Points of the Triangle

Tigerhawk posts on the health-care debate:

Pick any two of widespread or universal coverage, lower or at least stable costs as a function of national income, and a wide-open system with plenty of capacity and rapid innovation. All three are not genuinely possible, at least not in this lifetime. If we want a diluted version of all three, we should concentrate on incremental improvements at the margin within our current system. There is much that could be done to save money without changing its essential character or returns to technological innovation, and we should do those things first.

The author is clearly referencing the project triangle, a simple and useful template for viewing many undertakings.

From Wikipedia.

My quick take on the points of the triangle vis-à-vis the nation’s health care system:

Good – check. America has a large chunk of the world’s best doctors and hospitals. We have available the latest medicine and equipment. Thanks to the Internet, we also have a (fairly) well-informed populace, which helps not only in the treatment of disease but also in the promotion of preventive care.

Fast – check. The development of emergency-room and trauma-center protocols has been remarkable. For non-life-threatening conditions there can be delays of several months. For diagnostic tests (e.g., mammograms, colonoscopies) whose urgency is open to question, it has been our experience that doctors display good judgment in determining from other risk factors whether a patient should be moved up in the queue. But that’s just us.

Cheap – Are you kidding? In 2007 “total [health care] spending was $2.4 TRILLION in 2007, or $7900 per person. Total health care spending represented 17 percent of the gross domestic product (GDP).”

[note: above link to nchc.org quote has vanished. Here's a link to updated statistics in 2011: "Total health expenditures on healthcare in the US reached $2.6 trillion as it grew 3.8% in 2009 and 3.9% in 2010."]

The majority of Americans have the majority of their health care expense paid for by their employers or the government. Most know that the current system is certainly not cheap, but, because of this cost-shifting (itself the source of additional waste), do not view health care as budget-bustingly expensive either.

However, for those who are not covered by insurance, a health event can be financially disastrous. To prevent such ruin to a minority of the population (that admittedly runs into the millions), we are proposing to re-make how we pay for health care from head to toe. The worry is that, if the government has too big a role in paying for health care, it could wreck the fast and good system that we do have, jeopardizing all.

Better to take incremental steps, such as handing out vouchers to people who can't afford health insurance and regulating more heavily (I grit my teeth to say this) the insurance companies to require them not to take into account pre-existing conditions when pricing their policies.

I know doctors who have long since passed the threshold of working out of financial necessity; they enjoy their work, take losses on Medicare and Medi-cal patients, and turn a profit because of higher private-insurance payments. If a single-payer system forces them into a loss position, many who can afford to will hang it up. And we’ll all be stuck in a system that will be less fast, less good, and still not cheap.


© 2009 Stephen Yuen