Thursday, August 13, 2009

Price vs value

"What is a cynic? A man who knows the price of everything and the value of nothing."
Oscar Wilde, Lady Windermere's Fan, 1892, Act III
Irish dramatist, novelist, & poet (1854 - 1900)

Visiting Megan McArdle's site (h/t Instapundit) where she writes about her writing about nationalized health care and how critics are trying to paint a very narrow window for criticism while the larger objective is to get nationalized health care is interesting.  What is more interesting is that a number of commentators speak about chronic diseases and their cost.

So, having a number of chronic conditions or conditions which can complicate chronic conditions or being treated with medication that treats chronic conditions that lead to further and worse fall out from chronic conditions... do you follow that?

One chronic condition can get complicating factors from other, possible, causes and medicating to lower the risk of those separate causes then lowers the risk of further complications to the main condition down the road.  Thus you treat the others at the first sign of problems or, due to the effects of medications for those conditions, you have the medication supplied BEFORE any of those other conditions show up as they help the main condition stave off further problems.

Got it now?


Now I've had type I diabetes (previously 'Juvenile Diabetes' but it now has been demonstrated to show up independent of age and other conditions, although may have some environmental factors associated with it as seen in the Scandinavian effect of more cases showing up in late fall and winter) since 1983.  Over 25 years with it and nearly 26.  As type I is not amenable to the medications for type II, and has different symptoms with it, and is the low percentage of all types of diabetes (~10%), it has some similar and some different risk factors with it although complications run about the same direction.

Starting in the early 80's and going to the early 90's I was on NPH insulin, one injection per day.  That had crept up with a resistance to it, but that (as it turns out) is not a permanent effect.  I was switched to Lantus (glargine) which lasts longer in the blood stream, but my use of it crept up, also.  Before all this I was and am prone to infections of the upper respiratory tract, and if you have ever experienced a dual ear infection, sinus infection, pleurisy and vomiting, I know EXACTLY what you have gone through.  All at the same time.  Without modern antibiotics of the 1970's I wouldn't be here, today.

Now this all changed when I volunteered for a trial study at NIH.

You know, National Institutes of Health?

I was, relatively, well at that point but a few of my cholesterol and other numbers needed to be 'baselined' so I was taken off of one statin that was causing me to gain weight and put on another.  That all squared away I was then put through a day or so of 'how to properly maintain your blood glucose level for this study' which turned out to be a primer on how to do this for your life.  It is not that complicated, and takes about a month to finally get all the proportions worked out right so you are balancing carbohydrate net intake per meal with the proper amount of insulin to counter it, per meal, and then do a test two hours later to ensure that your glucose levels are in the preferred range.

Thus my control of my condition went from 80's understanding relatively so-so to early 2004 understanding by the top researchers on the planet.

With poor control I was getting normal and expected complications due to how long I have had the disorder.  I had three bouts of laser surgery to cauterize areas at the back of my eyes that were seeping interstitial material.  I was getting some peripheral neuropathy, mostly in my feet, but still had and have decent sensation in them.  Basically, at 20 years onwards I was doing pretty well, all things considered.  And being a government employee and having chosen a health plan, all of the complication were picked up by the plan.

Now things changed in 2004-05 as one of the medications given to me to lower my cholesterol level had truly nasty and undesired side-effects that are not well publicized but horrific for anyone getting them.  Beyond memory loss I was having sudden lapses where I could not do anything with my body but was conscious.  Lethargy was omnipresent and my stamina plummeted to almost nothing.  Starting in DEC 2004 when these problems first started to appear, they were not correlated to the study medication and the best minds at NIH got a chance to try and figure out what was going on.  My personal physician also started work on it.  My endocrinologist identified the medication and the problem immediately... that was FEB 2005 and things were getting worse as the loss of body control was happening multiple times per day.  I was taken off the medication but the problems persisted and were not getting better.  By MAY 2005 I had my primary care physician fill out the paperwork to take me off the roads and I could no longer function at work.  From MAY-JUL 2005 I went to a neurologist who had a preliminary diagnosis in JUN 2005 (after an MRI) and final diagnosis after a PET scan (which I paid for out of pocket) as I wanted the condition nailed down.

From then, onwards, I have been dealing with a steadily improving condition via treatment with medications that we still don't know very much about even after they were invented in the mid-1970s.  Seems fitting as my genetic background has a predisposition to the condition that the prescription medication caused to become present.  That is no hard and firm diagnosis, but it does fit all the facts and will continue to be the best-fit explanation until a better one can come along.  Turns out my own endocrinologist was thinking of putting me on that medication, anyway, because of my underlying condition.

That period from DEC 2004 to JUL 2005 saw me taking more blood tests, getting imaged multiple ways, having my heart scanned in 3D (I was interested but my lack of energy and stamina kept that to a minimum), having pins inserted into my muscles to measure them and then have them artificially stimulated (it is not as unpleasant as it sounds, but isn't pleasant, either) and until I got a neurologist who could figure it out the next thing up was a spinal tap.

Mind you, this is with the VERY BEST researchers and clinicians I could get my hands on in the DC metro area...

