Ron Amundson’s Political Blog

One of the problems with health care costs, is regulation which protects monopolies , ie the good old boys must not be subject to competition. An $8000 medical device maker cannot compete with a $150 Iphone and custom software. I sort of like this quote “We look at determining the effectiveness of the technology — and not the cost — first,” um no… you are looking at protecting vested interests.

Granted, cheaper is not always better, and no doubt for some people, the $8000 device is a better solution than the $150 Iphone. Also, there is a concern, that if even 50% of the folks, if they were allowed, might switch to a $150 device, there no longer would be enough business to justify keeping the $8000 device on the market. Another scenario is the $8000 device might actually have to double or even triple in cost. The thing is… if the market is un-encumbered, someone might just end up coming out with a new device for $2000 that blows the $8000 unit out of the water.

There are two other issues at place in this, first is folks crying foul because they didn’t get a deal, and second is the issue of snake oil and woo.

Folks like to cry foul a lot, I bet many would rather $8,000 of their taxes go to an in-effective device than $150 towards a Iphone, being one can also run games or watch videos on the Iphone. This puritanical fairness stuff is costing our nation a fortune, and impeding quality of life for many… but horrors that little Johnny has an Iphone for his med needs, and their own healthier Bobbie is jealous because you can’t afford to get him one… but alas, you will gladly advocate spend $8000 of your tax money for Johnnys proprietary device, because he cant play games on it.

The next issue is woo and snake oil, and its a huge business. All one has to do is consider the billions spent in supplements and other alternative medicine, some of which likely works wonders, and others are just a waste of already scarce resources. Govt in its wisdom in 1976 stopped a lot of device woo with the medical device act, but alas they also stopped a lot of progress too. Govt in its wisdom came out with HSA‘s to give people more freedom, but then restricted HSA’s so much, that many even proven treatments, devices, and other health care services are prohibited from being paid for under a HSA.

Woo and snake oil are obvious concerns, less so is the puritanical notion of fairness, especially when more and more of our GDP is being sucked up by healthcare expenses. When the costs are hitting astronomical numbers, perhaps we need to take a serious look at the costs of regulations, vs the aspect of fairness, as well as the need to take personal responsibility for purchasing healthcare. Granted, no consumers could know the intricacies involved in bad engineering in a Therac 25, so some regulation is needed.

By the same token, the creation of artificial monopolies and restriction of competition has to end… or it needs to shift to something like a public utilities panel such as used for the land phone system, electricity and natural gas, if indeed it is so critical to prop up said medical device maker monopolies.

An interesting approach might tie monopolistic regulations to tort reform and tight government regulations. Ie, if you grant monopoly status, also grant some type of no fault tort insurance from the government and combine this with an insane level of government oversight to protect the public. If a medical equipment maker does not want massive government oversight and control, it doesnt need govt sponsored no fault coverage, nor goes it need govt granted monopoly or protection status. Such a policy would likely put a serious dent in the world of lobbying for protections… if you need that protection its available, but in effect, you sell your soul to the government to get it.

There has to be a level of give and take. The era of free lunches has to end, or we need to accept that the percentage of GNP going to healthcare will continue to skyrocket until its no longer sustainable. Sooner of later, if left unchecked, the house of cards is going to come crashing down.

Argh…on the whole death panel thing. Guess what, we already have them. Nearly every time an insurance companies denies life saving treatment, people die sooner than they would have they been given care. Nearly every time congress roles back Medicare funding, care is rationed to someone, and people die. Nearly every day changes to the healthcare environment remain in the status quo, people die due to lack of care. This is not rocket science.

Look at the declines in Medicare funding over the last years… every time funding gets cut, doctors accept fewer folks on Medicare assignment. Some of those folks are going to die prematurely, because care is not available to them.

Every time EMTALA kicks in for acute care, and then government drops the ball on chronic care, it costs a fortune, and folks prematurely die as a result.

Every time the # of births is greater than the # of deaths, there is less care available per person, assuming total funds spent both privately and publicly remain the same. Some folks will prematurely die as a result.

Every time an uninsured baby is born, and due to the lack of funding, the QALY for that infant may be set as low as 1/3rd the cost of a new car. Some babies who need care, will not receive any, or only the minimum required by EMTALA, and some will prematurely die as a result.

