User:Sfmammamia/socmed

Health care as a market

A: benefits of eliminating profit motives, avoiding overproduction, administrative simplicity B: third-party payment incentivizes over-consumption (moral hazard argument), leads to wait times and other forms of rationing, market incentives lead to efficiency and innovation, governments never as efficient as private sector, regulation imposes extra costs

In most free-market situations, the health consumer of health care is entirely in the hands of a third party who has a direct personal interest in persuading the consumer to spend money on health care in his or her practice. The consumer is not able to make value judgements about the services judged to be necessary because he or she may not have sufficient expertise to do so. This, it is claimed, leads to a tendancy to over produce. In socialized medicine, hospitals are not run for profit and doctors work directly for the community and are assured of their salary. They have no direct financial interest in whether the patient is treated or not, so there is no incentive to over provide. When insurance interests are involved this furthers the disconnect between consumption and utility and the ability to make value judgements. Others argue that the reason for over production is less cynically driven but that the end result is much the same.

• No for-profit insurance companies are involved. This removes the incentive to deny or restrict care

A criticism leveled at insurance based systems, especially when insurance is done for profit, is that insurance companies make more money when they deny or restrict the care they to their policyholders. Socialized medicine is essentially insured by the community and so there is no profit motive present. If the socialized system under provides, the community applies political pressure to get additional provisions. In democracies, the normal political process achieves this.

Critics would contend that the "community" has no interest in pressuring the government for additional provision in many instances, because of the rather narrow issues involved.

Access, equality

A: benefits of preventive care versus delayed, expensive treatments; economic benefits of healthy populace; broad pooling eliminates adverse selection problems, human rights argument B: requiring health insurance limits personal freedom and choice, requires higher taxes, universal systems also limit access, adequate government funding is not sustainable as populations age

It is usually cheaper and easier to deal with disease in the early stages than to deal with it once it has advanced too far. Britain's NHS, for example, rewards doctors through a Quality and Outcomes Framework to actively take steps that will improve the quality of health of the nation. Finland's nurses can grant discounted access to fitness facilities run by the municipalities (which also run the hospitals) for those patients for whom improved fitness will improve their health.

Supporters of socialized medicine would contend that there is a fundamental disconnect with the interests of patients in a free market with employer funded health insurance and private hospitals. For profit hospitals mostly make profits by treating the unhealthy. Investigating and treating illness is what generates profits. For profit insurance companies tend not to fund preventative care because this costs the company money but the savings are likely to be achieved by another insurer because of the tendency to switch insurers over time. Critics of socialized medicine would contend that the government has no reason to reduce the costs since it can always transfer them onto someone else by raising taxes.

• Making health care affordable to all raises national productivity and the reduces the level of human misery
• The system is better geared to keep the nation healthy
• Centralized planning can maximize investment returns to reduce average costs when provider and payer are the same entity

For example, medical imaging technology, which has a high capital cost, is used most efficiently if there is a high throughput of patients. The average cost of an exam will be lower at higher throughput rates as high fixed capital costs are recouped across a high number of patients. A centrally planned health care system can guarantee a high throughput rate at a Magnetic Imaging Resolution (MRI) unit because it has an almost perfect knowledge of demand and supply conditions it can acquire new units and/or retire old units to meet anticipated demand in order to ensure a high rate of use.

For example the UK's NHS has increased MRI throughput rates over the past 10 years and are now handling about 4000 exams per unit per year, an increase of about 26% since 2001. There is evidence of oversupply in the US. For example, in the US, between the years 1985 and 2000 investors had installed MRI units at a much faster rate than the demand for scans such that average throughput rates actually fell, from 3,143 per year to an estimated 2,361 per year. Based on US data at 2001 prices, the average cost of a scan of unit running at 2,000 scans per year was 440 dollars per scan compared to 281 dollars per scan at a rate of 4,000 exams per year.

• Countries where health care is provided mostly by government tend to spend less on health care overall than similar countries with a more mixed health care system.

