Government better at controlling HC costs for 23 years.

[rubato]

Shocking better by the numbers. The 'worst possible' outcome is the ones Republicans have consistently pushed.

_____________________



November 29, 2010
Our Health Care Cost Problem Is Overwhelmingly a Private Cost Problem

Microsoft Excel.jpg

Ezra Klein sends us to N.C. Aizenman:

Want an appointment with kidney specialist Adam Weinstein of Easton, Md.? If you're a senior covered by Medicare, the wait is eight weeks. How about a checkup from geriatric specialist Michael Trahos? Expect to see him every six months: The Alexandria-based doctor has been limiting most of his Medicare patients to twice yearly rather than the quarterly checkups he considers ideal for the elderly. Still, at least he'll see you. Top-ranked primary care doctor Linda Yau is one of three physicians with the District's Foxhall Internists group who recently announced they will no longer be accepting Medicare patients.... Doctors across the country describe similar decisions, complaining that they've been forced to shift away from Medicare toward higher-paying, privately insured or self-paying patients in response to years of penny-pinching by Congress...

As Ezra points out, this fits very ill with the Republican talking point that the government cannot control Medicare costs:

Ezra Klein - What happens when Medicare controls costs too well: One of the dirty little secrets of the health-care system is that Medicare has done a much better job controlling costs (pdf) than private health insurers.

The problem is that Medicare can't control costs too much better than private insurers or, as you see from the article above, doctors will simply abandon Medicare.... [T]he dominant opinion is that Medicare can't control its spending. A lot of this... has to do with the failure of the Medicare Sustainable Growth Rate... a small formula that Republicans inserted into the 1997 Balanced Budget Act that was meant to save a bit of money.... The formula was wrong, and it quickly required massive cuts that would destroy the program, and that the SGR's authors never intended. So congresses controlled by both parties have repeatedly kept them from going into effect. Meanwhile, the SGR formula actually has cut costs in Medicare dramatically.... As James Van Der Water and Jim Horney document, the byproduct of the compromises required to keep the formula's cuts from taking effect is that "the reimbursement rate for physicians next year will still be 17 percent below the rate paid in 2001, adjusted for subsequent increases in the costs that physicians incur in providing services as measured by the [Medicare Economic Index]." This is why physicians are so upset. Meanwhile, the vast majority of Medicare cuts passed in the last 20 years have been implemented as scheduled...


_____________________________________


"screw the public hard and lock up the stupid vote" seems to be working for them.

yrs,
rubato

[dgs49]

What a wonderful example of an article written by someone who doesn't know the difference between "price" and "cost."

Simply lovely.

Medicare can't control the COST of anything; it can merely control what it is willing to pay for something (i.e., the PRICE). And the costs that are not picked up by Medicare have to paid by someone else.

It's no mystery.

The COST of state-of-the-art medical care keeps ratcheting up, and it's not a matter of finding the culprit; we are being bankrupted by our ever-advancing capabilities and our unlimited expectations. The technology gets more sophisticated, we are able to help people we were never able to help before, the Public expects the best care that money can buy, and our Tort Law system requires that every practitioner practice "defensive medicine."

One of my former tennis buddies, now 75 (or so) years old, has had a hip replacement, a knee replacement, a shoulder rebuild, and is waiting for his second knee (until everything else heals). Why? He wants to start playing tennis again, and he has the best medical coverages that money can buy (retired university professor). SOMEONE is investing about a quarter million dollars into this guy's joints in order to spare him a little discomfort - discomfort he would have stoically lived with a generation ago.

Do any money-saving suggestions come to mind?

[rubato]

In case anyone was wondering "just how far can someone go to deny obvious facts" you gave them an bright shiny example. Don't worry, no one is asking you to overcome your delusions.


The cost of overhead for M-care is a tiny fraction of that for private insurance. Private for-profit health insurance also extracts ca 20% in profit which adds to the ... what was that word again? ... Cost.


