% growth. That means by the time the program even STABILIZES, all the savings will already be gone!

Calls for socializing the system are, largely, engaging in fuzzy, wishful thinking on a massive scale, substituting "how things ought to be" for real analysis. 'Government costs less' is not a good argument over the long term, because the profits aren't the really dire problem. The socialized-medcine arguments are a distraction, opportunists using a problem to sell their non-solution.

We have three real, and SEPARATE problems, all of which need solving:

A) A lot of uninsured people;
B) Incredible growth rate in health care costs;
C) A government that is insolvent, running on a timed fuse before it blows up from poor fiscal policy.

At the present time, given the state of the economy and the Federal government's books, the idea of socialized care is a fucking disaster. It solves A, sure, but it doesn't even vaguely address B, and it makes C far worse, both up front and over time, because we still haven't done anything about B. And, if anything, it'll make B far worse, because we're increasing the demand for healthcare by a VERY large amount, without increasing the supply.

And the next likely step, what will seem logical, is trying to control B by imposing price controls. Price controls usually lead to lack of availabllity, over the long term. If it's not profitable to provide a service, people won't provide it. And then the next step is compelling providers to sell services that they lose money on, which weakens them, and makes them unable to invest in new services.

I'm not saying that our existing system is good. It isn't. It sucks horribly, and it's substantially worse than the socialized care available in other countries. But we just can't do it here, because there is no budget to do it. The government is already a trillion dollars in the hole this year alone. We're a tottering financial wreck. There is no wealth for this program; we would have to confiscate it all from the economy, and just now, that's not the brightest idea we've ever had.

Before we can even vaguely think about this kind of program, we first must balance the books, which will take at least a decade, and probably two. And we have to balance them FOR REAL, not with the bullshit cash-basis accounting Congress is so enamored with. Once we're at a truly even keel in terms of government spending, only then can we even see what the economy can actually afford. Right now, all our signals are fucked up from the huge interventions with money we don't have, and spending we can't afford. Only when we're back on an even keel can we even vaguely begin to determine the real availability of wealth for healthcare.

In the interim, we need to analyze and fix why costs are going up so much. That's the emergency, and I'm suspicious it's related to the financial system's invention of supersize-fake dollars. All that ersatz liquidity floating around is attractive, and doctors are one of the few groups with real pricing power in this country, since they're hard to replace with offshore workers.

I realize this is a near-and-dear thing to many of you, that you really desperately want to be able to care for everyone. But Congress has fucked us raw, and we just do not have the resources available. If we go ahead with it, it'll hasten our financial suicide. It's already inevitable if we don't get VERY serious about saving money on the Federal level, and and a program of this size and expense will make it enormously worse.

If Congress hadn't been such a bunch of fucking wastrels, we maybe could afford it, but we're north of sixty trillion in debt by GAAP standards, instead of the crap cash-basis accounting Congress uses. At sixty trillion in the hole, there are NO resources for government-paid healthcare. Nothing.

As a poster I respect said recently:

Regardless of how effective government-run health care might be, it's not for our society. It's for societies that pay for things.
posted by Malor at 4:59 PM on July 19, 2009 [3 favorites]


Please lets have something in the USA that eliminates the need for putting up change jars in convenience stores to help offset medical costs for whomever's picture is put on the front of it.

this is an embarassment for us, as a country, on the international stage.

Either we decide that healthcare is a fundamental human right that enables us to pursue happiness however that may be conceived by the individual, or we swallow the full-on market model.


But if we're going down the market model, then dammit I want to see some things

- a menu board at the hospital/clinic/er with prices for services. If I'm supposed to be a "consumer" rather than a person, then show me what your prices are and let me shop around. If you're a medical provider that doesn't do this, then fuck you or get on board for some form of socialized medicine. Price me, bitch.

- free market for prescriptions. Prices posted, let me buy wherever I want, fuck you for limiting my importation or "drug tourism" activities. Prescription drugs are one exception to NAFTA that hasn't been addressed

- media coverage of deaths due to denial of service -- I want to see in the local paper coverage of stories about people who died, due to their lack of insurance, or being underinsured and denied, whatever. what ever happened to the multiple individuals who had change jars at the convenience stores?

- there has to be a point at which a rational person can decide, under our model of health care as a consumer commodity, to end their life. There must be a way of saying no to treatment, with cost as the factor. "I don't want to continue to live, if I'm going to be perpetually burdened with these costs. Let me die now rather than face the bills." If it is a rational market, and we are rational "consumers" then denial of services by the "consumer" becomes a strictly rational choice.
posted by yesster at 5:00 PM on July 19, 2009 [8 favorites]


At sixty trillion in the hole, there are NO resources for government-paid healthcare.

If we really have no money left, then how about we divert some of the $600+ billion we spend on defense towards healthcare?
posted by Pyry at 5:10 PM on July 19, 2009 [1 favorite]


Oh yeah - one more thing

If we really want to treat health care as a consumer commodity, market driven, then:

We have to allow various levels of service, etc. the current rules regarding privacy rights, whatever, that mean that if i'm in the hospital, I can only have a private room, and so forth --- this has to give.

If it is a market then dammit I have to be able to have the same kind of experience that my cat gets when I take her to the vet (and I am absolutely not complaining about the vet care quality). Let me stay in a crowded multi-bed ward. Don't give me my only option as the most expensive option.

my whole point here is that, if you truly believe in the market, then let the market actually work in health care. Otherwise, bring on the socialized medicine.
posted by yesster at 5:12 PM on July 19, 2009 [2 favorites]


Calls for socializing the system are, largely, engaging in fuzzy, wishful thinking on a massive scale, substituting "how things ought to be" for real analysis.

and/or comparison to the actual, on-the-ground experiences and outcomes of Canada, France, Germany, Japan, and the Nordic socialist paradises (boo! hisss!).

But we just can't do it here, because there is no budget to do it. The government is already a trillion dollars in the hole this year alone. We're a tottering financial wreck. There is no wealth for this program; we would have to confiscate it all from the economy, and just now, that's not the brightest idea we've ever had.

