tag:blogger.com,1999:blog-7820485130017459619.post3541163675841503598..comments2023-10-24T01:46:47.151-07:00Comments on CynicusEconomicus: Rectifying Health Care Costs - No More NHSUnknownnoreply@blogger.comBlogger8125tag:blogger.com,1999:blog-7820485130017459619.post-55904615869493388512009-02-22T15:48:00.000-08:002009-02-22T15:48:00.000-08:00A very good idea. There would be a reduction in g...A very good idea. There would be a reduction in general taxation to offset the payments.<BR/><BR/>I have a gut feeling that the proportions of income you suggest are too low. Too many would never pay off completely to keep the rates as low as suggested. It would be good to have some figures based on present spending and demographics.<BR/><BR/>At present it is just about possible to control overall spend by such means as NICE. They however come under considerable pressure (some of it no doubt encouraged by drug companies) to increase spend on drugs and evermore complex procedures. Think of the increased pressures if people thought they were paying for their treatment. In yielding to these pressures payment periods would be extended until more and more revenue would be lost by death leading to revision of repayment rates.<BR/><BR/>The idea of rolling the debt at death into death duties would seem to have some mileage provided provision for spouse/partner were made as with present arrangements. Debts would be deferred until the death of the second person.OldNick666https://www.blogger.com/profile/14294879367543721380noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-85800082637868390652009-01-27T09:19:00.000-08:002009-01-27T09:19:00.000-08:00Dear Cynicus,A very interesting blog that raises s...Dear Cynicus,<BR/><BR/>A very interesting blog that raises some key issues about the sustainability of our current economy.<BR/><BR/>Regarding healthcare, it interests me that this has only become a burning issue in recent years. Healthcare systems, whether nationalised like the UK or privatised like the US, seem to have functioned well until recently e.g. up until about 15 years ago. <BR/><BR/>This leads me to the conclusion that it is the ageing population of the West and the increasing costs of ever more complex medical treatments that have led to the breakdown of healthcare systems. In the UK, the government is loading up with debt for future generations to fill the gaping hole in NHS funds while in the US individuals are increasingly going bankrupt from impossibly large medical bills. Neither system is desirable.<BR/><BR/>Unfortunately, your 'user pays' system, while market-based and thus more efficient, would not solve the fundamental problems of an ageing population and increasing cost and complexity of treatments. The elderly are the main users of healthcare but if a 'user pays' system were introduced tomorrow, very few of the current NHS clientele could afford to pay anything beyond a few pounds a week, which is nothing relative to the costs of their care. The reality also is that if a user has to pay directly from his own pocket for complex medical treatment e.g. mulitple organ transplants, skin grafts due to burns etc he may never earn enough in his whole life to pay it back. We see this in the US where non-insured users do pay directly for their own treatment and mostly end up going bankrupt as some modern healthcare costs are too vast for one individual to bear.<BR/><BR/>I would suggest that a reformed insurance system is the only way forward as this is the only way that large costs can be met collectively. My experience of living in Germany and using its healthcare system was very positive. Insurance was a legal obligation for all citizens but there was subsidised insurance for those who couldn't pay. Users had a chip and pin card that was simply scanned through on any visit to a doctor and all records were electronic. Choice of any doctor was also completely free although there was no formal rating system.<BR/><BR/>The Germans seem to have got it right so it shouldn't be so hard for us to follow suit but there is one caveat: even in Germany, healthcare costs for their growing elderly population are mounting so their system is also under pressure.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-71365714531781521352009-01-24T15:49:00.000-08:002009-01-24T15:49:00.000-08:00Swirus offers a very interesting argument, and one...Swirus offers a very interesting argument, and one with considerable validity. However, I think I have already pointed out that the system is one of subsidising healthcare. I agree with the perfectly reasonable point that it is the old who are the heavy users of the health care system. <BR/><BR/>However, the young also use the system to a sufficient degree that they can influence the efficiency of healthcare through their choices, and the same for older people for all but the oldest with serious illness (no prospect of paying the full amount back). <BR/>even for the latter group the costs will be minimised through the bidding system, and quality standards will also be enhanced through the system. <BR/><BR/>As for fairness, this medical system takes the misfortune of our imagined cancer patient, and addresses that misfortune. The system will (if it is possible under current medical practice) rectify the problem. This is done for a small percentage of that person's lifetime income. This exchange seems a small price to pay to stay alive and healthy. <BR/><BR/>Furthermore, that percentage of income will help ensure that the funding is available for others to have the same benefit. The system will also help ensure that the treatment is enacted in as cost effective and efficient way as possible. This means that there will be more money available for other people to benefit, and the quality of the treatment will be better. <BR/><BR/>No system can be perfect, but I think that this system has the benefit of directing a finite resource as efficiently as possible, but at a small cost to those who are the greatest users of the system. <BR/><BR/>I keep on coming back to the same point. Nobody is denied treatment, and I think that (of itself) is a pretty substantial commitment. <BR/><BR/>Life is full of potential misfortunes, and it becomes a point of both philosophy and also practicality as to whether government should (or can) seek to equalise all outcomes, and remove the ravages of all misfortunes. I