Printing money does not lead to inflation, argues Argentine central bank preside

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Re: Printing money does not lead to inflation, argues Argentine central bank preside

Post by MediumTex » Wed Apr 18, 2012 5:04 pm

moda0306 wrote: MT,

Can I assume, then, that you think medicare has been a failure?
Well, the question isn't whether Medicare has been a failure compared to doing nothing for senior health care; rather, the question should be whether Medicare has been a failure compared to what might have been done with the same resources under a different system.

Since Medicare was created, it's hard to argue that health care costs haven't exploded, which is what happens every time the government moves into an industry the way it did with Medicare.  There is suddenly an enormously larger pool of money available for providers, bureaucrats and crooks, and the predictable result is vastly increased levels of inefficiency, fraud and corruption.

By an objective standard, Medicare has been a failure because it has taken a much larger health care spend than any other country in the world and failed to translate it into increased longevity.  If that's not failure I don't know what would be.

It is easy to say that Medicare has been a success because it has provided a minimum level of health care to millions of seniors, but when you look at the cost and look at how disconnected the actual cost of the program has been from the initial estimates of the program's cost when it was enacted, it looks less successful.

To me, the question with a program like Medicare shouldn't be whether we could have done worse--we clearly could have done worse; instead, the question should be how much better could we have done, and when every government in the developed world is producing greater longevity at a lower per capita cost, it's hard to say the program has been anything but a failure, and bear in mind that I am saying the program has been a failure even when compared to other government-run systems around the world--that's like saying a turtle is so slow that he came in last place in a turtle race.
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Re: Printing money does not lead to inflation, argues Argentine central bank preside

Post by lazyboy » Wed Apr 18, 2012 5:12 pm

MT, you are acknowledging that other countries are be doing a better job. That says a lot because most of them have some form of single payer system. So the question may form as to what should be the best way to deliver health care to everyone.
Last edited by lazyboy on Wed Apr 18, 2012 5:15 pm, edited 1 time in total.
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Re: Printing money does not lead to inflation, argues Argentine central bank preside

Post by MediumTex » Wed Apr 18, 2012 5:39 pm

lazyboy wrote: MT, you are acknowledging that other countries are be doing a better job. That says a lot because most of them have some form of single payer system. So the question may form as to what should be the best way to deliver health care to everyone.
Oh sure.  In every turtle race there will be a winner.
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Re: Printing money does not lead to inflation, argues Argentine central bank preside

Post by MediumTex » Wed Apr 18, 2012 11:56 pm

I've been listening to the V-50 lecture series, which is very interesting but is definitely an idealistic libertarian take on the problems of the world.  J. Stuart Snelson, the lecturer for the 60 hour series, is a great speaker and a really sharp guy and he has some interesting things to say (the series was recorded in 1977 and Snelson passed away this past December).

One of the many amusing observations he makes is that the reason there are traffic jams is because the private sector makes the cars (which means there will always be plenty of supply relative to demand), while the government makes the roads (which means that there will never be enough supply relative to demand).

I thought about that comment as I was reading the posts above about health care and related issues.  In the health care setting, there is the bizarre countercurrent of health care providers constantly complaining about low reimbursement rates for medical services, while overall the cost of care continues to increase dramatically.  You would think that if reimbursement rates were that low, and a significant part of most health care practices depended on government reimbursement, then overall costs wouldn't be rising that dramatically.  The fact that overall health care costs are rising as reimbursement rates are either staying the same or falling suggests that there is something badly broken about the Medicare system.  A dynamic like that doesn't even make any sense, unless you accept the premise that gaming the Medicare reimbursement system is more important for doctors to master than providing effective medical treatment.
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Re: Printing money does not lead to inflation, argues Argentine central bank preside

Post by lazyboy » Thu Apr 19, 2012 1:22 am

It would seem that some countries that have single payer also have cost containment.  
The system is being gamed here but maybe not in other countries.
Why is that?
What could we do to improve our system?
Last edited by lazyboy on Thu Apr 19, 2012 1:34 am, edited 1 time in total.
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Re: Printing money does not lead to inflation, argues Argentine central bank preside

Post by MediumTex » Thu Apr 19, 2012 1:46 am

lazyboy wrote: It would seem that some countries that have single payer also have cost containment.  
The system is being gamed here but maybe not in other countries.
Why is that?
What could we do to improve our system?
As long as you have regulatory capture, you are going to have a system that is designed around maximizing insurance company profits.  That's the basic problem, IMHO.

