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Real Health Care Reform

Friday, March 12th, 2010

by jacob
When it comes to health care the public option is not the only option. There are many other ways to cut costs in health care. Part of the equation is that lack of Health Insurance does not equal lack of Health Care. This equivocation is a lie that has been perpetrated on the American public. Hospitals are required to treat patients. While emergency rooms are an inefficient vector for delivering health care, government takeover is even more inefficient means of delivery.

There are many other ways of reducing costs. First of all reduce the price of the insurance. How? First, start by allowing competition across state lines. The trouble with health care is that there is already too much government control and spending in this sector of the economy. Any solution that increases public sector influence in this segment of the economy will only lead to greater cost. What is needed here instead is a freer market. People should be allowed to shop anywhere for their medical health insurance. If people can find their own car, home and life insurance — they are also capable of choosing/finding health insurance — preferably in a free market.

Part of the current trouble is that the Federal and State Governments have not allowed for a free market. Dictating that insurance companies include given services in health care contracts does not provide choice; it instead has the opposite effect. A healthy 25 year old does not need the same type of coverage as the middle aged. The insurance companies should be left to provide a wider range of services. An example of the this kind problem is that men in their 20’s are forced to buy into health care insurance packages that include gynecological services. Services that are targeted toward various demographics will allow consumer choice and will encourage greater participation.

The next part of the equation is the fact that we, as a people have frankly ridiculous expectations when it comes to health care. We all have car insurance. Do we expect Geico to pay for tune ups, new tires and oil changes? No. Of course not. If automobile insurance did pay for such maintenance then we would be paying $8K to $10K per year for our car insurance. We have home insurance, do we expect insurance to pay for home maintenance? If we could buy insurance that did not cover a check up or a “Johnny has the sniffles” sick visit we would see our health care premiums slashed by some 30% to 40%.

Then there is the tremendous cost to the public caused be medical malpractice law suites. There are three culprits in this issue. The doctors, the lawyers and the public at large.

The Medical profession has historically refused to truly police itself. When doctors in the past proved themselves to be incompetent or negligent, the medical board would typically close ranks and protect one of their own. This is white equivalent of the blue wall of silence. This in turn lead to the second problem — lawyers.

The second culprit are the trial lawyers cum ambulance chasers. When satisfaction could not be found due to the AMA’s intransigence, the law was the only recourse for the public at large. The trouble here is that this profession has also jumped the shark and now we have lawyers trolling for cases through the media with lines like “If you even THINK you MAY have been wronged …” Which plays on the weaknesses of the third party in this dance. The public.

Many people think they will get rich suing their doctor. This is typically false. Especially in class action lawsuits. The only people who make out in class action suits are the lawyers. The thousands who are represented get a token check. The medical insurance company pays out millions. The lawyers get rich. The people paying for health insurance get stuck with the bill. Tort reform should concentrate on this issue first and foremost.

The end result is where we are today — doctors paying medical malpractice insurance premiums to the tune of $150K-$250K per year, per doctor. That is a burden of some $45B to $75B per year just to service malpractice insurance premiums. A burden that is passed on to the public at large. This does not include the costs of defensive medicine, whose impact on the price of medicine is even larger, and even harder to determine.

A possible solution is one where doctors who are repeatedly found negligent would see their licenses revoked. This would benefit the public on two fronts. First of all the medical profession would improve. Secondly, if the bottom 10% of the profession is gone, or improving then the number of lawsuits would drop. As the profession becomes a better risk, then the price of medical services will drop because the overhead from malpractice insurance will drop.

Health Care and Health Care Insurance are not the same thing. Emergency rooms are unfortunately the most expensive means of delivering medical treatment. An alternative are Health Care clinics with extended hours for the uninsured to handle sniffles, ear infections, or some minor trauma. Such clinics could deliver quality health care at a price that is far less than than sending people to the emergency room. Out of pocket expenses could be kept further down as the paperwork caused by insurance is out of the picture. People spend $75 for a plumber, or $30 for an oil change. Why is it too much to expect someone to pay $50 to $100 for the treatment of a simple medical problem?

For more complex issues, such as the uninsured with cancer, the current solution has its troubles, but the government single payer solution is worse. If the insurance industry were allow to provide plans that target catastrophic issues only, such plans would cost far less than the ‘Cadillac’ plans typically provided today. The numbers of the uninsured would certainly drop because cheaper is more accessible.

