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December 04, 2003

Marginal Revolution

Dear Friedrich --

It's hard to keep up with Alex Tabarrok and Tyler Cowen, the resourceful (and speedy!) economists blogging over at Marginal Revolution. Don't miss two eye-opening new postings: Alex (here) on how and why so many Americans are on disability, and Tyler (here) on how not all of those who lack health insurance are worth getting super-worried about. (Think "college students," for example.) Interesting fact: high rates of uninsurance are in part a consequence of ... high rates of immigration.



posted by Michael at December 4, 2003


Hmmmm. All the people I know who don't have health insurance are Americans. But, like that post you link to, my example is just anecdotal and may not mean anything in the larger picture.

Either way, so what if a few more people can't afford to see a doctor or get meds? Maybe that will help with overcrowding and stuff.

Posted by: Yahmdallah on December 4, 2003 6:23 PM

The essential thing to remember is that from the standpoint of the medical providers (who have managed to put this over on the news media and the opinion-generating classes) the only health care crisis we have is finding more money to get the uninsured medical coverage. In short, there's nothing wrong with the U.S. healthcare system that a whole lot more money won't fix. Yet another study just came out concluding that more medical care wasn't better medical care, and that up to one third of all treatments are a waste of time, but no, let me repeat, the only healthcare crisis recognized by doctors and hospitals is the uninsured.

The odor of hypocrisy is so rank surrounding all this that it can knock you out at fifty paces.

Posted by: Friedrich von Blowhard on December 5, 2003 10:00 AM

I was auditing an undergraduate class this semester and the Well Meaning Liberal (tm) prof was telling the students that after they graduated they should be sure to get some form of health insurance, because if they don't, they won't get treatment if they get sick.

I pointed out that this wasn't true, that hospitals are required by law to treat anyone who comes through the door, and that while health insurance is a nice thing to have someone who doesn't have any assets to seize (like most recent grads) should not be overly concerned with large medical expenses (sure, you'll get a bill for $250,000 - a bill the hospital knows it will never collect on). The important thing, I told the kids, is that if you do get sick without insurance, don't let the hospital convince your parents to sign anything making them responsible for your expenses, because they most probably DO have assets to seize...

Needless to say, I was looked at like I had three heads...

Posted by: jimbo on December 5, 2003 11:42 AM

I remember looking into poverty rates and being shocked to learn that I was once counted as one of the officially poor. During my year or so after getting out of grad school, I shacked up with a girlfriend and got by on raking lawns and being a busboy. Probably made not more than 5 grand the whole year -- which meant that I (and all other such slackers that year) was officially one of the "poor." I looked into the figures in my amateurish way: how many of the officially "poor" are really poor-poor, if you will? That was my question. The official poverty rate is usually given (if I remember right) as about 12 percent. As far as I could tell, the majority of them are people who don't really need worrying about -- slackers, people taking a year off, people who are poor this year because they're just getting started but who'll be doing fine in five years, that kind of thing. As far as I could tell, the hardcore, worthy-of-worry poor number around 3-4% of the population. But like I say, that was my amateurish guesstimate (though backed up by some serious economics work by others). Does anyone have a more trustworthy estimate of that figure than I got?

Posted by: Michael Blowhard on December 5, 2003 1:01 PM

No Michael, and I tend to agree with it. The percentage of people in the US who are poor one year and also poor 5 or 10 years later is very low; we have the highest financial mobility of any industrialized nation (there was a fact and figure filled discussion of this a while ago in the blogosphere, with many sources backing that idea up).

I've zigged and zagged up and down across the official poverty line many times in my life. They can variously be tracked to my father's cancer and my mothers subsequent marriages and divorce, and my own prospects during the tech boom and crash.

Right now the wife and I just climbed back above it this year, but she's going to be a full time student in Jan., so we'll see how we do (crossing fingers for good consulting work next year).

Back to lack of insurance: yes they'll treat you at the hospital, but they won't pull teeth, or treat chronic, non-lifethreatening ailments, nor will they let you burn them on more than one major procedure without paying, generally.

