A Matter Of Opinion

Monday’s Loose Thread

Posted by Gary

Nov. 9, 2009 1:30 p.m. • 26 comments

Big news over the weekend is that the health-care bill passed in the House. Onward to the Senate.

Thoughts on this and other news?

26 comments on this post so far. Add yours!

nslopeofw on November 09 at 2:52 p.m.
Luckily, the Senate has already declared it DOA!!
zelda on November 09 at 3:39 p.m.
My husband and I have private health insurance. We pay $470 a month with a $6K deductible and no Rx coverage. Assuming that premiums increase 25% a year, which has been the pattern, and assuming that there aren’t giant leaps at age 60, our monthly premium will be $2,800 per month by the time I’m eligible for Medicare in 2017. That’s $33,600 per year. From 2010 to 2017, we will pay in aggregate more than $140,000 in premiums for health care, and that doesn’t even account for our Rx costs and the annual $6K deductible that must be satisfied before any benefits kick in.

To say that this is insustainable is a gross understatement.
gmorton on November 09 at 4:24 p.m.
If your premiums have been increasing 25%/year for the last few years, Zelda, you need to find another carrier. The average annual increases have been about 9% over the past 10 years (which is bad enough).

But the government will soon come to your rescue. Your annual rate increases will be at least as great, choices of coverage will be even narrower (they are already narrow because of state regulations), and you will no longer have the option of “going bare.” You will buy the product dictated by the gummint, or off to the Gulag with you.

So don’t worry. Big Brother will take care of you.
zelda on November 09 at 6:14 p.m.
We did shop around and compare prices. There are only four carriers that we found that offer private insurance in Washington. After age 50 but not yet 65, 20-25% annual premium increases are typical. It’s also important to consider picking a carrier that docs will accept because reimbursement rates vary.

Single-payer really is the only moral option, but I’ll settle for a plan that will give me more than $1M in life-time benefits. With costs out of control, it’s very easy to blow through $1M with one serious illness or accident.

Malpractice reform is not going to address the most serious systemic issues with U.S. healthcare. It just isn’t.
spokelooneh on November 09 at 11:55 p.m.
“nslopeofw on November 09 at 2:52 p.m.

Luckily, the Senate has already declared it DOA!!”

Uhhhh, no. Senator Lindsey Graham (R, closet case) from the great state of South Carolina has declared it so.
gmorton on November 10 at 12:08 a.m.
Zelda Krup wrote,

“Malpractice reform is not going to address the most serious systemic issues with U.S. healthcare. It just isn’t.”

No, it wouldn’t. That is a problem, but not the major problem. The major problems are:

1) The system of third-party payers, which severs the nexus between supply and demand (the persons receiving the services are not the ones paying the bills), and

2) Mandates on insurers and providers, which force all customers to pay for services and coverages they don’t want and don’t need.

These are both government-created problems designed to deliver, or foster the illusion, of a free lunch, and thus win votes for opportunistic politicians. Having created a runaway cost spiral in health care, the pols are now “coming to the rescue” by assuming more control over the industry, further restricting your liberty to meet your own health care needs, and further increasing its costs.

And the sheeple will happily line up behind the Pied Piper.
Lulubelle on November 10 at 9:31 a.m.
Insurance company profiteers need to be taken out of the health care delivery equation. I support a single payer system, but can live with a true public option that will provide alternatives, choice and competition to insurance companies. Competition, choice, supply/demand……the good old capitalist American way. Insurance companies have enjoyed an unregulated monopoly for too long.
While I currently enjoy excellent employer provided health insurance….although it costs them and my family a bundle……many of my neighbors are not so lucky. And there are no guarantees on what will happen tomorrow. Any one of us is only one major medical event away from financial disaster.

If all other industrialized nations of the world have figured out how to provide medical services for their citizens, surely the US….the biggest, best, smartest, #1 country in the whole wide world can come up with something. What we have now is an unworkable, unsustainable disgrace.
nslopeofw on November 10 at 10:19 a.m.
I still don’t get why people here hate the idea of businesses making money. They don’t seem to have a problem with all the millionaire politicians, making HUGE money on our taxpayer backs.

