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The driver of the cost of health insurance is the cost of health care. Neither Obamaare nor Trump/RyanCare really address the drivers of the cost of health care. If we found a way to drive down the cost of health care, then the cost of health insurance could come down.
The bulk of health care costs are labor. In hospitals, it's 54.2% of operating costs. So you're going to pay nurses 50 cents on the dollar? And the janitor? And the cook in the kitchen? And the CNA in the nursing home that's 80% Medicaid patients?
My insurance company pays my GP $50 for my physical. That includes all the overhead like office space, the assistant, billing, heat, electricity.... Should that be $25.00? They'd go out of business.
No one really has answered the question. Why is Health Care so expensive. Break it down.
Who is making money off of us when we go to the hospital, ER, etc?
Insurance, BigPharm, Doctors, Government, etc etc.
It doesnt need to be so damn expensive to a point. I understand Cancer treatment, Open heart surgery etc etc, but a broken arm thousands of dollars? Really..
Due to government involvement, costs are going to be high. Period. But, who else is causing it to be stupid expensive..
Freeloaders...Having to pay for people that refuse to pay or cant?
The bulk of health care costs are labor. In hospitals, it's 54.2% of operating costs. So you're going to pay nurses 50 cents on the dollar? And the janitor? And the cook in the kitchen? And the CNA in the nursing home that's 80% Medicaid patients?
My insurance company pays my GP $50 for my physical. That includes all the overhead like office space, the assistant, billing, heat, electricity.... Should that be $25.00? They'd go out of business.
It's not the every day care costs, it tends to be more complex procedures and complex billing to go with it. A stint put in at one hospital with one insurance and one medical coder may be $10k but change one variable in that and it may be 20k. A hospital here in CT was running one of there CT scanners 24/7 because of the way they were getting paid for it, in meeting doctors were told use the CT scanner as often as needed as they had found a profitable way to code (the doctors were not told about the profit part just that the system to use the device had been streamlined for them).
The bulk of health care costs are labor. In hospitals, it's 54.2% of operating costs. So you're going to pay nurses 50 cents on the dollar? And the janitor? And the cook in the kitchen? And the CNA in the nursing home that's 80% Medicaid patients?
My insurance company pays my GP $50 for my physical. That includes all the overhead like office space, the assistant, billing, heat, electricity.... Should that be $25.00? They'd go out of business.
I have posted this before, but will again.
I think it's time that we look at some of the more successful countries with "universal" health care. I will use Germany, as I lived there for many years and know their system and quality of care. And I can attest that the health care that I and my family have received there is as good, if not better than a lot of what we have received in the US.
First, they see health care as a fundamental human right, not a privilege.
Second, everyone under a certain income ceiling is required to belong to what is known as a "sickness fund", insurance if you will. Which means everybody has a stake in the system. If you make more than 800 Euro a month (currently about 1000 dollars) then you will pay 14 percent of your gross monthly pay to that fund. Your employer contributes another 14 percent.
If you make between 400 and 800 Euro a month, you pay about 4 percent of your gross wages to the fund. Those that make less than 400 Euro are subsidized by the Government.
There are also co-pays for various items and services. Prescriptions,durable medical equipment, hospital stays, etc.
If you want additional coverage, and can afford it, then you can buy additional insurance.
The only way to make this work is through a very controlled system. Healthcare providers, hospitals, insurance companies and the government all work together to hold down costs. It is much like a giant HMO. Insurance companies are restricted, by law, that they cannot raise rates by more than 1 percent of gross wages in any given year. This is not a capitalistic system, its socialist. (Not necessarily bad, just different).
So, in order to have the same type of system here in the US, we would have to do the following:
Limit what Doctors, Nurses and other healthcare providers can charge.
Limit the amount that insurance companies can manipulate their rates.
Limit what hospitals can charge.
Limit malpractice lawsuits.(Critical component)
Make malpractice not only a civil law issue but also a criminal law issue (as it is in Germany)
Does anyone really expect any of the above to happen in the US?
Would we all be better off? Possibly. Would some of us pay more for our care? Absolutely.
You can call the 14 percent mandatory deduction from your paycheck a fee, but it is still a tax. Which would probably still be less than most people pay for their current health insurance premiums.
And before it comes up, Doctors in Germany are still some of the highest compensated people in the country.
No one really has answered the question. Why is Health Care so expensive. Break it down.
Who is making money off of us when we go to the hospital, ER, etc?
Insurance, BigPharm, Doctors, Government, etc etc.
It doesnt need to be so damn expensive to a point. I understand Cancer treatment, Open heart surgery etc etc, but a broken arm thousands of dollars? Really..
Due to government involvement, costs are going to be high. Period. But, who else is causing it to be stupid expensive..
Freeloaders...Having to pay for people that refuse to pay or cant?
A few tib-bits:
- The biggest cost is hospital care (at about 30% of all HC spending)
- Second biggest is physicians and clinics (read: diagnostics like MRI, CT scans)
- Everyone hates big pharma but it only accounts for 10% of HC spending
- By far the most spending is on people over the age of 65
- Less than 5% is due to private insurance profit and overhead
As far as demographic breakdown of population segments (including "free loaders"), the CMS report is here.
