To listen to President Obama discuss health care as he did last week in Virginia is to receive a well informed lesson on the problems of any health care system in the world and some unique American issues: It is all very expensive, some people do not receive needed care, there are administrative burdens in the system, quality could be improved, and costs are rising faster than growth in supporting revenue. There is no health care system in the world where the aforementioned five issues are not a problem. But making a diagnosis is not the same as coming up with the right therapy. He has identified problems but he has done so in an extremely superficial manner and this has led to proposed therapies that have virtually no chance of curing the patient.
The proposals put forward are only designed to fix one of the five problems- that some people do not receive needed care. The question of who these people are and why they have limited access to care is one that does not lend itself to quick or easy analysis.
They are not the poor and they are not the elderly. Those groups are cared for under current government programs of Medicare and Medicaid.
They are not the very young (<18 years) for they are now eligible to be covered under a government program, SCHIP.
They are those with moderate incomes (around $45,000/year) who do not receive employer funded care and who have decided that they cannot afford to pay for care themselves. This represents some 10% of the American people. Of these 30 million, some 25 to 50% are between jobs so the number is quite fluid. Some are young people who simply are unwilling to pay for any health insurance, even the kind that would guarantee payment for some catastrophic illness or accident. So the issue is about some 5- 10 million people who lack health insurance and really have a serious problem affording health insurance.
There are some 290 million or so Americans for whom the health care insurance system would have to change to accommodate the other 10-20 million according to proposed plans. Wouldn’t it be easier just to design a plan for the 10-20 million? The President is proposing changes for everyone. Why is that?
He says the reason to change the whole system is to control costs but in fact the only solid plans put forth are to guarantee health insurance for most of the uninsured, not to do anything at all to control costs.
The growth in health care costs in virtually every industrialized country is about at the same growth rate as in the U.S., so every country is grappling with the problem no matter how it finances health care. But our system is much more expensive than all other systems, for example about 50% more per capita than Canada so it looks like his diagnosis of excess costs is valid. But it is necessary to understand why our system is expensive to identify the right therapy. It really has to do mostly with the availability of technology in this country. Every time a patient needs an MRI done for back or knee pain, the actual cost of the image produced is the cost of the electricity that runs the machine- a few pennies. The reason the test is expensive is that the machine itself can cost millions of dollars and a crew of people need to run it and maintain it. These are called fixed costs and they are present whether the machine is used to take any images at all on a given day. But we have excellent access to MRI machines in virtually every hospital in the United States. There is little or no waiting for access to an MRI.
“Reducing unnecessary tests”, one of President Obama’s therapies for our health care “ills”, will only reduce costs if we get rid of the MRI machine and the people that run it. Shutting off the machine for a week or a month or a year will not save those fixed costs unless the people go and the payments to the bank that financed the machine go away too. That is how Canada does it. Less technology so less costs. That is why it takes 18 months to get a hip replacement in Canada. Less access is the real face of rationing.
Whether the population is content with these limits is a function of whom you ask. Individuals with greater health literacy will likely seek greater access to technology and care. In fact, even in countries like Great Britain, the more affluent utilize more services in the National Health Service than do the poor. But make no mistake, a key mechanism to reduce costs is to reduce access to care and to technology. Perhaps not to all care like emergencies, but to plenty of care like hip replacements, elective cardiac bypass surgeries, and screening tests like mammographies.
How about his other cost saving plans? Electronic medical records? Good idea but they are expensive to create, expensive to maintain, and have the potential to reduce errors and to save money but this has never been proven to occur in places where the electronic records are installed. They are probably a good thing to have but will not necessarily save money.
What about preventive care? Another good thing but also not necessarily a cost saver. Certainly some vaccines save huge amounts of money but other screening tests lead to increased costs because one has to screen everyone to prevent disease. Take the PSA test. Something like 80% of men develop prostate cancer but it is the cause of death in about 4-6% of men. So just finding a positive test and performing surgery on everyone with a positive test will be enormously costly to prevent the few from dying of prostate cancer. Again, depending on your point of view, a good thing, but not a cheap thing. There are many effective screening tests and avoiding terrible disease is a wonderful outcome, but not a major cost savings approach.
So where are the savings to be gained? Cut payments to hospitals and physicians? OK but that is not likely to help in the access problem, is it? Less revenue to hospitals means fewer people to staff the clinics, the equipment, the pharmacies, etc.
What about cutting payments to the insurance companies that provide health insurance? Commercial insurance companies, if they are efficient, typically pay 80 to 85% of their revenue to medical claims. So we have about 15% of their revenue that does not pay for health care and could be savings to the system. However, since about 50% of health care spending is in Medicare and Medicaid, and since those programs have a 3% overhead, that leaves about 4.5% of health care spending that would go away if all the insurance companies disappeared tomorrow and if Medicare or some other government program were the only payer. That could happen but the President promised us that we could keep our health insurance if we liked it and since polls show that most Americans are content with their health insurance, it is hard to see how we would save more than 1% or so on administrative costs with the current proposals unless the actual cost of health care goes down. The latter must mean less access to physicians or to technology.
And make no mistake, despite the President’s statement that “more health care is not better health care”, less spending on health care does indeed mean lower quality of care. Based on the recent research of Dr. Richard Cooper of the Wharton School of the University of Pennsylvania, “based on broad measures of health system quality and performance, states with more total health spending per capita have better-quality care. This fact contrasts with a previous finding that states with higher Medicare spending per enrollee have poorer-quality care. However, quality results from the total funds available and not from Medicare or any single payer. Moreover, Medicare payments are disproportionately high in states that have a disproportionately large social burden and low health care spending overall. These and other vagaries of Medicare spending pose critical challenges to research that depends on Medicare spending to define regional variation in health care.” President Obama’s quoting a New Yorker article as justification for decrying regional variations in health care and Medicare costs is amateurish.
Dr. President Obama’s makes the point that health care spending will bankrupt the nation as a 37 trillion dollar deficit is looming by the end of the century. But that deficit is in the Medicare and Medicaid programs!! That is the single payer plan that is his real endgame, as he stated in the campaign. So a single payer, government run health insurance plan as Medicare is constituted cannot be our salvation.
We do need a new system given the long term cost projections and there are models like Kaiser Permanente, Geisinger Health Care, and others that provide high quality and somewhat lower cost. They are still pretty expensive but if their approaches were instituted widely, we could probably control costs a bit better and over the very long run maintain our system without drastic limitation of access. But it will take many years and much local experimentation to achieve this goal. The Commonwealth Fund polled individuals in several industrialized countries to find out how they felt about their health care system. The results were the same across the countries polled. They mostly felt that the health care system was in trouble and needed to be fixed. But what bothers people in each country is quite different. Here our problem is cost although availability of primary care physicians is an ongoing source of frustration. In other nations, it is mostly access to technology and specialty care but rising costs are seen everywhere (mostly to accommodate new technology if it becomes available in other countries).
There is no panacea for health care. The President has diagnosed several problems with our health care system but his cures are off the mark. If our national goal is to assure all Americans have health insurance, and we focus on the 10 -20 million people who have fallen through holes in the safety net, then we need about 200 billion dollars to pay for their insurance. That is a 2 trillion dollar 10 year plan. If we want to lower health care costs by that amount, let’s get started. But to do it right does not mean a bill before the August recess. It means a long term plan that must include some means testing of entitlements, some hope that research produces therapies that really do lower costs of chronic illness, and some tackling of our current system of piecemeal reimbursements for most medical care.
And by the way, the province of Quebec has recently allowed some private health care insurance to exist. Leave it to the French(-Canadians)! They do not like to wait either.
61 responses so far
1 midcon // Jul 9, 2009 at 8:43 am
Stanley,
Excellent points. It occurs to me that the health care debate/discussion is not being parsed accurately, which leads to emotional responses regarding the topic. No American is without access to the full range of medical/health care that this nation offers. It may not be routinely be affordable for many – hence the need for insurance. It seems to me that the essential elements of the problem are the cost of health care and the cost of insurance. While significant efforts can and should be made to decrease costs, the nation can more easily address the insurance issue and has done so with programs like Medicare, Medicaid and SCHIP (although it is debatable whether these were real solutions or somewhat lame attempts because politics is an obstacle to real solutions).
Could and should the nation create an insurance program that covers every citizen with a base level of health care insurance? Well, with some exceptions we apply that model to retirement through Social Security, to savings throuh FDIC, and other similar government programs. So it seems the answer would be yes we should. If you accept that premise then the question becomes how to execute such a requirement. Social Security only provides a base level of retirement income and is not intended to cover all of one’s needs throughout the remaindef of their life. In that respect, retirement income is then comprised of both public (Social Security) and private income (401K/IRA). Perhaps health care insurance should consider the same approach.
We have several options to accomplish this; private insurance under government regulation; private insurance regulated by the marketplace; or a government program such as a Federal Health Insurance Corporation (FHIC). Personally, I do not believe in a solution that is without regulation. While regulation causes inefficiencies, providers who are profit motivated cannot be relied on to act in an ethical manner when faced with choices that conflict with maximizing profit because their primary responsibility is to their shareholders – as it should be.
Solutions do not become evident when debating the entire domain of health care. In order to tackle the problem you have to break it down into manageable components.
2 ottovbvs // Jul 9, 2009 at 8:57 am
An extremely superficial manner? Are you kidding me. Our healthcare dilemma is probably THE MOST analysed and debated area of public policy that we have and has been for years. The president’s point man on this, Peter Orzag, is by universal consent probably the most well informed or certainly one of the most well informed public servants in this area. To say his analysis and prescriptions are superficial is preposterous. The problem, surely, is not that his analysis is superficial, it’s that you don’t agree philosophically with his remedies for curing what you agree with him are the problems that bedevil the system. Obviously, no systems are perfect and of course other countries as you say face similar issues. The difference is that these are systems that already cover everyone and don’t have anything like the cost burden. A burden that is forecast to grow from around $2.4 trillion or about 16.5% of GDP to around $4.4 trillion which will be well north of 20% of GDP. I don’t disagree with your analysis of where some of the problems lie although you gloss over the issue of “the poor” because obtaining Medicaid is not a walk in the park. I don’t agree with your numbers on insurance company’s distributions which is an area that is shrouded in mystery basically because the insurance companies are very reticent about divulging info. There are in fact several studies which suggest their admin costs and retained profits are nearer 40% than 15% and based on my own private knowledge of the industry I suspect it’s actually in the low thirties. We do know however that health insurance has long been an exceptionally profitable area of the insurance market. In any case you are largely talking about the trees here rather than the wood. And when it comes to the wood you don’t actually offer any real solutions to the problem other than kicking the can down the road with “many years of local experimentation” and talks about talks. In fact contrary to your assertions the broad parameters of the issue are exceptionally well understood and there are mountains of data available on where the major operational and financing problems lie to guide health professionals in finding solutions as we move forward. The problem is those solutions are going to produce winners and losers. Broadly speaking the net losers are going to be the healthcare industry who are basically going to have to become more efficient and will inevitably become less profitable. Insurance companies for example are not going to be “forced out” of the insurance business but it’s going to be a lower margin business with all that that implies. Sorry to mix metaphors but we’ve been can kicking for years, it’s time to fish or cut bait.
