“Consumerism is chipping away at the status quo.”
Here’s a good column by Jon Rauser regarding health care reform.
That brings us to consumerism; most notably high deductible health plans (HDHP) coupled with health saving accounts. We Americans want to control our own destiny. Those who hated HMOs would like “Big Brother Health” even less. HDHPs are merely a way to take ownership over our health while at the same time making coverage choices for all more affordable. With premiums 35 to 40 percent lower than first dollar co-pay plans, this real savings - unlike overstated administrative costs - makes coverage far more affordable.
Properly set up, higher out-of-pocket costs at the time of claim are offset by the premium reduction with one big difference; if you don’t use the more expensive first dollar co–pay plan, does the insurer send you a refund? (Now come on: I’m advocating a true insurance product that costs one-third less - everyone I talk to loves the idea of giving insurers less premium!) As for that canard about putting off routine care, virtually all HDHPs cover wellness at 100 percent (not subject to a deductible or co-pay).
Literally millions of Americans have bought into this concept, and the effect on the delivery of health care has been profound. For example, it is not a coincidence that everyone is talking about wellness. Or that providers are sharing information on price and quality transparency. Consumerism is chipping away at the status quo. And the pace of change will only accelerate.
What we need is to take the profit motive out of health insurance.
Posted by scott on June 08, 2007 at 2032 hrs
That’s right scott, then we will have less options on that side of the equation as well…meaning less competition and higher prices. Or do you think they will all continue to run their business just for the good of society?
As one who already utilizes this type of plan, I believe he is right on point. I would rather spend that premium difference on my health care needs than on more paper-shuffling in the insurance company. The insurance company doesn’t even have to get involved until there is a real need.
Now, if we could take some of the liability out of the delivery side (reasonable caps, no assumption of infallibility), there would be more competition there as well…like there used to be when doctors could afford to have private practices.
Posted by .(JavaScript must be enabled to view this email address) on June 08, 2007 at 2348 hrs
and higher prices.
Like the higher prices everyone else pays for their health insurance! Oh, wait…
do you think they will all continue to run their business just for the good of society?
No, I think they’ll go right the fuck out of business and good riddance. Except those that want to sell supplemental insurance for those who want it. Or maybe they’ll stick to car insurance or some other thing. I really don’t care.
if we could take some of the liability out of the delivery side
I don’t really buy the argument that medical malpractice insurance is the reason we pay double what everyone else pays. Do you really think that’s the issue here? If not, then let’s focus on the real problems.
like there used to be when doctors could afford to have private practices.
Doctors make more money here than they do anywhere else in the world. (But we still have fewer of them than most other places. I wish someone would explain that one to me.)
Posted by scott on June 09, 2007 at 0208 hrs
I don’t really buy the argument that medical malpractice insurance is the reason we pay double what everyone else pays. Liberals never think that those costs impact the price of the service…neither do the multi-million dollar damage awards. Here’s a story for you: High Cost of Malpractice Insurance. This was three years ago, and the doctor’s insurance cost had nearly quadrupled. Those premiums have to be paid and are passed on to the patient, just like in every other business. If the government takes the place of the insurance companies, that cost is still going to be in the system - unless they also make all the doctors government employees, in which case the taxpayers would then be liable to pay for the huge malpractice awards.
Doctors make more money here than they do anywhere else in the world. (But we still have fewer of them than most other places. I wish someone would explain that one to me.) Maybe there is a negative incentive to spend fifteen years of your life studying and training for a profession - and have the potential that it can be taken away from you with one mistake and subsequent malpractice lawsuit (re: assumption of infallibility)?
Posted by .(JavaScript must be enabled to view this email address) on June 09, 2007 at 1036 hrs
Liberals never think that those costs impact the price of the service
Conservatives never let facts get in the way of ideology.
Posted by scott on June 09, 2007 at 1110 hrs
This study simply states that we pay more, but doesn’t give any reasons why. It says that malpractice isn’t the sole cause but is a “small part”. I’m not saying that the insurance companies are not also part of the problem; I am one of their biggest critics, but I’m less of a fan of government. The point of Owen’s post is that the consumer is the best point of control on costs and the HDHP/HSA concept is currently the best option of putting that power in our hands. Personally, I would be willing to sign a document that waived my right to sue, if it resulted in a lower cost for the treatment.
