Health Care Reform

[MsGuy]

Since Obama has indicated that he would sign a health care reform as part of a budget reconciliation bill (proceedurally bypassing a filibuster in the Senate), there now exists a realistic possiblity that some kind health care reform legislation will come out of this session of Congress. I think we all need to put on our thinking caps about this; everybody would be affected one way or another and we are talking about 1/6 of the economy here.

Here is a neutral overview of what's happening in Washington.

The Moment of Truth

[TotallyOz]

I will be curious to see the specifics of this. Naturally, I love the Clinton plan but that was shot down and caused turmoil. How will Obama change this debate? How will he insure the success of the plan we know he wants without sacrificing himself?

[MsGuy]

Oz, if I remember right, at the time the Clintons took on the health care industry it represented about 14% of GDP. Now it's over 18% of GDP. That's about $2.5 Trillion a year. Lotta Bucks. Measured as a % of GDP against the next most extravagant health care system in the world, the U.S. spends an extra $550 Billion per year on health care. Lotta excess money there to protect. Obama is a smart guy. So are his opponents. Who knows what will come out of Congress?

On the positive (?) side, health insurance has become a crushing cost on everyone from Big Business to small enterprises to individuals. Despite ideological misgivings, there's lot of hidden support for reform from business people, especially for cost containment and for shifting some of the burden to the government. Even within the medical industry folks realize that we are reaching the end of this road. Health costs are projected to exceed 1/5 of GDP by 2015, 1/4 of GDP by 2025 and 1/3 of GDP by 2040. Obviously, that's not going to happen, so the question becomes how and when we stop the madness. The big boys are already maneuvering to edge each other away from the pot. Watch the attack ads this summer to find out who is losing out.

[RA1]

MSGuy-

Excuse me for being naive but how does shifting the cost of medical care to the government not mean a big burden for all of us? The cost containment part I understand, although how this would be fairly done I am not as sure. Do we just say, you (Mr. Doctor) just can't make any more money? Do the hospitals just have too much overhead? Would liability reform cure many of these ills?

Not all docs are just coining money. Several years ago I knew a doc who could not find a better job than being the doc in charge of a doc in the box. His annual salary? In the 30,000 dollar range. Admittedly, this was 25 years ago but still.......

Stepping away from party lines and idealogy, I don't think this is a simple issue and I certainly don't think the Congress (or administration) has any good idea of how to deal with it.

Best regards,

RA1

[MsGuy]

RA1, it's the cost containment problem that's forcing the issue. In 2008 Canada spent less than 11% of GDP on health care; the U.S. spent 18% of GDP on health care. On a % of GDP basis, that's 980 billion dollars in extra costs for the American economy of 14 trillion dollars to support. No reasonable person believes we're getting a trillion dollars worth of extra value from our system and that extra cost is crushing the economy.

One structural problem (among many) is that our system of fee for service coupled with a system of 3rd party payment is inherently resistant to cost controls. At least since the 80's, American business has made a determined effort to rein in medical costs with very little to show for its efforts. The primary driver for a single payer system is that no credible alternative has been put forward for cost containment.

Our lunatic liability system, enormous and expensive bureaucracy of the fee for service insurance industry, the blank check to Big Pharma, and perverse incentives that drive hospital costs all play their part. Did you know that there's actually a sub-industry that handles payment battles with insurance carriers on behalf of service providers? That for decades about 2/3 of the payout on medical liablity insurance has gone to lawyers (1/3 to the defense bar, 1/3 to the trial lawyers)? That nearly 1/2 the personal bankruptcies in the U.S. are triggered by medical bills?

If we were starting from a blank slate, anyone who proposed to recreate our current system would be put in a straight jacket.

By the way, physician's fees play such a small part in the overall cost of health care we could put them all on $200,000/yr. salaries and not notice the difference. (Current median income for physicians w/5 to 9 years experience is $149,000.)

[RA1]

MsGuy-

Thanks for the reply. However, it seems to me you are stating the results of not containing costs rather than how to do so. What is the difference between large bureaucratic private entities wasting huge amounts of money and government bureacracries doing the same? If the doctors aren't to blame then it must be the hospitals, Rx providers and attorneys, mustn't it? I do know that other countries don't have nearly the legal liability issues that we do, so that must be a huge part of it, no? Not defending the Rx providers but they consistently point out that the US provides most of their money for not only profit but also research, so one cure would be for other countries to pay more of their fair share? I don't think we will make many friends by suggesting that the Canadians and Kiwi's and Limey's need to pay, say, 50% more for their medicines, will we? However, they would be quick to say the US system is all goofed up so if they need to pay more, let it happen.

Best regards,

RA1

[Guest Conway]

When one considers the substantive contributions that trial attorneys make to Democratic candidates, it will be impossible to get congress to approve a plan that restricts or limits tort claims. Without that, the system will continue to fail its customers whether the government or private industry is paying them.

