Healthcare and an Aging Population
Healthcare increases with age. The aging process naturally brings a need for more care as the body begins to wear out. With an aging baby boomer population about to enter the "Medicare years," the government will face a demand of unprecedented proportions in paying for this care (as it will retirement income for Social Security). The nation will be forced into a debate about the use of its national monetary resources to care for the elderly versus maintain the health of its younger productive working citizens. Compassion will collide with necessity. With the largest expenditures for healthcare typically coming shortly before death, cost control will force the nation to consider end-of-life treatment limits. This is the true "death panel" debate. Is the horrifyingly real "elephant in the room."
A sad irony to the success of helping people live longer is that it increases their lifetime need for healthcare. Dying younger means spending less for healthcare. Sad, but true. Success in extending life increases total costs. Unless the elderly have saved for those expenses, the costs are transferred to the younger workforce. This is exactly what Medicare does. As the ratio of retired citizens to working citizens rises, taxes on the workforce climb unless the cost and/or amount of services to the elderly are held in check. The first "generation" of Medicare saw the existing workforce paying for existing retirees. The boomer generation supported the one before it. As the boomers retire, the following generation ("Gen X") cannot support them completely. The result is the use of debt to make up the difference. This passes the payment load back to the generation following the "X‘ers" – "Gen Y." These dynamics are enough to spur the action of groups like the AARP to protect existing retirees and the boomers. It appears that Gens X &Y have yet to wake up to what is about to happen to them. "Us versus them" may turn out to be one generation versus another.
Healthcare Costs Climb with Advances in Medicine
Healthcare costs continue climbing because of advances in medicine and treatment. Compared to 50 years ago, diagnostic services, treatment procedures, and prescription drug availability add significantly to the practice of medicine and also to its cost. In the same way a modern car has more standard features at a higher price, so does modern medical care. It is no surprise that we spend more for healthcare. We also get more.
While medical advances are a wonderful benefit, the existence of advanced diagnostic and treatment options does not mean they are truly available. In a free-market economy, these things are rationed based upon the ability of the consumer to pay for them. Some things are available, but not affordable. For example, a trip to outer space on a Russian spacecraft is really available, but only to a limited few with the money to pay for it.
Rationing Healthcare
Healthcare today is allocated largely on a patient’s ability to pay – either directly or through his insurer. Pay the price, get the treatment. When price is not used to allocate/ration services, then rationing is done by another method. In the case of "free" healthcare, that may be the time spent waiting for care. A patient at a free clinic will necessarily wait longer for free care than will a paying patient at a for-profit practice. People waited for days at the Los Angeles Coliseum in August 2009 to get free care from the Remote Area Medical group who was there instead of a third world country. Waiting is a common complaint in nationalized care countries. In Canada, the average wait time for a non-urgent procedure is 17 weeks (4+ months). The Canadian government committed $4.5 billion dollars in 2004 for a six-year program aimed solely ate improving wait times. In less "civilized" countries, corruption and bribery become companions to the bureaucratic rationing process.
The easiest way to avoid the question of rationing healthcare is to pay for unlimited care with borrowed money. Because there is no immediate taxation, it appears temporarily to be "free" healthcare. This is political slight of hand and an economic illusion. It is behind the idea of improving coverage while increasing the government deficit. It is a healthcare house of cards that will ultimately collapse in the form of higher taxes and less care when the system reaches its breaking point and returns to a true economic equilibrium.
Is Prevention the Cure?
The use of prevention to drive down healthcare costs is desirable on its face. The means of prevention is, however, crucial to it cost-effectiveness. Personal preventive measures such as good diet and exercise are low-cost means for prevention. So are steps such as vaccinations. What is less cost effective are large scale screenings for possible problems across the entire population. While the benefit to the individual in finding a potential illness is quite high, the total cost of examining many healthy people to find the one sick person can be cost-prohibitive. The cost to find the one sick person is not the $200 for his test, it is the cost for the 100 other healthy people who were also tested ($20,000). If treatment costs only $10,000, then some diseases may be cheaper to cure than to screen for – when viewed from a societal perspective.
