Friday Highlights

Good morning. Interrogative day at link central. :D

  1. Money lost, is that stimulatory?
  2. Liberation or conquest?
  3. Zoom or huff-puff?
  4. How to control costs in healthcare?
  5. Who didn’t expect this? After all while there is consensus that spending should be cut there hasn’t been any consensus on what to cut. It’s why the Left’s “plan”, raising taxes is more feasible (even though raising taxes as a method of addressing deficits doesn’t actually work) is what will likely win. There’s no consensus required to just tax more. To bad the easy solution is the one that doesn’t work in this case.
  6. Why oh why will the anthropogenic climate people not read stuff like this? I would call attention to the study of weather data for the last 140 years … noting “So we were surprised that none of the three major indices of climate variability that we used show a trend of increased circulation going back to 1871.” You know the recent (Krugman!) notes about increased storms and droughts. All confirmation bias. Ooops.
  7. Is this a statement that the Palin haters would get on board with?
  8. Is this not exactly to the point?
  9. So what eactly is solertia and eustochia?
  10. Is this a sign of our decline?
  11. How to find a path between progress and history?
  12. Abortion is here. How about that back alley?
  13. Speaking of abortion, is this useful? At least he’s not bringing up the regrettable Violinist thang.

23 Responses to Friday Highlights

  1. Who didn’t expect this? After all while there is consensus that spending should be cut there hasn’t been any consensus on what to cut. It’s why the Left’s “plan”, raising taxes is more feasible …

    Interesting, the ‘left’, meaning the last Democratic Congress and Obama introduced no tax increases and cut the long run increase in health care spending and Obama in the new Congress cut taxes. Meanwhile the Republicans dither about trying to cut $100B in ‘discretionary spending’ which does nothing for long term deficits and ignores the fact that the short term deficit is simply a function of the recession.

  2. How to control costs in healthcare?

    Few issues here:

    First the 'cuts' in Medicare basically do embed productivity increases. If a hospital, for example ceases to get reimbursed for treating avoidable post-operative infections it could very well decide to continue to do business as usual, treating expensive infections without getting reimbursed. Or it could decide to limit post-op. infections thru a host of best practices that have already been documented. The idea that it's going to take the first route, see itself operating at a neverending loss and then mount a furious and irresitable lobbying campaign to 'reverse the spending cuts' rather than simply taking the second is just not very plausible IMO. Medicare's Chief Actuary, who is now beloved on the right when he was persona non grata a few years ago when he was talking about Bush's Medicare D, demonstrates this in his own numbers which say that 15% of hospitals may be at a loss in ten years with the 'spending cuts'. That sounds very dramatic but it's not. If I told you in 2001 15% of cell phone makers that existed now would be operating at a loss in ten years if they all stayed exactly the same you wouldn't be all that amazed, except at how low that number is. Between 2001-2010 the big players change, consolidations happen, and so on.

    Second, the 'consumer driven' Ryan plan is basically the Obama plan. The only difference is that the Obama plan institutes that for the under 65 crowd now. Basically you get gov't subsidies to buy insurance on the private market. The current health plan, then, is pretty interesting in that it's a running experiment of several big ideas for health reform. For 65+ and poor you have single payer (Medicare, Medicaid). For under 65 you have employer provided coverage (the status quo) with voucherized private markets for those who don't have employer coverage as well as some modest weaning away from employer provided plans (the 'luxury tax' on high end employer plans that hits high ranking executives and some gold plated union plans, which address a conservative criticism of employer provided coverage that consumers are too shielded from the cost of the care they demand when they have coverage that pays for just about anything under the sun without even a non-trivial co-pay).

    Third, we already did the Ryan plan on Medicare, it was/is called Medicare Advantage. The idea was that seniors could opt to get coverage from an insurance company which Medicare would pay rather than from Medicare. It ended up costing 15% more per patient than Medicare does. Why? Private insurance is good at seeking to limit costs and increase profits. Unfortunately the easiest way to do that with health care is not to 'bend the curve' on the costs of treating sick people, the easiest way to do that is just don't treat sick people. It's pretty cheap to figure out who in your pool of people are likely to get sick and boot them off. It's pretty expensive to take the sick people and figure out how to treat them for less money….esp. when their doctors will tell you they know what works best because they see it in real life as opposed to your Excel spreadsheets. No doubt Ryan's voucherizing plan would include a provision that insurance companies must take all customers and not screen for pre-existing conditions (like Obama's plan), but there's more subtle ways to keep your pool clean. Consider a plan that offers all types of 'goodies' like free gym memberships, holistic massage, accupuncture and 'alternative therapies'. This sounds great to a healthy active person. To a person who had cancer ten years ago and worries that it might come back they care more that the plan will cover most oncologists and not just one whose a hundred miles away. The 'yoga plan' then gets a pool of nice healthy people and can offer a lower premium but the sick people haven't gone anywhere.