According to the study authors, defensive medicine probably contributes more to higher health spending than malpractice premiums… In my opinion, doctors in the U.S. are practicing “defensive medicine” from the minute you walk in the door.
Posted by .(JavaScript must be enabled to view this email address) on June 09, 2007 at 1129 hrs
I’m willing to be flexible on the issue of suing. If most doctors were compensated by government paid insurance, I think we could work something out in this area. Unfortunately I’m not an expert in this area, but it seems to me that losing one’s license if grievous negligence can be proved in court, and if the government will pay your subsequent medical bills if you’ve been harmed, I’m fine with that. But only in the context of universal, comprehensive, tax-funded health insurance for every citizen.
I’ll bet that’s how other countries handle it more or less.
Posted by scott on June 09, 2007 at 1204 hrs
And I would be flexible in regard to malpractice insurance. I’m not entirely sure the market is able to properly assess and handle this risk. To me, it seems like something akin to flood insurance - the open market looks at that risk in some areas and either will not cover it or makes it unaffordable. I could see the medical malpractice process being a government function - limiting ridiculous settlements, compensating patients for ongoing treatment and maybe having a professional review process to gauge negligence.
However, I don’t know why you make that common-sense improvement contingent on universal health care. One deals with the reasons for high costs; the other with who pays and access. Our health care system is still the envy of the world and people who can afford it come here when they want the best.
What we need to do is figure out why the costs are high and what can be done to lower them…a good forensic accountant should be able to dissect the financials of a hospital or clinic and lay that out. As to access, very few go without care, but too many are using the expensive end of the system, driving up overall costs. And, I don’t believe a true number of uninsured has even been established…only exaggerated for effect during campaigns.
Posted by .(JavaScript must be enabled to view this email address) on June 09, 2007 at 2225 hrs
One deals with the reasons for high costs
Again, I reject the notion that our health care woes are because of malpratice lawsuits. And the reason I make reforms in this area contingent on universal coverage is because I don’t want to disempower individuals in our current environment where health care insurers and providers are incentivised to not give us the care we need. When that is gone, I’m willing to deal on malpractice.
What we need to do is figure out why the costs are high
It’s because of market forces working like a charm. Why are costs so low everywhere else? Shouldn’t we be asking that question?
As to access, very few go without care,
Well if by “care” you mean they don’t get turned away at the emergency room, sure. But to suggest that this is the same kind of “care” one gets with comprehensive medical insurance with doctor visits and prescription drugs is ludicrous. Millions have no insurance and thus avoid basic everyday care. Their health suffers and they become sicker and some die. The fact that they can hit the emergency room is really not the point here.
I don’t believe a true number of uninsured has even been established…only exaggerated for effect during campaigns.
Last I heard it was 46.6 million. Why do you believe this number to be incorrect? I don’t share your skepticism.
Posted by scott on June 09, 2007 at 2235 hrs
I understand that insurers have incentive to have us use less services…but health care providers do not - on the contrary, they often get patients to use more than is necessary (for defensive medicine and to secure and pay for new technology). New technology has been cited as half to two-thirds of the increasing costs above inflation. In the system, there needs to be some kind of limit on services, or else some people would be at the doctor’s office every other day - in the end, who determines “need”? If the government is paying, isn’t the doctor going to run through as many patients as possible every day?
Why are costs so low everywhere else? Is it possible that other countries have lower per-capita costs because they simply do not allow as many office visits or perform as many tests, surgeries and procedures as we do in this country (i.e. rationing)?
Why do you believe this number to be incorrect? It is not so much the total number as the assumption that all of those people are at risk, desperately in need of government coverage, or they will be dying in the streets. I believe that some level of coverage is available to everyone, but many people just choose not to buy it. The breakdowns show that 70% of uninsured people have full-time jobs and 40% are earning over $50,000 per year. Another 18% of the total is young people (18-24) who consider themselves healthy and choose not to buy insurance, even though it would be very inexpensive. So, in my estimation, almost 3/5 of that total make enough money to afford coverage and simply choose to spend their money on things other than health insurance.