We've got the wealth. We've just got to spread it around more. While the mooted direct surtax on rich bastards came out of left field to me, it's a start.

Taxes are simply too low in this country. Every dollar of rent . . . ah fuck it, you know what I'm going to say on that.
posted by @troy at 5:13 PM on July 19, 2009 [1 favorite]


That money needs to be diverted to repaying the debt on the wars we've already fought, not new programs.
posted by Malor at 5:13 PM on July 19, 2009


If we do raise taxes, troy, all the revenue needs to go to repay debt. Per the CBO, a few years ago, the overall tax income for the government needs to double just to pay for our existing liabilities.

There is NO money for this. None. We've already spent it all, and a ton more, and a ton more still. We need to wake up and start PAYING ATTENTION, or we're going to cease being a going fiscal concern.
posted by Malor at 5:19 PM on July 19, 2009


There is NO money for this

hmm, I guess you didn't know what I was going to say . . .

ATCOR!
posted by @troy at 5:23 PM on July 19, 2009


I find that this article substitutes sensationalism and anecdote for any serious economic or medical discussion. Huh.
posted by dsword at 5:26 PM on July 19, 2009


By the way, troy, that's exactly the kind of muddled, fuzzy thinking I'm talking about. You assert, "Sure, there's PLENTY of money, just soak the rich!"

And I'd be willing to bet that you haven't actually gone and analyzed the numbers. I bet you're just pulling that out of your ass.

Wishful, muzzy thinking. It's destroying us very rapidly.
posted by Malor at 5:40 PM on July 19, 2009


And I'd be willing to bet that you haven't actually gone and analyzed the numbers. I bet you're just pulling that out of your ass.

I discovered Georgism in late 2002. I have yet to see any arguments that refute the basic idea that land rents are taxable surplus and should be taxed first.

Now, you are correct that I haven't "run the numbers". Doing so is beyond my skills and education, but I believe land rent is 16-20% of GDP. As a good Georgist/geo-left-libertarian I would rather we tax that first -- before "soaking the rich" -- but taxing incomes over $250K is something of a simulacrum of taxing rents, since very little in actual wages are paid at that level.
posted by @troy at 5:51 PM on July 19, 2009 [3 favorites]


Wishful, muzzy thinking. It's destroying us very rapidly.

Malor:

If the majority of one side is guilty of "muzzy" thinking, then certainly the majority of the other side is guilty of seeing "the cost of everything, and the value of nothing". Priorities have to be made first, and then the cost determined.

I, personally, believe that health care for our population is bad now, getting worse, and untenable in the long run. So, in my opinion, I believe the prudent course is to make sure that sensible health care for everybody needs to be a priority. Regardless, it's obvious that there a HUGE opportunities for cost savings to be had in a reconfigured health care delivery system. It's not all costs; it's the morally, ethically and (quite possibly) economically right thing to do.

As for rationing, isn't a great deal of the problem now a result of rationing? Many, many people cannot participate in a system that now rations medical care by the ability of people to pay. Allowing that to continue will solve nothing, other than making insurance companies and insurance company shareholders happy.
posted by Benny Andajetz at 6:17 PM on July 19, 2009 [2 favorites]


I find that this article substitutes sensationalism and anecdote for any serious economic or medical discussion. Huh.

Yes, I certainly responded this way. I just am very frustrated at vacillating between uninsured and underinsured.
posted by YoBananaBoy at 6:36 PM on July 19, 2009


I realize this is a near-and-dear thing to many of you, that you really desperately want to be able to care for everyone. But Congress has fucked us raw, and we just do not have the resources available. If we go ahead with it, it'll hasten our financial suicide.

Wrong argument for me. I really want the government to have incentive to give free abortions on demand and get deeply involved in taxing junk foods and pollution. If we used public health care as the reason to cap costs by law, we have less problems here, and solutions too. What are they going to do, not sell us patented stents at 3000% profit instead of 9000%? I don't even see a practical way to cap costs without agreeing to pay most of it all first.
posted by Brian B. at 7:17 PM on July 19, 2009


Look. People. To pay just the programs we already have, tax receipts have to DOUBLE. DOUBLE.

If we double taxes, the economy will collapse.
posted by Malor at 7:46 PM on July 19, 2009 [1 favorite]


In other words, let me be even clearer.

Any possible tax increase you mention is already spoken for and already spent.

It doesn't matter what magic wand you wave. It doesn't matter where you think you'll get the money. Any amount of money you extract from the economy is already gone, necessary to pay for EXISTING liabilities. And lots more besides.
posted by Malor at 7:52 PM on July 19, 2009 [1 favorite]


Malor writes "Before we can even vaguely think about this kind of program, we first must balance the books, which will take at least a decade, and probably two."

Bullshit. Providing some sort of base-line public health-care option for uninsured Americans, something that they'd have to pay for but at a decent price, would have cost less than the clusterfuck that is the ongoing Iraq occupation. Indeed, in the long run it will actually save us money since people won't be getting diabetes at the age of 13 since they actually visit a doctor once a year.

I'm not saying that the financial house isn't in trouble, but there are plenty of things that could be cut (hint: 120,000 troops in Iraq) that would more than make up for a reasonable, rational public health-care system.

I don't think you're concern trolling, but this line of argument is flawed. Sure, let's get our act together as a country by getting our priorities straight. Maintaining a military based on Cold War assumptions should be the first thing we straighten out.
posted by bardic at 8:52 PM on July 19, 2009 [2 favorites]


Oops:

Per the CBO, a few years ago,

I meant the GAO. Sorry.
posted by Malor at 8:53 PM on July 19, 2009


Not to derail the conversation, really, but I must call bullshit on anotherpanacea's post about Viagra. I'm all for old dudes having orgasms, more power to them, but that research you cite is the picture-perfect example of correlation without any evidence of causation--which the authors themselves acknowlege, I might add.

There is nothing in that paper remotely resembling evidence that men with erectile dysfunction who are treated with Viagra or similar, thus increasing the likelihood of orgasm, will find an increase in longevity. Certainly Viagra is not prescribed as a longevity agent. It's proscribed so men who can't otherwise get it up can have sex. Which, as I've said, is great. But.

