All of this is just so right ON. The market forces that are being subverted by the government in the health care marketplace are numerous. We'd be better off moving in the direction of more freedom.

From Tuesday's WSJ (www.wsj.com) (subscriber)

HSA Man Vs. Healthzilla

By DAVID GRATZER
October 12, 2004; Page A22

"More uninsured Americans." "Double-digit rises in health spending." "Middle-class angst about health insurance." These problems dominate headlines, with both parties pushing their reform packages. The year, though, is 1994, not 2004. Ten years ago this fall, the most ambitious plan to remake American health care since the Wagner-Murray-Dingell bill of 1943 collapsed, not with a bang but with a whimper: Senate Majority Leader George Mitchell delayed the vote on "Hillarycare."

Basic problems remain the same, however. And so do many of the proposed solutions. In Washington, Democrats continue to push statist prescriptions to America's health care ills; at the state level, legislatures experiment with them. It would be easy, thus, to assume that while Hillary Clinton lost the battle, she is winning the war.

Perhaps that is what makes tomorrow's debate so interesting. With the presidential candidates focused on domestic issues, America will have the opportunity to witness a debate between two fundamentally different visions of health care. John Kerry has offered up more of the same for health reform. In sharp contrast, President Bush proposes a package that could rout Hillary Clinton's statism and create a health-care revolution.

Let's start with the lost decade. There have been two major reform ideas that dominated the years since the Health Care Security Act of 1994: government meddling and managed care.

While the White House failed in its grand design, many states forged ahead -- expanding Medicaid, and regulating the price and scope of insurance. Today, across America, there are many more regulations on the books and the number of Medicaid enrollees has swelled (from 30 million in 1994 to 44 million today), but the political enthusiasm for statist interventions has waned. No wonder. Consider Medicaid. Between 1999 and 2002, the program's bottom line grew 36%, from $189 billion to $258 billion.

Support for managed care proved just as transient. The original impulse for Hillarycare was cost-control. The White House in 1993 predicted that, without major reforms, health spending would suck up 19% of the GDP by decade's end. Managed care was the private sector answer to the problem of health inflation. And it worked: health spending was reined in. Hospital spending actually dropped through much of the mid-1990s (in 1997, by an astonishing 5.3%). But the thuggish methods employed by HMOs led to a consumer and political backlash.

Why did both fail? Government meddling and managed care awkwardly attempt to compensate for the central problem: Americans don't directly pay for the health care they receive. Out-of-pocket expenses -- that is, the amount not covered by public and private insurance -- account for just 14 cents on every health dollar spent in the U.S. American health care is dominated by third-party payment. Nelson Sabatini, Maryland's secretary of health, observes: "Using health care in this country is like shopping with someone else's credit card." If the last decade seems to have done so little to address the woes of the system, no wonder: Consumers were never brought into the equation.

Sen. Kerry looks at today's woes and promises something statist for everyone. For employers struggling with rising premiums, he promises that Washington will pay 75% of extraordinary health bills and then subsidize the remaining insurance cost. He promises to create huge purchasing pools, heavy in regulations and mandates, so that employers and individuals can join together to buy insurance. He offers a massive expansion of public programs, like Medicaid, to cover most of America's kids. And for anyone taking prescription drugs -- which is to say most of the country -- he promises lower prices by allowing importation of Canadian drugs (and thus Canadian price controls).

His plan would enlarge Washington's role, involving it in the purchase and pricing of much of American health care. Such ambition carries a high price tag: $1.5 trillion over 10 years, by at least one estimate. In contrast, President Bush promotes a completely different approach: health savings accounts. Rather than ignore consumers, HSAs place people in charge of their own health care, "a plan that you own," as Mr. Bush observed in Ohio last week. And that ownership has the potential to tame health spending in its wake.

Created by the Medicare Modernization Act of 2003, HSAs are personal medical savings accounts used in conjunction with a high-deductible health insurance plan. For smaller expenses, then, individuals pay out of their HSA -- money that can follow them from employer to employer and can accrue from year to year. Catastrophic insurance covers larger expenses.

How much could this help? Writing on this page, economist Martin Feldstein noted that a typical Blue Cross of California family policy costs $8,460 (with a $500 deductible per member). But a similar HSA-style high deductible policy costs just $3,936 (with a $2,500 deductive). The difference ($4,524), then, far exceeds the maximum additional out-of-pocket expense that the family would face if they reached the maximum deductible ($2,500). In other words, the HSA approach results in great savings. Data from eHealthInsurance, a leading online insurance brokerage, suggests that a majority (55%) of customers purchasing health insurance through the HSA approach pay less than $100 per month. Not surprisingly, about a third of these HSA-plan enrollees were previously uninsured.

HSAs have the potential, though, to do more than just save some money on premiums. Individuals empowered with health dollars will begin to act like consumers of health care. Third-party payment, in fact, will be pushed to catastrophic events. Thus, the market forces that reshaped the rest of the economy may soon transform the health industry.

Tomorrow, President Bush shouldn't just emphasize HSAs (which Sen. Kerry, incidentally, opposes). He can map out further reforms that will make health insurance more affordable:

• Tax fairness. While employer contributions to health insurance are non-taxable, individuals must pay in after-tax dollars. Leveling the tax field not only makes health care more affordable, it also corrects the employer-based preference, a carry-over from World War II wage-and-price controls.

• Out-of-state insurance. State regulations have decimated insurance choices and driven up the cost of coverage in many jurisdictions. Because of this, premiums for similar policies differ widely among the states. In New Jersey, according to the Coalition Against Guaranteed Issue, it now costs more to purchase a family health policy than to lease a Ferrari; while in Connecticut, similar coverage is 80% less expensive. The federal government must allow out-of-state purchases of health insurance.

• Deregulation. Health care is choked by an endless list of regulations and restrictive laws that stifle innovation and result in high-cost, low-satisfaction medicine. Clinics and hospitals must comply with more than 100,000 pages of Medicare regulations. Ownership, FDA, Emtala and antitrust laws have stifled innovation further. Is there a sector of the economy that Washington regulated into efficiency?


President Bush should speak simply and clearly: A decade after Hillarycare, there is an alternative that places Americans, not government bureaucrats, in charge of their own health care. He should emphasize this tomorrow night -- and every other night of the campaign.

Dr. Gratzer, a physician, is a senior fellow at the Manhattan Institute.

"Americans don't directly pay for the health care they receive. Out-of-pocket expenses -- that is, the amount not covered by public and private insurance -- account for just 14 cents on every health dollar spent in the U.S. American health care is dominated by third-party payment. Nelson Sabatini, Maryland's secretary of health, observes: "Using health care in this country is like shopping with someone else's credit card." If the last decade seems to have done so little to address the woes of the system, no wonder: Consumers were never brought into the equation."

Hey Wu, you go first (as in agree to pay for all medical treatment out of your own pocket in the event you need it).

Even if you're a multi-millionaire, you could easily be bankrupted in a year or less, if the disease was pernicious enough.

"Americans don't directly pay for the health care they receive. Out-of-pocket expenses -- that is, the amount not covered by public and private insurance -- account for just 14 cents on every health dollar spent in the U.S. American health care is dominated by third-party payment. Nelson Sabatini, Maryland's secretary of health, observes: "Using health care in this country is like shopping with someone else's credit card." If the last decade seems to have done so little to address the woes of the system, no wonder: Consumers were never brought into the equation."

Hey Wu, you go first (as in agree to pay for all medical treatment out of your own pocket in the event you need it).

Even if you're a multi-millionaire, you could easily be bankrupted in a year or less, if the disease was pernicious enough.
If people wouldn't use the system for regular health maintanence we could cut billions out of the cost of health care. Regular visits aren't that expensive and if something big comes up these people would file on their insurance policies (which cost significantly less) with this system. The idea of a tax free saving account for health care is wonderful, but no one will ever invest in their own health. They think paying these sky high insurance premiums are better so they don't have to worry about any health costs. I hear it all the time"iit only cost me a 15 dollar copay to see the doctor." (which only cost around 60 to begin with) The insurance company pulls in way more than 45 bucks to compensate for their "loss".

The insurance company pulls in way more than 45 bucks to compensate for their "loss".

Isn't that true of all insurance, though?

If people wouldn't use the system for regular heath maintanence we could cut billions out of the cost of health care. Regular visits aren't that expensive and if something big comes up these people would file on their insurance policies (which cost significantly less) with this system. The idea of a tax free saving account for health care is wonderful, but no one will ever invest in their own health. They think paying these sky high insurance premiums are better so they don't have to worry about any health costs. I hear it all the time"iit only cost me a 15 dollar copay to see the doctor." (which only cost around 60 to begin with) The insurance company pulls in way more than 45 bucks to compensate for their "loss".

I agree with much of this.

Consider this, though - what about ininsured persons using the emergency room of their local hospitals for routine medical treatment, and not being able to pay the bill? It gets passed on to the taxpayers.

I agree with much of this.

Consider this, though - what about ininsured persons using the emergency room of their local hospitals for routine medical treatment, and not being able to pay the bill? It gets passed on to the taxpayers.
This is why the state of Louisiana is hemmorhaging money in the Charity hospital systems. Instead of investing in primary care the money goes elsewere, and people wait for 13-24 hours for routine health problems in the ER. This costs at least 3 times as much as a normal office visit and they get less appropriate care as most ER docs aren't trained in primary care problems.

Isn't that true of all insurance, though?
My point was that insurance companies make a fortune. If people would use the money they pay in premiums to set up a tax free account (which is part of Bush's plan) they would save money in the long run. They would have a lower premium insurance set up for major problems only.

Hey Wu, you go first (as in agree to pay for all medical treatment out of your own pocket in the event you need it).

Even if you're a multi-millionaire, you could easily be bankrupted in a year or less, if the disease was pernicious enough.


I know it's late, but are you only reading the paragraph with boldface in it?

"...HSAs are personal medical savings accounts used in conjunction with a high-deductible health insurance plan. For smaller expenses, then, individuals pay out of their HSA -- money that can follow them from employer to employer and can accrue from year to year. Catastrophic insurance covers larger expenses"

The point is to have people approach health insurance as they do their car insurance. You pay out of pocket for the regular mantainence of your car as you should your body. Insurance is for catastrophies. You get diagnosed with something? You have an annual stop loss that you don't pay over.

Once people start using these more often, doctors will have new incintives to compete on price, further lowering costs.

I do think if HSAs were introduced along with new insurance products, basically catastrophe plans, people would switch based on the initial out of pocket savings in premiums, plus the fact that their monthly 'health expense' is no longer a totally sunk cost... insurance company premiums as now structured are sunk costs, so you might as well go to the doctor in order that you take advantage of the money you are compelled to lay out every month. HSAs are portable, you can take them with you to a new job, plus you can roll over the leftover money into the following year, so you are not incentivized to visit to doctor in an attempt to recover sunk costs.

Healthcare is a marketplace. Like any other market, it has supply and demand forces that, if subverted by gvt interference, (as described in the above article) will pervert the market and cause prices to rise.

I know it's late, but are you only reading the paragraph with boldface in it?

"...HSAs are personal medical savings accounts used in conjunction with a high-deductible health insurance plan. For smaller expenses, then, individuals pay out of their HSA -- money that can follow them from employer to employer and can accrue from year to year. Catastrophic insurance covers larger expenses"

The point is to have people approach health insurance as they do their car insurance. You pay out of pocket for the regular mantainence of your car as you should your body. Insurance is for catastrophies. You get diagnosed with something? You have an annual stop loss that you don't pay over.

Once people start using these more often, doctors will have new incintives to compete on price, further lowering costs.

I do think if HSAs were introduced along with new insurance products, basically catastrophe plans, people would switch based on the initial out of pocket savings in premiums, plus the fact that their monthly 'health expense' is no longer a totally sunk cost... insurance company premiums as now structured are sunk costs, so you might as well go to the doctor in order that you take advantage of the money you are compelled to lay out every month. HSAs are portable, you can take them with you to a new job, plus you can roll over the leftover money into the following year, so you are not incentivized to visit to doctor in an attempt to recover sunk costs.

Healthcare is a marketplace. Like any other market, it has supply and demand forces that, if subverted by gvt interference, (as described in the above article) will pervert the market and cause prices to rise.

Doctors can NOT compete on prices, especially primary care. The way the billing and coding systems are set up if a doctor does exam "x" and miscodes it as a lesser or greater cost code it is a felony. Many docs do this accidentally, but my point is that some major reform will have to take place with the system currently set up. Would you really want to go to a "bargain" doctor? THe lasik eye surgery commercials that you see, for example, pay 699 and get one eye free.

Doctors can NOT compete on prices, especially primary care. The way the billing and coding systems are set up if a doctor does exam "x" and miscodes it as a lesser or greater cost code it is a felony. Many docs do this accidentally, but my point is that some major reform will have to take place with the system currently set up. Would you really want to go to a "bargain" doctor? THe lasik eye surgery commercials that you see, for example, pay 699 and get one eye free.


I know stories, have read about them in the paper, and have heard from people, about doctors who have not charged people for a full office visit when they are just taking bandages off, or watching the patient walk down the hall. But the people had to ask for the discount. Those people were also paying out of pocket. People who pay out of pocket think like that. When it's just a co-pay ... who cares? You pass the cost on to the insurance company w/o a second thought.

I went to the Dr. once and he charged me the student rate for a shot, b/c i didn't have insurance... nor was i a student. He gave me the price break b/c of my situation (and i didn't ask).

What would be so bad with the Dr. having a price next to his name in the phone book? If we had some discount doctors around here we'd have less of a "health care" crisis to write threads about.

Sometimes you only need a perscription for allergy medication. You don't have to visit the Macy's of doctors every time, for some simple items, the Wal Mart doctor will do... which will allow you to save your money for the Macy's doctor when something serious comes along. What do you think of that?

To stay with my car analogy... you don't go to the dealer to get your oil changed ... unless it's under warrarnty and you don't have to pay for it. You go to the local shop that charges you $15 instead of the dealer that charges $30. But when you need something major fixed, you might just take it to the dealer, and you'll have the additional monetary resources that you preserved saving money on all those simple oil changes.

I know stories, have read about them in the paper, and have heard from people, about doctors who have not charged people for a full office visit when they are just taking bandages off, or watching the patient walk down the hall. But the people had to ask for the discount. Those people were also paying out of pocket. People who pay out of pocket think like that. When it's just a co-pay ... who cares? You pass the cost on to the insurance company w/o a second thought.

I went to the Dr. once and he charged me the student rate for a shot, b/c i didn't have insurance... nor was i a student. He gave me the price break b/c of my situation (and i didn't ask).

What would be so bad with the Dr. having a price next to his name in the phone book? If we had some discount doctors around here we'd have less of a "health care" crisis to write threads about.

Sometimes you only need a perscription for allergy medication. You don't have to visit the Macy's of doctors every time, for some simple items, the Wal Mart doctor will do... which will allow you to save your money for the Macy's doctor when something serious comes along. What do you think of that?

To stay with my car analogy... you don't go to the dealer to get your oil changed ... unless it's under warrarnty and you don't have to pay for it. You go to the local shop that charges you $15 instead of the dealer that charges $30. But when you need something major fixed, you might just take it to the dealer, and you'll have the additional monetary resources that you preserved saving money on all those simple oil changes.

Every example you cited is a felony. I know it seems odd but that is the law. Your analogy of walmart vs. macy's doesn't hold the way you stated it. It really should be primary care(wal-mart) vs Macy's(specialist) and those prices do correspond well. Would you really want a slickdeal with your health? Come on guys Dr. X ran an add in the paper that is wrong lets go get a good deal.

One more thing I forgot to mention. Doctors usually don't set prices it is the hospital they are affiliated with. Not to mention, the fees may seem high but after 11-16 years of training and several hundred thousand dollars in debt some compensation is necessary.

I think the problem with Health Care is that everyone thinks they are entitled to it.

1. How to pay for it given our society?
2. Why in the world do you think you are entitled to it?
3. Why don't you try out Canada's health system.......oh, there's nothing wrong with theirs...... :rolleyes:

I think the problem with Health Care is that everyone thinks they are entitled to it.



Thats exactly what John Kerry says in one of his current ads here in Florida.
I wont quote him since I can't do it word for word. But he says its a "right" not a "privilege".

Thats exactly what John Kerry says in one of his current ads here in Florida.
I wont quote him since I can't do it word for word. But he says its a "right" not a "privilege".

That's just crazy thinking. If people think necessary war in Iraq was/is expensive......this guy's thoughts/flip-flops (does he really think) can cost even more in the long run. I hope we never impliment something like he's thinking/flip-flopping (it's only a matter of time until he changes his mind).

Doctors can NOT compete on prices, especially primary care. The way the billing and coding systems are set up if a doctor does exam "x" and miscodes it as a lesser or greater cost code it is a felony. Many docs do this accidentally, but my point is that some major reform will have to take place with the system currently set up. Would you really want to go to a "bargain" doctor? THe lasik eye surgery commercials that you see, for example, pay 699 and get one eye free.

But if the cost of the actual procedure was reduced, then there would be no felonies. As was mentioned in the article, each hospital and clinic has to abide by 100,000 pages of Medicare regulations. That's a lot of crap to have to do, just to be open. And how do you think the hospitals pay for it? They pass it on to the patients. Suppose machine X costs $1 million, and is supposed to be good for 1000 patients before breaking/needing maitenance/etc. It would make sense to charge the patient $1000 to use that machine, maybe a little more to pay the technicians, doctors, etc - so $1100. But because they have to meet all those 100,000 pages of regulations, they charge $2200 to use the machine, and the cost of health care has just doubled.

I don't see a problem with a bargain doctor, as long as s/he's qualified, and has the necessary equipment, etc. Going along with Doctor Wu's analogy, do you always take you car to the most expensive place to get it fixed? You may not take it to the cheapest place either. But you balance between the shop knowing what they are doing (and how well they do it) and how much they are charging. Why not do the same thing for health care?

One more thing I forgot to mention. Doctors usually don't set prices it is the hospital they are affiliated with. Not to mention, the fees may seem high but after 11-16 years of training and several hundred thousand dollars in debt some compensation is necessary.

So anybody that goes to school for a while (to get a graduate degree, for instance) deserves to put thousands of other people horribly in debt, because "some compensation is necessary"? I'll have spent about 10 or 11 years in school by the time I'm done, so why don't you just start writing a check out to me now, since I need some compensation for it.

Every example you cited is a felony. I know it seems odd but that is the law.



Now that i think about it further... the article i read about doctors negotiating prices was in the WSJ and it was about a clinic that didn't take insurance... would that get them around the law? I mean the article used names and everything, with no mention of legality.


Your analogy of walmart vs. macy's doesn't hold the way you stated it. It really should be primary care(wal-mart) vs Macy's(specialist) and those prices do correspond well.


Were we to end the occupational licensure of doctors by the government the market would be able to arrange itself in ways we can't even imagine. The branding of doctors that corresponds with my department store analogy is just one possibility.

Now in this debate we are still not talking about a truly free market for health care, only the ability for doctors to compete on price.


Would you really want a slickdeal with your health? Come on guys Dr. X ran an add in the paper that is wrong lets go get a good deal.



Think about our current situation. The doctor is liscensed by the state to practice medicine. How do consumers know which doctors are good or bad? They have to read about them in magazines and get word of mouth refrences. The way you speak about this makes it seem that we don't have bad doctors now.

There is an old saw that says 'you get what you pay for' ... in a market scenario there would be a price consideration that one could relate to the doctor's quality. If a doctor wasn't very good, he would have to lower his price until he could serve enough people to stay in business. Likewise a young doctor starting out, would have to build a reputation before he could charge the big bucks.

So anybody that goes to school for a while (to get a graduate degree, for instance) deserves to put thousands of other people horribly in debt, because "some compensation is necessary"? I'll have spent about 10 or 11 years in school by the time I'm done, so why don't you just start writing a check out to me now, since I need some compensation for it.
Depends on the difficulty of your training, but getting a masters degree and drinking beer isn't very stressful. I'm sure you will be compensated for your work. No one can truly understand the stresses of becoming a M.D. unless they have been there for themselves.

Wu, if they don't take insurance then yeah that opens up the field for pricing. Plastic surgeons for example have very different prices, but you usually get what you pay for.

I thought Bush was great when he was talking about why health care is so expensive... went straight to the 3rd party payee issue... and I was suprised to see Kerry have to say "i'm not for a gvt run health system" ... much like clinton's "the era of big gvt is over" ... it's good to see even the framing of the debate on that issue in these terms.

I'd like to think it's a sign that socalism is on the defensive...

I thought Bush was great when he was talking about why health care is so expensive... went straight to the 3rd party payee issue... and I was suprised to see Kerry have to say "i'm not for a gvt run health system" ... much like clinton's "the era of big gvt is over" ... it's good to see even the framing of the debate on that issue in these terms.

