Health Care and the alternative point of view

**creditcardfree** · 03-29-2010, 12:40 PM

I don't know if I'm going to answer any of your questions, but I have always felt that the problem with the current healthcare is the insurance companies. They are the middleman between two parties in the transaction, the doctor and the patient. There were days when healthcare was provided and a financial arrangement (or barter) was agreed upon between the two parties. It just seems simplier...may not be the answer but it seems simplier!

Doesn't it seem costs have increased faster since insurance companies have been involved? So, I also question whether costs will really go down. Unfortunately, we required healthcare we will be held captive to the costs laid out in front of us...up or down!

Again...no answers just my two cents.

**dfeucht** · 03-29-2010, 12:51 PM

Always a fiery topic! I suppose I probably align myself with the liberal agenda, I also consult in health care (for insurance companies, providers, and governement programs). There are many of us in that field with a wide array of viewpoints as well... so we have many interesting (and mostly civil) discussions.

Full disclosure - I support a single-payer system personally... although if implemented I would be out of work. I also understand that is not something that will happen with the American mindset that the government does almost everything wrong and a social program as large as single-payer health care could only mean disaster.

As for your numbers - I have seen facts and figures about 45 million uninsured which would leave around 255 million insured in some way or another (commercial insurance, Medicare, Medicaid, Children's programs, etc.).

I believe the uninsured has increased from the number above due to increased unemployment and may increase more once COBRA coverage and subsidies expire. This is the first issue I have with the current system. Why does one have to be employed (with an employer who offers decent insurance) to get affordable coverage? I think there is a fundamental flaw there. As with pensions I think as costs spiral out of control more and more employers would drop coverage and leave employees to fend for themselves. Perhaps the penalties in the reform bill will help (even though they pail in comparison to the true cost of coverage).

There is affordable coverage in the individual market but only if you are in pristine health. The health care reform attempts to address this however the provisions included may drive the price too high for the healthy folks in the individual market. If the penalty (1-2% of income) for not having insurance is not enough to keep the healthy folks in the insurance market, there will be a death spiral of insurance costs as people will only buy in when sick. I believe the mandates in reform are weak and could cause a major issue. (Some will argue that that was what Obama and the liberals want is to see the death spiral so they can point at insurance companies and blame them for the high costs and take over the insurance system - I am less cynical than that, but who knows). Mandates are essential for this to work (in my opinion).

The question was asked whether the reform addressed spiraling costs and I believe that is an emphatic NO and that is my biggest issue with the bill. There are some demonstration programs to align payments with outcomes as opposed to per service payments, but not enough was done to address reimbursement and therefore I am pretty certain costs will still rise. At this point the administration has vilified insurance companies and has done less to target hospitals and specialist physicians (PCPs are underpayed and the incetives aren't there I don't believe for those in med school to become PCPs due to cost of schooling/training and lack of payment which will be a huge problem!)

One other issue is people have been spoiled with the level of benefits received and don't understand the true costs of medical care. I believe that preventive visits should be covered to catch diseases before they explode, but people aren't incented to truly decide whether they REALLY should go to the doctor for a cold or to the ER if it is after hours because they pay less than 20% of the cost of that visit and don't really know what it costs to make that trip.

Lastly - the person you mentioned who doesn't work and doesn't have coverage still will need to go out and obtain coverage. This bill isn't really universal coverage - people have to go out and get their own coverage. I believe all states require auto insurance (mandate) but many states have only 80% or less compliance. So who knows how many will be covered in the long run... we'll see.

As you can see I am passionate about this subject. I have my opinions but know I don't have the answers... but love to have civil discussions. Thanks for the post and look forward to discussion.

**alternateme** · 03-29-2010, 12:53 PM

I know very little about health insurance so don't slam me for this if it is wrong, but the way it was explained to me is that if your brother doesn't have health insurance, you are still going to have to pay for him when he gets sick through higher medical costs and your tax dollars when he ends up at an emergency room. The emergency room is the most expensive type of treatment. By getting everyone onto insurance, you bring down the cost because you catch the medical problems when they cost 100s of dollars to fix rather than hundreds of thousands of dollars.