A friend with cancer shot herself in CO last year because of this. She wasn't even going to go in for the first surgery until I convinced her to just burn the hospital. The first operation removed cysts, found out it was cancer, and then the financial folks wanted to know how she was going to pay for further treatment. And ye gods she couldn't afford the drugs at all after they wanted to put her on chemo. No help there. She was on organ donar, and decided to take herself out rather than suffer with no more treatment, and have all her organs spoiled when it finally metastesized.

THAT is the face of the gap in health insurance (and the cost of the insane over regulation which drives up prices).

Posted by: David Mercer on December 5, 2003 6:22 PM

What a sad story, and what a terrible predicament to get in. Thanks for passing it along. And best of luck with your own fortunes this year.

Posted by: Michael Blowhard on December 5, 2003 6:33 PM

Thanx. Watching a friend slide downhill because of lack of insurance wasn't pretty.

And I've been without it almost all of my adult life (the last 14 years). But I've not been driven over to the socialist medicine camp by my experiences.

On the contrary, I would advocate waste-reduction and simplification of insurance, and more free-market approaches. Provision of health care to the poor via emergency room isn't efficient, nor does it save anyone any money.

And how much of our health care costs are driven by doctors being the gatekeeps of prescription drugs? Or by the PCP system in the HMO's?

I've saved lots of time and (everyones) money the times I've gone right to a specialist (both with non-HMO insurance, and out of pocket) for conditions which made no sense to go to a general practitioner first, just to get referred to a specialist.

I've also saved a bunch by talking to non-doctor health professionals, consulting the Net, and then popping over the border to Mexico to buy the right anti-biotic. Oh but the AMA must get it's cut at every step of the way.

And dentists, don't get me started on dentists...there's a good reason that not too long ago a Surgeon General called the state of dental care the single largest public health problem in America. You can't work very well with chronic dental pain, and there are practically zero dental charities for the poor (unless you are a child).

I understand that dealing with peoples nasty mouths all day long requires lots of dollars to get you to do it, but damn, dentists are at the very bottom in donating services to the poor (even LAWYERS are required to do it!)

I've had a doctor in an emergency room almost in tears as he prescribed my wife antibiotics and painkillers for a tooth that just needed to be removed, as he told us about the several failed efforts to get dentists to volunteer even a few days a year pro-bono for extractions at their hospital.

Society gave them a monopoly on tooth care, they should at least return the favor and yank bad teeth from the poor for free (we're not asking for root canals and crowns here folks, just get the damned infection removed from our faces, thanks).

So on the whole I agree that the lack of insurance coverage problem isn't as large as often portrayed by those who'd like single-payer socialized medicine, but being working poor is no fun (see "Nickel and Dimed" for one Manhattan liberal's account of having her eye's opened by how wretched it can be. While I may not agree with some of the authors few prescriptions for what should be done about it, her account of being working poor in America tells no lies, as I've lived it).


Posted by: David Mercer on December 5, 2003 7:18 PM

In my Junior year, my asthma meds just stopped working. With a fill class load and two jobs, I couldn't sit and let it break up, which it sometimes did with rest. Finally, when I knew that I was getting to the point of danger, I went to the hospital and they directed me to the emergency room. The woman who was admitting me got to the insurance question, and when I said I didn't have any, she blew up, pointed at a sign that said more or less "no insurance, no treatment". After I asked a few times if they really meant it, even if I stopped breathing, I left, because she said "yes, too bad". (Though she did say that if, in fact, I did stop breathing, they would then admit me.) As I walked out, I paused by the ambulance bays to catch a breath to walk to my car. A young doctor happened by and asked what was up. I told him the story. He flipped. He brought me in and treated me for free. He discovered that, due to my age, I needed a complete update of my meds. While they were treating me, I heard him go ballistic on the woman who had turned me away. I was simply lucky enough to have encountered the right person. Had I not, I might have died. Really.

Laws may have changed since, but when I was in college, I had no health insurance, like many college students, and they wouldn't treat you if you didn't have any. Even today you exist in a transition phase the way insurance is typically handled. You are too old to be on ma and pa's insurance, but you certainly can't buy your own, and you don't have an employer who offers it. Even catastrophic starts at $200 a month, after you pay for doctor's visits to prove you're healthy enough to be insured.

In Denver, these days, they will take uninsured patients at only one inner-city hospital. They ask you in the ambulance if you have insurance, provided you can answer. If you say no, or they can't find proof of insurance on you, you go to this hospital. There, you simply wait in line, or if they are on diversion, too bad. It would be interesting to see the death statistics, I think.

