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Thread: AMA opposes Obama's Health Care plans...

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    Re: AMA opposes Obama's Health Care plans...

    Quote Originally Posted by celticlord View Post
    You are assuming that incentives to the patient are identical with or without insurance. However, a very brief analysis demonstrates that this could never be the case..
    You are right, there is in fact less incentive for patients to go routinely if there is no insurance. It is a well-known phenomena among people in the health profession. It has to do with the fact there is no natural demand for health care, it is a learned response. Worse, many people harbor an unconscious fear of it, which makes demand not only a matter of indifference, but avoidance. But such a distinction was irrelevant in my original post since either eventuality would have substantiated the point I was making.

    Quote Originally Posted by celticlord View Post
    With health insurance, for any doctor's visit, hospital stay, medical procedure, or prescription, the patient pays either a small portion of the price directly out of pocket or pays nothing out of pocket. Depending on the source of their insurance benefits, they may not even pay for the insurance premiums out of pocket, instead having them via their employer. Thus, it is impossible for the patient to ever know and accurately assess the price of healthcare and its impact on his or her finances. When the pricing does intrude on the patient's perception of healthcare consumption, it does so as the presentation that healthcare costs are so great as to be beyond the patient's capacity to pay.

    The end result is the patient does not consider healthcare costs in managing their finances or their lives.

    Without health insurance, the patient would be compelled to pay directly any and all healthcare costs. They would have, by virtue of the checks they write to doctors, perfect information about the impact of healthcare costs on their finances. It is impossible for a patient not to include healthcare costs in managing their finances or their lives.
    So your point is? You must agree with my original assessment then. Being able to visibly see those costs would scare patients off, justifying a delay of health care. Patients, I can attest, claim to be scared off just with token co-pays. Mostly that is probably an excuse, since they often will have just finished telling you they are about to go on a trip to Tahiti. Medicine is a service they need, not want.

    Having perfect knowledge of the cost would be doubly scary, even at half the current cost. Many co-pays for basic procedures are fairly small, less than someone would spend in on an impulse buy at the department store, so you have no basis to extrapolate that knowing the full, exact amount would somehow induce greater compliance, when compliance with much lower bugetable amounts is resisted.

    Quote Originally Posted by celticlord View Post
    How can we be certain of this? Easily--look at automobiles. Most car owners get their oil changed semi-regularly; they are not told to do this, but the cost savings from proper preventative care is a powerful incentive, and even when people are imperfect in maintaining their vehicles, overall they are willing to trade the inconveniences of preventative care for the cost savings of preventative care. Similarly, when one rents a vehicle, one does not worry about the oil, or the transmission fluid; there is no incentive to do so, as one does not directly bear the costs of vehicle maintenance in that circumstance..
    Bad example. People are often more abusive to their bodies, although not necessarily consciously so, than they are of their cars. Also, the life-span of cars is more visibly limited, and the cost to replace it visibly high, so there is greater incentive for an oil change. That is not to say no one learns and applies a similar concern toward health care, however even then, most have no clue what the consequences of a lack of treatment would be, or even what the symptoms of something serious may be. The medical consequences of lifestyle, and therefore the true cost of medicine, will always be a nebulous, if not invisible threat to most of the population ... a threat most will not fully understand until it is too late.

    A real world example: in the 60's Congress acted on the information that only about 50% of the population went to see a dentist routinely. They funded dental schools and helped push out a ton of dentists to serve the unserved. Forty years later, there still is only a 50% compliance rate. That suggests that the problem is not in the supply, but the demand. There are many well-known irrational factors in the human psyche that invalidate your hypothesis, not to mention the rational ones I have presented.

    More significantly, not all serious disease is preventable. People can lower their risk, but not eliminate it. Treatment of many serious diseases is completely unaffordable already by the majority of the population. There is zero chance most could ever budget for such contingencies, ever.

    Quote Originally Posted by celticlord View Post
    Change the payment model from third party payor (insurance company) to direct payment by the patient and the incentives have to change. As incentives change, the attractiveness of preventative care will change.
    Moreover, you still haven't answered the most important issue, how would prices actually fall without competition from a public system? I have never seen much price competition in any branch of medicine except in the more commodity-like cosmetic services. No one feels right about shopping around for bargain heart surgery, believe me*. The medical industry has no incentive to rebate any savings that may fall into their hands, and most doctors in the US expect to be in the upper quintile of earners. Given that the recession is pinching everyone, most doctors would seen any improvement in income as something they wholly deserve, however I suspect even in good times, many would find a way to justify keeping the extra as well.

    *although if people have no choice, and if they can afford to travel overseas, sometimes take on additional medical risk and go abroad to get essential medical treatment. It's called medical tourism. That is not an ideal medical solution however, since the hidden cost is the risk inherent in travelling when ill and possible post-op complications which would necessitate expensive retreatment at home anyway, possibly then bankrupting the person.
    Last edited by metreon; 06-12-09 at 04:43 AM.

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    Re: AMA opposes Obama's Health Care plans...

