THCB

The Meme-ifcation of Health Care

flying cadeuciiWhy can’t we have nice things? As a self-anointed health policy wonk, I find myself asking this question many times. It seems that every potentially transformative (to use a tired cliché) health care trend must eventually go through a process I’ll call “meme-ification.” And I’ll preface by saying that this applies across the political spectrum.

Take the hobby horse of many progressive reformers – single payer. If you’ve spent any time immersed in health care policy, you’ve probably heard it all: every other advanced country does it, insurance companies (and profits) are evil, health care can’t be a for-profit (evil) industry etcetera.

Of course, if you’ve spent any time immersed in health care policy you probably also understand that attempting to extrapolate lessons from the U.K. (relatively homogeneous, over 250 people per square kilometer, and about 1 homicide per 100,000) to the U.S. (about as diverse as you can imagine, about 35 people per square kilometer, and nearly five homicides per 100,000) is at best, an uphill battle.

Fortunately, this election cycle has offered up real cost estimates of a single payer plan. But even then, when criticism of the unicorn and fairy dust needed to make it work surfaced, advocates simply pivoted back to their usual memes.

Conservatives are just as guilty on this front! High-deductible plans, which will likely be a pillar of future reforms, are a core element of any conservative proposal. And that’s fine. But here too, the “patient as a consumer” mindset has its limits.

Ben Carson’s vision for health care, for instance – a $2,000 per year government contribution to an HSA – leaves much to be desired. Of course, giving people money to spend on out-of-pocket health care expenses – covering deductibles, copays, and everything in between – isn’t a bad idea. Pretending that this is the solution to all of our health care woes is. Just as progressives are guilty of believing in the magic fairy dust of single payer, so too are conservatives for thinking that “consumerism” – at least as advertised – in health care is a panacea. Health care’s skewed distribution – where a small minority are responsible for most of the cost – is instructive here. Leaving a cancer patient with an HSA and saying “good luck” probably isn’t the direction we want to be moving in. 

Hiding in the corner, glaring at both of these solutions of course, are the many “well-meaning” regulations. As my colleague Avik Roy pointed out in a recent report, these all stand in the way of more efficient health care arrangements that would deliver better care at lower cost. Serious reformers understand that addressing these challenges is a pre-requisite for improving health care outcomes and cutting costs, with or without HSAs.

Worse still, perhaps more than any other policy area, we’ve turned health care into a meme free-for-all. Maybe this has to do with the two most persistent meta-memes:  health care before Obamacare was “free-market,” and universal health care in France, Sweden, or the U.K. is all peaches and cream, and that’s why “everyone else is doing better than us.”

Neither are true. The status quo before the ACA was anything but a free-market, and had enormous problems that made care essentially unobtainable for many – but a $250 billion dollar annual tax exclusion masked that, giving the illusion of “everything working fine.” Similarly, the idea that flipping a magic “universal health care” light switch is realistic (or even desirable) ignores the complexity that makes single-payer so immensely difficult and undesirable.

Real changes to the health care system need more than sound bites, and American voters need someone, at some point, to level with them.  Change is hard, compromise between the perfect and the good is inevitable, and we should avoid utopian thinking driven by sloganeering

Yevgeniy Feyman is fellow and deputy director of health policy at the Manhattan Institute.

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18 replies »

  1. I take it from your vacuous reply that you don’t like free markets. Maybe next time you can provide a bit of substance in your comment.

  2. Nothing like the support of a glassy-eyed cheerleader to dissuade anyone from the notion that “free markets zomg!!!!1!” is an answer, let alone THE answer, to ANYthing.

  3. Peter, what can I say? Apparently coming from the left you have little understanding of the free market place and how it works to produce more innovative product at a cheaper price for more people. That free market is why you probably have more than one flat screen in your house.

    Take note how using your ideals have bankrupted many nations while we here in the US have done quite well. The very high prices we see are due to your type of intervention.

    Yes, even with the fantastically lower prices found in the free market some people still might not be able to afford needed care. That doesn’t prevent charity or even government subsidization of such needed care. The important thing is not to destroy the innovative and productive free market.

  4. Yes we can have a “free” market where drug, hospital and insurance conglomerates, and doctor groups set prices and determine access unfettered by government, and where people have to forgo medical care if income can’t pay the piper. But that’s, “the market”, some have, others don’t – there is no middle ground in health care.

    As usual Allan, your purest zeal bypasses reality.

  5. “There are no solutions, only trade-offs, as the peerless Thomas Sowell would say.”

