Entries from April 2008 ↓

In 1943, the Economist F. A Hayek wrote: “One need not be a profit to be aware of impending dangers. An accidental combination of experience and interest will often reveal events to one man under aspects which few yet see.”

Hayek was writing at a time when totalitarian socialism was running a muck in Europe and among many intellectuals here in the US. Hayek was, to say the least, suspicious and critical of “officials” who don’t actually do the work, make certain that they control those that are. Hayek points to experience and interest rather than position and intellect (or level of education) as a valued source in making sound judgments.

So then, consider this: what if your thoughts, perspectives, experience and insights are just as valuable as that of the “experts”? What if the issues involving healthcare are so broad, so complex and effect so many people in exceptionally personal ways, that no one person or group of professionals have any more to offer than do you?

This rather puts us into a quandry. This means that you and I along with anyone who has or will be involved with healthcare, have a legitimate role in contributing to any conversation on how best to reform healthcare, (providing reform is even indicated). In the book “The Wisdom of Crowds” James Surowiecki makes such a point, that many interested contributions to a problem often out performs the accuracy of a few experts. In this case experience and interest has a legitimate place in the public debate on healthcare reform, and for those who favor a centralized, “expert driven” approach compells an increasing burden of proof that it will work.

This site is aimed specifically at the doing. We’re interested in the comments and advice of many to guide the course of us all. The cheapest healthcare is the kind that works the first time. We need to understand the value of improving efficiency in providing care and how to make it happen. As mentioned here before, the demand for healthcare services is growing and the number of licensed individuals interested in providing those services is not. Something has to give.

Sipping on a cup of joe at my local Starbucks, I began thinking about the various healthcare proposals discussed by our candidates for President. As you may have seen in my previous post, ideas such as these produce consequences, many of which are not particularly good.

Anyway, as I continued, it seemed to me that the current set of ideas regarding healthcare reform are simply a contemporary version of good old 1930’s style Socialism. Perhaps cleverly written and poetically vague, all the same socialism it is. French writer Elie Halevy in 1938 said it best: “The socialists believe in two things which are absolutely different, and perhaps even contradictory: freedom and organization.” Is that not the promise? We will better “organize” healthcare and more people will have the freedom to receive the care the government thinks they need.

This quote seemed to put it together for me with regard to the healthcare debate. Most of the complains regarding healthcare are regarding costs, and of that the transaction costs, (insurance billing and such). Some estimates suggest that those costs are as high as 21% of US healthcare expenses, frankly I doubt that. Regardless, the question remains, is socialism the solution.

In reviewing the healthcare program of Hillary Clinton I happened across the following section:

Now just think about this a bit. The proposed solution of fixing a problem of an existing governmental bureaucracy is to replace it with an even larger one; now just why should we be optimistic? The United States healthcare industry is the largest in the economy, and passing that along to the Government to manage is nothing different than good old fashion socialism, in effect, more “organization” and less freedom.

Little frustrates a consumer than to purchase a product only to find out shortly thereafter that a newer version, with more capabilities is just released and the price is the same. For most of us, this is just an inconvenience, but consider this: what if you are about to have a knee replaced. Not so insignificant an event. It is painful, requires exceptional surgery and risk, followed by months of rehab. How then would feel if the same were to apply, but the new product, a new and improved knee, would last twice as long as the one you just had implanted.

The Federal Drug Administration (FDA) provides oversight into new products that enter the healthcare arena. This is a valuable service, but not one without its costs as demonstrated below.

During the decade of the 90’s the number of Premarket Approvals (PMA’s) were cut by over two thirds of the average for the decade before. By 1992, the first year of the Clinton administration, only ten products made it through the FDA process. For the remainder of the decade the average was one third less than the decade before, and only slightly improving thus far this decade.

What is missing in the numbers above the blue bars, are the number of products not approved and in the end, delayed.  Hidden also are products who’s financial risk of trying to bring to market have been crowded out by the time-valued risk of trying.  Some of these products are knowable, some are not.  Still there is a cost, as to how dear that cost, there is only speculation.

There is little time to reflect on the relative merits of this “crack down” or possible fear of investment due to the threat of nationalization (the blue bars reflect the first three years of the first Clinton administration), still there is a human element. It boils down to this. Our healthcare economy includes lots of researchers, innovators and manufacturers looking for ways to improve healthcare through technology. The question we have is do we want that innovation quickly or slowly. If we are to listen closely to those advocating national healthcare, the “enemy” to be controlled are pharmaceuticals and the vague argument that technology is causing the rise in healthcare costs.

A chest x-ray costs more than a close listen with a stethoscope, and Aspirin and a cane is cheaper than a knee replacement. Technology is not the problem for healthcare but rather a solution, and getting it more quickly is better than more slowly.