More than likely some will not be covered. No solution will bring us to Utopia. The trouble with the 3000 page mess we are being threatened with is that Utopia would not even be on the horizon. Currently we have some 10M to 30M who are not covered today. We can reduce this number by reducing the price of insurance with greater market based choices. A medical profession that vigorously polices itself, coupled with some sort of tort reform, will reduce the price of insurance further. The alternative proposed by the left is the government taking control over what should be our own personal business.

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Posted in Health Care, Politics | 12 Comments »

update your resume?

Thursday, January 21st, 2010

While I might want to have a Republican win the senate seats for Virginia as they come up for election, I also want to stop the health care “reform” that is currently the goal of the liberal politicians.

A simple letter sent to all my representatives:

A Republican elected in Mass. Did you get the message, or do you want to brush up your resume?

Stop health care “reform” now.

I think it might be effective if enough people send something that short and “sweet” to their congressmen. What do you think?

Please note, I’m not saying that I don’t want to change the people, I’m saying this can be used as leverage to stop what could be a true disaster in the meantime.

Posted in Campaign 2010, Health Care, Politics, Socialism | 2 Comments »

Immigration and heathcare? The barbarian gets both right.

Saturday, January 9th, 2010

California’s governor Schwarzenegger’s State of the state address includes the following:

Californians carry also a special burden since we are a border state. The federal government alone controls immigration policy, it alone controls border security. While acknowledging its responsibility, the federal government is not even funding a 50-50 split of the costs of undocumented immigrants.

We no longer can ignore what is owed to us or what we are forced to spend on federal mandates. We are currently owed billions of dollars by the federal government for various different programs. We need to work with the feds so that we can fix the flawed formula that demands that the states spend money that we do not have.

And now Congress is about to pile billions more onto California with the new health care bill. Now, as you know, while I enthusiastically supported health care reform, it is not reform to push more costs onto states that are already struggling while other states are getting sweetheart deals. Health care reform, which started as noble and needed legislation, has become a trough of bribes, deals and loopholes. Yet you’ve heard of the bridge to nowhere. Well, this is health care to nowhere.

California’s congressional delegation should either vote against this bill that is a disaster for California or get in there and fight for the same sweetheart deal that Senator Nelson of Nebraska got for the Cornhusker State. (Applause) Because that senator got for the Cornhusker State the corn and we got the husk. (Laughter)

Of course he is commenting on the federal government. The former is more an issue for California than any other state, but the later, health care, is important to everyone in the country. Here you have the governor of California telling the delegation of that state they should oppose the health care bill based on the sweetheart deals being made. What is really sad, is that this should be the response even of the people of Nebraska. No person within this country ought to be satisfied with any bill that is passed through such deals. There are very few people that will look at something that is to their benefit, and say “no, it isn’t right”.

We are seeing the destruction of democracy … when the people think of themselves before they think of the whole, democracy cannot work. If everyone asked themselves “what if everyone did this” before they do anything, it would go a long way toward making things better.

Posted in Health Care, immigration | 14 Comments »

The Real Enemy of Freedom

Monday, December 21st, 2009

This is the face of the true enemy of freedom in this country.

The Democrats have decided that any semblance of debate regarding the facts of any topic is too much trouble. Instead rank name calling is the order of the day. There was a time when this sort of thing was done by activists in order to rabble rouse. Now the party is cutting out the middleman, and Democrat Senators are engaging in empty, banal, name calling — on the floor of the senate.

If you are against the government take over of 1/6th of the economy, you are a racist. Really? If you are against a 2000 page bill getting voted on w/o anyone taking the time to understand what is involved, you are a member of the Aryans? The second worst thing that can happen to the Democrats is failure to pass this bill. The worst thing is them succeeding in this kleptocratic effort.  This mess is that bad.

The bill is unconstitutional. The federal government does not have the power to force people to buy a product. The 14th amendment demands that federal laws apply equally to all individuals. That means the amendment to the H.C .bill where Nebraska is exempt from paying in perpetuity its share of the Federal Health care is unconstitutional on its face. Noting the blatant illegality of this bill, and the fraud it is perpetrating on the American people will no doubt be called racist, homophobic, bigoted, fattening and will cause the polar ice caps to melt.  The correct answer to this level of debate is, “I know you are, but what am I?!”

The best part of this is that we now have it in the congressional record that the Democrats have crafted a bill to kill the insurance industry.  They denied it at first, and wrapped their rhetoric in business model talk — cost savings, consumer choice etc.  Lying through their teeth they claimed this is a market based  solution.  How can that be if you are killing the market?  Oh!  Is that question racist?

