Households pay for health care

Remember, no matter how we “pay” for health care, the money always flows from households.  Greg Mankiw makes an oft-ignored point when he writes that American business’ international competitiveness will not improve should they stop providing health care as a fringe benefit.  He cites the CBO (pdf):

Replacing employment-based health care with a government-run system could reduce employers’ payments for their workers’ insurance, but the amount that they would have to pay in overall compensation would remain essentially unchanged. Even though changes to the health care system could have various effects on the supply of labor, the underlying amount of labor supplied at any given level of compensation would hardly be affected by a change in the health care system. As a result, cash wages and other forms of compensation would have to rise by roughly the amount of the reduction in health benefits for firms to be able to attract the same number and types of workers.

Compensation could take some time to adjust to its market-clearing level (the point at which supply and demand are equal). During that time, firms that formerly provided health benefits—especially firms that employ workers under multiyear contracts—could experience substantial reductions in labor costs, which would boost their profits temporarily. But those firms would experience no permanent change in their competitive status.

Update: Here’s a retort by Ryan Avent.  Economists may say that the amount we spend on health care will be equilibrialized by the competitiveness of the international market.  Job lock is awful, but my feeling is that it is peripheral to the argument.  An employee exodus should make a firm more competitive, save for Darwin working his magic.

“Process ‘beats’ outcome,” hospital food tumblog

Hospitals should be scared of anecdotal stories.  The one time that surgery resulted in a mistake.  The one hospital stay with rude staff/patient interaction.  The one time that a communication breakdown between providers resulted in a longer stay.  Scared because the best (worst!) stories are powerful and they spread (and if it’s happened once, it’s likely happened again).  The “little” stuff matters, too.

Tom Peters, commenting on a Press Ganey survey, accurately writes:

(1) Process “beats” outcome in evaluating an “experience”—even one as apparently “outcome sensitive” as a hospital stay. The positive quality of staff interactions were more memorable than whether or not the health problem was fixed.
(2) Happy staff, happy customers. Want to “put the customer first”? Put the staff “more first”!
(3) Quality is free—and then some. We learned (well, most of us learned) when the “quality movement” dominated our consciousness that not only was quality free—but doing the quality thing right actually reduced costs, often dramatically.

With the attention being paid to patient satisfaction in hospitals today, it is interesting that organizations haven’t launched an all out assault on “process” elements (begging for 5s in Press Ganey’s patient satisfaction survey is far from such an effort).

Taking all of this into account, one might think that if a hospital appears on this Hospital Food tumblog (via Boing Boing), appropriate action would be taken.  Appropriate action, in this case, would be to completely reinvent the hospital food experience.

It’s A-L-L process “stuff” in the patient’s eyes.

Linked data will change health care

Boing Boing‘s coverage of TED 2009 includes this post about Tim Berners-Lee (he invented this here World Wide Web).  Turns out, people weren’t enamored with his creation early on.  Now he’s working on what is called the Semantic Web (it takes a little effort to figure out what that is, but it is very cool) and getting much the same reaction.  At its core, the Semantic Web means putting data on the web and then–very importantly–linking it together. Boing Boing’s Mark Frauenfelder:

Why is linked data important? Curing cancer, understanding economy, global warming. A lot of the state of the knowledge of human race is stored in databases that are not shared — stored in “silos.” Now they are linking the data, bridging across different disciplines. “When you connect data together you get this huge power out of it.”

The implications on health care, while not obvious at the moment, will be enormous.