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Socialized Healthcare and the Problem of Calculation

Joe_Stocks

Back from the Dead
The most definable characteristic of free market capitalism is the price system. The price system allocates scarce resources in the most efficient uses. And the price system goes along the profit and loss system. Enterprises that produce something or provide a service are rewarded for providing it in an efficient manner. Those that operate inefficiently record losses and are punished. This spurs innovation and ingenuity as industries compete at being the most efficient at their given task.

Socialism does away with the price system which then means that socialism does away with the profit and loss system.

So, the question invariably arises; how will the best types of healthcare be rewarded under socialized healthcare? Under socialism there is no incentive to be more efficient because there is no calculation system. For example, under socialized healthcare how would treatment X be regarded as more efficient than treatment Y? Under the free market system the treatment that produced the best results at the cheapest cost would be rewarded with profits whereas the treatment that was less efficient would be punished with losses.

The same scenario could be posed in regard to doctors. Will poor doctors be punished under socialized healthcare and will good doctors be rewarded with more pay under socialized healthcare? And under socialized healthcare how could there be a system to determine this?
 

Dunemeister

Well-Known Member
The most definable characteristic of free market capitalism is the price system. The price system allocates scarce resources in the most efficient uses. And the price system goes along the profit and loss system. Enterprises that produce something or provide a service are rewarded for providing it in an efficient manner. Those that operate inefficiently record losses and are punished. This spurs innovation and ingenuity as industries compete at being the most efficient at their given task.

This is so much BS, I can't even begin.

Socialism does away with the price system which then means that socialism does away with the profit and loss system.

It doesn't do away with the price system, it modifies it.

So, the question invariably arises; how will the best types of healthcare be rewarded under socialized healthcare? Under socialism there is no incentive to be more efficient because there is no calculation system. For example, under socialized healthcare how would treatment X be regarded as more efficient than treatment Y? Under the free market system the treatment that produced the best results at the cheapest cost would be rewarded with profits whereas the treatment that was less efficient would be punished with losses.

Efficiencies are calculated in terms of cost per procedure. What's difficult to calculate is where best to introduce efficiencies because being more efficient may kill people. But since lives don't factor into the equation, certain forms of capitalism may be fine with this.

The same scenario could be posed in regard to doctors. Will poor doctors be punished under socialized healthcare and will good doctors be rewarded with more pay under socialized healthcare? And under socialized healthcare how could there be a system to determine this?

Look at France. In France, doctors are incentivized to create good health outcomes for their patients. They get bonuses for getting their clients off alcohol and nicotein dependency. In America, there are no incentives, other than moral ones. They are also rewarded for providing treatments that cure or ameliorate conditions such as cancer, whereas in the United States, there is arguably an incentive (overall, not necessarily for doctors specifically) to perpetuate health problems. But that's good 'ol capitalism for you. If there's a buck to be made in keeping people sick or obese, that's what we'll do. YEEEEEEE HAAAAAAAAAAA!!!!!!!!!!!
 

methylatedghosts

Can't brain. Has dumb.
pffft.

Seems to work in countries that have it..

There's really no problem.

I think what you've just spouted there is a whole lot of bollocks, really.

Healthcare shouldn't be focussed on profits and losses. At all. That's not why hospitals exist.
 

Panda

42?
Premium Member
The most definable characteristic of free market capitalism is the price system. The price system allocates scarce resources in the most efficient uses. And the price system goes along the profit and loss system. Enterprises that produce something or provide a service are rewarded for providing it in an efficient manner. Those that operate inefficiently record losses and are punished. This spurs innovation and ingenuity as industries compete at being the most efficient at their given task.

Socialism does away with the price system which then means that socialism does away with the profit and loss system.

So, the question invariably arises; how will the best types of healthcare be rewarded under socialized healthcare? Under socialism there is no incentive to be more efficient because there is no calculation system. For example, under socialized healthcare how would treatment X be regarded as more efficient than treatment Y? Under the free market system the treatment that produced the best results at the cheapest cost would be rewarded with profits whereas the treatment that was less efficient would be punished with losses.

The same scenario could be posed in regard to doctors. Will poor doctors be punished under socialized healthcare and will good doctors be rewarded with more pay under socialized healthcare? And under socialized healthcare how could there be a system to determine this?

Do you even know what you are talking about here? I don't know where to start and just how wrong every word you have written is. I advise you to study how something like the NHS in the UK works then come back to this.
 