    Single payer is not an “economic” solution rather a political solution where politics is involved from then on. The purity of single payer is converted into corruptive actions and the politics behind it draws us ever closer to totalitarianism. We need innovation and to date the most innovative society is a free society with free market ideas. That is not something we have tried in healthcare for more than 50 years.

  6. “In any case, there is no causal link between having single payer and not having a large, poor inner city minority population.”

    Not my point. I was speaking demographically. As for homogeneous you’re going to have to explain that. Canada has immigrants from all over the world, just like U.S. They also eat and live pretty much like Americans, same food sources and processed percentage as well as quality, and levels of exercise/sedentary living. But I don’t see why that would disqualify Americans for single-pay anyway???

    “there’s not a lot of evidence that hospital closures hurt communities.”

    Maybe you should hear what those communities say. It hurts the poor if they are required to travel long distances for treatment, and it takes wealth out of a community. Hospitals can also support general public health with outreach. I’m just saying that they are not necessarily the best place for all treatment – but you need a good transportation backup support system.

  7. “All of them. By how much will be by negotiation with more money for primary and public health.”

    And one of the main tools for doing so is formulary exclusion. We’ve tried that in Medicaid in Oregon…it didn’t go over too well. It works pretty well in the VA, fwiw. But that’s for a very select, more homogeneous population.

    “I’m not sure. What effect on health will less drugs have? How much pain will there be in less erectile dysfunction drugs? We are over drugged, over fed, under exercised, over sugarized.”

    Possibly nothing. Possibly a lot. It depends what drugs don’t get developed. Do you think erectile dysfunction drugs would be the ones to not get developed? My understanding is that those are pretty damn profitable. Whether we are “over-drugged” is a very complicated question. Are we overprescribing opiods and stimulants to kids? Yep. Are we trying too hard to control bp? Yep. But the sweet spots for those probably aren’t too much lower than where we stand now. I’m really hesitant about allowing a distant bureaucrat decide what that sweet spot is.

    The hospital question is a tough one, as you acknowledge. Frankly, there’s not a lot of evidence that hospital closures hurt communities. But if you start paying all hospitals at Medicare rates overnight, you’ll run into trouble. Price variation is extremely important to address, but even in administered pricing systems that variation exists…Medicare and Medicaid come to mind.

    “Actually Canada is very similar, “demographically”, as well as lifestyle, diet and aging population. What they don’t have is a large, poor, black, inner city/rural population. Institutional differences are because of single pay – not despite it.”

    Universal healthcare in Canada arrived in the 80s. So probably not enough time to have affected institutions too drastically. In any case, there is no causal link between having single payer and not having a large, poor inner city minority population. If there is, please walk me through how that works.

    And Canada’s demographics are not all that similar. For starters, much more homogeneous and European. HIV/AIDS rate about half of the U.S. Higher life expectancy (pre-universal healthcare too). Lower IMR. MUCH lower homicide rate. And in Commonwealth’s rankings of healthcare systems, Canada’s is ranked just one above the US.

    “And the effects of our same course health system ARE predictable – outside of bankruptcy?”

    We know the problems with our healthcare system. And we’re trying to address them. Scrapping it and replacing with single payer outright introduces a whole new host of potential problems, which basically sets us back to zero.

  8. At the risk of being pilloried by my fellow libertarians, I don’t think a single payer system is at all catastrophic. The politics and culture are really where you run into trouble, I think. Where you start from is also important. The example I like to use is with drugs — b/c the U.S. is over 50 percent of rx profits, any price controls or formulary exclusions in the U.S. have a much bigger effect than the same policies elsewhere. Equally important, creating those price controls today would be very different than if we had created them 50 years ago.

    I have a bunch of moral qualms with single payer too, obviously, but those are less relevant pragmatically.

  9. Nice post to see here.The Meme-ifcation of Health Care is really great health information for us

  10. “What prices will you control? And by how much?”

    All of them. By how much will be by negotiation with more money for primary and public health.

    “What effect does that have on drug development?”

    I’m not sure. What effect on health will less drugs have? How much pain will there be in less erectile dysfunction drugs? We are over drugged, over fed, under exercised, over sugarized.

    “What will you do about the critical access hospitals in the middle of nowhere serving a small population? Will you let them close? Subsidize them?”

