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Old 05-18-2019, 10:05 AM
 
2,139 posts, read 524,377 times
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Quote:
Originally Posted by redguard57 View Post
How are other countries able to spend half as much and get twice more? It's not because we use so much health care.... - if you've ever been to Japan, those people go to the doctor for any little thing. They use their system far more.
Many economists (but not all) believe the answer to your question is administrative bloat. Back in the 1960s, a typical worker spent about 6 days of his annual compensation on health insurance & health care. Today the number is north of 60 days of annual compensation.

Doctors make a good living, but typically do not become rich (no 300-foot mega yachts, stable of Ferraris or Gulfstream private jets). The same is true for most everyone directly involved in delivering health care - RNs, PAs, NPs, X-Ray Techs, Respiratory Techs, Physical Therapists, and the like. Those who run a business (an imaging lab or a chain of physical therapy facilities or skilled nursing homes) earn more, but their compensation is based on successfully running a business. Even so, they typically don't own $10 million ski-in/ski-out vacation chalets in Deer Valley or Aspen. Hospital CEOs earn more still - but they typically don't own private islands.

SOooo.... people make a good living in health care, but they don't get rich. Ditto for the insurance side, although CEOs can make millions just like their counterpart CEOs at hospitals and CEOs in the broad non-health related economy at large.

If the money isn't going to make some people wealthy, and the money isn't being used to consume more product (especially relative to Japan), where is it going?

Administrative bloat seems the likely culprit. There are millions of people in the USA employed in the broad health care and health insurance marketplaces, and many don't make all that much money. They sit in front of computer screens, fill out forms, process forms, re-process forms, re-re process forms, answer questions (but not health questions as they have no clinical expertise), coordinate things, arrange for things, etc etc etc. Consultants fly in on Monday to teach the billing clerks how to code insurance claim forms so as to maximize revenue from insurance companies. Those same consultants fly to insurance companies on Wednesday to teach them how to read insurance claim forms so as to minimize their payments to the health providers.

All that administrative bloat seems to add very little to actually, you know, health care.
The same seems true regarding the costs of K-12 education. There are hundreds of thousands if not millions of employees at school districts across the nation who don't educate children, don't run schools, don't maintain physical infrastructure, don't drive buses... but they get paychecks and fat defined benefit pensions for sitting at desks, writing reports, generating information that no one will look at, etc etc etc.

Ditto for Higher Ed and for the same reasons.
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Old 05-19-2019, 01:50 PM
 
Location: Oregon, formerly Texas
5,448 posts, read 3,754,329 times
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Quote:
Originally Posted by RationalExpectations View Post
Many economists (but not all) believe the answer to your question is administrative bloat. Back in the 1960s, a typical worker spent about 6 days of his annual compensation on health insurance & health care. Today the number is north of 60 days of annual compensation.

Doctors make a good living, but typically do not become rich (no 300-foot mega yachts, stable of Ferraris or Gulfstream private jets). The same is true for most everyone directly involved in delivering health care - RNs, PAs, NPs, X-Ray Techs, Respiratory Techs, Physical Therapists, and the like. Those who run a business (an imaging lab or a chain of physical therapy facilities or skilled nursing homes) earn more, but their compensation is based on successfully running a business. Even so, they typically don't own $10 million ski-in/ski-out vacation chalets in Deer Valley or Aspen. Hospital CEOs earn more still - but they typically don't own private islands.

SOooo.... people make a good living in health care, but they don't get rich. Ditto for the insurance side, although CEOs can make millions just like their counterpart CEOs at hospitals and CEOs in the broad non-health related economy at large.

If the money isn't going to make some people wealthy, and the money isn't being used to consume more product (especially relative to Japan), where is it going?

Administrative bloat seems the likely culprit. There are millions of people in the USA employed in the broad health care and health insurance marketplaces, and many don't make all that much money. They sit in front of computer screens, fill out forms, process forms, re-process forms, re-re process forms, answer questions (but not health questions as they have no clinical expertise), coordinate things, arrange for things, etc etc etc. Consultants fly in on Monday to teach the billing clerks how to code insurance claim forms so as to maximize revenue from insurance companies. Those same consultants fly to insurance companies on Wednesday to teach them how to read insurance claim forms so as to minimize their payments to the health providers.

All that administrative bloat seems to add very little to actually, you know, health care.
The same seems true regarding the costs of K-12 education. There are hundreds of thousands if not millions of employees at school districts across the nation who don't educate children, don't run schools, don't maintain physical infrastructure, don't drive buses... but they get paychecks and fat defined benefit pensions for sitting at desks, writing reports, generating information that no one will look at, etc etc etc.

Ditto for Higher Ed and for the same reasons.
You're probably right.

