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How Big Data Is Destroying the US Healthcare System
KindMind writes "Robert Cringely writes on the idea that technological advances have changed the health care system, and not for the better. The idea is that companies now rate individuals instead of groups, and so move to a mode of simply avoiding policies that might lose money, instead of the traditional way that insurance costs were spread over a group. From the article: 'Then in the 1990s something happened: the cost of computing came down to the point where it was cost-effective to calculate likely health outcomes on an individual basis. This moved the health insurance business from being based on setting rates to denying coverage. In the U.S. the health insurance business model switched from covering as many people as possible to covering as few people as possible — selling insurance only to healthy people who didn't much need the healthcare system.'"
Is this the real Robert X. Cringley, or the dishonest Sears Robert X. Cringley.
"National Security is the chief cause of national insecurity." - Celine's First Law
Several years ago, I was called by the company providing the extended warranty on my appliances. The were offering me a renewal of the warranty. I said I'd only renew on the dishwasher. They responded that it was the only appliance they wouldn't cover. When I declined the extension, they reminded me that things are more likely to break the older they get.
I didn't feel like pointing out the reason they were declining coverage on the one appliance was probably because it was the only one that needed to be repaired, and twice at that. As such, it would be the most likely to fail again. And it did.
Still don't make it right though.
You're forgetting that a healthy free market requires healthy competition and intelligent consumers who are willing and capable of shopping around. In healthcare, neither is generally true.
If you are on an ambulance speeding towards the nearest hospital, you are hardly in a position to ask for prices (particularly if unconscious), and you couldn't get the EMTs to re-route to a different hospital even if you tried.
In cases where a patient is in need of non-critical care, it's highly unlikely that he or she has enough medical training to make informed decisions about which treatment should or should not be performed. Hospitals do not regularly advertise prices so you can shop around, either.
This is "evidence-based medicine", n'est-ce pas?
I'm generally not a "government solutions" kind of person, but I do wonder how private insurance is allowed to exist for essential things like health care.
How is essential defined here? Which of the following goods and services are essential?
Every single one of these things could save lives or drastically improve one's quality of life. Some of these are commercially available, some are available in hospitals, some are neither. Is it the presence of a doctor that turns some of these things into "essentials" and others into goods? Which of these should we allow profits on? If a government system does not cover any of these things, is it unethical?
If profits are unethical, should we allow profits on anything? Why?
I know this is a smarmy post—I'm not trolling, honestly. But I find people come into these conversations with a pre-existing mental framework that "health = essential" and therefore "profiting on health is unethical" without much exploration. Not everything offered in the health care industry is essential or life-saving, and many goods and services which are absolutely essential and life-saving are offered privately with no objections from anybody (e.g., refrigerators). What makes "health care" exist outside of the framework of goods and services in general? Most health care spending is dedicated to gradually improving quality of life, not saving people from axe wounds. If allowing profit and unrestricted competition is a bad way to improve people's quality of life, why are we even talking about health? Shouldn't we jump to the conclusion that anything that improves people's lives should be strictly non-profit and centrally planned?
That is only due to the US's relative geographical isolation. In Europe, if you are unhappy with the free care offered to you (typically because cosmetic treatments require long waiting times or prohibitive prices), even people who are not particularly wealthy can take a Ryanair flight a few countries over and get it done there right away for cheap. Hungary and Estonia do a brisk trade in laser eye surgery, and all of Eastern Europe is attractive for people wanting cheap dental treatments. It's not wealthy people going there, but any citizen who can pony up the paltry cost of a Ryanair flight.
This is slightly off topic, but I think it's not just the application of computing power to medical data, but the application of computing power to control and recover a lot of costs has generally been so successful that I think it's actually cutting the "slack" out of the economy and contributing to the decline of the middle class and growing economic inequality.
They're shaving the savings off the top and putting it in their own pockets, but the economic byproducts of the savings (cheaper goods) doesn't offset the economic loss of the savings not being spent on goods and labor, like additional inventory or additional workers.
Say a business sells a widget for $10. Their cost to make the widget is $4 and because of imperfect data/processing, sales forecasts, shipping, etc are all less accurate. They have to carry inventories to meet customer needs. Inventories require workers, facilities (which need construction...), they have to buy more raw materials. So $2 is added in overhead to the $4 and the profit on the widget is only $4.
With improved data/processing, they gain efficiencies. They carry as close to zero inventory as possible. They buy less raw materials. Need fewer workers. Smaller facilities (...less construction, fewer carptenters, less building materials, less ....) and so on. But the nominal cost of the widget doesn't go down, but the margin increases to $5 per widget because they save $1 in costs.
Since the price of the widget doesn't go down and at best rises slower, the consumer is only marginally benefitting, especially since the depressed employment resulting from greater operating efficiency results in lower wages, further mitigating any price declines or slowing price increases.
The $1 that was previously "lost" on administrative costs is now executive salaries, bonuses and benefits where it produces less economic impact than had it been spent on productive economic activity.
No, the problem is that the first pill costs $4.5 billion, then every pill after that costs 5 cents.
At the point where I have more to lose than to gain from trying to take your shit. Imagine I have incurable disease which will kill me within a month or two, but I have no way in hell to pay $30000 required. Then tell me, why exactly shouldn't I kill you and take your shit? I have nothing to lose anyway. This 'socialism' you so despise is a pressure valve that prevents violent revolution.
Yep, that's why we should have a single payer system of health care coverage. The hell with the insurance company middle men.
I have no problem with a single payer system for health care but everyone treats it as some magic silver bullet that will fix everything. It won't fix anything and if implemented like today's Medicare it will guarantee healthcare will be more expensive because of all of the illegitimate activity that current bilks 10-15% (latest estimates) through improper payments. That's far more than the profit margins of nearly every single insurance company. What most people don't realize is that insurance business is more tightly regulated than nearly any other industry, their premium and losses are scrutinized to be disallowed from making too much money (even though insurance companies try their damned best to get around it).
The US health care system needs to be addressed, point by point, from the bottom up - not the top down. Everyone loves to blame insurance companies because they're the ones holding the bag, but imho while certainly *not* innocent they're a small villain in the very long complicated list of bad guys.
Disclosure: I work for an insurance company
It amazes me that people in the US actively fight against universal coverage.
Governments are ideally suited to provide this kind of service. They can still contract out to provate suppliers if they wish.
I don't see the same people suggesting that the road networks should be privatised so they'd have to negotiate a price for each stretch of road they used.
Ideology trumping experience. If you can't look at Europe > Universal cover even for the homeless coupled with Lower costs, and admit it is better then you are an idiot.