At some point (probably in the 1950s), Americans began to believe that health care should be paid by someone other than the patient. I don’t subscribe to that philosophy, which is why I endorse the HDHP/HSA plans. It returns some of the pay-as-you-go mentality to the system. I like to equate it to your car insurance - it is there in case you are in an accident - you do not expect it to pay for oil changes, tune-ups and new tires.
Posted by .(JavaScript must be enabled to view this email address) on June 10, 2007 at 0008 hrs
insurers have incentive to have us use less services…but health care providers do not - on the contrary, they often get patients to use more than is necessary<>
Sounds like you’ve never heard of “capitation,” a system under which physicians earn more money for providing fewer services. It’s one of those dandy free market tools that insurance companies use to drive up their own profits.
<i>there needs to be some kind of limit on services, or else some people would be at the doctor’s office every other day
Doctor visits aren’t steaks or new cars. People go when they are sick - and often enough, not even then. Hypochondriasis is not a major cost driver in our health care system, and it likely never could be.
in the end, who determines “need”?
Same people as always: doctors, patients and the insurer. In my world, however, the patient’s aim is their own health, the insurer’s goal is not to make a profit off the insurance premium, and the insurer’s goal is to obey the laws of our elected government: cover everyone and pay according to a negotiated schedule of accepted fees and coverage items.
If the government is paying, isn’t the doctor going to run through as many patients as possible every day?
We don’t have to guess. This kind of system is being used just about everywhere. Is that what’s happening?
they simply do not allow as many office visits or perform as many tests, surgeries and procedures as we do
The article I linked to clearly says that supply constraints are not a major factor in the price differential.
some level of coverage is available to everyone, but many people just choose not to buy it.
And this is still a huge problem for a couple of reasons. These people you refer to who simply “choose” not to have insurance are effectively being forced to gamble on their health care needs, either because they feel their need to be low or because they are being priced out of the market. Even if they are correct in guessing that their odds of getting sick are low, what happens when they are unexpectedly injured? Just another family ruined in bankruptcy court, and we pay the bill. Plus, by healthier people opting out of insurance leaves sicker people in the system, thus driving prices up, thus pricing the next-healthiest people out, thus driving the costs up even more… It’s the reason my employer doesn’t offer me a kickback if I opt out of their health insurance plan. It would be ruinous for the entire system.
One of the problems with HSAs (and there are several) is that you’re trying to drive down costs by discouraging people from getting care. This is backwards. We need people to get more routine care, not less.
Posted by scott on June 10, 2007 at 0812 hrs
Just another family ruined in bankruptcy court, and we pay the bill. This is why an ever-creeping socialist mindset is unsustainable…eventually, there are no real consequences for decisions and no responsibility for one’s actions. At one time, in our not-so-distant past, you either figured out a way to pay for the services you used or suffered the consequences (and yes, that sometimes included even death).
you’re trying to drive down costs by discouraging people from getting care I totally disagree. The HSA is money that is set aside specifically for health care (instead of being handed to the insurance company)...it cannot be spent as you please. You are more willing (not less) to spend it on getting routine care. I will be more likely to get a physical paid for with my HSA money, than if (with a regular plan) it would be under the deductible and I would have to pay for it out-of-pocket.
I also looked at an earlier (2004) article by the authors of the study you linked and found some interesting reasons for the higher costs.
Ability to pay: In a free economy, prices rise until the majority of consumers object or a discount provider establishes the bottom (Wal-Mart effect). This has only recently begun to happen because most people have been isolated from the true costs of service.
Distribution of market power and pricing: Despite the view that doctors are highly paid, other career paths are available that offer similar pay with a lot less training and risk. The system is also designed in a way that allows the suppliers to set the prices rather than the consumers determining how much they’re willing to pay.
Capacity: I was surprised to see that the U.S. is behind many other nations in both physician and equipment per capita ratios. This means that demand still exceeds supply, meaning rising costs.
Administrative complexity and cost: An economist called our current system “an administrative monstrosity, a truly bizarre mélange of thousands of payers with payment systems that differ for no socially beneficial reason, as well as staggeringly complex public system with mind-boggling administered prices and other rules expressing distinctions that can only be regarded as weird.” This is no surprise, but streamlining will not occur until consumers actually demand lower costs.
