The last time I looked, maybe 4-5 years ago, somethin like 80% of the "health care" money was spent in the last year of someone's life. No one seems to think that extending a life by a few weeks or months isn't worth heroic effort AND heroic spending.
"Thirty percent of Medicare expenditures are attributable to the 5 percent of beneficiaries who die each year, resulting in per-capita spending on decedents that is six times as great as for nondecedents"
("only" 30%, but still impressively high if we assume something like 20 years in Medicare (?) for the typical beneficiary)
Possibly. I taught Health Policy for several years and that was from memory. But people die from lots of thaings besides the ravages of old age. Accident victims, premature babies, addicts, for instance, all can consume massive amounts of health care dollars even though they're very likely to die.
We don't triage such care as much as people think. And we still can't really preict which really early premies will live or die, so we aggressively treat them all. That can be $1M/per baby over the few days or weeks they may live.
Other countries don't do as much of tht. They tend to go way more for paaaiative care.
“2. The American middle class does not believe in paying taxes in order to support people who are very poor or very sick. We are not Denmark.“
Maybe that's the majority but I'd argue there is a very large left-leaning minority that very much believes in those taxes. Of course many of them think it can mostly be accomplished by the "rich" paying their "fair share" but that is almost a separate belief for most of them.
Tho the Adam Sandler songs about Chanukah and Christmas are also fun, and new to me.
One of the biggest missing pieces in most health care debates is the missing Med Schools. We don’t have enough schools, which means too few doctors which means…
Doctors cost too much.
Every US state should build a new state Med School, maybe with a few of them choosing a Slovak/Euro style 6 year program of Medicine and college combined, like my wife & first son went thru.
Arnold’s 5 notes all seem accurate, and seem oriented to allowing all to keep believing whatever they think would be better, would be better, but is infeasible. The discomfort in thinking about the issues will continue to push more govt and socialistic tendencies. Rather than more individual responsibility over decisions which are thought about, but include unpleasant trade-off combinations that so many folk would rather not be responsible for.
Healthcare is reminding me of Debeers. Diamonds are a commodity, but Debeers controls supply. Healthcare is a commodity help up by providers and local hospital systems that behave like monopoly.
Denmark spends about 10% of GDP on health care. I would venture to guess that the share of GDP they spend specifically on health care for the non-elderly poor is not more than 3%.
Technically you're correct that the US middle class is not willing to pay these taxes, because the US middle class pays fairly little in Federal income taxes, so most of this is paid for with borrowing and taxes on the upper class.
That is the case but rather than focus on the inclinations, I think it is more productive to think abut the system that has evolved to its present state because of a series of policy decisions. That is not to say that if payment of treatments of disease and injury and preventive measures were taxed and regulated like any other commodity, all would be well.
Health services are different in that the consumer does not have all the information they need to decide how much to purchase. And the consumer must rely on the provider to supply the information needed to a much greater extent than with other purchases.
The unpredictable nature of health spending even with adequate knowledge, would suggest that most people would want to purchase insurance to cover extraordinary expenses as they do for automobile or home hazard risks. The aleatory nature of illness and possibly its coverage by insurance dampens the inclination to avoid behaviors that increase incidence of illness.
The cost of that insurance is or would be greater than a significant portion of the population can, in the judgement of the rest of the population, “afford,” for example much older people, suggesting a desire to subsidize the purchase of health services insurance for some people.
And the layers of decision making also reduces the incentive of suppliers of health services to innovate lower cost ways of producing health service benefits or even to choose, together with the beneficiary, the service that has the highest NPV.
All these factors make it difficult to know on which margins to reform the system we have; different countries have vastly different systems, none of them remotely close to treating health services like any other consumer good.
One place in which the US is very much an outlier is use of the employment contract as a means of subsidizing health services and consequently of its purchase by the employer rather than the beneficiary of the subsidy. This woud be bad enough if the employer in this regard acted solely as the employees’ agent, but some employers impose their own values concerning what should and should not be covered. Adding this additional layer of decision making between the consumer and provider of health services exacerbates information loss in that process.
Furthermore, employers purchase the same coverage for all employees implying that the cost of insurance to the employer is a greater portion of total remuneration of low wage workers than higher wage workers. On the other hand, the value of the insurance provided in not taxed as income. Together these have the effect of subsidizing the wages of high paid workers and discouraging employment of low wage workers, the latter much as a minimum wage does.
