Health insurance deductibles continue to rise


Of all the issues with healthcare, a $1350 deductible seems only a small issue in the broader scheme of things. I have a $7500 deductible, fwiw.

Too many people believe healthcare INSURANCE should cover PREDICTABLE annual health wellness visits to a general practitioner. That should tell you all you need to know about the public's understanding of INSURANCE - and that they are too lazy to price shop doctors themselves.

The purpose of health insurance is not merely catastrophic risk spreading. It also serves a negotiation/transaction cost defraying tool. Providers will offer to accept lower reimbursement from insurers to be included in health insurance networks (trading margin for added volume).

Much of the purpose of health insurance is to defray the costs of negotiating these networks, and give insured patients access to a more a limited set of providers at lower cost.


One thing that I wish existed were "insurance plans" that simply let me piggyback off a network's prices without any coverage whatsoever. This was particularly an issue with maternity with us a few years back.

Pre-ACA individual plans don't cover maternity (logically). However without any maternity coverage you're at the mercy of insane prices. The actual Ob/gyn isn't too bad because most will give you a "total cost" up front. But any complications or even just incidentals, like an epidural, are just completely unknown.

I would've been happy to give Blue Cross $1000+, and still pay everything out of pocket, just to let me access their network's maternity related prices. I could see similar demand in other areas that typically aren't covered by insurance, like mental health.

'don't cover maternity (logically)'

What is possibly logical about not covering the medical costs of giving birth?

Does your car insurance cover buying a trailer?

No, but it covers towing one.

And in Germany, the Krankenkassen cover maternity costs. I might just have to ask a couple of Germans (if the opportunity arises in the next couple of weeks or so) whether they could imagine that maternity costs are apparently not routinely covered by the American system of health insurance. The funny thing is, whether they could or couldn't likely depends on just how horrible they already think the American health care system is.

Telling them that apparently some Americans feel that maternity costs are not something to be covered by the health care system would likely not be as surprising - somebody in America had to have voted for Trump, after all.

(Of course, one should also point out that in the German system, basically all kids are covered for free. There is no such thing as 'family health insurance' compared to health insurance.)

Many health care policies cover maternity. In general in insurance you fet what you pay for. The entire purpose of deductibles is to reduce the cost of insurance and reduce the risk to insurance companies. It is a compromise that benefits both parties. It only becomes and issue when one party gets their insurance for free. Then since they aren't paying for it they want and expect the Cadillac coverage.

You have a choice of paying for the maternity care all at once or divided by 12 in your premiums. The insurance company is not going to pay it for you, insurance does not mean free stuff.

'insurance does not mean free stuff'

Of course not, which is why the term is so misleading, at least when comparing Germany to the U.S. regarding their respective health care systems. In Germany (simplified in a number of ways, because for example, government employees are privately 'insured' and cannot use the normal Krankenkassen), those earning money pay into a health care fund (there is also a government sponsored called AOK, which anyone is free to join - unless they work for the government, that is), and everyone's health care is funded.

Insurance, in the American (or German, for that matter) sense is not involved at all. Women have children, it is a health care cost, thus it is covered by the Krankenkasse. This is one of the reasons that whenever I say Krankenversicherung when talking about American health insurance, Germans tend to find the term unfamiliar. Health care is covered in Germany, not insured.

Seems remarkably straightforward to be honest.

"Health care is covered in Germany, not insured."= socialized medicine. I am glad you like it, we in the states don't want it.

Interesting example: I went in to see my oncoligist yesterday. Initial visit because I have just moved. He wanted a CT scan of my lungs. Immediately after seeing him his appoinment secretary scheduled me for a CT one hour later. This is my normal experience; immediate tests and care. No waiting, not even a few days. My Canadian relatives wait up to 6 months for a CT scan and surgery can be two years.

That's a buying club, not insurance.

There is no way to insure for good health.

Insurance is only for relatively rare casualties. As the casualty event becomes less rare, the insurance premium approaches the casualty's actual cost. Like Chinese fireworks manufacturers being charged premiums in the mid six-figures for a $1M liability policy. That's also why younger, healthier people pay more in premiums than they'll use in services. They are paying nothing forward; they are just subsidizing the old and unhealthy.

We keep insisting on insurance acting like a buying club while still insisting that insurance should price like an insurer.

My personal view is that out of $3T+ in tax revenue a year we could fund some sort of universal health plan. I'd be willing to axe the Departments of Commerce, Energy, Education, Labor, Transportation, HUD, and NATO and the UN to help pay for it. Let's talk.

Young, healthy people tend not to stay that way: unless they are unlucky enough to die by sudden trauma, they eventually become old and sick people. So this us more some gross injustice, rather ut's a firm if consumption smoothing over a lifetime

That just underscores the absurdity of calling it "insurance." In insurance, when a good risk becomes a bad risk, it gets kicked out of the pool. That's the premise behind Medicare.

