Tuesday, December 29, 2009

Ezra spinning his wheels to defend the Senate financing scheme

Ezra responds to Bob Herbert's column by stating that cost controls are neccesary and the only way to gain those controls is through a punitive tax hike on the middle class. Color me unimpressed.

Cost control is obviously important but, as one of Ezra's commenters notes, costs are not driven by the consumer. No one signs up for an extra MRI or CT scan just because they have insurance. Sure they may see their general practitioner once more than they otherwise would because the copay is low but that's not a high cost item in the grand scheme of American healthcare. What drives cost is the fee for service model which encourages doctors to order more tests on the latest equipment. Ezra's approach to cost control is to punish middle class workers in order to save the medical professionals from themselves. It's maddening that he somehow views this as a perfectly legitimate means to achieve his desired ends.

In this debate I have, at times, found Ezra to be technocratic to a fault - this is one of those times.

1 comment:

Andrew Oh-Willeke said...

The real issue in cost control debates is not how much care people get, but what price they pay for it. Consuming more health care services than necessary is not something that many people need to do, and when it is a problem, intervention with individual hypocondriacs, rather than generalized incentives, is usually what is necessary.

Providers (doctors, nurses, med techs, med administrators, drug companies, hospitals, etc.) in the U.S. get paid far more than those elsewhere, even adjusting for cost of living, and charge many times more than that as their "usual price" that no one pays. For example, a hospital near where my father lives charges $900 for a one hour stay in a recovery room with no services other than a bed and intercom, on top of labor charges for the professionals doing the procedure before and charges for using that space.

In contrast, the Japanese use much more health care, but are exceptionally stingy with providers, and end up with a third as much cost per capita.

Large premium plans mostly involve little more than pre-paying for what one would otherwise pay for in predictable out of pocket medical costs. They are combined insurance and health savings account plans with less paperwork than a true HSA.