Economics

Grubernomics

Gruber OptimizedIn the giddy days after the passage of ACA, I was chatting to a PhD student in health economics. He was in love with the ACA. He kept repeating that it would reduce costs, increase quality and increase access. Nothing original. You know the sort of stuff you heard at keynotes of medical meetings; ‘Healthcare post Obamacare’ or ‘Radiology in the new era.’ Talks warning us that we were exiting the Cretaceous period.

He spoke about variation in healthcare, six sigma, fee-for-value and ‘paying doctors to do the right thing.’

‘How?’ I asked.

‘I just told you, we need to pay doctors for value and outcomes.’ He smugly replied.

‘How?’ I asked again.

He did not answer. Instead he gave me the look that one gives an utter imbecile who doesn’t know the difference between a polygon and a triangle.

My thoughts drifted to the great polar explorer William Shackleton, stranded in Elephant Island, Antarctica, with his crew looking at the night sky in negative sixty Fahrenheit.

‘Sir, what are we going to do so not to freeze next to the penguins?’ One of his crew asks.

‘We need to get out of here.’ Shackleton replies, thoughtfully.

‘Well thanks Captain! That’s what I call strategy. Why hadn’t I thought of that?’

Yes, why hadn’t I thought of that? Let’s just pay doctors to do the right thing. So damn obvious, eh! Except Shackleton probably would have said what I had hoped that economist would have acknowledged: ‘I don’t know, you imbecile.’

‘We need this’ is not a strategy. Just because we articulate a problem doesn’t mean the first thing that strikes us is the solution. Neither hope nor desire is either strategy or solution.

Was this economist, a wonk working with complex equation and models, one of the voters Jonathan Gruber was alluding to? Or was he in the ‘know’?

Actually, neither of the above. He was an aspiring technocrat; an emerging type of quantitative scholar who has over intellectualized the social sciences. He thinks he can rationally engineer society, just as an engineer builds a structurally sound bridge. For him the line between data-driven opinion and opinion-driven cherry- picked data is blurred.

He is smart. Very smart. He is not disingenuous or intellectually dishonest. Nor is he brainwashed. He has been commended all his life for post hoc rationalization of his opinions by an audience that listens to the same music. It’s not that the ends justify his means, it’s that the ends define his intellectual means.

Such people do not like arguing. If you question the solution too much they will quote something like ‘people who say it cannot be done should not interrupt those who are doing it.’

They are rarely ever challenged epistemologically. Occasionally, they’ll say ‘now let me play the Devil’s advocate and ask, how our new system can have problems.’ This ends up being a comical affectation of objectivity.

They are rationalists but treat numbers with the same reverence as Galileo’s captors treated god. The gods are different. The certitude in their omniscience is the same.

Technocrats are well meaning, as are people who have boundless faith in them. But being well meaning counts for rabbit droppings when it comes to the objective truth. Reality doesn’t care about our sincerity. Reality is what it is.

What’s the provenance of such optimism in technocracy?

I believe this is a phenotype of rational ignorance. It’s a heuristic. When we want to have our cake and eat it, we say ‘SOS, Technocrat. Get working!’

Few have the time to find out whether the technocrat’s solutions are really solutions or an introduction to another set of problems. More importantly, even fewer have the inclination to do so, particularly if the technocrat is building our perfect world.

There are prescriptions for technocrats. Classes in epistemology, philosophy of science and introduction to Karl Popper. Perhaps an elective with the 30-hour-week French technocrats.

But I doubt much will work. We want them to be fixers, Pulp Fiction’s ‘Wolf’ character. If they honestly told us ‘on the one hand this and on the other hand that,’ if they prefixed every plausible with a wide range of plausibles, if they spoke not about solutions but problems in solutions, they’d be branded as defeatists, as unprincipled waverers and be out of a job.

If our technocrats are falsely certain it is because we cannot bear the burden of uncertainty. It’s because we want solutions, not hear about trade-offs. Even as you are reading this you may be wondering ‘so that’s the solution?’

Every certainty, every point estimate stated without a confidence interval, every solution proposed without projecting its unintended consequences, is misleading. In the swagger of certainty lies not a lie but a truth: we cannot handle the nebulous and the messy. It is nihilistic. We want simple solutions to complex problems.

This is not a right-left issue. This is an issue of democracy, where people with different preferences, want different things, but do not wish to lose anything in the process of getting more. Politicians happily oblige our Disneyland fantasy. And the technocrats start working on the science that pretends to deliver it.

So ladies and gentlemen, the fault lies neither in Gruber nor in our academic stars but in our unresolvable contradictory desires. We want both security and freedom.

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100 replies »

  1. No, ACA is not working well anywhere. Please note MA has the highest medical costs per person as well as the highest premiums per person in the country. Let’s take it nationwide…

  2. “That is likely a large contributor to why US healthcare expenditures are higher than those in Europe. ”

    Paul, less utilization is argued as not the driving force in European lower costs, I’ll let you do your own Goggling. What does drive prices here is are “the prices stupid”, a quote from an article you can also find.

    I know that wealthy corporations (like insurance companies) can embellish their employee benefits such as 401k matching and health care, but that does not include most employers. I bet you also have one of those “cadillac plans” and probably a big bonus at the end of the year – like BCBS executives.

    As to so called evil “rationing”, well that is why there is push for HDHPs, to get people to ration who have no choice, while others, like you, can have all the services they can carry.

  3. Peter1,

    Overspending in US healthcare is estimated by Rand at 30%….others like Nortin Hadler think it may be as much as 50%. That is likely a large contributor to why US healthcare expenditures are higher than those in Europe. Another reason is that Europeans are accepting of the delays and rationing that help control costs there…..not so for Americans….we like to take responsibility for things ourselves….and that is why most of us highly value our 401ks and our high deductible plans linked to HSA’s. Our employees would try to lynch me if I told them we were replacing our 401k plan with a traditional pension. That is not to say that high fees charged by some 401ks drain returns.

    Paul

  4. Paul, I would like to add that what Peter1 uses as an argument is invalid. Our costs for television sets and refrigerators is higher as well. What does that mean. It means our market economy made us wealthier so that individuals could spend more.

    But what Peter1 is comparing is not a single-pay vs a market place rather a multiple of different systems compared to a system that is fundamentally controlled by government in a partial marketplace. [Canada is single-payer. Maybe there is another one or several single-payer nations, but I don’t think there are many if any others truly exist. Single-payer means one payer only and we have tiered systems all throughout Europe.]

    What country provides the best healthcare? The US if based upon outcomes. If it is a popularity contest the US will lose. What western nation has the highest per capita income? The US. Compare amenities provided to our poor and those among the non poor middle class of our western friends and one will find that our poor are likely to have more. Can we do better? Of course. Who can’t?

  5. Peter1

    Yes, good points……very similar to the 1970’s when many went from traditional pensions to 401ks. How are factory workers going to buy stocks and buy bonds and annuities….they must have this provided for them by people much smarter……and the sceptics were right, as it was hard to do back then…..but the financial services industry developed products aimed at that factory worker….including low cost Vanguard index funds….that allow the factory worker to beat the so-called smart guys. The same will happen in health care….it is happening since now as high deductible plans have grown to 30% of the private market…..and people LIKE owning their health care dollars and saving from prudent consumption.