Posted in Campaign 2010, Economics, Federalism, Health Care | 20 Comments »

Call and Write Your Senators

Sunday, December 20th, 2009

Put in a notice to Jim Webb and Mark Warner not to vote for cloture on this Health Care Reform bill. I doubt they care anymore, but it’s worth a shot.

Posted in Health Care | 4 Comments »

One More Boondoggle

Wednesday, December 9th, 2009

The U.S. Government is reported to have spent $6 billion to get H1N1 vaccinations out to citizens. Is is also reported that U.S. investment may grow by yet another billion or two. Canada is reported to have spent $1.5 billion on H1N1 vaccines.

On November 16, Canada’s chief public health officer said H1N1 is turning out to be much less deadly than seasonal flu, reporting that H1N1 fatalities are significantly less than seasonal flue.

Closer to home, studies here are beginning to confirm what Canada has previously reported :

The theoretical worst case scenarios associated with this year’s H1N1 pandemic taught us not to take influenza for granted. However, a new study suggests the worst case scenario for H1N1 may be only slightly more deadly than a typical outbreak of seasonal flu — and, in a best case scenario, much less.

In the study, published in the Public Library of Science journal, “PLoS Medicine,” researchers analyzed extensive data from outbreaks in Milwaukee and New York from April to July to get a more accurate picture of the risks associated with the virus.
Read Story

It seems that Washington has hosed taxpayers yet again. Given the season, I am looking at this news as the Ghost of Christmas Future, and will assume a pre-telling of further hosings by those officials in Washington as they march toward “Health Care Reform”.

Posted in Den of Thieves, Health Care | 6 Comments »

Is a Mandate Constitutional?

Tuesday, December 1st, 2009

Is a federal mandate to purchase health insurance Constitutional? Ruth Marcus says it is.

Marcus’ argument rests on two powers given to Congress: the power to tax, and the power to regulate interstate commerce. Looking first at the Commerce Clause, which has been stretched beyond all recognition, she relies on the Wickard v. Filburn case, in which Mr. Filburn was a farmer who had an 11.1 acre allotment for growing wheat, but harvested twice that amount. The excess, he said, was for his own use, not for sale. In this case, it is clear that, had Filburn not grown that extra wheat to feed his livestock, he would have either purchased that wheat, or not sold his 11.1 acre allotment. Thus his growing that extra wheat did impact the market for wheat, and if a significant number of farmers had emulated his actions, the national wheat market would have been significantly impacted.

Now, let’s examine the situation Marcus describes:

Spending on health care consumes 16 percent — and growing — of gross domestic product. There is hardly an individual activity with greater effect on commerce than the consumption of health care.

If you arrive uninsured at an emergency room, that has ripple effects through the national economy — driving up costs and premiums for everyone. If you go without insurance, that limits the size of the pool of insured individuals and — assuming you are young and healthy — drives up premium costs.

16 percent? So what? The housing industry claims a similar percentage of GDP, and everyone needs a place to live, right? Doesn’t being homeless impact the economy, considering all the expenses that the government spends on the homeless? Why then, should we not require people to by housing insurance, so that, if they lose their jobs, their insurance will cover the costs? Would that not have saved our economy from this recent recession?

As for the emergency room scenario, the answer is, “No, it only impacts the broader economy if someone else is required to pay for my care.” The problem is that people are not required to pay for their own care. If you show up without insurance or the means to pay, the hospital is forced to treat you. Everyone needs to eat, too. If you show up at a grocery store with no money, are they forced to feed you? No. Everyone needs shelter, too. If you show up at a hotel with no money, are they forced to give you a room? No.

It is the government mandate that hospitals provide care that creates the artificial impact of the uninsured on our economy. The government creates the problem with one mandate, and will solve it with another?

Marcus’ second argument lies in Congress’ power to “lay and collect Taxes, Duties, Imposts and Excises”:

The individual mandate is to be administered through the tax code: On their forms, taxpayers will have to submit evidence of adequate insurance or, unless they qualify for a hardship exemption, pay a penalty.

Yale Law School professor Jack Balkin likens this to Congress raising money for environmental programs by taxing polluters. “Congress is entitled to raise revenues from persons whose actions specifically contribute to a social problem that Congress seeks to remedy through new government programs,” he concludes.

