Econ Buff Podcast #6 with Neil Meredith
Dr. Neil Meredith talks with me about Medicare for All and the economics of healthcare. We discuss the the state of American healthcare, what Medicare is, why it is important, and what Medicare for All might look like. Problems with the current healthcare system and problems with a potential free market in healthcare are examined. We discuss the implications of various potential healthcare systems and trade offs between the different systems might look. We explore the nature of health markets from the consumer, producer, and government perspectives. Finally Dr. Meredith lays out his view on what the best option is and what he thinks is the best way for economists and citizens to best think the problem.
Transcript
Stitzel: Hello, and welcome to the Econ Buff Podcast. I'm Lee Stitzel. With me today is Dr. Neil Meredith Dana Professor of Business at West Texas A&M University. Neal, welcome.
Meredith: Thanks for having me out Lee. Look forward to talking with you.
Stitzel: So our topic today is gonna be Medicare for All. So I'm really excited, because, you know, a lot of times you get people --- let's do a podcast, let's have some interesting conversation, and, you know, they want to shy away from some of those topics that could be a little more contentious. So I'm really excited that you've agreed to go right for it. Let's talk about what's going on in American society today. Of course you're a health economist.
Meredith: Yes.
Stitzel:…[and you] teach health economics.
Meredith: Yes.
Stitzel: And [you] research and health economics.
Meredith: Hmm mmm.
Stitzel: So I have a bona fide professional here. So I'm very excited about that --- a little bit unfair of me to ask you this…
Meredith: Hmm mmm.
Stitzel:…but I just want to set the tone, set the context, [and] set the scene for our listeners. Because not all of us are the level of expert you are. Help us understand just, sort of, what/how you view, you know, (not trying to do anything else) --- just how you view the overview, sort of, a state of American healthcare right now. Huge question, I know.
Meredith: Right. Huge question. Some big talking points. I guess I would give you with that just as a general answer is, you know, there are there are some problems with the system. You know, that's sort of always going to be the case. There are always going to be problems. But there have also been some serious successes with the system. So if you go back, you know, over the last hundred years or so you get, you know, the invention of vaccines. You've got public health movements for sanitation, refrigeration, [and] those kinds of things. You know, you've got surgeries, and procedures, and medicines, and things that we can do now that we couldn't do say 20 or 30 years ago. So there have been some real advances, you know, the listening audience out there --- and I don’t you think I'm just giving you a fluff. So you know --- take something like [PCV13] Prevnar 13 (which you know is a vaccine against pneumonia) that, you know, is better vaccine than Pneumovax [23] ([which] I think that preceded it), or you take stuff like, you know, [Sofosbuvir] Sovaldi (blockbuster drug [because] it literally cures different types of Hepatitis C), [or] we've had advances in treating HIV (to where HIV is no longer really a death sentence, you know, especially if you get in there treated early [because] there's been a lot better control with that, and not just here in the US, but also worldwide). And so there have been some successes, but there are also some very loud and significant failures when you're talking about healthcare because it's a life and death subject. So, you know, other areas of economics --- all due respect to them --- you know, if you don't like the hot dogs you buy at the grocery store or something, you know, you can live for another day. You [can] try a different hot dog with hamburger [or] chicken. Or maybe you try some, you know, new no-meat substitute or something like that, right?
Stitzel: Right.
Meredith: [It] might be on meat or something like that. But with healthcare, depending on what it is --- if it's something like a quadruple bypass --- [and] if you don't get it [then] you're dead. Right?
Stitzel: Right.
Meredith: Like game over. I mean, so it has a different, you know, feel to it because of that life-and-death nature of some of the, you know, impact that American healthcare can have. So I don't --- I sound like I'm just dribbling on and on.
Stitzel: No you're doing great.
Meredith: O.K.
Stitzel: That's exactly what I was looking for.
Meredith: O.K.
Stitzel: So, you know, I think that's sets us up nicely. Just kind of frame what it is that we wanted to talk about today.
Meredith: Hmm mmm.
Stitzel: Right? Because I don't think there's any denying that, sort of, the progress and the success of medicine has been amazing.
Meredith: Hmm mmm.
Stitzel: Right? And so it's almost like the science (and correct me if I'm wrong here)…
Meredith: Hmm mmm.
Stitzel:…it's almost like the science of medicine is going so far…
Meredith: Yes.
Stitzel:…and the economics of medicine is proving to be (I won't say the problem but) a principal problem here.
Meredith: [Reiterates several times] Hmm mmm.
Stitzel: So that's exactly. Yeah, that's perfect. I was kind of interested, you know. You talked about, you know, antibiotics [and] vaccines --- those are among the biggest things.
Meredith: Sure.
Stitzel: Less than a hundred years old.
Meredith: Right.
Stitzel: Those are phenomenal. Those are phenomenal inventions. And so maybe we'll touch on that as we go. Can you briefly just, sort of, talk about medical research and invention? And are there trends in that? Is that something that we're talking about in this field?
Meredith: Sure. So, you know, now we have --- we've got more diagnostic equipment than we've had before. So two big pieces of equipment there, [that] we typically look at research wise, [are the] prevalence of MRIs (magnetic resonance imaging equipment) [and] also CT scanners. You know, prevalence of those in the United States is actually pretty high compared to elsewhere in the world. And so we actually have (more readily we have) better access to those sorts of sources. And that's not cheap. So that's one of the features of the actual healthcare system right now that's actually expensive. But people don't want to have to wait to get their knee imaged, or their brain imaged, or whatever else it is, you know, that can help us improve our diagnostic care --- and those kinds of things. You know, there's been a lot of research. Health economics research has really taken off. And say the last 20 to 30 years that, you know, the subfield has grown. For example the American Society of Health Economists (which I belong to) has gone from having a biannual conference to an annual conference. And that conference only started maybe about 10 [to] 15 years ago. And so there's just been huge pronounced growth. About $1 in every $5 of GDP (a little less than that, but almost $1 in $5 dollars in GDP) is expended on healthcare. So it's almost about 20% of the macroeconomy. So there's a lot of activity. There's a lot more expense going on there. You can see a lot of growth in healthcare administration, especially over the last 15 [to] 20 years. So there's been a lot of development. I don't/I don't know if I'm answering your question or I'm getting a little off track there?
Stitzel: You’re, yeah. You're right on target there.
Meredith: O.K.
Stitzel: You know, and you've hinted that something that I was going to spring on you later.
Meredith: Hmm mmm.
Stitzel: So we may have to circle back around to this.
Meredith: Sure.
Stitzel: You know, but the access to this kind of technology, you know, [and] the ability for us to, sort of, have it on demand and, you know, we spare no expense in American medicine --- a lot of/I think that's a lot [of the reason] that's a huge component of the answers to why prices are so high.
