Excellent Health Insurance Article

[haha]

Although I know from long experience on this board that nothing could be so sensible that it would preclude pages of argument, this may be close.

Yahoo! Personal Finance: Calculators,Money Advice,Guides,& More

Ha

[samclem]

An interesting read. And the point about the implications of accrate DNA prognostication on insurance underwriting are valid.

The author makes a fundamental error. He says; " . . . health insurance is like any other kind of insurance: It pools risk." He repeats this throughout the article, that the purpose of health insurance is to pool risk, and to protect against unusual but devastating high-cost medical events. But that is not how Americans view their health insurance--they want and expect health "insurance" to cover routine medical costs. So, in a real sense we're not talking about "risk pooling" but "cost transfer--from the recipient of the care to somebody else. (the employer, other people (through taxes) ), etc. It's not clear to me just why our routine medical costs should be paid by other people.

I don't know why the author just assumes that the present employer-insurance link is too politcally difficult to take on, especially fr a Democratic presidential candidate. John McCain's proposal does exactly this--seeks to address the (crazy, IMO) situation whereby an employee counts on his employer to pay for his medical care. Millions of people can't leave their jobs to find a better one because they'll lose their employer-provided health care (and private health insurance is too pricy, due in part to the lack of the tax breaks enjoyed by employers). Why should GM be in the health care business--they've got all the can do to build a decent car.


Thanks for the post.

[Midpack]

Several points on 'paying for routine medical care.' One of the fundamental issues is those at the bottom of the economic scale, making $6 or $10/hour - the can't even afford routine medical care. So they go without until there is a more costly issue, often something that could have been prevented, and when that's treated we all pay for it.

While I see your point, how is it that every other developed country has lower per capital healthcare costs despite including routine and preventive care? Maybe they've figured out that it's cost effective to do so.

I don't support Hillary by any means, but I agree with the author that she is conceptually ahead of her candidate peers. If she could only do it as cost effectively as other countries - which would require taking on malpractice and huge administrative costs to start with...

[RonBoyd]

Originally Posted by Midpack

how is it that every other developed country has lower per capital healthcare costs despite including routine and preventive care?...

http://www.nytimes.com/2008/05/27/wo...e/27czech.html

[Martha]

The main point of his article is a good one. The only way to make the insurance model cover those who are know to be unhealthy is to have everyone participate so the risk is truly pooled.

[samclem]

Originally Posted by Midpack

Several points on 'paying for routine medical care.' One of the fundamental issues is those at the bottom of the economic scale, making $6 or $10/hour - the can't even afford routine medical care. So they go without until there is a more costly issue, often something that could have been prevented, and when that's treated we all pay for it.

I agree that this is a problem, and that there are potential cost-savings for all of us if we can provide cost-effective care to the poor in a more efficient manner. But, providing health care to those who have paid virtually nothing into the system is not "risk pooling," it is "burden shifting" and it's got nothing to do with traditional "insurance" as we normally think of it. The linked article didn't address this very important issue of health care for the poor.

Originally Posted by Midpack

While I see your point, how is it that every other developed country has lower per capital healthcare costs despite including routine and preventive care? Maybe they've figured out that it's cost effective to do so.

One big reason that health care costs in the rest of the world are so low is that they ride on the coattails of the US. Just as the case you cite above of poor people's medical costs being transferred (to the ER--> the hospital --> paying customers (through higher insurance rates or higher fees for cash customers)), the rest of the world lets the US health consumer pay a large part of the cost of their health care. The major new medicines are developed in the US or for the US market, because the customers here will pay for it. Likewise for very expensive diagnostic machines and procedures. Likewise for implantable/external medical devices. After the very high developmental costs are paid for by US consumers, the EU and other socialized/government systems pay a lower unit price.

So, if/when the (admittedly wasteful) US system is reformed and the folks in the accounting department are running things, expect a big reduction in private research into all these critical medical areas. At that point, either medical progress will permanently slow, or the socialized/government run systems (including our own) will come up with some means to incentivize research and development. That will cost money, and when that is added in costs will come closer to our present costs. Big Government health care won't look such a great money saver once all these costs are included.

[Notmuchlonger]

What about the people who eat lousy,smoke,drink and refuse to exercise? Guess the people who take care of themselves should subsidize the lazy and foolish?

