No, you are misunderstanding the points that I make. You've said there is no demand elasticity. My point is that there can be demand elasticity, and that there should be demand elasticity, and that there is some demand elasticity. I've never said that it could be or should be 100% demand elasticity. You say that market forces don't work. I say that market forces can work, but we don't have them, except in limited cases.

You've also tried to paint this conversation as a liberal vs. conservative thing. My point is that there is irrationality on both sides. I don't see either side of the spectrum as realistic. In fact, both sides have their ideology getting in the way of clear thinking. For example, when you state there is no demand elasticity in health care, or conservatives state that reimbursements for end of year planning is akin to death panels.

Frankly, I think the health care cost crisis is so bad that we need both conservative and liberal methods to combat costs, including looking at what other countries do.

ray

You've also tried to paint this conversation as a liberal vs. conservative thing.

That was the point zakkaria was making that started this thread.That conservatives had become wooly headed theorists tied to ideological ideas that were countered by evidence.

You say that market forces don't work. I say that market forces can work, but we don't have them, except in limited cases.

I don't think market forces don't work. I see them working industries and business around the world.
I said that market forces don't exist in the case of medicine.
Not if you want to guarantee that all people have access to basic health care. And in the US, eventually everyone can get access to health care when they become emergent.
I've pointed to all kinds of obvious evidence Ray. The absence of price adveritising for 99% of services being the most obvious.What other busineses can you point to where there is an almost absolute absence of price or at least an acknowledgement of negotiation in the fee?
But the most important piece of evidence is that in most other systems in the western world that guarantee access to health care, there is some form of regulation. They've pretty much given up on market forces 35 years ago.
In the last 20 years that has meant a lower medical inflation rate and yet has also tended to produce systems with greater overall efficacy.

In fact, both sides have their ideology getting in the way of clear thinking. For example, when you state there is no demand elasticity in health care
Well, I'm a fiscal conservative. A social liberal. I've been in business my whole life. When i say there's no elasticity in the US health care system its because there isn't any significant evidence of it...
There is elasticity in cars. I see various kinds of cars offred for sale at all kinds of price points.
There's elasticity in home ownership. I see all kinds of options for prices and types of houses.
But when i need an appendectomy I don't go check the paper for the best price offered.
Its pretty simple Ray. You can offer up little anecdotes here and there but fundamentally when people need care they tend to go get it. If they are insured they don't ask questions about the cost.
There may be things like co-payments to reduce some demand, but people tend to get sick or injured without regard to whether or not they can afford to be sick or injured...
If they don't have insurance...and they are emergent, they still get treatment at the emergency room. The cost, indeed the payment isn't really discussed.
Doctors don't offer bargains for certain procedures...because it doesn't make sense. One doesn't do anything till its medically necessary ... So its largely impossible to increase your share of the market for bypass surgery by lowering your price.
These are all basic facts of life Ray. Medicine ain't like selling soup, or cars or movies. All businesses I've had exposure to first hand. People can always say no. Not now.
No matter how much you'd like it to be... the things that make price competition a reality in almost every other consumerable service or product have limited to no presence in medical services.
That this hasn't been understood when looking at why other systems ended up with forms of regulation.... is an ideological blindess.

Ricky, I respect your argument, but I don't think you have proven a thing about there being no demand elasticity. Do you have a respected economist's report? What percentage of US medical care is for emergencies, and what percentage is for minor stuff, and what percentage is preventative. Give me some data. Today there was an article in the WSJ that researchers estimate that 15% to 20% of pain meds distributed in the US are for addiction, and not pain.

I think your unwillingness to consider this statistic, or my anecdotal examples, or tort reform, or interstate insurance, or some degree of privatization, or to provide proof of your blanket statement about demand elasticity are symptomatic of liberal bias.

Faxmonkey wrote:

Doctor Fate wrote:I don't buy that. Maybe I'm too cynical, but as I said, totalitarian countries that are basically homogeneous and nationalistic tend to build that nationalism into a furor. At some point, that spills over to territorial expansion, because it is their "right" as a "superior race."

