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POLICY: Joe Paduda on consumer spending restraint

Joe Paduda has an article about Steve Case’s determination to piss away $500m changing health care. In it he correctly notes the problem with Colin Powell’s argument that buying health care services and buying TVs are about as simple as each other. (Actually I think buying a TV is very complicated but that’s another discussion). Joe has a very interesting case study about his own decision when concern for his daughter’s health over-rode concern for his pocketbook.

We are insured under a high-deductible MSA plan, so any charges would come out of our pocket. I thought about it for a few seconds, than agreed. I also agreed to have her brought over in an ambulance for the fifteen minute trip. I knew full well that the risk was minimal, the costs would be over $2000 for this “preventive” measure, and I would pay all that out of my own pocket. Was the very small risk worth the outrageously inflated cost? You bet your life it was.

Now the next question is, what if Joe were not a well educated and (I guess and I’m sure he’ll tell me if I’m wrong) a relatively wealthy consultant, but a single mother to whom that $2000 would mean not being able to pay the rent or put food on the table. That’s where the fallacy of an at the point-of-care economic decision by the consumer is demonstrated. And that’s where this isn’t like buying a TV.

Rational consumer-choice advocates (i.e. Alain Enthoven) tried to push this level of selection back up to the "sponsor" level. That meant that the health plan made the decision about treatment based on some level of cost-effective assessment about what was the best thing to do in each case. The UK now has a central body (the NICE) that hands down these guidelines. But no one who’s well versed in health policy seriously believes that these judgment should be made at the point of care, because the situation is totally uncertain, and the consumer almost always knows less than the provider and half the time is not in a coherent enough shape to make the decision.

There are plenty of places where there is a need for much better consumer-ist focus in health care — notably health plan and provider customer service.  But making these types of decision at the point of care is not one.

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Eric NovackBobSuegadflytheorajones Recent comment authors
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gadfly
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gadfly

//Based on watching my relatives I don’t see huge advantage in aging into my 90s or 100s.// I was a live in assistant for a man who lived to over 100. His mind was sharp, and he lived a rich life in his community. He was appreciated by many people, including me. He only declined and died after his sons decided to sell his house and moved him to another state. I appreciate the ability to make a reasoned decision based on family factors, and I wish every power to the decisions you make for your family. However, it’s not… Read more »

Sue
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Sue

//Get back to us when you actually are in the ICU, and your decision literally is life or death.// Gadfly, the people in family live into their 90s and 100s and I’ve got a husband with MS. I have considered the quality of life argument for a long time because I’ve always been surrounded by people who were facing it. Based on watching my relatives I don’t see huge advantage in aging into my 90s or 100s. The reality is that cost will factor into decision made about my health care and quality of life will be a factor as… Read more »

Eric Novack
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Gadfly- the flaw in your arguments lie in the fact that in your world– if you need something, then the people who supply what you need– should be forced to supply it, whether it be health care or any other service. What rights ought the providers have in your world? If all physicians worked only 35 hours/ week, the problems in healthcare would worsen… In your comments above you appear to be including doctors in “the richest people” category– a description many (for whom average debt upon completion of residency training is approx $130,000) would disagree.

gadfly
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gadfly

//companies have tried to convince the French to work more than their current 35 hour week and take less than the 4 weeks allotted vacation.// And companies are Entitled to exploit workers more than they already do why? Somewhere people have really lost track of the goals of civilization. Shouldn’t we be shooting for a better quality of life of every individual? Work for survival not for slavery? Opportunities to develop the spirit, to contribute to philosophy, the arts, and all the things that make a civilization great? Where is the pursuit of happiness? What does working faster and harder… Read more »

Bob
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Bob

Actually the percent of those who are insulated (to a great degree) from the cost of healthcare is closer to 83% of the population. Over the last dozen years or so the portion of the pop that is uninsured has hovered around 17%. About half of those have access to taxpayer funded programs, but opt not to participate. About a quarter of those uninsured are also not covering themselves voluntarily as they are between jobs (and coverage) or simply divert their funds to other things besides health insurance. As for the sense of entitlement, I would submit that those who… Read more »

gadfly
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gadfly

//our entitlement philosophy toward healthcare.//
To paraphrase the West Wing, there’s only a short putt away from Entitlement to Family Pressure and a Syringe in the Nightstand. It’s terrific when people know how they want to handle the end of their lives, but it’s terrifying that this philosophy might end up being enforced on others. Even the Holocaust was justified by “moral” and “reasonable” arguments.
//heroic measures//
Get back to us when you actually are in the ICU, and your decision literally is life or death.

Sue
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Sue

Let me add a different perspective. Different consumers view health care differently. My husband and I have good savings and are financially responsible. In buying health care we want to understand exactly what our liability is because we recognize that money spent on health care will impact our ability to fund other things–i.e. we actually have assets to pay the bills that a hospital will chase. If I were making the choice between a $2K ambulance ride and a ride in the car–unless I needed to be on life support it would be the car. And whether or not I’d… Read more »

gadfly
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gadfly

//no one who’s well versed in health policy seriously believes that these judgment should be made at the point of care, because the situation is totally uncertain, and the consumer almost always knows less than the provider and half the time is not in a coherent enough shape to make the decision.// Excellent way to put it. This is part of what I’m trying to get people to realize about just blindly getting on board with the EMR. With that access to information comes Point of Care Billing. In fact the Point of Care Billing will be put in place… Read more »

theorajones
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Exactly right. The point-of-care business model in healthcare isn’t like many other commercial transactions. I’ve been known to joke that the closest one I can find is, really, a mob shakedown. A doc and a mobster can both credibly say to a person, “listen, if ya don’t pay up, there’s gonna be pain and there’s maybe gonna be dying. And although I can’t explain it, you know what I’m telling you is true.” I’m NOT saying this because i think docs are mobsters; what I’m saying is that believing people will make good consumer decisions in this kind of transaction… Read more »