This is basic stuff but few people get it.

Total health care spending is over $4T. US Federal government spending is $4.5T. To have universal healthcare you have to give up more than Sesame Street. Using the thinking you are proposing here you have to cut all other entitlements and national defense spending . If you focus instead on price limits like how other governments do, health care spending could drop to 15% of GDP and we'd be able to work something out here. On the supply side, Congress needs to add more medical residencies. Unfortunately given Trump and the GOP's multiple attempts to "destroy" Obamacare only to make it immortal, I'm not so optimistic with the current set of clowns.

At least we're talking. Other countries have managed to figure it out and I count not less than six ultra vires Cabinet-level agencies that we could eliminate to help pay for it. Obviously, the notion that we or any other country, should or does completely cover its citizens' medical costs is not in the realm of reality.

'Too many people believe healthcare INSURANCE should cover PREDICTABLE annual health wellness visits to a general practitioner.'

Health insurance is a stupid way to frame this.

The German system (started under the government of that noted hard leftist Bismarck 130 years ago) is best translated using something along the lines of 'health care fund' (Krankenkasse - more literally, along the lines of 'sick persons fund').

'that they are too lazy to price shop doctors themselves'

We should anyone ever have to price shop doctors? My Krankenkasse card allows me to go to basically any doctor (and dentist) in Germany, and as the Krankenkassen as a group determine what doctors are paid, price is only a matter between doctors and a few major Krankenkassen. Basically all doctors are in private practice, by the way.

Why should anyone have to price-shop anything when you could have a few regulatory-monopoly companies set the price across all providers?

'have a few regulatory-monopoly companies'

Representing millions of members each. Basically, the Krankenkassen have the market power to tell a pharmaceutical company what price they are willing to pay - and if the pharmaceutical company finds that price too low, no problem, they can try to find other customers willing to pay their price. Generally, the two sides can agree on a price point that both are willing to consider reasonable - in part because the pharmaceutical companies know the Krankenkasse are interested in their costs, and fully capable of using their advantage as a major buyer to get the best deal possible.

The German Krankenkassen are not interested in profit, unlike a company like Aetna, they are interested in keeping their costs as low as possible while providing health care.

What happens if you want to go to a doctor not covered by your Krankenkassen, or want medicine not covered by it?

In the USA, if you go to an out of network doctor or want medicine non on formulary, you have to pay full price out of your pocket.

Why should insurance not cover predictable health wellness visits? Many new cars come with warranties that build in a few very predictable 'maintenance' visits. When exactly did it become the consumer's job to conform their preferences with what self-styled economic dungeon masters decree instead of the market finding products consumers want?

Mostly because it screws over the poor. Every hand that touches a transaction takes a small skim of the money off it it. Worse, the insurance billing procedures for predictable expenses are like just about any other billing procedure: complicated and subject to audit.

Your physician would be making good money for a primary care doc if she could simply pocket $40 for a typical visit. But the insurance company has to pay people to read her invoices, people to adjudicate those invoices and folks to actually process the checks. The physician typically ends up needing support staff of her own to pay this game. It is literally cost-effective for physicians to hire scribes at around $25 an hour (total net cost) to be able to see more patients instead of wasting more valuable physician time on documentation that is mostly used for billing. All of this has to be HIPAA compliant so prices are going to be higher for buying that magic stamp.

This is required by insurance companies because a very tiny fraction of physicians will game the system if they don't have safeguards. These bad apples will generate outsized losses. Essentially it is prisoner's dilemma, both physicians and insurance are better off with cooperation, but a few free riders lock us into an equilibrium with some defecting by all parties to ensure honesty of the others.

All of this adds up and becomes a loss for people who need to pay. The solutions are either to increase prices or to increase volume. The former is what doctors for the wealthy do, it sucks cash out but is manageable. The latter is associated with higher patient morbidity and mortality; it is what happens to poor patients.

Paying cash on the table would eliminate a lot of these wastes. You trust me with your life; you can likely trust me not to bilk you out of $40 once a year. Particularly as you can much more easily walk away if that is just the going rate the incentive structure is much less hospitable for scamming (patients locked in narrow networks are essentially assured cash flow for whatever you can get past the insurance company goalie).

So you believe that physicians just started "wasting time on billing"?

When did this occur?

It happens in every third-party payor system. Insurance creates perverse incentives. The insurance market clears them by denying coverage on the demand side and firing physicians on the supply side. Interference on either side in will distort prices.

"Health care" is a debate by people who don't want to face economic and biological reality.

Or look around at any of the other systems able to deliver comparable care at considerably lower price.

Bureaucratic systems have to initiate police actions which mirror the market mechanisms. I presume that's how the German public health system deals with them.