One thing that would improve our system would be to find a way to convince people to live healthier lifestyles, but that too runs into regulatory capture of a different type--i.e., media outlets are hesitant to run pieces that are too critical of certain practices such as eating fast food and sugary breakfast cereals because they represent so much advertising revenue.
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Re: Printing money does not lead to inflation, argues Argentine central bank preside

Post by lazyboy » Thu Apr 19, 2012 2:35 am

The conflict, then, would seem to be between regulatory capture and insurance company profits and you won't have one without the other, at least in this set up. To say that one exists purely as good guy and the other purely as villain is unrealistic. And if you had less of one than the other you might run into more abuses of one type or another. There's probably a better way, structurally, to set it up. I agree that focusing on healthier lifestyles is a way out.
I still think single payer seems to be the superior solution as long as there exists the freedom to take an alternative route. Coercion doesn't have to be part of the plan. There are far too may people without adequate health insurance and it's not getting better. I have medicare and I'm not complaining. I also pay out of pocket for alternative practitioners. Can you have a form of socialized medecine and also maximize freedom of choice? I don't see that they are mutually exclusive. Again, there are examples of other countries that seem to have better numbers and, I think, also some freedom of choice. I haven't heard of a purely private model of health care working anywhere in the world.
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Re: Printing money does not lead to inflation, argues Argentine central bank preside

Post by MediumTex » Thu Apr 19, 2012 3:00 am

lazyboy wrote: The conflict, then, would seem to be between regulatory capture and insurance company profits and you won't have one without the other, at least in this set up. To say that one exists purely as good guy and the other purely as villain is unrealistic. And if you had less of one than the other you might run into more abuses of one type or another. There's probably a better way, structurally, to set it up. I agree that focusing on healthier lifestyles is a way out.
I still think single payer seems to be the superior solution as long as there exists the freedom to take an alternative route. Coercion doesn't have to be part of the plan. There are far too may people without adequate health insurance and it's not getting better. I have medicare and I'm not complaining. I also pay out of pocket for alternative practitioners. Can you have a form of socialized medecine and also maximize freedom of choice? I don't see that they are mutually exclusive. Again, there are examples of other countries that seem to have better numbers and, I think, also some freedom of choice. I haven't heard of a purely private model of health care working anywhere in the world.
I think the good guys are the producers--i.e., the doctors and nurses.  The villains are the people who take the value created by the doctors and nurses and try to get a piece of the action without adding any value to the overall health care delivery system.

In this formulation, the villains are the government and a portion of the insurance industry. 

I don't really have an answer to what would work.  I can only observe what we have learned doesn't work.

As a suggested approach, perhaps the government could provide coverage for everyone that only kicks in when a person hits $50,000 or so in medical expenses in a given year.  The insurance industry would provide coverage for medical expenses between $5,000 and $50,000, and there would be a premium for this coverage.  Everyone would be responsible for self-insuring the first $5,000 of annual expenses, and this should keep the premiums on the $5,000-$50,000 coverage pretty low.

It's sort of like the current HSA/HDHP setup, except the government would pay everything over $50,000 in annual expenses.  Since few people have expenses in excess of $50,000 per year, the government would actually be providing health care to a relatively small population of sick/injured people, premiums would be lower, and people would be able to negotiate and shop for the first $5,000 in annual spending.  Since most families are going to average $5,000-$15,000 in healthcare expenses per year, this arrangement would provide a meaningful insurance component, while also allowing a premium structure that isn't outrageously expensive.

In the setup I am proposing, insurance rates would be set by age band, and if you are in that age band you would pay the premium for that age band, regardless of your own health situation, and anyone who wanted to buy insurance could buy it without answering any health questions. 

I don't have an answer to the problem of waiting until you get sick to buy insurance, and I agree that this is a thorny problem.  Maybe provide that for people who choose not to buy insurance and later get sick and have bills they cannot afford to pay, they become indentured servants to the state and once their health improves enough they are moved to a labor camp where they work off their medical bills.  The longest stay in the camp would be two years, since the largest bill would be $45,000, since the government pays everything over $50,000, and the first $5,000 wouldn't have been paid by insurance in any case.  That comes out to working off about $22,500 per year, which is probably about right.  I have to think that this arrangement would be a strong incentive to maintain health insurance, and I wouldn't have a problem if the government subsidized the cost of coverage for poor or disabled people.
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Re: Printing money does not lead to inflation, argues Argentine central bank preside

Post by Gumby » Thu Apr 19, 2012 7:51 am

MediumTex wrote:By an objective standard, Medicare has been a failure because it has taken a much larger health care spend than any other country in the world and failed to translate it into increased longevity.  If that's not failure I don't know what would be.
Seems like an unfair standard. That would be like saying higher auto insurance costs are a failure because the increased expenses haven't translated into longer-lasting cars.

