I have a job teaching this stuff to masters and doctoral students, and I'm teaching a new class this semester, so I've been pretty buried. But I just got out of the last class (student presentations next week where I find out if they learned anything), and so I thought "why not read the blog and finally respond"!

First of all, on insurance (hey, I loved that 10-page diatribe on California insurance you wrote all those years ago in Benzene, I read every damned word and used some of the examples in classes), as usual you had just about everything right, but didn't go quite far enough, I think, to really drive the points home. First off, health insurance is not really insurance. If it were, it would work more like auto collision insurance. You would have this assessor insurance adjuster guy who would come out to see you (wherever you were, yes, real house calls!) just like the auto insurance adjuster does whenever you wanted to file a claim. And then he would kick and prod you (just like they kick and prod cars) and then he would announce a claim price. He would then pay you with a check and you could do what you pleased. You could buy health care with it, or not. If you really were sicker once they came and opened you up (like the auto body shop does when they start fixing your car), the price could be adjusted some. But in any case, you would be paid in cash. And cash would be fungible. And you would shop for the price of care, because you would be paying the bill! But another distortion we've driven in there is to let health plans and pharmacy benefit managers come up with all sorts of arcane ways to try to save employers money (if they're paying the bill), and one of those is that they'll be damned if they let you screw up their negotiations by finding your own way to pay the bill. Right now they're actually all hyped up on "compliance" because you screw up their negotiations with pharmaceutical companies if you don't consume your drugs that you've been prescribed and generate the volume for the drug company that you're supposed to. We'll see where that goes.....

But hey, as I said, you got me at the last class of a semester, so I'm a bit cranky. The other issue is to drive home the "who gets the benefit is not the same as who bears the cost" argument. This also complicates the "put the money in communities and let communities decide" solution that Richard Weiss proposes. The British National Health Service sort of does this. And they have these pharmacy advisor guys who are supposed to be tracking the drugs that all the GPs [general practitioners] (our primary care providers) are prescribing to patients. These guys visit a couple of times a year and discuss how the system could save money, increase efficacy or both. This system doesn't work very well, because (think of Richard's quality oversight group) the pharmacy advisors don't get inside the contexts and communities that the GP actually faces. They also don't do a very good job of listening to the evidence. One of the things that they resist the most is when doing the "right thing" involves "shifting resources" from one type of care or provider to another. Let's say I came up with a study that replaced one drug prescribed by one kind of specialist with another drug that was dispensed by the same specialist, more expensive and maybe works a bit better. No problem, sign 'em up! What if that same study said that this new drug replaces surgery and we shouldn't do surgery for this illness any more. Then, wait a minute, things get lots more complicated. If we do this, then the surgeons will lose business and the specialists prescribing the drug will get long waiting lines. We can't have that, so we maybe move a few people at the margin, but we don't really make the real economic decision. If I was paying, and I was getting the benefit, I'd be much more pushy about making sure I was getting the best result. Or, perhaps better, I'll do surgery and give them the drug. That keeps everyone in business and ratchets up the expenditures some more. Very quickly you get Richard's 35% figure for overuse/abuse/underuse. It would be no problem if health care technology stayed constant, but damn it, we keep coming up with new ideas!

The study on decision making: But, the reason that patients don't really make good decisions about preventive care (and it varies by personality type, never forget that the fun and sun is in the variation not the average) is that health care really isn't much like auto insurance at all. It's a conglomeration of services that sometimes fix problems, sometimes make us feel better, sometimes look for problems that we wish we didn't know we had, and sometimes make up for activities or disabilities that we can't perform. But, depending on the person, many people get disutility and feel bad just thinking about getting sick or dying. So they put it off, and they hate the losses far more than the value the gains. All of this distorts the decisions people make. We can make people who feel dread and are less patient bear the costs of their shortsightedness, but perhaps we treat them just like the uninsured person who breaks his neck....

Lastly, these issues are closely related to the outsourcing jobs issue. I'm sure you see why ... question for extra credit.... Sorry, I did say it was the end of the semester.

And, Mark, I always like your arguments, you could teach a lot of what I teach better than me, your examples are clearer. I'm sure I completely lost some of your readers here.

Don't let Jim beg off for crabbiness. I just finished teaching a doctoral class also. Two of 12 probably deserved to be in a doctoral program. Four to six probably deserved to be in a master's program. However, there is always hope to make a difference in someone who will make a difference and therefore leverage one's influence. Actually I teach for my CV padding [curriculum vitae, ie, academic resume] and to actually learn what I am supposed to know.

Dental insurance is not insurance at all. Dental insurance is a method to redistribute the payments one would make for dental care over one's life from episodically to regularly. Very analogous to those who choose to pay their utility bill monthly on an estimated annual average.

Health insurance is insurance. Insurance started in London with people who wanted to invest in merchant ships. There were items similar to blackboards and people put money up and were listed. Those above the line and those under the line had different risks and different gains. Thus, underwriters.

Quickly insurance became regulated because the knowledgeable could easily sucker the less knowledgeable. In the United States most early health insurance was paid by societies for group coverage by a doctor or group, and also a pre-payment for MD services. Often in the late 1800s this was a dollar a month to cover the family.

The Flexner report and other professionalization of the medical guild led to stigmatizing anything other than fee-for-service. Only people taught in the new doctor schools that followed certain principles became upstanding members of a closed union. We actually have Hitler to thank for health insurance. [I would have guessed Bismarck.] We should also thank Hitler for desegregation and feminism, including the radical '60s that Jim and I enjoyed.

Because of WWII and the shortage of labor, there were wage controls. One could not raise wages to retain an employee. One creative HR [human resources] person decided to create "benefits." The most attractive benefit turned out to be health insurance. When the war ended, the government recognized the need for the men returning from war to have insurance and provided them not only access to higher education but health insurance flourished.

Health insurance is insurance because one makes a decision to pay a premium to be protected against certain costs. I think one company has finally offered what I consider "catastrophic" insurance that makes sense. Such a policy says you pay the first $1-2K a year and we will pay all of everything above a certain amount. One company is partnering medical savings accounts with short-term semi-catastrophic insurance.

Blending regular health insurance with medical savings accounts is the neatest idea I've seen regarding the new insurance needs. One can be insured for catastrophes, self-insure with benefit for the smaller costs, and theoretically over a few healthy years, have enough in the medical savings account to push for even higher self-pay limits and then eventually to self-insure or go on Medicare.

I support every other argument Dr Jim-Bob makes, including his points of emphasis. I also agree that you create lucid and vivid prose.

This week both the Annals of Internal Medicine and JAMA [Journal of the American Medical Association] have significant articles about the "chaos" which is our current health care non-system and thoughts about next phases. For decades I have been rooting for a total collapse. I don't think any President will allow that. Nor will the vested interests who pretend to be your fiduciaries but are not.