I'd like to think it's a sign that socalism is on the defensive...
Hopefully with the observations of European and the Canadian health care systems, we will wisely not go that route. I shudder to think of the decline in patient care and standard of treatment if we enter into those lines of thinking.

Depends on the difficulty of your training, but getting a masters degree and drinking beer isn't very stressful. I'm sure you will be compensated for your work. No one can truly understand the stresses of becoming a M.D. unless they have been there for themselves.

Wu, if they don't take insurance then yeah that opens up the field for pricing. Plastic surgeons for example have very different prices, but you usually get what you pay for.

You never mentioned anything about stress or working...only taking time out of our life to go to school/training for 11 years, and accumulating debt during that time, and deserving to be compensated (a lot) for it.

I would hope that doctors became doctors for more than money though.

A hospital is like any other business (or shoudl be, but isn't because of insurance): The hospital (doctor's office, etc) that is able to offer the best services for the best price will come out on top. That's no different than an auto mechanic, or a grocery store, or a bank, or a home repairman. Unfortunately, insurance gets in the way.

You never mentioned anything about stress or working...only taking time out of our life to go to school/training for 11 years, and accumulating debt during that time, and deserving to be compensated (a lot) for it.

I would hope that doctors became doctors for more than money though.

A hospital is like any other business (or shoudl be, but isn't because of insurance): The hospital (doctor's office, etc) that is able to offer the best services for the best price will come out on top. That's no different than an auto mechanic, or a grocery store, or a bank, or a home repairman. Unfortunately, insurance gets in the way.
I do agree. I think anyone with higher education should be "compensated", whereas a high school drop out can make millions playing basketball. That is neither here nor there though, the issue is health care and I definately think we need major reform in this country. If we listed the major things hurting health care now, insurance would be at the top of the list. Whether it be not having it, or the skyrocketing cost. This is where our leaders should look for answers to their questions.

I do agree. I think anyone with higher education should be "compensated", whereas a high school drop out can make millions playing basketball. That is neither here nor there though, the issue is health care and I definately think we need major reform in this country. If we listed the major things hurting health care now, insurance would be at the top of the list. Whether it be not having it, or the skyrocketing cost. This is where our leaders should look for answers to their questions.


M Ellerbe... this thread has been very interesting as we seem to agree and disagree oddly at various points...

You seem to agree that going in the direction of socialism is the wrong move.

You see reform as neccessary... and list insurance as a major part of the problem.

Where do we disagree exactly? Do you see the third-party payer or 'co-payment' system as part of insurance's problem?

I do agree. I think anyone with higher education should be "compensated", whereas a high school drop out can make millions playing basketball. That is neither here nor there though, the issue is health care and I definately think we need major reform in this country. If we listed the major things hurting health care now, insurance would be at the top of the list. Whether it be not having it, or the skyrocketing cost. This is where our leaders should look for answers to their questions.

Insurance definately is a problem with health care, along with doctors' salaries. Yes, they did take a long time to go to school, and probably accumulated a lot of debt, but so have a lot of us. The difference is the nature of their job - they basically hold the life of every patient in their hands (or many of them...not the ones with a broken wrist, etc). But so do airline pilots. So do nuclear power plant technicians. So do a whole bunch of other people - so why do doctors get paid a lot more than them?

Another problem, that has been mentioned, is people going to the ER for "normal maintenance". The ER is for EMERGENCIES - things that cannot wait until later. Part of this is due to doctors' offices not being open a lot, coupled with people thinking their common cold is an emergency.

Insurance definately is a problem with health care, along with doctors' salaries.

I actually want doctor's salaries to remain pretty high... b/c it helps attract smart people into medicine...

I actually want doctor's salaries to remain pretty high... b/c it helps attract smart people into medicine...

It also helps attract dumb people who only want the money...

It also helps attract dumb people who only want the money...


For sure... but we've got some pretty hardcore weed outs for the dummies... and in the event that medical schools teach people... maybe the dummies are turned into capable doctors...

For sure... but we've got some pretty hardcore weed outs for the dummies... and in the event that medical schools teach people... maybe the dummies are turned into capable doctors...

True. hhmm....it just seems that the high salaries will attract the wrong people...the kind who are just looking for money. And those are the kind of people who will do anything to get more money...and that usually means that the patients will end up paying more, to pay for the doctor's higher salary, which puts us back in the conundrum of outrageously high health care costs (or doesn't allow us to leave said conundrum). But, then the high salaries will also attract the right people....so I dunno :confused:

Like a years back, I read a proposal for mandatory health care (not government run, but subsidized for those who can't afford it)
Pro's -
===get rid of medicare, and basically consolidate it all
===increase the number of insured individuals (like manditory auto insurance in Mass.), where the people avoiding it now either can't afford it, or are of a lower risk of getting sick (young individuals with out a family). By attracting these people (young anyway) you decrease the average cost to the insurance co. thereby decreaseing the cost to us
===Getting people went to doctors early, and got treated early, we would save money in the long run (is this true that if everyone got treated for a disease (cancer) earlier it was save us more $$$ in the long run?

This is not my idea, just seeing what people thought about it. I think it would be nearly impossible to run on this platform but whatever, seems like the idea has good intentions, so whats wrong with it...

True. hhmm....it just seems that the high salaries will attract the wrong people...the kind who are just looking for money. And those are the kind of people who will do anything to get more money...and that usually means that the patients will end up paying more, to pay for the doctor's higher salary, which puts us back in the conundrum of outrageously high health care costs (or doesn't allow us to leave said conundrum). But, then the high salaries will also attract the right people....so I dunno :confused:
Docs salaries are such a misconception now. There are so many other fields which require half the schooling to make as much and many times more than MDs. With the rising cost of malpractice insurance and decreased medicare/caid paybacks, MDs salaries will continue to fall. The public shouldn't be fooled into thinking that docs are the ones causing higher prices. Insurance companies and hospitals rule the money in medicine. Doctors are paid servants of the public not business men (usually).

Link (http://www.omaha.com/index.php?u_np=0&u_pg=1642&u_sid=1235702)

Obesity increasingly weighs down health care costs

THE WASHINGTON POST

WASHINGTON - More than a quarter of the phenomenal growth in health care spending over the past 15 years is attributable to obesity, Emory University researchers reported Tuesday.

With 60 percent of the U.S. population deemed overweight or obese, report author Kenneth Thorpe said, the only way to control soaring medical costs is to begin targeting prevention efforts and treatment on the most costly weight-related illnesses, such as diabetes, high cholesterol and heart disease.

"We've got to find ways to get the rates of obesity stabilized or falling," he said in an interview. "We need to find effective interventions to deal with this on multiple levels - the schools, at home, in the workplace - because clearly this is a major driver in terms of growth in health care spending."

From 1987 to 2001, medical bills for obese people constituted 27 percent of the growth in health care spending, he found. The increase in spending was attributable to a rise in the number of obese Americans and to higher costs for treating those patients.

Treating obese patients was 37 percent more expensive than medical care for people of normal weight, Thorpe and colleagues from the Atlanta school wrote in the journal Health Affairs. Put another way, obesity accounted for an extra $301 per person in medical spending over the 15-year study period.

"The actual numbers are probably higher," Thorpe said, because his team relied on people who self-reported their weight and height.

Obesity is determined by body mass index, a formula in which a person's weight in kilograms is divided by the square of his or her height in meters. A score over 30 is deemed obese; 25 to 30 is considered overweight. By those standards, a 6-foot man weighing 225 pounds is obese.

Federal officials have estimated that treating obesity-related illnesses costs about $93 billion a year, but Thorpe is the first to examine the effect on the overall growth in health spending. The Emory team based its analysis on inflation-adjusted federal data on medical spending and health status.

"These numbers show that the prevailing approach for dealing with obesity, which is to blame people who have the problem and hope the situation will disappear, is a fantasy," said Kelly Brownell, director of the Yale Center for Eating and Weight Disorders.

"Something dramatic needs to be done to change the environment in order to prevent this problem from occurring in the first place."

Before 1980, obesity in the United States remained fairly stable at about 15 percent of the population. In the following two decades, however, the problem reached epidemic proportions, fueled primarily by a more sedentary lifestyle, processed foods and extra-large portions.

Brownell advocates creation of a $1.5 billion "Nutrition Superfund" raised by imposing a 1-cent federal tax on each soft drink can or bottle. The money could be used for a massive advertising and education program, especially aimed at children, he said.

"Once you are obese it is very hard to treat, so prevention makes sense," he said. "And when you focus on children you get away from the libertarian arguments that adults are just doing this to themselves."

Any opinions on my post above about 'mandatory health care'?

Like a years back, I read a proposal for mandatory health care (not government run, but subsidized for those who can't afford it)
Pro's -
===get rid of medicare, and basically consolidate it all
===increase the number of insured individuals (like manditory auto insurance in Mass.), where the people avoiding it now either can't afford it, or are of a lower risk of getting sick (young individuals with out a family). By attracting these people (young anyway) you decrease the average cost to the insurance co. thereby decreaseing the cost to us
===Getting people went to doctors early, and got treated early, we would save money in the long run (is this true that if everyone got treated for a disease (cancer) earlier it was save us more $$$ in the long run?

This is not my idea, just seeing what people thought about it. I think it would be nearly impossible to run on this platform but whatever, seems like the idea has good intentions, so whats wrong with it...


Hmm... so force people to buy insurance and subsidize the ones who can't afford it??

Interesting idea... and i'd go for it... but we'd have to eliminate things that keep insurance expensive now, like state mandated coverages.

That's actually one of the things Bush is proposing, by allowing companys to sell insurance nationally... and let consumers bypass state mandates that keep insurance expensive... kinda like the reimportation of drugs from Canada. Hopefully states would begin to repeal their mandates as consumers began to choose insurance from outside the state.

I also think the subisdy part is the wrong approach... b/c the subsidy would keep the cost higher than necessary. It's like a price support... auto insurance is mandatory, and it doesn't have a subsidy that i'm aware of...

Though people can choose to not own a car... and therefore not pay insurance... this idea is, i think, probably unconstitutional.

Like a years back, I read a proposal for mandatory health care (not government run, but subsidized for those who can't afford it)

I'm not sure there is any difference between government run vs subsidized



===increase the number of insured individuals (like manditory auto insurance in Mass.), where the people avoiding it now either can't afford it, or are of a lower risk of getting sick (young individuals with out a family). By attracting these people (young anyway) you decrease the average cost to the insurance co. thereby decreaseing the cost to us

Young people subsidize us whoever you are referring to as us ( i guess that refers to family people). I think that it is unfair! At my company our insurance originally had husband, wife , child1, child2, etc Now it has husband, wife , children and my cost went up. Should I be penalized for my choice to only have a single child vs a couple that has 2,3,4,5 etc.


===Getting people went to doctors early, and got treated early, we would save money in the long run (is this true that if everyone got treated for a disease (cancer) earlier it was save us more $$$ in the long run?
...

It may or may not save money. You can't make a person go to the doctor so they may not go early.

You said you wanted responses, so there you go.

By state mandated coverages are you refering to something like states that require certain levels of auto insurance, in that some states require some level of health insurance as a minimum plan? (And it probably wouldn't pass the constitution test)

When I say 'subsidize' I am refering to an example were a person gets sick, and their bills are clearly higher than what they pay for insurance, then the costs are diluted amoung all the healthy people through the bills they pay every month. If you attracted more healthy people (the arguement is that if EVERYONE had health insurance, then there would be a greater percentage of healthy people compared to sick), the average cost for that one sick person is diluted between more people decreaseing the individual cost per person. The US is a healthy person, who is now subsidizing the sick.

Thanks for the thoughts...

Though Tricky... Danman is right in part... one of the problems with the insurance structure is that healthy people, usually young people, don't get insurance... now that's partly b/c it's too expensive for them to justify...

But, the basic way insurance works is that healthy people pay for the costs of the sick, through premiums... when healthy people are forced out of the system by price considerations... it makes the premium go up... it's a cycle that perpetuates itself.

And that's part of the thinking behind government provided health care... now if they simply mandated that everybody get some limited insurance it'd be better than a straight up state run program... but i'm sure it has its own pitfalls that we've not anticipated.

WSJ (www.wsj.com)

Was Withdrawing Vioxx
The 'Right Thing to Do'?
November 10, 2004; Page A17

Your columnist wouldn't own individual stocks, and neither should most of you. Put your money in a diversified mutual fund. For reasons too dumb to detail, however, we violated our own policy by holding onto a few Merck shares that had been kicking around the family tree for a generation. It was foolish, but we did it anyway.

With that disclosure, take the following with a grain of salt.

Did CEO Ray Gilmartin blunder in withdrawing Vioxx from the market? Merck executives yanked the prescription pain reliever, amid much backpatting, when a study revealed that long-term users were at somewhat elevated risk for heart attacks and strokes.

Merck was evidently bidding for public admiration in sacking its biggest revenue spinner. If so, the tactic seems to have failed catastrophically. And contrary to the tone of much recent coverage, doctors had long understood that patients taking Vioxx would suffer more heart attacks than patients taking conventional pain relievers.

The Journal ran a front-page story on the heart risks of Vioxx and other so-called Cox-2 drugs on Aug. 22, 2001. And the national trial lawyers guild had a "Cox-2 litigation group" up and running by early 2002. Last year, the lawyers even devoted a session of their annual convention to Vioxx. So what had really changed? Good question.

Merck pulled the drug two weeks ago based on a study showing that, after 18 months of daily use, Vioxx subjects began experiencing heart attacks and strokes at twice the rate of a placebo group. Yet, on balance, this might have seemed mildly less alarming than the 2000 study that kicked off the Vioxx controversy. Also done by Merck, it showed that Vioxx users, from day one, suffered two or three times as many cardiovascular "events" as a control group using naproxen (the ingredient in Aleve).


At the time, Merck said the reasons were unknown but hypothesized that Vioxx wasn't causing heart attacks, naproxen was preventing them. Merck's critics hypothesized the opposite. But the difference is not one anybody would go to town on: A heart attack is a heart attack, and Vioxx was a substitute for perfectly good OTC pain relievers that were associated with fewer heart attacks.

It wasn't a better pain reliever. Its unique selling proposition was simply a lower incidence of stomach bleeding, a real benefit but one mainly relevant to the 15% of arthritis sufferers who can't safely take conventional pain relievers.

We're not trying let Merck off the hook. Go ahead and blame the company for overmarketing the drug. But all this was well known. Merck is in hot water now not because Vioxx was excessively risky but because the wrong people were taking it -- a problem for which doctors and the insurance system are also to blame.

Indeed, we've used the Cox-2 drugs in this column for years as an emblem of what's wrong with the payment system. Marketing alone doesn't cause patients to shell out $2 for a pill that doesn't work any better than a five-cent aspirin. Bruce Stuart of the University of Maryland has showed that the biggest determinant of whether a patient takes a Cox-2 or a cheaper drug is whether an insurance company is paying.

Likewise, we've heard two schools of complaint from patients since Vioxx was yanked. Some patients are irate at Merck for depriving them of a drug they found genuinely useful, but others are mainly irate at their doctors for never mentioning that Advil or Tylenol work just as well.

Merck chose to withdraw the drug, although honesty would have been equally well-served by a big informational campaign saying: "Don't prescribe this for patients not at risk for stomach bleeding. Don't let patients become chronic users."

Given that market surveys show that two-thirds of Cox-2 users don't need them, Merck's revenue hit would have been devastating in either case. But it would have made the point that Vioxx is not a defective product -- all drugs have risks that have to be weighed against their benefits -- but a seriously overprescribed one.

The Vioxx debacle is symptomatic of a system that shields consumers from price signals and sometimes actually discourages them from making the right health-care choices. Forget pain relievers. In certain common breast cancers, women opt for expensive, risky, miserable chemotherapy even though it doesn't significantly improve an already high survival rate. They have a hard time waving it off, though, precisely because an insurer is picking up the tab.

In any case, Big Pharma is well along in being corrupted by third-party payership, just like the rest of the health-care industry. Drug makers increasingly aim their development efforts at the aches, pains, insecurities, heartburn and erectile dysfunction of price-insensitive, over-insured baby boomers because that's where the money is.

The problem is compounded by a regulatory system that drives the cost of developing a new drug to a billion or more, then forces companies to recoup all their costs in a few short years before the patent expires. This basically forecloses a great deal of investment in drugs that don't fit the above description, such as vaccines or antibiotics.

Whether Merck follows the route of breast implant maker Dow Corning (bankruptcy) or just ends up tossing billions at plaintiffs and their lawyers depends on the occult properties of the tort system, plus whatever information is forthcoming about the real safety profile of Vioxx. (Just today, new research in the journal Atherosclerosis hints that at an unrecognized, cholesterol-related mechanism may be responsible for the uptick in heart risk.) But hold onto your hats: Except for aspirin, most other pain relievers haven't been studied at all for long-term safety either.

WSJ (www.wsj.com)


Simple, but Effective

By DAVID GRATZER
January 25, 2005; Page A16

The health care agenda of the second Bush term is immense, and the administration can begin by pushing a simple idea that won't cost a penny from the treasury: Allow interstate sales of health insurance.

Insurance premiums vary greatly from state to state. Last month, eHealthInsurance, a leading online insurance brokerage, compared the cost of a standard family insurance policy ($2,000 deductible with a 20% co-insurance) across the nation's 50 largest cities, involving some 4,000 insurance plans and 140 insurance companies. Some results are startling. Consider: a non-employer-based family policy for four in Kansas City, Mo., costs about $170 per month while similar coverage in Boston tops more than $750 a month. Unpublished data on the small group market -- which serves smaller companies -- also suggests great variability: Similar HMO coverage for a business in New Jersey is a third more per employee than in California.

Why the price difference? Many states dictate the type of services and providers. New York, for instance, requires that the services of a podiatrist be covered. It's a commonly quoted statistic that the average person walks about 150,000 miles in a lifetime. Let's hope the majority of this journey is on healthy, bunion-free feet. But should every insurance policy in the Empire State really be required to include podiatric services? Acupuncturists are mandated in 11 states, massage therapists in four, osteopaths in 24, and chiropractors in 47, driving up the price of even the most basic insurance plans.

Some states have gone further. Laws force insurers to sell to any applicant (guaranteed issue) and at the same price, regardless of age or health (community rating). Faced with higher premiums for insurance they seldom use, the young and healthy drop their coverage, leaving an insurance pool of older, sicker people -- and even higher premiums. After a decade of such political meddling, the average monthly cost of a family policy in New Jersey bests the monthly lease of a Ferrari. In such an environment, many insurance carriers choose not to do business; in Vermont, for example, just three companies sell to the individual market.

The consequences:

• Higher premiums. The regulatory burden means, in effect, a massive health tax for citizens in dozens of states. This hidden tax unfairly discriminates against the self-employed, as well as small and mid-sized companies. Large corporations, after all, aren't forced to follow state mandates (many self-insure); some spend two-thirds less than the national average on heath coverage per employee by using no-frills plans.

• More uninsured. It makes sense that the higher the premium, the more people will opt out of buying insurance. The CBO estimates that every 1% increase in insurance cost results in 200,000 to 300,000 more uninsured.

• Reduced labor mobility. In a recent study, University of Wisconsin economist Scott Adams demonstrates that 20% to 30% of non-elderly men choose to stay put at jobs with health benefits. No wonder: Since potential employers may not offer insurance and individual policies are so pricey (especially in cities like New York and Boston), labor mobility suffers.


A remedy? Some suggest massive tax credits and other subsidies, an unlikely possibility in light of the budget deficit. An alternative would be to allow out-of-state purchases of health insurance. The federal McCarran-Ferguson Act of 1945 empowers states to regulate "the business of insurance." Nothing prevents Congress, however, from allowing interstate sales. The foundation of such a bill would be the Constitution's Commerce Clause. Individuals and small businesses would then be able to shop around and find a low-cost policy -- an affirmation of free-market principles since interstate restrictions now leave many Americans at the mercy of a small number of local health insurance carriers.

Allowing a competitive market for health insurance won't be a major budgetary expense -- but it may prove priceless to the cause of advancing market reforms to better American health care.

Dr. Gratzer, a physician, is a senior fellow at the Manhattan Institute.

See this related thread:

http://slickdeals.net/forums/t60401.html?&highlight=health+care+costs

I thought the thread was related because it points out how much some people who don't have approprate insurance end up paying just to live.

WSJ (www.wsj.com)
Cheaper Health Insurance
July 25, 2005; Page A14

Republicans haven't been getting much credit on the health policy front, despite their misguided 2003 drug entitlement masquerading as Medicare "reform." That could change soon. Last week the House Energy and Commerce Committee approved a bill that could dramatically reduce the ranks of the uninsured and spur general economic growth -- all without costing a dime to the Treasury.

The idea behind the legislation, sponsored by GOP Representative John Shadegg of Arizona, is disarmingly simple: Allow Americans to buy health insurance from vendors in any one of the 50 states.

