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From: Steve Harris <>
Subject: Re: Soaring healthcare costs hurting US economy, driving business to 
Date: 17 Jul 2005 12:30:27 -0700
Message-ID: <>

george conklin wrote:
>>    If you are saying that the medical INDUSTRY would be hurt by trying to
> stop runaway costs, you are correct.  It is the most bloated sector of the
> economy, able to continue the bloat by laws which limit entry to the jobs
> they have, and by the fact that most patients are not yet going abroad for
> medical care.


There is bloat in the medical industry, but it has little to do with
limited entry on jobs, because the bloat money is not going to
physicians. The bloat goes up 12% a year and has been for a long time
(this includes medicare and medicaid in the US), while physician
salaries are actually falling. Nor are hospitals getting the extra
money-- their profits are falling also (mostly due to the large about
of unfunded care they are forced to provide).

The studies I've read indicate that the "bloat" in medicine, if you'd
like to call that rapid cost increases that, is driven by two major
factors: new fancy technology (angioplasty, MRI scanners, new expensive
drugs-- which means pharma and the med instrument people get it), and
an aging population. The use of fancy tech is somewhat out of control,
but that's at least partly because the system in the US is designed
with every profit incentive to use it, whether it saves money down the
line or not.

As for the aging population, I'm afraid you're stuck there, unless
you'd like to go back to 5 kid families.  But what you save in medical
costs, you'll then just end up paying in K-12, inflated real estate,
energy shortages and over pricing, polution cleanup, etc, etc, etc. At
some point you MUST have a stable population, and then you end up with
the funny age structure anyway. So unless you euthanize and frail
elderly, or perhaps find ways to ration or withdraw treatment from
them, the only thing you can do is makes sure you spend your medical
money wisely.

Fancy tech has its place. Just make sure it does so much good that most
people agree it's worth it, before you let the government pay for it.
But otherwise, let rich people be your guinnea pigs.  They're happy to
do it, and you learn from what happens. If some drug extends terminal
lung cancer victims' lives by 2 months, from 4 to 6 months, but costs
$20,000, should the government pay for it?  How about if it costs
$2000?  $200?  If you put 100 people in a room and made them write down
a number, you'd get a wide spread. And if you got the numbers from
people with lung cancer and their families, it would be a spread with a
different mean. That's the kind of thing you're faced with in medicine
ALL the time, when it comes to tech. Finding people (doctors,
businesses, politicians, patients, etc) to accuse of criminality for
this problem (which blame-finding aka "activism" seems to be the
penchant of the Left, over and over again), doesn't help much.
Recognizing that it's an inherent ethical conundrum of economics and
the human condition, starts getting you somewhere. Then you can decide
on the methods (which hopefully include science and local decision
making) which will get you the most bang for the limited resources you
always have.


From: "Howard McCollister" <>
Subject: Re: Soaring healthcare costs hurting US economy, driving business to 
Date: 17 Jul 2005 17:40:08 -0500
Message-ID: <42daddd1$0$50276$>

"outrider" <> wrote in message
> Another of Steve's masturbatory rants in need of edit:
> Blame the left
> by Steve Harris
> Zee

Gee, I read it pretty close, and from here in the trenches (as opposed to
criticizing from the outside without a shred of practical experience of
what's involved in the practice of medicine),  I think he's exactly on
target. That IS where the money is going these days. Technology is great,
but much of it is overused, and the system does indeed reward for that
overuse, making MRI scanners, for example, a good investment. I know that
our clinic has just entered a joint venture for an in-house MRI scanner with
the hospital and the radiology group, and the pro formas look pretty
impressive. We should make a lot of money on that over the next 10 years.
Thank you all very much.

But it goes beyond stuff like MRI, CT, DEXA, PET scanners and their overuse.
Much of surgery is now technology-dependant. There are many, many operations
that simply couldn't be done 5 years ago until somebody engineered the tools
to do it. Go back to laparoscopic cholecystectomy as the index example. Few
would argue its benefits to the population, but now every hospital in
America had to order a whole new set of  instrumentation and imaging
electronics. So many people here on rant on about medical records
and their availability and security, but a system wide EMR is enormously
expensive to implement. PACS systems, telecommunications, security,
HIPAA...that stuff all adds up and doesn't return a dime.

I realize that it's a natural tendency to want it both ways, but that rarely
works out.


From: Steve Harris <>
Subject: Re: Study: Americans pay more for health care, get less
Date: 27 Jul 2005 17:38:10 -0700
Message-ID: <>

rmjon23 wrote:
> Paper: Los Angeles Times (CA)
> Title: Prices Cited in Health Cost Gap
> A study finds that although the U.S. spends more for care than
> elsewhere, Americans don't always get more.
> Date: July 12, 2005
> The large gap in per capita spending on healthcare between the United
> States and other major industrialized countries cannot be explained by
> differences in malpractice costs or access to care, according to a
> study published today in the journal Health Affairs.


> "We pay more for healthcare for the simple reason that prices for
> health services are significantly higher in the United States than they
> are elsewhere," said lead author Gerard Anderson, a professor of health
> policy at the Johns Hopkins Bloomberg School of Public Health.


