Thursday, July 2, 2009
Congress / Kotz / Politics / The Economy Do You Favor Government-Run Health Care?
Posted by Pete Kotz on Thu, Jul 2, 2009 at 5:38 AM
Let's forget, for a moment, that Lamar probably hasn't talked to many doctors lately. There's been a bureaucrat between you and your doctor for years now. He or she just works for your insurance company, not the government. But they've been telling your doctor what he can and can't do for years. And has been doing it a more costly and inefficient way. The average for-profit insurer burns through 27 percent of its money on administrative costs. The average government program: A mere 12 percent.
You could also make the argument that running for-profits out of business is good for American workers. All that paper-shuffling work will remain, which means the jobs merely shift from insurers to government, which generally offers better pay, benefits and vacation time. The only real losses will be due to efficiency and a chopping of the executive ranks. But we're guessing you were never really happy about paying that $3 million CEO salary anyway.
In the end, private insurers will remain, if only to service people who want auxiliary, specialized or Cadillac policies. But to hear Lamar, fellow Republicans, and many Democrats in Congress tell it, we somehow owe a debt to the people responsible for the inefficiency and high cost in our health care system.
Do you buy this? Does anyone outside Congress?
Comments (26)
Showing 1-26 of 26
When Medicare was started in the mid sixties, the government projected that the annual cost in 1990 would be $12 billion.
The actual cost in 1990 was over $100 billion.
Yeah that government run healthcare is REALLY efficient.
The fact is that a significant part of the increase in costs of private healthcare is cost shifting from Medicare and Medicaid.
Those programs cap reimbursement rates for procedures that are below the providers costs so they try to make up the difference by shifting the costs onto private patients.
So government run healthcare is a parasite in two ways, a parasite directly on the taxpayers and indirectly on everyone with private health insurance.
When and if that ability to leech off the private insurance goes away, the only way the government will be able to control costs is by rationing - just like Canada, Britain, etc.
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"fellow Republicans, and many Democrats in Congress tell it, we somehow owe a debt to the people responsible for the inefficiency and high cost in our health care system."
"Owe a debt"?
Explain to me why anyone "owes" it to anyone else to subsidize their healthcare costs in any way to begin with.
And here is the debunking of the claim that government run healthcare is more administratively efficient:
http://www.realclearpolitics.com/articles/2009/06/27/the_adminstrative_cost_benefit_myth_97193.html
Those programs cap reimbursement rates for procedures that are below the providers costs so they try to make up the difference by shifting the costs onto private patients.
And you don't think Blue Cross is doing the same? Really!
Blue Cross is one of the entities that is getting costs shifted onto THEM because of Medicare and Medicaid.
The private sector has been no more successful than the public sector in containing rising costs. Managed care was envisioned as a cost-control strategy, but it was quietly written off as a failure. Rising costs in the Medicare and Medicaid programs are eating federal and state budgets alive, while rising costs for private-sector insurance are eating businesses and individuals alive. It's two sides of the same coin, and to pretend that the private sector has been more efficient is simply to ignore all the evidence to the contrary.
This is not to say that the public sector is drastically MORE efficient, but it is certainly no worse than what we have now. And, as Pete says, bureaucrats already stand between you and your doctor. The only difference is that they work on behalf of for-profit companies rather than for Uncle Sam.
Therein lies another public-private difference that is worth mentioning. While efficiency is an extremely important metric, it cannot be measured ONLY by dollars spent and saved when you're comparing public and private options. You also have to look at where healthcare dollars go, and that requires you to look at the incentives in the system.
In the case of for-profit healthcare, the incentives are to (a) optimize revenues and profits and, secondarily, (b) deliver high-quality care so you can continue to attract a stream of referrals and patients and optimize your revenues. In other words, the incentives are structured so that providers do better when they overprescribe healthcare and when they treat medical conditions rather than prevent them, and insurors do better when they deny legitimate claims, dump the sick and cherry-pick among the healthiest individuals.
In the case of publicly funded healthcare, the incentives are to (a) ensure the delivery of high quality care and (b) control costs and manage taxpayer dollars effectively. As I said, they're not necessarily a great deal better with Part B than the private sector. But the incentives are a lot more in line with what most Americans want from the healthcare system. No small part of the "efficiency" in the for-profit healthcare world comes from rationing care through excluding coverage to those with pre-existing conditions and blatant cheating of many policyholders with legitimate claims.
"In the case of publicly funded healthcare, the incentives are to (a) ensure the delivery of high quality care and (b) control costs and manage taxpayer dollars effectively."
Uh Huh.
Just like the VA Hospital.