This may be due to a number of factors such as regulations, marketing, underwriting, profits, which are not present or present to a lesser extent in government delivered care. There may also be other centralizing efficiencies such as bulk purchasing, IT, payroll, lower spend on defensive medicine and fewer potentially expensive litigations for malpractice. Spending on administration in Finland is 2.1% of all health care costs, and in the UK the figure is 3.3%. The US spends 7.3% of all expenditures on administration.

• Socialized systems that provide universal health care give expression to a collectivist view that health care is a right for everyone and that there is also a moral duty on the well to care for the sick. Filmaker Michael Moore, promoting Sicko says it should be re-labelled as "Christianized medicine" because it is what Jesus would do.

Critics have countered that if it was relabelled as such then the US could not introduce it because it would then violate the rule of separation between Church and State.

Outcomes

Debate over what constitutes quality, how value for money decisions are made in private vs public systems, how difficult it is to measure system effectiveness, difficulty of drawing conclusions from international comparisons

• Where there is a large common risk pool, such as where the state delivers health care to large national or regional populations (such as those in Britain, Spain and Finland for example) pre-existing conditions do not affect a person's access to medical services. The same is true of Canada's health care system.

In free market health care with multiple insurers, insurers employ actuaries and load premiums against insured persons with pre-existing conditions or limit the cost available. In practice this means that the healthiest and youngest people are offered low rates and are more likely to afford wide coverage. On the other hand, sicker, older people end to have to pay higher premiums, and may have their coverage restricted or denied, especially in areas related to pre-existing conditions.

• In narrowly defined socialized systems, where the state delivers health care to the national population (such as those in Britain, Spain and Finland for example,) changing employer does not have health care consequences. The same is true of Canada's health care system.

People are free to change employer, move to a new location, without ever leaving the risk pool and in the knowledge that a pre-existing condition will not affect the ability to get treatment and will not affect their future medical expenses.

• In National Health Care schemes, coverage is usually well understood by the population as a whole because there is one scheme. The coverage rules are often mentioned in the press and are therefore become known to many people.

• Low cost to the patients which can lead to earlier detections.

In some countries with a socialized health service, the state assumes the major costs of medical treatment and medicines at the time of need. Patients may be required to pay a capped contribution before the state begins to assumes the remaining costs of their treatment. For example in Finland the cost of a hospital visit is €22 (€11 in a smaller clinic), and in the UK all hospital and GP services are free. There is evidence that the cost of even a basic consultation in the United States deters some people from seeking medical advice. This can have serious consequences if the condition is discovered late where early diagnosis could save later costs and discomfort in the long run or even save a life.

• Socialized systems have long term patient relationships and can make investments on the back of this assumption.

This happens because there is a long term relationship with the patient and the preservation of records has long term benefits. Investment in IT is one often cited example where health care providers in socialized systems have access to electronic records of patients tests online and where computer systems can check for example incompatible drug combinations and that drugs are administered to the right patient. Some for profit systems find this investment hard to justify because the provider-patient relationship is not guaranteed to last long enough to justify the investment. Patients in the US are more likely to report that doctors are unable to trace the results of test than patients in other countries and inappropriate drug administration is much less likely to happen in VA hospitals and clinics than happens in private sector care.

• Coverage is set in order to maximise the health benefit under the funding arrangements

The government sets the framework for determining how the health care system delivers treatments to patients. Health care professionals work within the framework to determine what treatments are offered and on what basis and to whom. Typically criteria are established to maximize the health benefit that is delivered within the allocated funding. For highly expensive interventions, measurements of quality adjusted life years QALY are sometimes taken to calculate the cost/benefit ratio of a particular interventions in particular circumstances to formulate simple rules of guidance for clinicians. Doctors make decisions about the care of individual patients within the guidance of these rules in much the same way as an insurance company applies rules evenly to health insurance policyholders.

Patients for whom certain treatments are determined to be not effective or cost effective in their circumstances may be denied public funding for those treatments but will usually be free to pay for them themselves from their own pocket.