    Now it might at some point work that the private voucher model will hit with just the right incentives to lower costs. If it is, then, it makes sense to do it under the Obamacare which covers people who don't have any coverage at the moment rather than run the risk of ruining Medicare by pushing it there. This has some added opportunities….people under 65 who lack coverage or get it from their employer should in theory be cheaper to cover than older people. Likewise the ability to have coverage should make changing jobs less stressful (see your previous concerns about structural unemployment…..a downside in basing your insurance system on employer provided coverage). But Republicans seem to be missing a very important point in their war on the Obama plan. The Obama plan is the last stop before a single payer system, it's the last line of defense for a health system that is based heavily on the private sector and universal coverage. This is why the left had its own qualms about it, it's also why it was essentially the Republican proposal from ten years ago or so. In their world they would rather just expand Medicare downwards or some variation on that.

  3. Boonton
    No new taxes? Hmmm.

    The Obama plan is the last stop before a single payer system, it’s the last line of defense for a health system that is based heavily on the private sector and universal coverage.

    Or … it’s a plan to so ruin the current system as to force us by default into the worst of a possible worlds (regarding innovation and cost control) … complete government takeover of healthcare.

  4. Only problem Mark, the tax penalty in the so-called mandate is about $750 at its max a year. The 2% payroll tax cut alone swamps that let alone the extension of the Bush tax cuts.

    Or … it’s a plan to so ruin the current system as to force us by default i….

    Do you have an ‘insert crap’ macro on your keyboard? Perhaps a simple Markov chain generator can help automate your production of non-responsive responses.

  5. Boonton,
    Nice dodge on the “no new taxes” bit, btw.

    Let me ask you, is power generation in this country private or public. Remember that prices are fixed by the state, profits are capped, labor is regulated, and distribution is regulated as well. Amtrak and possible the USPS are other examples of completely captive industries. Look, the Obamacare act strictly limits how much “profit” a insurer can make, how much he can charge, and enforces the enrollment of high risk patients (with the oft noted problem of letting someone take the “mandate” penalty in lieu of coverage until a high expense medical problem occurs). It would be a simple matter for the regulator to force essentially all insurers into the pockets of the government forcing them to rely on government funds to keep them afloat in a situation where there is now way for them to make a profit. You can (and likely will) argue that this isn’t the intent. But that is irrelevant. It is allowed by the law and a future regulatory agency may decide to do just that and there would be no check preventing that to occur. Those who wish for single payer in fact would desire to see that event occur, that way they could force the consolidation of these insurers (for simplicity) and voila single payer by the back door.

  6. Actually I forgot about the health bill, but I’m unclear when anyone claimed it had no taxes. It did raise the cap on income over $250K subject to the Medicare payroll tax so whatever you want to say about the mandate it’s hard to say that’s not a tax increase…

    Look, the Obamacare act strictly limits how much “profit” a insurer can make, how much he can charge, and enforces the enrollment of high risk patients (with the oft noted problem of letting someone take the “mandate” penalty in lieu of coverage until a high expense medical problem occurs). .

    The problem here is if you want to use private insurance companies to cover people you run into the pooling games they will play. So the result is you make them ‘captive’ in this sense. I assure you in the fine print of Ryan’s plan there will be a clause that says insurance companies, in order to take the “Medicare vouchers” will have have mandatory enrollment, limited premium variation etc. If you don’t then you’ve just created a pork program where private companies insure the healthy seniors and leave the sick ones in Medicare.

    But that is irrelevant. It is allowed by the law and a future regulatory agency may decide to do just that and there would be no check preventing that to occur. Those who wish for single payer in fact would desire to see that event occur, that way they could force the consolidation of these insurers (for simplicity) and voila single payer by the back door.