Now there a shining example of quality care using taxpayer dollars efficiently.
LOL
Just like the VA Hospital. Now there a shining example of quality care using taxpayer dollars efficiently.
Yes, never let facts get in the way of a groundless assertion. From a 2005 report (http://tr.im/qDlL) by the Rand Corporation--that bastion of leftwingery--on quality of care in the VA system, subtitled "How the VA Outpaces Other Systems in Delivering Patient Care":
How does the VA measure up against other U.S. health care providers? To address this question, RAND researchers compared the medical records of VA patients with a national sample and evaluated how effectively health care is delivered to each group. Their findings:
VA patients received about two-thirds of the care recommended by national standards, compared with about half in the national sample.
Among chronic care patients, VA patients received about 70 percent of recommended care, compared with about 60 percent in the national sample.
For preventive care, the difference was greater: VA patients received about 65 percent of recommended care, while patients in the national sample received 20 percent less.
VA patients received consistently better care across the board, including screening, diagnosis, treatment, and follow-up.
Quality of care for acute conditions — a performance area the VA did not measure — was similar for the two populations.
The Rand report concluded:
If other health care providers followed the VA’s lead, it would be a major step toward improving the quality of care across the U.S. health care system.
As I've stated many, many times, most western countries offer public healthcare with a private option, while we're debating doing it back-asswards. The other problem, which I've stated many, many times, is that progressives want healthcare while Washington is focused on health insurance. Healthcare is not health insurance. Plenty of people with health insurance have been bankrupted by medical debt.
And I have already called Sen. Alexander's office to scold him for using fearmongering over a state income tax as a means of killing real healthcare reform. Shame on you, Senator.
I don't know why my comments over here end up in a black hole awaiting "blog owner's approval" but suffice it to say, I've made my views known on my blog many times.
I want healthcare while Washington is focused on health insurance. We aren't even debating the same thing anymore.
The NY Times just ran a big exposé of horrible quality in brachytherapy procedures at a VA Hospital in Philadelphia. Of course, I know Gilbert doesn't believe the allegations, since they came from the Times.
The VA System has indeed been plagued by some serious quality problems. Then again, you can find lots of places within the system where the care is first-rate, and the system as a whole spends a much lower percentage of each dollar on administrative costs than the private mishmash system that prevails elsewhere.
The larger point, though, is that comparing the VA to what is being discussed as a public option today is like comparing apples to oranges. Gilbert is dragging out a Red-Scare herring.
The public option would wind up being more like Medicare, with the delivery of care remaining entirely with the private sector. Patient surveys show an extremely high level of overall satisfaction with Medicare.
I don't know why my comments over here end up in a black hole awaiting "blog owner's approval"
The system does that automatically when a commenter embeds via HTML, I believe, more than one link (a comment spam preventive measure, presumably). It does that to me, it does it to everyone. That's why when I want to include links in a comment, as often as not I just use a URL shortener and paste in the URL itself without using an HTML tag to embed the link. Saves a step (but yes, at the price of elegance).
"Yes, never let facts get in the way of a groundless assertion"
Like Kotz's original claim that public health care's admininstrative costs are lower than the private sector - which is flat out wrong.
And all the phony squealing about the "crisis" of the 43 M uninsured people.
And the Obama administration's BS about health care "reform" being necesseary to "fix" the economy. The recession and the financial credit freeze weren't caused by healthcare expenses and "reform" won't have anything to do with "fixing" it.
You liberals can keep tap dancing and spinning around about healthcare all you want.
The fact is that Medicare and Medicaid are abject fiscal failures. You cannot create a system based on the premise that people are "entitled" to an unlimited amount of healthcare (or anything else for that matter) regardless of ablilty to pay and not have demand far outstrip suppply.
And you cannot create a NEW entitlement on top of all the ones that already exist and give even more people something they aren't paying for and have it cost less money.
The boosters of entitlement programs both inside and outside of the government have never been proven right yet about any of their pie in the sky projections of cost levels or cost savings
As I noted about, actual Medicare costs have been VASTLY higher than the original projections for it.
"Patient surveys show an extremely high level of overall satisfaction with Medicare."
Most people do like to get stuff that is mostly being paid for by somebody else.
That doesn't make it a viable system.
This is one of the things I am afraid of, that too much emphasis will be placed on getting the uninsured treated and forgetting that there are millions of us struggling to keep our own insurance and financial burdens afloat. Luckily, there are companies like US Healthgroup that care about the insured and try to make sure everyone has insurance coverage they need, and at a lesser cost than Washington is pitching.