9-10ths_Penguin

1/10 Subway Stalinist
Premium Member
Two questions:

- it seems like you're assuming that the market equilibrium in a for-profit system would be at the best point for medical care; why? Do you have any reason to assume that market-priced benefit and societal benefit will be in lock-step with reach other?
- how exactly does it stifle innovation for doctors and hospitals to receive insurance cheques with a government logo instead of a corporate one?
 

Shadow Wolf

Certified People sTabber
Why should a system that revolves around profits and loss even be a concern for the medical field? The only reason the costs of any medical procedure or medicine cost such outrageous prices is because of privatized insurance. Someone else was paying the bill, so costs went up. Having the government pay the bill wont help the inflation, but at least people wont have to suffer with some of the serious problems that come about, because just one visit to the doctor can cost as much as weeks worth of groceries. Add medicine, lab tests, and x-rays, and the bills get very high. With an E.R. visit, your automatically paying for much more. Maybe it's just me, but I don't think a serious injury or illness should prevent you from eating or paying rent for awhile, or a necessary surgery force you to file bankruptcy. It definitely should never to cause you to loose your home.
Facing a Choice Between Home And Health Care - WSJ.com
 

Valjean

Veteran Member
Premium Member
This has not proved a problem in other countries, Joe. They have modern, high-tech systems, both more advanced and more efficient than the deteriorating American system. Innovation and research have not suffered, public health is superior, and none even approach the cost of US healthcare.

The focus in the private, US system is profit, not healthcare, people or social benefit, and the results reflect this.
As far as efficiency, consider that the single-payer US system operates at less than 3% overhead, while the private system consumes ten times this, and this doesn't even take into consideration hospital administrative costs, inflated parmaceutical prices and other charges.
You might also consider some of the other socialized services in the US like police and fire departements. Would you really want to have to contract with private firms for these?
 
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anders

Well-Known Member
So, the question invariably arises; how will the best types of healthcare be rewarded under socialized healthcare? Under socialism there is no incentive to be more efficient because there is no calculation system. For example, under socialized healthcare how would treatment X be regarded as more efficient than treatment Y?
It's not a black or white world. In a General Health Care (GHC) system, there will often, like in Sweden, be private initiatives as well. If you're sufficiently well off and think that you have found a better way than the GHC funded ones, you're very welcome to spend any amount to shorten the waiting lists (if existing) of the official system.

The incentive for the GHC "business" is that if an Exodus to private alternatives were to be perceived, GHC funding might be reduced for the affected units. There's a mostly healthy competition between GHC and private care.

"how would treatment X be regarded as more efficient than treatment Y?"

We have a whole governmental agency concerned with evaluating drugs and procedures and medical appliances etc. Our "socialism" guarantees efficient and non-biased evaluations. Outmoded or inefficent and/or unproven or just "alternative" methods won't get UHC money unless scientifically vetted and proven, but sometimes may still be allowed for the gullible spender, but will OTOH often be totally banned if judged to be endangering the patient.

Returning to the first quoted sentence, the best healthcare within a sector (as perceived by patients, official agencies, and a very free press) will initially find lots of applicants. For a short time, waiting lists might look huge. Then, a re-allocation of funds and a search not least among "competitors" of methods to get more efficient will
1) draw competent staff to the leaders,
2) increase efforts and results from the trailers,
3) the rewards would be that the leaders will have an active working environment that attracts top performers and
4) the region where those leading-edge performers work will attract people who want to be close to top-notch care, should they need it.

But please note that in UHC like ours, your residence will not restrict your choice too much. If waiting for whatever rather necessary treatment is more than a few weeks, you're free to shop around in other regions or even in other countries. Anyway, you'll never pay more per year than some USD 115 for the combined medical procedures and analyses and X-rays or MRI's etc. etc. Drugs are extra: an annual max of USD 230, even if the label price is thousands of dollars.

Case in point:

Diagnosing my prostate cancer involved a GP visit, three bloood tests, two sets of rectal biopsies.

Treatment started with premedication hormones labelled at some USD 1000.

Then followed "brachythrapy" radiation. For the faint of heart, I won't describe it in detail, but it involved sedation and some fancy equipment sticking 18 not too thin needles into the offending gland and three days in hospital. Followed up by 13 sessions of radiotherapy in a gadget that costs a couple of millions of $.

All within a year = a total of $345 (see above).

I'm sure you by now understand that any political party suggesting that we scrap our UHC system would be dead before conception.

I should mention that the first post-treatment tests suggest that the treatment was successful.

Should you want more on UHC, I'd be happy to tell you how I was treated and rather successfully recovered from my stroke...
 