    You used power generation as your model, do we have single payer power generation in the US? No we don’t. The private-public-voucher system is not one the left is very fond of because it is hardly a guarantee of single payer down the road. In fact, it can quite likely lead to just the opposite. If most people have reasonable coverage under such a system there will be no political will to push into single payer (plus plenty of insurance companies would be around to lobby against it on the grounds of “why disrupt the system when most seem happy”). For one thing, I don’t think you can cite a single example of a country that adopted a single payer system via private-vouchers-regulation first. Most countries that I’m aware of with single payer like the UK and Canada jumped right into it. Other countries like France and Germany preserve private insurance with regulation and such but are not single payer systems.

    Moreso it is *not* allowed by law. For it to happen you’d need additional laws to get passed, not just regulators to apply administrative rulings to declare a single payer system.

  7. If you still trust the Republicans more than the Democrats on deficit reduction, I just don’t know what there is to say. You’ve obviously got your head so far up your ass it’s ridiculous. Note that the link you posted includes “ObamaCare” as having “huge deficits embedded” in it. We’re just not in the realm of reality here.

    Nobody ever said that we should only raise taxes and cut no spending. Nobody. It’s a total straw man. The very last Democratic president successfully turned the deficit into a surplus, while the last three Republicans ballooned it one after the other.

    Just look at the first chart here and tell me Republicans are better than Democrats on this issue.

  8. Boonton,
    Regarding taxes, uhm,

    Actually I forgot about the health bill, but I’m unclear when anyone claimed it had no taxes. It did raise the cap on income over $250K subject to the Medicare payroll tax so whatever you want to say about the mandate it’s hard to say that’s not a tax increase…

    Let’s see. Who said that, oh wait, you did, “Interesting, the ‘left’, meaning the last Democratic Congress and Obama introduced no tax increases and cut the long run increase in health care spending and Obama in the new Congress cut taxes.”

    The point made by me in item 5 was not specifically about the healthcare bill but taxes and the deficit.

    You used power generation as your model, do we have single payer power generation in the US? No we don’t.

    Well, as you know power generation is not federalized but state run. How many choices do you have for power? Hmmmm.

    Moreso it is *not* allowed by law. For it to happen you’d need additional laws to get passed, not just regulators to apply administrative rulings to declare a single payer system.

    Of course it is. And it’s quite simple. Just force the insurers out of business, and provide a special exemption (the sort Ms Sebellious is doing all the time for her buddies) for one particular insurer. Voila … single-payer by fiat without breaking a single law. No declarations needed. Note, by setting prices and payouts they completely control the ability of insurers to make profits. And can end their existence at will.
    JA,
    Your chart records record inroads against the deficit by Obama. Your chart person needs medical help.

    As I’ve noted on more than a few occasions the most successful attempts to counter deficits include modest tax decreases coupled with aggressive spending cuts. No Democrat on the planet is talking about doing that. It. Is. Not. A. Straw. Point.

    Your not living in the realm of reality regarding Obamacare, you’ve just happened to uncritically and without using an ounce of skepticism swallowed the party line and sinker without pausing to swallow.

  9. As I’ve noted on more than a few occasions the most successful attempts to counter deficits include modest tax decreases coupled with aggressive spending cuts. No Democrat on the planet is talking about doing that. It. Is. Not. A. Straw. Point.

    I said: “Nobody ever said that we should only raise taxes and cut no spending. Nobody. It’s a total straw man. ” How on Earth is that equivalent to what you wrote? You move the goalposts like it’s your job.

  10. JA,
    I see, we should “raise taxes and cut not spending” is the same (somehow) as “cut spending and lower taxes”. What goalposts? Show me a Democrat that promotes as a method of reducing the deficit moderate tax cuts and the primary method of attacking the deficit is not raising taxes but aggressive spending cuts and I’ll eat my hat. On the other hand, if you don’t … perhaps you should season your own.

  11. It’s why the Left’s “plan”, raising taxes is more feasible (even though raising taxes as a method of addressing deficits doesn’t actually work) is what will likely win. There’s no consensus required to just tax more.

    This is the straw man. You clearly implied the Democrats support ONLY raising taxes. (That’s what the word “just” means.) Later, when I pointed out it’s a straw man, you tried to pretend that “not talking about decreasing taxes while making aggressive spending cuts” was what I called a straw man.