Balkin cites a 1950 Supreme Court case upholding a tax on marijuana distributors. “It is beyond serious question that a tax does not cease to be valid merely because it regulates, discourages, or even definitely deters the activities taxed,” the court said. “The principle applies even though the revenue obtained is obviously negligible, or the revenue purpose of the tax may be secondary.”

Again, the government created the “problem” by imposing a mandate on hospitals to provide care for those who will not pay for it. Furthermore, the mandate does not impose a tax on an activity, but upon inactivity. Essentially, the idea is that the government can impose a penalty on you for not doing something the government wants you to do.

As noted earlier, the housing industry accounts for about the same percentage of GDP as the health care industry does. Everyone needs shelter. Thus, according to Marcus’ statist logic, the government can require you to buy a house when you leave school (and that house must be of a prescribed size and have the prescribed accommodations, of course), so long as the penalty for not doing so is in the tax code, not the criminal code.

Now, explain how it makes any difference whether the penalty is assessed through the tax code or the criminal code? There is none. Pay or go to jail.

Posted in Health Care | 3 Comments »

And the “Stupid Question” Award Goes To…

Friday, November 13th, 2009

… Sharon Lerner for “Why Doesn’t Health Care Cover Birth Control?”

Even more stupid, she answers her own question but doesn’t see it!

So far, none of the three reform bills has required insurers to cover contraception, although it is almost universally used by heterosexually active women…. Nor have the bills protected [contraception] from “cost sharing,” which means that women may well end up paying for much of their birth control out of their own pockets.

News flash, Sharon: having insurance cover contraception does not make it free, but more expensive, because insurance companies — even government-run and non-profit ones — must cover administrative costs. You may not see it, but that $50 per month will become $60 per month with the administrative costs.

This invisibility of costs has been a major driver of the increase in health insurance premiums. People like to pretend that their employers are paying for most their health insurance. The reality is that those premiums come out of the payroll budget, so there is less available for salaries. But hey, since the company’s paying for our insurance, or most of it anyway, we want our insurance to cover everything — even everyday expenses such as contraception.

Yes, you could probably find a car insurance policy that covers oil changes and tire rotations, too. But people don’t buy them because it is stupid to do so, and everyone knows it. Similarly, it is stupid to have insurance cover checkups and dental cleanings. But people don’t see that as stupid because they do not see that they are paying for it anyway, and paying more for it because of those administrative costs.

The comments in that post re-enforce that stupidity: “[I live] in the UK, where contraception is free….” No, honey, it’s not. It is paid for by taxes. And if you think the government does not add administrative costs to that, too, then I’s sure glad you’re in the UK, and not here.

Posted in Health Care | 1 Comment »

Owen, Democrat, Breaks 4 Campaign Promises in First Day

Monday, November 9th, 2009

One more time with feeling: Thank you Dede!! You liberal piece of trash. You were embraced by the party for 20 years, and when you suffer your first real setback you came out for the Democrat in the 11th hour.

Owens was brought into the Democrat fold real quick.  He lied on the campaign trail, and the idiot moderates, like Charlie Brown trying to kick the football Lucy is holding, voted for the Democrat expecting him to keep his promise.   Rats!  Owens said he would not support a public option, well he voted for it.   He broke that and three other promises the first day in office.  Where is that football now Charlie?  From the Gouverneur Times:

Many feel that it was unlikely Mr. Owens would have won those crucial few thousand votes if the voting public was aware of his intent with regard to the Health Care bill.  The majority of residents in this district do not support the Health Reform bill as it is now written and many feel like they’ve become victims of a fraud perpetrated by their chosen candidate.

Ya think?  Message to the great pho-intellectuals of the middle — read some history!  Democrats migrate leftward in a flash once they reach Washington.  Wishing it were otherwise will not make it so, accept reality.  Read up on economics and find out that there are NO moderate economic theories.  Either you are a socialist central planner, or you allow the market to make choices.  Mixing the two always leads to the former squeezing out the later. Always.  Wishing it were otherwise, will not make it so.

Let this be a lesson to Newt, Owens was the 219th vote. Owen’s win gave Pelosi enough ammunition to finish off conservatism in the US. Public Healthcare is the holy grail for liberals. Why, because historically it causes the country to drift ever leftward.  Gingrich has mud on his face for supporting Dede, and 2012 will be harder for him.

