US Healthcare Reform Bills Don't Address Cost

[Pangloss]

The two most often cited problems in health care in the US are:

 

1) Not everyone is covered all of the time.

 

2) Costs are too high.

 

US House and Senate Democrats are hard at work preparing bills that they say will reform the industry and solve the above two problems. Unfortunately they appear to only address the first one, and that only at staggering expense. The House bill calls for a law that will require all Americans to purchase health care. The cost of that healthcare is not addressed in any way, but it requires Americans to buy it or they have to pay a fine. No, really. It actually does this. Which is why the measure costs -- get this -- $615 billion. No, really. This actually makes sense to Congress. No no, honest! The reason for the expense is that those families who make less than $88,000 per year will have their health care paid for by the government.

 

The only aspect of either bill that even purports to address reforming the high cost problem is that both measures will create a government-run alternative health care plan that will compete with private insurers. One amusing aspect of that is that it will be paid for by -- get this -- taxing the private insurers! So if the government-run program actually succeeds in reducing private health care costs it will make less money and have to cut expenses!

 

Yes, this actually makes sense to Congress.

 

Why did we dump the GOP again? Oh yeah, Terri Schiavo. Dammit.

 

 

 

http://www.boston.com/news/nation/washington/articles/2009/07/16/obama_pushes_hard_on_healthcare_overhaul/

[CaptainPanic]

Sounds like the Dutch system to me... that works fine.

 

Monthly costs per person are about 100 euro for insurance, which covers all basic needs. Additions for special cases (densist, and some luxury treatments with extra care) cost extra. In addition, everybody must pay the first 250 euro of the sum of all costs per year themselves.

 

The government pays people whose income is too low.

 

the only thing I really dislike about this insurance system is that it is allowed to make profit. The whole idea behind insurance is that we spread the risk... why isn't that done by a non-profit organization? It can't be because non-profit organizations are less efficient - the paperwork produced by the current system is staggering.

 

Anyway - healthcare costs a lot of money. Did you compare the 615 billion to the amount that is already being spent on healthcare today? Because, the relevant number is the increase in costs, not the total amount.

[GutZ]

I'm confused so, if everyone has to pay for the GOVO (I made that up ) insurance, why would someone get private insurance? wouldn't taxing them cause them to raise prices?

 

It depends I guess on what covers what. Who applies for medicare? isn't that like the same?

[iNow]

Because, the relevant number is the increase in costs, not the total amount.

 

QFT.

 

 

I also think the suggestion that the bills don't "address costs" is somewhat disingenuous. The costs will go down simply because fewer people (who are uninsured) will need to seek treatment in the emergency room... they'll be able to go to a regular doctor. Also, the government has the ability to set prices. Further, this approach will lesson the burden we are currently experiencing from Medicare, which is going to absorb like 30% of our entire budget within just a few short years.

 

So... yeah. I think it's pretty disingenuous to suggest that it "doesn't address cost." It ABSOLUTELY addressed costs, if by peripheral impact alone... and that peripheral impact is ginormous.

 

 

Secretary of Dept of Health & Human Services Sebelius was on TDS last night. It was a good interview.

 

PART 1: http://www.thedailyshow.com/watch/wed-july-15-2009/kathleen-sebelius-pt--1

PART 2: http://www.thedailyshow.com/watch/wed-july-15-2009/kathleen-sebelius-pt--2

Edited July 16, 2009 by iNow
fixed %

[bascule]

The two most often cited problems in health care in the US are:

 

1) Not everyone is covered all of the time.

 

2) Costs are too high.

 

Costs are already high, but in the near future they will become unsustainably high:

 

 

US House and Senate Democrats are hard at work preparing bills that they say will reform the industry and solve the above two problems. Unfortunately they appear to only address the first one, and that only at staggering expense.

 

It's easy to bandy about terms like "staggering expense", but you really should address the relative costs of the new system versus the present system.

 

The House bill calls for a law that will require all Americans to purchase health care. The cost of that healthcare is not addressed in any way, but it requires Americans to buy it or they have to pay a fine. No, really. It actually does this. Which is why the measure costs -- get this -- $615 billion. No, really. This actually makes sense to Congress. No no, honest! The reason for the expense is that those families who make less than $88,000 per year will have their health care paid for by the government.

 

I'm not seeing the problem with this approach. My understanding, which may be flawed, is that this program would replace Medicare. Medicare presently costs $408 billion. So for an additional $207 billion the program insures all families who make less than $88,000 per year.