3 barker13 // Jul 9, 2009 at 9:22 am
Re: Midcon // Jul 9, 2009 at 8:43 am –
“Could and should the nation create an insurance program that covers every citizen with a base level of health care insurance?”
Midcon. Re-read what you just wrote. Now, think about it.
The problem isn’t dealing with the “base” level; the problem is when medical needs SURPASS the “base level,” which inevitably they will for some people.
Think of it this way: What’s a “base” level of food subsistence? Just making up a number, say it’s 1,200 calories a day. How’bout “base” levels of housing? Think a one-room apartment… think “X” square feet per person or per couple or per family. Clothing…? What’s “base” clothing necessity?
Healthcare doesn’t work like this. Yeah… there’s a “base” – but only until there’s NOT a base, only until something really bad happens.
If you’re ill (take Sinz for example) your “base” expenditures are gonna be a hell of a lot larger than if you’re generally healthy. Let’s say the average individual “requires” $1,000 a year “base” amount to cover “usual” medical expenses. Now, throw in the occasional “normal extras” like colonoscopies, MRI’s, mammograms, etc. So, call it a “base” of maybe $10,000 for every eight years – that’s assuming no major surgeries, hospitalizations, no “super drugs” costing hundreds or thousands per month…
See what I’m saying? Covering the “base” doesn’t address what happens when necessary care requires going beyond the “base.” It’s not like food stamps where you establish a per person/per family “base” and that’s that. No family member is suddenly going to “require” $1,500 per day worth of food – whereas if you suddenly find yourself a victim of cancer or some other dread disease God only knows what your new “base” care will cost over the next few years.
Sorry, Midcon, I just don’t see how one compares health care and treatment expenses which can and probably will fluctuate to a huge extent to programs such as rent assistance or food stamps or pensions where you actually can create a “base” and stick to it.
BILL
4 barker13 // Jul 9, 2009 at 9:43 am
Re: Ottovbvs // Jul 9, 2009 at 8:57 am –
“We do know however that health insurance has long been an exceptionally profitable area of the insurance market….There are in fact several studies which suggest their admin costs and retained profits are nearer 40% than 15% and based on my own private knowledge of the industry I suspect it’s actually in the low thirties.”
So let me ask you a question, Otto… let’s assume you’re right about administration costs and retained profits amounting to… say 32%. (Right…? Low thirties?)
Now. Just to pick a number the easy way, let’s “make up” a split of 50-50 as applies to administrative costs vs. profit. Fair enough? Thus, let’s assume “profit” is 16%.
Fair enough… for the sake of argument can we work with that 16% figure?
So… here’s the question: If we were to compare non-profit health insurance providers to for-profit health insurance providers, will we find that non-profits offer the same level of service and coverage for 16% less money in terms of premiums?
If not… well, if not, doesn’t this kind of blow a hole in the argument that it’s the “greedy capitalist insurance companies” which are behind the outrageous health insurance premiums people like me pay?
(I say people like me simply to separate myself (and I’m sure most, probably all of you) from those receiving benefits cutesy of direct taxpayer subsidy – government programs.)
BILL
5 ottovbvs // Jul 9, 2009 at 10:17 am
barker13 // Jul 9, 2009 at 9:43 am
“So… here’s the question: If we were to compare non-profit health insurance providers to for-profit health insurance providers, will we find that non-profits offer the same level of service and coverage for 16% less money in terms of premiums?”
………No it doesn’t blow any holes………You forget Barker we have a major non profit insurer currently in place…..it’s called Medicare……it’s admin costs are estimated to be around 3.5-5% versus the 16% admin you theorize (probably in the ballpark) for the insurance companies and of course there is no net profit margin required to pay management bonuses or shareholder dividends…….Apart from some complaints about reimbursement rates Medicare provides comparable service and coverage for most seniors in the country and they are after all the main recipients of medical treatment…….Your question is as usual bogus….Bottom line the comparison is between the total admin/net profit costs of the insurance companies which you are agreeing is probably around 32% and that of non profit Medicare which is max 5%……..When you recognize the fact that roughly 46% of the total $2.4 trillion healthcare tab in this country is paid for by insurance companies (that’s going to be around $1.1 trillion) that means something like $350billion is being left on the table to cover insurance companies admin costs and profit……….I never mentioned greedy capitalists…..just the fact that the healthcare insurance business is highly profitable…….And it’s making it’s profit not off you but principally business in the US which is paying about 75% of the premiums and bankrupting them…..but don’t let that bother you.
6 barker13 // Jul 9, 2009 at 10:26 am
Dr. Goldfarb,
Allow me to share some personal perspective with you and hopefully elicit a response:
My wife and I are now “on our own” in the sense that our daughter has graduated college, is now off on her own and thus no longer on our insurance.
I’m self-employed. My wife works for a small firm and we get our health insurance through her firm. Right now we have Oxford and our joint premiums come to a bit over $900/month. (That’s down from approximately $1,300 when our daughter was on our plan last year.)
Now… and I’m guessing this is the norm… our insurance premiums are figured on a yearly policy basis. In other words, every year my wife’s firm’s insurance agent comes to the partners a month or two before the yearly policies term out and he gives the firm’s partners (and employees) the new numbers and options for the upcoming year’s health insurance costs.
Well, it seems that if my wife and I want to keep our Oxford coverage as is… our premiums will go up 21%. (That’s TWENTY-ONE percent.)
Not everyone in the firm elects the same coverage or even the same company. Some of my wife’s colleagues have Aetna. Those forks are looking at a 25% premium jump to retain their existing coverage. (That’s TWENTY-FIVE percent.)
First question…
WHAT
THE
F**K…?!?!
Any thoughts, doc? I mean, this sort of thing has happened to us before – it’s not unusual – but in a way that’s my point… that’s my question. How the HELL can this kind of jump be justified?
Next point – which will lead to my next question:
I’ve wanted to get an HSA/MSA for years now. The concept just makes sense to me. I mean, I believe in paying “base” medical care costs out of pocket just as I pay ALL of my “base” living expenses out of pocket. What I want insurance for is… er… INSURANCE. In other words, I would love to have a true insurance plan where my wife and I are paying a reasonable amount (reasonable in terms of actuarial costs) for CATASTROPHIC insurance while being open to some reasonable (say $5,000… maybe $7,000… maybe even $10,000 or more) exposure on the medical care front.
We can’t do it! Not in New York! Nope. I’ve researched it. My wife’s firm’s insurance broker has verified it. As residents of the Empire State (a blue state… about as liberal, as “progressive” as they come) true catastrophic health insurance just isn’t an option. We could get something “called” catastrophic healthcare insurance, but the premiums would be right in line with “regular” insurance.
So… what the F**K am I supposed to do, doc? Just pay…? Just pay and pay and pay and pay…???
I mean, doc, I know I’m far from alone, but think about this… imagine what my wife and I have paid in healthcare insurance premiums since we’ve entered the workforce. Think about it… we’ve pretty much always paid at least 90% of our healthcare insurance costs out of pocket (my wife’s firm presently kicks in $150/mo. so we’re paying over $750/mo out of pocket). At $750/mo. we paid $9,000 out of pocket this year alone. Over the past 22 years my wife has been working at this firm…
(*HEADACHE*)
And for what? Our “major” medical expenses over the years have been dental – which is paid totally out of pocket. My wife had her appendix taken out last year… that was a few thousand… still, pretty sure well under $10,000. Other “major” costs… I’ve had three colonoscopies since turning 40; I’m 47 now. The first two were with the Valium drip, no separate anesthesiologist required. (*SHRUG*)
So what are we talking… hundreds of thousands of dollars (remember, until this year we had the “kid” on our policies) in premiums for… a 10% or perhaps less “payoff.”
Doc… you’re the expert. Does this make sense to you? I’ve gotta tell ya… it doesn’t make sense to me.
Anyway… I’m throwing out my personal situation not to get personal advice per se, but as an example of what I’m guessing tens of millions of us face. I don’t want socialized medicine. I consider the government “regulation” as is to be more of a problem than the germ of a solution! I believe in capitalism and pulling my own weight…
Doc. A 21% increase in premiums this year. That’s what I’m looking at. And next year…??? And the year after that…??? And the year after that…???
It seems to me that the present system is unsustainable. It also seems to me that further socializing it is the LAST thing we want to do.
So… any thoughts? Any answers…???
* HEY… Mike, if you’re reading this, throw your two cents in.
BILL
7 barker13 // Jul 9, 2009 at 10:30 am
Re: Ottovbvs // Jul 9, 2009 at 10:17 am –
Otto. How many times do I have to tell you. While I’m intolerant of idiocy, what really burns me is dishonesty.
“You forget Barker we have a major non profit insurer currently in place…..it’s called Medicare.”
No. Medicare isn’t a “non-profit” in the sense of my question and you damn well know it. Medicare is a government program and it achieves it’s “savings” by government price/reimbursement mandate.
You know this. Why waste my time, your time, and everyone else’s time by trying to bull$hit your way past my entirely reasonable question/observation?
That’s it. You’re back in “Time Out.”
BILL
8 ottovbvs // Jul 9, 2009 at 10:44 am
barker13 // Jul 9, 2009 at 10:30 am
…….Barker it is sometimes impossible to encompass the extent of your dimness/weirdness……Medicare performs exactly the same function as a health insurer……It pays providers for the provision of healthcare and drugs…..it receives their bills and sends them checks…..Conceptually it’s even funded in exactly the same way although with additional government subsidies…..believe me man you are one mixed up puppy
9 ottovbvs // Jul 9, 2009 at 10:54 am
barker13 // Jul 9, 2009 at 10:26 am
……..Barker you do appear to have figured out we have a train wreck on our hands because although you have happily been healthy but are faced with an infinite future of huge healthcare increases……However ideology seems to prevent you from connnecting A to B……..The right doesn’t have an answer that provides universal coverage and contains costs…….their constituency doesn’t want them to contain costs because that will make the healthcare “business” less profitable……Once you recognize that simple fact the lightbulb might come on but I wouldn’t count on it.
10 midcon // Jul 9, 2009 at 11:02 am
barker,
You have to start somewhere. If you accept the premise that there is base level of coverage for everyone. Then the next step is to address the sinzes of the nation. That’s the discussion that includes parameters such as chronic and catastrophic illness, and other major cost factors. The base for food stamps, rent assistance and other subsidies is already “based” on the nature of the need, including size of the family and income. It is not a one size fits all.
It is a fair criticism that my thoughts did not include what to do about sinz. That’s because I wasn’t trying to take care of all his needs. The problem we face is comprehensive solutions are nearly impossible to affect without at a reasonable cost. So I do not propose to solve that today. Hence my statement that we need to break down the problem into manageable increments. Having been in project management nearly my entire adult life I can tell you that large programs/projects are actually accomplished by breaking down the program into executable increments. That’s how we did the Space Shuttle program and many others that I worked on.