To go through the disability paperwork I had to fill out a raft of forms from SSN.  That was necessary for my government disability, I expected nothing, zip, zilch from SSN because I was just debilitated to the point I couldn't drive, could walk around the block, and had problems staying awake most of the day.  My lady helped me and SHE was fine!  She had problems understanding the SSN paperwork which appears to be meant to defeat anyone who does not have their full cognitive abilities to their credit which was my case at the time.  Remember, this is FOR that exact, same sort of problem, so the paperwork is made in such a way as to stymie those needing help.

Gotta love that.

My diabetes, however, was in great control!

And I was put on two non-systemic medication to address cholesterol which runs relatively high in my family.

So, from that, and trying to avoid things like dialysis by keeping my blood vessels open NOW means a raft of medications, many that can have pretty nasty side effects and a tendency towards low blood pressure... I have had nurses at NIH look at me and ask if I was actually still conscious when they took my blood pressure.  Twice.  Two different machines.  Then come back in a half hour only to find that it hadn't increased.

So, what is my annual cost to keep going?  Well, I will round and ballpark some figures.

Insurance cost: $7,800 /year

Insulin - $120/year for one on co-pay, market price $370/year

$120/year for a second type co-pay, market price $480/year

$120/year for a third type co-pay, market price $480/year

$160/year for syringes co-pay, market price $160/year

$180/year for pen needles co-pay, market price $180/year

$200/year for test strips co-pay, market price $1,560/year (I kid you not)

$45/year for lancets co-pay, market price $75/year

Hypertension - $240/year co-pay, market price $240/year (now if I take the pet version my price plummets)

Cholesterol - $240/year co-pay for the first medication, market price $340/year

$240/year co-pay for the second medication, market price $2,700/year

Neurological condition - $240 year co-pay, $800/year

Cost of medical visits varies, but I have few of them per year at this point.  A hard guess is $60/year co-pay, $600/year market

Dental costs vary widely due to my conditions and my ability to actually be conscious in a dental chair.  If I was healthier I could give an estimate on that, but I can't... the price differential due to my plan only giving partial dental coverage is generally a wash.

When I add up the numbers I come to the total cost insured, with cost of insurance: $9,765/year

Total cost without insurance: $7,985/year

Why stick with insurance?

Since I get my lady covered under this plan her costs, added in, would tend to balance things a bit, making health insurance a bargain.  It would be even more of one if we could just get to single plans, but that is not to be in our lovely world.  Shocking, but true, we could knock nearly $2,000 off our total coverage costs if we had two single plans.  Yup, divorce and re-marry!  Hey what a way to 'preserve the family'!  Thank you to the two party system for making something simple so asinine.

Plus my conditions and possible complications.

I am NOT a relatively healthy individual.  And yet just about half my net income goes towards my health.

I really do love how people make the argument, to me, that 'this is for those who are very sick', not realizing that I am very sick.

If I had federal paperwork ON TOP of all the other paperwork INCLUDING the daft SSN paperwork, I would not be here.

What I did do was ascertain the shortened life expectancy of people with my condition, the cost of long term complications, and then started planning when I was younger to deal with these problems.  My personal precautions were about half-done when the second chronic disorder was visited upon me.  Yet planning, saving, and working out how to deal with these things with the ones I love meant that I would not be a burden on them, that I would not be in poverty and that I would not need charity.  I have looked into getting a price break on some of my medications, but I am just 'too rich' for that.  Yes, take what I pay out and multiply it by 2.  That is 'too rich' in the way of income.  I do have other sources of funds, yes, but the plans I made have served me well.  I have gotten unexpected support from others, but that is extra and I am damned and duly grateful for such gifts and am not too proud to accept them... because I know I am not in the best of shape.

My life plan had not included anyone else, and I had expected to live a life alone.  That plan was adapted with changed circumstances, but the basis of preparing early for one's future meant that I had to face the basics of my condition as it was, then, and not expect a damned insurance company to pick up the tab for my costs.  Plus I did not and do not expect a single penny from SSN as it is heading towards insolvent and draining cash out of the rest of the federal budget which will sink this government like a rock heading into the abyss.


What is my 'solution' for 'health care reform'?


If you read past this, don't complain.


First - tort reform - Any malpractice suits are limited to actual costs to fix what wasn't done right and, yes, pay for your upkeep if the problem is permanent.  NO 'pain and suffering' awards which have become an inflator and a lottery system for juries to hand out bundles of cash that insurers have to pay, that raise the cost of insurance.  And double damages on anyone bringing a frivolous suit in attempt to win a payout lottery.

Second - remove the subsidies - Remove all tax incentives for 'health insurance'.  Why?  Because subsidized goods and services get over-utilized in an uneconomic fashion, raising costs.  What do we see?  Raising costs of health insurance and health care?  Why?  It is subsidized.

