Obamacare on the Path to making People wait 4 Hours to see a Doctor like in Canada

Posted by PITHOCRATES - January 25th, 2014

Week in Review

Obamacare so far has been a disaster.  The website is a billion dollar embarrassment for the Obama administration.  The lack of enrollees.  Far more old and sick signing up than young and healthy.  Millions of people losing the health insurance they liked and wanted to keep.  People losing their doctors.  People going to doctors thinking they have health insurance only to find out they don’t.  The health insurers are looking at huge losses unless they get a federal bailout.  Even the credit rating agencies have said the entire health insurance industry is in danger of going belly up because of Obamacare.

Still the Obamacare supporters say everything will be fine.  Just give it time.  Sure, there has been a bump or two during the rollout.  But it’s getting better every day.  While there are some who are saying these problems are all due to the insurance companies.  And that we need to cut them out of the loop.  And go with a single-payer system.  Like they have in Canada.  So we can at last have the same high-quality system they have where everyone has everything they need when they need it regardless of cost.  A health care utopia.  Where if you’re sick it doesn’t matter if you’re rich or poor.  You’ll get to wait the same 4 hours to see a doctor as everyone else in Canada has to wait (see Would you pay to not wait in your doctor’s waiting room? This company is betting on it by Erin Anderssen posted 1/22/2014 on The Globe and Mail).

In your hand, you hold the number 52. The nurse shepherding patients through the walk-in clinic just called 12, which means you can expect to be waiting hours.

What’s your time worth? A Montreal-based company is betting you’d be willing to pay less than the equivalent of a grande latte for your “freedom” from the coughing, sniffling and tedium of a doctor’s waiting room. Chronometriq has created a text service – $3 in Quebec (and the expected cost of $4 in Ontario) – that will buzz you on your phone as your number approaches. The company expects the technology, now in place in 24 clinics in Quebec, to expand to 50 walk-in clinics by spring, including some Ontario locations, pending approval from the provincial health ministry.

Its next stop is hospital emergency rooms, where Canadians endure longer waits than citizens of 11 other OECD countries, according to a study released last year.

But it’s also controversial: After all, the program introduces a questionable user-pay element to Canada’s health care system. (The program is optional – you can still save your pennies and linger in the waiting room.)

As Natalie Mehra, executive director of the Ontario Health Coalition, points out, it won’t do anything to reduce actual wait times in ERs, where according to the international study 31 per cent of Canadian wa[i]ted more than four hours to be seen by a doctor in 2010. (The average among all countries included was 12 per cent.) “It is not improving access to care at all,” Mehra says. “The issue is people waiting too long to get in the door.”

That’s the point, argues Louis Parent, Chronometriq vice-president. “How many years have government said they will tackle wait times. And nothing has changed. We have to face facts.”

Critics of national health care say it will lead to rationing and longer wait times.  As it has in Canada.  Why?  Because government can’t do anything well.  The huge bureaucracy adds costs by adding layers of people between doctors and patients.  To determine what treatment a doctor may provide for his or her patient.  More and more health care dollars pay for the bureaucracy instead of actually treating patients.  While at the same time an aging population is reducing the number of taxpayers while increasing the number of people consuming taxpayer-funded health care services.  Which means health care providers have to do more with less.  They have to carefully ration what they have.  Which leads to longer waiting times as patients wait their turn for those limited health care services.

This is where the left wants to take the American health care system to.  Even as countries around the world are having the same problems Canada has.  Many of which are privatizing parts of their national health care.  Even Canada.  Who is now charging some patients for the privilege of receiving a text to tell them when their 4 hours of waiting are nearly up.  Of course the Canadians are having these problems because they are not as smart as the American left.  Who after never doing it before will know how to do national health care right.  Just look at how well they rolled out Obamacare.

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Health Care Economics

Posted by PITHOCRATES - January 20th, 2014

Economics 101

Because Obamacare Insurance pays for everything Under the Sun it is anything but Insurance

Do you know what the problem is with health care?  Insurance plans that give away free flu shots.  Not that flu shots are bad.  They’re not.  And it’s a good thing for everyone to get one every year at the onset of the flu season.  For it does seem to limit the spread of the flu virus.  It’s because we get a flu shot every year is why insurance shouldn’t pay for it.  Because we know about this expense.  And we can budget for it.  Just like we can budget for our monthly cellular bill.  Which is in most cases more than ten times the cost of one annual flu shot.

When Lloyds of London started selling marine insurance at that coffee shop they were selling insurance.  Not welfare.  Losing a ship at sea caused a huge financial loss.  And shippers wanted to mitigate that risk.  So every shipper paid a SMALL premium to protect against a LARGE loss.  A POTENTIAL sinking and loss of cargo.  Not every ship sank, though.  In fact, most ships did not.  Which is why that little bit from everyone was able to pay the financial loss of the few shippers that lost their ship and cargo.  But that’s all that Lloyd’s of London paid for.  They didn’t pay a dime to shippers whose ships didn’t sink.  No, those shippers paid every cent they incurred (crew, food, rum, etc.) to ship things across those perilous oceans.  Because they could expect those costs.  And they could budget for them.