Meredith: Sure.
Stitzel: And then you immediately transition, and therefore a large part of the economy…
Meredith: Hmm mmm.
Stitzel:…as well.
Meredith: Hmm mmm.
Stitzel: You know, and so we're not doing a macro-podcast (thank goodness). We're both micro guys…
Meredith: Sure.
Stitzel:…in here. So we won't we won't go into the components of GDP there. But it does speak to the question --- you know, the dimensionality of this problem is enormous; the importance [of this problem is enormous and] the stakes couldn't be higher in a lot of ways. You know, I do a lot of, you know, local public policy type research. And I think my stuff is important. But then you sort of step back and go: O.K. well, what's the difference between this and doing health economics? So I think that sets the stage really well.
Meredith: O.K.
Stitzel: So what I'd like you to do now is: just kind of give us a brief understanding of what is the background for, and then what is the proposal as [an] O.K. solution to these kind of [problems. But] let me ask a specific question first actually.
Meredith: Sure.
Stitzel: And then we'll transition into that. Do you think the way that we're talking about things and the problems that we're trying to fix --- are they fundamentally price and expenditure type problems? Are they fundamentally addressing market failure? Are they fundamentally --- how do we improve people's access or outcomes? So, right, so there's lots of ways we could think: well the American healthcare experience could be improved if more people had access. The American healthcare experience can be improved if more people had better outcomes. The American healthcare experience can be improved if we got the same kind of productivity for lower price, right,
Meredith: Hmm mmm.
Stitzel:…if we had… And so as you and I know, and hopefully the listeners will grasp, a lot of those problems are interrelated.
Meredith: Sure.
Stitzel: The more access you want, the better outcomes you get, the higher the price is gonna be, and so on.
Meredith: Right.
Stitzel: So can you set the stage for us for this Medicare for All proposal? Is it trying to fix all those things, one of those things, [or] a combination thereof?
Meredith: You know, I can't speak for, you know, Bernie Sanders or for Elizabeth Warren who are really pushing Medicare for All right now in terms of all the different problems that they're expecting to address. I think what they're seeing is a lack of access. I think what they're seeing is perhaps, you know, you save on administrative costs. I think what you're seeing is also an ethical discussion of, you know, is medical care something that should, you know, if you can't pay for it, or if you happen to fall in this, you know, sort of between stage place (where you don't qualify [and] you make a little too much money to qualify for Medicaid, but you don't have a job such that, you know, you qualify for private insurance [and] maybe you live in a state that hasn't expanded Medicaid) and so you're sort of caught in this no-man's land --- and they don't want you to be caught and that no man's land anymore. They want you to have insurance coverage. So I think, I think it's a --- in my opinion it's a heavy-handed solution to any of a number of different issues. So you could look at issues like access. You know, you can ask issues if equity. Is it fair? You can ask questions about, you know, are people losing mobility in the job market because they're having…
Stitzel: Yeah.
Meredith:…to keep a job they don't want; because they can't take their health insurance with them [and] because their health insurance is tied to their job.
Stitzel: So let me.
Meredith: And so.
Stitzel: Can I debrief please?
Meredith: Yeah. Hmm mmm.
Stitzel: So my debrief --- that's a previous episode of this podcast --- labor mobility.
Meredith: Yes.
Stitzel: And so that's something --- I'm imminently --- fascinated in [that] we did not mention (I don't think) when we were exploring that topic (not pretending like I have a lot of answers there)…
Meredith: Hmm mmm.
Stitzel:…[but] they're just sort of the exploration. I don't think we mentioned healthcare. Do you want to talk briefly? Do you feel?
Meredith: Right.
Stitzel:…you want to dive into that?
Meredith: Yeah we can dive into that. So employer sponsored healthcare is actually a pretty sizable portion…
Stitzel: Yeah.
Meredith:…of, you know, the insurance market in the United States. We're sort of unique in that regard. Sort of an accident of World War 2 that there were these wage and price controls in place at the time during the war. And employers said: hey, you know, how can I attract better employees if we've got these wage and price controls? Well hey, how about we put this fringe benefit in of health insurance? It's this new thing we've put together. And [The] U.S. government said: sure, and we won't tax it. And so, you know, that just, sort of, then became its own thing (that has just morphed into the one of the biggest tax-free benefits that, you know, American workers receive right now).
Stitzel: So would you go for an interview, and then you come back and tell your friends. The second question they ask you is: well, what are the benefits like?
Meredith: Yeah. What are the benefits like?
Stitzel: What are your…
Meredith: And one of your biggest benefits…
Stitzel:…benefits like?
Meredith:…is your health insurance coverage. That while you may not see it come directly out of your pocket, your employer is probably paying a sizable portion of your premiums on your behalf, because they're incentivized to do so. And it's been recently estimated that, you know, the cost of an insurance policy for a year is about $20K dollars.
Stitzel: Wow.
Meredith: So we're not talking chump change here.
Stitzel: Yeah.
Meredith: We're talking serious amounts of money. And the problem with the employer sponsored health insurance is that, you know, what if you don't like your job? Well, what if it has really good healthcare?
Stitzel: Yeah.
Meredith: And this other job you're looking at --- maybe it's a start-up firm (or something else like that). You can't leave [and] you get stuck in this situation we call job lock.
Stitzel: Yep.
Meredith: And economists across the board don't like it. Whether you're conservative, liberal, or whatever…
Stitzel: Yes.
Meredith:…we don't like this job lock thing, because it's keeping people from moving into where they presumably would find themselves a better fit in the labor market.
Stitzel: Well that that's two-prong, right?
Meredith: Hmm mmm.
Stitzel: Which is, you know, the economist is gonna point out that's misallocation of resources.
Meredith: Right.
Stitzel:…job lock, right? So that's the classic story. But you've already mentioned equity today.
Meredith: Yes.
Stitzel: What if you want to be in the job where the options are better? You know, that you like the job itself better, but this healthcare thing is just something you can't overcome. Yeah, so I think that's a phenomenal point. O.K. so is the mechanism sort of a straightforward as I would imagine in that scenario where you say: O.K. I have benefits and this job. Now I go to switch jobs, or move to a new geographic area and find a job. And that's just one more thing that's a barrier to me finding a job that fits my needs?
Meredith: Precisely, yes. Especially if you are somebody who, you know, if you've got a significant medical condition….
Stitzel: Right.
Meredith:…[then] you may be concerned about pre-existing conditions…
Stitzel: Right.
Meredith:…and those sorts of things. Now if you've maintained continuous insurance coverage, [then] that shouldn't be an issue for you; because the laws…
Stitzel: Yeah.
