Interesting observations on the healthcare issue

[muck]

From a guy I've read for years and speculate that he is (i) a right-leaning independent, (ii) a hedge fund manager and (iii) as it regards this bi-monthly article, more interested in being thought provoking than in being right. But, he is often right. I'll leave it up to you to determine whether or not this is one of those times.

 

*******************************

 

Unhealthy Economics

 

We live in a world of limitations. In terms of natural resources, there's only so much oil we can pump out of the ground or arable land that we can farm. With respect to human resources, there are only so many rocket scientists, guys who can throw a 90-mile-per-hour fastball, and, yes, even hedge fund managers to go around.

 

In a market framework these finite goods and services are divvied up in accordance to their price, roughly determined by the intersection of the slope of the supply and demand curve. This distribution system exists because there is only so much of any good or service to go around. If we did live in a world of infinite supply, the market system would cease to exist.

 

It strikes me as perplexing how our left of center political representatives claim that a government-managed public option can deliver health care coverage to 47 million uninsured Americans while simultaneously reducing costs, and adding nothing to our deficit. (The uninsured number has been disputed, but I'll take it at face value.)

 

Healthcare is a finite resource, and though there are many goods and services that fall under that umbrella let's just look at the workforce for one example. According to the Bureau of Labor Statistics, there were roughly 13.6 million healthcare workers in 2006, and of those roughly 468,000 were physicians and surgeons. There are roughly 305 million Americans and counting. In terms of customer-to-patient ratio this looks to be a classic case of too many buyers chasing too few goods.

 

If this ratio is representative of the market of buyers to sellers, then it is difficult to conceive of any kind of circumstance where all Americans can receive healthcare coverage. Furthermore, it only seems axiomatic that if the government were to subsidize an incremental 47 million Americans, that given the finite resources, costs can only go up. That's without even taking into consideration the highly inefficient nature of government institutions.

 

Well, as a market practitioner I have learned not to fight the tape. If we're going to intercede with the market mechanism, we may as well go all out. Here are some suggestions to add to the healthcare reform bill that are about par for course in terms of some of the logic.

 

First, let's get more healthcare professionals into the industry. We can start with legislation requiring mandatory acceptance of students with composite MCAT scores over 15 and undergraduate GPA's of 2.5 or higher. If that's not working then let's just cut the MCAT requirement altogether.

 

Second, ban all fast food. Let's face it, McDonald's, Burger King, Taco Bell and the like make their living selling incredibly unhealthy, artery-clogging food. They will be replaced by Baja Fresh, Subway, and Chipotle, who will only be permitted to sell burrito bowls and low carb wrap burritos.

 

Third, we are too strict in our definition of healthcare. We should look into including faith healing, witch doctors, and those guys from Tom Cruise's church that offer free stress tests at the mall.

 

The lesson once again, even if it is not politically palatable, is that we must come to terms with our limitations or face financial ruin.

[westvirginia]

There you go, inserting logic and reason into the argument. Where's the hope? We need change!

[Jimmy Neutron]

Spot on as far as the supply and demand argument goes.

[Azazello1313]

here are some more, from the dean of harvard med school:

 

Nearly everyone agrees on the symptoms: rapidly growing health expenditures, diminished access to affordable insurance causing many to be uninsured, and inadequate quality and outcomes for the dollars spent. But what are the root causes? While there are many contributing factors, three merit special attention.

 

First, there is our inefficient and inequitable system of tax-advantaged, employer-based health insurance. While the federal tax code promotes overspending by making the majority unaware of the true cost of their insurance and care, the code is grossly unfair to the self-employed, small businesses, workers who stick with a bad job because they need the coverage, and workers who lose their jobs after getting sick.

 

This employer-based system arose not by thoughtful design but as an unforeseen result of price controls during World War II and subsequent tax policy. How this developed and persisted despite its unfairness and maladaptive consequences is a powerful illustration of the law of unintended consequences and the fact that government can take six decades or more to fix its obvious mistakes.

 

Second, in health care as in other markets, real progress depends on innovation. Yet health care markets rarely conduct successful experiments with new ways of paying for and organizing health care delivery. Why? Although health care markets have some unique attributes, these are not the explanation for lack of successful innovation. Rather, health insurance markets suffer from overregulation, which limits innovation in both insurance and new ways of delivering medical care.

 

Third, we have Medicaid and Medicare. These enormous federal programs address critical needs by delivering health care to the poor, the disabled, and the elderly. These programs pay providers by administrative pricing formulas that are well documented to promote both overuse and underuse of appropriate care, have led to rising expenditures decoupled from better health, and obligate massive future deficits that everyone agrees are unsustainable. They are also rife with fraud and abuse.

 

And yet the current political debate and the several and incomplete versions of “reform” proposals do little to address these core problems. Proposals such as those that would create a new public insurance program, for example, would likely magnify them and create a new generation of problems that will be as difficult to fix as Medicare has proven to be.