This is how insurance works.  Which isn’t how our current health insurance system works.  No.  Today people don’t want to pay for anything out-of-pocket.  Not the unexpected catastrophic costs.  Or the EXPECTED small costs that everyone can budget for in their personal lives.  Like an annual flu shot.  Childhood vaccinations.  Annual checkups.  Childbirth.  Etc.  Even the unexpected things that aren’t that expensive.  Like the stitches required when a child falls off of a bike.  Things that would cost less than someone’s monthly cellular bill.  Or things that people can plan and save for.  Like a house.  A car.  Or a child.  Which is why Obamacare insurance is not insurance.  It pays for way too many expected costs that we can budget for.  And because it does it only increases the cost of our health insurance policies.  Which are now anything but insurance.

Free Market Forces and Insurance for Catastrophic Costs will Fix any Problems in our Health Care System

When we pay these things out-of-pocket there are market forces in play.  For a doctor is not going to charge someone they’ve been seeing for years as much as he will charge a faceless insurance company.  Even today some doctors will waive some fees to help some of their long-time patients during a time of financial hardship.  Because there is a relationship between doctor and patient.  And they want to help.  Which is why they sometimes overcharge insurance companies to recover costs they can’t recover in full from other patients.  (Which is why insurance companies are vigilant in denying overbillings).  Especially those things government pays for.  Medicaid.  And Medicare.  Which the government discounts.  Leaving health care providers little choice but to overbill others to pay for what the government does not.

When we pay out-of-pocket doctors can’t charge as much.  Because they need patients.  If they charge too much their patients may find another good doctor that charges a little less.  Perhaps a younger one trying to establish a practice.  These are market forces.  Just like there are everywhere else in the economy.  Even a cancer patient requiring an expensive miracle drug benefits from market forces.  If there was true insurance in our health care system, that is.  Cancer is an unexpected and catastrophic cost.  But not everyone gets cancer.  Just as every ship does not sink.  Everyone would pay a small fee to insure against a financial loss that can result from cancer.  Where that little bit from everyone buying a catastrophic health insurance policy was able to pay the financial loss of the unfortunate few that require cancer treatment.  Even one including a costly miracle drug.  Because only a few from a large pool would incur these financial losses insurers would compete against other insurers for this business.  Just like they do to insure houses.  And ships crossing perilous oceans.

Health care would work better in the free market.  It doesn’t today because government changed that.  Starting with FDR putting a ceiling on wages.  Which forced employers to offer generous benefits to get the best workers to work for them when they couldn’t offer them more pay.  This was the beginning.  Now the health insurance industry is so bastardized that it doesn’t even resemble insurance anymore.  It’s just a massive cost transfer from one group of people to another.  Instead of a pooling of money to insure against financial risk.  For the few unexpected and catastrophic costs we cannot afford or budget for to pay out-of-pocket.

Because our Health Care System is the Most Expensive in the World it is the Best in the World

The American health care system is the finest in the world.  When you have a serious health care issue and you have the wherewithal there’s only one place you’re going for your medical care.  The United States.  And the best costs.  And it’s because it is so costly that people enter into the health care industry to do wonderful things.  Such as pharmaceutical companies.  Who many rail against for charging so much for the miracle drugs only they produce.  It’s a free country.  Anyone could have created that miracle drug.  All they had to do was to spend a boatload of money for years on other drugs that were losers.  Until they finally found one that wasn’t a loser.  That’s all you had to do.  Yet few do it.  Why?

Because creating miracle drugs is an extremely expensive and often futile endeavor.  Which is why we award patents to the few who do.  Which is the only reason they pour hundreds of millions of dollars into research and development and pay massive liability insurance premiums for taking a huge risk to put a drug onto the market that may harm or kill people.  They do this on the CHANCE that they may develop at least one successful drug that will pay for all of the costs incurred to develop this one drug, the costs for the countless drugs that failed AND provide a profit for their investors.  Who took a huge risk in paying their employees over the many years it took to come up with at least one drug that wasn’t a loser.  Their investors do this only because of the CHANCE that this pharmaceutical will develop that miracle drug that everyone wants.  But most don’t.  And investors just lose their investment.  But it’s the only way miracle drugs become available to us.  Because of rich investors who were willing to risk losing huge amounts of money.

This is what the profit incentive gives us.  The best health care system in the world.  Why the countries based on free market capitalism have the finest health care systems in the world.  And why North Korea, Cuba, the former East Germany, the former Soviet Union, Venezuela, etc., have never given us miracle drugs.  There never was an economic incentive throughout the economy to do so.  Like there is in countries with free market capitalism.  Where everyone at every level pursues profits that result overall in a pharmaceutical industry that produces these miracle drugs.

There is an expression that says you get what you pay for.  Our health care system is the most expensive in the world.  And because it is it is the best in the world.  Trying to inhibit the profit incentive for research and development and forcing medical providers to work for less (steeper Medicaid, Medicare and now Obamacare discounts) will change that.  Because you do get what you pay for.  And those who live/have lived in North Korea, Cuba, the former East Germany, the former Soviet Union, Venezuela, etc., can attest to.

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Marine Insurance, General Average, Mesopotamia, Genoa, Middle Class, Capitalism, London Coffeehouses and Lloyd’s of London

Posted by PITHOCRATES - April 3rd, 2012

History 101

It was in Genoa that Marine Insurance became a Standalone Industry

Risk management dates back to the dawn of civilization.  Perhaps the earliest device we used was fire.  Fire lit up the caves we moved into.  And scared the predators out.  As we transitioned from hunting and gathering to farming we gathered and stored food surpluses to help us through less bountiful times.  To avoid famine.  As artisans rose up and created a prosperous middle class we also created defensive military forces.  To protect that prosperous middle class from outsiders looking to plunder it.

