Stag Lord said:

I'm still not sure how a government run option is supposed to drive costs down. 

ktom said:

The operating costs for Medicare and Medicaid are very low, around 3%. Private insurance companies operating costs are in the high single digits or low teens. The main reason why Medicare and Medicaid cost so much is that when they were created the government purposely crippled them on behalf of pharma and hospitals. There is language in the Medicare/Medicaid bylaws stating that the United States government cannot used its huge influence to drive down the cost of services and medication provided by hospitals and pharma respectively. The whole point of socializing medicine is the fact that the government can leverage down the cost of services and medicine. That is one of the reasons other countries with socialized medicine pay much less than the US does for health care costs.

All that says is "the government has influence it doesn't use." But what's the actual mechanism? What "unused influence" does the government really have (short of price fixing) and how would it actually work?

No particular view on this other than that I hope the conservative side in Australia never EVER behaves like our brethren in the US have over this issue.

Check this out- a Democrat politician putting one of the lunatics in their place. (Finally!)

www.youtube.com/watch

Barney Frank FTW.

Seriously - I'm no fan of his, but he handled that a lot better than I would have. The Nazi comparisons and the swastika imagery associated wiht our President are nothing short of reprehensible.

To Ktom's question above: I feel that a governemnt option will compete with the insurance companies and enjoy advanatges which they do not. They will be able to provide a lower cost solution to health care options and the end reult will be that yes - some insurance comoanies may go under, but teh ones that survive will have to lower costs to stay afloat.

If you don't have a goovernment option, there will be NO incentive for the insruance companies ot lwoer cost. Health care isn't car insurance or home owner's insurance, or anything like that. helth isues are not a commodity - you have no choice but to use medical services when you get sick. I'm not sure the for profit insurance approach to health care is even a good idea to start with.

I strongly feel that like some House members were saying yesterday - if there is no government option don't even bother. jsut kill hte bill and try again alter - becuase forcing everyone into the insuaance pool, adding financial burdens to teh insurance companies and forcing businesses to provide insurance for all their workers is just going to make things worse if there isn't a government option. May as well just leave things alone then.

Stag Lord said:

Ah. We are looking at this from completely different angles. What you have described is how a government option is supposed to bring down the cost of health insurance. What I'm asking is how a government insurance/payer option (and the government's "unused influence") will bring down the cost of health care.

Yes - it seems we are.

And it goes back to your point that most people don't think in terms of what their actual care costs - the only see their insurance premiums and deductibles go higher and higher and wonder how the system can sustain itself. Or how they can keep it.

One of my huge, huge issues with the entire Democart appraoch si that there is little discussion about lowering the costs for care.

Stag Lord said:

And if you can't bring down the cost of care, bringing down the cost of an insurance premium isn't going to do anything good (and probably a lot of not so good) in the long run.

Now, there are some connections. Remember, for people with insurance, the care itself seems "free" because they pay so little (a deductible and/or co-pay at most) when they go to the doctor. For people without, they avoid seeking care until they have no choice, and their charges (which are now higher than they would have been if they had come in when the issue was more manageable) usually end up as "bad debt" for the healthcare provider. That bad debt turns into the healthcare provider needing to charge the people who do pay twice as much so they can cover their cost (assuming non-profit. ha). As costs rise, insurance rates rise. As insurance rates rise, more people are left without insurance, and so on.

So there is an argument for some form of universal coverage eventually lowering costs because there will be fewer uncovered procedures; providers will at least get something. But now we're back to the idea of overutilization. Overutilization (whatever the reasons) is indeed a primary source rising healthcare costs (more charges and more risks to the same number of patients). But people with insurance are far more likely than those without to overutilize.

There are two conflicting pressures on the cost of the actual care. Dealing with excessive uncovered and/or indigent care seems to be a pretty easy fix; universal care or at least an inexpensive government option. The overutilization thing is not so easy because all the answers seem subjective ("medical necessity") or the government getting into the business of practicing medicine ("rationing," or whatever you want to call it).