Meredith:… are already written, so that that should not be an issue. But, you know, it slows down mobility. And, you know, you can find news articles out there --- where you can find these anecdotes of people saying: I am not leaving my job because of the health insurance benefits.
Stitzel: Yeah.
Meredith: You know, you may have a health insurance employer --- you may have an employer with a health insurance --- that is such that, you know, it has to be regulated by your state. Or you may be employed by an employer that/where it's insurance regulation actually is, you know, beholden to some other federal law or something like that. There are idiosyncrasies within that sort of stuff.
Stitzel: ?? @14:37
Meredith: Generally speaking, people who are in the state, your state [who] ends up being the insurance body there, [also] ends up being the regulatory body (but not always the case). You might be working for the federal government office in your state, and your rules for your insurance and what it must cover may be, you know, subject to federal government policy rather than the policies of your state. And that may or may not be more generous or less generous depending on what it is.
Stitzel: And those idiosyncrasies are a decrease there of mobility…
Meredith: Right.
Stitzel:…that in and of itself is..
Meredith: Right.
Stitzel:…correct. O.K. So thank you for indulging me…
Meredith: Hmm mmm.
Stitzel:…on one of my pet interests. So I want to, sort of, turn it back. Can you set the stage for us a little bit? You've done a good job. You've laid out what this is [of] what [the] proponents of Medicare think they're solving.
Meredith: Hmm mmm.
Stitzel: And I'm really glad you mentioned like the equity and the fairness component; because I think it's a big part of how they're selling it.
Meredith: Right.
Stitzel: Can you give us a Cliff Notes version of sort of what is Medicare…
Meredith: Sure.
Stitzel:…and maybe why we think that would be a solution to some of the problems?
Meredith: So Medicare, as it currently is, is the government-sponsored medical insurance provision program for people who are 65 and over, or people who have renal-disease kidney-failure. And so if you fit in that category, you get notification from the government. And they're going to cover a large part of your premiums, and costs, and those kinds of things for your healthcare. And it's financed through payroll taxes. And, you know, it's a it's a pretty sizable program. It's pretty popular. It came about in the 1960s under The Johnson Administration, along with Medicaid as well; [thus] Medicaid being [established] for the disadvantaged, lower- socioeconomic status and or disabled [as a] program there that is financed by the federal government, but carried out by the states. So Medicare has, for getting back to Medicare, it has four parts. There's Part A, which is hospital insurance, that covers your hospital source of care. Part B is for physician office visits you can think of. Part C is sort of an interesting, sort of private-public partnership sort of thing, where you can opt in to Part C (if you wish); and it will cover, you know, your hospital and physician stays, [and] sometimes even prescription coverage too. Part D is specifically prescription coverage, and that was brought in by the George W. Bush Administration in the earlier 2000s as a way to start covering prescription drugs. So it's quite an amalgamation with all the different options in there. And Part C alone has so many different options in it, that people have even done studies trying to figure out what particular health plan within Part C is the better (is the best) fit for somebody given what's going on with them. And even experts can't figure it out with all the different choices that are in there (that's sort of a little aside). But Part C’s sort of an interesting thing, because you have private companies that have to meet certain targets, [and] that are set by the Medicare program that can offer plans then. And you can take and opt to do that rather than do traditional Medicare.
Stitzel: So say that last part again ---- different firms have to meet certain standards?
Meredith: Well, the/so a private insurer who participates in Medicare Part C --- they have to meet certain standards that the government sets. So the government pays a lot of the tab, but the actual day-to-day of administering and carrying out the health insurance is carried out by the private…
Stitzel: Got it.
Meredith:..entity.
Stitzel: So most of Medicare's direct…
Meredith: Umm.
Stitzel:…government?
Meredith: I couldn't tell you that off my head, off the top of my head. I believe that the majority of people participate in traditional Medicare rather than Medicare Part C; although there is a growing portion…
Stitzel: Yeah.
Meredith:…of Medicare Part C…
Stitzel: Fascinating.
Meredith:…that's for sure.
Stitzel: So the Part C mechanism would work like: the government pays on my behalf to the insurance, and then I deal with the insurance company, and [then] the insurance company deals with my medical providers?
Meredith: Right. So the government…
Stitzel: Wow.
Meredith:…is sort of the financier, so to speak. But more of the day-to-day is carried out by…
Stitzel: Right.
Meredith:…the insurer.
Stitzel: Right. Oh so that that leads to a lot of interesting questions in terms of when you're tackling that. You know, how is the administration from adding the insurance party in there --- how does that change the medical experience, how does that change the costs, [and] how does that change (the sort of) the clarity of options for the potential patient?
Meredith: Right.
Stitzel: So I assume there's been a lot, or probably burgeoning, research on that I assume?
Meredith: Yes. So…
Stitzel: Any kind of…
Meredith:…there’s…
Stitzel:…general insights you can give us?
Meredith:…so there --- when you talk about insurance in healthcare, you really are talking about third party payment.
Stitzel: Right.
Meredith: So, you know, other types of insurance like say your car insurance --- you really only kind of use it when there's a wreck, or someone you know bangs into your car, or something like that. But you don't use it maybe for your routine sorts of things like getting an oil change [and] stuff like that. Whereas health insurance, as we know it, is more [of a] third-party payment. We use it for everything.
Stitzel: Yeah.
Meredith: We use it for the office visit.
Stitzel: Yeah.
Meredith: We use it for going and getting our prescription filled. We use it for going getting our flu shot (which FYI please go get your flu shot out there listening audience). But..
Stitzel: So…
Meredith:..so, you know, there's a lot more [of how] you can think of it --- more of just third-party payment --- because you're basically setting up the insurer to take this big third-party role in healthcare.
Stitzel:…I've seen some economists argue calling what we call health insurance is a real misnomer. And I think I hear some of that element in your argument here [as] to say: when I properly think of insurance, I handle all of these things day-to-day, and if we meet a certain set of catastrophic conditions it triggers that, right? If my house burns down --- house insurance, right? If I crash my car --- car insurance. Health insurance is sort of nothing like that.
Meredith: Hmm mmm.
Stitzel: And so this is where the element --- so for our listeners at home going: O.K. well, what's the important difference between insurance (because they're gonna have a good ability) --- to think about what insurance is.
Meredith: Right.
Stitzel: And then you're making a very important point (which is very common I think in the field) which is to say: O.K. well, this is that third-party payer thing that we're talking about. Can you sort of tie those two ideas together for us?
Meredith: Right. So traditionally insurance --- you're trying to purchase a product that helps you address risk. Health insurance we sometimes also talk about it in terms of addressing lost income O.K. But traditional view --- you're trying to address risk and reduce your risk by buying insurance. So when you buy your homeowner’s policy you're trying to reduce risk of, you know, what if my home burns down?