As we put valuable cargoes on ships and sent them long distances over the water we encountered a new kind of risk.  The risk that these cargoes wouldn’t make it to their destinations.  So we created marine insurance.  Including something called ‘general average’.  An agreement where the several shippers shared the cost of any loss of cargo.  If they had to jettison some cargo overboard to save the rest of the cargo or to save the ship.  Some of the proceeds from the cargo they delivered paid for the cargo they didn’t deliver.  Some merchants who borrowed money to finance a shipment paid a little extra.  A risk ‘premium’.  Should the shipment not reach its destination the lender would forgive the loan.

So how long has marine insurance been around?  A long time.  Some of these practices were noted in the Code of Hammurabi (circa 1755 B.C.).  For ancient Mesopotamia was a trading civilization.  That shipped on the Tigris and Euphrates and their tributaries.  Out into the Arabian sea.  And beyond.  Following the coasts until advances in navigation and sail power took them farther from land.  The Greeks and Romans insured their valuable cargoes, too.  As did the Italian city-states that followed them.  Who ruled Mediterranean trade.  And it was in Genoa that marine insurance became a standalone industry.  No longer bundled with other contracts for an additional fee.

As the British Maritime Industry took off so did Lloyd’s of London

But the cargoes got larger.  And the voyages went farther.  Until they were crossing the great oceans.  Increasing the chances that this cargo wasn’t going to make it to its destination.  And when they didn’t the financial losses were larger than ever before.  Because the ships were larger than ever before.  So as the center of shipping moved from the Mediterranean to the ocean trade routes plied by the Europeans (Portugal, Spain, France, the Netherlands and England) the insurance industry followed.  And took the concept of risk management to new levels.

With trade came a prosperous middle class.  Where wealth was no longer the privilege of landholders.  Capitalism transferred that wealth to manufacturers, bankers, merchants, ship owners and, of course, insurers.  You didn’t have to own land anymore to be rich.  All you needed was skill, ability and drive.  It was a brave new world.  And these new capitalists gathered together in London coffeehouses to discuss business.  Including one owned by Edward Lloyd.  On Tower Street.  Where those particularly interested in shipping came to learn the latest in this industry.  And it was where shippers and merchants came to find underwriters to insure their ships and cargoes.

This was the birth of Lloyd’s of London.  And as the British maritime industry took off so did Lloyd’s of London.  As the British Empire spread across the globe international trade grew to new heights.  The Royal Navy protected the sea lanes for that trade.  The British Army protected their far-flung empire.  And Lloyd’s of London insured that valuable cargo.  It was a very symbiotic relationship.  All together they made the British Empire rich.  To show their appreciation of the Royal Navy making this possible Lloyd’s set up a fund to provide for those wounded in the service of their county following Lord Nelson’s victory over the combined French and Spanish fleets at the Battle of Trafalgar.  They continue to provide support for veterans today.  In short, Lloyd’s of London was the place to go to meet your global insurance needs.  From marine insurance they branched into providing ‘inland marine’ insurance needs.  Providing risk management to property beyond ships plying the world’s oceans. 

The Purpose of Insurance is to Let Life Go On after Unexpected and Catastrophic Events

Cuthbert Heath led Lloyd’s in the development of the non-marine insurance business.  Underwriting policies for among other things earthquake and hurricane insurance coverage.   And Lloyd’s helped to rebuild San Francisco after the 1906 earthquake.  With Heath ordering that they pay all of their policies in full irrespective of their policy terms.  They could do that because they were profitable.  Which is a good thing.  Insurers need to be profitable to pay these large claims without being forced out of business.  Which is why when the Titanic sunk in 1912 they were able to pay all policies in full.  And to continue on insuring the shippers and merchants that followed Titanic.  To allow life to proceed after these great tragedies.  And they would do it time and again.  Following 9/11.  And Hurricane Katrina.

This is the purpose of insurance.  Risk management.  So unexpected and catastrophic events don’t end life as we know it.  But, instead, it allows us to carry on.  Even after some of the worst disasters.  Because life must go on.  And that’s what insurance does.  Even people who rely on a particular body part for their livelihood have gone to Lloyd’s to buy insurance.  Perhaps the most famous being Betty Grable.  Who insured her legs for $1 million in 1940.  Pittsburgh Steeler Troy Polamalu has a lucrative endorsement with a shampoo company.  And insured his long hair for $1 million.  Rolling Stones guitarist Keith Richards insured his hands for $1.6 million.  America Ferrera (Ugly Betty) has an endorsement deal with a toothpaste company.  And they insured her smile for $10 million.  Even ‘the Boss’ Bruce Springsteen insured his voice for $6 million. 

People hate insurance companies.  Because they don’t understand how insurance works.  For they only know that they pay a lot in premiums and never receive anything in return.  But this is the way risk management is supposed to work.  And we need risk management.  We need insurance companies.  And we need insurance companies to be profitable.  Meaning that most of us will never see anything in return for all of our premium payments.  So these companies can pay for the large losses of the few who sadly do see something in return for all of their payments.  For insurance companies protect our wealth.  And earning potential.  So life can go on.  Whether we’re raising a family and planning for our children’s future.  Or taking precautions for some unforeseen accident to one of our body parts that may limit our future earning potential.

