Isn't it true that we spend huge sums on people who are in their last year of life, and isn't finding a socially acceptable way to stop doing that the best way to slow health-care spending? Link
This article discusses a major issue and controversy as it relates to our health care spending. It notes that 10% of health care dollars are spent on the 1% of people who die each year. This raises the difficult question of whether vital dollars should be spent on people in the final months of their lives. Does spending money on the chronically ill make sense? If so, what can be done to reduce this spending amount?
There is a fantastic product on insurance markets, entitled, "Long Term Care Insurance". It is actually so effective, and so efficient for policyholders that many companies are currently trying to get out of this market, quickly realizing their loss/benefit ratio. These are businesses nonetheless...and this type of insurance is legitimately so effective that many are trying to stop selling this financial instrument.
ReplyDeleteThis is however, a fantastic product that could be marketed by more specialized institutions or even from some tiers of the government.
How long-term care insurance functions is, a payment yearly, beginning around age 50--of $1,000-$5,000 a year. Medicare covers the first 90 days of hospital costs incurred, but nothing after in the present system. If we could move this, or change it, we can balance some of the costs by urging seniors to buy an insurance product similar to this. Some seniors would use the accumulated 1,000-5,0000/year later in life, for medical costs...while others would simply pay it out to government/the provisionary company. This could balance the present system to some degree, as payments out, from the government for long-term care would be balanced by those that pay for it--but don't end up needing it.
I'm not soliciting this as a perfect solution, as any insurance is a unilateral exchange, and this type of product stands to benefit one side over the other, with only marginal predictably--But we need new ideas for the system in summary. The current organization of medicare is obviously far due for reforms. Longer life-spans, earlier retirement, higher population levels, and government accounting for inflation have have excelled the current economic conundrum we face today.
ReplyDeleteThis is a very sensitive issue. From a purely economic prospective, it does not make sense to spend 10% of healthcare spending on those who are chronically ill. But when dealing with people in real life situations, the issue goes beyond economics. The government has the responsibly to protect and provide for citizens who are in dyer situations. Pulling the plug on the spending for the chronically ill might sound economically sound, but is not morally sound. For example, if someone was to die who could of lived a couple years long with the help of government healthcare spending, the friends of family of that person are going to have a very negative of the government's priority to provide for them and their loved ones. During the debate last night, Obama brought a very good point. He wants to increase healthcare spending so that people can take more preventive measures before facing chronic illness.
I don't think it is morally right to removed healthcare from people just because they facing chronic illnesses. Like Bianca says, from an economic perspective, it does not make sense to spend 10% of healthcare spending on people in the last months of their lives. No one wants to have their loved ones being taken away due to the lack of financial help. It is not fair. I agree with Alex in that the "Long Term Care Insurance" can be a good way to make this balance. This is definitely an important topic for the future president.
ReplyDeleteThe solution is not looking where to cut, but rather looking at how we can reduce the adverse selection inherent in our health care market. Medicare covers a large portion of very sick people because many are very poor. We need to insure young people so that they can get ideal preventative care, and so that we can widen and deepen our insurance pools. Perhaps even more importantly, we need to move our food culture in a healthier direction, the subsidies applied to corn and meat create massive distortions in the prices of foods, and tempt people with marginal means to eat poorly. Even for seniors, these improvements could be extremely effective at reducing costs, because they focus on promoting health rather than preventing sickness. Instead of subsidizing fast food hamburgers, we should tax them, and perhaps we could provide subsidies for foods that are actually healthy.
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