RAND and the Moral Hazard: Healthcare Triage #10
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- เผยแพร่เมื่อ 6 ม.ค. 2014
- As we've explained in previous episodes, insurance is complicated. Even John gets confused (watch the video!). But there's a reason we have all these deductibles, co-pays, and co-insurance. It's because of the moral hazard, and a very important research study known as the RAND Health Insurance Experiment. Watch this episode and learn all about it.
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Here's more info on the RAND HIE: theincidentaleconomist.com/wor...
John Green -- Executive Producer
Stan Muller -- Director, Producer
Aaron Carroll -- Writer
Mark Olsen - Graphics
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I'm a pharmacy student in school, and my professor told our class to watch this video. I love how the title slide is an imitation of a prescription label. I couldn't stop laughing!
This was a great video thank you very much for making sick people important in your argument for health care. As a person who was recently diagnosed with a chronic disease I have noticed that most people argue about health care under the impression that people who are sick somehow chose to be sick and deserve the astronomical health bills.
Another good analysis of a complicated issue. There's too much black and white when many people view current healthcare issues and it ends up excluding important factors. We need to look at everything and make the best choices to move forward.
I just had my Gallbladder removed this past weekend. I am a Canadian who lives in Canada, and no cost was incurred on myself, but If I was living in the US, I would most likely be saddled with crippling catastrophic debt.
I would most likely fall into the group of making enough money to not qualify for government assistance (I work basic manual labour construction jobs for temp agencies) but not enough to be able to afford even government health insurance in the US.
When I walked into the ER on Saturday, I received an ECG test, 5mg of Morphine for the debilitating, vomit inducing pain in my back, 3 chest X-Rays, a CT Scan, 2 ultrasounds and at the very least 3 rounds of blood and urine lab tests, all to determine that I needed a Laparoscopic Cholecystectomy (Gallbladder Removal). I also had to spend a day and half in a hospital bed due to ER overcrowding (This was Canada Day long weekend and people were stupid).
When I left, the only things I had to pay out of pocket was the 40 dollars parking and the 20 dollars I spent on my prescription of Tylenol-3's (Which, since I don't have supplemental insurance to cover prescriptions, is tax-deductible, so I'm getting that back next february).
If it wasn't for the health insurance paid for by the Canadian Federal and Alberta Provincial Governments, funded by my and every other Canadians tax dollars (gladly paid, I might add), I would be bankrupt.
The Medical Insurance system in the United States is woefully and horribly broken. Every year, people die by the hundreds, if not thousands, because they don't have insurance and can't pay to see a doctor and seek medical help, or are left with crippling debt because they get the help they need, even when they know they can't afford it.
Under Article 25 of The UN's Universal Declaration of Human Rights, the right to access health care for circumstances outside his/her control is covered and access to said right shouldn't affect his/her quality of living (IE saddled with crippling debt).
The US claims that it has the greatest health care system in the world, too bad its only accessible to those who can afford it. And thats sad.
A Civilization is judged foremost by how they treat those of its citizens who are less fortunate. So what does that say about the US where people with no insurance because they can't afford it die?
This.
Good grief you make good points. Same situation here in Sweden btw, free healthcare is very nice.
You're living in a dream land. Do you think your free health insurance just comes out of the blue and everything is just so perfect? Not a chance. A universal health system only pushes the government to up your taxes way higher than any United States tax, takes money away from healthcare providers erupting in a shortage of nurses and especially physicians, increases your wait times in EVERY department whether it be inpatient or outpatient care, and severely cripples hospitals and other healthcare facilities just getting by with little government reimbursement. This isn't just a magical cure to the healthcare system. Every system has its flaws and the United States is by far the farthest from the best healthcare system in the world and we don't sit here claiming so but Canada and every other country with a universal healthcare system aren't just picking flowers from the meadow claiming everything is just the greatest. As you stated in regards to the healthcare insurance system in the U.S., it is being reformed with the individual mandate requiring every American to have/purchase insurance. Solved your issue? Not a chance. Obamacare will only bankrupt our country further putting financial strain back onto healthy insured Americans having to fork up more money to accommodate for the sick that are joining health plans with no selectivity on the insurance companies part. So no, everyone having insurance isn't always the answer and it sure as hell isn't our answer, yet Obama believes so. Moron. As for Canada and your universal health system, nothing is free. Remember that. Your shortage of physicians and other underpaid healthcare professionals won't be as prevalent as more and more years pass and the population continues to grow older while healthcare becomes way too expensive for your government.
Alec Sanchez
Geeze, guy.
Alec Sanchez Alec, you're blind buddy. The United States spends more than any country on healthcare. ANY OTHER COUNTRY. Medicare, man. You guys already spend tons of money on it, but it's communism if it covers people below age 65 apparently.
We aren't taxed any higher than the United States, and our healthcare spending is much lower than you guys because of the single payer system.
Those that push for a system that puts more 'skin in the game' sicken me. Pun intended.
*****
Because you solve all your problems on your own, right?
I mean, even some of the systems he's described in other countries seem to follow this principle, where there's some cost-sharing with single-payer and people with chronic conditions have some or all of that cost-sharing waived. Worth noting is that the baseline cost sharing is very low to start with, when compared to the US where "skin in the game" means getting skinned alive
As a poor individual with little to no income, if I'm paying insurance, I expect them to cover the ENTIRE cost. To me that is WHAT insurance is supposed to do. If I'm paying you to take care of my bills and it's a premium rate, you better be taking care of those bills.
Healthy people don't go to the doctor, you only go when you're sick or you need to. Unless you go for your regular check-ups but who does that? Honestly? If you're healthy and not needing a doctor, you don't go.
