Universal Health Care - what are we waiting for?

[Midpack]

Good analogy, and at this seemingly "best opportunity" in US healthcare system, there is no 800 lb gorilla, and I cannot even fathom a healthcare structure that could be in place and operating in that "enforcer" role within 20-30 years.

I agree we still don't have an 800 lb incentive to drive popular opinion (if only people realized how much they really pay beyond out of pocket & partial premiums), but Switzerland started from a similar set of circumstances to the US in 1994. They already much have lower costs, better outcomes, no uninsured and no medical bankruptcies. I refuse to concede the US can't do anything any other developed country can, but we're don't have the collective will yet...

 

[Danmar]

Interesting reading. Canadians just don't understand how this issue plays out in the US. This has helped me understand a bit better. But I must say, it doesn't look look good for improvement any time soon. Too bad.

 

[donheff]

That option seems to be pretty good. Presumably there are good reasons why it won't happen?

donheff, you use "could" and I wonder if that is a something you expect to happen? Ooops, and forgot to ask; Is the health insurance offered to Federal Govt employees the same as Congress or are there 2 totally different plans?

Yes, Congress uses the same health insurance plan as the rest of the Federal Government. Employees (and members) pay about 1/3 of the premiums out of pocket (depending on which insurer they select) and the employer (you tax payers) pick up the rest. This is not significantly different than many large employers except that we have a large selection of insurers to choose from. The reason for that is we are a big employee group and the bureaucrats at OPM do a reasonably good job negotiating the contracts with the insurers.

When I say "could" what I mean is that Congress could theoretically pass a law implementing such a concept. I don't believe they will.

 

[Alan]

Yes, Congress uses the same health insurance plan as the rest of the Federal Government. Employees (and members) pay about 1/3 of the premiums out of pocket (depending on which insurer they select) and the employer (you tax payers) pick up the rest. This is not significantly different than many large employers except that we have a large selection of insurers to choose from. The reason for that is we are a big employee group and the bureaucrats at OPM do a reasonably good job negotiating the contracts with the insurers.

When I say "could" what I mean is that Congress could theoretically pass a law implementing such a concept. I don't believe they will.

Very interesting - thanks.

 

[explanade]

I think if our system had been centered around high-deductible policies, things would be very different.

-ERD50

Those high-deductible plans are the insurers' dream because the ratio of premiums collected to claims paid is higher than regular insurance. IOW, bigger margins for them.

 

[Texas Proud]

Instead of trying to define basic level of care, I'd start with what the 30+ developed countries with universal care provide. If they can provide more access and (more) effective basic care (including catastrophic) than the US at on average half what we spend per capita, it would seem we could learn a lot. I don't think anyone seriously considering universal health care in the US expects everyone should have Cadillac health care, I certainly don't. Again, those who can afford more or better care than the universal standard, are entitled to whatever care they choose...

I do not want to thread drift much, but this is the major problem that I see... we as a country in total pay twice as much per person with not better outcome... and the law passed did not address this issue... if there is a way to actually address the real problem, I am all for it... I just do not see making everybody buy insurance fixing the real problem..

In total, with employer contribution and my costs, I am paying over $12,000 for health insurance PLUS any costs of actually going to the doctors... if I knew that the number would go down to say $8,000, I would not care if everybody was covered or not... I just do not feel it will happen before I get on Medicare....

 

[ERD50]

Those high-deductible plans are the insurers' dream because the ratio of premiums collected to claims paid is higher than regular insurance. IOW, bigger margins for them.

Do you have zero deductible insurance on your car & home? Few financially aware people do. It is very inefficient to run every $100 claim through a third party, and somebody (the customer eventually) has to pay.

-ERD50

 

[Texas Proud]

I am not sure that a single payer system will work either... I have a sister that has been in the hospital and another who is a nurse...

One of the comments that my nurse sister said (and I will get the working wrong, but the theme correct) is the Medicare piling on... she said that when there is not a clear diagnosis, docs will call their friends docs to do more and more tests... even when they know it does not provide any benefit... not just on my sister, but on many people...


I could be wrong, and hope someone corrects me if I am.... but I do not think that the UK system has a profit motive in their decision making... IOW, the doc will not perform a test just so they can 'bill' for it... because there is nobody to bill... it just means nobody else had access to that test because it was used by that doc...