[TampaYankee]

A general comment about the national Health Care debate inspired by the debate about private and public Health Care carried out in the news, radio and TV by politicans and pundits. I refer to 'Business' to indicate for-profit Health Care providers and Insurance providers as distinct from employers that provided Health Care benefits.

Health care isn't about business and it shouldn't be. It is about persons, persons like you and me. It is also about the poor and working poor, the middle class who find it harder to afford every year and who believe thay are covered until, in their time of need, they learn about exclusions and limitations. It is about life and death, and pain and suffering. It is about affordability and access and it has also become about personal bankruptcy, even for the insured, on an alarming level.

If business can help deliver Health Care then all to the good, but business considerations or whether business can even compete in comprehensive health care delivery should not dictate or even influence the design of the Health Care delivery system. It is a distortion of history to even make that argument.

Business didn't even enter the fray until the 50s and 60s and then mostly through B(lue)C(ross)BS as a vehicle by pyhsicians to see that physicans were paid in a reliable consistent manner. With the urbanization and suburbaniztion of America, payment by barter of services or goods, or time payments extended to neighbors and friends became untenable. It was also the case that medicine was less complex and many people died before tremendous bills accrued or were treated in ways that didnt call for big expenses, eg. amputation over reconstruction and rehabilitation of severly injured limbs).

For-profit hospitals and HMOs entered the scene in a big way only in the late 70s and 80s. Clearly, the saw an opportunity to make money. That is their reason d'etre. Else if the private sector were moved by altruistic motives they would be not-for-profits which have inherent advantages for rendering public services.

Before all that, most physicans were individual providers and almost all hospitals were government owned and operated with a small number run by religious entities. Business entities were not the be-all and end-all of medical care delivery that the GOP and Conservadems make them out to be today. That is not to argue that Business cannot play a role in the delivery of Health Care, maybe an important role. Only that Health Care delivery should not be straightjacketed primarily to provide Business the control to determine what, how and at what cost services will be provide, and even more, who will have access to those services.

IMO, a public option is essential as a stalking horse to provide real competition to and among Business Health Plans. If as the GOP complains: that nobody would sign up for a private plan with a governement option avialable, then that puts the lie to the also often remarked GOP comment that: people like their medical care as currently constituted and don't want to see government run their health care. Which is it?

My bottom line: If Business can be part of the solution to comprehensive Health Care reform then I'm all for it. Competition is good for all. However, it is unacceptable if Health Care reform is constrained to meet Business needs/demands at the expense of Health Care affordability and delivery. I hope to see a public/private solution so that those who want to keep what they have are satisfied and for those who don't have that option for reasons of access, affordability or whatever reasons also have a public option open to them. But to deny a public option to facilitate private business interests over public health policy is unacceptable.

[MsGuy]

Conway:

When one considers the number of physicians and hospitals in every congressional district, reform becomes impossible.

When one considers the number of midsized cities that have become essentially become one industry health care towns, reform becomes impossible. (Birmingham, Ala., comes to mind)

When one considers the number of congressmen in the pockets of the insurance industry (not to mention their 100's of thousands of salesmen), reform becomes impossible.

When one considers the massive lobby power of Big Pharma, reform becomes impossible.

Except, of course, that paying 25% of GDP for heath care is also impossible and at its current rate of growth, we will achieve that benchmark well before 2025.

My point is only that any number of players in the health care game have what look to be unassailable political blocking positions (which is why we've gotten ourselves into this mess) but none the less reform will happen because it must happen. The only thing that's truly impossible is to continue the current system. The economy simply can't support the load.

The number of uninsured/underinsured is rising at an accellerating rate as more and more businesses find it impossible to pay for coverage for their employees and fewer and fewer individuals are able to foot the premiums. A friend of mine in good health was just quoted a price of $625/mo. for a second rate policy with big deductables & co-pays. Just birthing a baby now costs north of $7,500 and that's with no complications. The U.S. medical system is the General Motors of health care systems. Painful and difficult as reform will be, we can't continue much longer doing things the same old way.

I suspect that every ox in the pen is going to get well and truly gored. I have my doubts that it will happen this year, but I guarantee reform will be back on the plate every election cycle from here on out because we no longer have the resourses to ignore the problem.

[MsGuy]

RA1:

If I can make it work, this link takes you to a study showing that Big Pharma spends nearly twice as much on marketing as research. It's not just these guys that are spinning their facts to convince the public that they are the good guys. Everybody in the health care industry wants you to belive the sky will fall on your personal head if their particular baliwick is messed with.

Big Pharma Marketing Costs

[MsGuy]

TY:

I can't disagree with much of what you posted, but considerations of justice and humanity are not going to be the only drivers for health care reform. My hope is that the needs of the uninsured/underinsured can piggy back the absolute necessity for cost containment because single payer is the only plan on the table that offers a reasonable prospect for reducing costs.

