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Health Care Costs: Am I missing something? Or is there a lot of flimflam going on?

Driving home from work, listening to NPR’s story about health care costs, I couldn’t help but be struck by a couple of numbers. The Obama health plan will cost a trillion dollars we’re told. A TRILLION sounds big enough to end the debate, doesn’t it?

Then I hear, almost as a footnote, that that trillion is over ten years. That’s still a big number to be sure. A hundred billion dollars a year.
But then later in the story, I hear that US total health care costs are $2.2 trillion a year. Suddenly, that $100 billion a year doesn’t sound so big. That’s only a 4.5% increase.

Doesn’t it strike you as just a bit odd that we accept those kinds of increases from our insurance companies every year as a routine cost increase, but balk at the amount when it is presented as an attempt to overhaul the system?

Meanwhile, we’re expected to believe that it’s impossible to find 4.5% worth of cost savings in the system? That’s also hard to believe.
In this economic downturn, a lot of companies (including my own) have had to cut our costs a whole lot more than that in order to balance the books. Any industry with the will do so can find that much in the way of waste, duplication of effort, and improved processes that lead to cost savings.

All of this adds up to me to a description of a medical system out of control, a system in which everyone, from doctors, hospitals, and insurance companies, is out to get as much as they can from the system, and no one is willing or able to compromise. It’s sad, a story of greed and small-mindedness.

Maybe I’m missing something – after all, I just got these numbers from a radio show – but if it really is only a 4.5% a year gap, it’s really sad that we as a nation aren’t able to find the backbone to expand coverage for everyone.

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  • http://blog.jayparkinsonmd.com Jay Parkinson

    Healthcare in America costs twice as much as it should. Because payors are continuing to pay for quantity, providers will continue to offer quantity. And because only 15-20% of doctors use computers, quality metrics are simply unmeasurable. Healthcare is offline. Current Health IT business models have only been able to reach 15-20% of providers…therefore, those business models need to be disrupted with web-based technology similar to a secure, HIPAA compliant Facebook-like system mashed up with an EMR rooted in today’s technology. Until healthcare comes online, quality is irrelevant. And until quality becomes measurable, the only way to pay doctors is by quantity.

    And the current one in every 5 dollars spent in America is spent on healthcare will continue until its one in every 4, then 3…when does it stop?

    I have no faith in our corporate government. I have the utmost faith in new companies that will spring up to compete armed with new business models, new technologies, and new networks that enable them to deliver much better quality healthcare at a fraction of the cost of the dinosaurs swimming in their own bloated processes thinking they are going to live forever oblivious to the fact that their extinction is as sure as GMs.

  • http://prng.blogspot.com/ Greg Stein

    [note: talking just about the US health care system here...]

    Personally, I blame the health insurance system. It completely throws things off-balance.

    Say you’re needing some medical care. Your copayment is $20. Shoot… nothing. So you pay the fee, and get *whatever* the system wants to provide you. Insurance will pay the rest. Or maybe you need to pay 10% of any costs. Does you care whether that is $100 or $150 for your share of some serious medical treatment? Not really. But the care provider charges you the $1500 and makes an extra $500 bucks cuz you accept it. No skin off your back.

    About ten years ago, my S.O. and I had no health insurance, but she needed some care. The hospital said it would be $1500. We said, “eek. no insurance.” Their response? “Oh. How about if we make it $1200 instead?” IOW, there was a $300 markup *specifically* for the insurance company to cover.

    The insurance companies have been trying for years to bring the hospital costs down, but it isn’t easy at all. The *entire supply chain* has increased costs. Why? Because whatever they charge, it Will Be Paid.

    This is similar to universities increasing their tuition well beyond inflation rates. Why? Because financial aid will cover any gap between Average Joe and their rates.

    Universities, hospitals, surgical supply, medical practices, etc f’in etc… they can charge indiscriminately because they know they’ll get paid by the insurance companies. Average Joe keeps coming back because there is no pain. Not at 10%. Not at a $20 co-pay.

    I’ve taken lots of pride in the past for being able to find and solve hard problems. This one? Stymied. For years. I *still* have no idea how to unlock and tackle the problem.

    Sigh.

  • john corbin

    The problem is that you are used to dealing with REAL numbers and REAL math. These things do NOT apply to government.

    ANY government prediction of savings, cost, value, etc is calculated NOT on the quantitative or qualitative values of the numbers, but on the POLITICAL values of the numbers.

    Even moreso, when those numbers are for a time period AFTER the next election.

    Look back at the predictions of the costs of Medicare, medicaid, social security, and dozens of other programs. The real costs were/are orders of magnitude higher than the predictions.

    Central control inevitably leads to corruption, waste, negligence and egomania. That alone is enough to defeat ANY government-sponsored/controlled/managed health system.

    The fact that every proposed plan takes freedom away from many, at gunpoint (which is what a tax is) to provide for the welfare of a few is another good reason.

    The truth is that government is always wasteful and never efficient. Private markets are rarely wasteful and highly efficient. USE human nature to solve the problem, not jack boots.

  • john corbin

    Indeed, insurance is part of the cause. Patients NEVER see the bills and are happy for it. Same thing as payroll tax – you don’t miss the 16percent off the TOP of your salary because you never saw it.

    But, there are other problems, too. Highly trained specialists are often only paid a few hundred dollars for hours of microscopic surgery. Single cotton swabs cost a dollar. Hospital room shampoo costs $40. The whole system is separated from the free market and that means the bureaucrats and moneyflippers are free to run amok.

    Bring the whole system down to a few layers.

    Put people and doctors in front of one another with bills and fees clearly defined.

