[mike777]

helene_t, on May 30 2007, 02:23 PM, said:

mike777, on May 30 2007, 09:18 PM, said:

If you plan is more efficient, great, prove it. If the opportunity costs are lower, fine prove it or at least give some argument other than babies are dying now and your best friend died.

Peter has mentioned several times that the Medicare non-claim overhead is 2%, compared to some 15-40% for commercial insurance plans. What more do you need?

This has little if anything to do with opportunity costs.


Again I will let the forum economists tell their veiws on opportunity costs.

As a noneconomist opportunity costs are well... let me back up and discuss the Law of Demand first.

My understanding of the Law of Demand is that there is an inverse relationship between the price of a product and the amount of a product consumed. If the price of a product goes up, expect the consumption of the product to fall. If the price falls, expect the consumption to go up.

Prices are not only paid in dollars; a price can just be something a person gives up in order to get something else..an opportunity cost.

Non overhead claims could be zero and you still have opportunity costs compared to the present system. You seem to claim there is none or less based on this one stat...huh????// Silly ok.....

[pbleighton]

Quote

My answer is whatever you like it to be. I have no idea what you are talking about and I am not arguing with you. As I said I have no interest in the details.

Then why did you ask:

Quote

Just tell me two things about it:
1) The opportunity costs involved in your plan versus our present system. What are they and how did you measure them?
2) How are you going to combat rent seeking behavior? What rent seeking behavior will come out of your plan and how will you fight it? I assume you will fight it.

On the one hand you are not interested in cost and efficieny, on the other hand you are. I don't understand.

Peter

[mike777]

pbleighton, on May 30 2007, 02:34 PM, said:

Quote

My answer is whatever you like it to be. I have no idea what you are talking about and I am not arguing with you. As I said I have no interest in the details.

Then why did you ask:

Quote

Just tell me two things about it:
1) The opportunity costs involved in your plan versus our present system. What are they and how did you measure them?
2) How are you going to combat rent seeking behavior? What rent seeking behavior will come out of your plan and how will you fight it? I assume you will fight it.

On the one hand you are not interested in cost and efficieny, on the other hand you are. I don't understand.

Peter

Peter I guess you did not even bother to read my essay on rent seeking and my example about medicare, you just keep asking me to defend your proposal.

I am not defending the current sytem ok..

[mike777]

pbleighton, on May 30 2007, 02:18 PM, said:

Quote

The current system is going with perverse incentives, and yes incentives matter, big time.  With the current system of self-referral it's not clear if new technology will actually save money. Doctors can prescribe tests all day long and then perform them for fat fees. They can run and get reimbursed for tests galore while Medicare and DRG's Diagnostic related groups help limit payments. The procedures are spelled out in excruciating detail at the Department of Health and Human Services Center for Medicare and Medicaid Services with prices set by who knows.

Dr. laurence Baker at Stanford says new tech and increased medical spending is interrelated. You invent a new scanner and medical spending goes up. Health is better, but costs are not down. New technology drives more spending. It's hard to quantify better health.

Since the expense is in the catastrophic end of the curve, heart, stroke and cancer the real answer's got to be there somewhere.

This may surprise you, Mike, but I agree with you on this.

The government spent almost a million dollars caring for my grandmother after she had lost the ability to recognize anyone.

The mother of a friend died a terrible, very expensive private insuror-sponsored death in a very low chance of success treatment for her advanced lung cancer.

Meanwhile our infant mortality rate is more than 50% higher than the rate in the Czech Republic. That's over 80,000 extra dead babies every year.

Nice priorities we have.

But as you say, that's politics.

Peter

ok

[helene_t]

Mike, you said:
"I am not attacking your plan I am asking about costs."

The overhead is 2%, as has been stated many times. That may not be the end of the story but at least it's a number that is easy to compare to overheads of alternative plans. One might wonder what additional costs you might be wondering about. But now you write
"I have no interest in the details."

hmmmm .......

[mike777]

helene_t, on May 30 2007, 02:44 PM, said:

Mike, you said:
"I am not attacking your plan I am asking about costs."

The overhead is 2%, as has been stated many times. That may not be the end of the story but at least it's a number that is easy to compare to overheads of alternative plans.  One might wonder what additional costs you might be wondering about. But now you write
"I have no interest in the details."

hmmmm .......

Yes Helene I am talking about opportunity costs,,not overhead costs..sigh...

I will try one more time but please read my short essay.

If you spend tax dollars on health care and not on Hurricane prevention that is an opportunity cost. Some number are saved in health care while some number die in hurricanes..It has nothing nothing to do with overhead costs.

You cannot just assume there is enough money to go around for everything.

You cannot just assume if overhead costs are lower, that overall spending on health care will decrease leaving money for hurricane relief.
See my essay on Law of Demand and price, please.

Of course Peter's plan may very be better, I do not know and I am not saying No, ok If his single payer plan is the answer..buy it.

[pbleighton]

Quote

Yes Helene I am talking about opportunity costs,,not overhead costs..sigh

Why are you interested in one and not the other?