    Quote Originally Posted by NDNdancer View Post
    Unlike the AMA, the Physicians for Single Payer have done the research and have a plan.......
    While advocates of single payer coverage typically tout the benefits of such an approach, from an economic perspective very real adverse issues associated with monopolies that typically harm consumer welfare arise ie., reduced consumer choice, reduced customization of specialized products/services, long-run costs, lack of innovation, divergence of a monopoly's interests from those of its consumers, etc.

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    Re: AMA opposes Obama's Health Care plans...

    Quote Originally Posted by CaptainCourtesy View Post
    There's a point that everyone's missing. Read between the lines, and you'll get it. I work in the health care industry as a provider and I can tell you what the AMA's position is really about...what it's always about: MONEY. A public health care plan, to work effectively, will, undoubtedly necessitate that physicians start charging less for procedures. The doctors of the AMA don't want their salaries cut. I'm not saying that this is good or bad, but let's call it what it is. The AMA is not interested in you or me...if they were, as don said, they would have proposed an alternative. The AMA is interested in the AMA.
    Don't you already negotiate your rates with insurance companies for procedures? Are insurance companies really asking you to charge them more, for a procedure?
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    Re: AMA opposes Obama's Health Care plans...

    Don't jump to the conclusion that the AMA opposes this legislation for some noble, Hippocratic reason. Doctors get rich prescribing procedures and medications that cost a fortune, and they get a piece of it. Of course they would object to anything that makes them less money.

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    Re: AMA opposes Obama's Health Care plans...

    Quote Originally Posted by WillRockwell View Post
    Don't jump to the conclusion that the AMA opposes this legislation for some noble, Hippocratic reason. Doctors get rich prescribing procedures and medications that cost a fortune, and they get a piece of it. Of course they would object to anything that makes them less money.
    How is that different than a labor union?
    "Loyalty only matters when there's a hundred reasons not to be-" Gen. Mattis

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    Re: AMA opposes Obama's Health Care plans...

    Quote Originally Posted by metreon View Post
    You are right, there is in fact less incentive for patients to go routinely if there is no insurance. It is a well-known phenomena among people in the health profession. It has to do with the fact there is no natural demand for health care, it is a learned response. Worse, many people harbor an unconscious fear of it, which makes demand not only a matter of indifference, but avoidance. But such a distinction was irrelevant in my original post since either eventuality would have substantiated the point I was making.
    Your first sentence is patently false. There are clear economic incentives in preventative care when the patient pays the full cost of care that do not exist in the current health insurance model. Yes, people are reluctant to go to the doctor--and when there is no incentive to do so, that reluctance is not countered and thus predominates in the choices patients make.

    Quote Originally Posted by metreon View Post
    So your point is? You must agree with my original assessment then. Being able to visibly see those costs would scare patients off, justifying a delay of health care. Patients, I can attest, claim to be scared off just with token co-pays. Mostly that is probably an excuse, since they often will have just finished telling you they are about to go on a trip to Tahiti. Medicine is a service they need, not want.
    Some people would make that choice. However, others do not. I know people who go to the doctor at the first sneeze.

    Quote Originally Posted by metreon View Post
    Having perfect knowledge of the cost would be doubly scary, even at half the current cost. Many co-pays for basic procedures are fairly small, less than someone would spend in on an impulse buy at the department store, so you have no basis to extrapolate that knowing the full, exact amount would somehow induce greater compliance, when compliance with much lower bugetable amounts is resisted.
    Actually, perfect knowledge of the costs of care would only be scary in a "sticker shock" manner. Fear is primarily a response to an unknown/unknowable phenomenon. Very little that is well known is much feared.

    Quote Originally Posted by metreon View Post
    Bad example. People are often more abusive to their bodies, although not necessarily consciously so, than they are of their cars. Also, the life-span of cars is more visibly limited, and the cost to replace it visibly high, so there is greater incentive for an oil change. That is not to say no one learns and applies a similar concern toward health care, however even then, most have no clue what the consequences of a lack of treatment would be, or even what the symptoms of something serious may be. The medical consequences of lifestyle, and therefore the true cost of medicine, will always be a nebulous, if not invisible threat to most of the population ... a threat most will not fully understand until it is too late.
    Again, you are presuming incentives do not change. That is an irrational and unsupportable position to take. Incentives most assuredly would change.

    Quote Originally Posted by metreon View Post
    A real world example: in the 60's Congress acted on the information that only about 50% of the population went to see a dentist routinely. They funded dental schools and helped push out a ton of dentists to serve the unserved. Forty years later, there still is only a 50% compliance rate. That suggests that the problem is not in the supply, but the demand. There are many well-known irrational factors in the human psyche that invalidate your hypothesis, not to mention the rational ones I have presented.
    Those factors do not invalidate my hypothesis. I am not claiming people will be perfect in pursuing preventative care, merely that they will be incented to do so, and that the incentives will have significant impact on their consumption patterns regarding healthcare.