 

I would like to see projected costs over time ala the graph I linked above, but so far this isn't setting off any warning bells in my head.

 

Why did we dump the GOP again? Oh yeah, Terri Schiavo. Dammit.

 

Well, aside from taking us from a budget surplus to the first trillion dollar budget deficit by cutting taxes and increasing spending, driving the national debt up above $10 trillion, entangling in two nasty foreign wars, torturing prisoners, spying on Americans and ruining the economy...

 

Republicans passed a rather disastrous Medicare bill, the so-called Medicare Prescription Drug, Improvement, and Modernization Act.

 

This bill precluded Medicare from interfering in the supply chain between the pharmaceuticals and the pharmacies. Medicare could not purchase drugs in bulk from the pharmaceuticals and then disseminate them to the pharmacies so Medicare patients could receive drugs at a discounted price. Instead, Medicare was forced to pay retail for the drugs.

 

This is why drugs are so much cheaper in Canada than they are in the US. It's also one of the things driving up Medicare costs. So I'm unsure what it is you think the GOP did right in regard to healthcare.

---

Merged post follows:

Consecutive posts merged

As an addendum specifically in regard to the issues of costs and coverage:

 

According to Dennis Kucinich 60% of bankruptcies are because of hospital bills, and 80% of those people are insured.

 

Provided this is really the case, I think that's a pretty clear indication the system is fundamentally broken.

Edited July 16, 2009 by bascule
Consecutive posts merged.

[Pangloss]

It's not just me, folks. Or Republicans. The CBO came out today agreeing with me, saying that these two plans will not curtail the spiraling cost problem.

 

http://www.google.com/hostednews/ap/article/ALeqM5jlMpJGn28kqCcgU-aGcYE_ZHW-ywD99FQJL80

 

Democrats' health care bills won't meet President Barack Obama's goal of slowing the ruinous rise of medical costs, Congress' budget umpire warned on Thursday, giving weight to critics who say the legislation could break the bank.

 

The sobering assessment from Congressional Budget Office Director Douglas Elmendorf came as House Democrats pushed to pass a partisan bill through committees, while in the Senate a small group of lawmakers continued to seek a deal that could win support from both political parties.

 

I see a three big assumptions here that I haven't seen any evidence of:

1- Costs will come down automatically

2- Medicare is eliminated under these new bills

3- Government will be able to set costs

 

With regard to #1, why would they if the bills don't address costs? They don't do anything to reign in the inflation-without-any-reason-to-stop pressure created by the current relationship between insurance companies and medical providers. The fact that the government would compete suggests some improvement, but if that competition is thwarted by being funded (indirectly) by that same relationship then that undermines that very pressure (i.e. if the revenue collected from insurance companies goes down then the government system looses money and has to raise prices too -- it's a Catch-22).

 

With regard to #2, Medicare is for people 65 and over. As I understand it (and I could be wrong as well) they would continue that because they actually see it as working IF we get costs under control (but of course they aren't addressing the root cause of those skyrocketing costs). They have no incentive to kill Medicare.

 

With regard to #3, the government could set costs without spending the kinds of amounts we're gasping at here. Regulation can be expensive but not THAT expensive. I don't understand this reasoning at all.

 

I absolutely agree with bascule (and the president) that if we don't get costs under control then the deficit and debt will get WORSE -- much worse than even these costs suggest.

 

What I'm afraid of, however, is that we're about to add another $1.5 trillion in debt and not solve the cost problem! I think a lot of what's driving this current effort is politics. I wouldn't be surprised at all to hear, if these bills are defeated, the president come out and say that these were bad bills "in retrospect" and that his next effort will more directly address the underlying problems with the insurance industry.

[bascule]

I'll reserve judgment until I see an in-depth analysis of the combined House/Senate bills though.

 

Just for the record though:

 

http://www.boston.com/news/nation/washington/articles/2009/07/16/obama_pushes_hard_on_healthcare_overhaul/

 

[Obama] wants the legislation to be fully paid for and the total cost kept around $1 trillion over 10 years.

 

Compare to the Republican track record:

 

http://en.wikipedia.org/wiki/Medicare_Prescription_Drug,_Improvement,_and_Modernization_Act

 

By early 2005, the White House Budget had increased the 10-year estimate to $1.2 trillion.[3]

 

FWIW though:

 

http://finance.yahoo.com/tech-ticker/article/281590/Healthcare-Is-%22Not-a-Right%22-and-Obama%27s-Plan-Will-Cost-Way-Beyond-1T-Ron-Paul-Says

 

"They've never been right on projections of medical programs," referring to his colleagues in Congress, "they're always off by 100%, 200%. It always costs a lot more."