Insurance coverage of Viagra is frequently invoked in contrast to limitations on coverage of birth control. There is no question whatsoever that pregnancy, childbirth, and the manifestation of additional new people on the planet have massive consequences with respect to human health, impacts on society, and particularly relevant to this discussion, cost of health care.

The ability of old dudes to get it up? Not nearly so much. Really.

I hasten to add that Viagra has been in use since, what, the early 90s? Enough time that if there were subtantial off-target, health-inducing effects, you can be sure that (a) someone would have noticed by now, and (b) the manufacturer would be marketing it for that purpose as well.

The fact that someone needs to explain these things to you doesn't bode well for the strength of the rest of your arguments. Just sayin'.
posted by Sublimity at 8:54 PM on July 19, 2009 [2 favorites]


If we double taxes, the economy rents and land values will collapse.

FTFY.

Any amount of money you extract from the economy is already gone

The economy is not a zero-sum game, wealth is generally accretive. We simply need to make more people more net productive (and thus less destructive in many cases) and living within our means.

This need not be poverty, far from it. There's a lot of economic roles -- educators, medical professionals, computer programmers, technology research -- that are high value-add without being particularly capital-intensive.

That you think that wealth is "extracted" from an economy is a significant part of our disagreement. Wealth can be invested in shitty capital ideas, the products of labor can be suboptimal, but this is an immensely wealthy nation with the potential of raising our per-capita GDP an order of magnitude this century.

The economic problem facing medicine is that its delivery is riven with rent-seekers. I went to the E/R late last year, sat around for two hours, had a blood test, saw the medical guy, got a chest x-ray, and the bill to my insurance was $6,000. Talk about wealth extraction!
posted by @troy at 9:05 PM on July 19, 2009


Bullshit. Providing some sort of base-line public health-care option for uninsured Americans, something that they'd have to pay for but at a decent price, would have cost less than the clusterfuck that is the ongoing Iraq occupation.

Look. Dude. We have to stop fighting the wars and then not spend anything to replace it. We can't afford the wars EITHER. They were stupid, top to bottom, and a giant waste of money, but they will be nothing compared to an ongoing health-care system.

The GAO figured the Medicare drug benefit as being a net-present-debt of about twenty-five TRILLION dollars. In other words, we need to have about twenty-five trillion in the bank, right now, earning interest, to be certain we can pay for that program. It'll cost somewhere north of thirty times what our twin wars have. As the Boomers age, we'll end up having an Iraq war each and every year, purely to buy drugs for their ailing bodies.

We need to be on a crash austerity program, and we needed to be on it ten years ago, but instead we used the Social Security money to pretend that the books were balanced. We consumed and destroyed those assets, so we will have to pay Boomer retirements out of cash on hand, to the tune of another twenty trillion or so in net-present-debt. We don't have any cash, and won't have any for the foreseeable future. That's why we're borrowing a trillion dollars this year. We don't have any money!

Which would you rather screw over, the uninsured, or old people? There isn't enough to cover both and still maintain the other functions of government, even if we cut our defense spending to zero. We need to cut the Federal budget in half, or double taxes, or some combination of the two, if America is to be long-term viable.

Talking about giant new permanent spending programs before we've fixed the budget is fucking irresponsible. We need to be cutting like crazy and saving every goddamn DIME that comes into the government just to pay for what we've already promised, not start making extravagant new ones with no conceivable way of ever paying for them.

Again, it doesn't matter how much cutting of expenses you do, or how many taxes you raise, until you get to TWICE the current Federal receipts, cut the budget in HALF, or some combination of the two. At that point, any FURTHER cuts or tax increase you make could potentially fund this program.

Every dollar before that point is already committed. Every single one.

The other major alternative is war. If we don't get out of this fiscal death spiral in short order, wars of aggression are going to look better and better to politicians with no money, intensely, intensely angry citizens, and a gigantic Army.
posted by Malor at 9:24 PM on July 19, 2009


Troy, even if you DOUBLE taxes, and take the enormous, enormous economic damage that would do to us, it STILL won't pay for health care.
posted by Malor at 9:25 PM on July 19, 2009


even if you DOUBLE taxes, and take the enormous, enormous economic damage that would do to us, it STILL won't pay for health care

As I've said, I think you're wrong, two ways here.

First, raising taxes does not "damage" the economy. Talk about fuzzy wuzzy thinking. Like I've tried to explain three times now, taxes can and do come out of rents in the end.

If we doubled income taxes, over time rents would fall dollar-for-dollar to compensate, since nearly everyone pays more in rents than in taxes, and rents respond directly to AFTER-TAX income. We can go all night on this point if you want.

Second, a lot of health care is dirt-cheap to provide (ie not particularly capital intensive or burning expensive consumables). Medical advice, nursing home assistance, surgery (snip! snip! snip!), pharmaceuticals (COGS is lost in the noise on the income statements of Big Pharma).

Granted, the status quo (and its future promises) is unsustainable. Hence Obama's policy drive to put the nation on a more sustainable path.

We need to figure out ways to reduce the built-in profits in healthcare -- and let's not kid ourselves, they are immense -- and also perhaps moderate our demand for treatments for preventable diseases (ie perhaps a fat tax), and the social costs of inner-city violence. You know, as they say, an ounce of prevention is worth a pound of cure.
posted by @troy at 10:06 PM on July 19, 2009 [1 favorite]


Malor, while I agree that we need to stop the fuzzy and non-numerical thinking, the only situation worse than no numbers is nebulous or wrong numbers. Can you link to some more detail for what you're saying? Moreover, government revenues are just as dependent on the health of the economy as they are on the particular tax rates. Does this supposed "doubling" require both an economic recovery and raising income taxes to 70% in the top bracket? (Historically the US has taxed at 70% in the highest bracket, without destroying our economy.)