    Re European single payer lower cost…..one phrase for now: “crooked teeth” vs. American teeth. More at a later date.

  6. “Free markets places have been shown over centuries to be the best approach to efficiently allocating resources and being a catalyst for innovation’

    Paul, can you give me an example of health care in a free market industrialized country that beats single-pay on costs and access, surely if it’s so attractive someone would be doing it?

    If the U.S. is mostly “free” market health care why then are it’s costs about double of single-pay countries?

    Health care risk is the risk, the only way insurance limits their own risk is to pass it on with a reduction in benefits when they can’t squeeze patients any more on premiums. HDHPs are a shell game designed to hoodwink the patient into thinking they’re getting a deal. Great when your healthy (and with resources), not so good when your sick, like so much in health care. Purchasing across state lines only means you may be able to buy less coverage – less coverage for you will mean higher coverage costs (smaller pools) for the fractured health care others need.

    I don’t know how giving individuals the ability to “bargain” prices gives them “power”. Not sure if you’ve ever tried to negotiate separately with the hospital and the surgeon, and the anesthesiologist, and the radiologist and the drug company etc. etc. when trying to get prices on surgery – it would be quite a feat, especially if you’re admitted through the ER . Yes you can pick outside clinics for certain things (like imaging, if you’re conscience) IF the hospital has not already bought them, but that’s not what drives health care costs – it’s inpatient hospitalization.

    Try also picking the doctor you like from one hospital, the anesthesiologist from another hospital and maybe the radiologist from another in trying to assemble your best cost/performance team.

  7. “Contract law has existed for ages. I don’t know of a good substitute for contracts. Do you?”

    Contracts enforced by the judiciary or mutually acceptable substitutes like arbitration are essential to free markets….where supplier and customer freely enter an agreement without coercion. Otherwise we end up with no one trusting anyone except family and friends…..a huge impediment to economic development and prosperity….as we see in many countries like Afghanistan and South America.

  8. Peter1

    Medicare and Medicaid fixed prices represent 35-40 percent of all US healthcare payments (source cms.gov for 2012). And most insurers agree to medicare + a fixed percent. Furthermore, the set up severely hinders creative bundling of services (only fixed procedure codes)….another anti free marketplace option of almost all other services and product providers.

    I agree with you that many regions have anti competitive features, such as a single hospital system giving the provider huge power to impose higher prices. State regulations have the effect of limiting cross state competition so many many regions have only a few insurers….often with a dominant player who essentially tells providers what they will pay….squeezing docs and hospitals. The company I was on the Board of had 65% market share….the next closest insurer has only 20%….our operating managers just set the prices….and the docs/hospitals hated us……and often responded by consolidating to fight back (the 2 cardiology groups hated each other……but they hate us more so they merged so they could set their own prices).

    Yes high deductible plans shift risk…..and power….to the patient. Many employers use them and offset the financial impact by making often big contributions to the employee….with the nice feature that the contribution is suddenly the employees own money that carries over….so they become motivated seekers of value (optimizing cost and quality) as they are in every other domain. I think the ACA is a very bad law…..but the use of high deductible plans with subsidies is a good feature….though I like Ben Carson’s idea that the gov. should make contributions to HSA’s rather than make subisidy payments to insurers.

    Free markets places have been shown over centuries to be the best approach to efficiently allocating resources and being a catalyst for innovation…..and they will work fine in health care once patients and doctors take back decision making power and authority.

    Looking foward to your reply.
    Paul

  9. Yes, Peter1 fixing things frequently can be a good way to go, but this piece of legislation has so many problems that I fear it can never be fixed. Additionally the fixes to the many problems that exist create new problems.

    The law was very poorly written with holes throughout. Considering that it was pushed though without bilateral agreement and deeply involves the entire population this bill should be replaced.

  10. “Because of the ACA a lot of companies have dropped coverage that was good for their employees.”

    How good could it have been if they can’t afford to continue to insure their employees. Why would they drop what they were providing, unless they’re gaming like this:

    http://reason.com/blog/2014/10/22/how-obamacare-helps-employers-game-the-s

    This appears to be a problem:
    “Because the ACA is built on the assumption that individuals with employee benefits have coverage, it prevents individuals who accept employer coverage — however barebones and inadequate — from qualifying for premium tax credits and cost-sharing reduction payments. Even an offer of “adequate” and “affordable” coverage can disqualify individuals from tax credits, whether or not it is accepted. Indeed, the offer of affordable individual employer-sponsored coverage to an employee disqualifies the employee’s entire family from subsidized exchange coverage, even if family coverage is clearly unaffordable.”

    Needs to be fixed not repealed.

    Many states did not expand Medicaid, how is that helpful to uninsured.

  11. Because of the ACA a lot of companies have dropped coverage that was good for their employees. Those employees earning less than 138% end up on Medicaid.

    That is known as an unintended consequence even though the administration was notified of these types of problems in advance.

  12. “Peter1, the ACA has caused people to lose their employer sponsored healthcare and they have ended up on Medicaid. My goal would be to provide the opportunity for care that is better than what the ACA has left these people with.”

    Allan, I’d have to understand the circumstances why some people lost employer coverage to Medicaid. Obviously their employer income was so low they qualified for Medicaid (the poorest of the poor). I’d also have to know what type of coverage they were getting from their employer. Under the ACA these people would probably have qualified for a 100% subsidized private policy. Do you have details or is this just internet rumor?

    We seem to be in agreement about getting rid of Medicaid, but if not Medicare then what would you replace it with? Certainly a totally subsidized private policy seems better than Medicaid – would it not?

  13. “Medicare?”

    Peter1, the ACA has caused people to lose their employer sponsored healthcare and they have ended up on Medicaid. My goal would be to provide the opportunity for care that is better than what the ACA has left these people with.

  14. “I would like to see all patients have the opportunity of care that is a step above Medicaid.”

    Medicare?

  15. Saurabh, for me to understand what the problem is you would have to go into greater detail. For now I can only guess. I assume you are considering contracts between insurers and patients. There are always the bad apple problems seen in everything we do, but outside of those bad apples I don’t see the problem.

    We had severe problems with HMO’s, but those problems were mostly created by government. As you well understand a contract is an agreement between parties where each party is legally bound to provide something to the other party. The contract is then generally recorded and litigated if there is a contract dispute. Contract law has existed for ages. I don’t know of a good substitute for contracts. Do you?

    I can only surmise that your difficulty with the contract is that it could be too lengthy and difficult to understand. That is indeed a problem and that is why I suggest a standard contract that offers what is necessary and provided by almost all insurers today. It would only be used as a template and be totally voluntary.

    The insurer would then in clear language have to provide additions or subtractions to the contract where the insurer would hold the burden of proof. That would mean that if the wording was poor or unclear the patient would prevail.

