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Old 02-24-2013, 05:18 PM   #61
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What real evidence is there that Medicare pays less than the cost of care. From what I have read (including the recent article in Time) I am skeptical that Medicare pays less than cost of providing. I am quite sure that some physicians don't feel Medicare pays enough and as a result those physicians choose not to accept Medicare (which is their right). That is not the same thing as saying they are receiving less than cost.

I'm sure that physicians and other providers would like to be paid more than Medicare pays but that doesn't mean to receiving less that the preferred amount means that provider is losing money.
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Old 02-24-2013, 06:00 PM   #62
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What real evidence is there that Medicare pays less than the cost of care. From what I have read (including the recent article in Time) I am skeptical that Medicare pays less than cost of providing...... .
The author points to huge billboards in Florida vying for Medicare patients. Seems like a lot of effort to incur a loss.
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Old 02-24-2013, 06:09 PM   #63
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Or, maybe something as close as possible to a free market in medical care provision. That amazing innovation whereby we coax increasing improvements in the quality and cost of goods and services in virtually every other portion of our lives.
This doesn't (necessarily) mean shopping around for an MRI when you're bleeding. It might mean shopping for a total care package by price and quality.
Kenneth Arrow wrote "Uncertainty and the Welfare Economics of Medical Care" where he showed convincingly that health care was not suitable to a free market process. His paper can be found here.
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Old 02-24-2013, 06:59 PM   #64
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Or, maybe something as close as possible to a free market in medical care provision. That amazing innovation whereby we coax increasing improvements in the quality and cost of goods and services in virtually every other portion of our lives.
We have learned over the years that the free market way is the efficient way to do business. So I was amazed to read that Medicare's average cost to administer each claim is $3.80, while Aetna's average cost is $30. And of course Medicare's line item costs are lower than Aetna's also. As MichaelB writes above, the health care process apparently does not behave like a typical free market, and I'm not sure it can (or we want it to). Well, the Aetna's (and their employees and their shareholders) perhaps want it to be treated as a free market.

If price controls limiting industry profits, or opening Medicare to all ages (charging for <65 years old) were implemented, I wonder how many Aetna and Medtronic and Genentech jobs would be lost?
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Old 02-24-2013, 07:24 PM   #65
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We have learned over the years that the free market way is the efficient way to do business. So I was amazed to read that Medicare's average cost to administer each claim is $3.80, while Aetna's average cost is $30. And of course Medicare's line item costs are lower than Aetna's also. As MichaelB writes above, the health care process apparently does not behave like a typical free market, and I'm not sure it can (or we want it to). Well, the Aetna's (and their employees and their shareholders) perhaps want it to be treated as a free market.

If price controls limiting industry profits, or opening Medicare to all ages (charging for <65 years old) were implemented, I wonder how many Aetna and Medtronic and Genentech jobs would be lost?
Profit margins would be less but would the companies sell more drugs and equipment because of the increased access to healthcare?
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Old 02-24-2013, 07:36 PM   #66
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European healthcare saves a fortune on drugs compared to the US because the single-payer systems mean that the government goes to the drug companies and tells them what they're prepared to pay. That the US government is not using its leverage in this way (as someone pointed out, the US spends as much in public funds on healthcare as somewhere like France) is bordering on the criminal, but that's what $5 billion in lobbying gets you, I guess.

Any American with a chronic condition visiting Europe should bring a repeat prescription and get it filled over here. My local pharmacist confirmed to me that provided it's legible and intelligible, any Rx for non-trafficable drugs will be honoured. We get stuff like Claritin for about 1/4 of what Americans pay, even if we're paying for it (and in practice, we then get most of the cost reimbursed by the system as well).
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Old 02-24-2013, 07:51 PM   #67
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European healthcare saves a fortune on drugs compared to the US because the single-payer systems mean that the government goes to the drug companies and tells them what they're prepared to pay. That the US government is not using its leverage in this way (as someone pointed out, the US spends as much in public funds on healthcare as somewhere like France) is bordering on the criminal, but that's what $5 billion in lobbying gets you, I guess.

Any American with a chronic condition visiting Europe should bring a repeat prescription and get it filled over here. My local pharmacist confirmed to me that provided it's legible and intelligible, any Rx for non-trafficable drugs will be honoured. We get stuff like Claritin for about 1/4 of what Americans pay, even if we're paying for it (and in practice, we then get most of the cost reimbursed by the system as well).

I was watching one of the Sunday political shows today and the author was on a panel... he suggested that lowering the age of medicare would actually save the system money....

