Because people will pay basically any price to save their 6-month-old daughter’s life. There is no law of supply and demand because there is no limit on the demand.
Maybe. It would certainly be cheaper with less training for the surgeon. And that cost might be the billed cost, might be the insurance paid cost, might be the out-of-pocket cost - it’s very hard to know.
Prescription drugs are priced at the point that maximizes revenue, just like everything else. They have to negotiate with the insurance companies to some extent, but not with Medicare for Part D (as I understand it).
Very little.
Because if you are the only company offering no-limits policies to people with pre-existing conditions you either have to require a premium nobody can pay or you will go out of business. Or you have to be the US Government. Or you have to have a mandate to require that healthy people buy your policies as well to spread the risk and lower the required premium.
The rate the insurance company pays is actually substantially less than the amount billed. We received a bill for almost $1 million for my son’s first surgery, and the insurance company actually paid more like $300,000. Hospitals receive fixed rates of compensation from insurance companies and Medicare for certain procedures. Of course, my son’s hospital is a public hospital, so many of their patients have no health coverage. These people will be billed at the full rate and will never be able to pay their bills. This amount is covered by charging everyone else more.
Even without this, though, pediatric open heart surgery is going to be expensive. First you have the salaries: my son’s surgeon makes a salary of almost $2 million a year (he works for a public hospital so his salary is public information). In the operating room you also have a team of specialized pediatric cardiac anesthetists, nurses, technicians, etc. You are putting in specialized hardware (shunts and stents) that cost a lot of money because relatively few of these are made for the pediatric market. Then as the child recovers, they will spend several days in the ICU where there is a 1:1 nurse to patient ratio 24 hours a day. There are also respiratory therapists, child life specialists, a team of cardiologists and others involved in their post-op care. But yeah, everything is inflated to cover the costs of patients who will never pay their bills.
As to your question about why companies didn’t just get rid of lifetime caps and use that as a selling point, some companies did do this. Our insurance has actually never had a lifetime cap. But most employers want to offer their employees health insurance with the lowest premiums possible (especially if they are paying for all or most of the premiums!). Usually cost savings trumps all other concerns.
The family should continue to use their insurance and personal wealth to care for the child until they can no longer afford it. When this happens they should enroll in Medicaid.
Of course, I have explained before that, just as pkbites asks upthread, arithmetic suggests that it’s not only okay, but completely necessary. We can always imagine a point at which some huge expenditure of dollars would allow us to extend a patient’s life, but we cannot afford to pay that money. Where and how we draw that line is fruitful area for discussion – that the line exists somewhere seems pretty self-evident to me.
Or is anyone here actually taking the position that, as a society, we should never limit the dollars spent on any patient, under any circumstances?
I think that’s what critics are saying the policy banning lifetime limits already does.
It’s a legitimate question. Part of the high costs of health care springs from the fact that we have awesome, but expensive, technology and treatments today. Who knows how far, or how expensive, they will get? Will we invent something that can keep people alive until age 200, that costs a billion dollar per person?
That’s why we should invest in cyborg technology, so everybody we save can give back to society more than they did before. Sure, my throat surgery cost ludicrous amounts of money, but think how useful I’ll be as a festival PA system and recording studio autotuner!
I don’t take that position. But the line ought to allow for spending for babies with defects that can be corrected by expensive surgeries- even very expensive surgeries. Where do you think the line should be?
Also with significantly lower administrative costs.. The total budget for the IRS in 2012 was 13.3bn. If we use 2010 data for GDP and percent of GDP expenditure on healthcare costs, then extrapolate 15% administrative fees and about half of the expenditure on healthcare being through private insurance, we get a figure of over 160bn being spent on administrative fees in the US. The article points out marginal utility of administrative expenses for increased expenditure on healthcare, which is a roundabout way of restating the reasonable opinion that private insurance for the already healthy does not warrant the current fees.
Why do you hate single payer? Healthcare fees are expected to rise in Europe to 14% of GDP by 2030, which is under the current rate paid in the US today.
Isn’t the Catholic position that a sin of omission is as grave as a committed sin? Thus removing a feeding tube is as dire as starving the person? There have been some fairly tortured theological screeds along the principle of the double effect too.