Note to Republican leadership, try to at least run a moderate.  Running leftists makes it difficult for the conservatives (who are 3/4’s of the party) to vote for the candidates you field.  Scozzafava not only threw her support behind Owen, she was more liberal.    I guess it would be more embarrassing if she voted for the bill, but, there was another option.  The primary reason for a political party is to espouse a philosophy in the political arena, and bring this philosophy to life in legislation.  Picking candidates that are hostile to this philosophy makes no sense.

This is the US, not France, not England. We are made of sterner stuff. I hope conservatives do not go quietly into the night.  This vote today will seal the fate of the Democrat party in 2010.  But if the Republicans cannot hold on till then, or, overturn Obamacare, we as a nation are sunk.

Posted in Campaign 2009, Federalism, Health Care, Politics | 18 Comments »

Pelosi Bill Will Create a Monstrous Bureaucracy

Sunday, November 8th, 2009

Check out this Byzantine labyrinth.  I wonder how many evils dwell in that?

jec-chart-11-06-09

It really does speak for itself, doesn’t it?  There is no way in the world that the Pelosi Lemmings could have had a clue as to what they are voting for.  ‘Do it or else!’, was the message from the Democrat Mafia leadership.  The old, “It’s a deal, you no can refuse.” as Vito Corleone would put it.  The next line of defense for our Republic is the Senate.  Considering the track record of those stalwart defenders of the constitution.  I hold out little hope.

Posted in Federalism, Health Care, Politics, Socialism | 12 Comments »

Joe Wilson Has Highlighted What We Need To Accomplish In The Current Election Season

Friday, September 11th, 2009

Now that the dust has had a chance to settle after Barak Obama’s highly partisan speech Wednesday night – in which he belittled all opponents of the Democrat “health reform” legislation while offering exactly zero specific answers of his own – I am thinking about the impertinent moment caused by South Carolina Congressman Joe Wilson.

And what I’m thinking is: Thank God for Joe Wilson.

I am thankful not only because Congressman Wilson had the gumption to say “You lie” when President Obama repeated the total mistruth that the Democrat plan supposedly would not provide U.S. taxpayer-funded health care to illegal aliens.

I thank Joe Wilson for distilling all of our objections to the proposals, and the rising anger and resentment of the tea parties and town halls from the far corners of our nation onto the singular national stage, and being willing to call out “BS” on the entire bill of goods that has been attempted to be shoved down our throats for the past few months.

We made the phone calls, and stood up and complained, and told our various representatives what we think in every little event in every little town – but when all the cameras were focused on one stage and every media outlet was listening for one hour throughout the country, Joe Wilson took the opportunity to sum it all up in one statement and deliver it for all the world to hear:

You lie.

It was the summation, the recap, the next logical step in what the American people have been expressing all summer long. And let’s hope it serves as a springboard and style sheet for how the American people go forward.

If you want to thank Joe Wilson – and I believe you should – go to his Web site and hit the “Contribute” tab at the top, and send him a few dollars, whatever amount works for you.

But more importantly, realize that the battle against encroaching socialism, thievery and parasitism – in short, the moochers – has been engaged. Powers-that-be want to rob you blind, but there are people willing to stand up for you in the halls of power.

If you live in Virginia ( and frankly even if you don’t) one of the best of these is the guy I have been talking about here for years: Ken Cuccinelli. He is one of the best people and best candidates I’ve ever known, and in my view he is the top of the much-publicized Virginia ticket. If you ever wonder, aghast, how our country has fallen so far from the principles of our founders, you will find a refreshing ally in Ken Cuccinelli.

Americans have risen up against the thieves; Joe Wilson has voiced our concern; Ken Cuccinelli will be our next best hope for the future. Getting Ken into higher office will be the most significant possible outcome of the 2009 election season.

Send Ken Cuccinelli some money by clicking here.

Send Joe Wilson some money by clicking here.

UPDATE: And whaddaya know, in less than 48 hours Joe Wilson has reportedly raised $750,000. Let’s hope all those Republicans who sat meekly through the president’s load of hooey will learn something from this.

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Posted in Campaign 2009, Campaign 2010, Health Care, Obama files | 3 Comments »

Obama To Propose An End To The Cadillac Ride?

Wednesday, September 9th, 2009

What appear to be early leaked contents of President Obama’s speech tonight (via Instapundit) reveal that the president has in fact made up his mind and will push for a new government-funded insurance plan (“public option”) paid for in part by new taxes on individuals and insurance companies.