I don't have health insurance. I can't afford it, I can NEVER afford it, it's too expensive and even the so called "affordable" plans are terrible. They don't provide enough things. They want to cover the bare minimum and give you nothing for it while expecting you to pay 100 a month. That's not a cheap cost, that's EXPENSIVE.
What do I do if I need surgery? What if I get hospitalized for a few days? What if I just need to go to the doctor for something? Those weak plans don't cover it and on top of that, they don't even FULLY cover all the costs, I'm still hit with things I can't pay and won't ever be able to.
My credit is trashed because of this stupid, complicated, unreliable, broken, healthcare system and insurance companies.
It should not be a privilege to be healthy, it should be a right. My health and well being should not be dependent on how much money I do or do not have or can afford.
The system should be very simple. We pay insurance, they cover it, we get the care we need.
It's overly complicated when it doesn't need to be and greedy people who care more about the money they make, rather then helping the sick, are not helping matters.
I don't have the answer, I just know the current system isn't it, not for someone like me and there is a lot of someones like me.
EDIT: I want to add in that I live in FEAR of going to the doctor because I cannot afford the costs associated with it and I can't go to a hospital because unless it's life-threatening, they will turn you away. NO ONE should be allowed to turn ANYONE away, whether they have money or not when it comes to getting healthy and being treated.
We could have a system so simple that it could be described in one sentance: Everybody pitches in a bit of money in their taxes and with it we, as a country, collectively buy health care for everybody in the country. 300 million people has way more bargaining power than one poor individual, but god forbid we go with the cheaper, easier, less inefficient system because that would fly in the face of capitalism!
Seems some people have already responded to the statement "If colonoscopies were free tomorrow no one would run out and get them" with "Hypochondriacs sure would!" I'm going to assert that the number of hypochondriacs who would do that is statistically negligible, so the hyperbole, while strictly inaccurate, is permissible.
I thought this was going to be about Ayn Rand and the hazardous morals her ideologies exemplify.
Rand helped create a system that convinced millions of not-rich people to slavishly serve the rich people. I'm sure that the rich people are really happy about that.
tetsubo57
People in apartments protecting those in the mansions. Libertarians in a nutshell.
The U.S. government subsidizes corn farmers to overproduce on corn which then is used to make practically all junk food in the U.S.
So we are subsidizing the market to produce junk food and then we are also subsidizing health care companies to take care of the same people that ate that junk food that we subsidized.
That makes perfect sense!
One thing not addressed in this video is how member cost sharing may effect provider payment levels and increased awareness among the insured. I know of some CDHP plans that allow its members to see the differences in costs between providers as well as some "performace" statistics of various doctors/hospitals.
I think adding a cost element may help induce people to spend better and be more aware of their healthcare options, but I agree that sometimes this can have dangerous effects, which is why most preventable care is designed to be 100% covered even before the deductable is met.
What may also be a good add on is allowing people to get returns on good healthcare spending. This will incentivize people to make good and competitive healthcare decisions, but also allow those who need it to not to be penalized for it.
As my health insurance has changed over the last year, I have seen exactly what is mentioned in this video. I used to not have to pay anything to see a doctor. But last year, when I needed Physical therapy, I didn't go because I did not have the finances to pay for the new deductible. I'm now working with a chiropractor but even that is beginning to get out of hand.
In my limited experience, physical therapy is so much better than chiropractic care. It depends a lot on who your provider is, but I got MUCH better results from my physical therapist. I hope you can get the care you need soon.
Erin Howarth That might have to do with the fact that chiropractic is alternative medicine (meaning that it's effectiveness is not well established), and physical therapy actually works. It sucks that people are not able to get the care they need though. I hope the US does something about this. =/
I pay around $13/m for basic (mandatory public) healthcare in Israel. It costs around $2 to see a GP from my "HMO" and $5 to see a specialist. They also cover the costs of some of the medications I am prescribed.
I add an additional $25/m and I get crazy additional coverage- dental- fillings, wisdom teeth removal and regular checkups are only $5 a peice, I can see a specialist at the hospital (one of the best in the country, and world renowned) for the same $5 that I'd pay for a "basic" specialist. I have even more medications covered, as well as medical accessories. I had ligament reconstruction surgery on my wrist and it only cost me around $60!
I am well aware that the medical system in Israel is far from perfect- there is a massive shortage of nurses and doctors. They are also work crazy long hours and don't get paid enough. But on the other hand, there is virtually NO ONE who doesn't have at least basic healthcare. Why can't the United States do that?
There will be no firsts on this video. Healthcare Triage is too intelligent for these things.
Love, love, love this.
Healthcare Triage
"It's just a theory."
Oh no you did not just use that expression! :P
Diana Peña
Economy is as soft science as can be. We're not talking of theories like in Physics or Chemistry here. This is, literally, a thought experiment.
Dorth Lous
It was a joke. Hence the :P.
Healthcare Triage It really pisses me off that you used the phrase "It's just a theory." Great job on propagating one of the largest misconceptions in science as a whole.
I really look forward to this show every week It is informative, to the point and is great about breaking up complex issues into easy to comprehend, entertaining videos. These videos help give people a better understanding of the healthcare system which is needed since we now live in the time where it seems most people get their information from rating hungry news shows. Sorry for the rambling praise, I just felt like you guys deserved some recognition and maybe this could help ease some pain from a hater comment xD.
Awww... thanks!
I think it would be interesting to do some videos comparing our system to those in use by other nations such as UK, Germany, Canada, and Japan. Dispel some of the myths we always hear.
It'd be a short video. Universal healthcare is normal for a reason
Thank you for this content. It is well said and relevant, as always.
