Yet here we have reputable doctors acting in their self interest, and the result is that they are ordering unnecessary surgeries for financial gain. Meanwhile, patients are essentially unable to protect themselves against this travesty.

Maybe in this case the invisible hand cannot be seen because it is not there?

Because health insurance is now commonly provided by employers because of World War II price controls, and because we have become accustomed to using health insurance to pay for all matter of health care, including routine visits, consumers are often ignorant of health care costs.

Customer A: My insurance will pay? Fine, let's do this. Cha-ching, price rises.

Customer B: My insurance will pay? Fine, let's do this. Cha-ching, price rises.

Customer C: Oh, insurance won't pay? How much? Whoa! How did the price get so high?

It's no surprise then that the invisible hand works in a way that appears flawed when one of its inputs (the buyer's sensitivity to price) is frustrated.

People of my persuasion often make the case that if automobile insurance worked the same as health insurance, and we used insurance to pay for oil changes, the price of oil changes would shoot up wildly. Reason being that you would no longer care what it costs.

Obviously the seller (the doctor in the case at hand) wants the price to be as high as possible. The invisible hand can't keep this in check—it cannot discipline the seller with lost sales—when so many buyers do not act with actual price sensitivity.

In actuality, healthcare is a well known example of a market failure - there cannot be a normal market in healthcare ever, because definitionally, your health is worth an infinite amount of money to you (how much would you pay not to be a slave? how much would you pay not to have your hands and feet chopped off?).

Further, healthcare prices are unpredictable. How much does a gall bladder surgery cost? Did I mention that the patient got a flesh-eating bacterial infection as a result of the surgery? That's true and will always be true even if prices were posted at the door, which they are not.

The solution - which has been discovered by every advanced nation on Earth except the U.S. - is having the government strongly involved in paying for healthcare, insuring across the entire population to even out costs and making sure that, e.g., medical device manufacturers can't gouge the unknowing public. Monopsony powers nicely counteract the inherent power imbalance that healthcare providers normally have over the sick, and everything works just fine, costing each of those nations less to cover their entire nation than the U.S. currently spends to cover a small segment of its population.

Of course, the cost to me was $0, since I live in Canada and we do it right here. But supposing I lived in your "transparent pricing information" ideal society. How exactly do you suppose I would flip through the ten-thousand page pricing book to determine what brand of surgical gauze I'd like to have used in my surgery, when I'm in 11/10 pain and going to die within a few hours if left untreated?

And do you think the other local hospitals would send over their ten-thousand pricing books as well, so I can price-shop? Do you think Dr. Smithers is really worth a 12% price premium over Dr. Johnson, or not?

Can you really have a meeting of minds when one of the minds is unconscious from an automobile accident? Please advise.

That is not how you measure preferences, at all. Try "what likelihood of having your hands and feet chopped off would you trade for not being a slave?" Probabilities are fungible in a way dollars aren't.

If you're wheeled into ER with a knife in your chest, you don't have a fungible probability of needing healthcare. You're going to be buying the knife-removal service whether it costs $100 or $100,000. You may be unconscious.

Obviously at the other extreme of choice is purely elective surgery, like breast enhancement. Lots of choice there - if you don't like one doctor's prices you can shop around or skip the surgery all together.

In between are situations where treatment is required but isn't urgent, or where the problem is minor and you can live with it/use off the shelf treatments, or where there are various types of surgery available. A lot of the time when there are multiple options with complicated trade-offs, that's exactly where it would be nice to have a friendly, trustworthy doctor who can give you some unbiased guidance.

How exactly to bring all the incentives into alignment and make them fair, over the entire continuum of choice and accepting that the people who need the healthcare aren't themselves experts - that's the hard part.

No, it isn't. Avoiding certain very undesirable outcomes is worth an infinite amount of money to me, but suffering from strep throat symptoms for 3 days instead of 5 days is worth a finite amount of money. My upper bound on that is hundreds of dollars, but if I can pay less to get the result I want (if I'm certain I have strep, I want a course of amoxicillin, and I don't care if that involves seeing a doctor), I will pay less. Competition can drive the price down even if the buyer isn't price-sensitive.

Conservative, libertarian, I guess they are more or less the same for this subject. Fine.

> coming to the conclusion that the problem the U.S. is suffering from is "too much health care"

I suppose you're saying that because higher prices suggest a glut of supply? Wait, no.

I'm not sure why you say that is the conclusion of my argument. I certainly never said the US has too much healthcare, nor imply it.

In fact, if anything the US is supply-constrained in healthcare thanks to the AMA, FDA, etc. There is plenty of demand for healthcare, but the supply is pretty well controlled through regulation.

I certainly can't start selling healthcare. Even with a lot of studying, I still couldn't just sell healthcare. Making additional healthcare supply isn't like making more supply of furniture, food, or even cars (which is closer on the regulation spectrum to healthcare, meaning it requires a herculean effort to enter this industry—witness Tesla).

> therefore the solution is to reduce access to healthcare and insurance

What?

No, I'd rather make these services more readily available to everyone by making them available in the same way nearly every other product is available to anyone. Is the iPad unavailable to me because my employer doesn't provide tablet insurance? Just sell me healthcare and health insurance on regular markets, please. Nothing could be more available in my opinion.

As it is, the "availability" of healthcare in my life is extremely narrow (again thanks to what evolved from 1940s price controls). I have a small set of options from one vendor selected by my employer. With the ACA, I will now have that option (maybe, though it's an HSA and I've been told to kiss HSAs goodbye) and a few other ratified options that have been selected by a central planning committee.

If I can't afford routine health care on a regular market, I'd rather work harder to get a better job. In a worst-case scenario, I'll plead with friends and family or charities. I genuinely would prefer this to the current model. I'd pick up insurance to handle catastrophic events. I'd donate more to charity to boot.

> your health is worth an infinite amount of money to you

Actually, not really. If I have a quality of life issue and I can improve my quality of life for $500, I will weigh the pros and cons and probably go for it. If it costs $500,000, I'll suck it up until someone innovates the cost down to something I can afford.

Even if I have a catastrophic issue and I have no insurance, and the only resolution is something that costs $1M, this is something my family (friends, charities) should decide. Sell/refinance property or pull the plug? Bottom line, it's a local decision to pull the plug, not something for a central planning board.

> Further, healthcare prices are unpredictable

This is not a counter-argument to using regular price signals. Services that are unpredictable are usually billed at hourly rates or time and materials with an estimate. If I have the termite guy out to check my house, he's not going to be able to give me a quote until he assesses the situation. Even then, it may be worse than he thought. But he has a price sheet of hours and services and I can look at that and select a different termite guy if the price sheet seems out of line. Better yet, other people will have paid termite guys and give me a basic feel for what a termite guy charges. When he says his hourly rate is $5,000, I'll know he's a nutcase.

Today, if I heard it cost $5,000/hr for some medical procedure, I wouldn't even know how to react. Is that a lot? Is it low? I don't even know who I could ask for a guess.

> which has been discovered by every advanced nation on Earth except the U.S.

I don't enjoy the argument that everyone else does something a given way, so why don't you get in line already. The way I see it, this country has been doing healthcare more similar to other countries (no true market, no price signals) than similar to what I want for decades.

A free market can support a central-planning model inside of itself, but vice-versa is never possible. This is why those of us who support free markets are so sensitive to those who would shut them off. Central planners don't have to kill the free market to do their central planning exercise, but they always choose to.

We don't ask them to kill central planning so we can have a free market. In fact, we don't even care how central planners want to arrange their centrally-planned plan inside the free market, as long as it's voluntary. Have fun!

If I had my way, the ACA would make centrally-planned healthcare an entirely in or entirely out proposition. Voluntary. Don't want in? Fine, you're on your own. Entirely.

I'd opt out. And soon enough, I'd find people ready to sell me health care. Then I'd give more to charity. I'd be so much happier.

