Key Insight regarding Gov’mt in America

An important, simple point from: Backers of government-run healthcare, including the single-payer concept, think regulation by government and intelligent planning will work better. I think that these people are well-intentioned but wrong. If we follow their suggestions, we are more likely to end up with something like the U.S. Postal Service than a high-tech, streamlined medical system that can work in the future. This is not because governments can never do anything right, but because the American political system works the way it does. Other countries, usually smaller and more homogenous ones, can do these things better. Approaches that might work in Denmark don’t work well here. The messy compromises and one-size-fits-all solutions that usually come out of Washington generally can’t provide the kind of guidance our healthcare system needs.

Health insurance, over, under or miss Regulated? HI Monograph

The Hoover Institute’s Defining Ideas often has thoughtful, rational topic pieces, like this great one: The Car Insurance Model, by Scott W. Atlas that discusses Health Insurance. All I can say is read it, it essentially lays out an argument that health insurance state regulated is miss regulated and even monopolistic in many areas and before we try the monstrous over regulation layer on top we should look to insure at the county wide level. The state regulators should be the ombudsmen for the people not the lapdog rent providers of the insurance industry they seem these days. He also advocates high deductible insurance and Health Savings Accounts.

Now he does argue against forcing insurers to insure everyone at the same rate for the same coverage. Here I am a lot less certain, maybe because I am overweight, and no longer young, once smoked, etc. I agree that age and perhaps gender should be factors but the more specific you get the less useful insurance becomes (at the extremes {which a totally unregulated totally privacy devoid world of the near future might enable} the only coverage you could get would be for random acts of god…’so sorry to hear about that lightning bolt hitting you, good thing you’re not a cowboy or golfer, we don’t cover lightning strikes on cowboys or golfers without a special rider from Lloyds.’)

But that’s a niggle, basically the argument is the system as is, is broken but fixable with rational, simple changes, let’s start there before layering in more Regulation and gov’t oversight.

Nano Robots Move Out

 

Mothership?

A fascinating set of articles came out recently discussing the progress in micro and nano robotic techniques above. Is the picture from a short piece in IEEE Spectrum discussing the work of Dr. Ada Poon at the Standford Poon Group who are working on medical applications of beamed power. 

Poon Group Tech Map

Poon Group Tech Map

The basis is this technical paper (PDF).  Which talks about the chip, it essentially couples the beamed energy with a tiny antenna and converts the energy to a form needed to drive the chip using a electromagnetic propulsion fabricated on chip.  Very cool.  I will also point out that the Poon Group appears to be reasonably focused, some similar organizations I have run across or worked with have gotten way too diffuse and seem to wander off topic all the time.  Dr. Poon is doing a good job focusing on some key enabling technologies in the field.

So every battle platform needs its weapons, and what do you know these guys seem to have just the ticket.

Researchers at the Wyss Institute for Biologically Inspired Engineering at Harvard University have developed a robotic device made from DNA that could potentially seek out specific cell targets.

DNA Nanobot Shell

DNA Nanobot Shell

Obviously they are looking to ways to use this in the form of a more traditional delivery system, say a shot, but the Dreadnought could also use these for delivering deadly loads into exactly the right spot possibly repeatedly over time without repeated shots etc.

On its own very cool, in combination with everything else going on, mind-blowing!!

And yet we also complain about the costs of medicine.  The reason that money is put into these efforts is both altruistic and profit driven:

  • Medicine is after all about making life better for human beings
  • These techniques promise profound effects with minimal collateral damage
  • These devices can be fabricated in their thousands using ultra clean and precise techniques that will both lower cost and improve performance.
  • The price performance should move towards a Moore’s Rule like model of decreasing price AND increasing performance on a steep slope.
  • Conditions untreatable today will be treatable
  • People who would have died will live…some with health issues that will make them a drain on the economy.
  • Early clinical trials and during ramp up and cost recoupment the prices will be high because of limited supply and price controls…and people will complain about the cost of medicine.

And so the cycle will go on.  Do not take my screeds against Health Care costs and the Medical Establishment as any kind of Luddism, I want more technology more quickly, its the only path to better human lives.  What I hate is the almost Medieval Economic model of the existing ME in the US.

This explains it all! Really! It does!

As e connected as I am I still enjoy sitting down in the morning and reading the Indy Star in its print form.  I have to admit I sometimes spend more time reading the funnies than anything else, but I do scan the first section (and the first and last page of Metro) But I do often read articles and this OpAn (opinion/analytical) piece from the Washington Post caught my attention.  I think Ezra Klein’s caught on to the problem,

There is a simple reason health care in the United States costs more than it does anywhere else: The prices are higher.

Really! It is almost that damned simple.  This graphic or the table version in the Star is infuriating and eye opening. 