The report suggests the president’s plan to arrive at a public option will be a two step process. First, a series of new rules for and taxes on insurance companies which will greatly increase their expenses and reduce their revenues; and second a “trigger” of the public option which will occur if the insurance companies try to pass along the new costs to consumers either by increased prices or reduced coverage, which is certainly what will occur.

As has already been widely reported, the first element of the revenue side of the Democrat plan would consist of penalties for anyone refusing to purchase health insurance:

Under the plan, people who earn between 100% and 300% of the poverty level (or between about $22,000 a year and $66,000 a year for a family of four) would face fees ranging from $750 to $1,500 a year.

For taxpayers with incomes above 300% of poverty, the penalty starts at $950 a year and reaches as high as $3,800 for families.

Because it is difficult to say how many people would actually choose to pay such a penalty rather than simply enroll in some type of “insurance” plan (there are some real cheepies out there which entitle you to a band-aid a month), we should assume these penalties are not the primary vehicle for funding the “reform.” The main funding will come from health care businesses:

Starting next year, the plan also calls for annual fees of $6 billion on health-insurance providers, $4 billion for medical-device makers, $2.3 billion on drug makers and $750 million on clinical laboratories. The fees would be levied on individual companies based on market share. Insurers also face an excise tax of 35% for any health plan worth more than $8,000 a year for individuals and $21,000 a year for families. [emphasis added]

That last sentence got the attention of any of you who have HR responsibilities. For those who don’t, let me explain. For any small company up to say 20 employees (the only experience I have, but describes the majority of American businesses), there is one particular demographic who embody the “plan worth more than $8,000 a year” provision:

Female employees age 50 and older. Got any of them?

In earlier press reports this excise tax was described as applying to “cadillac” insurance plans, and I can assure you none of the women who are covered under ours likely thinks of it as such. Our copay is $20-$50, the deductible is $250, and for women over 50 the total premium is over $1200 per month (they pay 25% of that). For other employees, some of the different plans we’ve had might approach or surpass the $8000 per year mark, but in every case women are guaranteed to go way past it with the renewal after their 50th birthday. So does that mean that all of us who have middle aged female employees should be looking nervously at our expense budgets for the coming years?

Undoubtedly the “reform” proposal will require insurance companies to curb prices, perhaps eliminate the tiered pricing based on age and sex, and provide other forms of relief for customers. It would not be surprising to hear the president talk about those tonight.

It is possible the insurance providers will absorb the new rules and expenses, accept lower net revenues, and give consumers the great deal we should have been getting all along. It is also possible Barack and Michelle Obama will pay for the entire health care reform package out of their own pockets.

But the reality is “annual fees of $6 billion” plus 35% excise tax is undoubtedly going to result in higher insurance premiums passed on to customers and employers, and/or reduced coverage. If too much of the former, companies like ours will have to make up for the increased expenses by passing them along to employees or possibly cutting staff.

Along with raising premiums, it is likely insurance companies will begin taking the scalpel to any plans now costing over $8000 per year, to fit below the federal “cadillac” designation. Translation: less coverage, lower lifetime maximums.

The end result of the above scenarios will be a lot of pain and sorrow for consumers accustomed to their current level of health care services, followed by a huge outcry from all those who are paying more, getting less, and probably both. Thus, the “trigger” and, behold: the U.S. government health insurance option, paid for by who-knows-what new taxes and, as the White House has already promised, taking a scalpel to Medicare.

If this is indeed the plan the president unveils tonight, and if it passes Congress, then my advice to all the women of my generation is: Gather your things, ladies – the cadillac ride is over.

UPDATE: Now comes the news that in the hours prior to the speech the American public has turned against the public option, with the following new leak from an “aide.”

… while Obama will offer support Wednesday for a public option, the president will not insist on it.

“He’s going to say it’s the best tool for reducing costs,” the aide said. “I think he’s going to be a bit noncommittal.”

If this is what Obama in fact does, and you listen real carefully, that flushing sound you hear will be the last vestige of Barack Obama’s legitimacy as a leader going down the toilet.

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Posted in Health Care, Obama files | 13 Comments »

The single largest cause of health care costs

Saturday, September 5th, 2009

You walk into a hospital for an operation (or come though an emergency room) and you are there for a couple of days. You have the operation and receive an initial bill of $45,000 from the hospital, you then know your insurance was aware of the operation and chill, they are going to have to pay, and you are only going to have to pay $200 co-pay. When you get the ubiquitous Explanation Of Benefits (EOB) in the mail, it shows the $45,000, then it shows a write-off of $40,500 on a line that says “negotiated rate”. That leaves $4,500; your insurance company has negotiated paying 1/10th of the initial bill. You cannot do this yourself, and the hospital doesn’t advertise the prices before they do the operation. How is this even possible?