Right now Americans who aren't lucky enough to get insurance from large employers or poor enough to qualify for Medicaid find themselves at the mercy of the legislators and insurance commissioners of the state in which they happen to live. This can be OK in states that exercise this regulatory function judiciously. But in others, the young and working poor find themselves effectively priced out of the market by special-interest regulations dressed up as consumer protections.

New York requires every insurance policy sold there to cover podiatry. Acupuncture coverage is mandated in 11 states, massage therapy in four, osteopathy in 24, and chiropractors in 47. There are an estimated 1,800 or so such insurance "mandates" across the country, and the costs add up. "It is always the providers asking for the mandate; it is never the consumer," says health policy guru John Goodman, who has testified before legislatures considering such rules.

What's more, states like New Jersey and New York add two more ultra-expensive requirements: "Guaranteed issue" allows people to wait till they are sick and then buy insurance; "community rating" prevents insurers from charging different prices to people of different ages and health status. These may sound like compassionate ideas, until you realize they make insurance so expensive that millions of people are exposed to financial ruin because they aren't allowed to buy basic policies focused on catastrophic costs.

How expensive? A 2004 study by eHealthInsurance.com found that a typical insurance policy ($2,000 deductible, 20% co-insurance) for a family of four could be had for as little in as $172 per month in a reasonably regulated locality like Kansas City, Missouri. But in New York that family's only option -- managed care -- would run $840 per month, and in New Jersey family policies run a whopping $1,200-plus. We bet Democratic Representative Frank Pallone's constituents in New Jersey would be interested in his view that insurance in his state is only "slightly" more expensive than elsewhere.

As for the arguments against the bill, let's dismiss the phony federalism objection first. The Founders wrote a Commerce Clause into the Constitution precisely so Congress could act against internal restraints on trade of the sort represented by today's 50-state health-insurance market. The system has never made much sense; it is even more of an anachronism in the age of Amazon and eBay.

Critics also allege that freeing up interstate commerce will result in a "race to the bottom" in which fly-by-night insurers operating in poorly regulated states would be able to take advantage of consumers. But we've yet to hear which poorly regulated states they're talking about. The best analogy for what to expect here is probably our experience with interstate banking, which has indeed resulted in operators moving to friendly climes like Delaware and South Dakota but which has also proven nothing but a boon to consumers. A national market has allowed the growth of big, financially stable institutions that have earned consumer trust.

Nor, contrary to the self-interested arguments being put forth by the BlueCross BlueShield Association -- which has effectively monopolized many highly regulated markets and fears the competition -- would free commerce jeopardize the "risk pool" (i.e. the overall pool of money that makes insurance possible by allowing the healthy to subsidize the sick). In high-cost, guaranteed-issue states the young and healthy don't participate in the individual insurance market anyway; a larger national market can only improve matters.

As a major side benefit, interstate commerce in health insurance would remove a huge barrier to the efficient allocation of human resources in our economy. Right now untold numbers of Americans fear moving, switching jobs or starting their own businesses for fear of losing their health insurance. That would change if they were able to shop nationwide for policies that would follow them wherever they go.

But the most important issue here is justice. It is simply immoral that millions should be exposed to the possibility of financial ruin because of the all-or-nothing choice offered by the insurance regulations of states like New York and New Jersey. Amazingly, we hear the entire GOP delegations from both states are leaning against the bill, which may come before the full House in September. Their names belong on a dishonor roll should they end up letting the special-interest lobbies mentioned above determine their vote. We hope President Bush -- who supports the Shadegg bill -- is prepared to twist arms as he did on the Medicare vote.

It's no exaggeration to say this could turn out to be the most humane and consequential domestic achievement of the Bush years.

That sounds pretty good. I hope they do the same for auto insurance (Mass peeps get screwed so bad Geico won't mess with us).

Aside from that, I can see a few criticism (none of which out-weigh the benefit):
1. Like mentioned, bottomed out prices for bottomed out coverage. Makes you wonder how many people will get the cheapest coverage that does nothing just to have insurance...
2. Think its tough finding a Dr. in your network now!

I would hope competition and such would increase the service quality of the various insurance programs quickly.

I'd vote for it, though I am not sure I trust the numbers they used for New York and NJ versus Kansas City... seems like some 'fuzzy math'.

Healthcare costs vary by region. A NY city doctor charges a lot more for an office visit than and MD in Omaha. Same for hospitals, too.

Healthcare costs vary by region. A NY city doctor charges a lot more for an office visit than and MD in Omaha. Same for hospitals, too.
Very true as well, I didn't think of that.

So it would be unreasonable to think you could have the same cost as the insurance in Kansas City in NY. Makes sense...

Very true as well, I didn't think of that.

So it would be unreasonable to think you could have the same cost as the insurance in Kansas City in NY. Makes sense...Plus, many regulatory requirements are administered by the states, so that affects costs on the state level, especially for hospitals. Even if you aren't in an expensive city, you might be in an expensive state, because of those requirements.

Plus, many regulatory requirements are administered by the states, so that affects costs on the state level, especially for hospitals. Even if you aren't in an expensive city, you might be in an expensive state, because of those requirements.
Isn't that what they are proposing to eliminate with this bill? OR is it sort of a "You don't need a physical presence in a state but you can now sell there if you can abide by their laws" type a deal?

We need to lax on what we require insurance companies to cover.

Isn't that what they are proposing to eliminate with this bill? OR is it sort of a "You don't need a physical presence in a state but you can now sell there if you can abide by their laws" type a deal?

We need to lax on what we require insurance companies to cover.IMHO, there are no quick fix/magical formulas to reducing the cost of health care. Cutting out frivolous lawsuits will help, of course.

WSJ (www.wsj.com)
Perverse Incentives in Health Care
By JOHN C. GOODMAN
April 5, 2007; Page A13

Our public-school system and our health-care system may seem as different as night and day. Yet both systems share something in common: Mediocrity is the rule and excellence, where it exists, is distributed randomly.

In both cases the reason is the same. There is no systematic reward for excellence and no penalty for mediocrity. As a result, excellence tends to be the result of the energy and enthusiasm of a few individuals, who usually receive no financial reward for their efforts.

Research by John Wennberg and his colleagues at Dartmouth Medical School suggest that if everyone in America went to the Mayo Clinic, our annual health-care bill would be 25% lower (more than $500 billion!), and the average quality of care would improve. If everyone got care at Intermountain Healthcare in Salt Lake City, our health-care costs would be lowered by one-third.


Of course, not everyone can get treatment at Mayo or Intermountain. But why are these examples of efficient, high-quality care not being replicated all across the country? The answer is that high-quality, low-cost care is not financially rewarding. Indeed, the opposite is true. Hospitals and doctors can make more money providing inefficient, mediocre care.

In a normal market, entrepreneurs in search of profit would solve this problem by repackaging and repricing their services in order to make customer-pleasing adjustments. Yet in health care, contracts and prices are imposed by large impersonal bureaucracies. The individual physician has virtually no opportunity to offer a different bundle of services for a different price. As a result, very little entrepreneurship is possible.

Sometime in the early 20th century, lawyers, accountants and most other professionals discovered that the telephone was a useful instrument for communicating with clients. Yet even today, consultations with doctors by telephone are quite rare. Sometime in the late 20th century most other professionals discovered email. Yet only 21% of patients exchange email with their physicians; of these, slightly more than 2% do so on a frequent basis.

One would be hard-pressed to find a lawyer in the U.S. today who does not keep client records electronically. Ditto for accountants, architects, engineers and virtually every other profession. Yet although the computer is ubiquitous and studies show that electronic medical record systems have the capacity to improve quality and greatly reduce medical errors, no more than one in five physicians or one in four hospitals have such systems.

Why has the practice of medicine (as opposed to the science of medicine) changed so little in the modern era? The reason is because of the way we pay for medical care, particularly the way we pay doctors. At last count, there were about 7,500 specific tasks Medicare pays for. Telephone consultations are not among them. Nor are email consultations or electronic record keeping. What is true of Medicare is also true of Blue Cross and most employer plans.

Things are made worse by the fact that patients do not usually pay for health care with money; they typically pay with their time instead. As in Canada and most other developed countries, health care in the U.S. is mainly rationed by waiting, not by price.

When the doctor's time is rationed by waiting, the primary care physician's practice is usually fully booked, unless the practice is new or located in a rural area. As a result, there is very little incentive to compete for patients the way other professionals compete for clients. Because time -- not money -- is the currency we use to pay for care, the physician does not benefit very much from patient-pleasing improvements and is not harmed very much by an increase in patient irritations. Bottom line: When doctors and hospitals do not compete on the basis of price, they do not compete at all.

Where third-party payment is the norm, markets tend to be bureaucratic and stifling. But in those health-care sectors where third-party payment is rare or nonexistent, the market is vibrant, entrepreneurial and competitive.

Take cosmetic and Lasik surgery, for example. In both markets, patients pay with their own money. They also have no trouble finding what is virtually impossible to find for other types of surgery -- a package price covering all aspects of the procedure. People can compare prices, and in some cases quality. Providers are competing on price and quality and competition pays off. Over the past decade and a half, the number of cosmetic procedures grew sixfold along with numerous technological innovations of the type that are blamed for rising costs everywhere else in health care. Yet despite tremendous growth and technological change, the real price of cosmetic surgery declined. Over the past decade the real price of Lasik surgery fell by 30%.

The market for prescription drugs is another area where a great many people are paying out of pocket. In response, Rx.com was the first online outlet that began competing based on price and quality (they make fewer mistakes than local pharmacies). Wal-Mart's new policy of offering a month's supply of generic drugs is yet another example. Can anybody imagine Wal-Mart offering the same deal to Blue Cross?

Perhaps the most spectacular instance of a health-care product developing outside the third-party payment system is the walk-in clinic. These can be found in shopping malls and drug stores in the upper Midwest and they are spreading like wildfire around the country. They post prices. There is very little waiting. They maintain records electronically. The quality of service is comparable to traditional primary care at half the cost.

I know what you're probably thinking. Markets may work for certain specialized services; but can they work for run-of-the-mill hospital surgery? Medical tourism is proving that the answer is yes. If you're willing to leave the country you too can have access to efficient, high-quality health care. In India, Thailand and elsewhere around the world, facilities are offering U.S. citizens virtually every kind of procedure for package prices, covering all the costs of treatment, and sometimes airfare and lodging as well. These prices are often one-fifth to one-third the cost in the U.S. and care is often delivered in high-quality facilities that have electronic medical records and meet American accreditation standards.

One part of our health-care system (the part where third parties are absent) is teeming and bristling with entrepreneurship and innovation. In the other part (where third parties pay the bills), entrepreneurship has been all but extinguished. How can we make the latter more like the former?

Public and private efforts to reform the health-care system have been actively underway for the past two decades. The results have been disappointing, to say the least, and they all have one thing in common: They focus on the demand side of the medical marketplace.

Managed care, practice guidelines, pay-for-performance -- each of these short-lived fads involves buyers of care telling the providers how to practice medicine. Does no one notice how strange this is? In normal markets, buyers do not instruct sellers on how to efficiently produce their products. Even the HMO movement is a demand-side reform in this context. The HMO doctor is just as trapped as the fee-for-service physician and just as unable to rebundle and reprice his services in innovative ways.

Some believe that health savings accounts (HSAs) will raurlhasbeenblockedrm the health-care system. Yet this is also a reform that focuses on demand, not supply. Even with an HSA plan in hand as you approach the doctor's office, you should know that your insurer has already spelled out what services will be paid for, which ones will not and how much will be paid. HSAs, therefore, will not free doctors to take advantage of telephone, email, computerized records or any other truly innovative service. Like school vouchers, HSAs create new freedom on the buyer side without loosening the shackles on those who produce. The reform is commendable. But real innovation must come from the supply side of the market.

One would think that health insurers and employers would find it in their self interest to break the mold. To the extent that entrepreneurs raise quality and lower price, the insurance product itself should become more attractive to potential customers. The trouble is that the entire third-party payment system is completely dominated by government (principally through Medicare and Medicaid). Private insurers tend to pay the way the government pays and providers who break Medicare rules in order to better serve the patient risk being barred from the entire Medicare program.

A possible way out of this morass is to start with government. Under the current system, Medicare and Medicaid stifle entrepreneurial activity and financially punish efforts to lower costs or improve quality. Why can't these agencies reward improvements instead? Suppose an entrepreneur offered to replicate the Mayo Clinic in other parts of the country -- potentially saving Medicare 25% of costs and improving quality of care along the way. Medicare should be willing to pay, say, 12.5% more than its standard rates in order to achieve twice that amount in lower total costs. That would leave the entrepreneur with a 12.5% profit -- an amount that one would hope would encourage other entrepreneurs to enter the market with even better ideas.

Once government agencies jump-start the entrepreneurial process in this way, private insurers are likely to follow suit. In this way, government could promote entrepreneurship, instead of stifling it.

Mr. Goodman is president of the National Center for Policy Analysis.

60 Minutes (http://www.cbsnews.com/stories/2007/03/29/60minutes/main2625305.shtml)

If you have ever wondered why the cost of prescription drugs in the United States are the highest in the world or why it's illegal to import cheaper drugs from Canada or Mexico, you need look no further than the pharmaceutical lobby and its influence in Washington, D.C.

According to a new report by the Center for Public Integrity, congressmen are outnumbered two to one by lobbyists for an industry that spends roughly a $100 million a year in campaign contributions and lobbying expenses to protect its profits.

One reason those profits have exceeded Wall Street expectations is the Medicare prescription drug bill. It was passed three-and-a-half years ago, but as 60 Minutes correspondent Steve Kroft reports, its effects are still reverberating through the halls of Congress, providing a window into how the lobby works.

--------------------------------------------------------------------------------

The unorthodox roll call on one of the most expensive bills ever placed before the House of Representatives began in the middle of the night, long after most people in Washington had switched off C-SPAN and gone to sleep.

The only witnesses were congressional staffers, hundreds of lobbyists, and U.S. Representatives like Dan Burton, R-Ind., and Walter Jones, R-N.C.

"The pharmaceutical lobbyists wrote the bill," says Jones. "The bill was over 1,000 pages. And it got to the members of the House that morning, and we voted for it at about 3 a.m. in the morning."

Why did the vote finally take place at 3 a.m.?

"Well, I think a lot of the shenanigans that were going on that night, they didn't want on national television in primetime," according to Burton.

"I've been in politics for 22 years," says Jones, "and it was the ugliest night I have ever seen in 22 years."

The legislation was the cornerstone of Republican's domestic agenda and would extend limited prescription drugs coverage under Medicare to 41 million Americans, including 13 million who had never been covered before.

At an estimated cost of just under $400 billion over 10 years, it was the largest entitlement program in more than 40 years, and the debate broke down along party lines.

But when it came time cast ballots, the Republican leadership discovered that a number of key Republican congressmen had defected and joined the Democrats, arguing that the bill was too expensive and a sellout to the drug companies. Burton and Jones were among them.

"They're suppose to have 15 minutes to leave the voting machines open and it was open for almost three hours," Burton explains. "The votes were there to defeat the bill for two hours and 45 minutes and we had leaders going around and gathering around individuals, trying to twist their arms to get them to change their votes."

Jones says the arm-twisting was horrible.

"We had a good friend from Michigan, Nick Smith, and they threatened to work against his son who wanted to run for his seat when he retired," he recalls. "I saw a woman, a member of the House, a lady, crying when they came around her, trying to get her to change her votes. It was —it was ugly."

When the prescription drug bill finally passed shortly before dawn, in the longest roll call in the history of the House of Representatives, much of the credit went to former Congressman Billy Tauzin, R-La., who steered it through the house.

"It's just a messy process," Tauzin says. "I mean, the old adage about if you like sausage or laws, you should not watch either one of them being made is true. It's a messy process."

Tauzin says that the voting machines were open for three hours "because the vote wasn't finished."

As for arms being twisted? "People were being talked to," he says.

And of Walter Jones' comment that it was the "ugliest night" he had "ever seen in politics in 22 years?"

"Well, he's a young member," counters Tauzin with a laugh. "Had he been around for 25 years, he'd have seen some uglier nights."

(Continued for 3 more pages)

I still object to the contimual misrepresentation Canada's healthcare system is full of dying people waiting to see a doctor.

ALL healthcare systems, other than private physicians attending the very wealthiest of clients are a nightmare of scheduling conflicts and "how soon can I get in" questions being juggled back and forth - especially in America.

When was the last time you scheduled a physical for next week?
When was the last time you DIDN'T have to demand to be seen in less than 3 or 4 weeks from the day you called?
It's a simple fact, artificial restrictions on the number of doctors allowed through the system maintains artificially high wages for physicians, and you need look no further than the AMA to discover who is pulling the strings.
Who EVER heard of a doctor pulling a 40 and getting away for the weekend?
Imagine an artificial restriction on auto mechanicsCall back in a month Mrs. Jones, we may be able to squeeze you in and fix your power steering then.
or firemenYour house is on fire? You don't say. Let me see when we can send out an engine....will next Thursday be ok?How about policemen?Bank robbery in progess? Could you shove a thermometer up the robbers ass and give me his temperature?
Why? Oh, we need to see if he is REALLY angry or bluffing about shooting everyone in the bank. If he's mad, he should have a slight fever.
Ok, I understand, you need someone to arrest him.
Can you lock the robber in the vault until Monday morning when we have an officer free to pick him up?
I have offered up several suggestions on how to relieve a great deal of this shortage, but as long as lobbyists write the laws, and well-heeled interests continue to wine and dine legislators and fill their campaign coffers with tons of loot, the American consumer of healthcare will NEVER get a fair shake.

I still object to the contimual misrepresentation Canada's healthcare system is full of dying people waiting to see a doctor.

ALL healthcare systems, other than private physicians attending the very wealthiest of clients are a nightmare of scheduling conflicts and "how soon can I get in" questions being juggled back and forth - especially in America.

When was the last time you scheduled a physical for next week?
When was the last time you DIDN'T have to demand to be seen in less than 3 or 4 weeks from the day you called?

Its not quite a misrepresentation. Waiting times in Canada are far worse then anything here. Where do you live that you wait 3 or 4 weeks for an appointment? For routine stuff, I call today I MAY have to wait a week. Critical items are a few days or immediately.

That is a far cry from Canada's months long waits for little things... like chemo.

Customer Health Care (www.wsj.com)
By GRACE-MARIE TURNER
May 14, 2007; Page A17

It's Friday evening and you suspect that your child might have strep throat or a worsening ear infection. Do you bundle him up and wait half the night in an emergency room? Or do you suffer through the weekend and hope that you can get an appointment with your pediatrician on Monday -- taking time off your job to drive across town for another wait in the doctor's office?

Every parent has faced this dilemma. But now there are new options, courtesy of the competitive marketplace. You might instead be able to take a quick trip on Friday night to a RediClinic in the nearby Wal-Mart or a MinuteClinic at CVS, where you will be seen by a nurse practitioner within 15 minutes, most likely getting a prescription that you can have filled right there. Cost of the visit? Generally between $40 and $60.

These new retail health clinics are opening in big box stores and local pharmacies around the country to treat common maladies at prices lower than a typical doctor's visit and much lower than the emergency room. No appointment necessary. Open daytime, evenings and weekends. Most take insurance.

Much like the response to Hurricane Katrina, private companies are far ahead of the government in answering Americans' needs, this time for more accessible and more affordable health care. Political leaders across the country seeking to expand government's role in health care should take note.

Thousands of free-standing primary care clinics have been operating for years in malls and main streets around the country, often staffed by physicians and many offering a broad range of health services. The retail health clinics are creating a new model with more limited services at lower prices and almost always staffed by nurses. The Convenient Care Association estimates there are about 325 of these retail clinics operating nationwide today. Seventy-six of them are in Wal-Marts in 12 states, but the company announced last month it will expand to 400 clinics by the end of the decade and 2,000 in five to seven years. They will be run by outside firms, including for-profit ventures like RediClinic as well as local and regional health plans and hospitals.

The industry is rapidly expanding. You can find a MinuteClinic in the CVS on the Strip in Las Vegas. But you also will find many locally-run clinics in pharmacies and food stores across America, such as the Express Clinic in Miami, MediMin in Phoenix, and Curaquick in Sioux City, whose motto is "Get well soon."

Prices vary for services from flu shots ($15-$30), to care for allergies, poison ivy and pink eye ($50-$60), and tests for cholesterol, diabetes and pregnancy (less than $50). Competition already is starting to drive prices down.

Of all patients who have visited the clinics, almost half went there for a vaccination, and one-third received treatment for ear infections, colds, strep throat, skin rashes or sinus infections. Ninety percent said they were satisfied with the care they received. The nurses staffing the clinics are under physician supervision and follow strict protocols to refer patients to physicians or emergency rooms if problems are more serious.

