By the way, another group that you can thank for the high premiums is the AMA. Apparently, a small proportion of doctors are responsible for a large proportion of malpractice suits. If the AMA did more to police these doctors, then the rates wouldn’t have to be so high.
By the way, I meant high malpractice premiums, not health insurance premiums since we have already seen that malpractice premiums are not a major player in the cost of health insurance.
Another factor: labor intensity.
My father had had heart disease for over 15 years, but in 2001 his blood pressure dropped precipitously, and he had only minutes to live. But my parents’ house was 4 minutes from a hospital. Instead of dying quick, my father was tortured for two months at enormous expense. Helicopter flight to a university hospital. Too bad we never met the doctor who might have been able to save him. A baloon pump put it cut off the circulation to his legs. Operation to save legs. Sent to “tertiary care” or whatever it was called with huge gashes in his legs that dripped pus all day long. Daily treatments to drain the legs; I think that was $1000 dollars a day, not sure, but we had good insurance so the cost didn’t matter–to us.
But separating out the technology from the labor, the latter was tremendous. Doctors, nurses, therapists all doing their all to keep him alive and getting him on his feet. It was equivalent to his being the boss of a small company and having several high-income employees working long hours for him. All for what? (I will say, though, that the nurses who treated him in his last month or so were absolute saints and extremely confident people. Seeing them work reinforced my faith in people.)
But practically everyone who dies of heart disease or cancer these days puts a similar burden on the system; and practically everyone these days dies of heart disease or cancer. The result is that, no matter how you slice it, even if drugs were offered cheap and the industry didn’t require as much expensive capital as it does, the labor required to treat people is simply incredible. And, like barbers, the new technology doesn’t make the jobs of the doctors and nurses more efficient; it just gives them more things to do (OK, in a few instances, efficiency is gained; but the trend is toward more things to do with the same manual labor required to do them). Whether you give someone a shot in the year 1900 or 2004, it still takes the same amount of time. Only now there are more drugs and thus more shots to give.
There is a limit to this kind of thing. The reductio ad abusurdum is this: 1/3 of the nation old and/or sick and dying, with the other 2/3 nursing them. The sad fact, however, is that medical care already equals [url=http://www.nlm.nih.gov/nichsr/edu/healthecon/02_he_review.html]13.2% or more
[/quote]
of GDP.
Maybe malpractice suits and insurance have a part in it, but not the only part. Maybe high technology (more expensive) treatments are a part of it, but not the only part. There is also a problem with health care being mandated for people who can’t or won’t pay, as is happening in California. Illegal immigrants are “entitled” to free medical care, and somebody has to pay the bill. Any government reimbursment is too slow. Also these illegals made it a common practice to call for emergenecy medics and ambulances for routine things, when they could have just gone a few blocks to the hospital. Recently several health care clinics had to close, simply because they could no longer afford to stay open. The last part of the problem is, HMO’s are run by businessmen, who have to watch the “bottom line”. Some of it may be greed, some of it may be a realization that if they go bust, they are gone. It is not a single issue problem. There is plenty of blame to spread around.
of GDP.
[/QUOTE]
Its actually 15% now. However in Japan, Spain the UK and Italy only 8% of GDP is spent on healthcare. And somehow they manage to have competent care at half what we pay.
This is a HUGE problem in states like Florida that have a relatively high population of Medicare recipients. People feel “entitled” to specialty care, whether they need it or not. They’re old, so they “need” a cardiologist. Some TV program talked about that fancy new test for some disease, so they feel “entitled” to that test, whether they have the risk factors or symptoms for that disease or not. Since Medicare often pays for services regardless of whether they’re appropriate, there’s no real incentive for the doctors or the patients to “make do” with an older (but still appropriate) test or a general-practitioner or internist who can manage common health problems in the elderly.
Robin
This factor, that insurance covers health expenses, is why ‘competition’ will never lower the prices of health care in this country. Health care providers have almost no incentive to lower prices; only to improve care or more importantly the reputation for care.
Again, in my opinion, health care is too important a business to leave in the hands of those whose first goal is (and quite properly) to make a profit. Of course, those who are making significant profits, and those who ideologically oppose the idea of government actually providing benefits to its citizens want us to believe that the beauracracy involved in any governmentally administered program is automatically huge and inefficient. But as jshore pointed out, the inefficiencies in the current system are massive. And bear in mind that with the current system, the insurers and providers not only have to make enough to see a profit, they also have to pay for marketing. A lot of the money currently going into healthcare right now pays for things that have nothing to do with actual health care.
