The health care “villains”? It’s the hospitals, not the insurers

Everybody loves to hate health insurance companies.  There are endless anecdotes about denying needed coverage and they aren’t the ones actually making us healthy– that’s the hospitals.  Thing is, it’s the hospitals that are the relative “villains” in our health care drama as they are the ones very much responsible for driving up the super-high prices that bedevil health care in this country.  Thus, a very nice piece from Reihan Salam that explains how it is that hospitals are able to so effectively drive up prices (for which we all pay one way or another):

As for why hospitals charge such high prices, it’s fairly simple: They do it because they can. In a competitive market, a provider who jacks up prices risks losing customers to competitors who charge less. But what if incumbent providers have the political muscle to keep competitors out of the market? What if regulators look the other way when incumbent providers buy up the competition, or even help the process along? That, in a nutshell, is the situation with America’s hospitals, as Chris Pope outlines in a recent Heritage Foundation paper onconsolidation in the health care market. Because most medical care is purchased not by consumers but by third parties, like Medicare and Medicaid or your insurance company, and because consumers rarely get access to reliable data on quality, they place an extremely high value on convenience. If you’re not saving money by shopping around for a better deal, and if you have no idea if you’re getting better care, you might as well go to the hospital closest to you. Hospitals that don’t face competition from other nearby hospitals thus have a huge amount of power in their local markets. If a private insurer refuses to pay a hospital’s exorbitant prices, a hospital can just walk and wait for the insurer’s customers to scream bloody murder over the fact that they can’t use their local hospital.

Bummer.  And if you are counting on politicians to save us, think again:

Forget about big cities—there is a hospital in every congressional district in America, and local hospitals are often among the largest employers in the district. One of the reasons President Clinton’s 1993 health reform effort failed is that he never won over the hospital lobby. President Obama learned from the Clinton debacle; hospitals were among his most important allies. Republicans get in on the act too. Right now, for example, a number of GOP lawmakers are pushing a Medicare “reform” that guarantees higher payments to doctors and hospitals today in exchange for the promise of spending reductions a decade or two from now. Good luck with that.
You can hardly blame them though. The health sector employs more than a tenth of all U.S. workers, most of whom are working- and middle-class people who serve as human shields for those who profit most from America’s obscenely high medical prices and an epidemic of overtreatment. If you aim for the crooks responsible for bleeding us dry, you risk hitting the nurses, technicians, and orderlies they employ. This is why politicians are so quick to bash insurers while catering to the powerful hospital systems, which dictate terms to insurers and have mastered the art of gaming Medicare and Medicaid to their advantage. Whether you’re for Obamacare or against it, you can’t afford to ignore the fact that America’s hospitals have become predatory monopolies. We have to break them before they break us.  [emphasis mine]
Hmmmm.  How do you break government monopolies.  Can you say, “government regulation”?  Of course, Salam is actually a “reform conservative” so he’s not about to openly admit government is the solution:

Curbing the power of the big hospitals isn’t a left-wing or a right-wing issue. Getting this right will make solving all of our health care woes much easier, regardless of where you fall on the wisdom of Obamacare. Let’s get to it.

Of course this is a left vs. right issue.  Who does Salam think will curb the power of the big hospitals?  A groundswell of populist revolt?  No.  Government.  When you look at all those modern democracy health systems that out-perform us, every last one does so, in part, by relying upon government to help keep prices down.  Until we make a serious effort at doing the same (the ACA is a partial effort) we are going to continue to be bankrupted by health care prices.

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Photo of the day

Nothing like a good “super tide.”  From a cool Telegraph gallery of the phenomenon:

The supertide submerges Mont Saint-Michel's narrow causeway, cutting off the historic commune

A “supertide” is expected to affect coastlines around the North Sea, the English Channel and to a lesser extent in the Mediterranean. The world-famous Mont Saint-Michel on France’s northern coast was cut off by an especially big tide, with a difference between high and low tide of 47.6 ft (14.15 metres)

Picture: AP

The future of incarceration?