Edited July 17, 2009 by bascule

[Pangloss]

Or worse. "Iraq will only cost 50 billion dollars."

 

I'll reserve judgment until I see an in-depth analysis of the combined House/Senate bills though.

 

You're absolutely right, of course. The devil/angel is in the details.

[bascule]

For what it's worth, Democrats don't agree either:

 

http://edition.cnn.com/2009/POLITICS/07/17/health.care/index.html?eref=rss_topstories

 

This is why it's best to avoid painting people with too big of brush strokes.

[Pangloss]

Yes, it is generally best to avoid broad generalizations about political parties. Hint, hint.

 

It is interesting that not all Democrats are on board with the plan, I agree. It's questionable at this point if any of the proposed plans can get through the Senate even with the newly minted 60-seat majority.

[bascule]

I think a particularly interesting proposal which has not received much mainstream attention is HR 676 which would create a true universal single-payer healthcare system.

 

The bill is co-authored by Dennis Kucinich who has been a long-time advocate of such a system. I recall in the 2004 Democratic presidential debates among Kerry, Edwards, and Kucinich (who was only there because he had not yet conceded) Kucinich asked both Kerry and Edwards to join him in support of universal healthcare. Kerry and Edwards didn't know how to respond and there was an awkward silence before Larry King, the debate moderator, exclaimed "SOCIALISM!"

 

Of course, universal single-payer healthcare isn't socialism. The hospitals, doctors offices, pharmaceuticals, and all other parts of the healthcare system would remain privately owned. However they would receive all of their funding from a single not-for-profit non-governmental entity.

 

This stands in contrast to more socialistic healthcare programs like Health Canada or the UK's National Health Service, where all of these entities are government-owned.

 

The program would, in effect, destroy the entire health insurance industry in America, and pay for itself with funds which were previously going to private insurers. Kucinich has long claimed such a system will save money in the end because it will eliminate the large overhead involved in billing multiple insurers.

[Pangloss]

I think the fact that the single-payer crowd isn't part of the discussion even with a 60 seat Democratic majority in the Senate says more about the power of the insurance lobby than just about anything we've heard come out of Washington in the last 30 years.

 

Well, with one big, huge, honkin' exception of course.

[bascule]

I think the fact that the single-payer crowd isn't part of the discussion even with a 60 seat Democratic majority in the Senate says more about the power of the insurance lobby than just about anything we've heard come out of Washington in the last 30 years.

 

I'm curious why Obama doesn't back conversion to a single-payer system...

 

There was an interesting Politico article on the subject:

 

http://www.politico.com/news/stories/0409/21763.html

[JohnB]

I think a particularly interesting proposal which has not received much mainstream attention is HR 676 which would create a true universal single-payer healthcare system.

 

An interesting idea, however I can see a very big possible flaw.

 

From what I read on the link it's a move toward a system similar to ours.

 

However generally in ours we have around a 20% "copay". (I hope the word means what I think it means.) I pay the Dr $60 and get $40 odd back from Medicare.

 

HR 676 appears to be very like our "bulk billing" where the Dr bills the gov insurer directly. The downside of this type of system is that if there is no cost to the patient, people go to the Drs for every tiny little thing.

 

Once you hit cold and flu season, the Drs simply can't keep up with all the mothers taking little Johnny in because he has the sniffles.

 

Did you follow the Universal Healthcare thread?

[CharonY]

Depending on the amount of co-pay, however it may lead to the point that people only go to the doctor if something severe is going on. But it may be cheaper and easier to treat when it is still in the annoying but not incapacitating stage...

[john5746]

That's a good point, which this article addresses. Don't give obstacles to prevention, in fact give incentives for prevention.

 

Also, I think our current system rewards using expensive technology when it isn't needed. A new machine is brought in for 1% of cases, then more are ordered for 10% of cases, even if it is shown to have no advantage. Patients want the latest, hospitals get better ratings for more equipment and insurance will cover it(at first anyway) and raise their premiums.

 

There was an article about this in Newsweek.

[bascule]

However generally in ours we have around a 20% "copay". (I hope the word means what I think it means.) I pay the Dr $60 and get $40 odd back from Medicare.