[yo mama]

President Obama has discussed the need to increase the number of health care workers. The Mrs. is a health care professional and seemed generally supportive of the idea of increasing the number of physician assistants and reducing the cost barriers for the *right* kind of physicians (like family practice doctors). I think everyone understands that the current system is incapable of absorbing another 50mm new customers. Heck, it can barely service the patients it currently has.

 

Perhaps we were too quick to dismiss those death panels...

Edited September 15, 2009 by yo mama

[dmarc117]

President Obama has discussed the need to increase the number of health care workers. The Mrs. is a health care professional and seemed generally supportive of the idea of increasing the number of physician assistants and reducing the cost barriers for the *right* kind of physicians (like family practice doctors). I think everyone understands that the current system is incapable of absorbing another 50mm new customers.

 

Perhaps we were too quick to dismiss those death panels...

 

 

is she supportive of paying union dues?

[yo mama]

is she supportive of paying union dues?

She paid union dues back when she was an RN, but doesn't need to as a midwife. I don't think she ever got a significant benefit out of paying her union dues. Though I'm not sure if she supports the concept now, or why it would matter to this discussion.

Edited September 15, 2009 by yo mama

[dmarc117]

She paid union dues back when she was an RN, but doesn't need to as a midwife. I don't think she ever got a significant benefit out of paying her union dues. Though I'm not sure if she supports the concept now, or why it would matter to this discussion.

 

 

it could happen

 

http://online.wsj.com/article/SB1000142405...1702189240.html

[yo mama]

it could happen

 

http://online.wsj.com/article/SB1000142405...1702189240.html

Anything "could" happen. But if no one did anything because something might happen then the only thing guaranteed to happen is nothing.

[AtomicCEO]

President Obama has discussed the need to increase the number of health care workers. The Mrs. is a health care professional and seemed generally supportive of the idea of increasing the number of physician assistants and reducing the cost barriers for the *right* kind of physicians (like family practice doctors). I think everyone understands that the current system is incapable of absorbing another 50mm new customers. Heck, it can barely service the patients it currently has.

 

Perhaps we were too quick to dismiss those death panels...

 

Poll Finds Most Doctors Support Public Option

 

Turns out that between dealing with Medicare cost cutting measures, and private insurance company cost cutting measures... most of the would rather deal with the government.

 

Also, this shows a big difference between the AMA's position, and the doctors it represents.

Edited September 15, 2009 by AtomicCEO

[Chavez]

President Obama has discussed the need to increase the number of health care workers. The Mrs. is a health care professional and seemed generally supportive of the idea of increasing the number of physician assistants and reducing the cost barriers for the *right* kind of physicians (like family practice doctors). I think everyone understands that the current system is incapable of absorbing another 50mm new customers. Heck, it can barely service the patients it currently has.

 

That claim that "health care is a finite resource" just seems specious to me.

 

Of course, I'm too lazy at this moment to really dig in and dispute it with facts.

[yo mama]

That claim that "health care is a finite resource" just seems specious to me.

 

Of course, I'm too lazy at this moment to really dig in and dispute it with facts.

Its finite in the sense that there are X number of health care professionals in the market. They can only average seeing Y number of patients per day before quality of care declines unacceptably. Yes, we can increase the number of health care workers so more patients can be seen. However, at any given time there almost certainly a finite number of people who are willing and capable of becoming qualified to enter the field of medicine.

 

One of the core issues is that we need more of the right kinds of doctors, namely the the family practice variety that are willing to accept crap pay and long delays in medicare reimbursement. (At least relative to brain surgeons and boob job specialists). Because we could freakin' give health insurance away to every American, but unless the medical profession has the bandwidth to service the patients I suspect it wouldn't make the kind of difference that needs to be made... assuming the Nation is even willing to pony up the dough for the whole experiment. Bottom line, the number of people willing invest 10+ years into higher education, internship, residency, etc., incur $200k-300k of debt, incur the substantial risk of malpractice, AND make substantially less than a medical specialist is most certainly a finite number.

Edited September 15, 2009 by yo mama

[Chavez]

Its finite in the sense that there are X number of health care professionals in the market. They can only average seeing Y number of patients per day before quality of care declines unacceptably. Yes, we can increase the number of health care workers so more patients can be seen. However, at any given time there almost certainly a finite number of people who are willing and capable of becoming qualified to enter the field of medicine.

 

One of the core issues is that we need more of the right kinds of doctors, namely the the family practice variety that are willing to accept crap pay and long delays in medicare reimbursement. (At least relative to brain surgeons and boob job specialists). Because we could freakin' give health insurance away to every American, but unless the medical profession has the bandwidth to service the patients I suspect it wouldn't make the kind of difference that needs to be made... assuming the Nation is even willing to pony up the dough for the whole experiment. Bottom line, the number of people willing invest 10+ years into higher education, internship, residency, etc., incur $200k-300k of debt, incur the substantial risk of malpractice, AND make substantially less than a medical specialist is most certainly a finite number.

Financial amnesty on educationl for those willing to spend 10-15 yrs making a "mere" $100k* as a GP?

 

* - whatever a GP makes.