Stitzel: Yeah.
Meredith: Now with insurance in healthcare --- this third party payment --- it's culturally taken on this, you know, momentum of, you know, when I go to the physician [then] I expect to not pay X amount out of my pocket; and if I pay X amount of my pocket I'm gonna be mad about that. It's like: O.K. but if you don't pay X amount out of your pocket, [then] how do I know that you're not going to the physician too often? Of course that runs into a real uncertainty problem, which again, insurance is also there to address the uncertainty. You don't want to introduce so much -- when you introduce a lot of --- uncertainty; [because then] you're running into a quagmire of a problems, right? So you let's say you don't want to go to the physician too often, but yet you also get advice that says: hey if you've got the flu (let's say for instance because we're in flu season), [then] you need to go and see the physician right away.
Stitzel: Right.
Meredith: Right? Otherwise we can't use this Tamiflu stuff to help you.
Stitzel: Yeah.
Meredith: So then you're like: well, am I really that sick? Am I not? Do I go? Do I not? That you don't want to create a lack of insulation from some of these costs, and some of these things, because it can have real nasty consequences. So if you if you insulate too much though, then you can get overuse. If you don't insulate enough, [then] you get under use. So you want to try and find this Goldilocks amount of healthcare that gets used, right?
Stitzel: So our…
Meredith: So you just let me tell you an anecdote, O.K.? So I know somebody who doesn't have the greatest insurance policy right now. And that person didn't go and get a shingles vaccine. [The] said person ended up getting shingles…
Stitzel: Whew.
Meredith:…because said person didn't want to pay a $170 dollars out of pocket for the shingles vaccine. Now if [this] said person had an ACA compliant (sort of, you know, Obamacare sort of era) healthcare policy working for, you know, an employer or whatever, then the shingles vaccine would have been covered zero cost out of pocket, right? So that person then, because they were not insulated from that cost, they felt the pressure from that and didn't get the shingles vaccine. Well that person, you know, is regretting that they didn't get the shingles vaccine.
Stitzel: Yeah, the shingles are very painful. Very, very painful.
Meredith: It’s very painful. But there are some sort of quote these essential health benefits that came along with the ACA (which is the Affordable Care Act for short) because you want people to be getting routine vaccines. So no, we're not going to charge you anything out of pocket; because when we don't charge you out of pocket, then you tend to use the thing more, right? And if something like a vaccine, that's been shown to be extraordinarily cost-effective and really, really safe medicine, [then] you really want people to consume that. You don't want them to feel any, you know, hesitancy of getting a vaccine. So I'm getting a little long-winded there, but….
Stitzel: I think you’re cutting right to the heart of one of the things that we want to talk about, right?
Meredith: Right.
Stitzel: So I don't worry about people overconsuming shoes, or steaks, or bottle of water because there's the rationing mechanism; [whereas] that is a market, with a market price, that provides how do we allocate resources both in productive efficiency and allocated efficiency. So how do we do it in a way that makes best use of resources…
Meredith: Hmm mmm. Hmm mmm.
Stitzel:…and also matches the preferences of people, right?
Meredith: Hmm mmm.
Stitzel: So that's the beautiful part of the market.
Meredith: Hmm mmm.
Stitzel: And if you take anything away from econ classes, we hope that's what you would take. So now you're highlighting that issue. If we step in with third-party payer (I'm going to avoid the words insurance for a minute)…
Meredith: Right.
Stitzel:…[the] third-party payer comes in and says: go to the doctor, we need to go to the doctor, you pay this co-pay, [and] we pay the rest; [therefore] the price mechanism is effectively gone at that point.
Meredith: Right. Hmm mmm.
Stitzel: And then I'll just go for any little thing that I have.
Meredith: Right.
Stitzel: On the other hand, if the system is set up in such a way that things are actually more costly than they should ought to be, then you underutilize; [and] we end up with shingles when we really could have avoided shingles. So let's --- since we're on the Medicare topic…
Meredith: Hmm mmm.
Stitzel:… let's take it there, and then we'll go forward with it.
Meredith: Sure.
Stitzel: How do you view Medicare as aggravator or potential solution to that problem? Or maybe you just want to lay out the whole price problem for us…
Meredith: Right.
Stitzel:…whichever way you want to take that.
Meredith: So if you introduced Medicare for All, you're essentially saying you're gonna have the government finance all healthcare, [and] then you're gonna run into a problem. And this is where the Medicare for All things starts to break down for me --- is that often times when I'm listening to advocacy for it, or reading about--- it's as if people pretend that there's no disadvantage, [that] there's no disadvantage to going to Medicare for All. There are disadvantages to going to Medicare for All. There's disadvantages and advantages to any healthcare system you can possibly imagine. And there are several systems throughout the world, several of them. You may look at some and say: I wish we were more like that one, or more like this one, or if we took something for this, that, and the other, etc. Fine. But every system has advantages and disadvantages. I think it's disingenuous to pretend like every system, or that this particular system Medicare for All, is just like the bee's knees and it has no disadvantages. One of the disadvantages of going to totally government-funded care is, you know, what if there's a new treatment that comes out? And before, you could have gone to your private insurer and said: hey, you know, we want this new treatment to be covered by insurance this next year. Now you have to go through a government bureaucracy to ask for that new treatment, and they may not approve it. They may, you know, just give you the [Charlie Brown cartoon teacher noise] “wah, wah, wah” kind of thing in response. And then you'll be mad and whatnot. And then you won't really have any recourse. I mean, you can go and vote every once in a while. But there's no guarantee, [that] through the political process, that your voice is gonna be heard. So there you have some sort of, you know, heterogeneity of preference (which is fancy speak for saying there's different preferences that different people have throughout the entire United States for their different care) and that sort of thing. Those might not get met as well. There's also a known problem of global budgeting, which is that systems in the world right now that do fund all of their care through their government, you eventually run into a budgeting problem. You eventually don't have any more money. And so what are you going to fund and why? And how is that gonna be determined? So then, you've got an expert panel, let's say, where we're gonna fund this, but we're not going to fund this. Is that the right mix? How do you know that that's the right mix? You know, so you can end up --- now advocates may come back and say: O.K. but one of the advantages is that, you know, the administrative costs [are going] to be less than that. And that's true. You may get rid of the job lock then also. That's also true. And, you know, ethically it's the right thing to do to make sure that we get everybody in and get them treated whatnot. And right now, we actually do have laws that make it, you know, that you're required if, you know, you are sick [and] you go to the emergency room, [then] they're required to treat you. So it's not like we're right now saying: you know, we're gonna let somebody die in the alleyway (so to speak). But there is something to be said for [that] there's increased access if you do have insurance and whatnot. So, but, you know, nothing's free. And one of the things we harp about in economics all the time is: what's the next best alternative? What's the opportunity cost? Is that, you know, if you take this on then it's a serious, serious cost. And there are other things that will have to be pushed aside in favor of, you know, having to finance the care and those sorts of things. You're taking one set of problems and you're replacing it with another. That's essentially what you're doing. You're not going to get a system that's just gonna be problem free. That's a pipe dream.
