3.12.2005

Blogging the Future Wisconsin Conference, pt 6
Health Care Costs

The peeps: moderator Richard Blomquist; panelists Rep. Curt Gielow and Peter Farrow.

Blomquist goes first, and outlines the costs of healthcare, which are huge all around. These costs are part of the trend of losing jobs in Wisconsin, he says. Very dry. I had trouble with my Econ 101 lecture - this is not better.

Building more hospitals won't drive costs down, either. In fact, because there are more, costs will go up - because the fixed costs of technology in hospitals is so high. If you have three hospitals in an area that only bears two, things get more expensive than they should otherwise be.

Now to Curt. He talks about providers, payers, and patients. The patient is at the bottom of the formula, he says. "In health care, competition doesn't work as well in health care because supply drives demand. More supply drives... and insatiable demand."

Personal responsibility figures in, he says - consumers have to be better educated. Excercise and diet are the two big issues here. But people have to be involved in the entire process: it is wrong that the insurance company settles the bill without any input from the consumer. Curt focuses on transparency to solve these issues. He says that lobbying has produced some result with hospitals, and the threat of legislation helps push the agenda. If patients can compare prices at different hospitals, prices may get better. He also recommends health care cooperatives - they promote to each other the values of activities such as smoking that put people at the highest risk. Price per care times utilization equals total price, he says; we've done some with bringing down the price per unit, but utilization needs to come far down.

And then there was Peter. Mr Farrow is himself the head of a cooperative of health care providers, from what I understand. He will focus on four areas of improvement: first, evidence-based medicine (use most current, most effective forms of treatment). Doctors don't change their practices often, and it takes a long time for the best treatments to trickle through the system. Second, hosptils need to learn better from each other - competition doesn't force them to. Third, lower transaction costs. Generally 2-4% of our GDP is lost to these costs, he says. Finally, educate the consumer - we all need to be aware of the true costs of their health. So, he says, we need transparency, in the realm of value even more than pure cost.

Poor guys. They realize how dry this is - Peter makes a joke that "they obviously saved the best for last. Education reform is nice and all, but healthcare reform..."

Now Blomquist again. He wants to remind us that generally, physicians are wonderful, hardworking people who truly want to help. It's an important point after railing for an hour and a half about the awful costs of what they do. But he also saves some more venom for the "artificially high" cost, especially as it is borne by those who have no insurance. I like his sense of dignified, scholarly outrage.

Update: There is a question on tort reform. Curt takes it first. Wisconsin's limit currently helps to stabilize the system, he says. Also, there is a patient's comp fund, and the governor wants to use it to make up for shortfalls in the state budget this year - this is dangerous, he says. Then Peter says that although things can happen badly sometimes, but aggressively shielding doctors isn't wise either.