I have, they just let more people die (statistically speaking). They also goose their numbers by bring fewer pregnancies to term that involve high neonatal mortality and are vastly poorer societies regardless. Likewise, in spite health matched comparisons being the standard of analysis for medical cost effectiveness research, I never see the international comparison data take the higher American baseline morbidity into account.

And again, medical care providers pull from the top half of the productivity curve. You have to pay them enough to prevent them from vacating to higher remunerating sectors. Having a far smaller set of competing markets makes for far cheaper healthcare.

If it were cheap to institute a German style health insurance market in the US, somebody would have done it. Vermont tried and one of the most Democratic states in the country with a Socialist representing it in Congress said the system would cost too much.

I honestly have never seen a plan with actual numbers and cited evidence that amounts to even a 20% decrease in healthcare costs. Heck, I cannot even remember a single one that promise real cuts in the short term - all of them are about slowing the growth rate over time.

Even where we have built out systems not unlike those found in Europe, they still are not priced like in Europe. Tricare is much closer to US average costs than it is to anything in Europe. Even though it covers more people than a lot of smaller European states and even though it can literally order its patients to take medications, show up for appointments, and all the other advantages of a complete command economy ... it still does not show significant changes in costs or cost trajectories.

It began in the 1980s. It has accelerated since then. Crossover, when more physician hours were spent on paperwork than actual patient care was in the 2010s.

Pretty much before WWII insurance was niche and nobody had a third party payer. For the first couple of decades after physician reimbursement grew slowly and demographics kept insurance premiums low. Then in the 80s physicians began increasing their prices closer to what the market would bear. Some in time period scammed heavily. Around that time the insurance companies began to begin to be much more onerous about reimbursement. As they became more onerous, physicians hired more staff to offset the paperwork burden. They passed some of those costs along and prices rose.

Now we are coming full circle. It is arguably a good economic move for many PCPs to set up "cash only" practices and many have done so.

'Every hand that touches a transaction takes a small skim of the money off it it. Worse, the insurance billing procedures for predictable expenses are like just about any other billing procedure: complicated and subject to audit.'

Which is why a system that is basically private doctor - health insurer using universally agreed to rates means basically no hands being involved in any transactions, apart from someone entering the information into a PC at the doctor's office - not the patient or insurance information, that is handled by the person's health care card, simply what was done. Makes keeping records and billing so simple that basically no doctor in Germany would employ anyone to just handle the billing.

'Paying cash on the table would eliminate a lot of these wastes. '

I doubt it - the German system seems more efficient than a doctor needing to deal with cash.

Cash includes credit

Which one assumes means that the credit card company is getting a cut - remember this comment thread involves the point that 'Every hand that touches a transaction takes a small skim of the money off it.

Of course they do. As do the bureaucrats who administer the taxes in Germany. This may be worth it to people to have somebody else move money from one account to the other. Germany would assuredly have cheaper health care prices if all transactions occurred locally with cash.

It might not be as convenient. It certainly would be less redistributive. But it would be cheaper. People tend to dislike this option because it does mean that healthcare gets denied to people who cannot afford it.

Healthcare is always rationed. You can ration by price. You can ration by wait. Or your can ration by social dominance. Having practiced medicine on multiple continents I have seen all of these. Cold hard cash at least has the advantage that it attracts investment and capacity expansion.

Price controls, be they government or insurance, run into the same problems as any managed economy - how you match supply and demand without honest signalling?

Ultimately how you pay for health care is one the weakest impacts on health out there - as we saw with the Oregon natural experiment. Culture, like how often Germans have visited doctors for over two centuries, matters massively more.

Why should insurance not cover predictable health wellness visits?

If you have the cash to pay out of pocket for those predictable expenses, you don't want it to. A)You're making an interest free loan to your health insurer by doing so and B) the bundling of "insurance for rare but expensive health events" with "prepayment of predictable health expenditures" allows the insurance company to obscure the cost of the latter, making it harder for consumers to determine when they're being overcharged.

"It also serves a negotiation/transaction cost defraying tool. "

Indeed, some insurers offer what might be called "infinite-deductible insurance" which offers access to the negotiated rates but no reimbursement.

Although regulators prohibit calling infinite-deductible plans "insurance," presumably something equivalent can be offered with an extremely high (yet finite) deductible.

And so we have a circus in which everyone pays a different price for what is essentially the same service (or the same prescription drug). BUT, if this is somehow optimal, why don't we all have "food plans" and "haircut plans" (etc.)? Perhaps because if we did, any consumer saving due to negotiation would be more than consumed in transaction costs? Would we truly be worse off if medical services providers retained the freedom to charge whatever it pleased them to charge, BUT were restrained by having to charge all customers the same rate?