**jIM_Ohio** · 03-29-2010, 01:19 PM

Originally posted by alternateme View Post

I know very little about health insurance so don't slam me for this if it is wrong, but the way it was explained to me is that if your brother doesn't have health insurance, you are still going to have to pay for him when he gets sick through higher medical costs and your tax dollars when he ends up at an emergency room. The emergency room is the most expensive type of treatment. By getting everyone onto insurance, you bring down the cost because you catch the medical problems when they cost 100s of dollars to fix rather than hundreds of thousands of dollars.

I understand the problem you mention...

my understanding is the #1 cost of health care is "end of life care"
and emergency room would be more expensive than general doctor visits.

But I have no reference to show the above facts are facts and not just what I think...

Is the reason for the high cost of emergency room care because a hospital is REQUIRED to treat everyone (regardless of ability to pay) or is the reason for the high cost of emergency care because people abuse the first item and show up without the ability to pay?

I do see the "if everyone had insurance, hospitals save money on emergency care" argument and believe that is a top 5 problem for health care to fix. But to increase taxes a few trillion to solve that one problem is bureaucratic overload (to me). There must be a "simpler" solution than requiring everyone to have health care (IMO).

Thx for reply, these are the kinds of points I am trying to decipher thru to see if this makes sense for the whole country.

**creditcardfree** · 03-29-2010, 01:33 PM

I did a quick google of 'number uninsured americans 2009' and came up with several numbers ranging from 9 million, 45.7 million and 86.7 million (over two years).

And this article is interesting about the statistics of determining the number of uninsured. It was written over a year ago, and I can't say whether the source is credible or not.

**dfeucht** · 03-29-2010, 02:12 PM

Jim - 5% of the population represents about 50% of health care spend and most of that can be attributed to end of life care --- 20% of the population represents about 80% of costs - this additional 15% of folks are typically chronic conditions (diabetics, asthamtics, Congestive heart failure, etc.). I have seen this in numerous studies and in work I have conducted. It is actually remarkable how consitent these numbers are.

ER costs for a low level visit (i.e cold, flu that if a medical visit is actually required should probably be seen by a physician) seem to be about 3-5 times what the same visit to a doctor's office would cost. My guess for the vast difference is that the overhead for an ER is MUCH higher and it is set up to handle true emergencies such as car crashes, heart attacks, gun shots, etc.

Everyone has access to health care - anyone can go to a hospital or doctor whether they have insurance or not. Whether they can afford that visit without some sort of coverage is another thing. Whether we offer affordable access to everyone is truly a philisophical discussion because in order for everyone to have affordable access, someone else has to cover some of that costs (healthy people through higher premiums that don't reflect their risk, anyone who pays taxes through some surcharge, etc.). Still in plans obtained through your employer single people typically subsidize family premiums and the healthy people subsidize the sick as well. It just isn't as noticeable as often employers contribute 60-90% of premium costs.

**jIM_Ohio** · 03-29-2010, 02:28 PM

Originally posted by creditcardfree View Post

I did a quick google of 'number uninsured americans 2009' and came up with several numbers ranging from 9 million, 45.7 million and 86.7 million (over two years).

And this article is interesting about the statistics of determining the number of uninsured. It was written over a year ago, and I can't say whether the source is credible or not.

Originally posted by dfeucht View Post

Jim - 5% of the population represents about 50% of health care spend and most of that can be attributed to end of life care --- 20% of the population represents about 80% of costs - this additional 15% of folks are typically chronic conditions (diabetics, asthamtics, Congestive heart failure, etc.). I have seen this in numerous studies and in work I have conducted. It is actually remarkable how consitent these numbers are.

