I suspect, but don't know for sure, that private insurance can have no long term role in health care. The only role they seem to serve is to be a middleman who takes a substantial cut in return for work that is really pretty trivial, and insulates providers from consumers in a way that prevents the free market from working.
Whether medical care should be completely nationalized or can be implemented by a mix of public and private hospitals and other providers isn't clear to me, but what is clear is that the present system is rife with gouging and prevents a sizable part of the population from getting health care.
Here's my strategy:
1: Fix the PPACA. The mandate is critical. The regulatory constraints on what counts as acceptable insurance are critical. There are lots of details that need to be polished. The price of drugs needs to be brought under control. The numerous areas where there is huge gouging need to be regulated. (e.g. MRI) The medicaid expansion needs to be mandatory for all states and everybody needs to be eligible. If you have a contagious disease, you need to seek treatment, whether you're legally here or not. If you're afraid to go to the hospital because you might get deported, and you're sick, you are spreading disease.
2: A public option. The insurance companis exist to make a profit, and in far too many cases, they're making the bulk of their money by gouging. In addition, they are a major insulator between the provider and consumer, totally preventing any semblance of an effective free market. A public option would be an insurance company with the resources of the government behind it. When this has been tried before, it has been vastly more efficient than private companies. I am pretty sure that the insurance companies will not be able to compete with a public option, but I'd be more than happy to be wrong about this. In that case, the public option would simply be another option, which could help out in places where insurance doesn't reach for some reason. But I'm pretty sure that won't happen, and the insurance companies will fight hard and dirty, by lobbying, bribery and outright cheating, to keep their perquisite.
3: After a few years of a public option, most of the insurance companies will be gone. At this point, there will be three systems: 1: the various existing government systems, such as the VA and medicare. 2: the various existing employer based systems. Most of the insurance based ones will have already been turned into versions of the public option by this point, but the self-insurance ones may still exist. 3: public option. The employers and many employees will be seeking a way to rationalize this. I suspect the best way to do it is Medicare for All: Simply pay medical costs like any other government service. This is by far the cheapest way to do it.
None of this would ban private insurance. If you want private insurance over and above medicare for some reason, you can do that. More realistically, there are plenty of things the government shouldn't be paying for, such as optional cosmetic surgery, that will be paid for out of pocket, and that's fine. Other concierge services would also be perfectly ok.
I'm ok with a nominal cost per visit. One of the things that happens in government systems sometimes is that hypochondriacs and bored people often spend a lot of time with the doctor just to have someone to talk to. To some degree, this is ok--hypochondria is sometimes a cover for some more serious underlying condition. So charge a few dollars per visit, just to keep abuse to a minimum. The provider may waive this fee at the behest of the doctor.
Showing posts with label health insurance. Show all posts
Showing posts with label health insurance. Show all posts
01 August 2019
18 May 2014
Obamacare
One of the "Republicans" running for congress in my highly gerrymandered district just sent me a request for a donation, which began "If you think Obamacare is an unqualified success, I have sent this to you in error." Is the PPACA an unqualified success? No. But is it a huge win for our nation, especially for the tens of millions who could not get health insurance at all and the tens of millions more who had been getting gouged outrageously, either by selling them what was effectively minor care insurance which would be cancelled if something serious occurred, or by overbilling them or their employer. The PPACA has already made a huge bend in the rising cost of health care, has banned fraudulent policies, and has required efficiency improvements from insurers, providers, and more. It has unquestionably improved the health insurance status for the previously uninsured.
There are basically three types of health insurance available in various countries around the world:
1: Fully Nationalized. The government pays health service providers out of the general tax base, and no private insurers are involved. Everywhere this has been tried, from the NHS in Britain and its counterpart in France and the Scandinavian countries, Medicare in Canada, the VA and Medicare in the US, this has worked extremely well. It hasn't always been sufficiently funded--the drastic cuts to the VA that occurred under several Republican administrations have led to terrible wait times--but the actual cost and outcomes per patient actually covered are significantly better than any other approach. This is sometimes called "Single Payer". I'm not aware of any country that has single payer that does not permit you to buy premium coverage either through the private market or by paying special fees to the nationalized system.