 

Yeah that's the same thing copay means here in America. For example I recently had to visit the opthamologist. I was required to pay $50 copay for the visit. I'm not sure what the total fee is, but I always pay $50 for any specialist visit.

 

HR 676 appears to be very like our "bulk billing" where the Dr bills the gov insurer directly. The downside of this type of system is that if there is no cost to the patient, people go to the Drs for every tiny little thing.

 

Once you hit cold and flu season, the Drs simply can't keep up with all the mothers taking little Johnny in because he has the sniffles.

 

I suppose that isn't a problem with the present system because in many cases Little Johnny isn't insured.

 

Great for preventing too many people from getting unnecessary treatment, bad when Little Johnny needs a kidney or he'll die.

 

Did you follow the Universal Healthcare thread?

 

I read it a bit at the beginning but it eventually turned into a long drawn out discussion I did not find interesting.

[JohnB]

Great for preventing too many people from getting unnecessary treatment, bad when Little Johnny needs a kidney or he'll die.

Sorry. I reread my post and realised I wasn't clear. "Bulk Billing" only applies for general GP consults, it doesn't apply for anything past that. Further treatments or major things are handled differently.

[bascule]

Sorry. I reread my post and realised I wasn't clear. "Bulk Billing" only applies for general GP consults, it doesn't apply for anything past that. Further treatments or major things are handled differently.

 

I still contend "I have to wait longer because Little Johnny has the sniffles" is a better scenario than "Little Johnny dies from an undiagnosed sinus infection"

 

Also it's not like it's a breeze to get into a doctor in America. I usually have to schedule appointments at least two weeks in advance. And I'm supposed to have good insurance, or something.

[JohnB]

Also it's not like it's a breeze to get into a doctor in America. I usually have to schedule appointments at least two weeks in advance.

For a GP? You're kidding aren't you? Appointments are usually for the next day here, or if you think it's serious, just walk in. (I have a local private practice clinic.)

 

And that's for the run of the mill without private health insurance service.

[bascule]

For a GP? You're kidding aren't you?

 

Nope. Typical turnaround time for me, among many GPs, is typically a week, having booked an appointment in advance.

 

Appointments are usually for the next day here, or if you think it's serious, just walk in. (I have a local private practice clinic.)

 

If something is semi-serious and you need care, the typical approach here is to go to a clinic or the emergency room. However, be prepared to wait a few hours before someone is able to see you.

 

Then there are people who do show up to the emergency room with something serious but somehow don't get bumped up in the triage process who pass out and die on the emergency room floor.

 

Yeah, American healthcare rules.

 

And that's for the run of the mill without private health insurance service.

 

You'll get the same care if you're insured or not, it's just you end up paying out of pocket if you're uninsured. No insurance? Cash up front.

[CharonY]

I think depending on region one or two weeks are not uncommon (in the US). For me it was the same so far.

While I was sitting in the waiting room a guy was rejected because he had no insurance. While he had some cash, it probably was not enough. Apparently he had some pain in the legs and was told to go to an emergency room.

That being said, I suppose there is also a higher pressure for MDs to make money, given the fact that they leave med school with an average of 200k of debts. I am only wondering why they are not swarming to Germany to become MDs instead (those with good scores that is).

Edited July 24, 2009 by CharonY

[Pangloss]

I think bascule is overstating the case, but maybe it's just really bad in his area. I've never had to wait more than an hour or two for urgent care, and that was in the middle of the night on a holiday.

 

I think the real problem is people who don't have adequate health care coverage. They're worried about cost so they wait longer and then need more urgent care that costs even more, and end up in dire straights.

[bascule]

I think bascule is overstating the case

 

Zuh?

 

If something is semi-serious and you need care, the typical approach here is to go to a clinic or the emergency room. However, be prepared to wait a few hours before someone is able to see you.

 

I've never had to wait more than an hour or two for urgent care, and that was in the middle of the night on a holiday.

 

I'm not seeing how your statement is radically different from mine.

[DJBruce]

I am completely against the current idea of health care reform. For me it is not if the bill lowers the cost of health care or not; I simply do not feel that the government should interfere with health care. It is not the government's job to provide health care for me, my family, or any other person in this country.

 

As for waiting times, I can normally get an appointment with my doctor same day if I am sick, if it is a normal physical it normally takes about a week. I went to the ER during the swine flu scare and I was given a room and a doctor within 30 minutes. Although if you want to see a specialist for something that is not life threatening it can take up to four months to get an appointment.