Chinas population is really not that homogenous. There are i believe more than 50 recognized (by the Chinese themselves) minorities making up 100 million people. Better yet they are actually the majority in about 50% of the Chinese territories. It's not as bad as Iran, but there's plenty of potential for inner strife on that front.

This is supposed to disprove my statement?

With a population of more than 1.3B, 100M minorities means it's not homogeneous?

Your "territorial" argument is equally spurious. What percentage of the land mass do those 50% of territories comprise? How vital are those regions? What happens if they try to flex their muscle and express their desire for self-rule?

Just because someone thinks Obama isn't the Antichrist come to destroy America, doesn't mean he's a totalitarian communist sympathiser or an anti American. There are actually people who hold more nuanced positions than represented on Fox News or talk radio.

1. Obama is not the Antichrist.
2. That doesn't mean he's not out to destroy America--the Antichrist won't do that either.
3. Zakaria is a liberal.
4. I hold positions other than those represented on Fox News or talk radio, so all of your huffing and puffing amounts to you doing precisely what you are accusing me of doing: creating a caricature.

So what would you like to do right now to stop the rise of China when they bring the knife to the fist fight ?

Apply for a permit to carry a gun?

Ray Jay wrote:I think the converse is also true. The US has China by the beatzim as well. What would happen if we stopped buying their stuff or honoring their loans? This economic co-dependency strikes me as positive and a countervailing force to the geopolitical zero sum game.

The problem is that whatever damage we could, theoretically, do to China would only hurt us. We would lose a lot of international status if we announced we would not honor our debts. Imagine how the markets would react to that bit of unilateralism. We can't stop buying their stuff--because we don't make anything.

Furthermore, whatever pain we could cause them is likely to only make them yawn. They are a police state. People protest and they wind up dead or imprisoned.

I believe America is best served if it is not dependent upon anyone.

Doctor Fate wrote:The problem is that whatever damage we could, theoretically, do to China would only hurt us. We would lose a lot of international status if we announced we would not honor our debts. Imagine how the markets would react to that bit of unilateralism.

Who says you have to act alone? Europe is a major market for China too.

We can't stop buying their stuff--because we don't make anything.

Now that is 'Anti-American'! America makes plenty. While manufacturing is about 20% of the US economy, and lower as a proportion of your output than it used to be (which is not exactly a surprise given the evolution of industrialisation and post-industrial economics), America still produces about 20% of the world's manufacturing output, which has been the level for the last few decades (so you are not in 'decline' there either - the rise of China is not eroding your position as much as you may think).

What is happening is that low-skilled manufacturing is going to places with cheaper labour. High-skilled manufacturing, and that which is not necessarily dependent on labour so much as know-how and process, is staying put. For example, the USA makes an awful lot of aeroplanes. Which are sold all over the world. Sure, you have to compete with Europe, but you always did, and you maintain the position of majority producer.

Now, manufacturing jobs are going down, but that's what happens when you improve production processes and concentrate on the high-skill and machine-produced end of the market.

Actually, I'd think that what the US needs to work on is the knowledge economy. That's where the growth will be as we become more and more a world of computers and information networks.

Furthermore, whatever pain we could cause them is likely to only make them yawn. They are a police state. People protest and they wind up dead or imprisoned.

Which does lead to the question of what it is that you would do that Obama isn't that would make a hill of beans of difference?

I believe America is best served if it is not dependent upon anyone.

Autarky is it now? It rarely occurs and isn't always a success. Any nation, even one as large as the USA, will be wanting to trade. So you will be dependent at least on having foreign partners to trade with, at the very least to buy stuff from you.

Doctor Fate wrote:

Ray Jay wrote:I think the converse is also true. The US has China by the beatzim as well. What would happen if we stopped buying their stuff or honoring their loans? This economic co-dependency strikes me as positive and a countervailing force to the geopolitical zero sum game.

The problem is that whatever damage we could, theoretically, do to China would only hurt us. We would lose a lot of international status if we announced we would not honor our debts. Imagine how the markets would react to that bit of unilateralism. We can't stop buying their stuff--because we don't make anything.

