Healthcare

[Leif Roar]

Okay, picking a healthcare thread at random, I have a question.

If, magically, a universal health care system were implimented in the USA, then wouldn't those who already have healthcare with their jobs want a payrise equivalent to the cost of the healthcare they're now getting for free?

Employees always want a payrise. In this hypothetical case, though, they would have no argument for getting one: they would still get the health benefits they've used to have, but they do not have any additional expenses.

Now, companies that have used better-than-average health benefits to attract employees might have to raise their salaries a little to stay competitive as employers, but then they can afford that as they no longer have to pay more than competing businesses for health packages for their employers. Companies that have focused on high salaries and downplayed health benefits might, over a bit of time, have to adjust their salaries towards the average of their business, as they no longer save any money on health benefits to use for higher salaries.
It should all even out, though, and there shouldn't be any net increase in salaries for an industry.

 

[Rolfe]

Okay, picking a healthcare thread at random, I have a question.

If, magically, a universal health care system were implimented in the USA, then wouldn't those who already have healthcare with their jobs want a payrise equivalent to the cost of the healthcare they're now getting for free? Being as there are tax breaks on the healthcare isn't this going to end up costing employers more? Or at least hacking off a whole strata stratum of society who will view themselves as poorer?

Depends on how you fund it. There are almost as many ways of funding it as there are universal healthcare systems. Your error here is in regardiing the provision of universal healthcare as "free". It is not free. It is paid for by the people who use it, in different ways in different systems.

It may be that universal healthcare is implemented through the insurance system, by mandating the insurance companies to offer a certain basic level of cover to everyone, and mandating that everyone buys such a policy. The low-income then have their premiums subsidised by the taxpayer.

In this scenario, the employed citizen might see little change. The insurance premium would still be paid, possibly still through his employment. Or if it isn't, then indeed he would be justified in seeking that his employer pass on to him the savings that now accrue from the employer no longer paying the premiums, so that he can pay the premiums himself. You ask about the tax-payer-funded element to cover the low-income. Indeed, but it is likely that would be lower than the present tax take to fund the current socialised healthcare systems, and also the insurance premiums may decrease to reflect that the insured will no longer be subsidising the uninsured citizens' visits to the emergency room.

Or perhaps universal healthcare would be provided on an entirely tax-funded system, with the government paying the doctors and the hospitals directly. (Thus eliminating most of the health insurance industry.) I see this as an unlikely way for the USA to go, but if the insurance companies keep on resisting change, who knows?

In that case, it would seem logical that taxes would rise. However, health insurance premiums would no longer have to be paid. So the effect for an employed person might simply be that the deduction from the pay packet has a different label on it.

Actually, though, if the USA ever managed to get its act together to stop about 50% of what it pays out for healthcare being siphoned off in unproductive ways (from gold-plated cutlery in CEOs' executlive jets, through one doctor needing four clerks just to deal with the insurance paperwork, to unnecessary tests being done for defensive medicine reasons), then you'd think everybody might be a bit better off.

You do realise that countries with universal healthcare systems spend about the amount you guys spend just on Medicare and Medicaid, but they cover everybody? I can't see the USA emulating that overnight, but the potential is there.

Rolfe.

 

[Ziggurat]

And if people have a level of manageable debt, and it is a medical event that pushes them over the edge, the straw that broke the camel's back - you want to say this was nothing to do with the medical event?

Why should that be called medical if it's only a small fraction of the debt? If someone is carrying "manageable" debt which is just a hair from being unmanageable, they're carrying far too much debt. Furthermore, that's STILL not what's being measured, so this defense cannot rescue the study from inadequacy.

And you must also bear in mind that if someone loses their job because of a health problem, they may also lose their health insurance. So it may be extremely relevant.

In some cases it may be, but the statistics don't separate that out, which is the point. Those numbers are useless for telling you what you want to know. The definitions are designed to wildly inflate the numbers. Do you not get that, Rolfe?

 

[boooeee]

Which is pretty much the same principle as the NHS, just on a smaller scale. But it's BAD when the government does it!




In US health insurance, only about 78% of income is actually spent buying healthcare. And even that covers a lot of unnecessary tests, and the inflated prices the USA pays for drugs.

In countries where insurance is regulated to deliver universal healthcare, about 95% of income is spent on buying healthcare.




Maybe I'm hallucinating, but when you talk about the body funding the healthcare also owning the delivery systems, and then you exend that to mandating that everyone participate, and that everyone be guaranteed benefits - you seem to me to be describing the NHS.

Rolfe.