Regarding the health care bill currently in congress, the latest CBO estimates [pdf] are quite positive for the next five years. In the subsequent five years, 2015-2019, the projections are not quite as rosy with a (239-44)/5 = $60 billion a year increase in deficit, but even this is quite manageable. Further, the point estimates of such long term numbers are going to have huge variances; it's hard to know if it's be a $60 billion surplus or a $120 billion deficit per year.
posted by Llama-Lime at 10:30 PM on July 19, 2009 [1 favorite]


Um... anyone here think that the health care they get through their insurer isn't ALREADY rationed?!
posted by markkraft at 10:54 PM on July 19, 2009 [1 favorite]


First, raising taxes does not "damage" the economy.

Dude, are you high? Say you make $75,000 year, and you take home $40K of it. As your share of the doubling-of-taxes, you now only take home $20K/year.

What the fuck do you think is going to happen to you? And your house? And the things you want to buy? You'll go from fairly comfortable to scraping for pennies overnight, and you'll probably have a lot of your stuff repossessed, if you live on credit. You will permanently have a great deal less to spend, and a great deal less to invest. The people that depended on your spending will go poof. The people who depended on THEIR spending will go poof. And then maybe your business depended on THOSE businesses to survive, and it goes poof, and now you're unemployed and not paying taxes AT ALL.

Up to a certain point, you can argue that taxes add value to an economy, because they allow for the shared building of infrastructure, things that make all of us more efficient. But once you're taxing for consumption items, like healthcare or war-fighting, instead of investment items, like roads and schools and factories, you're destroying total wealth.

Now, I'm sure you're instantly going to go to 'but healthcare is an investment!', but that doesn't appear to be true. Keeping people alive keeps them paying taxes longer, but it also keeps them ALIVE longer, and someone alive at 80 is far, far more expensive to the system than someone at 50 or 60. It can be argued that, in many ways, preventative care actually INCREASES costs, because if lifespans go up, so do the exorbitant expenses in keeping old people alive. For every 13-year-old you catch with diabetes and improve total health spending over their lifespan, there will be a dozen or more that will have their lifespans extended at great cost and without contributing enough to pay for their extra years.

Yes, this is cold. No, it's not very nice. It's also true, and while we can wish it wasn't, it's most sensible from a fiscal perspective to charge people for healthcare equally, and then hope like hell that a lot of them die young so that they don't drain the system as much.

Healthcare is not investment -- it's consumption. With our infrastructure and diet, almost everyone will live to 50 with minimal healthcare, which covers the majority of their taxable income. They may die messily and expenively in their 50s, but they're going to die messily and expensively in their 80s anyway, and we won't have to pay their expenses for the intervening thirty years.

If we doubled income taxes, over time rents would fall dollar-for-dollar to compensate, since nearly everyone pays more in rents than in taxes, and rents respond directly to AFTER-TAX income. We can go all night on this point if you want.

"Over time" doesn't matter if you destroy the economy now. Doubling taxes will leave a smoking crater in the exact shape of the American border, long before any rents 'respond'.

When you tax, you take money away from people that can use it to be productive. Government, most of the time, is not productive. It's usually consumptive. So whatever basis real wealth flows from, if you take twice as much out of the economy, that means the economy has half as much wealth, and it will either grow a lot slower, contract, or outright collapse if there's no longer enough wealth to cover the basic consumption items that are required to stay alive.

There is only so much real wealth, and playing mental games about where it comes from doesn't change the fact that you damage the economy by taking too much out. If shoes last for one year, we have a hundred people in our economy, our cobbler makes 125 pairs of shoes, and the government takes 25 as taxes, there's enough shoes for everyone. If it takes 50, there aren't, and some people will go shoeless. And you can point at rents all you want, but it won't change the fact that those shoes are gone. What the government takes away, you don't have anymore.

Further, do you have any idea just how many people you would instantly bankrupt and turn into homeless vagabonds if you destroyed their property value that way? You would have a civil war on your hands overnight.

Wealth doesn't just magically come from nowhere, and taxing land instead of income won't change that. We make X number of total things every year, and whatever rationalization you use to take a bunch of it, if you take twice as much, and spend it on unproductive things, you're gonna do a lot of damage.

Your whole idea of charging everyone rent to occupy land is noxious in the extreme. The government owns everything, and we're all just serfs. Fuck that idea up the ass. We got away from having a peasantry for a reason.
posted by Malor at 11:04 PM on July 19, 2009


Llama, I'll try to scare up that GAO report from a few years ago tomorrow. I'm getting pretty sleepy tonight. It talks at great length about the dire financial condition we're in.
posted by Malor at 11:06 PM on July 19, 2009


Before we can even vaguely think about this kind of program, we first must balance the books, which will take at least a decade, and probably two

Health care is a major and immediate issue for the whole country. If we wait 20 years, we will be digging ourselves in further and it could become a serious impediment to economic recovery. Yes, the budget needs repair, but we're also in crisis mode for the economy, so there is a lot more flexibility in taking steps now to pay us back down the road. Health care is one of those steps. It's a big one, but we're the outlier here, as the rest of the countries in the world with similar economies already have socialized medicine. We already throw a huge amount of cash down a hole to get the health care we have. It's not about spending more. It's about sharing the burden so that we can manage costs and provide a baseline of care for everyone. Not doing anything for 20 years will cost a lot more and do much more damage.
posted by krinklyfig at 11:48 PM on July 19, 2009


There is only so much real wealth, and playing mental games about where it comes from doesn't change the fact that you damage the economy by taking too much out.

That's right. That's what's happening right now with the cost of health care in the US. It's being priced so high that it's becoming a drain on the economy, not only in the immediate effect of costing more, but also because the result is less people have coverage and all of the problems associated with that. We could take the same amount of money and get the insurance companies out of the game, and probably we'd get something we could use. It's not taking money out of the system. It's taking the leaches out of the system.
posted by krinklyfig at 11:54 PM on July 19, 2009 [2 favorites]


Say you make $75,000 year, and you take home $40K of it. As your share of the doubling-of-taxes, you now only take home $20K/year.

See, it's not just me in isolation, it's everyone, and since it's everyone, land values and rents would have to adjust downwards, since we'll all have that much less money to bid them up. I would expect my $1750/mo apartment would rent for $500 or so. Houses would be back to 1970s nominal values. Ie. housing would adjust down to 1/3rd of household takehome pay. I fail to see what's controversial about this.