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FT91: We vilify doctors, hospitals, pharmaceuticals and insurance companies for rising health care costs but we don’t vilify professors or universities responsible for rising tuition costs.

Posted by PITHOCRATES - November 11th, 2011

Fundamental Truth

Greedy Taxpayers are Blamed for the High Cost of Higher Education

Both health care and tuition costs are rising.  They’re out of control.  Both are crises.  We hear about it all the time.  And we’re doing something about it.  Interestingly, though, we’re trying to solve these crises differently.

We’ve identified villains in the health care industry.  Doctors who order unnecessary procedures.  Hospitals that carry out unnecessary procedures.  Greedy pharmaceutical companies that make seniors choose between food and medicine.  And greedy insurance companies who keep raising their premiums while aggressively denying claims.  All who contribute to the rising cost of health care.

So we know who wears the black hats in the health care crisis.  It’s a little different in the tuition crisis.  Do you know who the villains are there?  We are.  The greedy taxpayers.  Who have nothing to do with the rising cost of tuition.  No.  Our crime is our opposition to ever higher taxes.  So we can subsidize ever more of the high cost of higher education.

The Rich Fat Cats above the Professors live like Wall Street Fat Cats

So why are costs so high?  And why aren’t we blaming those who make these costs so high?  Like we blame doctors, hospitals, pharmaceutical companies and insurance companies?

Universities are awash in cash.  From tuition.  From the state.  From corporations.  From benefactors.  From alumni.  And, of course, from college sports.  A multibillion dollar industry.  That doesn’t pay a dime to the athletes that generate all that cash.  So universities have a lot of cash.  Yet tuition costs keep going up.  Why?

What are the costs of a higher education?  There are classrooms.  But these are long-term fixed assets.  That last decades without any improvements.  There are textbooks.  They’re very expensive.  Rarely less than $100.  Which is odd.  Because it’s rare to find a book at Barnes and Nobel for more than $100.  So that’s a profitable enterprise.  Textbook publishing.  While all other publishing is bleeding red and going out of business.  And there are, of course, faculty.

The life of a university professor is pretty sweet.  You get to hide from the real world on campus.  You have great working hours.  You get a lot of time off.  Sometimes all summer.  And have graduate students do all of your busy work.  It’s a charmed life.  And students pay them well for it.  And once they get tenure they can pretty much do whatever they want.  And no one will ever fire them.  No matter how many of their graduates can’t find a job.

And then you have all the rich fat cats above the professors who do even less.  Who drive the same kind of cars the Wall Street fat cats do.  And live in the same kind of houses the Wall Street fat cats live in.  But no one protests these rich fat cats.  Who got rich by ripping off students.  Via the ever rising costs of higher education.

Getting into the University System is like being Knighted in the Old World

The university system is a microcosm of Old World aristocracy.  Getting into the system is like being knighted in the Old World.  And university life is like the Old World.  Where no one challenges your privilege.  Because that wouldn’t be proper behavior.  And lacking the respect due to the privileged class.

Of course this isn’t a problem when you produce great doctors, scientists and engineers who make the world a better place.  We thank those professors who work tirelessly for the betterment of society.  But to those who sucker kids into worthless degree programs?  Where there’s no math?  Only ‘no right or wrong’ essay questions?  And no jobs waiting for them in the private sector?  Well, we’re not quite as enamored with these professors.

Because we’re left to clean up their mess.  From students defaulting on their student loan debt.  Because they can’t get a job.  To the mess they make while protesting Wall Street greed.  Because they can’t get a job.  All the while those responsible for their plights are preparing to raise tuition costs yet again.  As they always have.  And always will do.  Free from blame.  Even though they are more blameworthy than those on Wall Street.

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It’s the Lack of Capitalism in Health Care that Makes it so Expensive and Inaccessible

Posted by PITHOCRATES - November 6th, 2011

Week in Review

Why is health care so expensive in the U.S.?  Apparently it’s because of doctors and insurance companies.  Not the people who set the rules doctors and insurance companies must play by (see Health insurance in America: Obamacare is making health insurers bigger posted 10/29/2011 on The Economist).

Good, cheap health care has long eluded America. Doctors are paid for each service, so they deliver as many as possible, necessary or not. Insurers protect margins by micromanaging claims and hiking premiums.  These perverse incentives are addressed, faintly, by Obamacare. For example, there are pilots to reward hospitals for the quality rather than the quantity of their care. Mostly, however, the reform deals with the symptoms of muddled incentives: high premiums and poor access.

Yes, these are perverse incentives.  But this is what happens when you exclude capitalism from health care.

All of the problems, and I mean ALL of the problems, of health care go back to one fatal flaw in how we pay for health care.  We don’t.  That is, we don’t pay for our own health care.  Others do.  And when the recipient of services rendered doesn’t pay for the services rendered you can’t help but to have these perverse incentives.

When you buy a new fridge you don’t let the salesman sell you the most expensive one with the most features if you can’t afford it.  Because you’re going to say no.  Because you can’t afford it.  Those features are nice.  But they’re not necessary for a happy and healthy life of refrigerating stuff.

But if someone else is paying the bill, guess what?  You’re probably going to get the best.  Because it won’t cost you anymore.

Just like people with good prescription coverage don’t buy generics.  Because it doesn’t cost them any more to buy the name brand.

