Grandma Got Run Over By a Voucher
posted by Frank Pasquale
The “sensible liberaltarian” blogosphere is debating the wisdom of turning Medicare into direct cash payments to seniors. I guess everyone’s forgotten about the bargaining power of a public option like Medicare vis a vis increasingly concentrated providers. And hey, why bother with the boring big picture of health industry trends when you can spin out thought experiments about brave individuals risking cancer nontreatment by buying cheap insurance? Somehow the hypotheticals never specify whether those who “prefer” cheap insurance do so to buy a few more rounds of golf at the country club, or to find a dinner more satisfying than catfood.
Kudos to Ezra Klein for explaining some kinks in the voucher concept:
Let’s run through the cash-grant world: At age 65, grandma decides to purchase no health-care plan, as she figures she’ll just get one when she gets sick, or maybe just get one next year, or perhaps she just doesn’t want to spend money extending decrepitude. But then she has a stroke and gets rushed to the hospital. Someone is paying for that emergency care. It might be the hospital. It might be the taxpayers. But it’s someone: The paramedics aren’t going to refuse to lift her onto the gurney. And then she needs rehabilitation. Someone is going to end up paying for that, too. Or perhaps she gets leukemia and, in a display of consistency, doesn’t want heroic efforts made to fight it. But are we really prepared to deny her pain meds? Or hospice?
A Limbaughvian social Darwinist might deny the meds, but that position doesn’t have much political (let alone moral) appeal. As Ryan Avent notes, the “plan is a good one right up to the point at which society is unable to tolerate preventable deaths on the sidewalk outside of the hospital for those who took it.”
For a more serious consideration of the cost-control issue, check out Gregg Bloche’s work. In his new book The Hippocratic Myth, he explores the rationing issue in some depth. He also looks at the promises and limits of more macro-level approaches to cost control:
The 2010 health reform law created a “Patient-Centered Outcomes Research Institute,” funded by levies on Medicare and private insurers, to sponsor such research. But the funding level, less than a tenth of a percent of what Americans spend on health care each year, will do little to increase the fraction of medical decisions that rest on science. And the Institute’s governing body — composed mostly of representatives from the hospital, insurance, and drug and device industries, as well as physicians — seems almost designed to enable stakeholders to block studies that threaten their interests. Moreover, multiple provisions in the law (sought by providers and drug and device makers) hobble Medicare’s ability to base coverage decisions on research the Institute sponsors.
Perhaps high health care costs are less a problem of “greedy geezers” than they are a function of a profit motive gone wild throughout the industry.
April 15, 2011 at 12:05 pm
Posted in: Behavioral Law and Economics, Health Law
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Responses (6)
Seth Finkelstein - April 15, 2011 at 12:13 pm
> Let’s run through the cash-grant world: …
He’s deliberately missing the possibility of “compromise”. The public will pay for the very cheap stuff – i.e. standard pain meds are extremely extremely inexpensive. The expensive stuff – i.e. rehabilitation – won’t happen for anyone other than the very well-off.
The idea is actually more politically calculating than pundits generally discuss. Someone has to make decisions on medical care. If it’s for-profit companies, doing it for less than ultra-rich people, that’s generally considered OK, even laudable, in the current politics.
Frank Pasquale - April 15, 2011 at 12:41 pm
Yes, I think that’s often what the rhetorical moves for “pro choice” medical finance boil down to. (Even in otherwise thoughtful works like Clayton Christensen’s Innovator’s Prescription.)
I do understand that health care costs are high, and there is a lot of waste in the system. But to expect individuals to root those costs out is deeply unrealistic, as Tim Jost has exhaustively shown: http://www.dukeupress.edu/Catalog/ViewProduct.php?productid=15485
Ken Rhodes - April 15, 2011 at 2:59 pm
So Seth, explain the possibility of “compromise” in this hypothetical:
Mrs. Johnson is speaking on the phone to her friend Mrs. Finkelstein, when she suddenly gasps “Oh God” and drops the phone, and the line goes silent, but not disconnected. Mrs. Finkelstein, certainly concerned, calls 911 and reports the incident, giving Mrs. Johnson’s address. Paramedics arrive a few minutes later, finding Mrs. Johnson unconscious on the floor, apparently having suffered a major heart attack. They take the unconscious Mrs. Johnson to the nearby hospital, where she is stabilized and inducted into Cardiac Intensive Care, still unconscious.