    Read the paragraph I just quoted. Then read “not talking about decreasing taxes while making aggressive spending cuts”. Repeat until you can see the difference. It’s pretty huge. That’s shifting the goalposts.

    I can’t keep addressing new arguments in every comment because you’re so freaking dishonest about the prior ones. No progress can be made until we’re at least talking to each other instead of putting words in my mouth.

  12. Let’s see. Who said that, oh wait, you did, “Interesting, the ‘left’, meaning the last Democratic Congress and Obama introduced no tax increases and cut the long run increase in health care spending and Obama in the new Congress cut taxes.”

    You got me, I should have said cut taxes (which would have meant a net tax decrease after subtracting cuts from raises) instead of ‘introduced no tax increases’ (which saying nothing about the rate of taxation).

    The point made by me in item 5 was not specifically about the healthcare bill but taxes and the deficit.

    Indeed and my point stands. You claim that Obama would deal with the deficit by increasing taxes, yet this flies in the face of the fact that he’s cut taxes. This is a habit you have of letting your perception trump reality which is very common on the right. It’s what let’s Republicans believe Bill Clinton increased the deficit and George Bush cut it.

    Well, as you know power generation is not federalized but state run. How many choices do you have for power? Hmmmm.

    Actually quite a few, I can go to some website and choose from an array of power suppliers. But no one I know does unless they want to make a point of buying ‘green power only’. I think you’re confusing your electric utility with power generation. For the most part you buy your electric from a utility which hasa local monopoly on stringing wires to your house (although you are technically able to generate your own power with generators, solar panels, batteries etc.). Your utility buys power from power generators as well as sometimes owning its own power generation. If by ‘state run’ you mean there’s state regulations, well yea but technically there’s state regulations on everything.

    You’re right that power generation is a very complicated story with lots of big companies, various levels of regulation and so on. A lot of that is due to its nature. It’s one industry where it’s almost impossible to contain operations to the classical understanding of property. Your plants almost always impact the environment outside your property line and even if they don’t you can’t deliever your product without a lot of public accomodation.

    But the point is this is hardly an example of ‘back door single payer’ being instituted. And even to the degree you want to claim it is, it was hardly done with a single law that magically tricked people into it. It was done with a whole lot of laws with a varying levels of debate to all of them.

    Of course it is. And it’s quite simple. Just force the insurers out of business, and provide a special exemption (the sort Ms Sebellious is doing all the time for her buddies) for one particular insurer.

    How exactly would this work? You seem to think that the law has some magic provision for Ms Sebellious to just grant any exemption she wants. The scope of exemptions is actually quite limited, but the right has had a good time carping about ‘hundreds’ of exemptions that are, mostly trivial. The only relevant aspect of the law I’m aware of is the provision that insurance companies must spend at least 85% of the premiums they collect on health care leaving 15% for administrative cost and profit. Ms Sebellious may issue an exemption for a company that spends less than 85% but she can’t force the 85% higher without getting a revised law passed. You seem to have the relationship backward, issuing lots of exemption isn’t forcing single payer, it’s making the law’s burden less….and it’s not like the 85% number was choosen because only a few insurance companies could meet it, it was choosen because it’s already close enough to the status quo not to force ‘all but one’ company out of business.

    I think a fair criticism is that you’re not going to get a classical model of a market with numerous small insurance companies, you’re going to get a market dominated by large insurance companies with some small ones such as McDonald’s special crappy insurance protected for a while by exemption.

    Note, by setting prices and payouts they completely control the ability of insurers to make profits. And can end their existence at will.

    Except they don’t. Insurance companies remain free to offer expensive plans, free to play hardball with doctors offering them less payouts or play loose and let doctors charge more.

    As I’ve noted on more than a few occasions the most successful attempts to counter deficits include modest tax decreases coupled with aggressive spending cuts. No Democrat on the planet is talking about doing that. It.

    Heh, well actually Obama is. You have serious long term cuts in Federal health spending combined with his stated desire of making the Middle Class tax cuts permamet. Your Republicans are talking about massive tax cuts combined with aggressively cutting the smallest parts of the budget. You yourself admitted that one of the biggest people of substance in terms of GOP spending cutters, NJ’s Christie, was ‘70% fluff’.