(Of course, that's not going to happen as government, having the greatest negotiating power of any player in these markets can get prices that presumably lie somewhere above providers' marginal costs yet well below proportional costs. And therefore in an everyone-pays-the-same-price market, government would pay higher prices than it does now.)

A 'predictable' wellness visit might happen once or twice a year. What should that cost versus what does it cost under insurance? Let's say the should is $50 and the does is $250. Even under that extreme case (insurance companies can't negotiate that down?) what portion of the health care system is this?

The problem with the perspective you are pushing is this makes sense when you are talking about a market where medical services are very independent of each other. Today you have a cold so you need an exam with maybe a script for your cough. Next year you need a general physical. A few months later you want a flu shot. All these are independent of each other. Consumer based markets would sensible drive down those costs and you could spend some time calling around and finding the cheapest outlet for all those things.

But the cost of medical care is not being driven by those one off events. It is being driven by chronic illnesses where the doctor is a bit like a coach or manager of your health care. How would a football team work if they hired a new coach after every single quarter in a game?

It seems like a small issue to you because you are generally healthy. I've been living with ovarian cancer for the last 5 years in my family and a $1000 deductible versus a $7500 deductible is basically a $6500 per year tax for having a chronic illness.

This is not in line with how health care has developed. In the past a lot of health care was providing you a cure or you died. High deductibles, copays, these are designed with that type of model in mind. That still might make sense in auto repair (you may need a new oil pump, but whatever is wrong with your car tends to be an isolated event. No one ever gets 'car diabetes' which requires you to get an oil change every 3 weeks instead of 3 months, for example). Health care has invented a lot of treatments but only a few cures so more and more people are living with chronic conditions.

The most stupid example of this, dialysis is covered via Medicare/caid. If you get a kidney transplant, the lifetime of anti-rejection drugs is covered by whatever insurance you may or may not have. Copays and deductibles just leads to people trying to get skimpy, which ultimately causes the person to end back up on dialysis as the kidney which cost $100K is needlessly destroyed.

Why having the Republicans gotten rid of Obamacare yet so we can finally get more competition into the marketplace?

A small improvement, but wasn't there a new rule to make hospitals actually publish their prices? May be meaningless with all the discounts given to insurance carriers.

How does the private insurance market handle the issue of pre-existing conditions?

Here is a paper from 2003 showing just how getting more competition into the marketplace worked out in North Carolina -

America's messed up health care system predates Obamacare by decades, and shown by one example of trying to provide health care (not health insurance) at a lower cost.

If you had a magic wand and could delete every law regarding healthcare and start anew, it might work, but from a certain perspective we may be in a local maxima. That is to say, marginal changes towards the true optimum constellation of healthcare policy may (for a time) make things worse.

Not to even get into political considerations -- republicans depend on older voters, who depend on healthcare entitlements, which are intimately tied to the systems that provision and distribute healthcare.

LOL, the desperate troll is still masquerading as me. Just looking at the time stamp, it's probably somebody without a normal US schedule.

Oh well, carry on Troll, your desperation is somewhat amusing.

Well, the 'having' mistake was not typical, but you do know that for someone on the West Coast, 11:34pm is probably not all that strange.

This place uses Eastern time, reasonably enough.

"If you like your rising deductible, you can keep it!"

So, according to economists, all health care service prices and drug prices must be falling rapidly because everything is a commodity, and thus one can easily substitute one provider for another.

Every CT scan produces exactly identical data files read by any CT scan analyzer software on the market, and the commodity status of everything means the software is free open source.

China doesn't have universal health care; indeed, China doesn't even have something remotely comparable to Obamacare or even social security. That partially explains the extraordinarily high level of inequality in China. Now, China is considering the adoption of both universal health care and social security. [An aside, in China people rush to the hospital if they have a cold.] And just like in America, the those who have benefited most from the China miracle are predicting doom:

Do we care if China adopts universal health care and social security? Damn right. Because Chinese would consume more and save less, likely increasing China imports and reducing (the reliance on) China exports. The Trump administration might emphasize adoption of such social welfare programs in the negotiations with China, but the contrast between cutting (or risking funding for) social welfare programs in the U.S. while promoting more social welfare programs in China might make the supporters of the charlatan party reconsider their support. So instead the Trump administration is insisting that the U.S. have veto power over China fiscal policy (i.e., so that China's government spends less not more).

Maybe, but that's a difficult trade negotiation to pull off. The administration is nitpicking product by product but getting China to buy more US soybeans would happen by the Chinese gov't managing their economy on the micro scale, not by a macro policy like adding national health care in the hopes that the savings rate goes down and consumers spend that reduced saving on soybean based products and those producers will buy from the US.

The type of trade policy you're thinking about here would require, I suspect, negotiating not on the level of products and tariffs but the entire trade deficit as a target.