I stand by my opinion that there is a need for a base level of coverage for everyone. I also recognize that I have not solved sinz’s problem. For that we need to discuss whether there are limits to what society should provide to the individual (providing as in paying for and not simply providing access). For instance, should there be limits on experimental treatments,which by their nature are not ubiqituous? When does a treatment become part of the base level of health care? What do we do for those who are unable to afford advanced treatments that are not covered under the base level? Would there be another plan/program to provide that? Should the government subsidize that? I admit I have no answers but I am thinking about it.
Bottom line: There is no single answer to a complex problem. There are multiple solutions and the only way to arrive at a solution is to decompose the problem and address each element. That’s how it’s done in programs and projects from constructing roads and buildings to launching spacecraft and developing software.
11 Oneon1isto // Jul 9, 2009 at 11:18 am
I’d actually be interested in Stanley tackling this from the costs to business angle. Part of the healthcare debate can be looped into stimulus…right now healthcare is a major burden for corporations, especially small business. There are plenty of ways to theorize how this would reverberate through our economy…
12 barker13 // Jul 9, 2009 at 11:53 am
Re: Midcon // Jul 9, 2009 at 11:02 am –
“Barker, you have to start somewhere.”
Granted. But you do “get” what I was saying…. right? I mean you agree with me that that nature of medical CARE requirements is “different” from other “life” requirements since extraordinary expenditures are often necessary in order to provide CARE in a way they’re not in providing food, clothing, shelter, et al. Right…???
“If you accept the premise that there is base level of coverage for everyone.”
But I do! And I expect to PAY for this “base level” just as I expect to pay for my housing, clothing, food… (*SHRUG*)
Midcon. By and large I don’t want to “subsidize” tens of millions of my fellow Americans.
Here… example: This whole SCHIP deal. I don’t want to subsidize the insurance coverage of kids living within a family of four making up to ($80,000) EIGHTY FRIGG’N THOUSAND DOLLARS a year when my wife and I paid for our own damned insurance AND our daughter’s coverage for decades on LESS than that income!!!
I mean, sure… the truly needy… the truly deserving… those temporarily down on their luck…
I’m a charitable guy; I’m not a schmuck though. I don’t trust the government to separate the “truly needy and deserving” from the lazy and the scammers. Do you…???
Right next to my “affluent” town of Woodbury, NY (Orange County, NY) there’s another Town, Monroe. The Town (and there’s also a Village of Monroe within the Town of Monroe) of Monroe is also “affluent” if you compare/contrast nationwide census data.
Within the Town of Monroe there’s a Hasidim Village called Kiryas Joel. Last time I checked the census data the official poverty rate was 90+ percent. What’s that mean…??? MAJOR government grants and subsidies. Food stamps. Housing assistence. Medicaid. And on and on and on.
I pay for this. YOU pay for this. We ALL pay for this. Well, Midcon… I don’t wanna frigg’n pay for it! I don’t want these people living on the dole, on my dole, on your dole.
Black. White. Hispanic. Jewish. WHATEVER…!!! I’m just sick and frigg’n tired of being asked to reach into my pocket and support not only myself and my family, but every frigg’n weasel with his or her hand out!
(*RANT OFF*)
“…the next step is to address the sinzes of the nation.”
I agree. But this is a separate proposition from your original “provide a base” posting.
“That’s the discussion that includes parameters such as chronic and catastrophic illness, and other major cost factors.”
Again. I repeat. Here in New York State it is the STATE GOVERNMENT which for all intents and purposes regulates AGAINST catastrophic plans. My state government isn’t my “friend” when it comes to health insurance options… they’re my “enemy.” It’s the regulations that are bleeding me dry – it’s the state mandates! And from what I gather, Obama’s plan would drive the federal government policies more in line WITH the counter-productive and frankly harmful policies of states like New York rather than the other way around.
“I stand by…”
Great. You do that. I’ll stand by my writings also. In the meantime, if you haven’t already checked out the thread titled, “The Cost of Romneycare,” I urge you to do so.
Finally… and I know I sound like a broken record… but finally I’ll once again note that if the authors of these thread “contributions” won’t engage with us, with the posters, they I don’t see much hope for this site ever going beyond what it is today – just another blog.
BILL
13 sinz54 // Jul 9, 2009 at 12:03 pm
ottovbs: Medicare currently pays 80% of the cost of my dialysis. (Medicare considers my End Stage Renal Disease to be a disability.)
But Medicare’s reimbursement rates are significantly below what Blue Cross reimburses at. That’s why something like one-third of the providers in America either don’t take Medicare anymore, or they cost-shift to the private insurers. (That’s what is happening with my Blue Cross–they pay the other 20%, and pick up much of the cost of my doctor visits and surgeries.)
While the demand curve for health care is different than for other services, the supply curve is not. Cap payments and you’ll end up with fewer providers or merged providers. That’s exactly what is happening in Massachusetts where I live. To control rising costs, providers are being merged into giant networks, and each patient will get health care from that network.
Of course, that is yet another example of how Obama lied when he said that “if you like your current care, you can keep it.” No we can’t!
14 sinz54 // Jul 9, 2009 at 12:09 pm
ottovbvs: The “losers” of health care reform are not just the health care industry or the insurers.
The “losers” are going to include those American citizens who have become accustomed to a high level of inexpensive (for them) fee-for-service medicine–and who are now going to see that disappearing.
Those Americans with generous health care benefits are either going to see those benefits taxed (McCain’s idea which Obama ridiculed), or have to put up with higher premiums and co-pays, or get fewer benefits. And fee-for-service is going to replace with outcome-based medicine and even cost effectiveness tradeoffs. That older gentleman is going to be told he won’t get a prostate biopsy, because it’s more cost-effective to let a few men get prostate cancer than to pay for millions of biopsies with negative results.
That’s why the Midwest labor unions have started grumbling. They had agreed to wage concessions to save their employers from ruin, and now they’re being told they’ll have to agree to higher costs for their health care too–a violation of the contracts they negotiated.
15 ottovbvs // Jul 9, 2009 at 12:14 pm
Oneon1isto // Jul 9, 2009 at 11:18 am
” I’d actually be interested in Stanley tackling this from the costs to business angle.”
…….I wouldn’t hold your breath…….this IS a zero sum game……faced with an infinite future of paying 10% increases in its healthcare costs and the realization that over the last 10 years or so they have shifted all they can to employees the bulk of informed US business has become unwilling to go on funding the huge wealth transfer to the “healthcare industry” that the current US healthcare system involves…….This is why corporations like GE, Boeing, United Technologies and most recently Wal-Mart have decisively switched their support to reform of the system……..The math says it all (and I know I’m simplifying a bit) the premium for a healthy family of four costs around 13,500 with some significant copays and deductibles (I read today the Federal govt are paying $17,000 for such a plan so maybe they have no copays or deductibles). Over the past 10 years or so business has moved about $3,500 to $4,500 of that cost onto the employees so they are left with $10k in round terms to pay the insurance company. There are mass of studies out there that say premiums are going to continue rising by 8-10% a year and so will have doubled by 2017/18. Do the math assuming currently you are a corporation with 50,000 employees and it’s going to double within eight years during which profit growth will probably be in a range 30-50%. GE I believe has hundreds of thousands of employees in the US.
I wouldn’t need to buy groceries for a year if I had free meal for the number of presentations on this subject that I’ve heard privately and at conferences from insurance companies, business friendly advocacy groups like AEI, politicians like Jack Kemp, etc. At the end of the day the US which means principally business and taxpayers is paying twice as much as anyone else for a grossly inefficient system that provides a high standard of care for many but not all and is increasing in cost at twice the rate of peer groups. To bring it’s cost structure in line with others will involve winners and losers because it IS a zero sum game. And at the end the day this is what most of the anti reform advocacy is about.
16 midcon // Jul 9, 2009 at 12:19 pm
Yes I get what you are saying. And yes, I expect everyone to pay for this base level – except for the truly needy. And finally, yep an income of $80K does not sound “truly needy” to me – there needs to be limits. So given your caveats you and I are on the same page for a basic level of coverage.
Funny you should mention Kiryas Joel because I kinda zoomed by there on Monday heading home. The extreme poverty there is a direct result of the rabbit-like behavior of its residents. I am a fan of limits on individual rights when they infringe on individual rights to enjoy the fruits our individual labors. If you can afford 15 children, fine have them. If you can’t afford them, then you should not be allowed to have them thereby encumbering the state, which infringes on others’ individual rights. Our society should not tolerate this behavior regardless of ethnicity, religion, or language.
17 ottovbvs // Jul 9, 2009 at 12:36 pm
13 sinz54 // Jul 9, 2009 at 12:03 pm
………Well the first thing I’d say is it’s a good job you’ve got medicare because otherwise you’d be paying the entire cost yourself………. God knows where you got your 33% of medical providers don’t accept Medicare reimbursements……33%…. half the hospitals and doctors in the US would be out of business……I’m not saying there aren’t constant complaints about the level of medicare reimbursements but you’re massively overstating the problem…..the fact is and I’m sure it’s sacrilege but doctors, outside of primary care, and hospital systems are basically making too much money. Your argument is that if an oncologist stops making $750k a year and drops to say $600k they are all going to fly the profession. I doubt it. Btw I know a oncological surgeon in the south whose probably earning about $1.5 million a year……Reduced to their essential your arguments all amount to complaints that we’re looking at switching from an inefficient and over expensive system that rations by the ability to pay and has massive collateral problems to one where rationing will substantially be ended and an effort made to deal with the collateral problems.
18 SFTor1 // Jul 9, 2009 at 12:40 pm
People here, like midcon, understand the basic premise, that health care is a cost center, like fire or police.
There is no good reason why it should it be a profit center. We’ve tried that model, and it doesn’t work. It provides poor and uneven results at high costs.
The other thing that becomes obvious over time is that the lowest cost to society comes from maintaining a healthy population. To do that, you need to provide systematic care, which includes social (or preventive) medicine. The more you have a system that has a single risk pool, the better off you are from a cost point of view, for the very reasons barker mentions (unpredictable health developments for different people.)
The only reason some people think health care in the U.S. should be private is because it has a history of being private. It gets the conservative protection from socialization. In other countries, just as capitalist as the U.S., it has been public for a long time, and as the public system demonstrably works better, the debate has been over a for a long time already.