Internists and family doctors are watching. Some see the clinics as useful in providing efficient care for a limited number of uncomplicated ailments, freeing physicians and hospitals to deal with more complex cases. But others are worried about lost business, fragmentation of care, and the quality of care if the clinics miss something serious.

Rick Kellerman, president of the American Academy of Family Physicians, concedes, "The retail clinics are sending physicians a message that our current model of care is not always easy to access." The threat of competition from the in-store clinics means some doctors are keeping their practices open later and on Saturdays and holding an hour open for same-day appointments. Competition works.

And competition also worked to force prescription drug prices down: When Wal-Mart announced last year that it was dropping the price of several hundred generic medicines to $4 for a month's supply, other pharmacies, from Target to corner drug stores, followed suit. Wal-Mart now says that a third of all prescriptions filled at its pharmacies are for the $4 generics, and 30% of them are filled by people without insurance.

Take note, Congress: The market is providing cheaper medicines, more affordable care -- and it is also helping the uninsured. A Harris Interactive poll conducted in March for The Wall Street Journal said that 22% of those visiting the clinics were uninsured. Wal-Mart says that half of its clinic visitors are uninsured.

Retail clinics are particularly attractive to 4.5 million people with Health Savings Accounts who have health insurance with higher deductibles and want an affordable option for some of their routine care.

And the clinics are working to solve another problem that is vexing Washington -- creation of electronic medical records. Most retail clinics create computerized patient records, with the goal of making the records accessible throughout the chain. The records also can be emailed to a hospital or to the patient's regular doctor -- or sent by fax if necessary.

Critics of engaging private competition in the health sector will argue that the vast majority of health-care dollars are spent on a relatively small percentage of patients with serious illness, especially those with multiple chronic conditions.

But even coordination of care for those with chronic illnesses lends itself to patient-friendly solutions. The City of Asheville, North Carolina, cut its costs in half for employees with diabetes by teaming up with local pharmacists who did routine exams and got patients to their doctors or hospitals more quickly when they needed intervention. Employees received their medicines for free if they kept appointments, and their health improved.

Because health care is largely regulated and licensed at the state level, some states are more friendly than others at having non-physicians deliver care. California requires that clinics be a medical corporation owned by a physician. In Arizona, each site must be licensed, but in most other states, a single license will serve multiple clinics. Illinois is considering legislation to limit the number of nurses a doctor could supervise to two and restrict the clinics' right to advertise.

This industry is in its infancy and will hardly register in our nation's $2 trillion-plus health care bill. But just as Nucor overturned the steelmaking industry with a faster-better-cheaper way of making low-end rebar, these limited service clinics could be the disruptive innovator in our health-care system. Package pricing for more complex treatments, like knee replacement surgery, may not be far behind.

Government can get in the way, of course, with protectionist policies that throw up more regulatory barriers to entry. But retail clinics could be just the beginning of consumer-friendly innovations, if Congress were to change tax policies in a way that would allow people to have more control over their health spending, as President Bush has proposed.

The linchpin is giving people the same tax benefits whether they get their health insurance at work or on their own, or buy coverage through groups like churches, labor unions and professional or trade associations. Allowing people to buy health insurance across state lines would inject another dose of healthy competition into the system.

With many congressional leaders hostile to free-market solutions, these policy changes are unlikely in the next two years. But as consumers get a taste of what consumer-friendly health care is like, they may well demand that the top-down, centralized health-care delivery of the 20th century give way to a system more in tune with the demands of 21st-century consumers seeking greater value and efficiency.

Ms. Turner is president of the Galen Institute.

A recent post by Kevin Drum linking to the Commonwealth study

Link (http://www.washingtonmonthly.com/archives/individual/2007_05/011316.php)

HEALTHCARE IN AMERICA....The Commonwealth Fund has released its latest comparison of healthcare performance among various countries, and you can read all about it here. However, since I know you're all busy people, I'll just cut to the chase: we suck. Despite the fact that we see doctors less often, go to the hospital less often, and stay in the hospital for shorter times than any of the other countries in the report, we still spend by far the most money. In return for this we get lousier care. As the summary chart below shows, we score last or close to last on five out of five measures — though we do manage to eke out a first place finish in one subcategory. Go team!

If you want a quick and dirty look at the data, download the chartpack and page through the charts. My favorites are 21, 28, 50, and 56. There are a few areas where the United States does well (preventive care, for example), but for the most part we're either average or below average. And when it comes to various sorts of preventible medical errors, we're absolutely terrible. It almost makes you want to just stay home the next time you feel a pain in your chest

Subject: Giuliani develops healthcare plan (www.upi.com)
Date: Thursday, June 07, 2007 3:07:43 PM EST
Content-Type: text/html

Giuliani develops healthcare plan

Republican presidential candidate Rudy Giuliani has developed a healthcare plan that would move millions from employer-based insurance to the individual market.

Giuliani, the current Republican front-runner in opinion polls, said his plan is aimed at giving more choices to the insured, the Wall Street Journal reported Thursday.

"It's your health; you should own your own insurance," he said Tuesday at a Manchester, N.H., debate. "The reality is that we need a free market."

The former New York mayor said he believes health insurance should resemble car insurance in the way that insured parties pay out of pocket for minor procedures.

"What I would do is change the whole model that we have for health insurance in this country," Giuliani said. "The problem with our health insurance is (that) it's government and employer dominated. People don't make individual choices."

Giuliani said he would not do away with employer-based insurance, but he would promote a "paradigm shift" in Washington toward an individual insurance marketplace.

---

Oh... I've been saying that too... maybe he's trying to get me to vote for him? :dontknow:

Subject: Giuliani develops healthcare plan (www.upi.com)
Date: Thursday, June 07, 2007 3:07:43 PM EST
Content-Type: text/html

Giuliani develops healthcare plan

Republican presidential candidate Rudy Giuliani has developed a healthcare plan that would move millions from employer-based insurance to the individual market.

Giuliani, the current Republican front-runner in opinion polls, said his plan is aimed at giving more choices to the insured, the Wall Street Journal reported Thursday.

"It's your health; you should own your own insurance," he said Tuesday at a Manchester, N.H., debate. "The reality is that we need a free market."

The former New York mayor said he believes health insurance should resemble car insurance in the way that insured parties pay out of pocket for minor procedures.

"What I would do is change the whole model that we have for health insurance in this country," Giuliani said. "The problem with our health insurance is (that) it's government and employer dominated. People don't make individual choices."

Giuliani said he would not do away with employer-based insurance, but he would promote a "paradigm shift" in Washington toward an individual insurance marketplace.

---

Oh... I've been saying that too... maybe he's trying to get me to vote for him? :dontknow:

Need more details of his plan. How many ex-wives does it cover?

Need more details of his plan. How many ex-wives does it cover?
Hehe, reminds me of Jon Stewart's recommendation to Ron Paul for calling out Gulianni:

"Hey Rudy, if you love the war on terrorism so much, why don't you marry it? Wait ... you'd probably then just divorce it a couple of years later."

I haven't seen anyone post about this which was broadcast on 20/20. This might overlap Universal Healthcare thread but I will try skip that issue.

Keep these question in mind as you read the article.
Do you know how much each medical procedure really cost? (not the co-pay)
Why don't we know the cost?
Do we know what we are getting each time we see a doctor?
If there is a price difference for same procedure with different doctors why don't we go to the lower cost one or shop around? Doctors should be no different from any other service industry
Do doctors compete for best performance at lower cost? Why is there no competition? Competition is mother of innovation and quality/price.
What's preventing healthcare members getting procedure/drugs for stuff they don't really need? Rushing to ER for something really small.
Why does the insurance follow company and not the person? Why do company even offer insurance?
The ultimate question why do we need insurance? Why can't we pay directly to doctor? And see the best doctor for their price? Why aren't we in control?


http://abcnews.go.com/2020/Stossel/Story?id=3580676
John Mackey, CEO of the supermarket chain Whole Foods, saw his insurance premiums rise through the roof so he changed the way his employees got health care. He proposed a health insurance plan with a high deductible. To help meet that deductible, the company puts money into a "personal wellness account" for each employee and employees use that money to pay for routine care. The money in the account belongs to the employees and puts them more in control of their health-care spending. Employees pay for the small stuff, like sore throats and sprained ankles, but their health insurance covers them in case of a catastrophe. Accounts like these are typically called HSAs, or Health Savings Accounts.

Mackey saw Whole Foods' health-care costs drop by 13 percent the first year the plan was in place. Some employees objected. They wanted the old "full-coverage" plan back. One wanted "pet bereavement services" covered. Whole Foods then held a vote and "77 percent of team members voted for the health plan that we have today," said Mackey. Today he says most of his employees love the plan because it allows them to spend the money how they want to spend it.

'You and Me'

Whole Foods' health-care costs have been creeping back up lately. Mackey says it's because there are so few people with health plans like his. Only 4.5 million people in America have Health Savings Accounts, according to a 2007 census conducted by America's Health Insurance Plans. That's a tiny fraction of the insurance market, but consumer-directed health plans are a step in the right direction toward placing individuals — not government or insurance companies — in charge of their health-care dollars.

The more people control the money they spend on their own health care, the more people shop around and the more providers compete to attract patients by lowering prices while improving quality. It's putting individuals in control that could turn our health-care sector into the vibrant, competitive marketplace that we see in nearly every other area of our economy.

After all, it's our body and our health. Shouldn't we be in control of how our health-care dollars are spent?

Harvard's Herzlinger said, "Who should decide whether you live or die? Do you want the government to decide? Do you want a health insurer to decide? Who's gonna make that decision? Is it gonna be a government? Is it gonna be an insurer? Or is it gonna be you and me?"

Putting individuals in control of our health — rather than our employers or the government — is a better way to cure what ails America's health system.

http://abcnews.go.com/2020/Stossel/story?id=3602579
Don't you hate that high deductible on your insurance policy? You have to pay thousands of dollars before insurance covers your care. That's terrible, some say, but is it really? A version of it may be the key to lowering costs and putting you in charge of your health care.

Five years ago, the grocery chain Whole Foods Market switched to a different kind of health insurance (http://www.wholefoodsmarket.com/careers/benefits_us.html), a policy that puts patients more in control.

CEO John Mackey explained the appeal of these policies. "Because it's like, 'At last, I can go to that acupuncturist! At last, I can go to my chiropractor! At last, I can spend the money the way I want to spend it.'"

Whole Foods has an insurance policy with a high deductible. That means an employee like Braden Weirs must pay about $1,000 before his insurance kicks in. If he gets cancer or heart disease, his insurance covers it.

But if he has a sore throat or a sprained ankle, he pays.

To help workers pay, Whole Foods puts money into an account for them. Weirs got $1,500 this year. If he doesn't spend it on medical care this year, he keeps it and the company adds more next year.

"And I have plenty of money left over," Weirs said. "So I can go get my new prescription glasses at the end of the year."

Individual Responsibility

Most companies call these accounts Health Savings or Health Reimbursement Accounts. The company saved money, too. "Our costs went way down," said Mackey.

Still, some employees were angry about the plan. They said they wanted their full coverage back.

"When you go from a system where people are very dependent and now you're telling them, 'Hey, you have to take more responsibility for your own health.' … That was frightening to them," Mackey said. "Because they were going to have to be responsible for themselves, they weren't going to be taken care of any longer."

So, Mackey held a vote among his employees on the plan. "The result was, 77 percent of the team members voted for the health plan that we have today," Mackey said.

Today, some workers have piled up $8,000 in their health accounts.

"And then that's their money," Mackey said. "It builds up over time … and so, that's great because the money is compounding for them."

Weirs said he can save up his money and afford to have a child later on. It's because he controls the money and as it builds up, it can cover all sorts of future out-of-pocket medical expenses.

'How Much Will This Cost?'

Mackey said this changed his employees' behavior.

"They start asking how much things cost. Or they get a bill and say, 'Wow, that's expensive.' They begin to ask questions. They may not want to go to the emergency room if they wake up with a hang nail in the middle of the night. They may schedule an appointment now."

They didn't ask what things cost before?

"Why should they?" Mackey said. "Somebody else was paying for it."

When she went to the doctor, Whole Foods employee Mary Ann Buttros never asked, "How much will this cost?"

"Because it didn't matter," Buttros said. "And now it matters to me, because it's my money."

Because it is Buttros' money, some people worry that Health Savings Accounts will discourage people from getting the preventive care that they need or that they'll shortchange their health to economize.

"The premise in those kind of questions … are that people are stupid. They're not smart enough to make these decisions for themselves. It's sort of an elitist attitude," Mackey said. "The individual is the best judge of what's right for the individual."

Shopping Around

Apparently, most individuals are making smart choices.

Regina Herzlinger, a Harvard Business School professor and author of "Who Killed Health Care?," said that "people who have these high-deductible health-insurance policies take better care of themselves. … They have more yearly physicals," she said. "Because they're saying, if I keep myself healthy, in the long run, I'm gonna be spending less money."

Whole Foods employee Cheralyn Schmidt used her account when she wanted to get a physical. Because it was her money, she shopped around. She found prices varied by hundreds of dollars.

"If I had regular insurance, I would have never called around and asked for prices," she said. "I would have just walked in, showed my card, said, 'I need a physical,' … and I don't even really know what they would have given me."

The fact that she was paying changed the way she thought about that physical.

"I started thinking, 'Well, what I am getting for this price? For $1,200 what I am getting?'" she said.

Grace-Marie Turner of the Galen Institute, which studies free-market solutions to health-care problems, said doctors don't often know what to say when patients like Schmidt ask them what things cost.

"I mean, that shows you how dysfunctional our health-care system is," Turner said. "That people don't have the vaguest idea how much they're spending on health care, close to the closest $10,000 or $20,000, often, when they go to the hospital. And the sellers don't have any idea what it costs."

Competition forces Whole Foods to pay attention to prices. "We know what [Texas supermarket chain] H-E-B is selling broccoli for right now, so we have to reflect our prices to the competition," Mackey said. But in health care, "No one's trying to think, 'Yeah I'm going to cut 5 percent below that price, so I can increase my business.'"

Creating Competition

But some say health care's different. It's too complex. We can't decide that.

"Gosh," Mackey said. "You know, should we allow people to make decisions about whether they have children or not? I mean that's a pretty important responsibility, having children!"

But what about the argument that people don't know anything about things like cancer treatments?

"I don't know anything about cars," Mackey said. " if I go buy a Toyota, or an Audi, or a Lexus, I know I'm going to get a pretty good automobile, because competition ensures that it will be that way."

That is why Americans buy Toyotas instead of Trabants. Of course cars and cancer are different, but where there is competition, information resources like Consumer Reports and Web sites spring up to help consumers make decisions. As the sliver of competition has entered health care, similar resources have appeared, rating doctors and hospitals.

Ingenix, a health-care information and technology company based in Minnesota, has developed software that analyzes data from insurance claims to rate doctors and hospitals on quality and price. The firm has found that doctors that rate higher in quality tend to cost less money. They also catch problems earlier and keep their patients out of the emergency room more often.

Currently, this rating system is only available to customers of insurance companies, but the company plans to make it more widely available through public search engines in the future.

Whole Foods' Mackey said competition could improve American health care, except so far, not enough people shop for that health care.
[B]
"The doctor doesn't feel compelled to compete on price," he said. "The doctor doesn't worry that he's going to lose that business to a competitor down the street. So there really isn't any price competition going on."

That's why, he said, despite their big initial savings, Whole Foods' health care costs are creeping up again.

"But if everybody was out there asking doctors what things cost, if doctors were advertising their prices," Mackey said, "we'd begin to see prices dropping."

But when patients are in control of their health-care spending, things get better. Lasik surgery isn't covered by most insurance policies, so patients pay for this high-tech procedure out of their own pocket. It's for this reason that laser surgeon Brian Bonanni gives out his cell phone number and e-mail address to all of his patients. He knows that he has to attract patients by making himself available.

Competition has also made Lasik cheaper: While in nearly every other field of medicine, prices have gone up faster than consumer prices in general, the price of Lasik has fallen by as much as 30 percent. The quality of the surgery has also improved. The difference is that people care about prices when they spend their own money, so providers compete to offer services that are faster, better and cheaper.

http://abcnews.go.com/2020/story?id=3602626
In every area of our economy, when people compete for your business, consumers win. Prices drop and quality improves. And now there's good news: A little competition has begun to improve health care.

There are some doctors' waiting rooms in America that are elegant … and open on Saturdays. Some doctors even take e-mail from patients and give out their cell phone numbers.

Of course, those doctors usually work in fields that insurance rarely covers, like laser eye surgery and cosmetic surgery.

Dr. Brian Bonanni is a laser eye surgeon who reshapes eyes so that people can see without glasses. He knows he has to please his patients -- not some insurance company or the government -- because he is paid by his patients.

"I need to be available 24 hours a day," Bonanni said. "I want to be there when a patient has questions, and I want to be reachable."

Bonanni's patients often meet with several doctors before deciding on a surgeon, and they demand to know exactly what it will cost.

Competitive Prices

"I can't get away with not telling the patient how much exactly it's going to cost. No one would put up with it," Bonanni said. "And the difference of a hundred dollars sometimes makes their decision for them."

Laser eye surgeons have to compete for their patients' business. And a result of that competition is lower prices.

"In every other field of medicine, the price is going up faster than consumer prices in general," said Dr. John Goodman, president of the National Center for Policy Analysis.

"[But] the price of Lasik surgery, on average, has gone down by 30 percent."

Prices dropped even though doctors pay for advertising. And while the procedure got cheaper, it also got better.

"When the lasers first came out, all they could treat was nearsightedness," Bonanni said. "[Today] the lasers are faster, more precise."


We see better quality, and lower prices in medical fields where most people pay for care themselves -- cosmetic surgery is another example. The average price of cosmetic procedures has fallen, because doctors compete for patients' business, and if doctors want to get repeat business, they have to offer patients a good deal. It's what happens when doctors respond to you, not your insurance company or the government. And it's happening now, and not just with elective surgery. We're starting to see providers offer everyday health care even in … shopping centers.


Cheap, Convenient Care

A new kind of medical clinic, staffed by nurse practitioners, is popping up in stores like Wal-Mart, in pharmacies and grocery stores. They offer people with sore throats and ear infections convenient care … cheap. Most everything costs $59 or less.

But how can they make money charging so little?

"They're figuring how to do something faster, better, cheaper," said Grace-Marie Turner of the Galen Institute. "They're responding to consumer demand, because they see that they might make some money on this. Profit! And, look who's winning. Moms and dads and kids. Because they now have … easy access to routine health care."

And some doctors are finding that dealing directly with patients changes their practice for the better.

Dr. Robert Berry had enough of the hassles of insurance companies and Medicare and Medicaid, so he decided to stop taking insurance. Instead, he offers his patients a price list, with low prices. How often have you seen that in a doctor's office? With visits often as low as $40, it's hard to see how he makes any money off it.

But Berry said, "Last year I made about the average of what a primary care physician makes in this country."

Competition, Choice, Power

Berry said eliminating insurance paperwork saves him time and money.

"I don't have to hire billers. I don't have to fight the insurance companies to get the money."

And that lets him keep his prices low, which saves money for his mostly uninsured patients. Knowing that his patients pay with their own money, Berry works with them, trying to find ways to save them money.

"They're afraid. They don't know how much it's going to cost," Berry said. "So I can tell them, OK, you know, you have heartburn. Let's start out with generic Zantac, which costs around five dollars a month. But [they say] 'I see Nexium on TV, I see Prevacid.' Yeah, but that costs about $130 a month. They're great medicines, but why don't you try this one first and see if it works."

And sometimes, he said, the $4 pill at Wal-Mart is just as good as the $100 pill.

So when consumers pay for things themselves, saving insurance for the big stuff, doctors deal directly with customers directly and compete by posting prices and working to keep them low.

That way, instead of having governments or insurance companies make decisions for consumers, consumers decide for themselves. Competition gives consumers more choices. And choice gives them power.

Would you really want to go to a "bargain" doctor?

I heard Dr. Nick's voice say, "Hi everybody!" when I read this.

Thanks Doctor_Wu...now this is the thread I wanted to see on Healthcare discussion.

Fix the current system before we jump to Universal...because we will just carry over our current problem to the new system...which might make it even worse.

Thanks Doctor_Wu...now this is the thread I wanted to see on Healthcare discussion.


No problem. There are many good articles here on what's wrong. There are a number of market perversions at work in our health care system... many of those have been put in place by government attempts at 'fixing' things.


One major item that has increased costs is the 3rd party payer structure (co-pays)
-- This arrangements subsidizes trips to the doctor and keeps doctors from competing on price b/c patients don't care what the price is. This in turn makes people consume more of this good than they otherwise would... it also allows doctors to charge more than they would be able to otherwise. Copayments should be done away with. Even a percentage reimbursement that forced people to pay out of pocket at the beginning would be better, b/c it would make people ask "how much".

