Healthcare Discussion on CNN

[wabuffo]

I thought this was a pretty good article that describes the problems with health care - to wit, any system where the consumer isn't the one buying the service directly always has trouble with high cost, poor quality and poor service -- whether its a private insurance paid market or govt-paid market.

 

wabuffo

 

Some excerpts:

 

http://www.theatlantic.com/doc/200909/health-care/2

 

The reason for financing at least some of our health care with an insurance system is obvious. We all worry that a serious illness or an accident might one day require urgent, extensive care, imposing an extreme financial burden on us. In this sense, health-care insurance is just like all other forms of insurance—life, property, liability—where the many who face a risk share the cost incurred by the few who actually suffer a loss.

 

But health insurance is different from every other type of insurance. Health insurance is the primary payment mechanism not just for expenses that are unexpected and large, but for nearly all health-care expenses. We’ve become so used to health insurance that we don’t realize how absurd that is. We can’t imagine paying for gas with our auto-insurance policy, or for our electric bills with our homeowners insurance, but we all assume that our regular checkups and dental cleanings will be covered at least partially by insurance. Most pregnancies are planned, and deliveries are predictable many months in advance, yet they’re financed the same way we finance fixing a car after a wreck—through an insurance claim.

 

And...

 

Most MRIs in this country are reimbursed by insurance or Medicare, and operate in the limited-competition, nontransparent world of insurance pricing. I don’t even know the price of many of the diagnostic services I’ve needed over the years—usually I’ve just gone to whatever provider my physician recommended, without asking (my personal contribution to the moral-hazard economy).

 

By contrast, consider LASIK surgery. I still lack the (small amount of) courage required to get LASIK. But I’ve been considering it since it was introduced commercially in the 1990s. The surgery is seldom covered by insurance, and exists in the competitive economy typical of most other industries. So people who get LASIK surgery—or for that matter most cosmetic surgeries, dental procedures, or other mostly uninsured treatments—act like consumers. If you do an Internet search today, you can find LASIK procedures quoted as low as $499 per eye—a decline of roughly 80 percent since the procedure was introduced.

 

In other words, there’s been an active, competitive market for LASIK surgery of the same sort we’re used to seeing for most goods and services.

[twacowfca]

The very best universal healthcare system is Switzerland's. It costs

10% of GDP vs 17% in the US. Their government has 

Little to do  with it other than to require that everyone

have private health insurance that individuals must pay

for.  However, no one has to pay more than 8% of annual

individual or family income  for a policy.  If a basic adequate

policy costs more than 8% of income, you'll get a subsidy

for the difference.  There are no lines, no rationing, no

government authorities making life and death decisions.

Insuance companies play an important role in controlling

costs without telling doctors what they may or may not do.

If a doctor has a history has a history of ordering unnecessary

expensive tests or drugs the doctor can be required to

reimburse the insurance company.  This rarely happens

because doctors can't be sued for failing to order expensive

tests.  Satisfaction levels for doctors and patients are off

the charts far above levels in countries with socialized

medicine or in the US.

[SharperDingaan]

 

Universal health care was established in Canada because one politician (Tommy Douglas) called the medical professions bluff, & played hardball.

 

He effectively told the profession that every practioner in his province would have to have a 'practice' licence, and that he would refuse to give them one unless they complied; then phrazed the licence so that if didn't do what he wanted, they were in voilation of their 'oath'.

 

All doctors were free to leave, but couldn't get anything as without the license they couldn't sell their practices (no value). New doctors had to spend their first few years in the rural areas (where there were no doctors, & the province made it worth their while to do so) - & the terms were made public. The rest is history.

 

Then ask why is it somehow more 'acceptable' to force a medical patient to buy all kinds of questionable tests (products) in a one-sided transaction (high pressure selling); than it is to knowingly push sub-prime mortgages on individuals who clearly could not afford it?

 

Time for some change?

 

SD   

 

[Guest misterstockwell]

Please please please don't let there be any government option for health insurance. They can't run Medicare/Medicaid as it is---they sure as hell can't take on the the whole country. I am not a socialist--this is not supposed to be a socialist country. They control all mortgage lending, the banking system, GMAC, auto companies, and have ruined underwriting profitability in many areas of the insurance industry. Why destroy another industry? The government can't afford it, nor could they run it properly. Move on to something else Obama

[oec2000]

It's like TARP, but for sick people (we choose to treat them in the emergency room at higher cost than preventive medicine).