19 ottovbvs // Jul 9, 2009 at 12:47 pm
barker13 // Jul 9, 2009 at 11:53 am
…….Another little masterpiece of limpid clarity of thought
20 ottovbvs // Jul 9, 2009 at 1:06 pm
sftor1 // Jul 9, 2009 at 12:40 pm
……I agree with you that the dichotomy over whether the principal purpose of health insurance is to provide cost effective access to healthcare for all or to operate as a commercial engine of gain lies at the heart of the debate about how we fund our system. Before addressing that it just needs to restated for the umpteenth time that the paying side which at this stage is principally what’s being argued about is totally separate from the delivery side although conservatives constantly blur the difference as in “if Obama introduces a public insurance option you’ll have to change your doctor” or some such fictions. Personally I’m very much in favor of keeping the private insurance market because just as the public option will keep the private insurers honest so will the private insurers keep the private option honest. Despite the scaremongering there’s little chance that while it remains profitable the major insurers are going to quit the market. They are definitely going to have to adjust their cost base you can’t spend 15% on admin when your competitors spending half that and margins are going to shrink. They’ll still be there; just smaller, with fewer glass towers and not making as much money. When it comes to the delivery side which is largely private and will remain so, it needs competition if it’s going to squeeze cost out of the system. I’d like to think I understand that healthcare is a cost center rather than a profit one but that doesnt’ mean there isn’t a place for incentives. Don’t throw the baby out with the bathwater.
21 ottovbvs // Jul 9, 2009 at 1:09 pm
Ooops sorry literal:
“just as the public option will keep the private insurers honest so will the private insurers keep the public option honest.”
22 barker13 // Jul 9, 2009 at 1:27 pm
Re: Midcon // Jul 9, 2009 at 12:19 pm –
(*HANDSHAKE*)
BILL
23 barker13 // Jul 9, 2009 at 1:51 pm
Re: Sftor1 // Jul 9, 2009 at 12:40 pm –
“…health care is a cost center, like fire or police. There is no good reason why it should it be a profit center.”
Hmm… a few problems with such an approach.
1) So you want all doctors and nurses to work for the government or else volunteer their services? I mean, that’s how police and fire departments work – you have full-time police and firefighters who are paid salary and benefits and to supplement full-time, paid, professional firefighters you have volunteers who kick in their time and efforts in return for perhaps a tax benefit, but usually, mainly, because they enjoy being volunteer firefighters or auxiliary police officers.
2) “Profit.” Interesting word. Society certainly “profits” by having police officers and firefighters. And certainly the firefighters and police officers themselves “profit” by being PAID either in money and benefits, or – in the case of volunteers – in “satisfaction.”
3) We have professional police and firefighters… heck, we have a professional military… but we also have civilian “private” cops (“security”) and even private fire “departments” for certain large businesses who based upon cost/benefit analysis deem such “private” expenditures necessary. Will you allow “private” medical professionals to exist as back-up to the “government medical corp” you seem to favor creation of?
4) What do you want to pay government doctors… government nurses… government healthcare workers of all types? You gonna start off a new resident at $35-$45K or $135-$145K? Hmm? How’bout unionization? Cops are unionized. Will you unionize government medical professionals – with a doctor’s union at the top of the pyramid? Hmm… once a doctor completes his or her internship what’s their government salary gonna jump to? Do they get to retire at half-pay (or higher) after 20 years “service?”
5) Hmm… anyone watch shows like ER? I mean… IMAGINE that show if you threw in “union work rules.” (Hell… I can’t even see the internship system used to “season” new doctors being allowed if government were to directly take over medical care.)
“The other thing that becomes obvious over time is that the lowest cost to society comes from maintaining a healthy population.”
6) OK. Let me ask you… are you a doctor? Are you a nurse? As previously noted, the “problem” with this whole “lowest cost” focus is that in order for lowest cost to work out in an financial accounting sense you’re gonna have to lower expenses. Wages are expenses. Benefits are expenses. Equipment is an expense. So… whose salaries are you going to unilaterally cut – doctors, nurses, technicians, engineers…??? Back to what you do for a living, are you planning on taking a salary/benefits hit in order to serve the good of society? I mean your personal “costs” are factored in to the price of whatever it is you “provide” society through your labor – you gonna take a cut so that I and our fellow posters can save money on whatever your personal “product” is?
“The other thing that becomes obvious over time is that the lowest cost to society comes from maintaining a healthy population. To do that, you need to provide systematic care, which includes social (or preventive) medicine.”
7) Again with this “you need” business. Hey… what do YOU do…??? You’re pretty damned generous with others time and money… how’bout YOUR sacrifices? Hmm… you’re so worried about not enough healthcare being provided to enough people at low enough cost… why not sign up for med school, do an internship, and then volunteer your time at your local hospital in return for minimum wage?
BILL
24 ottovbvs // Jul 9, 2009 at 2:12 pm
barker13 // Jul 9, 2009 at 1:51 pm
…….It’s his cosmic understanding of how society, govt and business function that leave one lost for words
25 Oneon1isto // Jul 9, 2009 at 3:58 pm
Jumping in for sftor1…
1. Yes, that’s the idea. Although “work for the government” makes it sound like they’re DMV employees. You do the idea right by comparing them to police and firefighters, unlike some…
2. On profit – his point is that taken as a whole, its not a profit center for society in general. It’s a fixed cost attributed to keeping society alive, like keeping the peace. Doesn’t mean you can’t have entities profit, just means overall its a cost.
3. Private options still exist in a single payer system. They provide more expensive options. We’re already sort of in a dual system already, its just that they’re all private options.
4. As I understand it, we’d use a single payer system to adjust the way doctors are reimbursed. Right now its on a test by test basis that rewards specialists and penalizes general practitioners. It’s not a matter of wages, its a matter of adjusting how doctors make their money: by treating patients or by giving out treatments?
5. I’d rather not imagine.
6. From what I’ve heard most major national doctors and nurses groups are on board for a single plan system. They’re intimate knowledge leads me to suspect they’re correct. They’re ok with taking the hit because premiums and everything are so out of control they’re not making money anyway (the general practitioners, that is)
7. We all sacrifice in our own way. It’s called living in a society with people who are smarter, dumber, poorer, richer than oneself.
How’s that? Take me to task, friends!
26 Oneon1isto // Jul 9, 2009 at 4:03 pm
Sorry for the repost, I would edit if I could but this seemed better:
Jumping in for sftor1…
Bill: So you want all doctors and nurses to work for the government or else volunteer their services?
1. Yes, that’s the idea. Although “work for the government” makes it sound like they’re DMV employees. You do the idea right by comparing them to police and firefighters, unlike some…
Bill: “Profit.” Interesting word. Society certainly “profits” by having police officers and firefighters. And certainly the firefighters and police officers themselves “profit” by being PAID either in money and benefits, or – in the case of volunteers – in “satisfaction.”
2. On profit – his point is that taken as a whole, its not a profit center for society in general. It’s a fixed cost attributed to keeping society alive, like keeping the peace. Doesn’t mean you can’t have entities profit, just means overall its a cost.
Bill: Will you allow “private” medical professionals to exist as back-up to the “government medical corp” you seem to favor creation of?
3. Private options still exist in a single payer system. They provide more expensive options. We’re already sort of in a dual system already, its just that they’re all private options.
What do you want to pay government doctors… government nurses… government healthcare workers of all types?
4. As I understand it, we’d use a single payer system to adjust the way doctors are reimbursed. Right now its on a test by test basis that rewards specialists and penalizes general practitioners. It’s not a matter of wages, its a matter of adjusting how doctors make their money: by treating patients or by giving out treatments?
Hmm… anyone watch shows like ER? I mean… IMAGINE that show if you threw in “union work rules.”
5. I’d rather not imagine.
OK. Let me ask you… are you a doctor? Are you a nurse? As previously noted, the “problem” with this whole “lowest cost” focus is that in order for lowest cost to work out in an financial accounting sense you’re gonna have to lower expenses. Wages are expenses.
6. From what I’ve heard most major national doctors and nurses groups are on board for a single plan system. They’re intimate knowledge leads me to suspect they’re correct. They’re ok with taking the hit because premiums and everything are so out of control they’re not making money anyway (the general practitioners, that is)
Again with this “you need” business. Hey… what do YOU do…??? You’re pretty damned generous with others time and money… how’bout YOUR sacrifices?
7. We all sacrifice in our own way. It’s called living in a society with people who are smarter, dumber, poorer, richer than oneself.
How’s that? Take me to task, friends!
27 barker13 // Jul 9, 2009 at 5:14 pm
Re: Oneon1isto // Jul 9, 2009 at 4:03 pm –
(*CLAP-CLAP-CLAP*)
(*HUGE FRIGG’N GRIN*)
(*SCREAMING OUT, “BRAVO!”*)
Damn, Oneon1isto… very impressive! Straightforward… honest…
Folks. Compare and contrast Oneon1isto’s post to the average Otto or even Sinz post.
(*APPRECIATIVE NOD*)
Folks… see how frigg’n EASY it is to reply to simple questions and points in a reasonable fashion and even ADD substance?!
Anyway… admiration aside… I disagree with the premise that all (or most) doctors should be employees of the federal government (or of state government). That said, if we were to try such a system we’d have to go in soup to nuts.
Government would have to “provide” medical training the same way the military provides service academy training. Unlike the military, though, where there’s only a limited commitment (six years maybe… something like that) to active service for academy graduates, “US Medical Academy” grads would be stuck working for the government till they retire… IF that is they want to continue practicing medicine under the “Sftor1 Rule.”
Same deal with nursing.
Same deal with all medical techs.
To avoid this the other option would be to simply pay every medical student’s way through med school… but that would be pretty damned expensive and in terms of regulation and administration it just seems why not cut out the private middleman here just as proposed re: cutting out the middleman in healthcare delivery.
Well… might as well take over the pharmaceutical industry while we’re at it, right?
Heck… don’t forget the real estate. If all the doctors and nurses and techs work for the government, then I suppose they should all be working out of government buildings – right? (At the very least government hospitals.)
Oh… technology – can’t forget those medical gadgets! Hmm… with the “defense industry” example of $500 hammers and multi-billion dollar white elephant projects… what the hell… let’s just nationalize the medical device field. (And the defense industry while we’re at it!) (*WINK*)
Hmm…. no… on second thought, Oneon1isto, I stick with my original opposition.
Still… jumping back to the government being the primary employer of our nation’s doctors and nurses, we still have that thorny pay issue. If we pay the average white collar federal government employee say $70K… how’bout doctors – the millions of doctors we’d be employing. Three times… four times… five times the paper pusher average?
We have some serious math to work out! (*GRIN*) All this stuff sounds EXPENSIVE!
Oneon1isto. What I’m kinda playing around with is the tension between your answers in #1 vs. #4. Either the doctors and nurses are employees or they’re not. Contrary to what you wrote, it is indeed ultimately a question of wages, not just a paperwork shuffle.
(Anyway… perhaps Sftor1 might join us and clarify his or her original suggestion.) (*SHRUG*)
Regarding #6, Oneon1isto, no, this isn’t my understanding. It is however my understanding that doctors are indeed fed up with the current system. That doesn’t equate with being ready to jump out of the frying pan into the fire. (*GRIN*) But, hey… cite your sources and if I’m wrong then I’ll admit it. (But do me a favor and stay away from “groups.” Groups are politicized. Stick to surveys of individual healthcare providers – doctors.)
Re: #7 — Like I’ve indicated… I’m not of a socialist/communist mindset. I’m not a “…from each… to each…” kinda guy. Frankly I think I support too many folks as it is! (*WINK*)
Hey… anyway… absolutely 100% seriously… THANK YOU for providing reasonable, rational feedback.