Another feature of the U.S. system is the extent to which subsidies to health services (as is the case for old-age pensions and unemployment benefits) is (inadequately) are financed by taxes on wages rather than a broader consumption tax like a VAT.
It seems to me, therefore that one place to start with reform would be to chip away at the employer-health services consumer link and change the funding of health services insurance with a VAT. With status quo bias of consumers and lack of interest in this kind of reform by either political party this reform will not be easy
I pretty much agree with your list except one thing and an addition.
"One place in which the US is very much an outlier..."
I'm pretty sure Germany mostly goes through employers. Maybe a few other places.
I'd note that price sensitivity is extremely difficult to implement in that people of differing incomes have much different breaking points, treatments have very different costs, and the benefits vary in how much "we" think they should be readily accessible regardless of ability to pay. There is no one answer that addresses all the variables.
Thanks for the point about Germany. [Chat GPT describes the finance as very much like the US system. The benefit are though regulated non-profit entities like ACA, but ACA is through for profit insurers.]
Yes, I agree there is no perfect system, but it seem that getting rid of the employer link would help.
I guess that could be a trade off. Of course financing social insurance (even without reforming employer "provided" health insurance is highly desirable in itself.
“2. The American middle class does not believe in paying taxes in order to support people who are very poor or very sick. We are not Denmark.“ This isn’t surprising. America is a very large country. I would not expect Americans to believe they should pay taxes to support very poor or very sick. In the hunter-gatherer groups that our ancestors evolved in over millions of years, the concepts of family, kin, outsiders, trade, and negotiation were present, (just to mention a few) but paying taxes was probably not present. Paying taxes is a new concept relative to our millions of years of evolution. Perhaps willingness to pay taxes is a recent cultural innovation that works better in smaller communities. Perhaps we should consider paying taxes at the local level to help the sick and poor, rather than at the federal level.
The disinclination to subsidize health services for the poor (although to a lesser extent than for others) is not really universal. Medicaid expansions under ACA was adopted by most states and in others when on the ballot have very often passed.
I don’t think the evolutionary argument applies. Taxes are natural and as old as organized societies. Originally paid in goods or services, they took the form of tithes, tribute, protection payments, feudal rents, forced labor, forced military service, fees, tariffs, food for feasts, etc.
The taxes of which you speak probably only go back ten or maybe twenty thousand years. Not long, evolutionarily speaking.
It could be the size of our country but it seems more likely along the lines of something Thomas Sowell (and others) have said about who came here from other countries.
Our ancestors have evolved over millions of years. Organized societies have been around for perhaps 10,000 years, so 0.01 to 0.001 of this time.
Over how much time has there been a tax to pay for medical care? The forms of taxes that you list are not of the benevolent type like paying for the sick.
I still disagree. To me it seems like an evolutionarily adaptive family/tribe/culture would be the one where parents are expected to work hard to provide for children, and the vigorous are expected to work hard to provide for the elderly and sick. In exchange, the elderly provide wisdom and pass down the adaptive traditions. Providing for the sick would increase the tribal numbers (since some would recover; and all would trust that they would be so provided for as well, building intra-tribal bonds). I’m sure you could imagine a different scenario, and that’s one problem with evolutionary thinking as a way of making sense of the world.
“The American middle class does not believe in paying taxes in order to support people who are very poor or very sick.“ If you believe this statement to be true, what is your explanation for it?
Reliable health procedures are about five minutes old historically speaking. Semmelweiss was committed to an asylum by his colleagues in 1865, for example, for his criticism of hospital hygiene procedures.
I think it's fair to say that roughly around the time period in which you could start to call medicine an industrial science, political entrepreneurs picked up on the benefits of using tax money to take over the profession. LBJ did not miss a beat. It perhaps started as a placeholder for military spending, but now it is the permanent war against death that justifies any expropriation of resources in any quantity from the productive.
Pretty accurate, unfortunately. Also, "insurance should pay for everything".
The last time I looked, maybe 4-5 years ago, somethin like 80% of the "health care" money was spent in the last year of someone's life. No one seems to think that extending a life by a few weeks or months isn't worth heroic effort AND heroic spending.
