I’m not sure what Iraq has to do with health care - but based on present levels of Medicare and Medicaid fraud (estimated at 33 billion dollars a year), there would seem to be potential for “universal health care” to outdo our current system when it comes to corruption and inefficiency.
You just have to have faith in your government. :dubious:
I’m not surprised at how far afield this discussion has gone (from astro’s request for info on how his tax bill would be affected by institution of universal health care). I think there’s a severe shortage of accurate information on how much a radical overhaul will cost us, but no shortage of people retailing optimistic figures that range somewhere between fantasy and outright falsehood.
It’s sort of like trusting the Pentagon when it tells us how much a new weapons system will cost, only health care will make spending on a new bomber look like peanuts.
Jackmanii, do you think the U.S. government is particularly incompetent? Because other governments seem to be able to run healthcare systems with much greater efficiency, lower costs, full coverage, and – arguably – better outcomes than our semi-private system can manage.
Just as a real-world example that mismanagement, fraud, and other organizational bogeymen are not limited to government institutions. The assumption that “corporations can do everything better, faster, and more efficiently” is not one I’m ready to make.
Tax advantages, nope…real savings
Our costs for medical benefits is over $600,000 per year less than it would be had we merely bought premuims.
Under UHC, our company and its employees would be asked to subsidize the uninsured to a significant amount. This would be true for the vast majority of businesses that offer good benefits. The list of those who ‘benefit under the status quo’ at this point vs. UHC includes nearly everyone involved except for the uninsured and underinsured.
Medical services are more expensive in the US for a variety of reasons, only one of which is administrative costs. Admin costs may very well be the low hanging fruit, but they won’t nearly be enough to cover the costs of insuring everyone without more cost constraints then we currently have.
We will eventually get UHC, I believe. The sticker price for everyone involved will be quite high. But the current chasm between the insured and the uninsured is in the long run will continue to widen until something is done. The current trend is not sustainable, but that is pretty much been the commonly accepted wisdom for at least 20 years.
The Massachusetts method largely doesn’t address real cost constraints, so will cost far more than they suggest.
In general, business is not convinced that the administrative cost savings are enough to cover the uninsured without raising signficantly what companies pay. That is why you don’t see the companies who complain about high medical costs directly embrace UHC.
Everyone forgets that companies are incentivized to provide benefits instead of direct pay because benefits are not taxed. In general, it’s a cheaper form of compensation.
Again, since most companies do pay the lions share of claims, most young people who go to most companies with insurance benefits will actually not increase ‘premuims paid’ into the system. The Massachusetts technique of having these people pay if they are uninsured now will have more of them accept jobs where both they directly do not pay the premium and their companies do not pay premiums either.
Nearly every government program underestimates a market response by those targeted to pay more. The Massachusetts program will be no different.
I’m sure the number is not an exagerration, but I’d bet that what you have is actually 3000 or more different plans. That is because most of those plans are actually individual company plans and not ‘insurance companies’. That is because many companies are largely self-insured via their own plan.
Yup. But we disagree about the source. And a btw to redtail: not wanting to digress too much, but it is far from clearly shown that malpractice insurance rates are not tied to legal system and instead are tied to the stock market or that caps do not work, but that is another debate. We’d agree, I think, that malpractice premiums are a small part of the source of the problem. Fear of lawsuits and consequent defensive medical practices are a bit bigger. But a huge factor is the hidden cost of paying for the healthcare that the uninsured still end up getting but in the least effective and least cost efficient manner possible. Those costs just get buried in other bills after the uninsured go bankrupt trying to pay them off. Adminstration costs are huge and some are a direct result of our employer based model and the consequent switches of coverage every year or so, both associated with corporations looking for better deals and with employees switching jobs. Some is that corporate America is full of suits; believe it or not, Medicare and Medicaid have significantly less administration costs than the private health insurance market does. Some drain on resources is hidden in the effective tax subsidy that we give for buying health insurance to the relatively well-to-do by making employer sponsored health insurance be a pre-tax item, exempt from payroll tax.
Oh sure there are other factors too. The US underwrites a lot of research and product development for the rest of the world. That money is buried in our being the profit center for pharma. We also provide the profit driver that allows large portions of the less developed world to have access to medicines and vaccines that would not be produced it was not for the bonanza that is the US market even after it was developed. We do not want to say “no” to any intervention either. Our inabilty to rationally ration healthcare leaves us instead irrationing healthcare. At some point we have to recognize that, as distasteful as it may be to say, a year of human life is not priceless. We have to decide how much we are willing to spend to per year of life saved (and for different levels of possible morbidity) and make some judgements about which interventions are beyond our means.
But for now we must exist operated within the “art of the possible”. Single payor is just not possible in our current American culture. Universal coverage still is. Tort Reform is. Expanded availabilty of the Medicare and Medicaid model for a reasonable sliding scale fee to provide alternatives to private coverage for small business and individuals is. Standardized electronic billing systems with universally accepted requirements is. There are things that we can do within this mileu if we only have the leadeship to get there. Mitt Romney is providing some for Massachusatts. He will at least raise the profile of this as an item of discussion if he decides to indeed make a Presidiential bid. Maybe then some leadership for this issue will reappear nationally with a doable plan.