The next day Mrs. Johnson, now fully conscious, is scheduled for surgery to repair her badly damaged heart. On the way to the O.R. they wheel her gurney to the patient services office, where they ask her about her insurance coverage. “Insurance?” she replies. “Oh no, I don’t carry any of that expensive insurance. My son the economist evaluated my risk factors and advised me that the cost of insurance exceeded the expected return, so I opted out.”
Which “very cheap stuff” will we pay for?
Seth Finkelstein - April 15, 2011 at 4:07 pm
Ken – this has already been determined. Look at what happened before the law mandating emergency care was passed. Patients were literally dumped on the street. There are limits right now to how far emergency care will be given for uninsured non-Medicare/Medicaid patients. It’s not a puzzle how to simply extend this limit to everyone.
Not that I’m advocating this, quite the reverse. But what choices will be made is known territory. The same ones which are made right now, except more so (as in, in more cases, for more people).
Veracitor - April 16, 2011 at 12:17 am
You’re both wrong. The “law mandating emergency care,” known to those who know as “EMTLA,” had nothing to do with (non-existent) people “dumped on the street,” despite the black propaganda of proponents. The law was intended to do two things: spread the cost of unpaid emergency care from government and charity hospitals to for-profit hospitals, and provide illegal aliens (ineligible for Medicaid) with free treatment for non-emergency conditions. (Witness the world-famous Parkland hospital in Dallas, where every day of the week tens of Mexican-citizen mothers come to give birth to “anchor babies” at taxpayers’ expense.) Both of the law’s goals have been accomplished, but not without additional effects and costs.
Very many people from the lower half of our socioeconomic spectrum have learned that ER’s now offer free treatment without appointments. For many people such service is much more attractive than the service they can get by going through the hassle of enrolling in Medicaid (many are too drunk or stoned or feckless to navigate the Kafkaesque Medicaid bureaucracy) and making appointments with the (typically rushed and vaguely seedy) doctors and clinics willing to accept the desultory payments Medicaid offers. Of course, for the Medicaid-ineligible, “free” ER treatment is irresistible. Uninsured ER patients are hypothetically liable for their bills, but most of them are judgement-proof and many are impossible to deal with anyway.
If you actually looked into this, you would learn that EMTLA has been a disaster, clogging emergency rooms with non-emergency patients. In many places (especially in cities with large immigrant populations) patients with real emergencies suffer significant delays, often exacerbating their injuries and sometimes causing their deaths, when they seek treatment in ER’s clogged with uninsured non-emergency patients (the law strictly forbids sending anyone out of an ER untreated even if their problem is not, in fact, an emergency one).
If we had a rational government EMTLA would be repealed immediately. ER’s would continue to treat actual emergency cases (as they always did,* albeit the for-profit ones would send charity cases to government or charity hospitals as soon as possible).
We should reform Medicaid to help impecunious people pay for non-emergency care. We should extend citizenship only to babies born to citizens so we won’t attract illegal alien gravidas to clog Southwestern ER’s (where they stick US taxpayers with the costs of care for non-citizen moms and infants). And we should get all the non-emergency schnorrers the heck out of our emergency rooms.
*Of course there were horror stories of patients diverted from for-profit ER’s to charity ER’s suffering from transportation delays and so-forth. In truth such incidents were quite rare, and the proportion of such horror stories was not worse than the proportion of horror stories in any field– some guardians rob their wards, some judges take bribes to send juveniles to for-profit prisons, some mail carriers steal packages… dumping a flood of bums without emergencies on ER’s was no way to fix the statistically-miniscule problem of ER “turnaways.” More emergency patients suffer medically-significant delays now, due to overcrowding, than ever suffered such injuries due to diversion.
Hume - April 20, 2011 at 9:51 am
Just wondering: where do you come out on the assisted suicide cases?
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