This article by David Goldhill in the September Atlantic Monthly hits the health care problem squarely on the head in my view.
My favorite line:
"The most important single step we can take toward truly reforming our system is to move away from comprehensive health insurance as the single model for financing care. And a guiding principle of any reform should be to put the consumer, not the insurer or the government, at the center of the system." (Italics mine.)
Another article in Investors Business Daily by Tevi Troy and Jeffrey Anderson makes the similar point that the way to control costs is to put the patient in control. Patients have more control to the extent they pay their own bills, less control to the extent insurance (whether government or private) pays the bill.
A system in which patients pay their own bills, or at least reap a good share of the financial benefit of avoiding costs, does not preclude health care subsidies to the poor or a government-based insurance that protects people with catastrophic illnesses from financial ruin. It would be nice to see a cadre of politicians, liberal or conservative, who had this figured out and were pushing legislation in that direction.
I get that having even a small market of price-sensitive consumers can seriously drive competition. But I wonder how much of a market can truly exist -- even a small one -- when one gets cancer and their doctor tells them to do expensive treatment x, y, and z.
I believe that there can be a model for comprehensive insurance. You cannot have fee-for-service that incentivizes doctors to over-treat, just as you say insurance incentivizes patients to over-consume. And you cannot have the cost of insurance hidden in pre-tax amounts that are never revealed.
Daniel, those are Republican talking points and not serious ideas.
Posted by: John Jensen on September 17, 2009 12:55 PMHis solution is to redirect that money to the federal government. This would cement a still more cumbersome middleman in place, consolidate power in Washington and reduce consumer freedom — while increasing taxes, deficits and costs.
What are they talking about? Almost all of the money the federal government raises will go to tax credits to help folks buy insurance -- you know, like the first point of their plan!
Carter, I hope you spend some time talking about coverage and not just cost. It is impossible to ignore that 40 million people go without insurance in this country, and that their ranks are increasing as the years go by.
Posted by: John Jensen on September 17, 2009 01:05 PM...and our National borders weakened!
What a great idea!
What can we do to get more Republicans to run on this platform?
Posted by: scottd on September 17, 2009 02:39 PMI think that conclusion is bullcrap. Not a single industrial nation in the world has a system like that. Not one.
So it's not been tried; maybe we should give it a shot, maybe it will prove to be the best. Just because no one else does it is no reason to discount the solution.
It's unproven, and will certainly -- certainly -- not work for the poorest Americans. (Irresponsibility should have its costs, but should that cost be illness and death? Society will/does say no, and we'll cover them anyway.)
You sure are certain about it! Personally, I think it will work for the poorest of Americans because it will INCREASE the number of plans and solutions available, most certainly on the low cost end of the scale. More people can get catastrophic plans that allow them to avoid bankruptcy. Seems it's a good thing.
And you should check out the latest Zogby poll which is pretty conclusive that Americans OVERWHELMINGLY oppose the Obama reforms you keep claiming they want. Face it, John, the nation does NOT want what you want, not by a long shot:
- By a margin of 70% to 18% Americans do NOT want mandatory purchase of health insurance
- Three out of four - 75% - do NOT want taxes raised to pay for health insurance coverage for those not already covered
- A health care advisory panel - such as HR3200 creates - is opposed 2 to 1
- By a landslide 83% to 7% Americans want to be able to buy coverage across State lines
- 79% want tort reform
- 77% do not want to tax businesses for universal coverage
John, you're simply wrong when you say the American public wants what you and Obama are peddling. The facts are exactly the opposite by an OVERWHELMING majority. We're talking a factor of 10 to 1 on most issues. Not even close.
Daniel, those are Republican talking points and not serious ideas.
Except each and every one is OVERWHELMING supported by the American public. OVERWHELMINGLY. Maybe you need to start listening more, and lecturing less since you're clearly out of touch with what Americans want. They're not "talking points and not serious ideas", they are exactly a reflection of what Americans want.