  16. I cannot say who the best doctor is for everyone nor can anyone else. Invariably in the minds of some there is always a need to fight when things are divided up even if the division is done at random. All sorts of unjustified complaints and solutions are created to satisfy the mob mentality.

    Tiers in this case have to do with finances. To some extent tiered healthcare exists everywhere. The ACA tiers patients. Take note the number of people placed on Medicaid, a substandard program. Others are tiered based upon age, Medicare where wasted funds are the norm.

    “What medical care in your market “doctor/patient” relationship would you deny”

    I would like to see all patients have the opportunity of care that is a step above Medicaid.

  17. Saurabh, I would not consider India to be a modern industrial nation – would you? It has tremendous potential but severe problems to overcome.

    I’ve been to India, large disparity between rich and poor – maybe if middle class here keeps getting hammered we’ll be able to say we mirror India. What a success story that would be. But paying cash does limit what can be charged. Would you advocate paying cash for house purchases to lower the cost of housing?

    You might look at Japan with highly controlled medical prices. Japan cut the reimbursement for MRI drastically – the “market” then developed MRIs that cost a fraction of what we pay here in U.S. to be able to meet “market” conditions.

  18. “We cannot all see the best doctor or have the luxury of a ten O’clock MRI.”

    First how would you “tier” best doctor, worst doctor? Isn’t competent doctor what we all want and should have access to? What medical care in your market “doctor/patient” relationship would you deny to people who need medical care? Would you triage based on finances?

  19. Yes, Friedman, the best of the best.

    “Asymmetry of information is bridged by trust.” A wise statement Saurabh, that points in the direction of the doctor/patient relationship.

    The market has to be tiered. We cannot all see the best doctor or have the luxury of a ten O’clock MRI. We cannot even agree upon what healthcare is. Fortunately we are a rich country so we have the ability to offer high quality medical care to the entire population, but I am sure that if I avail myself of a bit of extra luxury paid for at my own expense that will generate a mob that will say healthcare isn’t equal enough and that is a violation of rights even though such care universally would diminish the socio economic status of those that we need to protect.

    I see that we have significant agreement, but I am at a loss by your final statement “I do see a problem in enforcing a market in the US.” I don’t understand enforcing something that comes naturally

  20. Allan, I would not infer from Arrow’s thesis that markets are worse than government intervention. As Friedman warned, the government comes with its own set of incentives.

    Asymmetry of information is bridged by trust.

    But the kicker in the thesis is the predictability of need and quantity of medical services. Left to the market this will lead to tiered segmentation, as in India.

    Thing is, it works in India, but it won’t work here.

    My skepticism of markets is not philosophical: I see no ‘right’ to healthcare, as in ‘right to freedom of worship.’

    I do see a problem in enforcing a market in the US.

  21. Saurabh, Your statement about Kenneth Arrow is enlightening. I think it may explain some of the philosophical incongruities I find with your approach to healthcare. If I am correct you might be weighting Arrow’s statements on information asymmetry more highly than I believe warranted (Of course you could be considering other distortions.). Some believe that information asymmetry requires government intervention. Is that true? To answer that question only requires one to ask, doesn’t government face the same problem of information asymmetry? Does government have an answer? Obviously I don’t think so and believe government could improve the asymmetry problem better from the sidelines than by being an active participant.

  22. Paul,

    Seeing the comments later, Hayek’s sentiments on healthcare have been correctly identified.

    That is Hayek considered healthcare no different to public education. Admittedly, there were no PET scanners in that time.

    Why healthcare is different? I’ve been quite influenced by Arrow’s work (Uncertainty and Welfare Economics of healthcare).

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

    I’ll certainly explain in a future submission, but the Austrian School are big in to information problem, which one would incur with multiple payers.

  23. Peter1 writes: “Sounds like he would have no problem with single-pay system of health care.”

    Yes, that would be the left’s soundbite interpretation. Do you really want to live your life on soundbites? I guess it is a hard habit to change when the alternative requires thinking and understanding. What you did was extract an outlandish out of context portion of Hayek’s ideas so you could feel exonerated even though he tells a completely different story.

    In this chapter Hayek is trying to relate security and freedom. You seem to like the nanny government of collectivists that provides a false security and a lack of freedom. Take note of the fact Hayek is trying to protect the truly needy, but he is not advocating redistribution or collectivism. He is the one that care’s about people, not that mob on the left. Take note of his “security of a different kind. It is planning designed to protect individuals or groups against diminutions of their income”. Take note of the Ben Franklin quote and the paragraph immediately preceding it.

    I’m not going to try in detail to correct your queer interpretation for you will simply provide another equally unreliable soundbite without the context of the before and after words that provide meaning behind the ideas.

    Hayek was correct about unlimited democracy. Our founders feared unlimited democracy and that is why we are a Constitutional Republic not a true democracy.

    Yes, Hayek did recognize the problems associated with corporatism and fascism where the state and big business join forces to control the nation. A direction we are moving towards.

    Hayek was not a conservative (common usage). Nor were our founders. Hayek could be considered a classical liberal as opposed to the capital ‘L’ Liberal of today. Alternatively one might refer to him as a libertarian not fitting into the anarchist group.

  24. And how exactly do you think lawyers get paid for medical malpractice cases? Hint: they can fare far worse than simply “not getting paid” when they lose…

  25. “Unfortunately in health care physicians and hospitals have for the most part lost their freedom to set their prices for their services”

    Surely you jest. What role do insurance companies have in setting prices by way of reimbursements? Hospitals in areas with limited competition have enormous power to set prices, even against insurance. Hospitals also are gobbling up outside clinics to stifle competition and raise prices.

    Do you then assume that “chargemaster” is the proper price? It appears you think the higher price is the correct price.

    “The rise of high deductible plans linked to health savings accounts has been a major step towards reasserting sound market principles”

    Again you get it wrong Paul. HDHP are a method of shifting risk to the patient while recognizing that premium prices can’t be controlled, so the only way to “sell” faux affordability is to lead with the low monthly premium while downplaying the real cost when care is needed. This is the practice of car dealers who sell low monthly leases but hide the real cost when those leases come due. HDHP work best for people who can actually afford the savings of rainy day preparedness – those with financial means.

  26. @ Allan,

    “…the case for the state helping to organize a comprehensive system of social insurance is very strong.”

    Sounds like he would have no problem with single-pay system of health care.

    Hayek is also quoted as saying, “…that a limited democracy might be better than other forms of limited government at protecting liberty but that an unlimited democracy was worse than other forms of unlimited government because “its government loses the power even to do what it thinks right if any group on which its majority depends thinks otherwise”.”

    He also said: “free choice can at least exist under a dictatorship that can limit itself but not under the government of an unlimited democracy which cannot”

    Hayek also recognized the insidious negative control that corporations (mega corporations) exert on government and the free market.

    Hayek wrote an essay, “Why I Am Not a Conservative”included as an appendix to The Constitution of Liberty), in which he disparaged conservatism for its inability to adapt to changing human realities or to offer a positive political program, remarking, “Conservatism is only as good as what it conserves”.