Every time a new person reaches 65 and starts to receive Medicare benefits, someone else over 65 is going to get less care, and some of those someone elses are going to prematurely die due to lack of care.

Every time a healthcare provider gets paid less than their costs of doing business, whether it be via insurance, Medicare, or EMTALA, sooner or later, said health care provider will no longer be a going concern. As a result, such payment practices foster longer term shortages in supply, and some folks are going to prematurely die as a result.

There are really only two options

1. Fess up that care MUST be rationed, and accept the moral responsibility as a society up front for doing so. Not every person can have the latest and greatest high tech uber comprehensive care, and a few people who might live had such care been given are going to die. Not every person can have even minimal care, some folks are going to fall through the cracks, and they too may die prematurely.

Or

2. Do not accept rationing of care, and do not deny life extending techniques for anyone (even multimillion dollar QALYs are allowable if patients or their families request such). Accept moral hazard, and accept the huge increases in societal costs to support such ideology.

Option 1, is the only politically feasible solution, as no way, no how, will US society ever go for the costs and moral hazard of option 2, no matter how barbaric it sounds to the rest of the world, or even some US citizens.

The question is, will folks continue to accept the current death panels as the optimum, even though it may result in their own, or their families deaths, or reductions in quality of life due to inefficiencies? Or will folks as a society work to reduce said inefficiencies to minimize the number of preventable deaths or reductions in quality of life? The status quo, as well as current legislative proposals which serve to prop up failing business and government models of healthcare are not the solution.

You know, at one time there must’ve been dozens of companies making buggy whips. And I’ll bet the last company around was the one that made the best goddamn buggy whip you ever saw. Now how would you have liked to have been a stockholder in that company? You invested in a business and this business is dead. Let’s have the intelligence, let’s have the decency to sign the death certificate, collect the insurance, and invest in something with a future. “Ah, but we can’t,” goes the prayer. “We can’t because we have responsibility, a responsibility to our employees, to our community. What will happen to them?” I got two words for that: Who cares? Care about them? Why? They didn’t care about you. They sucked you dry. You have no responsibility to them. For the last ten years this company bled your money.

From Lawrence Garfield (Danny DeVito) in “Other Peoples Money”

Yep, we can’t…we absolutely positively must prop up broken business models, privatize gain, and socialize risk, even better if we can shaft the elderly and children in the process. Case in point:

Corn Ethanol, without subsidies, its not sustainable. With subsidies, it prevents competition, ie we dont have sugar ethanol, nor switchgrass, nor other sources… We can’t let corn ethanol down, even if its greatly inferior to other ethanol sources.

Coal, absolutely, we must subsidize coal, and even railroads… instead, we send high tech solar offshore. We develop, and send the tech off shore… because we must prop up buggy whip business models. No matter the damage it causes, both health wise, and economic.

RIAA, the record industry is hosed… so rather than letting the market play out, and/or encourage new business models, the status quo must be kept in place at any cost.

Healthcare, yep, just read the Baucus bill… a major subsidy to the insurance companies, even more so than HR3200. We absolutely can’t let them compete or fail, they must be protected, and now, not only do they have protection, part, A, B, D subsidies, but they get the feds giving them new money left and right. No matter that the elderly, children, and medical providers get shafted, the insurance industry business model must succeed, even if it kills 45,000 people/year.

WallStreet… well I’ve written enough on that before.

We must keep big Ag happy, albeit at the cost of the family farm… Diversity in farming options is a must, there is no question we need to support the family farm… but when the family farm gets the publicity, and not the money, being that goes to big ag, a major rationale for ag subsidies goes right out the window.

Now, I’m not saying we should be heartless, and dump all subsidiezed businesses into chapter 7… There are orderly wind-downs, such as what has happened with military bases, Fermi-lab, and some NASA operations. Yes, ghost towns do occur as a result, but people do rebuild… This aspect of subsidizing buggy whip business models for the benefit of society is not a sustainable practice.

One good thing did happen today! $80 billion in govt subsidies were removed from the loan industry, at least in the house… we shall see what happens in the Senate.