Posted by: Shanghai Dan on September 17, 2009 05:39 PMScott D:
To get more republicans to run on that platform you have to stop supporting any that do not run on such a platform. That means opposing people like Reichert and supporting people like Rand Paul, Ron Paul, and Peter Schiff.
True enough, but maybe it will fail and hurt a lot of people as can easily be predicted. We have a world of evidence of health care systems that work.
France, for example, covers everyone, for cheaper, with private sector involvement (including all private doctors and hospitals, as well as private supplemental insurance), and has the best health care system in the world according to the World Health Organization. That's a single-payer model that works.
Switzerland is more expensive than France, because all of their insurance is private though non-profit. But they're still about $2,000 cheaper per person than us. They have a marketplace where people have to buy insurance, which is basically the exchange idea from Obama's plan. They have better health care as well. That's a private model that works.
So we can collect evidence from our peer countries around the world, and see what works in a uniquely American solution. Or we can, without any evidence of this plan's success, dissolve not only employer-provided insurance but the whole concept of insurance altogether.
Good luck getting that passed. As scottd implied, that this is a radical position that will never happen. Medicare is never going to disappear, and if Medicare ain't catastrophic coverage then you can't really expect the rest of America to be.
Risk-pooling is a fantastic idea for consumers. True, it limits our personal exposure to costs. But that is the very point. I have no idea if I'm going to get cancer or not. My mother and father both had mild forms of cancer, so I guess I might be at risk. If I pool my risk with others in society through comprehensive insurance, I can basically place a bet that I'll spend less over-all if the worst happens.
I think it's a good model. But it can be improved: We should have more cost exposure on the insurance side before we all cost exposure on the care side.
More people can get catastrophic plans that allow them to avoid bankruptcy.
Do I really have to state the obvious? Catastrophic plans are for the well-off, not the poor. $7,000 can cause bankruptcy for someone at 200% of the poverty level. Why? Because they make $21,660 a year. That's 30% of their salary. And a $7,000 deductible isn't even catastrophic coverage in the usual sense.
Lysander, The US had that system before and the result was our poor had better care than the entire world. Free markets include charities and not for profits.
You cannot talk about 19th century health care in any serious way, because it simply didn't exist. If you had cancer, you died. If you have diabetes, you died. If you had a heart attack, you died. We're keeping people alive now and the game is completely different.
Charity could handle a cold, but it can't handle the on-going costs of cancer or HIV/AIDS.
Posted by: John Jensen on September 17, 2009 09:11 PMMedical costs in this environment will stabalize and even fall. For those of you who do not believe that check out what the prices of two highly performed medical procedures have done over the last decade. Check out lasik eye surgery and boob jobs. Prices have gone down drastically as quality has gone up. Why is that? One easy answer, people pay cash for these procedures and insurance is not involved. With health savings accounts people will be paying cash for procedures and that will cause the same result as the market has seen with lasik eye surgery and boob jobs.
Posted by: dmeyers on September 17, 2009 10:21 PMYou are ignoring facts like higher homicide and vehicular death rates in the US versus France and Switzerland. Those SIGNIFICANTLY skew overall health care rates. Just like the way those nations count infant mortality - it's different than the WHO guidelines (which the US abides by), and thus skews the results.
Compare things like cancer survival or heart attack survival, and you'll find the US comes out on top. Only when you peanut-butter all issues does it change, and that's simply not an apples-to-apples comparison.
As far as a $7000 deductible, how about a $5000 deductible? And have you ever ASKED your doctor or dentist if you can make payments? Often they will extend low or no interest terms for payments, up to a year or three. Considering you can cut your health insurance costs by a factor of 2 or more, you can save a LOT of money if you actually WORK on figuring out what's best.
But you simply want to deny those options because they are inconvenient; they highlight the fact that there are private sector solutions that work.
