Equity market says US Health Bill is killed

[Random]

Random-- another comment related to cause and effect. It could be that all m.d.s are motivated solely by profit and that's why x% of all procedures are not really needed. Or, maybe the m.d.s are running the un-needed tests anyways to avoid liability when the patient eventually dies?

Its not just medical tests though. C-sections and hysterectomies have been way more common in the US than statistics in other countries would dictate, tonsilectomy rates can vary wildly from town to town and doctor to doctor, there seems to be a great deal of back surgery going on that is unneeded and dangerous, etc.

The problem is that a doctor might look at any one of these procedures performed on a particular person and say that that makes sense for that patient, but when you look at the statistics as a whole, there is something seriously, seriously wrong.

It doesn't even need to be greed. Entirely possible that a doctor will perform a procedure thinking that it is in the best interests of the patient, when he would not have if he was busier. I find myself giving more in-depth assistance over the phone at work when it is slow than when I am busy. No real malevolence on my part, just the way it is.

 

[Region Rat]

Yes, and that's what I meant with a different plan like Wyden-Bennet...

Pretty much the only alternative out there. Or did you know of another one?

I'm not of the opinion that every alternative for a health system reform has been explored, and that its not a case of the current House and Senate plans vs. your Wyden-Bennet plan. I'm of the opinion that because certain people just HAD to have a comprehensive, multi-billion (trillion?) dollar plan in a couple of months, that bad decisions were made up front that can't be reconciled. Smart people start from the ground up, building consensus at every step, and modify along the way. They don't start by trying to shove the entire plan through on an accelerated arbitrary time line and daring anyone to try to stop them. I realize that politics do not work that way. I am not deluded in that regard.

I'm not optimistic that our vaunted elected representatives can stop and figure out better alternatives, because elections are coming up in 10 months, and they can't possibly take the chance that they may lose a seat by agreeing that the other side has a better idea. I am not deluded in that regard either.

 

[Random]

This is a great point, and one which screams for a regulatory solution. There's no reason at all hospitals can't be required to charge the same fee for the same service for all their customers. In fact, their fees should be posted on their web site.

Of course, once hospitals are made to standardize all of their fees regardless of who pays the bill, we lose yet another answer to the question, "What do private health insurance companies do?"

 

[Ziggurat]

Of course, once hospitals are made to standardize all of their fees regardless of who pays the bill, we lose yet another answer to the question, "What do private health insurance companies do?"

They provide insurance. Their primary role is to pool risk, not provide discounts. Just like every other form of insurance.

 

[theprestige]

They provide insurance. Their primary role is to pool risk, not provide discounts. Just like every other form of insurance.

Given that some people can't afford insurance, I'm pretty sure that the primary role of insurance companies is to be really really mean to people.

 

[WildCat]

Of course, once hospitals are made to standardize all of their fees regardless of who pays the bill, we lose yet another answer to the question, "What do private health insurance companies do?"

Pool risk, like all other insurance companies.

 

[WildCat]

Given that some people can't afford insurance, I'm pretty sure that the primary role of insurance companies is to be really really mean to people.

Was someone arguing that assistance shouldn't be offered to people who can't afford it?

 

[Francesca R]

Fran-- how much did you lose on the health care / index trade!

Ha, wondered if someone would ask that. It was stopped out in early US time on the 20th at a break even price (moved the stop up as the sector rose the day before).

 

[Random]

Pool risk, like all other insurance companies.

Well, if the government is going to require everyone to buy health insurance, subsidise those who can't afford it, tax those who are wealthy enough to afford it easily, and standardize fees for medical procedures, why not just go to single payer and pay for it with higher taxes?

 

[Francesca R]

[ . . . ] why not just go to single payer and pay for it with higher taxes?

The answer to that (for those who oppose it) is in your question--taxes risk going up by more under single-payer, and the cost of the health system experiencing higher inflation than when intermediated by private insurers (**still under universal mandates).

The UK is an example, increases in health spending are more likely to be driven by politics than market costs. Since 2000 the Labour government has increased the NHS budget by 6% above inflation every year on average and, although it still costs much less than US health provision, its cost has been rising faster than in the US (and considerably faster than elsewhere in Europe, even as demographics are worse in most of Europe). Of course the government can "switch off" the increases in funding as well, and they are going to have to in our case because our fiscal deficit is as bad as yours, but that is incredibly politically difficult.

And as a practical point, as I said up the thread, I am sure it is completely impossible for the US ever to switch from what it has to a single payer model.