 

So, you mean private hospital emergency rooms are obliged to take care of these people? Who pays for the services then? What about cancer treatment or dialysis or HIV? These are not emergency procedures - where do these patients get their treatment on an ongoing basis? What about major organ transplants - are the uninsured simply told to go home and wait to die?

[Myth465]

It's like TARP, but for sick people (we choose to treat them in the emergency room at higher cost than preventive medicine).

 

So, you mean private hospital emergency rooms are obliged to take care of these people? Who pays for the services then? What about cancer treatment or dialysis or HIV? These are not emergency procedures - where do these patients get their treatment on an ongoing basis? What about major organ transplants - are the uninsured simply told to go home and wait to die?

 

Yes, More or less. Laws require that patients be stabilized (what ever that means). So you go to a hospital, get treatment for a day or so, get a bill, and trash it. Now your credit is ruined (usually not very important for those without insurance) but, the government picks up the tab for the emergency care. Outside of this I dont believe any treatment is available.

 

Here is an interview with a former insurance executive. This is a fairly left leaning organization but, they tend to have there facts in order.  - http://www.democracynow.org/2009/7/16/former_insurance_exec_wendell_porter

 

Excerpt 1 ----

 

AMY GOODMAN: What turned you? Why did you change?

 

WENDELL POTTER: I changed because over the last two or three years I began seeing more than I’d ever seen before and became more knowledgeable of how health insurance—how health insurance companies make money, how they maximize profits.

 

The companies that I worked for were two of the biggest for-profit health insurance companies. And over the past fifteen years, since the last time we had this debate, the health insurance industry has consolidated to the point that now there are about seven very large for-profit health insurance companies that dominate the market.

 

They have begun shifting their business model away from managed care, which, frankly, I used to think was a great model, a great concept, for the delivery of healthcare. But they’ve moved—they’re moving away from that to what they refer to as consumer-driven or consumer-directed care, and it really is just a euphemism for shifting the financial burden from insurers and employers onto the shoulders of working men and women. I saw that happening. But I also saw how—you know, the things that they do to maximize their profit, which really boils down to dumping the sick.

 

AMY GOODMAN: What do you mean, “dumping the sick”?

 

WENDELL POTTER: Two different ways that they do this. In the individual insurance market, we’ve seen quite a bit of news coverage, especially in California. When insurance companies who are active in the individual market—and this means when you don’t get your insurance coverage through your workplace, about the only option you have is to buy it directly from an insurance company, and usually it’s much more costly than it is through—if you buy it or get it through your employer. Once you file a claim, if you are unfortunate enough to get very sick or have an accident and file a claim, you very often will find that your insurance company will go back and look at your application to see if there might be a chance that you either didn’t disclose something that you knew about in the past or inadvertently didn’t disclose something or might not have known about a pre-existing condition. They’ll use that as evidence that you were committing fraud, and they’ll revoke your policy, or they call it “rescinding” your policy, leaving you holding the bag, making you completely responsible for all the medical bills. That’s one way that they dump people who need insurance the most.

 

Another is, if you are employed, particularly with a small business, and your insurance—your employer gets his or her insurance through one of the large insurers, and if just one person in your company files a claim that the underwriters think is too high, if it skews what they think is the appropriate medical experience or claim experience, when that business comes up for renewal, they very likely will jack up the rates so much that your employer has no alternative but to leave and leave you and all of your coworkers without insurance. Either that or they may cut benefits or try to shop for coverage somewhere else. But the end result is, you may find yourself dumped into the rolls and the ranks of the uninsured.

 

Excerpt 2 -----

 

AMY GOODMAN: Was there a seminal moment when you were head of communications at CIGNA that really made you start to look? And how were you isolated there from, well, most people in the country, you know, who were increasingly talking about the massive problems of healthcare and access to it and being cutting off, the dumping of the sick, as you put it?

 

WENDELL POTTER: I was very isolated, along with most insurance company executives who deal with numbers all the time—profit margins and medical loss ratios and earnings per share and how many millions of members you have, or things like that. It’s just—they’re just numbers. And I didn’t really associate that with real people as much as I should and as much as most insurance company executives should, until I went to visit my relatives in Tennessee.