    Sell insurance that really pays $1million in coverage, instead of $1million in retail dollars but only $230,000 when the checks are written to the health care providers.

    In short, get rid of the layers of detritus.

  • http://susanfitzgerald.com Susan

    What I’ve read is that the number of actual uninsured is actually about 10-15 million.

    Wouldn’t it be cheaper to just give them vouchers to buy their health care than to create a national public health care system that we can’t change, and would be run buy an inefficient government? Think post office, DMV.

    Even if the numbers were larger, it would be cheaper.

  • http://www.mlvwrites.com Monica

    Unfortunately, health care reform does need to happen partially because the system is so complicated no one (lay person) knows where to turn. Almost every state has a watchdog agency called a “Commissioner of Insurance” that hardly anyone calls when they have a problem.

    Most in the health insurance industry seem to be nervous about any sort of reform, partially because they’ve been running unchecked for so long that having someone look over their shoulder is very scary. Any business would feel the same way.

    At this point, I would like to see a federal agency (like a type of SEC) work with the state “Commissioners” to audit and do routine check-ups on health insurance companies.

    Unfortunately, with any plan (from any President or leader) I’d want to see “what” the details are before having an opinion as to whether or not it might work. It’s a lot easier to throw out numbers, but until people understand how they are personally affected it won’t get leverage.

  • http://orcmid.com/blog/ orcmid

    One of the screwiest games in the healthcare industry is the ways fees and benefits are explained by providers and by insurers.

    If I receive an explanation-of-benefits from an insurer, whether Medicare or a private insurance company, I’ll see what charge was submitted. It will be some frightening large number. Then I’ll see what the insurance company specified that the provider settled for and how much of it was paid by the insurance company. I will owe the difference of that, if any.

    Now, I could go “wheww, I really dodged a bullet there,” as I’m sure many folks do. But wait.

    We think the amoung submitted is what it cost and somehow we have escaped paying it. Boloney. What we see is a fictitious price and then we see what the negotiated transaction was. This is like sticker prices on cars, ones that no one ever expected to pay.

    Yet the fee that the provider submits is assumed by most of us to be related to the cost of the service. No, it is a price, and even then it is negotiable, because right before us we see what the provider settled for.

    The rest is a game. We have to get past believing that it shows us escaping the costs or that the numbers we see go by have much to do with the cost at all.

  • Curtis

    The insurance business is just legalized racketeering. The entire health insurance system should be nationalized by simply extending Medicare to all US Citizens. Anyone who argues otherwise is either a fool or thief with a financial stake in the status quo.

  • http://WWW.AMULMAGO.BLOGSPOT.COM AMUL MAGO

    Bill, to me it’s a simple demand and supply gap which has made healthcare costly in USA. If in USA there are 5 doctors per patient; in India (the country I come from)it would be 100 doctors per patient. The large numbers has been possible because of investments in the education system and policies that support infrastructure for private medical health care. To me the solution lies in creating more supply of medical practitioners and policies that support growth of medical/ health care industry.

  • http://www.redhotpenguin.com/ Fred M.

    So what is the open source solution to this problem?

    Some doctors have taken it upon themselves to provide concierge services for $XX per month, completely outside of the insurance companies. The result? The insurance companies sued the doctors, claiming the doctors were essentially providing insurance services. If Microsoft could sue Linus Torvalds to prevent him from developing Linux, wouldn’t they?

    The highly regulated nature of the industry makes an ad hoc solution difficult. Perhaps a Paypal like solution where individuals pool their resources to avoid larger institutions? (Banks == Insurance in this case) The problem with that approach is the inevitable fraud that would ensue; individuals in a large group would likely make no difference between the group and a large institution on a morality basis.

    Maybe what is needed is an insurance company run by doctors as a nonprofit. The core problem there is that it is unlikely a nonprofit insurance company could run as efficiently as a commercial insurance operation. Greed is a great motivating force to become as efficient as possible on all fronts.

    However, greed might just work both ways. Would you rather pay a bit extra for insurance from a nonprofit as opposed to a for profit insurance company? The upside of that is the nonprofit would be less likely in theory to deny you claim coverage. That’s greed working at the other end, for the consumer.

  • Frank Ch. Eigler

    > The Obama health plan will cost a trillion dollars we’re told.

    Consider what if the nationalization process begins, and these numbers turn out wildly off. If this program ends up being engineered so that it is as impossible to shut off later as medicare/social security/etc. have been; if in the process private companies have been driven from the business (as some dems outright desire), what’s plan B?

  • John

    Simply get hold of “the other side of the story” and not just the spin the Obama admin is putting on their health care proposals. Remember, his election promise was that health care costs will drop $2500 a year for the average family. Yet, he has not even come close to explaining how that will be possible.

    Start out by read the Heritage Foundation’s take on the Health Care proposals. I’ve yet to see, or hear, any one dispute their findings.
    http://bit.ly/qz0LF
    or
    http://blog.heritage.org/category/health-care/

  • http://dysplastic-brain.blogspot.com Bob Calder

    Tim needs to interview Chris Richardson – former developer of MUMPS, now it runs the VA system as WorldVista and has been open sourced. He is close enough to see face to face I think.

    http://worldvista.org/

  • Drew

    On vacation I chatted with a woman who heads up a multi-doctor practice, and she ran through how complex it all is, notably (if I understood her right) negotiating each type of medical procedure with each different insurance company they accept. Negotiation included competitive factors, like “I’m the only office within 10 miles that takes your insurance and performs this procedure.” Lots of time wasted, prices gouged, etc. Competition is great IMHO but the way it’s all orchestrated seemed very inefficient and imprecise (leading to excess costs somewhere).