BILL
28 KL7212 // Jul 9, 2009 at 8:07 pm
Maybe it’s just me, but it seems unjust that so many people in this country have to bankrupt themselves to obtain necessary, life saving, medical procedures when they become seriously ill or severely injured.
Our healthcare system is the best in the world—until you get get sick.
For a person like myself, mid-30’s, ex-smoker (9 years July 23rd!) healthy and fit (if a bit overweight) who has seen his income plummet by 40% over the last year, a “free” public option might not be bad, at least as a stopgap measure.
My employer provided HMO is the worst of all worlds: it is expensive, covers very little and has a very high deductible. If I need to see a specialist, the first $1000 of treatment is not covered. My annual check up is covered at 100%, but that’s basically it. The whole process of filing a claim is costly, inefficient and time consuming.
I might as well be uninsured…
29 TonyMas // Jul 9, 2009 at 10:46 pm
The cruel reality is that to effectively control costs, it is essential that any prescribed treatment (MRI, drug, biotech treatment, etc.) be statistically correlated to improve outcome and, whenever possible, lower costs. Our system, for the most part, currently does not do this. Expensive technologies are applied whenever possible, and access to this kind of unrestricted treatment is typically what people fear losing if a single payer system was put in place to “ration” services as a means of controlling costs.
This fear is understandable. Anybody who has had personal experience with a disease like cancer knows that the cost of access to the best technologies and treatments pales in comparison to the importance of keeping a loved one alive.
More and more, however, there is increasingly strong statistical evidence showing that this “spare no expense” approach actually doesn’t necessarily improve outcome. One commenter mentioned the frequency of prostate surgery despite the fact that the PSA test greatly overstates the likelihood of actually contracting prostate cancer. This is a prime example of where both a new technology (in the form of a better test), and a more selective prescription of surgery could help.
Ironically, many of the countries that employ single-payer systems are way ahead of the curve on this. These countries are very interested in studies that compute associations of genetic variation with drug efficacy, for instance. The idea is that if you can design an inexpensive assay to identify patients with a certain genetic haplotype that is associated with lower efficacy rates for an expensive drug regime, then it makes sense not to prescribe it to those patients. This may sound harsh, but this is essential in order to manage costs in such a way that all who desire and need healthcare can have access to it.
30 ottovbvs // Jul 10, 2009 at 8:19 am
tonymas // Jul 9, 2009 at 10:46 pm
……You’re right about the importance of data but the industry and their allies on the right and in the Republican party don’t want data. They don’t want to measure effectiveness, they don’t want to improve efficiency although they bloviate incessantly about it. I’ll give you three examples.
1. The admin recently sought to establish a program for measuring the effectiveness of treatments, medications etc. and tried to obtain funding for it. The Republicans fought it tooth and nail claiming it was the thin end of rationing, granny was going to die, all the ususal bs.
2. The admin in the stimulus program sought about $20 billion for a program to create a standardized system of electronic record keeping for patients in doctors offices. Again total Republican resistance not just to the money but to the entire concept. Now given that in every business you can think of ordering a bunch of flowers to maintaining an investment account electronic record keeping is the norm this is totally insane but that’s today’s GOP for you.
3. Now lets go low tech. You know all those women you see sitting behind glass partitions in doctors and hospital offices. What they’re mostly doing is wrestling with the enormous amount of admin involved in processing payment claims. Typically they are dealing with 8-12 insurance carriers plus Medicare/Medicaid/VA. All of them have different paperwork, codes for procedures, etc. For years medical professionals have tried to get the insurance industry to have a standardized form and set of procedures. The industry, again aided by it’s Republican allies in congress has fought this for years because they don’t want transparency and clarity, they want obfuscation so the enormous shell game where doctors over charge and they underpay can continue.
There was a superb piece in the New Yorker a few weeks back where a doctor did an examination of the most costly med district in the country which in the backwoods of Texas. They are spending three times as much per capita as the district in which the Mayo sits basically because the system is being gamed in one way and another. But the reality is a lot of people in the industry like it that way.
31 barker13 // Jul 10, 2009 at 8:31 am
Re: KL7212 // Jul 9, 2009 at 8:07 pm –
Question: Are you female? (Just curious.)
“…a “free” public option might not be bad…”
You place the word “free” in quotes, so obviously you do realize that there’s no such thing as “free” healthcare as national policy.
Yet…
Then you follow up with the non-sequitur “…might not be so bad.”
(*SIGH*)
We’re doomed. It’s that frigg’n simple. We’re just doomed.
BILL
32 Oneon1isto // Jul 10, 2009 at 11:58 am
Thanks for the kind words Bill.
Doomed? If you keep eating your potato salad, so will you.
Back to our above conversation though…I suppose part of my problem with your critique lies in how far a public plan (or single payer plan) would leech into the current system we have. In some of your examples, it feels as if you fully expect government to take on the burden of training and educating our doctors and nurses, and providing due compensation throughout. Pretty much ownership of the entire system. Your comparison to the defense department leads me to believe this.
I think the DOD provides a good cautionary example of how something that is “100% necessary” (and the prevailing view is that health care is 100% necessary just like national defense) can easily become bloated and wasteful. But I’m not sure we can expect this to happen with health care. I can’t tell you why exactly…I can only say that my belief is that’s not the goal of the current debate, and rather its far outside of it.
The goal centers around insurance and payment schemes, which would then be used to tweak the system around theories of preventative medicine, increasing the number of people burdened with shared costs, and adjusting the way doctors are paid.
To you that maybe paper shuffling, but the effects could be far-reaching. If you adjust HOW and WHY docs are paid because you’re the one making the insurance rules, then you incentivize more general practitioners. You can push for more preventative procedures, because the government would be in a position to do so because it’d be the insurance agency.
None of the above presupposes a need for a full blown govt take over–as you say, soup to nuts. Making hospitals fully owned subsidiaries, doctors as agents, etc. In fact doctors would be able to operate freely in the dual private system that (and even the dems and single payers agree) will be there no matter what. It’s just if they want to engage everyone else, they’ll have to play with the Big G Insurance Company.
Then consider the effect on businesses…this would increase their competitiveness oversees, and free up boatloads of cash for more business development. I’m honestly surprised more Republicans aren’t for this, because the idea is so pro-business. And yeah yeah, we can trot out “socialism” but lets face it folks, this country’s no where near it and doesn’t have the culture for it.
33 midcon // Jul 10, 2009 at 12:24 pm
Two of my major concerns about a government run insurance program to provide some basic level of coverage is the same problem I have about Social Security which also provides some basic level of income during one’s retirement years. The first is that many people for a lot of reasons rely upon SS to provide the bulk of their retirement because of their failure or inability to save for retirement. The second is the cost to me. I currently contribute the max in SS every year to the point where it stops coming out of my paycheck sometime in the fall of every year, yet because of the government pension offset and windfall provision act, I will never collect a single dime of social security. That’s a $10,000 tax every year over and above my federal and state taxes that neither my nor my heirs will ever see. I am concerned that a government run insurance program would have the same effect. I would not be covered because I have health insurance. While I have no objection to paying my fair share for the good of society, there has to be a limit and that limit is the point at which it no longer makes sense for me to work because there is little to no return on effort (ROE).
34 barker13 // Jul 10, 2009 at 1:29 pm
Re: Oneon1isto // Jul 10, 2009 at 11:58 am –
“Doomed? If you keep eating your potato salad, so will you.”
(*GRIN*) (*KNEE-SLAP*) Hey… Oneon… I clearly stated “a few times a year.” (*WINK*)
“Back to our above conversation…”
Hey – what ever happened to Sftor1…???
“I suppose part of my problem with your critique lies in how far a public plan (or single payer plan) would leech into the current system we have. In some of your examples, it feels as if you fully expect government to take on the burden of training and educating our doctors and nurses…”
I’m just trying to follow the logic of single payer and government “run” healthcare to it’s reasonable conclusion. We may disagree on where that “reasonable conclusion” takes us to in terms of policy prescriptions, but I’m fleshing my general thinking out on the topic as broadly as possible.
“I think the DOD provides a good cautionary example of how something that is “100% necessary” (and the prevailing view is that health care is 100% necessary just like national defense) can easily become bloated and wasteful.”
Yes, yes… but back up! National defense isn’t just a necessity, it’s a necessity necessarily tasked to government. Not so medical care. (*SHRUG*) You see that, right…??? I mean, providing national defense has ALWAYS and across history and cultures been a “national,” a “governmental” function. Not so provision of medical care. (*SHRUG*)
“If you adjust HOW and WHY docs are paid because you’re the one making the insurance rules…”
See. Once again we’re transposing our priorities. To me the priority is CARE, not insurance. To me the present “insurance” (which really ISN’T insurance) regime is a large part of the problem.
As I keep saying, while I sympathize (and sure… put me in the “yes” column if we’re gonna make this a yes or no issue) with the goal of EVERYONE being insured, my focus is on actual treatment vs. the Potemkin Village of “universal care.” (Me… I’m more concerned with ACTUAL care.)
As I also keep saying (ok… technically… as I keep WRITING), I want people to view their GENERAL healthcare individual responsibilities as they view their responsibility to purchase food, shelter, clothing, and so on and so forth. This is where catastrophic insurance comes in – real, effective catastrophic insurance.
“None of the above presupposes a need for a full blown govt take over…”
(*HEADACHE*) (*COUNTING TO TEN*) (*EXHALING*)
Oneon… PLEASE RECALL… I was responding to YOUR Jul 9, 2009 at 4:03 pm post:
QUOTE follows:
==========
Bill: So you want all doctors and nurses to work for the government or else volunteer their services?
1. Yes, that’s the idea. Although “work for the government” makes it sound like they’re DMV employees. You do the idea right by comparing them to police and firefighters, unlike some…
==========
(*SHRUG*) See…??? YOU said – you wrote – “Yes, that’s the idea,” in response to my question. Indeed, you placed emphasis upon the answer by saying I was right to use the analogy of police officers and firefighters.
Listen… Onein… we can go round and round all day and as previously noted, I find debating with you a real pleasure. Still… with all my posts on this thread… with all my posts on the other thread… with the entire history of my posts which many regulars are familiar with – at least in broadest terms – I just don’t know how else to articulate my views except in the manner I’ve done so.
I don’t want government running healthcare. I believe there’s too much governmental interference and regulation as things stand now. I believe our tax policies are ass-backwards with regard to subsidizing employer provided insurance. I believe individuals should be responsible for their own insurance. I believe that if employers want to “provide” insurance to their workers that the value of this perk should be taxable to the recipient/worker. I believe that people should expect to spend hundreds, perhaps thousands of dollars annually for health CARE but that catastrophic insurance should exist and indeed be required.
Focusing on that last…
Basically, I believe that insurance should be… er… INSURANCE. Insurance in the actuarial sense. Not something simply CALLED “insurance” that in reality is best described as being something between a Ponzi scheme and a shell game. (*SMILE*)
As to the poor… all I can tell you is that if we can figure out how to deal with the other necessities of the poor (food, shelter, clothing) I have faith we can work that out. For now I’m talking “Big Picture,” I’m talking “General Rules of Thumb.”