This is what happens when you don’t pay for what you buy.  This is why health care costs are out of control.  And fixing this problem by making the original problem bigger, having other people pay for your health care, as in Obamacare, won’t do a thing to cut costs or provide more access.  What will happen is what has happened in nations with national health care.  Higher taxes and a rationing of services.  To pay for the out of control rise of costs.  Which, surprise surprise, keep rising.  Even in these countries that have ‘solved’ the problem of out of control costs.

If you want to control costs you have to increase the amount of capitalism in the system.  Not reduce it.  Because this is what capitalism does.  And what bureaucrats can’t do.

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Health Care and the Deficit: Government Bureaucracy vs. Market Forces

Posted by PITHOCRATES - December 12th, 2010

Birth Control and Abortion Bankrupting our Nation

Health care is expensive.  When it comes to the federal budget, nothing costs more.  And its cost will only increase (see Health Care and the Deficit editorial published 12/11/2010 on The New York Times).

This year, Medicare, Medicaid and a related children’s health insurance program will account for more than 20 percent of all federal spending — higher than Social Security or defense. Unless there are big changes, by 2035 federal health care spending — driven by rising medical costs and an aging population — is projected to account for almost 40 percent of the budget.

Politicians are whores who steal from the American people.  Earmarks, kickbacks, patronage, fat pay and benefit packages, uber generous pensions, whatever.  The bottom line is that they’re screwing us while they live a far better life than we ever will.  And as bad as their screwing of us is, their screwing of us ain’t the worse of it.  It’s the entitlement spending that’s gonna bankrupt us.  Especially healthcare spending for old people.

Thanks to birth control and abortion, the American people shrunk their family size starting with the boomer generation.  Instead of 10 kids in a family we started to have only 2 or 3 kids.  And it is this reduction in family size that will ultimately bankrupt our nation.

Cutting Medicare Because Nothing else is Big Enough to Cut

Thanks to birth control and abortion, we have an aging population.  The kids of families with 10+ kids are aging and reaching retirement.  But the kids of families with 2-3 kids are paying their Social Security and Medicare benefits.  More people are collecting benefits than are paying taxes to fund those benefits.  BIG problem.

When FDR implemented the great Ponzi scheme, Social Security, a bunch of people were supporting each beneficiary.  As the population ages, fewer and fewer people are supporting each beneficiary.  So they have to keep raising taxes on each individual.  But there is a limit.  Eventually, an individual will have to pay more in taxes to support a retiree than they spend on their own family.  And few people will whistle a happy tune when more of their hard-earned pay goes to someone else instead of their own family. 

If we’re not having more babies, then we gotta cut costs.  There’s no ifs, ands or buts about it.  So they’re talking about cutting costs.  By making us pay more for our benefits.

The White House commission, headed by Erskine Bowles and Alan Simpson, proposes to wring nearly $400 billion from health care spending between 2012 and 2020, of which the biggest single element — $110 billion — would come from increased cost-sharing by Medicare beneficiaries. The second commission, an independent panel headed by Pete Domenici and Alice Rivlin, seeks to save $137 billion from Medicare cost-sharing.

So even though Obama denied it over and over again, they’re going to cut Medicare.  Why?  It’s the 800 pound gorilla in the room.  To make any significant cost savings you gotta cut something big.  And few things are bigger than Medicare.

Taxing our Health Care Benefits

They’ll cut Medicare.  And raise taxes.

The Domenici-Rivlin panel, the more aggressive on health care, would also phase out the exclusion that exempts workers from paying taxes for employer-subsidized insurance, a benefit that also encourages excessive use of medical care. The long-term gain in tax revenue could be huge — more than $3 trillion between 2012 and 2030 and almost $10 trillion by 2040.

Few people don’t realize how much their employer pays for their health insurance.  They will now.  Though they won’t be getting a big pay raise, they will pay taxes as if they had.  That’s right, they will tax the total cost of your health care benefits as taxable income.  Even if you never see a doctor.

Wither on the Vine

You know things are bad when they propose something their enemy once proposed.

The Domenici-Rivlin panel has a far-reaching proposal to give Medicare enrollees vouchers to buy coverage from Medicare or a competing private plan offered on a Medicare exchange. The voucher would increase in value at roughly half the likely rate of medical inflation. If the cost of coverage rose faster than that, the beneficiary would have to pay an extra premium to cover the difference or seek a cheaper plan.

Sound familiar?  Newt Gingrich proposed this.  Back in the 1990s.  He said that as more people voluntarily enrolled in private insurance Medicare would wither on the vine.  Of course, the political opposition said Gingrich was just trying to kill senior citizens.  So his proposal was defeated.  And here we are.  Same problem.  Only more costly to solve now.

Competition Makes Everything Better

The big problem with health care is that there is no competition.  No market forces.

The commission believes that competition on the exchanges will cause insurance plans to find ways to lower premiums. It also believes beneficiaries will restrain their own spending. The panel projects savings from premium support and its near-term cuts and cost-shifting could be huge — more than $2 trillion through 2030 and more than $7 trillion through 2040.

Competition makes everything better.  And there’d be more competition now.  If the government didn’t forbid it.  For it is the government that forbids insurance companies from competing across state lines.

Can you Say Death Panels?

A spending cap is just another way to say rationing. 