What makes Medicare non-viable for the long term as presently configured is not the concept of Medicare itself -- which was perfectly viable for several decades after the program began. It's the cost escalation in healthcare overall and the aging of the US population. These same factors also have made the current private healthcare system non-viable for the long term.
Besides, what makes you think Medicare involves more of a "something for nothing" than private health insurance? The concept behind private insurance is that you pay annual premiums against the advent of a serious need. Should the need arise -- say, you need a heart transplant or your home burns down -- you are likely to get a much bigger payoff than the sum of your contributions through your annual premiums. Someone else -- in this case, other customers of the insurance company -- is paying most of the bill. The system's viability is predicated on the assumption that only a limited number of policyholders will have big claims during a given year, so the total of premium contributions, plus return on the investments of those premiums, will offset the cost of claims paid and leave room for profit.
You and your employer make "premium contribution"s to Medicare insurance with every paycheck. The concept is not so different from any insurance operation. The biggest difference is that contributions have not kept pace with the cost of claims (which are driven by the aging population and the rising cost of healthcare). When this happens to private insurers, they raise premiums and limit coverage (or cancel policies). Something similarly unpopular with have to happen to Medicare. Premium rates will have to go up. The eligibility age for Medicare may have to be raised to 70. None of these will be popular, and AARP will do its best to kill any such efforts. But such changes will probably have to happen even in the unlikely event that we can keep healthcare costs from rising more than 1% or 2% per year.
Boyd Biggs,
Granted that there are many examples of excellent VA care, it is also true that many VA hospitals serve very small patient populations. However it is politically impossible to close such facilities, regardless of the costs.
That is a helpful reminder that the greater the federal government's share of health care and the greater its control, the more that politics rather than markets will dominate. Anyone who believes otherwise has no understanding of history or of the dynamics of government.
And, as government control increases, you can be sure that other shoes will drop. For example, the old Clinton Health plan seems to have suggested that the federal government set quotas on how many and which doctors could go into certain specialties. John Edwards, in a rare act of honesty, included mandatory check-ups in his health plan.
Mark, two quick points:
First, there's politics in every aspect of healthcare TODAY -- so it would be hardly surprising that politics would continue to play a role in healthcare even with greater federal involvement. I realize your point is that politics would get worse, and maybe it would. But it already plays a huge role today. Without the influence of Big Pharma and the insurance industry, to cite just two examples, it's almost inconceivable that the private portion of our healthcare system would look like it does today.
As to your second paragraph, when government pays for healthcare, it always mean more government influence. Sometimes that can be a bad thing, and other times not. Historically, most government control (I'll stop just short of saying ALL) has come in response to demonstrated failures by the private sector. For example, in the early days of Medicare, providers simply submitted their bills and got reimbursed. HCA was built on that formula. Then the government belatedly figured out they were getting gamed by providers who artificially elevated charges and overutilized care. So the government imposed the system of DRGs (diagnostic resource groups) and spelled out more clearly what Medicare would and would not pay for, in an effort to produce more accountability.
For largely different reasons, the free market has created an out-of-whack allocation of physicians according to specialties. I won't bore you with all the details, but mostly it's because of the way incentives are structured in the marketplace. There's an oversupply of doctors in some high-paying specialties, for example. And there's an acute shortage of primary care physicians, especially outside of urban areas. Fewer and fewer docs are choosing pediatrics because the hours and workload are awful and the pay is lower than many other specialties. More OB/GYNs are leaving the field because of the hours and high cost of insurance. The NY Times had a very interesting op-ed piece today that called attention to the fact that US medical schools don't even require residents to receive training in geriatric care, even though older adults make up nearly 1/3 of the patient population. That's just inconceivable, and it would be highly appropriate for the government, as the payer for Medicare, to impose a requirement in this area. As the article suggested, we're paying untold billions in unnecessary healthcare costs because too many doctors don't understand the particular needs of geriatric patients. I urge you to read this piece.
I do NOT favor the government setting quotas on how many doctors can go into certain specialties -- although, for the reasons I mentioned above, I do understand their motivation. I don't think it's a great idea for the government to get down to that level of marketplace manipulation. (If this was part of the Clinton plan, I have no idea whether Congress' new plan would include anything like this.) What I WOULD favor is something in-between, through which government works with the healthcare industry to create more incentives for physicians to go into certain specialties where there is an unmet need.
"What makes Medicare non-viable for the long term as presently configured is not the concept of Medicare itself -- which was perfectly viable for several decades after the program began..."
I disagree.
I think the concept of anything being an entitlemnet at all in the first place is the root of the problem.
The social security retirement system is also a big mess and it has nothing to do with healthcare costs.
