• Priceless: Chapter 3, ctd.

    You should, of course, read Austin’s thoughts first.

    Like Austin, my biggest gripe with this chapter is my frustration with how John portrays his “opposition”. I don’t know who he’s arguing against. He portrays the health care policy debate as one in which it’s him against a whole bunch of Soviet-planning-loving-free-enterprise-hating-capitalism-loathing hippies. That’s just not the way it is.

    Readers of this blog know that there are shades of gray. I have discussed the positive aspects of “minute clinics“. Austin has acknowledged times when Medicare Advantage works. I’ve freely admitted that government can stifle innovation and entrepreneurship. It’s not one way or the other. It’s nuanced. Government is good for some things. It’s bad for others.

    I could go on and on all day, but that’s a waste. Here’s my lightening round:

    1) John makes the all-too-common argument that mammograms can be gotten for $100 and that “a tiny, tiny, tiny portion of the population” can’t afford them. First of all, many, many, many people can’t spare $100. Moreover, that’s not what mammograms cost. Like with birth control, first you need to see a doctor (expensive), then you need a referral, then you need to go get the test. It has to be read. All of that costs money, likely far more than just the “mammogram”.

    2) Yeah, I can’t help myself. John is making up the opposition again. He claims that people are upset when private insurance companies deny bone marrow transplants, but not when Arizona Medicaid denied organ transplants. I screamed about those Arizona Medicaid cuts here and here. I even used the words “death panel”.

    3) John seems to love entrepreneurs, but thinks they can’t be copied. I don’t think he really believes that. After all, if someone discovers a better way to do something, we replicate that all the time. What he likes is when private people do it, and he hates when government tries to do it. That’s a different distinction.

    4) If John hasn’t seen any justification for the rationale for government getting involved in healthcare, then he’s not reading enough. Here’s Austin. He even cites Greg Mankiw.

    5) John seems to believe people who disagree with him want change because of process, not outcome. I beg to differ. We’re getting our ass kicked on outcome. Here’s a quote:

    What I discovered after many frustrating conversations was that people who like the way healthcare is organized in Canada do not like it because of any particular result it achieves. They like it because they like the process.

    Yeah… no. I can’t remember writing a post ever where I argue for a different health care system because I like its philosophy better. Moreover, the outcomes John likes to cite are things like percent of women getting mammograms, women getting cervical cancer screening, people who have had colonoscopies, and men who’ve had prostate screening tests. I can’t think of a better way to illustrate someone who is focused on process more than outcome.

    6) Money quote:

    If people don’t come to their convictions by means of reason, then reason isn’t going to convince them to change their minds.

    That could be a tag line for this blog. Blows me away that John think’s we’re the ones who don’t use reason.


    • Aaron, you are taking all this much too personally. Maybe your not a paternalist or a collectivist or someone who elevates process over outcomes, but surely you know a lot of people just like that. Don’t you go to health policy conferences?

      • Possibly, John. Of course, since I was mentioned – by name – in Chapter 2, it’s hard not to. 🙂

        But you do describe everyone who disagrees with you in sweeping generalizations. That’s what I’m reacting to. There’s a nuanced middle. Even that is wide.

    • With certain anecdotes like birth control, it is solely within the government’s ability to lower that cost barrier as outlined above. Have the FDA make it OTC. Then, the government can remove the arbitrary barrier for using HSA funds by rescinding the requirement that even an OTC drug requires a physician Rx.

      This may not work in all areas (as with any anecdote), but it seems to me that the argument makes a critical assumption of the paternalism within today’s policy itself (i.e. that a patient must see a physician before obtaining birth control).