Based on this alone, one would think income-dependent copays (preferably with single-payer) would be the natural solution, to expose people of differing income levels to the same relative degree of risk.
It's worth remembering that we have free healthcare in the UK and people still don't go to their doctor because 'I have more important things to do,' or 'it's embarrassing,' or 'I don't want to bother anyone.' We're trying to get people to go to the doctor for things they often ignore so much that we're spending government money on advertising, telling people to come in for a diabetes test, a flu jab, or if their poop changes consistency. Seriously!
What depresses me is that the state of discourse is so poor that I actually had to go to your youtube page and check out your subscriptions to quickly see if you're a genuine person from the UK and not a teabagger human-shaped pile of filtht
Deshara Why would you think I'm a teabagger? I'm not insulted, just confused.
You are aware that a lot of people here STILL think that universal healthcare involves having death panels that go around the country killing the elderly, right? There's a reason people think that. (The reason is that almost all criticisms of socialised healthcare in this country come from teabagger lies. "Every country in europe is broke because of how expensive socialised medicine is!" "I'm from germany and they won't give you healthcare unless you vote democrat!" (yes that is literally a thing somebody said to me))
Deshara Wow. I didn't think it was that bad.
***** This channel exists for a reason :)
As an australian I find this argument about healthcare in the USA absolutely bizarre. Universal health care that is paid for out of tax revenue is the norm. Our federal government is trying to introduce a $6 payment each time you see a doctor - in an effort to reduce the amount of times people see a doctor.
I can't say that the fee would be well received here and I don't understand why americans would want to encourage something similar in their already painfully expensive system.
See www.abc.net.au/news/2013-12-29/ama-criticises-proposals-for-new-gp-fee/5177522
That is such a pittance compared to what we pay in the USA. I can see why they wouldn't want that, you know change and all that. I mean I certainly don't have $6 every time I have to see a doctor. Sometimes I just suffer and I shouldn't have to.
They introduced a similar thing in Germany (we have universal healthcare as well) a couple of years ago. You had to pay a quarterly fee of 10€ to visit a doctor and you were supposed to get an informed referral from your general physician in order to see a specialist. This was intended to reduce costs from people "shopping around" for specialist to get a diagnosis. This is obviously stupid if you have to see your dentist or OBGYN for your regular check-ups. People also felt, that it put the elderly and people with chronic diseases at a disadvantage. I am generally very healthy myself but I had to pay the fee everytime I had to re-new my prescription for birth control, so that sucked, especially since birth control is only fully covered by insurance when you are under 18. We just got rid of this fee in 2013 because the data showed that the system did not help to reduce the costs. Good riddance!
PS. It just simply boggles my mind how agressively AGAINST universal healthcare some people in the US are.
Kerstin S I WANT Universal Healthcare that is actually good. I've always wanted it. I'm greatly in favor of increased taxes to compensate for it.
Universal healthcare would benefit everyone but the private companies, they are the problem. They lobby against it because they don't want to give up their profits.
Frankly, I feel that a government regulated, universal healthcare system is the way to go.
Scheefinator
I totally get that and I also took the time to read your other comment and I totally agree that being healthy is a right, not a privilege. But from what I see on the internet and other news sources, there are people who strongly oppose Obamacare (e.g. the GOP) and the general idea of universal healthcare.
I am lucky that thanks to the system in Germany I have had insurance my entire life and never had to worry about cost regarding my health (I spend 8 days in the hospital and 4 weeks in rehab because I slipped a disc in my spine last year and it literally cost me nothing). I can't imagine not having this security and I just don't understand why anyone would be against it.
Kerstin S Thanks for taking time to read that long other comment.
Man, that must have sucked hardcore. Over here that would have been hundreds of thousands of dollars.
Glad you are better.
Easiest way to reduce healthcare costs and increase care?
Universal Healthcare, plenty of studies on that :P
so the question comes down to... are the lives of poor people worth a few bucks in overall healthcare costs.
and this debate isn't over?
I think they are. Interesting though, if we mandate insurance, we would have more people in the risk pool. Despite having those that can afford this mandated healthcare, carrying the burden of those that cannot, their premiums will be much less because there are so many more people sharing the risk pool and therefore, cost.
Dread Pirate SWC This is why Obamacare is such a crazy, convoluted solution. If not enough people take advantage of it, then the insurance companies will be addled with only sick people and thus go bankrupt. America should get with the rest of the world on this issue and make it a single payer system so they have a unified voice to force healthcare providers to offer cheaper options (like they do in other countries without loss of quality).
Having more skin in the game isn't just about controlling overall utilization. When coupled to improved quality indicators and reference pricing it enables people to seek care from higher value providers. Also, cost insulation combined with health insurance being available with before tax dollars has shielded people from the rising costs of care. Since workers "were covered" they didn't care that prices kept going up. For a long time providers charged as much as they could negotiate, insurance paid the bill and passed the premiums on to employers. for the most part health premiums have made up a larger component of employer costs every year. When an employer looks to hire an employee they look at total cost which includes salary and benefits such as healthcare. Because of rising health costs workers have become more expensive each year even though they aren't taking home much more money. However, since there traditionally has not been much skin in the game workers have been unaware that their compensation has been increasing in the form of health benefits. When they don't see the premiums growing every year and taking up a larger component of their potential pay, they don't feel the urgency to look for more value. For example, if a patient needs to get something done and it can be done at either an academic medical center or their local docs office, I'd they are completely insulated from cost they may choose the academic med center. The academic med center could be way more expensive and not any better in terms of outcomes. The cost is pushed to their insurance who charges their employers more in premiums, the cost of the decision is never felt by the employee, and value is lost.
could you guys do a video on Sicko (the movie/documentary) I am watching it now in english class, would be intresting what everybody has to say about it (in comments and the doctor) Love the videos, keep up the good work!
i really like this channel
Video Request: Could you do a video on the "Friendly Societies" of the 1920's - 1940's?
