At what cost a human life?

[Riverwind]

I guess it depends on what you see the purpose of the public system is. I believe the purpose of the public system is to share the risk of unforseen future events which would be cost prohibitive for us to handle individually.?

Adding risk based premiums for factors that are beyond someone's control would have the effect of excluding many people from the public system because the additional premiums could be equally cost prohibitive depending on a person's ability to earn income. In other words, what is the point of having a public system at if it is only going to benefit those lucky enough to be rich enough to pay the premiums or healthy enough not to have inherited risk factors beyond your control.

There are many cases in society where we expect individuals to incur the cost of factors beyond their control. (Eg If your house floods due to heavy rainfall, you are not really expecting your neighbours to help share in the cost of repairs, are you?)

Actually, my neighbors would help me pay for the repairs because they pay into the same property insurance pool that I do.

[Renegade]

what is the point of having a public system at if it is only going to benefit those lucky enough to be rich enough to pay the premiums or healthy enough not to have inherited risk factors beyond your control.

It matters not whether it is a public, semi-public, or private system, there is the same value in a risk-sharing mechanism for paying for healthcare as for other insurances. The vast majority of the population falls into the category of "lucky enough to be rich enough to pay the premiums or healthy enough not to have inherited risk factors". There will be some who do not, but I fail to see why this group should be subsidized by the rest.

Actually, my neighbors would help me pay for the repairs because they pay into the same property insurance pool that I do.

Sorry I failed to be more clear in my example. In general most property insurance doesn't cover flooding. You as property owner cover the risk not the insurance pool.

Even if the situation were different and it was fire for example (which is covered by property insurance), would you not expect to have higher premium (all other things being equal) than your neighbour if you had a higher risk (eg your house is made from more flammable materials).

My point is simply that you still sometimes assume the cost of the risk of events which are beyond your control.

[Riverwind]

The vast majority of the population falls into the category of "lucky enough to be rich enough to pay the premiums or healthy enough not to have inherited risk factors". There will be some who do not, but I fail to see why this group should be subsidized by the rest.

You are overlooking the fact that the biggest risk factor in terms of healthcare costs is 'old age'. A risk based system would have the effect of denying healthcare coverage to anyone over the age of 65 since the majority of retirees have modest pensions that would not be enough to pay true risk based premiums. If you want to make an exception for old people then why wouldn't you make an exception for a woman from a family with 3 generations of breast cancer?

Most health care costs are incurred in the last two years of life whether you are a 56 year old smoker dying of lung cancer or a 96 year old dying of kidney failure. If you really want to force people to assume the cost of the risk then you need to look at a system that encourages people and families to make sensible decisions near the end of life instead of wasting millions of dollars to keep someone alive a few more months. If someone has absolutist moral vewipoints that require them to prolong life as much as possible then they should pay for those vewipoints.

[Renegade]

You are overlooking the fact that the biggest risk factor in terms of healthcare costs is 'old age'. A risk based system would have the effect of denying healthcare coverage to anyone over the age of 65 since the majority of retirees have modest pensions that would not be enough to pay true risk based premiums. If you want to make an exception for old people then why wouldn't you make an exception for a woman from a family with 3 generations of breast cancer?

Old age is about a predictable an affliction as one can get. No I would not deny coverage to anyone over 65, but they would have to pay the higher premiums which reflect their higher cost to the system. Someone who is over 65 has had their entire lives to prepare for the additional costs that occur at old age, and healthcare shoudl be part of that cost.

Let me ask you a hypothetical question. If I can invent a proven treatment to individuals older than 65 which will delay the effects of aging by 10 years, and cost $1Million per individual, should the senior population expect this treatment which the rest of us have to pay for?

you need to look at a system that encourages people and families to make sensible decisions near the end of life instead of wasting millions of dollars to keep someone alive a few more months. If someone has absolutist moral vewipoints that require them to prolong life as much as possible then they should pay for those vewipoints.