    Half baked thought — Maybe they need to automate these cost negotiations via electronic auctions.

    Likewise maybe customers could bid for procedures from various doctors who perform them. Ratings on the doctors and reviews could help people decide how much. Just like buying a TV. Loyalty to a given doctor (esp. specialists you’ve never seen before) isn’t as big as it used to be, so maybe cost and quality etc. all needs to be more visible.

  • Mad Man Moon

    Mr. O’Reilly — I heard the same story on my commute home from work this evening as well. I wish I could say that my reaction was like yours — surprised and dismayed.

    However, this is what I have come to expect from our government — a lack of real action due to corporate influence and the irrational reaction of a small but very loud majority. I had real hope for some real vision and leadership from our new president and his administration — but all we have gotten is nibbling at the edges, fence sitting and the inexplicable appeasement of those who will tear him down regardless. The fact is that this is not the change many of us believed in.

    One need only visit some of the other “western” nations to see that this country is falling desperately behind the rest of the world in so many areas. The unwillingness by our elected officials to do something about healthcare is a perfect example of why. I find myself more and more disheartened by what appears to be the inability of the American people to ensure that our government is “by the people,” and “for the people” instead of “by the corporation, for the corporation.”

    It brings tears to my eyes knowing that for the first time in my life I find myself wondering what it would be like my wife and I to raise our children elsewhere.

  • http://proteus-tech.com Ben Scherrey

    It is ludicrous to believe that the government can have *any* positive impact on health care by taking more control of it and reducing doctor & patient options. The opposite has been demonstrated time & time again. Federal government health care in the USA is a 100% failure every time it has been tried.

    Before allowing the feds to to anything else in health care they should be required to demonstrate the ability to do it right on a smaller scale first. Once they can fix the health care system for Veterans Hospitals and American Indian Reservations then I’ll be happy to review their proposals for the rest of us. Until then I suggest they remember the Hippocratic oath – First do no harm.

  • Mad Man Moon

    John — with all due respect, referring to the Heritage Foundation as your source for “truth” is absurd. When you use an organization who view Sean Hannity and Rush Limbaugh (both of whom outright lie to their listeners day in and day out) as esteemed spokesmen, you have zero credibility.

    At least show some intellectual honesty.

  • http://postlinearity.com gregorylent

    “insurance will pay for it” has removed all accountability from the system ..

  • Mad Man Moon

    Ben — LMAO. You think you have doctor and patient options with the current health care system???

    My private insurance company will not cover the cost of my doctor providing a lung cancer treatment has been proven to be very successful and safe against lung cancer in other countries — yet if I had testicular cancer they would cover the exact same treatment.

    I guess you’re right. I do have options.

    Option 1) Pay for the treatment out of pocket and lose everything I have worked for, leaving my family with nothing if the treatment does not work.

    Option 2) Go without the treatment, die, and at least the people I love will still have the home we worked so hard for.

    Sadly, #2 is the better of the two options.

  • http://www.alexandertolley.com Alex Tolley

    You have to be deaf, dumb and blind to fail to see the health care industry protecting itself from change. It’s “Harry & Louise” all over again. It’s too expensive, it’s socialized medicine (like those French have), it’s un-American. Blah, blah, blah.

    The major newspapers are priming the opposition with OpEd pieces, especially the WSJ. Congress is feeling the heat from lobbyists.

    The facts are quite simple. The US system costs more per capita and more per GDP than other western nations. The outcomes, especially for longevity are worse than elsewhere. Polls in countries show that by and large, the US system is the most unpopular model rated by citizens polled, with Holland the best. Even the UK’s NHS fares better than the US.

    Costs have escalated out of control, primarily due to how much providers can bill and insurers are willing to reimburse. Medicare shows that we can run a cheaper system, although the number of specialties and facilities may have to be drastically cut. The system mirrors the changes in the drug industry – drugs are no longer made for acute illnesses, but for chronic, lifestyle diseases. Medicine in the US is now a specialist system, rather than a generalist one.

  • http://prng.blogspot.com/ Greg Stein

    @Alex: the drug thing is an entirely separate can of worms. A drug company does not want to sell one week’s worth of drugs, to solve an acute illness. The *real* money is in selling a patient drugs for the rest of their lives.

    The drug/pharmaceutical industry is (IMO) a separate beast from the health system. There is a whole host of different problems there, least of which that the financial rewards are *not* aligned with the patients’ needs.

  • William Todd

    What we are seeing here is another example of why this society may need to literally fall apart before it can (hopefully) be (intelligently) put back together again.

    The rational mind says “Surely we can fix this mess we’re in, we’re intelligent people, right?” The rational mind also says “Surely we can overcome the selfishness and greed of the vested interests (including our own), right?.

    Unfortunately the answer to both these questions may be no. If enough people were to realize this, that, in and of itself, may be enough to effect change.

  • Charles Bearden

    In your tweet on this subject (http://twitter.com/timoreilly/status/2247653889), you link to a Kaiser Family Foundation primer on health care costs. Tucked away in this primer is the claim that Medicaid accounts for 40% of national healthcare spending. In fact, if this editorial (http://www.washingtonexaminer.com/opinion/Why-not-just-fix-Medicare-first.html) is correct, federal and state governments in the U.S. already spend almost half of all dollars that go to health care in this country. If the governments, federal and state, want to demonstrate their bona fides about reforming health care, they can start by improving efficiency and outcomes with respect to the money (our money!) they already spend, before they inaugurate new programs. If they can’t improve equity and efficiency where they already spend, then I see no reason to think that further new problems will improve the situation.