Peter

[hrothgar]

BTW...

The New Republic had a decent debate about health care about a month and a half ago.
I'm going to post some URLs that you can use to access each "day" of the debate. If you try to use the links on TNR's web site you'll (probably) run into some issues with the subscription system

Day 1
http://www.tnr.com/d...hngratzer041607

Day 2
http://www.tnr.com/d...hngratzer041707

Day 3
http://www.tnr.com/d...hngratzer041807

Day 4
http://www.tnr.com/d...hngratzer041907

[mike777]

1) I cannot read any of this, it keeps asking me for a login. Perhaps I am doing something wrong.

2) Btw in full disclosure I put alot of the family money into a broad spectrum of health care stocks decades ago and more all the time. So I may have a profit bias here. Whatever way the winds blows my guess is inflation adjusted spending in this broad field will go up, not down. I guess in a fashion you could say I bet the house, but that is real estate, a different asset class and a mixing of my metaphors.

[hrothgar]

mike777, on May 30 2007, 11:19 PM, said:

1) I cannot read any of this, it keeps asking me for a login. Perhaps I am doing something wrong.

2) Btw in full disclosure I put alot of the family money into a broad spectrum of health care stocks decades ago and more all the time. So I may have a profit bias here. Whatever way the winds blows my guess is inflation adjusted spending in this broad field will go up, not down. I guess in a fashion you could say I bet the house, but that is real estate, a different asset class and a mixing of my metaphors.

Bother...

For whatever reason, the TNR system lets you accessing information if you come in from Google, but blocks it if you directly input a URL.

If you go to Google and search on

new republic health care debate day 1

You'll get to the first article

[mike777]

Btw we have a spirted discussion of reforming health care but never really defined our goal.
I will give it a shot.

The goal is to:
1) Delivery more health care( quantity) than now.
2) At an average lower cost than now.
3) HIgher quality than now.

The only way I can think of is to scale health care somehow or way which is why I harp on that word so much.

When I think of scaling I think of Moore's law and computers/software.
How can we apply Silicon Valley to health care?
It just seems we need to end Medicine as we know it or think of it today to accomplish these goals.

[pbleighton]

Quote

The goal is to:
1) Delivery more health care( quantity) than now.
2) At an average lower cost than now.
3) HIgher quality than now.

One reason our discussion is that you left out my PRIMARY goal, universal coverage. 40 million are uninsured, without either Medicare, Medicaid, employer-sponsored group insurance, or individual policies.

Opinions vary. IMO is it a national shame.

Peter

[Winstonm]

This may be a little off topic but one of the reasons I cannot side with either conservatives or liberals is the mindset that only the methods they support are correct. In my views, some things are better done by a centralized government intervention while other things are better handled by private sector lassez faire.

Peter's point is well taken that compared to other industrialized nations the U.S. has a horrible infant mortality rate. The significance of infant mortality is the availability of pre-natal care. The implication of this low number means an inability on a large sacle to afford pre-natal care.

When as issue is so basically vital to each person within the society, then it should be up to the society to create a method of universal care. This is where a centralized approach with regulatory power is superior to the open market approach. To extend the thinking, although an open market approach may actually lower costs on the low end it also lowers the low-end care received - consider the "low cost" doctors the "quacks" who the poor must see versus the high-paid experts to which only the rich have access.

As for details, I am in favor of Peter's ideas but I might add something along the lines of a fixed cost for a basic health insurance package with a sliding scale of how much the government contributes verses how much the individual contribute.

This would give everyone access to a minimum health care that included pre-natal care yet allow others to keep what they have now and for the better off to pay more for better coverage. In essence, this would be a federally subsidized basic insurance package that each insurer is required to offer - we'll take the money to pay for it from the defense budget, just to piss them off.

[mike777]

pbleighton, on May 30 2007, 04:02 PM, said:

Quote

The goal is to:
1) Delivery more health care( quantity) than now.
2) At an average lower cost than now.
3) HIgher quality than now.

One reason our discussion is that you left out my PRIMARY goal, universal coverage. 40 million are uninsured, without either Medicare, Medicaid, employer-sponsored group insurance, or individual policies.

Opinions vary. IMO is it a national shame.

Peter

Great point and a perfect example of what may verywell be competing goals or priorities.

Please read nothing in this discussion to say your goal should not be most important or at the expense of the other goals.

If I understand your post, your goal is to increase the supply ( quantity) of health care. In this case to 40 million more people. You want to increase it now or very very soon, not years and years.

Can you understand the concern how this may vastly negative impact goals two and three. At least without some huge science fiction gain from scalability in the next decades?

I would go further and say the debate seems to be just on your one point and the opposite side fears that prices will sky rocket and quality will decrease drastically or some combination of the two.

[Winstonm]

Quote

It just seems we need to end Medicine as we know it

Seems many other countries have found a way to provide universal health care for their citizens - but, of course, most of them ended the need for war as we know it.

[mike777]

Winstonm, on May 30 2007, 04:11 PM, said:

Quote

It just seems we need to end Medicine as we know it

Seems many other countries have found a way to provide universal health care for their citizents - but, of course, most of the ended the need for war as we know it.

