Health insurance overhaul: the preview
There’s no surprise here; Obama’s proposals for health care upheaval will come with a hefty price tag [emphasis mine]:
The upfront tab could reach $1.2 trillion to $1.5 trillion over 10 years, while expected savings from wringing waste and inefficiency from the health care system may take longer to show.
Details of the health legislation have not been written, but the broad outlines of the overhaul are known. Economists and other experts say the $634 billion that Obama’s budget sets aside for health care will pay perhaps half the cost.
Obama is hoping the Senate comes up with a bipartisan compromise that would give him political cover for disagreeable decisions to raise more money, such as taxing some health insurance benefits. In the 2008 campaign, Obama went after his Republican presidential rival, Arizona Sen. John McCain, for proposing a large-scale version of that idea…
The U.S. spends about $2.5 trillion a year on health care…Experts estimate that at least one-third of that spending goes for services that provide little or no benefit to patients. So theoretically, there’s enough money in the system to cover everybody, including an estimated 50 million uninsured.
But one person’s wasteful spending is someone else’s bread and butter.
The office visits, tests, procedures and medications that the experts question represent a lot of money for doctors, hospitals, drug companies and other service providers. Dialing them back won’t be easy. Providers will resist. Patients might complain their care is getting rationed.
So let’s see: costs will go up rather than down at first. Obama wants his support to be bipartisan (after saying “screw you” to Republicans on almost everything else) in order to provide him political cover for doing what he reviled McCain for proposing. Oh, and there will be rationing, but they’ll try to convince us otherwise.
The simple truth is that the reason universal health care hasn’t passed is that it is very expensive, and rationing is inevitable (see this for an earlier post about the health care dilemma).
In related news, the NY Times reports today that the health care industry is promising to voluntarily cut costs in an effort to stave off price constraints in the new national health care (the signers of the pledge are officials of the Advanced Medical Technology Association, the American Hospital Association, the American Medical Association, America’s Health Insurance Plans, the Pharmaceutical Research and Manufacturers of America, and the Service Employees International Union).
Let’s see what’s planned:
…large amounts [of money] could be saved by aggressive efforts to prevent obesity, coordinate care, manage chronic illnesses and curtail unnecessary tests and procedures; by standardizing insurance claim forms; and by increasing the use of information technology, like electronic medical records.
I’ve got no particular beef with the last two on the list, or with “coordinate care” or “manage chronic illness” (and aren’t we already trying to do those things?). But “aggressive efforts to prevent obesity?” Good luck on that one. And what does it even mean, especially in terms of civil liberties? And how will those efforts be successful when it is well known that it is extraordinarily difficult to lose weight and keep it off, no matter how hard people try or what method they use?
Then there’s the little phrase “curtail unnecessary tests and procedures.” That, of course, is where rationing comes in. Who’s to decide, and what criteria will be used? I don’t exactly trust government to make these decisions in my best interest. Do you?
the junk food industry won’t be happy with that bit about obesity…….
I still haven’t seen any discussion of tort reform. IMHO a great deal of waste could be rung out of the system if the lawyers were kept at bay and suing health care providers were no longer a get rich quick scheme.
President Obama really likes lawyers who sue.
I doubt if you will see much about tort reform.
One tongue-in-cheek suggestion to reduce health care costs. Encourage smoking (tobacco, of course). Having people cut off their life spans by 20 years or so will reduce health care expenses, not to mention Social Security expenses.
While the final 6 months of a lung cancer patient’s life are very expensive, as an estimated ~ 1/3 of lifetime health care expenditures are in the final six months any way, this would appear to be a wash.
Courtesy of Jonathan Swift, that exemplary and prophetic health care economist.
I have been without health care insurance for most of the last 25 years. Healthy habits and spend as little as possible on MDs.
simply put, there is not enough health care for everyone to have everything they want – period. You can choose how to dole it out and what metric you use to ration it, but in the end it *will* be rationed no matter what.