The copayment structure has contributed to making doctor visits more expensive for people w/o insurance.

No problem. There are many good articles here on what's wrong. There are a number of market perversions at work in our health care system... many of those have been put in place by government attempts at 'fixing' things.


One major item that has increased costs is the 3rd party payer structure (co-pays)
-- This arrangements subsidizes trips to the doctor and keeps doctors from competing on price b/c patients don't care what the price is. This in turn makes people consume more of this good than they otherwise would... it also allows doctors to charge more than they would be able to otherwise. Copayments should be done away with. Even a percentage reimbursement that forced people to pay out of pocket at the beginning would be better, b/c it would make people ask "how much".

The copayment structure has contributed to making doctor visits more expensive for people w/o insurance.

How much do I owe you, Doctor Wu, for this? :)

How much do I owe you, Doctor Wu, for this? :)

My work here is an altruistic venture.

In other news...

Wal-Mart to sell cheaper generic drugs


NEW YORK, Sept. 27 (UPI (www.upi.com)) -- Wal-Mart, the largest U.S. retailer, says it will expand its program of selling prescription generic drugs for far less than retail prices.

New generics usually are priced at only a small discount compared to the original branded drug. But, Wal-Mart says it will sell a $4 new generic version of Coreg, a blood pressure drug that usually sells for $119.

The Financial Times says the retail giant plans a new generic version of the heavily marketed anti-fungal Lamisil for $4. A month's supply of the branded drug currently costs over $330.

Plans also are said to call for a monthly supply of prescription Ortho Cyclen and Ortho Tri Cyclen birth control drugs for $9, compared to current prices of $24 to $30.






Copyright 2007 by United Press International.

E-Prescriptions
By JOHN KERRY AND NEWT GINGRICH
November 16, 2007; Page A20 (www.wsj.com)

In 1799, doctors likely hastened the death of George Washington by draining a third of his blood to treat a bacterial infection. Bleeding was a common practice in those days, it dates back to the Greeks and Romans.

But nowadays, if a doctor used bloodletting he would be barred from practicing medicine. In the age of the Internet, is it any less inexcusable that we have yet to modernize and transform our health-care system?

We have talked long enough about using technology to cut costs and improve the quality of care. Now is the time to act -- and the place to start is preventable medication errors.

According to the Institute of Medicine, Americans average one medication mistake for every day spent in a hospital, accounting for more than 1.5 million injuries each year. Medication errors will kill at least 7,000 Americans this year. Of the more than three billion prescriptions written each year, doctors report nearly one billion require a follow-up between providers and pharmacies for clarification. The cost to our health-care system is in the billions.

One reason for this mess is that 95% of prescriptions are transmitted using 5,000-year-old technology: pen and paper.

That is unacceptable. The deaths and inefficiencies of paper prescriptions can be nearly entirely eliminated if we use the same technology we that use in other aspects of our lives. Electronic prescriptions can replace handwritten, misread and mismatched prescriptions with online, automated and expert technology.

The benefits are clear and compelling. When a doctor "writes" an electronic prescription, a computer can warn of potentially dangerous interactions with other medications or allergies and thereby prevent thousands of unnecessary hospitalizations each year. E-prescribing can also let a physician know whether a drug is covered by a patient's insurance or whether an alternative generic is available at a fraction of the cost. One initiative led by Chrysler, General Motors and Ford to encourage doctors to write e-prescriptions in the Detroit region has generated more than one million prescription alerts that have saved lives and money.

The benefits of e-prescribing are so important that the Institute of Medicine has called for every doctor and nurse to prescribe electronically by the year 2010. Business and labor leaders, health insurers and consumer advocates are unanimous in their support of this common-sense initiative.

Doctors also know that e-prescribing is vital for our health-care system. One recent study of 400 physicians found that 85% of physicians think e-prescribing is a good idea; 81% say it would reduce medication errors; and 65% say it would save time. They like a system that reduces their liability and allows them to focus on providing care, not filling out paperwork.

The problem is that very few doctors use the technology. Of those 400 physicians polled, only 7% actually transmit prescriptions electronically. And 63% say implementing the technology is not a priority. Why? It's not always in their immediate financial interest to do so.

That must change.

The federal government can lead by requiring that doctors who do business with Medicare convert to e-prescribing. This can be done by using market forces and the federal government's purchasing power to align financial incentives.

First, offer bonus payments to Medicare doctors who already prescribe electronically or who adopt the technology. Such payments will help doctors, especially those with small practices without many patients, to pay for startup costs. Private insurers, like WellPoint, are already using this strategy to drive adoption of e-prescribing.

If a majority of doctors don't e-prescribe a few years down the road, the government should require all doctors to adopt e-prescribing or face financial penalties. E-prescribing should become a condition of doing business with Medicare. This is no different than the requirements other suppliers expect to see when they negotiate with customers.

A new study by the Department of Health and Human Services estimates that if 18% of doctors in Medicare adopt e-prescribing, the government will save $4 billion and nearly three million adverse drug events can be prevented over five years.

This is something Republicans and Democrats can agree on. While we continue to debate how to cover the uninsured, improve quality, and lower costs, there is too little being done to modernize health care. E-prescribing for Medicare is just the beginning of the modernization and digitization our ailing health-care system urgently needs. A high-tech, healthier future is within our grasp. We just need creative leadership bold enough to reach for it.

Mr. Kerry, a Democrat, is a senator from Massachusetts. Mr. Gingrich, a Republican, is former speaker of the House and founder of the Center for Health Transformation. Chrysler, GM, Ford and WellPoint are members of the center.

...Wal-Mart to sell cheaper generic drugs


NEW YORK, Sept. 27 (UPI (http://slickdeals.net/?sduid=16556&t=46534&u2=http://www.upi.com)) -- Wal-Mart, the largest U.S. retailer, says it will expand its program of selling prescription generic drugs for far less than retail prices.

New generics usually are priced at only a small discount compared to the original branded drug. But, Wal-Mart says it will sell a $4 new generic version of Coreg, a blood pressure drug that usually sells for $119.

The Financial Times says the retail giant plans a new generic version of the heavily marketed anti-fungal Lamisil for $4. A month's supply of the branded drug currently costs over $330.

Plans also are said to call for a monthly supply of prescription Ortho Cyclen and Ortho Tri Cyclen birth control drugs for $9, compared to current prices of $24 to $30.

Copyright 2007 by United Press International.Ah, that evil WMT, putting mom & pop pharmacists out of business by charging less for prescription drugs :lmao:

The federal government can lead by requiring that doctors who do business with Medicare convert to e-prescribing. This can be done by using market forces and the federal government's purchasing power to align financial incentives.

First, offer bonus payments to Medicare doctors who already prescribe electronically or who adopt the technology. Such payments will help doctors, especially those with small practices without many patients, to pay for startup costs. Private insurers, like WellPoint, are already using this strategy to drive adoption of e-prescribing.

If a majority of doctors don't e-prescribe a few years down the road, the government should require all doctors to adopt e-prescribing or face financial penalties. E-prescribing should become a condition of doing business with Medicare. This is no different than the requirements other suppliers expect to see when they negotiate with customers.

A new study by the Department of Health and Human Services estimates that if 18% of doctors in Medicare adopt e-prescribing, the government will save $4 billion and nearly three million adverse drug events can be prevented over five years.

This is something Republicans and Democrats can agree on. While we continue to debate how to cover the uninsured, improve quality, and lower costs, there is too little being done to modernize health care. E-prescribing for Medicare is just the beginning of the modernization and digitization our ailing health-care system urgently needs. A high-tech, healthier future is within our grasp. We just need creative leadership bold enough to reach for it.

I have a neurologist who i visited within the last month. He was able to refill my perscription from his blackberry. Now this Dr., to me, seems no more 'with it' than any other Dr. I have seen, so I don't think the federal government needs to enter the picture.

Why can't we let them adopt as the best technology becomes obvious? It seems like the government stepping in (possibly to early to see what the best method would be) might hinder the natural progress?

No?

I have a neurologist who i visited within the last month. He was able to refill my perscription from his blackberry. Now this Dr., to me, seems no more 'with it' than any other Dr. I have seen, so I don't think the federal government needs to enter the picture.

Why can't we let them adopt as the best technology becomes obvious? It seems like the government stepping in (possibly to early to see what the best method would be) might hinder the natural progress?

No?

Danman, you know that I favor market based options more often than not. However when we speak about the "natural progress" it's important to remember what constitutes "natural". The health care marketplace has many protections and gvt mandates that ensure that it is not a natural mkt. These circumstances have created a situation where the 'natural' condition is for doctors to have files on paper along with all the other well documented insanities of the industry. Going to a doctor's office is like going back into time... a museum dedicated to how industries used to do business.

There is little incentive to innovate, in part b/c doctors do not need to realize economies of scale. This reality has a few sources... a couple of prominent ones include, occupational licensure... as well as the copayment structure, doctors do not compete on price.

Aside from all that... as I read the tea leaves... the people are hungry for change in the health care industry. These kinds of innovations that would promote efficiencies in the industry and help the nation realize savings from those efficiencies are preferable to a single payer health care system, or even the hybrid plan proposed by the Hillary campaign. What I'm saying is... sometimes the people simply favor "doing something"... just like Nixon and price controls... the people often favor a leader who is willing to take action, even if that action will result in a less favorable economic circumstance.

I think that sometimes we would be prudent to promote a certain kind of innovation in order to dilute the generally felt desire for change.

The Health Insurance Mafia
By JONATHAN KELLERMAN
April 14, 2008; Page A15 (http://online.wsj.com/article/SB120813453964211685.html?mod=opinion_main_commentaries)

Most discussions about the rising cost of health care emphasize the need to get more people insured. The assumption seems to be that insurance – rather than the service delivered by doctor to patient – is the important commodity.

But perhaps the solution to much of what currently plagues us in health care – rising costs and bureaucracy, diminishing levels of service – rests on a radically different approach: fewer people insured.

You don't need to be an economist to understand that any middleman interposed between seller and buyer raises the price of a given service or product. Some intermediaries justify this by providing benefits, such as salesmanship, advertising or transport. Others offer physical facilities, such as warehouses. A third group, organized crime, utilizes fear and intimidation to muscle its way into the provider-consumer chain, raking in hefty profits and bloating cost, without providing any benefit at all.

The health insurance model is closest to the parasitic relationship imposed by the Mafia and the like. Insurance companies provide nothing other than an ambiguous, shifty notion of "protection." But even the Mafia doesn't stick its nose into the process; once the monthly skim is set, Don Whoever stays out of the picture, but for occasional "cost of doing business" increases. When insurance companies insinuate themselves into the system, their first step is figuring out how to increase the skim by harming the people they are allegedly protecting through reduced service.

Insurance is all about betting against negative consequences and the insurance business model is unique in that profits depend upon goods and services not being provided. Using actuarial tables, insurers place their bets. Sometimes even the canniest MIT grads can't help: Property and casualty insurers have collapsed in the wake of natural disasters.

Health insurers have taken steps to avoid that level of surprise: Once they affix themselves to the host – in this case dual hosts, both doctor and patient – they systematically suck the lifeblood out of the supply chain with obstructive strategies. For that reason, the consequences of any insurance-based health-care model, be it privately run, or a government entitlement, are painfully easy to predict. There will be progressively draconian rationing using denial of authorization and steadily rising co-payments on the patient end; massive paperwork and other bureaucratic hurdles, and steadily diminishing fee-recovery on the doctor end.

Some of us are old enough to remember visiting the doctor and paying him/her directly by check or cash. You had a pretty good idea going in what the service was going to cost. And because the doctor had to look you in the eye – and didn't need to share a rising chunk of his profits with an insurer – the cost was likely to be reasonable. The same went for hospitals: no $20 aspirins due to insurance-company delay tactics and other shenanigans. Few physicians became millionaires, but they lived comfortably, took responsibility for their own business model, and enjoyed their work more.

Several years ago, I suffered a sports injury that necessitated an MRI. The "fee" for a 20-minute procedure was over $3,000. My insurance company refused to pay, so I informed the radiologist that I'd be footing the bill myself. Immediately, the "fee" was cut by two thirds. And the doctor was tickled to get it.

A few highly technical and complex procedures that need to amortize the purchase of extremely expensive hardware will be out of reach for any but the wealthiest patient. For that extremely limited category, insurance might work. A small percentage of indigent individuals won't be able to afford even low-cost procedures. For them, government-funded county facilities are the answer, because any decent society takes care of the weakest among us. But a hefty proportion of health-care services – office visits, minor surgeries – would be affordable to most Americans if the slice of the health-care dollar that currently ends up in the coffers of insurance companies was eliminated.

When I was in practice as a psychologist, I discussed fees up front with prospective patients, prior to their initial visit. People appreciated knowing what to expect and my bad debt rate was less than 1%. That allowed me to keep my charges reasonable and, on occasion, to lower them for less fortunate patients. And I loved my job because I was free to concentrate on what I went to school for: helping people, rather than filling out incomprehensible forms designed to discourage me from filing them in the first place.

Physicians and other providers need to liberate themselves from the Faustian bargain they've cut with the Mephistophelian suits who now run their professional lives. Because many doctors are loath to talk about money, they allowed themselves to perpetuate the fantasy that "insurance is paying." It isn't. There is no free lunch and no free physical exam.

If substantial numbers of health-care providers shook off the insurance monkey on their back, en masse, and the supply of providers was substantially increased by opening more medical schools, the result would be a more honest, cost-effective system benefiting everyone. Except the insurance companies.

Dr. Kellerman, clinical professor of pediatrics and psychology at USC's Keck School of Medicine, is the author of numerous crime novels and three books on psychology. His latest novel is "Compulsion" (Ballantine, 2008).

Several years ago, I suffered a sports injury that necessitated an MRI. The "fee" for a 20-minute procedure was over $3,000. My insurance company refused to pay, so I informed the radiologist that I'd be footing the bill myself. Immediately, the "fee" was cut by two thirds. And the doctor was tickled to get it.


Amen to that. Nothing is going to change in this country until we take a) the bloodsuckers out of the equation and b) make people more somewhat more responsible for their own healthcare costs -- notice that i did not say completely responsible. Nothing will get you to lose weight and quit smoking like the prospect of needing medications that cost hundreds a month or a cardiac procedure that will run you several grand. When you realize that you are getting charged $3000 for the MRI, you (the plural "you") will be able to negotiate more directly with the healthcare provider to arrange for better rates since the middleman is out of the equation.

A high-deductible insurance policy would be good for most people so as to not avoid financial catastrophe when they need that super expensive, once-in-a-lifetime cardiac procedure or chemotherapy for cancer.

Beware of the Big-Government Tipping Point (www.wsj.com)
Socialized health care fundamentally changes the relationship between citizens and state.

By PETER WEHNER and PAUL RYAN

For most of our nation's history, our approach to economics has favored enterprise, self-reliance and the free market. While the American economy has never been entirely laissez-faire, we have historically cared more about equality of opportunity than equality of results. And while Americans have embraced elements of the New Deal, the Great Society and progressive taxation, we have traditionally viewed welfare as a way to help those in dire need, not as a way of life for the middle class. We have grasped, perhaps more than any other nation, that there is a long-run cost to dependency on the state, including an aversion to risk that eventually enervates the entrepreneurial spirit necessary for innovation and prosperity.

This outlook, once assumed, is now under attack due to a recent series of political and economic events.

The first is the unprecedented intervention by the federal government, in the form of a $700 billion relief package intended for our financial institutions after the credit crisis last September. This was followed by extending billions of dollars of federal assistance to America's auto makers in order to prevent their imminent bankruptcy -- the first emergency bailout that went to companies outside the financial sector. We understand why the federal government did this, and even supported legislation that, while hardly perfect, prevented an economic meltdown.

Nonetheless, the consequences of this undertaking are enormous. Not only has the size of the expenditures been staggering -- there is talk of another stimulus package worth an estimated $825 billion -- but we are witnessing a fundamental transformation of government's relationship with the polity and the economy.

The last several months are a foreshadowing of a new era of government activism, rather than an unfortunate but necessary (and anomalous) emergency action. We will soon shift from a market-based economy to a political one in which the government picks winners and losers and extends its reach and power in unprecedented ways.

This shift is exemplified by the desire of President-elect Barack Obama and the Democratic Congress to push us toward government-run health care.

For all his talk of allowing consumers to select their own health-care coverage, Mr. Obama's proposal, as he laid it out in his campaign, will provide strong financial incentives for employers and individuals to sign up with a new, Medicare-style government plan for working-age people and their families. This plan will almost certainly use a price-control system similar to the one in place for Medicare, allowing it to charge artificially low premiums by paying fees well below private rates. These low premiums will serve as a magnet for enrollment and will devastate the private companies trying to compete in the health-insurance market. The result will be the nationalization of the health-care sector, which today accounts for 16% of U.S. gross domestic product.

Nationalizing health care will be profoundly detrimental to the quality of American medicine. In the name of cost control, the government would make private investment in medical innovation far riskier, and thus delay the development of potentially lifesaving treatments.

It will also put America on a glide path toward European-style socialism. We need only look to Great Britain and elsewhere to see the effects of socialized health care on the broader economy. Once a large number of citizens get their health care from the state, it dramatically alters their attachment to government. Every time a tax cut is proposed, the guardians of the new medical-welfare state will argue that tax cuts would come at the expense of health care -- an argument that would resonate with middle-class families entirely dependent on the government for access to doctors and hospitals.

Of course, this health-care plan is occurring against our particular fiscal backdrop: Without major reform, our federal entitlement programs will soon double the size of government. The result will be a crushing burden of debt and taxes.

In short, we may be approaching a tipping point for democratic capitalism.

While the scope of the challenge should not be underestimated, those of us worried about this fundamental reorientation of politics and economics have several things working in our favor. Among them is that a public accustomed to iTunes, Facebook, Google, eBay, Amazon and WebMD is not clamoring for centralized, bureaucratic government. The strong American instinct for individual initiative and entrepreneurship remains intact.

In addition, confidence in government -- from Congress to those responsible for oversight of the financial system -- is quite low.

Our sense is that at the moment, the public is not thinking in terms of "big government" or "small government." Instead, Americans want efficient government -- one that is modern, responsive and adaptive. People want government to act as a fair referee, providing guardrails that allow individuals to rise without intrusively dictating individual decisions.

If conservatives hope to win converts to our cause, we need to understand this new moment and put forward an agenda that reforms key institutions in a way that advances individual freedom, without creating an unacceptable level of insecurity.

This is no easy task, and it must begin with providing a compelling alternative to what contemporary liberalism and Mr. Obama are about to offer. This especially includes health care, where we must start by recalling that our current health-insurance system was designed to meet the needs of a 20th century economy and World War II-era employment laws. It is hopelessly outdated, yet the Obama plan would make the system even more sclerotic.

The core of our message needs to be a commitment to creating a health-care plan that meets the demands of the modern economy. We need to convince concerned citizens that we can help the uninsured find coverage in the private sector and use market incentives to contain costs. The result will be a system that makes it possible for everyone to afford health insurance, including those with pre-existing conditions.

Tax credits, high-risk pools, insurance choice and regulatory reform can form the basis of a transformation from today's enormously costly and inefficient third-party system into one driven by ownership, choice and competition. And at the nucleus of this redesigned system will be the patient-doctor relationship.

If we hope to succeed in making our case, it will require a concerted education campaign that relies on hard data and facts, rigorous and accessible public arguments, and persuasive public advocates.

This is quite a tall order. But if we do not succeed in resisting greater state involvement in the economy -- and health care is meant to be the beachhead of this effort -- we will move from a limited welfare state into a full-blown one. This will reshape, in deep and enduring ways, our nation's historic sensibilities. It will lead here, as it has elsewhere, to passivity and dependence on the state. Such habits, once acquired, are hard to shake.

Between now and the end of this decade may be one of those rare moments in which among other things will turn decisively one way or the other. The stakes could hardly be higher for our way of life.

Mr. Wehner, a former deputy assistant to President George W. Bush, is a senior fellow at the Ethics and Public Policy Center. Mr. Ryan, a Republican congressman from Wisconsin, is a member of the Budget Committee and the Ways and Means Committee

We have grasped, perhaps more than any other nation, that there is a long-run cost to dependency on the state, including an aversion to risk that eventually enervates the entrepreneurial spirit necessary for innovation and prosperity.

Perhaps I do not understand what he is saying here.

He seems to be saying that dependency on the state for health care, leads to aversion of risk necessary for entrepreneurial activity.

My own personal experience shows otherwise.

It is my aversion to health risk (need for good coverage) that discourages me from persuing entrepreneurial activities.

If I were guaranteed good coverage at affordable rates, I would be much more likely to be working for myself rather than working at a large corporation.

It is my aversion to health risk (need for good coverage) that discourages me from persuing entrepreneurial activities.