Instituted overnight, this would of course blow up the economy since most everyone has committed to borrowing immense amounts of money to buy their land use privileges. But we don't have to change horses overnight. So when I say bring it [higher taxes] on, I don't mean overnight, but over say two decades.

But once you're taxing for consumption items, like healthcare or war-fighting, instead of investment items, like roads and schools and factories, you're destroying total wealth.

LOL. The richest man in the world isn't very well off if he's fucking dying of pancreatic cancer, like say Steve Jobs or Kim Ill What's-His-Face. To be well is to be wealthy, if one takes wealth to be physical goods (and human skills) that provide services that satisfy human needs and wants.

If the economy isn't providing affordable goods and services to make and keep everyone productive members of society, then Mr Government is going to have to step in and give Mr Market a helping hand. That's partially why we instituted government, that whole General Welfare thing.

I share with you your technical definition of wealth and capital, but I consider health services, lifelong education, and local transportation to be Primary Missions of government, along with police and disaster response. Not to necessarily provide them for free to all who demand them, but to ensure access without regard to ability to pay. We're creating sufficient wealth at the moment to be able to afford subsidizing these services, provided they're delivered intelligently (something that we're not doing so well with at the moment, granted).

but it also keeps them ALIVE longer, and someone alive at 80 is far, far more expensive to the system than someone at 50 or 60. It can be argued that, in many ways, preventative care actually INCREASES costs, because if lifespans go up, so do the exorbitant expenses in keeping old people alive

First off, a healthy worker bee is a happy worker bee, and a happy worker bee is a more productive worker bee. Also, I question how much wealth is really consumed in keeping old people alive past their sell-by date. Food is cheap. Space is free. Labor is not, but one man's labor cost is another's paycheck.

Government, most of the time, is not productive. It's usually consumptive.

You're over-reaching here. Sure, a huge chunk of the defense budget is sunk cost in useless junk and the skills and labor to operate it. However, much of what government does is in fact accretive to earnings, as it were.

So whatever basis real wealth flows from, if you take twice as much out of the economy, that means the economy has half as much wealth, and it will either grow a lot slower, contract, or outright collapse if there's no longer enough wealth to cover the basic consumption items that are required to stay alive.

Government is not the only sap on the actual wealth creators in this society. They're in competition with rentiers. And losing, badly.

And, again, government isn't really taking all that wealth "out" of the economy. It commits to projects like CVN-78 and the F-22 program that are of questionable ROI, sure.

But we are immensely productive and inventive and I don't see us collapsing to a subsistence economy this century. Quite the opposite in fact.

To repeat, it's my argument that Taxes + Rents is a sum that's essentially fixed. In your world, you see Bad Government sucking wealth off us productive types, but I see rentiers of all stripes operating on at least that scale.

Outside the "nationalization" bugbear, the economic argument for Government mandating completely private insurance for all wage earners is compelling when one understands that . . . Taxes + Rents is a sum that's essentially fixed.

Wealth doesn't just magically come from nowhere, and taxing land instead of income won't change that.

Indeed. Land value comes largely from good government. Every dollar that local government spends wisely -- on infrastructure like roads, libraries, schools, public spaces -- ends up in local land values.

Your whole idea of charging everyone rent to occupy land is noxious in the extreme. The government owns everything, and we're all just serfs. Fuck that idea up the ass. We got away from having a peasantry for a reason.

And yet many of us (about a third) are still slaves to landlords, or heavily indebted to eventually purchase our freedom from that bondage of our youth. I won't get into the philosophical underpinnings of the LVT, but I find them quite common sensical and elegant in their simple assertions of self-liberty and the rights that pertain thereto. The geolibertarians are the people who articulate that best.
posted by @troy at 12:31 AM on July 20, 2009


Which would you rather screw over, the uninsured, or old people?

Old people.
posted by Justinian at 1:09 AM on July 20, 2009 [1 favorite]


Far more Americans reported forgoing health care because of cost. More than half (54 percent) reported not filling a prescription, not visiting a doctor when sick or not getting recommended care.

There is no reason anybody in a reasonably developed country should ever have to do this.
posted by twirlypen at 3:51 AM on July 20, 2009 [2 favorites]


The TRUE problem is that the cost of healthcare is increasing so quickly. It's going up something like 6-8% year. That is the real problem, inflation in health care. And that's the thing we need to fix before it eats us.

Whenever someone says that something is TRUE, I worry. How do you know? Where is your data? In this case, you're operating under a misconception: increased health care spending is not inflation. Inflation indicates that we're spending more money to get the same good as last year, as when a gallon of milk increases in price. It's not inflation when a new, different, and better good or service is more costly than the previous good or service. And in health care, as in computers, this is happening all the time. Quality of health care goes up and life expectancies go up. We spend more to get more, and if I can't afford the newest, best Intel CPU, it's not exactly injustice, especially because the old chips are available even more cheaply. The innovation cycle isn't quite so steep with health care, but the same issues apply.

Our rich and upper middle class are receiving the best care in the world, though on average we're well behind the rest of the industrial countries because they don't sacrifice equality for innovation. Instead, they wait for prices to fall and implement cost effective treatments population-wide. This seems more just, but only if you believe that the only people who matter are living today, and that we have no obligations to our children and grandchildren. If you accept that there are intergenerational duties, then their strategies actually look quite selfish. Think of the Ant and the Grasshopper.

Despite their selfishness and lack of foresight, in a decade or two the rest of the industrialized world will be delivering the same care to their lower and middle classes as our rich receive today. This occurs naturally as treatments go off patent and become cost-effective population-wide. In that sense, the entire industrial world is free-riding on our R&D sacrifices.

Obviously, I don't really think that's selfish: they can't afford to make the sacrifices, and we can, so it's more like a burden or a duty for us than it is a failing for them. Which is just another way of saying that I think it's important to expand our notion of justice to include intergenerational and world-systemic considerations. If you talk to Peter Singer about this, he'll quickly agree: in fact, he did exactly that on a related topic when discussing the problem with Tyler Cowen on BloggingHeads a few months ago.
posted by anotherpanacea at 5:27 AM on July 20, 2009


Your whole idea of charging everyone rent to occupy land is noxious in the extreme. The government owns everything, and we're all just serfs. Fuck that idea up the ass. We got away from having a peasantry for a reason.