I checked once in a similar thread and though I don’t remember the figures at all, the average income of a french doctor is indeed significantly lower than the average income of an american doctor.
Still, I doubt it’s a major factor considering all the other overcosts in the american system mentionned time and again (high admnistrative costs of private insurers, high administrative costs for doctors too due to complicated insurance systems, liability costs like insurances, overequipment, more costly drugs, lack of preventive care resulting eventually in higher medical expenses, profits made by private insurers, and so on…).
I suspect this is true to some extent. But can you provide any reference material indicating that in the U.S., interventions (procedures and chemotherapy) are employed to a much greater extent in terminal situations in comparison to, say, Canada or Great Britain? Are other countries more “successful” in telling people that the cost of keeping them alive another 6 months is too great?
It may not be apparent, but you’re subsidizing the uninsured now. There’s probably a good deal of state-to-state variation, but in general, anything that the hospital loses through “free care,” underreimbursement, or bad debt, gets made up on the back of the insurance companies. In other words, what you pay for medical services is considerably higher than what you might pay under a system of universal coverage. The entire premise of the medical system these days is cost-shifting.
Also, you say you spend $4200 per employee per year. Can you reckon the cost of providing this benefit (over and above medical bills, reinsurance and third-party administration)? For example, you need to devote resources to negotiating with the reinsurance company, negotiating with your third-party administrators, managing the benefit plan, etc.
In general I agree with you about the Massachusetts plan. It’s certainly more a homage to the art of the possible than it is to rationalizing the way medical care is paid for.
I fully agree. And yet politically, nothing will sink universal healthcare faster than talking about rationing this way. “They’re going to euthanize the elderly!” etc.
There isn’t any cost over the $4,200 per year. I have our broker negotiate with the reinsurance and the TPA, his fees are folded into the reinsurance. So sorry, other then the spread required for the reinsurance piece, which is very small, we are not subsidizing the uninsured.
As I’ve repeatedly stated, most companies of any size manage their health benefits in this manner. I know it’s easier to think the people who run businesses are a bunch of airheads who don’t understand that UHC will save them money, through the vast savings in administrative costs, and that other governments can run health care better. What you keep missing is the reason why you don’t see UHC is that the status quo serves the (at least short term) purposes of everyone except for the uninsured, largely because as others have pointed out, the insured in general pays less for the same service that the uninsured pays.
Most company plans follow some sort of the HMO/PPO model which has basically set fee services for most covered items. These set fees are a fraction of what the uninsured pay. Last year, my wife had a knee operation which cost our plan roughly $3,000, the normal fee for that service that the hospital/doctor charges for cash patients is over $6,000.
That is why those who have insurance are, by and large, not subsidzing those who don’t. Nearly everyone who has insurance now is going to be either to get less insurance for the same money or pay more for the same insurance.
The costs for covering the uninsured will need to be borne by some combination of reduced costs for medical delivery, corporate and personal taxes and increased insurance rates for those who actually pay premiums. The reason you don’t have UHC is each of these groups would rather have someone else pay. The Massachusetts plan isn’t the ‘art of the possible’ it is more the ‘art of the politic’ in that it only forces people into a pool, but not the same pool, which is the only way to really close the gap. It gives the illusion of progress, while in actual fact just shifts the problem around. It does serve the interests of the proponents, which is for now to congratulate each other. The numbers they propose assumes that those who will pay more will do very little to figure out ways to pay less than the proposal, which basically assumes those young males will stop acting in their own self interest.
Which I find rather ironic.
Clinton tried to solve this problem, but basically no one could get together on how much each of the groups should pay. Since then the gap has gotten bigger since then, the problem will be even more difficult and expensive to solve now.
This is categorically untrue. What do you think hospitals do about money they can’t collect on services they provide? They raise their prices for those who can pay. See this report from New Hampshire. I quote: “Medicare paid, on average, 84 percent of cost and caused a net loss for hospitals of $137 million. Medicaid paid 69 percent of cost and caused a net loss for hospitals of $48 million.” If hospitals just had to eat this cost, they would go bankrupt. But they don’t – they shift their costs onto privately insured patients. The same sort of cost-shifting happens not just with Medicare and Medicaid, but with people who are uninsured and who don’t pay.
It is interesting to note that the US also has the best and the brightest physicians practicing in the world. Why? Due to a "decent’ salary. I say decent because physicians are one of the few US professionals that average salaries go DOWN year after year due to lowering of insurance reimbursement and increases in mal-practice costs (over 100K per year for the ortho surgeons practice I currently work for). Taking into account average reimbursement, my doctors must perform 40 surgeries before they have covered their annual malpractice premium.