    Looks like Hayek has something for everyone, much like the Bible. Just pick the passage that suits your prejudice.

  27. In chapter 9 Security and Freedom Hayek makes a case for specific state intervention where the state is well off. He makes a distinction between two types of security and “that this distinction largely coincides with the distinction between the security which can be provided for all outside of and supplementary to the market system, and the security which can be provided only for some and only by controlling or abolishing the market.”

    He continues: “There is no reason why in a society that has reached the general level of wealth which ours has attained, the first kind of security should not be guaranteed to all without endangering general freedom.”

    …”but there can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody.”

    …”Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance, where, in short, we deal with genuinely insurable risks, the case for the state helping to organize a comprehensive system of social insurance is very strong. There are many points of detail where those wishing to preserve the competitive system and those wishing to supersede it by something different will disagree on the details of such schemes; and it is possible under the name of social insurance to introduce measures which tend to make competition more or less ineffective. But there is no incompatibility in principle between the state providing greater security in this way and the preservation of individual freedom. To the same category belongs also the increase of security through the state rendering assistance to the victims of such “acts of God” as earthquakes and floods. Wherever communal action can mitigate disasters against which the individual can neither attempt to guard himself, nor make provision for the consequences, such communal action should undoubtedly be taken.

    Continuing to the second kind of security: “The planning for security which has such an insidious effect on liberty is that for security of a different kind. It is planning designed to protect individuals or groups against diminutions of their income which although in no way deserved yet in a competitive society occur daily, against losses imposing severe hardships having no moral justification yet inseparable from the competitive system. This demand for security is thus another form of the demand for a just remuneration, a remuneration commensurate with the subjective merits and not with the objective results of a man’s efforts. This kind of security or justice seems irreconcilable with freedom to choose one’s employment.”

    In his conclusion he states: “But while this is a truth of which we must never lose sight, nothing is more fatal than the present fashion among intellectual leaders of extolling security at the expense of freedom.”

    …and then he quotes Ben Franklin “Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety”

    Note: Hayek in this discussion also includes an incidental notation on immigration which can be further interpreted to say that a free flow of immigrants and a welfare state cannot coexist.

  28. Bob,

    re your statement “But hispitals are setting their own prices all the time, at least for the uninsured and those out of network.”

    Agreed, but this represents a tiny share of their revenue…most prices are set by medicare or often dominant health insurers (medicare rate +x%).

    An interesting aside: the lowest prices often go to Candians who flee delays up north and come here for procedures. It is big business for health care systems along the border….and they offer great prices to attract the business….a real market….providers free to set prices and patients shopping for value.

  29. Paul, I agree that doctors are hamstrung in many ways about their fees.

    But hispitals are setting their own prices all the time, at least for the uninsured and those out of network.

    Read any of articles on Megan Rothbauer, who was taken in an emergency of an out of network hospital — which charged her over $300K for a few days, and still collected $150K from a stupid insurer.

    The American way of reducing health care inflation is pretty darned brutal.
    A few patients get just creamed with price gouging bills, and either go all the way to bankruptcy or escape with partial forgiveness. This does lower fees, because the cases are publicized plus the greedy hospitals eventually get exposed for suing janitors (c.f. Yale) or embarassed by selling old debts to bottom feeding collection firms.

    In other nations, health care inflation is usually curbed by lowering the national fee schedule. Yes this is bureaucratic — but it is far more humane than the American practice.

  30. Hayek in Road to Serfdom agreed that the state has a duty to ensure for all citizens “a minimum of food, shelter and clothing sufficient to preserve health and the capacity for work”. That is all I have found so far.

    The modern state does provide such items….in one way or another…..that doesn’t mean that these programs completely destroy markets where suppliers or providers set a price and purchasers freely choose what to purchase and from whom to purchase.

    Unfortunately in health care physicians and hospitals have for the most part lost their freedom to set their prices for their services….a most severe erosion to free markets….as well as the preponderance of plans where patients pay little or no cost….so their motivation to seek value is largely lost.

    The rise of high deductible plans linked to health savings accounts has been a major step towards reasserting sound market principles to health care (restoring to patients a financial incentive to purchase wisely)….and the spread of these plans is a big reason why health care inflation has slowed.

  31. Yes, Hayek made such a statement. Socialism had yet been invented when Adam smith was around.

  32. Yes, I am not sure which book I read it in but I remember Hayek saying (paraphrase) Intervention in the healthcare arena can occur, but with as little effect on the marketplace as possible. Targeted subsidies are one way to limit the effects on the marketplace.

    The question of health care being a right is always at issue. I can’t see it as a right for numerous reasons. We can’t even define the limits of healthcare. I am extremely sympathetic to that desire because of the way I was raised. But equally important is the recognition of what the state can do when one is not careful in applying that right. My spouse lived where healthcare was free. The only problem was for smooth access one had to bribe the doctor. I’d rather give up on that scenario and pay my own way being willing to help others that through no fault of their own are unable to pay.

    So, yes, the big question is between health care being a right or not and is a valid argument. The discussion as to whether one truly believes in marketplaces if they are willing to provide subsidies is junk.

    The question not raised is which government entity should be in control of healthcare, state or federal, hasn’t been addressed. Some people like the Constitution and the federalist system. Others don’t like the federalist system and still others don’t like the Constitution.

    Where I have both agreement and possible disagreement with you, Saurabh, has to do with longevity. Nothing survives forever. We both recognize that, but “Will a meaningful market place survive in the long run? I doubt it.” neither does the other form. The marketplace offers so much more and at a less expensive price in all areas.

    Without commenting on whether what Obama has done is good or bad (I don’t disagree with everything Obama has done or the rationals for doing those things if I understand them correctly.) Look at what has happened to our country since the beginning of the Clinton years through Bush and through Obama. It is not pretty. The rule of law has been perverted. Our freedoms have been infringed upon. Nat Hentoff is a Liberal of renown as is Turly and they both, being scholars of the Constitution, have noted unlawful activities that disturb the homeostasis developed by our three branches of government. Continue this a bit longer and Ben Franklin’s warning statement shortly after the Constitution was signed will soon be realized.

    “A Mrs. Powel of Philadelphia asked Benjamin Franklin, “Well, Doctor, what have we got, a republic or a monarchy?” With no hesitation whatsoever, Franklin responded, “A republic, if you can keep it.””

  33. Is Canada’s system not a “marketplace”? How about Germany’s, France, Great Britain, Taiwan?

  34. Peter1
    Thanks….yes you did limit your claim about insurance to health care…sorry for misreading it….

    My interest right now is arguments about why health care can’t be a marketplace….so for now I don’t want to get into a debate about the efficiency of government single payor systems….

  35. Paul, my sentence said “health care”, but in respect to auto insurance the fact that it is mandatory AND has government control/regulation speaks for how fair it would be without a referee.

    Tell me why other health systems in more governmentally controlled countries are not “efficient” marketplaces when they do it for about half of what we do it for? Is your local government water/sewage system “efficient”? How about your fire department or police force?