    A word about Mad Man Moon’s rhetorical techniques: connecting bugbears (Limbaugh, Hannity) with the Heritage Foundation and then citing that connection as grounds for not engaging arguments and data they present is sophistry. Do you seriously think that spokespersons for institutions you agree with haven’t lied in the same degree as these two? In any case, the one time I listened to Limbaugh, he made a verifiably true claim: that a small fraction of taxpayers paid more than half of the individual tax dollars in a particular year (don’t recall what that year was, but in 2006, the top-earning 4.4% of taxpayers paid more than 50% of individual income tax dollars, if I read this spreadsheet [http://www.irs.gov/pub/irs-soi/06in32tt.xls] correctly).

  • http://proteus-tech.com Ben Scherrey

    Mad Man Moon – interesting but you’re arguing against a point I didn’t make and ignoring the realities of the point I did make.

    No one is claiming that the current environment is the best or even completely adequate. I would argue that the situation with health insurance and complexities is, in large part, caused by government interference already (on behalf-of and in spite-of large insurance and legal groups). Had the feds owned health care as Obama proposes you likely wouldn’t even have the options you listed available to you.

    The fact is that no one owes you health care. You are fortunate to live in a country, however, where the citizens are generous and very interested in fairness. I have personally witnessed local communities coming together and assisting two friends of mine with cancer who were unable to pay for their treatments. I see it happening all the time.

    What I am saying is that govt. health care will be the worse of all options and we have VA hospitals and Indian reservations as perfect examples of what that will look like. Tell me you think that’s an improvement.

  • George Williams

    “Had the feds owned health care as Obama proposes you likely wouldn’t even have the options you listed available to you.”

    Ben, nice argument out of the handbook. How about actually comparing with other countries? It’s probably the opposite.

    “I have personally witnessed local communities coming together”

    Strange we don’t do this for bombs.

  • bowerbird

    how much will an average person, when they’re sick,
    be willing to pay to the doctors to keep them alive?

    probably whatever it takes, up to everything you have.

    there is zero elasticity of demand within health care.
    you pay what it costs, whether you “want” to, or not.

    so the medical industry and the insurance industry
    conspired to figure how to take everything you have.

    the brilliance of their plan is truly devastating…

    they hid the true costs by spreading ‘em out thinly,
    affordable at first, then gradually ratcheting it up…

    nobody knew how hard we were being hit because
    very few people were forced to take a hit directly…

    because “insurance will pay for it”, you accepted it
    – without realizing you were the one paying for it,
    just _though_ the insurance company — and _that_
    made prices go up more, and premiums go up more,
    and now you’re caught in a vise that will continue to
    extract more from your wallet until you will indeed
    be paying everything you have to keep yourself alive.

    and until you decide to tell the high-flying doctors
    – make no mistake, nurses aren’t getting rich! –
    they can no longer enrich themselves on your dime,
    and you tell the insurance companies to drop dead,
    there isn’t one single thing that you can do about it.

    anything else you try is folly doomed to failure…

    any savings you can “engineer” via your “technology”
    will end up being eaten up by the voracious greed of
    the vicious cycle they have unleashed on the system.

    -bowerbird

    p.s. there were other wrinkles here too, such as an
    emphasis on “heroic” (and thus expensive) methods
    which drove up the overall cost of the whole system,
    plus the wicked machinations of drug companies, but
    mainly it is greedy doctors and insurance companies.

  • http://www.megginson.com/blogs/quoderat/ David Megginson

    Would President Obama’s plan increase the overall cost of healthcare by 4.5%, or simply increase the government’s share by 4.5%?

    I live in Canada and have grown up with socialized medicine. Like any big operation, private *or* public sector, Canadian healthcare has its share of problems, waste, etc., but on balance, it delivers: as a country, we pay a fraction of what Americans pay per person for healthcare, but have great hospitals, a higher life expectancy, lower infant mortality rate, and comparable survival rates for everything else.

  • http://jimspaulding.com Jim Spaulding

    Well said, Tim.

  • http://susanfitzgerald.com Susan

    Thanks for starting this Tim. This is exactly the debate the whole country should be having.

    And it’s so interesting to see how we all see things so differently, through experiences, or philosophies, or sources of information.

    Have been looking at Google’s new Wave. Maybe such a large debate will be possible in the future.

  • Andrew S

    Reading through this post and the comments makes me glad I don’t live in the US. Here is Australia things seem to be much more under control and regulated so that our society is not taken on the greed ride.

    Granted there are problems and always will be but at least the majority of Australians get a pretty balanced standard of health care.

  • Jon

    “Suddenly, that $100 billion a year doesn’t sound so big. That’s only a 4.5% increase.”

    Oh, so Tim, your argument is that just because a huge number is small relative to an even bigger number, that makes it OK to spend?

    Typical Obama thinking.

  • http://MyHealthExperience.com Eugene Borukhovich

    Healthcare consumer who is actually covered by health insurance pays 33% of the costs out of pocket and that includes premiums as well as copays and yet the level of transparency in the system is completely missing from the picture. As a consumer, I want to know in detail what the cost of services are. I want to know how those costs can be controlled and improved. I want to know which doctor is right for me. I want to experience the level of personalization in healthcare that I have in my amazon.com shopping experience. I want feedback from people like myself. We, as a nation, need to invest and encourage innovation and new business models and focus on quality of the services, we, as consumers receive.

  • http://maggieplusplus.com Maggie Longshore

    Every time we spend money we are paying for someones insurance. Insurance premiums have to help pay for the benefits of the insurance companies’ employees. Hospital fees have to cover benefits for all of the hospital employees.

