Good article on health care costs in Washington Post

[Midpack]

Very interesting exchange of ideas on this page of the thread...

 

[Gone4Good]

But, specifically regarding your "point 1" ("Without an individual mandate there can be no guaranteed issue insurance")--if the SCOTUS finds the mandate unconstitutional, I believe there are other effective ways to encourage people to buy "guaranteed issue" insurance. I've mentioned these before (here and here ) , but we disagree on whether they would be effective. Okay, so it goes.

I'm curious. Do you think using the power of the state to penalize people for not buying health insurance in the way described in the links is materially different than a mandate? It sounds like a mandate, just with a different enforcement mechanism.

 

[samclem]

I'm curious. Do you think using the power of the state to penalize people for not buying health insurance in the way described in the links is materially different than a mandate? It sounds like a mandate, just with a different enforcement mechanism.

Yes, I think it's different. I'm suggesting that access to some government resources (which are not rights--student loans, public assistance, etc) be contingent on signing up for health insurance. I do have a right to use my private property as I choose, and when the government requires that I engage in private commerce or be penalized with loss of my private property, that's far more intrusive. Regarding the non-governmental sanctions (e.g. use of health insurance status as a factor in credit and employment decisions)--that's obviously entirely different from a government confiscation of property. It's just letting the entities who have a stake in these individual decisions make their own informed decisions. If I choose to go without medical insurance, my creditors are directly affected. So, if I decide not to have health insurance, it should affect my credit score. If I have a mortgage, the mortgage holder and I may decide to make the continued proof of such insurance a requirement that allows me to get a more favorable rate. Transparency and the actions of some non-governmental entities will induce more people to buy insurance. Again, as I recently mentioned, the biggest problem with noncompliance won't be from the destitute or from the very wealthy. It won't be from the sick of any economic level. It will be from healthy folks in the middle class who are engaged in the economy and, despite the availability of subsidies, etc, decide to roll the dice.

Again, all of this is done after the provisions of the ACA are in place. All the subsidies are being paid, the boost in Medicaid eligibility income level, the flat-rate insurance regardless of health status, etc. After that, after all that everyone else is being forced to do to make health care affordable for everyone, anyone who makes a decision not to carry their own load should be ready to face the ramifications of that choice.

It's a way of making people accountable for their decisions.

 

[MichaelB]

Regarding the free choice not to carry health insurance, when the individual in involved in a serious or catastrophic incident and not in a position to choose, the choice is made to provide care without regard to insurance - and if there is no insurance, the public pays. There is no true liability free scenario.

Likewise, the gov't in not confiscating property, it is mandating payment in a program where goods and services are provided in return.

 

[samclem]

Likewise, the gov't in not confiscating property, it is mandating payment in a program where goods and services are provided in return.

That's not what the law calls for. As it is written, if an individual fails to buy health insurance they pay an extra (punitive) government tax. They receive no benefit or service as a result of paying this fine.

There's been some debate on whether it is a tax or a fine, and the administration has claimed it is both at various times. IIRC, most of the court opinions have agreed it is a fine--a punitive taking of property.

 

[Gone4Good]

Yes, I think it's different. I'm suggesting that access to some government resources (which are not rights--student loans, public assistance, etc) be contingent on signing up for health insurance. I do have a right to use my private property as I choose, and when the government requires that I engage in private commerce or be penalized with loss of my private property, that's far more intrusive.

It still seems like semantics. After all, those government programs are paid for by the "confiscation of personal property" known as taxes. I think we're just adding a layer of complexity so we can pretend the government isn't doing the exact same thing: demanding that we buy health insurance or pay a financial price.

At least in the case of a mandate, the penalty can be sized so it actually achieves its objective. These alternatives will be hit or miss, with the middle-class healthy folks who are most unlikely to comply getting largely missed.

I'm not really against any of these suggestions, and you certainly get an "A" for creative thinking. They just seem like weaker alternatives to a mandate with no real compensating benefit.

 

[MichaelB]

That's not what the law calls for. As it is written, if an individual fails to buy health insurance they pay an extra (punitive) government tax. They receive no benefit or service as a result of paying this fine.

There's been some debate on whether it is a tax or a fine, and the administration has claimed it is both at various times. IIRC, most of the court opinions have agreed it is a fine--a punitive taking of property.