Also known as "Fraternal Organizations" or "Lodge Practice."
It is a way that communities used to meet their needs, and one of the needs was medical care.
Thanks.
Ok this is extremely useful for when I come out from under my families insurance and look for my own (eventually, and I'm in Australia.) Thank you :) (Also extremely interesting.)
Clear and concise. Thank you.
From a personal finance perspective, it makes sense to have health insurance with a low premium and a high deductible if you rarely require medical services, don't take daily meds, and don't have any chronic conditions that require medical intervention. This is so because the insurance keeps you from going bankrupt if you, for example, get hit by a bus. On the other hand, if you do have ongoing medical issues, a high premium is worth it because you'll save money on meds and treatments.
I totally thought this vid was going to be about Ayn RAND and political attitudes towards health insurance...
I thought it was going to be about RAND Paul...
Same here. I think this is better though.
when presented with the option of high deductible or high premiums, Atlas Shrugged.
ditto
silentqueue lol.
Uve been subscribed to bro deal with it u make good informative videos. Keep it up.
Another very useful video.
Nice vid, try putting links to videos when you show them in the last few seconds, so there is no need to search for them by the name but they can be found though clicking on them.
There is an interesting video related to this called "Oklahoma Doctors vs Obamacare" by ReasonTV. If you ignore the title in can be a very interesting video on how the healthcare system could be.
What would be the best kind of health insurance plan for me?
Background: I'm under 30, and have pigmentary glaucoma, which means I don't yet have the vision effects seen in typical glaucoma patients, which are caused by optic nerve damage. Due to the shape of my eye (genetics), I have high pressure in my eyes, which I need to keep down, or glaucoma damage may occur. I need to see a glaucoma specialist at least ~4 times/year, but it usually ends up being much more frequently if I have a procedure done and need several followups, or if I suddenly have strange pains in my eyes, for example.
That's my only health issue (for now) - what sort of plan would make the most economic sense for me, knowing I have to see a specialist so frequently? I find myself paying hundreds of dollars per visit on my current plan, yet when I was in college, I only had to pay $10/visit.
Meanwhile in the UK, we have effectively free healthcare...
Yes, it is paid through taxes, however the UK, Canada, Sweden, Denmark, the Netherlands, France, etc etc etc all spend less per capita on health care and have healthier citizens than the USA. The biggest reason is we are not afraid to go to the doctor or the hospital when we need to. We are not threatened with bankruptcy over medical expenses.
Matthew Smit So very true. People need to take their health more seriously.
We also don't have creepy commercials trying shift dodgy drug's on us. Seriously America, thanks to the wonders of the internet I now get to watch your ads, and they're pretty fucking scary. Normal people don't have medical degrees, why would they be making an informed choice after watching one ad for your product? Crazy, crazy people!
Max White
Believe me, none of us like it, but the plutocracy rules the US. Money controls everything, even voting.
Max White Every drug for sale has to be approved by the FDA, a process that takes years. No one's selling you "dodgy drugs."
Nicely explained
It's not about making it more expensive for people, as he says at the end. It's about removing market distortions and third parties that get in the way of customers and providers. Prices will come down with providers directly competing for customers.
I am training myself in Machine Learning, and that's why I got interested in RAND corporation HIE. I wanted to have access to the full dataset, but it frustrates me that you need to be part of the ICPSR. Otherwise, I probably have to pay $550 USD to have access!
My family has a high deducible plan and an HSA account funded by an employer because we're healthy. Right now. The much lower premium is more important than the deductible because we only "use" the heath system for annual exams right now.
That said, if any of us had high blood pressure, cancer, heart disease, or the like we would have never taken the risk of a high deductible plan.
im confused - at one point you say that those with high deductible healthcare plans (i.e. they pay 95% costs rather than 20%), spent significantly less and they consumed less healthcare. But then you say it quickly became accepted fact that increasing cost sharing (i.e. when patients pay for a portion of health care costs not covered by health insurance) was a good thing and that people would use less care and spend less. Isn't this a contraction? I'm probably being dim can you help explain please?
I hope these "Healthy People" who believe we need to pay more never get chronically ill. Because wow does it suck and you hemorrhage money every month just to get to normal, not exceptional! Barely functioning.
It is mostly not about paying more--it is about where it is paid. For me (being healthy) I could 1) pay several thousand a year in premiums and not go to the doctor, or 2) pay very low premiums and a high deductible each year. If I was healthy, I saved several thousand a year---if I was 'sick' (or my wife had a kid) the cost difference was negligible.
The key point is that most high deductible plans are lower premium pans.
dzjad The amount we pay for the same procedure or medication comparatively though out the industrialized world is ridiculous. That's why when your sick it sucks either way, low or high premiums, you end up paying a lot more than you should need to. Glad you're healthy, carpe diem, go outside, work hard and live a life, a lot of people can't:)
Meh...I'm not going to touch the high costs relative to other nations as that's a bit off topic.
Also, I had decent insurance. It didn't matter if I had gotten brain cancer or if I didn't visit the doctor but once a year with my old plan--the cost was about the same (and even cheaper for the high deductible plan). Granted, most people don't have access to good insurance like that--so I do continue to work hard so I can be employed by companies willing to compensate me with good insurance.
dzjad Actually it might have mattered, most policies have spending caps, they are just so high most people never hit them, I have friends who do. Also some cancer treatments aren't covered, especially experimental ones. I'm lucky to have decent insurance from my family's plan, plus my own Medicaid. Before I got Medicaid I paid 20% co-pay at Drs and on medications, it was still astronomical. I never went without medications, we did go without other things to pay the thousands of dollars every month in medical bills. Now that I have Medicaid it picks up the 20% at Drs who are in network, and fully covers all my medication. Once I hit 26 though, I don't know how its all going to change.