The other thing I still don’t get is why anyone believes they deserve ANY entitlement from the rest of the taxpayers. Yes, we already have plenty of free stuff for those who don’t want to pay for themselves, but why add to that? Why should I pay for anyone to get anything free? If I choose to donate, then that is OK, but why should i be forced?
Arch_Druid on November 10 at 10:30 a.m.
Nslopeofw, NO ONE hates businesses making money! There is a difference between profits and GREED however. If a business used gvt to stomp all over you, would you then argue that the business was only looking out for its profits or operating out of pure greed? Think about it.
nslopeofw on November 10 at 10:41 a.m.
I do think about it, Druid. It is that way now with manditory auto insurance. It is also that way now in the House of Represenatives. Regardless of their constituents’ wants, nancy and the uber-liberals are going to shove this down our throats. Do you think Nancy gives a rats patootie what i think?
Arch_Druid on November 10 at 11:02 a.m.
And when did the GOP, Nslopeofw, put out a plan until the Dems had crafted theirs? As I recall from some of “Richard’s” posts, they were simply too busy trying to stall out the Dem legislation to come up with a viable alternative. You think the GOP gives a rat’s patootie as to what you think? I don’t.
gmorton on November 10 at 2:44 p.m.
Lulubelle wrote,

“Insurance company profiteers need to be taken out of the health care delivery equation.”

Who would those be? You HAVE been following the threads here concerning health insurer profits, haven’t you?

http://news.yahoo.com/s/ap/20091025/ap_on_go_co/us_fact_check_health_insurance

“I support a single payer system, but can live with a true public option that will provide alternatives, choice and competition to insurance companies. Competition, choice, supply/demand……the good old capitalist American way.”

LOL. Sorry, Lulu, but “competition” from someone who is holding a gun to your head and dictating what kinds of products you may offer, and who offers a “competing” product financed with capital obtained from investors at gunpoint, and and sold to customers forced to buy it at gunpoint, is not “the good old capitalist American way.” That is the statist/fascist/Stalinist way. It is the way of tyrants.

The blindness revealed by that comment is incredible.
Arch_Druid on November 11 at 11:16 a.m.
GMorton, apparently, private enterprise can hold a gun to your head and dictating this and that in health insurance, this and that as to what will and will not be covered, when such coverage can abruptly be canceled and etc. is quite okay by you as long as it isn’t being done by gvt, correct?

And you can either pay up no matter how unaffordable the coverage is, or how little you get for the price, or you can simply do without.

Glad you have the money dude.
gmorton on November 11 at 1:48 p.m.
Arch_druid wrote,

“GMorton, apparently, private enterprise can hold a gun to your head and dictating this and that in health insurance… .”

Well, Arch, I know of no case where any insurance company has ever held a gun to anyone’s head. Every one I know of offers various insurance products to various persons, which those persons are entirely free to buy or not buy. If you do not like the products they offer and decline to buy them, they will not confiscate your property, throw you in jail, or shoot you. They exert no force against anyone, Arch.

You are using “holding a gun to the head” metaphorically, to mean they won’t give you a free lunch, i.e., they insist that you pay if you want their product.

Sorry, Arch, but no person, including insurance companies, has any duty to do business with you. No one has any duty to do business with you on any particular terms, any more than you have any duty to do business with them. And someone who declines to do business with you, or agrees to do business only on certain terms, is not “holding a gun to your head.” There is no gun; no force is being employed or threatened.

When I say that government holds a gun to your head, there is a *real gun*. It is no metaphor. If an insurance company attempts to offer an insurance product of which the government does not approve, it will seize their property by force and perhaps throw its employees in jail. If you refuse to buy an insurance policy approved by government, it will seize your property or throw you in jail. That is not a metaphor.

Your basic problem is that you believe others have some duty to meet your needs, and if they decline to meet them, or attach conditions to meeting them, then they are “holding a gun to your head.” So you wish to summon government to hold a *real* gun to the heads of persons who are holding these metaphorical “guns” of yours.

But they have no such duties, Arch. They owe you nothing.

Dispense with the metaphors and deal in reality.
garyc on November 11 at 5:24 p.m.
The reality is that nations that have even more government involvement in health care do it for lower costs per capita without worse outcomes.

Third-party paying is a problem. Keeping the insurance model, which is an accident of history, does not address that. No matter what the profits are, that is money that is not going toward care.