Well known fact number one: hospitals have a lot of people that cannot pay their bill. For those without insurance, it is around 9 out of 10 cannot pay. Only 1 in 10 uninsured (if that) do eventually pay anything close to their bill. So what happens to the costs of those that cannot pay their bill? Someone has to pay for the costs, so those costs are distributed to all the rest of the patients … well, that is the way it used to be.

Enter insurance companies and negotiated rates. You are Joe Insurer, and your company Ajax Health Insurance (I don’t think there is an Ajax Health Insurance … any similarity to a real person or company are coincidental). Ajax makes money, a very small percentage of the premiums paid, by making sure what they pay out is less than total premiums. They make more money by getting more people to purchase their insurance. They do this through keeping the price as low as they can for the benefits they offer. If they charge less for the insurance, actually provide reasonable service, and take care of the customer, they will have brisk sales and good profits.

Bob Businessman wants the best insurance for his company. He uses his benefits plan as a means of both recruiting and retention of high quality employees. He wants the costs as low as possible, so he finds Ajax Health Insurance, but being a smart businessman, he wants better prices without sacrificing quality of service. He asks them for better prices. Ajax says they will get back with him.

Ajax sees better prices as imperative if they are going to win the contract with Bob, so they look at what they can do. They cannot cut their margin any more (it is already paper thin) and they have the most efficient administration costs in the industry. So they look at trying to cut costs. They contact providers and ask for lower prices … at first, the providers balk, they are in the same squeeze. But Ajax finds one hospital in an area they can influence. The hospital is a good regional hospital, but they have competition … so Ajax promises they will put them on the “approved” list of providers for their insurance if they will cut out sharing unpaid bills with them. That would mean the hospital is guaranteed payment from all Ajax customers, so they *are* getting paid, and will have a guaranteed level of users as well (Ajax is a large insurance company). The hospital will just have to pass unpaid costs to those who don’t have Ajax Health Care. Now of course, that means every other insurance provider is going to do the same thing. And that means every other hospital is going to do the same. The negotiated rate will not be on the bill initially, it will be a write-off. But because they now are not distributing the cost of “dead-beat” customers to everyone, they are going to have to raise the cost to make up for not charging insured customers for the cost of dead-beats (it won’t affect the insured, they already have a rate).

Think of it this way. Suppose a 1000 “room-days” cost $4,500,000 (which is probably not that far off). Now suppose you have 900 of those days being used by insured customers, they will pay $4,050,000 (900x$4,500) the rest of the money has to come from those that have no insurance $450,000 to be exact. The problem is that only 1 in 10 pays their bill, and so the hospital has to charge the 10 that will pay $45,000 to get that money. The negotiated rate is fixed, so insured people still pay the same amount, but now those that have no insurance pay 10 times as much to make up for dead-beats. If everyone were charged the same, the cost would be divided between the 910 that will pay (900 insured, and 10 uninsured that are not dead-beats) and the cost would be $4945 each (probably a little less, as some people that cannot pay $45,000 could pay $5,000 and would, so it would not require quite as high a premium … more people would be paying).

So what would real reform look like? Remove negotiated rates from health care, and then everyone would pay the same for the same service. As it is, the negotiated rates are what cause most of the damage to the system and make it near impossible for people to be self-insuring. Take the negotiated write-offs away, and more people would be able to pay for health care themselves, and would. People would still seek insurance … a one day stay in a hospital would be more survivable financially, but 30 days would be much less so.

This is just one aspect of health care, and yet I’m convinced many other parts of the system are similarly affected. Take away negotiation, and prices would lower and equalize. Insurance companies would no longer be “best” if they can just negotiate well, but if they are efficient at administration.

I also like the idea in the Jack’s post about pre-existing conditions … make it that a company covers the cost until cure or death, whichever comes first.

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Mark Warner Town Hall Meeting

Wednesday, September 2nd, 2009

Who wants to go?

http://fredericksburg.com/News/FLS/2009/092009/09022009/490865

They want people to RSVP, but that is for planning purposes only, and does not guarantee admission.

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The Right Way to Reform Health Care

Wednesday, September 2nd, 2009

The following flier was passed out at Rep. Moran’s healthcare townhall meeting in Reston.

