A few thoughts on healthcare & health insurance

I’ve posted and replied a lot about health insurance and healthcare on the #ksleg hash tag on twitter. Most of these comments have been an attempt to critique others’ thoughts and to challenge conservative thinkers to improve their ideas but offering objections that left-thinking folks don’t often offer.

My critiques are not my plan. Not that I have a plan, but I do have a few ideas about how to improve the financing of healthcare in this country.

Although it would be the lowest cost option, I am worried about the long-term effects of a Medicare for all option. This option is the lowest cost because, even if we finance it 100% with taxes, the total cost will be less than what is currently spent paying for private health insurance plans. There would be an instant reduction of bureaucratic friction and conflicting billing & payment systems as well as a reduction of competing bureaucratic systems. What worries me about these plans is that the payment for healthcare will match the actual cost of healthcare, leaving profits only at the margin. This may remove some incentive for healthcare innovation. Innovation is not just in medical advancements but in providing more desirable care facilities and more individualized care plans. Current advancement in these aspects of healthcare are financed by profits created by higher costs driven by inefficient friction within the system.

That said, costs do need to go down and costs do need to become more equitable.

One of the problems with the current healthcare system is that it does not function as a market. Markets happen when buyers know the product (or service) and price before the time of purchase. This allows buyers to shop the market for the most attractive offer and this allows sellers to compete in a way that encourages lower pricing or higher quality or both.

Except for a short list of plannable procedures, it is about impossible to know the cost and how different healthcare providers price procedures differently. What’s an emergency heart bypass operation cost at KU Med vs. St. Luke’s? The only way to know the actual cost is to get the procedure.

The state can help create a market by making prices knowable and comparable between hospitals and other facilities by creating a standardized price system. The state should work with healthcare providers to create a comprehensive list of medical procedures and provide a base price for each procedure. We can call this a “medical price manual” and new procedures can be added to a medical price manual as they occur. Hospitals and other healthcare providers would not be bound to the prices listed in the manual but would be bound to a multiplier of the prices in that manual and this multiplier would have to be filed with the state, published online, and posted at all entrances to the facility.

An example of how this would work is that Hospital A decides they want to be a 1.35 hospital. Whenever they perform a procedure they take the price from the manual and multiply it by 1.35 and bill according to that price. The same price is paid for cash customers and insurance other payors. Hospital B might decide that it wants to increase its caseload and offer a 0.98 multiplier. A person going to that hospital for a procedure would see the rate from the medical price manual multiplied by 0.98 before being billed.

Once people know the cost of healthcare, healthcare providers will be forced to complete. This will help create a market for healthcare and healthy markets tend to be pro-consumer.

If having access to a healthy healthcare market is not enough to bring healthcare costs under control and more equitable, it might be necessary to provide a “Medicare for all” system into existence but it could be provided for only major medical expenses. For example, a policy might only cover expenses after the first $50,000 of costs are incurred in a given year. This would create room for private health insurance for the sum of expenses below $50,000 and health insurance companies would have a much more manageable risk pool, having policy caps in place at the $50,000 limit and deductible options for expenses below that cap at whatever levels the market will support. These private health insurance policies would become much more affordable and would require much less regulation than policies we have now that carry much larger risks.

If our elected leaders do not create a functioning healthcare market, the future will be socialized healthcare. Most of my critiques are in the half-baked thoughts of conservative leaders because they consistently ignore the reality that healthcare markets are not possible without government action that creates markets. They fail to plan for processes that make price knowable and comparable, making socialized healthcare the only other alternative.

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Grayscale your phone!

Vox has a new video with three tips to stop wasting time on your phone:

  1. Block all notifications except those initiated by actual humans with requests for contact.
  2. Move endless scrolling apps off your home screen. Keep only in-the-moment tools on your home screen.
  3. Make your screen black & white. Remove all color. Grayscale your phone!

The idea is that you not be compelled to engage with your phone like an addiction. Vox argues that phone applications are designed to mimic the same mechanism that creates gambling addiction.

On my own phone, I had already blocked most notifications and moved my infinite scrolling apps off the main screen, but grayscaling my phone was a more difficult task. There is no “grayscale button” and the app store was full of junk that didn’t work. This website, however, had instructions that did work for me. So now I’m trying my phone in grayscale only, to hopefully be more productive and less attune to what the app developers want me to do.

This is just one more way we can regain a sense of personal sovereignty in this digitally controlled world.

The Incentive of Capitalists

A common position of a left-leaning person is a deep suspicion of privatizing publicly-owned goods. Often the suspicion has certain merit behind it but that does not mean that all privatization is bad.

This post was inspired by a popular economics tweeter–

Overlooked is that capitalists, as owners of capital, have an incentive to utilize profits to maintain the value of their capital. This means that real money will be used to repair and refurnish these assets. When the asset is an electrical grid, that incentive itself become a public good. After all, an institutional bureaucrat or elected official with perhaps (up to) a decade in leadership over this type of infrastructure doesn’t have this type of incentive. He will be gone before the problem of decay become apparent and his successor can blame someone who is no longer at the helm and no longer politically relevant. Instead the pressure is to keep wages and benefits high for employees (which is good, but not at the expense of maintenance) and to otherwise not “rock the boat” by drawing attention to growing concerns.

Malls: Replacing Retail with Experiences

A large local mall recently lost a landmark store, one that sells high-end clothing and other items. Although most malls have been hit by serious decline, this one has thrived, mostly due to location. Looking forward, however, retail will have ever more competition and locations with high fixed costs won’t offer the flexibility that most retailers need to survive.

Instead of replacing retail with retail, it would be wise to consider venues that offer experiences, such as indoor driving range and pub combinations, indoor skydiving, or perhaps sports fields or zip-line courses. Experiences usually can’t be provided online and require a fixed location. Given that malls have large, open indoor space, it is at least worth a serious consideration.

Interesting Links & News Update – 24 January 2018

Today’s Quote:
“[Watches and clocks] inevitably fall in step with an owner’s natural disposition, be it ponderous or ebullient, and in the same way they reflect his conjugal patterns and political persuasions.” -Ahmet Hamdi Tanpınar

A conservative argument against voter identification laws

The principle that opposes voter identification laws is that it is the duty of the government to prove that I am not who I say I am, and not my duty to prove to the government that I am who I say I am. Fundamentally, this is about keeping intrusive government out of the lives of the people except when absolutely necessary. That’s the argument Ted Cruz uses in his tax reform arguments, that Rand Paul uses when he argues against Real ID laws, and that Ronald Reagan argued when he proclaimed more government isn’t the solution to the problem…it is the problem!

This argument does not oppose government officials investigating real cases of fraud, but it does put the responsibility on the government, not the citizens, in discerning the validity of one’s statement of identity. In a world of limited government, that’s the way it ought to be.