National Health and equivalents in all of the rest of 1st world also holds the ... costs ... of pharmaceuticals down much lower than US for-profit plans do. So much so that big pharma got BushCo to make importation of their own drugs from other countries illegal just to avoid giving up the excess profits ... which are part of our higher ... costs.




yrs,
rubato

[Big RR]

SOMEONE is investing about a quarter million dollars into this guy's joints in order to spare him a little discomfort - discomfort he would have stoically lived with a generation ago.

If he's 75 and in the US, that someone is the US government. Medicare parts and A and B pays the majority of the costs, and his supplemental policy picks up a small portion; and FWIW, as i recall, a physician can accept what medicare pays or opts out of the system or opt out, thy cannot charge the patient more than the scheduled amount (much as a pharmacist cannot charge someone with private insurance extra for a drug, only the approved amount (with may include a copay).

[Sue U]

What a wonderful example of an article written by someone who doesn't know the difference between "price" and "cost."

Simply lovely.

Medicare can't control the COST of anything; it can merely control what it is willing to pay for something (i.e., the PRICE). And the costs that are not picked up by Medicare have to paid by someone else.

It's no mystery.

The COST of state-of-the-art medical care keeps ratcheting up, and it's not a matter of finding the culprit; we are being bankrupted by our ever-advancing capabilities and our unlimited expectations. The technology gets more sophisticated, we are able to help people we were never able to help before, the Public expects the best care that money can buy, and our Tort Law system requires that every practitioner practice "defensive medicine."

Well if you don't actually look at or understand the data you can make up all kinds of fantasies about healthcare costs. But the fact is that average annual healthcare expenditures per person in the US run about $3,000 (which incidentally is a bit less than what it costs me in premiums to insure my family of 5). However, more than half of all people spend nothing (or a negligible amount) on healthcare in any given year, while 5 percent account for about half of all expenditures. The greatest share of that expense goes to treatment of chronic illnesses like diabetes, heart disease, pulomonary disease, cancer and renal failure -- much of which is preventable.

Another major driver of costs is not the actual cost of advancing technology but the fact that every podunk community hospital in the country is spending huge sums on obtaining every available technology as quickly as possible so it can be "competitive" with larger regional institutions and teaching hospitals.

Finally, costs are driven up by the billing methods and practices of healthcare providers: Since payment is based on each service provided, there is a financial incentive to provide as many separately billable services as possible and to "up-code" them at every opportunity to a more expensive category.

Your complaint about the "Tort Law system requir[ing] that every practitioner practice 'defensive medicine'" is specious and is a pure fabrication of the liability insurance industry aided by the U.S. Chamber of Commerce. The standards of competent medical practice are set by the medical community, not the "tort law system." If a test or a procedure is not required by the relevant medical standard of care, there is absolutely no liability for not performing it. That is the law. Medical malpractice insurers have a nasty habit of blaming lawyers whenever they jack up their premiums because their stock market investments or profit expectations go bad. If "defensive medicine" is the norm, how do you explain the Inspector General's report last month that found 15,000 Medicare beneficiaries are killed every month by medical errors, or the New England Journal of Medicine study that found no significant improvement in hospital safety since the 1999 National Institute of Medicine report (which concluded that nearly 100,000 people are killed every year by medical errors in hospitals)?

[Long Run]

Whatever the cause, doctors are dropping and limiting their exposure to Medicare, which in many cases does not pay adequate amounts for the care provided (Medicaid has the same problem). It is not as simple as saying doctors don't take Medicare because they can do better with private insurance. D/M's basic point is accurate: doctors who take some Medicare work are able to do so because that work is subsidized by their patients who pay out of pocket or have private insurers. He is also correct that the main reason for medical care cost increases is due to the amazing developments in care that continue to be created because there is a market for such improved care (i.e., insurance). If we all were satisfied with care circa 1990, we would have had a much more modest health care inflation over the last 20 years.

[Long Run]

One of my former tennis buddies, now 75 (or so) years old, has had a hip replacement, a knee replacement, a shoulder rebuild, and is waiting for his second knee (until everything else heals). Why? He wants to start playing tennis again, and he has the best medical coverages that money can buy (retired university professor).