However, medicine still has the potential to offer a physician a better than average lifestyle. Go to universal, pay government wages and just see what the quality of health care becomes. I for one, see too many folks coming from other countries (where their treatment is considered “elective”) paying in cash for relief to even consider supporting such a system.
Yet another part of the equation you miss. The reason the Hospital numbers don’t tell you the right story about the economics of health care is because, once again, most of the big company plans are largely self-insured. I know you don’t believe this, but it is true. It’s a pretty fundamental part of the problem.
The reason why my company saves $600,000 per year vs. paying premiums is because we are largely self-insured, and have the demographics to justify it. That is because the vast majority of our workforce spends much less than the average on health care. So no one is sending a check to a hospital or a doctor’s office. That is what you don’t see in the NH numbers you quote, the number of people who don’t pay because they don’t need the services. Sure we have some reinsurance for the high end, but the amounts are very small, largely due to the same demographics that allow us to save this amount in the first place.
The bottom line is that business is actually better at cost-shifting than the hospitals. As far as administration goes, I pay $44.50 a head per employee per month for the TPA, around 1.5% a month of costs, which compares favorably with Medicare, which I agree is pretty efficient. Yes, we’ve shifted the cost of administration to the hospitals.
I’m sure GM is getting a better deal on admin than I am as well.
The gap is caused by the fragmentation of pools, anyone who has a decent sized employee pool whose actual health care spending is less than average over a period of years uses a plan similar to what our company does. The only real subsidation our company pays is actually through Medicare payroll taxes, and the small amount of reinsurance.
Yet another part of the equation you miss. The reason the Hospital numbers don’t tell you the right story about the economics of health care is because, once again, most of the big company plans are largely self-insured. I know you don’t believe this, but it is true. It’s a pretty fundamental part of the problem.
The reason why my company saves $600,000 per year vs. paying premiums is because we are largely self-insured, and have the demographics to justify it. That is because the vast majority of our workforce spends much less than the average on health care. So no one is sending a check to a hospital or a doctor’s office. That is what you don’t see in the NH numbers you quote, the number of people who don’t pay because they don’t need the services. Sure we have some reinsurance for the high end, but the amounts are very small, largely due to the same demographics that allow us to save this amount in the first place.
The bottom line is that business is actually better at cost-shifting than the hospitals. As far as administration goes, I pay $4.50 a head per employee per month for the TPA, around 1.5% a month of costs, which compares favorably with Medicare, which I agree is pretty efficient. Yes, we’ve shifted the cost of administration to the hospitals.
I’m sure GM is getting a better deal on admin than I am as well.
The gap is caused by the fragmentation of pools, anyone who has a decent sized employee pool whose actual health care spending is less than average over a period of years uses a plan similar to what our company does. The only real subsidation our company pays is actually through Medicare payroll taxes, and the small amount of reinsurance.
Swissmtndog, you’re completely missing the point. Why is your cost per employee $4200 per head, and not $3500 per head? It’s because the prices for medical services are higher than they would be if there were no uninsured! Why did your wife pay $3000 for her knee operation, and not $2500? Again, because built into the price structure is the need to compensate the hospital for losses on uninsured patients, or under-reimbursed patients.
Where do you think those losses go otherwise? If the hospital has too much under-reimbursed business, and not enough well-reimbursed business (YOUR business), it has to close its doors. You *are *supporting the uninsured through higher prices.
You are the one completely missing the point. Why am I paying $4,200 dollars a head rather than $6,300 dollars a head, which is the average in my state… Under UHC, I would likely be paying much closer to $6,300 a head, and at the very least more than I am paying now. Will UHC have my wife’s operation cost $2,000. Fantasy.
The big issue is that company insurance fragments the pools, that is why business wouldn’t support UHC.
The losses the hospitals are being spread to their customers. The reason that we save money is that as a group our employees are less of a customer than average. For exactly the same reason going self-insured works. So those losses are being spread to other users, since we are a smaller average user, we are getting a smaller part of that spread than the average.
swissmtndog, first off I’d like to see some evidence that you claim of company self-insurance being so common is true. I certainly do not see it. Exceeding few of the plans that we deal with in my practice are company plans and we are in an area of many large corporations (Western suburbarbs of Chicago). Our medical group, nearly 200 physicians, is dealing with the issue of providing healthcare coverage to ourselves and our employees and have dismissed self-coverage out of hand, even though we could provide much of it ourselves at cost (We own our own imaging facilities including multiple MRI machines, breast cancer center, surgicenter and so on). Nor do any hospitals I have worked with self-insure. Moreover, private insurance plans covering corporations are dealing with the exact same demographics covering that group that the coorporation itself is. Your self-insuring does no better of a job cherry-picking than they do already.
There is no question that we all pay for the healthcare of the uniinsured when they end up getting care in the costly manner that they finally get it. Your argument of fragmentation of the market by self-insurance fails on the basis of both what I see with my own eyes as actually occurring, and on the basis of the logical fact that insurance companies are dealing with the same ability to fragment their acturial pools and offer different rates to different corporations based on past claims data.