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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FT188: “When it comes to Obamacare the left is either ignorant or devious.” —Old Pithy

Posted by PITHOCRATES - September 20th, 2013

Fundamental Truth

People buy Insurance to pay a Small Fee to Insure against a Large and Unexpected Financial Loss

What is insurance for?  To help mitigate a large financial loss.  Crossing the ocean can be dangerous.  There are storms.  Wars.  Even pirates.  Shippers can lose very costly cargoes.  Most ships make it to their destination without incident.  Wise people noted this a long time ago.  And they came up with an idea.  Insurance.

Let’s illustrate this with an example.  Let’s say there are 100 ocean crossings in one year.  Each one of these crossings has cargo valued at $10 million each.  Let’s say of those 100 crossings only three sink.  A loss of $30 million.  A loss few can afford.  But there are only three ships that sink.  And at the beginning of the year no one knows whose ships will sink.  It could be anyone.  And everyone of the anyone has a very strong desire not to be the one losing a ship with a $10 million cargo.  So they are willing to pay a small fee to insure against a greater loss.

Here’s a general idea of how it works.  With 100 crossings valued at $10 million each that’s $1 trillion in total cargo.  Of that $1 trillion there’s a very good chance based on past history that $30 million of it will sink to the bottom of the ocean.  So if we divide that catastrophic loss by those 100 crossings that’s an additional $300,000 insurance cost to add to each of the 100 crossings.  So instead of a possible loss of $10 million a shipper will only have a definite ‘loss’ of $300,000.  Which is far less than $10 million.  And something they can plan for.  As they can add it to the price to their customers.

People don’t buy Health Insurance because a Larger Percentage of the Population doesn’t get Cancer or have Bad Car Accidents

Because of insurance none of these shippers will have to suffer a $10 million loss should it be their ship that sinks to the bottom of the ocean.  This is insurance.  Everyone pays a small fee to protect themselves from a great financial loss.  And that fee is far, far smaller than that potential financial loss.  This is the only way great things get done.  Great things require huge outlays of money.  And no one would risk those outlays if they didn’t have a way to mitigate their losses should their ship sink.  Literally.  Or figuratively.

This is insurance.  Paying a small fee to insure against an unexpected and catastrophic financial loss.  Health insurance today doesn’t do this.  It pays for everything.  Including the routine things we know about and can budget for.  Things that are unlikely to bankrupt us.  Office visits.  Flu shots.  Physicals.  Breast exams.  Colonoscopies.  These are all part of living.  We know we will have these expenses.  Just as we know we have to buy groceries and gasoline.  But there is no grocery and gasoline insurance.  And thank God for that.  They’re expensive enough.  Can you imagine their costs if they went up like health insurance?

The reason why health insurance is so expensive is because it is not insurance.  It doesn’t just pay for the unexpected and catastrophic financial losses.  Like incurred from a cancer diagnosis.  Or a car accident.  It pays for everything.  In our shipping example that would be like those shippers paying a $10 million insurance premium to insure a $10 million cargo.  Which would never happen.  Because it would be less costly to lose the occasional cargo.  Because every ship doesn’t sink.  At most three may in one year.  Even if all three ships were yours it would be cheaper to replace $30 million in cargo than paying $1 billion in insurance premiums.  This is why a lot of people choose NOT to buy health insurance.  Because a larger percentage of the population doesn’t get cancer or have bad car accidents.

The Left learned after the 1994 Mid-Term Elections that they had to Lie to get National Health Care

Obamacare just makes everything worse.  Because it forces insurance companies to pay for even more routine and expected medical expenses.  Increasing the cost of health insurance even more.  Which in turn increases the cost of business.  Which provides most health insurance these days as an employee benefit.  With Obamacare mandates to provide more of everything the cost has grown so much that businesses have been dropping their health insurance benefits.  Or cutting back hours to escape the Obamacare mandates.  Making Obamacare a big part of the anemic economy.  For it is a great disincentive to creating jobs.  And hiring people.

Now, anyone with a rudimentary understanding of economics knows this.  If you keep raising the cost of business you will see less economic activity.  The left understands this when it comes to interest rates.  It’s why they want to keep printing money to keep interest rates low.  To lower the cost of borrowing so businesses borrow more to expand their businesses.  So they do understand at least one cost of doing business.  But they seem to be completely ignorant when it comes to taxes and regulatory compliance.  For while they worry about rising interest rates hurting business they don’t have any concern about rising taxes or regulatory compliance costs.  Why?

Because they are truly ignorant?  If so they shouldn’t be anywhere near the economy.  Or they are devious?  And lying through their teeth to deceive the American public to get something they want?  Well, they may be ignorant.  But the smart money is on devious.  For the left has always wanted national health care.  But the people don’t.  When President Clinton tried it he lost the House in the 1994 midterm election.  And the left learned a lesson.  To get national health care they had to lie to the people.  Which is what Obamacare is.  A big lie.  It will do nothing President Obama said it would do.  All it will do is destroy the private health insurance industry by placing regulatory compliance costs on businesses and the private health insurance industry that will simply put the private health insurance business out of business.  As we are seeing.  Leaving uninsured people that the government must step in to insure.  And once they do they’ve got their national health care.  While giving the American people the middle finger.  “Say no to our national health care?” they’ll say.  “Well, [deleted expletive] you.”  They will say this figuratively, of course, with their actions.  For they will never let go of the lie that Obamacare is about lowering costs and insuring the uninsured.  And not the truth that it is nothing but a means to advance their agenda.