Of course it’s not an explanation in and of itself and one could take Mr. Klein’s piece as a pointless frontal attack on the health care industry but the point is much more subtle. As I have discussed broadly before the issue is that things cost as much as they do because the way the current system creates vast inequality almost on purpose through weak and or distorted pricing signals.

A Gifted Man is a great TV show….how is that relevant? In it Michael Holt a brilliant neurosurgeon finds himself ‘gifted’ with the ghost of his wife, a socially conscious doctor who he had divorced (apparently amicably) years before.  While Michael runs Holt Neuro, an extreme high end clinic for the wealthy and powerful, Anna is running a Free Clinic, Clinca Sanando, in a poor section of the city (NewYork though its portrayed as almost any city.)  Anna has been killed in a hit and run, and her ghost goads him into helping the free clinic which is on the edge of folding.  (I could go on, its good TV but won’t.)

The thing is A Gifted Man points out without grinding ones nose in it the huge disparity in health care between the rich and the poor.  It also make the point that one can do good even superior general medicine in very spartan conditions if you have a dedicated and reasonably competent crew.  You can do even more if you back that up with truly superb facilities for those who need it, but those facilities are very expensive and somehow need to be supported by the clients. 

Now the the article points out the cost of medicine in many countries with more socialized medicine and I grew up in England then in middle class America where the conditions in the Doctors office were more reminiscent of the Clinica than Holt, today, I’m middle upper middle economic tranche and all the offices are much more like Holt than the Clinica, but why? Partially because I bitch if I have to wait for an appointment, and partly because I never see the cost until after the fact (except for dental work beyond the basics…becuase many more people lack dental coverage than lack general health insurance.)  In most ways the reason I go to my general practitioner is because he (or his office) keeps track of my overall health and is a central repository of my health records and I value that.  I’d value it even more if I could see it as a cost rather than an overhead hidden in the other post facto numbers I get….in no other part of my life do I have such uncertainty about the cost and yes perhaps because its hidden I’m not as reticent about going, because I know that in the end I can afford it, but many others are not as lucky and the uncertainty is discouraging, and then there are the folks with no coverage, who get bills many times what I pay…in some part because the Medical Establishment figures that in the end with many of those folks will end up paying pennies on the dollar, if you multiply the dollar by some large factor then the ME is more likely to at least cover costs one way or another.

 I do not ever feel that Micheal Holt does not deserve Holt Neuro or that the folks at the Clinica should have unfettered access to Holt Neuro.  I do not (most of the time) begrudge the well off hospitals their cathedral like front lobbies.  I do feel that the system is seriously distorting the messaging power of pricing and under suppressing the power of pricing the Medical Establishment hold because we are all frail humans who if not now then one day will have health issues to deal with.

Establish portable health savings accounts and require published pricing for standard procedures based on standard practice codes (and all procedures should have such codes and a cost you can find if you look or enquire.)  Don’t take away the tax advantages of the coverage companies provide, but extend it to everyone who buys their own insurance.  Reduce that tax advantage over a couple of decades.  Allow insurance companies to negotiate costs but they have to do so based on standard codes and publish some metric of what they are paying, make it illegal to charge different customers different prices for the same procedure (and don’t allow rebadging, the procedure codes have to be the same for all customers.)   Make it illegal for companies to charge different people different insurance rates, insurance takes into account your age and that’s it, different insurance companies can sell different sets of coverage and different age windows but that’s it.   Make the market place fair and flat.  An actuaries job is to make sure the insurance company collects enough money to cover its costs and make a reasonable profit! But again they have to publish their rates and compete for customers and if the marketplace is open and fair the prices will drop to the minium that covers costs and reasonable profits.

Some very blunt advice…

This article from the Cato Institute is very hard for me to argue with. Essentially the only parts of gov’t that matter when talking about deficits are (drum roll please) Medicare, Medicaid, Social Security and the Defense department. And even the DoD is relatively small beer, it’s a traditional bee in the bonnet of Libertarian/Cato types (with some reason.) Mr. Bandow points out that all of these programs have to become purely means tested, I think the age has to move up into the mid seventies and should start doing so essentially on a year every year basis ASAP and that anyone ten years or more from ‘retirement’ would be affected, ten years is a huge time horizon to deal with the change.

Anyway read the article it’s timely and prescribes the sort of major overhaul we need.

Regression as a good thing!

This article seems to have very exciting implications. Cellular regression in diseased heart tissue with the help of oncostatin M: Credit: MPI for Heart and Lung Research-press. They have found a channel where heart muscles can be regressed to stem cells (dedifferentiate?) which then can multiply and re-differentiate into healthy heart muscle tissue. This has huge implications not only for heart attack victims but many other diseases and treatments. As Glenn Reynolds would say “Faster Please.”