 

[explanade]

I am not sure that a single payer system will work either... I have a sister that has been in the hospital and another who is a nurse...

One of the comments that my nurse sister said (and I will get the working wrong, but the theme correct) is the Medicare piling on... she said that when there is not a clear diagnosis, docs will call their friends docs to do more and more tests... even when they know it does not provide any benefit... not just on my sister, but on many people...


I could be wrong, and hope someone corrects me if I am.... but I do not think that the UK system has a profit motive in their decision making... IOW, the doc will not perform a test just so they can 'bill' for it... because there is nobody to bill... it just means nobody else had access to that test because it was used by that doc...

Yeah that's one of the big issues with our system, that they bill for every procedure, not outcome.

So there is an economic incentive and some doctors have set up their own labs so that they get paid twice.

There was a famous article about El Paso TX or some border town which had the highest Medicare costs in the country. There was one dominant doctor's group and they also owned the labs for things like MRI and so forth.

 

[Alan]

I could be wrong, and hope someone corrects me if I am.... but I do not think that the UK system has a profit motive in their decision making... IOW, the doc will not perform a test just so they can 'bill' for it... because there is nobody to bill... it just means nobody else had access to that test because it was used by that doc...

I believe you are correct on this. NHS Doctors are paid a salary and get no extra pay for the numbers of tests they run. I don't know how they get paid in the private sector in the UK, but would expect the HI company (eg BUPA) to monitor their charges.

 

[Alan]

There was a famous article about El Paso TX or some border town which had the highest Medicare costs in the country. There was one dominant doctor's group and they also owned the labs for things like MRI and so forth.

I remember hearing that article, and IIRC it said that the numbers of Doctors having financial interest in labs and outpatient surgery clinics was rising very quickly.

 

[Zero]

My cardiologist is also an internist and when I was referred to him for heart issues he immediately asked if I wanted him to take over my primary care. He mentioned that he has his own labs and that the test results are quicker.

He gives me an EKG, an echocardiogram and blood work at every visit, which he set at 6 months. I figure each visit is $8,000. My PPO insurance has not pushed back that I know of.

 

[donheff]

I do not want to thread drift much, but this is the major problem that I see... we as a country in total pay twice as much per person with not better outcome... and the law passed did not address this issue... if there is a way to actually address the real problem, I am all for it... I just do not see making everybody buy insurance fixing the real problem..

What you are defining is ONE of the real problems. Cheaper HI won't help all the people around here who worry about not being able to get insurance at all. To me that is the scariest problem - being denied HI after quitting or loosing a job and then washing your nest egg down the drain because of a serious illness. I hope we don't lose "no preexisting conditions" fighting over the best way to save money.

 

[ziggy29]

Those high-deductible plans are the insurers' dream because the ratio of premiums collected to claims paid is higher than regular insurance. IOW, bigger margins for them.

Interesting. Do you know of any data I could review that would bear this out?

If this is the case, it's a market failure because if the margins were much higher than traditional low-deductible insurance, the players in the low-deductible space could undercut the competition in the high deductible market, *still* make a better margin then they get in the low deductible market, and gain market share due to lower premiums than the competition. Thus the free market (in theory) has a built-in mechanism to prevent what you are describing. Hence, a market failure.

Of course, market failures are unsurprising in a market that has been so grotesquely distorted by employer groups and disparate tax treatment for employer-based health insurance.

 

[Zero]

This would be my approach.
1. Establish a new NationalHealthcareSystem that will be the basic healthcare coverage similar to current Medicare. This NHS would eventually cover everyone and gradually phase out Medicare.
2. Everyone 55 and over continues to pay 1.45% FICA and will get Medicare after 65 and pay the $100 premium. So a 55 year old would progress into Medicare same as always, BUT, from 55 to 65 they would now be on NHS instead of private coverage that they currently have from employer or self payed. NOTE: This frees up employers to either drop insurance entirely or just give the employee a NTS supplement to gain them Cadillac coverage.
3. Everyone 65 and under is put into NTS immediately and those under 55 no longer pay FICA but some new tax FICA+ of say 5%, fair because they will have no premiums at 65 and because immediately healthcare is free, no copays, deductibles, etc.

