Everything HR 3200

[DJBruce]

There are many threads discussing the current healthcare reform, yet none of them are specifically geared to discussing the entire bill in question. This has meant many threads have been diverted from their original purpose and spiraled into massive tangents. So here is a thread to discuss HR 3200 in its entirety.

 

HR 3200 PDF Version

 

HR 3200 HTML Version

 

Please try to stick to discussing the issues present by the bill, not slippery slope arguments about "Obama-Care.

 

 

I apoligize to the moderators if they feel this is a repeat thread and feel that it should be deleted.

[navigator]

Hey thanks DJBruce!!!

 

I thought this was one of the easier ones to understand, maybe it could be used as a metric to gauge the similarities of our interpetations..

 

from page 61

 

22 ‘‘(E) an estimate of total funds needed to

23 ensure timely completion of the implementation

24 plan; and

 

To me, it says they don't know the cost so an estimate is needed?

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In the Tenncare thread DJBruce brought up the taxes employers will incur if they choose to not offer the acceptable coverage per the government plan.

 

Page 110

7 (B) EMPLOYMENT TAXES ON EMPLOYERS

8 NOT PROVIDING ACCEPTABLE COVERAGE.—The

9 amounts received in the Treasury under section

10 3111© of the Internal Revenue Code of 1986

11 (relating to employers electing to not provide

12 health benefits).

13 © EXCISE TAX ON FAILURES TO MEET

14 CERTAIN HEALTH COVERAGE REQUIRE15

MENTS.—The amounts received in the Treasury

16 under section 4980H(b) (relating to excise tax

17 with respect to failure to meet health coverage

18 participation requirements).

19 (2) APPROPRIATIONS TO COVER GOVERNMENT

20 CONTRIBUTIONS.—There are hereby appropriated,

21 out of any moneys in the Treasury not otherwise ap22

propriated, to the Trust Fund, an amount equivalent

23 to the amount of payments made from the Trust

24 Fund under subsection (b) plus such amounts as are

1 necessary reduced by the amounts deposited under

2 paragraph (1).

3 (d) APPLICATION OF CERTAIN RULES.—Rules simi4

lar to the rules of subchapter B of chapter 98 of the Inter5

nal Revenue Code of 1986 shall apply with respect to the

6 Trust Fund.

 

My understanding is sub section b covers SS, so the Treasury can take funds from SS line to pay healthcare.

Edited August 12, 2009 by navigator
Consecutive posts merged.

[DJBruce]

‘‘(6) IMPLEMENTATION AND ENFORCEMENT.—

18 Not later than 6 months after the date of the enact-

19 ment of this section, the Secretary shall submit to

20 the appropriate committees of Congress a plan for

21 the implementation and enforcement, by not later

22 than 5 years after such date of enactment, of the

23 standards under this section. Such plan shall in-

24 clude—...

 

(E) an estimate of total funds needed to

23 ensure timely completion of the implementation

24 plan; and" (60-61.)

 

I would say that they are saying once the plan has begun to be implemented, the Secretary of Health will have to present a budget to Congress.

 

I have a feeling they have a rough estimate of what the plan will cost, but like everything once the plan begins the actual costs will become more clear.

[navigator]

Ok, that makes sense, thanks.

 

For further clarification,

 

Page 61

18 ‘‘(D) programs to provide incentives for,

19 and ease the burden of, health care providers

20 who volunteer to participate in the process of

21 setting standards for electronic transactions;

 

I think thats what there unsure of the cost. Basically, there not sure how much it will cost to engineer a card you can stick up your rear, open your mouth and project on the wall...

 

Seriously though, I understand how that would save money by improving efficiency.

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The fed will usurp all state powers in state based health care exchange.

 

Page 111

 

9 (a) IN GENERAL.—If—

10 (1) a State (or group of States, subject to the

11 approval of the Commissioner) applies to the Com12

missioner for approval of a State-based Health In13

surance Exchange to operate in the State (or group

14 of States); and

15 (2) the Commissioner approves such State16

based Health Insurance Exchange,

17 then, subject to subsections © and (d), the State-based

18 Health Insurance Exchange shall operate, instead of the

19 Health Insurance Exchange, with respect to such State

20 (or group of States). The Commissioner shall approve a

21 State-based Health Insurance Exchange if it meets the re22

quirements for approval under subsection (b).

 

10th amendment anyone?

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In the opponents for HR thread Bascule has alleged that I am spreading disinformation regarding this plan being a single payer system.

 

Page 145

15 (4) AUTOENROLLMENT OF EMPLOYEES.—The

16 employer provides for autoenrollment of the em17

ployee in accordance with subsection ©.

 

Page 24 sec 116

18 (a) IN GENERAL.—A qualified health benefits plan

19 shall meet a medical loss ratio as defined by the Commis20

sioner. For any plan year in which the qualified health

21 benefits plan does not meet such medical loss ratio, QHBP

22 offering entity shall provide in a manner specified by the

23 Commissioner for rebates to enrollees of payment suffi24

cient to meet such loss ratio.

 

Page 72

8 (a) ESTABLISHMENT.—There is established within

9 the Health Choices Administration and under the direc10

tion of the Commissioner a Health Insurance Exchange

11 in order to facilitate access of individuals and employers,

12 through a transparent process, to a variety of choices of

13 affordable, quality health insurance coverage, including a

14 public health insurance option.

15

 

Page 265 sec1131

7 (1) IN GENERAL.—The first sentence of section

8 1833(t)(3)©(iv) of the Social Security Act (42

9 U.S.C. 1395l(t)(3)©(iv)) is amended—

10 (A) by inserting ‘‘(which is subject to the

11 productivity adjustment described in subclause

12 (II) of such section)’’ after

13 ‘‘1886(b)(3)(B)(iii)’’; and

14 (B) by inserting ‘‘(but not below 0)’’ after

15 ‘‘reduced’’.

16 (2) EFFECTIVE DATE.—The amendments made

17 by paragraph (1) shall apply to increase factors for

18 services furnished in years beginning with 2010.

