economics

Murdering Grandma does not substantially save on health costs

All the intellectuals in the US who are officially deemed to be very smart people are officially telling us that the big problem with health care, the reason your Obamacare bills are going out of sight, is that keeping Grandma alive for a few months longer can cost unlimited amounts of money

As you doubtless know, most government health care systems around the world wind up murdering Grandma to free up beds: “Prolonged deep sedation”; “The Liverpool Care Pathway”.

To rationalize this, as we in the US increasingly move towards a government healthcare system, everyone is telling us that grandma is causing out of control health costs.

People 65-79 (9 percent of the total population) represented 29 percent of the top 5 percent of spenders. Similarly, people 80 years and older (about 3 percent of the population) accounted for 14 percent of the top 5 percent of spenders (Chart 2, 40 KB).2 However, within age groups, spending is less concentrated among those age 65 and over than for the under-65 population. The top 5 percent of elderly spenders accounted for 34 percent of all expenses by the elderly in 2002, while the top 5 percent of non-elderly spenders accounted for 49 percent of expenses by the non-elderly.

But what all that adds up to is that grandparents dying of complications of old age are causing only a small proportion of total health care costs.  The article whines about how selfish grandma is for expensively remaining alive, but reveals that grandma is not in fact costing enough to make a noticeable difference. If in each year you kill off the most expensive five percent of over sixty fives, you save twelve percent.

A casual glance around the emergency room suggests that the main cause of out of control health care costs in the US is people who can freely demand health care without facing any risk that they will have pay for it, that the major factor influencing health care demand, is not age, but whether one has to pay for it out of one’s own pocket, that a young healthy person for whom health care is free, demands a lot more expensive health care  than an elderly person for whom health care costs money.

On casual and unscientific observation, looks like affluent white people are paying for most health care, and underclass and non asian minorities are consuming most health care, looks that married people are paying for health care, and single women are consuming health care, rather than young people paying for health care, and elderly people consuming most health care, that health care in the US consists of massive transfers from whites to non whites, and substantial transfers from males to unrelated single females, most of them indios.

But since the evidence of one’s own eyes is horribly racist, sexist, and homophobic, let us see if we can find some scientific and statistical evidence for this.

In Singapore, they have prices for health care, and even when these prices are set by the state in government health care facilities, they are not too far from market prices. Almost everyone everyone has to pay these prices, or some substantial part of them, except for catastrophic health care.  Almost everyone in Singapore has catastrophic coverage, but has to pay for normal health care themselves, in whole or substantial part.

Singapore has quite a lot of government intervention in health care, so some people point to Singapore and say “See, capitalist health care works”, and other people point to Singapore and say “See, socialist health care can work”, but the big difference between Singapore and most other countries is incentives:  That most health care in Singapore is paid for by the person receiving it, that health care in Singapore is, for the most part, paid for by the customer, and that doctors therefore answer to the customer, not the bureaucrat.  He who pays the piper, calls the tune.  If Singaporean healthcare is more capitalist than that of the rest of the world, this is an almost accidental and perhaps unintended consequence of the fact that people have to pay for it themselves.

Grandma dying of cancer is the same problem in Singapore as under socialist health care systems (she and her doctors are tempted to run up excessive bills) since most people in Singapore have catastrophe insurance, but with regular health care, people only pay for if it is worth the price.

Guess what.  Singaporeans, having to pay for health care from their own pockets, do not buy much health care at all, and despite that, have very good health outcomes.  That total health care expenditures in Singapore are remarkably small indicates that Grandma dying of the ailments of old age is not the problem.  The problem is incentives for young healthy people, for that is the big difference with Singapore.

Since Singaporeans get good health outcomes, they are not underconsuming health care.

Therefore people in other countries are overconsuming health care – which is what we would expect if health care is free or heavily subsidized.

In some countries, health care is free for everyone, and I suppose that most people overconsume, though those with the most free time, the unemployed, the underclass, and the retired, probably overconsume the most.  But most of the time, in most countries, and in particular in America, it tends to be free for some people rather than others – for the poor, for non asian minorities, and for unmarried women, and so we should expect most overconsumption to be by such people.

And that is what I seem to see when I go to medical facilities in the US.