Is this the statistic you are referring to?
https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1475-6773.2004.00232.x
"Thirty percent of Medicare expenditures are attributable to the 5 percent of beneficiaries who die each year, resulting in per-capita spending on decedents that is six times as great as for nondecedents"
("only" 30%, but still impressively high if we assume something like 20 years in Medicare (?) for the typical beneficiary)
Possibly. I taught Health Policy for several years and that was from memory. But people die from lots of thaings besides the ravages of old age. Accident victims, premature babies, addicts, for instance, all can consume massive amounts of health care dollars even though they're very likely to die.
We don't triage such care as much as people think. And we still can't really preict which really early premies will live or die, so we aggressively treat them all. That can be $1M/per baby over the few days or weeks they may live.
Other countries don't do as much of tht. They tend to go way more for paaaiative care.
Nothing has changed in 7 years. In fact, the situation might be worse.
“2. The American middle class does not believe in paying taxes in order to support people who are very poor or very sick. We are not Denmark.“
Maybe that's the majority but I'd argue there is a very large left-leaning minority that very much believes in those taxes. Of course many of them think it can mostly be accomplished by the "rich" paying their "fair share" but that is almost a separate belief for most of them.
Good example of a good comment by Stu, making a real counter-argument (which I agree with).
No argument from this corner. We're Pogo...We have met the enemy and he is us.
Merry Happy Christmas/Hanukkai to all!
Merry Christmas, everyone. My new-ish fav holiday song:
https://www.youtube.com/watch?v=-E1ULv6LcOk
Tho the Adam Sandler songs about Chanukah and Christmas are also fun, and new to me.
One of the biggest missing pieces in most health care debates is the missing Med Schools. We don’t have enough schools, which means too few doctors which means…
Doctors cost too much.
Every US state should build a new state Med School, maybe with a few of them choosing a Slovak/Euro style 6 year program of Medicine and college combined, like my wife & first son went thru.
Arnold’s 5 notes all seem accurate, and seem oriented to allowing all to keep believing whatever they think would be better, would be better, but is infeasible. The discomfort in thinking about the issues will continue to push more govt and socialistic tendencies. Rather than more individual responsibility over decisions which are thought about, but include unpleasant trade-off combinations that so many folk would rather not be responsible for.
Healthcare is reminding me of Debeers. Diamonds are a commodity, but Debeers controls supply. Healthcare is a commodity help up by providers and local hospital systems that behave like monopoly.
The US spends 3% of GDP on Medicaid:
https://fred.stlouisfed.org/graph/?g=1Csp8
Denmark spends about 10% of GDP on health care. I would venture to guess that the share of GDP they spend specifically on health care for the non-elderly poor is not more than 3%.
Technically you're correct that the US middle class is not willing to pay these taxes, because the US middle class pays fairly little in Federal income taxes, so most of this is paid for with borrowing and taxes on the upper class.
That is the case but rather than focus on the inclinations, I think it is more productive to think abut the system that has evolved to its present state because of a series of policy decisions. That is not to say that if payment of treatments of disease and injury and preventive measures were taxed and regulated like any other commodity, all would be well.
Health services are different in that the consumer does not have all the information they need to decide how much to purchase. And the consumer must rely on the provider to supply the information needed to a much greater extent than with other purchases.
The unpredictable nature of health spending even with adequate knowledge, would suggest that most people would want to purchase insurance to cover extraordinary expenses as they do for automobile or home hazard risks. The aleatory nature of illness and possibly its coverage by insurance dampens the inclination to avoid behaviors that increase incidence of illness.
The cost of that insurance is or would be greater than a significant portion of the population can, in the judgement of the rest of the population, “afford,” for example much older people, suggesting a desire to subsidize the purchase of health services insurance for some people.
And the layers of decision making also reduces the incentive of suppliers of health services to innovate lower cost ways of producing health service benefits or even to choose, together with the beneficiary, the service that has the highest NPV.
All these factors make it difficult to know on which margins to reform the system we have; different countries have vastly different systems, none of them remotely close to treating health services like any other consumer good.
One place in which the US is very much an outlier is use of the employment contract as a means of subsidizing health services and consequently of its purchase by the employer rather than the beneficiary of the subsidy. This woud be bad enough if the employer in this regard acted solely as the employees’ agent, but some employers impose their own values concerning what should and should not be covered. Adding this additional layer of decision making between the consumer and provider of health services exacerbates information loss in that process.