    When you buy Tide, you are helping to insure P and G employees. When you buy coffee at Starbucks you are helping to insure their employees. Our taxes pay for benefits for government employees, teachers, government contractors, military…

    Health care costs are too high, but much of that money goes to employing large parts of the population. If health care costs are reduced will people loose jobs and the result be less are insured?

    It seems to me to be a cycle that needs change. I don’t know what that change should be since finance is not my specialty.

    It seems that maybe if insurance was not a benefit of employment and everyone had to buy their own policy – then the costs may even out and it would not seem like we are already paying for health care for much of the population indirectly.

    I think any Healthcare reform will have to go along with Tax reform.

  • kevin Horgan

    Some remarkably uninformed comments on government healthcare above: especially Bob Scherrey.

    In last decade there is significant data that the VA has provided the best and the most cost effective healthcare in the country! The story is told comprehensively by Philip Longman is his book Best Care Anywhere – see article http://www.washingtonmonthly.com/features/2005/0501.longman.html

    Rather than ideological bombast the debate needs fact based debate. Other countries get equivalent or better outcomes spending much less – are they so much smarter!

  • Bryan

    I came across this when trying to nail down how much time doctors have to expend every day dealing with insurers. I would imagine that since some doctors don’t accept it at all, and others may have hefty managed care patient bases, that the number is very different case to case. It clocked out to 43 minutes a day on average. Now, read the article further and check out how much support staff time is spent

    “Nursing staff spend nearly four hours per physician per day interacting with plans, while clerical staff spend 7.2 hours per day. Solo practitioners and their staffs spend up to 50 percent more time interacting with health plans than physicians in larger practices.”

    http://is.gd/13VvX

  • http://azfoo.net Gerald Thurman

    Your use of the term “flimflam” reminded me of the following joke…

    U.S. government is hiring a mathematician and each candidate is asked the following question: What’s 1/3 + 2/3? Candidate A answers 1. Candidate B answers 0.999… Candidate C (a statistician) answers “what do want it to be?”

  • http://cfigallo.com Cliff Figallo

    I agree with everyone who recognizes this an just one example of where abuse of the American Dream has send us down a very wrong and internally destructive track.

    In well-intentioned social/economic models, there are always those who game the system, gain power through non-exemplary mean, and throw the system out of balance.

    Now we’ve got an unprecedented number of millionaires, a growing gap between Haves and Have-nots, and a healthcare situation that seems to need dynamite to repair itself.

    Thanks for bringing this topic to such a smart forum, Tim.

  • http://friendfeed.com/ahier Brian Ahier

    I might as well way in on the discussion…
    There is no doubt that healthcare is too expensive relative to the rest of the economy. I agree with Dr. Parkinson and I have faith that new companies will spring up to compete armed with new business models, new technologies, and new networks to lower costs. However, there will need to be continued action from the government, especially CMS/HHS.
    Healthcare reform will only be effective in conjunction with health information technology progress. Health IT is a toll that will help to improve quality, patient safety and clinical outcomes while making healthcare more affordable and accessible for everyone. Spurring advances and innovation, we can leave a sound system for the next generation. We should all take the approach that Mr. Daschle and Mr. Gingrich are taking:

    http://ahier.blogspot.com/2009/06/daschle-and-gingrich-discuss-healthcare.html

    - working together to solve problems, instead of tearing each other down.

  • john corbin

    IT comes down to freedom for me.

    I do NOT want the government to know anything about my health. Period. It’s my business. I will not trade that bit of security for a discount and you have no right to try to force me.

    Second, I do not trust ANY government to do the job as well as a private free market.

    Third, our current system is not a free market, but one that is managed by oligarchs and government regulation.

    Fourth, Doctors do NOT negotiate insurance payouts. They either accept the money the insurance company offers or do not accept that insurance. Same with medicaid and medicare.

    If anyone thinks the VA is a good medical system, they have no clue. It is nothing but death by bureaucrat – I have seen it and will sooner fight, kill and die before allowing such a system to be the American system.

    Lastly, Tim, the kaiser foundation graph you pointed to is irrelevant. It shows nothing of the reasons behind these dollars, just the pipeline it enters.

  • John

    The government owes you nothing in regards to health care. Nor so I as a tax paying citizen have to pay for my neighbor’s care. It is bad enough I have to pay for his kid’s schooling, let alone his health care, social security, etc. When is an already big government too big? Enough is enough already. Obama and gov’t are NOT the answers to the problems we are facing.

    @Mad Man Moon: As I stated, no one has yet disputed Heritage’s facts on health care; you included. Who cares what Heritage thinks of Hannity and Rush. The organization is accurate in all its assessments of Obama-care. So if the surveys of Obama-care came from Daily Kos you’d be ok with that?

    And how about backing up your claim that Hannity and Rush “outright lie to their listeners day in and day out” with some proof of those lies. I could easily say the same thing about Randi Rhodes, Keith Olbermann, and all the others of Air America. (However I don’t pick sides – that’s why I’m registered Independent.)

  • Sam Meder

    Couple of comments:

    Generally if you don’t have insurance you will actually end up paying your care provider much more than the insurance company would (even with any uninsured discounts you may get). Just take a look at the billed costs vs costs allowed by contract on your claims next time you have a chance.

