So possibly one of these plans should be supplimented by a plan to increase the availabiity of health care? There is an article in the New York Times maagazine about the lack of training opportunities in America. Apparently nursing colleges don't have enough places for all the Americans who want to become nurses and hospitals are relying on immigrants for staff.
I have nothing against immigrants but I do think that it is a problem that a nation like ours can't train its own people to staff its own hospitals.
I had surgery on my eye a couple months ago and my retinologist, one of the surgical aides, and two of the floor staff people (nurses?) were immigrants.
So is the shortage of care related to the failure to provide adequate training opportunites?

Few comments:
* obesity in poor people stemms often from the fact that they eat cheaper (less healthy) food. Not eating healthy has quite an impact on health and cost of health, but it is more preventive than curative.

* the waiting lists you describe in countries like the UK work differently. If it is urgent, you don't wait - if it is less urgent, you wait (or go to another European country if you live in the EU). Also, the UK has waitinglists, but Germany and France for instance don't - while a lot of people in the US find that their insurance forces them to use certain doctors and health facilities, and making an appointment will take them weeks. That is an unregistered waitinglist.

* In your description you do not take preventive measures in account. If you can prevent an illness, or cure it in a very early stage, that will require less "health care money" than if you wait till you HAVE to see a doctor.

And I forgot a most important comment; a hugh portion of the healthcosts of the US is administrative! One third or something like that, really big.

As dutchmarbel suggests, we could try to tackle the issue from the demand side. In recent years the U.S. has had a huge increase in health care costs related to chronic diseases such as diabetes, heart failure, and COPD. We could drastically reduce the prevalence of these conditions - and better manage the existing ones – if more people were willing to make a few simple, inexpensive (often free) lifestyle changes to improve their health.

Two thirds of Americans are overweight, and I read somewhere that obesity related illness costs us around $100 billion per year. Diabetes and heart disease were two of the biggest obesity related problems. If everyone just made an effort to eat less, make better nutritional choices, and exercise regularly we could significant reduce demand for health care. Beyond the health care savings, eating less saves people money, and exercise can be free.

Almost a quarter of Americans smoke. By giving up that habit, they could drastically reduce their risk of lung cancer, emphysema, heart disease, and other conditions – and as an added bonus they’d save themselves money by not buying cigarettes.

I’ve been working for a disease management company for over 2 years and I’m still amazed at the difference we can make in the demand for health care resources simply by encouraging people to make small changes to their behavior. We’ve seen significant reductions in inpatient admissions and overall medical costs as a result of having trained clinicians talk to chronically ill patients about their activity level, their nutritional choices, their smoking and drinking habits, and their medication compliance.

Lily,

I'm not sure of the best way to increase the availability of care. I suspect that breaking the AMA's monopoly on accreditation would help, however. It is in the AMA's interest to keep the number of doctors and nurses artificially low in order to keep prices high. Still, that's not going to do anything to help with the high cost of technical procedures like MRIs, etc. But it probably could help.

Dutchmarbel,

I'm not convinced that poverty leads to obesity due to the price of food. You can buy plenty of perfectly healthful foods at reasonable prices if you try. Hell, even McDonalds offers salads.

Even for urgent care, if the demand outstrips supply, people are going to wait. There is simply no way to avoid that. I'm sure that the people who run those systems do their best to minimize waits, as I cannot imagine that anyone wants people to die while waiting for treatment, but if supply is lower than demand, there's no way to avoid rationing.

I folded the issue of preventive measures into the point that the poor often have to rely on ER care in order to get health care, but perhaps I should have placed more emphasis on the point. Certainly it is a lot cheaper, for example, for me to take two triglyceride-reducing drugs than to treat me for a heart attack or diabetes a few years down the line.

Heather,

I concur that lifestyle changes could have drastic effects on health care spending. However, I'm not comfortable with a government that can tell people what they can eat and how often they must exercise (which I realize you did not suggest, but I'm not sure how else we're going to accomplish that worthy goal). I suppose we could push for more health education, but ultimately that's reliant on people making the right decisions, and it seems that there are many people out there who consistently choose unwisely.