That's been my impression as well. I think the NHS model has a lot to recommend it. My biggest objection to the NHS model is the lack of choice. While I think the Kaiser model may be the way of the future, I don't want to be forced into it. If I'm willing to pay for the freedom of a PPO, I want that option.

And the much-vaunted "public option" is pretty much the exact opposite of the integrated NHS model. As proposed, it would be an extension of Medicare, which is essentially a claims paying machine. There's no coordination of care, widespread fraud, and lots of financial incentives to run unnecessary tests and "upcode" to increase payment. They underpay providers relative to private insurance and it's still ridiculously expensive (it costs more, per capita, than other countries spend to cover their entire populations).

 

[Dancing David]

What are your opinions on healthcare ?
Do you think countries should have nationalised healthcare providers like Britains NHS, to support those who cannot afford private health insurance ?

It is not health care it is health insurance that is the issue. We end up paying for the uninsured anyway, might as well have national health insurance.

But somebodies stands to loose some huge profits.

 

[Darat]

That's been my impression as well. I think the NHS model has a lot to recommend it. My biggest objection to the NHS model is the lack of choice.

...snip...

There has been a lot of focus on that over recent years, trying to introduce more choice into the system, and in some areas it's been moderately successful. I posted this in another thread that touches on choice:

I'm having to go for a routine ...er.. procedure (one that has to be done in a hospital under light sedation by a consultant).

Went to my GP's, she requested the procedure, the computer churned out a list of the (about) 12 hospitals in the area I could attend, listed their distances from my address, whether they had car parking facilities and other ancillary details including average "waiting times". I didn't have my calendar with me so I didn't book the appointment there and then so the GP provided me with a booking reference and a password and a print out of the details.

I came home, went to the NHS website, typed in my booking details and password. Up came the list of hospitals, and it gave me the ability to do a comparison of the various hospitals (which takes you to another site that lists the ratings of the hospital and provides statistics like the number of MRSA infections per 100,000, how other patients have rated the hospital, it's like one of those insurance comparison sites). After that I click on which one or ones I want to check for an appointment.

A long list of appointment dates and times comes up (about 5 pages worth!) and I picked an appointment for the second week in September. Now that may seem a long time - it's 3 and a bit weeks from the GP visit but it wasn't the earliest appointment for this routine procedure, that was exactly for 14 days. (But that clashed with some holiday plans I have so I've picked a date and time that suited me.)

...snip...

There is no reason why a UHC system can't include at least as much choice as most USA folk seem to get with their insurance approach.

 

[Rolfe]

I'm not sure what choice Boooeee wants that we don't have. Maybe he could explain?

We can change our GP if we want to. My parents did exactly that, because the original doctor was very rude to my father. He got all huffy when he found they'd applied to be accepted on another doctor's list, saying "I'm trying to build up a practice here." (They get paid according to how many patients are on their list, rather than per procedure.) Well, he should have thought of that earlier.

We can have hospital treatment at any hospital we choose that is suitable (distance, and having the facilities we need). My mother recently changed to a diffrent Eye Clinic because the one she was attending was too far away. As a bonus, she got switched to the list of a more senior consultant at the same time.

If there are choices to be made about how our condition is managed, our doctor is obliged to involve us in the decision and help us make an informed choice.

I'd be interested to know what additional choices you had in mind. If it's a matter of paying extra to get a better room or stuff like that, you can do that too, though usually you have to go outside the NHS into the private sector. The private sector isn't large, but it's there if anyone wants it. Good for elective surgery if you want it done at a time more of your own choosing, and to feel a bit more pampered.

Rolfe.

 

[boooeee]

There is no reason why a UHC system can't include at least as much choice as most USA folk seem to get with their insurance approach.

I agree. I just think a Germany/Switzerland style model is a better fit for the US, rather than the complete overhaul that a single-payer NHS-style model would require.

 

[Rolfe]

I agree. I just think a Germany/Switzerland style model is a better fit for the US, rather than the complete overhaul that a single-payer NHS-style model would require.

I think you're right. There was an intresting article about path dependency in healthcare systems that discussed how several countries had got to where they were, what had prompted the introduction of universal healthcare and when, and how the starting point influenced the eventual system.

It always seemed logical to me that a country with a highly developed health insurance industry would use that industry to deliver universal healthcare rather than try to abolish it.

However, that doesn't seem to be where Obama is going at the moment with his "public option". I wondered whether he anticipated too much grief from the insurance industry if he tried to regulate them, as he'd need to to develop a European system for example. So he was trying to run a parallel system which would hopefully become gradually dominant if it was properly thought-out.