I couldn't agree more. If people don't have an economic stake in the outcome, they tend not to make economically sensible decisions. I would add that I think the sensible decisions need to be made through out life, not just at the end.

[vslayer]

It does bother me that we are on the hook for paying for emphesima (sp?) treatments for people who smoke two packs a day, and continue to do so even after they get sick. Its the abusers of the system that perhaps could be targetted, not the legitimate users.

<{POST_SNAPBACK}>

but at the other end of the free healthcare system, is the taxes which pay for it, and if those taxes are loaded onto cigarettes and other high risk items/activites, then it all works out.

in new zealand we have a 75% tax on tobacco, and a small(i think it is 10%) tax on hard alcohol. so the people who cause themselves injury/disease pay more for healthcare than the average person

[Renegade]

Food for thought:

--------------------------------------------------------------------------------

The New England Journal of Medicine -- October 9, 1997 -- Volume 337, Number 15

--------------------------------------------------------------------------------

The Health Care Costs of Smoking

Jan J. Barendregt, Luc Bonneux, Paul J. van der Maas

--------------------------------------------------------------------------------

Abstract

Background. Although smoking cessation is desirable from a public health perspective, its consequences with respect to health care costs are still debated. Smokers have more disease than nonsmokers, but nonsmokers live longer and can incur more health costs at advanced ages. We analyzed health care costs for smokers and nonsmokers and estimated the economic consequences of smoking cessation.

Methods. We used three life tables to examine the effect of smoking on health care costs -- one for a mixed population of smokers and nonsmokers, one for a population of smokers, and one for a population of nonsmokers. We also used a dynamic method to estimate the effects of smoking cessation on health care costs over time.

Results. Health care costs for smokers at a given age are as much as 40 percent higher than those for nonsmokers, but in a population in which no one smoked the costs would be 7 percent higher among men and 4 percent higher among women than the costs in the current mixed population of smokers and nonsmokers. If all smokers quit, health care costs would be lower at first, but after 15 years they would become higher than at present. In the long term, complete smoking cessation would produce a net increase in health care costs, but it could still be seen as economically favorable under reasonable assumptions of discount rate and evaluation period.

Conclusions. If people stopped smoking, there would be a savings in health care costs, but only in the short term. Eventually, smoking cessation would lead to increased health care costs. (N Engl J Med 1997;337:1052-7.)

Source Information

From the Department of Public Health, Erasmus University, P.O. Box 1738, 3000 DR Rotterdam, the Netherlands, where reprint requests should be addressed to Mr. Barendregt.

[mirror]

It is pretty clear what your problem is as I have stated before. You can't base everything on money, but you haven't figured out yet that money is not the end all and be all to quality of life. Our health care costs are manageable. Look at the progressive steps Manitoba has taken recently to bring in nurses to assist some doctors rather than paying other doctors much higher wages to do the same job.

[Riverwind]

Where an individual health insurance policy is required, they very much do ask for, and may have a doctor verify, risk factors, and the premium based upon that assessment.

The trouble is many of the risk factors are self declared and also depend on the time frame. An athletic weekend warrior will have more injuries than a coach potato in short term but won't require that heart transplant in the long run. If you set the premiums based on short term costs then the person living the healthy lifestyle would be penalized. You cannot set it based on the long run costs unless you have an insurance monopoly because there is no incentive for a company to subsidize the good behavoir of the athelete if they are not guaranteed to receive the cost savings 20 years later.

Furthermore, there are a huge number of people with expensive pre-existing conditions that would be simply denied coverage in a individual risk based system. Such a system is unacceptable to the overwhelming majority of people which means these people whould have to 'subsidized' by lower risk people.

Frankly, if individual risk based premiums made economic sense then US employers would have a system where the cost of healthcare coverage appears as a deduction on the pay slips.

[Renegade]

The trouble is many of the risk factors are self declared and also depend on the time frame.

Indeed. But the situation is very similar to life insurance which provides differentiated rates to smokers. It is usually a self-declaration, but there is a penalty for dishonesty (ie the coverage will be invalidated).