They also brought up the drug costs... and it was Rattner (sp?, the car czar) who said that it would be good, but would save 'only' about $120 billion over the next 10 years...


I would like to get those savings.... not that much easy ways to save and this is one....
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Old 02-24-2013, 09:37 PM   #68
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We have learned over the years that the free market way is the efficient way to do business. So I was amazed to read that Medicare's average cost to administer each claim is $3.80, while Aetna's average cost is $30.
Ah, when you understand what is included in these respective administrative costs the mystery will be solved.
In a nutshell, Medicare's administrative costs are limited to just the cost of cutting the check to the health care provider. The other costs of administering the program (especially the back-office coding costs in the doctor's office) are just rolled into the service provider's bill, becoming part of the denominator and thereby appearing to lower the percentage costs of the Medicare administration fees.
Usually these Medicare vs. Private comparisons are stated on a percentage basis. This greatly overstates the efficiency of Medicare because Medicare patients tend to have chronic conditions that require expensive care but, by their repetitive nature, have relatively low admin costs when expressed as a percentage. Private insurers are dealing with a larger number of unique cases. When stated on a cost-per-beneficiary basis, private insurance has lower administrative costs than Medicare.



Finally, to the extent that Medicare has low administrative costs because they fail to adequately validate claims and search out abuse/fraud in the system, it certainly is a pound-foolish way to "save money."
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Old 02-24-2013, 10:19 PM   #69
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Finally, to the extent that Medicare has low administrative costs because they fail to adequately validate claims and search out abuse/fraud in the system, it certainly is a pound-foolish way to "save money."
Which does raise an interesting question, which costs more the fraud and abuse or the work to detect it. If it cost 1.20 to find 1.00 of fraud and abuse, then let it happen its cost effective. One has to make a business decision on how much to spend on the policing of claims. (just like police make a business decision on how much time to spend on a case, depending on the case, in a large city a breakin of a house that no one is home at, just means taking the report. In a small town it means more because it will make the front page of the local paper.
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Old 02-24-2013, 10:22 PM   #70
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Kenneth Arrow wrote "Uncertainty and the Welfare Economics of Medical Care" where he showed convincingly that health care was not suitable to a free market process. His paper can be found here.
Thanks for the academic paper. Arrow's 1963 analysis lays out several failures of the health care "insurance" market, a case that hardly needs to be made anymore as the failures of our present (non) system are on full display. I don't find his paper to be a refutation of free market processes in medicine, but instead a description of how the fee-for-service model as implemented in the US fails to hew to these processes.

So, some actual data: There area few instances where patients still pay for medical services directly, cosmetic surgery is one of these. Because these particular services are generally not covered by medical insurance, patients are able to compare costs and make their own decisions on medical procedures. This paper is one of many that clearly shows the impact on costs:
Cost change: 1992 - 2005
General Inflation (CPI): 40%
Health Care: 70%
Medical Services: 80%
Cosmetic Surgery: 20%

Surgery to correct vision problems (PRK, LASIK, etc) is another specific health-care area unsullied by the effects of health insurance. These procedures have among the highest patient satisfaction rates and real costs are actually dropping over time.

These are encouraging cases of a decrease in direct health care costs, but they don't in themselves demonstrate the even bigger benefits of allowing consumers to shop not just for medical services but for medical insurance. When they can do that we'll see decreases in the even more important factors that drive up the cost of medical care in the US (e.g. failure to coordinate care, rewarding excessive procedures rather than improvements to patient health, etc)
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Old 02-24-2013, 10:27 PM   #71
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Which does raise an interesting question, which costs more the fraud and abuse or the work to detect it.
Aetna and other private insurers have to make this business case every day--you can bet they are spending only an amount that saves them more than they spend.
Medicare administrators have no such direct financial interest in reducing fraud or abuse.
We can all make our own assessments of which system is likely spending the appropriate amount needed to detect fraud and abuse.
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Old 02-25-2013, 01:17 AM   #72
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These are encouraging cases of a decrease in direct health care costs, but they don't in themselves demonstrate the even bigger benefits of allowing consumers to shop not just for medical services but for medical insurance.
If only all medical procedures were elective and one could take one's time to shop around for them. If only there were lots of alternative chemo drugs for every type of cancer, and the drug companies competed on price for cancer patient business. If only hospitals made cost-competitive invoices to their uninsured patients instead of trying to charge ridiculously, immorally high rates 5x to 10x as high as patients with Medicare or private insurance. Then I might believe we could leave heath care to the free market.