One problem with your present system is the inefficiency - enormous sums of money are being sucked into unproductive activity - from the gold-plated cutlery in the executive jets to the four clerks a doctor has to employ just to deal with insurance company paperwork. How do you streamline that? How do you free up these clerks to retrain as lab technicians?

Rolfe.

 

[ARubberChickenWithAPulley]

One problem with your present system is the inefficiency - enormous sums of money are being sucked into unproductive activity - from the gold-plated cutlery in the executive jets to the four clerks a doctor has to employ just to deal with insurance company paperwork. How do you streamline that? How do you free up these clerks to retrain as lab technicians?

"Gold-plated cutlery" is doubtfully much of an expense in the grand scheme of things. Nonetheless, the way to streamline the overall inefficiency in the system is:

- Nationalize health regulation. Allow insurers to compete nationally instead of state by state. That would eliminate overhead insurance companies have to spend on trying to keep up with, and comply with 50+ completely different standards across the country.
- The health insurance industry needs to implement a standard for claims processing, utilization management, etc. that is transparent to physicians; They say they are working on just that. We'll see.
- Physicians and hospitals need to modernize as well; Some government subsidies might be needed to help with initial capital costs; Technologies like electronic prescribing, electronic health records, etc. have been around for years and we have not adapted them very well. Upfront costs are high, but long-term savings to the system should be as well (heck, electronic prescribing should drastically decrease prescription errors and thus save lives as well as money).
- As much as people will hate it, mandate that people purchase insurance. We already do it with car insurance in most places. Along with expanding the risk pool, this will get rid of the need for underwriting individuals and pre-existing condition clauses. The reality is, it makes absolutely no sense for an insurer to accept anyone purchasing individual insurance who has a pre-existing condition, under the present system.
- Stop taxing health insurance premiums. Yes -- 3% or so of health insurance cost in many states is due the state specifically taxing health insurance premiums.

I'm sure there quite a few more improvements that can be made -- those are just a few.

 

[Rolfe]

- As much as people will hate it, mandate that people purchase insurance. We already do it with car insurance in most places. Along with expanding the risk pool, this will get rid of the need for underwriting individuals and pre-existing condition clauses. The reality is, it makes absolutely no sense for an insurer to accept anyone purchasing individual insurance who has a pre-existing condition, under the present system.

If you do that, you need to specify a few things.

• Level of cover has to meet a specified minimum. No point in forcing people to buy something that doesn't actually cover their treatment when they get sick.
• Co-pays and deductibles will have to be affordable. No point in buying insurance with a deductible of $20,000 if you don't have $20,000.
• Insurers must actually pay up - no rescissions, no denial of claims, no death panels - for claims that fall within the coverage specified by a policy.

Then how much would a minimum-coverage policy cost? Would everyone be able to afford to buy this? Self-evidently, the answer is no. It would be essential to use tax funds to subsidise the costs for the low-income.

Irrespective of subsidies, this is going to squeeze the insurance companies a lot. Covering everyone, to a reasonable standard of care, for whatever illnesses or injuries they suffer, without weaselling out, will cost them. And at the same time there will be pressure to keep premiums low, so that they can be afforded, especially as the government is going to have to make up what the beneficiaries can't afford. Regulation may be requited.

And you know what? If you achieve this, you have, to all intents and purposes achieved a universal healthcare system.

Welcome to the free world.

Rolfe.

 

[Dancing David]

"Gold-plated cutlery" is doubtfully much of an expense in the grand scheme of things. Nonetheless, the way to streamline the overall inefficiency in the system is:

- Nationalize health regulation. Allow insurers to compete nationally instead of state by state. That would eliminate overhead insurance companies have to spend on trying to keep up with, and comply with 50+ completely different standards across the country.

Uh huh, sure and then Lisa Madigan can't sue them under Illinois state law. the problem is the prfit, it is the profit that jacks up the price, not this.

- The health insurance industry needs to implement a standard for claims processing, utilization management, etc. that is transparent to physicians; They say they are working on just that. We'll see.

ha ha ha. So true and unlikely to happen, they want to deny coverage and ration care. For a profit.

- Physicians and hospitals need to modernize as well; Some government subsidies might be needed to help with initial capital costs; Technologies like electronic prescribing, electronic health records, etc. have been around for years and we have not adapted them very well. Upfront costs are high, but long-term savings to the system should be as well (heck, electronic prescribing should drastically decrease prescription errors and thus save lives as well as money).