Longevity tends to be a function of other factors beyond healthcare (DNA, diet, environment, obesity, stress, sleep, wars, etc). And Western healthcare, in general, tends to treat the symptoms, after they appear (heart disease, cancer, alzheimer's). Even the best hospitals in the world can only do so much for people once their symptoms appear.

On average, Japanese live five years longer than we do, but I wouldn't say that those five years of increased life expectancy are entirely due to their healthcare reforms. More likely the Japanese just don't become obese like we do.

There is a strong correlation between income per capita and life expectancy. Beyond income per capita and other exogenous factors, there's only so long you can stretch a human's life.

See: http://www.bit.ly/gI9IgP
(Click the "PLAY" button, or drag slider, to see life-expectancy trends over time)

In the United States, we throw a lot of money at post-symptom healthcare, but we don't see much ROI anymore.

After a certain point it comes down to quality of life — and some would argue that the very idea of extending one's life expectancy beyond their own natural timeline can often lead to a lower quality of life.
Last edited by Gumby on Thu Apr 19, 2012 8:25 am, edited 1 time in total.
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Re: Printing money does not lead to inflation, argues Argentine central bank preside

Post by D1984 » Thu Apr 19, 2012 8:05 am

MediumTex,

Three issues with your proposed idea to have people pay off medical debts they incurred due to lack of insurance:

One, wouldn't such a system violate current interpretations of US law as regards peonage, debt bondage, and indentured servitude (United States v Reynolds, 235 U.S. 133, 1914) i.e. that indentured servitude in payment of a debt is illegal?

Two, a large percentage of the nation's healthcare spending is incurred providing medical care for people in their last twelve months of life. This sytem would be unable to collect on that because you can't make someone work to pay back a debt when they are dead (or permanently disabled by a terminal illness until they end up dying).

Three, this is a complete political non-starter even if the above two objections didn't exist; as unpopular as the individual mandate is (even among many people who otherwise like what the PPACA does), do you really think what amounts to "buy health insurance or you could be sold into indentured servitude" would be any more acceptable to most Americans? The whole plan (to me anyway) has chilling overtones of slavery and of "Arbeit Macht Frei" and this would no doubt be pointed out by the idea's opponents if anyone tried to get something like this enacted as a law.
Last edited by D1984 on Thu Apr 19, 2012 8:46 am, edited 1 time in total.
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Re: Printing money does not lead to inflation, argues Argentine central bank preside

Post by flyingpylon » Thu Apr 19, 2012 8:32 am

MediumTex wrote:In the health care setting, there is the bizarre countercurrent of health care providers constantly complaining about low reimbursement rates for medical services, while overall the cost of care continues to increase dramatically.  You would think that if reimbursement rates were that low, and a significant part of most health care practices depended on government reimbursement, then overall costs wouldn't be rising that dramatically.  The fact that overall health care costs are rising as reimbursement rates are either staying the same or falling suggests that there is something badly broken about the Medicare system.  A dynamic like that doesn't even make any sense, unless you accept the premise that gaming the Medicare reimbursement system is more important for doctors to master than providing effective medical treatment.
Isn't at least some of this due to EMTALA and cost shifting (that occurs for reasons in addition to EMTALA)?
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Re: Printing money does not lead to inflation, argues Argentine central bank preside

Post by Gumby » Thu Apr 19, 2012 8:35 am

D1984 wrote: a large percentage of the nation's healthcare spending is incurred providing medical care for people in their last twelve months of life.
Yes, exactly.

See: 60 Minutes: The Cost of Dying: End-of-Life Care
"Every medical study ever conducted has concluded that 100 percent of all Americans will eventually die. This comes as no great surprise, but the amount of money being spent at the very end of people's lives probably will.

Last year, Medicare paid $55 billion just for doctor and hospital bills during the last two months of patients' lives. That's more than the budget for the Department of Homeland Security, or the Department of Education. And it has been estimated that 20 to 30 percent of these medical expenses may have had no meaningful impact. Most of the bills are paid for by the federal government with few or no questions asked."

Source: http://www.cbsnews.com/video/watch/?id=6754650n
The video shows how all this money is spent, why it is spent, and how little good it does.

In other words, people tend to die when they die. We just spend most of our healthcare money trying to extend that time by a few more weeks.
Last edited by Gumby on Thu Apr 19, 2012 8:41 am, edited 1 time in total.
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