  36. Peter1,
    re: The words “fair” and “insurance” in health care are diametrically opposed.

    Would appreciate an explanation why you say that….does your statement apply to life insurance, auto insurance, liability insurance too? I might have been ill advised to use the word “fair” as it is interpreted in such wildly subjective ways by all of us….but I will wait for your analysis.

  37. “but that the only hope of using healthcare resources efficiently as well as fairly is to remove the elements that bolux it all up from operating as a proper marketplace.”

    Spoken like a true insurance insider. The words “fair” and “insurance” in health care are diametrically opposed.

  38. Saurabh,

    re health care marketplace:

    “But healthcare is different. Even Hayek acknowledged that.”

    Would appreciate it if you could help me find where Hayek said or
    suggested that. Also, I’d be most interested in what leads you to think that.

    I used to believe that….most people believe that. I began to ponder that many years ago when I was on a health insurance board and concluded that it is true health care was/is not a proper marketplace….but that the only hope of using healthcare resources efficiently as well as fairly is to remove the elements that bolux it all up from operating as a proper marketplace.

    Thanks

  39. Saurabh, health care, public transportation, public education, needs government controls and subsidies to provide the widest access for the most possible people, we just haven’t put “public” in front of heath care yet.

    The U.S. has created a hodgepodge of government support for health care that creates a class system of access for patients which continues to embellish providers and insurance but which does not control costs. Patients are getting slammed by all sides, higher spending for subsidies, higher costs for care and higher cost sharing for the insured.

    No amount of Hayek or Smith will improve this.

  40. Interesting discussion! Neither Peter nor Allan are the types to cede any ground!

    I’m ideologically more inclined towards Allan’s camp – i.e. influenced by Hayek.

    But healthcare is different. Even Hayek acknowledged that.

    Can you have a marketplace in healthcare? Sure, in theory and in practice.

    Will a meaningful market place survive in the long run? I doubt it. That is I doubt that a market place can be enforced. Blatant inequality of treatment will get attention from the media.

    Central to Peter’s argument is that healthcare is a right. A right cannot be unequal. This premise is the beginning of another discussion, which the ACA tried to avoid.

  41. Has Mark Blyth stated that a marketplace cannot exist if there are any type of subsidies which is the question at hand or are you just name dropping?

  42. Bob, what debate? It is pure nonsense.

    Without a marketplace we cannot develop what you call a secondary market. Prices in healthcare vary tremendously and there are frequently many ways to skin a cat.

    Sometimes one will see a very expensive medication that replaces the earlier version. The big difference? The new medication is taken once a day while the old one is taken three times per day. As long as insurance pays for the once a day version the once a day version will be the drug of choice for almost all except for the uninsured that have to pay for the drug. Based upon cost many of the uninsured will take the three times a day version.

    My disagreements with Peter1 at this point have more to do with definitions than anything else. He is substituting ideology for a dictionary.

  43. Note to Peter! and Allan:

    Please keep up the debate, but let me add this point.

    In the world of cars, the millions of persons who cannot afford a Mercedes can get a $5000 used car. They can even pay per ride to Uber. We do not spend ten seconds worrying about their right to transportation.

    The same is roughly true with housing. There are millions of used houses, trailers. et al., although in affluent cities the poor can afford nothing.

    Any ways, health care has a profound “Cadillac Effect.” If Brain surgery costs $75,000 like a Mercedes, there is no one in the US offering brain surgery for $5000. Of course there are no used drugs either.

    This lack of a secondary market for health care is behind many of your disagreements.

  44. I can see you are not well versed in economics.

    You said: “You seem to want it both ways – willing buyer, willing seller for a “real marketplace” – and subsidies.”

    My statement was true and I provided you with Adam Smith who is thought by many to be the founder of modern economic thought (he was a philosopher) and Hayek who actually said what I paraphrased. I’ll bet you will find pretty much the same thing in Paul Krugman’s textbook on economics written with his wife. You are just chained by your ideology.

    You also said: “By the way I don’t get ANY subsidy for health care and never have, even when I was insured. No deductible, no HSA.”

    You declined to say how that was possible. I asked because that is very unlikely. The lack of response means you probably figured out that you were wrong and were in part subsidized. No need to dwell on this because you are one of many, not one of the few.

  45. “See Hayek and Adam Smith.”

    Holding up economic theory books is like holding up a bible and claiming it is the truth on life.

  46. Nonsense, Peter1,

    A person that is given a subsidy to make him able to purchase insurance can still participate in the willing buyer and willing seller arrangement. See Hayek and Adam Smith.

    Your second point is off the wall. The majority of Americans have held health insurance for decades despite micromanagement by government agencies that boost the price of insurance sky high. It seems to be almost a universal thought that health insurance is needed. Your desire seems not to want health insurance, but prepaid insurance. Using a frequent analogy, that is like ‘insuring’ gas and oil for one’s car. Ridiculous.

    Your point about the employer tax break denied to the employee (third party payer) is well founded. Ideally there should be no tax deduction for health care. A tax deduction increases the demand for healthcare and due to elasticity of the less important things increases spending on things that may not be worth it.

    However, your statement about marketplaces is almost completely erroneous. Since a person is only getting the subsidy based upon need he only requires enough of a subsidy to make it possible to buy insurance (not perfect). Therefore he can still be a willing buyer and the seller can be a willing seller which pretty much defines a marketplace.

    Healthcare is already available to everyone in this country. No country provides every bit of healthcare desired. The US admittedly could do a bit better and that is why we have discussions that involve how that should be done. Unfortunately politics enters the picture. You have collectivist ideas and I have marketplace ideas though I am not unwilling to help those in need. I like the marketplace because we are able to innovate and create products available to the consumer… example: Computers, i-phones etc. But, for marketplace thinking I don’t think we would have them in such a wonderful form today. In fact it’s been the marketplace that has made such technology available to the collectivist.

    “By the way I don’t get ANY subsidy for health care and never have, even when I was insured. No deductible, no HSA.”

    I find this interesting. I don’t doubt your word, but I would like to learn about the circumstances only because I find that is quite unusual.

  47. “I don’t understand your point.”

    You rarely do.

    “Do you know why subsidies are used?
    Do you know the ACA uses subsidies?”

    You should know by now that the answer to that is yes.

    “A targeted subsidy can promote individually held insurance among those that are otherwise unable to purchase insurance. It permits one lacking the funds to purchase healthcare insurance which seems to be desired by both the left and the right.”

    You seem to want it both ways – willing buyer, willing seller for a “real marketplace” – and subsidies.

    My point about Mercedes (cause you missed it as you usually do) is that U.S. health care is like a luxury car, everybody wants one, even needs one, but only those with subsidies can afford it. You do (or will) get subsidized by Medicare, you were (or are) subsidized by tax breaks for health coverage, you gave your employees coverage that was tax deductible by you and non-taxed by your employees.

    You can’t have it both ways, wanting your imaginary “real” marketplace but accepting subsidies – which defy the word “real”.

    Your way to lower costs is takeaway coverage for some, but full coverage for others who benefit from necessary coverage selection from those who can’t afford what you have.