That means we've circle back to that question of values: do you want a healthier country, or healthier citizens?
Interesting concept. So if we have high out of pocket costs but are healthy it's cheaper for the health insurance companies. If you are sick and can't afford your care you end up with higher cost ER services that may be left unpaid. Then those unpaid ER costs are passed along to the public through the hospitals increasing rates or fees to break even. If everyone pays their share then we are not stuck with rising health care costs. If no one pays their share...you sure will if you ever have to use care.
This may seem nitpicky, but in my non-trivial number of years studying economics I've never heard someone refer to "the" moral hazard. It's just "moral hazard". Any idea where the "The" is coming from?
If you want to see how it will work out if everybody gets the same basic insurance that also cover things like going to a gp and being spared of costs from for example anibiotics and other medication, just look at how it's done in The Netherlands.
BTW, healthcare insurance seems to be getting cheaper here, at least the last few years. The also say that the care is getting cheaper.
Is this RAND organization related to a certain lady novelist by any chance?
Moral hazard is not just about the amount of health care consumed, and the amounts of health care used. Cost sharing also encourages people to seek better values in health care, to obtain necessary care at lower prices than if one doesn't share costs (and the costs can vary widely for the exact same test, procedure, or treatment). The problem is this information is not easily available to people, and THAT is where requirements and regulations can help.
I think at 0:18 he meant go with a low "premium" instead of deductible. Because he then says he will likely have a high deductible. This is true for a lot of ins plans that are low in monthly payments.
does anyone have links to the pauly and Nyman studies?
I was taking classes for medical billing and the concept of coinsurance confused the hell out of just about everyone. Deductibles and copay didn't cause nearly as much trouble.
In England having the NHS means people don't consider whether it's totally 'necessary' before going to see the doctor about any symptoms. Could anyone from america explain the sort of healthcare they would consider unnecessary?
I was hoping this video was about you and John talking shit about Ayn Rand and objectivism
Riley Purcell I recommend Wisecrack's video on bioshock if that's what you're looking for
Have there been moral hazard studies in countries with single payer health coverage?
I'm okay with most of this video, but... "it's just a theory, not a law"? That misuse of terminology on a channel associated with SciShow? That makes me sad.
There are very few comments I agree with more than this one.
Because this phrase is so misused in so many areas of political discussion in the US, I agree. I think theory means something else here... not like evolution or gravity, but I wish he hadn't used this phrase.
RandomerThanAverage
The best plan is to not use it at all.
RandomerThanAverage Yes, it's clear that he meant hypothesis, but when those terms are detrimentally interchanged in a society that's low on scientific literacy, conflating them is a bad idea. Especially in an educational video.
It's important to remember here that Economics is not a science, it's a "social science" like psychology or political science.
Even calling it a hypothesis is misleading. It's not that kind of field.
1. For various reasons some people would not get the filet mignon for various reasons. 2. We are told that people do get too many colonoscopies also too many mammograms and too much antibiotics. These are documented on your own blog, so the grocery analogy is not that far off.
I read through the comments and saw that you acknowledged the sensitivity in your viewers when you used the words "just a theory". If you could acknowledge that in the video description I think that would be really helpful so that people don't have to sift through the comments to see what you meant.
For anyone else who reads this comment, I think it's worth noting to say that theories don't get upgraded to "undisputed laws" as it was put here. It was used here to mean an untested, unconfirmed hypothesis. It was just poor wording. "Laws" describe phenomena, where "theories" explain them. Actually, if one were to hypothetically get upgraded to the other, it's more likely that a law would get upgraded to a theory, but that doesn't happen.
INSURANCE SUCKS!
We should have public healthcare like all the other wastren countries!
uhm even with public health care we still have health insurance in Germany, so yeah I guess there is no fix for that problem.
At least here in Canada, there is still private insurance. Government run healthcare takes care of the basics and such. Then private insurance fills in the gap for things like oral care, eye care, and some niche healthcare procedures and medication.
Essentially, having public healthcare doesn't get rid of insurance. It just pushes it to the fringes, where it's not 'needed' in a life-vs-death sort of way.
Would you pay a high monthly payment that covers... OIL CHANGES ON YOUR CAR???
That is basically what we are doing when we include small things like regular dental/vision/doctor visits into monthly payment health insurance.
You get INSURANCE for the BIG BAD situations, the ones that are highly unlikely and catastrophic.
It does not make sense to bundle OIL CHANGES (doctor visits) with ENGINE FAILURE (cancer/heart attack).
You would obviously want to separate these types of scenarios in order for "insurance" to correctly serve its purpose.
I firmly believe that if insurance did not exist (and thus the expectation that people have insurance didn't exist) that prices on all insured goods/services would be significantly cheaper. If Medical/Pharmaceutical industries knew that most people could not afford their services (because they did not have insurance), prices would have to drop.
Insurance is just a fancy word for gambling, and in gambling, the house always wins.
Except that significant healthcare costs come from inelastic demand. Single people can not effectively lobby health providers for lower prices. So if I tell you that you have to pay $100 to live, you will pay it. If I tell you to pay $1000, you will find a way.
People win in that larger groups of people (insurance companies) can better negotiate 'bulk' prices.
There's a reason we have a national defense force and almost no providers for personal defense forces. Sick and dying people can't just go without until providers for healthcare lower prices to their range-- if you're sick and there's a procedure to fix you, you'll get it no matter what, even if it'll bankrupt you. Industries like that should NOT be left to corporations and the 'free market'
I'm so confused. The video moved too fast for me to understand. :( I guess I'll watch it again to see if that helps.