The health care reform law already seeks to cap the growth in Medicare spending per beneficiary to roughly half the rate it has been increasing in recent decades. It empowers a new board to find savings should the target be breached, subject to Congressional veto. The Bowles-Simpson commission would expand that approach by placing a cap on total federal spending for health care — not just Medicare and Medicaid but the subsidies on new exchanges and tax exemptions. But the commission punts on what to do should the growth cap be exceeded, as many experts deem likely.

This board will have the power of life and death.  They will say who will live.  And who will die.  They can deny it but that’s what rationing is.  We have enough healthcare services for one person today.  Who will get it?  The 39 year old factory worker who has many taxpaying years left (so the government can recoup its ‘investment’)?  Or the old retired guy?  Hmm.   The old retired pain in the ass who won’t hurry up and die?  Or the young guy that we can squeeze more taxes out of for another 20 years or so?

Cut Out the Middle Man

They have big hopes for Obamacare.

The best way to lower health care spending is to reform the dysfunctional health care system whose costs seem unrelated to the quality of care delivered. The reform law makes a good start, sponsoring research to determine which treatments are effective and which are not, starting pilot projects to change the way care is delivered and paid for, and setting up new organizations to rush successful approaches into wide use in Medicare and ultimately the private sector.

The problem with health care is that we approach it from a cost standpoint rather than a quality of care standpoint.  No law or board will change that.  Real competition would.  Such as allowing insurance companies to compete across state lines.

One thing not mentioned by the New York Times is tort reform.  If we keep the jackals off of the doctors, they can spend more time administering health care instead of enriching ambulance chasers.

Perhaps the greatest cost control measure we can take is to cut out the middle man.  Have people pay for the services they receive.  Health care insurance is supposed to be insurance.  Not welfare.  It is to protect us from unexpected catastrophic medical expenses.  Like cancer.  Not to pay for a doctor appointment because we have the sniffles.

We Need more Market Forces.  Not more Government.

Increasing the size of a bureaucracy never made anything more efficient.  Price caps never made anything more plentiful.  And having someone else pay your bills never gives you the best quality.  That’s why we say beggars can’t be choosy.  Because we give beggars crap.

To fix our health care insurance woes we need to introduce market forces.  Not more government.  Medical savings accounts and tort reform would go a long way in fixing our problems.  As will competition across state lines.  And, of course, repealing Obamacare.

And we need to pay for our health care services.  For when we pay we seek the best value for our money.  Because we give a damn.  Unlike a disinterested government bureaucrat.

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Look Out – Here Comes the Public Option

Posted by PITHOCRATES - September 24th, 2010

Insurance or Welfare?

People must think insurance companies can crap money.  The truth is, though, they can’t.  They take a little bit of money from the many so they can make big payments to the few.  That’s insurance.  You pay a little to protect yourself from big, unexpected medical costs.  Like an accident.  Or a disease.

Years ago I worked in a small company.  One of my duties was managing our healthcare.  The older employees (especially those with children) always did the responsible thing.  They enrolled.  The young single men didn’t.  Employees contributed to the plan.  And, well, a young man had better uses for that money.  But when one knocked up his girlfriend and saw the pregnancy costs, he came a running to enroll. 

Insurance doesn’t work when you only buy the policy when you have a known expense coming.  If we all did that look at what would happen.  Everyone paying a premium will be collecting a benefit far greater than their premium.  And it just can’t work that way.  I mean, where is the insurance company going to get the money to keep paying benefits that exceed the amount they collect in premiums?  There’s only one way.  Jack up premiums.  Or decline coverage.  Well, two ways.  To stay in business, insurance companies, as well as every other business in the world, gotta have revenues that exceed their costs.  If they don’t, they go belly up.

We’re Not Stupid

Obamacare’s mandates began to kick in this week.  On Thursday (9/23/2010), insurers must wave pre-existing conditions for children.  Also, they can no longer limit the amount of health care a person receives per year or in their lifetime.  (See Insurers Dropping Some Coverage For Children by Matthew Sturdevant on the Insurance Capital blog.)  This means you don’t have to buy insurance for your kid anymore.  If he or she gets sick or is hurt in an accident, THEN you visit your friendly insurance agent and enroll your kid into a plan.  And the open-ended benefit limit?  Yeah, you try to work something like that in your household budget.  House payment, property insurance, car payment, car insurance, utilities, groceries, cable and sundry expenses…$3,500 per month.  And the unknown, open-ended, potentially catastrophic expense…$25,000 per month.  Hmmm.  Maybe we should drop the cable.

Now you don’t need to be particularly sharp with numbers to draw the obvious conclusion.  Insurance companies can NOT stay in business under Obamacare.  Even those in Washington know this.  Unless those in Congress are extremely stupid.   So why, then?  Why would they do this when they’ve said all along that we’ll be able to keep our current plans?  Think about it.  It’ll come to you.  Why would they do something that would do exactly what they said it wouldn’t do?  Because it’s what they wanted all along.  To put the private insurance companies out of business. 

‘No’ Means ‘No’.  Unless You’re the Federal Government

The people said ‘no’ to nationalizing our health care.  They said ‘no’ to the watered down version of nationalized health care.  The public option.  But the Obama administration wanted this.  It’s the Holy Grail of Big Government.  So what to do when the people say “no?”  You screw the people and find a way around them.  And you make it look like the insurance companies’ fault.  Make them look greedy.  By writing laws that will put them out of business UNLESS they make huge rate increases.  Threaten and bully them when they do.  Exclude them from the pool because they did.  Then you step in with the public option.  Then, Bob’s your uncle, you got what you wanted.  Control of one seventh of the U.S. economy.