I can see why they made this guy a "perfesser." :)

> The U.S. spent $5,267 per person for prescription drugs, hospital stays
> and doctor visits in 2002, compared with $3,446 in Switzerland, the
> next biggest spender, followed by $3,083 in Norway, $3,065 in
> Luxembourg, and $2,931 in Canada. The median cost of healthcare per
> capita was $2,193 for the 30 nations that belong to the Organization
> for Economic Cooperation and Development.
> Healthcare spending accounted for 14.6% of the U.S. gross domestic
> product that year. Only two other countries, Switzerland and Germany,
> spent more than 10% of their GDP on healthcare.
> But contrary to conventional wisdom, Americans are not getting more
> healthcare with higher expenditures, the study found. In fact, in
> several key areas, Americans had comparatively less than the other
> countries.
> For example, the survey found there were:
> * 2.9 hospital beds per 1,000 Americans, compared with a median of 3.7
> per 1,000 residents in the other countries;
> * 2.4 physicians per 1,000 Americans (in 2001), compared with 3.1 per
> 1,000 elsewhere in 2002;
> * 7.9 nurses per 1,000 Americans (in 2001), compared with 8.9 nurses
> per 1,000 elsewhere in 2002;
> * 12.8 CT scanners per million Americans (in 2001), compared with 13.3
> per million elsewhere in 2002.
> The U.S. did appear to have more magnetic resonance imaging units per
> capita than many other countries. But other nations may get more use
> out of the MRI machines because they typically operate them for 18
> hours a day, compared with 10 hours in the U.S., Anderson said.


Hmmm, sounds like a hipshot to me. I think we have more of these damn
MRI scanners and we pay a lot of money for them, just as appears. Also
more nuclear scanners, PET scanners, late generation ultrasound,
angiography suites, cyberknife gamma irradiators and proton
synchrotrons! Enough stuff for a Buck Rogers movie.  And it's great for
the few cases where it's needed, but it's overused because it's there.

> Malpractice, as it turns out, is not the cause of our higher medical
> bills, according to the study. It found that malpractice payments --
> settlements and judgments -- were a small portion of overall health
> spending and were lower in the U.S. than in Canada and Britain. The
> average malpractice payout in the U.S. was $265,103 in 2001, compared
> with $309,417 in Canada and $411,171 in Britain.

Probably malpractice drives up costs in ways that have nothing to do
with actual malpractice *payments.* Defensive medicine costs money--- a
lot of money. This issue must be settled in other ways.

> The latest study bolsters a 2003 paper co-authored by Anderson
> entitled, "It's the Prices, Stupid," which identified fee differences
> as the primary cause for the gap. That report found, for instance, that
> the average cost of a one-day stay in a hospital in the U.S. was $2,434
> in 2002, compared with $807 in Canada.


Yes, but the hospitals aren't keeping the difference, nor are the
physicians. The price difference is due to the difference in
high-technology, which is real enough, and it's the makers of the
technology who are keeping the difference in cost.

> Jack Lewin, chief executive of the California Medical Assn., said
> malpractice costs were probably only a small reason for the healthcare
> spending gap. He believes that the difference in spending has more to
> do with a uniquely American expectation for a high level of care.


LOL! I said the same thing here yesterday, and today have some Canadian
accusing me of not being cosmopolitan enough to know the difference
between the two countries in terms of expectations. But I have been to
Canada, and (more importantly) dealt with enough sick Canadians and
Canadian doctors to see the difference. I guess Mr. Lewin noticed it
also. Bully for him.

> "We have a little twinge in our knee, we want an MRI," he said. "We
> want to see a specialist immediately. We want care now. Some of that is
> good in terms of getting an early diagnosis. But it's expensive."
> He added: "All of us baby boomers [want] to play tennis til 90 -- [that
> means] new hips, new knees. We're going to have it all. So until all of
> us as a society get more realistic about healthcare, I don't know that
> we're going to change this dynamic."


I've got nothing against knee and hip replacements. They work
surprisingly well, and probably pay for themselves in savings in
mobility assistance. That's the hell of new technology--- you need to
know what's worth the money and what isn't. But nobody really needs 10
MRIs of their knee over 5 years to tell when it's getting to the point
that a new one would be a good answer. But I see THAT done. The
bone-on-bone is pretty clear even in a standard X-ray, and the clinical
exam does count. Perhaps the surgeon will want a CT. On the other hand,
MRIs for back pain and back surgery for back pain are an endless sink
of resources, for which you get comparitively little, and the studies
show this. Somewhere, we are going to have to prioritize things.


From: "Steve Harris" <>
Newsgroups: talk.politics.drugs,talk.politics.medicine,,,
Subject: Re: War on Legal Drugs Ensnares Doctors Instead of Dealers
Date: Sat, 28 Jun 2003 19:06:07 -0700
Message-ID: <bdlhih$qf2$>

"George Conklin" <> wrote in message
>    So does this justify organized medicine saying nothing for the next
>    80 years?  It has had a lot to say about making sure medicine is a
>    privilege and not a right and organized medicine has made sure we
>    have the most expensive medical care in the world.

Most of the expense isn't in drugs, but in hospital
treatment that is labor intensive, and in expensive scanning
machinery, surgery, and blood tests. In the US we spend
about 10% of our health care budget on drugs, but it's up to
20% of healthcare in countries that really love drugs, like
France and Italy. Those places typically spend 9-11% of
their GDP on healthcare, whereas in the US it's about 13%,
but that still leaves them with about the same drug budget
as the US, in terms of GDP.,,EN-document-0-nodirectora

Bottom line: Germany and France spend as much on drugs as we
do in the US, and that isn't the largest part of healthcare
in any of these places. Nor do doctors get much of this
money, either in the US OR in Germany or France. So where is
your argument?


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