    One other big issue is that the current insurance system provides economic incentives to perform as many procedures and tests as possible (it’s the way to get paid after all) leading to a lot of wasted spending. I’m really not sure what the right way of fixing this is. Any ideas on good policies for rewarding care that does the right thing? Creating a metric for the “right thing” seems almost impossible…

  • Dan Brown

    As a physician, I would like to point out the sources of high health care costs:
    1) layers of insurance compsany bureaucracy dedicated to making it difficult to get through more costly medications and treatments
    2) the expectation of the public that every problem requires an advanced, technologically costly procedure to diagnose, as in “my knee hurts; my friend says I should get an MRI” and then demand it be done
    3) malpractice litigation that forces doctors to practice “defensive medicine” and spend more money proving that someone does NOT have a specific problem than they do in actually making the diagnosis
    4) direct-to-consumer advertising by pharmaceutical companies that raises the costs of medication

    The solution: tiered private health plans with varying breadths of covered services and medication coverage that meets the needs of the individual, based on how high a premium the consumer wishes to spend. The basic level, with preventive and catastrophic care, would be the cheapest and most affordable; added services would entail higher premiums for the “boutique” consumer. By doing this, layers of fat of insurance administrators could be removed, because it would be understood by the consumer UP FRONT what is covered and what isn’t, so there is no need for an insurance referee. With no financial pressure to either order tests or not to order tests, the physician will no longer be under suspicion by the patient vis-a-vis why certain tests are or are not ordered. If malpractice litigation reform is added, the lawyers can be kicked out of the exam room and doctors allowed to practice the medicine they were trained to deliver.

    Just a thought.

  • Fred

    I love the solution proposed in someone’s comment earlier up the list: if you want gov’t sponspored healthcare, simply had out vouchers for people to buy their own coverage. Do that instead of forcing gov’t coverage on everyone.

  • http://meyerweb.com/ Eric Meyer

    Although I may be biased by its being a hometown institution, the Cleveland Clinic does seem to be doing something right:

    http://www.cnn.com/2009/POLITICS/06/19/sotu.cleveland.clinic/

    For my part, Tim, I agree with you– it seems like we’re being hoodwinked about something. The problem is that it’s very hard to work out what, as many of the comments before mine demonstrate.

    Though it seems fairly obvious that, judged solely on the numbers, the U.S. is getting a bad deal. We pay more to get less. How does that make any sense at all?

  • Kay Wood

    I am fortunate to have several close friends who made a choice to become American citizens. Each of them has family still living in their countries of origin in Europe. My friends love America, but do not care for our health care system. I can find no one who does. Do they love the system(s) where their families live? No, but they like the system(s) far better than what we have here.

    My friend Charlotte is originally from Germany. If it were not for the health care system there, Charlotte’s mother would be dead. Her mother’s care is excellent. If someone wants more extensive healthcare coverage in Germany, they pay for it. Many do. BTW Charlotte votes Republican, but she is for single-pay health care.

    Universal health care is far from perfect. There is no health care system that is. A transition will be painful, but it is needed. Time to change. What worked in 1900, doesn’t work now. What would work now, won’t work in 2110. Nothing does or should remain the same.

    Rarely do a few weeks go by that I am not fighting with insurance companies, prescription plans or dealing with physicians’ archaic record keeping. My folks who are on Medicare spend many hours a week dealing with that poorly managed system and the outrageous costs of their medications. They are beat down. The system is broken and has been for over 30 years.

    It is time for a radical change.

  • Key

    Tim,

    You may know something about computers, but you know nothing about economics.

    Read Milton Friedman. He’s given answers to your questions *decades* ago.

  • http://twitter.com/aeroG Gordon R. Vaughan

    We hear a lot about the medical side of record-keeping, but almost nothing about the cost side. The fact is, accounting practices in medicine are atrocious.

    How can it be possible to lower costs if no one can say with any degree of accuracy how much something costs? Wal-mart does a far better job of tracking an item that sells for $1.79 than a hospital or doctor’s office does in tracking charges a hundred times as large.

    The old saying, “If you watch the pennies, the dollars take care of themselves” works for families and other sorts of businesses, and it will work for the medical business too, if they would just change their way of thinking.

  • http://ahier.blogspot.com/ Brian Ahier

    In Ayn Rand’s novel, Atlas Shrugged, Dr. Thomas Hendricks, a surgeon who quits explains:

    ‘Do you know what it takes to perform a brain operation? Do you know the kind of skill it demands, and the years of passionate, merciless, excruciating devotion that go to acquire that skill? That was what I would not place at the disposal of men whose sole qualification to rule me was their capacity to spout the fraudulent generalities that got them elected to the privilege of enforcing their wishes at the point of a gun. I would not let them dictate the purpose for which my years of study had been spent, or the conditions of my work, or my choice of patients, or the amount of my reward. I observed that in all the discussions that preceded the enslavement of medicine, men discussed everything–except the desires of the doctors. Men considered only the “welfare” of the patients, with no thought for those who were to provide it. That a doctor should have any right, desire or choice in the matter, was regarded as irrelevant selfishness; his is not to choose, they said, only “to serve.” . . . I have often wondered at the smugness with which people assert their right to enslave me, to control my work, to force my will, to violate my conscience, to stifle my mind–yet what is it that they expect to depend on, when they lie on an operating table under my hands?’

  • Connie

    To Mr. Tim O’Reilly,

    A genuine thanks for bringing up a apt political topic to the tech audience. Very eye opening. Perhaps not all techies share my point of view.

    To John, Re: VA hospital. I think you got the issue entirely wrong. The current healthcare reform seeks to address the payment/price of our healthcare system, not the delivery of healthcare. Very important distinction. VA hospital is a gov’t run facility that delivers healthcare to actual patients. Currently Democrats’s healthcare reform is seeking only to address “how to drive down cost” and “how to help our citizens pay for healthcare”, and NOT – “How to get gov’t to hire docs to see patients in gov’t hospitals”.