2: Strongly regulated private insurance: Switzerland, Germany, Japan and a number of other countries have this. It works differently in each place, and while it's not quite as efficient as single payer, it's dramatically better than the unregulated approach the US took until 4 years ago.
3: Weakly regulated private insurance. There are only a few countries in the world that do this and it's a catastrophe in all of them. The US has the highest health care costs of any country in the world by nearly a factor of 2, and this factors in our crazy quilt of far-more-effective nationalized systems, including Medicare, Medicaid, VA and more, which work way better than laissez-faire. The PPACA was an attempt, designed largely by insurance industry lobbyists at the Heritage Foundation, to bring some of the worst abuses under control while not really changing much. We now have slightly more regulated private insurance. The insurers can't rip us off quite as badly.
The name "Obamacare" was an attempt at an ad hominem assault on the PPACA. The theory was that people who hate Obama, whether because of the color of his skin or the party he represents, would be inclined to hate Obamacare, whether they actually know what it is or not. In fact, while most of the provisions of the PPACA enjoy 70% or higher support of Americans, including strong majorities of Republicans, only the mandate and the name "Obamacare" score lower than 50%. The exchange, extending coverage for dependents up to age 26, and disallowing denial for pre-existing conditions, have close to 90% support. The fact that these guys are still trying to run against "Obamacare" and have not been run out of congress on a rail tells us that their ad hominem assault has been working, at least for some of the voters.
Is Obamacare an unqualified success? No. Is it a huge success, albeit flawed and incomplete? Yes. We should fix the problems--the biggest of two being that most insurance still comes through employers, and that there are still private insurers getting payments every month, including from some people who are pretty darned poor--but it's a huge step in the right direction.
There are basically three types of health insurance available in various countries around the world:
1: Fully Nationalized. The government pays health service providers out of the general tax base, and no private insurers are involved. Everywhere this has been tried, from the NHS in Britain and its counterpart in France and the Scandinavian countries, Medicare in Canada, the VA and Medicare in the US, this has worked extremely well. It hasn't always been sufficiently funded--the drastic cuts to the VA that occurred under several Republican administrations have led to terrible wait times--but the actual cost and outcomes per patient actually covered are significantly better than any other approach. This is sometimes called "Single Payer". I'm not aware of any country that has single payer that does not permit you to buy premium coverage either through the private market or by paying special fees to the nationalized system.
2: Strongly regulated private insurance: Switzerland, Germany, Japan and a number of other countries have this. It works differently in each place, and while it's not quite as efficient as single payer, it's dramatically better than the unregulated approach the US took until 4 years ago.
3: Weakly regulated private insurance. There are only a few countries in the world that do this and it's a catastrophe in all of them. The US has the highest health care costs of any country in the world by nearly a factor of 2, and this factors in our crazy quilt of far-more-effective nationalized systems, including Medicare, Medicaid, VA and more, which work way better than laissez-faire. The PPACA was an attempt, designed largely by insurance industry lobbyists at the Heritage Foundation, to bring some of the worst abuses under control while not really changing much. We now have slightly more regulated private insurance. The insurers can't rip us off quite as badly.
The name "Obamacare" was an attempt at an ad hominem assault on the PPACA. The theory was that people who hate Obama, whether because of the color of his skin or the party he represents, would be inclined to hate Obamacare, whether they actually know what it is or not. In fact, while most of the provisions of the PPACA enjoy 70% or higher support of Americans, including strong majorities of Republicans, only the mandate and the name "Obamacare" score lower than 50%. The exchange, extending coverage for dependents up to age 26, and disallowing denial for pre-existing conditions, have close to 90% support. The fact that these guys are still trying to run against "Obamacare" and have not been run out of congress on a rail tells us that their ad hominem assault has been working, at least for some of the voters.
