Arnold Kling  

U.S. Health Care Costs

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John Goodman is indispensable on the topic of health care economics. In this instance, he points to a study of a hospital that delivers babies of at-risk mothers with good results at low cost.


So why not replicate Parkland's baby delivery system all over the country? One thing standing in the way is government. If all of Parkland's 16,000 expectant mothers were enrolled in Medicaid or had private insurance, for example, much of what Parkland does might not be possible

The cost of having a baby in this country has skrocketed over the years. We just presume that you need lots of doctor visits and ultrasounds, that you will sue your ob-gyn for a zillion dollars if the baby is not perfect, etc.

We could spend way less money near the beginning of life and near the end of life with little overall impact on our health statistics. But it would require big changes in institutions and cultural norms.

I personally am not on a crusade to change our culture around health care. I don't want to tell other people how much to spend on pre-natal care or end-of-life care. I just want them to be making decisions more on the basis of spending their own money, rather than someone else's.


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COMMENTS (7 to date)
Chris T writes:

One thing that would really help: limit hospital births to high risk mothers/babies. Hospitalization is overkill for most births.

Steve Sailer writes:

I'm all for spending less money at the end of life, but how do you know when the end of life is without spending a lot of money trying to prevent it? It's like the famous quote in the marketing industry: "Half of all the money I spend on advertising is wasted. I just don't know which half."

John Goodman writes:

Parkland's baby delivery system (the largest in the country, I believe) is efficient and of high quality precisely because none of the women are insured. That means Parkland can ignore Medicaid rules, private insurance perverse incentives to overspend and state and federal regulation of private insurance.

It's amazing what can be done if the bureaucracies don't interfere.

Doc Merlin writes:

And Steve wins the thread. You cannot reduce total costs by restricting the market, if you want to reduce total costs we need better knowledge of the future in the market. But instead of allowing for that (genetic testing etc) they are making it hard to gain the knowledge.

Steve writes:

All of that and Parkland is a government run facility. Of course, they still follow government set guidelines for care. You should also realize that Parkland is a teaching hospital. I would wager that their 79 residents provide a lot of that care. I am not sure that is applicable to non-teaching hospitals.

"That means Parkland can ignore Medicaid rules"

This puzzles me. Granted, we do only 3000 deliveries, but we do a large percentage of Medicaid patients. What rules would those be?

Steve

Hyena writes:

I care about our culture re health care. It costs me an ungodly fortune in insurance I don't use. If insurance companies could look into my motivations and see that I've really got no interest whatever in a bunch of poor procedures, I'd probably save quite a bit of money.

Tom writes:

Steve:

"Prenatal care delivered by nurses rather than doctors might not be allowed under many states’ Medicaid rules. Ditto for deliveries performed by midwives. And under typical state insurance regulations, patients with private coverage would be encouraged to see OBGYNs (because of zero patient cost sharing), where the cost would be higher and the overall quality of the pregnancy/delivery episode might not be as good (because of fragmented care).

"

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