An athletic weekend warrior will have more injuries than a coach potato in short term but won't require that heart transplant in the long run. If you set the premiums based on short term costs then the person living the healthy lifestyle would be penalized. You cannot set it based on the long run costs unless you have an insurance monopoly because there is no incentive for a company to subsidize the good behavoir of the athelete if they are not guaranteed to receive the cost savings 20 years later.

I wasn't suggesting it be based upon short term costs and behaviour. I'd be perfectly ok with a single long-term insurer whether private or public.

Furthermore, there are a huge number of people with expensive pre-existing conditions that would be simply denied coverage in a individual risk based system.

What I would expect is that they would have to resort to a carrier of last resort, similar to what is now done for high-risk auto insurance. Of course they would have high premiums, but a high-risk condition warrents a high permium.

Frankly, if individual risk based premiums made economic sense then US employers would have a system where the cost of healthcare coverage appears as a deduction on the pay slips.

The cost of healthcare coverage does appear as a pay slip deduction. At least it was when I worked there. In a relative homogenous group, it doesn't make sense to spend a lot of time differentating within the group based upon risk. However if there are wide varations of risk in the group, it does make sense.

The US cannot be used as a model because there is a barrier which prevents low-risk employess from fleeing the group. Their employer contributes toward their health coverage and thus choose the carrier. If the low-risk employee opted out of the coverage and went to another carrier who differentiated based upon risk, his employer contributions would not follow and woudl be lost. Thus there is a strong disincentive to leave the group even though it discrimminates aginst low risk employees.

[Riverwind]

Indeed. But the situation is very similar to life insurance which provides differentiated rates to smokers. It is usually a self-declaration, but there is a penalty for dishonesty (ie the coverage will be invalidated).

When I applied for life insurance they used a mouth swab to determine if I had been smoking recently. Even then, the discount for non-smokers only exists because insurance companies know that a person who does not start smoking by age 18 will almost never start smoking so they do not need to worry about people picking up the habit later.

Risk adjusted insurance premiums are generally an unfair way to assess premiums because insurance companies can only use factors that can be independently verified. For example, a non-drinking, church going male is most likely a lower auto insurance risk than a drinking, party going female of the same age yet that non-drinking male is forced to subsidize the rates of the partying female because he cannot prove that he does not drink and attends church regularly.

There are many other similar examples which demonstrate that there is no such thing a 'fair' premium set based on real risk factors.

What I would expect is that they would have to resort to a carrier of last resort, similar to what is now done for high-risk auto insurance. Of course they would have high premiums, but a high-risk condition warrents a high permium.

Which would have to be adjusted on ability to pay - bottom line is most people in this situation would have to be subsidized by lower risk tax payers. Sounds like a lot of bureaucracy that won't change anything.

The US cannot be used as a model because there is a barrier which prevents low-risk employees from fleeing the group.

This barrier is imposed by the insurance companies. They are the ones that tell the employers that health coverage must be mandatory for all employees. If an employer wanted to make insurance coverage optional then the cost per employee would sky rocket.

The free market in the US has basically said that mandatory group coverage is the most cost effective way to provide health insurance so you cannot argue that your system is based on free market prinicipals. What you are proposing is just another form of social engineering that would end up hurting more people than it helps.

[Catchme]

This is a very old thread brought back to life, and the question is awkward as how can you save a life that is going to be terminal, so I am not answering the poll.

What you do with terminal illness is provide palliative care.

[Renegade]

There are many other similar examples which demonstrate that there is no such thing a 'fair' premium set based on real risk factors.

Of course I agree, there is no objective way of determining that a premium is "fair". The only factor that is used today to set the premium is income. The linkage between income and health is tenous at best. I would say that it is infinitely "fairer" to use criteria which can be objectively linked to health.

Which would have to be adjusted on ability to pay - bottom line is most people in this situation would have to be subsidized by lower risk tax payers. Sounds like a lot of bureaucracy that won't change anything.