Another issue I have is your mention of 'charity'. Almost anytime this gets used in a political/economic discussion, it is used to dismiss a whole class of problems that the author does not want to deal with in their argument. In this particular case you mention that if you cannot afford a 'free market' doctor/treatment, then you can turn to charity to provide the funds. Of course we all know that charity will never come close to providing for the entirety of society, so you are left with a situation where almost everyone except those who can afford treatment are forced to go without it. And of course the typical libertarian response is "tough luck" or "work harder". But here is the thing, health, similar to environmental issues has strong public effects. There are a number of diseases and illnesses that, if left untreated in a large portion of the population, can have devastating impacts on society. A healthy population is a necessity of a first world economy and relying on charity to ensure positive, society level outcomes is absurd and ignores reality.

Look, I lean libertarian on many issues, but there are certain aspects of society that are just not suited to a free market. I want to be able to go to a restaurant without being terrified of catching TB from the waiter or getting salmonella poisoning from the food. I don't want industrial companies polluting the ocean and rivers that I surf and fish in. The free market can be very powerful, but it is also fairly dumb, it cannot recognize when it is doing more collective harm than good. I don't see why so many libertarians think in terms of all or nothing. Compromise shouldn't be such a dirty word in today's political discussions, it's a sad state of affairs.

I can imagine a world where it's sufficient to see that physician X is certified by Harvard and works for a clinic that's recommended by Consumer Reports without any involvement from the state. In this scenario the FDA would still exist as a competing organization but no one would be compelled to buy their product via taxation.

> Of course we all know that charity will never come close to providing for the entirety of society

Ostensibly, we've all voted for compulsory charity. If we can be trusted to vote so nobly, why not put down the guns and self-elect to be charitable?

> I want to be able to go to a restaurant without being terrified of catching TB from the waiter or getting salmonella poisoning from the food

I agree and I don't think I'd lose any libertarian cred to say that the government does have a role here because the restaurant has defrauded you and breached the implicit contract to provide you with safe food.

> I don't want industrial companies polluting the ocean and rivers that I surf and fish in.

I think property rights solve a lot of these things--"Oh, they polluted some river..." vs. "They polluted MY river?!" . I can concede that things like oceans and larger rivers should not be privately held but in these cases I'd prefer local government jurisdiction to federal/global governments. Essentially, the more aggregate the government, the more deliberate/unintrusive/restrained/super-majoritized I think it should be. In my mind, health-care is not one such federal issue.

With the amount of error we have (see malpractice suits) as it is, I'm not convinced that what we have right now is actually yielding better overall results than a free market would with actual price signals.

Reason being that medical care quality is usually not a binary matter—with outcomes of either total success or total failure. Usually it's a broad continuum, and yet mediocre doctors are presently extremely difficult to differentiate from superb doctors because of the lack of price signals.

Malpractice suits would still exist in a free market, of course. And if care lead to death, there would be lawsuits. But in a majority of cases, bad care would lead to non-death but non-ideal resolution. That's where price signals will flourish.

Ironically, I see the current situation as an all-or-nothing where I want more nuance. We currently treat all doctors as essentially similar because they have all completed the same rigorous training and certification process, and we few other measures to use. (Some above-market review systems notwithstanding.)

Finally, don't be certain that doing away with regulation would lead to certifications evaporating. It more likely would mean variation in certification. A less politically-entrenched alternative to the AMA perhaps. (Of course, I'm also not necessarily bowled over by certification. I put no stock in computer programming certifications.)

> And of course the typical libertarian response is "tough luck" or "work harder".

While true, this shouldn't be dismissed cavalierly. We tend to speak without as much political thought as the right and left—saying apparently heartless things like "work harder." But what we mean in practice is that there would be more emphatic pressure on individuals to work to solve their own life situations first and only in extreme cases leverage safety nets.

We have a situation today where half of the country uses some form of government assistance. That's not what safety nets should be for. But outside of "character" or other intangibles, there's no incentive to avoid the safety nets—in fact there's every incentive to use them, lest you be a sucker. Only suckers pay for things.

When I had an electric car, I momentarily reeled at the $5,000 federal government incentive because it goes against my every belief. But, come on. Who is going to pass on such a sweet kick-back? I took the money. We all do.

Yes, it's utterly impossible for a libertarian paradise to provide a 50% safety net. But we feel we have such a large safety net because it's a venus fly trap, not because it is necessary to have a 50% safety net as a first principle.

Furthermore, many libertarians are amenable to a basic income, and with a basic income and a free market for health care and health insurance, it's almost a foregone conclusion that a great deal of competition would angle for that demand.

> Compromise shouldn't be such a dirty word in today's political discussions, it's a sad state of affairs

The trouble with compromise is what I said earlier. We're willing to allow central planners to build within a free market, to create a voluntary consortium of participants supporting one another through centrally-planned distribution of resources. But reverse the tables and we're absolutely never permitted the same freedom. Central-planning is not voluntary; it a piece of totalitarianism.

So compromising with central planners means totally conceding. Either they plan for you or you plan for you. I prefer planning for me, difficulties and all.

Obviously, this works best the more people who pay in. When people don't get insurance until they need it, it raises the cost for everyone. When people don't get insurance and still end up burdening those who did (by going bankrupt when faced with monstrous E.R. bills, for a common example), costs go up for everyone. In these situations, there's only way to make the system work: enforce that everyone buys in. That's why I support single-payer.

Here's another car analogy: car insurance is mandatory for drivers in the U.S., and most countries. Because the system only works when everyone buys in.

Of course it offends the libertarian sensibility to force people to buy something. How barbaric! Personally, I'm a libertarian-to-leftist convert. I think society needs a monopoly on force, and that monopoly goes to the government. The use of that force should be minimized, but one of reasons we need it is to force people to chip in for the common good. When it comes to pooled risk for catastrophic events, it's worth it. I have no moral qualms. It's not a matter of who's doing the planning, it's a matter of societal choices that just plain don't work if not everyone's on board. You're right that central planning is not voluntary. That's the whole point.

> But outside of "character" or other intangibles, there's no incentive to avoid the safety nets—in fact there's every incentive to use them, lest you be a sucker. Only suckers pay for things.

"Yeah, look at all those suckers, paying for things, how stupid. Why bother trying to make more money? It's not like I value character-building." - single mom making $12,000/year, and (gasp) receiving government assistance

Do you really think government assistance makes poverty appealing?

Conjecture. Got proof? (let's say, a statistical analysis between the recent spate of doctors who no longer accept insurance -- only cold hard cash or credit -- and their Swedish counterparts in both patient care and malpractice suite rate)

That's the thing about this entire argument. We're point at those other folks that seem to be a doing a lot better job at this whole keeping people healthy thing than we are. And you're pointing at this conjecture that maybe people make rational decisions in a market.

And we know that's not true.

Just look at homeopathic medicine to see how well the free market does, without FDA intervention, at keeping people healthy - and getting them healthy if they aren't.

I would agree that in a more ideal world, we could have free market health care. With enough technological progress, it might be possible to get accurate diagnoses of illnesses just by using an iphone app and then go to a pharmacy (or get drone delivery) to get a prescription for a cheap nano surgery pillbot. But we are way too far away from that, and there are way too many human lives on the line. I think it's okay to be militantly idealistic, but when human lives are at stake, I think it is necessary to cede to practicality.

I do think various products and services should be reviewed but there are better ways to do it than with a federal agency. E.g., https://en.wikipedia.org/wiki/Air_ioniser#Consumer_Reports_c...

[1] http://en.wikipedia.org/wiki/Dietary_Supplement_Health_And_E... [2] http://www.sciencebasedmedicine.org/dshea-a-travesty-of-a-mo...

I think if people are forced to pay for routine care, we will get a much better system. Then insurance will be what it is meant for, catastrophic insurance. The simple analogy that noone uses car insurance to pay for oil changes is relevant I think.