Kevin, you bring up some good points but there is a lot you are missing which is part of which I talked about earlier in that the government can't use it's influence to bring down prices. It is basically the Wal-Mart model where the seller decides how much the producer is going to charge. The other thing is that hospitals, pharma, and clinics know the government is going to pay so it doesn't have to worry about padding prices and what not which you touched on. Another thing that other socialized medicine countries do, especially the UK, is practice preventative medicine. This lowers cost substantially since shorter frequent visits and/or procedures is better than long infrequent ones. Also, the facts speak for themselves in that socialized medicine countries spend less of their GDP on health care than we do by a large margin.

complord said:

Which brings up an interesting point.  What exactly is the goal of healthcare reform? Sure we can lower GDP spent on healthcare by switching to socialized medicine, but we could accomplish the same feat outlawing all medical treatments that cost more than $50.  But it won't improve the quality of care.

Is the goal to lower costs of healthcare, to give every person in the nation some amount of medical insurance, or to improve the quality of care?  Its hard to imagine that any law, any program, or any government entitlements program that can accomplish all three.  And when people start thinking that the government is going to lower the cost of healthcare by lowering the quality of healthcare, that's why people are freaking out (IMHO).

complord said:

Which private insurance companies have been trying to do for decades - although in an attempt to increase profits. Insurance companies, including Medicare, already pretty much dictate what they will pay the provider. This obviously has led to ever increasing cost of care here in the US, not the opposite. The providers compensate by pushing high-margin procedures, not by bringing down overall costs or prices. So how is another insurer, even a government sponsored one, entering this going to change things? What will be different?

Anyway, there is a basic difference here that makes the Wal-Mart model falls apart if you try to apply it to healthcare. Healthcare does not work like retail or manufacturing. The government is not buying the "product" from the doctor, then selling it to the patient through their "insurance company.". Rather, the patient goes to the doctor with an agreement that the government will pay. It would be like you going down to the Colgate factory, picking up a tube of toothpaste, and having the factory bill Wal-Mart. Wal-Mart would have considerably less control over how much the factory will charge for toothpaste when they don't control the "product" anywhere along the supply line. Especially if Colgate has to give toothpaste to everyone who comes through the door, whether they have an agreement with Wal-Mart or not.

complord said:

But as I also touched on, if the providers know what the government is going to pay, there is an incentive to push the high-margin procedures and encourage overutilization. (One of many reasons, including that the patient often wants everything.) The balance is not necessarily struck by insuring everyone, particularly if the government is not the only payer.

complord said:

Right, but how does the government influence this in our culture, which does not practice as much preventative medicine? The lack of preventative care in this country has as much, if not more, to do with social and cultural factors than it does with doctors not trying to get their patients to take more personal responsibility for their health before the problem arises. In fact, a good chunk of doctors are all for preventative measures, even though they don't get paid for them.

complord said:

Yes, but they also "ration" care and/or refuse certain treatments to different people (the government doesn't pay for dialysis for someone over 65, for example). Will that fly in the US?

Sounds like you advocate pure socialized medicine with a single government payer? If so, that essentially comes down to all healthcare providers being employed by the government (perhaps not directly, but essentially). Not saying it's a bad thing, only that to do that here, we wouldn't be "reforming;" we'd be "demolishing and rebuilding."

We already ration. Here is an excellent article on the NY Times regarding it.

"The choice isn’t between rationing and not rationing. It’s between rationing well and rationing badly. Given that the United States devotes far more of its economy to health care than other rich countries, and gets worse results by many measures, it’s hard to argue that we are now rationing very rationally."

Also, something that many who point the finger at the big bad rationing English fail to mention is that DESPITE rationing, or perhaps (as you allude to) because of it, they have better health care than us and greater longevity.

The New Yorker article goes in-depth into cost vs. quality. The big culprit is (surprise) profit-seeking physicians, not patients seeking additional care or tests because their insurance is footing the bill.

"Americans like to believe that, with most things, more is better. But research suggests that where medicine is concerned it may actually be worse. For example, Rochester, Minnesota, where the Mayo Clinic dominates the scene, has fantastically high levels of technological capability and quality, but its Medicare spending is in the lowest fifteen per cent of the country—$6,688 per enrollee in 2006, which is eight thousand dollars less than the figure for McAllen. Two economists working at Dartmouth, Katherine Baicker and Amitabh Chandra, found that the more money Medicare spent per person in a given state the lower that state’s quality ranking tended to be. In fact, the four states with the highest levels of spending—Louisiana, Texas, California, and Florida—were near the bottom of the national rankings on the quality of patient care."

