Friday, September 15, 2017

Some Healthcare Musings and Market Possibilities

Single payer healthcare is back in the news, since the introduction of a "Medicare for All" bill by Bernie Sanders. In an article for Bloomberg, "Incentives Are All Wrong for Single-Payer Healthcare", Tyler Cowen writes:
It's worth thinking through why some single-payer systems, such as those on the European continent or in Hong Kong and Taiwan, seem to work. Typically these systems were instituted while health-care costs were still fairly low, and then kept down by government fiat. The U.S. is not in that position, and it's hard to see doctors and hospitals -- powerful lobbies -- going along with significant cuts to their payments.
Essentially, most special interests in the U.S. are important parts of the "buy in" for legislative results. Tyler Cowen continues:
When it comes to access, the major problem in the U.S. is distributional: Some of the poor have insufficient access, and arguably some of the well-off have insufficient access, and arguably some of the well-off receive healthcare at too low a user price. Given Americas' love for consumption, it's probably too late to fix the latter problem.
However, there's somewhat of a paradox in the "Americas' love for consumption" argument. There are many potential treatment options across the spectrum, besides what may be suggested in the doctor's office. Many such options also happen to be less expensive. Nevertheless, alternative treatments and remedies have been systematically devalued as long as anyone can remember - not just by healthcare practitioners but in particular by major media sources. While this barrage of reasoning helped to reduce marketplace competition for professional providers and pharmaceutical remedies, it simultaneously made too many people who often couldn't pay for formal healthcare, more dependent on a system which in many respects wasn't structured to include them.

For decades I've observed the effects of "alternative healthcare product is bad/worthless/dangerous" reasoning, in spite of the fact formal healthcare has its own risks. Risks go with the territory! And while the intent of many healthcare professionals may have been to preserve the loyalty of high paying customers, they inadvertently gained the loyalty of low income customers who not only lost faith in lower cost alternative options, but also tended to prefer guaranteed access to treatments with built in higher costs.

Indeed, the government fiat which Cowen mentioned in the above quote, probably makes it simpler for other governments to include older tried and true methods alongside current medical remedies and procedures. Given the chance to visit other countries, I like to imagine that I would not encounter the negative media attitude towards informal and alternative methods, which exists here.

Healthcare in the U.S. is a more substantial problem at an equilibrium level, than elsewhere. Once governments set up processes in which they are expected to "give something back" (subsidies for those who can reciprocate) for legislation, that's difficult to change.

Regular readers know that I have high hopes for knowledge use systems which could incorporate the practical from modern medicine, alongside tried and trustworthy methods from the past. Interestingly enough the "single payer" framework suggested a suitable framing for small group approaches: Contributions from "single disease" specialists. Where once such specialization would have been impractical in small or local settings, the digital realm means new horizons for the cross fertilization of approaches and remedies, across local knowledge use systems. Not all research and development which takes place via time arbitrage, need be local in nature.

Of course, no participant need concentrate on a single disease, if they wish to continue. Rather, a single disease approach would provide means for individuals to gain solid economic footing at an early stage in their incremental learning process. Some participants could make a single disease focus their healthcare contribution for aggregate group efforts, while others may choose to expand into further healthcare studies.

In his above linked post, Tyler Cowen mentioned Medicaid expansion as an option. However, as noted by Dana Goldman at Brookings, the first "go to" of Medicare has its own problems:
People also forget that Medicare is a hidebound system. It took Congress more than 40 years to offer a prescription drug benefit, for example. Physicians are paid using an arcane system developed decades ago and that has now ballooned to more than 140,000 procedures codes, all of which is supervised (and gamed) by physicians themselves. Standard private sector cost-saving measures, like competitive bidding for routine services, are rarely used.
There is a better way - called universal catastrophic coverage - which borrows from both progressive and conservative playbooks. It would combine the federal guarantees of insurance for all with the cost controlling benefits of insurers competing for that business.
While universal catastrophic coverage sounds promising, the main problem for implementation, still goes back to the way our "rewards for all" system was developed. Likewise, today's formal healthcare specialists need to focus their efforts on what clearly pays in the marketplace. And because of the costs of their education, most specialists need our government to maintain the subsidies which are already in place.

Time arbitrage could finally allow individuals to focus on healthcare issues which don't provide the same profits. How so? Since time would compensate time, system participants would be able to pursue research and development which isn't profitable in general equilibrium conditions. Plus, healthcare participants would be able to allocate time to individuals where it is most actively sought. We don't really know what time would be sought, because time based compensation has often been allocated according to institutional needs instead of the personal needs of provider and recipient. Fortunately, by making each individual an active component of wealth creation, there are market possibilities for healthcare which have yet to be imagined.

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