Monday, November 29, 2010

The Doctor will Screw You Now

Let's talk about medical care, the skyrocketing costs, what to do, blahblah ...

Tough subject. I was rice-and-peanut-butter poor after college. Youngest son had asthma, constant ear infections. HAD employee-provided insurance, but massive deductibles and co-pays. Every doc visit was a kick in the nuts. Deeply resented the 'Senior Citizen Discount' signs in the drugstores. No "Young Family" discount. Socialized medicine -- for seniors only.

That experience taught me valuable lesson. Medical care is an inflexible demand. It’s sort of like drug addiction. When you’re sick or dying, you will pay any price to get well. (Same applies to your loved ones, naturally.) So, the medical industry charges what the traffic will bear. Say a visit to the ear doctor costs $80 and that’s all you can afford. You've got insurance that pays for it, except for an $80 deductible. They jack up the price to $800 and you wind up paying the $80 anyway.

Like water, the price of medical care will rise to find its level -- which is the maximum amount of money (begged, borrowed or stolen) people can possibly pay for the care they need.

Because PART of the system is socialized – namely medical care for old people – the medical industry can charge more for that portion of the market. It’s analogous to, say, subsidizing car repair for all vehicles over 15 years old. A radiator hose would wind up costing $500. An oil change would cost $1,000. Because, after all, somebody’s cutting those checks, right?

On top of that, private insurance is supposed to spread the cost throughout a collective risk pool. Instead, it winds up increasing the cost. (Yeah, I know the HMOs, PPA's, etc. were supposed to keep costs down. They just wound up ruining the doctor patient relationship in the effort. Care got worse. But costs still went up.) If nobody had insurance, the medical industry could only charge what people could afford to pay. Because most people are insured, it can charge what it likes because the cost is subsidized. And people with insurance STILL wind up paying as much as they possibly can for the care they get anyway. The people without insurance are, of course, screwed.

Add to this, the pyramid effect. The medical care that does the most good and costs the least is at the base of the pyramid. The top represents high-end technology and Hail Mary plays – like say, intestinal transplants, $8,000 heart pills, surgery for people with a week to live, etc. Care at the top-end does the least amount of good for the most amount of money.

The top of the pyramid is a Delta-T approaching infinity.

I.e.: assuming constant advances in medical science, we can keep you alive to 110 years (at a cost of a billion dollars) or 120 years (at a cost of five billion dollars). Or, to be fair, cure a child with Tay-Sachs syndrome with a nano-bot retroviral delivery system that rewrites the DNA in every cell of their body (at a cost of a trillion dollars).

There’s no upper limit to medical advancement. Hey, good news! But the more advanced it gets, the more expensive it gets. (And let’s not forget the inflexible demand driving the process. Nobody wants to get sick. Nobody wants to die.) So, in the process, basic care gets more expensive, too – or not offered at all.
Sure, for a fistful of dollars you could treat worm infestations and diarrhea in the Third World or make sure pregnant women get enough protein in this country. A few do-gooders will. But that’s not where the river of money will flow.

As long as the medical industry is subsidized, that industry will keep chasing the top end. Why run a Motel 6 when you can run a Ritz-Carlton?

Ultimately, there isn’t infinite money to provide infinite care to everybody. The ugly truth is: Health care must be rationed. A single payer system imposing price controls is probably best and politically impossible. Pay for play is another way to go. That’s probably where we’re going.

PS: I don't blame doctors. "The Doctor will Screw You Now" is just funny -- if unfair. I have to go for cheap jokes as I'm not subsidized.

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