    To John, again, Re: paying for neighbor’s kids schooling. Are you then saying that you do not want to pay for police protection? For fire department? I’m so tired of the political right’s selfish policies that benefits the few and screw other folks – as if working together in a group for mutual benefit is anti-capitalism. Get it in your head – it is like how your house is priced along with how the neighborhood is. Your livihood, your healthcare cost, DEPENDS on the quality and quantity of your neighbor’s care (that’s why it is called health “insurance”, a gamble that your health will be better than the general populations’)

    To Fred, Current reform presents just another choice for healthcare. You don’t have healthcare or can’t afford it, you can BUY into the gov’t plan. If you like your private ones, you can CHOOSE to stick with them. There is no forcing down one’s throat.

    For anyone who is interested in reading up more – here’s a great article in the New Yorker regarding how perhaps cost has nothing to do with who pays, but how doctors are paid and how are they encouraged to provide better health.

    http://tinyurl.com/pww9s6

    And folks, please RTFM on the issue before you comment.

    Thanks,
    Connie

  • john m howitt

    in reply to john corbin’s “Private markets are rarely wasteful and highly efficient.” john obviously managed to miss the recent banking crisis when making his point. Perhaps he might like to look at the inefficiency, dishonesty and potential criminality and then revise his opinion

  • Brian Murray

    I haven’t read ALL the comments so apologies if someone else raised the point.

    Whenever I see a discussion like this I always think to myself – why reinvent the wheel? Is the ANY country on this earth that has the perfect healthcare system? If so, based on what model? These are questions that need to be asked.

    If there is no ‘ideal healtchare system’; just like there’s no perfect system of government (let’s face it), then everything after that is just a compromise and the least hurtful compromise is probably the way to go.

    One thing is for sure though – if healthcare is a ‘business’ and not a social right then Joe Bloggs will lose out every time.

  • http://jamesmsingleton.com Jim

    The liability issues is the real issue. Until something is done about that, they would be just throwing away money.
    http://jamesmsingleton.com

  • india white

    Sigh, hardly any mention of freedom at all. The empire is truly falling when there is almost no mention of the devil’s bargain between government and business that created the 3 headed dog that health care is become.

    Health and education are the largest government rackets in the country and are our greatest social failures.

    End mandatory corporate insurance once and for all, end the subsidy, let doctors compete.

  • Pcjunkie7

    I do think that we need some health care and insurance reform, but I don’t think my taxes should be used to pay for health care for illegal immigrants. They already receive a lot of govt money and are filling our prisons costing us billions. We need some moral fiber in this country more than anything really. Many have turned from being a God fearing to being a bunch of atheists who think this life is everything and that we should get whatever we can and enjoy ourselves now instead of thinking about life after death.

  • Jerry Sheehan

    Tim,

    Another simple number that isn’t being talked about is the results of a recent study done by the Harvard Law and Medical Schools, and Ohio University showing that “Medical bills are behind more than 60 percent of U.S. personal bankruptcies.”

    75% of those who went bankrupt due to health care costs had insurance.

    See http://news.yahoo.com/s/nm/20090604/hl_nm/us_healthcare_bankruptcy_5

  • Chaz

    Tim, the Obama administration proved with the results of the first wave of the stimulus that they are a HORRIBLY inefficient means of creating/improving anything, and one can reasonably infer that health care reform will be another bureaucratic cluster f@&k.

    The bigger issue, however, that no one wants to talk about, is WHAT HAPPENS *AFTER* ALL THESE PEOPLE GET HEALTH CARE…

    Imagine if 45 million more people live 20 more years, with most of those people requiring welfare or other social support for those additional 20 years? The incremental healthcare cost PALES in comparison to the cost of housing, feeding, buying booze and tobacco for them…

    Hard questions to ask, but someone has to.

  • Leah Cohen

    As a native born US citizen I am happy to have paid for health care for not only fellow citizens/neighbors–legal or illegal–but for schooling, housing and anything else that makes us “human.” My 35 year old daughter is autistic. She missed the autism awareness of the last 10 years, and has been denied SSI on all appeals. She is SOL. She has no health insurance. She does not qualify for free medical care at the county hospital/medical facility because her dad makes $1,400 a month & the govt. believes he can pay for her medical, dental and opthamalogical care. She is fairly severely disabled. She has not had medical or dental or seen an opthamologist for needed surgery since she was 18 & thrown off her dad’s health insurance plan. I have 3 disabling conditions, am no longer in the job market (but when I was, for over 20 years, I had a professional position. I would flip burgers now if it were physically possible) and collect the grand total of $426.00 a month in SSD.(try living on that!) And am expected to pay $90.00 out of that for Medicare. I await the day my 35 year old can have her first medical exam, her cavities filled, her eyes checked and her first pair of glasses in 12 years. My friends in Spain, all doctors, are horrified by our “health care system.” It seems it’s more of haves vs have nots here, which is what our founding fathers deplored…and think about it: no one chooses to be born with a disability or expects to be stricken with a disabling condition in the prime of life. It happens. It could happen to you or someone you love…We *are* our brother’s (and sister’s) keepers. When we forget or ignore that, we lose our humanity.

  • Chaz

    Leah, I’m sorry, but that is a load of BS. While I greatly empathise with your situation, as I have a number of family members with severe disabilities, to claim that “I am happy to have paid for health care for not only fellow citizens/neighbors” is a lie. Based on your own descriptions of your financial situation, this simply isn’t true – you would not be paying any taxes.

    I am indeed glad to help my brothers and sisters who truly need it and have no alternative, but I do not wish to help those who can help themselves. I am a generous giver well beyond that which the government takes from me – it is something I feel a responsibility to do and do willingly.

    I am angered when I see the federal government increasing its pool of handouts beyond the truly needy – with the clear intent of “buying” votes and support for the administration’s broader agenda.