Furthermore, whatever pain we could cause them is likely to only make them yawn. They are a police state. People protest and they wind up dead or imprisoned.

I believe America is best served if it is not dependent upon anyone.

Those are all fair points. Our economy is very vulnerable, but our Republic is secure as long as we don't bankrupt ourselves, and maybe even if we do.

However, China's economy is vulnerable, and so is their government. Totalitarian regimes have a tendency to explode or implode, eventually. Look at the Soviet Union or Egypt. In some ways their vulnerability may be more acute than our own. Democracies adapt. Dictatorships do not.

Ray

I think your unwillingness to consider this statistic, or my anecdotal examples, or tort reform, or interstate insurance, or some degree of privatization, or to provide proof of your blanket statement about demand elasticity are symptomatic of liberal bias

I think your unwillingness to retain what I’ve said before suggests that you aren’t actually following my arguments.

First torte reform. I said just a few posts ago that torte reform was worth pursuing. (In other boards I’ve said generally not just specifically in medical care.) but it won’t amount to a lot ray.

Citation below:

According to the actuarial consulting firm Towers Perrin, medical malpractice tort costs were $30.4 billion in 2007, the last year for which data are available. We have a more than a $2 trillion health care system. That puts litigation costs and malpractice insurance at 1 to 1.5 percent of total medical costs. That's €™s a rounding error. Liability isn't€™t even the tail on the cost dog. Its€ the hair on the end of the tail.

Q.

You said the number of claims is relatively small. Is there a way to demonstrate that?

A.

We have approximately the same number of claims today as in the late 1980s. Think about that. The cost of health care has doubled since then. The number of medical encounters between doctors and patients has gone up and€” and research shows a more or less constant rate of errors per hospitalizations. That means we have a declining rate of lawsuits relative to numbers of injuries.

source: http://prescriptions.blogs.nytimes.com/ ... are-costs/


Interstate health insurance competition is regularly cited as a way to decrease health care costs. It’s a real nice conservative theory. More competition, prices are affected. The problem is that in the cold light of facts that doesn’t occur. Start with the theory that insurance companies all operate to maintain a margin of profit that is fairly standard for the controlling corporations…Then, I'll let this particular blogger answer :

1. Does the cost of health insurance really vary that much from state to state?

Yes.

2. What causes this price difference?

The majority of the difference has to do with differences in cost of living but some of it has to do with state regulations. There are a handful of health insurance providers that provide most of the health insurance in this country and they are present in all 50 states and the district of Columbia, if there is a lack of competition in health insurance in any state, then that same lack of competition would exist at a national level.

3. Even if Geico isn't offering national health insurance, what's to stop them from simply working in all states, is United Health not allowed to work in certain states?

Outfits like United and Wellpoint operate in all jurisdictions.

5. What kind of a price reduction could we reasonably expect if insurance companies are competing nationally.

Comparing apples to apples, you would have no reduction in prices but a national market would allow companies to operate under very light regulations and allow them to offer barebones plans that don't actually cover anything for very very low prices.

6. The idea that increasing competition will reduce costs seems to imply that right now the insurance companies in my state are raking in massive amounts of profits thanks to their monopoly. I was under the impression that they aren't making much profit, so where are the price reductions going to come from?

They won't come from increasing competition if they come at all.

Liberals/Democrats, as a special favour to me, try to avoid pouncing. You have a nice win, enjoy it. I really am curious to understand how all this is supposed to play out. What I'd love to know from Democrats is why they are against this form of legislation.

Mostly because it either strips out consumer protections for people buying health insurance, if it simply did nothing then they would just let the Republicans have it and claim to be bipartisan but it undercuts some very important consumer protections in many states.

Damui Ajashi

Let me also add to Damu’s blog that the increased number of insurance providers actually increases the cost of administration for doctors and hospitals. In one payer Canada administration costs at hospitals for dealing with insurance claims are an eighth what the average doctor and hospital incur in the States. More over, disputed claims are as much as a quarter of all claims in the US and are rare in Canada. (Plus with a one payer system, fraud is caught much more easily.) So in effect, competition has create higher costs... doesn't it seem logical that even more competition would generate even higher administration costs?