      The FDA already regulates drug safety, the class of drugs (if not the drugs themselves) have been around for quite some time to further prove the previous point, they are usually for prevention of a condition (not a condition itself) which means no diagnosis is required for use, and there isn’t really any abuse the drugs for recreational purposes. (Would that be a win-win-win-win? Plus lower cost barrier… win x 5!) I jest, yet we must still live in this inherently paternalistic procedural framework that cannot be effectively petitioned by patients/citizens to be changed so as to lower the price barrier to cheaper contraception. I vote for a system (pure or hybrid) where greater creativity in solving problems is allowed.

      Alternatively, since preventative appointments and birth control are now considered mandates for insurance coverage, the barrier is theoretically lowered for the individual. However, when thought of in the aggregate for “bending the cost curve,” the more free market approach does a better job since the insurance company is still paying for the preventative visit. Also theoretically better is the opportunity cost of what patient would have otherwise occupied that particular office visit slot.

    • Just one final point to add. I think the above fits with Austin’s efficient/equitable language from his Chapter 1 post. To those that favor equity, the cost of something is deemed unmeasurable (in the sense that it shouldn’t be measured even if it were possible because the “thing” is sacred). This literally means that the price becomes infinite.

      When using the foundation of equity, one would (most likely) be swayed more by the alternative situation rather than the initial because it has a zero cost barrier to the individual on the surface. (I am betting that the cost of missing work for hourly employees to obtain the Rx would be more expensive in lost earnings than the Rx itself would be if that barrier were removed altogether.)

      But, the healthcare system does operate under (modified) market conditions since the people who work in healthcare are paid for their work. How effectively can an equity value system that favors infinitely priced goods/services work within the bounds of a system that does assign cost to every good/service rendered and is seeking greater efficiency since “neither is the whole ballgame?”

      Not all personal preferences are created equal. Those that one individual holds as sacred are not the same as another’s. To the point of the final question of the hyperlinked Okun post, should there be a market for organs? That is hardly for me to decide. I don’t need an organ right now.

    • Aaron, I think we need a fact check on the mammogram issue and a few other things. Do you always need a physician to write a prescription so you can get a mammogram? Not for a screening mammogram. Furthermore, mammograms are read by radiologists that are physicians. Moreover, John might be pricing screening mammograms wrong. I think my tailor’s wife is paying $75 not $100. I am not saying that to be cute rather to point out that there are bargains everywhere when cash is the vehicle of payment. She carries a very high deductible and pays for almost everything in cash. She is middle aged. Recently when she had a problem with her leg she had an ultrasound and an MRI together for just a few hundred dollars. In many areas at least a few years ago one could even get a mammogram for free. (Check out Strax). She has saved so much money over the last 20 years without tax breaks that even a hospitalization probably won’t come near to the money she has banked.

      “If someone develops a better way to do something , we replicate that…”  You can replicate things and numeric items, but you can’t replicate cultures or people such as exist at the Mayo.

      You said we were getting our a$s kicked on outcomes. That I believe is false.

      • You can “believe” it all you want. That’s a faith based argument.

        I’ve written many, many, many posts with data that counteract your belief that cover a host of measures, countries, and years. No cherry picking.

        • Aaron, you wrote: “You can “believe” all you want.” I found that comment surprising because I mentioned many things. True and false is easy to prove in some of these responses I gave so let me list them again. I find it hard to believe that you disagree with all of them.

          1) One does not need a prescription to get a screening mammogram. True

          That is true in almost all states if not all of them. However, let us assume that there is one state that requires a physician signature. The radiologist who reads the mammogram can easily sign that request at the same time so I don’t know why you disagree.

          2) You disputed the cost of mammograms.

          I gave you a reference of one that I knew a long time ago. I told you about a neighbor. You don’t have to believe it, but cash pay can frequently provide astonishing care and astonishingly low prices. If you wish I will provide you an example of one whose prices exist on the net and if you want more we can find more. Mobile mammography clinics are advertising on the net for $150 and fixed centers frequently charge less.

          3) You said we were getting our a$s kicked in outcomes and I said I believed it to be false. 

