Posts tagged ‘Update Brad Warbiany’

The Only Health Care Cost Control Idea the Democrats Have Ever Had

I think this article makes it clear that, no matter what the rhetoric, the only health care cost control idea Obama and the Democrats ever had was saying "no" to care.  Whatever one calls this (managed care, rationing, death panels) it is really not that much different from what insurance companies have been doing for years.  And it is areal irony that Democrats passed this legislation feeding off anger of voters with insurance companies saying "no", when their plan really depends on the government saying "no" even more often  (or else there won't be any cost savings).

The author argues that information is important for patients to make better decisions:

When patients are given information about potential benefits and risks, they seem to choose less invasive care, on average, than doctors do, according to early studies. Some people, of course, decide that aggressive care is right for them "” like the cancer patient (and palliative care doctor) profiled in this newspaper a few days ago. They are willing to accept the risks and side effects that come with treatment. Many people, however, go the other way once they understand the trade-offs.

They decide the risk of incontinence and impotence isn't worth the marginal chance of preventing prostate cancer. Or they choose cardiac drugs and lifestyle changes over stenting. Or they opt to skip the prenatal test to determine if their baby has Down syndrome. Or, in the toughest situation of all, they decide to leave an intensive care unit and enter a hospice.

I agree, but I would go further -- information and incentives are important.  And the absolute most important bit of information when it comes to cost control is price, and patients under Obamacare have absolutely no incentive to give a sh*t about price even if they were informed of it.  Exactly the opposite of the incentives I have had since I took on a high-deductible health care policy several years ago.

Update: Brad Warbiany discusses the proposed IPAB and its powers to shape health care spending in the context of Congress as an addict trying to control its impulses.  However, I think Brad underestimates the power of the board to be captured.  What will result is rulings for more coverage of procedures with powerful lobbies, offset by less coverage of procedures with weaker lobbies, irrespective of the science.   Just look at the diseases the NIH and NSF gives grant money for -- the grants have nothing to do with the science of where research could be most productive and everything to do with diseases that have large and powerful constituencies.

Update #2: Isn't it interesting to see the NY Times, after arguing for months that Obamacare was not about rationing, is now admitting that rationing is the key to success.  It reminds me of this that I wrote a while back:

I have decided there is something that is very predictable about the media:  they usually are very sympathetic to legislation expanding government powers or spending when the legislation is being discussed in Congress.  Then, after the legislation is passed, and there is nothing that can be done to get rid of it, the media gets really insightful all of a sudden, running thoughtful pieces about the hidden problems and unintended consequences of the legislation.

Regulating the Process, not Actual Safety

Kevin Drum says:

The Consumer Product Safety Improvement Act makes it illegal to sell toys that haven't been tested for lead content.  In general, I think that's a perfectly fine idea.

He can't understand, though, why its effects seem so perverse and Draconian when its core is such a "perfectly fine idea."  It is amazing to me that the law of unintended consequences is so hard even for seasoned political observers to grasp.

A sensible restriction might be that a child cannot by any reasonable use of the product ingest more than X concentration of lead.  But of course that is not what the government does.  The government requires that every toy undergo expensive testing and batch tracking (almost like that of an aircraft part).  This is not by any means the same as simply requiring products to limit lead exposure.  It is a one-size-fits-all regulation of process, rather than true safety.  It imposes huge testing and tracking expenses on products that can't possibly have any lead in them.

And, like many laws of this kind, it imposes a huge penalty on small competitors and new entrants and rewards larger toy makers who both have the scale to pay for the testing and the political clout to shape the law in their favor.  In fact, the big winner from the legislation has actually been Matel, the company whose recalls actually led to the law in the first place.

The Consumer Product Safety Improvement Act (CPSIA) requires third-party testing of nearly every object intended for a child's use, and was passed in response to several toy recalls in 2007 for lead and other chemicals. Six of those recalls were on toys made by Mattel, or its subsidiary Fisher Price.

Small toymakers were blindsided by the expensive requirement, which made no exception for small domestic companies working with materials that posed no threat.

So while most small toymakers had no idea this law was coming down the pike until it was too late, Mattel spent $1 million lobbying for a little provision to be included in the CPSIA permitting companies to test their own toys in "firewalled" labs that have won Consumer Product Safety Commission approval.

The million bucks was well spent, as Mattel gained approval late last week to test its own toys in the sites listed above"”just as the window for delayed enforcement closed.

Instead of winding up hurting, Mattel now has a cost advantage on mandatory testing, and a handy new government-sponsored barrier to entry for its competitors.

Update: Brad Warbiany has similar thoughts.