Lying or stupid.  You pick.  Either way it’s a sad commentary on our elected ‘representatives’.

www.PITHOCRATES.com

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LESSONS LEARNED #22: “The only problem with health care these days is that it’s approached from a cost basis more than a medical basis.” -Old Pithy

Posted by PITHOCRATES - July 15th, 2010

ONCE UPON A TIME, in a distant land, there once lived a merry people.  And life was good.  They lived together in sweet harmony.  They worked long and hard to sustain their happy life.   And when people fell ill, they went to the doctor.  And after treatment, THEY PAID THEIR OWN DAMN BILL!

But those days are gone.  We don’t pay our own doctor bills anymore.  Health care is no longer between a doctor and a patient.  There’s somebody else involved now.  Someone who says what a patient can or cannot have.  Someone that tells doctors what they can or cannot do.  And our doctors have a bull’s-eye on their backs.

Medical care has taken a back seat to medical costs.  It’s not about what’s best for the patient.  It’s about what costs the least.  Think of a graph.  Increasing along the bottom are medical services rendered.  Increasing up the y-axis are costs.  On this graph picture two curves.  One that plots costs of medical malpractice lawsuits (very high when the doctor provides no medical services and decrease as the amount of medical services increase).  The other that plots costs of doctor reimbursements for services rendered (very low when the doctor provides no medical services and increases as the amount of medical services increase).

This is what a doctor considers when seeing a patient.  They don’t want to.  But the system forces them to.  Because of the conversion of health insurance (to protect your personal financial wealth) into a benefit/entitlement (to get free stuff with other people’s money).  And the rise of that other benefit/entitlement, the malpractice lawsuit as a vehicle to early retirement.

What better way to illustrate how cost takes center stage in our health care today but by some personal anecdotes?  So here is a smattering of our collective pasts.

I WAS IN some junior officer training program.  It was the last full day.  The last training we did was a run on the obstacle course.  It was hot.  Humid.  I kept pushing myself.  Now, I’ve suffered dehydration and heat exhaustion before, but whatever hit me wasn’t that.  I looked okay.  I had one of those ‘spike driven through your skull behind the eye’ migraines.  Nausea.  Some other discomforts.  All we had left was retreat.  Where we formed, though, we faced into the setting sun.  I asked my CO if he would excuse me from retreat.  I just wanted to hit my bunk.  To die.  Or sleep it off.  Whatever it was.  Training was over.  After retreat, they were going to open the pool for us. 

Well, he denied my request.  And made me feel like a little girl for even asking.  (I regret that moment of weakness to this day).  After I was dismissed, he called me back and said, “And if you do vomit in rank, vomit with bearing.”  “Yes, sir,” I replied and saluted.  Made it through without vomiting.  Crawled into my bunk.  When my CO saw that I was not partaking in the ‘mandatory’ fun he came to see me.  Was about to send my ass to the infirmary.  But whatever I had passed.  I felt fine.  The following day it was as if nothing had happened.

When you got through something like that, you’d be surprised how it impacts you.  You ignore things.  And live with things. 

I HAD A WART once under my thumbnail.  I made an appointment with my doctor to have it removed.  The day before my appointment, though, was a very busy day at work.  Didn’t sleep well the night before, either.  So I was tired.  And drinking coffee.  Apparently, I was the only one.  In the afternoon, half a pot was still remaining.  From the morning.  Nice and black.  Thick, too.  Like tar.  Strong.  I finished that pot.  Later that night, I had heart palpitations.  I rationalized it was from drinking too much coffee.

While getting that wart removed, I mentioned in passing the heart palpitations from the night before.  Laughing about it.  Last time I drink a pot of coffee, I said.  The doctor looked up from the wart and said, “Heart palpitations?  That’s serious.  This,” he pointed to the wart, “is piddling.  Heart palpitations?  That’s serious.”  The next thing I knew was getting an EKG and sent home with a heart monitor strapped to my chest.

I now thought about those things I was ignoring and living with.  Perhaps I was being irresponsible.  I mean, I was feeling things in my chest.  When I went in to get the results of all those tests, I told him about those things I’ve been ignoring and living with.  My test results were fine.  I asked him about those other things.  He asked, “How old are you?  You’re fine. You just have some anxiety.  Here’s some Xanax.”

When I mentioned heart palpitations, he couldn’t laugh it off with me.  For one, he was a doctor.  It’s what doctors do.  Save lives.  But he also buys malpractice insurance.  He was leaving himself open to a lawsuit if he didn’t do everything expected when a patient says he has had heart palpitations.  Once those tests came back confirming it was most probably the excess amount of coffee I drank that day that gave me the palpitations, I was just a young, healthy man.  Who did not justify any further testing.  At least, my insurance company wasn’t going to reimburse any further testing.

My test results looked good.  Feeling things in the chest, though, could mean something.  A stress test might be prudent.  But unless something turned up in that test, the insurance company wouldn’t reimburse that cost.  Which meant I would ultimately end up paying for it.  And stress tests are expensive.  Of course, if I paid cash outside the bureaucracy of the health insurance maze, it could be less.  So I said let’s do the stress test.  I’m buying.  I took the test.  Did okay.  Didn’t die.  Nothing strange happened.  The cost?  About half of what they would have charged had it gone through the myriad levels of overhead that process an insurance claim (at the health insurance company, at the hospital where the test was done and at my doctor’s office).