And you have NEVER addressed this basic fact: the administrative costs of Government plans are HIGHER, per person, than private plans. FACT. So putting more people into Government plans will WASTE more money that could have been spent to cover more people.
Bottom line: Government health insurance is inflexible and expensive. And the VAST majority of Americans want no part in it. See the Zogby poll (which I notice you conveniently ignored since it shows you were flat out WRONG about what the people want).
Medicare is never going to disappear, and if Medicare ain't catastrophic coverage then you can't really expect the rest of America to be.
Medicare is functionally bankrupt; cash-flow-negative comes in a matter of 8 years or so, meaning we either massively increase taxation OR we cut back on benefits.
See the Zobgy poll - you think people want more taxes? NO. Overwhelmingly no. Meaning benefits get cut, so that Medicare becomes even MORE of a catastrophic plan (as-is, Medicare is quite limited without the addition of extra-paid riders and coverage).
It'll exist in some form, but it'll go beyond a catastrophic plan, even thinner and weaker, as the tax base shrivels up and the costs keep spiraling out of control.
Charity can't provide insurance for the 40 million uninsured legal residents who lack it, what makes you think they can pay for the much higher costs of their care?
Again, you show your ignorance. Please educate yourself about how many really need help with insurance. Here's the "money quote":
Based on the Census data, the National Center for Policy Analysis (NCPA) estimates that a sizeable portion of the uninsured population earns $50,000 a year or more or qualifies for state benefits. "In theory ... about 32 million people, or 68 percent of the uninsured, could easily obtain coverage but have chosen to forgo insurance. That means that about 94 percent of United States residents either have health coverage or access to it. The remaining 6 percent live in households that earn less than $50,000 annually. This group does not qualify for Medicaid and (arguably) earns too little to easily afford expensive family plans costing more than $12,000 per year." (8)
Got that? We're talking about 6% - about 18 million - including the illegal aliens. Assuming they're about half that number, we're talking 9 million people who really need help, not the 40 million you spout (wasn't it 46 million a few weeks ago, and now 30 million according to Obama?).
Assuming 9 million people and an average of $12,000 per year for a family of four, we could just BUY them health insurance at the average cost for $27 billion a year, about 1/7th of what HR3200 or Obama wants to spend. Why are we wasting literally hundreds of BILLIONS of dollars to cover people beyond what's needed?
No, there aren't 40 million who need help with insurance; just because you don't have insurance does NOT mean you cannot afford it! It means you either don't need to buy it (the super wealthy) or are too lazy (often the very young), ignorant (you are covered if you just ask), or truly poor (the small minority).
And you have never, EVER said why I should lose my plan and have to pay more. Why the tyranny of the majority overcomes the minority. The rights of the individual are trampled because you and your ilk demand I pay more for someone who is most likely too rich, lazy, or ignorant to provide for themselves?
Posted by: Shanghai Dan on September 17, 2009 11:26 PMThe solution is the use of health savings accounts along with high deductible insurance policies. Health insurance policies with a 5,000 or 10,000 deductible are cheap and and stable in price. The individual contributes yearly to a fund in order to cover the deductible. all routine medical care is paid by the individual from the fund so the individual shops for quality care at a good price.
PRECISELY! It's what I use. It took me a few years to build up a big HSA, but I'm there, and the interest I earn annually pays for an extra physical (if desired) as well as two annual dental cleanings. I get free dental care right now, thanks to my HSA.
Extend HSAs, make ALL health care expenditures tax-deductible, open up cross-State insurance plans, and allow a la carte insurance (I do not want psychiatric, chiropractic, naturopathic, or OB/GYN coverage, but I have to pay for it in this State). You'll see costs plummet and stabilize, and coverage greatly increase.