As a rule, I like any comparison to the feudal past, because that's the whole point to democracy (to permanently avoid a private government). But where I see a reversal of fortune, you see it as being the same. I see it where the landowners are being assessed by the people, rather than the other way around. This is a reordering of what and who is encouraged to become more productive.
posted by Brian B. at 6:40 AM on July 20, 2009 [1 favorite]


Malor, I'm puzzled by your argument (though I will stipulate that economics frightens and confuses me). Isn't it true that the US National debt is nowhere near record levels relative to GDP? Weren't US tax rates from 1945 to 1980 far, far higher than anything anybody is proposing in the current political debate?

On the one hand we have your grim prognostications about the US economy becoming a "smoking crater" if taxes get raised when we're facing this amount of debt. On the other hand we have, well, history. Why wasn't the US economy a "smoking crater" through the, generally prosperous, '50s and '60s?
posted by yoink at 7:31 AM on July 20, 2009 [1 favorite]


Just some basics before I launch on a full-scale rant:

Raising taxes doesn't take money out of the economy. Because the government then spends it, keeping it in circulation and returning it back to the economy. So your panic-arguments that way are nonsense. (And what does "consumptive rather than productive" even mean when applied to the organisation that builds and maintains the nation's infrastructure?)

Also in Britain, we have the NHS. We spend less per head on healthcare in taxes than you guys do. And get comparable outcomes. (That's ignoring the money you piss down the sink on private provision of healthcare and the massive levels of bureaucracy and red tape that running this entire system takes).

And the profit motive isn't the only motive for research. Constraints do that too. The NHS does its fair share of medical research. And most fundamental research done in the US is done by the NIH - i.e. publically funded.
posted by Francis at 8:31 AM on July 20, 2009 [1 favorite]


The NHS does its fair share of medical research.

And most fundamental research done in the US is done by the NIH - i.e. publically funded.

Bullshit.

First, about 51% of all health care R&D is privately funded, 41% is publically funded, and 8% is funded by non-profits. Second, the NHS has 7% of the NIH's budget, but 20% of our population, so no, it's not doing its 'fair share.'

NHS research 2008 budget: £1.2 billion a year (@ US $2 billion)
NIH research 2008 budget: $30.5 billion a year
Global private research expenditures IN 2005: @$72 billion a year
US private research expenditures IN 2005: $35 billion a year

Public numbers are more readily available than private numbers, but even comparing 2005 to 2008, with all the increased costs of those three years, and before the recession hit, the private sector is still obviously spending much more money than the public sector.

As many have pointed out, the NIH does great work funding basic research, but they're not so good on turning that basic research into usable health care solutions. For that, we have to turn to the private sector. If we lose the profit motive, half of all medical R&D will disappear, and it'll be the practical half, at that.
posted by anotherpanacea at 9:01 AM on July 20, 2009


anotherpanacea, you're refuting a different point. The vast majority of "fundamental research," i.e. stuff that gets published and is publicly available and can be used to further other research goals and engineering applications, is done through public funds. Some amount of private funds do go to fundamental research, but this is almost always kept secret, as is evidenced by the small fraction of papers that come from industry.

And your list of public research is not complete. Though it tries desperately to not spend on health-related grants when the better funded NIH could, the NSF ends up funding a lot of the basic biotechnology that's required for any of that expensive tail-end monetized research in the private sector.

Further, sheer dollar numbers are deceptive for quantity of research. In private research, time against the patent clock is extremely valuable, so a ton of money is spent duplicating $300,000 pieces of equipment in many different labs just so nobody ever has to wait for anything. Then again, grad students are cheap labor but obviously not fully trained, so it can be tough to say if a dollar spent in academia produces more research than a dollar spent in industry.
posted by Llama-Lime at 9:30 AM on July 20, 2009 [1 favorite]


Don't forget that grad students only submit to the grueling hours and shitty pay because they're hoping to become the heads of their own research teams, which is a pyramid scheme that is only sustained because there's always an exit option: lucrative private work at swank profit-driven labs.

Without the private sector to bolster demand for scientific labor, the grad programs doing this research wouldn't be able to draw as much talent because the rewards of subsuming your life and personality to some taskmaster/dissertation advisor would be negligible. You know, like in the humanities.
posted by anotherpanacea at 9:37 AM on July 20, 2009


First, about 51% of all health care R&D is privately funded, 41% is publically funded, and 8% is funded by non-profits

Learn to read. Drug companies do just fine at researching drugs. That is not fundamental research. Now if you want to say that the private sector is good at monetising things, I'm not arguing.

Second, the NHS has 7% of the NIH's budget, but 20% of our population

Apples to oranges. If you think that all NHS research is funded as part of the NHS research budget I've got a lot of underwater real estate to sell you. As it happens, I'm doing some research myself that's under the umbrella of the NHS but doesn't have an NHS grant. And my sister was given ground-breaking cardiac surgical treatment that was written up as research afterwards. No research grants for it; the surgery was handled as normal NHS procedures and the write-up was done as an afterthought. In the US it is incredibly unlikely that anyone would have paid for that surgery.
posted by Francis at 9:40 AM on July 20, 2009


Yes, anotherpanacea, that's an extremely good point. If only I could forget it.
posted by Llama-Lime at 9:48 AM on July 20, 2009


Relax Francis.

You've made some sweeping claims and been refuted, and then retreated to anecdotes. Produce the numbers.

To your particular claim that research surgeries aren't covered, it's simply not true in the US. Clinical and surgical trials are usually done pro bono or the participants are paid.
posted by anotherpanacea at 9:57 AM on July 20, 2009


Here's the state of the US government finances in 2005, per the GAO, the one entity in the Federal government that really understands what the hell is going on with its books.

Their conclusion: in 2005, well before this latest crisis and the tens of trillions we've spent, we were over fifty trillion in debt and doomed to eventual fiscal collapse, and that we absolutely cannot rely on economic growth to get us out of the jam.
posted by Malor at 10:09 AM on July 20, 2009


Dammit! I hit post instead of preview. ... continuing.....

