Friday, December 16, 2016

Solving The BOcare, Medical Care Crisis

By the time you get to the end of this post, you will know how to fix the healthcare system.

This post is important -- we need a little background Friedman that PJ O'Rourke has enhanced to stick in our brains first relative to how money is spent. This is taken from his book "Don't Vote, It Just Encourages the Bastards!"

I think we all intrinsically understand the preceding -- it makes a REAL difference whose money any person is spending and it makes a real difference who it is being spent on!

Now on to Milton Friedman on healthcare (I recommend you read the whole linked column, but I'm doing cliff notes here in case you are not going to). Milton has astutely observed that as technology has advanced in medicine, people in the developed world have paid more and more for health care, yet are generally less satisfied. Advances in technology in other areas (cars, tv, cell phones, the internet) have produced LOWER costs and GREATER satisfaction!

Rapid technological advances have occurred repeatedly since the Industrial Revolution—in agriculture, steam engines, railroads, telephones, electricity, automobiles, radio, television, and, most recently, computers and telecommunication. The other two features seem unique to medicine. It is true that spending initially increased after non-medical technical advances, but the fraction of national income spent did not increase dramatically after the initial phase of widespread acceptance. On the contrary, technological development lowered cost, so that the fraction of national income spent on food, transportation, communication, and much more has gone down, releasing resources to produce new products or services. Similarly, there seems no counterpart in these other areas to the rising dissatisfaction with the delivery of medical care.
So apparently, having 3rd parties -- employers, insurance companies and government buy our healthcare has provided us with a very expensive off color Yugo healthcare -- and we are surprised? But it's worse than that -- because government is involved.

Some years ago, the British physician Max Gammon, after an extensive study of the British system of socialized medicine, formulated what he called "the theory of bureaucratic displacement." He observed that in "a bureaucratic system . . . increase in expenditure will be matched by fall in production. . . . Such systems will act rather like ‘black holes,’ in the economic universe, simultaneously sucking in resources, and shrinking in terms of ‘emitted production.’" Gammon’s observations for the British system have their exact parallel in the partly socialized U.S. medical system. Here, too, input has been going up sharply relative to output.
Why is government different? It combines typical human hubris and incompetence with monopoly power -- in fact,  potentially total coercive power.  How to escape from this morass, now made much worse by BOcare? Well, the "perfect solution" would be:

The ideal way to do that would be to reverse past actions: repeal the tax exemption of employer-provided medical care; terminate Medicare and Medicaid; deregulate most insurance; and restrict the role of the government, preferably state and local rather than federal, to financing care for the hard cases. However, the vested interests that have grown up around the existing system, and the tyranny of the status quo, clearly make that solution not feasible politically. Yet it is worth stating the ideal as a guide to judging whether proposed incremental changes are in the right direction.
 So what does this all mean in simple easy to understand terms?

  1. Like all goods, medical care WILL (and always has been) be "rationed" -- supply and demand are a form of rationing, as are long waits. The government decides on the waits, like having less MRI machines for the country than Mayo has with waits of 12 - 18 months. My wife would likely be a quad in Canada, but their healthy people LOVE their system! (the number of healthy people exceeds the number of sick people -- so socialized medicine is politically astute ...  note "insane evil pig" above )
  2. 80/20 rule, 80%+ of medical care can be "WalMart, Target, Bloomies" levels of care -- basic physicals, high blood pressure, thyroid issues, diabetes, throat cultures, standard pregnancy/delivery -- People need to pay for 80% of their health care out of pocket, just like their groceries and gasoline.

    You buy the level you can afford when you are hurting -- and it is cheap because there is competition, and very limited liability. It is like buying normal groceries -- not steak, certainly not caviar. Just like when your car breaks or house needs a new roof, you either have savings to handle those "unexpected expenses", or you are forced to use credit. If you are really poor, you go seek state assistance, or to to the "medical shelf" (like the food shelf).
  3. When really bad things happen -- cancer, trauma, heart attack, stroke, etc, "Cirrus Vision Medicine" kicks in -- note, I didn't say "Gulf Stream, Trump's plane, or Air Force One" level of medicine. The Cirrus Vision is a very advanced JET plane ... but it isn't "snotty". You can't afford the Cirrus level either, but just like fire insurance, you pay a premium for a policy so you are not RUINED ... it costs more than your fire insurance because the odds of you eventually getting bad sick are higher, and the care is going to cost more than replacing your house.

