Thoughtful Conversation About the US Healthcare System

[Chuckanut]

Once upon a time in the US things worked like this. People could buy “Major Medical” insurance for serious illnesses, injuries, and hospitalizations and took care of the smaller and routine things themselves. Doctors also made house calls, sigh!

It seems to me that the high deductible plans are trying to bring that back to a small extent. Or am I wrong? I don't know too much about the HD medical plans.

 

[audreyh1]

It seems to me that the high deductible plans are trying to bring that back to a small extent. Or am I wrong? I don't know too much about the HD medical plans.

Not really. They certainly help with insurance negotiated rates, but that doesn’t bring retail prices down.

 

[pb4uski]

Perhaps. Employer plans do effectively subsidize low Medicare and Medicaid reimbursement rates. But that just means that employers and working people are paying more than their fair share which is a stealth tax.

I'm hopeful that AI will increase healthcare service productivity and help offset the decline in docs and nurses.

 

[pb4uski]

... They compare spending with developed European countries and factor in many aspects commonly mentioned, such as needless testing, cost of malpractice and litigation, insurance company overhead. Their conclusion is the cost of physician and hospital services is higher because the providers in the US charge more relative to everything else. ...

I agree that the issue is what healthcare providers charge, but am skeptical that insurance company overhead given that ACA requires that claims and claim admin must be 80% of premiums as I recall, with the other 20% (at most) to cover overhead, taxes and profit.

 

[Lorenzo]

Once upon a time in the US things worked like this. People could buy “Major Medical” insurance for serious illnesses, injuries, and hospitalizations and took care of the smaller and routine things themselves. Doctors also made house calls, sigh!

Right. Insurance of any kind, as I think of it, is to protect against events that the insured would find impossible to handle out of pocket. And I believe most people thought of it that way decades ago. For the genuinely impoverished, we created Medicaid. Now, rather than "major medical" insurance, we have "health plans," and this seems to have driven up costs, as every participant in the web of entities involved in the system finds a way to skim some profit from every medical encounter.

 

[pb4uski]

Let it not be forgotten that all through our working years we are effectively pre-paying for our Medicare benefits through our FICA payroll deductions and the employer match. I don’t think we seniors are underfunding our share.

What if the Medicare taxes, with interest, along with the Part B premiums are inadequate to pay for a senior's Medicare health care expenses? I suspect that is the case in that the extreme increase in health care costs wasn't expected so premiums were insufficient.

 

[starry night]

What if the Medicare taxes, with interest, along with the Part B premiums are inadequate to pay for a senior's Medicare health care expenses? I suspect that is the case in that the extreme increase in health care costs wasn't expected so premiums were insufficient.

But I expect that this “prepayment” factor, along with Medicare’s ability to negotiate fees/rates for service may explain why Medicare recipients are being charged below “commercial rate”, as cited by Toocold in message #100.

 

[CaptTom]

I would need a lot more analysis to reach the same conclusion. Things that are not "profit driven" in the US are not characterized by being inexpensive and high quality.

Look at public schools for example. How about the US postal service?

I do think a more transparent and market-driven system could improve costs and quality. More transparency on price and quality of services offered by different providers for example.

I'm not sure public schools or the postal service are good examples. Both operate under severely constrained budges controlled by politicians who only want short-term results. And both have become political footballs in our current polarized environment.

I'm a big believer in market forces. But I am not a fan of letting businesses run wild, which is just anarchy. First you must establish the marketplace, then let entrepreneurs compete in it. A marketplace has rules.

A good example is what my former MegaCorp did. They're self-insured. The define the medical benefits they want to offer employees, then they shop for a company to administer the plan. Every so often they find a better deal and sign the next year's contract with a different administrator. The last two I recall were Cigna, then Blue Cross.

Imagine doing that nation-wide. One set of well-defined plans. Everyone knows what's covered and what's out of pocket. The companies which find the most efficient way to meet the requirements will succeed, while any bloated or inefficient ones will fail.

Of course you still have the question of how to pay for that, but there have already been a few posts here on that subject.