Being in education, I can tell you that the (state) government forces us to produce all that information as a condition of getting taxpayer funding. Teachers are busy teaching. They don't have time to do it, so they hire an administrator to do it. As the compliance requirements grow, so do the administrative tasks. Basically, all that reporting is to prove in 100 different ways that we're doing what we say we're doing, and ironically, to prove to the state that we are not too bloated! If we don't do it the state will close us down. Those requirements can be more or less depending on the state, but that's the pattern in all 50 of them.

Last edited by redguard57; 05-19-2019 at 02:18 PM..
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Old 05-20-2019, 07:39 AM
 
8,309 posts, read 9,063,524 times
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Quote:
Originally Posted by redguard57 View Post
You're probably right.

Being in education, I can tell you that the (state) government forces us to produce all that information as a condition of getting taxpayer funding. Teachers are busy teaching. They don't have time to do it, so they hire an administrator to do it. As the compliance requirements grow, so do the administrative tasks. Basically, all that reporting is to prove in 100 different ways that we're doing what we say we're doing, and ironically, to prove to the state that we are not too bloated! If we don't do it the state will close us down. Those requirements can be more or less depending on the state, but that's the pattern in all 50 of them.

1). The US, by far and away, has the highest healthcare related administrative burden in the first world.
A).A significant amount of this cost-foam is due to various governments cost shifting much of medicare's administrative burden onto hospitals and doc. offices.
B). Much is due to ins. co. intransigence. Docs. spend about 3 hrs. on average communicating with ins. cos. per week. Doc. admin. help ~19hrs. per week per physician.
C). Some is due to the admin. costs of defensive medicine in efforts to avoid lawsuits.

https://www.nytimes.com/2018/07/16/u...h-care-us.html
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Old 05-20-2019, 09:30 AM
 
Location: Living rent free in your head
30,988 posts, read 13,558,751 times
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Quote:
Originally Posted by RationalExpectations View Post
In economics, there is a concept of Public Goods and of Private Goods.

A Public Good is a good that is both non-excludable and non-rivalrous in that individuals cannot be excluded from use or could be enjoyed without paying for it, and where use by one individual does not reduce availability to others or the goods can be effectively consumed simultaneously by more than one person. Examples include National Security, Flood Control Systems, Lighthouses, Street Lights, Fire Departments, Police Departments and the like.

A Private Good, in contrast, is an item that yields positive benefits to people that is excludable, i.e. its owners can exercise private property rights, preventing those who have not paid for it from using the good or consuming its benefits. It is also rivalrous, i.e. consumption by one necessarily prevents it from being consumed by someone else. Pretty much anything we individually purchase are private goods, including for example food, clothing, entertainment -- anything at a shopping mall, etc.

It is important to understand the distinction between Public Goods and Private Goods in order to have a discussion of the things you've identified that I quoted above: Universal Healthcare and Free Tuition for College.

Healthcare goods and services are clearly Private Goods. If I want to purchase a physical and a cholesterol blood test, I do so myself. I may have insurance (which, of course, is not actually insurance; what we call health insurance doesn't operate the way automobile insurance or homeowners insurance work; what we call health insurance is actually a pre-paid funding mechanism)

Healthcare goods and services are not Public Goods. They share nothing in common with National Security, Flood Control Systems, Lighthouses, Street Lights, Fire Departments, Police Departments and the like.

College Tuition is also clearly a Private Good. When I want to go to college, I apply and if accepted I pay and I attend. I may have a funding mechanism such as student loans or part-time employment. The total number of slots for students at a college or university is relatively fixed and is a scarce resource. When I take a slot, it doesn't preclude you from taking a slot, but once all the slots are taken, there are no more.

College Tuition is clearly not a Public Good. College tuition shares nothing in common with National Security, Flood Control Systems, Lighthouses, Street Lights, Fire Departments, Police Departments and the like.

So no, it makes no sense to provide Universal Healthcare. Healthcare is a private good where each of us are free to purchase as much or as little as we like for our own benefit. Ditto for higher education.
Do you know the economic definition of a public good?
A public good has two key characteristics: it is nonexcludable and nonrivalrous. These characteristics make it difficult for market producers to sell the good to individual consumers. Nonexcludable means that it is costly or impossible for one user to exclude others from using a good. Nonrivalrous means that when one person uses a good, it does not prevent others from using it.

Strictly speaking our current form of healthcare is NOT a public good because many people are excluded from using the healthcare system. That does not infer that healthcare should be a private good but makes the case as for why we should move toward universal healthcare in which healthcare more closely resembles a public good.