Most hospitals already do, put having the nurse doctor interface is part of accountability. there are no saving there, despite O-mans statements.
The decrease in medical erros is somewhat likely

- As much as people will hate it, mandate that people purchase insurance. We already do it with car insurance in most places. Along with expanding the risk pool, this will get rid of the need for underwriting individuals and pre-existing condition clauses. The reality is, it makes absolutely no sense for an insurer to accept anyone purchasing individual insurance who has a pre-existing condition, under the present system.

Nope. that is silly, provide catastrophic coverage from a single source that may be suplemented would be easier. So will you make people sell their property if they don't purchase insurance.

- Stop taxing health insurance premiums. Yes -- 3% or so of health insurance cost in many states is due the state specifically taxing health insurance premiums.

I am reluctant but my employer contribution to health insurance is income, so it should be taxed as income tax. yes you should be able to right off many things, but not premiums, that is a service you buy.

I'm sure there quite a few more improvements that can be made -- those are just a few.

remove the profit motive from the insurance stream, it will cost jobs, but it will reduce costs.

 

[ARubberChickenWithAPulley]

Uh huh, sure and then Lisa Madigan can't sue them under Illinois state law. the problem is the prfit, it is the profit that jacks up the price, not this.

Uh huh. That's why all the non-profit plans have such significantly lower premiums, right? That's sarcasm, by the way. They don't. And by the way -- non-profit companies still have to have a profit margin. Generally, staying in the black is a prerequisite to staying in business.

ha ha ha. So true and unlikely to happen, they want to deny coverage and ration care. For a profit.

Like I said -- there are non-profit plans out there, particularly Blue Cross/Blue Shield. They aren't faring any better than for-profit plans.

Most hospitals already do, put having the nurse doctor interface is part of accountability. there are no saving there, despite O-mans statements.

Do you have any actual evidence that "most hospitals" have adapted electronic health records, or electronic prescribing, amongst other things?

The decrease in medical erros is somewhat likely

Much more than somewhat.

Of the 25 studies that analysed the effects on the medication error rate, 23 showed a significant relative risk reduction of 13% to 99%.

And another, from HHS - dispensing error rate was cut in half:

The research team found the rate of dispensing errors to be reduced for the intervention clinics only for those prescriptions ePrescribed (3%) and not for prescriptions still routed the traditional method (6.1%).

Nope. that is silly, provide catastrophic coverage from a single source that may be suplemented would be easier. So will you make people sell their property if they don't purchase insurance.

Will you make people sell their property if they don't want to get their catastrophic coverage from a single source? I'd rather still have some choice of what company I can purchase my service from. We can subsidize people who can't afford premiums or don't get it through their employer so they don't have to "sell their property."

I am reluctant but my employer contribution to health insurance is income, so it should be taxed as income tax. yes you should be able to right off many things, but not premiums, that is a service you buy.

You're confusing taxing benefits as income, and state health insurance premium taxes. Many states tax health insurance premiums directly. That cost is passed on to you directly. 2-3% in most cases.

In any event, I'd most likely go the other way: Right now, employer-based premiums are not taxed as income, individually-purchased premiums are. I'd rather make it consistent and let both individual and employer-based insurance be pre-tax income.

remove the profit motive from the insurance stream, it will cost jobs, but it will reduce costs.

Maybe a few cents on every dollar, at best. Of course, you could also remove profit from the hospital system and the pharmaceutical system and that would save a lot more money. We could also cut down on our use of defensive medicine. Lots of savings all around. A few cents in health insurance profit isn't anywhere near the biggest one.

 

[WildCat]

Uh huh. That's why all the non-profit plans have such significantly lower premiums, right? That's sarcasm, by the way. They don't.

Actually, they do. See post #13 in this thread. It's an incredible difference. Try comparing for yourself on esurance.com if you still have doubts.

 

[ARubberChickenWithAPulley]

If you do that, you need to specify a few things.

[*]Level of cover has to meet a specified minimum. No point in forcing people to buy something that doesn't actually cover their treatment when they get sick.

Sure. Have a minimum-standard plan available. Ambulatory and emergency care, for example.

[*]Co-pays and deductibles will have to be affordable. No point in buying insurance with a deductible of $20,000 if you don't have $20,000.

I've never heard of a $20,000 deductible. I intentionally chose the highest deductible possible, and it is 6k. But yes, I agree. Right now, I can save money tax-free in a health savings account. To get that, the government mandates that I have a high-deductible plan -- and they set the minimum dollar amounts. I think it's a great idea -- except that a $3000 deductible is a lot more attractive to someone making $300,000 per year than to someone making $30,000 per year.

[*]Insurers must actually pay up - no rescissions, no denial of claims, no death panels - for claims that fall within the coverage specified by a policy.