I’m not against clinics – free or otherwise. I just want them to be mainly private. I’m not against government grants for “capital” equipment purchases – though again I’d rather see private charity handling that sort of thing.
I’m in favor of lengthening and strengthening patent protections and I oppose the whole “generic” movement. If the “real thing” is indeed the “real thing” then that’s that; all generics do is put downward pressure on the value of innovation and advancement.
I could go on and on… (and I HAVE!)… (*GRIN*)… but as I wrote above… my views are over all this blog, filling the threads, filling the archives.
As to your last paragraph, Onein… hmm… perhaps you’ve heard of Fannie Mae… Freddie Mac… Chrysler, GM… Citi… AIG… Bear Sterns…
(*SIGH*)
(*SNORT*)
BILL
35 barker13 // Jul 10, 2009 at 1:37 pm
Re: Midcon // Jul 10, 2009 at 12:24 pm –
“I currently contribute the max in SS every year to the point where it stops coming out of my paycheck sometime in the fall of every year, yet because of the government pension offset and windfall provision act, I will never collect a single dime of social security. That’s a $10,000 tax every year over and above my federal and state taxes that neither my nor my heirs will ever see.”
And that’s just plain WRONG.
That’s WRONG…!!!
That’s unacceptable. That’s not “my” America.
Anyone else care to take a stand…???
Beyond the ethics… Midcon is absolutely dead on correct; based upon prior experience it’s pretty much a no-brainer to expect that down the road government run (in the larger national financial sense even if we keep the fiction of “private” care) health insurance/care will be destined to go upside down at some point in the future.
Hey… anyone read…
http://www.ibdeditorials.com/IBDArticles.aspx?id=332031100195115
…the preceding linked op-ed? If not… give it a go.
BILL
36 Oneon1isto // Jul 10, 2009 at 1:52 pm
Enjoyed your rebuttal. You’re right, we can go round and round with this. I can’t leave you hanging about us marching towards socialism though!
http://correspondents.theatlantic.com/conor_clarke/2009/06/what_socialism_looks_like.php
Check it out. Conor links to a few other good charts as well. By the by, GM just popped out of bankruptcy and is already declaring its intent to get out of government ownership. It’s never been about the government owning anything, just preventing economic collapse. Socialism indeed.
37 midcon // Jul 10, 2009 at 4:05 pm
barker,
I read the IBD editorial and they are right on. We already have a government run insurance program and it is broken. We should fix that one before we create a new one. I am personnally aware of physicians that will not accept Medicare because they consider the payments too low. Now maybe the physicians charge too much, but regardless of the reason, if you are on Medicare you may have to shop around for a physician that accepts Medicare. Which by the way is another tax I am paying with no benefit because I will never be covered by Medicare (except perhaps part A). Wanna know who I can thank for that tax? The man himself Ronald the Communicator.
Well, like I said I am willing to pay my fair share and I am convinced I do and then some. But before you make another raid on my wallet, you had better make sure you are getting it right.
38 barker13 // Jul 10, 2009 at 4:49 pm
Re: Oneon1isto // Jul 10, 2009 at 1:52 pm –
Cute!
(*SMILE*)
Hey… if you think that makes your case… good for you!
(*HEARTY CHUCKLE*)
No doubt we’ll continue going back and forth on the issue.
(*WINK*)
Re: Midcon // Jul 10, 2009 at 4:05 pm –
I came up with the solution way, way, way back… back in middle school if memory serves:
The doctors just stop treating – refuse to treat – lawyers and politicians for… oh… let’s say ten years.
(*HUGE FRIGG’N GRIN*)
BILL
39 midcon // Jul 10, 2009 at 5:37 pm
While I would agree that withholding treatment for lawyers, I do not believe 10 years is adequate. I believe the only rational course would be to make access to health care conditional based on passing the bar exam. If you pass the bar exam you immediately become ineligible for any health care as long as you practice law. The 10 years no access would be acceptable for politicians because some of them are not attorneys. But attorneys are the bane of our society. They provide no net benefit to society whether they are from the ACLU or ATLA or Justice. Ulimately we are poorer economically, ethically, morally, and constitutionally because of lawyers. They are America’s Al Qaeda.
40 ottovbvs // Jul 10, 2009 at 7:27 pm
midcon // Jul 10, 2009 at 4:05 pm
“We already have a government run insurance program and it is broken.”
……..Would you like to explain precisely how it’s “broken.” Government is currrently responsible for about 54% of healthcare outlays in the US. That’s made up of Medicare, Medicaid, VA and payments to state programs like SCHIP. Medicare is roughly 37% of the total health expenditures. So we have an insurance program that is picking up 37% of total healthcare payments for that section of the population that’s actually the main recipient of healthcare and it’s “broken.” It’s not broken, it’s working just fine, has admin costs that are less than a third of private insurers, but faces funding shortfalls in the years ahead because of the exorbitant cost of healthcare provision in the US. Are your parents on Medicare? If so would they rather be paying their own insurance out of income? But don’t confuse me with the facts eh!
41 ottovbvs // Jul 10, 2009 at 7:31 pm
And before the lawyers become the fall guys…..the settlement of malpractice suits totals less than 1% of total healthcare expenditures which are currently running at around $2.4trillion…….But don’t confuse me with facts.
42 dwollstadt // Jul 10, 2009 at 8:05 pm
Dr. Goldfarb,
Your critique of Obamacare is devastating and on target, but technology is not the only reason for excessive costs, and maybe not even the primary reason. Our health care system in the U.S. is superb, but it is based almost entirely on the premise that all of the costs will be paid for by somebody else. If you have health insurance, “somebody else” is your insurance company. If you don’t have health insurance, “somebody else” is Medicare, Medicaid, or the people who wind up paying for emergency health care–notably, hospital charity budgets or other people’s health insurance policies.
This premise–that almost all healthcare costs will be paid for by somebody else–permeates the system. It is the premise that allows/encourages drug companies to engage in research to discover very expensive drugs–which will be paid for by somebody else. It is the premise that allows/encourages medical device/equipment manufacturers to design the next generation artificial hip and the next generation imaging device, secure in the knowledge that the device and the imaging fee will be paid for by somebody else. When you’re rushed to the hospital after an automobile accident, will anybody ask you if you want to use the hospital’s brand new million-dollar imaging device, that will provide a state-of-the-art image in 30 minutes at a cost of $3,000, or whether you’d be willing to settle for a regular MRI that take two hours for only $500? No. The system assumes that you deserve the very best–and that somebody else will pay for it.
When I was being examined for a six-month checkup (of course, it was paid for by my Medicare Advantage provider), my doctor pointed out that there is one part of Medicare that doesn’t follow this model–the Part D prescription drug program. Part D pays a percentage of most prescription drug costs for participants, up to a certain level, but then it has a rather large “donut hole,” where people have to pay out of their own pocket. No one likes the donut hole, but it has had a signal effect of the people who participate in Part D. They don’t like the idea of paying for drugs out-of-pocket, so they pay very close attention to their prescription drug costs, and they make decision and take a variety of actions to avoid doing so. For example, my doctor said participants in Part D ask their doctors if this or that prescription is really necessary, or if a generic drug will do as well as a costlier non-generic. My doctor discovered several years ago that he could reduce my cost for Lipitor by 50% or more by having me cut an 80 mg pill in half and take it every other day, as opposed to taking one 20 mg pill daily.
The Part D prescription drug plan has stumbled on a process that has encouraged participants to work with (and sometimes against) their doctors to control costs, while still protecting them against catastrophic expenses. Can a similar process be devised that will provide similar encouragement for people to control their other healthcare costs? Not if Obamacare simply changes the definition of who “somebody else” is.
43 ottovbvs // Jul 10, 2009 at 10:31 pm
dwollstadt // Jul 10, 2009 at 8:05 pm
“Our health care system in the U.S. is superb”
…………By what criteria?……by most measures it’s only average……I seem to remember we ranked something like 17 in the world……and remember we’re paying twice as much as everyone else to achieve that exalted spot….What it is true to say is that there are areas of real excellence notably in the diagnosis and treatment of cancers……but the notion that our system overall is the best in the world is simply untrue and we’re not covering about 17% of our citizens despite spending double what everyone else does
44 Mike K // Jul 10, 2009 at 10:31 pm
“* HEY… Mike, if you’re reading this, throw your two cents in.”
I finally got a password from the “new” site. Long ago, when I first entered practice, there was something called “indemnity health insurance.” It paid a flat fee for a diagnosis or procedure. If you had to have your appendix out, it paid (let’s say) $600. After that, if your doctor bill was higher, you had to negotiate or pay the difference. The medical societies lit the fuse on the present crisis by successfully convincing insurance companies that indemnity was not good insurance because it did not pay the full fee.
Little did we know.
What we need, and the French have, is a system which pays for catastrophic illness but not for routine care. Now, the French system does pay for routine doctor visits but only AFTER the patient has paid the doctor at the time of the visit and only 80% or less of the national fee schedule. The fatal mistake we made 50 years ago was to convince insurance, and Medicare, to pay for routine care and to make that payment “payment-in-full.” It is illegal for me to bill above the Medicare allowance. As a result, an increasing number of internists are refusing new Medicare patients and many are dropping out of Medicare altogether. It is even happening with orthopedic surgeons.
Obama will attempt to continue the regulatory model of Medicare with private, and public, insurance. It will not work. Either doctors and patients begin to arrange private care outside the system, sort of like private schools where the parent pays twice, once for the public school and once for the private school, or the entire system will crash.
General surgery, a specialty with bad work hours and declining reimbursement, is now developing a critical shortage of new surgeons. General practice will become the province of “physician extenders” like nurse practitioners. That may be OK but my son’s diabetes got out of control while he was supposed to be under the care of an endocrinologist who he had had not seen in a year. The nurse practitioner “fired” him from the practice for noncompliance (His blood sugar was too high and she didn’t know why) a week before he was hospitalized with sepsis.
The endocrinologist saw his wife in the hospital but avoided her. No, they didn’t sue him for abandonment. I might have.
We need to get away from the prepaid care model where all care is free. Insurance should cover events that actuaries can estimate the frequency of. Routine care should be paid by the patient with some reimbursement over a certain limit. We can do this; the French system is very much like this and costs half per capita what we pay. First, we have to get rid of the Obama political agenda and that may be impossible.
I have an analysis of the French system and how we could use it as a model here:
http://abriefhistory.org/?p=400
There is a series of posts about it.
45 Neocon Sleeper Cell at Ag? | America Watches Obama // Jul 11, 2009 at 12:09 am
[...] for Agriculture. Meanwhile, over at NewMajority.com, the appointee’s father has written a devastating critique of the Obama health care plan. No TweetBacks yet. (Be the first to Tweet this post) Bookmarks [...]