would suggest that, if government seeks to remove all risk of misfortune, then it is setting itself a task that can never be managed. <BR/><BR/>An example of this can be seen in the endless attempts of government to remove risk in finance. You may want to see my post on banking regulation to examine this. <BR/><BR/>The point in the reforms that I propose through this blog is to try to offer systems that are about taking the resources that are going to be available (and these will be diminishing), and encourage better use of the resource. <BR/><BR/>In a perfect world, it would be possible to have infinite resource for healthcare, but it is not a perfect world. As such, compromises must be made. <BR/><BR/>A small percentage of an individual's income for their ability to have health seems a very small compromise. Our imagined cancer patient has his/her health, and society has a system that maximises their **overall** resource. <BR/><BR/>This point applies to the people who will not earn much. They will still be directed towards maximising the resource available, as they will have an incentive to do so. That percentage of income is the only way to drive people to think of resource. It is not a perfect system, but people must have a stake in the system they use for it to operate efficiently. <BR/><BR/>It all comes back to the point that resource is finite, and we need to have a system that maximises that resource so that it is available to all in a way that the potential of the limited resource is maximised. <BR/><BR/>I hope I have explained this clearly, but am sure the questions will continue. Just to be clear, I would love that there is a system in which there is endless resource for health, that there is no need for compromises. The trouble is that this is not the case. Resource is finite and overall resource is diminishing along with a collapsing economy.Markhttps://www.blogger.com/profile/14983165364072918091noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-38706560474842486282009-01-24T14:02:00.000-08:002009-01-24T14:02:00.000-08:00First post - interesting blog! I can't see how suc...First post - interesting blog! <BR/><BR/>I can't see how such a system would provide useful finance for a health service. The NHS system is extremely disproportionately used by the elderly. I am 30, and I haven't ever had cause to visit the doctor about anything serious. A mole removal at 16, and some moisturising creams for my eczema, that's it. My 80 year old grandmother is suffering from Parkinsons, and she probably consumes more medications per month than her entire income. Her income is next to nothing and her life expectancy is sadly not long. A stop on a proportion of her income is not actually going to provide any meaningful NHS finance, either in value or duration. Creating a lifelong draw on the resources of one of those rare instances of those unlucky enough to acquire an illness in youth is nothing more than a bad luck tax. And the thing is, it's not going to shift the basis of the NHS away from direct government subsidy, since the bulk of its users are elderly and will not pay off the costs they incur before they die, indeed, the costs of administering the bureaucratic system to stop a varying proportion of income alone might account for more than the contribution of many patients. I guess you could pass the charge on to an inheritance tax - the fairest tax of all because it falls only on the dead - but inheritance taxes are very easy to game.<BR/><BR/>Other people who are chronically ill such as the disabled, tend to have suppressed opportunities for earning, too. My father in law has MS and has had a stroke, and he's five years off retirement age. He hasn't worked for ten years, because his illness has precluded him doing very much at all.<BR/><BR/>So your system would probably not change the bulk of health service funding, which will still be a transfer from general taxation, albeit buttressed by a tokenistic draw on the income of the ill. But it would create the inequity that somebody who is unfortunate enough to develop cancer in their early 20s will carry a financial burden from it for the rest of their working life, along with the physical and mental legacies.<BR/><BR/>The thing about healthcare is that those who need it most don't generally can't afford it. The system must always be financed by the well - either through the taxation system, or an insurance system. Yor idea, although it pretends otherwise, would just be the same as the current one (with some reheated 'internal market' and 'patient choice' stuff from the Major and Blair eras respectively). The attempts to make the ill pay would be tokens in terms of the cost of care, yet also would also manage to recreate many of the inequities which existed before social healthcare.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-42630610108461001052009-01-14T15:53:00.000-08:002009-01-14T15:53:00.000-08:00Danny M offers an interesting criticism, which is ...Danny M offers an interesting criticism, which is that the system is unfair. In particular, that the rich would pay in a couple of months,in contrast to the poor who will have to pay over a longer period. <BR/><BR/>However, he has not accounted for the following:<BR/><BR/>1. The system as it is proposed is actually a system of partial subsidy and interest free loan. In absolute terms, assuming that the rich person and poor person pays off the cost of treatment, they will have been charged the same. However, the poor person is gaining a greater subsidy, as the loan is over a longer period. This is worth a great deal of money, in particular for a poor person paying for a major operation. The rich person's prompt payment helps keep the cashflow of the system positive, thereby subsidising those who pay less quickly. <BR/><BR/>2. The percent repayment is capped. As such, if a poor person requires a large amount of treatment it is quite possible they will never fully repay the costs. As such, they will gain a significant subsidy. <BR/><BR/>3. Even under my simplified tax system, the rich person will be paying more tax in absolute terms. As such they are the person making the greatest contribution to the subsidy that is implicit in the system. <BR/><BR/>As such, the poor person is receiving a greater subsidy in interest repayments, and potentially an absolute subsidy. <BR/><BR/>More to the point, I am not sure how guaranteeing health care for all could be called 'unfair'.This is the purpose of a national health service - that no person is denied treatment regardless of income. As such, this is inherently fair, in that it guarantees equal access to all. <BR/><BR/>In one reading of 'fair' that Danny proposes, what he appears to mean is that poor people should not pay for their healthcare, and that rich people should pay for the healthcare of the poor. I am not sure how this is 'fair'. For example, living in a house is a necessity in the way that healthcare is a necessity, or food is a necessity. Should the rich pay for all of this too? Where do you stop? At what point does such fairness start and stop?