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President Obama lied about Obamacare because Socialists are Devious

Posted by PITHOCRATES - September 14th, 2013

Week in Review

Politicians lie.  Especially those on the left.  Why?  Because their policies have a record of failure. So when they campaign for office they don’t tell the truth.  Because the people don’t want their taxes to go up.  They don’t want more regulations that might put them out of a job.  They don’t want higher unemployment.  They don’t want more environmental policies to save the world from global warming when the earth hasn’t been warming as predicted.

The people have rejected socialism.  So when the left campaigns for office they don’t use the ‘s’ word these days.  Even though their policies have but one goal.  To turn the United States into a European social democracy.  Despite some of these social democracies moving away from their socialist ways (see Is Rightward Shift In Norway, Australia A Trend? posted 9/10/2013 on Investors).

Elections held in recent days in two modestly populated but economically significant countries show that the global political pendulum may be swinging back toward conservatives.

First came the triumph of Australia’s Liberal (conservative) Party and its socially conservative Catholic leader, Tony Abbott, in national elections last weekend.

That was quickly followed by the surprise victory of the Conservative Party’s Erna Solberg, dubbed “Iron Erna” for her staunch conservatism, in Norway’s national elections.

A mere coincidence? Not likely. Polls show people in most developed countries are fed up. Angry rank-and-file voters are turning away from leftist parties that push welfare spending, higher taxes, increasing debt, more regulation, open-border policies and tight environmental restrictions.

Politically, socialist ideas no longer sell so well.

Which is why politicians on the left lie.  President Obama said if you liked your health insurance plan you could keep it.  Which was a lie to pass Obamacare.  As Obamacare was only a stepping stone to socialized medicine.  And the first step in getting there was to first destroy the private health insurance industry.  And with no private health insurance industry there would be only the government to step in and be the insurer of last resort.  And, voilà, national health care.  A devious way to get there.  But, then again, socialists are devious.  Because they know people don’t want what they’re selling.

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The NHS shows Obamacare will lead to a Fall in Efficiency and Quality in our Health Care

Posted by PITHOCRATES - September 8th, 2013

Week in Review

The holy grail for the left is national health care.  They were hoping that Obamacare would be their holy grail.  But there were Democrats who worried about their reelection chances if they voted against the will of their constituents.  So they took out the public option.  The thing that made Obamacare national health care.  Instead having to settle for Plan B.  Destroy the private health insurance industry.  Leaving only the government as the lone provider of health insurance.  And then, voilà, national health care.  And then the left will get their holy grail.  And our health care will become like that in the NHS (see John Neill: Why does this man think he can cure the NHS? by Margareta Pagano  posted 9/7/2013 on The Independent).

John Neill has a challenge for Health Secretary Jeremy Hunt: “Give me the NHS and I will prove that we can change the culture – improve the quality of care for patients, inspire the employees, innovate, reduce waiting times, improve nursing and increase the output of the doctors, and reduce costs.”

So this is national health care?  It doesn’t sound that good.  In fact, it sounds pretty bad.  Something we can look forward to under Obamacare.  And whatever it evolves into after it destroys the private health insurance industry.  “If you like your insurance plan you can keep it.  If you like your doctor you can keep your doctor.”  None of that turned out to be true.  Worse, Obamacare is raising the cost of health insurance.  So hello national health care.  And poor quality, uninspired employees, a lack of innovation, longer waiting times, poorer nursing, doctors doing less and higher costs.

What’s more, he will do it for free. Mr Neill is chairman and chief executive of Unipart, one of the UK’s biggest private companies with clients including Jaguar, Asos, Vodafone, BMW and Sky…

So where’s the catch, Mr Neill? “There isn’t one. But what I know is that there is a moral and economic imperative for the health service to become massively more efficient. And I really mean this – we could change the culture – and for free. Sadly, it’s the mythology that holds the NHS back from changing. It’s too political, and politicised…

Nor does he see any problems between comparing the health service with making cars: “I’m going to be frank with you, and this will upset a lot of people in healthcare, but if we ran our factories with the same level of defects as those in an average hospital then we’d be out of business in 24 hours. And, we would go bust if we ran the factories only five days a week, as many hospitals are doing…”

His greater worry is that the government is not doing enough to improve productivity: “Growth comes from competitiveness, and that comes from productivity. That’s going to be tough for the UK as nearly half the economy is in the public sector. What are government ministers doing about it?”

So, in national health care, everyone gets free health care.  As long it is during business hours.  Which means if you suffer a heart attack or are seriously hurt in a car accident on the weekend you better hope your accident/emergency room is not one of the many closed on the weekend.  Or else you may be forced to postpone your heart attack or car accident.  Of course if you could do that you could probably avoid them in the first place.  But you can’t.  Which means you’ll be in for a long drive.  Or a long wait until your hospital opens on Monday for business.

This is why you don’t want government taking over more of the private sector.  Because when they do the things they take over become political and politicized.  And suffer in efficiency and quality.  As things are wont to do when government takes them over.  As demonstrated by the NHS.  Providing a clarion call to anyone who will listen.  It’s as if the British are warning us.  Don’t do what we did, they tell us.  Learn from our mistake, they say.  But will the Americans heed their warning?  Not as long as the Democrats are in control.  For they don’t care how horrible health care becomes.  As long as they get national health care.  Their holy grail.  So they can politicize it.  Create a mythology.  And use it to increase their political power.