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Joe_Stocks

Back from the Dead
Hi Dunemeister,

It doesn't do away with the price system, it modifies it.

In what ways?

Efficiencies are calculated in terms of cost per procedure. What's difficult to calculate is where best to introduce efficiencies because being more efficient may kill people. But since lives don't factor into the equation, certain forms of capitalism may be fine with this.

How would per procedure costs be calculated? I want to know how socialized healthcare would cut costs and increase efficiency without rationing care.

Look at France. In France, doctors are incentivized to create good health outcomes for their patients. They get bonuses for getting their clients off alcohol and nicotein dependency.

Where do these bonuses come from? Is it from the taxpayers? Do bad doctors get punished for providing substandard care?
 

9-10ths_Penguin

1/10 Subway Stalinist
Premium Member
I think I should go back and re-address the OP more thoroughly:

The most definable characteristic of free market capitalism is the price system.

Arguably, but okay.

The price system allocates scarce resources in the most efficient uses.
Incorrect... or at least misleadingly over-simplified.

And the price system goes along the profit and loss system.
No, it doesn't. Not necessarily, anyhow.

To use an example that I'm familiar with, take driver route selection: it has a pricing system, where "price" is measured in travel time. There is no "profit" and "loss"... certainly not financial profit and loss in any case.

Enterprises that produce something or provide a service are rewarded for providing it in an efficient manner. Those that operate inefficiently record losses and are punished. This spurs innovation and ingenuity as industries compete at being the most efficient at their given task.
Incorrect. Under a free market system, an enterprise is "rewarded" just as much for turning an internal cost into an external one as it is for eliminating the cost through efficiency.


Socialism does away with the price system which then means that socialism does away with the profit and loss system.
Socialism doesn't do away with the price system. It exists no matter what. If price isn't reflected in financial cost, it will still be reflected in effort, time, resources and other measures of non-financial cost to the supplier and consumer.


So, the question invariably arises; how will the best types of healthcare be rewarded under socialized healthcare? Under socialism there is no incentive to be more efficient because there is no calculation system. For example, under socialized healthcare how would treatment X be regarded as more efficient than treatment Y? Under the free market system the treatment that produced the best results at the cheapest cost would be rewarded with profits whereas the treatment that was less efficient would be punished with losses.
Lots of ways. For example, the measurement that makes the news most often here is wait time: the government monitors the average wait times for different procedures, and encourages hospitals to lower those wait times. The quicker a patient gets an MRI, hip replacement or cataract surgery, the better.

However, there are a ton of other measurements for how well a health care system is doing. I'm sure a quick Google search will pull up the annual reports that many agencies and minstries put out that list things like rates of infection, rates of mortality, patient satisfaction, cost per patient, etc. Most of them correlate much better with actual quality of care than the bottom line on a hospital balance sheet.


The same scenario could be posed in regard to doctors. Will poor doctors be punished under socialized healthcare and will good doctors be rewarded with more pay under socialized healthcare? And under socialized healthcare how could there be a system to determine this?
I don't know if you'd call it "socialized healthcare", but under the government-funded health care system where I am, doctors get paid based on the work they perform: one amount for a checkup, another for a full physical, something else for diagnosing and treating an illness. The more work a doctor does and the more patients he or she treats, the more that doctor makes.
 

Joe_Stocks

Back from the Dead

Hi meth and panda,

pffft.

Seems to work in countries that have it..

There's really no problem.

I think what you've just spouted there is a whole lot of bollocks, really.

Healthcare shouldn't be focussed on profits and losses. At all. That's not why hospitals exist.

Do you even know what you are talking about here? I don't know where to start and just how wrong every word you have written is. I advise you to study how something like the NHS in the UK works then come back to this.

Well, I want to know why the NHS has a waiting list and cancels hundreds of thousands of surgeries (Valerie Elliot, " Bed Blockers' Farmed Out of B&B Recovery," The Times (London), February 9th, 2002) while thousands of beds are empty on a given day ("Publication of Latest Statistics on Bed Availability and Occupancy for England, 2000-2001," UK Department of Health Press Release, September 19, 2001).
 

Joe_Stocks

Back from the Dead
Hi Shadow Wolf,

Why should a system that revolves around profits and loss even be a concern for the medical field?

Price competition would increase efficiency and lower prices which would make healthcare more affordable to the greatest amount of people.

The only reason the costs of any medical procedure or medicine cost such outrageous prices is because of privatized insurance.


Yes, this is one reason, but it is not the only reason. Any time a third party pays for something and people don't look at the price, the costs will go up.

