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djonnI've been mostly sitting on the sidelines as health insurance and health care have taken over the mediascape and the blogosphere. For me, much of the "debate" has been an exercise in frustration -- there's a lot of railing against the Evil Insurance Companies, the Evil Government Bureaucrats, and the Evil Drug Manufacturers, and even many of the more thoughtful commentators have not, to my mind, really managed to come to grips with what I consider the real underlying problems.
I also note for the record that much of my own context on the discussion arises from observation of my father's professional career. He spent virtually his entire working life in the nonprofit health insurance field, beginning in the 1950s as a claims clerk for a smaller Blue Shield plan. By the time he retired in the 1990s, the company had become a great deal larger, and his final big project as a senior executive and general counsel was coordinating its evolution into a group of affiliated Blue Cross & Blue Shield plans covering most of four western states. As you might expect, I am therefore easily irritated by those who rail indiscriminately against Evil Insurance Companies; by the standards of many such commentators, I am obviously the Spawn of Evil and thus irredeemably tainted.
However, as![[livejournal.com profile]](https://www.dreamwidth.org/img/external/lj-userinfo.gif)
e_moon60 points out in an excellent recent post, the foregoing is not itself a point of civil discourse; it's an emotional response. And as it happens, a different post from kateelliott crystallizes for me what one of the key issues actually is.
It's this: people can tell you without too much difficulty what they've spent on health insurance and/or medical care in a given year, and frame that figure as a dollar amount (call it $xxx for simplicity's sake, recognizing that there are often more digits than that in the real figure). But in order to accurately frame the the economic context, we need a second number. We need to know $yyy, where $yyy is the value of the resources received for that expenditure.
This leads to two distinct levels of complication. One is that determining an exact $yyy figure for any given specific case can be extremely difficult. Different analysts may apply different values to the same test, procedure, or drug depending on who they're working for, who supplied the product or service, and to what degree their evaluation metric controls for inflation, overhead, supply-demand issues, and what they think the product or service should cost.
The second is simpler, but no less problematic. In order for the health care system to "break even", the sum total of everyone's $xxx figures -- what's been paid in from all channels, public & private -- needs to be at least equal in value to the sum total of the $yyy figures -- the actual value of all the resources expended. In practice, however, most of the legislative proposals I'm hearing (and many of the anecdotal reports I see from individuals about what their costs are now) involve situations where $xxx is often-to-always less than $yyy. But that way lies a black hole. In order to both (a) make the system break even, and (b) provide a high level of care for all consumers, you need a sizeable pool of consumers who pay into the system, who don't use it -- and who also don't complain about paying for the resources they don't use. And as far as I can tell, that pool of consumers just doesn't exist.
Nor is this simply a problem in the world of "catastrophic" care -- organ transplants, cancer treatments, long-term premature-infant care, and the like. Consider a single middle-aged male whose insurance costs $250/month with a $250 deductible, for a basic $xxx cost of about $3,250 in a year. Now say that in that year, he gets a routine physical ($250 for the exam, another $250 for assorted tests), a flu shot ($50), and a broken arm (guesstimate $3800 after adding up an ambulance, assorted exams, treatment, and supplies). That's a $yyy cost of $4,350 in resources, such that our hypothetical patient has is $1,100 ahead...and that $1,100 has to come from somewhere. I am also given to wonder about all those $4-copay drug programs; clearly they're a great deal for the consumer, but someone still needs to pay the real resource cost of manufacturing, distributing, and dispensing the drugs -- and even in the world of "big pharma" the pots of money that are subsidizing those programs can't be truly bottomless.
I don't have a good resolution for the foregoing situation (although I think it helps explain why health care bills are going up as fast as they are). My sense, though, is that the underlying problems we're having with health care distribution in the US are not, or not primarily, a function of whatever corruption there may be in the system. Rather, they're a function of a fundamental and increasing imbalance of resources that can't be corrected merely by rearranging the mechanics of the distribution system.
I also note for the record that much of my own context on the discussion arises from observation of my father's professional career. He spent virtually his entire working life in the nonprofit health insurance field, beginning in the 1950s as a claims clerk for a smaller Blue Shield plan. By the time he retired in the 1990s, the company had become a great deal larger, and his final big project as a senior executive and general counsel was coordinating its evolution into a group of affiliated Blue Cross & Blue Shield plans covering most of four western states. As you might expect, I am therefore easily irritated by those who rail indiscriminately against Evil Insurance Companies; by the standards of many such commentators, I am obviously the Spawn of Evil and thus irredeemably tainted.
However, as
e_moon60 points out in an excellent recent post, the foregoing is not itself a point of civil discourse; it's an emotional response. And as it happens, a different post from kateelliott crystallizes for me what one of the key issues actually is.It's this: people can tell you without too much difficulty what they've spent on health insurance and/or medical care in a given year, and frame that figure as a dollar amount (call it $xxx for simplicity's sake, recognizing that there are often more digits than that in the real figure). But in order to accurately frame the the economic context, we need a second number. We need to know $yyy, where $yyy is the value of the resources received for that expenditure.
This leads to two distinct levels of complication. One is that determining an exact $yyy figure for any given specific case can be extremely difficult. Different analysts may apply different values to the same test, procedure, or drug depending on who they're working for, who supplied the product or service, and to what degree their evaluation metric controls for inflation, overhead, supply-demand issues, and what they think the product or service should cost.
The second is simpler, but no less problematic. In order for the health care system to "break even", the sum total of everyone's $xxx figures -- what's been paid in from all channels, public & private -- needs to be at least equal in value to the sum total of the $yyy figures -- the actual value of all the resources expended. In practice, however, most of the legislative proposals I'm hearing (and many of the anecdotal reports I see from individuals about what their costs are now) involve situations where $xxx is often-to-always less than $yyy. But that way lies a black hole. In order to both (a) make the system break even, and (b) provide a high level of care for all consumers, you need a sizeable pool of consumers who pay into the system, who don't use it -- and who also don't complain about paying for the resources they don't use. And as far as I can tell, that pool of consumers just doesn't exist.
Nor is this simply a problem in the world of "catastrophic" care -- organ transplants, cancer treatments, long-term premature-infant care, and the like. Consider a single middle-aged male whose insurance costs $250/month with a $250 deductible, for a basic $xxx cost of about $3,250 in a year. Now say that in that year, he gets a routine physical ($250 for the exam, another $250 for assorted tests), a flu shot ($50), and a broken arm (guesstimate $3800 after adding up an ambulance, assorted exams, treatment, and supplies). That's a $yyy cost of $4,350 in resources, such that our hypothetical patient has is $1,100 ahead...and that $1,100 has to come from somewhere. I am also given to wonder about all those $4-copay drug programs; clearly they're a great deal for the consumer, but someone still needs to pay the real resource cost of manufacturing, distributing, and dispensing the drugs -- and even in the world of "big pharma" the pots of money that are subsidizing those programs can't be truly bottomless.
I don't have a good resolution for the foregoing situation (although I think it helps explain why health care bills are going up as fast as they are). My sense, though, is that the underlying problems we're having with health care distribution in the US are not, or not primarily, a function of whatever corruption there may be in the system. Rather, they're a function of a fundamental and increasing imbalance of resources that can't be corrected merely by rearranging the mechanics of the distribution system.