    Part of the reason insurance premiums went up after ACA is no pre-exist and other mandatory coverage that is part of the sharing and risk spreading necessary for a responsible citizenry in a modern industrialized economy where health care should be available to everybody.

    By the way I don’t get ANY subsidy for health care and never have, even when I was insured. No deductible, no HSA.

  48. I don’t understand your point.

    Do you know why subsidies are used?
    Do you know the ACA uses subsidies?

    A targeted subsidy can promote individually held insurance among those that are otherwise unable to purchase insurance. It permits one lacking the funds to purchase healthcare insurance which seems to be desired by both the left and the right.

  49. Mercedes has willing buyers and willing sellers. If we gave subsidies to buyers of Benz’s would that be a “real” marketplace too?

  50. ” described your “real” marketplace.”

    A willing buyer and a willing seller.

    “Wouldn’t subsidy defy your “real” marketplace?”

    No. Read Hayek.

  51. “since a real marketplace would cause prices to fall considerably.”

    But you haven”t described your “real” marketplace.

    “Additionally targeted subsidies can be used while still preserving the marketplace.”

    Wouldn’t subsidy defy your “real” marketplace?

  52. Anyone that can afford the premiums in Obamacare and more since a real marketplace would cause prices to fall considerably.

    Additionally targeted subsidies can be used while still preserving the marketplace. In essence subsidies is something the ACA is doing though I think it could be done better

  53. Worth to who, those who could afford the price or those who could not?

    Mercedes Benz’s have a market price but few can afford to pay. So what’s a “real” marketplace in health care?

  54. Wouldn’t a real marketplace for healthcare services do a reasonable job of figuring out what those services are worth?

  55. I love this post because it’s so honest and raw. It gets to the heart of the matter in a way. My colleague Dr. Jack Cochran and I would argue that preserving and enhancing the careers of physicians is a prerequisite to achieving the kind of access, quality, equity and affordability our country needs. In a couple of weeks Jack and I head to Orlando for the IHI annual forum — always a great learning event. At our session one of the things that will happen is that we will tell a story about something Jack did when he was elected to lead the Kaiser Permanente medical group in Colorado. To me, it is an amazing story. Before actually taking the new job Jack went out and sat down with all 500 doctors in the group — face-to-face in groups of 2s and 3s and he listened. He really listened. And when he was done it was clear that unless he took meaningful steps to respond to the concerns/anxiety/fury etc of the physicians, there would be no chance of increasing membership etc. Some of his colleagues thought he was going down the wrong path. Preserve and enhance the careers of doctors to some sounded like coddle doctors or docs on pedestals. But that wasn’t it at all. Lawyerdoc, your sense of frustration is so real and troubling to those of us who rely on men and women like to to comfort and heal us. Are the leaders of your organization listening to you and your colleagues? If not, why not? To me, that is the crucial point — getting docs to be leaders and leaders to listen. Then things can change. But if frustration and complaints from docs is viewed as just white noise, then it’s hard to make any headway. One other pt: Scientists are capable of sending a spacecraft 300 light years into the cosmos and land it on a meteor travelling 40,000 mph but we cannot in the US figure out ways to pay physicians for their important work in ways that benefit patients, docs and payers? I don’t believe it.

  56. My question exactly.

    If we’re no longer going to be paid for volume, won’t the goal be to see as few patients as possible?

  57. BTW, I’m not nearly as smart as many of the folks on this blog, I didn’t go to Yale or Harvard, and I don’t have an undergraduate degree in philosophy or a PhD in economics . . . I just see actual patients in an actual hospital.

    But how in the heck am I supposed to be paid to see ER patients based on “metrics and outcomes”? If I see only 2 patients a day and then spend 2 hrs each documenting on their 27 page EMR that they don’t have firearms in their home, have had a pneumovax 7 yrs ago, and I have addressed their Wong-Baker pain facies each time with an injection of IV dilaudid (so their satisfaction score is high!) – then I guess I have met all my “metrics” and thus should be paid handsomely??

    What if I see 27 patients, run 3 codes, reduce two fracture-dislocations, write ten sets of full admission orders, sign off on 19 mid-level’s charts, respond and intubate a patient on the telemetry floor (while the hospitalist is having his lunch hour), transfer 2 out with GSW’s, and offer “sidewalk” consultations to four hospital employees who “don’t want to check in” to the ER???? What am I supposed to be paid then? and if you don’t want to pay me by the hour, or by acuity, then whom do you expect to work in my stead? some mid level who orders a CT head on every patient with a headache and normal neuro exam?

    just sayin . . .

  58. Is this statement: “Policy has to be experimental which means that it is best tested within smaller units.” consistent with ” Policy needs time to work which is why I hope the Republicans don’t R & R (replace and repeal) Obamacare but do some R&D on it.”?

    There are ideas in the ACA that are valuable. Three were mentioned in a recent piece by Greg Scandlen.

    “1. Breaking the tie between employment and health insurance.
    2. Tax credits for individually-purchased health insurance.
    3. High-deductible health insurance.”

    But, I worry about keeping the ACA intact and correcting it because of its size and awkwardness. In too many places it refers to existing laws, rules and regulations preventing clarity that is absolutely essential. That can continue to bite at us for decades. Moreover, many things were created with good intentions, but were not carefully constructed while other portions left gaping holes in the legislation “the secretary shall decide”.

    Normally I would attempt to subtract the errors and leave the incites (Klein), but in this case I think the legislation is too far gone. The best ideas need to be kept along with those things that supported the reasons for the law though the legislation needs to be altered so that the legislation permits more innovation and competition.

  59. This may be for another post but I would vy much welcome your thinking on how fee for value would work. The FFS concern, obviously, is the incentive for overuse. Would that incentive be removed with fee for value? Your writing is always interesting and thought-provoking.

  60. “Anyways, I read that Gruber or a firm he headed had received over $4 million for what sounded like a meaningless study of Health Care Plan D choices by seniors.”

    Kind of a double standard for Medicare fraud isn’t it?

  61. What bothered me the most in the Gruber stories was not his “kiss and tell” about the ACA. The invention of You Tube will create many of these moments for both political parties — just ask Mitt Romney about ’47 per cent’. I am sure that what Ev Dirksen or Lyndon Johnson used to say about legislation after having a few drinks was not so elegant either.

    Anyways, I read that Gruber or a firm he headed had received over $4 million for what sounded like a meaningless study of Health Care Plan D choices by seniors. The looting of government by contractors is depressing to me, and it happens just as badly in medicine and social sciences as in the military.

    Kind of reminds me of my reaction to Linda Tripp in the Lewinsky scandal.
    I did not care about her exposing the President. I was bothered that she made over $75,000 a year (20 yrs ago) as some kind of junior Pentagon information officer.

  62. “Our health system is the size and complexity of a large country (Germany), and as tribal/political as Afghanistan (only full of people with advance degrees).”

    Great quote!

    “The natural impulse is to be completely paralyzed by the complexity, but if you just start deleting data, eventually you find a “solution” that makes sense.”

