I watched the PBS Frontline special: “Sick Around the World”. Evidently they did not reduce costs by reducing overtreatment, but by squeezing providers. It was very disappointing to me to see the ridiculous stuff that they cover. They cover Chinese medicine and acupuncture! Both hove shown no evidence of working at all. One might counter that this is no different from back surgery and many other procedures that we spend on here in the USA, but advocates of national healthcare hope to do away with such in no net benefit procedures a nationalized system. Disappointingly across the globe nationalized systems still pay for such.

So their system controls costs primarily by squeezing providers. I think that we might be able to get the same affect of squeezing providers by easing licensing requirements. The squeezing of providers reduces income in the healthcare sector thus presumably lowering the quality of applicants into medical school and nursing etc. which is the same effect that you might get by easing licensing requirements. Now when I say lower quality providers I mean in grades in school and in SAT scores but you might end up with more caring, less money oriented people in medicine which might actually improve outcomes.

If we nationalize healthcare I think that we should target spending just 5% of GDP. We could squeeze providers AND reduce overtreatment to achieve this low level of medical spending. People desiring more care could pay for it or go overseas for care see: Apollo Healthcare.

Of course it would be good if the insurer the state or private could get some help from the consumers in reducing costs. Maybe this could be done by having insurance start with a low deductable with a growing deductable and growing health saving account that would be allowed to get into the hundreds of thousand of dollars. So at some age people would be spending only money from the health savings account even for high cost treatments. They would also need to be allowed to draw unspent money from the health savings account at some time. I wonder if a system that paid a lump sum at diagnosis could be policed. I sill have lots of questions?

They cover Chinese medicine and acupuncture! Both hove shown no evidence of working at all.

The UK NHS does the same thing. Hell, they even pay for bullshit like chelation therapy for cancer!

Ezra talks about comparative effectiveness boards all the time. Its a nice thought, but its not in the cards, regardless of whether you have socialized medicine or not. It turns out that "free marketer" consumers are identical to "socialized" consumers in that they both refuse to accept a healthcare plan which refuses treatments, no matter how ridiculous they are.

Its not true that Taiwan docs get paid substantially less than Americans. Taiwan docs act as pharmacists and sell drugs directly to patients (which doesnt happen in the US except for oncologists). Although Taiwan reimbursement rates are less than in the states, Taiwan docs make up fo r the shortfall by scripting more drugs and selling them directly to patients. This means that the overall incomes are pretty close between the countries.

Here's more evidence that Taiwan docs and hospitals make a lot more money from selling drugs directly to patients:

http://content.healthaffairs.org/cgi/content/full/22/3/61

According to a December 2002 study report by the DoH, close to half of the doctors in Taiwan prescribe four to five drugs per visit for upper respiratory infections, and 10 percent prescribe more than eight drugs; in only fourteen of 103,024 outpatient visits did the doctor not prescribe any drugs.

In the USA, I'd guesstimate that less than 10% of american docs script any drugs for URIs.

The Taiwan docs are clearly not following well established standards of care.

Anonymous our docs get free lunches and trips from drug companies. Most analysis shows that our docs also prescribe more than optimal amounts of meds and higher cost drugs when cheaper would do. If Taiwan docs are making money by retailing (BTW that is what many Veterinarians do to help counter their low rates) they are at least providing a service. The fact that they are motivated to over prescribe is of course a bad problem.
BTW It is startling to me how quickly our family docs change the prescriptions to generics and give us free drugs when we let them know that we are paying for the drugs.

As a resident of Taiwan for the last 18 years, I can say the health care system here works. I never worry about a doctor visit because it will be too costly. Chinese medicine, acupuncture, and massage ARE covered. Thank goodness. When my back hurts the Western style doctor here prescribes drugs. The Chinese style doctor prescribes a massage. One of these covers the pain, and one relieves it. Taiwan has a good thing going with the health care system.

Anonymous our docs get free lunches and trips from drug companies.

Sure, but it doesnt compare to the income that Taiwan docs make when they prescribe 4 drugs for every patient who comes in the door with a cold.

Most analysis shows that our docs also prescribe more than optimal amounts of meds and higher cost drugs when cheaper would do.

Sure they do, but its an issue of scale. Like I said, I'd estimate less than 10% of docs prescribe a single med for a URI. Compare that to Taiwan, where the AVERAGE number of drugs scripted per URI is 4. Thats insane, and not comparable to the overprescribing that happens state-side.

If Taiwan docs are making money by retailing (BTW that is what many Veterinarians do to help counter their low rates) they are at least providing a service. The fact that they are motivated to over prescribe is of course a bad problem.

No they're not providing a service. Drugs for URI = bad across the board. It drives up costs while providing zero benefit to the patient. Its fleecing, pure and simple.

BTW It is startling to me how quickly our family docs change the prescriptions to generics and give us free drugs when we let them know that we are paying for the drugs.

Pharmacists regularly substitute generics, you dont even need the doc to change the prescription, the pharmacy will do it automatically.

Anonymous we agree it is a difference in scale with American docs coming out way ahead especially since excessive meds and do harm. In both cases it shows that insurers need help from the patients to control costs. It is evidence that Robin Hanson is correct that people act strangle when it comes to medical care.

Bryan's post shows a strange human behavior. Presumably if his insurer did not pay for the massage, surely not the type of catastrophic expense that one should insure against, that he might take that meds instead. Back pain is so common and if it is treatable (in some case it is not, it can be treated inexpensively and so should not be covered by insurance. One of frightening things about medical is the greatly expandable. Without food we die of the disease of starvation so maybe health insurance should cover food, how about health club memberships, vitamins, amino acids, counseling sessions etc.

All this makes me wonder again if the insurer the state or companies would be better off paying out sums to patient. So if one has a heart attack of x severity he would get say $100,000 if one is diagnosed with a long term disease like diabetes for example he might get 300/ month for life etc.

BTW I understand that my scheme woudl invite fraud but I wonder if there is a way around that. Also as Anonymous pointed out there is a particularly destructive fraud in the Taiwan system in the area of over prescription of drugs.

As an American expat, long-time Taiwan resident, and NHI smart card holder, I'm not sure what Anonymous is complaining about, and I'd echo Bryan's comment above.

The system works.

I suspect the too-generous low co-pay is gonna have to increase, but Taiwan appears to have successfully addressed a lot of the big challenges.

Thanks, Ezra, for directing attention Taiwan's way on this issue, I think it's well-deserved. Like land reform, it's a Taiwanese success story that we'd do well to study.