Profits are derived in part by withholding care and cherry picking the healthy. Lifting government regs would accelerate that, leaving the sickest for government.

I realize that is a goal for some. Not for me.
richard on November 11 at 8:31 p.m.
And “the reality is that nations that have even more government health care” have systems that are un-sustainable, similar to ours. Japan’s hospitals are going broke and Germany’s costs are going up at a higher rate than planned. And so far all involved are just “looking the other way” because they don’t want to upset the applecart, as it were.

In fact, if you look at Japan’s infatuation with Keynesian economics, you will find it has been in stagnation for nearly 20 years.

But most “dream-visions” are just that. Dream-visions.

Skip the back and forth on what the best health care system is; there is no such animal. Every nation has different strengths and weaknesses; there is no “one size fits all” solution. We cannot afford it right now! Why are we not discussing the most impacting aspect of the current bills from the Democrats? We are in the middle of a devastating recession. No one has ever even had the gall to contemplate adding a TRILLION dollars to the deficit when we need jobs. And just like the 800 billion dollar “stimulus,” this bill will also not create or save jobs.

We need calculated, step-by-step reform of our health care - not a mind boggling 2000 page boondoggle that we will start paying for immediately, but not receiving anything for 6 or 7 years. That is confiscation of tax money, with nothing in return for that whole period.

It is largely a scam and it must be defeated so we can start over without the “rushing” of the Obama machine.
garyc on November 12 at 2:24 p.m.
<<skip the=”” back=”” and=”” forth=”” on=”” what=”” the=”” best=”” health=”” care=”” system=”” is;=”” there=”” is=”” no=”” such=”” animal.=”” every=”” nation=”” has=”” different=”” strengths=”” and=”” weaknesses;=”” there=”” is=”” no=”” “one=”” size=”” fits=”” all”=”“ solution.=”“>>

Who said there was? Whatever problems that are occurring elsewhere, those nations cannot match our spending.

As for government being profligate, I wrote this awhile back:

The Congressional Budget Office found that the VA pays 42 percent below the average wholesale price for prescription drugs. The Federal Supply Schedule, which includes the Department of Defense and the Bureau of Prisons, pays 53 percent of the average wholesale price. Both use their substantial purchasing power to land big markdowns.

“Medicare Part D could do the same, but Congress wouldn’t allow the agency to bargain on behalf of enrollees. Instead, the government subsidizes health insurers in the name of privatization, which means each plan negotiates with drug suppliers. Goodbye, clout. Families USA found that the VA whips Part D on the price of every one of the top 20 drugs used by the elderly. Economist Dean Baker estimates that if Part D were allowed to bargain, the government could’ve saved $600 billion between 2006 and 2013. It’s not too late.”

But … but … but …. that’s socialism! Better to have the right “-ism” than to save money.

As for our “private care.”

“That only works because the government subsidizes employers to provide coverage. Washington Post writer Ezra Klein notes a 2007 Joint Committee on Taxation report estimating that “ending all employer-related tax breaks for health care would raise $1.23 trillion between 2009 and 2012.”

“Why do we route care in such an incoherent way? To maintain the illusion that we’ve fended off socialism. As a result, our hybrid system spends 17 percent of the GDP on health care, which is easily tops in the world, while leaving so many people uncovered. This will continue until we admit the system is sick.”

The price of doing nothing is too high.
gmorton on November 12 at 2:49 p.m.
Gary Crooks wrote,

“The Congressional Budget Office found that the VA pays 42 percent below the average wholesale price for prescription drugs. [and other examples]”

Sure. The drug companies provide drugs to Canada at cost also. They can do that because other customers (you and me) are paying full freight and then some – the prices the companies must charge to finance R & D and pay an attractive return to their investors. The VA, Canada, DoD, et al are getting a free lunch, at your expense.

They offer those discounted prices to government agencies in the hope of winning brownie points (“good will”), much like saloons offer free drinks to cops. “We’ve been nice to you, now you be nice to us.”

You’re not imagining that those companies could charge similar prices to all customers and stay in business, are you?
gmorton on November 12 at 3:08 p.m.
Gary Crooks wrote,

“Why do we route care in such an incoherent way? To maintain the illusion that we’ve fended off socialism.”