    Here’s what’s going to go down. The Republicans will define spending in such a way as to isolate away most real spending (Defense maybe excluded, Social Security, Medicare, Medicaid, Interest excluded). They will then ‘aggressively cut’ what’s left. Declare victory and demand massive tax cuts. (The more creative may try to assert their attempts to repeal Obama’s health bill is their way of ‘cutting entitlements’) It’s already happened. I already demonstrated to you how Christie’s ‘massive cuts’ happen against a hypothetical ‘model budget’ that is never actually enacted and the real cuts are more or less in trend with the previous Democratic governor (even less if you add back in gimmicks like not making pension fund payments and practical tax increases like lowering the property tax rebate). That’s how the game is done on the state level, watch how it will be done on the Federal level.

  13. Thinking more again about your model for ‘stealth single payer’…..

    1. Interestingly, the 85% control on profit/admin costs sunsets in 2013. So if this was the trojan hoarse that’s supposed to generate single payer, there’s only two years for all but one insurance company to go bankrupt or merge into one mega company (http://www.opencongress.org/articles/view/1357-The-Most-Important-Health-Care-Reform-Provision-You-ve-Never-Heard-Of).

    2. The 85% rule doesn’t seem to work in most likely cases.

    Imagine you’re running an insurance company. You collect $100 each month, pay out $85 for medical care, asorb $10 for administrative leaving you $5 net profit. Now let’s say you have a crack number cruncher who figures out a way to achieve the same level of medical care for $84 without increasing your administrative costs. Now absent the 85% rule, you could book this directly to your profits increasing them to $6 a month. On the other hand, you can simply increase the amount of health care you buy so now you’re spending $85 a month again (but buying more care so now you can cover things you didn’t cover before) or you could increase your administrative spending $1 (basically raises for you and your workers off the $1 savings your cruncher achieved).

    This doesn’t magically produce a single insurance company and granting exemptions doesn’t either. Consider an insurance company like the one McDonald’s offers. If their costs are $20 per month, keeping $5 profit and they are given an exemption from the 85% rule for now they aren’t being done any favors. They still have higher costs than other plans. Just because they are allowed to give less for the money doesn’t alter the fact that the market would have little reason to opt for a plan that costs $0.25 per $1 of care provided versus one that costs only $0.15 per $1 of care.

    The one case where you may get a single company is if there was huge economies of scale. If by signing up, say, 80% of the population you could get admin. costs down really low (say to $5 per $100) you could drive all the other companies out. After all, you can give for $90 what everyone else charges $100 for while still enjoying $5 per month profit.

    This is a big if, IMO.

    1. If it’s true the 85% rule wouldn’t stop it. So why don’t we see one insurance company today?

    2. If it’s true then the least costly insurance company is a monopoly or near monopoly…..but then where’s that argument for competition?

    3. The 85% rule only applies to individual and small group plans…not to large group plans….so since something like 50-60% of people who aren’t on Medicare or Medicaid get their coverage from large employers just dominating the indiviual plans is hardly going to make you a de facto single payer.

  14. Also speaking of health care Mark, you may recall last year we were discussing barriers to health care supply….you were focused on the idea of an online doctor who could take a series of symptoms and prescribe medication for simple problems instead of having a regular doctor’s appointment.

    Last week Nova did a special about Watson, the computer program that is supposed to play Jeopardy this week against Jeopardy’s top two champs. While what they showed of the program was pretty good, it’s kind of interesting to see why people only are using them for things like playing Jeopardy right now. It gets enough right to be on par with an above average Jeopardy player…but it also seems to get stuff wrong that no human would get wrong. For example it botched a question on First Lady’s by answering Richard Nixon rather than his wife, Pat. It didn’t connect that First Lady’s is a gender specific category hence the correct answer should agree.

    I suspect your old faith in AI replacing doctors is still a bit too ahead of its time. AI is still making errors it shouldn’t and who wants to trust their lives with that just yet. I’m kinda curious what you think of that view now….esp. since I see you’ve talked about how radiologists are trained in a master-apprentice method where the essence of reading x-rays can’t quite be articulated.