Having the government pay the bill wont help the inflation, but at least people wont have to suffer with some of the serious problems that come about, because just one visit to the doctor can cost as much as weeks worth of groceries. Add medicine, lab tests, and x-rays, and the bills get very high. With an E.R. visit, your automatically paying for much more. Maybe it's just me, but I don't think a serious injury or illness should prevent you from eating or paying rent for awhile, or a necessary surgery force you to file bankruptcy. It definitely should never to cause you to loose your home.

How exactly would the government lower the costs of healthcare?
 

9-10ths_Penguin

1/10 Subway Stalinist
Premium Member
Well, I want to know why the NHS has a waiting list and cancels hundreds of thousands of surgeries (Valerie Elliot, " Bed Blockers' Farmed Out of B&B Recovery," The Times (London), February 9th, 2002) while thousands of beds are empty on a given day ("Publication of Latest Statistics on Bed Availability and Occupancy for England, 2000-2001," UK Department of Health Press Release, September 19, 2001).
If I were American, even before asking that question, I'd want to know why my health care system compares unfavourably to the British one, which you've declared to have serious flaws:

http://www.nytimes.com/2007/08/12/opinion/12sun1.html?_r=1
 

Joe_Stocks

Back from the Dead
Hi Seyorni,

As far as efficiency, consider that the single-payer US system operates at less than 3% overhead, while the private system consumes ten times this, and this doesn't even take into consideration hospital administrative costs, inflated parmaceutical prices and other charges.

Is this more efficiency or because the government has a greater power to turn out the spigot to healthcare and often does?
 

Joe_Stocks

Back from the Dead
Hi anders,

It's not a black or white world. In a General Health Care (GHC) system, there will often, like in Sweden, be private initiatives as well. If you're sufficiently well off and think that you have found a better way than the GHC funded ones, you're very welcome to spend any amount to shorten the waiting lists (if existing) of the official system.

But there are waiting lists, correct? Sweden cannot overturn basic economic laws. For every healthcare success story you can tell there are numerous stories of people waiting for healthcare. And if they don't have the money, then they are out of luck. The government has to ration the care.
 

Valjean

Veteran Member
Premium Member
Joe, I think you're spouting industry talking points and ignoring the actual facts.
Price competition restricts access, decreases efficiency and increases costs. How can you ignore the experience of the rest of the developed world? It's not like this is a new, controversial or untried concept.
 

Autodidact

Intentionally Blank
Joe:

In the actual, as opposed to theoretical world, who is spending more per capita on health care, the U.S., Canada, Spain or Australia? In fact, in the real world, who is spending the most per capita on health care in the entire world? And in the real world, who has a greater life expectancy, the U.S., Canada, Spain or Australia?
 

Joe_Stocks

Back from the Dead
Hi 9/10ths,

Socialism doesn't do away with the price system. It exists no matter what. If price isn't reflected in financial cost, it will still be reflected in effort, time, resources and other measures of non-financial cost to the supplier and consumer.

And exactly how do you measure that in a non-monetary way?

Lots of ways. For example, the measurement that makes the news most often here is wait time: the government monitors the average wait times for different procedures, and encourages hospitals to lower those wait times. The quicker a patient gets an MRI, hip replacement or cataract surgery, the better.


Because there has to be waiting lines or lists, right? There is no way getting around this. This is one of the surefire ways countries with socialized healthcare can control costs; withhold healthcare from people.

If I were American, even before asking that question, I'd want to know why my health care system compares unfavourably to the British one, which you've declared to have serious flaws:

http://www.nytimes.com/2007/08/12/op...sun1.html?_r=1

Most certainly does the U.S. system have its flaws. Precisely because third parties (be it government or insurance companies) pay for healthcare instead of the actual consumers of healthcare paying for it. Socializing healthcare would only make the problems worse.
 

Panda

42?
Premium Member
Hi meth and panda,





Well, I want to know why the NHS has a waiting list and cancels hundreds of thousands of surgeries (Valerie Elliot, " Bed Blockers' Farmed Out of B&B Recovery," The Times (London), February 9th, 2002) while thousands of beds are empty on a given day ("Publication of Latest Statistics on Bed Availability and Occupancy for England, 2000-2001," UK Department of Health Press Release, September 19, 2001).

Those reports are 7 or 8 years old and completely outdated. The NHS is currently having a total overhaul of operations and how it is managed. Waiting times are coming down currently.
Still it is far better than the American system, at least we all get healthcare.
 
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