 

And while I was there, I happened to learn about a healthcare expedition that was being held at a nearby town across the state line in Virginia. And I was intrigued, borrowed my dad’s car and drove up to Wise County to see what was going on there. And this expedition was being held at the Wise County fairgrounds, and it was being put on by this group called Remote Area Medical that got its start several years ago taking volunteer doctors from this country to remote villages in South America, where people really don’t have any access to medical care. The founder realized pretty soon, though, that the need in this country is very, very great, and he started holding similar expeditions in rural communities throughout the country. And this one was nearby. I decided to check it out.

 

I didn’t have any idea what to expect, but when I walked through the fairground gates, it was just absolutely overwhelming. What I saw were people who were lined up. It was raining that day. They were lined up in the rain by the hundreds, waiting to get care that was being donated by doctors and nurses and dentists and other caregivers, and they were being treated in animal stalls. Volunteers had come to disinfect the animal stalls. They also had set up tents. It looked like a MASH unit. It looked like this could have been something that was happening in a war-torn country, and war refugees were there to get their care. It was just unbelievable, and it just drove it home to me, maybe for the first time, that we were talking about real human beings and not just numbers.

 

AMY GOODMAN: And so, what did you do with that?

 

WENDELL POTTER: Well, it took me a while to just really process it. I came back to work. I knew at that time that I couldn’t continue doing what I was doing. It just didn’t seem like it was ethically the right thing for me to do. My first career, I was a journalist, and I had been in PR, though, for many years. And I came to realize that much of what I was doing now—or then—in my PR career was just the opposite of what I was trying to do as a journalist. But still, you know, I had mortgage payments. I had other bills to pay. And it was just—it was difficult to work through this and figure out what do I do and how do I—what do I do next?

 

[twacowfca]

In the US there are all sorts of resources available for those

witwout health insurance but these are unadvertised and

people who are ignorant or passive or just proudly poor

can fall through the cracks without an advocate to seek

help.  Case in point:  The mother of a friend was proudly

poor, living in a rural area.  A lump developed in her

neck, but.  a local doctor wouldn't accept her as a new

patient because she didn't have insurance.  Medicare

wouldn't. cover her even though she was 68 and had

more than enough years of work to qualify because

she had missed their annual deadline for filing and

would have had to wait another whole year to qualify.

(Yes, this is how our benevolent government operates. 

She paid her Medicare taxes for a lifetime of work, and

now when she needs the policy she paid for and is entitled

to they won't cover her!)  My friend's Dr was more charitable

than the first Dr.  He treated her without charge called

upon a friend who, knowing her situation, got her

the necessary tests at no charge.  Diagnosis : Burkitt's

Lymphoma, one of the few cancers that can be treated

successfully with chemotherapy. A couple more calls

and she's now being treated at the finest cancer treatment

center in the state ,and will continue to receive treatment

at no charge as long as necessary.

 

[ERICOPOLY]

What about major organ transplants - are the uninsured simply told to go home and wait to die?

 

The Blackfoot tribe (Montana) just used to leave their elders behind (to die of cold or be torn apart by beasts) when they could no longer move with the buffalo herd.

 

Maybe we're just going full circle back to "savages".

 

[Packer16]

Thx for the article oec.  The idea of doctor patient relationship is the key and giving the patent the economic resources directly (not via a third-party (be it insurance cos or the govt) is the key to cost control.  If the patient does not have direct control of the economics of the situation, the pigs start lining up for favors and those who can lobby the best get the best deals (be it from the insurance cos or the gov't).  Inflation occurs in services (and will continue) where the price is not clearly paid for the consumer directly.  If you want to subsidize health care that is fine but let the consumer decide where to spend that money not the third-party.  We need the third-party to pay for some services (maybe catastrophic insurance) but we should try to minimize the number of services paid for in this way to reduce the wrong incentives.  The same is true of education (another area where third-parties pay large portions of the cost) where the costs are out of control.  Much like Hayek and other observed about prices in the general controlled economies of the 1970s, we are seeing in healthcare and education today.  The solution is to let the consumers have the power to decide what a service is worth and provide as few general subsidies as possible.  (This does not mean cut off aid to those who cannot afford it but to remove general subsidies paid directly to institutions from third-parties.  The subsidies should be paid directly to the people who need them and let them decide how to allocate the subsidy.)   

[twacowfca]

Well said Packer24 .  People spending "free money" is a

certain formula for waste and misallocation.