Criticisms

Some criticisms of socialized medicine are

• Higher Taxes:

A country which adopts a totally tax funded socialized form of health care will have to increase the average tax rate by an amount equivalent to the cost of providing health care and administering the system. Offsetting this in whole or in part will be savings equivalent to the entire revenues of the health insurance industry, which will cease to exist all together, and all other direct medical fees paid to medical providers such as non-insured treatment, co-payments and deductibles, and prescription drug costs.

Some countries use a payroll tax in whole or in part to fund health care which may be levied on both employers and employees. Other countries (e.g. Switzerland) use a compulsory national insurance funding model with a flatter rate contribution system less related to income. Contributions for such programs can be considered as a form of taxation even if the funds do not pass through government hands.

• Waiting times: Critics often contend that socialized medicine is characterized by long waiting times for treatment.

For example, the National Health Service reports that the median admission wait time for elective inpatient treatment (non-urgent hospital treatment) in England at the end of August 2007, was just under 6 weeks, and 87.5 per cent of patients were admitted within 13 weeks. 0.04% of those waiting were waiting more than 26 weeks. The median wait time has reduced slowly over a 3 year period from about 10 weeks in 2004 to its present level of about 6 weeks. Similarly, the median wait time for a first GP referral to a specialist was just over 3 weeks. 92% of patients were seen within 13 weeks. According to some supporters of socialized medicine, more recent UK statistics on waiting can also be misleading and overstate true waiting times. This is because under the new 18 week maximum target, the clock starts ticking much sooner, when the patient has been referred to a specialist by the GP. It only stops when the medical procedure is completed or the patient has been fixed on some regime to cure or mitigate the problem. The waiting period thus includes all the times taken for the patient to attend the first appointment with the specialist, any tests called for by the specialist to determine precisely the root of the patient's problem and determining the best way to treat it. It may also include any intervening steps deemed necessary prior to treatment, such as recovery from some other illness or the losing of excessive weight. Some transient medical conditions are not at all easy to diagnose. Therefore the so-called wait time may contain certain absolutely necessary and unavoidable activities which most people would not regard as "wait time" at all.

Supporters of socialized medicine say there is also waiting in free market medicine because of normal scheduling or because the price mechanism can force some to wait. Those that cannot afford their treatment at the price level determined by the free market (or by a combination of the free market and state regulations that are common in most countries) because they cannot afford insurance premiums, are denied coverage by their insurer, or cannot afford to take out loans to cover their medical costs, or cannot obtain private charity, have to wait until they can afford their treatment. The numbers of people waiting in the free market is only known to hospitals and the insurance companies and is not recorded in governmental statistics. In socialized medicine, it is not the price mechanism but the relative need of the patient as determined by medical professionals (who may also be civil servants) that determines waiting times. In a socialized system, the numbers waiting are recorded in governmental statistics which informs the public debate about how much national funding should be provided for health care.

Surveys on waiting times for certain elective procedures suggest that whereas such respondents are intolerant of long waits, exceeding three to six months, they can be quite sanguine about short and moderate waits, depending on the severity of the symptoms.

Critics say the patient's "need" as defined by a doctor constitutes an arbitrary criterion for the distribution of health care .

• Health care rationing

Critics of socialized medicine argue that medical resources are rationed in socialized systems so that some people are either denied care or have to wait for it.

Supporters would argue that rationing also happens in free market health care with the market price determining on the demand side who can afford health care and who cannot, and on the supply how much care is available.

In a democracy, the people through the democratic process are free to determine how much of their money as taxpayers should be spent on health and what services are covered and which are excluded. They also determine how much should be paid by users at the time of consumption and how much is paid as a form of insurance by way of tax. Both the allocation of overall funding to health and the allocation between areas and within an area to individual patients can become a topic of ending political debate. Within the medical profession, professional bodies may established bodies (such as NICE in the UK) which examine the cost effectiveness of treatments and set 'rational' guidelines as to how allocations should be made.

