Health care cost bubble

[dex]

Dex, health insurance is just one piece and I know about the profit margins. We do little to contain costs. One piece of this problem of doing nothing is shown by huge regional cost differences. I've linked to a couple of studies on this issue before. This letter from a couple of the researchers summaries the issue:

There are marked variations in spending observed across hospitals and regions that are largely due to how much time similar patients spend in the hospital, how many specialists they see and how many diagnostic tests they receive. On average, health systems that spend more on these services are less likely to deliver safe and effective care.
The key point: It’s not how much you spend. It’s what you spend it on. And all thoughtful scholars agree that the United States has tremendous room to improve the quality and costs of care.

http://www.nytimes.com/2010/06/11/opinion/l11health.html

That is an interesting point. The question is if all the thing were done would it offset the trends that increase cost and decrease revenues. I think they would be a speed bump.

Right now, one reason health ins. premiums are increasing is because fewer people have ins either due to layoffs or companies no longer giving it as a benefit. Costs are spread among fewer ins. payees. This trend will continue after the recession.

How about others -
Aging baby boomers - w/ins using more services
Aging baby boomers w/o ins using more services*
Poor w/o ins. using services that the hospital must provide*
Workers & families w/o ins. using services that the hospital must provide*
Politically mandated services that must be covered for 'new ins. policies' under Obamacare.
Expansion of Obamacare - similar to how other gov't programs have expanded.

In short - cost cutting can not offset revenue decreases and political mandated cost increases.

Increased premiums or government plan with higher taxes or increased debt is the only way to pay for health ins at this point.

*hospitals will have to recoup their costs someplace

The mistake most make int the health ins. question is that they focus on cost. How to increase health ins. participation and revenues would go further to addressing the issue for everyone.

 

[nun]

What is your and criteria for cost cutting?
For example:
-Must everyone be covered?
- Would you be OK with eliminating the law(?) that anyone that enters an emergency room, must be treated regardless of their ability to pay, or their nationality?
-What kind of system - individual pay, government pay, combination?
-What about increasing the national debt; is that OK?
-Can services be cut as in the UK? What are examples that you would approve?
- How would you describe an acceptably level of cost to the consumer?

It appears, that you are OK with the UK system and their cuts, so why is not an answer for you?

Right now the US system has rationing as insurance companies regularly refuse procedures for cost or pre existing conditions, so to hold the US system up as in some way superior to those in Europe is obviously wrong.
I am amazed at the reaction to the thought of adopting some proven ideas that provide universal coverage and better health care at a lower cost.

Personally I would like to see a single payer system similar to that of Canada. However, that would be too radical for the US. So the Japanese model of private insurance companies regulated by the government might work. It should be done on a State to State basis to accommodate regional differences. Coverage should be Universal to keep costs down. More should be invested in public health and preventative medicine. I believe that part of the higher cost of US health care compared to the rest of the world is that many people don't go to the doctor regularly becasue they don't have insurance or are frightened of the deductible. lack of ealy treatment makes the resulting acute care expensive. The multiple levels of administration and duplication of effort in the US system is also an area for cost savings.

 

[dgoldenz]

I went to the doctor this morning and was prescribed two medications - since I have an HSA plan, I specifically asked if there was a generic available that would work. Just went and picked them up and the cost was a total of $5.17 for both. One was free and the other was $5.15. The free one had a brand name equivalent that costs $305 and the one that was $5.15 has a brand name that costs $110. How many people with a co-pay plan would have just taken the brand name and not bothered to ask about a generic? And people wonder why health insurance is so expensive...

 

[travelover]

I went to the doctor this morning and was prescribed two medications - since I have an HSA plan, I specifically asked if there was a generic available that would work. Just went and picked them up and the cost was a total of $5.17 for both. One was free and the other was $5.15. The free one had a brand name equivalent that costs $305 and the one that was $5.15 has a brand name that costs $110. How many people with a co-pay plan would have just taken the brand name and not bothered to ask about a generic? And people wonder why health insurance is so expensive...

Too bad you didn't have coupons from the brand name drug manufacturer. Then your out of pocket cost would have been zero and the insurance company would have been billed $415.

 

[dex]

Right now the US system has rationing as insurance companies regularly refuse procedures for cost

I don't think that is correct, if it is a covered procedure they pay for it - they can refuse to pay for it if is an experimental procedure.

or pre existing conditions

Pre existing conditions are an issue when you get the policy - either not covered or pay a higher premium.

so to hold the US system up as in some way superior to those in Europe is obviously wrong.

Which poster/post said the above?

 

[Martha]

I went to the doctor this morning and was prescribed two medications - since I have an HSA plan, I specifically asked if there was a generic available that would work. Just went and picked them up and the cost was a total of $5.17 for both. One was free and the other was $5.15. The free one had a brand name equivalent that costs $305 and the one that was $5.15 has a brand name that costs $110. How many people with a co-pay plan would have just taken the brand name and not bothered to ask about a generic? And people wonder why health insurance is so expensive...

It does seem like more and more insurance plans have much lower copays for generic drugs so using generics is reinforced more often than it used to be.

But on the other hand, some drugs never go generic. There is no generic insulin available as it is a biologic and subject to different rules than other drugs. The FDA has to put out guidelines for approval of generic insulin. It hasn't and there is little indication that it is going to do so.

Complexity has a cost.

 

[M Paquette]

Right now the US system has rationing as insurance companies regularly refuse procedures for cost or pre existing conditions, so to hold the US system up as in some way superior to those in Europe is obviously wrong.

Rationing is another now-meaningless buzzword. In the US system, you can obtain any amount of care you like, AS LONG AS YOUR RESOURCES CAN PAY FOR IT. Now, your insurance company may not pay for some things, but if you're Warren Buffett, or one of the Koch brothers, you can still get pretty much whatever care you want.

The argument that you can't get care your resources don't cover constitutes rationing might just as well apply to buying groceries. You can't buy more groceries than your resources (cash, credit, WIC card, etc) will cover. Does the US system ration food? Similarly, you can't buy cars that your resources won't extend to cover. Does the US system ration cars? If your answer to these is yes, congratulations! You've just rendered another word meaningless, or at best, neatly shoved it through the looking-glass.

`When I use a word,' Humpty Dumpty said in rather a scornful tone, `it means just what I choose it to mean -- neither more nor less.'

This is why we won't see any meaningful action on health care issues in the US. Idiot America is in charge of the debate, busily creating soundbites as a substitute for reasoned thought. "Rationed healthcare" "Death panels" "Socialism!" Truthiness takes precedence over facts. Rationality went thataway...

US healthcare is expensive for the results it delivers. That makes the insurance, which represents the averaged cost of healthcare over a covered group, plus the cost of administration and perhaps profits, expensive. Whether you buy a low deductible policy, or a high deductible, when you add the premiums and deductibles up for a year's coverage the price comes out roughly the same, representing very roughly the average cost of care for the slice of the population that has that policy.

Shopping for lower costs, bringing market forces into play, would be a wonderful thing. Alas, there is a certain amount of 'fixing' in the marketplace. There are a fixed number of positions available for internships and residencies for med school grads (National Residency Matching Program), which serves to limit the number of doctors in practice. (The AMA has recently moved from projecting a surplus of doctors to projecting a shortage, so perhaps they'll stop working to limit the supply of doctors.) Large hospital chains, such as Sutter Health, have come to dominate services in some regions. Sutter is notorious for it's arrangements to ban disclosure of its prices for various services.

Where supply is deliberately held back, and pricing is concealed, don't expect a free market behavior to emerge. A free market would be nice, but would go against the interests of current participants in the existing market.