It could be any of those things - or it also could be a payment for coverage the individual is receiving, like the one I mentioned in my previous post.

The bigger issue is many years ago society decided every individual should receive a minimum of health care, regardless of resources or situation. The requirement was placed on service providers such as hospitals, but not on the individuals. This has created one distortion (and led to many more) and it needs to be reconciled. As long as society - and the taxpayer - is obligated to provide care, the individual that opts out gets, in part, a free ride.

 

[Gone4Good]

The bigger issue is many years ago society decided every individual should receive a minimum of health care, regardless of resources or situation. The requirement was placed on service providers such as hospitals, but not on the individuals. This has created one distortion (and led to many more) and it needs to be reconciled. As long as society - and the taxpayer - is obligated to provide care, the individual that opts out gets, in part, a free ride.

Bingo!

This gets to the heart of the matter. The individual mandate has one function and one function only: to end the free rider problem. There are only two ways to solve that problem 1) make sure everyone in the system pays 2) deny care (not coverage, but care) to people who don't pay.

As long as citizens benefit from society's decision to provide care regardless of ability to pay, they have an obligation to contribute to that system. If they don't, society has an obligation to collect there share through "punitive confiscation of property" if needs be. Alternatively, we can deny them care. Those are our two choices. Everything else is a diversion.

 

[samclem]

I'm not really against any of these suggestions, and you certainly get an "A" for creative thinking. They just seem like weaker alternatives to a mandate with no real compensating benefit.

If the Supreme Court finds the mandate to be unconstitutional but (despite the deliberate lack of a severability clause) does not strike down the rest of the ACA, folks who favor the law will be scrambling to find ways to increase the purchase of insurance without a direct government fine/imprisonment, etc. These might be among the measures used, but I'm sure there are better ideas out there. I'd like to read about them somewhere.

 

[Gone4Good]

If the Supreme Court finds the mandate to be unconstitutional but (despite the deliberate lack of a severability clause) does not strike down the rest of the ACA, folks who favor the law will be scrambling to find ways to increase the purchase of insurance without a direct government fine/imprisonment, etc. These might be among the measures used, but I'm sure there are better ideas out there. I'd like to read about them somewhere.

To show how silly all of this is, a per person tax against which the value of purchased health insurance is deductable solves the problem. It's 100% Constitutional and 100% identical to a mandate and a penalty. But again, sematics often seem important to people.

I'm really more interested in the best approach, though.

 

[ziggy29]

The bigger issue is many years ago society decided every individual should receive a minimum of health care, regardless of resources or situation. The requirement was placed on service providers such as hospitals, but not on the individuals. This has created one distortion (and led to many more) and it needs to be reconciled. As long as society - and the taxpayer - is obligated to provide care, the individual that opts out gets, in part, a free ride.

Yep. To me, the question of whether or not health care is a "right" is the wrong question, and I think those who press the issue by saying it *is* a right are barking up the wrong tree. I think they are inviting opposition that might not be there if they couched the question in terms of human decency instead of human rights.

I personally take a more libertarian view of a "right." I like the Jeffersonian test with regard to religious freedom here -- if it "neither picks my pocket nor breaks my leg," it's probably a human right. And by that definition, health care is not a right, because you can't exercise it without forcibly taking from someone else who may or may not be willing. BUT ---

I don't strictly see this in terms of natural rights. This is 2012, not 1787. Society has changed a little bit in 225 years. Rather than suggest it's a right, I'd say this:

Is it something that a prosperous and compassionate society wants to find a way to provide to all of its citizens?

I don't think it's a right, but I agree with what I boldfaced above. I for one don't know how people can live with a conscience that would suggest letting people die from treatable conditions because they can't afford it. And to be fair, I don't see anyone in this debate who suggests we *should* be okay with that. The question is -- how do we implement and pay for a system which doesn't allow it -- and that doesn't break the bank?

I see no one advocating for the status quo, which to me (as an individual, not a mod) is at least a nudge in the right direction. I think we all know the system is dysfunctional if not totally broken.

We all agree it's dysfunctional if not broken. We even agree on some details about how to fix it. The question, as I see it, is -- are we going to let what we disagree on get in the way of reforming what we do agree on?

 

[samclem]

To show how silly all of this is, a per person tax against which the value of purchased health insurance is deductable solves the problem. It's 100% Constitutional and 100% identical to a mandate and a penalty. But again, sematics often seem important to people.