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The worst of the NHS will be 5-Times worse in the US under Obamacare

Posted by PITHOCRATES - February 9th, 2013

Week in Review

Obamacare is the first step towards national health care.  They designed Obamacare to raise costs to get employers to drop their health care and pay a cheaper fine instead.  As more do private health insurance companies will struggle to stay in business with fewer and fewer clients.  The fewer they have the more each will have to pay.  So those who try to keep providing health insurance will have to give up and pay the fine instead.  In time the private health insurance industry will collapse.  Leaving the government as the only remaining option for health insurance.  A backdoor way to national health care.

So that’s where we’re heading.  So what will it be like when we get there?  Something like this (see NHS staff must reveal poor care by law, says inquiry by Robert Winnett posted 2/5/2013 on The Telegraph).

Medical staff should have a “statutory duty of candour” to disclose any concerns they have following the “shocking” situation that led to the deaths of up to 1,200 patients in two hospitals run by Mid Staffordshire NHS Foundation Trust between 2005 and 2009, the report concludes.

Robert Francis QC will publish his report into the failings following a two-and-a-half-year public inquiry which will conclude that “routine neglect” became the norm because of a culture of “fear, bullying and secrecy”.

He is expected to conclude that there were multiple failings within the NHS, with doctors and nurses failing to report concerns, managers failing to monitor standards, local bureaucrats failing to intervene and regulators failing to run inspections properly…

A Labour source said: “Labour’s four-hour target revolutionised emergency care in Britain, with 98 per cent of patients seen within four hours.

“In the same way, the 18-week target stopped the scandal of patients waiting two years for operations.”

Routine neglect?  Fear?  Bullying?  Secrecy?  Don’t know which is worse.  This.  Or 4-hour wait times in emergency rooms and 2-year wait times for operations.

Anyway, this is what we have to look forward to under Obamacare.  When it ushers in true national health care.  A horrible time for those entering the health care system.  And it will be worse in the United States.  Because the United States had 5-times the population of the UK.  So they will have 5-times the bureaucracy.  And 5-times he horrible times.

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Obamacare will Bring the IRS into our Lives like Never Before

Posted by PITHOCRATES - July 14th, 2012

Week in Review

You wanted free health care?  You think you got free health care?  Think again (see Constitutionality of Healthcare Law Is Still in Question by Nina Owcharenko posted 7/10/2012 on U.S. News and World Report).

Not only is the IRS expected to enforce the employer mandate, it must also make a complex tax calculation including household incomes for each employee, and collect the individual mandate tax (based on each month a person is uninsured or otherwise fails to satisfy the HHS guidelines for coverage). At a time when lawmakers on both sides are advocating for making the tax code simpler, these provisions only make the code more complicated.

Health care isn’t free.  Obamacare just changes who pays for it.  Either by forcing people to buy health insurance policies.  Using the IRS to delve deep into the personal lives of everyone living in your household to see if you have health care.  If you or the other people in your household can afford your health care.  And if you or someone else in your household can afford it but didn’t buy it for you look out.  You will be paying the penalty.  If you can’t afford it then the government will force someone else to pay for it.  Really little different than the way things are now when you go to the emergency room without insurance.  The only difference being the IRS colonoscopy.  And that part about the federal government forcing you to buy something.

So what’s the incentive here?  To show you and everyone living in your household cannot afford to buy a health insurance policy.  That way you get around the federal government forcing you to buy something.  And all you have to endure is the IRS colonoscopy.  Which shouldn’t be too painful if you don’t work and only live on the kindness of government benefits.

Of course this may be the calculated plan all along.  When you factor in a lot of small business planning to drop their health insurance and pay the fine instead because it’s less costly you have a noticeable trend.  A decline in people buying private health insurance policies.  While the private health insurers have to pay more benefits (such as covering preexisting conditions for someone who never owned a health insurance policy before).  While they collect fewer premium dollars to pay for those benefits.  So what must they do?  Raise their premiums on the few people remaining who are still buying their policies.  Thus encouraging more people to drop their insurance coverage.  Because the penalty will be less costly.

Of course this can lead to but one end.  The end of private health insurance.  Forcing the government to do what they wanted to do all along with Obamacare.  Transform it into a full-blown, tax-funded national health care service.  Including the high taxes, the long wait-times and the rationing of services common to all national health care systems.  And the death panels.  Where some government bureaucrat decides whether a person is worth spending health care resources on.  And having that bureaucrat telling you “no” will be a rather unpleasant experience.  Even worse than that IRS colonoscopy.

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CBO Scores Obamacare over 10 Years of Revenue and 9 Years of Implementation and finds it about Twice as Costly

Posted by PITHOCRATES - March 18th, 2012

Week in Review

The news just keep getting worse.  Obamacare is twice as costly.  It will destroy the private health insurance industry. Prolong the Great Recession.  And reduce the quality of our health care.  There’s just nothing good that we can say about it.  Other than, perhaps, it will make President Obama a one-term president.  Like Jimmy Carter.  Who also wreaked  economic destruction on the nation.  Making way for the new president to repeal Obamacare.  And save the nation from this most tragic fate (see ObamaCare: If Possible, The News Is Getting Worse by Grace-Marie Turner posted 3/14/2012 on Forbes).