If I were guaranteed good coverage at affordable rates, I would be much more likely to be working for myself rather than working at a large corporation.

I would tend to agree. Private health insurers have utterly failed to make available affordable insurance plans that don't exclude everything under the sun. It seems to me that when you can't get proper health care and health insurance, you're not going to take as many risks as you would if you were sure of your health situation.

I have good insurance right now and it's still difficult. I don't have any idea how much things will cost until after I've had them done. How is anyone in a situation like me supposed to plan, which is an essential component of risk analysis?

Despite posting it in the health care thread, this article speaks to a general point of risk taking being discouraged by government interference in, and excessive control of, markets. The most extreme example of this that I can recall currently would be the auto industry in India... for most of the 20th century state protection kept few players in that industry, and the largest car company in India, Hindustan motors produced one design 'the Ambassador' for about 50 years... w/few updates.

In our own history the CAB control of the rates airlines charge prevented innovation in low fare airlines and the expansion of air travel to the middle class at large. The CAB had officers who were to go around searching for hidden discounts & perks among the airlines. At one point they were regulating the size of sandwiches on planes.

In terms what this may mean for innovation in health care, it's hard to say with precision, as the future is hidden from view. Is private investment in medical research connected to return on investment? Probably so. If we remove all market forces from health care we may slow our "progress" in areas of research. Especially at the margins. Research into high profile things like breast cancer, and pancreatic cancer might not really be affected... but research into some more rare disease may suffer if we politicize the access to research money, for example.

As to the larger issue just mentioned of the expense of an insurance policy. There are many reasons for this, many of them are related to market perversions... some the responsibility of state governments, some the responsibility of our culture of malpractice lawsuits (which has resulted in doctors preforming tests that are often unnecessary).... and then there's the small matter of the 3rd party payer structure (aka 'co-pay')... whereby the consumer of the service is not made aware of the cost, not sensitive to cost considerations, etc. All of which have been discussed in this relatively short thread (considering its age).

Despite posting it in the health care thread, this article speaks to a general point of risk taking being discouraged by government interference in, and excessive control of, markets.

But that's the thing, our economy is where it is because of lack of control and interference.

As to the larger issue just mentioned of the expense of an insurance policy. There are many reasons for this, many of them are related to market perversions... some the responsibility of state governments, some the responsibility of our culture of malpractice lawsuits

Primarily though the expense is due to the greed of the third party (the insurance company).

Despite posting it in the health care thread, this article speaks to a general point of risk taking being discouraged by government interference in, and excessive control of, markets.

Then perhaps the solution is to have no price controls on new treatments for an introductory period of say 10 years.

Of course companies will probably pervert such incentives with minor tweaks to existing treatments and claim it's "new."

The point is, government involvement does not have to mean risk aversion.

Of course companies will probably pervert such incentives with minor tweaks to existing treatments and claim it's "new."

That's exactly what will happen, just look at drugs like Nexium.

But that's the thing, our economy is where it is because of lack of control and interference.

There's also the small matter of the desire of the government to expand home ownership to people who previously couldn't afford it (and still couldn't)... under plans started by Carter and expanded by Clinton. So, from a different perspective it was the government's desire for this politically popular but unsustainable scenario that created an institutional aversion against oversight.

In a sense, the attempt to control things creates perverse incentives inside the government.

As for the general principle, I think there's probably a balance that can be found. But it seems very difficult for the government to do that. And based on the presence of Tom Daschle, I don't expect the impulse of the administration will be for that middle point.


Primarily though the expense is due to the greed of the third party (the insurance company).

That's an easy target I suppose. The presumed greed of large corporations is always something we could point to. Though do we think the same way about auto insurance companies?

There are state mandated coverages that require insurers to cover things that people may or may not want... that's one of the things that drives up prices and makes it more expensive in some states than others. One very easy item that would lower costs would be to open up the marketplace between states... but we don't see that. I wonder why?

Then perhaps the solution is to have no price controls on new treatments for an introductory period of say 10 years.

Of course companies will probably pervert such incentives with minor tweaks to existing treatments and claim it's "new."


There's that, on the issue of drug development. But there's also new procedures that are tried by people trying to innovate and when you've got multiple insurance providers to deal with, and multiple doctors too... you can shop around, and so can doctors.

Minimally invasive hip replacement comes to mind. The market allows that kind of new procedure to come into being in a way that a single provider might not. Especially when that single provider has a heap of bureaucratic overhead on top of itself.


The point is, government involvement does not have to mean risk aversion.


I agree that it doesn't. But i think the point of the article... and a point that I agree on is that there is probably a tipping point at which the government becomes too big... too important in the lives of everyday people. The idea that a tax cut could never happen again b/c people are too dependent on the government should give people pause.

There's also the small matter of the desire of the government to expand home ownership to people who previously couldn't afford it (and still couldn't)... under plans started by Carter and expanded by Clinton. So, from a different perspective it was the government's desire for this politically popular but unsustainable scenario that created an institutional aversion against oversight.

But the other side of that token is that lenders happily lent to people that weren't qualified and made money off of those loans, then bundled up these bad loans and sold them off, making more money.

As for the general principle, I think there's probably a balance that can be found. But it seems very difficult for the government to do that. And based on the presence of Tom Daschle, I don't expect the impulse of the administration will be for that middle point.

It seems very difficult in general. Companies have conflict over near-term profit and risk thus and lend out to otherwise unqualified customers. The company makes money, managers are driven to get bonuses by hitting quotas and overall the system isn't entirely driven by rational risk management. This isn't unique to government.

That's an easy target I suppose. The presumed greed of large corporations is always something we could point to. Though do we think the same way about auto insurance companies?

:nod: :nod: :nod: :nod: :nod: :nod: :nod: :nod: :nod: :nod:

Auto insurers can be just as scummy, but I think to a lesser degree. There are all kinds of instances where people pay in for years, make a claim and then are denied coverage or rates are jacked way up.

It's not just easy to blame them, but it is reasonable and logical. They are a source of huge confusion about what is covered, causing doctors and patients to invest significant time and energy in resolving claim disputes. They deny services that they should cover, and made medical decisions under the guise of "business decisions".

There are state mandated coverages that require insurers to cover things that people may or may not want...

Like what? We have coverage minimums here in AZ, but there is no requirement for optional things, like glass coverage.

One very easy item that would lower costs would be to open up the marketplace between states... but we don't see that. I wonder why?

I'm not sure what you mean. Assuming you're still talking about auto insurance, I'm insured by American Family which operates across states. If not, my health insurance is by United Healthcare, which also operates across states.

There are state mandated coverages that require insurers to cover things that people may or may not want... that's one of the things that drives up prices and makes it more expensive in some states than others. One very easy item that would lower costs would be to open up the marketplace between states... but we don't see that. I wonder why?I'm not sure what you mean. Assuming you're still talking about auto insurance, I'm insured by American Family which operates across states. If not, my health insurance is by United Healthcare, which also operates across states.I think he means allowing people to buy plans from other states...IOW, insurers wouldn't be required to conform to your state's regulation, only to that where the plan originates (the state of incorporation, or whatever). I believe some states allow this in some form already, but done at the federal level would obviously require all to.

One of the outcomes with this that I see, though, is that every insurer will follow the credit card company model (move base to the state[s] with the least restrictions, and all plans will be based on those).

I think he means allowing people to buy plans from other states...IOW, insurers wouldn't be required to conform to your state's regulation, only to that where the plan originates (the state of incorporation, or whatever). I believe some states allow this in some form already, but done at the federal level would obviously require all to.

One of the outcomes with this that I see, though, is that every insurer will follow the credit card company model (move base to the state[s] with the least restrictions, and all plans will be based on those).

Why does it make sense for my state to allow another state to effectively dictate the minimum insurance levels for drivers on our roads?

Why does it make sense for my state to allow another state to effectively dictate the minimum insurance levels for drivers on our roads?It probably doesn't, but that would be irrelevant at that point. Your state would be neither allowing it nor prohibiting it; it wouldn't have a say at all. Much the way it doesn't have a say about credit card usury today.

It probably doesn't, but that would be irrelevant at that point. Your state would be neither allowing it nor prohibiting it; it wouldn't have a say at all. Much the way it doesn't have a say about credit card usury today.

I can see the difference between credit and auto insurance though. With credit, it's only you that is affected if something goes wrong. With auto insurance, you have the potential to cause a lot of damage that you can't pay for if you don't have enough insurance.`

I can see the difference between credit and auto insurance though. With credit, it's only you that is affected if something goes wrong. With auto insurance, you have the potential to cause a lot of damage that you can't pay for if you don't have enough insurance.`While I don't think it would necessarily only be me affected by defaulting on credit debt--someone's going to have to pay for it in some way or another--I agree that the risk scenarios are completely different. What I was getting at, though, is that, similar to state usury laws regarding credit, enabling someone to buy an out-of-state policy would (effectively) render individual state regulation, for all but the state of origination, useless. And there'd eventually be only one state of origination, the one with the least regulation. Note that I don't think this would be a good thing.

Like what? We have coverage minimums here in AZ, but there is no requirement for optional things, like glass coverage.
Under the scope of healthcare, here in MA where it is mandated by law (else face a fine), we have the following healthcare mandates that must be included in every plan offered to citizens of this state (some are federal requirements):


Chiropractic services
Contraceptive services
Diabetes-related services and supplies
Early intervention services
Home health care
Hormone replacement therapy (HRT)
Human leukocyte antigen testing (HLA)
Infertility treatment
Low protein food products for inherited amino acid and organic acid diseases (PKU)
Mental health care
Nonprescription enteral formulas
Scalp hair prostheses for cancer patients
Speech, hearing, and language disorders
Alcoholism rehabilitation
Bone marrow transplants for treatment of breast cancer
Cardiac rehabilitation
Clinical trials for treatment of cancer
Cytologic screening (Pap smear)
Hearing screening for newborns
Hospice care
Lead poisoning screening
Mammography
Maternity health care (including minimum maternity stay)
Preventive care for children up to age six (including specific newborn testing)
Off-label uses of prescription drugs to treat cancer
Off-label uses of prescription drugs to treat HIV/AIDS


Now, regardless of how badly you would want any of the above included in your health care plan, can you imagine how a young married man (like me) might be more than little confused that he has to pay money for Maternity health care, AIDS drugs, Mental Healthcare, etc.

All of these mandates increase the costs of healthcare to ordinary people.

I'm not sure what you mean. Assuming you're still talking about auto insurance, I'm insured by American Family which operates across states. If not, my health insurance is by United Healthcare, which also operates across states.
I use to be insured by Blue Cross and Blue Shield of Massachusetts. I don't know how every co. works, but BCBS is in probably every state, but most of them are seperate entities all under the same name (like franchises). Some are for-profit, some are non-profit, some are private, and a few are traded on the stock market. The reason there isn't 1 BCBS is because there are/were laws preventing companies from operating in multiple states. These barriers are put up to protect existing co's, but they are slowly, very slowly coming down.

These barriers increase healthcare costs.

Under the scope of healthcare, here in MA where it is mandated by law (else face a fine), we have the following healthcare mandates that must be included in every plan offered to citizens of this state (some are federal requirements):


Chiropractic services
Contraceptive services
Diabetes-related services and supplies
Early intervention services
Home health care
Hormone replacement therapy (HRT)
Human leukocyte antigen testing (HLA)
Infertility treatment
Low protein food products for inherited amino acid and organic acid diseases (PKU)
Mental health care
Nonprescription enteral formulas
Scalp hair prostheses for cancer patients
Speech, hearing, and language disorders
Alcoholism rehabilitation
Bone marrow transplants for treatment of breast cancer
Cardiac rehabilitation
Clinical trials for treatment of cancer
Cytologic screening (Pap smear)
Hearing screening for newborns
Hospice care
Lead poisoning screening
Mammography
Maternity health care (including minimum maternity stay)
Preventive care for children up to age six (including specific newborn testing)
Off-label uses of prescription drugs to treat cancer
Off-label uses of prescription drugs to treat HIV/AIDS


Now, regardless of how badly you would want any of the above included in your health care plan, can you imagine how a young married man (like me) might be more than little confused that he has to pay money for Maternity health care, AIDS drugs, Mental Healthcare, etc.

I can see where you are coming from, but it does make some sense to require that these things be insured. Without requiring insurers to provide them, there is no guarantee that anyone will provide them or that the number will be so low as to be unaffordable. In that case you lose the whole purpose of insurance which is to spread the risk out over the whole pool of insureds.

I use to be insured by Blue Cross and Blue Shield of Massachusetts. I don't know how every co. works, but BCBS is in probably every state, but most of them are seperate entities all under the same name (like franchises). Some are for-profit, some are non-profit, some are private, and a few are traded on the stock market. The reason there isn't 1 BCBS is because there are/were laws preventing companies from operating in multiple states. These barriers are put up to protect existing co's, but they are slowly, very slowly coming down.

BCBS is like that but that's their decision I think. We have a BCBS of Arizona and they are separate from all the other BCBS organizations, but my UHC is out of Atlanta, GA, proving that health insurance really can cross state lines. :)

While I don't think it would necessarily only be me affected by defaulting on credit debt--someone's going to have to pay for it in some way or another--I agree that the risk scenarios are completely different.

True, I didn't mean to dismiss that. However, that risk is factored in to your terms and conditions and the interest they place on your card. The way their business is supposed to work is that they charge sufficient interest across the board for people in your risk level such that they still make a profit after all the defaults. So in that respect, if you default, it affects only you and your credit score, as the credit card company has already factored that risk in. Or at least, that's how it's supposed to work.

Note that I don't think this would be a good thing.

Me either. :cool:

I can see where you are coming from, but it does make some sense to require that these things be insured. Without requiring insurers to provide them, there is no guarantee that anyone will provide them or that the number will be so low as to be unaffordable. In that case you lose the whole purpose of insurance which is to spread the risk out over the whole pool of insureds.


That is the purpose of insurance, however by making individual policies more and more expensive, the pool is reduced as people on the margins (typically younger males) choose to spend money on something else. Which in turn makes policies more expensive.



BCBS is like that but that's their decision I think. We have a BCBS of Arizona and they are separate from all the other BCBS organizations, but my UHC is out of Atlanta, GA, proving that health insurance really can cross state lines. :)

This is not to say that national companies don't operate in several states and have policies that are state specific. Beyond that... some states may allow insurance policies from other states to be sold there, not sure on that. Some do not.

I don't know that the credit card company model is the solution, or even a good idea, but having some choice in what you have to pay for would be nice. State mandates do make insurance more expensive, which in turn causes fewer people to buy it...

I think one of the reasons we've not seen that pass is that there is a vested interest in Washington for insurance to remain expensive... as that increases the desire for a federal solution.

Another item we've not seen, although it was proposed by McCain and others... is allowing people who buy insurance policies with out of pocket money to do so with pre-tax income... the way it's done when you buy through an employer. That would also reduce the 'cost' of a policy.

I can see where you are coming from, but it does make some sense to require that these things be insured. Without requiring insurers to provide them, there is no guarantee that anyone will provide them or that the number will be so low as to be unaffordable. In that case you lose the whole purpose of insurance which is to spread the risk out over the whole pool of insureds.

If enough people demand it, the market would provide it.

Unfortunately, we don't let the market provide it. The winner here? Insurance co's.

The main problem (outside being forced to purchase health insurance or pay a fee) is that alot of these aren't really 'emergency care'. Their things we want but don't really need to live.

Chiropracter for example. Should a back pain have to covered by health insurance? Maybe if you broke your back, but a pain?

I completely understand that some issues lead to larger ones, but its not like people can't pay for services out of their own pocket too. Mandating things that are not infinite in supply will raise their prices.

If enough people demand it, the market would provide it.

I don't want to drag this thread down into a debate over what type of market is best, so let's let this one drop. We've got plenty of other places to discuss (and have discussed) it. :D

I can see where you are coming from, but it does make some sense to require that these things be insured. Without requiring insurers to provide them, there is no guarantee that anyone will provide them or that the number will be so low as to be unaffordable. In that case you lose the whole purpose of insurance which is to spread the risk out over the whole pool of insureds.


Hormone Replacement Therapy has come under heavy fire for the risks associated with blood clots and breast cancer. It's ridiculous to mandate coverage for something like that.

Bone Marrow Transplants have actually been associated with patient DEATHS in treating breast cancer, so again, it's asinine for MA to want to have this covered.

OTOH, mammography is a relatively cheap and effective method of early breast cancer detection. Overall, I think MA is smart to leave these issues to healtcare professionals.

Hormone Replacement Therapy has come under heavy fire for the risks associated with blood clots and breast cancer. It's ridiculous to mandate coverage for something like that.

I didn't say everything on the list was a good idea. :)

Bone Marrow Transplants have actually been associated with patient DEATHS in treating breast cancer, so again, it's asinine for MA to want to have this covered.

Does it have uses other than treating breast cancer that would make it a good idea to cover? It doesn't make it asinine if just one disease it treats has bad side effects.

Overall, I think MA is smart to leave these issues to healtcare professionals.

Except it's not healthcare professionals that would make the decisions. :shake:

Does it have uses other than treating breast cancer that would make it a good idea to cover? It doesn't make it asinine if just one disease it treats has bad side effects.

sure-- but according to Danman, MA has it covered specifically for Breast Cancer, which is asinine :nod:

Except it's not healthcare professionals that would make the decisions. :shake:

And that's unfortunate. Healthcare will never truly progress until there is COMPLETE transparency in the system wrt costs and the cost-effectiveness of various interventions/meds. Decisions should be made between a doctor and a patient, not bureaucrats.

sure-- but according to Danman, MA has it covered specifically for Breast Cancer, which is asinine :nod:

:doh: How did I miss that!? What is the rate, so I can judge how "asinine" it is? :D

:doh: How did I miss that!? What is the rate, so I can judge how "asinine" it is? :D

This might be a book to consider for further reading:

http://www.amazon.com/False-Hope-Marrow-Transplantation-Breast/dp/0195187768

I don't recall the exact rate of deaths, but at a top-notch cancer center in CA, the rate was ~1% (http://articles.latimes.com/1999/apr/16/news/mn-28020). You'd expect results in the community to be much worse. One of the Amazon reviews mentions a death rate of 15%.

I don't want to drag this thread down into a debate over what type of market is best, so let's let this one drop. We've got plenty of other places to discuss (and have discussed) it. :D

I agree. :lol:

But to further my original point, would you agree that mandating any and all of these things (whether you agree or not with each, because obviously each is debatable) increasing the cost per use?

I see these mandates as increasing the demand because people will be more likely to use them.

From my own personal experiences, I will be going to a dermatologist to have a blemish removed. Under normal circumstances, it's completely livable. But if it's only going to cost me a $5 dollar co-pay, why not?

I am increasing the demand for this person, allowing them to charge more. Of course there are other factors like what they negotiate with my insurer, price fixing, etc., but the bare bones of it, as I see it, is that mandates artificially increase demand, leading to higher prices.

From my own personal experiences, I will be going to a dermatologist to have a blemish removed. Under normal circumstances, it's completely livable. But if it's only going to cost me a $5 dollar co-pay, why not?

I am increasing the demand for this person, allowing them to charge more. Of course there are other factors like what they negotiate with my insurer, price fixing, etc., but the bare bones of it, as I see it, is that mandates artificially increase demand, leading to higher prices.

(I know we've talked about this before, but here's a new opportunity... just using your post as a jumping off point...)

And that plays back into the problem the copay creates. Whereby if you only face a $5 copay for that visit, you are more likely to go. Economics suggests that when people don't face the full cost of a good or service they consume more of it. In this situation we're in a bit of a fix b/c we want people to go to the doctor when they are sick in order to prevent greater expense in the future... but the by product of this is greater consumption of the doctor's finite time. I've heard that Canadian doctors would favor a small co-pay of even $5 just to keep the lonely people from making appointments just to talk.

We really need to explore options that get people talking to the doctor about how much the visit will cost. Maybe a good idea would be an HSA where people are reimbursed at the end of the quarter for a percentage of the cost of their doctor visits. Or perhaps we could create incentives for people to save money... like giving a bonus for going to a nurse practitioner for minor things like colds, or to get maintenance drugs like allergy or blood pressure medicine refilled.

Health care: The hidden business killer (http://money.cnn.com/2009/01/26/smallbusiness/health_cure.fsb/index.htm?postversion=2009012809)
Soaring health insurance costs hurt small companies more than their big rivals. Here's how smart entrepreneurs are coping with the crisis.

Rich Gallo says he can't afford to provide health insurance for his nine employees. For a long time he put off buying insurance for himself, figuring he needed time to shop carefully. Gallo's desk was piled high with policy proposals when he suffered a heart attack. Lacking insurance, he delayed going to the hospital for several hours.