The high-risk group which cannot afford to pay is a small minority of the population similar to those on welfare today. There are many options to mininmize the impact on the low-risk taxpayer and also reduce the incentive for others to join this group. Rationing coverage to this group is one option. Rationing is not necessary to the rest of the population which pays their own premium.

This barrier is imposed by the insurance companies. They are the ones that tell the employers that health coverage must be mandatory for all employees.

Of course. They do it for their own self-interest. The more employees they lock down, especially low-risk ones, the higher their profitability.

If an employer wanted to make insurance coverage optional then the cost per employee would sky rocket.

Nevertheless, the low risk employee is basicly trapped in that his premium is subsidizing the high risk employee.

The free market in the US has basically said that mandatory group coverage is the most cost effective way to provide health insurance so you cannot argue that your system is based on free market prinicipals. What you are proposing is just another form of social engineering that would end up hurting more people than it helps.

The US is not a free market system when it comes to healthcare. The fact that employees are trapped behind rules negotiated between carriers and employeers should dispel the notion that it is a free market.

The US is also not an efficient market. It spends far more per person for less coverage.

I understand that there is an efficiency argument to minimize bureaucracy, however a system which does no risk assesment, uses only one factor (income) and then rations out care, seem to me to be in serious need of reform.

[Renegade]

This is a very old thread brought back to life, and the question is awkward as how can you save a life that is going to be terminal, so I am not answering the poll.

What you do with terminal illness is provide palliative care.

I think you misunderstood the question. It is not to simply save a life. It is to provide a cure.

In essence, would you improvish yourself to provide a cure for someone and save their life.

[Riverwind]

Of course I agree, there is no objective way of determining that a premium is "fair". The only factor that is used today to set the premium is income. The linkage between income and health is tenous at best. I would say that it is infinitely "fairer" to use criteria which can be objectively linked to health.

I will agree that our system needs to have a cost component that is connected to usage. I do not believe risk based premiums are the way to go - I would much rather see user fees collected as part of the income tax system where the fees are levied as a percentage of income. I also like the idea of tax credits for people which demonstrate that they live a healthy lifestyle (i.e. not-overweight or under-weight, don't smoke or drug, drink moderately, etc).

The US is not a free market system when it comes to healthcare. The fact that employees are trapped behind rules negotiated between carriers and employers should dispel the notion that it is a free market.

Have you every tried to buy health or disability insurance as an individual? Anyone who even asks for it is automatically considered higher risk. The only way people can get reasonably priced health insurance in a free market system is to be part of a group where coverage is mandatory. It is a mistake to assume that a free market means more freedom for individuals. In many cases it does, however, when it comes to things like insurance a free market often means less freedom for individuals.

[Charles Anthony]

I will agree that our system needs to have a cost component that is connected to usage.

Why should it?

I do not believe risk based premiums are the way to go - I would much rather see user fees collected as part of the income tax system where the fees are levied as a percentage of income. I also like the idea of tax credits for people which demonstrate that they live a healthy lifestyle (i.e. not-overweight or under-weight, don't smoke or drug, drink moderately, etc).

Am I misunderstanding something? This sounds like a complete contradiction.

How is your proposed tax credit any different from a risk-based premium?

[mikedavid00]

What if there were a cure for AIDS, or Cancer, but the cost was enormous? What if the cost was so high, that if we cured everyone we would impovrish ourselves, should we still do it?

Yes we should. But for the love of God, ONLY for poeple who are Canadians and who have paid into the system - not the 300,000 people that come here each year.

[mikedavid00]

Our health care costs are manageable.

I disagree. With our current levels of immigration and the situation that we're in, I would say that our costs at this point in time are simply not manageable.

There is a huge influx of people using the system that have not paid into it.