Grandma having an incentive to spend irresponsibly is not a significant part of the problem. The problem is beggars, gypsies, liars, cheats, tramps and thieves.  The problem is gimmiedats.

What makes healthcare expensive is the gimmiedats, not Grandma.  And proof of this is that when, as in Singapore, you continue to indulge Grandma, but you don’t indulge gimmiedats, healthcare costs a lot less.

In Britain, the NHS murders your grandmother to save money, but gives the man who thinks he is a woman a free sex change. In Singapore, they will not murder your grandmother, and will not provide a free sex change. Which place is more successful at reducing health care expenses?

If health care costs are such a problem that we need to murder people, let us murder gypsies.  Saves a lot more money than murdering grandmas.

Whenever one of the officially smart people tells you that the problem is old folks, he is saying “Let us murder your Grandma for your own good.  It is going to maximize utility.  You will love it.”  I say, kill the gimmiedats.

If we are going kill elderly people and eight month fetuses because they are expensive and inconvenient, I have a long list of people who are a lot more expensive and less convenient.

38 comments Murdering Grandma does not substantially save on health costs

jim says:

Yes, but a lot of them die off before they hit the very expensive levels, so the total number of very expensive people is dominated by young very expensive people.

Red says:

“What makes healthcare expensive is the gimmiedats, not Grandma. And proof of this is that when, as in Singapore, you continue to indulge Grandma, but you don’t indulge gimmiedats, healthcare costs a lot less.”

This may be wrong. I have some experience with higher ed and I can tell you for a fact the price increasing in higher ed are all the increase in the size and pay of the administration. A friend of mine works at a hospital with no givemedats and he believe the huge rise in prices is primarily due to having tons of worthless administration and secondarily paying doctors and nurses too much for too little work. A women I work with sister is a doctor in Canada and she works 8 hours a week and is payed 80k a year because she has children at home.

spandrell says:

Is the increased administration staff mandated by new legislation, or who the hell is driving that? I’ve heard about it worldwide.

Red says:

It’s most likely driven by Harvard. Back in the 50s and 60s Harvard replaced traditional mangers and foremen with people who knew nothing about the business they were running and relied on metrics to justify their jobs. This was a bigger problem for big auto than the actual unions were(See “Car guys vs the bean counters”). Some professions continued to rely on foremen type mangers like hospitals and the alike but in time they were corrupted by increasing amounts of paperwork and state reporting. Today every large enterprise are filled with metric based mangers who know nothing about the business. Hospitals were simply one the last dominoes to fall.

jim says:

Parkinson’s law.

Administration always grows. The only cure is the frequent death of old institutions and the creation of new ones.

Ideally you should shut down the most conspicuously bloated institutions first, both because that saves the most money, and because that deters bloat.

Steve Johnson says:

I have some experience with higher ed and I can tell you for a fact the price increasing in higher ed are all the increase in the size and pay of the administration.

Impossible.

Prices are driven by supply and demand. Increasing salaries for administration neither restricts supply nor does it enhance demand.

Prices are set by what the market will bear. The income is then spent paying the people who control the institution – the administrators.

Red says:

You’re forgetting student loans and government grants.

Steve Johnson says:

No I’m not.

Student loans and government grants shift the demand curve and therefore increase the market clearing price.

That’s your explanation for the why of higher ed prices increasing.

Red says:

Student loans are very special because they don’t have be paid back until the student is done with college. As such they represent an almost unlimited line of credit without a payment feedback mechanism that causes students to reduce their consumption. This is deeply inflationary.

jim says:

Whether the problem is admin or gimmiedats, murdering Grandma does not solve the problem, and making patients pay does solve the problem.

Having patients pay – and thus call the tune, solves both problems. The hospital with inflated administrative staff cannot compete. Thus the success of Singaporean healthcare fails to reveal which is the problem, staff inflation, or gimmiedats.

But it does reveal the cure.

Of course having students pay does not solve the higher education problem, since Harvard is selling political power, not education. One can set up a new competing hospital, but not a new competing Harvard.

Stirner says:

Just a data point from my personal experience.

My grandmother lived to 90+, generally in decent health. She had a clever estate consultant, so she divested/sheltered her meaningful assets well before she entered the end of life.