 

page 84 sec 203

5 (a) IN GENERAL.—The Commissioner shall specify

6 the benefits to be made available under Exchange-partici7

pating health benefits plans during each plan year, con8

sistent with subtitle C of title I and this section.

9 (b) LIMITATION ON HEALTH BENEFITS PLANS OF10

FERED BY OFFERING ENTITIES.—The Commissioner may

11 not enter into a contract with a QHBP offering entity

12 under section 204© for the offering of an Exchange-par13

ticipating health benefits plan in a service area unless the

14 following requirements are met:

15 (1) REQUIRED OFFERING OF BASIC PLAN.—The

16 entity offers only one basic plan for such service

17 area.

 

These are some of the points of the bill that lay the ground work for single payer, IMO. I base my assertion on this...

 

http://www.youtube.com/watch?v=p-bY92mcOdk

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Page 111

 

9 (a) IN GENERAL.—If—

10 (1) a State (or group of States, subject to the

11 approval of the Commissioner) applies to the Com12

missioner for approval of a State-based Health In13

surance Exchange to operate in the State (or group

14 of States); and

15 (2) the Commissioner approves such State16

based Health Insurance Exchange,

17 then, subject to subsections © and (d), the State-based

18 Health Insurance Exchange shall operate, instead of the

19 Health Insurance Exchange, with respect to such State

20 (or group of States). The Commissioner shall approve a

21 State-based Health Insurance Exchange if it meets the re22

quirements for approval under subsection (b).

 

10th amendment anyone?

 

Are none of those in favor of this bill interested in interpeting this? Or am I to assume that my interpetation is correct, this is clearly a violation of the 10th amendment?

[Pangloss]

Interesting fact-check video at ABC News tackling two key questions:

 

1) Does the House bill eliminate private health care insurance?

2) Does the House bill do anything to stop employers from simply dumping their employees on the government plan?

 

The fact-check answers the first question "no", refuting the Page 16 citations directly, focusing on how it's actually just bumping the regulations and requiring private insurers to comply with those regulations (like we already do). That may put some private insurers out of business if they can't comply with the new regulations, but that may be more of a good thing than the bad thing, if the regulations are warranted.

 

The fact-check answers the second question "yes", citing tax breaks and mandates designed to keep companies on their private plans in order to avoid dumping everyone onto the government plan. This stands to reason, because the government plan is paid for in part by funding derived from special taxes on those private plans. So if everyone leaves the private plans, then the government will lose most of its funding for its own plan. It's a built-in incentive to keep people where the are.

 

Of course, I still have serious problems with this plan -- my main one being that it doesn't address the cost issue in any way (we're just having the government spend another trillion dollars per year that it doesn't have on whatever the insurance industry feels like charging). But fact-checks are important.

 

http://blogs.abcnews.com/theworldnewser/2009/08/fact-check-can-you-keep-your-current-health-plan.html

[padren]

Of course, I still have serious problems with this plan -- my main one being that it doesn't address the cost issue in any way (we're just having the government spend another trillion dollars per year that it doesn't have on whatever the insurance industry feels like charging).

 

Maybe I am naive, but while we don't know how to pay for it, don't we have to see where the dust settles somewhat first, since this is going to shake up a lot of how money currently goes to health care?

 

The way I see it:

 

1) As a nation, we already spend a ton on health care, some privately, some publicly, and often money is spent without ever being paid for directly - pushing costs all over the place in a very temperamental manner. The last point specifically referring to medical bankruptcies in which tons of collectors have already spent a ton of money trying to collect, followed by lawyers and eventual bankruptcy hearings. Not only does a hospital get stuck with an unpaid bill, but they've paid their collections and legal departments a ton of money to get nothing. When they do collect on someone that just barely avoids bankruptcy, it is still at a high cost - collection companies often take 50% of an unpaid balance of delinquent bills, and that's before they have to resort to lawyers.

All these factors drive up cost, as a hospital can't just ignore hemorrhaging money - they have to make it up elsewhere, by inflating costs to cover their losses. I would expect this isn't done in an even handed manner, but usually in the most reliable manner to match the fluctuation in losses. Where they 'make it up' is not in any way guaranteed to be evenly distributed - they could just push it mostly onto senior care for all we know, if that is reliably inelastic enough. I am not saying I have any evidence that it is unfairly distributed now, just saying there is no causal connection that would evenly distribute these extra costs.

 

Of the people who don't pay their hospital bills, it's usually people without insurance that use the ER as their doctor's office or come in after a problem has gotten out of control.

 

So:

 

2) That, combined with so many other factors that have been unsightly landmarks in our current health care system (people with conditions trying to hide them so they can get coverage, most discussed heavily) the sum costs to everyone are going to be thrown all around. We are taking a huge burden upon the public side of paying for health care, but we are trying to reduce the cost to hospitals (in unpaid bills) and people (fighting litigation, filing bankruptcy, overhead associated with wage garnishing, collection companies) so honestly no one knows where the dust will settle.

 

It is disconcerting that when it settles, we could be very deep in the red - but can anyone really tell us the current cost of the 'business as usual' system we have now? Do we have any idea of how much of an impact universal coverage would have to our national productivity, preventative care, bypassing collection costs and 'tight money management' costs? One thing I can say for sure, having very little money makes life gets very expensive fast. Being short two dollars can add a hundred dollars in NSF fees to your bank account if you have no savings, putting off car repairs leads to more expensive repairs or even accidents due to mechanical failure. All of these things leave less money in people's pockets, whether to spend on taxes to support publicly funded health care, or buy private coverage.

 

So really, the main reason I am not too concerned with the 'how to pay for it' question right now is we have no idea how this will all re-balance out, and where we will be. All we know is it's a horrendous mess right now, and these reforms can make the costs more predictable while at the same time be far more humane and reduce suffering to those currently falling through the cracks. To me, I think that makes it worth a shot - and I do hope to have some serious discussions on the costs as they balance out. Hopefully Republicans will have returned to their fiscally responsible roots by the time they reemerge as a powerful party and can help at that time, but right now we need some plan that even as a 'first pass' solution cleans up some of the mess, and we can deal with the lingering problems from there.