Doctors in Canada get rationed out to where they are needed most (Ontario) and the net effect are less Doctors in less populous provinces. Quebec has a problem becuase many Doctors can not speak french and they pretty much have to turn out their own Doctors. They are the lowest paid in Canada and they have HORRENDOUS waiting times. Try 17 hours in emergency. Try 3 years to see a specialist and get a surgery.

"Duff McDonald was showing symptoms of prostate cancer last March. He had to wait six months to see a specialist and before a bone scan could be performed, the 65-year-old checked himself into the hospital and died. His daughter spoke out because she says her dad trusted the health care system and doesn't want other people to make the same mistake."

another

"Dennis Scott's saga began in February of 2003 when his family doctor found antigens consistant with prostate cancer. He didn't receive a biopsy until the next September. That wasn't the end of Dennis Scott's ordeal. He requires surgery to ease his discomfort. Last week he was on a hospital gurney, prepared for the surgery, when he was told to get up and put his clothes on. There were no recovery beds. It was the third time the surgery has been cancelled."

[Riverwind]

I will agree that our system needs to have a cost component that is connected to usage.

Why should it?

The demand for free healthcare is potentially infinite. The gov't deals with the demand by limiting supply. Adding a cost connected to use would give the gov't another tool that can be used to limit demand.

How is your proposed tax credit any different from a risk-based premium?

Purpose. The primary purpose of a risk based premium is cost recovery. A tax credit for a healthy life style would be about promoting lifestyle changes that would likely lead to lower healthcare costs in the future - not cost recovery.

[mikedavid00]

The demand for free healthcare is potentially infinite.

Yes. Potentially. It's our own countries healthcare system, thus, we can control the demand for it.

The gov't deals with the demand by limiting supply.

Yes. That is what they are currently doing becuase there seems to be no other way.

Adding a cost connected to use would give the gov't another tool that can be used to limit demand.

Here's a crazy though, how about limiting demand by not letting poeple use it who have not paid into the system. Yes that would mean serioiusly overhauling our current immigration policies.

Purpose. The primary purpose of a risk based premium is cost recovery. A tax credit for a healthy life style would be about promoting lifestyle changes that would likely lead to lower healthcare costs in the future - not cost recovery.

I agree.

We don't need new ideas. My household already pays well over $875 a month for healthcare for only 2 poeple. This is more costly than private, out of pocket, US coverage with top medical care.

When someone uses the system who has not paid into it, rates will usually increase for most types of insurance.

But suppose that rates can no longer be increased becuase they are at a maximum. Then what happens? What happens is healthcare needs to be rationed and supply will not meet demand.

The question is, where is all this demand coming from this last 15 years?

We already know the answer to that. That is the real issue IMO - not playing with numbers or coming up with new idealisms.

If we continue to let people wander into our country and use health services for free, we will have no choice but to allow private hospitals and insurance into Canada.

It's either one or the other at this point.

[Charles Anthony]

The demand for free healthcare is potentially infinite. The gov't deals with the demand by limiting supply. Adding a cost connected to use would give the gov't another tool that can be used to limit demand.

I want to pick your brains for why you choose to limit supply by adding cost as a factor. You are not defending that choice.

It sounds like you want a market incentive. If that is correct, I want to trap your argument by making your government-controlled market indefensible.

What is your goal?

social engineering

lower costing healthcare

maximum number of health-care recipients

something else?

I would suggest that advertizing campaigns explaining the benefits of "lifestyle changes" would be more honorable. If people want something, there will be no need to spend energy coercing them into accepting it and dealing with its bureaucracy.

What exactly do you mean by cost recovery?

For example, the grave-digger's primary purpose is not to place both hands on the spade-handle. Using a spade is just a strategy. If he secretly brings a back-hoe to work undetected but yields the exact same results, why should his customers care about his cost recovery? All they need to know is his price for the service.

How is your proposed tax credit any different from a risk-based premium?

Purpose. The primary purpose of a risk based premium is cost recovery. A tax credit for a healthy life style would be about promoting lifestyle changes that would likely lead to lower healthcare costs in the future - not cost recovery.

