I have a lot of customers with facilities on both sides of the US/Canada border. I am always surprised by the number who say they prefer to do business in Canada, and health care costs are a frequently cited reason.
Boy that’s a lot jumps you just made.
First off, as a doc, I know a lot of them. I don’t know any who own yachts. Don’t get me wrong, I’m not crying poverty, but neither are docs up there with CEOs, traders, and malpractice lawyers. Average income for a primary care MD in the US is $140 to 150K and average debt at graduation is $115K from a public med school and $150K from a private one. Years in training? After the four of college and the four of med school, another three to seven or more in indentured servitude before you can posssibly hang out a shingle. Real income for US MDs has been steadily going down, on average.
Israel differs from the US in many ways. The educational system is funded differently for one. You are also looking at a surplus of MDs there. (No jokes about Jewish mothers and doctors allowed.)
Internationally I do not know the figures but I do suspect that single payor systems tend to cut MD salaries and I do believe that single payor systems are more efficient than the current US system. I doubt that other docs elsewhere make much less than US MDs while coming out with similar debt burdens. Most of all, I think that you confuse the chicken and the egg.
Please note: even though I am confident that a single payor system would result in my salary being cut, I would support it if it was an achievable way to provide more universal coverage and to reduce our current morass of paperwork. I just do not think that is politically doable. The program getting off the groud in Mass. is doable, not ideal, but a good start. It is definitely worh watching and perhaps imitating in other states with improvements.
Astro,
Curious, have you seen the Enzi Senate bill 1955? Its bare bones health insurance for everyone. Initially it seems great for small businesses however, it doesnt cover anything; mammograms, cervical cancer screenings, mental health illnesses, cancer treatments. So basically you think you have insurance and when you actually need coverage, you are screwed. WOW, thanks Senator Enzi for trying to pass this terrible piece of legislation. Have you head of this? If so what do you think?
And by the way, we have a thread going about that.
That’s because the vast majority of companies of any size (say over 250 employees) are largely self-insured, I’m certain GM is. Demographics favor this, people who work are by and large healthier than those who do not. Going to a universal health plan will very likely cost GM money, via a combination of comparable payroll taxes, plus increased demands from union for a wage correction to make up for the benefit cut which would occur when the universal plan is not as good as the current GM plan.
The status quo does serve business interests and, generally, the interest of the medical services community, who benefits by being able to collect higher fees for the same services.
The suggestion that company provided health care has been a big factor in the current situation is pretty much on. That is why the Massachusetts plan will eventually cost much more than they project. The plan gives the illusion of coordinating how people get insured, but the end result will be to continue the fragmentation that contributes much of the problem today. The article touts that the big idea is forcing everyone to buy insurance, especially the ‘young males’ who don’t buy insurance but hit the emergency room after a bungee jumping accident. As anyone who has shopped a companies health care program knows, having young males on your payroll gets you an advantage in costs, even with all the bungee jumpers.
This young male subsidy will vaporize as more of them will gravitate toward companies that provide health care to avoid paying the insurance out of pocket. The costs will get shifted to other states. The article did state that much of the impetus for this move was to protect funds flow from the federal government, what a surprise.
Good move for Massachusetts, not so good for the rest of us. Sure the medical community would support it, no mention of any cost control procedures, so they get a bump in the revenue stream, first from the young male subsidy, then from fed supports when this plan doesn’t financially work as originally described.
Shift the costs to others and to the future, looks like a pretty conventional government program to me.
I just saw the bills for my wife’s two retinal operations. Costs for these are so high, and doctors do so many of them per year, that I doubt that doctor’s salaries, even if CEO high, would account for but a fraction of the US’s inflated health care costs. My cite was intended to show that the 30% chunk of administrative costs - which adds nothing to anyone’s health - is the low hanging fruit.
I don’t know, but I have the impression that there is a wide range of doctor’s salaries, even in the US.
Health costs in Spain are lower than in the United States for the same treatment. One of my teachers said Seguridad Social is an example of a “buying group”: they’re buying bandages for 40M people, so they have better leverage than if it was for 1 person.
A Spanish doctor makes about as much as a Spanish engineer. I’ve had American premed students who wanted to go to medical school because they wanted to get rich; Spanish medical students (no premed) go into medicine for things like “having been very sick when they were little and wanting to give back”, “being from a medical family and liking it”, etc. Definitely not because “I want to be rich”.
Most medication is covered by Seguridad Social. If you (or the person on whose SS you depend, usually a parent) are of working age, you pay 40% of the “government price” of the medication; if you’re retired or have disability over 33%, you don’t pay. Doctors are told to order generics when possible (the recipe doesn’t say Aspirin, it says 250mg acetylsalicilic acid); the price for generics is usually the same as the government price. Any medical company can charge more, but they know this will mean lower sales.
My “prepaid, compulsory medical plan” costs me 7.5% of my base salary; my employer has to pay the same amount. Some special groups (people under 25, people with less than 2 years experience, women over 45, etc) still pay their 7.5% but cost their employers less; if you’re self-employed you pay 15% of your “estimated income” (most self-employed people prefer to pay the smallest possible amount).