"Besides, what makes you think Medicare involves more of a "something for nothing" than private health insurance?"
Because absent government invlovement/mandates, the assumption of risk is a voluntary transaction by both parties entering into the insurance contract. In a free market system insurance would be priced on the individual risk of the insured at the time the policy was purchased. And insurance companies would be free to offer different types of policies tailored to the desires of insurance consumers. They could offer bare bones catastrophic coverage only type policies that are closer to what the concept of insurance is for in other types of insurance such as automobile and homeowners insurance (i.e car insurance doesn't pay for oil changes and homeowners insurance doesn't pay for painting your house). If people don't want to pay for a policy that covers all sorts of things like mental health coverage, then they don't have to pay for it.
Medicare doesn't differentiate premium/tax payments based on risk and it mandates what is covers for everybody so there is inherently more cost shifitng and more "something for nothing" involved in it.
The "premium" charged is a fixed percentage of one's paycheck - which has nothing to do with any actual level of healthcare risk being assumed by the insurance entity.
I will add also that, absent government mandates there is no cost shifting from the uninsured to the insured. With car insurance, there is no "emergency body shop" one can go to to get their car fixed for free and foist the costs off onto people who do have insurance or privately pay directly. If you don't have car insurance and don't have the money to fix your car, you just have to do without.
Of course the entitlement expansion that is being proposed is not perfectly analogous to Medicare in that the plan, as I understand it, it going to either subsidize or directly pay for the insurance premiums of selected low income people so that they essentially get it totally free.
The Republicans argue that putting government in charge of health care is unamerican because our country is founded on capitalism, and therefore health care should be provided by private industry and profit motivated.
My Republican Senator from NH, Judd Gregg, believes that private health care is the American way, and should be run for profit. He also says the government shouldn't compete because it's not fair. He says the government will drive the private insurers out of business because the cost will be lower.
Clearly, the Republicans are focused on profits (for the health care industry) while Democrats are focused on the well being of people and the cost of health care.
The Republicans just don't get it.
Boyd,
A few points:
1) Without big pharma and the insurance industry both public and private health care would look different. They might even look worse. But without private innovation, markets and profit, it seems obvious that the level of development in all health care would be years behind where it is today.
In government-run systems there is no incentive for efficiencies like labor-reduction since that means firing workers. In governmen-run systems it is harder to remove incompetent doctors and nurses (like teachers) because of unions' control over politicians.
Travel around the world and look at government-run business and explain to me how we won't end up with static and inefficient health care.
2) "Historically, most government control (I'll stop just short of saying ALL) has come in response to demonstrated failures by the private sector."
Even if one grants that, which I don't, the converse is that one a failure has been corrected, government tends to want to maintain control. That explains why we maintained irrational farm policies and other regulation for too long.
3) Why are insurance costs so high for OB / GYNs? One big reason is litigation which owes more to political influence than to actual health care policy.
4) Maldistribution of doctors can be cured through incentives rather than regulation.
5) The greatest threat of federal domination of health care is that Edwards was honest in his plan for mandatory check-ups. If you take profit out of health care (see Gary above), there will be no incentive for efficiency. Cost-overruns will simply be covered by higher taxes and user fees.
At some point the only solution will be mandatory wellness. With the wars against cigarettes, sugar, fats, and almost anything tasty, it is only a short step to government regulation of our diets. First it will be taxes and then outright prohibition of harmful foods. That will please the environmentalists and animal rights activists because such health mandates fit nicely into their vision of meatless diets.
Lest you suggest that this is wild speculation, check out Dr. Kessler's recent statements. Or the growing efforts to tax certain foods.
the insurance companies have run amok over americans for years and it's time to stop them. they charge whatever they want and hold you prisoner w/ "pre-existing" exclusions if you have ever once had a proceedure ( i broke my leg and they excluded anything that ever would happen to my leg). 75% of americans want a gov't option and don't mind paying for it (they pay HUGE premiums now don't they?). i think we should eliminate private insurance/the medical portion of work. comp./medicaid/medicare/etc and provide health care for ALL americans---who cares if one is old/young/rich/poor/hurt at work/whatever...just cover us for health care for god's sake!!!!
Mark:
I don't have a lot of time today to come back to this, but I do want to briefly address your points, in the order you made them:
1. When I was talking about how big pharma and insurance companies have changed healthcare, I wasn't talking about eliminating them. You said a bigger government role would inject politics in the system. I'm saying politics is already there. Lobbying and payouts by these two industries have changed the face of healthcare significantly. In some ways this has not been for the better.