I fully agree that if we paid out of pocket for routine maintenance and minor "repairs," we'd have the makings of a superior system. Give healthcare a genuine price signal and stop asking, "why is healthcare so expensive?"

It's expensive for the same reason university education is expensive. Most of the time, someone else is paying.

Good luck sucking up "take the procedure or die." Somehow, the "free market is best! Free market is king! Free market loves you!"-crowd always seems to ignore this not so small part of healthcare. It is always just "I don't need this procedure, so I just wait until it gets cheaper and suck it up until then!" .. yeah, sure.

Frontline did a whole show on that, "Dollars and Dentists".

http://www.pbs.org/wgbh/pages/frontline/dollars-and-dentists...

Frontline isn't known for having a conservative bias.

- No person would ever sell themselves into slavery (OK, this is only implied).

- No person would ever kill themselves for the life insurance.

Do you see any problems with that?

Allow me to suggest that if your health is worth an infinite amount of money to you, you must have terrible relationships with your family.

You would hand over a small copayment and get your burger. Months later, you would receive a really confusing looking Explanation of Benefits from your burger insurance provider with multiple pages of line items - full of really high prices for pickles, pickle slicing fees, etc... ending with an "Amount You May Owe Provider" that would be many times more than we pay for hamburgers on our current free market system.

We'd then demand a huge law be passed that would slightly decrease out of pocket costs for some, increase them for others, and force everyone to buy burgercare. And when it caused even more problems, we'd throw up our hands and finally adopt a single payer burger system.

In the end, we'd have long forgotten and laugh at anyone who suggested that burgers were once far cheaper, and that it was therefore a lot easier to buy a burger for someone who couldn't afford one.

I used to work at a place that made medical electronics, and the idea that 'because smartphones that are churned out by the million only cost half a grand, every other electronic item should be similarly cheap' is just wearying.

Similarly, 'just sell in developing countries' is an utter throwaway line for medical devices the way you're using it - and you'll find that these products already do sell in such markets anyway (what a novel idea indeed!). Not to mention that developing countries have extremely limited medical budgets, and 'allied health' stuff like ultrasounds are luxuries - they're available and have sales teams, but the turnover is extremely low.

With car insurance, if someone wrecks my car, I get a check for the repair bill and the transaction is complete. However, if car insurance ran like health insurance, the insurance company would pay for a rental vehicle and leave my car totaled. If I ever drop my insurance, they'd take away my rental car and leave me with just the old wreck. There's no plan to make me whole again.

Granted, health insurance companies don't give out rental bodies. However, with other types of insurance, an adverse event (e.g. house fire, car accident) leads to an insurance payout that covers your loses. However, with health insurance, an adverse event (e.g. cancer diagnosis) just leads to a piecemeal payment of health expenses while you remain on their policy. If your policy ends, they don't have to pay for treatments on an event that occurred under their policy.

If we really want health insurance to act like catastrophic insurance, then it really needs to act that way. If I get diagnosed with cancer, I shouldn't get treatments covered on an annual basis as long as I am a member. Instead, the actuaries should calculate an average lifetime cancer treatment cost and I should be sent that as a check. It's then my responsibility to pay for that treatment.

This would be a far more economical system, but it requires that health insurance companies start paying for health expenses that are incurred under their policies, just like every other form of insurance.

If you get cancer, get a check to cover the total expected cost of treatment, and don't spend it on treatment, the hospital can't refuse you treatment when you show up with serious symptoms.

Plus I'm not sure I'd want to receive a check for the "average lifetime cancer treatment cost" because it would sure suck if you case was more complicated than the average case.

With medical insurance you never receive payment without spending at least as much on the treatment and in most cases the payment is made directly to the provider.

With fire insurance if you have a mortgage the payment is made to the lender who hold it until the repairs are made and many insurance policy require that the money be spent on repair or pay less if it is not spent on repairs.

All of these rules and procedures are to reduce fraud and limit costs.

First, the argument that insurance disrupts market pricing is wrong. Car insurance does cover car repairs and the car repair market is quite competitive, since insurers are heavily invested in managing prices.

The problem here is not insurance. It's that health care is a poor fit for free market dynamics.

In order for markets to function, consumers need to have the ability to comparison shop. That core requirement is often severely constrained in the health care "market".

One reason is urgency. A great deal of the most expensive health care offers no opportunity for the consumer to comparison shop whatsoever, because it's an emergency situation. You're wheeled in unconscious on a gurney. Even for non-emergency care, like cancer treatment, it's often urgent.

Another reason is capital requirements. Doctors and hospitals are extremely expensive to create. In order for markets to function there need to be multiple options to choose from. But the capital requirements of doing so with expensive specialities like oncology significantly retard competition.

There is a reason why every other industrialized country in the western world coordinates health care via a single-payer government instead of the free market. And usually with better public health outcomes.

Markets are not always the best solution. Consider the fire department "market". We actually tried that once in the U.S., a long time ago. Houses would pick their own fire company, which competed with one another. You'd affix an emblem on the front of your house with the company you subscribed to. It was something out of a 20th century Libertarian fantasy. Not so great a solution for fighting fires though.

Are you really sure? It seems to me that functional changes are competitive but aesthetic changes are not. I wonder if that is because the primary buyer of aesthetic fixes is car insurance companies, while more functional fixes are financed by consumers directly.

> That core requirement is often severely constrained in the health care "market".

I am curious why you go off on emergency service, when the bigger elephant is the inability to price.

Ask any physician how much it will cost you on a high deductible plan to have anything done. If you are lucky they might be able to figure out an office visit, but usually they don't know and won't tell you anything about more complex procedures.

Since the person who chooses to have the procedure doesn't pay, we have not attempted to keep the ability to predict prices. Even if you could comparison shop, you aren't comparing real prices.

> And usually with better public health outcomes.

Except single payer doesn't solve any of the problems that we are discussing here. The only thing it solves is the silly system of marking up "standard" rates to make contracts more attractive resulting in impossibly high prices for uninsured people.

Even a large percentage of ER visits would likely see people acting with price sensitivity -- This is why in some places of the country you see Emergency Rooms advertising about how low their current wait time is. The wait time isn't really relevant to true emergencies (you get seen right away), but people without true emergencies don't want to wait. Financial cost is irrelevant (someone else is paying), but the cost to their time is relevant, and so people select emergency rooms (and urgent care clinics) where they will have to wait less. Hospitals are acting on the one thing that the patient cares about (sitting in a waiting room), since the other (price) doesn't matter.

For the really expensive things, like end of life care, governments with universal healthcare systems are the ones that act with price sensitivity and ration this care and refuse in some cases to pay for the most expensive treatments. For example, the UK has the National Institute for Health and Clinical Excellence (NICE), which set a maximum of about $47,000 per quality-adjusted year gained. What we refuse to do in the US is allow patients to make a choice like that (instead, we mandate that insurance cover far more in health care expenses, driving up the cost of that insurance). As a comparison, the US sets it supposedly to about $50,000 per QALY, but in practice it tends to be far more, with some regulation-required treatments requiring as much as $500,000 per quality adjusted year (some heart pumps, and kidney dialysis being another very expensive example).

Does the ACA address QALY? Seems like it might make sense to tie health insurance coverage to that metric. I would be more than happy to pay for coverage that covered the low end of the spectrum if it would mean lower premiums.

What insurance lets you do is decide in advance what you think is reasonable, assuming no government rules about what must be covered (just like the UK does for its entire population).

Nobody (at least before preexisting conditions were not required to be covered) was buying insurance that would cover a $500k/QALY right when they needed it. Instead, they previously bought insurance that the government decided had to cover a $500k/QALY for certain treatments and weren't allowed to make any other decision.