Making people pay more for healthcare saves the healthcare system money because people don't use the system until they absolutely have to. This is 'good' because it saves money, but it's 'bad' because people are bad at telling when something is serious or not, thus are at risk for undiagnosed health problems.
(This is how I understood it, someone correct me if I'm wrong)
interesting.... sadly i'm still quite young (and Canadian) so I don't quite get what he is saying, nonetheless I think it's important to think and learn about this stuff. Also I think I know some adults who should watch this too :D
Ok, so they established that people seek less healthcare and spend less money when exposed to a greater degree of the cost. To my mind, this is only a good thing if there is evidence that seeing your doctor less and spending less dollars on healthcare causes the overall cost of services to go down. I'm skeptical of this link because we've had the co-payment system in place for a while now and healthcare costs have gone steadily up. Now, cost inflation in healthcare is a complex issue and it may be that using co-payments/deductibles has buffered costs from increasing more quickly than they would have, but again, I'm skeptical. It seems to me that until we can formally establish a causal link between use of co-payments/deductibles and overall cost-of-care, the more compassionate thing would be to forgo their use.
Australia is currently in a situation where the prime minister wants to introduce a similar system. A co payment on gp visits, tests, procedures, and medications - basically turning Australia's medical system into a version of the American system.
And look how many people here are up in arms about it - including the medical profession..... There are very few people who actually agree with the proposed (as the legislation hasn't made it through Parliament at this stage it is still just proposed) changes to Medicare.
You don't see people complaining about firefighter entitlements. You're not going to use their resources, but it's better to have it and not need it than the other way around. Same for healthcare.
I do not think that you can say that poor people with hypertension died more as a caused result, because if you look at enough slices you are bound to find effects in some of the slices. You can only look at the overall effects.
So, what I really hate is when I get stung by a bee/wasp, and even when I have my epipen I have to go to the doctor to get a steroid shot so I don't die. I get told by my insurance they won't cover it, so I end up having to pay $150 to go get a shot so I don't die.
Basically, I'm good with paying for healthy or mildly sick visits, but I don't want to have to pay for staying alive. You get my drift?
I'm glad I live Canada
You see? Give results a study, get people focusing on the things they want to hear (confirmation bias). Tell people that high deductibles kill people and they focus only on that.
What I heard is the same study gave different results for different situations--thus meaning that either plans that provide the "best of both worlds" or a ability to have greater choice (as well as information about impact) is better.
Moral hazard doesn't necessarily refer to the quantity of the items demanded. In the case of healthcare, the point is that if there is the option between a $50 drug and a $500 drug, there is no point in choosing the $50 one. E.g. hospitals charge exorbitant rates for things like toiletries because the consumers don't feel the cost.
Actually they do. If they don't have health insurance.
With a single payer system (ie: truely universal healthcare) the government can select the $50 drug, which enforces competition between the drug companies to offer lower cost options. In theory this could reduce quality, but if you measure for that as well when negotiating (as a single payer eg: the govt) it can be managed.
A sick person will pay whatever they need to or go into crippling medical debt to ensure they survive. Insurance doesn't help a healthy person if they think short term, which is why there is such a furor over Obamacare. People who're healthy feel they shouldn't be forced to pay for healthcare insurance because they don't need it.
Until they do, of course, but they want the option of simply not paying. The problem with that, is if you insure only those who're sick, the insurance companies would go bankrupt as they pay out for sick peoples stuff without being able to recoup it from those who don't make use of their insurance as much (eg: healthy people).
A single payer system would solve this by making it actually just a tax, or like in some provinces in Canada, a monthly healthcare fee that must be paid. In the United States they force people to buy some sort of insurance, but still have the underlying issues of higher costs for healthcare (BY FAR) than any other country due to the healthcare companies being able to negotiate rates per insurance provider etc.
how come a plastic cup cost $18 at the hospital?
You want it costing less, make a law that says they can't charge more then 100% over costs..the wheelchair im in because i'm disabled retails for $1,600 But where i had to buy it it cost $4,000..and it has only a small amount of needed custom features
At first I was surprised that John hadn't heard of co-insurance. Then I remembered he used to believe that a minute had 100 seconds.
Yes, I have exceptional health insurance&you BET I use it more: were I spending lots out of pocket, I WOULD NOT BE ABLE TO WALK. I'd likely be paralyzed as I doubt I could've paid both high out of pocket AND the cost to fly to a GOOD trauma center when I was literally crushed neck to hips+calves to toes. My back surgery would've required 18-vs 7!-months bedbound IF I even survived the 1970's surgery[low budget] hospital would've performs on*5*vertebrae-its lowcosttech MISSED 9 of 14 I fractured!
I see higher out-of-pocket medical costs as penny-wise & pound foolish. If a person can't afford a $50 doctor visit that could treat a situation before it gets bad, they may leave it until they no longer have a choice but to go the the ER, which is always more expensive.
I don't think that third party payer just makes people get more colonoscopies, but it does increase the cost of what you are getting. When people pay between two parties, everything is cheaper/better. Just like every other good or service.
The Moral Hazard argument isn't that people would get more treatment. It means they don't care about the cost so the get the over-valued version. With the example of Groceries insurance, people would go to get food, and since their insurance covers it they'd end up paying 100$ for a measly hamburger. That's one of the main reasons a simple 2c asprin pill can be charged up to 20$
Seriously, love this channel :)
Thanks!