You missed the point I made about the Trump demand that the U.S. have veto power over China's fiscal policy. You are right, that the focus has been on small bore specific tariffs on specific items, which mask the real stumbling block, which is the demand for the veto power. China would never let the U.S. control its fiscal policy, because it contravenes China sovereignty. The demand is beyond bold. I would take my chances with increased social welfare spending in China. If nothing else, it will give the impression to the Chinese that Trump is looking after them. And if it works (by increasing consumption and reducing savings), then it's a home run.

I would think that China will go to a more UHC type system sooner than we. First off China knows how to create the money to do so. And slow and cumbersome politics is much less a concern with their central command. China has already been turning their economy towards their people as consumers, and away from massive infrastructure/manufacturing/exports. Including social supports. We as future exporters may gain from all this.

First, I don't think Trump has demanded veto power over China's fiscal policy. If you think about it, that's not even something that is easy to negotiate since there's no guarantee of honest economic numbers from China's gov't and when you have a communist gov't, you can always cook the books. (Example, China could increase gov't spending by $250B to comply with a US request that it spend more and save less. It can then write contracts worth $250B with construction companies to build stuff. Ohhh wait, the gov't owns those companies so the companies do nothing, invoice $250B and then put the payment into a Chinese bank (also run by the gov't) which then buys the $250B of debt issued to fund the 'spending'. )

Second, i doubt Trump has the will to do this. This would be a long term game with diffuse winners. Trump likes and wants short term wins like Carrier Air Conditioning. He wants to hear companies X, Y, Z were benefited by his efforts so he can go there and have rallies about the jobs he saved. China increasing spending over the long run thereby increasing US exports and GDP is one of those gradual 'rising tides lifting the boats' thing that's not easy to attribute to any one thing. For Trump to make that his focus would mean his cares about the US beyond the degree doing so benefits himself. He doesn't.

Here's a good summary of the real reasons for the standoff between China and the Trump administration (i.e., to do whatever it takes, war if necessary, to stop China's economic ascent): The irony is that the perceived economic threat from China is the result of China's state (authoritarian) capitalism. It's ironic because our model of democratic capitalism is supposed to be far superior, while China's model is supposedly doomed to fail. If it's doomed to fail, then where's the threat? Think about it: those in the Trump administration are convinced of the economic threat from China because they believe China's model of state capitalism is superior. Thus, we either adopt the superior China model or force China to adopt our inferior model.

Let's say China's system is superior. If we adopted China's system we'd prolong our advantage over them, but only for a while. With 3-4 times the population China will ascend economically.

So the thinking here is we must go to war to either massively slaughter China's population or force a huge portion of humanity to suffer under a knowingly inferior system?

In crude terms if the Chinese central command continues to do what's best for its people, then it can continue as superior. With our politics I can't imagine us adopting anything like theirs.

As you know, Obamacare saved us all $2500 per year on insurance, so it doesn't seem like a big deal if the deductible goes up a few hundred.

Insurance is way more expensive under Trump than it ever was under Obama. He needs to fix this or I'll be a Bernie bro this time around.

Here's a different view, using data from the annual Consumer Expenditure Survey. The cost curve through 2017 has not bent downward.

The cost curve is also correlated with hospital consolidation and hospitals acquiring various physician practices. Check the data and you will see a significant rise in M&A activity from 2012.

Yeah, it is almost like these are human conglomerations that respond to stimuli and offset impacts. If government is going to create monopsony pricing you better believe that monopolies will consolidate to offset it.

At the end of the day you have small army of legislators and bureaucrats working to contain costs through mandates. You have orders of magnitude more lawyers and bureaucrats working to secure largess for the system. Nailing shut all the loopholes is never going to work under these circumstances.

To the ears of one not trained in economics: why does this sound anything like Bezos' lifting Amazon employee wages to $15/hour in order to cut other "generous" employee benefits? (Thank you, Senator Sanders.)

Is this captured in inflation stats? I know they love to make hedonic adjustments when products "improve." What about the opposite?

Healthcare is expensive because we want a lot of it. We want to be obese, drink too much, smoke too much, do too much drugs, have too much risky sex, have too few friends, exercise too little, are involved in too few social groups, and possibly even have too little non-risky sex. I could go on, but suffice it to say that there are costs to our modern vices; many of those costs show up in healthcare (e.g. patients staying in the hospital because they literally have no one in their social network who can stop by twice a day and ensure they have taken their meds). Our baseline morbidly is high and growing higher.

Of course we fear the power that healthcare has over us. We must choose to give control to a cabal of clerics with mysterious knowledge who may accidentally kill us. So we demand safeguards and seminars. These burn through money madly. The average physician spends more time and effort on complying with government and insurance company regulation than on treating patients.

We would also like our healthcare practitioners to be cognitively skilled, so we have to pay them (MDs, RNs, OTs, PTs) wages commensurate to their next best alternative (Lawyers, stock brokers, etc.) over 25% of the profession are already foreign born, but we keep leaking talent to other sectors. We demand that our medical care providers be well educated, but then make that education consistently longer, more expensive, and less effective.

