Friday, September 18, 2009

An Instructive Example of Why Healthcare Costs So Much

Why save money when you can spend much more for much less?

Medicare and private health insurers decline to cover cheap devices like iPhones and netbook PCs that can help the speech-impaired, despite their usefulness and lower cost.

Instead, public and private insurers insist that, if Ms. Lynn and others like her want insurance to pay, they must spend 10 to 20 times as much for dedicated, proprietary devices that can do far less.

The logic: Insurance is supposed to cover medical devices, and smartphones or PCs can be used for nonmedical purposes, like playing video games or Web browsing...

This type of perverse logic is a big part of why I am highly distrustful of government claims that they can reduce healthcare costs. Their track record on just about everything else is not good.

Why don't private insurers cover this kind of technology?

Private insurers tend to follow the government’s lead in matters of coverage.

If we want to reduce costs, maybe what we need is less government involvement in healthcare rather than more?

Read more about how technology can help the speech impaired here.


thinking said...

First, in every modern country with universal healthcare, costs are controlled much better than in the US. The experience around the world shows that such govt involvement creates better outcomes at lower costs.

Second, Medicare is actually more efficient than private insurers. And consumers give higher approval marks to Medicare than to private insurers.

With private insurance, 30 cents of every dollar pays for nonmedical costs: marketing, billing, denying coverage, hassling patients and doctors, profits and astronomical CEO salaries. Medicare overhead, on the other hand, costs just 3 cents on the dollar.

Third, health care reform is not only about controlling costs...that's one angle on the debate.

There's the moral and human dimension. Just yesterday, Harvard Medical School released a study that shows nearly 45,000 people in the United States die each year because they don't have health insurance.

All the evidence shows that publicly financed systems, unburdened by the need for marketing and profits, can provide better care, less expensively. No one is left out and you can take the coverage with you from job to job.

This one anecdote about the smart phone does not really prove much.

I can offer up numerous anecdotes about insurance companies denying coverage and treatment to people based on "pre-existing conditions" like cesarean sections and having been a victim of domestic violence. This has really happened.

Of course no system will be perfect, and any govt involvement will have to be monitored like a hawk. But there's no reason to believe that if we just let the private insurance market totally alone, somehow things would just work out great.

thinking said...

As an addendum, there's this mythology out there that all govt is bad.

Quite the contrary...govt is a useful institution that, properly administered, has made a positive difference.

Some examples:

Largely due to the efforts of the NIH, the CDC, and state and local public health departments, polio, cholera, and smallpox have largely been eradicated from this country.

What about the Interstate Highway System? No govt, no such system.

Thank goodness we have the FDIC...otherwise, our banking system may have collapsed all over again last year.

Then there's Social Security and Medicare, which have done enormous good. Social Security has cut the rate of poverty for the elderly by over half, and Medicare has doubled the number of the elderly covered by health insurance, so that 99% now enjoy that benefit.

How about the GI Bill? That only made possible the post-WWII boom in this country and elevated society in the process.

What about consumer protection laws? Do we really want to go back to the day where nothing, not even our food, was regulated for safety?

There's anti-discrimination laws, such as the Civil Rights Act and Title IX.

The list goes on and on...

Derek Bok, a former president of Harvard, conducted a comprehensive study of national progress in the 1990s and published a book on his findings called The State of the Nation.

His finding:
During the past thirty-five years, our society has made substantial progress in most of the fields surveyed. In almost all of these advances, government actions have played a prominent role, whether it be in cleaning up the environment, expanding personal freedom, extending health care to the poor and elderly, reducing poverty, or increasing opportunities for women and minorities. Federal policies have clearly had a hand in America’s greatest domestic achievements…