My income tax is at 22%, so I pay about 30% in direct taxes. Seguridad Social covers other things as well, like unemployment coverage. And it covers everybody: if one of you guys comes to Spain on vacation and gets sick, you can go to a ER and they will treat you first and ask for your insurance data later! (Actually, they’ll ask your government to please pay if you’re so kind, they won’t ask your insurance company)
I’m sure better benefits through supplemental insurance will not be illegal. The real problem is that GM is competing against companies in countries with universal health care, where the costs of coverage are spread over a wider base, and are not in the cost structure of the company. It is the same problem as a company giving benefits competing against another US company not giving benefits.
My reading of the articles on this is that they found that young males did not buy insurance at all. They still cost the system money when they had a claim, but they did not subsidize older people or families. The new plan forces them into the base. They’re clearly acting out of economic self-interest - they just hurt the larger population.
It appears that there is a law requiring a certain maximum number of uninsured people, above which federal payments get cut. I’m astonished such a law exists, and that more states aren’t doing something about it. I can’t believe that Massachussetts was the worst of the states in this regard. So, they did it to preserve current funding, not to get additional funding.
I’m pretty sure this is untrue, by the way. GM sort of stands out, in fact, for pursuing the the self-insurance route. No company with 250 employees could really afford to do such a thing.
The question I was responding to was why GM and other companies were not in favor of UHC. The answer is that is would very likely cost them more than it does now, which will hurt their competitiveness.
The young males will continue to act out of their economic self-interest by trending toward employers who offer insurance as a benefit, rather than paying the state. Since many of these employers will be self-insured, the young males won’t be subsidizing the older people or families under this system either, or at least not nearly as much as they are probably claiming.
So no, the new plan does not force them into the base.
Like I said, this was done to protect funds flow = preserve current funding. If more states got creative as Massachusetts did about shifting much of the problem around, rather than solving it, I’d guess the feds would revise the support structure they provide the states.
I am the CFO of a company of 350 employees. When I became CFO, I investigated options to curb our spiraling health care costs five years ago, I found that roughly 60% of companies over 250 employees are basically self-insured. It’s probably higher now. Our demographics (we have a high number of young male employees) made the move to self-insurance a no-brainer.
The last time I found info regarding the average cost of employer provided health-care in the state I live in (Washington) is roughly $6,350 per employee. Ours is around $4,200.
Should mention that self-insured companies generally buy some sort of cap insurance that limits payments to, say $100k per employee per year and some percentage % (say 125%) of expected claims. The $4,200 per employee number we have includes the cost of this cap insurance and third-party administration.
This portrait of Americans reflects an inaccurate stereotype in my experience. If you interviewed American medical students about reasons for seeking a medical career, the vast majority would cite things like inspiring mentors (family or physicians), influences due to sick family members, general interests in healing/research etc. Very few would cite income considerations - and in this country there are many careers that offer comparable or greater income potential without the need for many years of training (and which are free of litigation worries).
I don’t begrudge you your salaries at all, nor do I take you guys to be all high-rollers. I’m just doing what they say on the cop shows: following the money. Health care in the U.S. is so expensive in part do to high physicain salaries. physician salaries are so high because of high tuition costs and because of malpractice insurance. Tuition costs are so high because a lack of government subsidies, and malpractice insurence is so expenseive because of the way the American legal system works and the American public thinks.
My point is, it’s not a simple situation. You can’t just install a state funded insurance program and hope to solve the problem; you have to find the sources of the problem.
That’s the kicker right there. I’m given to understand that there are tax advantages to being “self-insured,” and this business of buying reinsurance is something of a loophole. I think the number of companies that genuinely self-insure – as in managing the medical plan and paying all medical claims, as GM does – is quite small. Without reinsurance, you’d need a very large mass of employees to make it work, so that the occasional outlier doesn’t break the bank.
Do you really think that going to a system like that enjoyed by their competitors would hurt? Even supplemental coverage, with the main body of coverage paid by the government, would be a lot cheaper than they have now, which, in my understanding, is much more generous and expensive than the average in the country.
Maybe they’re not convinced about the savings from administrative cost reduction. Maybe the board doesn’t like that old socialized medicine. Maybe they feel their lobbyists have other priorities.
Not all the young will be working for young only companies. They’d certainly help whatever pool they’re in, right? If you had 500 employees, 250 old and 250 young, and only 100 of the young in the pool, I’t think that having all the young in the pool would increase premiums paid in without increasing claims significantly. That has to help. The Mass. system is kind of a hodgepodge, true, so this might not help the welfare and elder population all that much - I’d have to see the details.
Would it be any worse than the rampant fraud and waste we get from the corporations?
Maybe they’re afraid of getting branded as “socialists” from the nutjobs out there?