And what if they choose the insurance that didn't cover a $500k/year heart pump and realize in a panic at the last minute that they actually did want to be able to be treated at that high level of expenditure, but can no longer afford it? They're in no worse condition than somebody in the UK who would never be given the option.

And my point was that such situations account for a very small percentage of situations in health care. Most situations and most medical care expenditures aren't of the type claimed by OP. In other words, it's really not a prime example and many of the highest costs are things that people could decide on. For example, the UK will probably not offer treatments that cost more than about $50,000/quality-adjusted year. It would be possible to offer insurance in the US for substantially less if insurance companies could sell a policy that would stick to that, and many people would take probably buy them (many people choose not to even buy insurance currently).

And I think that you are wrong, particularly when you consider this based on dollars billed by emergency rooms, not patients seen by emergency rooms.

The statistics are that all emergency care expenditures totaled accounts for about 2% of all medical expenditures, or in any case no more than 10% depending on who is reporting and calculating [1]. And, not all emergency room visits are emergencies by far [2] and many patients are swayed by things like advertisements for emergency rooms.

Sources:

1) http://www.politifact.com/truth-o-meter/statements/2013/oct/...

2) My ER doctor wife

Who is talking about all medical expenditures? I am talking only about emergency room visits.

1) Ads for emergency rooms function as ads for hospitals in general. People in need of non-critical care will naturally be influenced by ads that depict a high quality of care for emergencies. The existence of ads for emergency rooms therefore tell us little.

2) "Real" emergencies will almost certainly be more expensive than "non"-emergencies. They are going to charge more to sew your hand back on than to give your kid some coughdrops.

3) "Non"-emergencies, as perceived by a doctor, are not the same as "non"-emergencies, as perceived by patients. The mother frantically driving her kid with a broken arm to the hospital is going to consider the situation far more urgent than a doctor would. In these cases, people are not going to act with price sensitivity, even though they could, strictly speaking.

I said "my point is that [those situations] don't make up the majority of situations in healthcare" and you said "And I think that you are wrong, particularly when you consider this based on dollars billed by emergency rooms". I don't get the point of looking at a percentage of emergency-related dollars billed in emergency room visits. My point is that if less than ten percent of all medical expenditures are related to the type of emergencies where (to quote OP) you are "bleeding out in the middle of a street or who are delirious from fever [and] won't be acting with price sensitivity.", then that type of situation is not a primary driver of medical costs in the US, nor is it the most important factor to consider when deciding how our medical system should be run. A huge portion of health care expenditures are of the type where a person would act on price.

In short: Non-emergency care doesn't necessarily mean care where you can flexibly and easily choose your care provider.

How long she should suffer before getting treatment definitely doesn't have anything to do with your disposable income. Some people might agree with you that poor adults deserve whatever the market gives them (I won't) but how are you going to hold people's kids responsible for having parents who are too price-sensitive to get them timely medical treatment?

I know this is a straw man for your argument but try and make it somewhat realistic. And no need to appeal to emotion by making it about a child.

If that's true, why are we using this tiny loss-rate percentage in healthcare—when other industries handle double or triple the loss rate without any drama—as a primary argument for making dramatic changes to healthcare, or alternatively, as an argument against changes that would fix a whole bunch of other things, but not that, because they don't go far enough? Do we really need to solve that?

It seems to me that we can actually just ignore the problem of emergency room situations—including non-payment—when discussing improvements to healthcare regulation in the US because it really doesn't matter. And since it doesn't matter, people should stop bringing it up as if it did.

My $0.02 (assuming the percentage I've heard is accurate).

"Not everybody can afford cell phones. What's the point in offering them on a free market place for the 1% who can afford them?"

Initially introducing price sensitivity into the healthcare space would only touch marginal areas - maybe surgeries that could be scheduled and small things where it's quite interesting to see whether CVS or Walgreens is the more inexpensive choice, or whether the physical is cheaper at an urgent care clinic or my primary care doctor who offers a monthly low membership fee. But, eventually, open competition by those who master processes and methodologies will create a price pressure (combined with public reviews/vetting) that will permeate the entire industry. Those who optimize by leaving patients happier (less cost more care) will draw more attention, money, expand). So, if you can picture such a model, even the person hit by a car in an accident could benefit from faster and higher quality EMR as and end point of a whole long list of improvements triggered initially by something as mundane as transparency in pricing. Still, funny, we accept that for most parts of our lives as a given.

Thanks for saying this, it's fits in well with my sense that Capitalism (and Communism, and so on), like all -isms, is faith-based. People say the same thing about religious texts, that televangelists are reading it wrong, or that screwy evangelicals are taking the wrong parts too seriously, or a serial killer on a mission from God didn't pay attention to some other part. The problem is that the framework can be so radically misinterpreted, and this is a fundamental design flaw. It just so happens that Capitalism is the Western world's state religion.

Now we see that Adam Smith actually has myriad of hands, and they all have to be working properly for the system to work as intended. Never anything about the hand itself, only its steerer, or that we are experiencing the fruit of a poisoned tree.

If it results in selling more bus passes and electric cars, we should do it. Unfortunately, we do not want to limit access to health care in the same way as health is needed to maintain a stable labor base.

How would a single payer system work with oil changes? We don't have to guess. Many places have single payer health and auto insurance. Large companies provide single payer benefits to their employees on much better terms then normal. Having only a single payer means prices can be dictated and adjusted as society demands to balance profit with affordable access to services.

I have a hard time comparing seven years oncological torture to having your oil changed, you see.

http://en.wikipedia.org/wiki/Invisible_hand

This is obviously not the case in patient-doctor relationships.

The standard Austrian response for those information assimetries are that an independent third party will arise that will offer an unbiased opinion (usual example is Underwriters Laboratory or UL).

A more government-based approach would say that more regulatory oversight is needed.

However, in practice, I haven't seen this happening, I'm not an economist but I see there are agency problems, regulatory capture problems, etc..

Stiglitz said:

"the reason that the invisible hand often seems invisible is that it is often not there. Whenever there are "externalities"—where the actions of an individual have impacts on others for which they do not pay, or for which they are not compensated—markets will not work well...

recent research has shown that these externalities are pervasive, whenever there is imperfect information or imperfect risk markets—that is always"

Adam Smith coined the term invisible hand, so lets use him to take the place of the strawish man. Apart from 'Wealth of Nations' he also wrote 'A Theory of Moral Sentiments.' He was a moral philosopher at least as much as he was a economist. The invisible hand does not assume people are profit maximising robots in a theoretically perfect world.

Since Smith was very much talking human beings, he dealt with all sorts of motivations: selfishness, selflessness, empathy and a bunch of socially mitigated motivations like the desire to be held in esteem. He uses words like "often" not "always" to describe helpful outcomes from self interested motives. He isn't a fundamentalist at all.

So from a Smithian perspective I would say that immoral doctors are arseholes.

Honestly, I think this case just shows that nothing is perfect.

A better breakdown might be insurance as it completely destroys the concept of a market though a dramatic subsidization of coverage. It would be like your company buying your car for you sight unseen. Sure, you want a nice car(heath outcome) but you have a lot less incentive to research BMW vs Acura resale value as your not paying full price for it. So after minimal research your far more willing to go along with what the sales guy(doctor) says.

Socialized medicine certainly has its problems, but I suspect that you might have dismissed the possibility on principle (as opposed to giving it a thorough look) because we actually do have a basis for comparison, the international community, and the overall trend doesn't agree with your supposition.

Single-payer systems in other countries manage to provide comparable care (in terms of outcomes) at half the cost [1], without leaving 15% of the population completely in the lurch [2], and without increasing barriers-to-entry for aspiring entrepreneurs. If our care providers matched that level of efficiency (cost per GDP per capita), the medicare and medicaid budgets would suffice to cover universal health care. Say what you will about theoretical waste and efficiency, but keep in mind that the experiment has already been run and the results are in: single-payer systems are more efficient. Not by 5% or 10% or a standard deviation, but by a factor of 2.