They also point out that, if you compute our liabilities to GAAP standards, which is what we require of our corporations so that they don't mislead investors, overall tax receipts need to double to pay our expected liabilities. And they need to double RIGHT NOW, so that we can start saving for the huge outflows that are coming.

They obviously don't think that's workable. In his quiet way, the GAO's comptroller is doing his best imitation of a klaxon, with an ordinary speaking voice.
posted by Malor at 10:14 AM on July 20, 2009


Is there a reason you're using the 2005 report when they put one out each year? Here's 2009. No doubt, things are bad, but we can fix a lot of it by simply rescinding the Bush-era tax cuts.
posted by anotherpanacea at 10:20 AM on July 20, 2009


Malor, anotherpanacea's link confirms my claim that our debt is not yet at the comparable historical high (post WWII). Again, I ask, if the US faced higher debt in the past, raised taxes far beyond their current levels for decades to pay it off, and didn't turn its economy into a "smoking crater" what makes you so sure that that experiment is unrepeatable?

I mean, I'm not saying that economic history is every exactly repeatable, and there are obvious constraints (peak oil, global warming etc.) that we will face in the future that we did not have to face in the past--but your claim seems to be simply that N-tax rate is in principle unsustainable when we have clear historical evidence that even higher tax rates have been not only sustained but have allowed for high levels of prosperity.
posted by yoink at 10:27 AM on July 20, 2009


Malor, thanks for sharing the link, it's a surprisingly readable beast. As others have said, the necessary doubling of revenues requires both a) continuation of current trends and b) re-enacting the Bush tax cuts after they expire. If we keep a), but drop the Bush tax cuts, the situation is clearly manageable. The continuation of current trends is always questionable; but this is also what you're arguing in that we need to change some of the trends.

In fact, it's rare to see such a clear argument for dropping the tax cuts and returning to 1990 levels of taxation; no wonder such useful and informative reports get so little press!
posted by Llama-Lime at 10:33 AM on July 20, 2009


I understand the debt issue. I may not be able to truly get my head around the numbers (who can, really?), but I have a business degree and I understand the basics.

After almost thirty years in the real business world, however, there is one thing I do know: "lost sales" never get a place in the accounting. The money spent on inventory and what is stocked is gone over with a fine tooth comb, but arguments that this or that needs to be changed because sales are being missed are routinely ignored because lost sales are not accounted for.

In this argument, where are the "lost sales" numbers? What are the costs we suffer when employees are out sick? How does our present system affect the length of those absences, if at all? Are we losing productivity because people are stressed by medical and insurance costs? How many people are unemployed because companies can't afford to insure them? Are the profits removed from the middle of our system a drag on the economy? Etc., etc.

Every other industrialized country on the planet has come to the conclusion that a more centrally-managed system is called for. The numbers that I've seen, by and large, bear them out. It's not always how much money you spend, it's how much money you waste.
posted by Benny Andajetz at 10:34 AM on July 20, 2009


AFAIK, productivity gains are an order of magnitude greater than preventative and restorative health care costs. Keeping people healthy and productive pays off in spades.
posted by five fresh fish at 12:36 PM on July 20, 2009


alor, anotherpanacea's link confirms my claim that our debt is not yet at the comparable historical high (post WWII). Again, I ask, if the US faced higher debt in the past, raised taxes far beyond their current levels for decades to pay it off, and didn't turn its economy into a "smoking crater" what makes you so sure that that experiment is unrepeatable?

Because their models, even as bad as they are, are overoptimistic. They assume that the economy will continue to grow at 1990s levels indefinitely, and that's extremely foolish. Our economy has been overstimulated, over the last fifteen or twenty years, into appearing to grow faster, by large injections of dollars from the Federal Reserve at any hint of crisis, and enormous government and personal borrowing.

As soon as that borrowing stops, as it must, the economy's growth will fall off a cliff, and it STAY down for many, many years. Meanwhile, each year's payouts will continue to accelerate as more and more and more Boomers retire. Our economy will be going nowhere, because it's dependent on new debt issuance to "grow". But it can't service what we've ALREADY issued. It looked good a the time, but we issued the debt while the economy was overstimulated from too much debt issuance!

When we let the economy cool to a natural level, by ceasing our massive intervention, we will find that there's no real wealth to pay for even what we've already promised, much less new liabilities, and it won't matter how high we raise taxes. We are well past the point of sustainability.

Basically, that 2005 report (and I link to that one because it's so very readable and lucid) is OVERoptimistic by a very substantial fraction, probably 20 to 25% on total revenue. Our economy isn't stable BECAUSE OF the debt we've been issuing, and no linear projection of growth will be remotely accurate.

As soon as we start acting like responsible adults again, we're going to go into a profound economic contraction. It will last a very long time.
posted by Malor at 1:21 PM on July 20, 2009


Here's a link to the pdf of the 2005 testimony. I find it more readable than the plain text: also, charts!

It's actually a weird thing for you to choose, because it's a testimony, not a report, and it's principally about financial management, literally about the accounting challenges that make it difficult to make sure that DoD spending and interagency transfers are all being accounted for. Still, it repeats in prose form many of the things the 2009 report says with charts.

However, nowhere does the GAO assume that GDP growth will return to 90s levels. Instead, GAO financial outlooks assume that the growth will return to its 40-year historical levels, not its 90s levels. A 40 year historical average includes the recessions of the nineties, eighties, and seventies. In addition, they account for the costs of funding the debt and the costs associated with the retirement of an aging workforce. In fact, those are the two problems that they're highlighting.

Malor, I know you like to be the doomsaying prognosticator, but don't fuck with the GAO. They're smarter than you, and they don't make shit up.
posted by anotherpanacea at 2:22 PM on July 20, 2009


from the GAO pdf:

About one third of the approximately $26 trillion increase resulted from enactment of the Medicare prescription drug benefit in fiscal year 2004.