Stitzel: So let's talk about the administrative cost component. So one of the potential benefits for Medicare for All --- the government comes in and steps in and says: O.K. well, administrative costs will go down. That doesn't ring true to a casual observer, in that we're gonna add layers of bureaucracy, so that we can scale up a Medicare system.
Meredith: Right.
Stitzel: Which you know the scale like they’re…
Meredith: Right.
Stitzel:…not gonna be returned to scale.
Meredith: Right.
Stitzel: That's gonna get more costly the bigger the system gets.
Meredith: Right.
Stitzel: Just sort of classic organizational theory there. Where would even the proposed reduction in administrative costs come from? For those of us that are casual observers are like what are you talking about…
Meredith: Right.
Stitzel:…doesn’t make any sense.
Meredith: So, you know, a typical private health insurer right now is required to, you know, not have any more than say 15% if it's premiums spent on the administration of processing claims --- of, you know, getting premiums paid in of going out and negotiating with providers and those kinds of things. Medicare [and] actually Medicaid are actually more efficient at that sort of process.
Stitzel: Than the insurance companies?
Meredith: [More] than private insurers because Medicare [and[ Medicaid --- they're bigger. So they can take advantage of their sort of scale to sort of kick those administrative costs down. But again, you're gonna perhaps bring the administrative costs down but that's actually not a big feeder into what's causing the big ballooning and costs. Big ballooning and costs is coming about, you know, --- arguably there may be some --- [from a] cost disease problem; where[as], you just have a resource that's just not becoming that much more productive. And [then] we're just putting more and more financing into it because we're trying to get more and more out of it.
Stitzel: So let's break that down, because that's a phenomenal point. So I see two things that I want to talk about…
Meredith: Hmm mmm.
Stitzel: You feel free to add any others that you see here. One is: part of the what's driving the cost is that hospital care is an enormous proportion of that is overhead.
Meredith: Yes.
Stitzel: And it's scaled to peak use.
Meredith: Right.
Stitzel: Which is O.K. We have all these bays we, have all these MRI machines, we have --- O.K. what's the most we can need of them at once? Let's have all them on hand.
Meredith: Hmm mmm.
Stitzel: Because like you said there's an equity problem. Like is it really fair if three people got in a car wreck and there's only two emergency bays, [and] there's only two ambulance or whatever?
Meredith: Right.
Stitzel: And so now I gotta lay on the side of the road because I had the accident third. That doesn't seem fair, right?
Meredith: Right.
Stitzel: And so there's an allocation problem there. And the economist in you --- it's always ringing in the back of your head ---- [that] we could allocate this with prices. But we've talked about some of the difficulties of doing that. And then a second [ago] you mentioned this specific-like cost disease idea. And I think there's sort of two components. And you feel free to comment on either. One is: as we talked about before ---- if our utilization of these things for some of these other purposes is going up, [then] well naturally the cost would be there. And second I think fundamentally the medical innovation and research --- if we're getting decreasing returns to that, but we're trying to keep up that level of medical innovation, [then] that drives up cost. Any comments about any of those three…
Meredith: Right.
Stitzel:…topics?
Meredith: So just --- long question. So let me see what I can do to address those.
Stitzel: Can you comment on the overhead part first then?
Meredith: Overhead? So what specifically with overhead?
Stitzel: Yeah. So I think, right, my comment is related to this --- you see these occasional posts. Somebody says these are --- [well, I ] had knee replacement surgery…
Meredith: Right.
Stitzel: I had two aspirin whenever I went to the emergency room, and I looked at my bill and it said $100 per aspirin.
Meredith: Right.
Stitzel: As if…
Meredith: Yeah.
Stitzel:…as if the price of the aspirin!
Meredith: Right.
Stitzel: How unfair!
Meredith: Yeah.
Stitzel: That's related to the overhead right?
Meredith: Yeah. So what's going on with that particular scenario is your aspirin doesn't cost that much. What the hospital has had to do is say: O.K. we've got under funded or unfunded mandated patients coming through our doors. Where are we going to get the revenue? Well we're going to have to charge higher prices to people who come through who can pay for their care. So when we get somebody who comes in who is privately insured, we've negotiated a particular price for the aspirin or whatever it is. That [it] is not only covering say the average cost of that particular service and whatnot, but it's also covering the overhead. And [it is] also helping fund the mandated care that has to be covered; because where else is the hospital gonna get the revenue? I mean, it gets (it may get) some from taxation..
Stitzel: I was going to say from ?? @35:00
Meredith:…they get some from charities. But it's not gonna get enough. It's gonna have to fill that gap somewhere. And that gap has to come from people who enter into the emergency room (the hospital otherwise) who have, you know, the means to pay through their private insurance or whatever it is. And so through that sort of weird sort of amalgamation, we have, you know, essentially that's the way in which we are taxing people (so to speak)…
Stitzel: Ugh.
Meredith:…to pay for other people's care. We're already paying for everyone else's care. That's what I want the listeners out there to hear this…
Stitzel: Yeah.
Meredith:…right now. This is sort of the dirty secret. But we're already paying for everybody else's care; because if you follow this hospital story with me, that's how it's going on. It's going on through price discrimination in the hospital. That's how that's happening.
Stitzel: So I'm really glad you mentioned that. Let's talk about that really seriously.
Meredith: Hmm mmm.
Stitzel: So right now we're paying for that, because anytime we go to the hospital we pay a little more, right?
Meredith: Right ---or anybody in your insurance network.
Stitzel: But now I'm making choices about the type of insurance that I carry, the type of medical decisions, [and] the amount of medical care that I consume based on that. I still function, I still respond to incentives, [and] I still act like that's a price to me (even though you and I both know that it’s mangled beyond recognition as far as prices go).
Meredith: Hmm mmm.
Stitzel: And so taxation (you won't hear me advocate for that very often) but at least have sort of the intuitive fairness of if we're all paying for it, [then] maybe we should all pay for it; [whereas], rather than people who need to go to the hospital more frequently [should likewise] pay more than people who go to the hospital less frequently.
Meredith: Hmm mmm.
Stitzel: Because you're implicitly taxing them. There's a pass-along of that cost that the market hasn't allocated that. So we don't know that that's the right allocation as you've mentioned…
Meredith: Right. Hmm mmm.