The law could have been written that way, but it wasn't. For political reasons we both know. "If you earn less than $250,000, your taxes won't go up." Or words to that effect. Semantics, I guess. Lots of other reasons, too. So, here we are. And there's no way Congress will pass anything like this again anytime soon. Those that want this thing to work will have to find a way to make this imperfect creature sing and dance.

Putting on the Ritz

 

[Free To Canoe]

While it can indeed be difficult for the consumer to compare doctor prices, the financial luster of a medical career is clearly in decline.
Here's a very interesting & well-referenced analysis of ROI (Return on Investment) for medical education:
The Deceptive Income of Physicians
Physician bankruptcy, previously rare, is now not unusual-
Small Business: Doctors going broke - Jan. 5, 2012
And the "cost" of being a physician is not measured just in $$, but in a toll on personal health inc. increased rates of suicide, divorce, and cardiovascular disease compared to the general population.
Physician wellness: a missing quality indicator : The Lancet
FWIW- Medical schools are increasing tuition not out of greed but in an effort to stay afloat-
AAMC Study: Recession Forced U.S. Medical Schools to Take New Tack -- AAFP News Now -- American Academy of Family Physicians
Interestingly, the number of med school applicants in US has NOT been steadily increasing over past 20yrs but has waxed and waned with economic conditions.
https://www.aamc.org/data/facts/

Really good thread.
I noticed that that in the last link, the number of applicants varies over the years but that the number of doctors graduating has stayed steady at about 16,000 over the years. Meanwhile, the population has increased so that there are less and less doctors per person over time.

Why do so many people have to go overseas for their medical education?

 

[samclem]

Why do so many people have to go overseas for their medical education?

Seems strange, doesn't it, that more people don't enter the well respected and rewarding field of medicine? Well, for years the AMA has successfully fought to limit the number of new doctors trained in the US. Various means have been used (most obvious was the shutting down of medical schools after the Flexner Report in 1910). The LCME--with members appointed by the AMA--decides how many students will be trained each year in US medical schools. For years the AMA lobbied Congress to limit the number of funded residencies in the US to about 100,000 per year (most residencies are funded by HHS--specifically Medicare). Since every doctor needs to go through residency,this serves as an effective cap on the US production of doctors.

For a long time the AMA predicted a looming "doctor glut" ("glut" being in the eye of the beholder I suppose). That was the rationale for their actions. Some glut. Cynics might suspect this was all intended to limit the supply of doctors and assure that the pay for US physicians remained among the highest in the world. Naah.

When we ask why our medical costs are so high, I hope we'll consider these types of deliberate "market failures" as well.

 

[Gone4Good]

The law could have been written that way, but it wasn't. For political reasons we both know.

Yes, of course.

But for those of us who care about substance, how can two identical things be different Constitutionally; where one way of taking X dollars from people who don't buy insurance is an "un-constitutional confiscation of personal property and an afront to individual liberty" and another way of doing the exact same thing is "shrug, same as the existing tax code?" After all, I can rightfully claim that the government is penalizing me through confiscation of my property for not engaging in the private transaction of taking out a mortgage, or having kids, or dozens of other things the government thinks I should do and taxes me more because I don't do.

It's all really very silly.

 

[Texas Proud]

Yep. To me, the question of whether or not health care is a "right" is the wrong question, and I think those who press the issue by saying it *is* a right are barking up the wrong tree. I think they are inviting opposition that might not be there if they couched the question in terms of human decency instead of human rights.

I personally take a more libertarian view of a "right." I like the Jeffersonian test with regard to religious freedom here -- if it "neither picks my pocket nor breaks my leg," it's probably a human right. And by that definition, health care is not a right, because you can't exercise it without forcibly taking from someone else who may or may not be willing. BUT ---

I don't strictly see this in terms of natural rights. This is 2012, not 1787. Society has changed a little bit in 225 years. Rather than suggest it's a right, I'd say this:

Is it something that a prosperous and compassionate society wants to find a way to provide to all of its citizens?

I don't think it's a right, but I agree with what I boldfaced above. I for one don't know how people can live with a conscience that would suggest letting people die from treatable conditions because they can't afford it. And to be fair, I don't see anyone in this debate who suggests we *should* be okay with that. The question is -- how do we implement and pay for a system which doesn't allow it -- and that doesn't break the bank?