[navigator]

Interesting fact-check video at ABC News tackling two key questions:

 

1) Does the House bill eliminate private health care insurance?

2) Does the House bill do anything to stop employers from simply dumping their employees on the government plan?

 

The fact-check answers the first question "no", refuting the Page 16 citations directly, focusing on how it's actually just bumping the regulations and requiring private insurers to comply with those regulations (like we already do). That may put some private insurers out of business if they can't comply with the new regulations, but that may be more of a good thing than the bad thing, if the regulations are warranted.

 

The fact-check answers the second question "yes", citing tax breaks and mandates designed to keep companies on their private plans in order to avoid dumping everyone onto the government plan. This stands to reason, because the government plan is paid for in part by funding derived from special taxes on those private plans. So if everyone leaves the private plans, then the government will lose most of its funding for its own plan. It's a built-in incentive to keep people where the are.

 

I don't understand, I was hoping to disect the bill itself and rely not on some one elses opinion. However, IMO based on the amount of control the government leverages on the private health providers, there is a subjective point that determines at what point its still considered private.

 

Of course, I still have serious problems with this plan -- my main one being that it doesn't address the cost issue in any way (we're just having the government spend another trillion dollars per year that it doesn't have on whatever the insurance industry feels like charging). But fact-checks are important.

 

http://blogs.abcnews.com/theworldnewser/2009/08/fact-check-can-you-keep-your-current-health-plan.html

 

I agree, one aspect of this is the ~13 million non citizens, whether or not they are covered. I have heard reports both ways.

[padren]

I agree, one aspect of this is the ~13 million non citizens, whether or not they are covered. I have heard reports both ways.

 

Actually, the largest issue I have with universal coverage (while I do still support it) is I can't help but to see it impacting our rather open and liberal immigration policies. Canada's immigration policies are often seen as draconian by comparison, but they literally do get 'medical refugees' and it could put a huge strain on their system if they didn't screen so carefully.

 

I do wonder about these secondary impacts.

[Pangloss]

It is disconcerting that when it settles, we could be very deep in the red - but can anyone really tell us the current cost of the 'business as usual' system we have now? Do we have any idea of how much of an impact universal coverage would have to our national productivity, preventative care, bypassing collection costs and 'tight money management' costs?

 

I agree, and I will ultimately support the House bill if it passes, even though I think that one of the few things you can definitively state about it is that it gives the insurance industry exactly what it wants. But it could ultimately affect cost in a positive fashion. Maybe. Hopefully. If we're lucky.

 

I don't think we experiment enough in this country. We run around insisting that we know two diametrically opposed things -- what conservatives "know", and what liberals "know". We do this on virtually every single issue before this country. Almost never do we Americans stand up and say "we don't know what the best thing is to do on this issue".

 

Just do something and let's see what happens. It almost doesn't even matter what the "something" is.

[navigator]

Page 145

15 (4) AUTOENROLLMENT OF EMPLOYEES.—The

16 employer provides for autoenrollment of the em17

ployee in accordance with subsection ©.

 

An employer must auto enroll employees into public option plan.

 

Page 24 sec 116

18 (a) IN GENERAL.—A qualified health benefits plan

19 shall meet a medical loss ratio as defined by the Commis20

sioner. For any plan year in which the qualified health

21 benefits plan does not meet such medical loss ratio, QHBP

22 offering entity shall provide in a manner specified by the

23 Commissioner for rebates to enrollees of payment suffi24

cient to meet such loss ratio.

 

Government sets prices for all private health plans.

 

Page 72

8 (a) ESTABLISHMENT.—There is established within

9 the Health Choices Administration and under the direc10

tion of the Commissioner a Health Insurance Exchange

11 in order to facilitate access of individuals and employers,

12 through a transparent process, to a variety of choices of

13 affordable, quality health insurance coverage, including a

14 public health insurance option.

15

 

Government is creating an health care exchange to bring private health care plans under government control.

 

 

Page 265 sec1131

7 (1) IN GENERAL.—The first sentence of section

8 1833(t)(3)©(iv) of the Social Security Act (42

9 U.S.C. 1395l(t)(3)©(iv)) is amended—

10 (A) by inserting ‘‘(which is subject to the

11 productivity adjustment described in subclause

12 (II) of such section)’’ after

13 ‘‘1886(b)(3)(B)(iii)’’; and

14 (B) by inserting ‘‘(but not below 0)’’ after

15 ‘‘reduced’’.

16 (2) EFFECTIVE DATE.—The amendments made

17 by paragraph (1) shall apply to increase factors for

18 services furnished in years beginning with 2010.

 

Government mandates & controls productivity for private health care industries.

 

 

page 84 sec 203

5 (a) IN GENERAL.—The Commissioner shall specify

6 the benefits to be made available under Exchange-partici7

pating health benefits plans during each plan year, con8

sistent with subtitle C of title I and this section.

9 (b) LIMITATION ON HEALTH BENEFITS PLANS OF10

FERED BY OFFERING ENTITIES.—The Commissioner may

11 not enter into a contract with a QHBP offering entity

12 under section 204© for the offering of an Exchange-par13

ticipating health benefits plan in a service area unless the

14 following requirements are met:

15 (1) REQUIRED OFFERING OF BASIC PLAN.—The

16 entity offers only one basic plan for such service

17 area.

 

Government mandates all benefit packages for private health care plans in the Exchange.

 

 

These are some of the ways the government will control the "private" health care industry. IMO, based on this level of control, they are just another government run entity. I will see if I can find more ways the bill plans to micromanage the private health care industry.

[Mokele]

None of the sections you quote explicitly say they're about private companies, and your quoted sections are too short to determine anything more.

[ParanoiA]

Sorry for the long post...but it takes a lot of verbiage to anticipate and empathize with the crowd on this forum.