The remit of healthcare, of course, keeps increasing. After all housing needs are healthcare needs (so we have social workers). Meditation helps with all manner of health outcomes, so we hire Mindfulness coaches. Work once done by the priest or charities with few mandates and exceedingly low overhead rates is now done within healthcare with all manner of constraining mandates and exceedingly high overhead rates.

Healthcare is expensive because we have created a system that dumps social costs into healthcare. Any improvement in cost-effectiveness is running against long term social trends that place us in a massive Red Queen scenario.

You lean rather heavily on the idea that health is about individual choices. It is in part, but not completely. And even when it is in part, it is more like a lottery than a purchase.

Consider the saga of artificial sweeteners. At first they were good because they kept us healthier, then they were bad because they gave us cancer, then they were good again, and now we learn they kill off intestinal bacteria. So, probably bad again.

Being healthy is hard, and not in ways that "less regulation" (or less government help research) really helps.

Or I'm also reminded of the "simple" question which is healthier tap or bottled water? Sadly, it depends on the city, and too bad Sparkletts stopped using those glass bottles.

Seems like it’s a combination of both, I agree.

Apparently between 75 and 86% of spending is on chronic conditions.

I don’t know what % is based on poor lifestyle choices but I assume it’s a hefty chunk.

$147 billion and $117 billion for “lack of physical activity” and diabetes.

But that’s a drop in the bucket compared to 3 trillion a year.

$442 billion on drug and alcohol abuse, in public spending alone (I have doubts about this figure, from 2016 Surgeon General)

Now we’re up to $700 billion (probably much less)

I think a significant chunk of medical spending is due to poor lifestyle choices.

Can’t we just pay people to not drink, do drugs, or be obese?

Seems like a Coasian solution here.

"Can’t we just pay people to not drink, do drugs, or be obese?"

If people were already "properly" processing risk and reward all these problems would be solved.'_Error

I don’t think that’s the issue. The issue is that time preference varies between individuals.

Maybe you call it Descartes error.

In Econ we call it time discounting, and some have different discount rates.

Paying people cash / debit cards to exercise, not drink to excess, smoke, or engage in high risk behavior solves the difference in discount rates problem.

Of all the stupid things we spend money on, this would be a perfect trial for the CDC to engage in.

Clicking through to the somatic marker hypothesis:

"In economic theory, human decision-making is often modeled as being devoid of emotions, involving only logical reasoning based on cost-benefit calculations.[3] In contrast, the somatic marker hypothesis proposes that emotions play a critical role in the ability to make fast, rational decisions in complex and uncertain situations.[1]"

People still respond to incentives. This has to be one of the least controversial economics principles.

Why not let the CDC run a randomized trial?

At least see where it shakes out.

Use Medicaid recipients.

I'm all in favor of randomized trials, and I think there have been many related to behavior and health.

I think the outcome so far is that it's really hard to shape how human beings behave in the wild.

Can’t find one where they paid cash/debit cards to exercise, avoid alcohol, tobacco, fast food and soda.

We know that increasing alcohol and tobacco taxes reduces consumption.

I’m glad you support the trial.

How about GPS, Fitbit, and all sorts of other trackers? Imagine an Amazon echo that monitors what you say because maybe people who talk about unhealthy activities are highly correlated with actually doing them. The incentives corporations roll out soon will basically be a corporate Stasi in your own home. If you opt out of being tracked, you will be charged more because rationally they can't verify your behavior.

That seems unlikely

'Healthcare is expensive because we want a lot of it.'

The German I know who just came back from spending 6 months in SC would completely disagree. She was shocked at how people did not go to the doctor the way they would in Germany, or how people would work when sick, or how they would buy OTC medications to paper over whatever was actually wrong.

'The average physician spends more time and effort on complying with government and insurance company regulation than on treating patients.'

America is really screwed up. The German 'gods in white' generally avoid this, as the system is pretty transparent at that level.

Americans consume oodles of high intensity sporadic health care. Even for the "chronic conditions" we spend most of our dollars on the stuff that is acute care rather than chronic prevention.

Other places don't do this, but other places are also okay with having kids die for want of the highest end care being available (because it cannot be available for everyone). Rich people in America will not agree with this. So we skimp on PCP care (bad) and try to make up the difference with procedures (expensive).