To me, this medical insurance question is about lives, not money. It will probably become one of the other embarrassments that America will have to face with the other developed counties once the full extent of the crisis comes to light. People dying for lack of being able to afford basic medical care is just barbaric, imvho.

Posted by: Yahmdallah on December 5, 2003 10:54 PM

Yahmdallah, I've been to the hospital in Denver you're talking about, and it's no picnic.

Outside of Denver County, but still in the metro area, is the Lutheran hospital in Wheatridge, which is excellent, and takes patients without insurance at the urgent care and emergency.

Come to think of it, I've been to a couple of Lutheran hospitals, and they were always wonderful. Much better than any University teaching ones, or St. Mother of Perpetual Suffering type catholic ones.

I'm not big on religion, and not all Lutheran sects are very nice, but the hospitals of theirs I've been in have been first rate.

Posted by: David Mercer on December 5, 2003 11:04 PM

As of Jan. 5, for the first time in my life, I'll have no health insurance. I have severe asthma and allergies, clinical depression treated with medication, and birth control. I'll be a fulltime student, but I'll get no help from the school for prescriptions. So, that'll add up to about $400/month in prescriptions. Every time I need a prescription renewed, that'll be a minimum of $180 to see the doc. I bring in about $1400 a month, including federal student loans. Tell me again how having no health insurance is okay? Or that college kids don't count as poor?

My s.o. only recently got health insurance. Two summers ago, the birth defect in his shoulder was acting up, and he was in excruciating pain. Worse than the occaisional joint dislocation he endures. I didn't want to incur a bill at the E.R., because contrary to popular belief, they do make you pay it back, I was a student with a graduate assistantship of $700/month, and he wasn't doing so well as a freelancer. If we'd gone to the ER, it would have been $1500 minimum.

So I called around - the local clinics wouldn't schedule an appointment for him for six weeks. G.P.'s would schedule an appointment for him for 12 weeks. The original orthopedic surgeon who did the surgery on his shoulder simply wouldn't see him. So I gave him some codeine I had left over from dental surgery, and cursed the S.O.B.s who simply didn't care how much pain he was in, or that a simple 10 minute visit would have written him a legal pain prescription, or that an X-ray that we were willing to pay for at a clinic wouldn't have taken up much of their valuable time.

Essentially, if you have no health insurance, you have *very* limited access to medical care. If you think otherwise, try making a doctor's appointment without it. And if being a poor college kid without health insurance is no big deal, then I'm sure you won't mind paying my prescription bill, right? pfft!

Posted by: Courtney on December 6, 2003 12:01 AM

Courtney, situations such as you describe with your SO are one of the many reasons I don't think a prescription should be required for medications.

But as I said, the AMA want their cut at every step of the way.

Posted by: David Mercer on December 6, 2003 12:42 AM

Courtney -- My sympathies: your situation sounds like a tough one, and here's hoping things work out. FWIW, I suspect that Tyler Cowen in his posting meant to refer to middle-class (and better-off) college students. My parents, for instance, were barely middle-class, but when I was a college student I had the college infirmary for minor stuff and my parents' health plan for major stuff. Being poor's a terrible problem, and it certainly doesn't make getting decent health care easy. Best of luck.

Posted by: Michael Blowhard on December 6, 2003 2:09 AM

My best wishes to everyone who shared their stories here. And I am shocked at how regularly the (apparently false) argument gets made that "it's not that Americans can't access health care, they can through emergency rooms, it's just that that drives everybody else's medical insurance rates up" rather than making the argument that "people genuinely can't access health care." Another blown explanation by the news media. Granted, we're nearly twenty years past this now, but when I was in graduate school the University offered a student health insurance plan that was incredibly cheap per month, and prescriptions at the student health center were super-cheap.

How did insurance companies get such a lock on our lives? Because at the same time that these stories are told, doctors are actually having to quit practicing certain medicine because their malpractice premiums are so high even they can't justify affording them anymore.

Legal, medicinal drugs have been the single biggest medical advancement of the last fifty years, and I don't blame Pfizer or Lilly for their cost, because tremendous research expense for drugs that end up not working has to be covered by the ones that do, and the last thing we want medical care to do is stop the R&D.