 

Rhetoric aside, look at the bill for exactly what it does. It establishes a national exchange, which all citizens are required to participate in. Whatever minimum requirements the government decides, every insurance carrier that wants to be that required minimum insurance provider must meet them.

 

The only insurance arrangement that gets out of this mandate is individual private insurance as a “grandfathered” plan. It must not change or renew or it loses grandfathered status and is subject to meeting the requirements of the exchange in order to qualify as a minimum requirement insurance plan. The citizen is now obligated to purchase a plan from an Exchange participating provider the moment a change is made.

 

You must be very careful with the wording, because the bill is not making this insurance illegal, it's marginalized by keeping this insurance from qualifying as a required minimum insurance plan (it all gets labeled as “supplemental”) . I use that terminology because of the direct requirement for citizens to purchase insurance from the Health Exchange, which will determine the minimum requirements for a health insurance provider to be considered “exchange-participating”.

 

It’s easy to see how the arguments then are made. No, private insurance is not outlawed. Rather, private insurance is not good enough by itself, to qualify a citizen as ‘compliant’ unless that private insurance plan meets the requirements by the Exchange. Thus, by extension, it is not a plan solely dictated by the customer. It always has to be a joint agreement by the citizen and the government, otherwise, it’s just supplemental, and the citizen still has to secure an Exchange qualifying plan. So a citizen is refused the right to get the kind of coverage they alone prefer. That’s a removal of choice. A trampled right. No spin necessary.

 

This is entirely opposite of the direction of consumer level control. Company provided insurance and benefits have always been out of our hands. Companies are pandered to by the insurance providers, not the employees themselves, because we’ve grown accustomed to our job providing directly for this service (though for some reason we don’t have them directly provide our groceries or furniture). So instead of correcting this odd and unnatural arrangement, we expanded the entire concept into a “Health Exchange”. Granted there’s choice, but it’s filtered by a standard we don’t control. Now everyone’s insurance will be a group decision. We are now required to meet the expectations of bureaucrats for the base level of insurance coverage. Again…insurance companies will pander to bureaucrats, not to us.

 

Except for supplemental coverage of course, which may well evolve into a stapled service depending on how the qualifications of the exchange are manipulated by lobbyists and politicians.

 

The details of “exchange qualifications” say nothing about deductibles. So high-deductible based health savings accounts are up in the air. If they do qualify, the acceptable premiums are equally up in the air. If the government wishes, they can effectively kill them, or, force everyone to use them. The government has complete control over what kind of insurance method the entire public will choose, free to manipulate, just like our Tax laws. Complicate the system to obfuscate the machinations.

 

The Health Exchange is a consolidation of power. Its magic is in the “qualification” parameter and required participation by the citizenry. That’s the giant bureaucratic hole for lobbyists and politicians to flex and stretch – and potentially save or screw the entire public.

 

These new laws don’t leave with Obama, they stay with the office of the president; they stick to the land. The president appoints the commissioner of the Health Exchange, per the bill, and congress can change the qualifications of this Exchange however they want.

 

What’s to stop another GWB and republican neo-con majority from citing “war on terror” costs or other propaganda, and requiring ALL participating-exchange health insurers to require, say, $4,000 cumulative deductibles? Devastating, since presumably, the public option must meet the same qualifications per the Exchange. Any insurance lobby is doubly dangerous because the power is consolidated to the “exchange”. Just imagine how minor changes to the Exchange Qualifications could provide profit opportunity, such as a sudden imposed deductible. Such a thing could easily make supplemental insurance a necessity.

 

This kind of power in the hands of regularly elected ethically challenged politicians should scare the shit out of any citizen. This isn't a slippery slope, fear mongering argument any more than the arguments for a check and balance philosophical design of our very government. It's power structure 101. This is dangerous.

 

And, of course, this is exactly what the politicians want – focus the solution on insurance coverage instead of the cost of healthcare. Yeah, I know, coverage alone helps with the cost of healthcare. And band-aids do help stop the bleeding for a gun shot wound.

 

I wonder how much money is in healthcare cost solutions verses legislating insurance coverage…I can’t imagine lobbyists choosing one over the other, and who on earth would possibly benefit…?

[Pangloss]

A very thoughtful and detailed post. It's also consistent with some of the more logical objections I've seen coming from thoughtful and reasonable conservatives on other sites. I guess the only real problem I have with it is that it's ultimately based on two very subjective opinions:

 

1) It's not fundamentally different from what we do now (regulation on private insurers). We already regulate private insurers -- the concern you're expressing, as I read it, is that the addition of things like this "exchange" would put too much authority on the regulatory side (tipping the scales a bit too far in the wrong direction).

 

2) The objection assumes that things will move farther in that direction over time (hence the "slippery slope" reply you usually see to this objection). I actually agree that it's important to be concerned about the direction of government regulation and where it may lead. But I'm not sure I can ultimately agree that this is the only logical outcome of this legislation.

 

In short, I respect these concerns (unlike many other concerns being raised by fools and crackpots) but remain frustratingly undecided on HR 3200/"Obamacare".

 

Look at it this way: It may be the best approach that we are actually capable of implementing in this country, given ALL factors in play, including politics. And since the concerns above are actually based on things that might happen, we can actually pass this bill and then work to prevent them from happening. Make sense?

 

And is it even really very likely that we, as a nation, could come up with a health care plan that did not have any logical and reasonable objections to it, and concerns that would have to be addressed after it was passed?

[iNow]

I guess the only real problem I have with it is that it's ultimately based on two very subjective opinions:

 

1) It's not fundamentally different from what we do now (regulation on private insurers). We already regulate private insurers -- the concern you're expressing, as I read it, is that the addition of things like this "exchange" would put too much authority on the regulatory side (tipping the scales a bit too far in the wrong direction).

 

2) The objection assumes that things will move farther in that direction over time (hence the "slippery slope" reply you usually see to this objection). I actually agree that it's important to be concerned about the direction of government regulation and where it may lead. But I'm not sure I can ultimately agree that this is the only logical outcome of this legislation.