    There’s a lot of recent wisdom in writings such as those of Taleb & Gary Klein that emphasize subtractive wisdom. That is it is useful to identify the bits that don’t work. Getting us to a state of satisfice.

  63. ” Let the AQC and other “technocratic” proposed solutions have a bit of time and then let’s see whether they work.”

    Charles, thanks for reading my piece.

    I agree with the above sentiment. Policy needs time to work which is why I hope the Republicans don’t R & R (replace and repeal) Obamacare but do some R&D on it.

    Policy has to be experimental which means that it is best tested within smaller units.

    My main fear of fee for value is its continuing transactional nature. For example, British GPs will now be paid to make an early diagnosis of dementia. The measuring instrument is imperfect. Paying physicians to abide, essentially blindly, to an imperfect instrument is bound to lead to an increase in false positives.

    Still, I have not ruled out that fee for value could be better than fee for volume.

  64. “she was exhilirated by the freedom to do what she pleased, but crushed by the responsibility of choices.”

    Reminds me of my first week in the states when I wanted to have bagel with cheese. I was asked which type of bagel. Cinnamon was the first one I saw, and have stuck to it since!

    Choice is great but overrated.

  65. Hey Booby, what do ya think of checklists?
    Does it matter if they are digital or paper?

  66. Your response to my statement: “It is better to give the needy vouchers or subsidies than to price fix the entire population.” is an enigma.

    Apparently you don’t even understand what principles are or what the phrase “It is better to give…than” means.

    That is understandable based upon some of the things you say on this blog.

  67. Take away employer–that is Government–provided healthcare for all of Congress, their families and staffs, and the Supreme Court, and I guarantee there would be a workable plan favorable to the middle-class consumer before sunset today.

    You saw how quickly they restored funding for air traffic control during the shutdown when they could not get home for the weekend.

    The same self-serving politicos who want government out of healthcare have one of the richest, employer-provided plans there is. If they had to choose between plans that limit your choices, charge a thousand dollars a month and leave you with up to $25,000 out of pocket expenses every year, there wouldn’t be time to repeal it a 51st time. I’ll suggest this as the next executive order.

  68. You couldn’t even get the quote right, a quote of something that showed he was diametrically opposed to what you said. Now you want to tell us what is in another’s mind. Don’t make me laugh.

    How did he “weasel out”? There was no evidence of that. In fact he answered directly.

    You just don’t like his answers which are historically accurate.

    “Everyone knew what he meant.”

    Really? So now you are telling that you can divine what the person meant? Maybe you don’t have the slightest idea of his position on this matter and are just making things up to promote your ‘religion’.

    Your claim to fame is that you “watched that entire debate live” which apparently didn’t do you much good because you didn’t even know his answer.

    I love your attempts at insults, but from what everyone can see you don’t know what you are talking about.

  69. He clearly tried to weasel out when pressed (and they didn’t play the rest of it). But he said “That’s what freedom is all about; taking your own risks”

    Everyone knew what he meant.

    BTW, “Allan,” I watched that entire debate live, Mr. World Net Daily.

  70. I listened to your video and nowhere did Ron Paul make that statement.

    In fact:

    The question asked by the moderator was: “Are you saying that society should just let him die?”

    Ron Paul’s answer was: “No”

    So much for your BS and rewriting of history. You are delusional.

  71. GOP Presidential Primary debate. Question was posed about someone without insurance dying from a serious illness. His weasely answer was basically, “hey, you make bad choices, you have to suffer the consequences.”

    The audience yelled “YEAH!” and cheered. I’m not making anything up.

    September 12, 2011

    “That’s what freedom is all about; taking your own risks”

    https://www.youtube.com/watch?v=yva0VSN1_T4

  72. It is better to give the needy vouchers or subsidies than to price fix the entire population.

    By the way I never heard Ron Paul say “pay your own way or die.” Do you have a citation for that quote? Of course not. Just more BS.

  73. I’ve always found it a mildly amusing head-scratcher as to how the notion of GIVING people federal tax dollars — “vouchers” — to buy goods and services (e.g., schooling, healthcare) became a “Conservative” idea.

    America’s Crazy Uncle Ron Paul is at least consistent — “pay your own way or die.”

  74. Agreed….to build on that:
    A further thought re over-treatment: an essential element to fixing this is already in play: high deductible health plans. They transform patients into active, engaged consumers who ask whether the next suggested procedure is really necessary…..engaged patients asking questions is a powerful elixir supporting system reform…..and it is too often overlooked and underestimated.

  75. Well, we have one big problem–some of us believe the largest problem in health care–and it’s a problem that we can eliminate. It’s just sitting there waiting to be solved. Easily. This is the fact that third parties are paying for everything and the psychology of the patient is “I don’t have to be concerned with prices. I can go for excesses (moral hazard) and try to milk the system. I don’t have to shop and look for good prices.” And the psychology of the doc and hospital and other providers is also harmed: “Someone else is paying. Why should we care? We can do anything we want.”

    And we know that when patients are concerned with prices–see Frist’s column on THCB and read Greg Scandlen’s writings anywhere–prices come down, mirabilis dictu. They do so because docs and other providers feel sorry and concerned about patients and often have personal relationships. And there are other human feelings going on too, like embarrassment over high charges and wanting to compete with peers and knowing that the patient knows a little about the resources used on his care.

    We intuit all this because we can imagine driving a company car. How much attention are you going to pay to its cost of servicing? QED

    And the good thing about this canonical problem in health care is that there are easy ways to fix it….and nevertheless remain kind and altruistic and humane and egalitarian.

    We can give money proxies to poor people. Vouchers, Medi-Bucks.
    We can use indemnity insurance where money goes through patients first.
    We can use high deductible insurance where cash subsidies for the poor are used to help people pay deductibles and co’s. And folks keep the savings.
    We can allow people who are paying deductibles to go outside the plan and shop for non-plan services, which would also accrue toward the deductibles.
    We could make hospital care free and let patients do whatever they want in ambulatory care. They manage this cheaper front end of health care themselves and the poor would get help with vouchers or tax credits. This was tried in Canada early on. People would learn about costs in a safe arena. This knowledge would inform their critique of hospital care charges.
    And finally, HSAs and high deductible plans have been discussed for many years and work fine.

    Just getting rid of this one problem–the patient’s and provider’s nonchalance and unawareness of prices and costs–would begin to allow healing in our vast health care sector. And we can be kind and gentle in the way we do it, too.

  76. I think there is a difference between “paying doctors to do the right thing” (very difficult to implement in a way that leads us to the care we want, esp for primary care of aging adults) and re-engineering the system so that it makes it easier for doctors to do the better things and harder for them to do the wasteful/harmful/bad things.

    Re the health econ PhDs, they don’t have to go be doctors for a year. They should take their “pay for value” idea and just go to a small primary care clinic and work with the team for a few months to see what it would take to implement.

    This is a process that designers use: go observe the users in their natural environment. See just what kinds of frictions and obstacles are in the way.