And an illusion it is. The “system” has become increasingly socialized for the last 50 years. But we have attempted to do it in such a way that choice, availability, and innovation have not been unduly comprised. The result is spiraling costs.

Health care is an irrational market, meaning that supply and demand are not in sync. In that situation you can either:

1) Reduce demand (rationing),

2) Increase supply (spiraling costs), or

3) Restore a rational market.

The latter, of course, means no free lunches. Which is not politically feasible.
garyc on November 12 at 5:05 p.m.
Definitely not rationale.

The regions with more supply have highest costs. More supply should mean more competition and lower costs. That shows that the providers are not in competition with each other. They’re introducing more services and telling people they need them. And if providers do lose patients, they can do more procedures per patient.

HC has never been a rational market. Always been supply driven. Unless by “restoring,” you’re longing for the 19th century again. Not feasible. Glad you recognize that.

So of the remaining choices, which one?

If cutting unneeded tests and procedures, admin. costs and allowing bargaining to bring down drugs costs is rationing, I’m pro-rationing.
garyc on November 12 at 5:12 p.m.
<<you’re not=”” imagining=”” that=”” those=”” companies=”” could=”” charge=”” similar=”” prices=”” to=”” all=”” customers=”” and=”” stay=”” in=”” business,=”” are=”“ you?=”“>>

I’m imaging thal they raise prices in other countries once we employ the same practices as them. They don’t need to do that now, because U.S. customers are paying for that free lunch … and then some.

After reform, we pay less; other countries pay more. Drug companies still profit.

Or, do you want to keep paying for those foreign meals?
gmorton on November 12 at 9:08 p.m.
Gary Crooks wrote,

“The regions with more supply have highest costs. More supply should mean more competition and lower costs.

Only when the customer is paying the bills. That is a *requirement* for attaining market pricing. When that link is broken, then supply expands without limit, to meet the unchecked demand, and costs spiral upward.

“HC has never been a rational market.”

Of course it has. It was a rational market until WWII, when government made employer-paid health insurance tax-free and exempted it from wage-price controls.

“If cutting unneeded tests and procedures, admin. costs and allowing bargaining to bring down drugs costs is rationing, I’m pro-rationing.”

Ah. And who will decide which tests and procedures are needed – you, you+your doc, or a bureaucrat? And what makes you think admin costs will be lower if the admin is a government bureaucrat? How many of the latter will be laid off if costs begin to outrun revenues? Public schools have an admin ratio 10 times higher than private schools. Do you except the health care bureaucracy to be more efficient?
gmorton on November 12 at 9:25 p.m.
Gary Crooks wrote,

“I’m imaging thal they raise prices in other countries once we employ the same practices as them.”

Not unless Canada and other countries with price caps repeal them. Canada sets drug prices at manufacturing costs + a fixed markup *over those costs* (6 or 7% I believe). No allowance is made for R&D. Why would Canada give up its free lunch? If other countries do the same, there goes R&D. There goes the main engine of pharmaceutical innovation over the last 100 years.
gmorton on November 12 at 9:30 p.m.
“Do you except the health care bureaucracy to be more efficient?”

Er, “expect.”
garyc on November 20 at 9:51 a.m.
<<and what=”” makes=”” you=”” think=”” admin=”” costs=”” will=”” be=”” lower=”” if=”” the=”” admin=”” is=”” a=”” government=”“ bureaucrat?=”“>>

Because they are now, with Medicare and the VA.
garyc on November 20 at 11:05 a.m.
<<h. and=”” who=”” will=”” decide=”” which=”” tests=”” and=”” procedures=”” are=”” needed=”” –=”” you,=”” you+your=”” doc,=”” or=”” a=”“ bureaucrat?=”“>>’

The decision is what will be paid for. Procedures won’t be banned.

<<why would=”” canada=”” give=”” up=”” its=”” free=”“ lunch?=”“>>

Why should we pay for it? It’s not as simple as pay for it or we lose all innovation. The government is already responsible for a lot of that Other nations, too.

http://www.tnr.com/article/health-care-special-issue-creative-destruction-0

Drug companies pour money into the R&D that will return the most bang for the buck. But those “innovations” often are not the most important. Many are minor tweaks to protect patents.

So we get a surfeit of antacids, allergy and erectile dysfunction meds, while NIH works on more important breakthroughs.