 

I had the same thoughts when reading the post, and would like to second Pangloss' points. People seem to assume that he current system is without regulation, purely free market, while that's totally untrue. What is being proposed are more protections. A maximum amount a patient must pay... A provision to prohibit discrimination based on preexisting conditions... A provision to prevent coverage from being dropped exactly when it's needed... All types of things that give more power to the consumer... That's good, since we've been being robbed of that power for quite some time now. Also, I'd just like to mention that the government option and assistance doesn't remove choice from the consumer, it provides an additional one while protecting them from bullies in the private sector.

 

http://www.whitehouse.gov/health-insurance-consumer-protections/

http://www.whitehouse.gov/realitycheck/faq

 

On top of that, if people are worried about slippery slopes, now is the time to write protections against certain outcomes. There is no reason whatsoever that we cannot use those concerns to write a better bill... a bill which will account for longer term concerns and deal with them up front.

Edited August 15, 2009 by iNow

[ParanoiA]

1) It's not fundamentally different from what we do now (regulation on private insurers). We already regulate private insurers -- the concern you're expressing, as I read it, is that the addition of things like this "exchange" would put too much authority on the regulatory side (tipping the scales a bit too far in the wrong direction).

 

Yes. It makes it far easier to control the method of insurance for every citizen. The government could force high deductible insurance citing mounting costs, while premiums stay the same - making insurance companies a ton of money at our expense.

 

Or the government could force non-deductible insurance citing the impoverished, triggering mass overuse and abuse, again at our expense. Or anything in between. Yes, we can still purchase supplementary, but an arrangement like this could cause a de facto mandatory market - again make insurance companies a ton of more money.

 

This level of reliance by the citizenry serves the insurance market with an unfair advantage and maintains the high cost status quo we deal with today. It leaves the third party payer psychology firmly in place.

 

2) The objection assumes that things will move farther in that direction over time (hence the "slippery slope" reply you usually see to this objection). I actually agree that it's important to be concerned about the direction of government regulation and where it may lead. But I'm not sure I can ultimately agree that this is the only logical outcome of this legislation.

 

Well sure, but it's always possible. We don't, until recently, draft laws carelessly leaving holes of exploitation. I'm always very concerned about consolidation of power because it's never malevolent out of the gate. My argument does lose ground since private supplementary insurance is freely available, but I'm strongly wary of how that may evolve.

 

Look at it this way: It may be the best approach that we are actually capable of implementing in this country, given ALL factors in play, including politics. And since the concerns above are actually based on things that might happen, we can actually pass this bill and then work to prevent them from happening. Make sense?

 

Certainly. But of course, that doesn't mean guys like me should compromise. I want to solve the problem, the actual problem. To me, that's cost. And cost problems in a capitalist economy are solved by competition. That competition depends on consumer level scrutiny and economizing and cannot be watered down with third-party payers and regulations that force consumers to do business in a narrowed market.

 

My argument is that those two things are 2/3rds of the cost issue. People need to pay directly, so they scrutinize their bills like any other bill and the international drug market needs to be accessible for all americans. The other 1/3 I believe is the lack of payment for services by the poor. Understandable, but more manageable if costs weren't inflated.

[Mokele]

I want to solve the problem, the actual problem. To me, that's cost. And cost problems in a capitalist economy are solved by competition. That competition depends on consumer level scrutiny and economizing and cannot be watered down with third-party payers and regulations that force consumers to do business in a narrowed market.

 

But how low can the costs really go? IMHO, it's like platinum jewelery - you can reduce shipping costs and manufacturing costs and marketing costs, but it's still made out of a really expensive (rare) metal. There's nothing you can do about that.

 

I do agree that there are a lot of unnecessary costs, but even if you got everything at the cost of production, cancer is still going to cost tens of thousands of dollars to treat (maybe hundreds of thousands for some types), and the insurance company still has to spread out that cost to stay in the black. And those costs may put insurance beyond the reach of some.

 

The irony is that any system that works will make things cost more - the longer people live, the more likely they are to wind up with chronic conditions, which are what really costs loads of money. A condition that costs $200/month to treat can eclipse the cost of patching you up after an accident pretty quickly. And cancer is always costly, but is fundamentally inescapable. It's the price we pay for being warm-blooded, and the only way to avoid it is to die of something else first.

 

 

So, quick summary - costs are a problem, but only so much can be done about it because medical stuff is just plain expensive by its very nature.

[Pangloss]

But how low can the costs really go? IMHO, it's like platinum jewelery - you can reduce shipping costs and manufacturing costs and marketing costs, but it's still made out of a really expensive (rare) metal. There's nothing you can do about that.

 

Actually treatment costs drop all the time. Look what happens when a drug company looses its patent and generics appear, or when low-cost MRI centers open up, or when alternative treatments are developed.

 

I agree with your other point that you're always going to have a problem with cutting-edge treatments that are more expensive than older treatments that benefit from mass production or other efficiency strategies. But if the overall program is fiscally sound it should be possible to spread out those costs effectively. (See my next point.)

 

 

I do agree that there are a lot of unnecessary costs, but even if you got everything at the cost of production, cancer is still going to cost tens of thousands of dollars to treat (maybe hundreds of thousands for some types), and the insurance company still has to spread out that cost to stay in the black. And those costs may put insurance beyond the reach of some.

 

Maybe. But I still think that if health insurance cannot work, if the concept itself is actually flawed, then it's probably also true that no insurance of any kind can ever work either. How can I have a homeowners policy when the people insuring my house have a vested interest in not paying me when my house is destroyed? How can I have auto insurance when the people insuring my car have a vested interest in not paying me when my car is damaged?

 

I still have not seen the case definitively made that health insurance cannot be be both profitable and efficient just because they make more money when they cut costs (which is true of any insurance).

 

------------

 

The thing I keep wondering about this is -- doesn't Actuarial Science "prove" that this stuff works? Or is this one of those "soft" sciences like economics where you have people winning Nobels based on unprovable theories?

