Time: Why Medical Bills Are Killing Us (Walmart, kidney, security)

[Minervah]

Originally Posted by golfgal

That cost that the rest of us supplement for you....the cost of your plan is FAR more expensive than that, you just don't pay the full rate--it's discounted, and they will eventually fail because of that and eventually someone will put 2 and 2 together that corporate plans rates started their huge increases when these MA plans surfaced....also, your costs are more than $143/month.. that is just the portion you pay for the MA.

Now it's my turn.

[golfgal]

Originally Posted by Minervah

Now it's my turn.

The truth hurts...it's simple math really. You can't expect the most expensive medical population, people over 65 to have the least expensive rates and sustain those policies. All of those policies are supplemented by their regular book of business, group and individual policies. Look up the shareholder reports...

[Ariadne22]

Originally Posted by golfgal

The truth hurts...it's simple math really. You can't expect the most expensive medical population, people over 65 to have the least expensive rates and sustain those policies. All of those policies are supplemented by their regular book of business, group and individual policies. Look up the shareholder reports...

It all goes back to the gouging/extortion rates charged by the providers.

Get those hyperinflated hospital/provider charges, which bear no relation to actual medical costs, back to earth, we've gone a long way to solving the disparity of high insurance premiums in the private sector vs. Medicare.

This extortion translates to higher insurance premiums in the private market and perceived underpayments by Medicare, when in fact:

By law, Medicare’s payments approximate a hospital’s cost of providing a service, including overhead, equipment and salaries.

That’s because Medicare collects troves of data on what every type of treatment, test and other service costs hospitals to deliver. Medicare takes seriously the notion that nonprofit hospitals should be paid for all their costs but actually be nonprofit after their calculation. Thus, under the law, Medicare is supposed to reimburse hospitals for any given service, factoring in not only direct costs but also allocated expenses such as overhead, capital expenses, executive salaries, insurance, differences in regional costs of living and even the education of medical students.

Yes, every hospital administrator grouses about Medicare’s payment rates — rates that are supervised by a Congress that is heavily lobbied by the American Hospital Association, which spent $1,859,041 on lobbyists in 2012.

But an annual expense report that Stamford Hospital is required to file with the federal Department of Health and Human Services offers evidence that Medicare’s rates are on the mark. According to the hospital’s latest filing (covering 2010), its total expenses for laboratory work in the 12 months covered by the report were $27.5 million. Its total charges were $293.2 million.

That means it charged about 11 times its costs.

According to the latest publicly available tax return it filed with the IRS, for the fiscal year ending September 2011, Stamford Hospital — in a midsize city serving an unusually high 50% share of highly discounted Medicare and Medicaid patients — managed an operating profit of $63 million on revenue actually received (after all the discounts off the chargemaster) of $495 million. That’s a 12.7% operating profit margin, which would be the envy of shareholders of high-service businesses across other sectors of the economy.

The ManorCare convalescent center, which Alan A. says gave him “good care” in an “O.K. but not luxurious room,” got paid $11,982 by Medicare for his three-week stay. That is about $571 a day for all the physical therapy, tests and other services. As with all hospitals in nonemergency situations, ManorCare does not have to accept Medicare patients and their discounted rates. But it does accept them. In fact, it welcomes them and encourages doctors to refer them.

Health care providers may grouse about Medicare’s fee schedules, but Medicare’s payments must be producing profits for ManorCare. It is part of a for-profit chain owned by Carlyle Group, a blue-chip private-equity firm.

Bitter Pill: Why Medical Bills Are Killing Us | TIME.com

So much for Medicare being a negative for the hospitals' bottom line. More hospital propaganda.

Repeat - Stamford Hospital with a 50% Medicare/Medicaid patient load:

Stamford Hospital — in a midsize city serving an unusually high 50% share of highly discounted Medicare and Medicaid patients — managed an operating profit of $63 million on revenue actually received (after all the discounts off the chargemaster) of $495 million.

That’s a 12.7% operating profit margin, which would be the envy of shareholders of high-service businesses across other sectors of the economy.

This propaganda that Medicare is causing hospitals to charge private insurers more is merely that - propaganda to justify and buttress those outsize profits of 12.7%.

And, if Medicare played little part in Stamford's profits (doubtful), that means the private insurers were extorted (or was it colluded?) to provide those outsize profits.

Bottom line: the medical providers need to be regulated - as markg suggested.

[Weichert]

Nope, you really can't expect this to continue forever. Eventually the entire US healthcare system will collapse. Too bad Obamacare came into existence. If it didn't exist the collapse would happen sooner.

The insurance companies have essentially priced themselves out of existence. Obamacare is their last lifeline. If it fails, down they go. And the healthcare providers with them.

And then???

[Ariadne22]

Originally Posted by Weichert

The insurance companies have essentially priced themselves out of existence. Obamacare is their last lifeline. If it fails, down they go. And the healthcare providers with them.

Heh - hoist on their petard.