I see no one advocating for the status quo, which to me (as an individual, not a mod) is at least a nudge in the right direction. I think we all know the system is dysfunctional if not totally broken.

We all agree it's dysfunctional if not broken. We even agree on some details about how to fix it. The question, as I see it, is -- are we going to let what we disagree on get in the way of reforming what we do agree on?

Very good post.... and I also agree that healthcare is not a right...

I do agree that we, as a society, should provide a basic level of medical care... I think that I would disagree with you on treatable conditions... I actually think that the cost of healthcare is so expensive for some items that we can not just provide it to everybody for 'free'.... IOW, if you do not want to participate by not buying insurance and you need a heart transplant that cost a lot of money... well, sorry about that... or if you get cancer and the drugs cost $20,000 per month to keep you alive... again, you made a choice and you live or die with it... (yes, I am cold hearted in this aspect)

But, we can provide a decent level of basic medicine for everybody.... the question is where do we draw that line... and who pays for it....

Our system is not designed to provide this at an affordable cost and will not be changed with any of the proposals out there that have a chance of passing...

 

[Gatordoc50]

Seems strange, doesn't it, that more people don't enter the well respected and rewarding field of medicine? Well, for years the AMA has successfully fought to limit the number of new doctors trained in the US. Various means have been used (most obvious was the shutting down of medical schools after the Flexner Report in 1910). The LCME--with members appointed by the AMA--decides how many students will be trained each year in US medical schools. For years the AMA lobbied Congress to limit the number of funded residencies in the US to about 100,000 per year (most residencies are funded by HHS--specifically Medicare). Since every doctor needs to go through residency,this serves as an effective cap on the US production of doctors.

For a long time the AMA predicted a looming "doctor glut" ("glut" being in the eye of the beholder I suppose). That was the rationale for their actions. Some glut. Cynics might suspect this was all intended to limit the supply of doctors and assure that the pay for US physicians remained among the highest in the world. Naah.

When we ask why our medical costs are so high, I hope we'll consider these types of deliberate "market failures" as well.

The U.S. Has about 2.3 physicians per 1000 people. Access is not the problem, IMO. There are countries with more but I doubt those countries are as heavily covered by physician assistants, nurse practitioners, etc. Also, our technology allows for greater efficiency compared to other countries. Don't forget that the lions share of educating Drs. is paid for by the taxpayer. So while flooding the market with docs seems to be an easy answer, it is a bit more complicated. It's really easy to find stats on healthcare costs in the USA, but try to find the total of premiums paid to insurance companies/ year. What percentage of premium is paid out in care? Some say 55 to 65%. I would start there.

 

[samclem]

The U.S. Has about 2.3 physicians per 1000 people. Access is not the problem, IMO. There are countries with more but I doubt those countries are as heavily covered by physician assistants, nurse practitioners, etc. Also, our technology allows for greater efficiency compared to other countries.

Just to be clear, I'm not saying US doctors are overpaid--that's a value judgement I can't make. But I can say US general practitioners are among highest paid in the world. Here's a good, impartial link to some figures. US GP's earn about 25% more than a doctor in the UK, double what a doctor in Australia earns. This is for GPs, I'd bet the difference among more highly paid specialties is quite a bit more.

I'm sure US doctors are very efficient and productive. I'm also sure that if we had more doctors each one would be paid less.

Don't forget that the lions share of educating Drs. is paid for by the taxpayer.

Yep. That government money flooding into the medical education business has done exactly what it has done in other parts of the education business: driven prices up for tuition, books, etc. And since nearly 1/2 of the money spent on medicine in the US is spent by the government, the US taxpayer continues to pay a hefty surcharge year after year due to the artificial shortage of MDs.

How much would the cost of a medical education go down if there were enough medical schools available to train those all the qualified people who want to be doctors?

but try to find the total of premiums paid to insurance companies/ year. What percentage of premium is paid out in care? Some say 55 to 65%. I would start there.

Starting this year, many health insurance companies will have to spend 80% of the premiums they collect on actually providing health care, or rebate the difference to policyholders. We'll see how many rebate checks go out. I also wonder what will count as "providing health care"? 10 page glossy advertising leaflets with a snippet on the back telling people to eat more vegetables? The arbitrary 80% spending level for a fundamentally unmeasurable service as outlined in an unenforceable regulation surely warmed the hearts of those who favor more laws to fix every problem. Why not mandate 100%?