Excellent point, we do spend alot on war that with the opportunity cost of saving Amercan lives through health care spending. Other countries do not.

Also please note another opportunity cost is much higher rate of unemployment in France which was cited as a good country to copy. That means people do not have money or jobs to put a roof over their head or food on the table...they do appear to have good health care in France. but the article I cited said France is not efficient. I have no idea of the true facts of French health care.

In any case please do look at other countries and see who we should copy and at what cost.

[pbleighton]

Quote

If I understand your post, your goal is to increase the supply ( quantity) of health care. In this case to 40 million more people. You want to increase it now or very very soon, not years and years.

Can you understand the concern how this may vastly negative impact goals two and three.

I understand that people are concerned.

I disagree emphatically that it would do so.

The cost per person should be lower with decreased overhead. I know this makes people's heads hurt, but it is real.

There should be no decrease in quality. There would be (under my plan) no rationing, no government ownership or control of doctors' practices or medical/drug companies. This is basic insurance, not health care. People would be free to buy supplemental policies and/or purchase additional/more expensive care with cash.

Peter

[mike777]

pbleighton, on May 30 2007, 04:17 PM, said:

Quote

If I understand your post, your goal is to increase the supply ( quantity) of health care. In this case to 40 million more people. You want to increase it now or very very soon, not years and years.

Can you understand the concern how this may vastly negative impact goals two and three.

I understand that people are concerned.

I disagree emphatically that it would do so.

The cost per person should be lower with decreased overhead. I know this makes people's heads hurt, but it is real.

There should be no decrease in quality. There would be (under my plan) no rationing, no government ownership or control of doctors' practices or medical/drug companies. This is basic insurance, not health care. People would be free to buy supplemental policies and/or purchase additional/more expensive care with cash.

Peter

Peter if you claim your plan does:
1) increase 40 million units of health coverage.
2) at an average per person lower cost, I assume the overall cost goes up yes?
3) quality stays the same.

Sign me up.

a couple of more questions.
1) I assume the overall cost goes up alot. 40 million times average cost per person. Where does that money come from?
2) Quality stays the same, for how long and what incentives are there for future quality improvements in your plan?
3) Who determines price and how?
4) How do you handle the overusage issues?

[Winstonm]

mike777, on May 30 2007, 04:13 PM, said:

Winstonm, on May 30 2007, 04:11 PM, said:

Quote

It just seems we need to end Medicine as we know it

Seems many other countries have found a way to provide universal health care for their citizents - but, of course, most of the ended the need for war as we know it.

Excellent point, we do spend alot on war that with the opportunity cost of saving Amercan lives through health care spending. Other countries do not.

Also please note another opportunity cost is much higher rate of unemployment in France which was cited as a good country to copy. That means people do not have money or jobs to put a roof over their head or food on the table...they do appear to have good health care in France. but the article I cited said France is not efficient. I have no idea of the true facts of French health care.

In any case please do look at other countries and see who we should copy and at what cost.

It really is about priorities. Is our desire to provide health care for 40 million Americans greater than our desire fior the results of other government spending?

[hrothgar]

mike777, on May 30 2007, 11:46 PM, said:

Btw we have a spirted discussion of reforming health care but never really defined our goal.
I will give it a shot.

The goal is to:
1) Delivery more health care( quantity) than now.
2) At an average lower cost than now.
3) HIgher quality than now.

The only way I can think of is to scale health care somehow or way which is why I harp on that word so much.

When I think of scaling I think of Moore's law and computers/software.

You are confusing a number of different issues:

In general, when Economists use the expression "Scale" they are discussing "Increasing Returns to Scale" or "Decreasing Returns to Scale".

Lets assume that you have some production process where widgets production is a function of Capital (K) and Labor (L).

Widgets = F(K, L).

Lets assume that we increase the amount of Capital and Labor used in the rpduction process by some value X. (X > 1)

Increasing returns to scale occurs when

X * F(K, L) < F(X*K, X*L)

Constant Returns to Scale occurs when

X * F(K, L) = F(X*K, X*L)

Decreasing Returns to Scale occurs when

X * F(K, L) > F(X*K, X*L)

There is also a notion of the Minimum Efficient Scale of Production. The MES defines the quantity of widgets that one should produce in order to minimize average total cost per widget.

In the business world, folks often talk about "scaling problems". Here, they are using the expression in a slightly different manner. Scaling problems occur when the institutional processes that work well for a small firm don't carry over to a large company.

None of this has anything to do with Moore's Law which is an observation that the number of transistors on an integrated circuit doubles (roughly) every 24 months. For what its worth, when I was at MIT my class visited Intel and some of their R+D bigwigs gave a presentation on Moore's Law. Their main point was the Moore's Law has become a self fulfilling prophecy. Companies like Intel and AMD need to publish roadmaps years in advance. Their customers have come to expect that Moor's Law holds true. Accordingly, Intel's R+D budget is based on a requirement that they achieve these types of improvements in chip density.