Look at it this way, lets say we have “health care untis” – we will call this “dollars”. There is currently ten dollars worth of health care out there, it costs 10 dollars to keep someone health for their whole life – we have 11 people. We can take the European method and split it evenly, though those with enough money can go elsewhere and get up to their 10 dollars, or we can go the US method and have them get whatever they can pay for – in any event at least one person is going to get screwed.
The nationalized health care plans our government (note I do not say “federal” here, as someone who lived in Tennessee during our great TennCare experiment I know quite well states try this too) require everyone to have 10 units of health care. That will either quickly run the whole system bankrupt (as it did in TennCare) and/or cause the govt to decide who gets shorted on their medical care (which TennCare did also – though thankfully we still have private insurers when you are the one getting screwed).
Math works for a reason, this is called the Pigeon Hole Principle and there is no way around it – hope, change, and good feelings aren’t going to change that. There is not enough resources to give everyone everything there so it has to be rationed by some metric.
The most interesting part of your story concerns the part about “1/3 of health care spending is wasted”.
I wouldn’t doubt that is at least a little true. But I would bet that a large portion of the waste isn’t known until after the fact. That is, its not until you spend the money in a particular instance that you discover it was a waste.
You have a condition. The doctor says: It could be one of three things. Lets test ‘a’ first. It comes back negative. Now they test ‘b’. It comes back positive. So now test ‘a’ was wasteful and can be eliminated.
James
Unnecessary tests are those one’s where they check to see if you really have something worse than a cold… re: if your actually in danger they find it in time… maybe only 1 in 400 find something… but just saying… that’s your ‘unnecessary test’….
You not only save on tests… more people die rather than needing [costly] treatment for their sadly undetected chronic illness…
Still can happen today, but when it does today it is usually due to an arrogant or incompetent doctor… who you (or your family) can sue into oblivion. When the government is behind killing you off, good luck with that.
James Says:
“You have a condition. The doctor says: It could be one of three things. Lets test ‘a’ first. It comes back negative. Now they test ‘b’. It comes back positive. So now test ‘a’ was wasteful and can be eliminated.”
Bingo… or maybe you just have a cold… but unless they do an xray, how do they know you don’t have something more serious?
While I don’t like what he Obamabots are planning to do to healthcare, the undisputable truth is that the healthcare system in this country is broken and the republicans did nothing to try and fix it when they were inpower.
Yes, we have the most advanced equipment and treatments, but unless you have insurance, you might as well be living in a third world country. Don’t believe me? Wait until you contract a seerious illness or have a major accident.
Small and medium sized businesses struggle to provide any type of afforadable insurance. I saw my old employer have to change providers four years in a row as we wound up paying more for less. COBRA coverage is very expensive for what you get. If you’re self-employed, you have few, if any viable options.
HMO’s were certainly not the answer. I have as much suspicion of medicine for profit as I do of government medicine. I find it curious that I’ve managed to find more than a few doctors who are in agreement.
At this point, perhaps the best option is for the government to completely get out of health care. I wish I knew the answer. All I know is that so far, I’ve been healthy as a horse (knock on wood), but as I get older I will need the healthcare more and that there will be less of it there and it will cost me a lot more. If I can afford it at all.
I don’t think anyone can reasonably argue that health care will not be rationed under any system created and/or approved by our current President.
Likewise, I don’t think that our current President is likely to aggravate another avid group of supporters (the plaintiff’s attorney’s bar) by enacting the tort reform necessary to protect physicians attempting to work within the guidelines of a system in which they must practice according to the government’s philosophy and principles and not their own.
What if rationing of health care is such that the doctor can only attempt one of several options as authorized by the committee of knowlegable persons to be appointed by our president and his health care czar? What if a person of a certain age is simply not eligible for a certain procedure despite subjective indications that such a procedure for that person makes sense? I know there are problems with our present system, but I don’t believe that people realize how well certain aspects of our system work.
Remember Harry and Louise? I think, to a degree, they still have it right. (At least, I think their names were Harry and Louise).