 

[Gone4Good]

An interesting article on doctor pay under the old fee for service scheme and the new one . . .

In February 2009, Michael Zucker told a group of high-paid surgeons something they did not want to hear: The way they earned a salary was about to change.

Zucker is the chief development officer at Baptist Health System, a five-hospital network in San Antonio. For 37 common surgeries, such as hip replacements and pacemaker implants, it would soon collect “bundled” Medicare payments. Traditionally, hospitals and doctors had collected separate fees for each step of such procedures; now they would get a lump sum for treating everything related to the patient’s condition.

If a hospital delivered care for less than the bundled rate, while hitting certain quality metrics, it would keep the difference as profit. But if costs were high and quality was too low, Baptist would lose money. For the first time in their careers, the doctors’ paychecks depended on the quality of the care they provided.

Four surgeons quit in protest.

The program launched in June 2009 with a checklist of quality metrics. To earn a bonus, surgeons would, among other things, need to ensure that antibiotics were administered an hour before surgery and halted 24 hours after, reducing the chances of costly complications.

Only three doctors hit the metrics that first month, but their bonuses caught the attention of others. “There was a lot of, ‘Why are those doctors getting more, and I’m not?” Zucker says. Eight doctors got bonus payments in July; two dozen got them in August. Compliance with certain quality metrics steadily climbed from 89 percent to 98 percent in three months

 

[Gatordoc50]

An interesting article on doctor pay under the old fee for service scheme and the new one . . .

A movement from a patient oriented system to a cost oriented system. Denying treatment when it becomes cost inefficient. Eventually, competition will arise and private hospitals will provide treatment to those patients denied care under the new system. A government and insurance controlled system for basic needs and a private system for extensive care, for those that can afford it.

 

[samclem]

A movement from a patient oriented system to a cost oriented system. Denying treatment when it becomes cost inefficient. Eventually, competition will arise and private hospitals will provide treatment to those patients denied care under the new system. A government and insurance controlled system for basic needs and a private system for extensive care, for those that can afford it.

That might be the way it goes. The public system will fulfill our national angst about assuring everyone has basic care (paid for by taxpayers). Like all services paid for by others, demand will outstrip supply and stringent cost control measures will be required. The private system would include self-pay, pre-pay (insurance) and also charity hospitals not receiving government funds. Maybe some of the expensive private care will be done in other countries.

 

[Gone4Good]

A movement from a patient oriented system to a cost oriented system. Denying treatment when it becomes cost inefficient. Eventually, competition will arise and private hospitals will provide treatment to those patients denied care under the new system. A government and insurance controlled system for basic needs and a private system for extensive care, for those that can afford it.

I don't see anything in here about denying care. I see incentives to reaward efficiency instead of simply paying for volume.

People forget that fully competitive markets "deny" services all the time and by design. If that weren't true, I'd have a private jet.

 

[Gone4Good]

Like all services paid for by others, demand will outstrip supply and stringent cost control measures will be required.

All insurance markets work this way . . . with someone else paying the bills. Even if we buy insurance in a completely free market, our actual care for most things is paid by a third party. As long as we have insurance, the people using health services are removed from the impact of price at the point of consumption.

I think part of the challenge in dealing with health care economics is the propensity to compare possible solutions to an ideal market solution that doesn't exist.

 

[Gatordoc50]

I don't see anything in here about denying care. I see incentives to reaward efficiency instead of simply paying for volume.

People forget that fully competitive markets "deny" services all the time and by design. If that weren't true, I'd have a private jet.

To use a sports analogy, we are no longer going to play ball with anyone unless we know we can beat them. Thus improving our winning percentage.

 

[samclem]

I think part of the challenge in dealing with health care economics is the propensity to compare possible solutions to an ideal market solution that doesn't exist.

Yes. And that the value of the services changes with frame of reference. I can sit here and objectively "know" that $200,000 buys more happiness and "good" if it is used to buy basic meals, vaccinations, textbooks, or other items rather than surgery and supportive care for an 80 YO cancer patient. But if that cancer patient is a loved one and this is the (very miniscule) chance to get another few years of life, and the family isn't ready to let go, and the money is "someone else's" then the situation is different.