Wrong. The primary purpose is to maximize profit. The risk premium is just a business strategy or a conduit towards making profit.

For example, the primary purpose of a cola company is not to produce cola -- if they could sell you water, they would -- but rather to maximize profit. Currently, people want cola beverages much less than before. It is a dying market. Hence, what are the soft drink companies doing? They are jumping on the bottled-water band-wagon. Why? because that is where the demand is going. Why? because people want healthier consumption and the allure of better health.

[Riverwind]

You are not defending that choice. It sounds like you want a market incentive.

It is a form of market incentive. The free market is a tool that gov'ts can make use of when (an only when) it makes sense. However, there is a huge difference between saying that the gov't should make use of the free market tools when it makes sense and saying that the gov't should leave everything to free market.

I would suggest that advertizing campaigns explaining the benefits of "lifestyle changes" would be more honorable. If people want something, there will be no need to spend energy coercing them into accepting it and dealing with its bureaucracy.

That works too - ICBC is the auto insurance monopoly in BC that runs like a business. It has invested in many educational campaigns to encourage safe driving in order to reduce the cost of its claims. However, such measures are only possible when there is a gov't mandated monopoly. In a free market no company would invest in a compaign that would likely help their competetors.

Wrong. The primary purpose is to maximize profit. The risk premium is just a business strategy or a conduit towards making profit.

Whatever. Call it profit or cost recovery it does not matter. The objective of a risk based premium is to make money. The objective of a tax credit/educational compaign is to promote better health.

[Drea]

We don't need new ideas. My household already pays well over $875 a month for healthcare for only 2 poeple. This is more costly than private, out of pocket, US coverage with top medical care.

Is this $875 for healthcare insurance? Or does that include a new pair of glasses every month? Or are you on a really expensive medication?

There is no way that your health premiums are $875 a month. This is an exageration. I used to pay $93 per month for my son and I. $63 when I was considered "low income". So $875 is kinda high IMO.

[Charles Anthony]

Whatever. Call it profit or cost recovery it does not matter.

Are you using the terms "maximizing profit" and "cost recovery" interchangeably?

They do not mean the same.

[Renegade]

I will agree that our system needs to have a cost component that is connected to usage. I do not believe risk based premiums are the way to go - I would much rather see user fees collected as part of the income tax system where the fees are levied as a percentage of income. I also like the idea of tax credits for people which demonstrate that they live a healthy lifestyle (i.e. not-overweight or under-weight, don't smoke or drug, drink moderately, etc).

As CA has pointed out, your proposed system of incentives factors into the overall cost many of the same factors which would go into a risk-based pricing system. I agree with user fees and users having to share some of the cost similar in concept to a deductable. Where you and I differ is I don't see income as a factor which should affect one's healthcare insurance cost. Above a certain threshold income and wealth, people should have to bear the full burden of their health insurance. Now I do realize that there are cases of serious conditions which would cause some individuals to expend a huge component of their income on health insurance. That can be handled by putting a cap on the insurance cost as a % of income, but I would set the cap very high so that large majority of the population doesn't reach that cap.

Have you every tried to buy health or disability insurance as an individual? Anyone who even asks for it is automatically considered higher risk. The only way people can get reasonably priced health insurance in a free market system is to be part of a group where coverage is mandatory. It is a mistake to assume that a free market means more freedom for individuals. In many cases it does, however, when it comes to things like insurance a free market often means less freedom for individuals.

You have raised this objection before as an argument for government run insurance, with the assumption being that insurance companies will unfairly differentiate against individuals where as the government would not. I've already said, I'm fine with the government running the health insurance, so I don't see this as a valid objection.

[Renegade]

Yes we should. But for the love of God, ONLY for poeple who are Canadians and who have paid into the system - not the 300,000 people that come here each year.

Paid how much? If I've paid $1 into the system is it enough?

If I'm a Canadian and I haven't paid into the system, do I still get to collect medical benefits?