Moral Hazard? Exactly as you say, try having a chronic illness. Suddenly that high copay you chose before you got sick seems like the worst decision you could have ever made (short of not having insurance...although many are uninsured without recourse, by no fault of their own. Yes, even under the ACA, there are still those unable to attain insurance, especially in states that declined Medicaid expansion...)
and that is why I am a socialist. For the society to be healthy, even the poor needs to be healthy.
The mixed outcome of the study risks being interpreted in black & white - hazard exposure reduces overall costs drop for the healthy so therefore don't have universal insurance coverage, OR increasing poor health for the poor/unwell and so have full insurance. Living in UK we have total coverage (well mostly, not cosmetic surgery or procedures of low clinical benefit), but we surely would wish for coverage for those with illness (despite taking good selfcare to avoid) especially those with lower incomes but without encouraging the healthy to have expensive interventions that wont affect health... we seek both good health and doing this without wasteful expense.
Our system in UK does not get this right, with all the patients who see a doctor with obvious common cold who have not thought to see their Chemist first. US does not get this right with excessive screening and then intervention that is more expensively delivered than elsewhere in world, possibly in part due to higher medical insurance premiums because people have to sue for high amounts because there is poor free healthcare delivery to address iagtrogenic adverse consequences of treatments.
bi1iruben
Um, the UK spends far less than the US per capita and has a better healthcare system with more comprehensive coverage and lower medical debt.
en.wikipedia.org/wiki/World_Health_Organization_ranking_of_health_systems_in_2000
Diana Peña yes. What is your point?
Pontus Welin
My point was a joke, unless you meant my second comment. It was a reply to someone who said that the UK can't do healthcare right.
Diana Peña Of course they don't do healthcare right. Their poor are getting it! That's obviously wrong-- how are we supposed to subjugate people if they aren't too sick, disenfranchised and destitute to fend for themselves!?
As a person poor in both money and health, I'm pretty sure removing the moral hazard would kill me.
Poor health is bad for overall healthcare spending though. Preventative care costs a lot less than emergency care. Like a LOT less.
And no country spends more on it's healthcare than the U.S. despite most having similar or even better results and more coverage.
It sounds to me that the problem is more then just how much people are spending but what they are spending it on. Thus, the solution is to better educate people about what medical care is and isn't necessary for them. If this true then a new question arises; how to better teach the masses about their medical care? Any ideas?
i had to go back and listen a couple times at 2:04
when you hear it..
Was the difference in deaths of patients with hyper tension statistically significant? With a sample size of 600 total, what percentage of each group that had hyper tension? And what was the fatality rate among those? In addition to being double blind, controlled experiment, the results also have to be statistically significant, or you can't show causal relationship.
There is one other obvious exclusion from the video (and study -- as it would be too hard set up); catastrophic only coverage increases competition, as individuals are more likely to seek deals on routine healthcare than a 3rd party payer. Since there were only 600 participants in the study, it wouldn't have enough effect on the market to show this difference.
Lastly, he doesn't talk about pairing the high deductible insurance with a tax sheltered Health Savings Account invested in conservative investments making slightly more than the rate of inflation. What would the availability of the savings for health costs have on both the fatality rate?
The paper is publically available, The results are significant, and you can go look them up.
You've outlined the justification for shopping around. It rarely happens.
Health Savings Accounts are only appealing to people who take itemized deductions. These people are NOT at the low half of the socioeconomic spectrum and are MUCH more likely to have comprehensive insurance available through their jobs.
Healthcare Triage
I've found the study. I see that hyper tension explicitly affected 2% more of the population with the cost-sharing plan than with the free comprehensive coverage (page 101), but I see no mortality numbers.
www.rand.org/content/dam/rand/pubs/reports/2006/R3055.pdf
"You've outlined the justification for shopping around. It rarely happens."
It rarely happens when you have comprehensive coverage because we have fairly comprehensive 3rd party payer system. Insurance companies lock you into the network, sort of selling you to healthcare providers for "discounts." But the insurance companies don't really pay the costs, the policy holders do in the form of premiums, so the 3rd parties are incentive to play hard ball for lower costs.
Healthcare costs under the current model have skyrocketed faster than the rate of inflation in almost every area; however, contact lenses and laser eye surgery has fallen. What makes these two things special? They aren't covered by most insurance companies, and people do shop around.
The Affordable Care Act, on the other hand, makes insurance plans cover more things, and forces everyone to be covered. It stands to reason that it will decrease the incentive for consumers to shop around and negotiate, and increase healthcare costs.
I'm opposed to socialized healthcare, but socialized healthcare would reduce, at least in the short term, the cost of healthcare. The government would use the whole citizenry as a bargaining chip for the cheapest satisfactory hip, cheapest satisfactory MRI machines, etc. because the government would put it all out for bid. The problems fundamental problems with this are two fold, eventually we'd have larger medical state-sanctioned monopoly on medical equipment and the prices would start to rise again, and second, a lot of privately funded research and innovation would stop. The last bit is that almost all the politicians in Washington have an approval rating bellow 50%. They, and the bureaucracies they run, have shown themselves to be untrustworthy with the powers we have given them. Why should we give them the authority to dictate healthcare choices?
I predict that the ACA will prove worse in controlling healthcare costs than socialized medicine, worse than what we have now, and certainly worse than a country with high deductible plans.
"Health Savings Accounts are only appealing to people who take itemized deductions."
Not true. HSA are post tax dollars. The tax incentive for an HSA is not having to pay capital gains on the money earned, state sales tax on medical services and products purchased (without having to itemize), and to have money earning interest in investments.
"These people are NOT at the low half of the socioeconomic spectrum "
The people who use them generally aren't in the lower half, I'll grant you that. That doesn't mean they shouldn't. The lower and middle class don't save enough for retirement. A lot of them are planning to depend on social security when they retire, which is a system that needs to be repaired to work out with the declining birthrates, increasing life expectancy and continued retirement of the boomers. That said, social security was never enough to retire on and maintain the same standard of living a middle class citizen has come to enjoy.
