Organization: Penn State University
Date: Thu, 13 Aug 1992 07:35:31 EDT
From: <DGS4@psuvm.psu.edu>
Newsgroups: alt.politics.clinton,alt.politics.bush,talk.politics.misc
Subject: Re: National Health Care
 <1992Aug4.125929.28921@athena.cs.uga.edu> <archer.290@utkux1.utk.edu>
 <1992Aug5.155201.7938@murdoch.acc.Virginia.EDU>
 <1992Aug9.062917.24910@ke4zv.uucp>

In article <1992Aug9.062917.24910@ke4zv.uucp>, gary@ke4zv.uucp (Gary Coffman)
says:
>
>Neglected in the praise of Canadian health care is the fact that
>Canadians are coming to the US for health care because of waiting
>lists and health care rationing in Canada. It's true that paperwork
>costs, insurance, medicare, and medicaid, drive up medical costs
>in the US, but two out of three are *government* imposed costs.

The stories about Canadians comming across the border are grossly exaggerated.
A study of US hospitals along the border found that more than half could
not find even a single Canadian patient in their records.  Buffalo had
the highest rate, about 1 Canadian patient per hospital per month.  The vast
majority of those patients were Canadians who were being treated for renal
problems and lived closer to Buffalo than to the nearest Canadian facility.
The Canadian province had worked out a contractual arrangement with the
Buffalo hospitals to treat these patients.

A study of American citizens showed a number of American women crossing the
border for pre and post natal care.

The vast majority of administrative costs in the US are imposed by private
insurers.  Can you say utilization review?

The stories about long waiting lists in other countries, paticularly
Canada and Germany, are myths.  A number of studies have documented only
short waiting lists for primarily elective procedures.


>However, the major factor in health care costs remains *fear* of
>malpractice suits. Unnecessary tests, second opinions, malpractice
>insurance, etc are major factors in driving up US health care costs.
>When a hospital charges you $8 for a Tylenol capsule that it got as
>a free sample, and won't let you bring your own, that charge is to
>cover their ass in case they get sued. We need to reform the legal
>system much more than we need to reform the medical system. General
>aviation saw the average price of it's aircraft rise from under $20,000
>to over $100,000 over the last 20 years due to product liability
>insurance costs brought on by sue happy "public interest" lawyers,
>many working under government grants. This in an industry with an
>enviable safety record. Other sectors of our economy are similarly
>distorted.

Your claims about malpractice are completely false.  When the AMA
calcualted the cost of malpractice and defensive medicine back in 1987
they came up with a total cost of 15 to 20 billion.  That's a minor
portion of the differences in costs across nations. The reason the
hospital charges $8 for Tylenol is because some payers (Medicare, medicaid
Blue Cross, and whoever has sisgnificant market power in the local
area) are paying less than cost for other services.  Hospitals then
cost shift to other payers.  The $8 Tylenol is the result of our multiple
payer  system.

>The government drives up health care costs by limiting competition
>for medical services. In the US you can't build a hospital without
>a certificate of need from the government. You can't even install
>a cat scanner in your hospital without a certificate of need from
>the government. You can't operate a hospital without promising to
>do a certain percentage of charity work. The government is restricting
>competition in the medical field and imposing paperwork and social
>work burdens on the medical system. No wonder costs are skyrocketing,
>the government is forcing their social welfare costs onto the medical
>profession.

Nonsense.  Since the mid-1970s, with the HMO Act compeition has been
steadily increasing in the US with little effect on costs or access.
A number of economic studeis clearly show that a decrease in measures of
market concentration (i.e. an increase in competition) in the hospital
industry is associated with a rise in costs and prices.  Talk to anyone
from another country and you'll find that a key factor in their success
in controlling costs is their ability to make sure new technologies are
used in a way that takes advantage of economies of scale.

Dennis G. Shea, Penn State
<<DISCLAIMER>>
Ain't nobody's bizness but my own. I'll be happy to accept all
the credit for anything I've written.  It's funny, however, how
employers only acknowledge the profitable ideas.
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