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  16. Boonton,
    My suggestion was not that an AI replace a doctor but that automation of tests and reporting filter results through checklists/flowcharts monitored by a doctor and his staff to leverage his knowledge to serve an order of magnitude more patients. As you recall what I said was that automation was needed to leverage a doctors skill to serve more patients, not that computers replace doctors entirely. Healthcare costs aren’t going to come down if they require intensive care by specialists.

    My point with regulation and the healthcare bill regarding single payer (and the power company comparison) was not to note that the existence of a number of power providers proves that single payer is impossible to be forced via regulation by government, because nobody on right nor left really wants a single provider of power as their captive. However, the left by and large does want single payer … and has a new unused regulatory hammer with which to force lots of insurers out of business if they so choose. Why might they see that as a good thing, … well because they like single payer. I don’t know where you stand on single payer, but for example I thing JA thinks it’s the solution to our healthcare woes. Why he thinks that will address the automation/supply problem is beyond my ken.

  17. As you know my temperment is conservative so I’m inclined to think not only can some systems be better than others, I think the system should be matched to the society. Hence while employer provided insurance isn’t the best idea in abstract, it is the dominant system we have now combined with a single payer for the old. I think one of the great merits of the bill is that it basically let’s most pepole keep the system they are currently using, or move into the system they are closest (small and med. size companies get tax credits to start providing coverage, individuals who aren’t poor but just aren’t covered buy insurance personally, if you’re poor or close to poor then it’s Medicaid). If any particular system has great merit over the others you can propose later on to make the entire system use that model. Likewise if any one is worse you can abolish it later on.

    This makes for an ugly bill that’s long and complicated and isn’t a ‘pure play’ but that’s not a bad thing IMO. The Ryan bill you cited favorably, though, suffers from multiple defects (granted it’s a deficit bill, not a health reform plan but still if you’re going to radically change Medicare you’re doing health reform like it or not)

    1. It radically changes Medicare, which right now covers people at the lowest cost per person and is mostly liked by patients (hence you see the argument the left has for single payer). Private plans cost more per person, which is why Medicare Advantage ended up costing more per Medicare patient even though the idea was that patients would save the gov’t money by using private sector plans.

    2. The Obama plan is already doing the Ryan plan’s scheme of having individuals buy private coverage with gov’t subsidies and protections. The difference is that the Obama plan is doing this for people who don’t have coverage now. This is likely to cost less since they are younger and healthier than the 65+ set on average. More importantly, you should do no harm. The best people to experiment with this new system of coverage on is people without coverage. If it works, great. If it doesn’t, well worse case is they can go back to where they started.

    3. I think a serious problem remains insurance company’s incentive to profit not by true innovation but by pooling the good risks. Medicare achieves lower costs by economies of scale (they don’t spend anything on figuring out whose risky, they just figure out whose over 65) and acting to counter the habit of the medical system to demand more, more more. Private insurance has these incentives but it also has the risk pooling incentive which can be played even if its prohibited by law (see my previous comment about offering yoga classes as a way of signalling to sick people that your insurance plan isn’t a serious one for their needs while healthy people are enticed). I do think it’s an interesting idea to try to keep private insurance for the competition while removing as best as possible its pooling incentive. I think it’s just as likely the system will settle down to a stable point where people are generally happy to either have employer coverage or buy from the exchanges ’till they are 65 where they transition to Medicare, maybe with their old private coverage turning into a supplemental gap coverage. In that case singe payer advocates would be stuck.

    Automation: Health care costs for specialists themselves are not great. In terms of paying for a doctor to see you, evaluate you and issue a recommendation….that’s not very expensive in itself even if you’re talking about a specialist. OK for you as a patient paying OOP that’s expensive but not you as an insurance company. You have the ability to send the doctor lots of patients, you can negotiate a low price per visit in exchange for keeping the doctor’s waiting room filled. The specialized oncologist may charge you $500 OOP to see him because if he gets patients that way he may get one per hour. An insurance company could drive him 4 patients per hour and he will be happy to agree to $125 per patient.

    Where I think the costs are driven is in the nature of what a doctor does. A doctor doesn’t so much provide care as advise you on buying it. Think of a doctor as a wedding planner or interior decorator. What do these people do? They push you to buy more stuff. OK sometimes they can use that power to save you money but often that savings is offset by their fees and the other stuff they push on you. This is why I find your analysis suspect about ‘increasing supplies’ as more doctors. More wedding planners wouldn’t make weddings cheaper, they’d probably make them more expensive as they’d push up demand for wedding services like catering halls, bands, decorators etc.