I used to work for a company that (to my shame) did direct mail. One project I worked on did direct mailings for one of those Medicare replacement deals for exactly one county in Kansas. We were doing several mailings a month for these people, and while I don’t know what we were billing, I know that the time I alone spent on this project (let alone the people who actually printed and mailed the stuff, etc) meant it could not be cheap. It scared the hell out of me that a company doing business strictly with 65 year olds and older in a single county found the expense of our mailings justified, and I often wondered how their customers did. I’m willing to bet that marketing took a significant percentage of the company’s revenues, and not one penny of that money contributed in any way to the health care of their subscribers.
Health care needs to be controlled, not only from the unbridled profit-taking of providers and insurance, but from the fads and fancies of the recipients. As long as it is not (IMO), costs will continue to spiral out of control, while quality, except for the wealthiest, will continue to go down.
Huh, thats funny, because I’m a full-on California citizen, and I am entilted to fuck all as health benefits. I somehow doubt that illegal immigrants live in a health-care paradise here. There is a county funded program that covers my reproductive health, but right now I’m pretty sure I’ve picked up a case of dysentary and I have no way to see a doctor about it. Of course, if the situation becomes life threatening, I can show up at the emergency room and they will treat me. But as long as I don’t have any money, I have no way to see a doctor to prevent the situation from becoming life threatening.
Right now a non-disabled adult has absolutely no government health benefits. Millions of poor people without insurance have no way to get the preventative care or timely treatement that will keep them out of the emergency rooms and out of unpayable debt. I believe health care is the number one cause of bankrupcy. The situation is unbelievable considering that so many nations spend less money on health care than us and still manage to provide decent care to all of their citizens. And yet we, as the richest nation on Earth, feel it’s okay to let our poor suffer easily treatable diseases and face unpayable debt when those diseases become critical.
I don’t feel “entitled” to anything, but I still think it’s kind of ridiculous that I live in this increadably rich nation and can’t get treatment for my stupid dysentary.
I have to pay “insurance” for my health care. Nobody picks up the tab, except me, because I pay whether I use it or not. Yet, there are people who find ways to get care and not pay for it, and do not have any insurance, through no fault of their own (they can’t afford it). Personally, I think anyone who needs care - either preventive or otherwise SHOULD be able to get it, but that would mean an overhaul of “the system”. There have been closures in the Los Angeles area recently (L.A. Daily News covered this a week or two ago), because they can not turn anyone away, but the reimbursements are either too slow in coming, or do not come at all. The present “system” is inadequate.
Not yet. According to the articles I could find (no reputable sources, sorry) it is still number 2. I did find many predictions that it could become number one if the trend toward increasing costs continues.
Just FYI, but you did check here, right?
During my career I’ve been involved with the management of multiple employee group health insurance plans. I’ve seen the same “catch-22” play out time and time again when it comes to rates. You start off with a group with a high level of participation but over time as rates increase the participation decreases. It eventually gets to the point that the majority of the participants left are the ones heavily dependant on the plan and can’t afford to drop it. The insurance provider eventually notifies the employer that they are either raising the rates to unpayable levels or are dropping altogether. Employer then tries to negotiate favorable rates with new providers using the existing employee survey/level of participation - let’s just say it’s not pretty.
Why do the rates go up? (Top 4 IMHO)
Treatment providers keeping up with the latest and greatest in technology.
Malpractice Insurance rates.
Unnecessary Treatment which is performed “just to be safe” - Please note “just to be safe” refers more to not being sued than patient care.
Treatment providers covering the costs of treating individuals that can’t pay by increasing the charges to those that can.
Adding to what Aeschines has stated, I would also include simple demographics. Life expectancy for those living in the developed world has increased dramatically over the past 50-100 years. The average age of the U. S. population is getting older every year, and the fastest growing segment of the US population are those 60 years and older (actually its the 85 and above category).
One of the reasons for this trend has been the success of medical advancement.
As people get older, they require more medical services and require them more often. So as your population ages, it stands to reason that the demand for medical services will increase. As demand increases - given simple market mechanisms - the price for medical services will increase as well.
However, I would argue that helath care is a different type of service demanded (and also supplied). Under normal market circumstances, as the demand for something increases (and the subsequent price for that thing increases as well), one would expect more agents to enter the market in order to take advantage of the rising demand/prices. Over time, this increase in the number of agents offering services would help drive down the price (or if not, help it stabilize at a point where demand equals supply).
