Common Sense Health Care: A Guest Post

Earlier this week, we ran a Q&A with Julie Salamon, author of the new book Hospital: Man, Woman, Birth, Death, Infinity, Plus Red Tape, Bad Behavior, Money, God, and Diversity on Steroids. Given the richness of her book and the primacy of healthcare as a topic of interest, we’ve asked Julie to guest post here, and she has obliged.

(Disclosure: Julie once reviewed a book of mine; and yes, if it had been a bad review I would have remembered …)


Common Sense Health Care

A guest post by Julie Salamon

Last week a young friend, an international student at N.Y.U., received an upsetting call from a bill collection agency. She was told she owed a $1,089.50 balance on an emergency room visit, the part her insurance didn’t cover.

She had a high fever at night. The resident advisor in her dorm took her to the N.Y.U. emergency room, which accepts her student insurance. After a long wait, a doctor saw her, gave her Tylenol, and sent her home.

I called the insurance company, which had no record of any claim being filed or turned over to the collection company. On hearing this, the collection company told us “to sit tight” while the two companies deal with it.

“What does it mean, to sit tight?” the foreign student asked. “To do nothing,” I said. “To wait.”

“Crazy system,” she said.

As problems go, the $1089.50-plus tab for a quick fix was microscopic in the face of the $2.3 trillion spent on health care in the U.S. last year — about 16 percent of the GDP compared with 7 percent in 1965. But it was a big bill for my young friend.

Sitting tight in our crazy health care system doesn’t cut it anymore. A useful June election tracking poll from the Henry J. Kaiser Foundation reports that 25 percent of Americans see paying for health care costs as a serious problem — for them.

Our market economy approach to medicine has to change. There is “a fundamental illogic to trying to contain costs in a market-based system,” writes Dr. Marcia Angell in a thoughtful article about health reform in the April 21 issue of The American Prospect.

Dr. Angell, a senior lecturer at Harvard Medical School and a former editor-in-chief of The New England Journal of Medicine, was called “an unlikely muckraker” by The New York Times in 2004, when she published a powerful expose of the drug companies.

Her position on health reform appeals not to corporate interests but to common sense and the desire for good medical care, making it appear radical:

“The only workable solution is a single-payer system (there, I said it), in which everyone is provided with whatever care he or she needs regardless of age and medical condition,” she writes. “There would no longer be a private insurance industry, which adds little of value yet skims a substantial fraction of the health-care dollar right off the top.

“Employers, too, would no longer be involved in health care,” she continues. “Care would be provided in nonprofit facilities. The most progressive way to fund such a system would be through an earmarked income tax, which would be more than offset by eliminating premiums and out-of-pocket expenses.”

Until then, will state and federal lawmakers be willing to rein in a system that dishes out Tylenol at $1,089.50 a pop?

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  1. Luis says:

    Hi, I am a spanish reader of this blog, and my only contact with an american hospital was when I caught a cold, they gave me Tylenol for a chepar price: $ 279. It seems ridiculous for me because in Spain public hospitals have even bettere resources than private ones. I still have a private insurance myself, but just because its price isn´t as abusive as in the States. The Government either have to find a more eficient way to offer health care, or they will have to provide it themselves…

    For me the best solution would be the first one, with, say, subsidized insurance for the poor. The government taking complete care of it should be the last solution, but there seems to be no solution at all at the momment.

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  2. DJH says:

    I’m not sure I like the idea of government-managed healthcare … bureaucrats deciding whimsically who lives, who dies, who gets treatment for something and who must live with a painful condition ’cause we won’t pay for that. I mean, we already have the Religious Right fighting HPV vaccines for moral, not health-related, reasons; if they were in charge of our healthcare, would they also decide to permit other diseases to remain in the population, in order to discourage other “immoral” activities?

    No, that the bureaucrats in charge of healthcare would make decisions based on metaphysics or ideology, rather than medicine, is not something I find attractive.