    The insurance company then acts as a kind of anti-buyer who throws cold water on the buyer’s ideas. “OK yes the patient is depressed but before we pay for the new brand name anti-depressent, try the generic one that costs 1/10th as much and has been on the market for 15 years”….”Yea we’ll pre-authorize you to do a nose job but first give us this test to establish the procedure is not just cosmetic but actually medically needed”…. This is pretty interesting because it’s a market where you’re not really demanding goods and services but are hiring a ‘good cop bad cop’ pair to hopefully produce health for you buy demanding goods and services intelligently….

    So I think the ‘automated doctor’ is not going to come from the demander side but the cold water side. I could see the ‘doc AI’ scanning thousands of doctors’ prescribing habits and maybe noting docs who opt for brand name drugs a bit too much thereby triggering a visit from an insurance rep who will advise the doc on the merits of generic drugs (I’m sure pharma companies would have an interesting reaction to having their reps share the waiting room with ‘anti-reps’). Or having the automated doc seek out medical errors. But the having it be the doc itself is pretty far off I suspect.

  18. Boonton,
    I wasn’t aware that I favorably cited the Ryan health care bill.

    Health care costs for specialists themselves are not great.

    Uhm, the term “specialist” here means “person with training” not specifically any particular training. Look. Human’s cost money. Trained human’s (who’ve had a deal of education or on-the-job training of a specialized nature) cost a lot more. The reason that the price of food and durable goods has come down by orders of magnitude and healthcare has been more resistant to the same is that machines and other devices have leveraged manufacturing and farming to allow one person to do the work of hundreds or thousands as compared to past ages. What I had suggested is that we need to find ways for one doctor to do the work that 100 did a generation ago … for one pharmacist to do the work of a 100 and so on. How does one hospital which is doing 50-100 procedures a day, do 500 or 1000? That’s the problem at hand. How to do it is the question, for which if you have no answer … then premium healthcare will always be the privilege of the wealthy and very costly for those who are not and there’s no way around it.

  19. How does one hospital which is doing 50-100 procedures a day, do 500 or 1000?

    How did Rockerfeller pump, ship, refine and sell millions of barrells of oil while his original competitors worked on hundreds? His customers wanted to pay less for oil. If ten years before you asked what would happen if people paid 15% less than oil, an analyst might say that was impossible, 15-20% of drillers and refiners would go out of business as the use of oil was suppposedly increasing! Impossible. But that did happen because he found as he increased the scope of his operations, he was able to accomplish economies of scale that smaller operations couldn’t thereby lowering the price he charged per unit of oil while still seeing his profits go up at a healthy clip.

    But here you’re clining to the Medicare actuary’s report that asserts that the bill’s spending cuts are impossible because 15% of hospitals might be in the red 10 years from now. That might be true if hospitals do nothing in reaction to getting less money for some things but why wouldn’t they consolidate and seek out those cost savings that come from automation, economies of scale etc.?

    No don’t push the analogy too far. I think the health market is far too deep and complicated to make a Standard Oil of health care a likely outcome. But it seems like you’re arguing two opposite ideas at once here. One that it’s quite possible to achieve impressive savings in health care. Two that it’s quite impossible and any spending cuts are therefore politically impossible, despite the record of actual bills passed to the contrary.

    I wasn’t aware that I favorably cited the Ryan health care bill.

    You cited the article by saying “How to control costs in healthcare?” which was basically a defense of the Republican assertion that the modest cuts in Obama’s bill are politically impossible and therefore shouldn’t count while the massive cuts in Ryan’s bill are. I suppose I should have noted the question mark you put at the end of your sentence as an indication you weren’t quite buying the article’s assertion.

  20. Boonton,

    How did Rockerfeller pump, ship, refine and sell millions of barrells of oil while his original competitors worked on hundreds?

    Why did the Soviet economy not innovate the same way ours did? Government is setting prices (like there) in healthcare and stifling innovation with regulation (like there) yet you expect innovation (like here).

    It is quite possible to achieve impressive savings … but we have structural problems which are completely untouched by the programs being suggested. They only mandate the cost savings in a way, which without the structural loosening, are impossible to achieve.