Subsidizing them to keep costs down is a place it would be A-OK with me for our tax dollars to go.

Posted by: annette on December 6, 2003 12:28 PM

I agree that we don't want the drug R&D to stop for sure. But we spend 2-5 times more than other industrial democracies in assuring that drugs are safe before going to market, and we most certainly don't get that much better protection from unforseen side effects.

In other words, we're not getting our moneys worth for the additional safety we underwrite in the FDA approval process. Somewhere since the 1950's we passed the point of diminishing returns and now are too careful. End result: much higher prices for American consumers, as other countries free-ride on the R&D with regulated prices and patent evasion.

If the FDA approval process were shorter and easier, it can still be safer than other countries by almost as much as it is now, needed therapies will get to market faster, saving more lives, more R&D will get done as the cost of approval will no longer be 10 times the R&D cost (yes, you read that right), and a higher percentage of costs can be recouped in the market overseas.

There's got to be a middle ground in there somewhere!

Posted by: David Mercer on December 6, 2003 8:46 PM

Y'all might enjoy -- or be driven nuts by, beats me -- this posting at Jane Galt about the Tyler Cowen posting. Tons of interesting/provocative comments. It's here.

Posted by: Michael Blowhard on December 7, 2003 12:34 AM

To me, this medical insurance question is about lives, not money. It will probably become one of the other embarrassments that America will have to face with the other developed counties once the full extent of the crisis comes to light. People dying for lack of being able to afford basic medical care is just barbaric, imvho.

Yamdallah and others, I think we should take a look at financial reality here. I quote from an essay in the WSJ of July 17 by Jagadeesh Gohale and Kent Smetters:

Medicare now faces an imbalance exceeding $36 trillion--yes, trillion. That is the amount of money in present value that Medicare is projected to pay for future benefits in excess of the money in its trust fund, plus the money it is projected to collect in future taxes and permiums...So why don't we see real entitlement reform? Why does Congress seem more interested in expanding these entitlements without also proposing real reforms that would put [it] on a sustainable course?

The fact is that the health care monster is going to eat our children's future. Remember, you're talking about a system in which "demand" has been socialized (via government subsidies and insurance) while the suppliers are vigorously private income-maximizing professionals. (This is a formula for exactly what we have--i.e., massive "gold plating.") The health care monster will happily soak up any amount of money thrown at it. Contenting yourself with vague statements about how health insurance should be everyone's right on a moral basis plays right into the hands of the monster.

Also, not to play Scrooge or anything, but I'm a little hazy on the moral situation of college students demanding that their health care be subsidized. I mean, aren't they going to school so that ultimately they can earn more money? Are they saying they should not only be able to earn more money after graduating but that their lot would be even better with a generous health insurance subsidy? Well, golly, I guess it would, but I'm not sure that's a moral argument for getting a subsidy. I mean, if they're so stressed about health insurance, why not drop out of school and get a job with health insurance?

Posted by: Friedrich von Blowhard on December 7, 2003 2:16 AM

Michael, interesting discussion over there about how to fix what's (obviously, from this thread) broken.

Posted by: David Mercer on December 7, 2003 4:29 AM

I do agree that our society does need to choose: either healthcare is sort of a basic priority in a society, and therefore profit margins need to be controlled (doctors, insurers, etc.) just like defense is considered a basic priority and, let's face it, military personnel are not getting paid anything like doctors; or it isn't, it's a right that can only be had if one can afford it, and we just need to leave it at that. We seem to be stuck in no-man's-land right now, with the worst possible combination. And we've been stuck there forever---one of my term paper assignments as a freshman in college was about spiralling healthcare costs.

Posted by: annette on December 7, 2003 7:47 AM

How is this monster to be tamed?

How would concerned Americanís best approach the issue of healthcare reform?

If, as a group of people, we here were able to do something about this problem, what should it be. Complaining to complain is bad for morale and insights panic. Complaining with recommended changes is constructive criticism. These little forums here may be enough to get the ball rolling in the right direction. An opportunity exists, I hope we donít pass it up.

Posted by: ShipShape on December 8, 2003 11:18 PM

Good point!

Posted by: FREE PORN on May 29, 2004 7:08 PM

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