Why Isn’t Health Care More Like a Washing Machine?

When shopping for a washing machine—or a car, or a DVD player, or a stroller—consumers have lots of options. Competition and innovation help bring prices down, and generally speaking, the products that give the most bang for the buck are successful in the long run. With health care as it is today, there is limited competition and ever-increasing prices, and the only innovations I’ve seen among insurers are inventive new ways to make money—namely, by not paying claims.

So here’s hoping that somehow, in all of this health care debate mess, we’re able to introduce genuine competition into the equation. The problem is that the winners of capitalist competitions are usually those who figure out how to make the biggest profits. With health care, the winners should be the ones who give us, well, the best health care. Strictly from a consumer perspective, we need to be getting the most bang for the buck—as individuals, as taxpayers, as a country as a whole. That’s certainly not the case now.

The country should be looking at health care from a savvy consumer perspective. The sort of perspective you get at Consumer Reports. And what do you know? The Consumer Reports August 2009 issue is all about health care. Among the eminently sensible recommendations is that health care reform should reward doctors and health providers for great care, not necessarily for conducting procedures, which is how doctors generally make money nowadays. It’s this overmedicating and overdoing of procedures that pushes health care costs up.

There’s also a list of common fears about reform, including the correlating—and reassuring—facts. Such as:

Fear Health reform will let faceless government bureaucrats come between you and your doctor.

Fact Private health insurance already comes between you and your doctor. And because each company sets its own rules, it’s hard to imagine a more bureaucratic system. Some insurers decide which doctors you can see, which hospitals you can visit, and what drugs you can take and still be covered. And they may require copious paperwork before approving a treatment you and your doctor want. Health-care reform would standardize claim procedures to cut down on all of that. And it would protect you from other abuses, like being rejected for coverage or paying exorbitant premiums if you get sick.

Another interesting consumer-style approach to health care is in the NY Times op-ed section today, with a call for choice, competition, and incentives to improve care and lower costs for everyone.

If nothing else, we Americans are really good consumers. Unfortunately, we often buy stupid stuff we don’t need, and worse, we overpay. When it comes to health care, I hope for my children’s sake that we can figure out what’s the best product to buy. Do you think there’s any chance Sony or Honda is going to release a health care policy alongside their other 2010 models?

debslatter

This is an excellent article.

I strongly recommend the following article. It a suburb application of logic and basic economic to illustrate the main problem with the health care market.
http://www.americanthinker.com/2009/06/looking_for_competition_in_all.html
carpevis

The simple fact is that while Healthcare remains a profit-motivated venue, it will ALWAYS sacrifice the patient at the cost of treatment. One can NOT split one’s motivations when they are trying to treat patients and keep stock holders happy at the same time. The fact is, the two are mutually exclusive. The feduciary duties of the company demands profits. The medical duties of the pesonnel are to provide the best care possible regardless of the cost.
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Regardless of how dedicated a health care professional is, as long as hospital directors are constantly trying to maximize profits and minimize expenses, the patient will suffer.
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Remove all profit motivations from health care, work on creating effective, but efficient diagnostic and treatment options for everyone and the cost of health care will come down. Look at what gives the best bang for the buck, and do that.
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mentalpestilence

In his book “A Second Opinion”, Dr Arnold S Relman describes the evolution of the commercialization of health care and why it hasn’t worked to keep costs down. Specifically, he mentions Kenneth Arrow’s article “Uncertainty and the Welfare Economics of Medical Care” from the American Economic Review of 1963 which gives a pellucid view as to why health insurance is unlike any other “commodity” of the free-market.

For one, the relationship of supply and demand break down since the demand for health services is not regular or predictable. Two, the supply of services does not simply respond to the desires of the buyer. What that means is physicians are the ultimate informed consumers of health care. Although a patient can voice their opinion or insist on a specific treatment, the physician is the person who will be ordering the types and number of tests, procedures and prescriptions.

Three, there are limitation on who can enter the provider side of the market due to high start up costs and education, licensing and so forth. And finally, there is significant insensitivity of prices in the health care system. No hospitals or doctors are actively advertising lower prices or clearance procedures! Simultaneously, a majority of patients don’t actively seek out those price reductions. There aren’t many individuals who are willing to risk monetary savings for assumed quality of service.

Thus, we shouldn’t expect to see many changes by trying to alter the current system a little here or there, or going as far as implementing cumpolsory health insurance. Let me include this caveat: by no means am I saying that single-payer health insurance is the answer to all of our problems. There are many other reasons why health care costs are continuing to rise and are hard to control (ie. how health care is administered). However, as Dr Michael Ybarra states, “administrative costs make up 7% [of health care costs]. [Accounting] for $168 billion dollars annually”. The significance of this number is shown when compared to Medicare’s 2% administrative costs.

- http://www.mentalpestilence.com
Brad Tuttle

I guess the question is: Do profits and good health care have to be mutually exclusive? There’s a lot of talk about incentivizing good, efficient care. Health providers ostensibly would then make more money the healthier their clients are. I’m sure there would be ways to skew data and manipulate the system. But I don’t trust anyone — not the gov’t, not insurance cos, not regular old docs — to provide good care simply because it’s the right thing to do. Human nature being what it is, everyone is always looking for an angle. Everyone is always asking, “What’s in it for me?”
http://www.healthcontentadvisors.com/2009/06/28/headline-commentary-june-22-28/ Headline Commentary June 22-28 | Health Content Advisors

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