History seems to teach that the corporate responsibility to earn profits for shareholders is in contrast with being strictly competitive in the marketplace (and with protecting the environment and with worker safety and with consumer protection, etc) unless there are a few regulations set forth to remind those corporations how to behave and how not to behave.
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Old 02-25-2013, 01:45 AM   #73
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So, some actual data: There area few instances where patients still pay for medical services directly, cosmetic surgery is one of these.....
.....
Surgery to correct vision problems (PRK, LASIK, etc) is another specific health-care area unsullied by the effects of health insurance. These procedures have among the highest patient satisfaction rates and real costs are actually dropping over time.
Without belaboring the point unduly, I think it is clear that those areas don't really compare to the many factors that make the healthcare market different from other markets.

Cosmetic surgery and vision surgery can be planned for in advance and are elective. They are also relatively simple.

I have had LASIK surgery. I could (and did) spend months researching it. I researched the surgeon and the surgeon. This was some years ago when it was still a newer surgery. In point of fact, I didn't choose the least expensive option. I actually chose the most expensive option as there were factors that were more important to me than cost.

The point is that I could spend a lot of time learning about LASIK, learning about surgeons, visiting online message boards, etc.

I would also point out that all the time I was doing this. I was, well, healthy. Contrast that with someone who is in the middle of a heart attack (great time to research costs) or has just been diagnosed with cancer or even when I broke my ankle (I was just barely able to choose a hospital for the ambulance to take me too but wasn't in a position to compare costs).

Also when I had LASIK or if I was having cosmetic surgery - those are elective surgeries. Had LASIK been too expensive I would have simply not had the surgery.

Also, in having LASIK I spent months researching and learned a lot about LASIK (I learned so much that at one time I had a web site on LASIK that was one of the most visited sites on the web). But I'm not a physician. I can't do that kind of research on every medical problem I might have. And, LASIK is relatively simple. Compare that with deciding what is the best cancer care and how to compare costs. I don't think it is practical to expect the individual to be able to navigate that and compare costs.

I do think it should be easier for people to compare costs. I think that would be useful.

But I don't that the healthcare system can be solved by simply telling everyone - go figure it out on your own and no insurance for you (and if you can't afford care, then tough - skipping LASIK due to cost is one thing, skipping chemotherapy due to cost is something else entirely).
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Old 02-25-2013, 05:15 AM   #74
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Why healthcare is killing us? greed would be on the short list.
Infuriating Paragraph About The Health Care System - Business Insider

As a Canadian i'll never understand why America tolerates such an outrageous health care system..
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Old 02-25-2013, 06:10 AM   #75
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Old 02-25-2013, 07:46 AM   #76
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I believe most insurance does not cover LASIK, as it is elective. I wonder if there is a connection to why the price has come down.
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Old 02-25-2013, 07:50 AM   #77
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I think it would be really hard to see the impact of such a thing, given how much it would be over-shadowed by the inescapable and substantial impact on price from something going from being brand new to being well established.
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Old 02-25-2013, 09:56 AM   #78
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Why healthcare is killing us? greed would be on the short list.
Infuriating Paragraph About The Health Care System - Business Insider

As a Canadian i'll never understand why America tolerates such an outrageous health care system..
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America isn't a of a single mind.

Not so simple of an answer.... most people do not agree on the current system, but disagree on how to fix it....
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Old 02-25-2013, 10:14 AM   #79
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Not so simple of an answer.... most people do not agree on the current system, but disagree on how to fix it....
I'm no expert, but too many people and even politicians in the US are clueless about how the US health care "system" (it's not an organized system, that's one of the central issues) works to begin with, making 'agreement' unlikely. And they still hold on to old and mostly false impressions of how universal health care works in every other developed country. We're a third world country in terms of health care access with very high costs and middling outcomes...

"Among the OECD's 30 members -- which include Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, South Korea, Luxembourg, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, and the United Kingdom -- there are only three lacking universal health coverage. The other two happen to be Mexico and Turkey, which have the excuse of being poorer than the rest (and until the onset of the world economic crisis, Mexico was on the way to providing healthcare to all of its citizens). The third, of course, is us."

And Mexico is actively working on some form of cost effective universal health care...
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Old 02-25-2013, 11:00 AM   #80
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Not so simple of an answer.... most people do not agree on the current system, but disagree on how to fix it....
Uh huh.

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I'm no expert, but too many people and even politicians in the US are clueless about how the US health care "system" (it's not an organized system, that's one of the central issues) works to begin with, making 'agreement' unlikely.
Yes, though I think it is as much a matter of differing priorities as lack of understanding.
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