I like to compare free market health care to the GNU Hurd. It's a great idea in theory because it applies a solid, generalizable principle to an important problem but in practice devolves into a rat's nest of practical issues that frustrate the vision (I can talk about these at great length if anyone is interested: the problems are concrete and intuitive, but complicated). In this analogy, single-payer health insurance plays the role of Linux: a perfectly workable, well-tested alternative that performs better and with fewer bugs, even if it doesn't hold the same alluring promise of eventual simplicity and possible eventual superiority.

The US is like the hacker that sacrifices his career in order to stick exclusively with the Hurd. Except when it comes to health care the cost for "sticking with it" is ~$1.3T (50% of 2.7T) and 45,000 lives per year [3].

I'd rather cut our losses and go with single-payer.

EDIT: [2] is an excellent compilation of work on the subject ("work" as in "papers that include actual numbers and well-reasoned arguments as opposed to philosophical musings")

[1] http://en.wikipedia.org/wiki/List_of_countries_by_total_heal...

[2] http://www.pnhp.org/facts/single-payer-resources

[3] http://news.harvard.edu/gazette/story/2009/09/new-study-find...

For instance if a US company makes a drug knowing they will be able to sell a pill for $100 in the US and $20 abroad, is it really fair to say that the US paid 5x as much (since it is most certainly subsidizing the cost of the drug).

I live in Uruguay, and the local medicine system works a lot better than the U.S. system in practice, for the "normal" cases, and at an incredibly cheaper cost.

It's far from perfect, and hospitals are usually very near bankruptcy and have to be propped up by the state.

I've written a lot about it, I should condense it into a blog post, but for example:

https://news.ycombinator.com/item?id=6261120

"We have private emergency systems, and they work extremely well for the consumer, my girlfriend had a burn from scalding water and was treated by a doctor within 5 minutes, for U$ 15. Doctors at those emergency services are criminally underpaid, though (as little as U$ 500 per 6 hour-shift monthly)"

https://news.ycombinator.com/item?id=3558726

"My uncle went for a cardiologist evaluation here in Montevideo, Uruguay (where we have a form of socialist-style medicine in the style called Mutualism). They found a suspicious spike in his heartbeat, which they suspected to be a treatable syndrome (Wolff-Parkinson-White), and decided to do some special evaluations. He was treated (with full anaesthetics) one week later (at almost zero cost)."

A big one about healthcare costs in Uruguay, on a parent post comparing heart surgery in India to the U.S.

https://news.ycombinator.com/item?id=6124081

"on an investigative piece from a weekly that goes into great detail on the costs of surgery in Uruguay. I'll just quote some basic numbers:

- Fixed fee per major surgery (medical act) UY$ 27.500 / U$ 1300

- Monthly Head Heart Surgeon salary (per hospital) UY$ 263.000 / U$ 12500

- Other heart surgeons, between UY$ 162.500 and 243.000 depending on seniority and other factors - U$ 8.000 to 12.000 range, per month.

Those are close to the best salaries anywhere in Uruguay, usually as well trained as any doctor in the U.S.

- Cost to the hospital per major operation (heart surgery), UY$ 206.000 / U$ 10.000

Smaller operations like angioplasty cost UY$ 60.000 / U$ 3.000

The most expensive surgery is heart transplant, which costs UY$ 684.000 / U$ 32000

All those are set by the government, so those ARE the actual costs (well, actually they were in 2008, I didn't adjust by inflation and exchange rate), no insurance or strange stuff involved.

The patient is not billed a cent, but there is a huge delay (months usually), and doctors don't really schedule surgery unless it's critical for the person's health (almost no quality of life procedures through the public system). Source: http://www.semanario-alternativas.info/archivos/2008/5)mayo/...

MRI costs in Uruguay

https://news.ycombinator.com/item?id=2248231

The most expensive MRI bill for someone in the "mutualism" system here in Uruguay is U$ 100.

I tried to explain the Uruguayan "mutualist" socialist health system here:

http://news.ycombinator.com/item?id=1627862

"Mutual organisations do not have external shareholders - they are controlled by their members. Members may be users of the mutual, employees, other stakeholders or a combination of these Mutual organisations are either owned by and run in the interests of existing members, as is the case in building societies, cooperatives and friendly societies, or, as in many public services, owned on behalf of the wider community and run in the interests of the wider community"

A HN member compared them to credit unions, I think it's a valid analogy.

The mutualist system is always near bankruptcy and is perfectible (and the government is always meddling), but it doesn't bankrupt it's users and it kind of works (life expectancy here in Uruguay is the same as in the U.S.).

funnily, it seems it's very similar to the Japanese case (and MRI's cost U$ 98 there too):

http://news.ycombinator.com/item?id=2247969

1. http://en.wikipedia.org/wiki/Frenulum_of_tongue

When I was in 4th grade I wrote a country report on the US. When I got to the economics portion of the encyclopedia, I still remember the opening line..

"The United States is a mixed economy operating predominantly under capitalistic principles.."

Why settle for one when you pick the best from both worlds?

Unbelievable how much this affects people's lives..you can ONLY like Go or C++..you can ONLY like Apple OR non apple products..you either watch Art House Cinema or you watch Hollywood blockbusters, absolutely not allowed to watch both..you're either 100% capitalist or 100% socialist.

The idea of the "truth lies somewhere in the middle" is at least as old as the Greeks (that quote was attributed to Aristotle when I first read it), and yet every single day, the same people regurgitate the same tired arguments to the point that I'm starting to sound like a broken record myself in response.

There's a deep rabbit hole at: http://en.wikipedia.org/wiki/Anxiety/uncertainty_management

Particularly relevant: "Axiom 20: An increase in perceiving that we share superordinate ingroup identities with strangers will produce a decrease in our anxiety and an increase in our ability to predict their behavior accurately."

Unfortunately there is a disconnect in the U.S. between what people really believe to be just, moral, and good governance and what they vote for.

Medicine is an area where the individual patient can very often not provide useful feedback to themselves or others. It is too technically hard because anecdotes can easily fool individuals, even expert individuals.

Adam Smith himself was both a moralist and an economist. He had a nuanced understanding of the topic, and recognized the tendencies of the invisible hand to go the very bad places, under some scenarios.

Markets in medicine suffer from three problems.

One, that the doctor knows so much more than the patient it's hard for the patient to know whether or not he's receiving good care.

Two, that it's not practical to shop around in emergency situations. If I'm having a heart attack I'm not going to drag out the yellow pages and call around to find the best deal.

And three, many people will never make enough money to cover their own medical care. Sometimes because they have some expensive condition, and sometimes because they just don't have much money. While I'm pretty comfortable saying people who can't afford wide screen televisions should have wide screen televisions, I'm not at all comfortable saying people who can't afford and appendectomy should find a comfortable spot to die.

But I still don't see why insurance companies with a little help from patients aren't able to reel in costs.

We need to figure out a way to get out of the binary thought process where you are either a market guy or a communist.

The debate is all about when, how and for some even if the invisible hand can be improved on. Medical care should be a particularly difficult area for the reasons you list among many others. At least so far the results of efforts to improve on the invisible hand in US medical care have been mixed as the examples in the OP point out.

My wife was in labor for a bit less than a day. Baby was fine, everything good, but apparently we were taking too long. Doctor demanded we do a c-section. When we said we wanted to wait, she walked out, slamming the door. We got scared, they made 60K for about 20 minutes of work. Guess what the c-section rate at that hospital is? 50%. Not kidding. I'm in the wrong business.

http://www.icanofnj.com/hospitalcsectionrates.htm

A friend of the family was unexpectedly laid off, with insurance expiring at midnight the same day. She had the first of many grand mal seizures around 3 hours after the insurance expired.