In this case, arguing for reasonable limits is precisely the act of omission which would lead to the death of an infant, by failing to provide the infant with adequate care. We’re all coopted into the death panel, it’s just Republicans want to limit the number of actors in it to the controllers of capital. See, wealth tracks merit, so if someone has a congenital condition without the means to pay for it, that’s their own damn fault: the free market and mother nature working in harmony to purify humanity. Abortion is a different issue though, interference with the economic decisions of the foetus. Any amount of time or effort is warranted on behalf of the taxpayer in order to prevent a woman from ending the life of her genetically inferior burden in order to prevent a far more protracted, painful death and increased costs further on. Hardheaded sentimentality from the Gospel of Malthus.
Unfortunately, I can’t even agree with your second sentence. A million dollar surgery? Maybe. A five million dollar surgery? Ten? I can’t sign on to the proposition that we must save a baby if we can, no matter what the cost. Because resources are not unlimited.
So you, rightly, ask me, “OK, where should the line be?”
I don’t know. I don’t even know how I’d begin to calculate that, especially knowing that I was potentially putting someone on the wrong side of that line with my decision.
Society should only step in if the family is in financial need. With the ACA society steps in even if the family is well off and can afford the care. Fellow policy holders are shouldering the burden for everyone who requires expensive care, not just the needy.
The ACA should be repealed. Medicare should be repealed and poor old folks should be rolled over into Medicaid. Medicaid should be reformed and expanded to cover any expenses of poor people who cannot afford care. All insurance mandates should be repealed, allowing individuals to choose a plan best for their situation. Also, the deduction for medical premiums should be ended and taxes lowered accordingly to make up for the increase. This would sever personal medical plans from the employer and folks could use the money to purchase insurance from whomever they wish or just save money in case shit happens.
If these changes are made, medical care costs would fall tremendously and everyone who still couldn’t afford care would be taken care of by society.
Not exactly. In fact, it’s the principle of double effect which saves us: we are not refusing to care for the infant – we are, instead, caring for other infants in a situation where we don’t have the resources to care for all.
But I certainly don’t think Catholic postulates should form the basis of secular policy – do you?
Ok. But in the real world, do 5 and 10 million dollar surgeries exist (maybe they do- I’m really just asking)? How common are they? There probably should be a line. But (without doing the math) I think for non-elderly people (and especially children) the line ought to include pretty much every life-saving treatment. That doesn’t include every medical situation (for example- what kind of prosthesis does an amputee get- the $10K version or the million dollar version? Probably “good” rather than “the very best” is good enough.). But I’m asking about the life-and-death ones. Like a patient with a chronic illness (perhaps HIV) that requires thousands of dollars of medication per month, with a long life expectancy as long as they stay on this expensive medication- if they’re not rich, then either they need cap-free insurance (or the equivalent) or they’re dead.
It seems to me that the Republican party position (from what I can tell- I don’t think they’ve been asked this specifically) is that patients and families in situations like these must hope for charity or die. What’s your position?
It’s not like this question has never been considered. The cost of lifesaving treatments is measured in cost per Quality Adjusted Life Year (QALY) gained. A year in perfect health is one QALY, and various conditions and ailments reduce that number; in theory, a year spent in what would be considered 50% of perfect health would be 0.5 QALYs. Coming up with that multiplier is extremely complicated, but there is a body of literature behind it.
So a treatment that costs $10,000 that gains someone ten years of perfect health costs $1,000 per QALY gained.
The cutoff for considering a treatment “cost-effective” is usually given as $50K per QALY gained. This is the result of some economics work in the 1980s, and that figure hasn’t been adjusted for inflation–it is still the figure most people cite. So when we’re talking about a baby that we’re taking from certain death to a normal life, we can ballpark it at 60 QALYs gained, and it would be worth about $3 million.
This is not to say that we don’t treat anything that costs more than $50K/QALY; in fact we do it all the time. Dialysis almost certainly costs more than that. Mammograms do if you do them every year. It’s really the level at which we start to wonder if a certain treatment is worth the cost; below that we generally don’t.
If nothing else, it’s a very valid place to start the discussion.