Insatiable demand for public services paid for by “other peoples money” will always grow if we reward the beneficiaries and not expect them to be responsible for their own lives. Health care, affordable housing, debt relief, education, food, and clothing are all high profile targets of the whiners who want something for nothing and are willing to vote for it. Ultimately our sleazy politicians will bankrupt the system by destroying the value of our currency. Our grandchildren will not be alone in paying for this unsustainable stupidity, we will all pay very soon.
Tim P Says:
“Yes, we have the most advanced equipment and treatments, but unless you have insurance, you might as well be living in a third world country.”
One of the problems with Obama ducking the label progressive… or liberal… or socialist… is we can’t really talk about his goals. He brushes off the attempt to categorize his thoughts… the left has been doing this for about 6 years plus (even disavowing the liberal label). They’re purely pragmatic. 🙂 But back when lefties were more open about it there were a lot books (even fiction) analyzing their motives and goals… It was a lot more honest…
But anyway, what I’ve seen about these folks, in general, is they want forced equality. So let’s say we have a million people who can’t get insurance and need it (they have health problems but can’t qualify for existing government programs). The progressive response is to use them to justify taking over the entire system to run it by the government and force everyone to have the same care. The conservative response is to ask what we can do for those that need the care (re: deal with the actual problem at hand).
As to costs, a lot of things can be done about costs but the government is pushing things in the opposite direction. High on my list would be paring down government mandates on what is covered. If they have to cover mental health or whatever else is the PC crowd pushes one year, it just makes it more expensive for everyone who might actually need… you know… medical care (cancer or heart treatment, et cetera). Second would be asking employers to stop treating their employees like children and offering major medical only plans. I would rather my insurance be much much cheaper in return for having a high deductable and an understanding I’ll just pay for the everyday office visits (the first, say, $5k worth). If you don’t become ill, you’ll come out ahead overall (because the insurance will be cheaper and you probably don’t go to the doctor anywhere near $5k on an average year… plus you still have FSA). If you become ill 6-7 years after getting into such a system, you’ll still break even if your care falls into one year (you saved the $5k over the years) and still have the option of switching to HMO in the next election period…
“At this point, perhaps the best option is for the government to completely get out of health care. I wish I knew the answer. All I know is that so far, I’ve been healthy as a horse (knock on wood), but as I get older I will need the healthcare more and that there will be less of it there and it will cost me a lot more. If I can afford it at all.”
There is an answer, but it is an answer you do not like. The answer is you want something that is impossible and never be able to get.
Better for you to say there is no solution that gives you what you want. I suppose I want it to (I’m not, nor will I ever be, rich enough to get all the health care I could want).
But then there are lots of things I can not afford – I can not afford my hobby to the fullest extent either. I can not afford the travel nor can I afford anything more than mid grade equipment (Olympic Archery in this case – I can afford traditional and compound equipment but still can not the travel). I understand this and accept it.
Yes, I do realize that with health care it is my life instead of a hobby – yet the same thing (scarcity) exists and operates in the exact same fashion. Math doesn’t suddenly change because my life is on the line. And yes we could do better – a good place to start is to look at malpractice insurance, the need for ubiquitous cutting edge equipment instead of specialized units, and running unneeded tests (yes, I also understand the above posts – yet there are still many many unneeded ones ran, many are run more to prevent malpractice lawsuits instead of doctors actually thinking they are needed).
Even then we are skipping two of the largest costs and I bet *nothing* will ever be done to “fix” it (indeed, I expect everything to be done to make it more of a problem). First is how much the last six months of obviously terminal patients costs in tests and treatments instead of trying to make their last bit of time as less bad as possible. The other is limiting ER access to the poor for non-emergency medicine. You can’t touch the old (especially the dying) or the poor, we have to do all we can to help them.
But then we are back to no answers – or rather no solutions people want to hear. Plenty of answers out there that will work, none that give people what they want.
“and by increasing the use of information technology, like electronic medical records.”
After which doctors will be compelled to submit these records, and based on the opinion of bureaucrats, doctors can be fined for not following the gubmint’s one-size-fits-all guidelines.
Furthermore, the initial outlay for converting records to electronic is $30 to $60 K. But the gubmint has not decided the system to standardize on, so doctors get screwed if they guess at the wrong system.