Work a day World….which will come

Another article about the end of work as we know it and I have to agree that this is the ‘feeling’ i get when looking and listening to the world at large. My jobs over the years have taken me to many companies, many new, some middle aged, a fair number ‘old line industrial.’ And the way I see it now is that we’ve been overlooking profound changes that were happening without causing much of direct stir while looking in the wrong direction and perhaps (probably) pursuing the wrong ‘solutions’ to what may not be real problems.

The story I would tell is this, that the heyday of the giant integrated conglomerate as a generic solution in the technology arena was probably sometime around the middle of the twentieth century. Not that anyone realized it or noted it, but after that smaller companies were often able to outmaneuver the big guys and started carving away chunks, not directly but by making managers/owners make decisions that marginalized pieces of their business. These middle sized companies started small and sometimes grew big and became conglomerates but on average the company size got smaller and more focused.

Many of the companies I visit have huge factories built in the heyday of mass production. Today these factories instead of producing just one product, produce several, or dozens and the people who service the machines are a fraction of the ‘old’ work force, or much of the facility stands vacant while the still sell just as much in raw value as they did when they had hundreds if not thousands of workers. Many stay in these old factories, because they’re essentially free and/or tearing it down would open them up for problems with the EPA re ‘Brown Field Remediation’ etc.

What happened to all those workers? We’ve heard about the hollowing out of our manufacturing for a long time but the pain was ‘mostly’ pretty low level, why? Because for the first forty years most of the the effects were hidden. Those smaller, mid sized companies were usually, less automated and less efficient but less expensive in terms of human driven overheads (generally younger staff, lower wages, small efficient shops, small effective teams, managerially efficient), and they sopped up, the workers no longer needed by the ‘mainline’ shops.

So why the agony now? I think that the internet bubble then the financial bubble hid the tailing off of the gentle transition, or maybe it kept more of the old line industries / jobs in play and then dropped them on the floor in one steaming pile. And suddenly the staid old like companies appear to have vanished, and the jobs appear to have vanished, but they had mostly vanished a decade and more ago, the rest was financial illusion.

If there had been no 911 and a need to hide the cost of the wars it sparked and a Ranch and Cancun Vacation (instead of bread and circuses) program put on to distract our attention, we would probably have seen the pain earlier and I think less severely. Now we probably are going to undergo a painful decade of recession, maybe more until we understand that the world has changed and work and the economy have to evolve.

How that evolution is going to happen is a blank to me. But what I see as happening over the next several decades is an ongoing evolution of work to highly automated mass production of basic needs, and the creation of more and more boutique, even artisanal companies often supported by constantly shifting teams of people who are engaged for short run needs.

And perhaps the gov’t and many folks who are still looking at the past to guide the future, will stop trying to save industrial age health and retirement systems that are unsustainable in the long run, and look to a much more personally focused system one that is portable across the country and across the globe if we have any sense.

Health Care Costs (3)

So to continue:  The way I see Health Care has seen a bubble in the US that has grown huge over a very extended period.  Most have called this ‘bubble’ Health Care Cost inflation.  But a bubble over any period between inception and bursting can be seen as (mistaken for) inflation. Is the HCC “Bubble” going to burst or do we have to just accept this as inflation.  I think that too many people want this to be Inflation, not a bubble. And I do not want a ‘bust’ but I do think we need to get on the off ramp, to a price plateau at the very least.

I’ve discussed:

  1. The pernicious effect of opaque pricing
  2. A spike in Cost/Value in capital investment (buildings and equipment.) 
  3. The Gov’t affected floor to pricing
  4. The profit motive effect of increasing costs in the system

Now I’ll add some more:

  • Direct sales…more and more selling of this that or the other service, drug, wonder cure, to the general populace who have no real way of parsing the useful from the useless or even harmful.  And then the sales guys got to congress and punditry and started demonizing those who tried to point out that the common man was not really in a position to make medical decisions. (Not that the god-doctors should be put in charge, much as many of them believe that they should be because they are smarter than anyone else.)
  • Litigation, because medical outcomes are impossible to ensure, and there has been a Lawyer bubble going on for many decades, doctors got sued more and more frequently, malpractice insurance costs went up and so another cost was added into the equation (and for a long time absorbed because the system hid the costs)
  • Specialization, again 9% of 10,000 is a lot more money than 10% of 5,000, but 15% of 10,000 is even more.  Specialist charge at a higher rate because they are specialists and have special skills, that are needed by special cases…..they don’t have to see as many patients, get to go to conferences and consult with other wizards and look down their noses at the rest of the world, even at other doctors.  What’s not to like? Just one more cost adsorbed in the system.
  • Administrative fief building, its a fact of nature, or rather an emergent property of human society:  administrations grows more complex and adsorbs more resources as time moves on, as the top level administrators increase the number of ‘direct reports’ then create hierarchies so they don’t have to talk to as many people so they can be ‘more efficient.’  Administrators (Bureaucrats) are extremely good at capturing the system and turning it to serve them versus the customer the system is supposed to serve.