Is Obamacare an unqualified success? No. Is it a huge success, albeit flawed and incomplete? Yes. We should fix the problems--the biggest of two being that most insurance still comes through employers, and that there are still private insurers getting payments every month, including from some people who are pretty darned poor--but it's a huge step in the right direction.
12 December 2013
Politifact, Again
Politifact just came in with its Lie of the Year. Once again, it's not really a lie, but a mostly true statement that has been turned into strawman outrage by the right wing talk machine.
First of all, it's important to understand how the LotY is selected: Politifact puts up a list of candidate statements and politifact readers vote. The other candidates were mostly various incredibly wrong things that republicans had said about ACA, a few statements about NSA spying, and the eventual winner, which was "You can keep your plan if it hasn't changed since the law passed." If you were to pick a sample of voters evenly distributed across the political spectrum, this was the guaranteed winner--ALL republicans would vote for it, because it's been repeated by all media over and over, while no other lie would get more than a percent or two of votes.
Let's look at the actual statement. The point of it was that if you had legitimate health care insurance before the law was passed, you'd get to keep it--that there was nothing in the law that would cause you to lose it. This is basically true. Trouble is, there were a lot of insurance policies that were really only minor-care insurance--they didn't cover major health catastrophes. Those policies were often very cheap and the purchaser wouldn't find out they didn't have real insurance until payment for a serious health problem had been refused or the policy cancelled. ACA required that any new policies issued be real insurance, and that's where the problem came in: The insurer had to find some way to pay for the required coverage, when they had heretofore only been charging for much cheaper, minor care coverage. But under ACA, old policies were grandfathered--even the worthless ones. Until the policy was significantly changed, it could continue as before. Most insurance policies are rewritten every few years, so eventually, the bad ones would be flushed out of the system.
Of course, the insurance companies knew that they had the customers over a barrel. All they had to do was cancel the old policy or restructure it in a way that under ACA required it to become real insurance, and they could charge "real" market prices and force customers to pay them. Since no new fake coverage could be issued, the customers didn't have a cheap alternative anymore. Viola! Of course they were still hoping for a big enough backlash to get PPACA overturned, allowing them to go back to their old scams, but this was a pretty good scam too.
The lie is that this somehow proves that PPACA is a bad thing. The fault is entirely with the scammer insurance companies, that have been scurrying out of the light like the cockroaches they are, and which the incredibly corrupt congress has forced us to do business with, instead of squashing them as they should have. They are now limited to gouging only 20% where before 30% was commonplace. Estimates are that about 5% of Americans will be harmed by these price hikes, nearly all of them well-to-do, and that the VAST majority of Americans will see their health insurance costs go down, often quite dramatically.
First of all, it's important to understand how the LotY is selected: Politifact puts up a list of candidate statements and politifact readers vote. The other candidates were mostly various incredibly wrong things that republicans had said about ACA, a few statements about NSA spying, and the eventual winner, which was "You can keep your plan if it hasn't changed since the law passed." If you were to pick a sample of voters evenly distributed across the political spectrum, this was the guaranteed winner--ALL republicans would vote for it, because it's been repeated by all media over and over, while no other lie would get more than a percent or two of votes.
Let's look at the actual statement. The point of it was that if you had legitimate health care insurance before the law was passed, you'd get to keep it--that there was nothing in the law that would cause you to lose it. This is basically true. Trouble is, there were a lot of insurance policies that were really only minor-care insurance--they didn't cover major health catastrophes. Those policies were often very cheap and the purchaser wouldn't find out they didn't have real insurance until payment for a serious health problem had been refused or the policy cancelled. ACA required that any new policies issued be real insurance, and that's where the problem came in: The insurer had to find some way to pay for the required coverage, when they had heretofore only been charging for much cheaper, minor care coverage. But under ACA, old policies were grandfathered--even the worthless ones. Until the policy was significantly changed, it could continue as before. Most insurance policies are rewritten every few years, so eventually, the bad ones would be flushed out of the system.