By the way, I also love that Steve, a big states rights guy, wants interstate competition that would eliminate the states ability to regulate insurance schemes in their jurisdictions. He’s wonderfully contradictory.


In short Ray, there is abundant evidence that there already is interstate competition and abundant evidence that it hasn’t lead to lower insurance rates. Nice in theory….Not proving out its what Zakkaria illustrated...theoreies not borne out by evidence. It goes back to the magical beleif in the wisdom of the markets.. (Sometimes the marekts aren'[t so wise and the practioners in those markets need boundaries).

As for your anecdotes. They are what they are. I can’t prove or disprove anything based on your anecdotes. You may or may not be reporting accurately and I have no way of independently analyzing your report. Its kind of like debating climate change based on today's weather. to me they merely point out that you8r current American experience with health care can be kinda crappy. Even though it costs so much. And i wonder why you're willing to enbdure that insecurity when there are better solutions...

But again ray; your arguments are base upon theories. I’ve provided the supporting evidence for torte reform and agree with you that it should be pursued. The “increased competition” theory is proven not to be true byu current evidence until and unless until you provide evidence that it does actually work to lower costs. The blogger above demonstrates why it doesn’t (and why in effect there already is interstate competition). All you need do to refute him is compare Illinois (where 20 companies compete) with other states where there is less competition. I tried. Its incredibly convoluted and suggest that in effect there is no change in prices of health insurance. But you have a go. In all the conservative claims about competition none actually point to examples in todays world that support the notion.

I’m a horribly conservative person when it comes to fiscal matters. I believe you deliver the service or product as efficiently and effectively as you can. The world wide evidence and the US evidence demonstrates that fiddling with “market levers” isn’t going to effect significant change in how health costs are managed in your country.

Non-sequitars like

Today there was an article in the WSJ that researchers estimate that 15% to 20% of pain meds distributed in the US are for addiction, and not pain

.

Add nothing.

How do you know that the same isn’t true in Canada (it probably is) or any other European market? The cost of those drugs is still remarkably higher in the US. Besides,
Besdies, You can’t expect that anything is going to significantly alter this pattern of behavior in the near future, so why bother to bring it into the conversation? “Theoretically” if you cut out that 20% of addiction use you could cut costs 25%. But here’s your wooly headed theory again.

I’ll go for the proven method of reducing drug costs over your wooly headed theory, with no practical way of getting there, any day. The proven method is regulation/collaborated pricing …And its proven to work Ray….

rickyp wrote:By the way, I also love that Steve, a big states rights guy, wants interstate competition that would eliminate the states ability to regulate insurance schemes in their jurisdictions. He’s wonderfully contradictory.

That's contradictory? Richard, you are really acting like . . . well, like you do.

That's just a ridiculous point from a ridiculous person.

Allowing companies in one State to compete across State lines . . . wow, how radical! It's almost like we would not have 50 different countries--able to charge tariffs to products produced in other States.

Oh yeah. That IS THE LAW!

What is wrong with you?

As "proof," you cite a "blogger." Well, that's it then. Case closed.

In short Ray, there is abundant evidence that there already is interstate competition and abundant evidence that it hasn’t lead to lower insurance rates.

Here's a bit from Newsweek. Now, the article says competition across State lines won't work and it gives reasons why. I would argue those reasons are absurd and easily preventable (like how about simply requiring full disclosure?).

So, why did I link it? Because it demonstrates that there is NOT "abundant evidence that there already is interstate competition." Mr. Klein, one of your idols, is claiming it won't work. However, he is making it from the perspective that it currently DOES NOT EXIST.

I use big letters hoping they will penetrate your apparently thick skull.

It goes back to the magical beleif in the wisdom of the markets.. (Sometimes the marekts aren'[t so wise and the practioners in those markets need boundaries).

And, in this case the markets are subjected to the Berlin Wall.