Stitzel:…before. Neither has the political process allocated that --- which is O.K. Now I'm arguing with my insurance company and say: O.K. well, aspirin can be a $100 and knee surgeries can be $10K. Well now people who get aspirin are paying some portion of the unfunded mandate. And people will get knee surgery or paying a different portion of it.
Meredith: Hmm mmm.
Stitzel: And it's like --- so now through not having a market and neither allowing the political process to work, we've placed the cost (may be disproportionately --- I don't know how the actual price is) disproportionately on people who have knee surgeries or whatever.
Meredith: Hmm mmm.
Stitzel: Like that can't, from an equity standpoint, that can't be a good outcome.
Meredith: It's the outcome that we’re with though because...
Stitzel: Hmm mmm.
Meredith:…I think apart of cause of the political reality. If, you know, you go and say: hey, we're gonna tax you for whatever, [then] that's gonna be really politically unpopular.
Stitzel: Yep.
Meredith: And so we go through this weird charade of saying: well, you know, I'm not gonna pay for so-and-so's healthcare. When in truth, if you follow everything along with this narrative we're talking about, we're already paying for everybody else's care anyway. You may not be the person who is unlucky enough that has to go to the hospital, but somebody in your insurance network does. And you've been contributing premiums to that insurance network. So somebody in your insurance pool goes there, and the vast majority of their bill (with what they're left with the vast majority of that) probably gets covered by the money that's in your insurance pool. So you may not see that money [and] so maybe “out of sight, out of mind.” And so psychologically just doesn't occur, and that's human nature. That's fine. But that money's going in there. I, you, we all are already financing care for a lot of other people --- whether that person is in our insurance pool or whether that person is someone who came into the ER [and] wasn't able to pay for anything. And because somebody else in your insurance pool ended up in that ER, they got charged for whatever. And what they got charged (and the price that got paid) helps to finance not only the person in your insurance network, but it also helps finance that person who came in and was not able to, you know, pay anything for their care. So we're already paying for everyone else's care.
Stitzel: Yeah.
Meredith: We just don't see it.
Stitzel: And there's very little case to be made that there's a way out of that as it were…
Meredith: Hmm mmm.
Stitzel:…given that it seems unlikely you can get to a, sort of, mostly free market --- couldn't be a free market situation probably. You can't even get back to a free market situation. So all those problems that you talked about --- you know, allowing people to be insulated from the price so they consume too much, versus, you know, being insulated from the service so that they bear unnecessary medical cost --- that those are a reality.
Meredith: Hmm mmm.
Stitzel: Do you view Medicare for All as potentially having a solution to that or making that worse?
Meredith: Well I mean, like I said earlier today, you know, when you make a change in the system, [then] you're really/you're replacing one set of problems for another set of problems. That's really what you're gonna be doing. So the question becomes then: is the net benefit there? Is the benefit worth the cost? And I think, you know, there will be given how diverse the United States population is (of, you know, we're getting up to close to 350 million people in a not so distant future, you know, 50 different states, and the District of Columbia, the outlying territories, and all that sort of stuff, and Puerto Rico, [and] every everything else mixed in there) [and just] the just diversity of people --- if you just go to this sort of Medicare for All one-size-fits-all kind of thing that's gonna try to address, you know, medical care for 350 million people; [whereas you] try and, you know, fit all their needs and everything, [then] I think you're just gonna end up with a huge mess. And some of the private --- some of the advantages of private insurance is that it can better adapt to what a particular group is wanting to get. So, you know, some of what's being proposed now instead is to just say: hey, let's just take the ACA and put the individual mandate back in place, and just put a public option in there, [in order] so that we make sure that we got everybody covered. And just leave it at that. Because the political reality, and the way in which the system has just been set in motion at this point, is that you'd be lucky to even get that done. That Medicare for All just politically it's just like, (you know, I know the Democratic primary right now candidates are, you know, they're jockeying back and forth and whatnot trying to get votes and everything but, you know, you forget that there's another big party out there and to try to get you know the Conservative Party to say: hey, let's go for a Medicare for All) that is going to be a very, very tough sell. And, you know, you/we forget that The Affordable Care Act, in itself, had to have, you know, Democratic control of the Senate, and of The U.S. House Representatives, and the Presidency. And [it] just barely squeaked through.
Stitzel: Yeah.
Meredith: And a lot of the ideas in that Act actually didn't --- some of those ideas came from Republican administrations.
Stitzel: Right.
Meredith: So, you know, it's yeah. I'm probably going…
Stitzel: ?? @42:40.
Meredith:…a little too far down the rabbit hole there for you.
Stitzel: So let me summarize just a tad bit here.
Meredith: Yeah.
Stitzel: So Medicare for All has potential benefits and potential drawbacks. You know, the potential benefit is an increase in coverage.
Meredith: Right.
Stitzel: And I want to say coverage particularly ‘cause I want to talk about the access issue next...
Meredith: Right.
Stitzel:…and potentially benefits from the administrative cost. It's not gonna, in your estimation (which I think is very reasonable estimation)…
Meredith: Hmm mmm.
Stitzel:…probably not gonna do a great job in terms of matching preferences, encouraging innovation, and sort of allowing the medical system to evolve into something that meets a wider range of people's needs and wants.
Meredith: Sure.
Stitzel: Right?
Meredith: Hmm mmm.
Stitzel: And then you've got this option that you’ve been talking about which is: (I didn't/I don't know if you said go back to) but you get the public option and give more people coverage.
Meredith: Yeah.
Stitzel: I’m saying coverage…
Meredith: Hmm mmm.
Stitzel:…in particular because do, you know, had a conversation with a colleague (previous Econ guest Dr. Pjesky) and he mentioned insurance is not the same as access.
Meredith: Right.
Stitzel: And so my interpretation of him when I we said that in our…
Meredith: Hmm mmm.
Stitzel:…conversation was giving people insurance coverage, and then further insulating people from the price considerations that we talked about, leads to access problems; because there still has to fundamentally (there has to) be rationing of them, of the medical care.
Meredith: Yes.
Stitzel: And if there's not a price mechanism to do that, you will get overuse. You will naturally have an access problem. So two-part question. One --- did you interpret that the same way?
Meredith: Hmm mmm.
Stitzel: And two --- would you have anything that you would add or change related to that idea?