Unwillingness to ration health care. This is one I hadn’t considered, but is a very touchy subject: the option of purchasing, through health care, additional quality-adjusted life years (QALYs) at increasingly higher prices. In the UK, total expenditures appear to be capped at about 30,000 pounds. Compare this in the U.S. to several million dollars for private insurance and effectively no limit for public health care (except that at some point, the doctors are simply not able to do anything).
Pharmaceutical prices. This is another factor that I haven’t considered…that, in a global economy, companies are simply going to raise prices in countries where they can: they accuse foreign governments of keeping those prices artificially and unduly low within their own health systems, thereby beggaring U.S. patients, who now fund the bulk of U.S. pharmaceutical R&D. This lends credence to the argument of the price-control proponents; however, it will then translate into less R&D and less overall innovation.
At least more people are getting engaged in actually thinking about how this all happens. Many Americans became spoiled by employer-provided health care plans; they simply received services and never had to face the reality of the costs. The same thing has happened as a result of employer withholding of taxes - people don’t think about the how much government is really taking from them, they only look at the bottom line.
Posted by .(JavaScript must be enabled to view this email address) on June 10, 2007 at 1206 hrs
At one time, in our not-so-distant past, you either figured out a way to pay for the services you used or suffered the consequences (and yes, that sometimes included even death).
Ah, the good old days!
Posted by scott on June 10, 2007 at 1213 hrs
Ah, the idealist…I knew you’d like that. If only we could all live happy, care-free lives and never die.
Posted by .(JavaScript must be enabled to view this email address) on June 10, 2007 at 1354 hrs
If only we could return to the days when medical care came out of your pocket and those who couldn’t pay went without.
Posted by scott on June 10, 2007 at 1358 hrs
I was thinking more of the guy who chooses to have a bigger house and new car rather than health insurance. Why does society owe him anything for his irresponsible choices when he is injured? If he is treated the same, why should any of us act responsibly?
As I pointed out above, that represents about 60% of the uninsured. Even heartless conservatives recognize the ones who have true “need”...you’re lumping them all together.
Posted by .(JavaScript must be enabled to view this email address) on June 10, 2007 at 1457 hrs
You seem to have the idea that the majority of those 46.6 million Americans with no insurance are yuppies who would rather furnish their McMansions with antique shaker furniture than buy an individual health plan for themselves and their equally young, healthy and childless wives. I think you’re dreaming.
I’d guess half of them are either under 18 or over 45. Most are employed, but either their employer does not offer health benefits or they can’t afford the benefits they are offered. I’d further guess that at least half of them are lower income Americans with household earnings under 35k.
But in any case, I don’t want to insure the young, affluent and healthy “for free.” On the contrary, I want everyone who can pay to pay - through their taxes. You seem to be alarmed that I’m robbing these DINKs of their freedom to go without insurance. I find that hard to get upset about. I think if you offered them comprehensive medical insurance that covered doctor visits, prescription drugs, diagnostic tests, hospital stays and surgeries at half the cost of what most Americans pay now, most of them would jump at it.
People do not want to be without insurance. It’s just that because we are paying double what we should be paying, some of the healthy do elect to opt out rather than pay the premiums out of pocket. This kind of health care gambling benefits nobody in the long run.
Posted by scott on June 10, 2007 at 2134 hrs
There’s no need to speculate on who they are. My facts in #10 came from this site: Facts About Healthcare.
their freedom to go without insurance Can’t have people making decisions on their own, now can we?
This discussion will be over as soon as a majority decides that healthcare is a “right”, which is very close. You’ll see how laughable your “double the cost” estimate is when the government takes over. But, then you can move on to deciding what the next thing is that everyone is entitled to have (nice house, reliable car, etc.).
Posted by .(JavaScript must be enabled to view this email address) on June 11, 2007 at 0841 hrs
You’ll see how laughable your “double the cost” estimate is when the government takes over.
I’m not laughing yet, as I look at every other civilized country on earth and see that they do in actual fact pay half what we pay. (I seriously get sick of repeating this.) It may not be the case that our per capita expenditures drop by 50% the day we nationalize the health insurance business; I expect some of the savings to be achieved over time, in cost increases that we don’t get, but still.
Posted by scott on June 11, 2007 at 0927 hrs
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