    This of course begs the question of why people like you and JA think government should have anything to do with entitlements at all for anyone except the extremely poor. Why is there any medical aid or retirement assistance for the middle class? What political theory motivates your thinking to suggest that is necessary and proper, i.e., a role with which government should rightly involve itself.

  21. You haven’t really shown where gov’t is setting prices. At best you’ve demonstrated that gov’t will not pay more than a certain amount for some things. That’s no more setting prices than your unwillingness to pay $5 for a gal. of milk is setting prices, but it does spark the innovation that allows Wal-Mart to sell milk for $2.58 a gal and still stay in business…

    They only mandate the cost savings in a way, which without the structural loosening, are impossible to achieve.

    Except for the fact that recent history says otherwise. For your argument to work the system overall must already be highly efficient given its current structure. It’s simply not. To use some simple examples, paying hospitals to treat preventable post-surgical infections does not require the hospital to invent robot doctors and get the AMA to allow them to practice medicine. To simply rent electric wheel chairs for 18 months rather than up and buying them outright does not require the gov’t to revolutionize Lenin style the health care economy.

    This of course begs the question of why people like you and JA think government should have anything to do with entitlements at all for anyone except the extremely poor.

    Of course the obvious answer is that we are dealing here with the status quo, what are you dealing with? (http://krugman.blogs.nytimes.com/2011/02/16/medicare-and-medicaid-are-big/) About 48% of health spending is from some type of gov’t insurance system (Medicare/caid/VA benefits). Add in the 3% public health spending by gov’ts and you have a majority. Only 12% of spending comes from individual oop, only 22.72% is private insurance (which don’t forget enjoys massive tax expenditures by the gov’t in the form of zero income taxes). Proposals to radically change this suffer then from not being very conservative with a small ‘c’. Cato Institute may like the idea of a system where 60% of spending is individual OOP, 30% private coverage and 10% gov’t aid to the very poor and VA benefits. The Progressive Policy Insitute may rather see a universal Medicare system like Canada’s supplemented with 10% private insurance for those who want more than the public system offers. But both are hypothetical ‘blank slate’ approaches that ignore the fact that we are here now and we have a history.

    The more direct response to your question, though, is it’s the nature of health care. We have a product that costs a lot. That alone means nothing….yachts, inground swimming pools, country club memberships all cost a lot too. The difference is simply we as a society are unwilling to allow people to reap the consquences of not being able to afford it. We are willing to say to the unemployed 45 yr old single mother if your country club membership expires, that’s tough, we don’t care that you golf game suffers. You should have saved more when you were working to cover it or not have lost your job. We aren’t willing to say to her its tough you found a lump in your breast. You should have saved $30,000 or so when you were working or enough to continue private coverage so just go die and don’t let your corpse litter the street.

    That being reality you have to keep in mind the ‘two legged stool’ meme. Taking a leg away from a 3 legged stool doesn’t make it 1/3 less of a stool, it makes it almost 100% less and trying to pretend otherwise will just cause you to end up flat on your ass. Pretending you can have a pure market play in health care while ignoring the fact that you’re not going to allow one of the major ‘legs’ of the market system is the same thing. And here let’s be clear, you’re not going to allow it. Even Ayn Rand, at the end, had Medicare paying for her oncologists and lung cancer treatments.

  22. Funny how the alleged Constitution fans on the right always forget the bolded phrase:

    “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America”.

  23. BTW, It looks like they are already looking at taking the Watson program into hospitals in order to increase productivity
    http://www.computerworld.com/s/article/9209899/IBM_s_Watson_could_usher_in_new_era_of_medicine?taxonomyId=12&pageNumber=1

    JA,

    Those taking what they consider to be a more authentic view of the Constitution are deluding themselves. In the first half century since the Constitution was enacted Congress was providing Americans with ‘universal access’ to land and working to boost ‘rail connectivity’ throughout the country. No one thought of having universal health care in 1810 not so much because the Constitution is against it but because there would be little point. Almost anyone could afford to pay the doctor his chicken back then and if you were lucky you’d actually get care worth about as much. Then again today we’d find the idea that we should be granting vast expanses of land free to rail road companies rather eccentric. Priorities change over time and the Constitution is flexible enough to accomodate that.

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