For the 500th time, we don't know if the free market would work in medical insurance, because we've not tried it. "Free market" is not even close to describing the medical insurance market. If we had gasoline on the same basis, well, we know what would happen--it would cost more.

For example, gasoline sold in California has to be refined in California. Who pays more for gasoline--California or other States without such rigid regulation?

Answer: California.

As for your anecdotes. They are what they are. I can’t prove or disprove anything based on your anecdotes.

Frankly, you would have to be able to grasp English in order to prove or disprove Ray's anecdotes. Given your constant carping about the failure of the free market where it does not exist, your inability to grasp medical insurance cannot be sold across State lines, and your tenuous hold on reason, there is little reason to be optimistic.

All you need do to refute him is compare Illinois (where 20 companies compete) with other states where there is less competition. I tried.

Are companies outside of Illinois allowed to compete in Illinois? Is the Illinois market free and unfettered by State regulations and restrictions?

In all the conservative claims about competition none actually point to examples in todays world that support the notion.

Please. Point to a State that offers a free market for health insurance.

I’m a horribly conservative person when it comes to fiscal matters.

Right. I think what you mean to say is that you think you're conservative on fiscal matters.

One thing is clear: you have no capacity for understanding what a free market is, but an endless capacity for caricature.

danivon wrote:Any nation, even one as large as the USA, will be wanting to trade. So you will be dependent at least on having foreign partners to trade with, at the very least to buy stuff from you.

There is a difference between trade, generally, and the dependency we've developed on China. What do you suppose would happen if China simply said, "We're done loaning you money"?

You want to know what Obama can do? Cut spending. Propose a plan to get our economy on a path to stabilization. Stop his demagogic nonsense.

In short: act like he's the President of the US, instead of an insipid, third-rate party hack.

Because it demonstrates that there is NOT "abundant evidence that there already is interstate competition." Mr. Klein, one of your idols, is claiming it won't work.

Actually he doesn't claim that there isn't competition in states from out of state companies. (He wouldn't do that because he's probably aware that 6 companies compete in all 50 states, sometimes under different marketing names...)
he's simply saying that the plan to have insurance companies operate under a chosen state law nationally, would fail. Read again. What he's saying is if the standards for Deleware became the easiest for an insurance company to follow thats what they would choose. never mind that it has the fewest protections for consumers, or the loosest law binding the company to its policies. He's saying it would be a rush to the lowest standards.

Do you disagree with the concept that states should be able to set their own standards Steve? Should they be forced to acept the regulations and standards for insurance from another state?
And would you then apply that to other areas..like say marriage? Say drinking or driving age?
The canard about increasing competition by allowing an insurer to operate nationally under the loosest possible regulation is not a rush to greater efficiency. Its simply to provide insurance companies freedom from what some of them consider encumbrances upon the way they'd like to do business, and what consuemrs generally consider to be protections from fraudulent or deceptive practices or underfunded and mismanaged companies. If Deleware didn't think any of these things were worthwhile, you'd have every company jumping on board to incorporate there...
Full disclosure? Read your credit card agreement Steve. Feeling fully informed are you? Forget that, read your curent insurance policy. Most people are unaware of the terms for reimbursement. Things like life time limits...
Why? Some states don't do more than ask for the mice type disclaimer...

rickyp wrote:Do you disagree with the concept that states should be able to set their own standards? Should they be forced to acept the regulations and standards for insurance from another state?

Why should a State force me to accept their standard? If a State outlawed abortion, what would you say?

Oh yeah, abortion is protected by the Constitution *cough*, but my capacity to determine my own health requirements is not? That's not privacy?

And would you then apply that to other areas..like say marriage? Say drinking or driving age?

If I choose a health insurance package that meets my needs, how does that negatively impact anyone?

I've always said marriage is a State issue. Insurance is a personal issue. That's why we don't mandate life insurance.

Well, insurance SHOULD be a personal issue. How is it that the "right to privacy" covers abortion, but not medical insurance? How is it that Congress has set up all manner of "privacy" laws to protect my medical records, but can't be bothered to extend my privacy to my choice of insurance?