To mark the law’s two-year anniversary, the House of Representatives is planning a vote to repeal one of the law’s most unpopular provisions — the Independent Payment Advisory Board (IPAB), which many seniors fear will become Medicare’s rationing board…

ObamaCare will cost $1.76 trillion over a decade, according to a new projection released Tuesday by the Congressional Budget Office, rather than the $940 billion forecast when it was signed into law.

The new 10-year projections cover nine years of ObamaCare’s implementation (2013-2022). Original estimates counted only six years of implementation — a budget gimmick to obscure the true cost of the law. At this rate, the conservative estimates of ObamaCare’s cost will be $2 trillion over 10 years, not the $1 trillion that President Obama promised…

Sen. Mike Enzi (R-WY) released a statement saying that the CBO’s estimate also shows that the new health law will dramatically increase Medicaid spending and result in 4 million fewer people getting health insurance through their jobs. So much for being able to keep the coverage you have now “no matter what,” as the president promised.

There will be rationing.  This despite the $2 trillion price tag for the program.  Which when you compare 10 years of revenue to 10 years of implementation the price shoots up from $1 trillion to somewhere closer to $2 trillion.  Which adjusts their previous estimate up 100%.  Talk about a large margin for error.  Which really begs the question do you want the same people who were off 100% in their cost estimates running one-sixth of the U.S. economy?  Or be in charge of rationing life-saving health care services?  And if that wasn’t bad enough (and don’t you think it should be?) it will also end private health insurance like you have now.  Meaning that if you like the plan you have, tough.  You’re going to lose it.

An AP-GfK poll taken early this month shows that only about a third of Americans (35 percent) support the health care law, while nearly half (47 percent) oppose it. That’s about the same split as when it passed.

Opposition remains strongest among seniors, many of whom object to Medicare cuts that were used to help finance coverage for younger uninsured people…

A new study of employers conducted by Willis Human Capital Practice found that employers expect higher health costs for both employers and employees as a result of ObamaCare, and many expect to shift employees into taxpayer-paid coverage once the option is available. That shift would certainly exacerbate the exploding costs of the law.

Last year, health costs rose 9 percent for employers, triple the rate of the year before ObamaCare’s provisions began to be implemented. Employers expect costs to only go higher…

Uncertainty about the future of the health sector is also drying up investor capital — and threatening tomorrow’s medical innovations. The share of venture dollars flowing to seed and early-stage investments in biotechnology and medical devices has plummeted since 2007, when investors pumped $3.6 billion into 332 deals in which a price was disclosed, according to data compiled for Kaiser Health News by FactSet Research Systems. Overall venture investing declined by nearly one-third as the economic recession set in.

Obamacare is unpopular.  It will gut Medicare.  Kill the private health insurance industry.  And when it does all those people covered under plans they got at work will be dumped into Obamacare.  Absolutely exploding costs.  And forcing more rationing to spread limited resources over more patients.

The economy is mired in recession.  The Great Recession lingers on.  With unemployment at 14.9% (the more realistic U-6 rate that counts everyone who can’t find full time work as opposed to the U-3 rate that doesn’t count everyone who can’t find full-time employment).  And because of the costs of Obamacare employers aren’t hiring.  So the economy isn’t going to improve anytime soon.

With the fall in medical investment you can add in a further decline in quality to the high costs and rationing of health care.  While the economy sinks further into recession.  Unless the next president repeals Obamacare.  Or the Supreme Court strikes it down first.  For if we don’t repeal it the country may never recover from the economic fallout that Obamacare wreaks.

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Obamacare – Lies and Politics to transform One-Sixth of the U.S. Economy into a Welfare Program

Posted by PITHOCRATES - March 11th, 2012

Week in Review

Here’s the skinny on Obamacare.  And it isn’t good.  For it transfers health insurance into a massive welfare program.  That ultimately will be paid for by the state.  Which means we the taxpayers will pay for it with massive new taxes.  After Obamacare shuts down the private health insurance industry.  Which it appears to be designed to do (see Obama’s health care law: A trek, not a sprint by RICARDO ALONSO-ZALDIVAR, Associated Press, posted 3/11/2012 on Yahoo! News).

The Affordable Care Act gradually reorganizes one-sixth of the U.S. economy to cover most of the nation’s 50 million uninsured, while simultaneously trying to restrain costs and prevent disruptions to the majority already with coverage.

If the government takes over one-sixth of the U.S. economy this won’t be the same USA anymore.  It won’t be free market capitalism here.  But a European social democracy.  Like the European nations suffering from the European sovereign debt crisis.  Caused by excessive government spending.  And excessive government borrowing to pay for that spending.  Which will happen under Obamacare.  Because you can’t provide more for less.  More health care will cost more.  And when the private health insurance industry fails when they can’t provide more for less that leaves government as the sole provider in the health care market.  The ultimate plan for Obamacare.  As it has to be.  Because you can’t provide more for less.

“We really haven’t seen the main game,” said Drew Altman, president of the California-based Kaiser Family Foundation, a nonprofit information clearinghouse on the health care system. “The major provisions that will affect the most people and cost the most money don’t go into effect until 2014 or later.”