 

I've been asking that question since Hurricane Andrew destroyed the Florida insurance industry, begging the question of whether the insurance companies followed their actuarial tables correctly or if the science itself was flawed, and I've never heard a really good answer.

[iNow]

The thing I keep wondering about this is -- doesn't Actuarial Science "prove" that this stuff works? Or is this one of those "soft" sciences like economics where you have people winning Nobels based on unprovable theories?

 

I swear... I've got ex-girlfriends I hate less than you hate Krugman. He's like your Karl Rove, isn't he?

[ParanoiA]

But how low can the costs really go? IMHO, it's like platinum jewelery - you can reduce shipping costs and manufacturing costs and marketing costs, but it's still made out of a really expensive (rare) metal. There's nothing you can do about that.

 

Oh believe me, I'm under no illusions that medical care could ever be cheap. You're right, however, let's not lose track of how artificially inflated they've gotten. Just because it's expensive by its very nature does not suggest there's sanity in charging $10,000 for a procedure that the insurance company pays $4,000 for, per adjusted billing. It's a billing game to maximize how much the servicing agent can get out of the third party payer - be it insurance, medicaid, what have you. On the one hand the insurance carrier and medicare are controlling costs by not agreeing to this high price, while on the other hand they trigger the costs to go up in hopes that the 'adjusted billing' agreement will go up.

 

On the consumer level, we don't run into much of that. The bill is the bill and we pay it and if we don't like it and there's a better deal somewhere else, we may go there instead. Any "sale price" is used as an incentive to get us in the door and is the price used on the bill.

 

Cancer, I believe, falls under the concept of catastrophic care, in my opinion. That will always be expensive, and understandably so. It will also probably always require a third-party payer concept, thus heavily used insurance coverage and the billing game. But when insurance coverage is purchased under the market principle of "measured risk", then its costs should be far more reasonable. Today there is no "measured risk". Everyone will use their insurance, for every little thing. But in a catastrophic scenario, only a portion will end up using such coverage, so "measured risk" once again creates a market consequence of price competition.

 

Getting a handle on out-of-control costs should be our concern as consumers. But we always talk about coverage. Fascinating. I don't think that would be the center of our attention if we were accustomed to managing our healthcare costs. If we want to raise the standard of living for ourselves, then we must incorporate healthcare investment in our lifestyle. High deductible HSA's, to me, are a terrific consumer level cost control technique with the complimentary psychological methodology of taking responsibility for yourself. At that point, we're only subsidizing the poor, which is more reasonable and ethical.

Edited August 19, 2009 by ParanoiA

[Mokele]

Actually treatment costs drop all the time. Look what happens when a drug company looses its patent and generics appear, or when low-cost MRI centers open up, or when alternative treatments are developed.

 

I agree with your other point that you're always going to have a problem with cutting-edge treatments that are more expensive than older treatments that benefit from mass production or other efficiency strategies. But if the overall program is fiscally sound it should be possible to spread out those costs effectively. (See my next point.)

 

True, but there's a limit to how far things can drop. Part of what I was thinking of was less about MRIs and more just the accumulated cost of sterile scalpel blades, syringes, IV bags, suture needles, X-ray film, blood refrigeration, etc. Plus the necessary paychecks for doctors, surgeons, nurses, and the hundreds of 'behind the scenes' people who make things run. Plus repairs to the fancy equipment when it breaks down and the cost of sending patients to other facilities while it gets repaired (no minor feat - I've spent the past two weeks trying to fix a fluoroscopy setup).

 

The thing I keep wondering about this is -- doesn't Actuarial Science "prove" that this stuff works? Or is this one of those "soft" sciences like economics where you have people winning Nobels based on unprovable theories?

 

I've been asking that question since Hurricane Andrew destroyed the Florida insurance industry, begging the question of whether the insurance companies followed their actuarial tables correctly or if the science itself was flawed, and I've never heard a really good answer.

 

Actuarial tables aren't "proof" - they're evidence, based on the past, and as such, they suffer from a few shortcomings:

 

First, they have limited scope - an event that occurs only once every hundred years (such as a truly massive plague or Cat. 5 hurricane hitting a major city) probably last occurred prior to really effective data gathering (or has only happened a very few times when we could get data). Poor data, especially with only a few data points, makes for poor predictions.

 

Second, they're based on the past, and thus vulnerable to "game changing". Consider how the actuarial tables for health insurance companies must have changed once insulin became cheap and easy to produce, or once we figured out organ transplants. In the future, there are likely to be other advances that change things, either for the better or worse (new cures but new diseases).

 

Getting a handle on out-of-control costs should be our concern as consumers. But we always talk about coverage. Fascinating. I don't think that would be the center of our attention if we were accustomed to managing our healthcare costs.

 

But how feasible is it for consumers to manage healthcare costs?

 

First, if it's something terribly traumatic (car accident), you may not have any choice in where you go and what they surgeons do, possibly out of urgency and possibly because you're just plain unconscious.

 

But even with more moderate issues, how do you "shop around"? 95% of the time, you don't know what treatment you even need, and hospital A may be cheaper than B for one treatment, but vice versa for another.

 

And even with an itemized bill, can you *really* say "Well, you gave me ciprofloxacin, but couldn't you have saved me some cash by using amoxicillin?" or "Did the lab really have to include the lactate dehydrogenase test in my bloodwork?" No. Unless you actually are a doctor, you have no idea what was needed, what wasn't, how much it "should" cost, or even what 90% of it means.

 

Essentially, the consumer has no power, in part because the consumer has nowhere near the level of knowledge needed to exercise any power. When 99% of people go to the doctor, it's like an Amish guy visiting a car lot - there's really no possibility of an informed decision.

[iNow]

Great points, Mokele.

For me, one of the reasons I see costs of care as less of a factor is because it rests on the notion that costs to consumers here in the US have risen primarily as a result of increases to cost of care. While some costs have certainly gone up, those cost increases are not local to the US... The cost increases are global, yet we in the US have seen costs to the consumer raise at an alarming rate... and that rate FAR exceeds the consumer cost increases seen outside the US.