    Quote Originally Posted by metreon View Post
    More significantly, not all serious disease is preventable. People can lower their risk, but not eliminate it. Treatment of many serious diseases is completely unaffordable already by the majority of the population. There is zero chance most could ever budget for such contingencies, ever.
    True enough, but you are talking about a small sliver of overall healthcare cost and consumption. Also, given the problematic nature of serious disease, it is a markedly different economic discussion. Cost of cancer treatment is not what drives the cost of "normal" healthcare through the roof.


    Quote Originally Posted by metreon View Post
    Moreover, you still haven't answered the most important issue, how would prices actually fall without competition from a public system? I have never seen much price competition in any branch of medicine except in the more commodity-like cosmetic services. No one feels right about shopping around for bargain heart surgery, believe me*. The medical industry has no incentive to rebate any savings that may fall into their hands, and most doctors in the US expect to be in the upper quintile of earners. Given that the recession is pinching everyone, most doctors would seen any improvement in income as something they wholly deserve, however I suspect even in good times, many would find a way to justify keeping the extra as well.
    Prices would fall because the current price models are only sustainable with insurance, and are in fact driven by the insurance distortion. When the economic concern regarding healthcare is a lack of health insurance for some, rather than access to the services themselves, that alone is proof of an irrational pricing mechanism. Prices could not do anything but fall if health insurance were withdrawn from the equation.

    Further, while it is true that healthcare is not a pure commodity, there is competition among physicians just as there is in many service industries--chiefly on the basis of skill/knowledge/competence. Doctor "A" competes with Doctor "B" on the basis of who's "better". A non-distorted market mechanism would leverage even that competition to push prices down overall.

    In a functional free market, pricing pressures for such compel both Doctor "A" and Doctor "B" that they are worth the higher fee; their economic incentive is to argue the value of their services and justify whatever fee they seek to assess. The value argument is also part of what would moderate patient behavior and shift the perception of healthcare in a positive direction. People are not troubled by price when they perceive value.

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    Re: AMA opposes Obama's Health Care plans...

    Quote Originally Posted by donsutherland1
    While advocates of single payer coverage typically tout the benefits of such an approach, from an economic perspective very real adverse issues associated with monopolies that typically harm consumer welfare arise ie.,
    I don't see the economic benefit or welfare to consumers from AETNA, Blue Cross-Blue Shield et. al. at present.
    reduced consumer choice,
    I know you're talking about single payer and single payer only, but the proposals that I have seen offer at the very least, one more choice.
    reduced customization of specialized products/services,
    Who is advocating the elimination of specialized coverage (cancer insurance, long term care etc.) if people so choose to pay for it?
    long-run costs,
    Costs over the long run is what is trying to be curbed right now
    lack of innovation,
    I keep hearing that and don't see it, how many study grants do university hospitals receive each year?
    divergence of a monopoly's interests from those of its consumers, etc.
    What other interest would a government payer plan have other than to provide a vehicle to help pay medical costs. We already know that private insurers interest is to make as much money as possible for themselves and that is not to the consumers benefit.
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    Re: AMA opposes Obama's Health Care plans...

    BWG,

    You are correct that I'm only talking about single-payer in reply to a member's posted message.

    Without doubt there are major issues with respect to the current system. Some major issues include:

    1. Persistent high incidence of uninsured persons. This situation imposes costs on the nation's economy.
    2. Persistent situation where costs are rising faster than nominal economic growth, an unsustainable situation in the long-term.
    3. Procyclicality of a largely employer-based private system.

    Any credible health reform efforts will need to tackle those issues. Until I have a chance to examine the actual details of what is on the table, rather than reports of what might be in the works, I will hold off on commenting in any great detail.

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    Re: AMA opposes Obama's Health Care plans...

    Quote Originally Posted by donsutherland1 View Post
    1. Persistent high incidence of uninsured persons. This situation imposes costs on the nation's economy.
    You mean that figure of 46 million who are uninsured? Time for some fun facts:
    1. 9.7 million are not Americans.
    2. 16 million make more than $50,000.
    3. 14 million are eligible for government programs.

    This leaves only 8 million uninsured, and be sure, these are not CHRONICALLY uninsured. When you look at the data, the people at the bottom rung of society change completely about every 5 years.

    2. Persistent situation where costs are rising faster than nominal economic growth, an unsustainable situation in the long-term.
    And maybe technology is improving in the medical sector more than other industries. Compare the cost of a normal Hepatitis B vaccine. See how that price has changed over the years. I'm sure you'll have fun with that.

    3. Procyclicality of a largely employer-based private system.
    When government runs it is the same thing. Since businesses and people will pay for it, and people are subject to economic fluctuations, the medical industry will still be subject to business cycles just like the rest of the economy. I know that you're not necessarily for government takeover, but nothing will avoid this problem. If there's a business cycle, medicine will necessarily feel it.

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    Re: AMA opposes Obama's Health Care plans...

    Quote Originally Posted by hazlnut View Post
    Doctors are not economists. But we shall note their objection and continue on with the debate.
    Obama isn't an economist either; just look at his idiotic policies to date.

    What the AMA knows is that this will indeed lead to Government controlled healthcare and destroy the best medical care systems in the world.

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