The Daily Cow

For years, I've been planning to synthesize my perspective on the growing need for health care reform, but I've had neither the will-power nor the time to compose something as comprehensive yet completely rational as this. Although it is a lengthy read, I assure you every word is worth your time.

In the essay, the author (Goldhill) scrutinizes the major faults of the entire health care infrastructure--the lack of transparency in pricing, the disconnect between the customer (Medicare and insurance companies) and the consumer (us), and the complete abuse of the role of insurance. In short, with a truly rational judgment, he identifies the key issue: the failed incentives.

While reading his essay, I was constantly amazed by how eloquently and clearly he expressed what I've been wanting to synthesize for years, but could not. With every word, I nodded in agreement--his analysis is so comprehensive and flawless that it would be impossible not to.

With the initiative of a business leader and the focus that policy leaders aspire to have, he concludes his essay with clear actionable steps that is concisely summarized as follows:

A more consumer-centered health-care system would not rely on a single form of financing for health-care purchases; it would make use of different sorts of financing for different elements of care—with routine care funded largely out of our incomes; major, predictable expenses (including much end-of-life care) funded by savings and credit; and massive, unpredictable expenses funded by insurance.

And to mitigate the common fear that this would drive the incremental direct costs of health care (such as end-of-life care) through the roof, Goldhill addresses that fear directly:

Anyone with whom I discuss this approach has the same question: How am I supposed to be able to afford health care in this system? Well, what if I gave you $1.77 million? Recall, that’s how much an insured 22-year-old at my company could expect to pay—and to have paid on his and his family’s behalf—over his lifetime, assuming health-care costs are tamed. Sure, most of that money doesn’t pass through your hands now. It’s hidden in company payments for premiums, or in Medicare taxes and premiums. But think about it: If you had access to those funds over your lifetime, wouldn’t you be able to afford your own care? And wouldn’t you consume health care differently if you and your family didn’t have to spend that money only on care?

Ultimately, the author offers us a vision of what America's health care system could be--efficient, affordable, and competitive:

Today, insurance covers almost all health-care expenditures. The few consumers who pay from their pockets are simply an afterthought for most providers. Imagine how things might change if more people were buying their health care the way they buy anything else. I’m certain that all the obfuscation over prices would vanish pretty quickly, and that we’d see an end to unreadable bills. And that physicians, who spend an enormous amount of time on insurance-related paperwork, would have more time for patients.

I hope you find the time to read the essay. It deserves an hour of everyone's time. In order to ensure that this essay remains available even if the original source has removed it, I've attached a full PDF-print out for your convenience.

A NYT article makes the seemingly-outrageous but completely rational assertion that the value of life, especially of a terminally ill victim of bad health, is finite. Why should healthy Americans have to pay several times more than their peers in Europe or Japan to be less healthy? Why are we paying tens of thousands to extend the life of a suffering cancer victim when we can't afford hundreds to immunize children against the cheapest-to-prevent, yet most contagious and deadliest, issues like the flu?

For a better understanding of how paying more can result in less, take a look at this excerpt:

When the media feature someone like Bruce Hardy or Jack Rosser, we readily relate to individuals who are harmed by a government agency’s decision to limit the cost of health care. But we tend not to hear about — and thus don’t identify with — the particular individuals who die in emergency rooms because they have no health insurance. This “identifiable victim” effect, well documented by psychologists, creates a dangerous bias in our thinking. Doyle’s figures suggest that if those Wisconsin accident victims without health insurance had received equivalent care to those with it, the additional health care would have cost about $220,000 for each life saved. Those who died were on average around 30 years old and could have been expected to live for at least another 40 years; this means that had they survived their accidents, the cost per extra year of life would have been no more than $5,500 — a small fraction of the $49,000 that NICE recommends the British National Health Service should be ready to pay to give a patient an extra year of life. If the U.S. system spent less on expensive treatments for those who, with or without the drugs, have at most a few months to live, it would be better able to save the lives of more people who, if they get the treatment they need, might live for several decades.

The last sentence nailed the issue directly.

Americans need to stop falling back on the "You can't assign a value to life" argument, because it doesn't work. If you can positively claim that the lives of 10 healthy, productive members of society is somehow worth more than that of a suffering patient in his 80s, waiting for the final strike of his tumor, then you can value life. Life must be valued in relation to other lives in order to avoid the infinite backup that's guaranteed with trying to arbitrarily come up with a value to life.

The choice is between lowering the poverty of seniors (social security), reducing the effectiveness of our research institutions (higher education funds), alleviating general poverty, immunizing children against various contagious diseases, or extending the miserable lives of a few unlucky individuals by a couple months.

What do you think?

I think that it's important to prioritize our goals. Otherwise, we will achieve none of them.