However, the cost of entering the market is prohibitive for numerous resons (for example, doctors and nurses limited by training and licensing). In other words, there’s a disincentive for agents to enter the market that would allow for a correction in the price of health care. Plus, there’s a disincentive for people wanting medical services to be primarily price conscious. If I have cancer, I want to be treated the best I possibly can. I can’t just say “I can’t afford it so I might as well forego the treatment.” Well, I could, but many people don’t make that kind of decision based on price alone. In addition, doctors and nurses have an obligation to help their patient as much as possible. Telling someone they can get treatment for cancer because they can’t afford it (even though it’s available) puts doctors and nurses into very uncomfortable positions contrary to their training.
Reading this thread I see only a couple of brief mentions to fraud and one sacastic remark of “those greedy doctors !”. Truth is, there is an enormous burden of fraud, committed by your doctors and hospitals, that is passed on to you through your insurance premium. Last year fraud was estimated to cost the insured American public over 100 billion dollars. All kinds of procedures performed without merit, billing for procedures not performed, egregious scheduling of uneccesary office visits and blatant over medication of patients with very expensive drugs.
I second greed as a major factor.
[QUOTE=ralph124c]
Howmuch DOES a Canadian doctor or dentists have to pay (for liability/malpractice insurance) to protect himself from the hordes of greedy landsharks?
Another relevant question would be: How much preventive medicine do canadian doctors have to practice to avoid being sued? Are lawyers allowed to advertise in canada?
[QUOTE]
Yes, lawyers can advertise in Canada (we have ambulance-chasers too), but they’re far less prevalent than in the U.S. (on the other hand, drug companies havve to jump through many loopholes to advertise, because they can either mention the name of the drug, or the condition it treats, but not both).
Preventive medicine? Well, my normal physical north of the border consists of a 10-minute discussion, blood pressure check, and the usual inspections based on my level of exercise and family history. In the states, I get a frigging EKG in the GP’s office-- something that I don’t think any Canadian GP has the equipment for.
In Canada, your GP (or the emergency room) is also the first step for any health problem you have (aside from opthamology and dentistry, which are separated out). You don’t just pop into the cardiologist’s office because you’re nervous about the hidden dangers of angina-- you go to your family doc first and if he thinks it’s warranted, you get a referral.
I don’t know how much malpractice insurance is, but I’ve never heard of a doctor giving up their practice because they can’t afford it. On the other hand, provincial government’s dictate doctor’s wages, so the province would have to make sure doctors can afford to work.
Tghose highly-successful cosmetic/plastic surgeons in Miami seem to have no trouble making money! AND, their services are NOT reimbursable by health insurance. Herein, we find the anser to the problem! Make health isnsurance cover BASIC care only…in other words, you will be treated for a life=threatening condition. But, should your insurance pay for tatto-removal? No way-you get to pick that one up!
Also, let us boost LEGAL MALPRACTICE insurance to the same levels that doctors pay (say around $150,000/year). Then, the supply of litigious landsharks will be considerably reduced (to our benefit).
I guess this forum of Great Debates has sort of morphed into “IMHO”…No need to provide any evidence to support your beliefs. You can simply state things like your opinion that malpractice insurance rates are a significant proportion of rising health care costs even if the actual evidence does not support this claim. Cool!
Boy. A lot of misinformation here. One thing at a time.
Scott’s claim
is just false. That is not the deal they offer us docs at all. The classic HMO paid us a fixed fee per patient and in return we agreed to see them for all their primary care needs. Our tier (payment) was often pegged to quality measures (rates of compliance with various preventative guidelines, etc). Sure they had problems - but they were not evil or a cost driver other than the cost of too much bueracracy in the way.
The claim that the stock market collapse drove malpractice rates up is also false. By law insurance companies are limited to how much they can have in the market. They were not hit too badly. If the stock market collapse was a driver then all states would be hit equally, not less of an increase in states that have cap limits. If the stock market collapse was a driver then other insurance products (life, car, home, etc.) would have a similar rate of increase as medical rates. Both are not so.