Great piece by Mark Kleiman and colleagues in Vox about how to re-think incarceration.  I’m actually teaching Prisons in my Criminal Justice Policy class this week and this one goes straight into required reading.  It actually builds on ideas in Kleiman’s great book, When Brute Force Fails.  Our current system of incarcerating of way too many people is absurdly costly in both dollars and the needless damage to human lives.  So, here’s the proposal:

America’s prison state is a disaster. One percent of the adult population is behind bars, and corrections is squeezing higher education out of state budgets. We have five times as many people in prison as we ever had before 1980, and five times as many (per capita) as any other advanced democracy.

What’s worse is that it is, in this era, a completely unnecessary disaster. It’s simply not true that to punish someone and control his behavior you need to lock him up and pay for his room and board.

While it lasts, prison is horrible for the prisoner and expensive for the state. And things often don’t get better when it ends: of the people released from prison today, about 60 percent will be back inside within three years…

For the transition from prison to life outside to be successful, it needs to be gradual. If someone needed to be locked up yesterday, he shouldn’t be completely at liberty today. And he shouldn’t be asked to go from utter dependency to total self-sufficiency in one flying leap. He needs both more control and more support. Neither alone is likely to do the job.

Of course, both control and support cost money. But so does prison. The trick is to start the re-entry process before what would otherwise have been the release date, so the money you spend in the community is balanced by the money you’re not spending on a cell. The average cost of holding a prisoner comes to about $2,600 per month. At the same time, even very intrusive supervision leaves a released offender freer than he would have been on the inside. So even a program that looks expensive and intrusive compared with ordinary re-entry or parole is cheap and liberating compared with a cellblock…

Start with housing. A substantial fraction of prison releasees go from a cellblock to living under a bridge: not a good way to start free life. Spend some of the money that would otherwise have financed a prison cell to rent a small, sparsely furnished efficiency apartment. In some ways, that apartment is still a cell and the offender still a prisoner. He can’t leave it or have visitors except as specifically permitted. The unit has cameras inside and is subject to search. But he doesn’t need guards, and doesn’t have to worry about prison gangs or inmate-on-inmate assault.

Drug testing and sanctions can avoid relapse to problem drug use; GPS monitoring can show where the re-entrant is all the time, which in turn makes it easy to know whether he’s at work when he’s supposed to be at work and at home when he’s supposed to be at home. This makes curfews enforceable and keeps him away from personal “no-go” zones (the street corner where he used to deal, the vicinity of his victim’s residence). GPS would also place him at the scene of any new crime he might commit, thus drastically reducing his chances of getting away with it and therefore his willingness to take the gamble.

Start with housing. A substantial fraction of prison releasees go from a cellblock to living under a bridge: not a good way to start free life. Spend some of the money that would otherwise have financed a prison cell to rent a small, sparsely furnished efficiency apartment. In some ways, that apartment is still a cell and the offender still a prisoner. He can’t leave it or have visitors except as specifically permitted. The unit has cameras inside and is subject to search. But he doesn’t need guards, and doesn’t have to worry about prison gangs or inmate-on-inmate assault.

Drug testing and sanctions can avoid relapse to problem drug use; GPS monitoring can show where the re-entrant is all the time, which in turn makes it easy to know whether he’s at work when he’s supposed to be at work and at home when he’s supposed to be at home. This makes curfews enforceable and keeps him away from personal “no-go” zones (the street corner where he used to deal, the vicinity of his victim’s residence). GPS would also place him at the scene of any new crime he might commit, thus drastically reducing his chances of getting away with it and therefore his willingness to take the gamble.

The apartment functions as a prison without bars. [emphasis mine]

It’s well worth reading through the whole thing, but suffice it to say, this proposal is win, win, win, win.  Better for the prisoners, better for society, less recidivism, less financial expense, etc.  The only downside, if you see it that way, is that it is less punitive.  Alas, that certainly makes it harder (though not nearly as much as status quo bias).  I think most Americans (and polling suggests as much) would prefer a criminal justice system with much less recidivism that is less economically costly if the “cost” is that prisoners suffer less.

Anyway, the technology is there to make this feasible in a way it wasn’t not long ago.  Here’s somewhere where we can truly leverage technological advancements for substantial improvements over existing policy.  The only thing lacking at the moment, oh-so-sadly, seems to be political will.

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