MANA 5334 Consulting

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MANA 5334Consulting Research inHealth Care
Organizations

• A Presentation on Arnold Kings Crisis of
  Abundance Rethinking How We Pay for Health Care

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The Rise of Healthcare Costs

• Who is Arnold King, the CATO institute what do
  they know anyway?
• What is the root cause of this rise in health
  care costs?
• What is the concept of Premium Medicine?
• What, if any, alternatives can be implemented?
• What does the future hold?

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The Man, the Myth, the LegendArnold Kling

• Earned Ph.D. in Economics in 1980- M.I.T.
• Economist with the Federal Reserve Board in
  Washington D.C. later with Freddie Mac
• Founded Homefair.com in 1990s one of the first
  commercial internet enterprises, sold in 1999
• Since then, volunteer teaching in high schools
  and adjunct professor most recently at George
  Mason University
• Contributing editor of TCSdaily.com writes for
  Econlog.econlib.org
• Has written two other books and his website is
  arnoldkling.com

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The MAN is keepin us down. The Cato institute
will drop knowledge

• Founded in 1977, A public policy research
  foundation dedicated to broadening the parameters
  of policy debate to allow consideration for more
  options consistent with traditional American
  principles of a limited government, individual
  liberty and peace.
• Idea is to educate the lay public about questions
  of policy and roles of the government

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BIG BROTHER is crushing us.Cato Institute is
here to help.

• Named for Catos letters
• Despite achievements of fore fathers, virtually
  no aspect of life today is free of government
  encroachment
• Publications including the Cato Journal the
  quarterly magazine Regulation combat the
  governments trampling of civil liberties
• The Cato institute accepts NO government funding
• Contributions are given by foundations,
  organizations and individuals
• Nonprofit, tax-exempt, educational foundation
  under section 501(c)3 code of the I.R.S.
• Location 1000 Massachusetts Ave. N.W.
• Washington D.C.20001
• Website www.cato.org

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Health Care Cost Rising

• The 3 economic Narratives
• -Private Insurance does not work
• -Health care providers over charge for services
• -PM medicine accounts for most of the problem
• Arnold Kling feels PM is the only plausible cause
  for increasing health care cost

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Health Care Costs Rising

• Past 30 years, medicine has become more
  expensive. Todays medicine could be termed
  Premium Medicine
• PM utilizes more physical capital (MRI machines)
  more human capital (specialists)
• PM reflects cultural expectations that call for a
  high level of effort to diagnose correctly and
  treat effectively
• PM clearly has caused the rise in health care
  cost, evidence for a rise in health care BENEFIT
  is mixed
• Because of the triumph over many IDs, must turn
  our attention to DDs, this will cause more cost
  increase and less visible benefit

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Growth of CT MRI Scans in the United States
from 1980-2003
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Are the DOLLAR making a DIFFERENCE?

• Kling suggests NO WAY!
• Klings 3 options for treatment
• -do nothing
• -treat empirically
• -treat on the basis of a through diagnosis,
  ruling out minor possibilities (PM)

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ALTERNATIVES SUGGESTIONS

• Insulation v/s insurance
• Matching funding systems with needs
• Markets and Evolution
• Policy ideas
• -Medical Guidelines Commission
• -Single Point of Accountability
• -Lifting licensing restrictions

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F U T U R E

• SOME GOVERNEMNT INVOLVMENT, BUT NOT TOTALLY
  CONTROLLED
• MORE BURDEN SHIFTED TO INDIVIDUALS
• GUIDELINES COMMISION
• DO AWAY WITH MEDICARE, MOVE TO SAVING ACOUNTS.

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QUESTIONS STATEMENTS CONCERNS COMMENTS