 

While I concede there are some areas of really strong care being provided in the US, the description that we pay more because we have higher quality in the US just doesn't line up well with reality. The cost increases are better explained by insurance companies focusing on their balance sheet and shareholders instead of on the level of care provided to their customers.

 

Anyway, cost control is always important. I am just responding why I find it less of a factor in the challenges facing us here in the US, and I'm of the mindset that a single payer system which allows us to spread costs around to the maximal extent and get the greatest leverage and purchasing power is the most intelligent way for us to proceed here.

[ParanoiA]

But how feasible is it for consumers to manage healthcare costs?

 

First' date=' if it's something terribly traumatic (car accident), you may not have any choice in where you go and what they surgeons do, possibly out of urgency and possibly because you're just plain unconscious.

 

But even with more moderate issues, how do you "shop around"? 95% of the time, you don't know what treatment you even need, and hospital A may be cheaper than B for one treatment, but vice versa for another.

 

And even with an itemized bill, can you *really* say "Well, you gave me ciprofloxacin, but couldn't you have saved me some cash by using amoxicillin?" or "Did the lab really have to include the lactate dehydrogenase test in my bloodwork?" No. Unless you actually are a doctor, you have no idea what was needed, what wasn't, how much it "should" cost, or even what 90% of it means.

 

Essentially, the consumer has no power, in part because the consumer has nowhere near the level of knowledge needed to exercise any power. When 99% of people go to the doctor, it's like an Amish guy visiting a car lot - there's really no possibility of an informed decision.[/quote']

 

How much do you know about your car? Can you *really* question the mechanic's decision to replace the rear seal or an intake manifold gasket?

 

It's the culture of accountability and consumer level scrutiny that helps to police cost control with our automotive maintenance - an expert level informed decision is not required. Sure, by and large none of us are experts, but we're also not wholesale idiots and can smell bullshit effectively enough to keep it manageable. Imagine if all of your car repairs and maintenance, including oil changes, were done through insurance with a co-pay.

 

Certainly, an ER visit isn't likely to include much pre-treatment babble, but even today my regular doctor goes over the different options for treatment that I have. Imagine if she has to be sure that in general, if appointments to her clinic cost more than the MD next door, she might lose some patients. It's up to her if she wants to concern herself too much with price competition, or if she believes she's worth the extra cash.

 

Word of mouth and reputation can associate one hospital as cheaper than another. I've had several scheduled procedures where I could have chosen my hospital, and potentially my doctor if I wasn't locked in my HMO.

 

It doesn't need to be even close to a line by line analysis of the bill - a generalized reputation is plenty effective for cost control. I don't know why my car is having problems, but I do know that taking it to the Ford service center will cost me more than TJ's Automotive off of 40 highway.

 

The third party payer psychology has done considerable damage to cost control because we don't even consider costs like we do with pretty much everything else in our lives, plenty of which we are not experts about. You don't need to be an expert to compare prices and adjust how and who you do business with.

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Merged post follows:

Consecutive posts merged

The cost increases are better explained by insurance companies focusing on their balance sheet and shareholders instead of on the level of care provided to their customers.

 

Sounds correct to me. A logical conclusion to your statement being: The fewer transactions they are involved in, the lower the costs.

[Mokele]

How much do you know about your car? Can you *really* question the mechanic's decision to replace the rear seal or an intake manifold gasket?

 

It's the culture of accountability and consumer level scrutiny that helps to police cost control with our automotive maintenance - an expert level informed decision is not required. Sure, by and large none of us are experts, but we're also not wholesale idiots and can smell bullshit effectively enough to keep it manageable. Imagine if all of your car repairs and maintenance, including oil changes, were done through insurance with a co-pay.

 

I can see your point, but I'm not sure the analogy holds for several reasons, mostly that a) general working knowledge of cars among the public is a LOT higher than a general working knowledge of medicine, because b) cars are a LOT less complicated, but also c) a broken car is a minor inconvenience and a totaled car is a financial setback, but a sick person is often more than just minorly inconvenienced and you can't get an insurance check and go buy a new life.

 

Plus a car can be turned off, and a car that's off is not going to get worse. If my car makes funny grinding noises, things aren't going to be better or worse if I rush it in today or just wait until the weekend. Humans don't have that luxury, especially if the cause of the problem (and therefore its seriousness) is unknown. In one very common disease (meningitis), 24 hours is the difference between 'slight headache' and 'dead'.

 

All of these mean that it's unlikely that we will be able to shop around, or at least do so effectively.

 

Certainly, an ER visit isn't likely to include much pre-treatment babble, but even today my regular doctor goes over the different options for treatment that I have. Imagine if she has to be sure that in general, if appointments to her clinic cost more than the MD next door, she might lose some patients. It's up to her if she wants to concern herself too much with price competition, or if she believes she's worth the extra cash.

 

I agree, and I suspect that the very factors you outline actually do help control costs at that level.

 

The problem is that the really expensive stuff often doesn't have treatment options, or the options should not be decided on the basis of cost (who wants to half-ass cancer treatment, or re-attaching an arm?).

 

And part of what you're buying is the not-insubstantial skill of the doctor, which is part of what the hospital or practice is selling. Think of CDs - why haven't CD prices come down, in spite of the fact that any company could easily undercut the others and still make assloads of money? Because they have exclusive deals with particular artists, which is what you *really* want, so instead of dropping prices, they just compete to promote their artists. Same thing here, and you can already see it in hospital billboards - instead of competing by lowering costs, they compete by claiming higher quality.

 

There's also the instinctual aspect. Not just the "OMG I'm going to die' part, but the well-documented case that, when presented with two seemingly identical products, humans will chose the *more expensive* one, because they believe cost is indicative of quality.

 

Word of mouth and reputation can associate one hospital as cheaper than another. I've had several scheduled procedures where I could have chosen my hospital, and potentially my doctor if I wasn't locked in my HMO.