But to claim that malpractice insurance rates are the main driver is also untrue. Even factoring in the indirect but more significant factor of “defensive medicine” (ordering tests that you do not believe are medically necessary only to insulate oneself from a potential legal exposure) out of control malpractice suits and awards are only part of the story Tort reform is necessary but not sufficient. Still, for its part what is required is: a reasonable cap on noneconomic damages; decreasing frivilous suits by increasing the strength of “the affidavit of merit” - making sure that qualified experts have reviewed a case to verify its nonfrivolity before it can be filed; standards for expert witnesses; encouraging settlement of disputes outside the legal system through arbitration and allowing a physician to apologize without it being used against him/her.
Babarian, many parts of Illinois are without OB’s and neurosurgeons because so many have moved out of the state or just quit. I know many docs who are moving out of state or retiring early because they can’t afford the malpractice rates. There will be a severe shortage of OBs everywhere in a few years: who will go into a field where they have to train that long, keep those odd hours, and then make nothing becuase they have to pay almost everything they make to the malpractice carrier?
BTW, most doctors are good doctors who really try hard. Most of us have or will be be sued. (OB’s who do any “High-risk” procedures are sued on average once every 18 months!) Many will choose to settle rather than risk their personal assets to the whims of a jury and slick lawyers. Not a proud fact, but reality.
But the major driver of cost is something else: our irrationing of healthcare in this country. More on that in my next post.
We do not believe in rationing healthcare in the US. We irration it instead.
We provide for extremely expensive care of sometimes little benefit but do not provide for primary care that would be very cost effective. We are often so very adverse to paying for someone elses care that we say the uninsured have to figure it out for themselves but do not recognize that we still pay for their care eventually albeit less directly - when they end up in the ER with preventable heart attack or there for a simple pneumonia and stiff the hospital who must recoup it somewhere - guess where?
We perversely have only those who can least afford it charged full retail. The more you can afford it, the better your discount. No insurance company pays my full fee structure. Only someone uninsured or with a high deductiable is charged that. Only the individual trying to buy health insurance is charged full price for the product; a large company is offered a significant discount. And if you need helthcare God help you find an insurer.
The cost of health insurance makes more and more companies decline to offer it or to offer only individual (not family) coverage. The cost of health insurance makes many US companies noncompetitve in the world marketplace. The switching of insurers every year or so and the effort to out-cherrypick the other company adds to an already bloated insurance bueracracy.
The employer based system is inherently flawed. Scrap it.
Here is the answer.
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Make health insurance mandatory.
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Make insurers charge one price for one product. Compete by price and product, not on who can out cherrypick the other guy.
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Tax credits based on income level to help individual purchase health insurance of their own choice. An expanded safety net for those still below a level that health insurance is affordable.
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Tort reform.
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Be willing to place a dollar value on year of life saved and make recommendations that are more cost effective rather than based exclusively on some data that it might work rarely at a cost that is beyond belief.
Without addressing this issue our economy is hamstringed in the world market. We cannot afford to not have basic healthcare for all.
Two interesting posts, DSeid, thanks.
I’d be curious about what you think about a few of the other ideas thrown around:
[ul]
[li]The suggestion that competition between hospitals has led to the over-purchase of expensive pieces of equipment, like MRI scanners and such.[/li][li]The idea that, as time goes on, more expensive, specialized procedures become available and are used.[/li][li]A more specific version of the last: heroic lifesaving measures for very young children and the very elderly are both more common and more costly then they used to be.[/li][/ul]
I don’t have the data or experience to judge the validity of any of those, but they make sense, they seem to be common thoughts (for the infentisimal amount that’s worth!), and they don’t seem to contradict your “irrationing medicine” idea.
Dseid, I agree with almost all of your solutions, except the tax credit one. The problem with it is simple; the people who need the most help benefit from tax credits very little, if at all. For one thing, their income is so low that they are paying little, if any tax at all. For another, when each pay period is a struggle to come up with enough to cover housing, utilities, food, and transportation, tax benefits are not of much value to you; they’re either tiny amounts spread across the entire year, or a single lump payment received at refund time. Neither works to the health advantage of the very poor unless a lump payment and need for healthcare happen to come at the same time.
I also question the desirability of retaining independent, for-profit health insurance companies. Their motive is (quite rightly) to make a profit for their stockholders. They have no vested interest in the public good, nor, as private companies, should they. Only a government agency can operate with the welfare of its recipients as its primary goal.
I know there are many here who feel that any government agency automatically becomes a swolen, inefficient bureacracy. But we already have a ludicrously inefficient bureacracy comprising the hundreds of insurers and the different rules each follows.