"After the needless death of his father, the author, a business executive, began a personal exploration of a health-care industry that for years has delivered poor service and irregular quality at astonishingly high cost. It is a system, he argues, that is not worth preserving in anything like its current form. And the health-care reform now being contemplated will not fix it. Here’s a radical solution to an agonizing problem." - Steven Perez from Bookmarklet

Wow. That was an amazing read. Thank you, Steven! - Ladybug Heather

"The housing bubble offers some important lessons for health-care policy. [...] But by making housing investments eligible for special tax benefits and subsidized borrowing rates, the government has stimulated not only the construction of more houses but also the willingness of people to borrow and spend more on houses than they otherwise would have. The result is now tragically clear." - Really? Decades and decades of such policies, but yet the housing boom only occurred in the last decade: is it *really* plausible that those housing-boosting policies are the root cause? Come on. - Andrew C

Also, I think his primary message (I ended up skimming the second half) of fixing things by going to a purer market-based approach ignores the failings of a health care market: http://krugman.blogs.nytimes.com/2009... - Andrew C

Krugman summarizes: "There are two strongly distinctive aspects of health care. One is that you don't know when or whether you'll need care -- but if you do, the care can be extremely expensive. The big bucks are in triple coronary bypass surgery, not routine visits to the doctor's office; and very, very few people can afford to pay major medical costs out of pocket. This tells you right away that health care can't be sold like bread. It must be largely paid for by some kind of insurance. [...] The second thing about health care is that it's complicated, and you can't rely on experience or comparison shopping. ("I hear they've got a real deal on stents over at St. Mary's!") That's why doctors are supposed to follow an ethical code, why we expect more from them than from bakers or grocery store owners." - Andrew C

What an idiot. He thinks you can shop for healthcare like buying groceries. People like this are so out of touch I don't even know where to start. - Piaw Na

"And it wasn't really paying for the quality of his care, either; indeed, because my dad got sepsis in the hospital, and had to spend weeks there before his death, the hospital was able to charge a lot more for his care than if it had successfully treated his pneumonia and sent him home in days." - is that true? Because Medicare explicitly does not pay for certain "health care acquired conditions" - that is, it does NOT reimburse providers for (certain) conditions they caused, for the obvious adverse incentive reason Goldhill raises. - Andrew C

PA effectively has a healthcare monopoly. Sounds like something that's easy to fix. In a world where people routinely make a hash out of their 401(k), trusting people to make sound decisions about complicated medical procedures is insane. - Piaw Na

The whole "you are not the customer [and that's the problem]" point is fairly silly. For a lot of health care, even the non-catastrophic parts that Goldhill would prefer we all pay for out of pocket rather than through insurance, it's a thing with a tremendously flat demand curve. If I can afford cold medicine, or a cast for a broken arm, or etc, I'm going to buy it from the most convenient place and as soon as possible. Would there really be a big rise in the consumption of anti-psychotic meds if they were cheaper? Or would demand be pretty much fixed at the actual level of medical need? - Andrew C

There are some things I agree with in this article, namely, the fact that our current system provides a perverse incentive to perform lots of procedures, and which favors volume over quality. But the idea that the free market can actually keep costs down is pretty naive. This is what we had before managed care and government regulation, and this is how health care systems in a lot of developing countries function, and it doesn't work very well. - Victor Ganata

Atul Gawande's article in the New Yorker http://www.newyorker.com/reporti... actually covers some of the same ground, but he's pretty lukewarm about the idea of letting the free market try to keep costs down. - Victor Ganata

The reason it won't work is pretty much encapsulated in this quote: "We tried to imagine the scenario. A cardiologist tells an elderly woman that she needs bypass surgery and has Dr. Dyke see her. They discuss the blockages in her heart, the operation, the risks. And now they’re supposed to haggle over the price as if he were selling a rug in a souk? 'I’ll do three vessels for thirty thousand, but if you take four I’ll throw in an extra night in the I.C.U.'—that sort of thing? Dyke shook his head. 'Who comes up with this stuff?' he asked. 'Any plan that relies on the sheep to negotiate with the wolves is doomed to failure.'" - Victor Ganata

I'd encourage everyone to read the entire article. Though I'm not completely sold on Goldhill's proposal, it does have some merits. Separating out unpredictable, catastrophic care from routine maintenance is helpful. The former should be insured against, whereas the latter is much better approached through buying-clubs. The problem arises when health insurance is used for both purposes. - Kohl S Gill