 

It doesn't need to be even close to a line by line analysis of the bill - a generalized reputation is plenty effective for cost control. I don't know why my car is having problems, but I do know that taking it to the Ford service center will cost me more than TJ's Automotive off of 40 highway.

 

I don't know about you, but I don't know enough people who've had cancer or heart surgery to be able to even guess at the reputation of any doctor in this city. And even if I did, every procedure and patient is different, so unless the difference is massive, it'll be hard to tell who *actually* is better. Should I be worried about the report from a guy who had a long surgery and difficult recovery following coronary bypass if I don't know he had a different configuration of coronary arteries from me (not at all unusual in humans, and how many of use *really* know the layout of our own coronary arteries or other internal organs)?

 

Plus, what about the dead patients? You can't really ask them, can you? But they might not be dead due to incompetence, but rather just due to having a bad case of whatever.

 

I'd trust word-of-mouth reputation if I was shopping for a dermatologist or optician or dentist, but not for a surgeon or oncologist or anything actually *serious* (which is also where the big bucks are).

[The Bear's Key]

Plus the fact unlike cars, medical prices don't get as visibly advertised.

[ParanoiA]

I can see your point' date=' but I'm not sure the analogy holds for several reasons, mostly that a) general working knowledge of cars among the public is a LOT higher than a general working knowledge of medicine, because b) cars are a LOT less complicated, but also c) a broken car is a minor inconvenience and a totaled car is a financial setback, but a sick person is often more than just minorly inconvenienced and you can't get an insurance check and go buy a new life.

 

Plus a car can be turned off, and a car that's off is not going to get worse. If my car makes funny grinding noises, things aren't going to be better or worse if I rush it in today or just wait until the weekend. Humans don't have that luxury, especially if the cause of the problem (and therefore its seriousness) is unknown. In one very common disease (meningitis), 24 hours is the difference between 'slight headache' and 'dead'.

 

All of these mean that it's unlikely that we will be able to shop around, or at least do so effectively.[/quote']

 

Certainly. There's no one-to-one analogy I can draw. But there's also a consequence to a culture of consumer level accountability that we don't have today, that can partially explain the lack of general knowledge. Although, I don't think our working knowledge of the human body and medicine is quite that bad. The conditions you raise are more geared to chronic conditions, which I do think escape any practical application of competition on the consumer level.

 

But what about rotator cuff surgery? Carpal Tunnel? Knee replacement? Hip replacement? These are popular procedures, that I'm not an expert in, by any stretch, but I do feel I could assess the level of service I'm willing to pay for.

 

I would bet such knowledge would only get better as we get more involved. Sure it's complex, and treatment is generally more dire, but when we're pandered to - directly - for our dollar, and society in general takes a more active role in managing their care expenses then this knowledge becomes a natural consequence. My opinion, of course.

 

We already see commercials for drugs on TV followed by "ask your doctor". I don't think it's too much of a stretch for an Amoxicillin manufacturer to advertise their "economy" brand.

 

But like you say, chronic and emergency care would not benefit directly from an economically competitive design. Although I think those costs would decrease a little as a by-product of the competition in the non-emergency end of the market. But all of this is far more manageable since health insurance would once again, in theory anyway, be a measured risk for chronic and catastrophic care, and thus far more affordable and accessible.

 

And part of what you're buying is the not-insubstantial skill of the doctor' date=' which is part of what the hospital or practice is selling. Think of CDs - why haven't CD prices come down, in spite of the fact that any company could easily undercut the others and still make assloads of money? Because they have exclusive deals with particular artists, which is what you *really* want, so instead of dropping prices, they just compete to promote their artists. Same thing here, and you can already see it in hospital billboards - instead of competing by lowering costs, they compete by claiming higher quality.

 

There's also the instinctual aspect. Not just the "OMG I'm going to die' part, but the well-documented case that, when presented with two seemingly identical products, humans will chose the *more expensive* one, because they believe cost is indicative of quality.[/quote']

 

Well sure. The same old market dynamics. I don't deny that at all. Exclusivity and networks won't be going away, I'm sure. But I do believe it would be vastly superior to the billing games between medical providers and insurance companies. Changing the dynamics of the game by pandering to the direct user as opposed to a loaded third party insurance carrier is going to have an economic consequence favorable to the direct user.

 

Maybe my measurement is too rosey, but I just can't appreciate the convenience we pay for by insisting on a simplified catch-all cover-everything static payment system that obscures the actual costs - happily enabling our willful economic ignorance.

 

I don't know about you' date=' but I don't know enough people who've had cancer or heart surgery to be able to even guess at the reputation of any doctor in this city. And even if I did, every procedure and patient is different, so unless the difference is massive, it'll be hard to tell who *actually* is better. Should I be worried about the report from a guy who had a long surgery and difficult recovery following coronary bypass if I don't know he had a different configuration of coronary arteries from me (not at all unusual in humans, and how many of use *really* know the layout of our own coronary arteries or other internal organs)?

 

Plus, what about the dead patients? You can't really ask them, can you? But they might not be dead due to incompetence, but rather just due to having a bad case of whatever.

 

I'd trust word-of-mouth reputation if I was shopping for a dermatologist or optician or dentist, but not for a surgeon or oncologist or anything actually *serious* (which is also where the big bucks are).[/quote']

 

Cancer and heart surgery are pretty chronic, and I don't think we can realistically pay for those services out of our pocket.

 

The consumer level competition I'm talking about is maintenance, maybe a special procedure here and there, like knee surgery.

 

Sticking with my car analogy...you'll notice body shops that repair damage from wrecks and so forth are expensive, thousands of dollars for a couple of panels, matching the paint, bending part of the frame back into position. Oil changes? $19.99 with some poor guy in a Pennzoil costume waving to traffic.

 

Insurance typically pays for auto damage. You pay for oil changes out of your pocket. Even though my analogy with healthcare is not perfect, we are paying for our proverbial oil changes with insurance. That's the cost that can be remedied.

 

And since part of the logic used to advocate universal coverage is "preventative maintenance", then bringing down those costs are entirely reasonable.