Ah yes the joys of universal health care. One size fits all!

[samclem]

Originally Posted by Midpack

. . . how is it that every other developed country has lower per capital healthcare costs despite including routine and preventive care? Maybe they've figured out that it's cost effective to do so.

And, some of these countries have pioneered some efficiencies that have led to lower costs. Here's a good example from Friday's Toronto Sun about the cost-efficient ER system in a Toronto hospital. A patient reportedly spends 5 days in the ER on a stretcher waiting for care.

TorontoSun.com - Toronto And GTA- She lay 5 days on stretcher in ER

Just an anecdote and not typical, I'm sure.

[Brat]

There once was a study that said that a smoker was cheaper to insure because they died at a young age! Maybe vices that killed quickly after age 50 should be encouraged...

IMHO a basic health insurance policy should be available to all. It is not just to pool risk because the person next to me in the grocery store may be neglecting an infectious disease that I might catch. A basic policy should have a modest co-pay for visits with a Nurse Practitioner while an appointment with an MD without a referral has a higher co-pay.

There should also be catastrophic coverage.

Many would complain that the basic policy doesn't cover enough. For that reason I think people should be able to go to the private insurance market for broader coverage. For that coverage I do thing pre-existing conditions exclusion would be appropriate.

[igsoy]

Basic health care should not be a profit center for middle men. Can you imagine shareholders sitting around at a meeting happy because the corp made more profit by retroactively denying coverage to legions of people who had trusted in them?

There is no need for middle men to pile up profits. All that is needed is an administrator. As in the UK, people can be free to pay for extra coverage that may get them treated quicker, but the baseline level of coverage should apply to every American.

I am still convinced that this will not be truly addressed until fully half the population is uninsured. That may happen in the next 10 years, or the next 20. In the meantime we can pacify ourselves by chanting We're Number One!!! We're Number One!!! YAY!!

[Midpack]

The original article was thought provoking.

This link has been posted here before, but if you're interested in UHC, this is an hour well spent IMHO FRONTLINE:sick around the world | PBS.

Originally Posted by samclem

I agree that this is a problem, and that there are potential cost-savings for all of us if we can provide cost-effective care to the poor in a more efficient manner. But, providing health care to those who have paid virtually nothing into the system is not "risk pooling," it is "burden shifting" and it's got nothing to do with traditional "insurance" as we normally think of it. The linked article didn't address this very important issue of health care for the poor.

One big reason that health care costs in the rest of the world are so low is that they ride on the coattails of the US. Just as the case you cite above of poor people's medical costs being transferred (to the ER--> the hospital --> paying customers (through higher insurance rates or higher fees for cash customers)), the rest of the world lets the US health consumer pay a large part of the cost of their health care. The major new medicines are developed in the US or for the US market, because the customers here will pay for it. Likewise for very expensive diagnostic machines and procedures. Likewise for implantable/external medical devices. After the very high developmental costs are paid for by US consumers, the EU and other socialized/government systems pay a lower unit price.

So, if/when the (admittedly wasteful) US system is reformed and the folks in the accounting department are running things, expect a big reduction in private research into all these critical medical areas. At that point, either medical progress will permanently slow, or the socialized/government run systems (including our own) will come up with some means to incentivize research and development. That will cost money, and when that is added in costs will come closer to our present costs. Big Government health care won't look such a great money saver once all these costs are included.

Most posts here seem to disagree more on how we improve --- more than fundamental disagreement.

I think the Swiss would disagree that the US is the only country with drug company R&D results, but they're the only exception I've heard about so your point is well taken. And I don't know enough about medical equipment so I can only concede that to be true as well.

However, I don't want US consumers (OK, my family in particular) to bear the development costs for the rest of the world. So that's all the more reason a competitive (compared to other developed nations, unlike the NYT example) UHC system in the US makes sense. Either advances will slow or the other developed countries will bear some of the expense of R&D. In the latter case, their costs should go up and ours should go down, again bringing our per capita costs more in line.

I'm not sure I see the distinction between 'risk pooling' and 'burden shifting' to begin with --- so I may be misreading the drift of your 2nd & 3rd paragraph, but it almost sounds contradictory to the 1st paragraph. It's not OK for the "haves" to subsidize the "have-nots" in a UHC system, but it is OK for the "haves" to subsidize the health care of other countries by eating a disproportionate share of development costs?