And I continued to ignore and live with those things I was feeling in my chest.  Even stopped taking the Xanax.  If I was feeling any anxiety, it was from my little episode in the health care machinery.

BUT THINGS SEEMED to only get worse after a year or so.  I started wondering that maybe I was only making things worse by ignoring them.  So I went to the doctor.  I explained what I was feeling.  He did the perfunctory tests that shrunk the lawsuit window.  Again, things looked good.  “How old are you?” he asked.  “You’re fine.  Look, we can keep doing tests but it’s going to get expensive.  Your insurance isn’t going to pay for them if nothing turns up.  And, I gotta tell you, I don’t think anything’s going to turn up.”

Again, he was looking at the cost-service tradeoff.  He felt he had minimized his costs.  He did enough testing to protect himself from a frivolous lawsuit.  And he didn’t do more testing than the insurance companies would reimburse.  Further testing would be on my dime.  Not that I didn’t think my life was worth the investment, but more tests would mean more missed work.  And with me feeling he wasn’t going to do anything but throw darts in the dark, I didn’t pursue additional testing.  It didn’t appear that anything big was wrong so I continued to live with those feelings.

THIRD TIME’S A charm.  After another year or so, I went to another doctor.  Again, I thought I might be doing more harm by ignoring these things.  Being further away from my original heart tests, I didn’t really discuss them this time.  Which was good.  It was a red herring.  You start talking ‘heart’, you look at all things ‘heart’.  High risk.  High costs.  But if you don’t start from ‘heart’, you can explore things that are lower risk and lower costs.  I had some serious acid reflux.  Acid regurgitating up your esophagus can mimic heart attack symptoms.  Who’d a thunk it?

HAVING AN INTERMITTENT problem is hard to diagnose.  All but impossible if you’re young.  I was a young college student.  With intermittent stomach pain.  I went to a doctor.  He felt me up to see if it was appendicitis.  I didn’t feel anything when he pressed over my appendix.  So he ruled that out.  “How old are you?” he asked.  “You’re fine.  You just need to get drunk and get laid.” 

A couple of years later, I was still feeling that intermittent stomach pain.  So I went to another doctor.  (It was a clinic.  The doctor I saw last since retired.)  He felt me up.  Ruled out appendicitis.  Sent me for an upper GI (where you drink a cup of barium and they x-ray your esophagus and stomach).  Test came back.  Everything looked fine.  “How old are you?” he asked.  “You’re fine.  Just drink some Maalox.”

So I drank some Maalox for awhile.  Didn’t seem to help.  Another year and another trip to the doctor.  And another upper GI.  The instructions this time called for a wait time before one last x-ray.  This x-ray showed an ulcer.  Just past the stomach at the beginning of the small intestine.

MY MOTHERINLAW WENT into the hospital with chest pains.  She was in her mid-sixties.  She spent the night in the ICU.  The next morning they transferred her to the cardiac care wing.  They did just about every test they could.  She was elderly.  Elderly people have health problems.  So doctors do ALL the tests to slam shut the lawsuit window knowing that the health insurance company or Medicare will reimburse for most of those tests.  They found nothing.  She went home.  Without them doing anything or being able to explain what had happened.  They had practiced due diligence to protect themselves legally.  And the health insurance company would rule that any further testing would be frivolous and unnecessary, only to produce additional revenues for the hospital and doctors. 

This repeated a few times until they found pancreatitis and stones in her bile duct. 

IT’S NOT THE doctors.  It’s not the hospitals.  Or the insurance companies.  It’s the system.  When other people pay your way there has to be rules.  For a free ride is not free.  We just make other people pay.  The problem with all things free?  We over consume.

How many plates of food do you eat in a restaurant when you pay per plate?  One?  How many plates of food do you eat when you eat at an all-you-can-eat buffet?  The answer?  More.  It’s happening in health care.  Those with insurance don’t care a whit about cost.  Don’t give me generics, I have insurance.

But someone is paying all those bills.  And they see this over-consumption.  They raise their premiums to cover it.  But when they do, they find some people stop buying their health insurance.  Which means they have to raise their premiums again.  More people stop buying.  So they need to raise their premiums again.  But they can’t keep doing this.  So they have to put in some kind of spending rules.  Say what they will reimburse and what they will not.  And they force the poor doctor to police this mess who is trying to help you get well at the same time.  All the while trying to keep the lawyers off his back.

It’s worse on the Medicare side.  For private health insurance has some young, healthy people paying for insurance who aren’t consuming medical care.  Everyone in Medicare is sick and/or old.  Big consumers of medical care.  The trend has been to micromanage the rules more as the consumption of medical care has outpaced the taxes collected to pay for that care.  And with an aging population, those costs are running well ahead of tax receipts.  It’s not a question of if the program will go bankrupt.  But when.  And a national health care system will only be worse.  The added costs will require massive taxation and cost management worse than any hated HMO.

AND LOST IN the shuffle is the patient.  Who, once upon a time, went to his doctor.  And the doctor did what was best for the patient.  And the patient paid the doctor for his services.  And everyone lived happily ever after.

www.PITHOCRATES.com

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