[Big John]

Financial amnesty on educationl for those willing to spend 10-15 yrs making a "mere" $100k* as a GP?

 

* - whatever a GP makes.

General Practitioner

[yo mama]

Financial amnesty on educationl for those willing to spend 10-15 yrs making a "mere" $100k* as a GP?

 

* - whatever a GP makes.

Something along those lines was discussed by President Obama. Remove the financial disincentive to entering family practice, and more medical students will be willing to become family practice doctors. Kind of like the inverse of when hospitals disallowed those sexy, old school sexy nurses' hats: all those nurses ended up going into pron instead.

Edited September 15, 2009 by yo mama

[evil_gop_liars]

Anything "could" happen. But if no one did anything because something might happen then the only thing guaranteed to happen is nothing.

 

[bpwallace49]

I run a country club.

 

I have a lot of doctors that are members (and have been for every club i have worked at).

 

I see them golfing during the day quite a but . . . on average twice a week during the afternoon or "office hours".

 

In my experience I do not see the doctors having "not enough time" to see patients, but they CHOOSE to not see more patients because they dont have to in order to maintain the lifestyle they prefer.

 

Granted this is a fairly small sample, and consists of GP, to OBGYNs and specialized surgeons and anethesiologists.

 

I just dont see the "supply and demand" argument apply in real life. These doctors arent all hardworking dedicated public servants that you observe on ER or Greys Anatomy . . .lol

[Azazello1313]

Financial amnesty on educationl for those willing to spend 10-15 yrs making a "mere" $100k* as a GP?

 

* - whatever a GP makes.

 

I think they generally do better than $100K. maybe at the low end, they start there and move up over the years. I'm sure the average is at least $150K, probably closer to $200.

 

in any case, aren't medical schools still turning down large numbers of applicants? if there is some kind of bottleneck, perhaps it is there. regardless, I don't really care for the idea of the government massively subsidizing the costs associated with any particular career choice, the way you guys seem to be discussing.

[AtomicCEO]

in any case, aren't medical schools still turning down large numbers of applicants? if there is some kind of bottleneck, perhaps it is there.

 

Honestly, I'm ok with that.

 

Well... what I'm getting at is that we shouldn't have stupider doctors. But, if there was a way to encourage more *smart* people to become doctors (instead of... say... lawyers or politicians), then I could work with that.

Edited September 15, 2009 by AtomicCEO

[muck]

What about people on the government option get served by doctors who went to some sort of newly established "government medical school" that enrolled the students who couldn't get into or did get into but decided they didn't want to pay for all the other existing medical schools out there? Sorta like the military ... serve 10yrs in school / residency (in VA hospitals, etc) then 10yrs treating "government insured patients" before being able to go out in to the world of private practice?

 

...dunno...just an idea off the top of this addled brain...

 

ETA: "...couldn't get into or did get into but decided they didn't want to pay for..."

Edited September 16, 2009 by muck

[yo mama]

What about people on the government option get served by doctors who went to some sort of newly established "government medical school" that enrolled the students who couldn't get into all the other existing medical schools out there? Sorta like the military ... serve 10yrs in school / residency (in VA hospitals, etc) then 10yrs treating "government insured patients" before being able to go out in to the world of private practice?

 

...dunno...just an idea off the top of this addled brain...

That would be awesome. Hollywood Upstairs Medical College, here I come!

[muck]

EDIT:

 

"...couldn't get into or did get into but decided they didn't want to pay for..."

[Azazello1313]

well, if this polling is in any way accurate, it sure won't help that whole supply and demand problem.

 

Four of nine doctors, or 45%, said they "would consider leaving their practice or taking an early retirement" if Congress passes the plan the Democratic majority and White House have in mind.

 

More than 800,000 doctors were practicing in 2006, the government says. Projecting the poll's finding onto that population, 360,000 doctors would consider quitting.

 

yo mama, that mail order paid-for-by-government medical degree you seek might be closer than ever!

[yo mama]

yo mama, that mail order paid-for-by-government medical degree you seek might be closer than ever!

If Upstairs Hollywood Medical School is good enough for Dr. Nick Rivera, then it's good enough for me.

[AtomicCEO]

well, if this polling is in any way accurate, it sure won't help that whole supply and demand problem.

 

yo mama, that mail order paid-for-by-government medical degree you seek might be closer than ever!

 

http://www.fivethirtyeight.com/2009/09/ibd...rustworthy.html

 

As we learned during the Presidntial campaign -- when, among other things, they had John McCain winning the youth vote 74-22 -- the IBD/TIPP polling operation has literally no idea what they're doing. I mean, literally none.

 

(snip)

 

My advice would be to completely ignore this poll. There are pollsters out there that have an agenda but are highly competent, and there are pollsters that are nonpartisan but not particularly skilled. Rarely, however, do you find the whole package: that special pollster which is both biased and inept. IBD/TIPP is one of the few exceptions.

 

I'm kinda suspicious of a poll from someone with no credibility that mysteriously contradicts 4 other polls.