The timing of Obamacare is further proof that it will be a disaster for health insurers and for those buying health insurance.  If it was good they would have implemented it before the 2012 election.  So Obama could campaign on its successes.  But knowing it was a failure they pushed back implementation until after the 2012 election.  So that failure wouldn’t dash all hopes for an Obama second term.

Millions of people are getting preventive care that now must be provided at no additional cost to patients. Birth control for women soon will be on that list. Insurance premium increases are getting more scrutiny.

You can’t provide more for less.  Forcing health insurers to provide free birth control without charging more in premiums to pay for this will put the private insurers out of business.  Unless they allow insurers to increase premiums.  Then everyone will pay more so women can use birth control without paying for it.  A product that shuts down a natural biological function of the human body.  Which isn’t insurance on more than one level.  First of all, it’s not financial protection against an unexpected catastrophic health care expense.  For there is nothing unknown about this expense.  Second, getting pregnant is the proper thing for female body to do after sex.  Stopping this process is not a health issue.  It’s a lifestyle choice.  And therefore shouldn’t be paid for by the same thing we use to pay for cancer treatments.  An unexpected catastrophic expense.

A highly promoted program that provides a lifeline to people denied coverage because they already had medical problems has probably saved lives. But enrollment in the Pre-Existing Condition Insurance Plan has been disappointing, with only about 50,000 people nationwide.

Glenn Nishimura, a consultant from Little Rock, Ark., checked it out and found his premiums would come to about $6,300 a year.

“It’s out of my price range,” said Nishimura. It makes more financial sense to take care of his high blood pressure and high blood sugars by paying out-of-pocket and gambling that his health will hold up, he reasons. In three years he’ll be eligible for better coverage under Medicare.

This individual mandate, the main target for the law’s critics, also takes effect in 2014. Without it, many experts fear that the new exchanges, the state-based markets for private insurance, won’t work. Healthy people would be tempted to postpone signing up until they get sick, raising costs for everybody.

You can’t provide more for less.  And there’s nothing that costs more in the health insurance industry than paying for preexisting conditions.  Because if you’re covering a preexisting condition it means that the preexisting medical condition wasn’t covered before it existed.  Meaning the person did not buy health insurance when they were younger and healthier.  And paid nothing into the health insurance pools to help offset the costs of those who fall ill with an unexpected and catastrophic illness.  Only now that they are sick and facing large medical bills do they want health insurance coverage to pay these bills.  Which isn’t insurance.  It’s welfare. 

The individual mandate addresses this.  But it’s unconstitutional.  For the government doesn’t have the right to make people buy anything.  And, no, it’s not the same as car insurance.  Because if you don’t drive a car you don’t have to buy car insurance.  And if the Supreme Court upholds this unconstitutional individual mandate it will have the same effect as a massive tax increase.  And kill economic activity.  At a time the nation is still reeling under the Great Recession.  Massive new government expenditures and a fall in economic activity, and therefore a fall in tax revenue, will put the U.S. ever closer to those European social democracies wallowing in the European sovereign debt crisis.  And in case you’re wondering what that would mean it would be a bad thing.  A very, very bad thing.  Unless you like riots in the streets.  As they had them in Greece, France, and the UK.  And elsewhere wherever they tried to cut back some great government welfare program.

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Medicare Cost Savings are Cost Transfers to Private Sector Businesses

Posted by PITHOCRATES - June 12th, 2011

Private Health Insurance Costs rising Faster than Medicare Costs

Looking at graphs makes problems easy to see.  They can make you jump to the wrong conclusions, but you can see the problems more clearly.  And the good news is that Medicare doesn’t have any problems.  At least cost-wise.  It’s the free market that does.  Because it operates without the keen and wise oversight of government.  As a result they can charge whatever they want for their insurance.  Well, the government doesn’t allow this in Medicare.  Therefore, the government way is the better way.  Just look at the graphs (see It’s the Health Care Costs, Stupid by Paul Krugman posted 6/12/2011 on The New York Times).

The larger point is that we don’t have a Medicare problem, we have a health care cost problem. And Medicare actually does a better job of controlling costs than private insurers — not remotely good enough, but better…

If Medicare costs had risen as fast as private insurance premiums, it would cost around 40 percent more than it does. If private insurers had done as well as Medicare at controlling costs, insurance would be a lot cheaper.

But graphs can be misleading.  Looking at them does support everything he says.  However, the graphs don’t explain why.  And if you want to know the ‘why’ talk to a doctor.  Ask about his or her Medicare billings.  You won’t hear a happy story.  The government keeps cutting the amount they will pay.  Because they can.  And every year further ‘automatic’ cuts have to be postponed by Congressional action.  Which usually happens.  Because these future cuts are so steep that, if enacted, will make a lot of doctors stop seeing Medicare patients.

But if the government isn’t paying doctors fairly, how can they stay in business?  Isn’t the fact that they are staying in business prove that the government-determined prices are fair?  No.  Costs are costs.  Those unpaid by the government still have to be paid.  And guess by who?  That’s right.  Private insurance.  That’s one reason why private insurance costs are so high.  They’re picking up the unpaid Medicare costs.  And unpaid Medicaid costs.  And a large part of costs incurred by people using the emergency room in lieu of buying health insurance.  Through inflated billings to private insurance companies.  Because costs are costs.  And someone has to pay them.