"I could have died," says the 50-year-old owner of Office Outlet, an office-products supplier in Indiana, Pa. Medical care related to Gallo's heart attack cost $200,000, which was paid by the state welfare department, a foundation affiliated with the hospital, and donations from Gallo's church.

Gallo isn't the only small business owner struggling to cover the cost of health care. The long-simmering crisis has reached a flash point in the past few months. Premiums on group policies have soared by as much as 30%, on top of double-digit increases in each of the past five years. Coverage is shrinking. Thanks to insurer consolidation, policy choices are more limited than ever. And in a seller's market for insurance, small business owners have little room to negotiate prices or terms.

The escalation of the health-care crisis couldn't come at a more difficult time. Sales and profit margins are dwindling amid a weakening economy and a credit crunch. As a result, companies can no longer pass higher health-care costs on to their customers.

"Many of our members are wrestling with very tough issues," says Karen Kerrigan, CEO of the Small Business and Entrepreneurship Council, an advocacy group based in Oakton, Va. "Do they lay off some workers in order to provide coverage for the rest?"

President Barack Obama has promised reform, but health care is only one item on an urgent to-do list that is also crowded with two wars, a ballooning budget deficit and a faltering economy. Health care may indeed get a sweeping overhaul under the new administration, but policymakers will probably exercise caution in changing a system that accounts for 16% of the U.S. economy. Many powerful interests will have their say in crafting legislation, including (but not limited to) insurers, state regulators, doctors and the drug industry. Proposals range from eliminating employer-based health insurance and requiring all Americans to buy plans through state-run agencies, to lowering the cost of insurance by allowing employers to join insurance associations that pool risk across state lines. (For more on the policy debate, see "Fixing Health Care.")

Relief could take years. That's cold comfort to Donna Partin, who owns two Merry Maids franchises that employ a total of 40 workers in Camp Hill and York, Pa. Only about a third of her employees opt for coverage, and Partin pays a total of $5,000 a month to insure them. (Partin owns another Merry Maids franchise in St. Augustine, Fla., where she cannot afford coverage for her 10 employees.) Her premium has tripled since 2000.

"I'm paying more and more for less and less every year," Partin complains. Like many owners, she says health insurance is vital because it helps her retain trusted workers, which is particularly important for a housecleaning business. To maintain coverage, she has pared other benefits, such as vacations and bonuses.

The health-care crisis has hit entrepreneurs like Partin particularly hard. Small businesses typically pay 18% more for health insurance than big companies, which can use their purchasing power to drive down the cost of coverage, according to a study by the Commonwealth Fund, a health policy research foundation. And the number of small firms that provide health insurance to their employees has been shrinking every year: 59% in 2007, down from 68% in 2000, according to the Kaiser Family Foundation. Of the 46 million uninsured in the U.S., 27 million are small business owners, their employees or their dependents.

The good news? Many U.S. entrepreneurs are finding innovative ways to cover themselves and their employees.

Take Steve Cole, 59, who runs an auto body shop in Villa Park, Ill. For more than a decade, providing health insurance for himself and his five employees was a "headache." Now it's a migraine. In 1997 an employee's wife had a bout with breast cancer. Cole's monthly premiums promptly soared from about $300 to about $1,800 per employee. Every year since then, Cole and his broker have engaged in a complicated dance they call the shuffle. It involves switching insurers almost annually to qualify for low introductory premiums. Cole does get lower premiums - he's had eight insurers in the last 10 years - but at a price: He spends six to eight hours each fall filling out new insurance forms.

This year Cole's monthly premium climbed 30%. He then switched to a policy that primarily covers medical catastrophes - but there's a catch. His bad back and sinus problem are considered pre-existing conditions and aren't covered under the policy. Soon, Cole frets, he may be uninsurable. "This is an ugly situation," he says. "I just hope I can hang in there until I qualify for Medicare."

In some states small firms have banded together to qualify for lower group rates on insurance. In Cleveland, for example, companies with 500 employees or fewer can buy health insurance through the Council of Smaller Enterprises (COSE), the partner of the regional chamber of commerce. Rates are about 8% lower than on the open market. Some 14,000 companies participate in the pool, which dates back to the 1980s. But Cleveland's experiment has not been widely imitated. Pools are difficult to organize and costly to administer. And insurers are less motivated to participate now that there's less competition in the industry. (For more on pools, see "Why pools haven't worked.")

Insurance woes are forcing many entrepreneurs to rethink their business plans. In 2007, Debbie and Ned Wicker launched Mission Enabled, a Web publishing business based in Oconomowoc, Wis. The Wickers knew that one of their biggest challenges would be finding affordable health insurance for themselves. Debbie's former employer had been paying an annual insurance premium of $18,000 for the Wickers. (Ned, 58, had tested positive for high blood sugar several years before. That triggered the high premium, even though he hadn't developed diabetes.)

Debbie, 51, discovered an ingenious solution when she took a class at the University of Wisconsin. By enrolling in one course each semester, she qualified for low-cost student health insurance with an annual premium of $4,000 and a deductible of $250. (Her annual tuition bill is $2,200.) "I'm lucky I found a loophole," Debbie says. "Without it we're basically uninsurable."

What a difference a decade makes. Back in the 1990s, the Wickers owned a sports magazine with a circulation of 45,000. They offered health insurance to all 20 of their employees. But they sold the magazine in the late 1990s, and their new Web venture relies entirely on freelance contractors.

"I liked having workers on the payroll and offering benefits," Debbie says. "I think it's patriotic - jobs for America and all that. Will I do it again? Probably not. Insurance costs are a big disincentive to an entrepreneur."

Whittling down coverage
Small businesses that do provide health benefits are trying to cut costs any way they can. Many firms impose long waiting periods before new hires become eligible for health coverage.

"Thirty days used to be common," says Alex Miller, an insurance broker in Armonk, N.Y. "Then they pushed it to six months. Now some workers are waiting a year for their coverage to kick in."

Once they qualify for health benefits, employees are likely to receive bare-bones coverage that doesn't include dependents. Such policies also tend to exclude alternative treatments such as acupuncture as well as conditions such as infertility. They often trim mental-health benefits by limiting therapy sessions.

And many employers reduce insurance costs by choosing plans with high deductibles. At Northridge Holdings, a 15-employee real estate investment company in Addison, Ill., single workers pay a deductible of $2,600; the family deductible is $5,200. That's not unusual: More than a third of covered employees of small businesses - those with a workforce of fewer than 200 - pay deductibles of at least $1,000 before coverage kicks in, according to a survey by the Kaiser Family Foundation and the Health Research & Educational Trust. That's up from 21% in 2007.

Another option for business owners is bypassing the health-insurance market and covering employee medical costs directly. Fifteen years ago, Thomas Johnson left Ghana in search of the American dream. A skilled woodworker who had studied classical joinery in Italy, he arrived in the U.S. with $20 and a young man's zeal for hard work. Today, Johnson owns Thomas A. Johnson Furniture, a successful furniture-making business in Lynchburg, Va. Eight employees - apprentices, in his view - work side by side with him to learn how to craft fine furniture.

Unable to afford group health insurance, Johnson pays out-of-pocket for his employees' medical expenses. So far the bills have been minimal and mostly for antibiotics. Skilled woodworkers are hard to find, and Johnson can't afford to lose those in whom he has invested so much time.

"My workers are part of my business and part of my family," he says. "They are exceedingly valuable to me." To him, paying their medical bills is a matter of honor - and pragmatism.

It's also risky. By picking up the tab for medical bills, according to some legal experts, Johnson has set a precedent that could obligate him to pay for all his workers' medical expenses - even for a catastrophic illness such as cancer, which typically costs hundreds of thousands of dollars to treat. Johnson acknowledges that a big medical bill would devastate his business, which posted 2008 revenues of $400,000. But he can't afford to buy insurance in the current economic downturn.

"What I am doing is very dangerous, I know," he says. "But I don't have a choice."

Employers who buy health insurance can pare costs in several ways. Some pressure employees to switch to generic drugs, take preventive measures during flu season, and limit doctor visits for colds and other minor maladies. Others have tried to lower insurance costs by putting a price on vice - penalizing unhealthy behavior such as smoking and overeating. Sixteen percent of the nation's largest employers make workers who smoke contribute more than nonsmokers to cover health-insurance premiums, according to Mercer, a global human resources consulting firm.

Small business is following suit, adding thousands of dollars to the deductibles of workers who suffer from obesity or high cholesterol. (To comply with federal law, employers must offer programs such as smoking-cessation classes or Weight Watchers (WTW) to help workers get fit.)

At Independent Alliance Banks, a bank holding company in Fort Wayne, employees can undergo an optional annual screening that measures body mass index, blood pressure, cholesterol and tobacco use. Test results determine employee deductibles; merely taking the test leads to a reduction. Independent Alliance's family plan sets a deductible of $1,400 for workers who score in the healthy range on all four tests. For those who won't take the test, that number jumps to $5,400. Independent Alliance hasn't exactly set the bar too high to start - employees can be substantially overweight, but not obese - but promises stricter standards in 2010.

Such penalties represent a new twist on a decadelong effort by employers to reverse the nation's slide into sloth - and save money on insurance. In the 1990s companies of all sizes started wellness programs to push workers to shape up and lose weight. Some even offered rewards such as movie tickets and cash. Results were mixed.

"People put pedometers on their dogs to log mileage and did all sorts of crazy things to win the prizes - anything but exercise or lose the weight," says Doug Short, CEO of BeniComp, which crafted the cost-reducing plan for Independent Alliance. "Now people have to take responsibility for their health."

Anecdotal evidence aside, it's unclear that wellness programs make a major dent in health-care costs. And despite the increasing popularity of this approach, it has another downside: TMI. That's "too much information" - about workers and their private lives. Some business owners confess they are uncomfortable discussing personal health issues with workers or sponsoring contests that require embarrassing weigh-ins reminiscent of The Biggest Loser.

"I have one employee - kind of a big guy - and we've got to keep him under a certain weight," says Cole, the body-shop owner. "I hate telling someone to lay off the doughnuts. And I don't like nagging folks not to go to the doctor for a sniffle, but I do it now."

Health care: The hidden business killer (http://money.cnn.com/2009/01/26/smallbusiness/health_cure.fsb/index.htm?postversion=2009012809)

So with all these problems, do we really have the best healthcare system in the world? Sure we've got the best treatments and specialists available, but does that do any good if people can't get access to them?

So with all these problems, do we really have the best healthcare system in the world? Sure we've got the best treatments and specialists available, but does that do any good if people can't get access to them?

so we should work on access to treatment. But if you want to ask me if we have the best quality of care, then yes, I think so (if you are able to get access to it).

This is one of the BIGGEST things wrong with the US healthcare system today. Nobody will stand up about the costs of healthcare until they find out what they are really paying from their own pocket. And the only way they are going to find that out is to find out how much things ACTUALLY cost....

Biggest medical mystery: The bill (http://money.cnn.com/2009/04/22/news/economy/doctors_pricing/index.htm?postversion=2009042205)

With more consumers paying out-of-pocket for their health care needs, experts say physicians, hospitals and insurers have to provide easier access to prices.

NEW YORK (CNNMoney.com) -- Ask most Americans how much it costs to visit a doctor and they probably do not know.

Ask doctors what their fees are and they're not likely to know that either.

Health care prices - both physician fees and prices of medical procedures - have been cloaked in mystery for decades.

But as the number of people who are uninsured, underinsured or are opting for higher-deductible insurance plans grows, consumers have reason to care.

"With health care costs coming directly out of their pockets, these people have more skin in the game," said Barry Silbaugh, CEO of the American College of Physician Executives (ACPE), an educational association that teaches medical management to physicians.

Most Americans haven't worried about the price of a doctor's visit because they have health insurance through their employers.

But things have changed. Besides the 72 million uninsured and underinsured Americans, even those with coverage have had to pay higher premiums and deductibles.

Consumers also have been encouraged into consumer-driven health care plans, tax-free savings vehicles such as health savings accounts (HSAs) or health reimbursement arrangements (HRAs), in which up to $2,000 comes out of their pocket.

As a result, they can't be indifferent to the cost of a trip to the doctor.

Obstacles

However, several barriers stand in the way of what's known in the industry as price transparency.

For one thing, there is no such thing as a standardized price list for doctors' fees or medical procedures.

"There are so many types of payment systems, both public and private, that it's hard to understand," said Silbaugh. "No one pays the same price on anything."

Another challenge is that insurance companies don't want their rivals to know what rates they've negotiated with hospitals and physicians. That stymies, for example, a doctor trying to answer a patient's question about how much a recommended hospital procedure might cost.

"As a physician, I struggle to find out what these rates are," Silbaugh said.

Health care costs also vary significantly across geographical regions, as documented by the Dartmouth Institute for Health Policy and Clinical Practice.

Looking specifically at the disparity in Medicare spending, the institute's study of 306 health care markets nationwide shows the cost of providing health care to seniors is rising more than twice as fast in Dallas as in San Diego, and that Medicare now spends nearly three times more to care for its enrollees in Miami as it does in Honolulu.

"Even after doing all the research that they can, the health care [pricing] system is too darned complicated for the average person to understand," said Jonathan Weiner, professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health.

Price transparency

Although President Obama has talked about the issue, Weiner said "price transparency does not appear to be a centerpiece" of his health care reform as yet.

But Department of Health and Human Services spokesman Nicholas Papas disagreed, saying that "President Obama is committed to cutting health care costs and price transparency will be an important part of our efforts to reform health care."

Until Obama unveils specifics about his plans for price transparency, Weiner said consumers have resources that might help remove some of the mystery surrounding health care prices.

Web sites such as Wipricepoint.org and outofpocket.com that research this information are a good place to start, he said.

For those on Medicare, "Medicare Compare is the government's effort to provide price comparability," Weiner said. "But it's not easy to use."

Silbaugh said retail clinics in Walgreens (WAG, Fortune 500) and Wal-Mart (WMT, Fortune 500) stores also typically list prices for basic primary care.

While cost is important, Weiner and others said consumers should not base their health care decisions solely on prices.

"One of the dangers of greater price transparency is that consumers use prices as a proxy for quality," said Paul Ginsburg, president of non-profit Center for Studying Health System Change.

"There's also very limited information available to consumers on provider quality," he said.

His tip to consumers: "Higher prices don't always mean better quality of service. Research your doctor."

The Whole Foods Alternative to ObamaCare (www.wsj.com)


By JOHN MACKEY

“The problem with socialism is that eventually you run out
of other people’s money.”

—Margaret Thatcher

With a projected $1.8 trillion deficit for 2009, several trillions more in deficits projected over the next decade, and with both Medicare and Social Security entitlement spending about to ratchet up several notches over the next 15 years as Baby Boomers become eligible for both, we are rapidly running out of other people’s money. These deficits are simply not sustainable. They are either going to result in unprecedented new taxes and inflation, or they will bankrupt us.

While we clearly need health-care reform, the last thing our country needs is a massive new health-care entitlement that will create hundreds of billions of dollars of new unfunded deficits and move us much closer to a government takeover of our health-care system. Instead, we should be trying to achieve reforms by moving in the opposite direction—toward less government control and more individual empowerment. Here are eight reforms that would greatly lower the cost of health care for everyone:

• Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs). The combination of high-deductible health insurance and HSAs is one solution that could solve many of our health-care problems. For example, Whole Foods Market pays 100% of the premiums for all our team members who work 30 hours or more per week (about 89% of all team members) for our high-deductible health-insurance plan. We also provide up to $1,800 per year in additional health-care dollars through deposits into employees’ Personal Wellness Accounts to spend as they choose on their own health and wellness.

Money not spent in one year rolls over to the next and grows over time. Our team members therefore spend their own health-care dollars until the annual deductible is covered (about $2,500) and the insurance plan kicks in. This creates incentives to spend the first $2,500 more carefully. Our plan’s costs are much lower than typical health insurance, while providing a very high degree of worker satisfaction.

• Equalize the tax laws so that that employer-provided health insurance and individually owned health insurance have the same tax benefits. Now employer health insurance benefits are fully tax deductible, but individual health insurance is not. This is unfair.

• Repeal all state laws which prevent insurance companies from competing across state lines. We should all have the legal right to purchase health insurance from any insurance company in any state and we should be able use that insurance wherever we live. Health insurance should be portable.

• Repeal government mandates regarding what insurance companies must cover. These mandates have increased the cost of health insurance by billions of dollars. What is insured and what is not insured should be determined by individual customer preferences and not through special-interest lobbying.

• Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year. These costs are passed back to us through much higher prices for health care.

• Make costs transparent so that consumers understand what health-care treatments cost. How many people know the total cost of their last doctor’s visit and how that total breaks down? What other goods or services do we buy without knowing how much they will cost us?

• Enact Medicare reform. We need to face up to the actuarial fact that Medicare is heading towards bankruptcy and enact reforms that create greater patient empowerment, choice and responsibility.

• Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren’t covered by Medicare, Medicaid or the State Children’s Health Insurance Program.

Many promoters of health-care reform believe that people have an intrinsic ethical right to health care—to equal access to doctors, medicines and hospitals. While all of us empathize with those who are sick, how can we say that all people have more of an intrinsic right to health care than they have to food or shelter?

Health care is a service that we all need, but just like food and shelter it is best provided through voluntary and mutually beneficial market exchanges. A careful reading of both the Declaration of Independence and the Constitution will not reveal any intrinsic right to health care, food or shelter. That’s because there isn’t any. This “right” has never existed in America

Even in countries like Canada and the U.K., there is no intrinsic right to health care. Rather, citizens in these countries are told by government bureaucrats what health-care treatments they are eligible to receive and when they can receive them. All countries with socialized medicine ration health care by forcing their citizens to wait in lines to receive scarce treatments.

Although Canada has a population smaller than California, 830,000 Canadians are currently waiting to be admitted to a hospital or to get treatment, according to a report last month in Investor’s Business Daily. In England, the waiting list is 1.8 million.

At Whole Foods we allow our team members to vote on what benefits they most want the company to fund. Our Canadian and British employees express their benefit preferences very clearly—they want supplemental health-care dollars that they can control and spend themselves without permission from their governments. Why would they want such additional health-care benefit dollars if they already have an “intrinsic right to health care”? The answer is clear—no such right truly exists in either Canada or the U.K.—or in any other country.

Rather than increase government spending and control, we need to address the root causes of poor health. This begins with the realization that every American adult is responsible for his or her own health.

Unfortunately many of our health-care problems are self-inflicted: two-thirds of Americans are now overweight and one-third are obese. Most of the diseases that kill us and account for about 70% of all health-care spending—heart disease, cancer, stroke, diabetes and obesity—are mostly preventable through proper diet, exercise, not smoking, minimal alcohol consumption and other healthy lifestyle choices.

Recent scientific and medical evidence shows that a diet consisting of foods that are plant-based, nutrient dense and low-fat will help prevent and often reverse most degenerative diseases that kill us and are expensive to treat. We should be able to live largely disease-free lives until we are well into our 90s and even past 100 years of age.

Health-care reform is very important. Whatever reforms are enacted it is essential that they be financially responsible, and that we have the freedom to choose doctors and the health-care services that best suit our own unique set of lifestyle choices. We are all responsible for our own lives and our own health. We should take that responsibility very seriously and use our freedom to make wise lifestyle choices that will protect our health. Doing so will enrich our lives and will help create a vibrant and sustainable American society.

—Mr. Mackey is co-founder and CEO of Whole Foods Market Inc.

Even in countries like Canada and the U.K., there is no intrinsic right to health care. Rather, citizens in these countries are told by government bureaucrats what health-care treatments they are eligible to receive and when they can receive them. All countries with socialized medicine ration health care by forcing their citizens to wait in lines to receive scarce treatments.



Tell that to Stephen Hawking....
(http://network.nationalpost.com/np/blogs/posted/archive/2009/08/12/stephen-hawking-defends-british-health-care-system-against-u-s-conservatives.aspx)

Why can't doctors and hospitals compete on price and service? Veterinarians do many of the same procedures and even use many of the same diagnostic labs to run tests yet people pay hundreds times less for their pet care. I can get an contrast MRI for a dog for about $800, total hip replacement for $2-3000 and the list goes on and on. Interestingly, even though many people won't pay the money for the more expensive treatments, veterinarians still are able to turn a profit running a similar overhead to many small physician offices.

People can purchase indemnity insurance for their pets as well at very reasonable rates. In these cases, the client is still billed the full amount and only sees the benefit after reimbursement. Yes, pre-existing conditions still apply, some genetic conditions for the life of the pet, but if they didn't the insurance costs would skyrocket. Of course these policies also do not cover routine health care as that would no longer be insurance but a pre-paid medical plan (hmm, sounds familiar)

Why can't doctors and hospitals compete on price and service? Veterinarians do many of the same procedures and even use many of the same diagnostic labs to run tests yet people pay hundreds times less for their pet care. I can get an contrast MRI for a dog for about $800, total hip replacement for $2-3000 and the list goes on and on. Interestingly, even though many people won't pay the money for the more expensive treatments, veterinarians still are able to turn a profit running a similar overhead to many small physician offices.

