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It isn't that bleak, Scoop, nor need it be that severe.
Part of the problem now is that medical care is a sunk cost via insurance. Sunk costs in the form of $X per month every month for a year. And everyone who passed Econ 101 knows that sunk costs have no bearing in future decision making.
So, in my case, I pay about $1K per person per month. That's a sunk cost. It doesn't impact my decision to purchase medical care on a daily basis.
HOWEVER, I do have a co-pay and an out-of-pocket. Those DO impact my decision to purchase medical care. A doctor's visit is $20 - that is pretty nominal. So a doctor's visit is almost free. That is not a sunk cost, so I do consider the price of $20 per visit, ignoring of course that behind the scenes the doctor bills my insurance for a some large number where I don't know the details, nor do I particularly care. Well, I care -- but not that much. And $20 is mouse nuts. My out-of-pocket does influence my behaviour. Early in the year, I choose not to purchase medical care unless I think I really need it -- all because I have not yet met my out-of-pocket yet. Sometimes that behaviour lasts all year; other times I hit my out-of-pocket early at which point my decision to purchase medical care going forward is based on a cost of $20. And labs, xrays, MRIs, CTs, and durable medical devices such as orthotics & splints & crutches are free, as in zero.
I have an older brother, in his 60s, who last went to see a doctor in 1977. That's not a typo. He's extreme, but he does not believe in medical care. My elderly mom is cut from the same cloth -- and she was a medical/surgical RN at a county hospital her entire adult life until she retired. Aside from childbirth and cataract surgery, she hasn't visited a doctor in decades.
And neither of them are curled up anywhere waiting "to die in a financially responsible manner."
Yes, the problem is insurance isn't insurance; it is pre-paid health care. If it were really just insurance, everything would be more efficient. Not perfect -- but at least as efficient as, say, automobile repair.
Yes, pure dead weight in the system precisely because of the existence of insurance. If instead of pre-paid health care, if our system were actually insurance there would be no need for the dead weight.
A better comparison would be to compare insurance companies with the Federal Government's Health and Human Services bureaucracy. Which one would you guess has more money to waste? Which one cares the least about efficiency? Which one is staffed with people who get lifetime employment, gold-plated pensions & Cadillac health-care regardless of their performance or level of competence?
Medicare is the most efficient payer, with the least overhead.
Their rules are patient centric. As in the fact that if I'm going to provide you with an expensive service, that I know you'll come out of pocket for, I have to tell you up front. Did Medicare ever **** me off? Ask me about the congressional inquiry that we launched over the 5010 debacle.
For those that have never heard of it, 5010 was the major changes made to electronic claim formats that came into effect a few years back. Our state's Medicare payer seriously dropped the ball. They lost the contract with Medicare for this state , in part over this.
And yes, you are correct about insurance vs. prepaid healthcare. You can thank the HMOs for that.
And neither of them are curled up anywhere waiting "to die in a financially responsible manner."
Most people will not eventually suffer an aneurysm, massive coronary, or accidental trauma death -- the quick kind. Most people will have a string of debilitating events, all of which are expensive but treatable. And most people will not have the funds to pay a'la carte for such treatment.
And since most people do not have the means to pay $1K-plus per month for decent health insurance, we're back to my original two options. You can't use two outliers as examples of what needs to happen to fix American health care.
Medicare is the most efficient payer, with the least overhead.
You're much closer to this than I am, of course, as you work in the industry. But I think your observation would be better be characterized as "if you compare Medicare with the existing private insurance paradigm, Medicare is the more efficient payer." Since you work in the industry, I defer to you on that.
Let's think of a slightly different comparison: Medicare vs. the paradigm for paying for health care pre-WWII. Which is more efficient? Clearly, the pre-WWII paradigm without either of them. It had its own issues, of course, but from the point of efficiency, it was great: few transactions involved 3rd parties, and the cost of health care was reasonable -- precisely because individual consumers did what they do everywhere else - make individual choices using the pricing system.
Now in the real world, we cannot return to a world where most health care purchase decisions are individual consumer choices. That ship sailed generations 50 some years ago.
Switching from private insurance to government-centric Medicare replaces one bureaucracy with another, although one that is more efficient from your point of view. Unfortunately, it doesn't solve the problem that health care costs too much. It doesn't solve the problem that individual choices to consume health care are largely independent of price.
Here's another way to think about it. Let's say single-payer really is best -- it cuts out a wide swath of inefficient middlemen.
Then I think we should extend this to Porsches. I think everyone should be able to afford a Porsche. The solution to the rising cost of Porsches is to have a single-payer system where the middleman (dealer) is eliminated.
That would cut out lots of costs, but we could do better — the government should cut out the manufacturer (Porsche) as well, and just have its own Porsche manufacturing plant, providing everyone a Porsche at the minimum cost.
And, just as ER visits are too costly, if I bring my Porsche in after a car wreck, it should be repaired for free as well.
OK, the above is absurd for one marketplace. Maybe its absurd for both.
You're much closer to this than I am, of course, as you work in the industry. But I think your observation would be better be characterized as "if you compare Medicare with the existing private insurance paradigm, Medicare is the more efficient payer." Since you work in the industry, I defer to you on that.
Let's think of a slightly different comparison: Medicare vs. the paradigm for paying for health care pre-WWII. Which is more efficient? Clearly, the pre-WWII paradigm without either of them. It had its own issues, of course, but from the point of efficiency, it was great: few transactions involved 3rd parties, and the cost of health care was reasonable -- precisely because individual consumers did what they do everywhere else - make individual choices using the pricing system.
Now in the real world, we cannot return to a world where most health care purchase decisions are individual consumer choices. That ship sailed generations 50 some years ago.