This was highlighted in a report from the Congressional Budget Office in August 2009 that cited a study showing only about 20% of traditional preventive care services saved more than they cost to provide to the broader population. It also noted, somewhat less convincingly, that about 60% of preventive services provided clinical benefits that were felt to be cost-effective. While the individual may enjoy the peace of mind screening provides, the role of preventive healthcare as a cost containment strategy on a large scale basis remains uncertain.
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When speaking of rationing, it is important to note that if you are in a "pay" system and are uninsured, or under insured (the number of under insured is large as can be seen from the medical bankruptcy rate and that is only the tip of the iceberg) and can't pay, then the effective wait time for a non-urgent procedure is indefinite which is must longer than 4 months.
ReplyDeleteFurther even if you are covered and can pay, there is a wait time for most. Many people see wait times and think they don't apply in the US and this is simply false. In fact if you where to determine an average wait time in the US, it would be extremely long since mathematically an indefinite/infinite wait does not average down. The mathematics may be a bit obtuse, but the fact is that average waits in the US will be higher than ANY public system simply because significant numbers of people are never treated.
Wait times are used as a tool along with the key buttons (abortion, race, illegal immigrants, higher costs, death lists...) to cause fear. Emotional thinking generally out weights rational thinking. So those seeking to stop reform appeal to fear using half truths and often blatant misinformation/lies. They do this because once fear is instilled it is much more difficult to convince someone with discussion, rational or not.
Excellent points, especially about fear. Competing fear dynamics are: a) government takeover of healthcare or b)not having coverage. You can align the political parties along these two points. The math problem is true, but a bit convoluted. If you have unserved people with infinite wait times, the average of all person including them will also be infinitely high and essentially meaningless. But, it you do the calculation excluding the infinite waits, you get a realistic number for the people actually being served. It is the later group the post referred to. Comparing served groups is the closest "apples to apples" comparison available for wait times. However, comparing universal healthcare wait times with US wait times is also a bit like "apples to oranges" because of the mismatch in who is served and not served. The point is, that adding unserved people into a system would be expected to increase wait times unless the system had excess capacity to absorb them. If there were no wait times in our current system, it would suggest excess capacity, but that is not likely the case.
DeleteHealth care rationing occurs and has been occurring in this country for ages. The problem is that it is not only not uniformly applied, but also paradoxically punishes the "good." What I mean by this is if you are a "good" responsible person, and have neither adequate insurance nor the money to pay out of pocket for health care, you either go without care or wait until you can afford it. If, however, you do not feel any sense of personal responsibility, you simply go to the nearest emergency room and get care which will be paid for on someone else's dime. So many ERs are treated as free clinics by many of their patrons. This is not to say that the patients don't need or deserve access to health care, it is just to say that health care is being "voluntarily" rationed by many people who otherwise would have access to that same care.
ReplyDeleteAs for the costs increasing as lives are extended by advances in health care, while this is true, many of those costs could be avoided if doctors felt they could be honest with their patients and patients' families about the true chance of success for any given procedure. Not everyone needs heroic actions near the end of life. This would not have to be prejudiced against the old either - for instance, if an incredibly sick patient with terminal cancer were to "need" an expensive heart surgery to live, but the chances of successful outcome were so reduced by the other illnesses, it would not matter whether the patient was 35 or 85, they should consider not having the procedure. The inverse would apply as well - an otherwise heathy patient should have the surgery whether 35 or 85.
A key problem here which you may end up touching on later is medical malpractice insurance. Doctors have been reduced to performing defensive medicine. That is the real reason for multiple seemingly unnecessary tests, not the desire to make an extra dollar on the test. Until malpractice tort reform is addressed in a real way, we will continue to see "over-testing."
The mathematics of wait times are a good point. I take it that in the US we have covered people who have relatively short wait times and non covered people who never get any service and therefore have infinite wait times. Omitting those persons from the wait time calculation skews it to look shorter than it is.
ReplyDeleteBy expanding coverage to everyone, we add into the mix those who were outside it. They now have coverage they never had before. The result is that persons previously covered are now in a larger que populated with additional newcomers. Depending upon your prior situation, your wait time has gone done from infinity (good), or up from a shorter time (not so good). It appears the trade off for universal coveage is longer wait times for those previously receiving services. Whether those persons should be "afraid" or not is an individual decision. Should they know that is a possibility? I think so. Should the mathematics of wait time calculations get better exposure? Good idea.