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 Insurance Premiums and Deductibles

Posted by PITHOCRATES - October 21st, 2013

Economics 101

The Requirements of Obamacare force Insurers to Cancel their Less Costly Policies

We buy health insurance to protect our financial assets in case of a catastrophic health problem.  Such as a bad accident requiring costly hospitalization and rehabilitation.  Or a costly disease.  Like cancer or a heart attack.  As bad as those things are the good news is that most people don’t suffer from these health problems.  Which allows us to use insurance to protect our financial assets.

People in an insurance pool pay a small premium to pay for a potential loss.  Such as a catastrophic health problem.  Because not everyone in the pool will suffer from a catastrophic health problem the insurance premium can be much smaller than the cost of medical care for the few that do.  A premium small enough that individuals and families can budget this amount and rest comfortably knowing that a catastrophic health problem won’t cost them their home, their kids’ college fund, their retirement savings, etc.  A system that has worked well.  Until we started using insurance to pay for everything under the sun.  Which has caused insurance premiums to soar.  And Obamacare just doubles down on this trend and turns insurance into welfare.

Premiums before and after Obamacare R1

Obamacare raises the coverage requirements for all insurance policies.  To a ridiculous extent.  For example, couples whose children are grown adults still need pediatric coverage.  Obamacare requires a lot of standard coverage like this that is virtually impossible for some people to use.  Thus greatly raising insurance premiums.  In our example our fictitious insurance pool contains 10,000 individuals and 10,000 families.  To include everything the Obama administration wants to include raises individual premiums 240%.  And family premiums 257%.  Which causes a problem with President Obama’s promise to the American people.  That thing about keeping your current insurance if you like your current insurance.  As insurers have no choice but to cancel their less costly policies.

The Affordable Care Act makes Premiums Unaffordable by Requiring Insurers to Cover More

That promise was, of course, a lie.  Because you can’t buy more for less money.  You just can’t get more for less.  So if the policies cover more they cost more.  If they cover a lot more they cost a lot more.  Well, that creates a bit of a problem for the optics of the Affordable Care Act.  When you make the existing health care system ‘affordable’ you really can’t raise the cost of insurance by over 200%.  Even if you are giving more insurance coverage.  Because if it’s just too expensive people won’t have the money available to pay for it.  So they brought the premiums down from what they would need to be to do what they want them to do.  To something a little more affordable.  Like this.

Premiums before and after Obamacare Adjusted R1

Which brings the increases to 80% for an individual policy.  And 129% for a family policy.  These are still steep price hikes.  But with the more these policies cover and subsidies for those who need them they are an easier sell.  Of course, there is another problem.  Selling these policies at these lower prices won’t bring as much money into the insurance pool.  Which will limit what this pool can pay for.  Leading to rationing.  And longer waiting times.  As health care providers will have to tell patients ‘no’ because the insurer denied the treatment or procedure.  Which sort of defeats the purpose of Obamacare.  Affordable health care for everyone.

So what to do?  To cover everything under the sun requires hefty premiums.  But hefty premiums are not affordable.  There appears to be a paradox here.  And that’s because there is.  Because you can’t get more for less.  But Obamacare has a workaround for this paradox.  At least for the optics of Obamacare.

The Ultimate Goal of Obamacare may be to Fail to Clear the Way for Single-Payer National Health Care

There’s another part of health insurance.  The deductible.  The out-of-pocket portion of our health care expenses.  When insurance was truly insurance we paid for our routine health care expenses out-of-pocket.  We took our kids to the doctor for their vaccinations and the doctor billed us.  Then we paid the bill.  Using our insurance only for those catastrophic health problems that we couldn’t plan for.  Or budget for.  And it’s the deductible that makes Obamacare look more affordable than it is.  By making their deductible far exceed their premium.  So a lot of people pay into the pool but never collect from it.

Claims Individual and Family R1

In this example we look at some claims.  The money the insurance pool pays out.  The above numbers are net of the deductible.  So the annual claim per individual and family is money from the pool paying their bills.  Most people get little.  While the breakout with the fewest members have a catastrophic health care problem.  The total claims for this pool for both individuals and families come to $159,750,000.  While premiums total only $123 million at our adjusted premiums.  That’s a $36,750,000 shortfall.  Well, insurers can’t pay out more than they collect so they need to find another $36 million or so without making this affordable health insurance appear unaffordable.  So where can we find another $36 million?

By raising the deductible, of course.  If we raise the deductible for both individuals and families to $7,500 those claims at $7,500 or less are out-of-pocket.  They don’t come from the insurance pool.  If we add up the claims that become out-of-pocket they total $57,250,000.  More than enough to cover the shortfall.  As well as provide subsidies for the poor.  And all those new government jobs to run Obamacare.  With these higher deductibles AND higher premiums people will be paying far more for their health care than they did before.  Perhaps more than they can afford.  Thus making the Affordable Care Act unaffordable.  Which may be the ultimate goal of Obamacare.  To fail.  So the government can blame greedy insurers who the people will hate even more.  And setting the stage to get the people to acquiesce to a single-payer system.  Or national health care.  Which the left wanted all along.

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Canada has Record Number of Doctors but Canadians still have Trouble Finding a Doctor

Posted by PITHOCRATES - September 28th, 2013

Week in Review

Obamacare is coming.  The path to single-payer/national health care.  Which we’ll have once Obamacare kills the private health insurance business.  By forcing insurers to cover so much that they have to raise their premiums beyond what people can afford.  As people stop buying insurance they will have to raise their premiums further still due to fewer people in the insurance pool.  Which, of course, will force more people out of the pool as they simply won’t be able to afford insurance anymore.  Eventually the insurance companies will not be able to insure enough people to remain in business.  Leaving only the government.  And then the left has their single-payer/national health care.

So what will that be like?  Well, we probably won’t be able to keep our doctors.  Like President Obama promised us we could.  No.  Socialized medicine does not encourage people to go through the hell of medical school to become a doctor.  So there will be fewer doctors.  Requiring higher caseloads per doctor.  Prompting many to retire.  And then it will be more like it is in Canada (see Canadian doctor total at record high posted 9/26/2013 on CBC News).

Canada had a record 75,142 doctors last year and they earned $328,000 gross on average, according to two new reports…

But the numbers alone don’t present the full picture. It’s important to ask not just how many doctors are needed, but where are they most needed and in what specialties, said Geoff Ballinger, CIHI’s manager of physician information.

Kristin Speth, 35, of Toronto, has been looking for a regular doctor since she moved from Alberta four years ago. She’s had headaches since childhood and has been going to walk-in clinics but is frustrated with the experience.

She’s tried the provincial service to find a doctor but keeps getting notices saying there are no leads.

“It is extremely frustrating,” said Speth.

“It’s just so hard to find someone who will just stay longer than the one year that I need for my physical. They just don’t stick around or you know, you can’t find anyone who is taking new patients.”

Canada’s population is around 35 million.  So there’s about one doctor per every 468 Canadians.  The US population is around 314 million with about 691,000 doctors (in 2010).  That’s about one doctor per every 454 Americans.  So the Canadians have more doctors per capita than they do in the US.  But currently finding a doctor in the United States is not as difficult as it is in Canada.  Well, until Obamacare, that is.  After which Americans will be as exasperated as their Canadian neighbors.  Because they already have what Obamacare will give us.  Single-payer.  And doctor shortages.  Even though they have more doctors per capita than we do.  But apparently their ‘single-payer’ workloads are so heavy they just can’t—or won’t— take on new patients.   Something to look forward to under Obamacare.

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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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