 

[pjigar]

I'm a big believer in market forces. But I am not a fan of letting businesses run wild, which is just anarchy. First you must establish the marketplace, then let entrepreneurs compete in it. A marketplace has rules.

We do have rules: e.g. 80% of premiums must go to care, uniform services for plans, etc.
The problem we have had for a few decades was a vicious cycle:
1. Consumer pays premium so they think it is their right to maixmize "use" out of the plan. They show up at doctor office/hospital door steps for every little thing, due to nominal copay (historically). I did for our first born.
2. Medical providers see demand so they can raise price.
3. Insurance company raise premium to account for the increased costs (both from overuse and inflation). Consumer ever more furious, starts over from #1.

Lately, we have seen some restraints from the consumers mainly due to high deductible plans (including me, we used less office visits for our second-born). I don't know how we can put this cat back in the bag.

A good example is what my former MegaCorp did. They're self-insured. The define the medical benefits they want to offer employees, then they shop for a company to administer the plan. Every so often they find a better deal and sign the next year's contract with a different administrator. The last two I recall were Cigna, then Blue Cross.

Imagine doing that nation-wide. One set of well-defined plans. Everyone knows what's covered and what's out of pocket. The companies which find the most efficient way to meet the requirements will succeed, while any bloated or inefficient ones will fail.

Of course you still have the question of how to pay for that, but there have already been a few posts here on that subject.

This would essentially mean a single-payer system. We debated this as a country in the past and the discussions were not very pleasant.

 

[JoeWras]

"Major Medical", wow, there's blast from the past term! Those were the days.

----

I had my back problems when I was on a high deductible plan. You can be sure I was very aware of the costs of everything. I still think HD plans are good. People pay attention because they are paying real bucks instead of some co-pay. I paid a lot of attention. Now that I'm on a PPO, I don't pay attention.

Even when I was on the HD plan, they still made me go through months-long "back protocol" to get an MRI. I went through months of BS that I knew was fruitless since I had the issue for years. But I had to do it. Steroids, PT, etc. Once all that didn't work, I got the MRI, and paid for it out of my pocket. I would have been happy to pay for it straight away.

My MRI was so bad the tech asked me if I needed a ride home. Then he shut up because he knew he went too far and was playing doctor.

I found the whole process of going through protocol baffling because I read here about people getting an MRI at a drop of a hat. Yet protocol for back problems makes sense, because well over 80% of people just have a strain, and the delay of protocol is usually all they need. They usually don't have jagged bone spurs pressing on their spinal cord roots. Sometimes delay makes sense. I knew it didn't in my case, but I went along and suffered those months because I'm a good doo-bee, I guess.

 

[Flieger]

I'm not sure public schools or the postal service are good examples. Both operate under severely constrained budges....

I would agree on postal, but they are also up against a bevy of free market competitors. Schools, not so much. Spending is way up with no results, primarily due to lack of free market competition but that may change hopefully improving both options.

Flieger

 

[surprising]

Even when I was on the HD plan, they still made me go through months-long "back protocol" to get an MRI. I went through months of BS that I knew was fruitless since I had the issue for years. But I had to do it. Steroids, PT, etc. Once all that didn't work, I got the MRI, and paid for it out of my pocket. I would have been happy to pay for it straight away.

This is interesting to me. Recently I had severe back pain for a couple days but then it subsided. I told my PCP about it and he ordered MRI right away, which showed a bulging disc. There was no push-back from insurance either. Does this mean that the PCP can decide whether to follow 'back protocol'?

 

[Flieger]

I had to have CT w/contrast every 6 months for 3 years, then 1x each year until next year (5 years total) due to cancer diagnosis and surgery. Never had a question asked.

Flieger

 

[sengsational]

This is interesting to me. Recently I had severe back pain for a couple days but then it subsided. I told my PCP about it and he ordered MRI right away, which showed a bulging disc. There was no push-back from insurance either. Does this mean that the PCP can decide whether to follow 'back protocol'?