People can purchase indemnity insurance for their pets as well at very reasonable rates. In these cases, the client is still billed the full amount and only sees the benefit after reimbursement. Yes, pre-existing conditions still apply, some genetic conditions for the life of the pet, but if they didn't the insurance costs would skyrocket. Of course these policies also do not cover routine health care as that would no longer be insurance but a pre-paid medical plan (hmm, sounds familiar)


Did you actually pay for a hip replacement on your dog? You must really hate Michael Vick :lmao:

I was curious where Canadians would go if our health care turns into Obamacare? I mean if their health care is so great why do they come here when they have serious issues and need a specialist..

so rather than having paying canadian people come for specialized care.. we'll have mexican people coming for more free care??

Why can't doctors and hospitals compete on price and service? Veterinarians do many of the same procedures and even use many of the same diagnostic labs to run tests yet people pay hundreds times less for their pet care. I can get an contrast MRI for a dog for about $800, total hip replacement for $2-3000 and the list goes on and on. Interestingly, even though many people won't pay the money for the more expensive treatments, veterinarians still are able to turn a profit running a similar overhead to many small physician offices.

People can purchase indemnity insurance for their pets as well at very reasonable rates. In these cases, the client is still billed the full amount and only sees the benefit after reimbursement. Yes, pre-existing conditions still apply, some genetic conditions for the life of the pet, but if they didn't the insurance costs would skyrocket. Of course these policies also do not cover routine health care as that would no longer be insurance but a pre-paid medical plan (hmm, sounds familiar)

Cue the tort reform will solve everything group... :lol:

Tell that to Stephen Hawking....
(http://network.nationalpost.com/np/blogs/posted/archive/2009/08/12/stephen-hawking-defends-british-health-care-system-against-u-s-conservatives.aspx)


Good link, thanks.


Yes, well, no doubt the average Briton gets the same timely and expert care as Mr. Hawking.

Next up to bat - a bunch of politicians who will tell us that they have no trouble getting timely (i.e. queue jumping) care also.

What BS.

Sir Hawking: As brilliant as you are, the facts point to you as an idiot. Of course your healthcare would fondle you as the penultimate reason to keep alive. If you did not have the supreme intelligence that the scientific world desires, you would be turfed aside as worthless. You are truly naive in your twisted logic of praising your health care system. Like Canada's it sucks.

Did you actually pay for a hip replacement on your dog? You must really hate Michael Vick :lmao:Uhh, no Cat, I charge people to implant them in their dogs.

Yea, Vick was quite the topic of conversation here in Atlanta probably more than were you are. Of course if it wasn't for his stupidity, we wouldn't have Matt Ryan now. :D

I know it's late, but are you only reading the paragraph with boldface in it?

"...HSAs are personal medical savings accounts used in conjunction with a high-deductible health insurance plan. For smaller expenses, then, individuals pay out of their HSA -- money that can follow them from employer to employer and can accrue from year to year. Catastrophic insurance covers larger expenses"

The point is to have people approach health insurance as they do their car insurance. You pay out of pocket for the regular mantainence of your car as you should your body. Insurance is for catastrophies. You get diagnosed with something? You have an annual stop loss that you don't pay over.

Once people start using these more often, doctors will have new incintives to compete on price, further lowering costs.

I do think if HSAs were introduced along with new insurance products, basically catastrophe plans, people would switch based on the initial out of pocket savings in premiums, plus the fact that their monthly 'health expense' is no longer a totally sunk cost... insurance company premiums as now structured are sunk costs, so you might as well go to the doctor in order that you take advantage of the money you are compelled to lay out every month. HSAs are portable, you can take them with you to a new job, plus you can roll over the leftover money into the following year, so you are not incentivized to visit to doctor in an attempt to recover sunk costs.

Healthcare is a marketplace. Like any other market, it has supply and demand forces that, if subverted by gvt interference, (as described in the above article) will pervert the market and cause prices to rise.

The problem here, Wu, is defining what is catastrophic. We can clearly mark off ER and intensive care and cancer, etc. But when something chronic is wrong with someone the costs can easily amount to that of catastrophic care. I've heard $5k-$10k+ figures being tossed out as the baseline for when this coverage should activate.

When your doctors are trying to figure out wrong with you, and you're as broken as a car in a major accident, why should you be paying 5-100x the deductible of auto insurance?

I'm really getting tired of these comparisons with cars. People != cars everyone! :ranting:

The problem here, Wu, is defining what is catastrophic. We can clearly mark off ER and intensive care and cancer, etc. But when something chronic is wrong with someone the costs can easily amount to that of catastrophic care. I've heard $5k-$10k+ figures being tossed out as the baseline for when this coverage should activate.

When your doctors are trying to figure out wrong with you, and you're as broken as a car in a major accident, why should you be paying 5-100x the deductible of auto insurance?

I'm really getting tired of these comparisons with cars. People != cars everyone! :ranting:


I don't think that's unreasonable. 5K isn't that much money to sock away in an HSA over a few years. People ought to get an HSA as soon as they begin working, and maybe a mandatory 3% contribution should kick in, or some such. Plus, they're talking 5K as a deductible. That's not that bad... especially when you consider the cost savings you'd get vs paying for a modern PPO plan where the policy cost may be upwards of 500 a month. If you could get your out of pocket cost for the policy down to 200 a month... you (or you in concert with your employer) could conceivably place an extra 3600 a year in an HSA... just in premium savings alone.

ObamaCare Is All About Rationing

Overspending is far preferable to artificially limiting the availability of new procedures and technologies.


By MARTIN FELDSTEIN (http://online.wsj.com/article/SB10001424052970204683204574358233780260914.html)

Although administration officials are eager to deny it, rationing health care is central to President Barack Obama's health plan. The Obama strategy is to reduce health costs by rationing the services that we and future generations of patients will receive.

The White House Council of Economic Advisers issued a report in June explaining the Obama administration's goal of reducing projected health spending by 30% over the next two decades. That reduction would be achieved by eliminating "high cost, low-value treatments," by "implementing a set of performance measures that all providers would adopt," and by "directly targeting individual providers . . . (and other) high-end outliers."

The president has emphasized the importance of limiting services to "health care that works." To identify such care, he provided more than $1 billion in the fiscal stimulus package to jump-start Comparative Effectiveness Research (CER) and to finance a federal CER advisory council to implement that idea. That could morph over time into a cost-control mechanism of the sort proposed by former Sen. Tom Daschle, Mr. Obama's original choice for White House health czar. Comparative effectiveness could become the vehicle for deciding whether each method of treatment provides enough of an improvement in health care to justify its cost.

In the British national health service, a government agency approves only those expensive treatments that add at least one Quality Adjusted Life Year (QALY) per £30,000 (about $49,685) of additional health-care spending. If a treatment costs more per QALY, the health service will not pay for it. The existence of such a program in the United States would not only deny lifesaving care but would also cast a pall over medical researchers who would fear that government experts might reject their discoveries as "too expensive."

(((Wu's footnote... let's not forget that new things are often more expensive and prices fall as they become more widespread. So, rich people and overspending insurance companies play a role in progress.)))

One reason the Obama administration is prepared to use rationing to limit health care is to rein in the government's exploding health-care budget. Government now pays for nearly half of all health care in the U.S., primarily through the Medicare and Medicaid programs. The White House predicts that the aging of the population and the current trend in health-care spending per beneficiary would cause government outlays for Medicare and Medicaid to rise to 15% of GDP by 2040 from 6% now. Paying those bills without raising taxes would require cutting other existing social spending programs and shelving the administration's plans for new government transfers and spending programs.

The rising cost of medical treatments would not be such a large burden on future budgets if the government reduced its share in the financing of health services. Raising the existing Medicare and Medicaid deductibles and coinsurance would slow the growth of these programs without resorting to rationing. Physicians and their patients would continue to decide which tests and other services they believe are worth the cost.

There is, of course, no reason why limiting outlays on Medicare and Medicaid requires cutting health services for the rest of the population. The idea that they must be cut in parallel is just an example of misplaced medical egalitarianism.

But budget considerations aside, health-economics experts agree that private health spending is too high because our tax rules lead to the wrong kind of insurance. Under existing law, employer payments for health insurance are deductible by the employer but are not included in the taxable income of the employee. While an extra $100 paid to someone who earns $45,000 a year will provide only about $60 of after-tax spendable cash, the employer could instead use that $100 to pay $100 of health-insurance premiums for that same individual. It is therefore not surprising that employers and employees have opted for very generous health insurance with very low copayment rates.

Since a typical 20% copayment rate means that an extra dollar of health services costs the patient only 20 cents at the time of care, patients and their doctors opt for excessive tests and other inappropriately expensive forms of care. The evidence on health-care demand implies that the current tax rules raise private health-care spending by as much as 35%.

The best solution to this problem of private overconsumption of health services would be to eliminate the tax rule that is causing the excessive insurance and the resulting rise in health spending. Alternatively, Congress could strengthen the incentives in the existing law for health savings accounts with high insurance copayments. Either way, the result would be more cost-conscious behavior that would lower health-care spending.

But unlike reductions in care achieved by government rationing, individuals with different preferences about health and about risk could buy the care that best suits their preferences. While we all want better health, the different choices that people make about such things as smoking, weight and exercise show that there are substantial differences in the priority that different people attach to health.

Although there has been some talk in Congress about limiting the current health-insurance exclusion, the administration has not supported the idea. The unions are particularly vehement in their opposition to any reduction in the tax subsidy for health insurance, since they regard their ability to negotiate comprehensive health insurance for their members as a major part of their raison d'être.

If changing the tax rule that leads to excessive health insurance is not going to happen, the relevant political choice is between government rationing and continued high levels of health-care spending. Rationing is bad policy. It forces individuals with different preferences to accept the same care. It also imposes an arbitrary cap on the future growth of spending instead of letting it evolve in response to changes in technology, tastes and income. In my judgment, rationing would be much worse than excessive care.

Those who worry about too much health care cite the Congressional Budget Office's prediction that health-care spending could rise to 30% of GDP in 2035 from 16% now. But during that 25-year period, GDP will rise to about $24 trillion from $14 trillion, implying that the GDP not spent on health will rise to $17 billion in 2035 from $12 billion now. So even if nothing else comes along to slow the growth of health spending during the next 25 years, there would still be a nearly 50% rise in income to spend on other things.

Like virtually every economist I know, I believe the right approach to limiting health spending is by reforming the tax rules. But if that is not going to happen, let's not destroy the high quality of the best of American health care by government rationing and misplaced egalitarianism.

Mr. Feldstein, chairman of the Council of Economic Advisers under President Ronald Reagan, is a professor at Harvard and a member of The Wall Street Journal's board of contributors.

I don't think that's unreasonable. 5K isn't that much money to sock away in an HSA over a few years. People ought to get an HSA as soon as they begin working, and maybe a mandatory 3% contribution should kick in, or some such. Plus, they're talking 5K as a deductible. That's not that bad... especially when you consider the cost savings you'd get vs paying for a modern PPO plan where the policy cost may be upwards of 500 a month. If you could get your out of pocket cost for the policy down to 200 a month... you (or you in concert with your employer) could conceivably place an extra 3600 a year in an HSA... just in premium savings alone.

When you have a chronic condition, that $5k can be sucked dry very rapidly and then what do you do for next year?

Oh and there's so many ways a deductible doesn't get met. Over the counter prescriptions, prescriptions of any type, out-of-network services, etc.

So with all these problems, do we really have the best healthcare system in the world? Sure we've got the best treatments and specialists available, but does that do any good if people can't get access to them?According to Senator Jon Kyl, the American health care system is the bravest, warmest, most wonderful health care system he's ever met, and it must be true because he said it to me in three separate form letters from his office, plus he cited the "highly respected" Lewin Group (i.e., United Healthcare's paid shill), as did Senator Charles Grassley, so it must be really, really true.

In the early 1990s, the late Democratic Senator Paul Tsongas opposed universal health care and said that if the US had Canada's health care system, he would not have received the cancer treatment he was given in the US and would have been dead. But in reality, Canada not only offered the very same treatment, but they invented it.

In the early 1990s, the late Democratic Senator Paul Tsongas opposed universal health care and said that if the US had Canada's health care system, he would not have received the cancer treatment he was given in the US and would have been dead. But in reality, Canada not only offered the very same treatment, but they invented it.

What treatment was it?

What treatment was it?From the always 100% reliable Wikipedia, it was probably non-Hodgkins lymphoma.

Tell that to Stephen Hawking....
(http://network.nationalpost.com/np/blogs/posted/archive/2009/08/12/stephen-hawking-defends-british-health-care-system-against-u-s-conservatives.aspx)


Stephen Hawking was a known genius in his circles before he was stricken by ALS.

So, for someone as bright as Stephen Hawking, it's a disingenuous argument to say NHS would afford the same healthcare level for him, a Commander of the British Empire, than the average Joe's in Britain.

CL, do you not recognize the political fallout that the NHS would get if they let Stephen Hawking die or receive substandard care? I know you well enough to know you're not that naive.


But then, what do I know? The NHS doesn't want to be bothered with greedy women who think it's unjust to give birth on the sidewalk.... http://www.dailymail.co.uk/news/article-1207151/Woman-gives-birth-pavement-refused-ambulance.html Of course, the newly born daughter got a great taste of concrete and her first journeys through the NHS.

While health care is the current focus of the Socialism or Capitalism debate, I reflect on where the world's developed nations would be, if Social Safety Nets had never appeared.

Many people seem to think health care reform is somehow a separate and distinct issue, completely apart from say, unemployment insurance, workman's compensation insurance, pension plans, food stamps, medicaid, Social Security, paid vacations, 401k plans, auto insurance, or the ability to attend a school in any form at all.
It is not, it is part and parcel of the same system, which we call "civilization".

The most vocal opponents to a public option in health care, or the single-payer system, rely on the argument that it is wrong to take from those who have earned to pay for those who have not.

An examination of what it is, exactly, that is being "taken".

Taxation: the cost of supporting a system of gummint, which provides for the common weal that which private industry either will not or cannot.

How much is a "fair" burden of taxation for any given individual?
Is it a percentage?
Is it only that which a person feels willing to give up voluntarily?
Or is it a debt which can never be repaid, no matter how wealthy or poor one is and how much or little they contribute?
I argue for the latter.

"ORIGINAL DEBT"

When we are born, we have no voice in where we are born. We have no voice in how we are raised, we have little choice the direction of our lives will take, until we reach an age of awareness, (somewhere around 9-10 years old), when we can begin to express our desires for our futures to those charged with our care and upbringing.

If we are lucky, our care-givers heed our wishes, if we are not, we are confined to the providence of whatever largess those care-givers bestow upon us, until such time as we reach the age of majority and assume full control of the direction of our lives - 18-21 years of age in most cases.

So by the time we assume our own destinies, we are more or less a recipient of the society we lived in, and whatever we have been given, whatever benefits kept us alive and healthy and educated to the point we can then take over the directing of our lives, is a DEBT, a borrowed investment we are responsible to pay back as a condition of having survived to majority.

We do not live in a PAYGO universe/society, but if we did, the odds of our survival would go down tremendously. Most parents have children long before they are wealthy enough to cover all possible contingencies that can arise from the vulnerability of the newborn and neo-natal periods in our lives. Your parents "borrowed" as much from the system for you as you, yourself, may have "borrowed" to complete your early upbringing and education.
Whether you believe it or not, (and I'm at a loss to understand how ANYONE can think themselves so self-sufficient as to believe they owe nobody but their own hard work and industry for their success), you ARE in DEBT to society, and it is your obligation to repay it.
Even if your parents assumed every single cost of your health care and education, by hiring private doctors and sending you to private schools - you STILL owe society for the privilege, and you and your parents owe society for the freedom to pick and choose those self-pay options.

WHY WE OWE

The very foundation that allows private schools to exist is funded on the public dime, the very foundation that provided your parents the doctors and health services you consumed are a product of Socialism.
Don't believe me, then answer the following questions;

1.) Who trained and educated the teachers in your "private" school?
Unless you are a Jesuit, and even then the donations from tithing congregants paid for their education, you are being taught by those who would not be in a position to teach you anything had society not trained and educated them first. You are the recipient of that debt's benefits.
Additionally, how sure are you that you would have even been able to enter your private school if you had to compete for a spot against all the people then being educated in public schools? Private schools are not an endless resource any more than gummint subsidized ones are. It is the public support of education that allows private schools to even exist and unless your family undertook to educate infants for the express purpose of becoming your tutors one day, you owe the system and society a HUGE debt, which you and your family barely paid the maintenance cost of a seat for.

2.) Who trained and educated the "private" doctors used to give you medical care?
Again, the very same answer as the above one for education. Unless you and your family raised those doctors from infancy, all the health care you've ever been the recipient of, is on the public dime for 99% of it.

Accumulate the cost of that debt over the 1st 18 years of your life, compound the interest on that debt, and adjust for inflation.
How much in taxes would you have to pay, over the rest of your life, just to repay the principle - if the interest stopped accumulating as soon as you paid the first dime of your income in taxes at age 18, and lived in a cave and never utilized another penny of public resources by being 100% self-sufficient.?
(Best slickdeal offer YOU'LL ever get.)
How would you even earn the money to pay off the principle, if you lived apart from society completely?

MORAL OBLIGATION DEBT

None of this, so far, even addresses the moral obligation to repay society for the OPPORTUNITIES it has given you - which is an argument I have often used to justify additional taxation of those who have benefited more than the average member of our society.

The "original debt", though incalculable, is an enormous amount of money by anyone's present standards. Add to it the amount of "benefit" debt incurred for availing yourself of the opportunities our society provides, and very very few people could ever justify refusing taxation with the argument they've already contributed more than others, or too much, already.

"OPPRESSION" & "THEFT"

This is why I believe, even if it is an inconvenience and you might be deprived of a few extra or more expensive optional luxuries, there are only three alternatives to accepting that civilization has thrived on Socialism policies and you are obligated to help pay for those according to your ability to pay - for as long as you live in this country.
And while it may seem like a tyranny of the majority, the fact is that if you are being "oppressed" by that majority, that gummint has put a gun to your head and committed legalized "theft", you are one of the FORTUNATE minority.
Being "robbed" at all, is a pretty good indicator of that fact.
Civilization HAS moved on, past your backward & selfish thinking, and evolved further than it ever would have, had Social Safety Net political policies never been implemented - and you have been one of the fortunate as a direct result.

Here are your three options:

The first is to cut yourself off from society and stop participating, thereby consuming no more of it's resources - but you STILL owe your "original debt".

The second is to leave, and go live somewhere else where Socialism is not practiced and you can keep all of your wealth and not be forced to pay for benefits others receive.

I'm not sure such a place as the second option actually exists, but if it does, I'm fairly sure it resembles the interior of Sudan or the deepest parts of the Congo - but hey, at least you won't be paying all those taxes. :cool:

The third and last option, which those with mo' money may not LIKE, but which results in the greatest good obtainable outside of complete abstention from contributing to taxation or leaving the country - is to pay. Grumble and grouse, & b!tch all you want, then STFU and get out of the way - you are impeding the ascension of civilization, AND your own continued success.

[B][COLOR="DarkGreen"]While health care is the current focus of the Socialism or Capitalism debate, I reflect on where the world's developed nations would be, if Social Safety Nets had never appeared.


Care to quantify this debt?

Moreover, are you saying that the government is taxing in proportion to this "debt" that we owe? If we are successful member of society that increases economic activity through our actions, is that not sufficient?

Care to quantify this debt?

Moreover, are you saying that the government is taxing in proportion to this "debt" that we owe? If we are successful member of society that increases economic activity through our actions, is that not sufficient?Did I not sufficiently explain my position on where that "original debt" comes from?

Have I not sufficiently explained my position, in the past, on why those with much owe a greater debt in proportion to that which they have received as a benefit of society's enabling of their wealth generation?

NO, contributing the minimum is not sufficient, even if you have generated jobs and income through your investments - which has not been true for many of the wealthy, unless you count hiring an illegal alien as your gardener as "job creation".

I cannot quantify how much is enough, or too much, but it seems to me whatever your gummint requires to keep this economy afloat is not "overly greedy".
Unless and until someone can demonstrate how we can eliminate gummint and privatize all those services - which is a mixed bag at best and a dismal failure in many cities/states/federal agencies where it's been tried already - AND increase the general wealth of all, the gummint is not asking for too much.

Trust me, I'll be the first in line if it can be shown we can do just fine without massive gummint in this complex world, and sporting over 300M people in the U.S. alone.

Trust me, I'll be the first in line if it can be shown we can do just fine without massive gummint in this complex world, and sporting over 300M people in the U.S. alone.

Nobody has really made an attempt to do this.