[MaryleeII]

Originally Posted by InsaneTraveler

I have never seen the government charge a bill as exorbitant as those the couple in that article facing.

Just WTH happens if they can't pay it? Ruin their credit? foreclose on their home? shoot them?

Your money or your life....looks they they've lost both

[Minervah]

Originally Posted by golfgal

The truth hurts...it's simple math really. You can't expect the most expensive medical population, people over 65 to have the least expensive rates and sustain those policies. All of those policies are supplemented by their regular book of business, group and individual policies. Look up the shareholder reports...

I just don't know how I sleep at night. Of course when it's your turn to be eligible for Medicare, you will gallantly turn it down and opt to pay for a private health insurance policy. Without question.

Go on, continue to amuse me.

[golfgal]

Originally Posted by Minervah

I just don't know how I sleep at night. Of course when it's your turn to be eligible for Medicare, you will gallantly turn it down and opt to pay for a private health insurance policy. Without question.

Go on, continue to amuse me.

Won't have to, we have a group plan for life . Chances of Medicare being around when I retire are very slim...

The point is, your plan isn't fully funded by you so to compare it to a group or private plan is just silly...

Ariadne22--so just how much should medical procedures cost? See, the market determines cost. That is the benefit of living in a capitalist society. Doctors or hospitals that charge too much eventually will go out of business either due to being dropped from insurance networks or simply lack of patients. My next surgery will be in the $100,000 range for the surgery and after surgery care (cochlear implants). Just how much should that cost. Maybe you should make up your own list of costs and submit to hospitals and see what they have to say......and then experience the decline in quality of care as a result.

[Weichert]

kaiser produces interesting info regarding health insurance. The following is for 2011 and is percentages of those with (and without) health insurance for the US.

Employer 49%
Individual 5%
Medicaid 16%
Medicare 13%
Other Public 1%
Uninsured 16%

Texas leads with 24% of its citizens having no insurance at all. Some say if you have no insurance go to ER. I've read though that in Houston 400 people are turned away everyday from ER because of lack of facilities and resources.

The percentages shown above are not very encouraging. The benefit of living in a capitalistic society doesn't seem very beneficial. Those with employer insurance is 49%. That includes all sources of insurance including active duty military with very good health insurance as well as corporations with health insurance that is essentially worthless.

In any event 54% of the public have some form of insurance. The remaining 46% depend on subsidized gov't insurance or else have no insurance at all. But an increasing number of employers are dropping employee health insurance completely. Other employers are reducing their contributions toward employee health insurance. Individual policy premiums have reached the point of fantasy. As have provider billings.

The entire health system in this country is simply unsustainable in its current form. The health industry itself is either unwilling or incapable of regulating itself.

Should providers actually collect what they bill those totals would exceed the entire US GDP.

golfgal, I wouldn't depend on this group plan for life that you have. Should Medicare go your group plan will have long since been gone.

It is interesting that you attack Medicare so strongly and yet you aren't even on it. You do the same with national healthcare systems of other countries but have never used them or any version of them. In reality, one would think that you'd be the last person with any credibility in this subject.

[markg91359]

The point is, your plan isn't fully funded by you so to compare it to a group or private plan is just silly...

The point which you keep ignoring is that total Medicare costs are increasing at a rate which is about half that of private health insurance plans. I agree the elderly and everyone else ought to have to pay more for medicare. However, that's the reason why Medicare is in trouble. It is not because it does a bad job controlling health care costs. It does a better job than anything else out there and that obscures the essential truth in this debate. Since you didn't read it the first time, see my article from wikipedia which outlines the fact that medicare cost increases are about in line with GDP growth (in other words, something which is near sustainable). Private health insurance increases are about 4.8% a year. (unsustainable, even if down from 7% or more before 2008). You need to distinguish between what the elderly are actually paying and the fact that Medicare does act to control health care costs. These are two separate issues.

Now, use some imagination. What if we had a national health insurance plan where all young and healthy people were part of the same plan as sick and elderly people were. How do you think that would affect average costs? The answer is the average cost for health insurance through a national health insurance plan--achieved by expanding medicare--would decline. Further, imagine no more need on the part of employers to buy a private health insurance plan for employees or for individuals to purchase their own health insurance. I see a system which is affordable for everyone.

http://en.wikipedia.org/wiki/Medicare_(United_States)

Ariadne22--so just how much should medical procedures cost? See, the market determines cost. That is the benefit of living in a capitalist society. Doctors or hospitals that charge too much eventually will go out of business either due to being dropped from insurance networks or simply lack of patients. My next surgery will be in the $100,000 range for the surgery and after surgery care (cochlear implants). Just how much should that cost. Maybe you should make up your own list of costs and submit to hospitals and see what they have to say......and then experience the decline in quality of care as a result.