Part of GMs problem is that they more or less completely cover a retired, or soon to retire aging, well paid, but not particualrly well educated middle class workforce that smokes, is often overweight and does not have particualrly good health habits, and will likely have high rates of cancer and heart disease.
The financial liabilities GM faces in this context are astounding and will only grow larger with time.
You’re right, it’s not a simple situation. However, I think you’re mistaken about the problem sources.
It’s been clearly shown in several studies that malpractice rates are not tied to the legal system - they’re tied to the stock market and how much the insurance company is making there. This is why capping malpractice payouts doesn’t lower rates. However, you are correct that the insane cost of malpractice insurance is part of the problem in our medical expenses.
DSeid is right, the majority of the problem is in administration. We have thousands of insurance companies. That number is not an exaggeration - last I checked, there were 3000+ companies (that’s been a few years back). Each company makes up their own rules, policies, and procedures. Each physician’s office has to comply with those rules, policies, and procedures to get paid - when the insurance company doesn’t decide that they don’t have to pay, just because.
In the very large group where I work, we have something like one billing person for every 3-4 physicians plus lots of automation - and we still can’t keep up. We have one entire office dedicated to contracting with insurance companies and another dedicated to nothing but getting physicians credentialed with insurance companies. We’re getting ready to pay a very, very large sum to a company that does nothing but track coverage contracts against actual payments against costs - by our estimates, we’ll make that money back within a few years, because that’s how badly we’re being underpaid due to insurance company shenanigans. It’s such a complicated situation that it would cost us more to do it in-house than to outsource it; the company we’re hiring has made an entire business of doing nothing else.
The doctor I see has opened a separate clinic (his regular practice is part of a good-sized physician group). An “existing patient” visit at his regular office is charged at $80*. The same visit at his new clinic is $25. The new clinic accepts no insurance - it’s cash only. That’s how much he can save in administration costs. *Please note that it’s illegal to charge a smaller fee for self-paying patients if you see Medicare or Medicaid patients, and that most insurances have the same clause as part of their contracts - so the regular clinic MUST charge cash patients the price that they charge insurance companies, even though the insurance companies only pay a fraction of that charge. Why not set the charges lower overall? Because then they’ll only pay a fraction of that amount. Many procedures are paid by insurance companies at or below actual cost, unless the physician’s office is very, very careful in contracting - but most physician offices don’t have the clout to get insurance companies to change the contracts. There was a huge deal about this a few years back, when essentially all the physicians in Dallas boycotted Aetna. Until that happened, none of the physicians (even the large groups) had been able to get Aetna to renegotiate contracts.
I think you are right about following the money, though. Who benefits from our current system? Let’s see: employers/patients pay money to insurance companies, at whatever rates said companies decide to charge. A portion of that money (plus profits made from investments) is used to pay doctors/hospitals for care - the rest goes into shareholders’ and executives’ pockets. Doctors, who these days are essentially put in the position of accepting whatever insurance companies are willing to pay (unless they’re part of a very large physician group that can actually manage some negotiating power), then pay a large portion of those fees back to (frequently the same) insurance companies for malpractice insurance, again at pretty much whatever rate the companies decide to charge. And once more, a portion of those fees (plus investment profits) is used to pay off malpractice suits, with the rest being pocketed by shareholders and executives. Hmmm, I wonder who’s benefiting from this scenario?
As far as government incompetence - Medicare is in general more efficient in administration and pays less per procedure than any private company I’ve dealt with in 15 years of medical billing. Not to say they’re great - having legislators write medical oversight rules that are then interpreted by bureaucrats is not the optimal method, I’d think. And they’d have to raise their payment levels if we took Medicare universal, or all the docs & hospitals would go under. However, overall they haven’t really done a bad job. A lot of Medicare’s cost stems from the fact that they’re paying for the most expensive portion of our population - the elderly and disabled.
The theory of insurance is that you spread costs across the population. One way to keep costs per head low is to cherry-pick and refuse coverage to expensive patients. This is the method that insurance companies favor. Another way is to spread costs for expensive patients across a much larger population; you can’t get any larger than the entire population. Since we’re already paying for the most expensive patients via Medicare and Medicaid, it only makes sense that increasing the population base would cut the per-capita cost if that money was being spent on actual healthcare instead of insurance company profits. There are many other reasons why universal care would cut costs, such as getting patients out of ERs and into primary care, reducing overall costs by improving preventive coverage, etc.
Of course, the huge jump in unemployment caused by all of the adjudication and billing personnel from insurance companies and doctors’ offices might cause a problem…
Damn, knew I’d miss something retyping that screed. Should have been:
Since we’re already paying for the most expensive patients via Medicare and Medicaid, it only makes sense that increasing the population base would cut the per-capita cost if that money was being spent on actual healthcare instead of **administrative overhead and **insurance company profits.
Huh - I think you’re on to something here - the University clinic here has about 150 doctors, and 7 billing clerks in total I think. Obviously, all the billing goes to the same place and is done the same way, so they’re much more efficient.
Interesting.