The goal of the plan’s structure should be to maintain the customer’s cost incentive not to utilize services unless they really need them, while at the same time preserving the reason we buy insurance in the first place: risk sharing.

Consider a plan for a single person with a deductible equal to the median per capita health care spending in the United States (say $3000) that covers all visits, procedures and drugs at 50% until the deductible is reached, then at 95% after that. Maybe add a max-out-of-pocket clause of $10,000 per year.

I know I would think twice about certain health care “purchases” if I were going to pay 50% of the cost. The deductible should be high enough that most people won’t reach it, otherwise everyone banks on hitting it and bases their decisions on the 95% post-deductible coverage.

http://www.nytimes.com/2010/07/29/us/politics/29bai.html?hp

I got this plan right? Because if that’s the case . . . yes. That would totally work. If things got better, then things would be better. Yes.

. . . and a personal tip of the hat to throwing “British system” in the 1st paragraph. Totally irrevelant to your point, but really emotional trigger — saying “European Socialist” would have been too obvious, agreed.

Besides, you’ve got the commenters to pick up the ball and run with it. So well done in terms of professionally manipulating people. A skillful job, Mr. Goldfarb. If you want to make it less obvious next time, bury the British reference until about the 35%+ mark. Get at least one random objective point going, then call the trigger. Right in the opening is a tad gouche.

It is very rare for hospital to undertake extraordinary measure on terminally ill patients. Not only is there a cost element, but within the medical community there is a realization that extraordinary measures (and I don’t mean keeping the patient comfortable) are cruel as most medical procedures are intrusive, painful and dangerous. The exception historically has been for ground breaking work — think heart transplants etc. But then the patient has decided to “donate” their body to science.

Other countries (than the U.S.) have a very well established “hospice” system, that provides end of life counselling for both patient and family (Ms Palin’s infamous Death Panels). This in not something that is common in North America because of the country’s litigious nature (again no criticism — just an observation). The reality is also that doctors are today much better trained to understand when end of life treatment is appropriate. These are complex ethical and moral problems with which doctors have to deal with.

As an example of the change in attitude, 15 years ago a treating physician would usually give to the patient and the family a positive statement as to the nature and progression of the illness. It was though that hope by the family and the patient would “improve” the healing, and increase the likelihood of recovery. Believe it not when this “view” was tested it proved to be false, because as soon as the patient faced a setback (which happens all the time), he became discouraged. Today, “failure is not an option attitude” is no longer part of the vocabulary of the treating physician, they will provide a forthright analysis of the outcome, providing the patient (and his family) with a clear outlook (the internet has also helped): This has proven to be the best outcome for patients since they can “trusts” their physicians — counterintuitive, yes but that’s the result of empirical analysis

And let’s face it, health care will always be rationed. We need to take care away from patients in their last months of life and replace it with hospice care and palliative care. Yes, doctors are competent to make the determination whether you are on your last legs.

And then, more social medicine. More initiatives against obesity, diabetes, and heart disease. More initiatives to increase the health status of the general population. That’s how we provide meaningful care and strengthen our economy to boot.

I think of Dick Cheney and his multiple heart attacks and stints and life saving operations and his recent implant of a heart pump. I can’t imagine the cost of all his medical care (I’ve read the pump could be a couple hundred thousand dollars) but I have no doubt his is also paid for by his medical insurance from the government.

The difference between the two men is income. My friend lives on a small pension; if he had to pay out of pocket for his care, he would be long dead. In Cheney’s case, he has made millions of dollars over the years and could easily pay for his treatment.

Question: should Cheney (as a symbol) pay for his treatment? Should people of vast wealth pay the same amount of health insurance as the average Joe?

It seems fundamentally wrong to me that people who can afford to pay don’t have to pay.

I’m sure no one agrees with me and I’m not suggesting it would work as legislation. I’m just telling you how it makes me feel: like it is intrinsically wrong.

Gman
I was very struck by what you wrote: that we are 49th in life expectancy. There has to be a moral in that story related to the quality of our healthcare system.

I’d be curious how that number breaks down socio-economically because I have a feeling that at least right now, our healthcare system is better for some people than others i.e. people without healthcare die faster than people who can afford medical care — no question — so I wonder how many of those who die young are living in poverty in this country. Maybe that number is less in those other countries and that partly accounts for the difference in overall life expectancy. Certainly the number is an average of all the deaths.