Of course, it’s the people who pay for private insurance who end up paying.  And because health insurance is an employee benefit, the employers ultimately pay.  Businesses.  And the more unpaid Medicare costs are passed on to businesses, the higher their health insurance premiums get.  Forcing them to make cuts elsewhere.  Make the employee share in part of the costs.  Or they simply quit providing health insurance.  So these remarkable cost savings the government achieves are nothing more than an additional Medicare tax.  That private sector businesses pay.

And when businesses have to pay more for unpaid Medicare benefits, they have less to pay their employees.  Or simply can’t afford to hire more people.  Which means a net reduction in consumer spending.  Either through lower wages.  Or less job creation.  So the more the government ‘saves’ on Medicare, the less economic activity there will be.  And possibly the less Medicare there will be (if further cuts make doctors drop out of the system).

So, yes, the graphs are accurate.  But they don’t tell the whole story.  They show a smaller rise in Medicare costs than private insurance costs.  But it’s just smoke and mirrors.  Misdirection.  A magician’s trick to make us look one way.  So we don’t see what’s really happening elsewhere.

Health Care Costs are Rising in the Military, Too

About 60% of government spending covers Social Security, Medicare/Medicaid and defense.  Each at approximately 20%.  We continue to spend more and more on Social Security and Medicare/Medicaid.  And yet these programs are projected to go bankrupt.  Defense spending has gone up, too.  But it is the only one of the three programs that ever sees any real cuts.

The U.S. population is a little over 300,000,000.  And about 40% of the federal budget covers the elderly (approximately) of that 300 billion.  About 13% of the U.S. population.  Or about 39 million people.  It’s this 39 million that is bankrupting America with their Social Security and Medicare benefits.  Those who passed Obamacare want universal single-payer health care for all 300,000,000 people.  You don’t need a higher degree in math to see that adding some 260 million more to the 39 million is going to make a bad financial situation worse.

Meanwhile the U.S. military has approximately a million and a half people on active duty and another million and a half in the reserves.  In addition to this 3 million there are about another 2 million in retirement (850,000 who are collecting a pension).  So that’s about 5 million (approximately) in our military health care and retirement programs.  These numbers are very approximate.  But the order of magnitude is accurate.  And telling.  Because even though 5 million people are a whole lot fewer than 39 million people, the health care and retirement costs in the military are unsustainable (see Panetta: Military healthcare costs are on my radar by John T. Bennett posted 6/12/2011 on The Hill).

The Obama administration is proposing increasing TRICARE fees for retirees of working age, which have remained the same for a decade. Specifically, the proposal would raise premiums for family plans by $5 per month, and by $2.50 for individuals…

“Even with the estimated savings from the healthcare efficiencies proposed in the … 2012 budget, the cost of the Military Health System continues to increase as a percentage of the DOD budget and will exceed 10 percent of the budget in just a few years,” Panetta told the committee…

“Part of this is understanding where the money is,” Mullen said. “Two of the big places the money is is [sic] in healthcare, and it’s in pay and benefits.”

First you increase the beneficiaries’ cost.  And when that no longer works you start the rationing.  The ultimate result of any single-payer system.  Just like in the UK.  Where one of the goals of their ongoing NHS reform debates is cutting wait times.  Because with the high costs of their single-payer system, people have to wait a long time for some medical tests or procedures.  Because their costs prevent them having a lot of these tests or procedures available to the UK citizenry.

Destroying the Private Health Insurance Market

Social Security and Medicare Light (military health care and retirement) isn’t working with only some 5 million people in the system.  Regular Social Security and Medicare isn’t working with only some 39 million people in the system.  And expanding Medicare-like health care to another 260 million people probably isn’t going to help.  Unless your goal is to destroy the private health insurance market.  Which will happen.  Because private insurance (i.e., businesses) simply cannot afford to pick up the unpaid medical costs of another 260 million people.

And once you’ve destroyed the private health insurance market, all those unpaid Medicare costs (and the new unpaid Obamacare costs) will have to be transferred somewhere else.  To the taxpayer.  Both businesses.  And consumers.  Which will further reduce consumer spending.  Which will reduce economic activity.  Despite all the promises of a single-payer system.  Because costs are costs.  And someone has to pay them.

www.PITHOCRATES.com

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Government as Usual, Making a Bad Financial Situation Worse

Posted by PITHOCRATES - June 8th, 2011

The Federal Debt is Bad; what we’re Adding is Worse than can be Imagined

If you thought the debt was bad, you ain’t seen nothing yet (see U.S. funding for future promises lags by trillions by Dennis Cauchon posted 6/7/2011 on USA Today).

The government added $5.3 trillion in new financial obligations in 2010, largely for retirement programs such as Medicare and Social Security. That brings to a record $61.6 trillion the total of financial promises not paid for.

This gap between spending commitments and revenue last year equals more than one-third of the nation’s gross domestic product.

The current outstanding U.S. debt is $14 trillion and change.  So, in addition to that debt, the U.S. has to borrow an additional $61.6 trillion sometime in the future.  Meanwhile they debate deficit reduction in Washington.  And the Obama administration is desperately trying to get the Republican-controlled House to raise the legal debt ceiling.  By a whopping $2.4 trillion.  You don’t have to be a whiz kid to see that something bad financially is coming this way.

Medicare alone took on $1.8 trillion in new liabilities, more than the record deficit prompting heated debate between Congress and the White House over lifting the debt ceiling.

Social Security added $1.4 trillion in obligations, partly reflecting longer life expectancies. Federal and military retirement programs added more to the financial hole, too.

