[lvmensch]

I think we also need to note that it is relatively easy to keep score on the performance of a medical operation or a hospital. Small single practioners are not going to be easily measured. But as soon as it gets any size it becomes clear.

So the MDs are going to have to be competitive with their peers or catch a lot of bad flake. And the hospitals will be even worse. Much easier to keep score.

[tijlover]

Originally Posted by johninvegas

I used to know a guy who worked for a newspaper in Florida in the 80's. He did a story on the cost of the death penalty versus life in prison in Florida at the time. His investigation worked out that due to the court time and lawyers, most of whom were public defenders, it would cost over $1.5 million to put someone to death were it generally cost about $850k to keep them in prison for life. Given that there is room for the prisoners in the prison system, it's a no brainer.

Of course, that was almost 40 years ago. Now I suspect the costs are much higher.

I once read a True Crime book involving someone in NV that was sentenced to Death Row. This man wanted to be executed the next day. Sorry about that, ain't gonna happen! The others on Death Row and the guards made his life so miserable, he had no other choice but to go thru the appeal process.

And then there's other costs to incarceration/Death Row. If, through DNA testing, they find out this inmate is innocent, the state must pay X amount for the years he was incarcerated. Peculiarly enough, Texas has the highest payout for someone wrongly convicted.

[RationalExpectations]

Originally Posted by Dom Cobb

I think you are arguing against single payer because you don’t think it’s going to solve the problem? Sure, you could be right but my point is at least try. It can’t get any worse than it is right now...

Yes - that is the essence of my comment: I don't think single payer will solve the problem that health care costs too damn much in this country.

Originally Posted by Dom Cobb

I think your making my argument here. If prices were capped or negotiated, I think the hospitals would reduce costs accordingly and possibly layoff or reduce headcount.

You may be right. But those hundreds of thousands (millions?) of future laid-off employees vote, and they would protest the government throwing them out of their jobs - and politicians respond to such pressure. And that doesn't even count the hundreds of thousands of employees at the current insurance companies - Aetna, UnitedHealth, Cigna, etc.

Will politicians have the backbone to throw hundreds of thousands (millions?) of hospital employees out of jobs to drive healthcare costs down? And by doing so, will it cause shortages of healthcare and long wait lists?

Your guess is at least as good as mine (maybe better), but here's one thing to consider (sorry for this digression):

George Stigler won the Nobel Prize in Economics in 1982 for showing that governmental regulation is itself an "economic good" in the same sense that "guns" and "butter" and "widgets" are economic goods. He showed regulation responds to the laws of supply and demand: governments control the "supply of regulation." Moreover, he demonstrated that most demand for government regulation comes from the industry being regulated. One of the simplest examples he used was the elimination of cigarette advertising on TV. The impetus was from Big Tobacco - Big Tobacco knew that TV advertising (1) was expensive, (2) was not effective at expanding the TAM (total addressable market - the total pie) of smokers, and (3) was required to maintain market share. If they didn't advertise on TV, they lost market share. So they all advertised on TV, but received little benefit from doing so. It was game theoretic. So Big Tobacco banded together to lobby Congress to eliminate TV advertising. In Congressional hearings, they said the expected things about not influencing children, but the REAL reason was to cut costs out of the system. Surprise, surprise, after enacting the legislation banning TV advertising, Big Tobacco profits had a one-time discontinuous jump.

It's called "Regulatory Capture" in the academic literature.

Sooo back to Single Payer - will the soon-to-be-laid-off employees sit back and take it? Or will they take to the streets, causing the Federal Government to implement something expensive for them (that is, keep them on some payroll for a very long time)?

Moreover, one of the things that governments are exceptionally good at is creating shortages - they can accomplish this with the stroke of a pen by imposing a price cap. Chemotherapy is expensive (Google says it is from $1K to $12K per month). If the government says "chemotherapy is now price capped at $200 per month", within short order essentially all chemotherapy will disappear. Pharmaceutical companies that manufacture & sell chemotherapy drugs to hospitals & clinics will stop manufacturing & selling the drugs. Hospitals, even if they have access to a supply of free medicine, will see that $200 per month is less than their labor costs to do the work, and just won't offer it.

Will chemo patients sit back and take it (die)? Or will they take to the streets & scream to their elected representatives, who will assuredly raise the cap back to a market clearing price? Within short order, we are back to where we started.

In classic economic models suppliers and hospitals reduce costs to the point where they can manufacture & administer the medicine (within reason).

But in the real world, because demand for healthcare is essentially inelastic (as you point out), it becomes a political game of chicken. Patients vote. Health care employees vote. They both scream "DO SOMETHING!"

I don't have the answer.

[Dom Cobb]

Rational:

All in all, some good points - a lot of classic Econ theory I studied in undergrad, which makes sense in a textbook but i think those models are a little bit outdated.

Modern Capitalism is an extremely complex system, that retail prices (think major box stores, E-commerce pure play, airlines etc) are now run off of extremely complex algorithmic elasticity models that are run off of competition and on time demand and updated constantly. ( I know, I work for an E-commerce company)

The point is that hospitals are still stuck in the stone ages when it comes to how they run their business. Mainly to be in compliance with insurance and Medicare/Medicare for billing. I don’t think the single payer system would set prices so low that they would charge 200 for an actual cost of 1200. I think we can agree there is definitely opportunity to streamline, and I don’t think millions of people would be out of a job.

Coming full circle to our discussion was how our tax dollars are spent; which we both can agree is not spent wisely, and we get very little in return comparatively to other industrialized nations for our total tax burden.

You probably are supporting low or no taxes, based on your Econ theory - while I would be happy to pay taxes, even more so if I did not have to pay for privatized healthcare, childcare, elementary school, likely higher education, and my own retirement.

[RationalExpectations]

Originally Posted by Dom Cobb

You probably are supporting low or no taxes, based on your Econ theory - while I would be happy to pay taxes, even more so if I did not have to pay for privatized healthcare, childcare, elementary school, likely higher education, and my own retirement.

Actually, I agree with SCOTUS Justice Oliver Wendell Holmes when he said, "Taxes are the price we pay to live in a civilized society."

I would be thrilled to have an income tax burden of a billion dollars per year for the obvious reason.

BTW, it sounds like you have a very interesting career!