My best guess is that in the end (5 or 10 years down the road?) we will wind up with basic medical insurance subsidized by the government with add on supplemental policies available for those who can afford them or can get them from their employer. The delivery system won't look all that much different from what we have now, except that it will operate under cost control measures administered by means of the basic coverage. Americans like incremental reform, not wholesale change.

[TampaYankee]

Conway:

...

My point is only that any number of players in the health care game have what look to be unassailable political blocking positions (which is why we've gotten ourselves into this mess) but none the less reform will happen because it must happen. The only thing that's truly impossible is to continue the current system. The economy simply can't support the load.

...

I suspect that every ox in the pen is going to get well and truly gored. I have my doubts that it will happen this year, but I guarantee reform will be back on the plate every election cycle from here on out because we no longer have the resourses to ignore the problem.

I agree with all you say with the exception as to whether it will happen this year. It may not but I hope that it does. It certainly won't happen next year and I'm not sure Obama will have reserved enough political captial to get it through the year after.

The longer it drags out the more I think reform will move in the directon of the GOP vision which IMO is only concerned with slowing cost growth. They care little about opening access to anyone who can't ante up going insurance rates or aren't covered under an employer's umbrella.

[TampaYankee]

TY:

I can't disagree with much of what you posted, but considerations of justice and humanity are not going to be the only drivers for health care reform. My hope is that the needs of the uninsured/underinsured can piggy back the absolute necessity for cost containment because single payer is the only plan on the table that offers a reasonable prospect for reducing costs.

I dont disagree about cost containment being the tall pole in the tent. However, coverage for the uninsured/underinsured cannot be separated from cost containment because treatng them as system nonparticpants in the system is a serious cost driver for hospital costs.

My best guess is that in the end (5 or 10 years down the road?) we will wind up with basic medical insurance subsidized by the government with add on supplemental policies available for those who can afford them or can get them from their employer. The delivery system won't look all that much different from what we have now, except that it will operate under cost control measures administered by means of the basic coverage. Americans like incremental reform, not wholesale change.

I agree with the basic/supplemental insurance view. However, I do think the delivery system will change if we get the public option. I believe the delivery model will consist of much more integrated services delievery in place of the piecemeal individual service actors in today's model. Else I don't see much efficiency to be gained for cost containment. Records reform alone can't accomplish what is necessary. Neither can capping service charges in the present model IMO. That doesn't address unnecessary or redundant services.

[MsGuy]

TY:

We're posting past each other.

I think too much of the Republican party is finantially dependant on the the different branches of the health care industry to expect much more than tinkering around the edges from them. As I type, I'm listening to Senator Jon Kyl, the minority whip, spinning away on C-SPAN about how the Dems. are cooking up an extreme left wing bill that's just impossible for America to swallow. Apparently any gov. competition with private insurance is just horrible. Using the gov.'s purchaseing power to negotiate lower drug prices from Big Pharma is also verboten. Hospitals are just find as they are. I keep looking for the hand in the puppet.

Changes in the delivery system are more likely to be achieved by incentives (like paying for result rather than service) than by mandate. I don't think mandated change here is politically feasible and the government would probably screw it up even if it were. Ours a big diverse country; one size doesn't fit all.

[TampaYankee]

TY:

We're posting past each other.

So it seems.

Changes in the delivery system are more likely to be achieved by incentives (like paying for result rather than service) than by mandate. I don't think mandated change here is politically feasible and the government would probably screw it up even if it were. Ours a big diverse country; one size doesn't fit all.

I agree again. I also think that 'paying for result' will 'encourage' more integrated treatment as determining who is responsible for the outcome, thus who gets paid, will become the issue among indivual actor service providers.

[MsGuy]

Obama tries to calm AMA.

AMA speech

Hospitals warn us to be ready to dodge pieces of falling sky if they don't get what they want.

Oh My!

Some details on proposed cuts.

The first ox is gored

Some are speculating that Obama is demanding way more than he expects to get in order to provide political cover for a congressional compromise he can live with. The Galen Institute, a conservative medical think tank, has commented that everybody agrees with 80% of the proposed reforms and violently oppose 20%. Unfortunately it's a different 20% for each segment of the industry.

[Guest JamesWilson]

... What is the difference between large bureaucratic private entities wasting huge amounts of money and government bureacracries doing the same?