Meredith: So look. You know, just because you have insurance doesn't mean you're automatically going to get access. So for example, let's say you have Medicaid, but Medicaid payment rates in your state are rather low. Well then, that doesn't necessarily guarantee you access, right? Now provided you're paying enough through whoever your insurer is, provided they're paying enough, then you can relatively get better access that way than if you are quote “uninsured.” So generally speaking (just generally speaking), if you are insured you generally tend to have better access; because you are better assured that you have said access and whatnot. Whether that plays out for you though, given specific circumstances, you know, be careful with that. The only other thing that I would say related to comments, you know, that I saw there is, you know, I think of the Rand Health Insurance Experiment in the 1980s. [It was a] big study that was has carried out -- a randomized sort of thing, in which they looked at, you know, different types of insurance. Like let's give you insurance that basically just covers everything. [and] you have no out of pockets. Let's do insurance that has sort of a high deductible, where you're actually, you know, having to pay a lot out-of-pocket and whatnot. And [then] let's see how much people use care [from the different scenarios]. Well, when the care is quote “free,” meaning you're not paying anything out-of-pocket directly, yeah there's overuse of the resource. That being said, there's probably underuse when you have a high deductible and, you know, you're on the you're on the hook for a lot of it. Now what could help is if you had pricing transparency and easy to understand prices. So, you know, there's currently a rule under review that may come to fruition of, you know, making it so that hospitals have to publish all their prices. Well that's fine. But do you? I may not even understand all the different prices…
Stitzel: Yeah.
Meredith:…that a particular hospital may…
Stitzel: Wow.
Meredith:…publish because they may break things down ([and] itemized it by every particular service or whatever else) to the point where you can't understand what it is you're paying for.
Stitzel: Well.
Meredith: So that's like a big difference between, say, going to a steakhouse. If I buy a ribeye steak I, you know, you don't have to be an expert to know, sort of, what you're getting with a ribeye steak. You can, you know, experience it…
Stitzel: Sure.
Meredith:…and see what kind of quality you have there. But if you're purchasing a quadruple bypass you probably have no idea whether that surgeon is any good or not. You may not even know yourself whether you need the procedure or not (which spoiler alert for the audience out there --- please get a second opinion if you ever have the opportunity to, when, you know, you're looking at something serious medically out there, because I've heard one too many horror stories). Just, you know, I'm getting off a little track here.
Stitzel: Can I set that up?
Meredith: Yep. Hmm mmm.
Stitzel: You know, because, you know, I mentioned buying steak, buying water bottles, buying shoes, [and] whatever it is I said earlier. You brought that back, talking about the steakhouse and I find it really interesting. Because so I heard a couple of economists responding to one of Paul Krugman's latest articles in…
Meredith: Hmm mmm.
Stitzel:…defense of Warren's version of the Medicare for All. And those economists said: well, this is why this doesn't work. Imagine let's go through a thought experiment. Instead of going to a steakhouse and you pay the bill, you go to a steakhouse and you give them your steak insurance card. And then so how much steak are you gonna buy? How often you're gonna go? Of course you'll make bad choices on that front. And I think, sort of, the underlying --- if the point they were trying to make is no further than to say: this overuse which you…
Meredith: Hmm mmm.
Stitzel:…know…
Meredith: Hmm mmm.
Stitzel:…discussed already…
Meredith: Hmm mmm.
Stitzel:…a couple times today (if that's where it stops fine), but as an economist I recoil at the idea of treating medicine in this way; because we understand some of those fundamental ideas. Now, you just said: O.K. get a second opinion. You don't know what a quadruple bypass [is]. It's very difficult I know exactly when I need to steak, because I'm hungry and I go: hmm, I want a steak.
Meredith: Yeah.
Stitzel: And if I go to a steakhouse --- we're fortunate to live here in Amarillo, Texas and there's a good steakhouse on…
Meredith: Hmm mmm.
Stitzel:…every…
Meredith: Hmm mmm.
Stitzel:…corner…
Meredith: Hmm mmm.
Stitzel:…and I have my preferences. You have your preferences. After the show…
Meredith: Hmm mmm.
Stitzel:…we'll compare notes and…
Meredith: Sure.
Stitzel:…compare our favorite steakhouses. if I go there and I have a bad experience I just don't go to that steakhouse again.
Meredith: Right.
Stitzel: And there are some steakhouses in town that are O.K., but I don't like them, [and] so I don't go to them.
Meredith: Hmm mmm.
Stitzel: And then there's other steakhouses that are my favorite. And so when it's my birthday, or my anniversary, I talk my wife into going out for steak. We go there.
Meredith: Right.
Stitzel: So there's, sort of, two elements there. One is which you've already hit the nail right on the head --- which is I know exactly what I want out of a steak, and I know when I do or don't get it. What about that second element of like: O.K., but I get repeated interaction, right? So a game theory…
Meredith: Hmm mmm.
Stitzel:…standpoint…
Meredith: Hmm mmm.
Stitzel:…it would be…
Meredith: Hmm mmm.
Stitzel:…this repeated…
Meredith: Hmm mmm.
Stitzel:…game idea. What's the role of that in medicine? Do you see a role there?
Meredith: I mean…
Stitzel: Or am I too far down, you know, [the rabbit hole]?
Meredith: If you wanna talk about repeated interaction, I mean, you know, if you're going for a routine physical or something like that, it's not as high-stakes (or so to speak) where you're gonna repeat set activity.
Stitzel: Right.
Meredith: You can get to know that in terms of (you can get a better idea) as to whether you're getting quality interaction there or not. But let's say you need a liver transplant. You may not know the first thing to know whether you're getting, you know, a good experience or not. You may just get a referral from your physician. You've got a huge information asymmetry problem there, where the physician providers know way more than the patient presumably.
Stitzel: Can I?
Meredith: Hmm mmm.
Stitzel: And I don’t even want to frame this as pushing back on that.
Meredith: Yeah.
Stitzel: I'm not entirely sure that's even true.
Meredith: Hmm mmm.
Stitzel: So I had an experience, not this past summer, but the summer before. And I had an ear infection.
Meredith: Hmm mmm.
Stitzel: And I went to the urgent care and I saw one doctor; and I went back and I saw another. And they wanted imaging and I saw stuff. And they didn't communicate very well with each other. And then they wanted to send me --- because I had some bad reaction to the medicine…
Meredith: Hmm mmm.
Stitzel:…they wanted to send me to the gastroenterologist. And he like walks in, he sees the chart, he looks at me, he reads the chart, [and] he says: so you have X, Y, Z, right? I want to see your blood. That was a whole interaction, right?
Meredith: Hmm mmm.
Stitzel:…and I'm like, you don’t know anything about my case, right? Then I go over to the ear nose and throat doctor --- she's phenomenal.
Meredith: Hmm mmm.
Stitzel: She gets the story, she reads [it], she puts the pieces together. It’s just like watching a detective work.
Meredith: Yeah.
Stitzel: And I'm like, I'm not even sure. And bear in mind this wholetime I have a GP who happens to have been out of town.
Meredith: Hmm mmm.