          Your statement was rather startling. Instead of providing you with some of the sources I have I’ll provide you with John’s on page 89 of his book. The CONCORD study. That study is pretty devastating to your kicking our a$s’s comment. 

          • Just jumping in to provide a resource for procedure costs and their variation. On mammograms in particular, see this:

            (I have no idea whose side this evidence supports. I’m barely following the thread. I’m just providing some objective data.)

            • Austin, thank you for the information. Forgetting all of this that has occured to date would you as an economist, recognizing the tremendous costs on physicians imposed by Medicare and private insurers, think that a physician might be able to carve out a practice that eliminates insurance totally and focus’s only on cash pay and by doing so he could beat the going price and still make a profit?

          • The CONCORD study is a perfec example of the use of survival rates in likely overdiagnosed/overscreened for diseases. I’ve written about the use of mortality versus survival rates many, many times. I’ve also shown that by cherry picking cancers (ie breast/prostate) and then using survival rates, we make ourselves look better than we likely are.

            • OK Aaron, I suppose you yield on the first two items.

              International comparisons of outcomes is extremely difficult. I provided you with John’s CONCORD because it is available to everyone reading the book and the numbers are devastating to anyone that thinks it is a slam dunk to prove that the US is behind in outcomes. It is way ahead in most studies that I have seen unless those studies have been mixed with variables that include politics, data collection issues and social issues.

              For my purposes at this time I don’t have to prove that the US has superior outcomes. That would overburden the blog and everyone reading it. All I have to show is that the proof is difficult and can be elusive which has been adequately demonstrated.

              Why is that all I have to prove? You said: “We’re getting our ass kicked on outcome” That obviously is not something that is apparent or proven and turns out to be a comment that is very overstated.

            • I disagree. And I actually have spent the time, and provided the data in many, many posts to prove it.

              I’m not going around in circles here. You keep claiming things, while simultaneously declaring you don’t need to prove them. I’m asking you to accept nothing on faith. I’ve provided the links. I’ve written 10-part series on quality here. I’ve made my case. You just keep making assertions.

              Also, I yield nothing. I don’t dispute you can get a mammogram for $150 somewhere. I dispute that you can everywhere, or that $150 isn’t a significant amount of money for much of the population. Or that a mammogram is the be all and end all of health care. It’s one thing, and a rather small one at that.

            • Aaron, there are no absolutes. The fact is many people all over the country are able to get prices on mammograms that are in the $100 range and DON’T need a prescription to get it. If you wish to say that some people might not be able to get that price I won’t disagree. I won’t even disagree that to some people $100 is a lot of money. But, you made a big deal over this along with adding costs that don’t need to exist. Let’s deal with the bulk of society and then handle the rest, but remember virtually every time one covers things of this nature one increases the price and that negatively impacts the very people that can’t afford $100.

              You may have written many things, but none appear here on this specific thread. The CONCORD study does and is in the book. There are more, many more. You mentioned your dislike of one type of study and preference for another that has the problems of genetics, data problems, problems attributed to a health care system that should be attributed to societal problems, etc. Those problems make it difficult to do comparisons without spending a great deal of time and energy removing these variables and most of the times one ends up with one of these or other problems that caused our outcomes to not look as good as they are.

              Finally, I didn’t say I don’t have to prove my *data*. What I proved was that your comment that we are getting our ass kicked on outcome was a bit over blown.

    • The phrase”cannot afford” is far to vague for any meaningful discussion. We should all try to be more concrete.

    • “Readers of this blog know that there are shades of gray.”

      Readers of this blog also know there’s a whole rainbow of colours as well.

      “What I discovered after many frustrating conversations was that people who like the way healthcare is organized in Canada do not like it because of any particular result it achieves. They like it because they like the process.”

      I don’t know if it’s the process or the outcome, and I don’t really care. All I know is that as a Canadian living in Canada, I have no financial worries with regard to required medical treatment.

      Perhaps the process achieves the outcome.