Thursday, September 20, 2007

Health Care Fun With Dr. Sowell (No, He's Not That Kind Of Doctor)

I just so happened to catch this several weeks old column on health care from Thomas Sowell. It's a nice, quick little read - Even more fun are the comments and the complete and utter lack of understanding about health care costs. Some of the commenters act as though Dr. Sowell is a senile old man, waxing romantic about an out-of-pocket medical care past that would be unrealistic today:

From Lilly:

That Was Then, This is Now
In the 1950's my pediatrician used to make a house call for $7. We paid it out-of-pocket. I also recall that in the early 1960's we were paying that same amount, $7, for an office visit to a board-certified internist.

Fast-forward to 2007. I am now sitting at a desk with statements from my insurance company that they have recently paid $746 for lab work---nothing exotic, just routine tests. Luckily, I did not have to pay it out-of-pocket because I have that evil Communist thing called: medical insurance. BTW the blood for the lab work was drawn during a routine office visit that no longer costs $7---that part was $218.

Sowell is a smart man. He probably knows that a day on Intensive Care nowadays runs around $2000, and EVERYTHING, every pill and shot and machine and plastic tube, is billed extra. One thing that is billed extra is surgery (and extra-extra for anything they implant inside you) and, for example, the cost of a defibrillator-pacemaker, like Vice-President Cheney has, runs around $75,000. As a federal employee, Cheney has medical insurance and probably did not pay his costs out-of-pocket even though, with a reported $8 million a year still going to him from Halliburton, he could well afford to.

Few people today could possibly stand to pay their medical bills out-of-pocket. This is a ridiculous idea.

And from Jill:

I know a woman who, when she was in her early twenties, was involved in a very serious accident. She survived, but was left with a brain injury. By the time her care was complete (it involved multiple operations, a lengthy hospital stay, physical therapy, occupational therapy, etc.), $4-5 million dollars in costs had been incurred. (I'm told this is par for the course for people who have brain injuries.) Not surprisingly, she was extremely thankful for her health insurance. It is one thing to have to pay out-of-pocket for routine medical expenses, but doing away with insurance to the point that not even catastrophic incidents would be covered is very unwise. It would be difficult to impossible for all but the wealthiest among us to cover such costs without insurance -- even on the "installment plan."

And finally, there's No BS Artist, who spends the entire comment thread trying to explain why the free market doesn't work when it comes to health care, without ever actually discussing what a free market system of health care would actually look like:

Join me on a reality break sheeple......
about healthcare,ok? I have been working in a hospital billing office for 26 years and I've seen some horrible changes in that time. In the late 70's and the early 80's the DRG system (DRG means Diagnostic Related Group) came to be. See a bunch of bean counters got together in a board room and gave every single condition, illness and disease from athlete's foot to a stroke a numerical code and an allotted amount that you, the customer-er-patient- needs to recover, provided you have no other pre existing medical conditions or unforseen complications. For example, if you are a 35 year old male with no other problems and are admitted for pneumonia you should be out of the hospital in 5 days tops. Maternity is the most dicey of all conditions. When I first started the average normal delivery stay was 3 days, 7 days for a C section. Now both mother and child are kicked out in a day for a normal delivery 2 days at most for a C section. In fact my hospital closed down its maternity ward--it was just way too expensive to maintain. Isn't that sad? Even hospitals have to toe the bottom line and economize to trim the fat as much as possible.

Did I forget to mention other little unpleasant facts of modern medical costs like deductibles, co-pays and co-insurance. Most doctors aren't even going to ask you to stick out your tongue and say "Ahhhhh" unless you can stick out your health care insurance card first. Gee, in all his misty eyed nostalgia, Sowell doesn't understand squat about the facts of modern health care. Sorry sheeple, runaway lassiez faire capitalism doesn't work with health care. Can any of you just whip out $100,000 in cash for a hospital stay? I didn't think so!

I'll make my replies brief, as I'm sure I'm beginning to sound like a broken record to regular readers. First, the outrageous costs of our medical system are not the result of the free market- they are the result of government intervention- medicaid, medicare, and other free riders, along with regulation, regulation, and more regulation. Oh, and there's also the bloated insurance system, buoyed by our tax laws which make employer provided health insurance the easiest and cheapest way for most Americans to obtain medical care.

Second, to respond to Jill, no one thinks we should do away with insurance all together - or even do away with any sort of health care insurance. The point is that insurance drives up costs, period- and the more people using insurance, the more costs go up. Tragic accidents pose a problem in many regards, not just in terms of health and medical care. If my uninsured business burns down and all my assets are tied up in my business, well, I'm pretty damn screwed too. It was probably stupid of me not to have fire insurance - just as it's stupid of people not to have insurance for severe or unexpected injuries and medical conditions.

And finally, No BS Artist inadvertently points out a problem not of free markets but of third payer systems. (Third payer systems would include both standard insurance and any sort of government health coverage.) And that problem is that hospital stays have to be limited in order to ration care fairly and effectively. You either have corporate bean counters or government bean counters doing the job, but someone (or some group of people) has to make these decisions in order to keep down costs and ensure that citizens (in a government system) or customers (in an insurance system) are basically getting the same bang for their buck. When you pay out of pocket, you have no such problem. You can make your own decision, with the help of your doctor, as to what sort of stay you need, and what sort of stay you can afford. And yes, yes, yes, medical treatments can cost thousands of dollars - but, if your in your twenties like I am, have you ever taken the time to see how much money you've actually paid out to your insurance company (and how much has been paid by your employer)?


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