She eventually stroked out, and pretty much disappeared mentally. Physically, she was fine, but mentally, there was no there there. She went off to the old age home, and quickly transitioned into the Medicaid funded care for “impoverished” seniors.

At first, one of the attending nurses functioned as an “angel of death” who promoted a very bare bones care regimen. My father bristled at her suggestions, and basically told her to go fuck herself, and instead lobbied for a higher standard of care.

Months later, my father dies, and the care decisions fall to me. My grandmother is completely non-sentient, and the gentle suggestion is made to not give her a flu shot in the fall. Not wanting (or able) to actively euthanize my stroked out grandmother, I agree, and no flu shot is given. She dies from complications from an illness several months later. My grandmother had a DNR that my father had decided to ignore, so there were few moral qualms about making such a choice

This was a very nice Midwestern care facility, and that is how the game is played.

jim says:

In the British National Health Service, they play the game a bit rougher.

[…] Murdering Grandma does not substantially save on health costs « Jim’s Blog […]

DocClar says:

The truth is somewhat between what you are saying and what the mainstream narrative is. A substantial proportion of total care spending goes towards the last 6 months of life, and health spending by age stats are pretty compelling. I am not sure why you took the stats you did and ignored other stats that show the rest of the picture.

That said, the pattern you are describing 100% exists regarding those that do not pay anything. The most egregious examples at out hospital are all young, indigent, type 1 diabetic women who purposefully stop taking their insulin so they can get admitted and get pain medication. The worst of them is below 30, but has by my estimate in excess of 5 million dollars of unpaid written off bills due to how much CCU time she has eaten up.

Shifting incentives to users solves both of these problems though.

jim says:

The stats I have look motivated to me, motivated to argue that your grandma is responsible for health costs, rather than bad incentives are responsible for health costs, and they say, among other things.

the elderly (age 65 and over) made up around 13 percent of the U.S. population in 2002, but they consumed 36 percent of total U.S. personal health care expenses.

So if you kill everyone when they reach retirement age, total health expenses drop to two thirds of their current cost. Big whoop.

I suppose that is significant, but no one proposes to kill everyone who hits retirement age. The unspoken program is to kill old people when they get expensively sick, when they start being big spenders, when they become among the top five percent of spenders. How much does that save?

And the answer is, not a whole lot. The top five percent of elderly spenders caused thirty four percent of all elderly expenses, so if you kill them off, you save 34% of 36%, for savings of 12%

Singapore, on the other hand, does save a whole lot.

Thales says:

“We must invest in Sandmen and Sleepshops to bring down health care costs, create new jobs and stimulate the economy…”

jim says:

A substantial proportion of total care spending goes towards the last 6 months of life, and health spending by age stats are pretty compelling. I am not sure why you took the stats you did and ignored other stats that show the rest of the picture.

They superficially sound compelling if you don’t read them carefully, because they are arguing we should murder grandma. The numbers are massaged to make the case for murder.

But, if you carefully read them, rather than superficially read them, we would save around ten percent of health care costs by murdering those seniors that appeared to be approaching end of life.

The figures you look at show that dying people are pretty expensive. No shit, Sherlock. You need to look at dying seniors as a percentage of all health care. It is around ten or twelve percent.

The reason it is so low, is because some people who are not all that sick are costing a lot.

VXXC says:

We have anti-majority government.

Once this is recognized, along with the depth of their malice, it’s a question of what course to take.

This is the depth of their malice. Babies and Old people are killed because they are easier victims. That’s all. If they dared kill the rest they would. They don’t. They can however bring in 100 million mexicans to crowd us out. They can empty the prisons and raze the insane asylums. These aren’t quite marginal actions. But they’re limited by fear. That’s.All.

Fear is all that limits them.

This suggests a course of action.

But of course …if you’re afraid…

jim says:

What, specifically, do you propose to do?

The majority is minority, in that single females are effectively a non asian minority.

RS says:

> The most egregious examples at out hospital are all young, indigent, type 1 diabetic women who purposefully stop taking their insulin so they can get admitted and get pain medication.