I'd be more likely to accept the premise if you literally meant separating out just trauma from the rest of medical care. Because no one ever really knows when they're going to get hit by a bus. But the things that can land you in the ICU like heart attacks, liver failure, cancer, sepsis? Those things have known trajectories. You can actually prevent or at least mitigate some of these things with timely routine care. It would be interesting to see what the insurance companies would consider "catastrophic" - Victor Ganata

I agree with parts of this article, but I'm not sure the solution he proposes would be workable, at least for anyone other than really healthy people. One issue is that there are a lot of chronic conditions like diabetes, epilepsy, and various mental disorders that require regular doctor visits, tests, and prescription medications to manage the condition. Someone with a chronic condition may well be taking money out of the savings account as quickly as it can be put in, especially if the patient doesn't respond well to cheaper treatments. In those cases, the money wouldn't be available for expensive end-of-life care. - John (a.k.a. dendroica)

I think in a system like this, anyone with a chronic medical condition would have a short, grim life. It would simply be financially untenable. Which is totally whacked because with the proper care, a lot of people with chronic diseases can still be very productive members of society. - Victor Ganata

some one with chronic ie crohns now under current USA profit making for wall street anti healthcare must fight to receive tratment with insuance company as a foe to any treatment more expensive than aspirin - that is not conjecture that is 40 years of actual experience managing a severe life threatening diease that nevr ever ever is cured but merely lies dormant periodically... - WarLord

I agree with you WarLord. - John (a.k.a. dendroica)

@John, a cap on costs for chronic conditions was addressed in the article: “ Proposals for true catastrophic insurance usually founder on the definition of catastrophe. So much of the amount we now spend is dedicated to problems that are considered catastrophic, the argument goes, that a separate catastrophic system is pointless. A typical catastrophic insurance policy today might cover any expenses above, say, $2,000. That threshold is far too low; ultimately, a threshold of $50,000 or more would be better. (Chronic conditions with expected annual costs above some lower threshold would also be covered.) We might consider other mechanisms to keep total costs down: the plan could be required to pay out no more in any year than its available premiums, for instance, with premium increases limited to the general rate of inflation. But the real key would be to restrict the coverage to true catastrophes—if this approach is to work, only a minority of us should ever be beneficiaries." On 24 Sep 2009, at 11:49 PM, John the Parrot of FF wrote: - Kohl S Gill from email

I can't help but feel that people will therefore simply delay care for what would be a routine situation and wait until their condition evolves into something that would be considered catastrophic. - Victor Ganata

Yeah, what Victor said. And in addition to that factor, there's also the sad truth that way too many Americans are way too financially squeezed to pay for managing any kind of expensive - but not immediately ruinous - condition. - Andrew C from Android

The more I think about it, the more it seems that switching to a catastrophe-only model merely defers the inevitable fight between the insurer and insured about what is covered and what is not, and makes it more likely that the insured is too sick or has too little time to successfully fight the insurance company. - Victor Ganata

Things like high blood pressure and diabetes often don't cause any symptoms for a long time, until catastrophe happens. If you're asymptomatic, and you have to pay cash, are you really going to go to the doctor? So when you do have your heart attack, or stroke, or start going blind, or end up in renal failure after being asymptomatic for years/decades, isn't the insurance company just going to say, well you should've taken care of that earlier, we're not going to cover your angioplasty/triple-bypass/post-stroke rehab/photocoagulation/dialysis? - Victor Ganata

I’m honestly not sure what people would do, or whether all populations would thrive or suffer equally under such a system. I think it’s an interesting system worth piloting. From what I’ve heard, some countries (Singapore: http://en.wikipedia.org/wiki... ?) have such a system in place, so it might be worth taking their experiences as initial data. On 25 Sep 2009, at 11:06 AM, Victor Ganata wrote: - Kohl S Gill from email

It would be interesting to look at their data, but the thing is, Singapore's government basically enforces price controls and mandates health care savings, and they provide subsidies dependent on income and also ensure universal access. If we forego massive government intervention and instead try and let the free market determine prices and access, we're not going to end up with the same results. - Victor Ganata

Wikipedia sources this article regarding Singapore's health care system. http://www.watsonwyatt.com/europe... The major question is whether such a system could actually scale to a country with 75x more people. - Victor Ganata

"Singapore's government basically enforces price controls and mandates health care savings, and they provide subsidies dependent on income and also ensure universal access." - that's a few major differences from Goldhill's proposal as far as I can tell. - Andrew C