[bargainman]

Thx for the article oec.  The idea of doctor patient relationship is the key and giving the patent the economic resources directly (not via a third-party (be it insurance cos or the govt) is the key to cost control.  If the patient does not have direct control of the economics of the situation, the pigs start lining up for favors and those who can lobby the best get the best deals (be it from the insurance cos or the gov't)...  If you want to subsidize health care that is fine but let the consumer decide where to spend that money not the third-party...  The solution is to let the consumers have the power to decide what a service is worth and provide as few general subsidies as possible...

 

Yes and no.  This is the same argument used by those who advocated the destruction of pension plans in favor of consumer directed 401ks and the like.  "let the consumer decide".  All good until a year like 2008 where all the baby boomer's 401ks get wiped out.  Also it's been proven time and again through behavioral finance studies that consumers and people in general are not rational. I mean that's the whole assumption of value investing.  Maybe I'm taking what you wrote and misinterpreting it, but basically it sounds like it would discourage preventative care and encourage people to wait till they had a really costly illness.  It would also discourage collective bargaining.  A large organized company is a lot better at bargaining than a consumer.

 

A good friend of mine who is American once explained this to me: "The thing about the US is that people here have an inherent distrust of government. It's in the blood and in the history of the country. I mean we still celebrate overthrowing the British".  To me that is a very interesting point.  Some people in the US are so distrustful of government it's truly amazing.  Honestly I don't know where I fall in that camp.  After living through the last election and seeing all the government shenanigans and posturing during the credit crisis, I can't say I blame them.  On the other hand the insurance industry is clearly broken.  So shouldn't we distrust large industry as much as we do government?  Remember Eisenhower's warnings about the Military Industrial complex? (originally he actually wrote it about the "Military Industrial Congressional complex" but he valued his relationship with Congress too much).  It seems to me like large companies control government more and more these days.  Especially militarily contractors, but also health insurance.

 

Anyway, sorry for rambling, but my point is that at some stage shouldn't we start trusting our own government?  I mean our government is supposed to be our advocate.  Industry is supposed to make profit and is selfish by design.  But our government is supposed to be on our side no?  If it's not then how is private insurance on the people's side?  It seems to me that the incentive system is really really broken right now.

 

 

 

[ERICOPOLY]

Food rationing might be necessary.  I went to a buffet at Disneyland last night and there were all these 300lb people piling the plate high with fried chicken, mac&cheese, bread&butter, coke, cheesecake... then going back again and again.  It was truly disgusting, and just imagine the costs to clean up this problem later on.  Yet the food industry bears none of that cost... they privatise the profits of overfeeding people on unhealthy food while later we'll socialize the cost of fixing the patient.  People get outraged about the financial bailouts but this doesn't look much different.  The costs of cleaning up the mess are not born by the people making money as the mess is being made, and it's obvious to most of us that a mess is being made.  Without food rationing, we'll just have to make unhealthy food much more expensive via taxes so that the free market will encourage people to make the right choices... otherwise the choice is bankrupting ourself on healthcare.

 

When the junk food is the cheapest, the free market incentives encourage people to get fat.  That isn't an efficient allocation as a society because later we all wind up paying for that.

[Guest misterstockwell]

http://www.minyanville.com/articles/economy-government-healthcare-obama-deficit-debt-medicaid-medicare-doctors-medical-malpractice-lawyers-congress-hospitals/index/a/25230

[ERICOPOLY]

http://www.minyanville.com/articles/economy-government-healthcare-obama-deficit-debt-medicaid-medicare-doctors-medical-malpractice-lawyers-congress-hospitals/index/a/25230

 

The first thing that article does is quote Thomas Sowell.

 

This is the scholar they quote from:

http://www.freerepublic.com/focus/f-news/1397106/posts

 

I have read three of his books.  To say the least, his ideas surprised me.

 

 

[twacowfca]

Bargainman,  Eisenhower was right about the military

-industrial complex.  Whenever there's a government

program there will be an army of pigs feeding at the

public trough.  Example: I have a friend who works for

a nonprofit org that helps organizations that receive

government grants spend the money wisely with proper

controls etc.  They do this efficiently for 4% of the grant

even though the Feds allow up to 8%.  Now officials in the

new administration are telling them that they should

charge 8% because they are making all the other consultants

(who are also political contributors) look bad.