Say, you make 30,000 a year, and want to maintain the same life style in retirement. You expect a return of 8% on your investment (which is a bit high to assume in to perpetuity), that means you can reasonable draw 6% of the total each year. You'd need to save at least $145,000. Say you realized this when you were 30, and planned to retire at 65, so you have a 35 year to save that amount. $145,000/35 years = $3,857 a year to save (neglecting interest made in those year).
Asking someone making 30,000 to sock money away in an IRA, you'll hear "I can't afford to." But, really they can't aford NOT to sock money away. HSAs, ESAs and retirement tax sheltered savings plans aren't held liable bankruptcy. The HSA is far more useful to the middle class and poor than you give it credit. It can be used like a Roth IRA in old age, but can be used to pay medical bills without tax or penalty at any time. The problem is that people often don't long term.
Wouldn't another issue be that when fewer people are getting eg. MRIs because they have to pay more for them, the hospital has to spread that multi-million dollar capital expense over fewer customers, raising the price per scan
Capital expenditure (misnomer, I grant you!) is not treated as an expense but as an asset acquisition, so no.
6:15 I think you are wrong here. I think a lot of people who want really high co-pays actually don't care about poor people getting sick and dying. They just want to save money.
"If surgeons refused to accept payment for appendectomies anymore would anyone go and get one just for the hell of it?"
eh. maybe if I have some time to take off I would. I've seen my brother and a good friend both writhing in more pain than I can imagine from appendicitis and I fear that my appendix might go rogue someday too - a preemptive strike just seems logical. Amirite?
I'm kind of upset you just used the words "just a theory" as in to say that because something has the term "theory" attached to it it is somehow not credible.
... just sayin'
In physics, having your idea called a theory is actually pretty good...
Because this is a theory in the just a theory sense, not in a scientific sense.
Timothy McClure Well this is science... soo
Adam Grier He's referring to the economic theory of the Moral Hazard, and economics is a science in the same way that Monster Munch tastes of Monsters
Wow that came off as really bitchy... Sorry bout that
That's not what he did. He pointed out that the theory wasn't perfect. It is a theory, and like all scientific theory, it's only as valid as the data to support it. Also, we're talking about social science. Valid, unbiased data showing a causal link between variables is a lot more difficult to acquire, and it should take a lot more of it for a theory to achieve the same degree of validity than in other sciences where causation is easier to prove.
I love the fact that I CAN go to the Doctor's :D
"Higher deductibles ... may be good for health care spending but may be bad for people's health."
Yes, now our high health care costs are bad so if the higher deductibles and so forth drive health care costs down wouldn't that be good for people's health? Remember the issue is not driving health care costs down just for the heck of it, it's driving them down so that poorer people can afford it.
"No one likes going to the Doctor" Go and be a GP in the UK and discover the, (thankfully rare) condition of lonely-patient syndrome. It seems to be caused largely by longevity and partly by urbanisation. [1] #LPS
I know some people who are fans of the idea of removing health care, not because of the moral hazard, but because they believe that a large part of the cost in medical appointments is tied up with the extra pair of hands payment went through; they swear that if we removed health care and doctors just charged what they thought was fair, that the costs would go down. I would love to see a criticism of this issue from someone more knowledgeable on the subject than I am, because I'm not satisfied with my own ability to phrase my concern with this idea.
Generally the idea is that insurance adds to the cost of health care where there is little to no personal responsibility. An injured or ill person that has full coverage will "need" every item that they are qualified for. I need all the pills and the wheel chair and the walker and the exercise equipment for recovery and the personal aids. It doesn't matter if I really need it or not but I want it because work or my insurance is paying for it. Generally it's people that have been paying for insurance for years and feel that they need to get as much as possible for all the money they have payed in the past.
There is also the idea that doctors prescribe name brand medicines when the generic drug is also available for a cheaper price. Again the doctors don't care what it costs, he knows it works and he's not paying for it. Most patients have coverage and don't care about cost or are unaware that an alternative may be available. All of these higher costs get added on to premiums and we all pay for it sooner or later.
I get that.. thoughtful
All I know is, I have schizophrenia. I went to an emergency room back in december of '13 and I said IU didn't have health insurance. They looked at me like I was crazy. Granted I am, but I have the money to pay for my healthcare. Anybody got answers to my problem?
If you have the money to pay for healthcare, why wouldn't you have insurance to protect your assets? That said, I would seek some service that can provide verification of self-coverage or buy a basic policy that will eliminate the penalty under the ACA as well.
How many purple shirts does he have?
This is confusing...why is it not the role of doctors to determine what care is needed?
Preventative Care Story: My dad's a dentist, and thanks to the wonders of technology it became possible to find and treat cavities much earlier than before. So it became cheaper, easier, and less painful to get rid of the problem off the bat. For about a year or so he made bank doing this, as everyone had lots of little almost-cavities that he could get rid of very inexpensively. And then, once he'd gone through all his patients... the number of patients needing care went down. Dramatically. Because everyone could get the preventative care, they didn't need something more expensive or severe. It's almost like preventative care helps lower costs in the long run, right?
Brush and floss every day, kids. It'll save you pain and money the road.
Why oh why did they not call it the RAD Corporation?
I personally think that our system punishes people for not being healthy, and that's not fair because people can't usually control whether or not they have health issues.
Hi, you must be new to this country
That entire part re. people not wasting chemo is entirely missing the point. People will take large amounts of wasteful medical tests (CT scans, MRIs etc.).