If a person is "rationed out" of the public health care service (perhaps because the treatment is not considered effective or cost effective enough to warrant intervention) they will be able seek alternative treatment in the private sector. If they cannot afford private care, they may have to go without.

Some have argued that government regulations impose extra costs in free market health care that distort the price mechanism and make health care too expensive.

• Cancellations: Critics of socialized systems say that cancellations are a feature of the system.

As an incentive to reduce cancellations in UK NHS hospitals, regulations were introduced to force the NHS trust to perform a cancelled operation with the following 28 days or else give the patient the opportunity to have the surgery done at a private hospital of his own choice at the trust's own expense. As a result, the percentage of operations carried out on time has risen to almost 99%..

• Bureaucracy: Critics in the United States often claim that "socialized" or public medicine would introduce additional government control over the provision of health care and increase costs.

However, administrative costs in US private sector health care are in fact higher than those in the public sector health care system . One often-cited study by Harvard Medical School and the Canadian Institute for Health Information put the total administrative costs at 31 percent of U.S. health care spending.

Supporters of the free market medicine would contend that these costs arise out of the substantial level of government regulation that exists in the United States's health care sector. According to a Cato Institute study, this regulation provides benefits in the amount of $170 billion but costs the public up to $340 billion.

• Choice: Critics sometimes argue that choice is restricted in socialized systems because individuals are not allowed a public sector alternative or are required to pay twice when one is available--once to subsidize the socialized system and a second time for their private care.

In some countries with socialized medicine, such as the UK, patients are offered a choice of general practitioner, all of whom are self-employed or work in private partnerships employing all practice nurses, doctors and clerical staff. In addition, some hospital services are sub-contracted to the private sector, so that patients can choose from a range of providers International comparisons of quality of care and health outcomes generally rank the UK above the U.S.

The degree to which waiting in a socialized system affects choice varies from country to country. In the UK for example, a person is free at any time to seek treatment faster in the parallel free market medical system, but they will have to pay the full cost of their private treatment on top of their contribution to the national health care service. In Finland, it is possible to get some funding from the Social Insurance System for private sector delivered care. In Canada the right to jump the queue in this fashion has been discouraged in some provincial legislation and outlawed in others..

• Capacity: Critics argue that central planning is inefficient and under investment leads to capacity shortages and that a lack of willingness to invest in expensive technology leads to shortages in areas such as MRI scanning. Some would argue that only the price mechanism in free market health care can allocate resources efficiently and that political pressure often leads to shortages in socialized systems.

Supporters might argue that analysis of the facts reveals that it rather depends on how the system is supported financially and managed. Soviet era Russia was clearly starved the health care system of basic facilities, and made this worse by making bad investment decisions. Freeing up markets and introducing insurance has not made things better or delivered extra choice. Cuba demonstrates that remarkably good outcomes are possible for very little investment, even if some facilities are rather basic.

Critics would respond that there's no guarantee that current day systems won't make "bad investment decisions" like the Soviet Union. Additionally, they would point to the fact that health outcomes under Cuba's socialized system have declined relative to those of the pre-revolutionary period. [1]

• A right to health care

Opponents of socialized medicine contend that no one has a right to health care. [2] According to this view, the individual and not the government or doctors should get the choice to determine what amount of health care coverage, if any, is appropriate for his or her needs.

Supporters would argue that everybody has a right to health care and it is therefore logical for the government to set down minimum standards of care available to all and to determine how the cost burden should be shared.

• Subsidies are incentives for unhealthy behavior

Critics argue that subsidizing health care costs creates incentives for individuals to engage in unhealthy behaviors (smoking, overeating, engaging in unsafe sex) because individuals do not have to bear the costs of their own actions. As such, individuals who do take care of themselves are, in effect, paying for the carelessness of others.

Supporters would argue that the issue of health care costs is not a significant behavioral driver. If it were, then Europeans would be expected to be more overweight and have a worse HIV rate than Americans. But this is simply not the case .