The doctor who was first called in to the ER specialized in one type of cancer. He mother suspected she had a second type of cancer, and if so would be eligible for a free research study. Because she didn't have health insurance, she got whatever doctor the hospital assigned and she kept getting this guy. He refused to sign off saying she had the second type of cancer and he refused to admit her to the hospital, even when she was having more than 4 grand mals a week.

About a month and a half after her mother initially contacted them, she got them to look at her records, and the research team determined that she did in fact have the cancer they were studying and flew her out to their research facility. Unfortunately, by the time she got there, the researches said the cancer was 1-2 weeks beyond the effective window for their proposed treatment.

In the meantime, Florida legislators were working a bill to eliminate the bonus for specialists called into an ER. The young lady returned to Florida in time to see the bill passed. On her very next trip to the ER for a grand mal, the doctor that had several dozen times previously refused to admit her to the hospital finally admitted her (now that he wasn't going to get any more bonuses from ER visits)!

To add insult to injury, the young lady was a veteran from the first Gulf War. She died a little less than 3 months after being laid off. The VA still hadn't processed her paperwork to get her in the system.

It was not only excruciatingly depressing watching this young lady and her family's battle with cancer, it was a serious wake-up call about the problems with our health care system!

Maybe the doctor slammed the door because she was really looking forward to going shopping with her bonus (like an angry retail customer that once told me I was "taking money out of his pocket" because I wouldn't give him an expired sale price on a stack of blank CD-Rs).

AFAIK it's nigh impossible to get away with this in the EU, or at least in Belgium. Belgium's worried about an increasing C-section rate, but at 20% it's still far below those in the U.S. it seems (which was ±33% in 2010/2011).

Also: is the cost actually USD $60,000 or is that a typo? That'd be about 10 times the rate in Belgium!

Our deductible sucks so we do this all the time. If you have cash in the bank, ask what they'd be willing to do if you pay 100% today (money now is worth more than the same amount in the future, and a lot more than money discharged in bankruptcy).

Challenge every line item. Every $600 bandaid and sleeping pill. It really helps here if you have evidence of what someone else paid for the same or similar procedure.

If they won't budge, take a payment plan with the absolute lowest possible monthly payment you can get them to accept.

It's completely normal to be billed $2,000 and pay $3.59 for something. I don't even know why they bother with the fake number in the first place.

It also cost $0 total, with a baby delivered and 5 days in the 'new-parents-hotel' at the hospital, which included monitoring, help and instruction, and vaccines.

No he wasn't. That number is fake. They get about $700.

Did I misread that ? If not, it's just insane.

Or are you under the delusion that you don't pay for it? Just because you aren't charged doesn't mean you haven't paid for it, and probably more in taxes.

Some countries prefer to pay for this stuff via taxes, others individually.

And in the US free insurance is available for pregnant women who can't otherwise afford insurance, and has been for years (i.e. nothing to do with obamacare).

My personal physician loves it, he no longer wastes time filing for OHIP payments and no longer worries that maybe he is only ordering procedures to make more money rather than for a legitimate purpose.

This is a particular problem when diagnosing problems, is "your gut" or "your greed" telling you that the patient needs this $1000 test.

Capitation also has it's own perverse incentives, you are motivated to work less, spend longer with each patient (beyond what is appropriate, such as shooting the breeze with patients) and take more breaks. It is almost as bad as giving physicians a flat salary, you don't promote efficiency, turnaround, and accessibility.

Capitation is ideal for the individual patient provided they can get an appointment, but is bad for the system overall. Medicine is primarily concerned with the well being of the general population rather than an individual.

They get paid by patients under their management so if they are taking breaks that can't manage that many patients.

Sure you can. You just go way larger. To entire cities, or counties. It doesn't cover travelers, but you could have bilateral exchange agreements with other municipalities.

When/how do these errors get caught? I'm sure many never are.

I'm ok with incentivizing less medicine rather than unneeded surgery :-P

1. "Medical offices which have equipment for certain services provide those services more often than offices that don't."

They've got the equipment in-house, so of course they're going to use it. The article doesn't take into account the possibility that patients are choosing to go to these offices _because_ they have the in-house facilities for the treatment they want. Going from "doctors who have X machine order X procedure more often" to "doctors treat patients like an ATM machine" is a huge leap.

2. "Some surgeons in Florida performed unnecessary surgeries for money."

There are bad apples in every bunch, this is why you get a second opinion before going under the knife. Yes surgeons get paid per procedure, yes it's a flawed system, but that doesn't mean they're all wheeling and dealing to get as many people to submit to surgery as possible.

It's worth noting also that whenever the article says "charged patients" what they mean is "billed patients' insurance company." Chances are the people who don't have insurance were the ones smart enough to see another doctor before paying.

This kind of fearmongering crap undermines confidence in medical professionals and medical science. The vast majority of medical professionals are extremely hard working, knowledgeable people who's primary goal is to help everyone that walks through their door. Without trust from their patients, they can't do this effectively.

I recall what a nurse once told me, that she was glad she doesn't have private insurance, because that can easily mean they put "tubes into every hole" even when there is no point in doing so (this was in the context of terminal cancer, mind you). That was in Germany, and not in some crappy backwater hospital either.

> There are bad apples in every bunch

Actually it's "a few bad apples spoil the whole bunch". So instead of blaming "fearmongering crap", maybe blame the bad apples, instead of just accepting them as given. Not that you don't have a point at all; trust is really required. But not blind trust, and not naiveté; those are just as unhelpful as unfounded distrust would be. As they say, nature abhors a vacuum.

Exactly, they are going to use it as much as they can, whether it's necessary or not, because they have it.

I have no idea as to the veracity of the story or the effectiveness of such a model (and hold no truck with the pseudoscientific methods used by such practitioners), but it raises an interesting thought - would healthcare be more effectively funded through some mechanism other than private insurance or state funding? Might the debate over healthcare have been narrowed into a false dichotomy, when there may be a far better option lying unnoticed on the third hand?

"Why should I: stop smoking, stop drinking excessively, exercise, or change my diet? If I get sick (not healthy), I don't have to pay my doctor!"

My question is, why do we keep talking about ACA like it provides care? It doesn't. It mandates insurance. If you need care, it still costs you more out of your pocket.

I can't think of any objection for trying out your idea and seeing how things go.

Of course that wouldn't prevent any doctor and patient from doing whatever they wanted, at their own expense.

There's only one other sector of the US economy that's "single-payer": military procurement. And that's not known for its spending efficiency, either.

So it's not simply "single-payer" that magically saves money, but the specifics of the incentive system that's set up, and the other precedents from American federal governance are not positive.

Thank you for acknowledging that the main mechanism that a federal medical buyer monopsony (aka nationalization/single-payer) could use for cost-control is, essentially, "death panels" who say no to many treatments currently performed.

But can the American political system embrace that step, or will it wind up with single-payer without cost-controls? We wind up with the kinds of giant federal programs that can make it through the political system, and get implemented by the bureaucracy... not the kinds of idealized programs existing only in advocates' minds.

Finally, in single-payer systems, getting "whatever you want" done "at your own expense" is often effectively prohibited. For example, when the official system has particular limits (like price controls, limited participating providers, or waiting lists) for a covered procedure, it has often been illegal, in US Medicare or Canada's programs [1], to purchase that same procedure out-of-pocket/out-of-system for a negotiated price. Once you've nationalized, there's even a certain logic to such prohibitions: the system is straining under budget caps, and you can't risk the wealthy siphoning off capacity/copayments that could help support the common base.

[1] http://www.cato.org/publications/policy-analysis/freedom-

Similar to the claim that under ACA, no one would lose a plan they liked [1], the claim that single-payer will still allow full freedom to work outside the system is a pre-implementation falsehood used to build support. Hell, it's even in the name: "single-payer". You have to crack down on competing payers, or your price leverage slips away, and voters stuck in the single-payer system get angry that they're facing the political cost-benefit rationing that others aren't.

