Prevention
WHICH WAY WILL OBAMACARE BEND THE MEDICAL COST CURVE?
We know that more than half of all medical cost is wasted, adding no value to the patient. We also know that the total costs of medical provider billing, collection, and payment consume as much as 30% of every health care dollar—about ten times the transaction costs in every other industry. If medical care were as efficient as, say, our economy’s food sector, it would provide higher quality for a third of today’s $2.6 trillion cost and free up $1.7 trillion every year for higher wages, lower federal deficits, and a major boost in job-creating private-sector investment.
Moreover, 75% of all medical spending now goes to treat preventable chronic diseases. If we could figure out how to get people to stop eating, drinking, and smoking themselves to death, and cut out the wasteful spending, our total medical bill would plummet to only 10-20% of today’s level.
The Health Reform Summit—Making Prevention Really Work
As we approach Thursday’s bipartisan health summit, no one has yet successfully challenged the comprehensive health reform proposal I describe in my book, speeches, media interviews, and this blog. It has withstood all technical, actuarial, financial, behavioral, and economic challenges to date. This would be gratifying if it weren’t for one annoying loose end—the political issue.
Almost everybody tells me that my approach’s lack of sound-bite simplicity renders it DOA as a workable legislative agenda. They have a point. As bad as our health care system is, it’s not yet bad enough to engender the kind of political will necessary to put American consumers fully in charge of buying their own health insurance and medical care. Until we get there, let me offer a simpler, interim proposal that will immediately offer relief from out-of-control medical costs: we should make everyone financially responsible for his own preventable illnesses.
SHOULD HEALTH INSURANCE COVER PRIMARY AND PREVENTIVE CARE?
I buy collision and comprehensive insurance on my car, but after talking to my State Farm agent, it might as well be called collision and incomprehensible. With seven layers of coverage, most of it is as clear to me as the details of health insurance are to many others. But it has two aspects I do understand. First, it doesn’t cover gasoline, oil changes, or worn-out tires. Those are predictable, normally affordable consumer purchases. Even if I could buy such coverage, I wouldn’t. It’s not worth the added insurer overhead and profit—not to mention the cost inflation on gas and tires once sellers discover their customers no longer care about price. I’m better off shopping around for reliable service, low price, and credit card convenience.
The other part I understand is the deductible. If my car gets accident damage, I pay the first $2,000 to fix it. Insurance pays the rest. I could get a $100-deductible option, but that costs an extra $183 per year. I’d rather save the money and drive more carefully—even if the two gents who’ve run into me during the past 40 years didn’t. I’m still way ahead.
TAXING OUR WAY TO HEALTHY LIVING
The Dietary Nanny Patrol is at it again, this time with an article in the current New England Journal of Medicine claiming that a penny-per-ounce tax on sugary soft drinks would help to reduce the nation’s bulging waistline while raising $150 billion “that governments can use for health programs” over the next decade. And cows nationwide will breathe a sigh of relief over the plunging demand for belt leather. This is another in a long line of similar ideas to paste a bull’s-eye on isolated food groups as a way to refill depleted tax coffers under the guise of public health advocacy. It always seems odd to me that the estimates of enhanced tax revenues and increased public health are so often trumpeted together, even though the achievement of one always comes as a tradeoff against the other. Such “solutions” send mixed messages and are inefficient as hell.
PRESIDENT OBAMA’S SPEECH TO CONGRESS: FAITH-BASED HEALTH REFORM
President Obama went all-in on health reform tonight (September 9, 2009) with his win-one-for-the-late-senator pitch to the assembled houses of Congress. Beyond his always-inspiring rhetoric, his actual proposals offered virtually nothing we haven’t heard before. His essential message: when it comes to health reform, I’m asking the American public to accept hope over experience, faith over fact.