Of course, the insurance companies knew that they had the customers over a barrel. All they had to do was cancel the old policy or restructure it in a way that under ACA required it to become real insurance, and they could charge "real" market prices and force customers to pay them. Since no new fake coverage could be issued, the customers didn't have a cheap alternative anymore. Viola! Of course they were still hoping for a big enough backlash to get PPACA overturned, allowing them to go back to their old scams, but this was a pretty good scam too.
The lie is that this somehow proves that PPACA is a bad thing. The fault is entirely with the scammer insurance companies, that have been scurrying out of the light like the cockroaches they are, and which the incredibly corrupt congress has forced us to do business with, instead of squashing them as they should have. They are now limited to gouging only 20% where before 30% was commonplace. Estimates are that about 5% of Americans will be harmed by these price hikes, nearly all of them well-to-do, and that the VAST majority of Americans will see their health insurance costs go down, often quite dramatically.
27 August 2013
Politifact
Politifact has an interesting problem. They'd probably like to be fair and accurate. But they know that today's political reality is completely one sided. People from both sides lie, but it's a 90-10 thing. For one side, lying is a central part of their policy. Their economic programs, their foreign policy programs, their social welfare programs, even their military programs, have been consistently somewhere between poor and catastrophic, so they have to lie. And they've been allowed to get away with it. The other party rarely calls them on it, and when they do, it's always timid. Politicians have always known that if you show confidence, it doesn't matter how brazen the lie, a lot of people who don't know any better will believe a confident liar over a softspoken truthteller.
Politifact is trying to be a fair arbiter of this situation, but they know that if they call it as they see it, the Republicans will come after them and probably destroy them. So they twist. Here are a couple of examples, on the ACA's administrative overhead requirement: http://www.politifact.com/truth-o-meter/statements/2011/may/30/barbara-boxer/barbara-boxer-says-medicare-overhead-far-lower-pri/ http://www.politifact.com/truth-o-meter/statements/2013/jul/24/barack-obama/barack-obama-says-millions-benefit-insurance-compa/. The background: ACA requires that individual and small company insurance policies spend 80% of client revenue providing them health care, 85% for big companies. Historically, single payer programs like Medicare, VA, and big companies "self insuring" etc, spend 95-98%. Private insurance averages 93% for big companies, 74% for medium sized companies, and 70% for individuals and small companies. Payers would be rebated any excess administrative costs. Each of these two articles are discussing an ACA supporter describing this, completely accurately, and if you read the whole article, you get that. Yet they rate both supporters statement as "Half True", because there was some aspect of their statement that could be misrepresented. Sen. Boxer said that Medicare and other single payers have 1-5% overhead, and the single payer part of medicare does indeed achieve that. But there's a private insurance part of Medicare, called "Part C" or "Medicare Advantage", that does not, but has the usual private insurance high overhead. Taken together, the private and public parts net about 11%. Proof, really of the point the Senator was saying. The other one, Obama says that 13 million rebates averaging $100 had been paid. In fact, the numbers were 12.8M and $98. Politifact admits that the rounding is acceptable but insists that because the majority of the rebates went to companies and not individuals, it's only half true. The rebate went to whoever had paid for the policy and the president didn't suggest otherwise.
Every year, Politifact rates the President's State of the Union speech and the rebuttal. They're very good at picking on slight oversimplifications in the Democrat's speech, and ignoring gross lies in the Republicans. This one actually provoked me to try to get a response from Politifact but in their replies to me they dissembled. In 2011, Paul Ryan's rebuttal included the statement "Depending on bureaucracy to foster innovation, competitiveness, and wise consumer choices has never worked – and it won’t work now". Well, nobody except Ryan is suggesting solely depending on bureaucracy. But government bureaucracy created the internet, the interstate highway system, the national hydroelectric grid, nuclear power, medicare, social security, and thousands of other innovative, successful programs, many of which promoted private innovation many times the value of the government investment. Ryans statement, very much the central thesis of his speech, is worthy of Politifact's "Pants on Fire" rating. But it got crickets.
The history of the Lie of the Year is interesting. In 2009, it was Sarah Palin and others' completely false statement calling end of life counciling "Death Panels"
In 2010, it was the often repeated and nonsensical claim that ACA represents a government takeover of healthcare.