    Nearly half of those uninsured (and often, unemployed or underemployed) have chosen their lot in life voluntarily, and are not willing to take on readily available work (which is often filled by foreign illegals) when they can make the same amount of money or more on government-sponsored handout programs. It is pathetic and undermines the bootstrap/can-do spirit that this country was founded on. There should be NO welfare in this country other than for those who truly cannot work or support themselves. For all others, it must be a workfare scenario.

  • http://www.hipaabox.com Skip Snow

    This problem is epic in its systemic implications. In this thread we have seen so many views and interests represented in response to the original question of whether or not there is a lot of flimflam going on.
    Aside from outright fraud, which of course occurs in health as everywhere else there is not flimflam at play, but simple old fashioned American style self / special interests. The provider (doctors nurses technicians, Assistants etc. ) insurance carrier, the pharmaceutical company, the health care device provider including the vendor of health care software (like myself), all wish to provide value, go home at night believing that they contributed to the solution; they want to live comfortably, and thus wish to extract a profit from the labor they produce.
    A hodgepodge of solutions for medical research, health care funding via employers, care for our veterans, entitlements for the poor, training mechanisms, and standards of quality that make the providers over cautious when it comes to their ensuring that they will not be sued has driven the care of cost to its disproportionate size of, in the trillions at almost 17% of GNP.
    It is not so much that people are flimflam artisans; we have constructed a nightmare where actually doing the right thing is almost impossible. I like the idea that we would conceive of the Department of health as being responsible to regulate as the SEC does, except that we see where that got us.
    We face an uphill battle where we need to incrementally fix this thing with a plan. For example we first need to solve the problem of how data can be moved from one place to another, building an infrastructure core of data mobility, in order to empower the next tier of the interoperability story, which is having the data move from it’s raw binary form to its manifestation as information in front of the concerned folks eyes and ears.
    The normal pain of privacy, open standards which commodity what vendors wish to economically exploit is in the way of this. The cost to the provider and the vendor to move to this new world is great. Yet it is only by moving to an open exchange of information, between necessary participants in health care decisions, that we will drop the cost of care, and move to the notion of caring for the whole person instead of transacting for economic gain against the symptom.
    I am not a fan of the large vertically integrated solution like the VA as being our only choice, the centers of excellence, such as the University need their autonomy, the gifted maverick small practice doctor or group of doctors who can innovate outside of the constraints of the enterprise is required to be supported; I.e. this is not about socialism, vs capitalism when we talk about single payer single provider solutions, it is about the need to create an echo system in which the different roles can be played out in a system where the factory medical establishments like Kaiser serve a public by dishing out medical routines efficiently, and the university can move the ball forward in the exotic frontiers pushing the envelope of science, and the small practice doctor can synthesize from all worlds to create new combinations of protocols and tools in order to optimize medicine, on a small scale, and present these findings, in this brave new web 2.0 world of medicine to the community by sharing sanitized data and moving change down the pipe to economic efficiency more quickly.
    I have been told that a new ‘best practice’ in medicine takes 20 years to migrate from lab to the ordinary doctor’s practice. While I realize that folks lives are at stake and we need to be cautious, we need to foreshorten this by figuring out ways to move information and models through the pipeline in an open manner.

  • http://www.clientfirst.com Rodger Bayne

    Consider the amount of monies spent on physician, lab, hospital and other negotiations between health care providers on all levels and the health insurance / or managed care companies that negotiate fees with these companies.

    A PPO network can lease a benefit plan their “discounts” at a rate between $4-$6 per contract (employee) per month. Consider 250 million Americans, an average of 2 covered Americans per “contract. This means that each month we collectively spend 125 million times $4-6 simply for negotiated fee schedules. That means between $500 to $750 million per month in fee negations and provider contracting, recruiting, and management of these networks of providers. That’s between $6-9 BILLION dollars annually!

    Consider the alternative:

    The simplest and fastest route to controlling health care is to provide consumer empowerment through what I call GLOBAL TRANSPARENCY. Health care should be as most businesses where total disclosure of the charges for a service, the expected outcome of a service, and the payment terms of a service should be consumer knowledge prior to the provision of such.

    Global Transparency in health care means – that all providers of medical care, services, medications, tests, procedures or other related services should have their fees disclosed and published as a standard requirement to practice, thereby enabling the consumer to see the cost and value of the health care they consume; furthermore, every insurance company, self-funded plan or other payer of health care should be required to disclose exactly what they are willing to pay for those same services. Finally, providers including hospitals, physicians, drug companies, should be required to publish outcomes and records of success / failure for services rendered.

    The disclosure of these details of health care delivery will provide the consumer greater understanding of what and how one is paying for such services and the expected or desired result. Ultimately the consumer will drive improved quality and outcomes as well as more competitive pricing…

    AND ELIMINATE THE NEED FOR THE EXPENSES MENTIONED ABOVE THAT ARE DEVOTED SIMPLY TO NEGOTIATING, CONTRACTING AND SELLING PROVIDER DISCOUNTS TO AMERICAN CONSUMERS.

    Through Global Transparency, we ARE simply restoring free enterprise principles to the health care system. We’re not fixing any prices, we’re not limiting provider compensation or income, we’re not restricting drug costs or limiting research. We are simply suggesting that the American consumer is capable of making a competitive choice when cost, quality and risks are fully disclosed.

    After all, when is the last time you’ve heard of a need to reform the paper towel industry? Prices are disclosed, quality is promoted, results are obvious, and consumers choose. Free enterprise drives results, efficiency, product improvements and innovation. Government too often fails to display similar traits.

  • http://www.intentionalprosperity.com/somethingismissing.html BobB

    No accountability in government