Originally Posted by notmuchlonger

What about the people who eat lousy,smoke,drink and refuse to exercise? Guess the people who take care of themselves should subsidize the lazy and foolish?

Originally Posted by brat

IMHO a basic health insurance policy should be available to all. It is not just to pool risk because the person next to me in the grocery store may be neglecting an infectious disease that I might catch. A basic policy should have a modest co-pay for visits with a Nurse Practitioner while an appointment with an MD without a referral has a higher co-pay.

Also agree that Americans are their own worst enemies in terms of taking care of themselves. Unfortunately human nature requires that everyone pay enough that they bear some consequence for an unhealthy lifestyle. A simply $10 co-pay isn't enough, but arriving at the right $ expense is a whole 'nother thread.

[gerrym51]

We have a national health care system . Its called Medicare.

I can't see why it can't be adapted to the entire population.

call it MEDICARE WITH ADJUSTMENTS

come up with a financing mechanism and go from there.

and just like Medicare Advantage plans all insurance companies

can process them and everybodies happy.

just an opinion.

gerry

[ERD50]

Originally Posted by Martha

The main point of his article is a good one. The only way to make the insurance model cover those who are know to be unhealthy is to have everyone participate so the risk is truly pooled.

I agree, a very good, succinct article. The only way for this to work does seem to be to really pool everyone's risk.

But that leads us to this point:

Originally Posted by Notmuchlonger

What about the people who eat lousy,smoke,drink and refuse to exercise? Guess the people who take care of themselves should subsidize the lazy and foolish?

And add to that - I suspect that the lower class would be less likely to go for routine preventative checks (even if made available free or low cost)? And routine preventative checks might provide a net saving in cost of care that could at least offset the costs somewhat.

So, how do you get people to put in some effort to be healthy, eat right, exercise, and get check ups? There will be outcries that 'Big Brother' is trying to run their lives, and some conspiracy theories too, I bet. If they are already on the bottom rungs, and being subsidized, you can't 'fine' them, you can't put them in jail? How is this part of it going to work?

That said - maybe it doesn't need to 'work'. If that imperfect system is better than the imperfect system we have, it would still be an improvement. But I don't have a clue how to guesstimate that.

-ERD50

PS - while I'm not a fan of govt intervention, I did start thinking this whole thing through the other day. It does seems that he only way to avoid the issues of people falling between the cracks is to get everyone in the risk pool. You can't do that w/o mandating it, and who is going to mandate it other than the govt?

[Texas Proud]

One of the problems I have with 'insurance' is their use of cost avoidance..

My mother is 88 yo... and is having a bladder problem.... but when she goes to ask about an operation that has a good percent of helping (80% according to my sister)... she is told 'you are to old'.... WTF

And there is nothing she can do about it except change plans... and then she gets to go through the same thing and hope to get a different answer...

My sister works with doctors who do the surgery all the time and say there is no age limit...



as for the article... I do not have a major problem with having mandatory insurance (yes... against a lot of what I say in other posts about what the gvmt can and can not tell me what to do)... I just am not one who wants them to run the whole shebang....

But if you drive in our state (and I would assume in most states) you are supposed to carry insurance.... so yes, mixed message on gvmt... but I think it is a good thing...

[samclem]

Originally Posted by ERD50

It does seems that he only way to avoid the issues of people falling between the cracks is to get everyone in the risk pool. You can't do that w/o mandating it, and who is going to mandate it other than the govt?

I think there may be some value in keeping a distinction between those who are receiving government assistance and those who are not. When govt is providing the benefits, there will be rationing--there must be. (Yes, I know we are having de facto "rationing" now, but hang in with me here). With a finite amount of taxpayer money, we'll need to decide between full vaccinations for 10,000 children or a heart transplant for a 300 lb 80 YO smoker. The taxpayers cannot fund every conceivable procedure. So, why not government clinics staffed by government docs (no insurance middleman to pay, few forms to fill out, no billing, etc.) Anyone can go to these clinics, but priority goes to the poorest. The care here is bare bones--expect to wait, expect to be on a ward with many other patients, expect to see many more PAs than physicians, expect limitations on the pharmacy formulary options, and expect to be told "we can't help you" if you need an expensive procedure and don't meet some fairly stringent criteria. Stillm, these places would provide the basic care that helps people recover and helps avoid more costly care later.