<BR/><BR/>It seems to me that equal and (virtually) unlimited access to healthcare is a good balance of fairness. Yes, the rich will pay more under this system, but the poor also contribute significantly, but not in a way that impoverishes them. In the end, everyone gets healthcare, and no one is made to be poor in the process. <BR/><BR/>Danny M also says:<BR/><BR/>'Furthermore, poor or middle income patients would almost certainly hold back from visiting the doctor for financial reasons - conceivably until it was too late, for example in cases of cancer, where early symptoms can be confused with those of minor ailments.'<BR/><BR/>My answer is that they are grown up people, not children. If they see the utilisation of a small part of their income as more important than their health, then they are fools. It should not be the business of government to protect people who are fools from their own foolishness. <BR/><BR/>They are grown up people, and need to take responsibility for themselves and their own choices over how they use their income. In real terms, we are asking for a choice from (for example a very poor person)of whether they go out once a week for a drink at a pub, or look after their health by visiting a doctor. <BR/><BR/>In addition, the system makes provision for some free of direct charge preventative medicine checks. <BR/><BR/>Danny also suggests that my solutions are too harsh, whilst at the same time agreeing with the analysis of the crisis in the blog. I am heartened that he finds the analysis interesting, but the implications of that analysis need to be accepted. <BR/><BR/>We simply can not afford such an expensive and inefficient system as the NHS as it now stands. <BR/><BR/>Danny's suggestion is to do away with the armed forces. This is beyond the remit of my blog and my solutions, which are aimed at making existing structures as efficient and effective as possible, whilst trying to retain the underlying principles of their purpose.<BR/><BR/>It is, however, an interesting point in that the structure of the armed forces does need some consideration. Perhaps in a later post....reform of the Armed Forces. <BR/><BR/>A much appreciated comment, as it has driven me to discuss some underlying principles..Markhttps://www.blogger.com/profile/14983165364072918091noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-60557350491619575252009-01-14T14:25:00.000-08:002009-01-14T14:25:00.000-08:00Sorry, but I think this is a dreadful idea. The po...Sorry, but I think this is a dreadful idea. The poor would be paying for any major treatment (eg. a heart bypass)- and having 10% of their income deducted- perhaps for life. Whereas the rich would get payments over within a month or 2. <BR/>Furthermore, poor or middle income patients would almost certainly hold back from visiting the doctor for financial reasons - conceivably until it was too late, for example in cases of cancer, where early symptoms can be confused with those of minor ailments.<BR/>Now I'm not saying that some NHS reform isn't desirable, and I am in fascinated agreement with many of your observations about the causes of the economic crisis - but I find your solutions too harsh.<BR/>Why not do away with the Armed forces instead (individuals could pay Blackwater to protect them in the event of a French, Russian or Chinese invasion) I like that idea a lot more...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-17176266355553314812008-10-24T05:24:00.000-07:002008-10-24T05:24:00.000-07:00I like this idea a lot.You could sow the seeds of ...I like this idea a lot.<BR/><BR/>You could sow the seeds of a system like this by introducing it partially WITHIN the NHS. In fact, I see no reason why we have to remove the name NHS at all, as people are comfortable with it. Many of the changes the NHS have gone through reflect some level of private management anyway. It wouldn't be a big step to tell people their health will now be managed through a Health Account.<BR/><BR/>One thing I really like about this would be that people could look at their health account and see what it is. This way, people see the real cost of what is done for them, which I think they don't presently understand. It might help intelligent folk be more humble about what they get and a bit less critical.<BR/><BR/>Finally, wouldn't it be a good idea for everybody, even people with no medical costs against their name, to pay some minimum percentage from their pay anyway? The money to be stored in their account, accumulating (with interest) against any future medical costs. If people are only paying their percentage when they get ill this could create some serious cashflow problems, particularly at the outset. A minimum health insurance payment every month is something people are used to with NI now anyway.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-43739051920066592412008-08-03T02:13:00.000-07:002008-08-03T02:13:00.000-07:00Yes it probably would work, and I'm sure the adopt...Yes it probably would work, and I'm sure the adoption of this sort of system is inevitable. It fits well with the 'choice' agenda which the government thinks people want (personally I hate having to make choices, and I am happy when they are made for me, particularly if I am ill!). <BR/><BR/>Of course the adoption of such a system would be an admission that the idealism that led to the previous NHS was misplaced which would be a little sad.<BR/><BR/>One subtlety I can't quite see the point of is that a hitherto healthy person would not have been registered previously. Is it conceivable that a person could reach adulthood without consulting a doctor or dentist?Anonymousnoreply@blogger.com