The canard

Richard, you have earned your new nickname *see above.*

This is an all-time low:

the canard wrote:(He wouldn't do that becasue he's probably aware that 6 companies compete in all 50 states, sometimes under different marketing names...)

They don't "compete." They "conform."

They have to conform to the regulations of each State. States require all manner of things that I have no desire to buy. Should everyone have to buy "cadillac" coverage?

If so, why? If I'm 21, should my coverage have to cover everything that a 70 year-old in poor health has?

Doctor Fate wrote:There is a difference between trade, generally, and the dependency we've developed on China. What do you suppose would happen if China simply said, "We're done loaning you money"?

You'd say "we're done buying your stuff", I guess. The USA does have other means to borrow (a lot of them being domestic: public debt = private investment)

You want to know what Obama can do? Cut spending. Propose a plan to get our economy on a path to stabilization. Stop his demagogic nonsense.

In short: act like he's the President of the US, instead of an insipid, third-rate party hack.

And that will stop China from growing faster than you? I was asking about policy to China. We already know your opinion on domestic fiscal policy (oddly, since you hardly ever mention it more than five times per thread, we also know that you think Obama's a demagogue)

Re the subject of controlling health care costs. Here's a story that broke yesterday:

http://weblogs.baltimoresun.com/busines ... e_are.html

If you Google unnecessary stents you'll see that this is an ongoing issues. Basically the incentives of our medical system are such that this sort of thing seems to happen across the board. My personal experiences (AKA anecdotes) seem to be repeated along every medical expense category. There seem to be so many forces causing an increase in medical costs. I still believe that if the patient had skin in the game, they would be more conscious of costs which would also reduce waste and unnecessary, expensive, and sometimes harmful procedures. There has to be something that balances the doctors desire to avoid a lawsuit as well as his motivation, conscious or otherwise, to sell more product.

Part of the disconnect in this conversation is that there are two types of regulation: regulations that require insurance companies to provide certain services and regulations that seek to limit procedures and/or control prices. In Mass we have a lot of the former which is driving up prices. For example, Massachusetts requires insurance companies to include mental health and substance abuse as a treatment. Maybe that's a good thing, or maybe not. But the result is that even though I don't need that stuff, it is covered and my premium is more expensive. Similarly, under Obama's health plan the feds require that dependents living at home who are 26 or younger MUST be covered. I have to pay for that even though my kids are in elementary school.

There are other types of regulation that control costs. I have mixed feelings about that, as I've expressed. On the one hand, these costs are so out of control and so destructive, that we have to get them under control. On the other hand, there are always unintended consequences to regulation.

I do agree with the concept of comparative effectiveness research which tries to get a handle on various procedures, including what works, what doesn't, and how do you get the most bang for your buck. Republicans have blocked this, and Obama didn't pursue it enough. I do know doctors who hate it because they claim medicine is too individualized. But I believe that cost has to enter the equation, or the economics of escalating US health costs won't change.

I still believe that if the patient had skin in the game, they would be more conscious of costs which would also reduce waste and unnecessary, expensive, and sometimes harmful procedures. There has to be something that balances the doctors desire to avoid a lawsuit as well as his motivation, conscious or otherwise, to sell more product.

Fundamentally this assumes that patients have the ability to understand, have the time and wherewithal to be informed and can therefore make important decisions about what's necessary and unnecessary in their care...
I submit that without the specialized education that consumers will always be incapable of making good decisions in this.
You can't agree with the concept of effectiveness research on one hand, and equally support the notion that "empowered consumers" is the way to cut costs...

Why? Because "effectiveness research" requires that epidemiologists and medical practioneers examine their practices in detailed, disciplined fashion. And even then the judgments about effectiveness take years... Its very important that effectiveness be a constant to continually improve the health care system or medicine anywhere.
But uninformed uneducated consumers are really a part of this, except as data respondents...

Medicare Part D was designed to make users more responsible for costs and it was expected that as a result the costs would diminish. They went up the same as the rest of Medicare, as already noted and linked to in this thread...
That's hard evidence Ray, as opposed to your theory...