I wasn't all that surprised at the push back on an MRI if if it was a limited network policy. Sounded more like an insurance company that was over-managing treatments, and less about whether it was high deductible or not. When I was on a limited network ACA policy, they were over managing often, requiring doctors and patients to fill out forms, explain why the treatment prescribed is the best way and their alternatives are not applicable. They make these "utilization management" procedures with the sole purpose of slowing things down which makes people give-up trying to get insurance to pay. They'd have a harder time justifying their rules if they had different rules for high deductible vs regular policies. So even though the bill would be paid by the insured in the case of an HD policy (paid at the negotiated rate), to be consistent, they still would make the insured jump through the hoops.

 

[JoeWras]

Let me put it this way. Right now I'm with BC/BS and pretty happy, although DW just got a big old delay on a medication that required a couple of months of back and forth between them and her doctor to get it approved.

During my back surgery days, the insurance company I had was UHC, the one that is in the news right now about denials, utilization management, etc.

 

[Montecfo]

I'm not sure public schools or the postal service are good examples. Both operate under severely constrained budges controlled by politicians who only want short-term results. And both have become political footballs in our current polarized environment.

They are good examples in not being profit driven but also not being viewed as cheaper or better. You can also look abroad at most anything that is state run. And health care itself is probably the largest political.football to use your term.

To your further point, in my role as CFO I helped select and participate insured health care plans. I and my company liked them because of choice in plan design largely untouched by federal legislation (though state laws do apply), and better ability to manage costs. You could tailor the plan to our population and to our budget. That to me.is innovative and I suspect most medium and large employers are similarly self insured.

Making one plan the only plan would eliminate choice as I see it. Bur it is an innovative idea.

It seems to me part of managing cost would have to include getting more doctors, in addition to the push for price and quality transparency.

A system where services are sold and purchased and neither the doctor nor the patient knows the price will not be cheap or efficient, as I see it.

 

[Markola]

I'm hopeful that AI will increase healthcare service productivity and help offset the decline in docs and nurses.
[/QUOTE]

+1. It’s a vastly inefficient field, and ripe for disruption by AI.

 

[Taxman59]

About the competition between employers for workers in the 40's, I heard the same thing. Apparently IBM in New York was vying for workers from a shoe plant, and they got into a bidding war with employee benefits because they weren't permitted to increase wages. Hearsay from my days with the old guys from Fishkill, but I think it was a thing.

I did some research on tax issues back into the 30's and 40's. There were several companies that raised wages during the war and were slapped down. The companies and the guvment agreed to allow fringe benefits, including health insurance.

 

[Alan]

I worked for a mega-chemical company in the UK and when I moved to the USA on secondment and under their US subsidiary I noticed that the fringe benefits for the US company were 39% of the salary bill compared with 17% for their UK company. The UK company also included private health insurance as a fringe benefit, plus it had a much more generous paid vacation allowance, and without knowing the fringe benefit breakdown I put it down to the difference in health insurance. Before moving to the USA we had had employer-based health insurance for 8 years but were fortunate never to have needed it.

On returning to the UK in 2017 we took out private health insurance which costs ~$210/month for the both of us and includes dental and vision. We use it every year for dental and vision and have also used it for 2 cataract surgeries, knee surgery, cardiology and video GP consultations. The EOBs from the various surgeries were incredibly simple and straight forward, just 1 EOB, and only after the follow-up appointments and it includes surgeon, hospital etc, no co-pay, just the annual deductible (£500) applied.

 

[Closet_Gamer]

The reality in the US is that we do not have a healthcare system but rather a health insurance system. No matter how it is spun, health insurance is simply not health care.

Many people advocate for "Medicare for all" which would no doubt provide more access and negotiating prices of drugs would help, but administrative costs would soar and like Medicare we would continue the health insurance industry rather than a healthcare system. We would be simply throwing a lot more money at basically the same solution we now have but with possible broader benefits.

A system like the British NHS would be the best solution, but that would mean nationalizing all the hospitals, ambulance services, paramedic services, etc. and negotiating a service contract with the Medical associations to establish a fee for service and service obligations for any doctor that wanted to participate!