    You DO "notice it" -- Some number, say "20% of your net income" is yours to pay. Serious illness ought to be financially like having your home burn down -- a really bad thing (which it WILL be anyway, because serious health issues are MUCH more than just financial). 
A lot of this unfortunately assumes that we re-educate people on some of the basic facts of life that our political and educational system have hidden from us so they can shear us. 

  1. "Single Payer" means that if you are a person that uses only public housing, public transportation, public health, etc today, you will likely LOVE it! If not -- like if you have your own home, car, etc, then you will also find that you need to have your own healthcare. You will pay dearly for the "public option", and THEN  unless you are REALLY wealthy, you will pay hyper-dearly for the "private option" that you actually use -- if you can afford it at all. Increasingly, many of us that bought into the old "American Dream" will finally fall into a frayed, stinking, 10-20 people to a ward slum of healthcare like the VA (the "public option" poster child), and find that we are dying in BOistan. 
  2. Single Payer" isn't ... it is "paid by all taxpayers present and future". It is one stop lobbyist stop for those getting the money. They know who to pay off, take on junkets, provide good stuff for, etc. No need to deal with slimy "customers" (patients) anymore ... they are not paying anyway! If DC is happy, it's all good. If your business ever had a "large users group", imagine a "ONE users group"! How well did your business treat the customers that were not "large" compared to the big spenders? Imagine only a single real customer that determined your entire financial picture as a healthcare provider and you will start to get the idea. 
  3. There is NO free lunch! Somebody is paying -- maybe not you, but somebody. Your neighbor, your kids, your grandkids, SOMEBODY (and likely not the "really rich guy" -- he has lawyers and tax accountants that he pays instead). When you don't understand that, most likely you AND everyone else is paying WAY more than you realize for your "free lunch", which is exactly the case for healthcare. "Free goods" are insanely expensive!
  4. NEVER insure against losses that you can self-insure for! Yes, this means NEVER purchase the "extended warranty"! Assuming that the warranty is actually going to cover things that actually might happen (a BIG assumption!), someone is betting that they will make money by you purchasing the warranty, and they have LOTS more information than you have about the transaction and odds! Just like Vegas, they are "the house", and rule #1 is that the house wins! They have to, otherwise they would not be in business!

  5. Note, this applies DOUBLE to "don't have the (federal) government pay for people's food, car repairs, or basic medicine". The government is REALLY "the house", and they will take A LOT of pounds of your taxpaying flesh as they seek to pad their pockets and buy votes to stay in power! If government MUST be involved in chairity (it ought to be neighbors and churches), then it starts LOCALLY and as failure happens, the funding needs to take longer and longer expensive trips to the state and federal capitols so that 20-30-40 cents can return to do good deeds.
  6. "The Government" is not "magic", and certainly not "god". Yes, it can promise to rob from your neighbor to give you things like healthcare, but it will also certainly charge a hefty fee for it's larceny "service". Since it is robbing though,  it WILL also rob from you, your children and your grandchildren as well. You asked it to be a robber, do you REALLY think it is going to be an "honest robber"?
  7. Robbing for a "really good reason" is still robbery. If the reason is THAT good, reasonable people will want to invest in it, or even gift the money. The corruption engendered by deciding that it is morally OK to take money from others by force fits well with the "morality" that it is OK to take the life of another person for your own convenience. When you are willing to kill for convenience, or even allow such killing,  morality is over. (killing for convenience is another name for abortion -- as in the abortion of all moral standing, meaning that if you trust any person or organization (eg US Government) that supports abortion, you are insane and deserve whatever happens to you)
  8. Once institutions are robbing people, there is no such thing as "reasonable", or "limited" because "institutions" ARE people  -- real imperfect standard issue people. Not "public servants", or some other sainted term. When your day to day job is robbing a set of people to hand the money to another set of people so they will keep you in power, you are going to want to keep some loot for yourself, and you will find a "legitimate" way ... or your union will.

    Since you have already convinced yourself that charging people vastly different rates based on income for redistribution is "moral", "progressive" even, it is much easier to see how you absolutely "deserve" a higher salary, cushy benefits like super health care yourself, full salary retirement at a young age "indexed for inflation", shorter work hours, more vacation, total job security, etc, etc) ... all of these are either "in" or "in sight" for unionized government workers see (AFSCME

The whole Friedman article is WELL worth reading. We COULD solve our healthcare issues in the next year or two -- I only hope that Trump and his advisors are looking at this sort of information! 

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