 

[daenku32]

Well, if the government is going to require everyone to buy health insurance, subsidise those who can't afford it, tax those who are wealthy enough to afford it easily, and standardize fees for medical procedures, why not just go to single payer and pay for it with higher taxes?

That IS the preferred way.

But there is stupid talk about bipartisanship. Plus it wouldn't survive the filibuster.

 

[Peephole]

If only...

 

[TellyKNeasuss]

Why not get the states out of regulating health insurance entirely, and regulate it at the federal level? Replace 50 state insurance bureaucracies, each with hundreds if not thousands of pages of regulations, with one federal one.

This would be politically difficult ("loss of local control") and a possible violation of the 10th Amendment of the US Constitution.

 

[WildCat]

This would be politically difficult ("loss of local control") and a possible violation of the 10th Amendment of the US Constitution.

It's interstate commerce, so it has no 10th Amendment issues.

It's politically difficult only so far as politicians have no spines.

 

[TellyKNeasuss]

There is plenty of competition in healthcare delivery, but in medicine, supply drives demand. The more doctors there are, the more they have to compete for clients, but doctors are usually paid ala carte or for each procedure performed. If the numbr of clients they have starts to fall, they start looking for things to fix in their remaining patients (extra blood tests, laser eye surgery instead of glasses, knee surgery instead of a cane, etc). The result is that the amount of work the doctor performs stays the same, regardless of how many extra doctors you throw in the mix. Patients who can afford it like it because they get more bells and whistles and yeah, a few extra lives are saved. Doctors like it because they can stay in business and make money. But costs don't come down at all. That's how we got a healthcare system where one third of medical procedures are medically unneccessary.

There is also the issue that in healthcare the sellers (doctors) have much more knowledge than the buyers (patients), so that the buyers are highly dependent on the recommendations of the sellers. It's almost like buying a house from your real estate agent.

Health insurance has its own issues regarding competition. Health insurance companies save money is by arranging contracts with hospitals and doctors to have their clients get discounted rates, or else they will go to a different hospital/doctor. If one health insurer covers fifty percent of a hospitals patients, they are in a great position to bargain for lower rates. But if there are more health insurers in an area, they will each have a smaller portion of a hospitals business and lose bargaining power. Counterintuitively, increased health insurace company competition can lead to higher prices. Thats why Aetna dropped a lot of contracts. Not because they were unhealthy or unprofitable, but because of their physical location. If they lived in an area where Aetna didn't have a solid bargaining block of the population, Aetna dropped em.

In addition, the profit margins of health insurance companies have only averaged around 4 percent the last few years (of course, that's 4 percent of a very large amount of money). Competition cannot drive down rates beyond what is required for companies to make a profit, and while competition might make companies a little more efficient, with only a 4 percent profit margin to work with it's difficult to see how increased competition would cut health insurance rates by more than a few percent, which is negligible considering the rate of inflation in health care costs

 

[Newtons Bit]

They provide insurance. Their primary role is to pool risk, not provide discounts. Just like every other form of insurance.

Though quite ludicrously, most people have a discount in their total bill just from having health insurance. I get something like a 25% discount on prescription medicine from all pharmacies in my area just because I have insurance.

 

[TellyKNeasuss]

Its not just medical tests though. C-sections and hysterectomies have been way more common in the US than statistics in other countries would dictate, tonsilectomy rates can vary wildly from town to town and doctor to doctor, there seems to be a great deal of back surgery going on that is unneeded and dangerous, etc.

The problem is that a doctor might look at any one of these procedures performed on a particular person and say that that makes sense for that patient, but when you look at the statistics as a whole, there is something seriously, seriously wrong.

A specific example: Doctors who own MRI scanners order 4 times as many MRI scans as doctors who don't.

http://www.forbes.com/forbes/2008/0225/032.html

 

[WildCat]

A specific example: Doctors who own MRI scanners order 4 times as many MRI scans as doctors who don't.

http://www.forbes.com/forbes/2008/0225/032.html

As the saying goes, when the only tool you have is a hammer everything looks like a nail.

 

[TellyKNeasuss]

It's interstate commerce, so it has no 10th Amendment issues.

Then why aren't insurance companies suing states on the grounds that states have no authority to prohibit out of state competitors?

 

[WildCat]

Then why aren't insurance companies suing states on the grounds that states have no authority to prohibit out of state competitors?

1. They like having little to no competition.

2. Lacking any federal laws in this area the states are free to do as they wish.