In 2011, it was the completely true claim by Democrats that Paul Ryan's proposal to privatize Medicare was in effect a proposal to end Medicare as we know it.
In 2012, it was Romney's completely false claim that Chrysler/Fiat was moving Jeep assembly lines from Ohio to China. (In fact, they started doing a small amount of assembly in China for the growing East Asian market for Jeeps)
Politifact is playing a game of statistics. They report that Republicans lie three times as often as Democrats (note that the Lie of the Year statistics match that), and the Republicans scream about this indicating a leftward bias. In fact, they are being extremely generous to Republicans. They tend to soft pedal outrageously false screeds from the right, and ignore many of the worst, and are overly harsh on slight misstatements and even things that are pretty much true from the Ds.
update 25 Jan 2014
I just stumbled on this. Alternet and Salon are not necessarily bastions of neutrality but they are better than Politifact.
Politifact is trying to be a fair arbiter of this situation, but they know that if they call it as they see it, the Republicans will come after them and probably destroy them. So they twist. Here are a couple of examples, on the ACA's administrative overhead requirement: http://www.politifact.com/truth-o-meter/statements/2011/may/30/barbara-boxer/barbara-boxer-says-medicare-overhead-far-lower-pri/ http://www.politifact.com/truth-o-meter/statements/2013/jul/24/barack-obama/barack-obama-says-millions-benefit-insurance-compa/. The background: ACA requires that individual and small company insurance policies spend 80% of client revenue providing them health care, 85% for big companies. Historically, single payer programs like Medicare, VA, and big companies "self insuring" etc, spend 95-98%. Private insurance averages 93% for big companies, 74% for medium sized companies, and 70% for individuals and small companies. Payers would be rebated any excess administrative costs. Each of these two articles are discussing an ACA supporter describing this, completely accurately, and if you read the whole article, you get that. Yet they rate both supporters statement as "Half True", because there was some aspect of their statement that could be misrepresented. Sen. Boxer said that Medicare and other single payers have 1-5% overhead, and the single payer part of medicare does indeed achieve that. But there's a private insurance part of Medicare, called "Part C" or "Medicare Advantage", that does not, but has the usual private insurance high overhead. Taken together, the private and public parts net about 11%. Proof, really of the point the Senator was saying. The other one, Obama says that 13 million rebates averaging $100 had been paid. In fact, the numbers were 12.8M and $98. Politifact admits that the rounding is acceptable but insists that because the majority of the rebates went to companies and not individuals, it's only half true. The rebate went to whoever had paid for the policy and the president didn't suggest otherwise.
Every year, Politifact rates the President's State of the Union speech and the rebuttal. They're very good at picking on slight oversimplifications in the Democrat's speech, and ignoring gross lies in the Republicans. This one actually provoked me to try to get a response from Politifact but in their replies to me they dissembled. In 2011, Paul Ryan's rebuttal included the statement "Depending on bureaucracy to foster innovation, competitiveness, and wise consumer choices has never worked – and it won’t work now". Well, nobody except Ryan is suggesting solely depending on bureaucracy. But government bureaucracy created the internet, the interstate highway system, the national hydroelectric grid, nuclear power, medicare, social security, and thousands of other innovative, successful programs, many of which promoted private innovation many times the value of the government investment. Ryans statement, very much the central thesis of his speech, is worthy of Politifact's "Pants on Fire" rating. But it got crickets.
The history of the Lie of the Year is interesting. In 2009, it was Sarah Palin and others' completely false statement calling end of life counciling "Death Panels"
In 2010, it was the often repeated and nonsensical claim that ACA represents a government takeover of healthcare.
In 2011, it was the completely true claim by Democrats that Paul Ryan's proposal to privatize Medicare was in effect a proposal to end Medicare as we know it.
