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Healthy bodies, healthy markets

None of us are getting any younger. This truth, long recognised, has finally dawned on the Australian government, and the media is in panic mode about the cost of it all.

No wonder. Australia has a socialised medicine and health system, so the costs could well rise to infinity. At least we will be able to read about it because one of the few medical procedures in Australia that are not regulated to death is laser eye surgery.

But there are none that are as blind as those who will not see.

10 comments to Healthy bodies, healthy markets

  • steer

    I’m not much informed about the Australian healthcare system, but the US healthcare system is staggeringly inefficient. There may be other private systems that work better, in which case I’d love to know more about them.

    It is of course very hard to judge the effectiveness of healthcare, since there’s no criteria for healthiness. Do you go for mortality figures? Some ‘quality of life’ figure? How about an individual’s own perceived healthiness?

    Prior to working in the field, I had always assumed that someting like the US system resulted in significantly better healthcare for the middle-income and better population, and slightly worse care for the poorer. I now realise, that it results in adequate but vastly overpriced care for the middle-income or better, and inadequate but still overpriced care for the poorer. It’s really quite an impressive failure of the market to get stuff right.

  • Well, I am not sure the US healthcare system is really much of a “market”. It is run by private companies in a way that those in many other countries are not, but the trouble is that everything is regulated to death, and (as with healthcare pretty much everywhere) in a lot of cases the people making the decisions about what is to be spent are not the same people who are actually spending the money. And this leads to high prices.

    And having used both the Australian and British systems, I have to say that the Australian state system (where the healthcare is usually provided by the private sector and the government then pays a substantial portion of the cost) is vastly better than the British system, where everything is nationalised and everyone actually works for the government.

  • steer

    “the people making the decisions about what is to be spent are not the same people who are actually spending the money.”

    I agree – but isn’t this necessarily the case in healthcare? Consumers cannot reasonably educate themselves to the point where they can make the choices. Of course they can make _some_ choices, and they should certainly make more than they do under the current UK system, for example. But overall, most of the choices aren’t going to be consumer based.

    It also seems to be the case that consistency is important in healthcare, and I don’t think markets encourage that – they encourage change and diversity. Diversity is also bad in many cases – 1 poor, national standard for electronic patient records is much better than 7, better, but different standards for patient records.

    In the US if you move between HMOs, states, and physicians, it’s terrifying how much of your medical history is effectively lost.

  • Joseph Olde

    fill me in on the Audtralian health care system … can you opt out, or in other words, are private providers allowed to charge for publicly insured services?

  • 1 poor, national standard for electronic patient records is much better than 7, better, but different standards for patient records.

    Hell no! All that guarantees is 1 poor standard forever. Try actually living under a socialised healthcare system before you claim it is better.

  • Euan Gray

    Are there any wholly private healthcare systems anywhere in the world that work better than the American system?

    I’ve never had to experience the joys of the American health system, but do I know several British, European and Canadian expats out there who have, and their opinion seems to pretty much reflect steer’s. It is pretty obvious from historical experience that state run health systems aren’t much good, but it appears that private systems aren’t amazingly better.

    Having said that, experience seems to suggest that private medicine is much better for routine and non-life-threatening cases, where in effect the patient can make an informed choice about things. I understand the the pre-war British system was pretty effective, economical and efficient – but although it wasn’t state run most of it was also not for profit. Mutual and charitable organisations ran large parts of it, including the insurance schemes.

    Are there not two contradictory factors to deal with?
    Not many people would agree that when Johnny Lunchpail has a heart attack the doctors should wait until his credit card is validated before plugging in the defibrillator. Equally, the market isn’t going to invest in healthcare if it can’t make a profit out of (ill) health.

    My pet idea is to encourage mutual organisations like BUPA to take over the hospitals, to provide all forms of medical care needed including insurance. At least to start with, it would be necessary to have taxpayer subsidy of insurance premia for the worst off and chronically sick, but I’d think this could be largely eliminated in a few years. It would also eliminate the need for continual food scares and regulations from the government (most of them, anyway) since these are necessary in large part only because the state has to limit demand for the “free” service and therefore has a direct interest in restricting the people’s choices.

    Is there anywhere that still works like that?


  • Joseph: Yes, healthcare providers in Australia are free to treat people and charge them money for it. If the patient is covered by the state health service, the patient then usually sends the bill to a government office, and receives a refund from the government equal to a standard government set fee for that particular service. (If on the other hand the patient is not entitled to use the government health service – for instance he is a visitor from the US – then he can simply pay, receive treatment, possibly claim it off his travel insurance, and the government is not involved).

    Usually the fee charged by the provider is greater than the government set fee, so the patient is still somewhat out of pocket. It is also common for doctors to do a bit of differential charging – people who genuinely can’t afford to pay very much are often charged only the government set fee.

    The Australian system is complicated by the fact that insurance for private healthcare is extremely regulated, and this can at times can make the situation much more complicated than it needs to be, but it is the funding of it that has been nationalised more than the actual provision. And although the arrangement is not one I would personally choose, it does broadly work. Whereas British healthcare doesn’t.

  • Sorry but I thought it was a pile of SHIT!!

  • Wild Pegasus

    Insurance is very heavily regulated in the US, usually at the state level. The US also provides universal health insurance past 65 under Medicare. It also provides medical insurance to poor children and their families under Medicaid. Many states have also adopted something called CHIPs, which extends the range of Medicaid and offers state-owned-and-subsidised insurance to poor families with children. Many hospitals are also state-run or receive substantial state funding.

    So, there is a market, but a heavily distorted one.

    More importantly, the tax system for corporations in America strongly encourages them to provide health insurance for their employees. This means that few people understand and absorb the costs of most of their medical decisions. Their healthcare is provided “free” after a co-pay (that’s a small fee for doctor’s visits and prescriptions) or a deductible. This creates many of the same perverse incentives to overuse healthcare that socialist systems suffer. Problem is, just as people in Britain and Canada expect the government to provide healthcare, people in America expect their companies to provide healthcare. Reforms which will shift the burden to consumers and off companies are bound to be extremely unpopular.

    – Josh

  • You can get all your medical needs seen to privately in Australia — at a very high standard — and the insurance premiums needed to cover that are less than what most smokers spend on their habit