• Goldhill’s *Catastrophic Care*

    I guess I’ll post some things as I read David Goldhill’s Catastrophic Care: How American Health Care Killed My Father–and How We Can Fix It. I will admit up front that I’m not very excited about this. It’s not Goldhill’s fault. It’s all me. I’m just tired of health reform and the health care debate.

    Don’t get me wrong, it’s an important debate. It’s just that I feel like I’ve seen and heard it all already, and blogged on just about every issue that is of interest to me. I’ve been letting a lot of stuff go by lately for this reason.

    On the other hand, it could just be a phase, and I’ll get fired up again in a few weeks. It’s happened before. As I wait, I will drop a few notes about Goldhill’s book. It really is the only way my brain will remember anything about it. I won’t be comprehensive. I will deliberately not wrestle with everything I find problematic or praise everything I like. It’s the best I can muster. Read along and join in in the comments.

    The introduction includes this:

    [T]he frustrating reality is that despite more than sixty years of government efforts — representing the work of both political parties — we are moving further and further away from what we want. Prices are higher, more people are excluded from needed care, more excess treatments are performed, and more people die from preventable errors. Why?

    That’s a huge invitation to point out that efforts at changing the health system haven’t been entirely public sector. I can think of some private-side innovations and developments. But you know where this argument is going. You’ve seen it before. Go ahead and debate public vs. private in the comments. It’s the classic conundrum in health reform. Important. But old.

    All in all, the introduction is making two points I fully agree with. In one of my talks, I put it this way: As costs escalate, the health system has remained stubbornly unresponsive to both consumers and evidence. If this isn’t shocking, you’re as numb as I am. Consumers — patients — are the reason for the system’s existence. Evidence is what gives it credibility. So, the system is failing to serve its intended role and failing to do so in a trustworthy way. In a (generally) capitalistic economy and (broadly) free culture, if anything isn’t sustainable it’s this. Someday some of the constraints will loosen and the perverse incentives unwound. I don’t know when, but it’s coming.


    • At whose feet do you place the “stubbornly unresponsive” blame? Effective big-dollar lobbying by the industry that keeps costs high? Inability to build a collaborative model in a deeply sectored, competitive marketplace? Plain vanilla stupidity and/or greed? All of the above?

      I get your exhaustion. I share it. But short of continuing to widen the flat spot on my forehead from years of head/desk-head/desk over this topic … I feel like the discussion still hasn’t reached that “p*ssed off villagers storm the castle” level yet. And until that can happen – which will take millions of villagers with torches and pointy sticks – we’ll be stuck here.

    • One cannot dispute Godhill’s findings that there is a correlation between government involvement and ever rising costs. It makes sense and when one looks at individual cost factors one can see causation. Additionally almost all of the private innovations have been negatively impacted by government actions preventing those innovations from reaching their full potential. Look at the very successful HSA program that has been prevented by government from being even more successful and look how the ACA might get rid of this successful program. It should not be a debate of public vs private rather where and how the public sector should be involved in healthcare. We have to remember that government has been very much controlling the private sector so the actions of the private sector don’t reflect that of a totally private entity. In the end the government has to be careful about affecting innovation that can be helpful in bringing costs down. HSA’s is one of those private innovations.

      • There seem to be very few who can appreciate your point of view while, simultaneously, appreciating the opposite conclusions drawn from experiences of other nations. I’m one of those few. It’s a lonely place. And, by the way, it is possible for both sides to be right.

        • I don’t know if we look at the right things when viewing other countries’ systems. By looking only at “who pays”, we miss out on some very important lessons about how they organize their systems and make care available to their citizens. I don’t know how you control costs without a global budget with prioritizing products and services that go into the budget. When you have open ended reimbursement, with citizens required to pay the difference for the most critical services (often without seeing the price tag in advance), makes it difficult to reign in costs. When you have to constrain costs because there is a limit, people make hard decisions about what and how much to deliver and even how much to spend on packaging. If that were to happen, perhaps we would not have so many fireplaces in hospital entrances. If people can build it and get it paid for, they will build it.

          • None of this is precisely news. See Elhauge, 1994, “Allocating Health Care Morally.”

            Just that we prefer to keep debating it endlessly rather than solving the problem.

        • Yes I agree, if we could keep the same level of government involvement but make the involvement smarter perhaps the sides could agree more. What I think though is that government does not do stupid things because politicians are stupid. Politicians are in fact smart but they know the median voter is rationally ignorant and so stupid things get you elect. Politicians hate to have Government do stupid things but they think that in net their getting elected is better so they do them.

        • It might be a lonely place but I think we can go only so far in dealing with the other western nations for comparisons. The US is quite different from them as discussed over and over again by historians of the 18th century. We have a very different culture and a different demographic mix.

          • I understand. It’s an argument not unlike that of saying health care is different from other goods and services. There’s something to it, but one need not buy it 100%. Like I said, there are reasonable arguments on both sides. Not all of them can be perfectly tested, empirically. An honest thinker will recognize that (s)he has chosen to accept some arguments and reject others based on faith or ideology. If one is uncomfortable settling an argument that way — and I am — one can’t fully settle.

    • Since you have established by example that I need not address everything mentioned above, I will take on only the most aggravating issue for me…today–that of the costs. As you note, “As costs escalate, the health system has remained stubbornly unresponsive to both consumers and evidence.”