46 ottovbvs // Jul 11, 2009 at 8:20 am
Mike K // Jul 10, 2009 at 10:31 pm
………I agree with you that the French system is extremely good and I’d be quite happy to see it adopted in the US. I was treated in it for, as it happens, an emergency appendicitis and it was absolutely outstanding. Also very good for what I call repair and maintenance medicine. That said, it is very much a state sponsored and supervised system which you know as well as I do, and somehow I don’t see the healthcare industry or its allies in the Republican party embracing it…..do you? And how much does it cost to have your appendix removed in the US today? About the cost of a small car assuming no complications.
………As for the routine boilerplate about mass withdrawals from Medicare by the medical profession it’s simply not true. It’s the major vehicle for providing healthcare for seniors who are the largest consumers of it. Since it accounts for about a third of all healthcare reimbursements that’s difficult to square with your claims that most doctors are refusing to participate. If it wasn’t there half the hospitals and doctors in the country would be out of business. It’s also more cost effective than private insurance providers…massively so……And the only way the system crashes is if we maintain the status quo.
47 ottovbvs // Jul 11, 2009 at 8:58 am
….As a sidebar to this discussion I wonder if anyone saw this PBS program last night on where the insurance industry’s priorities lie. I don’t necessarily blame the insurance companies who are in the business to make money and have a fiduciary duty to their shareholders but it does go the heart of what is health insurance? A highly profitable engine of commerce, or a means of providing access to healthcare for everyone at reasonable cost.
http://www.pbs.org/moyers/journal/07102009/watch2.html
48 midcon // Jul 11, 2009 at 9:05 am
Medicare is broken. References from a non-partisan source -The Congressional Budget Office document “Key Issues in Analyzing Major Health Insurance Proposals” Main conclusions follows:
The rising costs of health care and health insurance pose a serious threat to the future fiscal condition of the United States. Under current policies, CBO projects that federal spending on Medicare and Medicaid will rise from about 4 percent of gross domestic product (GDP) in 2009 to nearly 6 percent in 2019 and 12 percent by 2050. Most of that increase will result from rising per capita costs, rather than from the aging of the population.
Without changes in policy, a substantial number of nonelderly people (those younger than 65) are likely to be without health insurance. CBO estimates that the average number of nonelderly people who are uninsured will rise from at least 45 million in 2009 to about 54 million in 2019.
Those problems cannot be solved without making major changes in the financing or provision of health insurance and health care. In considering such changes, policymakers face difficult trade-offs between the objectives of expanding insurance coverage and controlling both federal spending and total costs for health care.
By themselves, premium subsidies or mandates to obtain health insurance would not achieve universal coverage. Proposals could, however, achieve near-universal coverage using a combination of approaches. One option, for example, would be to establish an enforceable mandate for individuals to obtain insurance and provide subsidies for lower-income households to help them pay their required premiums. Another option, under a voluntary system, would be to provide subsidies that cover a very large share of the expected costs of insurance for every enrollee and establish a process to facilitate enrollment (as is done in Medicare). Other policies could achieve substantial reductions in the number of people who are uninsured at a lower budgetary cost.
Serious concerns exist about the efficiency of the health care system, but no simple solutions are available to reduce the level or control the growth of health care costs. Steps to restructure the insurance market and to encourage people to purchase less extensive coverage could reduce the use of treatments that provide minimal benefits, but enrollees would face higher cost sharing or tighter management of their care.
Other approaches—such as the wider adoption of health information technology or greater use of preventive medical care—could improve people’s health but would probably generate either modest reductions in the overall costs of health care or increases in such spending within a 10-year budgetary window.
In many cases, the current health care system does not give doctors, hospitals, and other providers of health care incentives to control costs. Significantly reducing the level or slowing the growth of health care spending would require substantial changes in those incentives.
49 midcon // Jul 11, 2009 at 9:09 am
P.S. My parents are on Medicare, but of course they need a supplemental policy which they purchase from AARP. So yeah, they are paying for medical care/insurance out of fixed income as well as paying the Medicare premiums. It might be confusing for you, but those are the facts.
50 ottovbvs // Jul 11, 2009 at 9:25 am
midcon // Jul 11, 2009 at 9:05 am
“Medicare is broken”
……..The system is not broken…..The document you quote says:
“The rising costs of health care and health insurance pose a serious threat to the future fiscal condition of the United States. Under current policies, CBO projects that federal spending on Medicare and Medicaid will rise from about 4 percent of gross domestic product (GDP) in 2009 to nearly 6 percent in 2019 and 12 percent by 2050. Most of that increase will result from rising per capita costs, rather than from the aging of the population…………”
…….What this means is that the system is facing a funding problem principally because of the “rising per capita costs” of the PROVISION of healthcare. It doesn’t mean the Medicare insurance program itself is broken just that the product they are paying for is becoming much more expensive so that they might not be able to afford it. Like most people you fall into the trap of confusing the paying side (Medicare, Medicaid, private insurance) and the providing side (doctors, hospitals, drugs).
51 ottovbvs // Jul 11, 2009 at 9:44 am
midcon // Jul 11, 2009 at 9:09 am
“P.S. My parents are on Medicare…..It might be confusing for you”
……..Not really since I’m on medicare too….actually I’m on a Medicare funded advantage plan which is an exceptionally good deal where I pay a small supplement to the inflated premium Medicare pays the carrier….A Bush boondogle for the insurance industry that is unfortunately not going to last….However, I have to buy insurance for my wife who is somewhat younger than me, and healthy, at a cost of around $1,300 a month which fortunately we can handle but isn’t chump change and I can see would be an enormous burden for many…….I also not confused because I have a fairly good grasp of how it all works as before I retired I managed a fairly large business and have listened to literally scores of presentations by insurance companies and others on aspects of this…..while we wrestled with how we were going to keep paying the endlessly rising bills and not dump too much on our employees.
52 barker13 // Jul 11, 2009 at 9:55 am
Re: Mike K // Jul 10, 2009 at 10:31 pm –
Hmm. Interesting about indemnity health insurance. Thanks for sharing that, I hadn’t been aware.
“What we need, and the French have, is a system which pays for catastrophic illness but not for routine care. Now, the French system does pay for routine doctor visits but only AFTER the patient has paid the doctor at the time of the visit and only 80% or less of the national fee schedule.”
I agree with the first part – that we need a system that pays for catastrophic illness but not routine care, but if I’m following your description of the French system, the French don’t really stick to that logic; instead, they reimburse their citizens for 80% (or less) of the physician’s routine fee schedule for routine visits.
I don’t see why Americans (or the French for that matter) should expect routine medical care to be reimbursed at all, subsidized to any extent. I mean, sure, I see the surface logic of the “carrot” approach as regards encouraging routine physicals and other routine preventive care, but I believe the “stick” approach would be a more rational economic bet. For example:
Just as we charge smokers more for insurance (and we should charge the obese more – and I’m sure others could come up with other examples) it seems to me that if government requires everyone to have catastrophic insurance which kicks in at a certain threshold of yearly expenditure, you employ the “stick” of increasing the threshold for folks who don’t complete a “checklist” of routine care or else you simply fine them (perhaps the better option – indeed, upon further thought definitely the better option) for not “living up to their part of the social contract.”
“The fatal mistake we made 50 years ago was to convince insurance, and Medicare, to pay for routine care and to make that payment “payment-in-full.” It is illegal for me to bill above the Medicare allowance. As a result, an increasing number of internists are refusing new Medicare patients and many are dropping out of Medicare altogether. It is even happening with orthopedic surgeons.”
Agreed (re: the fatal mistake.) And, yes, the Medicare/Medicaid model is deeply flawed and indeed for all intents and purposes puts doctors into a sort of “indentured servitude” to the system – all the while the government winks and nods when doctors pass on the cost of loses from Medicare/Medicaid treatment they provide onto the backs of the insurance companies via the privately insured and out of pocket payee patients they see. It’s a sick, smoke and mirrors, dysfunctional system and because it is… it’s falling apart.
“Obama will attempt to continue the regulatory model of Medicare with private, and public, insurance. It will not work. Either doctors and patients begin to arrange private care outside the system, sort of like private schools where the parent pays twice, once for the public school and once for the private school, or the entire system will crash.”
Yep. But beyond further squeezing doctors and the middle class, I fear your average liberal isn’t so far removed from the belief that if “need be” our society should simply “draft” medical professionals into “governmental service” – if not as formal employees, then by controlling their “private” incomes via regulation.
“…we have to get rid of the Obama political agenda and that may be impossible.”
And there lies the rub. No matter how much sense Mike makes… no matter how little sense Obama (or McCain or Bush or name your favorite boogieman) makes… the Dems control both Houses of Congress and the Presidency (and arguably the Courts). As with energy… as with economic policy… as with environmental policy… the politicians are going to continue to lead the country in the wrong direction – full speed ahead.
GOD HELP US!
BILL
53 barker13 // Jul 11, 2009 at 10:09 am
Re: Midcon // Jul 11, 2009 at 9:05 am –
(*SIGH*)
“They” don’t care, Mid.
(*SHRUG*)
By “they” I of course mean Obama, Pelosi, Reid… and, yeah, RINO Republicans as well.
Yes, OBVIOUSLY Ayn Rand’s “Atlas Shrugged” was a work of fiction, a philosophical tome in the guise of a novel, yet the extreme portrayal of “the destroyer class” is indeed based upon the reality of human nature – the reality that “the haves” (and I’m talking the movers and shakers, the politicians, the wealthy, the top ten percent of the professional class, et al) will still by and large be getting the best still existing medical care and power and food and both the luxuries and necessities of life in far greater abundance than the “common folk” as the system is driven to the brink.
Hey… you’re still toughing it out, Midcon. Your parents are too. Hey… so am I. Mike’s gonna be fine. But I’m talking the coming decades of decline. I’m talking right now the situation our kids who have just graduated college find themselves in. I’m talking the stagflation I expect down the road, next year. I’m talking national brownouts in five years, seven years. I’m talking following the numbers as we know them to their logical conclusions.
(*SIGH*)
After “they” break America… (*SHRUG*)
BILL
54 midcon // Jul 11, 2009 at 10:50 am
Regardless of the cause of the funding problem – it is a real problem. If the government reduces payments, to decrease cost, it is likely (but not certain) that many practitioners will opt out. I will not pretend that I could craft an acceptable solution to the funding problem, but I do recognize that Medicare has problems that will continue to escalate over time. Just because you are currently riding the train and all is hunky dory, does not mean mean the track is not broken down the line. The unfunded liability of all entitlement programs is a serious issue – with a future train wreck for all of them. This is the same problem that GM faced with its pensions. The total unfunded liability of the U.S. Government at the end of 2008 is $65.5 trillion. For those who do not know, the defintion of an unfunded liability is a liability that is not covered by an asset of equal or greater value. That means the nice little social security check, Medicare insurance, and other entitlements that many of you currently enjoy (I bet its nice to be one of that demographic, which I am paying for because I work and pay taxes) is not funded except by current and future revenues. As unemployment increases, those revenues decrease, increasing the unfunding liability. Well, you can see where this leads – down the line the tracks are missing, the train derails. At present the only solution significant economic and population growth (jobs and people in those jobs to pay the unfunded liabilities). Start making babies cause you are going to need them.