The insurance industry has proposed exactly this. And if everyone were in the system, they wouldn't have to do recissions or pre-existing condition clauses.

As for "no denial of claims" -- that's unrealistic, if we are serious about cutting costs. I would say no unfair denial of claims, and no retroactive denial of claims, perhaps. But if a doctor wants to prescribe a $100,000 drug and a $1,000 drug is available that has the same proven effectiveness, I have no problem with an insurance company denying it.

Then how much would a minimum-coverage policy cost? Would everyone be able to afford to buy this? Self-evidently, the answer is no. It would be essential to use tax funds to subsidise the costs for the low-income.

Well, there is Medicaid already for very low-income people. The bigger issue is people in the "gap" -- make too much for Medicaid, but don't make enough to purchase their own insurance, or get it through their employer. Plus, it would help if Medicaid and Medicare paid reasonable rates to begin with.

Irrespective of subsidies, this is going to squeeze the insurance companies a lot. Covering everyone, to a reasonable standard of care, for whatever illnesses or injuries they suffer, without weaselling out, will cost them. And at the same time there will be pressure to keep premiums low, so that they can be afforded, especially as the government is going to have to make up what the beneficiaries can't afford. Regulation may be requited.

It won't just squeeze insurance companies. It will also squeeze hospitals and doctors. If you take all profit out of the equation and insurance companies just break even, you're saving a few cents on the dollar. Insurance companies are not largely responsible for why health care is so expensive. We can talk about higher overhead and such all we want, but it doesn't come close to explaining why the U.S. typically spends twice as much as most other countries. In a hypothetical world where admin costs were zero, we'd still be paying a lot more and getting less. A lot of other things have to be done to make premiums affordable, outside of insurance reform.

And you know what? If you achieve this, you have, to all intents and purposes achieved a universal healthcare system.

I agree. Maybe I'm an optimist, but I think we can have our cake and eat it too in some respects. If people want choice in health insurance, we can preserve that (and really, expand it, since choice now is a bit of a joke), and still make sure everyone has access.

 

[ARubberChickenWithAPulley]

Actually, they do. See post #13 in this thread. It's an incredible difference. Try comparing for yourself on esurance.com if you still have doubts.

What you compared is completely different. You compared Kaiser Permanente, an HMO that also owns the hospitals in its system. Kaiser is an interesting model, but it's not the same as comparing traditional health insurance companies.

Of course, non-profits also get tax-exempt status so that is a saving right there. Sort of.

 

[WildCat]

What you compared is completely different. You compared Kaiser Permanente, an HMO that also owns the hospitals in its system. Kaiser is an interesting model, but it's not the same as comparing traditional health insurance companies.

It's a model the entire country should be adopting. Costs need to be controlled, the entire "health care as a business" model is a complete failure which has produced nothing but spiraling costs with no measurable benefits to the patient.
Seriously, a health insurance plan with 40% coinsurance is scarcely better than no plan at all.

 

[WildCat]

Uh huh, sure and then Lisa Madigan can't sue them under Illinois state law.

Maybe then she'd have time to prosecute the rampant corruption in this state, of course she won't because that would mean putting her daddy and all his friends in jail.

 

[ARubberChickenWithAPulley]

It's a model the entire country should be adopting. Costs need to be controlled, the entire "health care as a business" model is a complete failure which has produced nothing but spiraling costs with no measurable benefits to the patient.
Seriously, a health insurance plan with 40% coinsurance is scarcely better than no plan at all.

I don't disagree that Kaiser-like organizations across the country could be a good way to go. I'm just saying if you're talking apples to apples (health insurance companies), 48% of our population are covered by non-profit health plans, and I don't know that they are getting significantly better service or value. You're not just talking about profit vs. non-profit, you're talking about a fundamentally different system.

It's worth pointing out, though, that the physician side of Kaiser (Permanente Medical Group) is for-profit. It's an odd structure.

 

[WildCat]

It's worth pointing out, though, that he hospital side of Kaiser is for-profit. It's an odd structure.

You have to have some profit to remain viable. But you can still be for-profit and still be low-cost. I'm talking about the whole "health care as a business" model so common throughout the US today. We have doctors who have a financial interest in the MRI clinic, for example. Guess what? That doctor will send patients to get an MRI far more often than a doctor who doesn't have such an interest. It also leads to hospitals and doctors upselling patients tests and procedures they don't really need. When a doctor gets paid per procedure guess what you get? More procedures. Health care is being run like a auto dealership, fine for auto dealerships but disastrous for patients.

And the AMA has done nothing to discourage such practices.