Switching from private insurance to government-centric Medicare replaces one bureaucracy with another, although one that is more efficient from your point of view. Unfortunately, it doesn't solve the problem that health care costs too much. It doesn't solve the problem that individual choices to consume health care are largely independent of price.
Here's another way to think about it. Let's say single-payer really is best -- it cuts out a wide swath of inefficient middlemen.
Then I think we should extend this to Porsches. I think everyone should be able to afford a Porsche. The solution to the rising cost of Porsches is to have a single-payer system where the middleman (dealer) is eliminated.
That would cut out lots of costs, but we could do better — the government should cut out the manufacturer (Porsche) as well, and just have its own Porsche manufacturing plant, providing everyone a Porsche at the minimum cost.
And, just as ER visits are too costly, if I bring my Porsche in after a car wreck, it should be repaired for free as well.
OK, the above is absurd for one marketplace. Maybe its absurd for both.
You said it, Sporty. Healthcare is only for those that can afford it. I'll just leave out the part where I have saved lives as an EMT, never asking about their health insurance. I can count three. You?
Most people will not eventually suffer an aneurysm, massive coronary, or accidental trauma death -- the quick kind. Most people will have a string of debilitating events, all of which are expensive but treatable. And most people will not have the funds to pay a'la carte for such treatment.
And since most people do not have the means to pay $1K-plus per month for decent health insurance, we're back to my original two options. You can't use two outliers as examples of what needs to happen to fix American health care.
My thesis is the main reason treatments are so obscenely expensive today is because of 50+ years where consumers do not use price when considering consumption. The lack of price as an input to health care consumption means we've had generations of distortions in how resources have been allocated.
Let's take a couple examples where insurance companies and Medicare are not involved in the transaction.
1. Laser Refractive Surgery, including LASIK, LASEK, and PRK, among others. These are forms of Laser Eye Surgery intended to correct a patient's vision so they do not need to wear eyeglasses or contact lenses in order to see well. The technology has improved to the point where the surgeon's skill is, well, pushing a button (actually a foot pedal). The machine does the rest. A computer system tracks the patient's eye position 4,000 times per second, redirecting laser pulses for precise placement. The computer system adjusts the laser to center on the patient's visual axis and will pause if the eye moves out of range and then resume at that point after the patient's eye is re-centered.
With minor exception, insurance does not pay for these procedures. What do we observe in the marketplace today? The technology has improved by orders of magnitude over a few short years, and the price in the marketplace has dropped precipitously -- all because neither insurance nor Medicare are involved.
Let's do a thought experiment where the ACA required insurance companies to pay for this. What do you think would happen? Prices would go up, of course, but consumers don't care because they don't pay for it directly. Demand would go up. As a society, we would consume far more Laser Refractive Surgery. The eyeglass industry would protest and demand government subsidies to help them compete.
2. Breast augmentation and breast reduction. Again, with minor exception, these procedures are individual choices between a patient and a surgeon where neither private insurance nor Medicare are involved. What have we seen in the marketplace? Prices have come down. There have been dramatic improvements in the techniques and outcomes -- all because neither insurance nor Medicare are involved.
Now, in the real world, we are where we are -- generations of economic distortions driven by employer-based health insurance have led us to the point where many think Medicare-style single-payer is the answer. But the answer to what? With single-payer, consumers still treat healthcare as essentially free, because the marginal cost of treatment is nil - so demand for health care goes up. Total dollars expended in the USA on health care does not go down -- it goes up.
About the main thing everyone can agree upon is with single payer, it is the taxpayer who will pay, and of course payment for it will be quite progressive.
You said it, Sporty. Healthcare is only for those that can afford it.
Clearly, I haven't communicated very well if my posts led you to think I believe healthcare is only for the affluent. My bad.
My point is the cost of healthcare has been driven into the stratosphere because of the insurance system, and single-payer is not likely to drive down costs.
Clearly, I haven't communicated very well if my posts led you to think I believe healthcare is only for the affluent. My bad.
My point is the cost of healthcare has been driven into the stratosphere because of the insurance system, and single-payer is not likely to drive down costs.
You do realize that enrollment in Medicare Part B, is optional and that you have to pay a premium to enroll? You also realize that it's a classic 80/20 plan, with deductibles and coinsurance?
Unless you give up your Medicare benefits to one of the managed care organizations. Medicare Advantage plans, my ass.
We agree on one thing. The insurance companies have driven costs through the roof. I can only speak about this particular market, because it's the one I've worked in for basically my entire adult life.
Medicare for everyone would solve most of the problems. Not all of them, but most of them.
You remember the Desai scandal where the clinic was reusing syringes to save a buck and ended up killing people by spreading Hepatitis?
That, my friend, is what private insurance has brought us. And there was a whole team of attorneys hired to defend Sierra's liability in that case. I know because they were in an office down the hall from mine.
Lots of profits made by doing exactly nothing to improve healthcare in this valley. United bought Sierra / HPN because it was a cash cow. If you have a better solution than open enrollment for Medicare, I'm all ears.
There are simply things not suitable to free enterprise...and health care is one of them. There is large scale proof that a better product is obtained by single payer and at a lower price.
The consumer is simply not in a position to negotiate medical prices. And the recent pricing of drugs is showing another problem. How do you determine the worth of a drug? If it the only thing between you and short term death is it not priceless?
And this deal where :Medicare cannot negotiate pricing? Talk about a license to steal.
And after we do medicare for all we go after the cost structure.
i would suggest we simply cut all chidren in at day one and then drop the medicare age two years each year.
Drugs get a fair return over a relatively short period and then it goes open to manufacture.
We need medicine to be a desireable career path...but not movie star level.
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