2. True, once government has control, it tends to keep it. This would be a bigger bogeyman if we were talking about some Canadian-style plan, which we're not. But let me pose the reverse of the question to you. Can you imagine what things would be like today without Medicare, if people over 65 had to obtain their own coverage? Seniors simply wouldn't be able to get any meaningful coverage at all in the private market, as insurors cherry-pick the healthiest and exclude the rest. We'd have a situation more like the 1930s before Social Security, when most older adults lived in poverty or not far from it. Speaking of Social Security, can you imagine what would have happened had we adopted Bush's idea of privatizing accounts and investing them in the market? They'd be worth half their former value right now.
3. Insurance costs for OB/Gyns ARE incredibly high, as I mentioned, and HAVE contributed to doctors leaving the profession. That has given rise to calls for tort reform. Texas adopted a very severe form of this, on the prevailing theory that medical costs would go down. Since it passed, malpractice lawsuits in Texas have dropped to almost nothing. Medical costs and insurance premiums have continued to rise.
4. Maldistribution of doctors can be cured by incentives rather than regulation -- that's pretty much what I said.
5. "If you take the profit out of healthcare, there will be no incentives for efficiency. Cost overruns will simply be covered by higher taxes and user fees." On this last part, um, no. Medicare and Medicaid set limits on what they will pay for particular procedures, such as, say, laparascopic gallbladder removal. Medicare is also starting to refuse to cover the costs when hospitals and doctors make mistakes, creating an incentive for better efficiency. (And, yes, doctors and hospitals make lots and lots of mistakes; a major study several years ago found that around 100,000 patients each year in the US die because of preventable medical errors.) As to your first part, the profit motive does spur innovation, such as the development of new drugs and technologies. In healthcare, it has also spurred a great deal of overutilization -- needless surgeries, extra tests at physician-owned imaging facilities, and on and on. I highly recommend you read the recent article by Dr. Atul Gawande in the New Yorker. It's very illuminating on this subject.
Peter, you are absolutely right about the insurance companies. The story about your leg is sickening but not surprising.
Unfortunately, it's even worse than that. Another favored tactic of insurance companies these days involves retroactively researching a patient's medical history after the policyholder develops some major (and very expensive illness). Let's say, for example, you developed liver cancer. Your insurance company would have someone (usually a doctor in their employ) review all of your medical records. Let's say you've had your present policy for three years. But they go back even before that. Four years ago, you went to your doctor complaining about stomach pain. Your doctor at the time diagnosed the problem as, oh I don't know, an ulcer and gave you medication for it, and the problem seemed to resolve. But the insurance company would claim that stomach pain was a symptom of liver cancer. Because it occurred before you were covered under their policy, and because (they claim) you and your doctor should have known your stomach pain was liver cancer, your entire claim is denied. Problem solved! (I'm not a doctor, and this is a made-up example, but this is exactly the type of thing they're doing these days.) Americans are sick of it. I don't think the politicians really understand how deeply insurance companies are hated -- either that or they know the insurance companies will kick a lot more money into their campaign coffers than you or I can manage.
My son was hit by a truck while changing a tire on a freeway in Kansas City Mo. in 1998, he was 17 just days before his 18th birthday, He was hit so hard it knocked his leg completely behind him up to his shoulder, and split his head open in several places,(he had full coverage insurance at the time) my son wasn't susposed to last the night, but he did and I've never seen in the last 11 years, the most terrible treatment of a person as what my son has endured, he was thrown in a nursing home to die just weeks after the accident, in a solid coma, I had to move my son 9 different times because of the abuse and neglect, the 1st place he laid in feces for hours while I was working, then I would have to clean him up, he developed bed sores,(common in nursing homes) still had insurance, moved to another facility, which claimed to be a rehab facility, while there, the nursing home sapped the insurance company saying they were giving him occupational theraphy, and physical theraphy,excuse me to a comatose patient, I never saw them do a thing, while there he got more bed sores, a hugh knot on the back of his neck and nearly died from several pnuemonias, the facility dropped my son and nobody reported it so for the next few months my son was in extreme pain, to where he was drawn up like a ball, the nursing home called me and said to relieve my son they were going to cut the nerves in his shoulders, THEY DIDN'T TELL ME THAT HE WOULDN'T BE ABLE TO RAISE HIS ARMS AGAIN! because of the poor treatment in that facility, Jim developed a lung condition and had to have assisted oxygen, the nursing home couldn't put up with me holding them accountable, so they moved him out of state, from Ks to Mo wait til you hear the rest of the story, if interested contact me at jtrinidad@kc.rr.com, there is much more and everyone needs to know, you wouldn't want anyone to go through what my son has gone through