Sara Robinson, a blogger for "Campaign for America's Future", has written a number of articles in recent years about health care in the US and Canada. She may not have all the answers, but some of her ideas may help us to focus on the right questions. Here are a few of her relevant articles...

http://www.ourfuture.org/blog-entry/mythbu...lth-care-part-i

http://www.ourfuture.org/blog-entry/mythbu...free-marketeers

http://www.ourfuture.org/blog-entry/200808...eed-health-care

http://www.ourfuture.org/blog-entry/200810...nges-everything

http://www.ourfuture.org/blog-entry/200903...lready-23-there

http://www.alternet.org/healthwellness/105...re/?page=entire

[MsGuy]

Thanks for an excellent set of links. In the next few months America will be hammered with the mother of all media blitzes from every segment of the heath care industry that fears it has something to lose by reform. We have to use every forum we can find to present the facts on reform to the public or we'll be swamped by slickly spun ad campaigns.

I really like the tone and approach Ms. Robinson uses in her blogs. I'll be posting these links in several other sites I participate in. (It's o.k., TY, MER is still my first love. )

[MsGuy]

Employer heath care costs to rise 9% in 2010.

The U.S. economy can no longer support our parasitic health care system. We are not all that far from a mass exodus by employers from medical insurance. Should we wait for the resulting implosion of our current system or begin a orderly reform now? Today's system is dead. Those who believe a few patches around the edges will salvage the situation are just putting rouge on the corpse.

2010 health care costs

[Guest JamesWilson]

Thanks for an excellent set of links.

You are most welcome... I'm glad you liked them! ;-)

[RA1]

I liked the links also. I have not read them all yet but I intend to do so.

MsGuy-

I think your analysis of the problem is generally correct. Not to be repeititve, but, what is the solution? From the links (articles) about the Canadian system, I would have to think it would not work in the US. The author says it isn't socialized medicine but I would have to characterize it as heavily subsidized and "controlled" by the government health delivery. Of course, one of the roles of government is to have rules and regulations "protecting" its' citizens. It would be interesting to know what % or how much money is being spent in Canada on what we call welfare recipients. Perhaps that is covered later in one of the articles.

I wonder what would happen in Canada if the US suddenly did not exist any more? The Canadians certainly like yankee dollars as well as plentiful MRI equipment in the US. Whether they are completely thrilled to have us as a neighbor or not, they do depend upon the economic us. I am not throwing any rocks at the Canadians. I have rarely met one I didn't like a lot and I hope they liked me. I don't think I am perfect any more than I think they are.

Back to the US. Does our medicare system work? It surely trys to do exactly what you outline in an earlier post; namely to contain costs each and every way it can. Some characterize medicare as containing costs by ramming their methods down the throats of health providers. However, most do accept it, don't they? Some medicare recipients have aux insurance to cover any difference between what the provider charges and what medicare pays. Is any or all of that a good solution? It seems to me to have several inadequacies that are mainly provided by being government run. However, it seems the AMA, the drug companies, the equipment suppliers and their lobbyists have had their run and chance. If the system is not broken, it is severely bent. I just don't know if anyone of us can be careful enough to craft legislation that will really cure this problem. Certainly, the Congress has been a willing participant in both sides of the issues and, all too often, comes down on the wrong side.

Best regards,

RA1

[Guest LeapYear]

From the sounds of the proposals, it appears that I will continue to fall through the cracks. I am retired, but not yet of Medicare age. So, I have had to carry private health insurance which isn't subsidized by any employer and is paid for with "after tax" dollars. I do have health insurance, so I consider myself somewhat lucky. However, the cost is eating me alive!!! I don't know how much longer I can afford to pay the premiums. See, I am not part of a large group that spreads the risk out and makes insurance premiums reasonable. Since I have some health issues, and even though they are under control, my insurance company slams me each year. So, are you ready for the number?... $40,000 per year! I can't change companies because no other company will take me. So, I am stuck. I can't afford not to have health insurance and I can't afford to have it. I thought the Obama administration was going to help me in this area, but now they are talking about excluding anyone making more than $70,000 per year which I do. So, even if the plan passes, there are some of us that still fall through the cracks.

[MsGuy]

LeapYear:

Don't give up yet. Most of the Democratic plans envision forming large groups of one sort or another from which folks with pre-existing conditions could not be excluded. Your premiums would be no more than any other individual in the pool. You would get no subsidy because of your income, but just being able to join a group would save you 30+ thousand a year. This is all very fluid right now, who knows what if anything will come out of Congress.

Your situation is a case study in the mad finantial destruction our health care system can visit on individuals.

[MsGuy]

It just occurred to me that the best predictor of the chances of real health care reform would be the stock market. Way better the all the murky b.s. from the media. A lot of well informed people are betting real money on the outcome. A classic wisdom of crowds situation. And another example of my talent for overlooking the obvious.

Barrons on Health Care Rally

Sorry, for some reason the link only gets you the nonsubscriber version.

[Guest JamesWilson]

I really like the tone and approach Ms. Robinson uses in her blogs.

For those who are interested, here is another of her articles on the subject that just came out today:

http://www.ourfuture.org/node/39300