A few high-lights:
- Medicaid (the bottom strata of ability to pay) is about 17% of NHE (national health expenditure)
- Medicare is about 20%
- Private insurance covers 33%
- Out of pocket covers 11%
- The rest is VA, and state coverage
But it is still fun to talk about it. I can see both sides of the argument. It is a complex issue.
Yes it is fun. Just for fun, let's look at another single-payer environment: K-12 Education. There is single-payer (government) K-12 education everywhere in the US, and that is the way most people consume K-12 educational services. Yes, there are alternatives (parochial, independent) but most people send their kids to public school.
Check out this chart about the inflation-adjusted cost of public K-12 education:
Just as with health care and health insurance, the cost of public sector K-12 education just keeps going up and up and up. Unlike health care, the outcomes of K-12 education are pretty much flat; at least with health care, we've had an increase in life expectancy as a result of all the money we're pouring into it.
So... where is all that money going? Not into more teachers; the teacher/student ratio has not significantly changed for the better. Some places it has gotten better temporarily; others much worse.
The money isn't going into teacher inflation-adjusted salaries (and, in health care, not into the compensation of nurses, doctors, technicians, etc). Yeah, if you add the value of public sector teacher pensions and public sector health insurance to the mix it gets better, but total compensation is not the root cause of the increase in the overall cost of K-12 education:
The answer is surprisingly similar in both health care and K-12 Education: administrative bloat is the root cause of the cost disease. The number of administrators per teacher has gotten out of control. From 1950 onward, the number of non-teaching personnel in schools (administrators) has risen 2.8x the number of teachers added (due to increases in population).
Ditto for the number of health care administrators per doctor.
How have we let it get this bad? While you point to the lack of single-payer as one piece of the puzzle, I point to lack of real competition as a piece of the puzzle.
No one really has answered the question. Why is Health Care so expensive. Break it down.
Who is making money off of us when we go to the hospital, ER, etc?
Insurance, BigPharm, Doctors, Government, etc etc.?
For a conversation like this, there is no need to break it down - but there are some examples I can give you.
1. I know folks who work for Big Pharma - they make enough to buy 300K boats and stuff like that. The hot women who do the sales to the docs only make 150K+
Is a sales job like that worth 150K?
Either way, neither of the above represents the really big bucks.
You see, the USA is one of the few countries in the world that allows "direct to consumer" drug/pharma advertising. BILLIONS go there.
2. Earlier in the thread someone said the money is NOT going to big business. I call BS on that. Said person quoted numbers from financial reports - but that's not how the game works! Again, a few examples:
a. Rick Scott was CEO of a health care firm that defrauded the government for BILLIONS. They paid the largest fines in US history. His punishment for sitting over the company during this scheme?? We elect him governor.
b. Mitt Romney and many other investment bankers have BILLIONS of dollars in profits from health care "bets". Of course, this money doesn't show up on hospital profit and loss statements eithers.
c. It's not coincidence that, for example, the Prez of the Senate until GWB (Bill Frist)...his family owned HCA (Hospital Corporation of America). BILLIONS involved.
d. Cancer Centers of America (you've seen the commercials) are IMHO total money sucking scams...and they probably know it, which is why they support the GOP as one of the largest donors. Basically, our so-called "free market" allows you to scare people when they are at their most vulnerable....and make it seem to them that they may live if they choose your "brand" of cancer treatment.
So, take the above times 100 or 1,000X and the money really starts adding up. Bottom line - our entire system is a ripoff (or worse) designed to take people when they are at their weakest and extract anything and everything from them.
As far as premiums - that's very simple. The cost per person for health care in 2008 was $8600 per year - it's about 10.5K today (relatively slow inflation). If you are not paying that much per year (family of 4 paying 40K"), then someone else is paying for your socialized medicine. We are 63 and pay about 1400 per month for two...with a bunch of deductibles and no dental, etc - so I can at least claim to be paying most of my way.
The others here who complain about the high costs......for some reason I get the idea they pay less than the average cost per person per year. `
I think that after 5 years, pre-existing conditions become available for coverage. But yeah, that is part of how they keep costs down.
Medicare has no restriction on pre-existing conditions that I have seen. I have what would probably qualify as two and I have had no problem. Hell, most people by age 65 have something that would qualify. Hang nail would probably do it.
A word about our experience with LTC. The folks-in-law paid $200 a month for 10 years. When it came time for care - there was a waiting period. My FIL died 7 months after admittance to assisted living. Still in the waiting period. My MIL used the coverage for two years and then the coverage ended.
Certainly with their costs > $4000 a month - it was worth it. However, my MIL continues in assisted living/nursing care now 3 years past my FILs death - and its on her dime.
Thankfully, she has the resources to cover her care.
LTC insurance banks on people dying shortly after their need is diagnosed.
We're not going that route.
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