Third - incentivize health care - What the hell is that?  Here is a two-fold deal: change 'health care' from an 'insurance' system to an 'investment' system.  Instead of paying for 'coverage' you pay for 'treatment' that you may or may not immediately use.  Your 'treatment' can then be cashed in at any future time at any set institution that you invested in.  The cost is set on purchase and can even be reduced if the group providing treatment doesn't expect you to need it any time soon.  What would a triple-bypass cost 20 years before you could reasonably expect to need it?  If you paid for it NOW via investing at an institution that will guarantee the procedure (backed up with proper insurance and bonding) then you have an ironclad guarantee of service for that treatment.  Going to move?  TRADE IT.  This is an investment, after all, but one for treatment.  So if you wanted to trade it for, say, similar coverage at a facility near where you are moving to and, maybe, 3 visits over 5 years for a top notch specialist in the area and can work that trade, then you have those in trade for your previous investment.  Like bonds, if an institution goes under you are first in line for the FULL COST of the treatment when the place goes under: you are a creditor.  That is part one of incentivizing health care so you pay, now, for procedures you may not need and can then trade for ones you DO need.

Fourth - health savings accounts redux - Allow a full roll-over of money in all HSAs just like IRAs.  Allow full investment in money earning vehicles in HSAs.  Do not tax money earned in HSAs so long as they are used for medical procedures, medications, office visits, durable equipment, etc.  Set no limit on how much can be put into such accounts.  Allow employers to put money into their employees accounts TAX FREE.  Thus the employee could manage these funds towards the good end of paying for their health care (be it with or without insurance).  When employers offer job packages they can offer HSA contributions in lieu of pay or in addition to health insurance but with a lower salary.  Good long term investments will yield larger accounts, over time, and will ease the worry of skyrocketing medical costs... particularly if people decide to invest IN those providing health care.  Are health care companies and pharmaceutical companies making gonzo bucks?  That is reflected in investment portfolios, is it not?  If you invest in a portfolio, then you gain the benefit of a growing industry that will help you pay for the costs of it due to it being the one you need services from.

Fifth - there is no such thing as a 'national market' for health care - This is why we have 50 States.  You see a better arrangement in another State?  MOVE THERE.  Or write to your State representatives to see if a State to State arrangement can be made to expand coverage.  Large companies providing coverage already do this, of course, but smaller ones need protection due to the fact they address more localized markets and are better adapted to them.  When localized health care companies go under to be taken over by larger ones, the market loses competition and that is a long term worry to the citizenry and should be to the Nation as only a dog-eat-dog system at the lowest level allows larger structures to be pulled apart by innovation.  As it is the larger companies gobble up the small, shut the small facilities and leave communities without the facilities or coverage that used to be available.  Small scale inefficiency that is adapted to the small scale may have other benefits outside of 'cost maintenance': like providing any care AT ALL to a small community or sub-community in a larger population center.  If we are supposed to have 'laboratories of liberty' in our 50 States then getting a 'national market' is the last thing anyone should want.  That concentrates too much power in the hands of too few groups and individuals.  This also removes the 'tragedy of the commons' in which no one really much cares about the larger market and it then starts to stagnate because no one has the power to actually make sure it is working well at the small scale.

Sixth - The grotesque thing about government run anything is the inefficiencies of government, itself.  The best run of government agencies at the federal level, and I worked at it, was 65% efficient at what it did.  Yes the government, via overhead, only wasted 35% of every dollar spent!  Private industry does a much better job at 20% inefficiency, on average.  Remember the average of industry is still better than the best of government.  But if you really want to drive costs DOWN and put COMPETITION into the market there is one area that can compete with industry.  That is charity.  There are organizations that rate the amount that charities spend on overhead, and it is typically in the 7-15% range.  That is the equivalent of waste for a charity.  There are some that try to get that down to 1% via volunteers and other organized form of help that doesn't need to be paid for.  Of these three groups, which is the most efficient at providing 'health care'?  Government, industry or charity?  If you answer 'charity' then why is not the full and absolute amount donated to charity given as a tax write-off?  This, too, is a marketplace incentive, but one geared towards actually HELPING the poor get treatment.  Pharmaceutical companies could be given write-offs based on donations of modern medicines, not those that have expired, but fresh production.  Ditto to other parts of industry making durable goods and consumables used in health care.  By allowing companies to donate goods directly to charity to be used for the poor or those that cannot pay, we ALL gain greatly without any further interference by government.  Indeed local governments can give incentives in the way of property tax and other tax breaks to charitable organizations that do this work.  What is garnered are committed individuals who have the best interest of patients and the community at heart.


I do, indeed, want a health care system that 'works' for everyone.

One where we invest in our future infrastructure, not worry about current payments.

One where individuals are allowed to invest in themselves and their families, not one that takes money from them in taxes.

One that rewards charity to build communities so that the poor and needy are looked after by those who want to and will do their level best to cut all costs so that the money is spent ON the poor and not for profits.

To do these things requires that we change our way of viewing 'health care' as a service and treat it as an investment for ourselves, our children, our neighbors and our Nation.  You can't get that with government oversight.

But you can do that by the common citizen willing to take part to donate money and time, precious time from their lives, to charity.  Why do we penalize that instead of rewarding it? 

We are missing out on the best value around when we argue about costs.

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