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08/31/2009

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Ben in Boston

The focus should be on getting the cost of the test down to the point where people individually can make a cost/benefit analysis based on the chances that it will find something important versus the cost. If you put the information and the choice in the hands of the individual consumer, then each person has control of their own destiny. In the current scenario, nobody does. We're all paying into a big pot to pay for everybody. Look how well that's working out for us.

Hank Rearden

Excellent post. However, I must point out something; and it actually harkens back to one of your earlier posts referring to "good" versus "great" medicine. Ample preventative care could conceivably reduce costs over the long haul, provided that actual physicians weren't burdened with that additional mandate. Legislation that specifically targets the ease of getting preventative care (thereby making it cheaper to get most preventative screening) could reduce healthcare costs. BUT, and this is a big but, said preventative care would need to operate independently of other medical care. Hypothetically, approved medical tests would be carried out by individuals other than physicians. Also, the legislation would need to establish some kind of “cutoff” point for testing; the goal of which would be to prevent overuse. In short, it would make “good” health screening a legal, out-of-pocket expense, which would be a step in the right direction.

Hal Horvath

Reasonable post I think, but for completeness, readers might want to see the brief summary article much of the national discussion on this is based on:

http://content.nejm.org/cgi/reprint/358/7/661.pdf

Of note: considering *only* medical costs along over time -- ignoring various non-medical costs and savings -- about 20% of "preventive" care is (medical) cost-saving. Further large portion of preventive care statistically buys life-years at very low cost (e.g.-- for example for less than $10,000/life-year).

Of course best of all is to have a very competent doctor that can gauge your individual risk factors well and competently decide how much screening tests you need.

That's where a market-based system, such as the one I advocate is...superior.

http://findingourdream.blogspot.com/2009/06/new-way-to-hold-down-health-care-costs.html


John Galt

"Further large portion of preventive care statistically buys life-years at very low cost"

Ah, but at whose cost?

Hal Horvath

Indeed.

Pragmatically, and I think in terms of *both* pragmatic and ideal outcomes -- we currently already pay for free Emergency Room care for those that cannot afford to pay for their own health insurance and costs, therefore those particular preventive health care measures that actually do save net costs, including such costs such as governmental (taxpayer supported) disability payments to very sick people who could have been healthier with preventive care....are of course a relative bargain. So "at whose cost" becomes for these *particular*, limited measures: "at whose savings".

Now, there is further complexity, and there is no way for the *public* (government, panels, etc.) to *choose* the trade off on a personal level....thus....outcome-based incentives (reimbursement according to outcomes-over-time) are better. See?

I suggest specifically we set up good market structure (payments related to value, exactly like in other markets for other goods and services), and let the actual choices then be made privately.

Sound familiar? This is typically called a "free market" -- when individuals choose trade-offs of value vs. cost on their own.


John Galt

You can sometimes be unclear. Is it possible to summarize that? (And a link to a longer document is not "summary.")

ConservativeLibertine

Excellent Post. Many of my friends are under the illusion that preventative care for all is the magic bullet.

I saw an excellent piece in the Wall Street Journal that makes the same case you do. Preventative care means more procedures and more costs. The dramatic increase in demand for tests and procedures quickly out strips the cost of just treating those who become diagnosed with the illness. But now I can't find it. Still looking though.

Besides, how do you do preventative care for cancer? By telling me what to eat? not drink? how much? how little?

Anyway. You are right. The numbers don't add up. Here is some more evidence.

http://online.wsj.com/article/SB10001424052970204619004574322401816501182.html

you can't get away from the law of supply and demand. Just like you cannot spend your way out of debt.

Hal Horvath

Anyone can read the links I offered, and both links can be read easily in under 20 minutes, and both will offer considerable insight. Also, Conservlib -- your generalization about preventive care isn't quite on target: some preventive care creates cost-savings in medical costs alone, some creates cost-savings when additional non-medical costs are included, some increases net medical costs if done indiscriminately, etc., etc. In other words, complexity, like in real life. And my previous comments offer the links.

John Galt

I was hoping to avoid this.
Consider this quote, Hal, from one of your comments:

"Pragmatically, and I think in terms of *both* pragmatic and ideal outcomes -- we currently already pay for free Emergency Room care for those that cannot afford to pay for their own health insurance and costs, therefore those particular preventive health care measures that actually do save net costs, including such costs such as governmental (taxpayer supported) disability payments to very sick people who could have been healthier with preventive care....are of course a relative bargain."

Now, best I can tell, that's all a single sentence. So it shouldn't be surprising that I can barely understand it.

I don't want to read twenty more minutes' worth of that. Can you summarize your point?

As it is, I honestly cannot tell if you think subsidizing "preventive" screening for everyone saves more money than it costs, or who you believe should be paying for it.

Do I really need to read for 20 minutes to understand your position?

Hal Horvath

yeah, that was an out-of-control sentence. But I have a sharp-eyed friend who helps edit my blog posts, and I think they are *much* easier to read than this example.

The trouble on the other hand with trying to summarize my proposal on how to pay for outcomes over time is that it really should be judged on its practical effects. But its practical effects depend entirely on its detailed structure.

I may eventually get to changing it into a bullet-form, but that is more than a 20 minute task.

In the meanwhile, if you read it, it is indeed possible to skim portions (without leaving out a portion) and see its overall structure.

It includes for instance how to set up the entire complex medical process into markets and market-like mechanisms, where there is little or no work for bureaucrats, past maintaining web sites.

Hal Horvath

See, the difficulty in health care as a market is information-assymetry. How can the buyer choose? *That's* one thing a good reform can address, in a market-building way.

John Galt

Are you unable to provide a simple clarification of your comments on this post?

Hal Horvath

Don't you think other than the one sentence my comments were clear?

John Galt

If your comments were clear, I'd understand whether you think subsidizing "preventive" screening for everyone saves more money than it costs, or who you believe should be paying for it. As it stands, I have no idea.

Do you think you've explained that clearly here?

MaryAlice Nelson

And how about the groups that are not fans of the big med/big pharm methods ? Christian Science, Jehovah Witness to name two groups plus many individuals that rely on vitamins, herbs, homeopathic and other systems that give us good results without the huge costs of the orthodox medical programs. We will be stuck with the whole tab for insurance that we will not use. It will be like having to buy auto insurance when you take the bus.

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