      Costs are not necessarily the issue, but the quoted price, or more accurately, the mix of quoted prices which are used/misused to explain what ails our health care system. As an example, the “cost” of my CT scans, chest, pelvis and abdomen, have been quoted as $8000 for nearly seven years by my health provider. The “cash” price for the same procedure is $930. When my insurance kicks in, the provider gets $1000 from them, leaving me to pay about $600. So is the procedure’s price $8000, $930 or $1600? And what number is used in the comparisons with other industrialized nations? Thus a certain cynicism arises in me–and the rest of the populace.

    • This is a great line:

      As costs escalate, the health system has remained stubbornly unresponsive to both consumers and evidence.

      It is great because it contains so much of the problem in so few words.

      I want to add something that struck me when reading one of your posts on guns/homicide in the USA. There are 3 areas where the USA spends more and gets worse results they are:

      1. We in the USA spend much more on healthcare and have worse health outcomes than the other developed countries. They have medicine that is more socialized than ours in the other developed countries.

      2. We in the USA spend much more on schooling and do worse on PISA than the other developed countries. We have as much or more socialized schooling than the other developed countries.

      3. We in the USA spend much more on crime control and do worse on the most important crime statistics (those concerning violence) than the other developed countries. We have as socialized crime control as the other countries.

      If you compare us to middle and low income countries in these areas we do OK. So maybe the miracle is that the USA does so well economically despite:

      1. A high degree of corruption and/or incompetence in Government and/or business.

      2. A poorly educated (assuming one considers PISA a test education, I do not) population.

      2. A population prone to crime.

      Most economists when explaining why poor countries failing to develop blame corruption, poor education and high crime and violence. So one could go the other way wonder how are we as wealthy as we are in the USA despite lagging in these areas.

    • The intractable contentiousness is a reflection of the money and fat margins still to be had. And, the “reflection” is a function of opacity.

    • Remember, all Medicare payments go to providers; and Medicare mission is to use its funds to support available medical care. When falling provider income means drs clos e shop, Medicare flies to the rescue: covering new wellness procedures, etz. so Medicare costs never go down; If pts are healthier and require less care—god forbid—it will require further “subsidies” to providers. Maintaing provider presence and lowering costs are mutually incompatible. I’d just like them to refuse to cover garbage like routinely testing seniors for testostrone and thyroid and writing those prescriptions!

    • I sure get the fatigue part. It gets bad with the zombies that keep coming back.


    • I hope you regain your enthusiasm. Your participation is important. Even positive changes on the margin can make things better, though sometimes it’s easy to believe otherwise.

    • Austin,

      I understand your fatigue, I feel it too. I think part of the problem is that the terms of the debate (and this is true for more than just healthcare) haven’t changed–its still “government is the problem” or “capitalists are the problem.” I submit that neither of these is correct. The real problem (and its growing), is that the line between Big Gov and Big Biz is disappearing, such that the continuing prosperity of each is functionally dependent on the other. The officials that operate both (especially in finance but in healthcare too) are essentially interchangeable at the highest levels, and consequently share the same financial and political motivations: the continued extraction of wealth from the broader population for as little in return as possible.

      Take, for example, Baumol’s cost disease hypothesis. I understand that TIE does not agree with everything in his analysis, but it seems, to me at least, that the basic conclusion–that costs will continue to grow faster in healthcare than other industries, due to the low productivity growth endemic to healthcare services, relative to the rest of the economy– is undeniable. We see it in every advanced economy, regardless of the public/private mix of their systems.

      The conclusion I draw is that the solution to our collective problem is not “bending the cost curve,” but rather giving a “haircut” to the entire industry. The debate should be how to administer this haircut in a manner least-harmful to patients that removes the most waste from the total system. This means several oxes will be gored, but if the result is a more efficient and useful system, for citizens, then its worth it. Unfortunately, what’s good for the private sector goose is also good for the government gander, and so we instead get the debate they want, “how to slow growth” (and implicitly, protect the establishment’s incomes) rather than the one the country needs, “which elements of the system are socially useless and can be reduced.”

      Just a thought.


    • It’s not really a matter of private vs. public – more accurately, the choice is between decentralization (i.e., markets and genuine competition) and control by a central authority. In so far as economies based on markets and competition always outperform those that are centrally controlled, then decentralization is the answer. And decentralization means going not only with markets and competition, but also limiting the role of federal government in favor of the states, when required (you know, a little self-government and self-determination). We’re going in the wrong direction in this country, and it’s only going to get worse as long as we insist on centrally-planned healthcare. Goldhill’s approach is in the right direction.

      • The problem with state regulation at this point in time, I think, is that the healthcare market is becoming more national and even international. When states create their own specific regulations, it makes it harder for consumers to utilize healthcare when travel to other states and other countries. Especially when we need data to be more fluid, one state making one set of regs and another state making another set makes it more difficult for patients to experience more “fluid” care. And do you want to be able to access specialists remotely? Is the care regulated where the specialist is located or where the patient is located? I’m all for reducing regulations and enabling consumers to figure out what works for them, but don’t expect states to give up their attempts to regulate (perhaps being even more captured by provider interests) anytime soon.

    • @SB in STL “The real problem (and its growing), is that the line between Big Gov and Big Biz is disappearing, such that the continuing prosperity of each is functionally dependent on the other. ”

      That is a major problem. Without trying to label any side of the discussion big business joining with government is a major component of fascist states. That is one of the components of fascism that the western democracies looked upon favorably before WW2.