If you want to reduce health-care costs to 1950s costs, roll back the technology to the 1950s. Ta-da!
My sister’s baby was born with club feet, so the Dr.s did a lot of tests.
Including a scan basically to see if he had a brain– very slight chance, but they had good insurance, and club feet was a possible indicator.
The test came back saying Squeaker was fine– the poor couple ahead of him… didn’t.
How much do you want to bet that all the tests they’ve done on my nephew would count as “wasteful”? After all, you should just kill any defective child. Wouldn’t want someone to be stuck with an imperfect child.
I can think of a lot of things that become “wasteful” if you are pro-abortion. Even more if you’re pro-duty to die.
The means for cutting down “unnecessary tests and procedures” is quite simple, Neo. The power writing the checks simply refuses to pay for them and forbids the provider from billing the patient outside of the system. This already exists in the practice of Medicare assignment, under which the provider agrees not to do this. Watch for mandated assignment as a feature of Obamacare.
I just found a WSJ piece today that summarizes the point I was trying to make. I’m sure you will find it yourself. Other commenters should take a look:
http://online.wsj.com/article/SB124208364853008485.html
What portion of the “wasteful” spending in healthcare is attributed to Medicaid and Medicare fraud? A considerable amount, I would bet. And this problem will somehow go away when there’s even more gov’t involvement?
I doubt it.
“…a great deal of waste could be rung out of the system if the lawyers were kept at bay and suing health care providers were no longer a get rich quick scheme…”
Per my sister, who’s been an RN for 30 or so years, this is one of the reasons that “unnecessary tests” are run: CYA, nothing more, nothing less. For those times when the lawyer asks, “Doctor, I see you ran tests A, B, and C. Why didn’t you run test D?”
“Well, Counselor, I didn’t think it was necessary.”
“But test D can sometimes detect the disease in question, yes?”
“In very rare cases, yes”.
“But the chart shows you still didn’t run it.”
“No, Counselor, I didn’t.”
“No further questions, Your Honor”.
And so on. Generally, the physician or insurer settles before trial to save any even bigger payout, but you better believe they pass the costs along to us. Tort reform isn’t a cure-all for health care costs by any means, but, done right, it would help. But on the other hand, it shouldn’t go so far as to leave patients (or their survivors) without recourse in cases of genuine malpractice. As always, the devil is in the details.
The industry isn’t “negotiating” to save themselves; they’re “negotiating” so they’re the ones allowed to run the cartel.
Oh, and Tim P — the health care system is not “broken”. There are people who cannot afford boutique medical care. So what? If it bothers you so much, put together a charity to fund it for them.
The high costs are due to routine care being paid by insurance or medicare, etc. This removes the market constraint on costs.
The solution is to reform the tax code so that there is no longer a benifit to employer provided insurance, and the phase out of socialist medicine like medicare.
Reality, however, is that the Democrats are not interested in improving the system. They just want to control it. This is really about raw power.
Rob C said, “There are people who cannot afford boutique medical care. So what? If it bothers you so much, put together a charity to fund it for them.
Rob, what a smug ass you must be.
Perhaps in your little world of commenting ‘bon mots’ you consider running out of insurance to cover your treatments for cancer as ‘botique?’
Perhaps you consider hospitals dumping emergency room patients at the doors of other hospitals because they don’t have insurance as ’boutique?’
“If it bothers you so much, put together a charity to fund it for them?”
Why don’t you just crawl back under your rock?
For the obesity problem it’s simple. cap and trade based on calories or pounds. If it works for emissions why not?
(with tongue firmly planted in cheek)
I know that, of the ten or so folks that I know in my folks’ home valley who either have breast cancer or got a knee replacement, only my mom had full insurance to cover it, and she’s the only one still paying for it– the rest didn’t, and the gov’t paid for the whole thing. The breast cancer folks besides mom don’t even have to pay as much for their meds as mom does– they pay ten bucks, she pays half.
(Highly selective sample because *EVERYONE* who has either of those two things now talks to my mom for reassurance. Drives her INSANE because all but one of the folks involved is very, very well of– they just don’t bother with insurance.)