Furthermore, employers purchase the same coverage for all employees implying that the cost of insurance to the employer is a greater portion of total remuneration of low wage workers than higher wage workers. On the other hand, the value of the insurance provided in not taxed as income. Together these have the effect of subsidizing the wages of high paid workers and discouraging employment of low wage workers, the latter much as a minimum wage does.
Another feature of the U.S. system is the extent to which subsidies to health services (as is the case for old-age pensions and unemployment benefits) is (inadequately) are financed by taxes on wages rather than a broader consumption tax like a VAT.
It seems to me, therefore that one place to start with reform would be to chip away at the employer-health services consumer link and change the funding of health services insurance with a VAT. With status quo bias of consumers and lack of interest in this kind of reform by either political party this reform will not be easy
I pretty much agree with your list except one thing and an addition.
"One place in which the US is very much an outlier..."
I'm pretty sure Germany mostly goes through employers. Maybe a few other places.
I'd note that price sensitivity is extremely difficult to implement in that people of differing incomes have much different breaking points, treatments have very different costs, and the benefits vary in how much "we" think they should be readily accessible regardless of ability to pay. There is no one answer that addresses all the variables.
Thanks for the point about Germany. [Chat GPT describes the finance as very much like the US system. The benefit are though regulated non-profit entities like ACA, but ACA is through for profit insurers.]
Yes, I agree there is no perfect system, but it seem that getting rid of the employer link would help.
If you want to do the good work of getting rid of the employer link, you should abandon the support for VAT.
Nobody supports breaking the link to add VAT, but many oppose VAT and would oppose any policy X plus VAT.
I guess that could be a trade off. Of course financing social insurance (even without reforming employer "provided" health insurance is highly desirable in itself.
Thoughtful
“2. The American middle class does not believe in paying taxes in order to support people who are very poor or very sick. We are not Denmark.“ This isn’t surprising. America is a very large country. I would not expect Americans to believe they should pay taxes to support very poor or very sick. In the hunter-gatherer groups that our ancestors evolved in over millions of years, the concepts of family, kin, outsiders, trade, and negotiation were present, (just to mention a few) but paying taxes was probably not present. Paying taxes is a new concept relative to our millions of years of evolution. Perhaps willingness to pay taxes is a recent cultural innovation that works better in smaller communities. Perhaps we should consider paying taxes at the local level to help the sick and poor, rather than at the federal level.
The disinclination to subsidize health services for the poor (although to a lesser extent than for others) is not really universal. Medicaid expansions under ACA was adopted by most states and in others when on the ballot have very often passed.
I don’t think the evolutionary argument applies. Taxes are natural and as old as organized societies. Originally paid in goods or services, they took the form of tithes, tribute, protection payments, feudal rents, forced labor, forced military service, fees, tariffs, food for feasts, etc.
The taxes of which you speak probably only go back ten or maybe twenty thousand years. Not long, evolutionarily speaking.
It could be the size of our country but it seems more likely along the lines of something Thomas Sowell (and others) have said about who came here from other countries.
Our ancestors have evolved over millions of years. Organized societies have been around for perhaps 10,000 years, so 0.01 to 0.001 of this time.
Over how much time has there been a tax to pay for medical care? The forms of taxes that you list are not of the benevolent type like paying for the sick.
I still disagree. To me it seems like an evolutionarily adaptive family/tribe/culture would be the one where parents are expected to work hard to provide for children, and the vigorous are expected to work hard to provide for the elderly and sick. In exchange, the elderly provide wisdom and pass down the adaptive traditions. Providing for the sick would increase the tribal numbers (since some would recover; and all would trust that they would be so provided for as well, building intra-tribal bonds). I’m sure you could imagine a different scenario, and that’s one problem with evolutionary thinking as a way of making sense of the world.
“The American middle class does not believe in paying taxes in order to support people who are very poor or very sick.“ If you believe this statement to be true, what is your explanation for it?
Reliable health procedures are about five minutes old historically speaking. Semmelweiss was committed to an asylum by his colleagues in 1865, for example, for his criticism of hospital hygiene procedures.
I think it's fair to say that roughly around the time period in which you could start to call medicine an industrial science, political entrepreneurs picked up on the benefits of using tax money to take over the profession. LBJ did not miss a beat. It perhaps started as a placeholder for military spending, but now it is the permanent war against death that justifies any expropriation of resources in any quantity from the productive.