    Unfortunately, all the talk about “market solutions” to the healthcare problem has one massive, screaming flaw: Not all healthcare is subject to market forces! Markets work when people can shop around and make purchase decisions weighing price, quality, etc. Unfortunately this does not work with healthcare, since in many cases it’s a need, not an option, and shopping around is not always possible or even practical.

    Example 1: You’re having a heart attack. Under the “market” model, you shop around … first to ambulance services, then to hospitals, then to doctors. Once you’ve compared price, experience, location, etc. you make a choice. But — by the time you’ve made all those calls, you’re already dead from the heart attack! It doesn’t work. You CAN’T shop around in such cases. Instead, you call 911, get picked up by the ambulance that’s available, and get taken to the ER that has room for you and is close by. Shopping around not only cannot help you in such cases, it could cost you time (and therefore your life).

    Example 2: You have a chronic condition like hypertension, requiring periodic doctor visits (say, 4 a year). You could shop around to doctors, 4 times a year, and select a new one each time. Even though in such cases you DO have the luxury of shopping around, unlike the heart-attack example, it’s not a good idea. Why? Because your medical records would end up being shuttled all over town, you’d be in the care of a new doctor each time, and you’d have no long-standing relationship with any of them. None of these are good, and any or all of them could endanger your health needlessly.

    I’ll grant that SOME healthcare CAN be regulated by market forces … e.g. things like plastic surgery and other one-time procedures in which life and death are not in the balance. It CAN work in those cases. But it cannot work overall. Anyone who says healthcare can be fixed by “market forces” is, therefore, lying.

    So what is the solution? I’m not sure there is a good one. What I do know is that “market forces” cannot do it, and healthcare-by-bureacratic-fiat is not something that can be trusted.

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  3. schadenfreude says:

    Anyone who thinks that the American Health Care System is free market knows very little about the American Health Care System or doesn’t understand what is meant by “free market”. The current system is heavily regulated by the government and the employer-insurance company relationship was formed when the government rewrote the tax laws to allow employers to pay for health insurance with pre-tax dollars. We should try a more market-based approach before giving more control to the government/insurance/medical cabal that screwed the system up in the first place.

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  4. Crabhands says:

    After hearing about the issue of health care and money in the USA over the last dozen or so years… single-payer is what it always comes down to.

    People just don’t want to accept that.

    Single-payer. Time to get on board.

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  5. Observer says:

    So all doctors would be paid the same, irrespective of quality? I am not sure who would complain more, doctors or patients? Would patients get to choose their doctors? How? Just who will deal with issues related to abortion, birth control, HPV vacine, etc.

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  6. wintermute says:

    “I’m not sure I like the idea of government-managed healthcare … bureaucrats deciding whimsically who lives, who dies, who gets treatment for something and who must live with a painful condition ’cause we won’t pay for that.”

    How do you feel about privately-employed bureaucrats “deciding whimsically who lives, who dies, who gets treatment for something and who must live with a painful condition ’cause we won’t pay for that”? Because I’m not sure Ic an see a difference between the current system, and what you’re attacking…

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  7. Josh says:

    To DJH – most of us need food too, yet markets seem to work pretty well there. The reason is that we do not wait until we are starving to buy our food. We buy food when we’re not starving so that we can take time to shop around (or at least have the option to do so), and then consume it when we are starving (or nearly).

    The analog in medicine is to shop around now for a doctor (or ER) that will guarantee to treat you at a future time for a set price. Just like with food, you do the shopping when you can afford to shop around (i.e. before the heart attack) and consume the service when you need to.

    In some ways, this is what private insurance is. You pay a fixed amount and they agree to treat you (or really to outsource the treatment to a doctor) when you need treatment.

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  8. Some Random Economist says:

    Costs are going to be contained by a system that allows anyone to consume as much health care as they want without paying the costs of their health care choices? And that’s “common sense”?

    Please explain.

    Would this logic apply to other insurance markets? Would we have better/cheaper car insurance if no one had to pay their own premiums and any damages and injuries caused were paid for by the government?

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