Now, everyone can go to these clinics, but those who can afford it will probably choose to go for private care. You can pay out of pocket or with insurance. The laws will be changed to:
1) Break the link between employment and insurance. This can be done simply by eliminating the employer tax deduction for employee insurance premiums and transferring either a deduction or a credit to taxpayers.
2) Mandate standardized health insurance policies (as we do with Medicare Supplemental policies) to make price comparison easier. This has been a big help in bringing choice and competition to the market.
3) The government should take additional steps to reduce friction in the insurance marketplace. For example, making health care outcome information easily available and understandable, making customer satisfaction and compalints against various insurers easily accessible, etc.
4) Cross-state portability. Sorry, but this is a "states' rights" area that probably needs to yield to the feds. It's the only way we can have an efficient market and to cut costs for everyone.
5) Keep in place incentives for individuals to fund health savings accounts and to purchase high-deductible health insurance policies.
6) No medical underwriting or exams will be allowed. Those selling insurance have to take everyone who applies. But, we'll need to come up with a mechanism to preclude people from upgrading to a more comprehensive policy upon receiving news of an expensive illness (just as you can't buy fie insurance once the house is ablaze). Maybe a two-year phase-in period for new benefits?


Result: A safety net of compassionate universal coverage, but no government mandate that everyone buy a particular type of policy. This system also fixes a problem we haven't spoken much about: It protects the stupid, ignorant, lazy, and incompetent (SILI, or insert your own PC wording). The government clinic is where you go when you are sick. Simple. Today there are millions of people who qualify for various government benefits (health care coverage for their children, free food, etc), but they don't file for them because enrollling is difficult and because these people are SILI. We'll have the same problem in a national health care system, and when these people get sick they'll still try to go to the nearest hospital ER, driving up costs in the private system. No--go to the govt clinic unless you are having a bona fide emergency.

[youbet]

Originally Posted by ERD50

So, how do you get people to put in some effort to be healthy, eat right, exercise, and get check ups? There will be outcries that 'Big Brother' is trying to run their lives, and some conspiracy theories too, I bet. If they are already on the bottom rungs, and being subsidized, you can't 'fine' them, you can't put them in jail? How is this part of it going to work?

You can try to educate people, encourage people, have publicity programs that try to sell healthy living as "cool" and all that, but you can't punish people that don't succeed.

How could you establish criteria? 10 pounds overweight is OK but at 11 you pay more? What if you gain some weight while recovering from two broken legs? What if you're underweight due to an eating disorder? What if you quit smoking 5 yrs ago? 10 years ago? 15 years ago? (That would be me btw) 1 beer a day OK? How about 2? 3? Wine OK? Who measures your consumption? Etc. etc.

Poor lifestyle habits also overlap with genetics. Keeping the two separated would probably be troublesome. Some folks should never be in the sun at all, period. Others tolerate it much better. What would the criteria be? If you have fine red hair, freckles and fair skin we'll double your insurance rates if we catch you outside without being fully clothed and wearing two gallons of SPF 50 sunscreen?

How do you check on people without becoming big brother or impacting personal rights and freedoms more than our current Homeland Security?

How do enforce if enforcement might involve higher costs for people who can't afford it?

I understand the temptation to conclude that just obvious violations would get tabbed......such as being a heavy smoker. Or being obese. But I still wonder how to set criteria, deal with exceptions, monitor without violating privacy and enforce without inappropriate harsh punishment such as denying coverage or witholding care.

And I share the frustration. People display unhealthy life habits yet get medical coverage for the same price as folks with healthy habits. Kinda sucks. But I really don't think there is a viable solution.

Anyone know how it works in Canada, UK or Australia?

[Ed_The_Gypsy]

And, some of these countries have pioneered some efficiencies that have led to lower costs. Here's a good example from Friday's Toronto Sun about the cost-efficient ER system in a Toronto hospital. A patient reportedly spends 5 days in the ER on a stretcher waiting for care.

TorontoSun.com - Toronto And GTA- She lay 5 days on stretcher in ER

Just an anecdote and not typical, I'm sure.

I don't think so.

Up here, things don't work as well as the media hippies in the US want us to believe. Not this year. Maybe once, maybe later. Not right now.

Alberta Ed