In 2012, it was Romney's completely false claim that Chrysler/Fiat was moving Jeep assembly lines from Ohio to China. (In fact, they started doing a small amount of assembly in China for the growing East Asian market for Jeeps)
Politifact is playing a game of statistics. They report that Republicans lie three times as often as Democrats (note that the Lie of the Year statistics match that), and the Republicans scream about this indicating a leftward bias. In fact, they are being extremely generous to Republicans. They tend to soft pedal outrageously false screeds from the right, and ignore many of the worst, and are overly harsh on slight misstatements and even things that are pretty much true from the Ds.
update 25 Jan 2014
I just stumbled on this. Alternet and Salon are not necessarily bastions of neutrality but they are better than Politifact.
25 April 2011
Medical expenses and inflation
As everybody knows by now, medical expenses have been skyrocketing and are now a large part of government spending, both at federal and state levels. The republicans want to reduce them by reducing government payments. This doesn't work, and it results in ever more people not being able to get medical care. This kills at least 45,000 people a year (and here). So then, what are the causes of the rise in medical expenses?
One of the big areas could fairly be described as gouging. This happens for several reasons, some reasonable, some lame, some opportunistic. By law, Emergency Rooms are not allowed to refuse to care for anybody, including those who can't pay. Moreover, ER care is the most expensive--patients are sicker, equipment, doctors and nurses can't be scheduled (so they have to keep a surplus on hand). Since every medical provider has this huge hole in their budget, they have to shift the cost to elsewhere. Charge higher prices everywhere else. One of the places this happens is spectacularly lame. Every provider has a deal with the insurers they work with often. Generally part of this is an across-the-board price cut, often as much as 40%. Knowing they're going to do this, they raise the prices of the individual services to compensate. Folks who haven't negotiated this deal don't get the cut. This includes insurers that don't do enough business with that particular provider (e.g. they're from a different part of the country) and uninsured customers. If you know to ask for it, they'll typically give you an "Uninsured discount" if you pay promptly or in advance, but this is more often only 25%. But if you don't ask or can't pay promptly, you pay the full price. Of course since there's this radical decoupling between actual costs and list prices, there's lots of opportunity to gouge further.
By increasing the number of people who have insurance and can thus get scheduled care for non-emergency issues, the new health care law should substantially reduce ER costs, and it should allow more people to participate in the "negotiated" price breaks. But notice that the insurance companies managed to convince congress to put this off until 2014 and are now trying to kill it.
Drugs are another big cost. For example, drug companies are able to gouge for new drugs that are still under patent, but not for generics, where the free market applies. A major bit of cynicism is the continual development of new drugs that are really the same as older drugs only different enough to be able to patent. For example, new statin drugs like Lipitor and Crestor are only trivially more effective than older statins like Lovastatin and Simvastatin, but they're able to charge 10 times as much. Doctors and medicare are aware of this but enough still prescribe the more expensive options that it's a profitable scam.. The drug companies have another big cost that is totally unnecessary but is a huge part of their costs: TV advertising. They spend a LOT more on this than they do on R&D. The return from this is small, but significant. If one company stops doing it, they'll lose market share, so they can't. The only way to stop this would be for the government to stop it all. I'm fine with drug companies advertising in medical journals and other doctor-specific promotions. But it should be banned in mass media, like TV, newspapers and general interest magazines.
Another big cost is profit taking and wasteful overhead on the part of insurance companies. A certain amount of waste is unavoidable, but we need to keep tabs on this. One recent study puts this at 20-30% of total costs. Meanwhile, Medicare and the VA are able to keep this under 6% This extra 14-24% goes on top of all other costs, including all of that gouging.
One huge cost that I haven't seen discussed much is offshoring. When Walmart (for example) buys from a Chinese manufacturer rather than a US, the price goes down. When they pay workers less, the price goes down. The standard measures of inflation, such as CPI, consist of a "basket" of products, some of which are reducing in costs this way, and some of which are not. If half the things in the basket are going down in price, and half are going up, then the inflation we measure is somewhere between. Medical care is one of the things that can't be offshored much. Even if medical care were remaining as a constant share of GDP, this would make it seem like it was inflating faster than nearly everything else. But people get sick whether their wages are high or low (in fact, low income people tend to be a little sicker). Inflation-corrected wages for more than half of the population have been close to flat for over 30 years, so those people--the majority--are less and less able to pay. Their wages are being held down, in effect, by offshoring. My solution here: we need to recognize this effect and raise wages for the bottom 80% or so. We can do this with small changes to the tax code--not really redistribution, but the effects are similar. This will be good for everybody and really not hurt those at the top.