Posted by: Shanghai Dan on September 17, 2009 11:30 PMI actually read Goldhill's article in the Atlantic and am currently reading Who Killed Health Care? by Regina Herzlinger. What Goldhill is saying is that the model of health insurance for everything increases costs. For example no one uses car insurance to buy gas or routine maintenance, yet we use health insurance to pay for routine/expected health care expenses (check ups, dental cleanings, pregnancies, etc.) I go over my auto repair bills with a fine tooth comb because the money is coming out of my pocket.
By putting the onus on the patient to pay for routine services the costs will drop. The real life example is given in the article in the cost for LASIK surgery.
More Insurance is not the answer - it is part of the problem.
Posted by: Paul D on September 18, 2009 10:20 AMI can afford it, Dan. Tens of millions poor people CANNOT. Do you understand that paying $7,000 out of pocket ($2,000 premiums and $5,000 in deductibles) will ruin lives of people who do not have the same economic mobility as us?
the administrative costs of Government plans are HIGHER, per person, than private plans. FACT.
What the hell are you talking about? Medicare has substantially lower administrative costs than the rest of the insurance market, and in particular the individual market.
The individual market -- the least regulated by government -- has by far the highest administrative rates.
Medicare is functionally bankrupt; cash-flow-negative comes in a matter of 8 years or so, meaning we either massively increase taxation OR we cut back on benefits.
Or we end fee-for-service like experts recommend and preserve good health care for less money?
Dan, you keep on making about the government. You need to get it through your skull that what's bankrupting Medicare is bankrupting the private sector as well. Premiums are skyrocketing at three times the rate of inflation. Wages are stagnant because of this. More people are losing employer-provided insurance because of this.
Medicare needs much better spending practices, and lobbyist influence on congress is a major problem. That's why Obama supports IMAC -- a completely independent group of doctors to advise on Medicare payments. You have repeatedly opposed this commission because you're more interested in partisan attacks than practical solutions.
Again, you show your ignorance. Please educate yourself about how many really need help with insurance. Here's the "money quote":
If everyone can afford insurance, then the government will have provide almost no subsidies meaning that this bill will be significantly cheaper than expected. What's the problem?
The problem is that the study you cited is obviously bullshit. The average premium is $1,100 higher because of the uninsured according to the Center on American Progress.
And you have never, EVER said why I should lose my plan and have to pay more.
Um, I have responded to this query numerous times, Dan. You might not like my answers, but they exist. The answer is that you and others being cheap creates too much risk which exposes the rest of society to higher premiums when you go bankrupt.
Lysander, Yes we have advanced and have more treatments. That does not mean that economics has changed. Charities could cover the people that need help. No it probably could not help the 40 million people at todays cost, but in a free market we would have much lower costs, we would have more people insured on their own, we would have more money to donate, and we would be able to help the poor.
...You hope. But there is little evidence showing that. We have a relatively free market in health care. In GOP states we have higher health care costs than the rest of the world. In some blue states, like Washington, we have better costs but still have hundreds of thousands uninsured. More "free market," more "charity." It's like an Ayn Rand novel.
If charity cannot solve today's problems, what makes you think they can solve tomorrow's problems? Hope. While I applaud your optimism, it isn't borne by any serious research.
Posted by: John Jensen on September 18, 2009 03:03 PMThe individual market -- the least regulated by government -- has by far the highest administrative rates.
Flat out wrong, I've corrected you on this before, so now it's a LIE. Read and learn, correct your ignorance once again. Per-patient administrative costs for Medicare and Medicaid are higher than private insurance. That's the fact, as inconvenient as it is for you.
If you can't even get the basic facts right after being shown the truth several times, why should anyone listen to you? Just go home John, play with your tiddly-winks and dream of sitting at the Obamassiah's knee as his happy lap-dog in his Marxist revolution...
Posted by: Shanghai Dan on September 18, 2009 05:46 PMAny so-called comprehensive health care bill that passes from this administration will be the public option masked as some other name. Anytime you see or hear the word "Comprehensive", that should immediately elicit a red flag - just say no.
Posted by: KKDS on September 20, 2009 07:24 PM