It’s those social democracy things.  The same things that are bankrupting countries in the European Union.  Free health care.  And free pensions (with everyone living longer people are collecting far, far more than they ever paid into these programs).  Which just goes to show that free things are very expensive.

The $61.6 trillion in unfunded obligations amounts to $527,000 per household. That’s more than five times what Americans have borrowed for everything else — mortgages, car loans and other debt. It reflects the challenge as the number of retirees soars over the next 20 years and seniors try to collect on those spending promises.

Imagine yourself living as you are.  Working hard to pay your bills (mortgages, car loans and other debt).  And then adding another mortgage to the mix for a magnificent half-million dollar home.  Only without the home.  Just the mortgage payments.  If you’re not good at imagining that’s okay.  Because you’ll be living it within 20 years.  Can it get worse?

The government has promised pension and health benefits worth more than $700,000 per retired civil servant. The pension fund’s key asset: federal IOUs.

Why, yes.  It can.  While you struggle to pay these enormous bills you can think about this.  Your civil servants.  The people that work for you.  They will be making about $173,000 more in retirement than you.  Their boss.  That ought to put a smile on your face.  And a skip in your step.

Here Comes National Health Care

And it’s going to get worse.  Because national health care is coming (see Study Sees Cuts to Health Plans by Janet Adamy posted 6/8/2011 on The Wall Street Journal).

A report by McKinsey & Co. has found that 30% of employers are likely to stop offering workers health insurance after the bulk of the Obama administration’s health overhaul takes effect in 2014.

The findings come as a growing number of employers are seeking waivers from an early provision in the overhaul that requires them to enrich their benefits this year. At the end of April, the administration had granted 1,372 employers, unions and insurance companies one-year exemptions from the law’s requirement that they not cap annual benefit payouts below $750,000 per person a year.

But the law doesn’t allow for such waivers starting in 2014, leaving all those entities—and other employers whose plans don’t meet a slate of new requirements—to change their offerings or drop coverage.

Bill Clinton lost the 1994 midterm election because he campaigned as a moderate and governed as a liberal.  With Hillarycare being the poster child of his liberal agenda.  Barack Obama lost the 2010 midterm election because he campaigned as a moderate and governed as a liberal.  With Obamacare being the poster child of his liberal agenda.  The people spoke.  Then.  And now.  They don’t want national health care.  That’s why Hillarycare failed.  And why they watered Obamacare down to be something short of national health care.  But Obamacare will serve its purpose.  It will kill the private health insurance market.  Setting the stage once and for all for national health care in the United States.

In surveying 1,300 employers earlier this year, McKinsey found that 30% said they would “definitely or probably” stop offering employer coverage in the years after 2014. That figure increased to more than 50% among employers with a high awareness of the overhaul law.

The Obamacare legislation was something like a thousand pages long.  Guaranteed to confuse.  In fact, it was so confusing that Democrats voted for it without reading it.  Republicans read as much of it as they could.  And because they saw what was in it they voted against it.  Those who take the time to read it don’t like it.  Including the 50% of employers surveyed.

The nonpartisan Congressional Budget Office, in a March 2010 report, found that by 2019, about six million to seven million people who otherwise would have had access to coverage through their job won’t have it owing to the new law. That estimate represents about 4% of the roughly 160 million people projected to have employment-based coverage in 2019.

So let’s crunch some numbers.  Private insurers can’t cap benefits below $750,000 per person per year.  Some 6-7 million people will lose their insurance because of Obamacare.  So if the government has to pick up the costs for half of the lower amount (3 million) of these people consuming $750,000 each that comes to…$2.25 trillion.  That’s a lot.  Now let’s say the 160 million who have employment-based coverage lose it.  And that half of them need $750,000 in benefits.  That comes to…$60 trillion.  How about that?  That’s about the same as the amount of the government’s unfunded financial liabilities. 

So, in addition to the $14 trillion or so in debt, there may be another $120 trillion that we’ll have to borrow.  And that’s a little more than the $2.4 trillion the Obama administration is desperately trying to get the House to approve.  And warn about dire consequences if the Republicans refuse to do so.  This reminds me of that scene in Jaws where Chief Brody was throwing out that chum to attract the shark.  It worked.  The shark appeared.  Only it was a lot bigger than Brody thought it’d be.  He told Captain Quint, “You’re gonna need a bigger boat.”  Because fighting a $120 trillion debt with a $2.4 trillion dingy is going to lose the battle.  And by ‘lose the battle’ I mean the United States will end up like Greece.  Only without anyone big enough to bail her out.

OPEC not increasing Oil Production, no Help for Depressed Economies

That’s some pretty doleful news.  Maybe there’s a white knight rushing to the rescue.  Perhaps the economy will rebound and go gang busters.  Maybe the United States will grow itself out of this debt sinkhole (see OPEC Keeps Lid on Oil Production Targets by The Associated Press posted 6/8/2011 posted on The New York Times).

OPEC decided on Wednesday to maintain its crude oil output levels and meet again within three months to discuss a possible production increase.

The decision was unexpected and reflected unusual tensions in an organization that usually works by consensus.

Saudi Arabia and other influential oil-producing nations had pushed to increase production ceilings to calm markets and ease concerns that crude was overpriced for consumer nations struggling with their economies.