Impacts under this scheme:
1. Employers get bailed out of the huge burden of healthcare. So tax them at 5%. They would be ecstatic with this I would suspect.
2. Doctors are going to see nearly 90% of patients walking in with "gov't Rate" insurance. Not gonna be happy(rich) campers.
3. Since gov't now controls 90% of payments, it has the control over cost, 900 lb gorilla.

EDIT: Everyone in either plan has an option to buy their own "supplemental" plan to be able to gain access to enhanced coverage and likely needed to see the best specialists, etc.

 

[samclem]

If this is the case, it's a market failure because if the margins were much higher than traditional low-deductible insurance, the players in the low-deductible space could undercut the competition in the high deductible market, *still* make a better margin then they get in the low deductible market, and gain market share due to lower premiums than the competition. Thus the free market (in theory) has a built-in mechanism to prevent what you are describing. Hence, a market failure.

If I'm following you, one probable source of market disruption is the HSA rules that drive folks into high deductible plans that meet the pre-stated government requirements. The more favorable tax treatment of HSAs (vs flexible spending accounts, etc) would theoretically allow insurers to charge a higher price for high-deductible policies that meet the guidelines. Further, if an insurer wanted to gain a market advantage by offering bells and whistles that included a lower deductible, etc, then the policy might not qualify for use in HSAs and customers would flee.

Anyway, I'm not sure the health insurance margins are such a great metric. The gold-plated "pay for everything from the first dime" policies have premiums so much higher than a high-deductible policy that the insurers can still make much more money per policy than by selling high deductible policies. They are (understandably) interested in higher total profits, not (per se) higher margins.

As a consumer, I'm not primarily concerned about the margins earned by the insurance companies. I'm trying to get the most health care for my money and protect against catastrophic losses. In today's market and barring other disruptive influences, most folks who have the choice are finding that high-deductible plans best accomplish this.

 

[explanade]

No, but the biggest critic is Wendell Potter, who claims the insurers want to switch everyone from PPO/HMO to these high-deductible plans:

Insurers’ Bait and Switch

There are pro HSA advocates who are complaining about the MLR requirements for these high-deductible or "consumer-directed" plans:

Consumer Power Report: How Obamacare Targets Consumer-Directed Health Plans | Heartlander Magazine

Specifically, they think the out-of-pocket payments by customers of these high-deductible plans should be counted against the medical loss ratios of the insurers of those plans. That is, if customers of a plan have a $5000 deductible, all their payments for services under that deductible should count in favor of the insurance carrier of that plan.

Potter says claims are paid at a far less rate than in standard insurance plans. What is of greater concern is that people are avoiding preventive care because of the expense:

Largest study of high-deductible health plans finds savings, less preventive care

HSAs and high-deductible plans seem to be little more than an effort to cost-shift from employers to employees. Theory is that patients would only seek care that they need, not just go to the doctor for frivolous reasons.

But if people are just delaying care or skipping some types of care altogether, then they will likely require more expensive care later. So there isn't the cost savings that the HSA/high-deductible proponents claim.

Unless, that is, they're counting on cost savings from more people dying off than would have been the case if they weren't covered under this scam.

 

[samclem]

Unless, that is, they're counting on cost savings from more people dying off than would have been the case if they weren't covered under this scam.

(Emphasis added) I'm not sure the tone is contributing to a useful exchange of ideas. But, if you had a study that backed up the claim that the deferred/cancelled doc visits led to higher costs later, that would be interesting.

It's easy enough to allow low/no deductibles under high-deductible plans for immunizations/well baby care/screenings that have been shown to reduce costs overall. Many policies already allow this.

 

[MichaelB]

This is a very interesting discussion and I'm sure everyone would like it to continue in the same friendly tone that everyone has shown 'till now.

Edit for clarity: inflammatory language is not helpful.

 

[explanade]

From the press release on the Rand study:

But as families reduced their medical spending, they eliminated some care that is clearly beneficial, researchers observed. While childhood vaccination rates increased among families in traditional health plans, they fell among families in high-deductible health plans. Rates of mammography, cervical cancer screening, colorectal cancer screening and routine blood tests among those with diabetes also fell among those with high-deductible health plans.