The most powerful factor creating Ill health is nothing more than the passing of time, which no one can escape. No matter how virtuous a life you lead, eventually stuff starts to wear out and not work

Sure but not all wear and tear is priced the same. Expensive things are conditions which you live with for a long time, but require a lot of care before you pass top options include:
alcoholism (bonus highly correlated with killing random people)
tobacco use disorder (recent advances have made lung cancer more expensive, COPD and the like are brutally expensive)

Cheap options include:
Aggressive cancers
Aortic aneurysm
Certain forms of heart disease

The unhealthy get everything in the top list. The exceedingly healthy tend to live until their brains wear out, they are even more expensive. The cheap folks die of something wearing out catastrophically once the body cannot manage repair mechanisms and both you & your doctor are on board with the idea that the recovery is not going to be viable.

Currently far more of the costs lie on the unhealthy side of the equation.

I'm not sure what your point is. It is certainly not the case that "health nut" types all drop dead of a massive heart attack on their 90th birthday. A lot of this stuff is luck of the draw from one's genes, and some of it is the result of accidents that no one can control, from a car wreck caused by a drunk driver that leaves the non-drunk victims with injuries for life, to a stray gamma ray that provokes a cancer. And every now and then you can find a rakehell who nonetheless lives to his 90s without a lot of trouble until an artery in his brain gives way. Life is complicated, and even death often is. The old maxim "There But For The Grace Of God Go I" should be engraved on all these discussions

What one almost never hears, sees or reads, is about the enormous benefits and value of better health, happiness, family security and longer life itself with all the new medical advances and costs.

It might take a serious health issue in oneself, family or friend to come to this realization.

As a long time doc I have seen this in my patients and families.

As a patient myself I've realized it.

Caring for my wife with her recent serious trauma and now stem cell transplant and renal failure, it is even more apparent to me.

"Work once done by the priest or charities with few mandates and exceedingly low overhead rates"

Really? As much work as done now?

Come on, you have to admit that one guy with an ox cart yelling "bring out your dead" was very economically efficient.

Most likely more. Priests historically worked longer hours than doctors do today.

Take something simple like major depressive disorder. You are socially isolated and nobody wants to ask you hard questions. You finally say something like "life is not worth living" in a way that freaks out a police officer. You come see me. I go through all the symptoms: sleep disturbance, irritability, guilt, depressed energy levels, poor concentration, decreased appetite, psychomotor symptoms, suicideal ideation, and of course poor mood/anhedonia. I mark yes to 5, congrats you have a most likely diagnosis. I then get to spend a bunch of time figuring out if you a bipolar I, bipolar II, schizoaffective, or a laundry list of other things (e.g. withdrawing from drugs). Eventually we get through all that, you've rung up a few hundred in bills, and then we know that you can be managed outpatient. Your PCP then determines if you need psychiatric care, psychological care, or just primary care management. That is maybe another hundred bucks. Finally you get to somebody who will help you talk through the stressors of your life. The get to know you at maybe $100 an hour. Eventually they learn what is wrong and help you work through it with extremely good results.

In the olden days your priest would likely see the depression coming long before you approach suicideal ideation. They would counsel you and provide a framework through which to view stresses which is still highly successful.

A large component of the healthcare system goes into figuring out history; this is vastly harder for a stranger to manage than someone you see every single week of the year. The western world has begun eliminating the institutions that provided long term regular care and replaced it with high intensity short term care. The latter is always going to be more expensive.

As a primary care general internist I have seen this first hand since the early '80's when medicine headed more toward specialist care. So instead of me taking care of 75-90% of all my patient's medical problems. They see a handful of specialists. None of who know the whole story. I see duplicity of treatments and meds. And now we in primary care don't even participate with our patients in the hospital. Another expensive layer, never knowing the whole story. And more unneeded testing and treatments. And on and on ringing up more expense all along the way.

according to Bloomberg News, we spend, on average, more than $40 billion per year on lawn care – $3.5 billion more than the federal government’s 2017 budget for foreign aid.

As long as Americans continue to squander money on bogus grass it will be difficult to sympathize with their health care financing problems.

Also related, a country that spends money on geriatric care for pets is going to have a hard time figuring out socialization of human medical costs.

That one is easy. We think we're so clever because we get social animals like cats and dogs to bind themselves to our family group. As members.

But we are not immune ourselves.

I've seen people pay for dialysis treatment for their pets. Such people are going to have a hard time with a system that has to tell granny that, past a certain age, she will just have to live with her broken hip. Or that turns down a child cancer patient after the third experimental treatment.

I don't think I would do that, but I can understand it. The person paying for the dialysis has bonded with the pet as a family member.

Sadly, they may even feel a stronger emotional connection to that pet than to your grandmother.

High emotion, low altruism.

That's the difference between two of the sides in this debate. One side recognizes that humans frequently make emotional, irrational choices that, if indulged, would quickly bankrupt a system, and another insists that if we can we must, like dialysis for a 10-year old Cocker Spaniel.

That is incredibly foolish, but of course, if you think there are only two sides.

If you were a mature, deliberative person, you'd observe that I wrote "One side" and "another," not "the other."