That of course is dead on arrival and nothing more than wishful thinking.

I cannot see a solution, especially considering our political and capitalistic environment.

I lived in the UK for three years. During that time we wound up with a couple critical interactions with the NHS. In one case my wife almost died and they did save her life.

If at any point I could have snapped my fingers and been back in the US healthcare system I would have. In truly life threatening situations they do a good job if you’re in the right places, which we were.

Otherwise, my experience with NHS (and even their version of 911) is that it was flat out dangerous. I will spare you the litany of examples. Suffice it to say, I don’t think that grass is greener.

 

[Flieger]

I lived in the UK for three years. During that time we wound up with a couple critical interactions with the NHS. In one case my wife almost died and they did save her life.

If at any point I could have snapped my fingers and been back in the US healthcare system I would have. In truly life threatening situations they do a good job if you’re in the right places, which we were.

Otherwise, my experience with NHS (and even their version of 911) is that it was flat out dangerous. I will spare you the litany of examples. Suffice it to say, I don’t think that grass is greener.

Agree. Lived in Germany for 2 years. Although I did not have to utilize emergency services, I befriended and knew Germans who did and heard their stories. Also heard from those that were expats from Germany here and their experiences and comparisons.

Sometimes ideologies overcome rational thinking.

Flieger

 

[Alan]

A lot of countries provide universal health care either through single-payer, 100% mandated private insurance, or a combination of both. I believe that a couple of things they all have in common is that all healthcare providers and insurance companies have to be non-profit and that a regulatory body imposes price caps on all procedures.

 

[CaptTom]

To your further point, in my role as CFO I helped select and participate insured health care plans. I and my company liked them because of choice in plan design largely untouched by federal legislation (though state laws do apply), and better ability to manage costs. You could tailor the plan to our population and to our budget. That to me.is innovative and I suspect most medium and large employers are similarly self insured.

I was an employee in a MegaCorp which faced these same issues. I will point out that none of us were fooled by the HR people who were always on about how they were doing us all a big favor by reducing our health insurance benefit every year. Doing so in the name of "choice" rang hollow when we were getting essentially the same care, with higher costs to the employee, with each change.

That said, I agree that this is not the company's fault. As was pointed out here already, the whole idea of offering health "insurance" as a benefit of employment was sort of forced on corporate America, and I don't blame them for wanting to reduce the cost. I just wish they were more honest about it, at least at the company I worked for.

It seems to me part of managing cost would have to include getting more doctors, in addition to the push for price and quality transparency.

A system where services are sold and purchased and neither the doctor nor the patient knows the price will not be cheap or efficient, as I see it.

Agreed. That whole middle tier of insurance companies and MegaCorp hospital/health care conglomerates only further isolates patients from their providers.

 

[JoeWras]

On returning to the UK in 2017 we took out private health insurance which costs ~$210/month for the both of us and includes dental and vision. We use it every year for dental and vision and have also used it for 2 cataract surgeries, knee surgery, cardiology and video GP consultations. The EOBs from the various surgeries were incredibly simple and straight forward, just 1 EOB, and only after the follow-up appointments and it includes surgeon, hospital etc, no co-pay, just the annual deductible (£500) applied.

Simple EOBs would be nice and a good step forward to reform.

People are hoppin' mad over airline fare ala carte fees. Congress may even get involved. YET, we accept the absolute ridiculous hospital and surgery bills with all their junk fees. Oh, and those bills frequently take over 6 months to come, long after you remember anything from the event. Ridiculous.

My mom saved the bill she got for my delivery into this world. It was typed on a card and two lines long, one for the hospital, one for the doctor. I believe the fee was about $300. Inflation adjusted to about $3100 today.

 

[Montecfo]

A lot of countries provide universal health care either through single-payer, 100% mandated private insurance, or a combination of both. I believe that a couple of things they all have in common is that all healthcare providers and insurance companies have to be non-profit and that a regulatory body imposes price caps on all procedures.

Which is fine. They can get cheap drugs that Americans are subsidizing.