Single payer health care questions

[T.G.G. Moogly]

I've worked in clinical labs, including ones which have undergone the types of staff reduction and automation as described by ZiprHead.

Reducing staff does reduce cost, but every one of those analyzers is extremely expensive to purchase, must be maintained by trained staff, and uses very expensive reagents in order to carry out the tests. In a hospital that size, anything other than the tests outlined in ZiprHead are almost certainly sent out to another, larger lab where economies to scale can be found because guess what? Larger labs purchase reagents at cheaper prices and sign contracts to lease or purchase those analyzers for much less than a 500 bed hospital can. More esoteric, specialty tests are often sent to reference labs and labs which specialize in such tests, again, because of economies to scale. I'm not certain what robotic system ZiprHead means but of all the various analyzers I've seen and worked with, including very up to the minute technology currently in use, none are 'robotic,' or not what I would call robotic, anyway.

What I'm getting at is that the testing is not really less expensive because of reduced staffing. Staffing that remains is likely more highly trained and more expensive. The instruments, reagents, analyzers almost certainly are.

My point is that nobody really knows what the costs actually are.

Not the technicians, not the lab management, and certainly not the doctors who order the tests.

Because it's impossible.

And I speak as someone whose job was to determine the costs of pharmaceutical manufacturing, in a simple environment with routine lab testing. Medical tests are necessarily more difficult to cost, as there are even more permutations to consider.

That's true of everything. But it is possible and necessary to put price tags on things so a person can make a choice and that groups of people can make collective decisions. We make very complex equipment where I work, same as lots of industries, but we have prices on everything, even service calls. And it works.

 

[Toni]

My point is that nobody really knows what the costs actually are.

Not the technicians, not the lab management, and certainly not the doctors who order the tests.

Because it's impossible.

And I speak as someone whose job was to determine the costs of pharmaceutical manufacturing, in a simple environment with routine lab testing. Medical tests are necessarily more difficult to cost, as there are even more permutations to consider.

That's true of everything. But it is possible and necessary to put price tags on things so a person can make a choice and that groups of people can make collective decisions. We make very complex equipment where I work, same as lots of industries, but we have prices on everything, even service calls. And it works.

The big difference is that you don't have the same diversity of payer and payment schemes.

 

[bilby]

My point is that nobody really knows what the costs actually are.

Not the technicians, not the lab management, and certainly not the doctors who order the tests.

Because it's impossible.

And I speak as someone whose job was to determine the costs of pharmaceutical manufacturing, in a simple environment with routine lab testing. Medical tests are necessarily more difficult to cost, as there are even more permutations to consider.

That's true of everything. But it is possible and necessary to put price tags on things so a person can make a choice and that groups of people can make collective decisions. We make very complex equipment where I work, same as lots of industries, but we have prices on everything, even service calls. And it works.

Yes, it's possible and useful, as it sends signals to both consumers and producers about the value of goods and services relative to the rest of the economy.

However this signalling is valueless in the case of unavoidable and unwanted consumption; nobody chooses to break a leg or develop cancer because it is cheap; and when you are having a heart attack, you don't pick which ER to attend on the basis of their price list.

So in the case of the provision of medical care, a 'User pays' system cannot work effectively, and needs to be replaced with something else - and the demonstrably best 'something else' is to have the government collect progressive taxes, and use that money to pay for treatment based on medical need.

There are lots of nice theories out there that suggest otherwise, but observation always trumps theory.

'User pays' is a very useful tool; it works well in many different cases, and indeed is one of the best ways to make comparisons between dissimilar activities, and to fairly allocate resources. But it's not universal; some situations demand different tools. Healthcare and natural monopoly infrastructure are the obvious ones - in these cases, central funding by a democratically accountable body which offsets the inflationary effect of paying for these things by drawing funds out of the economy via progressive taxation gives a better outcome for all.

 

[ZiprHead]

Sure - so we know the costs have changed; and we can guess that they are now lower. But it's still very hard (and, perhaps ironically, too expensive) to work out exactly what the costs actually are.

Like all businesses, they will be 'calculated' based on educated guesswork and simplifying assumptions, some of which are inevitably wrong; and, like in all businesses, once a number is decided upon, it will be treated as gospel when used as an input into decision making and other calculations, with no estimate of error or hint that it might not be a hard fact.

All commerce is like this - lots of accountants doing highly accurate sums that are based on highly inaccurate initial data, and pretending that their results are meaningful.

It's astonishing that economies work at all. It's certainly amusing when economists are surprised by unexpected events - such events are (predictably) the norm in complex systems where the data about the system is fundamentally corrupt from the outset.

And of course the entire thing is even less accurate when demand is uncoupled from price, as is the case with health care. If you sell widgets, you know that widget prices are too high, because people stop buying widgets. But if you sell malaria tests, people don't stop getting malaria because your test kits are too expensive.

So prices tend to inflate, and in the absence of a signal from the market in the form of reduced demand, or any good understanding of the costs on which a reasonable price could potentially be based, they can inflate rapidly - and the more payers there are, the faster this can occur.

I've worked in clinical labs, including ones which have undergone the types of staff reduction and automation as described by ZiprHead.

Reducing staff does reduce cost, but every one of those analyzers is extremely expensive to purchase, must be maintained by trained staff, and uses very expensive reagents in order to carry out the tests. In a hospital that size, anything other than the tests outlined in ZiprHead are almost certainly sent out to another, larger lab where economies to scale can be found because guess what? Larger labs purchase reagents at cheaper prices and sign contracts to lease or purchase those analyzers for much less than a 500 bed hospital can. More esoteric, specialty tests are often sent to reference labs and labs which specialize in such tests, again, because of economies to scale. I'm not certain what robotic system ZiprHead means but of all the various analyzers I've seen and worked with, including very up to the minute technology currently in use, none are 'robotic,' or not what I would call robotic, anyway.

What I'm getting at is that the testing is not really less expensive because of reduced staffing. Staffing that remains is likely more highly trained and more expensive. The instruments, reagents, analyzers almost certainly are.

We did a fair amount of send-outs too. Although we were a reference lab for others.

As far as the robotic system, our lab was one of the first to have a robotic system installed. It was very expensive, in the millions IIRC, and we had people from all over the country touring the lab.

We were also a very early adopter of computerization of order/result reporting. I was our shift trainer for that system.

It was a very interesting time in my life.