My impression is the other sides in this debate, such as yours, are childish and wishful rather than adult and pragmatic.

I have to admit, I missed the "of" in this:

"That's the difference between two of the sides in this debate."

Anyway, speaking of childish, how childish is it to think you are the only one doing cost-benefit analysis, or that cost-benefit analysis can only have one result?

Individual shadings on things like altruism lead to different results.

I mean with or without that "of" you're acting like there is one side who wants to help people and bound to that without limits on cost and there's another side that knows you can't help people because cost.

I'll admit there are subtleties but that's my overall impression, yes. As this very thread demonstrates, most people--even intelligent, well-read ones--lack even a basic understanding of insurance.

More to my original point, I am skeptical that a society spending thousands of dollars to keep frightened, geriatric, and in-pain animals alive for a few more months will enact a fiscally sound or compassionate system for socialized medical care.

k. fine.

But we actually have a status quo that does contain costs. Perhaps not where you'd have them contained, but neither unlimited.

Why exactly does granny have to live with a broken hip? Exactly what costs are incurred with setting a broken hip? Are we making casts out of solid gold these days? X-ray machines have been around 100 years, are we running out of photons?

For that matter why exactly is it too expensive to give a child a third experimental treatment? If it is experimental doesn't that imply we are trying to figure out if it works or not? How exactly are we going to do that without trying it out on people who have the disease?

This whole tough guy routine pretends being tough ("we gotta get real about paying for granny's broken hip!") is being level headed. It's not.

QED: most people, including you, are unable to come to terms with biological and economic reality.

Past a certain age you are not going to get a new ball-and-socket, or even a pin and screws; you are going to get a wheelchair. We will not pay for an operating room, medical-grade hardware, and a surgical team for somebody who is going to have another fall and will be dead from sepsis within a year or two. If Ruth Bader Ginsburg falls asleep in the hospital waiting area, you'll probably get tackled by the CFO if you try to wake her.

If you've got metastatic cancer and it keeps showing up, then at some point we give you morphine, not genetically-tailored experimental drugs. Metastasis is a sign of fundamental, systemic breakdown. It remains practically incurable so after a point, we just try and make you comfortable, even if you're only 12 years old.

We cannot provide Cadillac-care to everybody, everybody will grow old and die, if you have genetic pre-dispositions we can't cure you, we need incentives for people to take care of themselves, and we need some way to pay for all these wonderful things.

As I said, out of $3T+ in tax revenue a year I'm sure we could fund some sort of universal medical care plan that, like any socialized good, won't be optimum but should suffice for most people's purposes. I'd be willing to axe the Departments of Commerce, Energy, Education, Labor, Transportation, HUD, and NATO and the UN to help pay for it. I'd love to see it debated but I don't think there are enough adults in the room.

I think you're messing up two different ideas here. The typical 80 year old who gets a wheel chair rather than a new ball and socket is because the operation and recovery imposes a huge cost on the body. If you have another 40 years of life that cost makes a lot of sense but if you only have two years left do you want to spend half of them in recovery and run a 40% chance you'll die before that is even complete due to complications.

But those conversations already happen. Chemo does stop for many cancer patients before the point when it still might be able to kill some of their cancer cells .

But you're painting this as a cost exercise. If you mean a cost in well-being versus the potential gain of various treatments you're correct but if you mean cost in terms of dollars you're incorrect. There's no pot of money to be saved by wisely turning down 88 yr old grannies from heroic medical interventions.

It is a cost exercise. The NICE has explicit cutoffs ($300,000 per QALY or something) beyond which the socialized healthcare system will not pay for additional care even it might be curative. The British NHS explicitly does do cost extrapolations and older individuals suffer from having few potential QALYs and less chance of things working.

The great virtue of private funding is that people who wish to spend "irresponsibly" do so in a manner that generates additional demand and investment. Rich geriatric patients often subsidize the development of new medicine and infrastructure that benefit everyone.

The great flaw in socialized systems is that more funding only comes in by taxing everyone. Being unable to chase supply with cash, patients will turn to other influence options (e.g. hounding bureaucrats, legal action, political agitation). These actively consume resources with no increases in medical capacity.

These days most Grannies get their hips repaired or replaced, since the pain, misery and immobility from non-intervention is commonly a larger risk and burden on the patient, family, HC system and costs.

Only in America ?

Probably not "only in America." End-stage dementia is expensive wherever you are. That is a typically superficial Vox article.

Welcome to Trump's America where everything is more expensive than it should be. Trump really fixed Obamacare didn't he? Thanks Trump!

Thanks for your interesting topic of health insurance. and you are present to continue to rise This


I've recently been aknowledged of a so called Intus Life association that provides safe and consistent interest through its plans. I don't know if any of you have any experience with it but considering the current situation of consistent rise of the deductibles it seems reasonable to me.

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