There was an article in the NY Times in the lead up to the NY Marathon about covering the costs of running injuries. Runners have more injuries than the normal population. The insurance company people interviewed were clear that they were happy to pay the costs of treating injuries for active people since that care is a fraction of the cost of caring for inactive people.

[dgs49]

A few responses (in no particular order):

Any calculation of "overhead" cost in connection with government services is necessarily nonsense. The entire Federal Government is "overhead," as it produces nothing. The phenomenon (mainly occurring in D.C.) of government departments "competing" for the work they do with private enterprises is a good illustration of the ethereal nature of government "overhead." The existing agencies invariably "prove" that they can do things more efficiently than private companies - because the overhead numbers are easily cooked.

Denying that defensive medicine is endemic is ignoring stark, obvious reality. ANYONE who has observed the medical treatment of an elderly relative can attest to the fact that extensive diagnostic testing in the face of the simple deterioration of old age is the norm. The better their insurance, the more tests are run. In my own case, I recently had a simple melanoma removed in my dermatologist's office. Current practice is to go back surgically and remove a chunk of tissue at the site of the melanoma, along with the associated lymph nodes (which makes it two surgeries, not one), when there is less than a 5% chance that the cancer has spread beyond the original excised mole. Total bill, about $30 thousand. And a nasty scar, to boot.

How can you criticize non-urban hospitals from "tooling up" to offer state-of-the-art diagnostics and treatments, when EVERYBODY IN THE FCUKING COUNTRY EXPECTS the best available care? What, exactly, would you suggest they do?

I don't deny that the HC system in this country is, in many ways, a giant cluster-fuck of opportunism - it is not deniable. But I do deny that Libs have any clue about how to address the endemic problems. Simply passing a law that says (a) you can't turn someone down for a prior medical condition, and (b) you can have annual or lifetime maximum maximum benefits, and (c) you can keep your kids on the plan until they grow up [i.e., maybe never], and cetera, is not a solution. It does not address the COST issue, while trying to attack the PRICE, with the result that insurance companies (and unions, by the way) are having to drop coverages due to the fact that this sort of policy requirements are prohibitively expensive.

And as to rubato's point that government controls costs better than the private sector, it is an un-funny joke. The history of Medicare itself is the best (but by no means the only) illustration of that fact. The only way to control costs in a capitalist economy is to unleash the monster of competition. Allow as many competitors as possible, while inserting safeguards against fraud and similar ills. In our case, allow competition by health insurers across state lines. Demand that every insurer quote exactly the same catalog of coverages, so that the consuming public can compare apples to apples. Make employer-provided health insurance taxable as ordinary income. THEN you will see COSTS start to come down.

Socialized medicine can work in theory, however, as I have posted in other forums, it cannot work unless it is premised on a FINITE amount of available funding, and the American people cannot accept that restraint. See stories on the current kafuffle in Arizona over the transplant list.

[rubato]

When Medicare fails to cover costs the providers will refuse Medicare patients. That is how markets work. It is true that if you have excess capacity which is not being utilized you will take a lower level of payment until that capacity is used up but if it is easier to reduce the capacity, and thus reduce costs, you will do that instead. Much of the cost of HC is labor and it is easy to cut hours and reduce the number of employees.

When the Wash. state version of "Medi-Cal" reimbursement was too low to cover the costs, back in the early 2000's, KaiserPermanente chose not to accept the contract (I don't recall the name.).

If the numbers were reversed would we still be hearing this same bullshit argument? No. It would be accepted as definite proof that the government is less competent than private insurers in controlling costs. It is only because the mythology that private is always better-cheaper-faster has been exposed as false that we see the ideologues concocting excuses.

yrs,
rubato

[Andrew D]

One cost that would be eliminated by a single-payer system is readily identifiable: advertising.

[dgs49]

Single-payer would save on a lot more than advertising.

Administration.

Fraud prevention (everything covered - or not).

Just like socialism generally, great in theory: sucks in practice.

[Gob]

Just like all the sensible solutions used in the first world.

Work in practice, unachievable in the USA.

[rubato]

"Competition" great in theory but in practice it has given us the highest healthcare costs in the world with only the 20th-best outcome.

But that only matters to the fact-based community.

yrs,
rubato