One of the big areas could fairly be described as gouging. This happens for several reasons, some reasonable, some lame, some opportunistic. By law, Emergency Rooms are not allowed to refuse to care for anybody, including those who can't pay. Moreover, ER care is the most expensive--patients are sicker, equipment, doctors and nurses can't be scheduled (so they have to keep a surplus on hand). Since every medical provider has this huge hole in their budget, they have to shift the cost to elsewhere. Charge higher prices everywhere else. One of the places this happens is spectacularly lame. Every provider has a deal with the insurers they work with often. Generally part of this is an across-the-board price cut, often as much as 40%. Knowing they're going to do this, they raise the prices of the individual services to compensate. Folks who haven't negotiated this deal don't get the cut. This includes insurers that don't do enough business with that particular provider (e.g. they're from a different part of the country) and uninsured customers. If you know to ask for it, they'll typically give you an "Uninsured discount" if you pay promptly or in advance, but this is more often only 25%. But if you don't ask or can't pay promptly, you pay the full price. Of course since there's this radical decoupling between actual costs and list prices, there's lots of opportunity to gouge further.
By increasing the number of people who have insurance and can thus get scheduled care for non-emergency issues, the new health care law should substantially reduce ER costs, and it should allow more people to participate in the "negotiated" price breaks. But notice that the insurance companies managed to convince congress to put this off until 2014 and are now trying to kill it.
Drugs are another big cost. For example, drug companies are able to gouge for new drugs that are still under patent, but not for generics, where the free market applies. A major bit of cynicism is the continual development of new drugs that are really the same as older drugs only different enough to be able to patent. For example, new statin drugs like Lipitor and Crestor are only trivially more effective than older statins like Lovastatin and Simvastatin, but they're able to charge 10 times as much. Doctors and medicare are aware of this but enough still prescribe the more expensive options that it's a profitable scam.. The drug companies have another big cost that is totally unnecessary but is a huge part of their costs: TV advertising. They spend a LOT more on this than they do on R&D. The return from this is small, but significant. If one company stops doing it, they'll lose market share, so they can't. The only way to stop this would be for the government to stop it all. I'm fine with drug companies advertising in medical journals and other doctor-specific promotions. But it should be banned in mass media, like TV, newspapers and general interest magazines.
Another big cost is profit taking and wasteful overhead on the part of insurance companies. A certain amount of waste is unavoidable, but we need to keep tabs on this. One recent study puts this at 20-30% of total costs. Meanwhile, Medicare and the VA are able to keep this under 6% This extra 14-24% goes on top of all other costs, including all of that gouging.
One huge cost that I haven't seen discussed much is offshoring. When Walmart (for example) buys from a Chinese manufacturer rather than a US, the price goes down. When they pay workers less, the price goes down. The standard measures of inflation, such as CPI, consist of a "basket" of products, some of which are reducing in costs this way, and some of which are not. If half the things in the basket are going down in price, and half are going up, then the inflation we measure is somewhere between. Medical care is one of the things that can't be offshored much. Even if medical care were remaining as a constant share of GDP, this would make it seem like it was inflating faster than nearly everything else. But people get sick whether their wages are high or low (in fact, low income people tend to be a little sicker). Inflation-corrected wages for more than half of the population have been close to flat for over 30 years, so those people--the majority--are less and less able to pay. Their wages are being held down, in effect, by offshoring. My solution here: we need to recognize this effect and raise wages for the bottom 80% or so. We can do this with small changes to the tax code--not really redistribution, but the effects are similar. This will be good for everybody and really not hurt those at the top.
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