To quote a line from Planes, Trains and Automobiles, they have a better chance of playing pickup sticks with their butt cheeks.  The moratorium on oil drilling in the Gulf of Mexico put pressure on supply.  Then the unrest in the Middle East and North Africa added more.  The recession had kept oil down for the last year or so.  But with supply being squeezed that wasn’t going to last.  It’s back up.  With an assist from Ben Bernanke.  Whose quantitative easing devalued the dollar and sparked some inflation.  For we buy and sell the world’s oil in U.S. dollars.  So consumer prices are up.  While high unemployment and flat wages continue to make life hard for the American consumer.

Those opposed were led by Iran, the second-strongest producer within the Organization of the Petroleum Exporting Countries…

Iran and Venezuela came to the meeting opposing any move to increase output, which would have probably lowered prices for benchmark crude from the present levels of around $100 a barrel.

But OPEC powerhouse Saudi Arabia, which favors prices of around $80 a barrel, wanted higher production levels — and served notice that it was prepared to raise production unilaterally, to close to 10 million barrels a day from its present daily production of about 8.7 million barrels.

How about that?  Our enemies want to keep the price of oil up.  While our friends want to bring it back down to $80 per barrel.  Yet the Obama administration demanded that Mubarak step down from power in Egypt (a move the Saudis did not like as Egypt was anti-Iran and kept a lid on radical Islam like the Muslim Brotherhood) while doing nothing to help the democracy movement in Iran.  And Obama himself has a close and personal relationship with the Venezuelan dictator.  Hugo Chavez.

Policies like these will do little to bring the price of oil down.  Or make the economy rebound and go gang busters.  So there’s little hope of the U.S. growing its way out of their unfunded financial obligations. 

Monetary Policy doing more Harm than Good

And it doesn’t help to have Big Government Keynesians trying to fix things (see Sizing up the Fed’s few options by Cyrus Sanati posted 6/8/2011 on CNNMoney).

At the time the Fed began its second round of quantitative easing, inflation was low, so Bernanke felt comfortable instituting a program that would see $600 billion injected into the economy. After all, how much inflation can $600 billion cause when the country has a national debt load of $14 trillion and a personal debt load of $30 trillion?

Inflation has jumped in the last three months at a much faster pace than historical averages. The consumer price index rose by 6.1% annually during the April quarter, and core CPI, which excludes food and energy, rose by 2%. Such an accelerated move in inflation would be explainable if there was strong economic growth, but that’s not the case.

Higher prices without economic growth.  We saw this in the Seventies.  Under Jimmy Carter.  His treasury secretary, Paul Volcker, raised rates to reduce inflation.  Interest rates soared.  But he tamed inflation.  And he didn’t do it with quantitative easing.  He did it by doing the exact opposite.  Bernanke could learn a lesson from Volcker.

“If you’re Bernanke and you are seeing this rapid acceleration in core inflation and a high unemployment rate, you got to be thinking to yourself, ‘Gee, my models aren’t working right,'” says Drew Matus, senior U.S. economist at UBS Investment Research. “This should cause more caution in the part of the Fed and it is this caution that will keep them from doing QE3.”

Yes.  The models don’t work.  They’ve never worked.  And never will.  Because monetary policy is not the be all and end all of economic activity.  Think of it this way.  Say there is a restaurant not doing well.  The Keynesian would help that restaurant with monetary policy.  It would lower prices on the menu.  To make the menu items cheaper (like making money cheaper to borrow from a bank).  The only problem is that this restaurant has problems.  People aren’t going there.  The food is bad, the service is poor and it’s dirty.  Lowering the menu prices isn’t going to fix those problems.  So lowering prices is not going to bring the people back.  Just as making money cheap to borrow won’t bring the consumers back to the market.

People need Disposable Income and Responsible Government

Unemployment is high.  A lot of people have no jobs.  Or disposable income.  Meanwhile, prices are going up.  Leaving even less disposable income.  Businesses aren’t going to borrow cheap money to hire people to expand production.  Because current production levels are already in excess of current demand.

People need disposable income.  Inflation is taking that money away from the people.  And two things are driving inflation.  High oil prices (demand greater than supply).  And bad monetary policy (a devalued dollar increases the price of oil and everything else).  We need to fix these things.  We need to drill.  We need to increase American production of oil.  And we need to stop printing money.  We need to do these two things ASAP.

Then we need to address the insanity of spending money we don’t have.  And stop it.  Sooner or later, we have to address entitlements.  Actually, later may no longer be an option.  With $60 trillion in unfunded liabilities in the pipeline.  And with Obamacare potentially adding another $60 trillion.  That’s just too much.  Trying to pay this will kill economic activity.  It will require more taxes, more borrowing and more printing.  Everyone of which will increase the cost of doing business or investing.  Which will ultimately kill jobs.  Giving people even less disposable income.

Benjamin Franklin warned, “When the people find that they can vote themselves money, that will herald the end of the republic.”  That’s why they designed the republic to have disinterested, responsible people between the treasury and the people.  But that was then.  When disinterested, responsible people were in government.  Perhaps not everyone, but enough to keep the republic solvent.  Today most serve themselves.  The treasury is just a tool to buy votes.  And to hell with the consequences because most of them will be dead by the time the republic ends.

So don’t expect them to do the right thing anytime soon.  Because doing the right thing will not make their lives better.  Only ours.

www.PITHOCRATES.com

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