Stitzel: You didn't know anything about this…
Meredith: Hmm mmm.
Stitzel:…until like…
Meredith: Hmm mmm.
Stitzel:…six months later until we have a check-up.
Meredith: Sure.
Stitzel: So there's this huge informational problem even on the provider side.
Meredith: Yes.
Stitzel: That's an, that's sort of outside of the scope what we're talking about today.
Meredith: Hmm mmm.
Stitzel: I don't think Medicare for All it sort of fixes that (or probably, I doubt it makes it worse either).
Meredith: Right.
Stitzel: You know, so I'm not trying to again, I'm not trying to attack the point that you say: O.K. well, they know more. They almost for sure know more.
Meredith: Hmm mmm.
Stitzel: Except in some cases they don't know that much more.
Meredith: In some cases, you know, you have to be careful and go back to the second opinion thing.
Stitzel: Yeah.
Meredith: You got to be careful with who you're getting care from. And you got to be careful if you're, say, trying to look up statistics on a particular provider. You know, does so-and-so have such a rate of patients dying on their operating table because they're a bad surgeon?
Stitzel: Yeah.
Meredith: Or do they have them dying on their operating table because the really bad cases are coming to them?
Stitzel: They get all the hard cases.
Meredith: Yeah. You really then have to rely on somebody that you trust in the medical profession…
Stitzel: Yeah.
Meredith:…to give you a solid opinion on who's actually a good provider, and who is just dangerous.
Stitzel: When I teach my students some of these ideas, you know, you and I would know that statistical term is selection, right?
Meredith: Hmm mmm.
Stitzel: When I teach my students about selection I always talk to them about --- there's a famous surgeon named --- James Andrews who works on top level athletes. So if you look at his recovery times --- and I'm sure I'm sure quite sure that he is a phenomenal doctor, but if you look at his recovery times --- and then you say: O.K., so we had, you know, [an] ACL tear and then they're back in 8 months (when the normal is 14 months, and if it were you or me it would be 2 years, right) is that because he's a phenomenal surgeon? Or is that because if you do knee surgery on an economics professor, it takes longer for them to recover than if you do it on one of the best athletes in the world?
Meredith: Sure.
Stitzel: Right?
Meredith: Sure.
Stitzel: So it’s sort of the…
Meredith: Sure.
Stitzel:…short kind of idea…
Meredith: Sure.
Stitzel:…in reverse. So we are sneaking up on an hour here. We've covered so much ground. I do kind of want to bring this in for landing.
Meredith: Hmm mmm.
Stitzel: And what I'd like to do is, given that we've talked about all these things that you would trade-off, that you would balance between these things…
Meredith: Hmm mmm.
Stitzel:…what alternatives do you see? What path would you recommend we go if going to our steakhouse model of [a] fully…
Meredith: Hmm mmm.
Stitzel:…free market…
Meredith: Sure.
Stitzel:…has these kind of problems? Going to this Medicare for All obviously has these other kind of problems. And then I think you mentioned ACA, and a public option, and whatnot. You know, how would you navigate some of those things --- even if it's just general principles for those of us that are gonna go listen to the rest of the Presidential Debates…
Meredith: Sure.
Stitzel:…and have to hear about Medicare for All. Help us at least frame that in terms of the alternatives and how you see the trade-offs.
Meredith: So I think just looking at [and] just thinking about the words trade-off and the word cost --- so, you know, every system has trade-offs. Every system has costs and benefits. So no matter what you're hearing the rhetoric, you have to be honest with yourself about what the advantages and disadvantages are. Now you may get to a point where you say: well O.K., but I really do think the advantages of Medicare for All outweigh the disadvantages. O.K., but be honest about what the disadvantages are. Let's not just cherry-pick data and just, you know, pretend like global budgeting isn't a problem elsewhere in the world. Let's not cherry-pick stuff and pretend like, you know, in the Canadian system that, you know, you don't have a situation where you may have to wait longer to get an MRI, or CT scan, and those sorts of things. Now you may be O.K. with that, but I don't know given, you know, how we may want things right away --- our way right away just like, you know, Burger King or whatever --- [and] that may not fly in American culture. So I would say that every culture is different in the world. I think that our solution, what we come up with, will probably look different. It'll look American, so to speak. And, you know, I would say also this: there's a there's a famous quote from Hayek or one of the Austrian school economists. [The quote] basically says: you know, one of the real dangers out there is how much people don't realize that they don't know. [The quote] translated just basically means: be careful, because you may have all these great plans, and these sorts of things. And it's great to try and pursue the next evolution of stuff. But you may not think you know as much as what you think you know. There may be something that when you make one move, it can set in motion other unintended consequences that you didn't mean. And you can end up causing a lot more damage than you ended up helping something. So there's a healthy level of, you know, sort of caution I guess, when you're looking at changes in the medical care system; because, you know, you make that one change and then well a year from now all these other problems emerge. And it's like: well O.K., maybe we should have thought 2 or 3 steps down the road; instead of trying to take a revolutionary approach to just, you know, undo something that's already been set in motion. So looking at all the options out there, I mean, me personally --- I kind of think that the next evolution is going with a public option [and] with the reinstituting of the individual mandate. [And the reason I think this is] just given the political reality, the history of medical care reform, and the goals of what seems to be going on with people who are in the system and whatnot --- that seems to be the most feasible, and it seems to be where things are heading. You know, free market sorts of stuff --- if you push more for a free market that can come with ---- and now where you can put in market mechanisms, sure do it. Do it. If you can do pricing and medical care that's both transparent and easy to understand for certain types of care and whatnot, do it. Do it. It would be very advantageous for us to be able to easily shop. Right now we do, sort of, our shopping through managed care insurance that some of us may have. The managed care provider just goes out there and does all that --- this sort of shopping behind, you know, the closed doors (so to speak) that that many of the rest of us cannot (or don't have the time to) do by making lots and lots of phone calls. But, you know, just looking at all the day-in day-out stuff, human nature, all the different factors, just everything that I've read [and] studied; [because I have] taught healthcare economics for almost ten years now, it just seems like that's where things are heading. And I know that may come with its own drawbacks and whatnot, but that's where it seems where we are. And it's gonna be sort of an amalgamation. There with the public option, you're gonna have Medicaid, Medicare, public option, private insurance, employer provided, not-employer provided, [and] exchanges. You're gonna have this sort of funny amalgamation of things you're gonna look at and say: that's truly American. It's different. It's differentiated. It's taking some different ideas from some of these different systems around the world, and it's sort of saying and making its own. Well, we'll see what happens.
Stitzel: My guest today has been Dr. Neil Meredith. Neil, thank you for joining us on The Econ Buff.
Meredith: Thank you for having me.
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