Andrew, the supply and demand issues are interesting and tricky. Assume neither of us are anarchocapitalists who think all taxation is theft - or perhaps I should say, intolerable theft. Assume we're actually Hayekians who have made our peace with the idea of some kind of "safety net." Assume we also don't confuse the present American chimera with a "free market" in health care. IOW, let's, as you were, consider the Murray proposal's political economy, in outline. (I haven't read the book either.)

Seems to me, the following is plausible: Health care desire can be inelastic for the reasons you state. Murray's plan would increase aggregate demand by increasing the purchasing power of a lot of the folks with those inelastic desires. Classically, what should happen is, "Demand goes up; prices go up; profits go up; profits attract new entrants; prices go down; the rate of real profit declines toward zero; productivity increases partially offset the decline in the rate of real profit; eventually health care becomes an economic afterthought and we all spend our income on something else instead." That assumes an elastic supply, right?

So the question becomes, how inelastic is supply. We know right now that entry into health care practice is cartelized. There are side benefits to this - a certain level of professionalism for instance - but its main "benefit" is to maximize the earning power of the gatekeepers. We also know that the intellectual property system makes the supply of existing medicines and equipment less elastic than they might otherwise be. The important side benefit of this is that Robert Reich's symbolic analysts have a huge incentive to develop cool new drugs and machines.

Intellectual property and the gatekeeping functions of organizations like the AMA are social constructions, and reviseable. There are justice issues involved here, centered around the expansive view of the the "takings clause" that I hold and I suspect you hold as well. But it all comes down to the elasticity of supply.

I guess my question is, would health care supply be as relatively inelastic as post-secondary education? Government subventions for post-secondary education since the 1960s do not seem to have led to a flowering of new elite private universities. Instead they've led mostly to massive tuition increases at existing ones. (Should check to see if, say, Harvard graduates bigger classes now than it used to. Perhaps there's been more growth in the supply of "college" than I, um, credit.)

Heather - that's a good point. I'm not sure how generalizable it is to the overall population. The key is that health insurance is creating moral hazard, which is creating an externality (ie, people have reduced health care costs so they are basically overutilizing by not taking care of themselves). I'm not sure how to get people to internalize that cost after providing health insurance.

On another note, are you still here in MA? Which disease management co. do you work for? I'd be interested in hearing about any publically available research/data you have about the effect you are having on medical costs.
(I'm working on some projects involving disease management.)

Thanks.

I'm still in MA, telecommuting to Nashville/Raleigh, working for Healthways Inc. I'm not authorized to speak for the company, but from what I've seen our programs really work - we can keep a lot of people with chronic diseases out of the hospital just by encouraging them to make simple lifestyle changes. I can only imagine the difference we'd see if we could convince people to make those changes before they got sick.

All voluntary of course - I do not want the government to force people to exercise or eat right. But if people choose to smoke, overeat, not exercise, etc. then I will have no sympathy for them when they complain about the cost of health care - much like the way I just roll my eyes when my Hummer-driving colleague whines about the cost of gas.

Ahhh, Healthways. Funny, the main office for my company is in Raleight/Durham.

There was an interesting question raised at a recent meeting here. If disease managment works to delay rather than prevent disease (which, so far is what the evidence points to, but the jury is still out) is that producing any economic benefit. That made me curious if disease management is actually serving to increase the cost of health care, because medical costs increase faster than the discount rate. From a present value perspective disease management could very well be increasing the total cost of health care. Of course, that is from an economists perspective. Someone who gets 5 extra years before going to the hospital (or 5 extra years of life!) for the first time might see things differently.

No time for a long discussion unfortunately. But there is a lot of study about the influence of socio-economic circumstances & health, the accessibility of health care and the impact of prevention. Here is one of the OECD studies:

A study by the US Public Health Service in 1994 estimated that population–based strategies in six areas – heart disease, stroke, fatal and non-fatal occupational injuries, motor vehicle related injuries, low birth weight and gunshot wounds – would reduce medical spending by USD 69 billion by 2000, or 11% of medical spending on those conditions.

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