And unless the trend in profit-seeking physicians is reversed, this is what we can look forward to if everywhere becomes like McAllen:

"In a few cases, the hospital executive told me, he’d seen the behavior cross over into what seemed like outright fraud. “I’ve had doctors here come up to me and say, ‘You want me to admit patients to your hospital, you’re going to have to pay me.’ ”

“How much?” I asked.

“The amounts—all of them were over a hundred thousand dollars per year,” he said. The doctors were specific. The most he was asked for was five hundred thousand dollars per year.

He didn’t pay any of them, he said: “I mean, I gotta sleep at night.” And he emphasized that these were just a handful of doctors. But he had never been asked for a kickback before coming to McAllen."

 

Man - everyone should read that New Yorker article. It makes it pretty clear that doctors who are involved in the profitability of the hospitals theya re affiliated with are definitely driving up cost. I'm not sure if the patients really wnat all these tests - theya re told to take them by doctors: so what are they going to do? Refuse treatment?

The problem with the insurance for rpofit model is that there is often a conflict between the best interest of the insuracne companies shareholders and the best interest of their patients.

SiddGames said:

 

Of course we already ration. It's the method of rationing that you have to pay attention to.

In American, we ration just about everything based on the "almighty dollar." If you can pay for it, there is no reason you shouldn't have it, right? Private security companies, package delivery services, private schools and personal generators are just a few examples of how people with means get themselves "better" or "more" services than the public options. (And how people who don't really have the means will ruin themselves economically in pursuit of the associated status.) That's the heart of capitalism, after all. The necessary (and inevitable) economic rationing is based on what an individual can pay for.

When I ask "will that fly in the US," I am referring to the system of rationing used in socialized medicine, which is based on a mixture of need and outcome formulae. It may work great (depending on whose stats you look at), but philosophically, it would be a nightmare in the US because, in general, we don't think that way. Leaving aside the emotional "socialism is not a democracy" stupidity of comparing an economic system to a political system, the idea of socialized medicine leaves people thinking that they cannot get what they want, even if they can pay for it. People see it as the sickest people with the poorest prognosis would not be able to get the medical resources they want/need, regardless of their means to pay. This is not something that "computes" with most Americans. Further, Americans hate being told what they "must" buy. We'll go into debt spending money we don't have on houses and cars at unreasonable or short-sighted terms, but ask us to pay and extra $25 a month in taxes for improved public works and we freak out.

Keep in mind that this goes straight to the heart of the question "is healthcare a right or a privilege?" If it's a privilege, then the capitalist model of rationing works just fine. If it's a right, then a better rationing system that measures its success in equity and/or quantity of "positive" outcomes needs to be introduced.

The problem is that we want healthcare to be a right, but we still measure success of the system in profit (ultimately). The public attitude needs to change, and the current reforms are not taking the hard, and unpopular, stance that if you want healthcare to be an accessible right, we have to make a public commitment to making it so, and ability to pay cannot create an "elite class" of healthcare recipient.

jmccarthy said:

You are operating under the assumption, as lots of Americans do, that we have the best health care. Well, we don't. We are on the bottom when it comes to health care concerning developed countries. The worst that would happen is the level of care stays the same and we don't bankrupt the country by reducing the cost of health care through reform.

ktom said:

If you read what I wrote you would realize what you stated is false. Medicare/Medicade does not dictate prices which is the problem. Hospitals, clinics and pharma dictate prices which makes the cost go through the roof because they are in it for profit. The more procedures they do and the more expensive they make them the more money they get. They argue they would go bankrupt if they didn't do this because they have to cover the cost of malpractice lawsuits and non-insured patients but that again is a lie. Most doctors get paid commission on how much money they can bring in through expensive unnecessary procedures.

ktom said:

Again, false. Hospitals, clinics and pharma dictate what they are going to charge and the government says fine.

ktom said:

The reason this is prevelant in our culture/country is that insurance/health care is expensive. If health care was free or very cheap more people would go to the doctor to get preventive medicine but right now people wait to the last minute because they can't afford to go to the doctor for little visits. Also, the uninsured won't go at all because it would be much more expensive than someone with insurance and they don't go to the hospital until they are dying.

ktom said:

Since when has rationing become a dirty word? The word I prefer to use is triage but even that has become a negative term. I have no problem with health care being smart and focusing resources on people who actually need it.

Yes, I think single payer is the way to go. Our current health care system in the US sucks...hard. I see no reason to keep it in its current state. Reform would be good but as always not much would change.

Stag Lord said:

Exactly.