I snipped what was not needed
this is good info-

can you help me with demographics.

5% of population is 50% of the health care expenses... if this is "consistent" year over year, my questions would be... is it the same 5% this year as last year, or is this "rolling" meaning whoever had that $500k bill this year is usually "off the radar" the 10 years following.

I asked this same question to MIL which tracks high claims for anthem- she did not know.

20% of population represents 80% of costs. Do we know which 20% (is it the same 20% year over year, or is a significant amount of the 20% someone new to the system each year).

If 15% are chronic, do we have a way to extract that data out from above (for example if you compare my expenses to someone with diabetes, their costs are higher than mine, and on occasion might be in the 5% or 20% above).

Here was the theory I am going off of...

We do NOT need to insure 100% of people if only a small fraction of the people incur a significant fraction of the costs. What we need is a way to either
a) predict who will have high costs, and require those people to have insurance (or provide it to them with a subsidy).
b) have a "lifetime minimum" tax credit for health care where the first $X of care are not subject to the AGI floor or are handled like an HDHP. Meaning if there was a universal HDHP type plan all americans fell into (for life) where you are expected to pay the first $40,000 (or whatever number the stats suggest is a sweet spot) you incur, then some form of co-insurance kicks in...

My thought is if I need something fixed, its better to tweak something here or there, and not make broad mandates or requirements.

For example, if a federal HDHP plan existed, and to qualify you must either
a) have incurred 20k or more of uninsured medical expenses during last year
or
b) incurred 40k or more of uninsured medical expenses during last 4 years
or
c) incurred 100k or more of of medical expenses over last 12 years...

**the point of a-b-c choices was to use the stats mentioned above for 50%, 80% and chronic costs to qualify for some level of coverage**.

I do not like penalizing employers which do not provide it
I do not like penalizing people which choose not to insure themselves initially.

the fact no one was looking to tweak the system, and everyone just wanted to overhaul it with the current insurance providers tells me this probably won't work (but that is just me).

Thanks for the stats...

**Scanner** · 03-29-2010, 02:40 PM

Hello JimOhio - long time no post. I hope you are fine.

Here are my liberal leanings:

1. I do think healthcare needed/needs reform.
2. I did think a Public Option (key word - option) wasn't the coming of the Anti-Christ
3. I do think some consideration to the "self-employed" (i guess your brother falls here) needs to be made. We pay double SSI, don't get double the benefits and they are the "seeds" of the economic engine in this country. The next Bill Gates could be sitting in a cubicle somewhere, afraid to go out and upstart the next Microsoft for fear of losing his crappy HMO that him and his family are on.

I am not saying give the self-employed healthcare. . .just some consideration and an opportunity to pool resources (as per the exchanges).

Here are my Conservative leanings:

1. I think VAT (value added tax/sales tax) is the best way to fund healthcare and change behavior. Placing VAT on cigarettes, sugary sodas, tanning beds, fatty and sugary fast foods, chips, etc. could fund healthcare and reduce costs and was a platform the GOP really missed out on during the whole debate.

No one says Americans have a God-given right to tax-free unhealthy food. Hey, I know I'd pay a $.50 chocolate bar tax (like my dark chocolate).

**creditcardfree** · 03-29-2010, 02:43 PM

Originally posted by jIM_Ohio View Post

a) predict who will have high costs, and require those people to have insurance (or provide it to them with a subsidy).

I don't know why exactly I have a problem with this...you pick the person with the most care cost, require an insurance company to charge a premium, which will be high because the cost of care will be high and then subsidize it. Of course, it is with all tax dollars. The insurance company takes the brunt of the cost share on that. Maybe not different from what already happens today, the only difference is the insurance company has to cover the person. I don't think I can actually articulate why that bothers me.

My thought is if I need something fixed, its better to tweak something here or there, and not make broad mandates or requirements.