Have Faith that the government will provide a public insurance option that is more competitive, efficient, fair, and effective than anything you can get from a private insurer. Subtext: Ignore the man behind the curtain who has already given you the unmatched fairness and effectiveness of FEMA, Fannie, Freddie, Medicare ($74 Trillion in the hole), Social Security ($17.5 Trillion under water), the national debt ($11.7 Trillion and counting), the sex-offender registry, and the SEC’s crack enforcement of Bernie Madoff’s Ponzi scheme.
THERE YOU GO AGAIN, MR. PRESIDENT
“There’s no reason that we shouldn’t be catching diseases like…prostate cancer on the front end.” President Barack Obama’s op-ed on health care reform in the New York Times.
Once again, Mr. President, wrong end. It reminds me of a banker friend who years ago told me about his first annual adult physical: “The doctor told me he was going to give me a digital prostate exam. I said it was simply amazing what they can do with computers these days.”
THE TUBE’S NOT THAT LONG, MR. PRESIDENT
“(W)e will require insurance companies to cover…colonoscopies. There’s no reason that we shouldn’t be catching diseases…on the front end.” President Barack Obama’s op-ed in the New York Times, 8/16/9.
Uh, I don’t think it’s that end, Mr. President.
OBESITY’S EARTHSHAKING MEDICAL COSTS–A BRIEF PROPOSAL TO LIGHTEN THE LARD
The average obese American consumes a beefy 42% more in medical costs than his normally-weighted neighbor. So says an article published today in the journal Health Affairs. Last year, such avoidable avoirdupois boosted health care spending by a corpulent $147 billion. That’s enough to buy comprehensive health insurance for more than a million uninsured families.
America’s infatuation with “weight loss” (I got 107 million Google hits on the term.) is exceeded only by its obsession with successfully avoiding it. In the mere eight years between 1998 and 2006, the obesity rate distended from 18.3 percent of the population to 25.1 percent. This progression of portly proportionality gives every indication of continuing until we all resemble the ponderous passengers on the movie spaceship in Wall-E—but without the anodyne of zero-g.
What can be done? Taxes on Twinkies? Measuring the obesity rate in “porcint”? Mandating spandex halter tops and sweatpants for Wal-Mart shoppers? No? Then how about a market-based solution?
THE 7 MYTHS OF MASSIVELY INEFFECTIVE HEALTH CARE REFORM
The government’s full-court press on health reform, epitomized by the awesomely inapt and inept Affordable Health Choices Act of 2009 (AHCA) now wending its way through the House, is trying to petrify in amber many of the myths that dominate so much of our thinking about health care. Here’s a brief look at some of the worst:
Myth # 1: Prevention and electronic medical records (EMR) will save money. Prevention is indeed a wonderful thing for extending people’s lives and allowing them to make more money, buy more stuff (including medical care), give more money to charity, and spend more time with their grandchildren. But it does not save any money on medical care! Here’s what the journal Health Affairs concluded earlier this year, “Over the four decades since cost-effectiveness analysis was first applied to health and medicine, hundreds of studies have shown that prevention usually adds to medical costs instead of reducing them. Medications for hypertension and elevated cholesterol, diet and exercise to prevent diabetes, and screening and early treatment for cancer all add more to medical costs than they save.” So forcing people to buy insurance that covers yet more preventive services (an oxymoron if you think about it) will drive premiums up not down.
BE AFRAID, BE VERY AFRAID: THE UNAFFORDABLE HEALTH CHOICES ACT OF 2009
I recently spent the better part of a Colorado summer Saturday reading the worst parts of something called The Affordable Health Choices Act of 2009. Purported to constitute health care reform, its thousand pages were introduced this past week by the chairmen of the three congressional House committees with jurisdiction over health policy. It is the single most egregious piece of health care legislation to cross my desk in four decades. Hillary Care (yes, I read that one too), nonsensical as it was, represented an order of magnitude more thought than this bill which is so blind to basic economics on so many levels that I marvel at the ability of the three chairmen, Speaker Pelosi, President Obama, and the AMA to praise it with straight faces.