So what is the solution.  Well I think you can see the one I would focus on first but that will be a discussion for another day.

Health Care Cost (2)

When I was a kid and even as a younger adult I went to the dentist’s office and other ‘providers’ and the amenities were clean and neat but often I was treated in a ‘ward’ environment.  And this was way after I’d left Jolly Olde England and the NHS (National Health Service.)  Today most providers I go to the office/clinic space is custom designed often with soothing art, music, video etc.  Now don’t get me wrong, Video/Music does help when you’re under the drill (having something probed etc,} and the video screens used for modern digital x-rays or other data reproduction are a boon as well. But why is every ‘provider’ the same.  Why did hospitals move away from wards to private or semi private rooms with the concomitant increase in capital and operating costs.  Why does my local hospital s soaring almost churchlike multi story lobby floored in granite with overlooking balconies and a Yamaha robo grand piano, and this is not the top end hospital in the region. 

It seems to me that what we have seen is a health care bubble, much like the higher eduction bubble (or the overall education system foam,) we’ve seen in the last thirty years….but I digress.

  • As providers realized that they could attract more lucrative patients by setting up nice offices in nice parts of town the general price of HC (excuse the acronym) went up, in general the expectation in all for pay HC went up while the free clinics crashed.
  • It’s mathematically obvious that 10% of 5,000 is a lot less than 9% of 10,000 and the cost of consumables etc are usually fully reimbursed by the payee because their price is a published known. So providers made more and more use of high cost consumables of one sort or another, and were not incentivized to keep the costs down even if their ‘profit’ was squeezed a bit.
  • Medicaid and Medicare have managed to subsidize the lower end of the patient rainbow and pushed up the overall cost by pushing the higher end patients and providers into a different ‘market space.’
  • Because the actual cost of HC is essentially invisible to the patient the steady spiralling cost was not noted by the high-end clients because they perceived (I think rightly) that they were receiving value for money.  BUT as the high-end pulled away the middle dependent ons insurance etc was stretched and the low-end fell away, the old-fashioned cheap equipment / methods / services they had used were rendered obsolete and replaced by the new much higher cost versions.

Add this and other mechanisms together and you have a bubble.  One that grew and grew, while people griped, tried to do something about it but failed.  For some reason we seem unwilling to change the basic underlying dynamics.  Is that because they are so complex and interlaced that people can’t be bothered to go beyond the simplistic.  Or do a lot of the bad things have attractive sides that would be lost if we made major changes? 

In the current system its impossible to figure out the trade-off between a private room and a ward.  Once that wasn’t true or as true.  We have the technology to make this problem go away.  I believe that with transparent pricing and costs wouldn’t we make different decisions.  Maybe not all the time, but maybe enough to break the back of the ridiculous inflation rate we see in health care.

Health Care Costs (1)

I was listening to the Diane Rehm show this morning.  She had a panel discussion on Health Care, Obama Care and Health Care Costs.  They touched on a couple of issues that I find rather under discussed and it struck me as odd after a while that no one really dug in on the topics.

Here is Topic 1…

Why is it that the cost of a procedure or a piece of gear etc, varies according to who is paying?  If you’re lucky enough to be covered by a relatively old fashioned policy like I am you will see on your explanation of benefits that the Doctor, Hospital, Clinic, Dentist…(the provider) charged one price but the insurance agreed to pay another, the provider agreed to that and wrote off some or all of the rest and you paid your deductible plus some additional cost sometimes for one arcane reason or another. 

The Provider and the Insurer have some pre agreed price sheet that you never get to see.  (You never get to see any price sheet that I know of.)  Blue Cross Blue Shield apparently has one price sheet, UHC another, Medicare and Medicaid another, and the uninsured are hammered with the top line rate.  An uninsured person who cannot prove he/she can pay up front is charged a higher rate again, (at least that appears to be the game) and then the hospital hounds the near-victim for some ‘pittance fraction’ that in the end is still probably more than an insurer would have paid.

If there were an industry agreed to list of procedures etc (which has to be effectively in place.) You, a consultant, a doctor w/should be able to tell what services you require and you should be able to look up what those services cost on the web comparing various providers.  There should be various providers offering various prices and various deals, that you can work through and figure out what is the best value solution for you and your family quite quickly.

This way the insurance companies could reduce costs because they no longer have to individually negotiate prices, rebates, write-offs with each set of providers, the providers likewise can reduce costs for the reciprocal reason.

Administration costs are a huge part of the Health Care Expenses these days and to me this seems to be one of the myriad reasons why.

Health Care Costs are rising almost uncontrollably and the lack of a price comparison mechanism seems to me to be a significant issue.