    You cannot develop effective solutions without having some understanding and empathy for those whose behavior you want to change.

  77. “This is an issue of democracy, where people with different preferences, want different things, but do not wish to lose anything in the process of getting more. Politicians happily oblige our Disneyland fantasy. And the technocrats start working on the science that pretends to deliver it.”

    So was he right to say the voters are stupid?

    “Massachusetts is not in any way a microcosm of the US.”

    Is Mississippi?

    If American voters are stupid then are lies the only way to get good legislation?

    The ACA clearly helps those who receive subsidies for health coverage, most people (including congress) in this country receive subsidies for health coverage, but think giving subsidies to others is “socialism”.

  78. Checklists, not doctors are given bonus’s.

    Thus:

    a bad doctor with a good checklist gets a bonus
    good doctor with a good checklist gets a bonus

    How does this make sense?

  79. Are doctors going to be paid for checklists or for keeping patients functional and alive?

    I know a doctor who is most cost effective and skilled as a diagnostician, whose outcomes exceed most in the region of the practice. This doctor uses paper records. No bonus for the good doctor!

  80. Health economics Phd’s seem to be cloned from one another and follow the leader like ducklings follow their mother.

    Ever see what happens when the mother duck makes a mistake and steps in front of traffic?

  81. All the Obamacare supporters and ardent defenders just reveal after this latest debacle is why everyone else not beholden to partisan interests alone should all both shiver and bristle simultaneously. We let narcissistic and antisocial cretins, who by in large have no basic knowledge of what is honestly needed for effective and responsible health care, control the health care process both administratively and clinically, and then such cretins look astonished when the majority of the population do not reflexively applaud and sit back comfortably. Oh, and then society is just to silently and pleasantly let the consequences play out without dissent?

    I honestly do not know what is worse, that we have corrupt and clueless people in government who act like leaders, or, there is an entrenched 30-40% of people in our electorate who, as ardent supporters to this dysfunctional control in society just reflexively genuflect to these loser “representatives” without pause or hesitation and will say, until they die, that such leadership and legislative insults are wonderful and should be accepted without any argument.

    “Blind loyalty” should be amended to “Senseless servitude”. Because these losers who continually support this legislative insult on this country not only are blind, but are deaf, and ironically dumb because they talk TOO much, not at all.

    Gruber was just icing on a cake so stale and unsavory, even bacteria would stay away from this mass of disgusting brew that is the content of Democrat driven health care ideology. That sums up what Obamacare really is at the end of the day.

    Again, pay attention who just echoes this legislation is wonderful, and then look deeper to why they regurgitate it like the emetic content it really is.

  82. Gruber assisted Massachusetts in its 2006 reforms, which were the template for ACA: mandates, insurance exchange, subsidies. His model predicted the cost and enrollment effects of premium subsidies, and the impact on the insurance market of regulatory and benefit structure. Here’s a description of how it worked: http://www.ct.gov/sustinet/lib/sustinet/board_of_directors_files/resources/grubermodel1pagedescription.pdf

    Massachusetts is about as similar to Florida or Tennessee as Denmark is.
    Its employment base is highly unionized and its insurance industry was already minutely regulated. Massachusetts’ success in implementing its reforms relied as much on the unique political climate in the state, and voluntary compliance by companies, as on the incentives and structures embodied in the law.

    Massachusetts is not in any way a microcosm of the US.

  83. ” He let the administration get away with the conceit that Massachusetts was somehow a model for the rest of the country, an unforgivable sin in my view”

    Could you explain? Thanks.

  84. “Our health system is the size and complexity of a large country (Germany), and as tribal/political as Afghanistan (only full of people with advance degrees).”
    ___

    Awesome. Stealin’ that one.

  85. “The whole construct is to pay doctors for value and outcomes — process and outcomes measures. This contract seems to have gone quite well in many respects — improving quality metrics”

    Quality metrics are neither value nor outcomes. If you like teaching to the test, you’ll love quality metrics.

  86. The prescription for every one of them: go practice medicine for a year and come back and tell us “the answer”. Of course, they’d have to go to medical school, then residency and by that time, they’d have forgotten the question.
    The world looks a lot different from the ground than it does up at 45k feet where most of the policy wonks live. There’s more oxygen near the earth’s surface.

    Our health system is the size and complexity of a large country (Germany), and as tribal/political as Afghanistan (only full of people with advance degrees).
    The natural impulse is to be completely paralyzed by the complexity, but if you just start deleting data, eventually you find a “solution” that makes sense.

    I really like your postings. Keep ’em coming. For what it’s worth, I gave at least a hundred of those Healthcare Post Obamacare talks. They were full of cartoons and black humor.

    And for what it’s worth, I think Gruber has gotten what he deserved. He let the adminstration get away with the conceit that Massachusetts was somehow a model for the rest of the country, an unforgivable sin in my view. He served his client poorly, and then dissed him afterwards. You just don’t do that.

    Besides, real consultants don’t have tenure!

  87. Immensely entertaining! Excellent writing, as usual, and love the Wolf reference from Pulp Fiction. And I get what you mean generally about technocrats. But is it all that clearcut? Your callow young friend who was PhD candidate wanting to pay doctors for value and outcomes was on to something, no? In fact, as banal as the notion now seems it was something of a breakthrough in thinking not that many years ago. I recall when the team at Blue Cross Blue Shield of MA proposed the original Alternative Quality Contract in 2009, I believe. There was much hesitation throughout the MA provider community until the folks at Mount Auburn got on board and many others followed. The whole construct is to pay doctors for value and outcomes — process and outcomes measures. This contract seems to have gone quite well in many respects — improving quality metrics in many areas and chipping away at costs. So, no, pay doctors for quality is not a strategy I agree, but it is an idea and the idea had to take root among a lot of thoughtful people before it became as widely accepted as it appears to be today. Let the AQC and other “technocratic” proposed solutions have a bit of time and then let’s see whether they work. In the meantime, Mr. Wolf is on standby.

  88. ‘I just told you, we need to pay doctors for value and outcomes.’

    Somehow, I don’t think not paying lawyers for losing cases would go down very well. Why should doctors be any different?

  89. “We want both security and freedom.”

    Yes, that’s about it, Saurabh. The problem is that with freedom comes responsibility. I met a young lady a few years ago from a very restrictive Middle Eastern country. The inhabitants felt somewhat secure (as long as they followed the gov’t rules), but had very limited freedom (especially women). When she came to the States, she was exhilirated by the freedom to do what she pleased, but crushed by the responsibility of choices. She found it difficult to adapt to a situation where she was not provided for.
    We want to be protected from terrorists on planes, but our liberty-loving selves don’t want to undergo the hassle of security checking.
    We want the freedom to make our own health choices, but the security of knowing if we get sick, or make the wrong choices, we’ll be taken care of without going broke.
    We want affordable health care but we want to be able to choose our own doctors and hospitals without restriction or price increases.
    Somewhere in the middle lies the right answer, and it is different for all of us.

  90. You are absolutely correct. Our tendency to immediate results does mean we write off programs before even given a chance of success.

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