For example, if a federal HDHP plan existed, and to qualify you must either
a) have incurred 20k or more of uninsured medical expenses during last year
or
b) incurred 40k or more of uninsured medical expenses during last 4 years
or
c) incurred 100k or more of of medical expenses over last 12 years...

I think a better plan for the government would be to subsidize hdhp insurance plans. This gets people working on their own healthcare and understanding the costs, putting less cost on insurance companies, but yet covering large bills...which is what insurance was originally designed for: to reduce the risk of financial disaster.

Now we have insurance with high premiums that cover our oil changes...oh, I mean routine office visits! Shouldn't we be able to cover the small stuff?

**dfeucht** · 03-29-2010, 03:21 PM

Originally posted by jIM_Ohio View Post

I snipped what was not needed
this is good info-

can you help me with demographics.

5% of population is 50% of the health care expenses... if this is "consistent" year over year, my questions would be... is it the same 5% this year as last year, or is this "rolling" meaning whoever had that $500k bill this year is usually "off the radar" the 10 years following.

I asked this same question to MIL which tracks high claims for anthem- she did not know.

20% of population represents 80% of costs. Do we know which 20% (is it the same 20% year over year, or is a significant amount of the 20% someone new to the system each year).

If 15% are chronic, do we have a way to extract that data out from above (for example if you compare my expenses to someone with diabetes, their costs are higher than mine, and on occasion might be in the 5% or 20% above).

The top 5% are usually end of life, cancer, or a serious accident. Typically those 5% are unpredictable and change year over year. I would say that the next 15% are more predictible as they have the chronic diseases such as diabetes, asthma etc. On average yes a person with diabtetes will cost Y times more than the average non-diabetic and similarily CHF patients will cost Z times a "normal" non-chronic person. They require more physician visits and monitoring and often more prescriptions thus higher costs.

Although I believe in the single-payer system (and understand some sacrifices that would need to be made such as waiting lists for elective procedures - whether we consider them elective now as a society or not and rationing end of life care like heart transplants for those over a certain age) -again I know that will not happen so I think a catastrophic coverage is absolutely the first place to start. Not sure what that level of coverage is, but it is a good thought and one I personally advocate in the current enviroment.

**maat55** · 03-29-2010, 04:22 PM

It is a fundamental truth that anything the government gets involved in will cost more.

Insurance is expensive because the government gives incentives to the employer and not the individual. Most people carry low copay insurances and do not shop for insurance or lower cost healthcare.

In addition, government plans(tri-care,medicare, medicaid and the plan government employees are on) do not pay full price causing the private sector to pick up the tab.

To get lower prices:

Give tax incentives(not credits)to the individual, not the employer. Most companies would replace healthcare dollars with wages or bonuses. The individual would shop for insurance, likely buying an HDHP. This would allow them to contribute to an HSA and shop for regular healthcare provision.

If need be, mandate HSA's,this keeps the money out of the hands of the government.

Limit bankruptcy amounts on healthcare.

Limit medicaid to children under 18.

Faze out medicare.(with the 60 billion in fraud)

Tort reform.

Global insurance competition. Insurance is for wealth/debt protection, not all inclusive healthcare. Individuals should have multiple options from multiple companies.

Medicare is a failure, expanding it with an single payer system would be suicide. Forced healthcare or insurance is unconstitutional and unamerican and unnecessary.

The free market and personal responsibility will reduce costs, reduce fraud and reduce over usage.

Modern healthcare is a plague on freedom.

**jIM_Ohio** · 03-29-2010, 06:08 PM

Originally posted by creditcardfree View Post

I don't know why exactly I have a problem with this...you pick the person with the most care cost, require an insurance company to charge a premium, which will be high because the cost of care will be high and then subsidize it. Of course, it is with all tax dollars. The insurance company takes the brunt of the cost share on that. Maybe not different from what already happens today, the only difference is the insurance company has to cover the person. I don't think I can actually articulate why that bothers me.