Congress rolled over and let Big Pharma write this bill. Prices WERE NOT negotiated, and the public was royally screwed. This speaks both to the greed of the corporations running our health care, and to the potential HUGE savings available in a revamped system.
posted by Benny Andajetz at 2:36 PM on July 20, 2009


I linked it, anotherpanacea, because it's telling us some hard truths. Here's one (emphasis mine):

As these simulations illustrate, regardless of the assumptions used, the problem is too big to be solved by economic growth alone or by making modest changes to existing spending and tax policies. Rather, a fundamental reexamination, reprioritization, and reengineering of major spending programs, tax policies, and government priorities will be important to recapture our fiscal flexibility and update our programs and priorities to respond to emerging social, economic, and security changes. Ultimately, this will likely require a national discussion about what Americans want from their government and how much they are willing to pay for those things.

Here's the really critical bit:

Although revenues will be part of the debate about our fiscal future, assuming no changes to Social Security, Medicare, Medicaid, and other drivers of the long-term fiscal gap would require at least a doubling of taxes—and that seems to be highly implausible.
posted by Malor at 3:48 PM on July 20, 2009


As soon as we start acting like responsible adults again, we're going to go into a profound economic contraction. It will last a very long time.

You may very well be right and you may very well be right with good reason. However, I've lived long enough to know that there has never been a time when it was not possible to find equally qualified and respected economists with radically opposed opinions about even the near-term future of the economy. I'm afraid that when it comes to long term predictions economists passed the "boy who cried wolf, no fox, no, sorry, make that goat, no, wait, it's a robot, no, hang on, it's actually a wolf, definitely a wolf, um, no surprisingly it's an ormolu clock in the form of giant carrot, or a arquebus, or a wolf...." point a very, very long time ago.

If economics is a science that allows the kinds of predictions you are making here why has it not successfully made them in the past?
posted by yoink at 4:14 PM on July 20, 2009


Because economics isn't really a science. There are no controls, and with the advent of globalization, it's harder than hell to even suss out proper cause and effect.

That said, this latest crisis was foreseen by some practicing economists, and I was posting here on MeFi about the coming global crash in 2004-ish. (We started to crash in 2001, but then 9/11 gave the Fed an excuse to pump the system full of vast quantities of cash, which led directly to the housing bubble, and the subsequent, even LARGER blowup.) Economies, especially ones the size of ours, are slow, slow things. Getting the timing right on this kind of disaster is very difficult, since they're very rare, and there are active entities in the center trying to prevent it. I'm just an amateur, and mostly I'm just reflecting what these guys are saying -- Janszen in particular. I also find myself agreeing very strongly with Peter Schiff, although I wasn't aware of him until well into the crash. One economist the author unfortunately doesn't mention is Doug Noland, who writes for the Prudent Bear. I regard him as the professor emeritus of the Credit Bubble, even to the point of naming it himself. If Noland didn't have an Inappropriate Capitalization problem, I think he'd be taken much more seriously.

The Economist just ran a couple of articles on how discredited economics has become of late. I haven't read these myself yet -- I just saw them posted yesterday -- but I'll post them here for your edification.

The Other-Worldy Philosphers

Efficiency and Beyond.

That said, you can make simple forecasts -- it's pretty clearly obvious that taking on debt fuels economic expansion, and ceasing to take on debt will stop stimulating it. Absent some other new source of demand, the economy should then contract. If you borrowed to make productive items, that in and of itself can fuel demand growth, but if you borrowed to consume, you just end up in hard times.
posted by Malor at 4:36 PM on July 20, 2009


Because economics isn't really a science.

Quite, Malor. Quite.
posted by yoink at 4:39 PM on July 20, 2009


So, Malor, you're saying that if we raise taxes back to the Reagan era levels, everything would be fine?
posted by yesster at 5:42 PM on July 20, 2009


That won't be enough. BEFORE the health care program, taxes need to double, we need to cut spending by half, or some combination of the two.

This isn't optional.

Do those things, get the budget truly in balance, and give it five years. At that point, we'll have a better idea of what, if any, wealth is available for health care. I don't think there's much.

Getting rid of Voodoo Economics wouldn't hurt, though. Reagan's prescription worked because we were borrowing and spending money we didn't have, not because the tax cuts really stimulated the economy that much. I'm sure they helped, but it's the public and personal deficits that have been driving the economy since the 1980s, and that game is very nearly over.

We might get one more big rush out of the giant bailouts this year and last, but I strongly suspect that'll be the last hurrah, barring a miracle. And then we have to actually start paying for all those cheap Chinese goods we imported. Or explicitly default, or print more money. I suspect we'll choose the latter, which will be immensely destructive.
posted by Malor at 7:20 PM on July 20, 2009


Actually, I should be more accurate: getting rid of Voodoo Economics will be extraordinarily painful, but it's the only path back to health.
posted by Malor at 7:21 PM on July 20, 2009


BEFORE the health care program, taxes need to double, we need to cut spending by half, or some combination of the two.

Double, half. These are nice, round numbers, you're trafficking in. But they're completely unjustified by the GAO's report.

By 2030, we need to increase revenue or decrease spending from the baseline inflation adjustment by about 15%, and if we wait and do nothing, in 2040 that goes up to 30%. Overall, the fiscal gap between now and 2083 is 21.5% of revenue or 18% of spending (because spending reductions are more efficient than increased taxes.) There's work to be done, no doubt, but the sky is not falling, and insisting it is will only hamper the needed reforms.
posted by anotherpanacea at 5:01 AM on July 21, 2009


"I also find myself agreeing very strongly with Peter Schiff, although I wasn't aware of him until well into the crash"

Peter Schiff is an Austrian School-type, which is fine I guess, but I find their views pretty restrictive in the sense that it becomes like a religion for its adherents. Economics is often more art than science, but I tend to favor economists without ideologies and who are willing to add new information to their outlook rather than cherry pick what confirms their opinions.
posted by krinklyfig at 10:03 AM on July 21, 2009


As California Goes, So Goes the Nation Without Reform
posted by homunculus at 1:48 PM on July 22, 2009


Uninsured Travel from Across US for Free Healthcare from Relief Group Remote Area Medical
posted by homunculus at 1:51 PM on July 22, 2009


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