The Right Way to Reform Health Care

Issue 1: Pre-Existing Conditions

A major driver for health-care reform is that people are denied insurance, or coverage of a medical expense, because of a pre-existing condition. However, it is not reasonable to force your new car insurance company to pay for repairs for an accident that happened before you bought the insurance. No, the insurance we had when the accident occurred is responsible for the repair costs, whether you have since gotten a policy with another company or not. Similarly, health insurance companies should be required to pay for all expenses arising from a condition diagnosed when you had that insurance, whether or not you have changed insurance companies since that diagnosis. With that little reform of the law, insurance companies will have no incentive to deny coverage for pre-existing conditions, because they will have no responsibility to cover them. Pre-existing insurance would be responsible for pre-existing conditions.

Issue 2: Portability of Insurance

Most people’s health insurance is provided by their employers as a benefit. This situation arose when yet another attempt by the government to interfere in the private market backfired. During the labor shortages of WWII, the government imposed wage and price controls to hold down wages. So, to attract the best people, companies started offering health insurance as a benefit. That needs to change. The insurance benefit needs to change to a voucher with which we can buy insurance that meets our needs. That’s how we shop for car insurance.

Issue 3: Insurance Bloat

As a result of its being a company benefit, the people using health insurance (we employees) are not the people buying the insurance (the company officers). Since we don’t feel like we’re not paying for it, we want it to cover more and more and more. We want our insurance to cover check-ups and birth control and Robitussin. And we use it more, too. “Well, it’s only a $5 co-pay, so let’s take Johnny in for this cold.” To appear useful, the doctor might even prescribe an antibiotic, which is useless for a cold. What the heck, it’s only another $5 co-pay, right?

Does your car insurance cover rotating your tires, which might prevent a blow-out and an accident? No. Does your insurance cover the annual safety inspection, which might reveal worn out brake pads and prevent an accident? No. If it did, the insurance would cost just that much more, plus some extra for the administrative overhead. Just the same, putting everyday costs and checkups into our health insurance raises the cost of that insurance by that amount, plus some for administrative overhead. That doesn’t happen with car insurance because we, the people using it, are also the people paying for it, and we know better. We still get our tires rotated and our oil changed.

Issue 4: Insurance Costs

There is no question that health insurance is expensive. Health insurance for my family costs me and my employer over $13,000 a year. But that insurance covers almost everything with merely a $5 co-pay. On the open market, I can get a high-deductible policy for less than half that, and pocket the rest. Except that I don’t get the rest. If I do not get insurance through my company, the company will only give me $1000. (That is the limit set by the federal government.) And that $1000 will be taxed, as will the money I use to buy the insurance. So if I buy the insurance through my employer, the money I pay for it, and the money my company pays, is not taxed. But if I buy it myself, it is. That’s ridiculous. Money spent for health insurance, especially basic, no-frills insurance, should not be subject to income tax.

Under the subject of insurance costs, we can add the “exorbitant” profits insurance companies make. The fact is, the profit margins of the ten largest health insurance companies have averaged less than 4.5% over the last three years, according to Yahoo Finance. That is hardly exorbitant.

Issue 5: Health Care Costs

Another reason health insurance is so expensive is that health care itself has gotten more expensive. Aside from the costs of malpractice insurance, we simply have more and better procedures and medicines than we did years ago. Years ago, when you got cancer, the doctor said, “I’m sorry, there’s nothing we can do,” and you died, painfully. Now, we have very expensive chemotherapy and radiation treatments, and much better pain killers. The survival rate of cancer is up significantly. The development of those drugs and procedures is expensive. Without the profit motive, there would be little incentive to develop such cures.

Wrapped into the cost of health care is malpractice insurance. Good doctors, especially OB-GYNs, are leaving the field because of malpractice insurance costs. Tort reform must be part of any solution.

Conclusion

The issue of pre-existing conditions must be addressed. The insurance policy in effect when a condition is diagnosed must be responsible for the costs of treating that condition and all others arising from it. Do that, and insurance companies will have no reason to deny coverage because of pre-existing conditions, and since they will still be responsible for the costs, they will have no incentive to drop customers who get sick.

The company’s health insurance benefits should become vouchers, untaxed vouchers, with which one can shop for insurance. Since one’s insurance would not be tied to one’s job, portability would no longer be an issue, and we could have real competition in the health insurance market, just like we do in the car insurance market.

Finally, we need tort reform to bring down the costs of medical malpractice insurance.

Posted in Health Care | 2 Comments »

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