Just because I posted it, does not mean I believe it... if we can predict based on statistics, my stance is we can then make the problem go away without forcing everyone to carry the insurance.

If the system requires those which not need it pay into it to fund it for those which need it, the system is broken.

Life insurance works well- only the people which want it pay in. They are the ones which also collect... the issue with health insurance is everyone has this expectation a doctor visit costs $20 or $50 for a co-pay, and it costs so much more than that for the visit. Its easier to change the expectation than it is to change the funding (IMO).

**markusk** · 03-29-2010, 09:38 PM

I see the spiraling costs and I already have insurance
so I just "don't get it" that everyone having insurance prevents the costs from continuing to increase.

jIM_Ohio, you have a very good point.

If you look at certain elective procedures or medications for which insurance does not pay, you will find that the cost of that procedure or medication, over the years, have come down. Take Lasik surgery, for example. Because you have to "pay cash out of pocket," you WILL shop around and look for a good price. For lasik surgery, better and more complicated machines have come out, but prices keep dropping. This is true market forces at work!

There is one area of healthcare that will always need HEAVY subsidies: children's hospitals. Most major cities have only one children's hospital (if they have one at all). This is because they are so expensive to run and can never earn a profit. For this reason, children's hospitals in the US are non-profit, affiliated with a major university -- I am not aware of a single for-profit children's hospital -- supported by constant community fund raisers and research grants (come to think of it, the phrase "for-profit children's hospital" simply sounds "wrong").

Others posted about the high cost of "end of life care" in the elderly. What about pediatrics? Because children are so "plastic" they can easily "bounce back" from major injuries and disease -- if they are given proper care (sometimes many weeks in the ICU) -- and can expect to live normal productive lives. Pediatric end of life care is very expensive.

**cptacek** · 03-29-2010, 09:41 PM

Health care should not be tied to employment. Individuals should be treated the same as companies, in that if companies get a tax deduction for providing their employees health insurance, individuals should also get a tax deduction for buying health insurance on their own. Health insurance is a benefit that should be taxed, but then individuals could write off their cost. You are supposed to count bartering as income, so why not employee benefits?

Tort reform wasn't included because trial lawyers have a very powerful and competent lobbying force in Washington, and many lawmakers are themselves lawyers.

Companies cannot compete against the government on price. The government does not have to break even when looking at price vs. cost. The government can force the price to be one thing while ignoring the cost, but companies have to actually break even or make money in order to stay in business. Also, the government does not have to pay taxes and companies do, an automatic disadvantage companies have to overcome if they are allowed to compete with the government. Government should be referees, not participants.

I like HDHPs and Health Savings plans, where the person actually pays money out of pocket before the insurance portion kicks in. I dislike that these are disappearing with this new law. I do like your (someone above's) idea on 5 year out of pocket caps or lifetime oop caps.

I am worried that doctors are going to quit rather than deal with this new law and new regulations. I am already 30 miles away in two directions from the nearest hospital or doctor's office. Most hospitals out here are more like triage centers...stabilize and airlift to a big hospital 2 1/2 hours away. The nearest ob/gyn that knows anything is over an hour drive away.

I think the biggest problem is that the users of health care don't have to directly pay for anything. Even if individuals had to pay the costs up front and then submit to insurance, I think people would get a better understanding of how much these things really cost. It is like when you are a kid and your parents complain about the cost of going out to eat. You don't know how much work went into earning the money for a night in a restaurant, you just know the food tastes good and you would like that experience again.

I don't know why insurance companies can't sell across state lines, and even with that law, I don't know why states didn't set up agreements between themselves to have the same requirements so that one company could sell the same kind of policy to multiple states. The state insurance commissioners really dropped the ball on this one. If they had diluted some of their individual power by working with other states, they might have saved some power instead of losing it all to the federal government. Is there still a need for an insurance commissioner in a state? Perhaps for auto insurance and fire insurance, but won't the health insurance part of their job be gone now?

Health Care and the alternative point of view