None of the other-country "single-payer"-ish systems cover even 1/4th the population size of the US. If single-payer can work so well for cost-control in the US political reality, why doesn't it work for Medicare, and the Defense Department?

[1] http://networkedblogs.com/Qy7JI

That is 100% meaningless. Cost per patient is the only metric that matters. Its the same old right-wing canards that get pulled around here by the same ultra-conservative libertarains. I am so glad you are on the losing side of history.

Imagine if I said "Whoa whoa, you can't open a giant factory in the US! No one has ever made one so big!" and you said "But my cost per item and cost per worker works out." Its madness that this kind of thinking is artificially applied to healthcare, like its some special industry immune to all the rules and can never, ever be regulated or be made in single payer like the Europeans have been doing for decades.

If what you say about the ease of running an efficient nationwide federal program were true, Medicare and the DoD would be known for their cost-controls. Instead, they're known for the opposite.

Why can't the feds force each state to figure out a single-payer system? No state is bigger than the UK or Canada (ok, California has a few more people than Canada), and they have it figured out.

Look, if you like the private system for some reason, give that reason. Don't spout bullshit about "it's impossible to manage because the US is 4X larger than the UK".

Our constitution, politics, and culture don't let "the feds" easily dictate such things. The federal government can nudge with some mandates and grants (as with the ACA itself), but forced nationalization of industries is hard, especially so when most states (by count) would prefer otherwise. It's also especially hard, if those in favor of single-payer takeover only barely or temporarily have the legislative majorities necessary (again, as with the ACA itself).

That much larger and more diverse populations, economies, geographies, and institutions are harder to govern via a working consensus isn't "bullshit", it's a political and historical reality. (How many government shutdowns has the UK had recently?) You can stomp your feet over this, and perhaps wish that some more-powerful central government could just "force" everyone to enthusiastically implement your preferred policy... but that's not the US way.

Maybe you could get a single-payer constitutional amendment passed. That'd establish clear legal authority, and prove a broad consensus that would help with implementation. Why don't you try that?

I dislike national single-payer (and the baby-step of the ACA) because I don't think it can work well here. It'll have the cost-efficiency of the pentagon, the compassion of the INS, the simplicity of the tax code, and the innovative pace of the FDA.

What would be a good decentralizing alternative to this current forced-march towards unprecedented-scale nationalization? Leave more details to the states. Use national action mainly to undo existing distortions, like medical cartels/protectionism and the tax-preference for non-portable employer coverage. And, provide direct payment assistance to the neediest/sickest, rather than new regulations on the shape and cost of policies for everyone.

My wife has limited private health insurance. I can buy private health insurance.

http://thehealthcareblog.com/blog/2012/01/16/the-awkward-wor...

My point is that "single-payer" doesn't mean one specific thing, and the implementation details in different political systems matter.

As for moving to the US, two reasons. 1) Wait times in other provinces were much longer than we wanted to wait. Even going the private route in Quebec would have mean a year and a half (that was on top of the year we had already been waiting). In the PA, we got more help for my son's Autism in the first 2 weeks than we had the entire time up in Quebec. 2) I'm American, and because of that, my sons are also American.

Note, I don't pretend that this means the US health care system as a whole is better, or that Canadian health care is worse. However, my experience with a child with Autism in Quebec is not unusual, and my recommendation to parents with Autistic children in Quebec is to leave.

Glad to hear you found treatment for your son, and best wishes for the future.

Having a government run healthcare system like Great Britain's would solve the problem, but it could do that with or without single payer. In fact, Singapore has had quite a bit of success combining a semi-government run hospital system with private payment for healthcare.

Well, now that you've put it that way, the idea of a government-led panel -- rather than the family -- deciding that Grandma is too old to bother treating sounds so much better.

The "death panel" bit is just the question of how long the government would have continued to pay benefits.

The advantage of single-payer, is that he will not have a profit motive to do so. And monopoly bargaining power on the side of the public.

According to the article (Physicians in general aren’t allowed to refer their patients for treatment in facilities that they also own), that's also generally true in the existing system except for some exceptions. In particular the one cited in the article.

That isn't to say that a single-payer is better or worse, but we should be methodical and careful when considering wholesale replacement of the incentive structures.

For those times that incur large costs, I would bet that you could make a better-than-chance guess. What are the success rates of "extraordinary measures" ?

http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_...

Wow.

The image of the physician as somebody who is there to help relieve suffering is cemented as a meme, but the way the system seems to have evolved in the past few decades is towards help as a secondary duty if any.

Unfortunately, anyone who seems to want to speak out against the system is immediately rebutted with cries of "Why do you hate doctors?" and "They saved my babies!".

It is very hard to have an honest discussion and self-introspection in the current environment, especially with so much money at stake.

To be fair, with spinal fusions in particular, when a review panel says surgery is "not medically necessary" they're recommending daily pain/numbness/loss of range of motion is better treated with narcotics/steroids/etc.

So it's hardly as simple as "doctors ignoring pain for profit". It can quite easily be "insurance company ignoring pain for profit".

You simply can't ignore the role of insurance companies. Their disincentivize to approve any treatment, necessary or not, to mitigate their own costs is also a well-studied problem.

Reminds me of the song "Stuck in the middle with you":

  Clowns to the left of me, jokers to the right.

6) Doctors not only have a financial incentive to prolong life needlessly, they also worry about not prolonging life out of fear of being sued by family members unless there is a living will, and perhaps even if there is a living will.

== Buried a bit, but worth highlighting.

On my part, I was just doing some Web searches for patient guides about how to select treatments and when to get second opinions. Regardless of how health care is paid for, patients sometimes need guidance about how to choose physicians, and how to choose treatments. (I know this for sure because my family lived in Taiwan for almost three years under Taiwan's single-payer national health insurance system, and we still had to decide which doctor to visit--we had choice in that matter--and whether or not to follow the doctor's treatment recommendation, which we sometimes followed and sometimes did not.) I'll keep looking for a user-friendly guide like that online, and if someone else commenting here can link to one, I'll be very grateful for that.

1. Medicare / insurance fraud --- The author obviously hasn't heard of the Health Care Fraud Prevention and Enforcement Action Team (HEAT). HEAT led to the record number of fraud charges in 2012. In addition to that, ACA standardized fraud convictions, so any provider convicted of fraud can no longer claim any federal money (Previously, a provider convicted of medicare fraud could still collect payments from medicaid et al).[2] These are only 2 provisions of the roughly 50 that directly address fraud. [2a]

2. Massive amounts of Paperwork --- This paperwork is moving to EHR / EMR systems that will file it automatically for the vast majority of patients. ACA mandates that the systems must use a standard format, so that any system built can communicate with all federal / private insurance carriers. [2]

3. Since doctors have direct contact with patients, and insurance companies don't it's easy for docs to blame insurance companies for unnecessary procedures --- I'm confused by this point, it seems a bit confused and contradictory toward his other points.

4. Doctors perform needless tests for fear of being sued --- The author has clearly never heard of ACOs. One of their primary goals is to limit the number of tests and procedures done. Insurance companies and the government will provide fairly significant bonuses when the cost of provided care comes in below average. [4a] In addition, the ACA provides research grants to study best practices and patient outcomes, having published, peer-reviewed research for common diagnoses will greatly limit the ability to sue for stuff considered CYA. [4b]

5. End of life care is insanely expensive --- This would've been addressed in the ACA, but Sarah Palin, Newt Gingrich and their dimwit followers torpedoed the 'death panels' to score some cheap political points.

6. Life is prolonged without living will --- Again, thank Sarah Palin, Newt Gingrich, and the Fox News brigade for their insane rants against 'death panels' which would have directly addressed this.