Apparently they have a fair rate of depression/ major depression, though I only heard it from one source.

jim says:

Depression is an undefined illness with no objective symptoms and no effective treatment.

People who are actually sick, but the doctors have no idea what is wrong with them get classified as depressed, and people who are not sick, but claim to be sick, perhaps believe themselves to be sick, get classified as depressed.

Depression is the “other” category of illness.

[…] A casual glance around the emergency room suggests that the main cause of out of control health care… […]

[…] Murdering Grandma does not substantially save on health costs « Jim’s Blog […]

Alrenous says:

Regardless of the savings on dead grandmas, you would get the same savings by sending them home instead of outright murdering them. Indeed, slightly higher savings.

Naturally, this possibility doesn’t even come up, let alone get argued against.

Dan says:

Right — this is the answer. It is the closest thing I know of to a free lunch in all of economics. Let people ready themselves to meet their maker while surrounded by loved ones, rather than wither in some desolate hospital wing surrounded by the miserable dying.

You achieve at least three things: (1) people die happier, (2) you save a ton of money, (3) you infuse belief in God into the lives of the family that does the caring. People who must face dying must naturally get close to that old time religion.

I think you could start by giving big discounts and bonuses to those who care for family themselves.

Erik says:

(4) Hospitals shed some of the “places to die” image.

I think this may be changing.

Thank God I have not had to face it (yet) but I know two people who provided insurance-funded hospice care to terminally ill family members in their homes.

I am not kidding here: they will Fed-Ex the morphine and syringes to your door.

[…] Murdering grandma does not reduce health care costs. […]

forks_make_us_fat says:

Welcome to the world of the ‘gimmedats’!

A world where everyone is in line for a hand out…

Turn our the lights…the party’s over for the United States….

Murdering Grandma doesn’t reduce health Care costs?

You just are murdering her soon enough.

And don’t discount the cost of her assisted living that is also costing more every year than she ever earned in her life.

jim says:

To significantly reduce health care costs, reduced them by one third, that is to say, to two thirds of their current value, have to execute everyone on their sixty fifth birthday.

Executing all those over sixty five in top five percent of healthcare spenders only saves one eighth of current health care costs, reducing them to seven eighths of their current value.

The big spenders are largely young, and largely female minorities.

Glenfilthie says:

Screw Grandma.

Grandma, when she was younger, voted for unsustainable social programs and voted against politicos that wouldn’t pay for her vote. She probably got all politically correct as liberals and democrats flooded the country with low IQ immigrants to bolster their power base. Her entire generation lit the fuse on problems like feminism, homosexuality, recreational drug use and all the social problems that went along with those issues. She will bitch and whine that ‘she paid into the system and now can’t take advantage of it’ when actually – she, her idiot generation and her lickspittles in gov’t – pissed the money away long ago. Hell, chances are the dumb chit voted for Obama – twice! If she gets potted by the gov’t she helped create I see it as a form of poetic justice myself.

As for the younger crowd – all this will have been settled by the time they reach their senior years. There will be no health care at all. For them, end of life care will probably involve a quart of whisky and a Smith & Wesson – assuming liberals don’t steal the guns too.

Enjoy the socialist dream America! You most assuredly deserve it, I am sorry to say.

jim says:

Back in the day, progressives lied that it was not a transfer from young to old, but a forced savings scheme.

Today, they lie that it is a transfer from young to old, because it is today primarily a transfer from whites to non asian minorities, and secondly a transfer from males to single females.

Glenfilthie says:

Yeah. And it never seems to work, and it always seems that the people responsible are the people they are trying to steal from…!

Dan says:

I would say most healthcare dollars go to hopeless cases that are never restored to good health.

jim says:

I would say that by far the most healthcare dollars go to illegal immigrants in good health with no job, no income, and no assets.

Steve Johnson says:

Mexican illegals in the US are ridiculously diabetes prone – I wouldn’t bet on them being in good health.

http://www.bbc.com/news/magazine-35461270

“”About 10% of kids are being fed soda from zero to six months of age,” says Dr Salvador Villalpando, a childhood obesity specialist at the Federico Gomez children’s hospital in Mexico City.
“By the time they reach two it’s about 80%.””

Leave a Reply

Your email address will not be published. Required fields are marked *