"We saw that patients reduced preventive care, and if this persists, it is likely to have health consequences in the future," Haviland said. "These cutbacks could cause a spike in health care costs down the road if people end up sicker and need more-intensive treatment."

There isn't a study yet because high deductible plans are relatively new and the Rand study, which is the largest study of such plans at the time, only tracked the first year of those plans.

But it's common sense, that if screening for chronic conditions like diabetes is being skipped, then the care for those conditions are going to become more expensive later.

It's clear that this is motivated by cost-shifting, not cost-saving. What incentive do insurers have to reduce costs beyond their own profits? If health care becomes affordable, then people don't need insurers.

You just have to call a spade a spade sometimes.

 

[harley]

Potter says claims are paid at a far less rate than in standard insurance plans. What is of greater concern is that people are avoiding preventive care because of the expense:

Largest study of high-deductible health plans finds savings, less preventive care

HSAs and high-deductible plans seem to be little more than an effort to cost-shift from employers to employees. Theory is that patients would only seek care that they need, not just go to the doctor for frivolous reasons.

But if people are just delaying care or skipping some types of care altogether, then they will likely require more expensive care later. So there isn't the cost savings that the HSA/high-deductible proponents claim.

Unless, that is, they're counting on cost savings from more people dying off than would have been the case if they weren't covered under this scam.

I don't see that people choosing less preventative care in any way makes an HSA a scam. I didn't see anything in the studies to indicate that they allowed for the possibility that many people that choose HSAs do so because they don't have dependents, or pre-existing conditions, or even health problems in general. Choosing an HSA isn't shifting costs from employers to employees, either. It's an employee making a decision to decrease their own costs, then make a decision as to whether they should go to a doctor themselves. Maybe the bias in the studies is that people who have HMO/PPO plans go to the doctor more often than they need to, driving up costs all around. I think that like many things that involve personal choice, an HSA works well for some and not so much for others. All of this is outside the influences of Obamacare, though. If it happens I think there will need to be some shake out time to see how every aspect of medical care will be impacted.

 

[Alan]

It's easy enough to allow low/no deductibles under high-deductible plans for immunizations/well baby care/screenings that have been shown to reduce costs overall. Many policies already allow this.

The insurance we have has a co-pay for Dr visits, except approved screenings which have zero charges. These include annual physical and associated tests. Last month DW had a "well-woman" check-up which included blood work, bone density scan, pap-smear and mammogram. I would have thought it great value to have paid the usual $30 co-pay, but at zero cost it is even better.

I assume that since this is retiree insurance through my ex-employer they are able to take the long view and decide that it is better, cost-wise, to encourage all participants to get these screening tests done by providing them at no charge.

 

[samclem]

But it's common sense, that if screening for chronic conditions like diabetes is being skipped, then the care for those conditions are going to become more expensive later.

It's "common sense" that a high-deductible health insurance provider has every incentive to encourage screenings, etc to help reduce the very large costs (that they'll have to pay) that result when effective preventative care is avoided.

 

[ziggy29]

Unless, that is, they're counting on cost savings from more people dying off than would have been the case if they weren't covered under this scam.

It may not be what you like, but it seems pretty provocative to call it a "scam" and using emotional phrases such as suggesting they are letting people die just to pad profits. Is that really what you wanted to say?

It's "common sense" that a high-deductible health insurance provider has every incentive to encourage screenings, etc to help reduce the very large costs (that they'll have to pay) that result when effective preventative care is avoided.

Indeed, many if not most HDHPs attached to an HSA (mine included) provide first-dollar, no-deductible preventative services as appropriate by age and gender. This is a win-win situation in this case since patients are not discouraged from preventative care and the insurers know that catching a potential future problem today, before it becomes a big problem, is good for their bottom line too.

 

[MichaelB]

My understanding of HSA and high deductible plans is a lower premium in exchange for assuming more risk. The trade off between the two may not be perfect, but there is no evidence of anything unlawful or conspiratorial, notwithstanding Mr. Potter's book (which I have not read).

People forgoing medical care because they cannot afford is a real problem, but it is not limited to nor the product of high deductible policies.