I've discussed this in an early post too. Here's something that some people never seem to get: There is something in economics that is known as "market failure". The free market system has done much good overall in this country. However, economists have analyzed the conditions in which in works well and I'll try to outline them for you:

1. When there are a large number of both sellers and buyers of a product or service.
2. When there are limited entry barriers to entering a market.
3. When consumers have a high level of information about the product or service they are purchasing.
4. When consumers are actually the people paying for the product or service that they receive.
5. When sellers are not able to differentiate or distinguish the product they are selling from other similar products and services.
6. When consumers are situated in a fashion where their transactions with sellers are "arms length" transactions and not made quickly or carelessly.

Take a look at the health care industry and very carefully and tell me which of these conditions is met by that industry:

1. In most small towns and counties in this country, exactly one hospital exists. If the people in that community are lucky, there are one or two specialist physicians who treat problems like cancer or heart disease. Health insurance plans further restrict competition by limiting the choices consumers have to pick from a group or health providers and force them to select "preferred providers".

2. Setting up a hospital or becoming a physician is a complex process that requires a huge investment of funds. Entry barriers into the field are high. There is education, licensing, and equipment purchasing. Virtually all small town hospitals in this country now have either CT scanners or MRI scanners. You can bet the costs of this equipment will be passed along to consumers through bills even if they never need this service.

3. I routinely talk to clients who take medications they can't pronounce, prescribed by physicians they cannot name, in medical specialties they don't understand. Its a sad and sorry state of affairs and I blame my clients as much as I blame the health care industry for this one. However, its a reality. Most people do not understand much about the care they are getting and are not in a position to make informed decisions based on the very limited and imperfect information that they get.

4. Third party payers (insurance) pays for most of the health care in this country. Occasionally, I hear someone advocate abolishing insurance and going back to a "cash for service" model. I'm sure this would reduce medical care costs. It would also be devastating for millions of people. Unfortunately, third party payment is a necessary part of health care and is here to stay.

5. Doctors and hospitals go to great length to try and make their practice or facility appear to be "better" than others. It seems to work too. Many private health insurance plans make a big deal out of the patient's right to "choose their own doctor". Much of this "product differentiation" is nonsense. Generic medication is almost always as good as name brand medication. Yet, t.v. commercials convince thousands of people they need to have the name brand.

6. Finally, and most importantly, buying medical care is not like buying a car, a t.v., or a home. I make the decisions to buy all those products slowly and over time. I get a chance to compare competing brands and shop at competing stores. I may purchase a product online now through a distributor like Amazon. Compare this with the purchase of medical care services. Ever been sick or injured and desperately need to go to an emergency room? I have. You don't get to do any comparing at all. You go straight to the nearest facility and you PRAY they will treat you. I'm not getting kidney stones any more, but when I did that's exactly what I did on no less than four separate occasions over a 7 year period. There is no opportunity (except perhaps with elective surgery) to compare health care prices and try to get a better deal.

Now, what really amazes me is that some people consider everything I have said and just mentally cannot accept the notion of "market failure" when it comes to health care. I view it as a sort of "brainwashing" where some people in this country have become lead to believe that "the free market system is always better" even when its not. Even when it is a colossal failure.

Its very clear me based on the way you have posted about health care over the last months that you are very wedded to a private health insurance model. I hear a lot about you and your family. You profess how well this model works for YOU. My problem with all that is that we really aren't talking about what is good for one person or for one family, or even one community. We are talking about a model that can get decent health care at an affordable price for 95% or better of the people in a country with a population of 300 million. (I omit 5% because that's probably the proportion of people illegally here in this country).

I'll tell you what I'm sick and tired of. I'm tired of half-truths and misrepresentations by people who continue to beat the drum for the private health insurance model. I'm tired of suggestions that if the poor gave up their cell phones they could afford health insurance. A cell phone costs a maximum of about $500 to $1000 a year. Health insurance costs around $7000 to $9000 per individual right now. I'm tired of people working over 40 hours a week being told they are "lazy" or to find a better job in this economy because their current job doesn't offer health insurance. I'm sick of the way we Americans love Walmart while we ignore the fact that many Walmart employees are on Medicaid because they earn so little money (and their employer won't provide health insurance) that they have no choice, except to turn to Uncle Sam. I'm sick of the way that countries like Canada are accused of having "socialized medicine" when the reality is that Canadian health care providers are all private employees who simply are paid by the government for their services. I'm tired of the way that we ignore the fact that every modern country in this world from Germany to Japan to the United Kingdom to the Netherlands to Australia to New Zealand and even Taiwan provides universal health care for their citizens.

The truth is that the way we adhere to our model of health care in this country is proof of just how stale and moribund some of the ideas we have in this country have become. When I grew up, America was the premier country in the world that was doing great things. Now, I see a society that is so stuck on some bad ideas that we can't change the way we do things to save our lives. It ought to be clear we can't go on running our health care system the way we have. The question is do we have the intelligence, the ability, and the means to change it before it runs off a cliff. The cliff is out there. We don't have unlimited time to keep from going over it.