    They’re closing now. Hospitals should be community owned and run, with boards that are accountable to local citizens. If the hospital can be justified then it should be subsidized. Maybe we can’t do it all in all hospitals, maybe better transport services to larger regional hospitals is the answer. There was a post on this blog about hip and knee surgeries being less successful in rural hospitals because they just don’t do enough. My last hip replacement charge from the hospital was $43,0000 for a one day stay (not including surgeon) – justify that! The other two hospitals in the same city charge $55K and $60K respectively for the same operation – how do you stop that?

    “The lessons we can take away from Canadian single payer are relatively minimal, given institutional and demographic differences.”

    Actually Canada is very similar, “demographically”, as well as lifestyle, diet and aging population. What they don’t have is a large, poor, black, inner city/rural population. Institutional differences are because of single pay – not despite it.

    “the effects are very unpredictable”

    And the effects of our same course health system ARE predictable – outside of bankruptcy?

  11. Nice piece & a gallant response to the solution-mongerers. There are no solutions, only trade-offs, as the peerless Thomas Sowell would say.

    There are very few single-tiered systems in the world. Even the NHS, where I grew up, is a two-tiered system where those with private insurance get more expedient care.

    So the reality is, unless you have draconian state such as North Korea’s, a single payer system is, in fact, a two-tiered system: government and market.

    I support a single payer, because of the information anarchy of the current system, which is built on a patchwork of incrementalism. That is I would support a system where the government pays for the essential care, and care that is relatively price inelastic.

    Of course, such a system would be unpalatable to many American, including self-proclaimed supporters of single payer (we call them “champagne socialists” but they are known to sip latte), once they can’t get marginal care on Uncle Sam’s tab.

    That is I think single payer is the least worst bitter pill, which is sure to nauseate many who are cradled in employer sponsored insurance.

  12. Alright, Peter. What prices will you control? And by how much?

    Let’s say we cut drug prices in half. That shaves off 5 percent of national health spending assuming no change in utilization. What effect does that have on drug development? If your answer is “none” then I recommend going through the literature a bit more. Is that tradeoff worth it? How will you decide what drugs are and aren’t on the national formulary? Would you take NICE’s approach by tying that decision to ICER? How will you do that when we haven’t been able to do that in Medicare or Medicaid for half a century?

    Cut hospital prices by 50 percent. What will you do about the critical access hospitals in the middle of nowhere serving a small population? Will you let them close? Subsidize them?

    The reason I say single payer is undesirable — independent of my own moral and political views — is that the effects are very unpredictable. The lessons we can take away from Canadian single payer are relatively minimal, given institutional and demographic differences. In any case, I have yet to see a comprehensive single-payer proposal that takes this into account, and doesn’t rely on experiences of other countries to gauge the potential cost savings. Ignoring institutions and ignoring politics is silly.

    And to be clear, I don’t have a silver bullet for health care. That’s why I believe in incremental changes that we can reasonably expect to improve outcomes and lower costs.

  13. Healthcare reform can’t be achieved by creating an epidemic of soundbites and sloganeering

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  14. “everyone else is doing better than us.”

    No, they’re doing it for about half what we’re doing it for, and their citizens are getting as good or better health care, minus the grandiose marble lobbies, an MRI on every street corner with testing til you puke doctoring.

    “….ignores the complexity that makes single-payer so immensely difficult and undesirable.”

    No, not undesirable, just more difficult or impossible if we also don’t control prices, like what we have now without price controls.

    What’s your vision Mr. Feyman.

  15. Of course the “Why can’t we have nice things?” question is a meme too ; )

  16. Thanks for the kind words.

    I agree. Incrementalism is the only way you really get anything done. And frankly, I don’t want a “revolution.” That’s scary, and I think those who clamor for it do so out of ignorance more than anything.

  17. Excellent and wise discussion. Thank you.

    It would be tempting to get a few non-partisan economists and consumers and STEM-types into a calm sequential discussion about each of the dilemmas in health care: e.g. is there significant provider-induced demand and what to do about it; tax deductibility and ramifications thereof; third party payer and getting the public to feel costs; is there really much moral hazard in patients; costs induced by scientific innovation and US patent law; mental health funding and fairness; long term care; drug rehab and prevention; costs around death; is insurance a necessary tool and component of health care? ; what government levels have to be involved?; cost-sharing…what is the best and most efficient way?

    The problem is that we have locked ourselves out of some approaches…e.g. those that reduce the number of folks making a living out of the health care sector will be fiercely resisted. Ditto for tax deductibility or changing patent laws.

    So it may be that we have to let the sector evolve by itself from the bottom up, simply trying to tilt the spaghetti mess slightly, here and there, as it caroms forward into the future.

    A little lugubrious. Sorry.

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