Quote:
First, building on the classical definition of public goods, public health is a collective property that depends principally on the conditions that create public health (i.e. the structural, social, and political forces that produce health of populations) rather than on any individual action. These conditions are features of social structures that are not owned and not buyable by individuals. Salutogenic urban environments seek to be both non-excludable and non-rivalrous; so do policies that incentivize healthier foods and efforts to minimize pollution. As well articulated in Global Public Goods for Health, the provision of public health is inextricably linked to government action and other classic public goods. Therefore, the conditions that promote the health of the public are classic public goods, even if an increasingly assertive ownership society may threaten some of that. Knowledge (for example, on health risks), technology, policy, and health systems have many properties of considered public goods— but, as Smith argues, modern health technologies are “increasingly patented and thus made artificially excludable.” Likewise, health systems, absent public financing, are not affordable to many. https://www.bu.edu/sph/2016/01/10/pu...a-public-good/
An article in the Economist explains that healthcare is neither a private or a public good - but a "common good"

Quote:
Having said this, there's a qualifier: universal health insurance probably isn't best described as a public good. It's non-excludable, but it's somewhat rivalrous. The more generous the universal insurance plan is, the more it increases poor people's consumption of health-care resources, leaving less available for the rich. Increased demand creates increased supply, but at the expense of other goods and services in the economy. In that sense, like universal primary education, police (and prisons), and public roads and parks, universal health insurance is better described as a "common good": non-excludable but rivalrous. Managing common goods, like fish stocks and water, often takes a lot of government intervention and market-based co-pays to ensure resources aren't exhausted. But here's the deal: this is a perfect description of what's happening with Medicaid and Medicare spending. We turned health insurance into a common good in 1965. And unless America wants to deprive the poor of health insurance, which it doesn't, there's no going back. https://www.economist.com/democracy-...-a-common-good

Last edited by 2sleepy; 05-20-2019 at 09:54 AM..
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Old 05-20-2019, 12:13 PM
 
Location: Ruidoso, NM
5,416 posts, read 5,104,592 times
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Quote:
Originally Posted by EDS_ View Post
1). The US, by far and away, has the highest healthcare related administrative burden in the first world.
And the highest doctor pay.

From 2009:

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Old 05-20-2019, 06:38 PM
 
Location: Oregon, formerly Texas
5,448 posts, read 3,754,329 times
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Quote:
Originally Posted by rruff View Post
And the highest doctor pay.

From 2009:
I wonder what the ratio is of doctor pay:living costs?
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Old 05-20-2019, 07:42 PM
 
8,309 posts, read 9,063,524 times
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Quote:
Originally Posted by rruff View Post
And the highest doctor pay.

From 2009:

My guess is this stuff escapes you but think about this:
1). Nearly all professionals in The US earn more in adjusted terms than their counterparts elsewhere.
2). If doctors were paid less in The US nearly all of the good ones would do something else. Making doctor shortages worse. The fact is very few people have the mental wherewithal to make it through med. school and residency. Of that group only some are willing to actually go to school and make little until they are ~30 or more.
3). Given the numbers if US docs. took a ~20% pay cut each it would lower HC costs by 2%. So focusing on doctor pay is folly.
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Old 05-20-2019, 10:28 PM
 
Location: Ruidoso, NM
5,416 posts, read 5,104,592 times
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Quote:
Originally Posted by redguard57 View Post
I wonder what the ratio is of doctor pay:living costs?
It's adjusted for living costs, that's what PPP is.
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Old 05-20-2019, 10:31 PM
 
Location: Ruidoso, NM
5,416 posts, read 5,104,592 times
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Quote:
Originally Posted by EDS_ View Post
My guess is this stuff escapes you
You just made it up, so...

You should try backing up your opinions with facts. I'm not going to do all the work.
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Old 05-21-2019, 08:11 AM
 
2,139 posts, read 524,377 times
Reputation: 3726
Quote:
Originally Posted by 2sleepy View Post
Strictly speaking our current form of healthcare is NOT a public good because many people are excluded from using the healthcare system.
Your premise is correct - healthcare is NOT a public good. However, your justification isn't the reason. It is NOT because "many people are excluded from using the healthcare system." That has nothing to do with it, and in any event, no one is excluded from purchasing healthcare.

Healthcare is not a public good because when I consume, say, an antibiotic, you cannot consume it. The pills are already in my stomach.

This is fundamentally different from, say, national defense. I incur the benefit of national defense. So do you. When I incur the benefit of national defense, I cannot prevent you from doing so.

Quote:
Originally Posted by 2sleepy View Post
That does not infer that healthcare should be a private good but makes the case as for why we should move toward universal healthcare in which healthcare more closely resembles a public good.
Your notion of "should be" has nothing to do with it, of course. That's a bit like saying pi "should be" a whole integer. Healthcare isn't a private good, and nothing anyone does can move it one way or the other.

You provide a quote from https://www.bu.edu/sph/2016/01/10/pu...a-public-good/ . The author of that opinion piece is not an economist, but rather a medical doctor with no economics expertise, and his opinion piece is deeply flawed. In the same article, the doctor also rails against the constitutional right to gun ownership even though he is not an attorney and has no legal training.

At the same time, the decision of a government to purchase healthcare goods and services on behalf of its people is independent of that good's classification (public vs private). Should a government purchase healthcare goods and services on behalf of its people? If so, why?

The same logic used to say a government ought to purchase healthcare goods and services on behalf of its people can be used to say the government ought to purchase food and food preparation services on behalf of its people.
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