[1] - http://www.npr.org/2011/12/30/144491419/doj-posts-record-for... [2] - http://www.healthit.gov/policy-researchers-implementers/stan... [2a] - http://www.btlaw.com/files/ALERT%20-%20Healthcare_Health%20C... [4a] - http://www.washingtonpost.com/blogs/wonkblog/wp/2013/08/29/o... [4b] - http://www.nlm.nih.gov/hsrinfo/cer.html [5 & 6] - http://en.wikipedia.org/wiki/Death_panel

If democrats could have truly passed any version of the bill they desired, it would likely be a single-payer system or at bare minimum include the public option. Why didn't either of those come to be?

Also, when a party is actively lying, and has convinced almost 50% of their dimwitted backers that a new law is going to actively kill senior citizens, it's safe to lay some of the blame for the exclusion of that provision at the feet of that political party.

In the end, thought, your parent post is correct. They got 0 republican votes on it, so they could've made it anything they wanted that they all agreed on and wouldn't be ruled unconstitutional.

    In the end, thought, your parent post is correct.

The PPACA passed the senate before Ted Kennedy died. When it became clear that the republicans wouldn't vote for any provision, the democrats had two options.

1. Start over with a new, more aggressive bill

2. Pass the senate bill in the house

Since Scott Brown took away the 60-seat supermajority in the senate, the republicans could have completely scuttled any bill at all in the senate, preventing even modest changes to health care.

The D's had no option but to pass the PPACA.

* * * Late Edit since people take exception to my last line above:* * *

The D's technically did have a choice to not pass the PPACA. However, since 0 republicans would vote for any health care reform, their two options were either pass PPACA in the house, or not pass any health care reform. If they had neglected to pass any health care bills, all of their political capital would have been wasted along with several years of debate in congress. It was clear at the time that the 2010 census would provide numerous gerrymandering opportunities to the Rs (who had state-level majorities in many states), which would lead to unavoidable democratic losses in the next election. Add to those losses the impact of a non-presidential election cycle, and the wasted political capital and lack of progress on health care reform, and it was clear that for health care reform to pass in the decade, it would have to be the PPACA.

Clearly they had every option. Including, doing something different. These are senators, not 5 year old children.

The behavior of Ted Cruz, et al successfully shutting down the government for a few weeks over something party leadership told them wasn't winnable would seem to indicate that there's really not that much difference between the two.

Yes, it's worse now, but it was already headed there when the ACA was passed.

I would not deny that the Honorable Junior Senator from Texas does comport himself like a five year old.

The point still stands, however, that the party leadership did not want that fight and knew that they were unlikely to get any real concessions. Boehner, for all his flaws, got pushed into it by the even more unreasonable element of the GOP.

Yes, they did. They could have not passed it.

It's an option that is likely to look increasingly attractive in hindsight over the next year or two.

I do not.

"Something" is not always better than "nothing". There are "somethings" worse than "nothing". You may find that you turn out to be in full support of a "something" worse than "nothing".

Oh, and I do have suggestions about what should have replaced it, but since you'll just then accuse those suggestions of killing millions of poor innocent babies and kittens, why bother sharing them? You're arguing with emotion, not fact.

Unfortunately, ACA has left the realm of emotion and entered the realm of fact... and it is faring poorly. I do not relish this, believe it or not, but the longer it takes for people to realize the size of the gulf between fact and promise, the more damage it's going to do to people. And that is where we are right now with the ACA... damage containment mode. Not "celebrate the end of health care woes in the US!" mode.

And just because a website rollout didn't go as planned does not mean that the program is fairing poorly. There have already been a number of key changes that have had a positive impact (a ton of my friends were able to maintain health coverage throughout the recession thanks to the age limit increase (26) for dependents). It's not perfect, but doing nothing was not an option simply because it would be a least a decade or more before the issue could have been addressed again.

    Why can't the Democrats win them over with better messaging?

[1] - http://washingtonexaminer.com/howard-deans-scream-tv-screwed... [2] - http://en.wikipedia.org/wiki/John_Kerry_military_service_con... [3] - http://www.marketplace.org/topics/elections/campaign-trail/n... [4a] - http://research.stlouisfed.org/fredgraph.png?g=nQE [4b] - http://research.stlouisfed.org/fredgraph.png?g=nQF

If anyone is interested, go read the O'Reily book "Hacking Healthcare" to learn about how brainfucked the system is.

    If anyone is interested, go read the O'Reily book
    "Hacking Healthcare" to learn about how brainfucked
    the system is.

  $50k+ per instance

    No problem; $80,000 per spinal fusion.
    Even if caught, they're profiting. If.

I'm curious how you guys think medical professionals should actually be paid / how can pricing be done "fairly" in a system where there can never be "information symmetry"?

I can only speak for myself; I made very good experiences with doctors whenever I myself was sick, but I also worked for 11 months on a cancer ward a while ago, and some of the stuff I saw there was kind of rage inducing. Nearly all nurses were fine, most doctors were fine, but the ones that weren't, really really made up for that. I don't think doctors are all evil, nowhere near, but the reservations and skepticism I do harbour, I don't harbour because it's "fun" to have them. It's merely a way to cope with real shitty stuff that does exist.

> I'm curious how you guys think medical professionals should actually be paid / how can pricing be done "fairly" in a system where there can never be "information symmetry"?

First off, of course there can be "information symmetry". Not between patient and doctor as much as among medical professionals and health insurance providers. Medicine isn't Voodoo, things are reasoned about and tested, usually, and given the right laws and enforcement of them, everything can be documented and subject to review.

As for how to improve the situation: while I haven't thought in-depth about this, but how about a flat hourly rate for doctors etc.? That is, not being paid for the kind of treatment, but rather for being on the job. Of course, the hospital would need money depending on what kind of treatments they do, but if there was no (legal) way to pass on that "profit" to the staff itself, there would be no incentive for malpractice based on greed. As I said, I haven't thought much about this and maybe I am overlooking other problems this might cause (like offloading patients that are too expensive and/or too much work to other specialists, like a hot potato), but I wanted to put this out there anyway.

The OP read an article in NEJM once and has a numbered list of things to say, followed by an unnumbered list of things to say.

Forgive the pedantry. I'm sure the title will be changed soon anyway.

Also, link to the original study, rather than some random person's commentary.

She reported that some doctors already used it for practice-improving stuff. The middle set of doctors were a bit like "oh well, the gig is up". But the third set of doctors were outraged that she should tell them how to spend their money. They saw this drug company money as part of their personal income.

I am the perfect example of this. I went to a particular doctor with the expectation that he would eventually perform the surgery I desired. He did technically evaluate if I was a good candidate, but I got the impression his patients only visit him if they want the surgery performed. He also does a lot of these surgeries, making him more experienced and more attractive as a surgeon. I would imagine this Florida doctor is similar.

I always had a strong suspicion that the doctors prescribe too many medications (which were also brands more expensive than the generics). Not so paranoid after all.

Taking it back to startup-land, this is why sales team compensation structure is discussed at such length at the board level. You generally get exactly what you compensate for, and it's easy to create unintended consequences.

Outside of other comments: of course profit changes doctors' decisions! Why wouldn't it? The medical industry is a business. It is, however, the most regulated industry in the USA. Tech is the least regulated. In the tech industry progress and innovation abounds. It does not in the medical industry. I see a correlation there.

Fraud, ridiculous amounts of paperwork, and incentives to do the wrong thing were everywhere you looked before Obamacare. The same problems exist now.

Worse yet, Obamacare added to the mess by over-charging millennials and their kids, and undercharging smokers and others with unhealthy lifestyles. Except for those below certain wage thresholds, insurance costs are likely to increase.

Yep.

Obamacare sets the vital, initial steps into the industry.

Conservatives love to jump on this line because it bashes Obamacare. IN REALITY, it means it didn't go far enough.

False. The US federal government initially entered the private healthcare market in 1966, with the passage of Medicare. The transformation from private to public healthcare has been going on for nearly 50 years now.