55 ottovbvs // Jul 11, 2009 at 11:47 am
midcon // Jul 11, 2009 at 10:50 am
“Regardless of the cause of the funding problem – it is a real problem”
……….Midcon: you can’t disregard the CAUSE of the funding problem because the CAUSE of the funding problem IS the problem! That’s what this is all about because we’re spending twice as much on it as anyone else…..why is that? And there’s the certain probability that the cost of providing healthcare is going to increase from the currrent $2.4 trillion (about 16.5% of GDP) to around $4.4 trillion (well over 20% of GDP) over the next 8 years…….And can you spare me all the rather nasty personal stuff since I’ve probably paid more taxes than you’ve ever paid some of which are funding your parents Medicare and SS as well as mine. I could live quite easily without my SS checks, in fact I lose some of it because of tax, could your parents?…….Sorry but you need to get beyond the simplistic bumper sticker logic.
56 midcon // Jul 11, 2009 at 1:39 pm
I did not “disregard” (pay no attentionto; ignore) the funding problem. I said “regardless” (in spite of everything). Meaning it is a problem “regardless” of the funding problem.
And you may have paid more taxes than I, since you have a few years on me but, then I have spent most of my time in the states. So, who knows. But really, who cares. You have probably paid your fair share as I have and as I continue to do so. Nonetheless, because of the increasing unfunded liabilty, you enjoy benefits that are not available to me and may not be available to my children. No offense meant. That’s just the way the entitlement system works.
57 ottovbvs // Jul 11, 2009 at 2:09 pm
midcon // Jul 11, 2009 at 1:39 pm
…..Your words were:”Regardless of the cause of the funding problem ” in the context of saying Medicare was broken…..It’s not broken……It’s got a funding problem because of the escalating cost of providing care
” But really, who cares. You have probably paid your fair share as I have and as I continue to do so. ”
…………Well I do when you say you’re paying for my Medicare which is what you said originally……You clearly don’t understand I’m still paying taxes…..quite a lot actually but I don’t whine about it……and it isn’t an entitlement system…….it’s a system of national insurance…….that’s intended to give the elderly access to medical care and save them from having to live under bridges…..ask your parents if they want to give up SS and Medicare…….If I’m around I’ll ask you in about 30 years
58 neobasher // Jul 12, 2009 at 6:37 am
Welcome to neocon medicine. 1. There is no problem with uninsureds; and if there is, to hell with them. (Thank you Rush.) 2. There is no problem with rising costs, and if there is, there’s really nothing we can do about it. (Just say “no.”) 3. The fact the we’re the only country in the industrialized free world that has trusted its health care system to the free market shows how great we are and how weak everyone else is. (Sounds a lot like the Bush foreign policy). Let the free market rule; after all, Kaiser Permanente has given us “somewhat lower costs.” (That must be the way to go. After all, it’s gotton us this far. And all those Kaiser customers just love their health care. Probably about as much as the Canadians, the Brits, the French and the Aussies. Maybe not.)
I don’t pretend to know how to fix this problem. But I do believe there is a problem. And I’d sooner trust the solution to the crowd in there now, rather than to the crowd we, thankfully, threw out.
59 brate // Jul 16, 2009 at 11:08 pm
Quite an impressive observation Carla. Sometimes it happens that we waste a large sum of money on insurance and other medical preventions, and on one day we think, that it would have been better to spend on its cure than its prevention. But sometimes, prevention results into a better decision for someone like me. Because of having many heart problems, I was enrolled in a concierge Healthcare program from elite health. I was attacked by a severe heart attack in a party, luckily surrounded by many people. Some of the sudden changes in my body was recognized by me and anticipated immediately. I got a very severe chest pain which was almost unbearable for more than a minute. I got the suspicion that I might be having heart attack, and immediately called my physician on the phone, and explained my condition and its severity. Because of the immediate guidance, I was directed immediately to have an aspirin which I used to carry with me as prescribed by my physician. It was quite a frightening experience for me to face such a heart attack, but somehow I managed to be calm until 911 arrived. I was immediately taken to the nearest hospital, where already my physician were present and have got everything setup according to my medical history. And it was in some matter of seconds that everything was in control. A doctor, who already have the complete knowledge of the medical history and fitness of the person, extra ordinarily ameliorate your recovery process. Hence such a concierge level program from Elite health, helped me a save my life, like many others.
60 Jim Pier // Jul 22, 2009 at 2:55 am
I know I am late to the party, but here goes anyway:
According to Otto:
“Broadly speaking the net losers are going to be the healthcare industry who are basically going to have to become more efficient and will inevitably become less profitable. Insurance companies for example are not going to be “forced out” of the insurance business but it’s going to be a lower margin business with all that that implies. Sorry to mix metaphors but we’ve been can kicking for years, it’s time to fish or cut bait.”
Otto seems to think everybody knows what needs to be done. Then he obliquely refers to measures that will injure providers and insurance companies. This is so asinine it is sickening. Why should this “crisis” be solved on the backs of doctors and nurses and insurance agents and stockholders? That is patently unjust. How many times does it have to be demonstrated in real life that these theoretical fixes – interventionism, and especially price controls – do not work. They do not work. They never have. Communism was able to survive as long as it did only because it had free markets to exchange with, and to steal pricing from. Eventually, it caved in, and so will socialized medicine. Collectivism destroys the price mechanism, and that destroys an economy. Medicare, according to Otto, basically works well. If high costs are the no 1 issue, then Medicare does not work well. When a product or service has very little cost to the consumer, the demand for that product is very nearly infinite. Medicare/Medicaid is the primary reason for high medical care costs in the US. Interventionists (going back to Marx, up to and including Otto) love to call out the bogeyman of profits — profits come out of the workers’ earnings, profits are what jack up costs. That is hogwash. The incentive to make a profit is what drives competition and spurs improvements in productivity and efficiency. Profits are the heart and soul of every market, and it is markets that create wealth and provide better and cheaper goods and services. Those who cannot make a profit at the market price do not survive. They go do something else. That is, of course, in virtually every market except medical care and medical insurance.
It is not the case that markets have failed so we need government intervention, but rather that intervention has so distorted the market that it is no longer recognizable as a market. So we call it a “system,” which of course implies some type of control, and that naturally is to be provided by the all-knowing state. There is infinitely more information exchanged in a free market by way of the price mechanism than the entire government can master. That market information is what ought to drive resource allocation, not the dictates of some committee of Obama’s. Why don’t we need government food and drink? Shoes, clothing, automobiles, housing? Because these are provided by willing sellers and purchased by willing buyers. Nobody has to cap the “reimbursement” for dry cleaning services or gasoline – because they are capped by competition.
The other socialized medicine plans that are referred to admiringly by Otto and his fellow interventionists (logically leading inexorably to socialism), because they supposedly provide the same care for less money, are relatively new to the scene. Canadian Medicare started up in the 1970s. It is clearly unsustainable, and it sucks. Our Medicare is also clearly unsustainable, and it sucks if you are a doctor, receiving compensation for a procedure at the same rate as you did 20 years ago. More of that will get us fewer doctors, and they won’t be as good. The talent will follow the money. Just ask the Canadians. If the money in American sports was in soccer, then the best athletes would play soccer. But as it stands, they play basketball, football and baseball, because that is where the money is. When my wife had surgery ten years ago, it was wonderful to know that she was being treated by one of the best surgeons in the US, and therefore the world. Nobody has better doctors than the US. The average French doctor earns less than a big-city cop does in the US – do you suppose the best talent is attracted to medicine? Can you see American doctors going on strike like French doctors do? Those measures that put the US 37th in the world are a joke. Sure our life expectancy is lower than Canada’s – entirely because of murder and accident rates more than twice theirs. Compare apples to apples and we come out on top. And we spend a lot of money on health care for three reasons: 1. We want a lot of health care; 2. We can afford it; and 3. The government and employers shield consumers from the true cost of their consumption, so they naturally overconsume, and they don’t shop prices.
Obama’s solution is to have the government gradually take over the entire “system.” The real solution is to get the government 100% out of the medical care and medical insurance markets. The market will develop competition, it will improve medical care and medical facilities, it will vastly improve the information available to consumers because consumers will demand it, it will much more efficiently allocate all types of resources so that productivity improves and prices come down. Repeal the tax deduction for employee health insurance benefits. Acknowledge that Medicare is just welfare, and phase it out, leaving Medicaid to address the needs of the truly needy. There is no reason a middle class, even lower middle class, family should not be able to purchase the health insurance they need. Insurance companies need to be free to innovate with packages. Mandates need to be eliminated, and restrictions on who can buy from whom eliminated as well. Sure, there will be discrepancies in the level of care, but we don’t all get the same housing, food and transportation. We can choose equality, or we can choose freedom and prosperity. Not both. If people can afford housing and transportation without assistance, they can afford medical insurance. A whole lot more medical care needs to be paid out of pocket; insurance should be for catastrophe, as it is everywhere else. This will be sorted out by the market. We need to abolish the mentality that every person is entitled to the best care no matter the cost, or that he is entitled to care equal to his rich boss. The former idea is a fantasy, and the latter is Marxist, and they don’t fly in a free society that respects the sanctity of private property.
The solution is laissez-faire, but I’d settle for incremental steps in that direction.
61 Jim Pier // Jul 22, 2009 at 3:26 am
Otto again:
“What this means is that the system is facing a funding problem principally because of the “rising per capita costs” of the PROVISION of healthcare. It doesn’t mean the Medicare insurance program itself is broken just that the product they are paying for is becoming much more expensive so that they might not be able to afford it. Like most people you fall into the trap of confusing the paying side (Medicare, Medicaid, private insurance) and the providing side (doctors, hospitals, drugs).”
It is you, Otto, who is confused. The cost of provision cannot be divorced from the means of funding. This is an economic problem, as well as a political one. You cannot separate the paying side from the providing side if you want to address the problem. There is also the consuming side. Because the paying side is between the consuming side and the providing side, the consumer has little incentive to price shop or to economize, and the provider has little incentive to compete on price. So we get the feds setting reimbursement rates based on a byzantine schedule of codes, and insurance companies largely basing their rates on those of the feds, and some providers either working the system for honest but wasteful extra revenues, or defrauding the system, which is easier to do because of Medicare’s famously low admin costs, and all the while some consumers call 911 to get a ride to the hospital because they have no car, or go to the ER for a cold or to the doctor’s office just to socialize. (If an insurance company allowed as much abuse as Medicare, it would not be in business long.)
Bottom line: the Medicare of which you are so enamored is in fact an entitlement program (one is entitled to benefits by virtue of age, correct?), it is tremendously expensive and wasteful, it is gradually destroying incentives for providers which can only lead to shortages and lesser quality, and it is rapidly threatening the nation’s fisc. How many recipients really cannot afford their own medical care? I don’t know the answer, but we ought to call it what it is – a transfer program from the young to the old. What is just about that? A voluntary program of course would not be objectionable, but a coercive one is flat wrong.
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