Krugman on Healthcare

Here is a bit from a NY Times op-ed by Paul Krugman on getting US costs under control. I especially enjoy the bit that mocks the re-interpretation many Americans have of the Declaration of Independence:

We have to do something about health care costs, which means that we have to find a way to start saying no. In particular, given continuing medical innovation, we can’t maintain a system in which Medicare essentially pays for anything a doctor recommends. And that’s especially true when that blank-check approach is combined with a system that gives doctors and hospitals — who aren’t saints — a strong financial incentive to engage in excessive care.

Hence the advisory board, whose creation was mandated by last year’s health reform. The board, composed of health-care experts, would be given a target rate of growth in Medicare spending. To keep spending at or below this target, the board would submit “fast-track” recommendations for cost control that would go into effect automatically unless overruled by Congress.

Before you start yelling about “rationing” and “death panels,” bear in mind that we’re not talking about limits on what health care you’re allowed to buy with your own (or your insurance company’s) money. We’re talking only about what will be paid for with taxpayers’ money. And the last time I looked at it, the Declaration of Independence didn’t declare that we had the right to life, liberty, and the all-expenses-paid pursuit of happiness.

And the point is that choices must be made; one way or another, government spending on health care must be limited.

Now, what House Republicans propose is that the government simply push the problem of rising health care costs on to seniors; that is, that we replace Medicare with vouchers that can be applied to private insurance, and that we count on seniors and insurance companies to work it out somehow. This, they claim, would be superior to expert review because it would open health care to the wonders of “consumer choice.”

What’s wrong with this idea (aside from the grossly inadequate value of the proposed vouchers)? One answer is that it wouldn’t work. “Consumer-based” medicine has been a bust everywhere it has been tried. To take the most directly relevant example, Medicare Advantage, which was originally called Medicare + Choice, was supposed to save money; it ended up costing substantially more than traditional Medicare. America has the most “consumer-driven” health care system in the advanced world. It also has by far the highest costs yet provides a quality of care no better than far cheaper systems in other countries.

I'm constantly amazed at the lack of reality in American's view of health care. I think the following is instructive. It is from James Fallows' blog at The Atlantic:

Here is how health care is financed in Canada.

1- The state determines how much money is available for heath care from the budget of the year. Say $1.00 [billion] etc

2- The state then asks the various medical professionals for a price for say 50,000 broken legs to be repaired, 20,000 births, you name it. The statistics of the needs of the country are known from previous experience.

3- The medical professionals discuss between themselves how to divide the available money for the various procedures. They know that it takes 10 minutes to do this and two hours to do that.

4- They return to the state with a price list for each procedure.

5- The state then guarantees that every medical act will be paid according to the price list.

6- The medical professionals know that they will get paid immediately upon completion of services. The only paper to fill is a credit card slip of paper containing the identification number of the physician and the procedure with the agreed price.

7- That is it. No collection agency, no discussion with an insurance about the need to do an MRI etc.. Whatever is ordered by the doctor is executed. If a question arises, then it is the medical association that looks into the matter and decides. The association has the power to remove the license of the offending doctor.

I live in Canada. I generally like the Canadian system. I know we have lots of complaints about waiting lines, but I've been with relatives in the US trying to get care in their "world's best" system and seen them wait interminably in the emergency room. I sat with my brother once for many hours in the emergency waiting room while he passed a very painful kidney stone. The hospital "treated" him only after he had managed to pass the stone on his own. Of course they billed him an astronomical sum for this "medical care". That was ridiculous. You might as well bill your neighbor the the loud music you play as "entertainment". Nutty!