Government Health Proposals

My sister, because of pre-existing conditions, pays $1200 per month for her insurance.

"Defensive" medicine is also good for the patient when it helps get an accurate diagnosis.

Preventive medicine is what can reduce medical costs.

A broken leg may only require a few days in a nursing home.

The major medical part of health insurance is where the problems lie.

The government needs to deliver enough care to keep people working or at least out of nursing homes.

The problem with high deductible insurance is that the insurance company doesn't bargain lower fees from the doctors and hospitals.

-- Ron

Which highlights another problem with the current system. Unless you are an attorney with a lot of healthcare knowledge and time to invest reading the policy it is very difficult to compare policies and know exactly what you are getting.

One of the best things I discovered about Medicare when I reached 65 is that there are a reasonable number of medigap plans (12 I think) whose benefits are precisely defined by Medicare. So if you decide that plan F is right for you you can then compare the cost of plan F among various vendors and know with absolute certainty that you will get exactly the same coverage no matter which vendor you pick. That forces the insurers to forcus on being the low cost provider instead of trying to make money by limiting claims. Anything that forces the focus to cost control is a good thing.

Not true of my high-deductible health plan (from Great West, recently acquired by Cigna). I pay the insurance company's negotiated rate. AND I pay it with pre-tax dollars, which is a pretty significant savings.

--Bill

Medicare funds no charge counsellors (the SHIP program) who will help you compare your options in dealing with the costs that Medicare does not cover. The major difference between Medigap policies are those which use age related premiums and those which use county based premiums.

I concur with Bill.

That is not what is generally understood as "defensive" medicine. Defensive medicine is diagnostic testing which has no medical benefit and whose sole purpose is to provide documentation for defense of a malpractice suit.

Exactly. Even if you get a policy with a deductible that is so high that it does not qualify for the tax benefit you are still way ahead because you will pay the contract rate for services even though you are paying 100% of the bill and the insurer is paying nothing.

Depends very much on the state. In states with variations on community rating, the most expensive folks to insure get rates that are limited by law -- typically to something like 200% of the rates they charge the youngest and healthiest folks. Naturally, that means that in those states, the youngest and healthiest pay much higher rates than in states without community rating (and leads to higher rates of uninsured healthy young people).

In a few states, community rating is imposed on small group plans (ie. small employers). In even fewer, community rating is imposed on individual plans as well.

The variation in cost if you are an individual pricing a plan in a non community rating state against a plan in a state which has it is quite instructive. In my own family's case, our rate in a community rating state was approx 2x the cost for a similar plan in a non-community rating state.

They do. Someone with a typical HSA high-deductible plan gets the same negotiated "network" rates as folks in the traditional plans -- and typically very much cheaper than the standard billed rates that providers attempt to charge the uninsured.

The whole business needs vastly more pricing transparency. Having one's health insurance paid for by one's employer, thus hiding the cost of the insurance itself, and then having the bills paid directly by the insurance company to the providers without the patient ever seeing the actual costs is an obvious recipe for inflation. Folks will always use more of something that doesn't seem to have any price. HSAs and high-deductible plans may not be perfect, but they are a vastly better approach to this lack of transparency than the alternatives currently in place.

(Then there's the whole issue of getting employers out of the loop entirely - it would be hard to contemplate a worse plan than having one's employers provide this stuff. And the current bill that the House passed actually makes the employer entanglement *worse* rather than better.)

You would think, but apparently not. I was listening to an interview with a former U.S. Surgeon General (didn't catch which one) on NPR. He made the point that preventive medicine reduces medical costs for an individual but in most cases not for society. As an example, the total cost of screening most or all women periodically for breast cancer via mammograms is much higher than the cost would have been to treat those women who's cancer went undetected until a late stage since relatively few women end up with breast cancer.

His point was that the benefit of most preventive medicine is better outcomes, like catching breast cancer early, not saving money.

-Will

will dot trice at comcast dot net

recommends screening for breastcancer.

To only look at mortality in determining cost effectiveness is short sighted. Breast cancers that are caught early involve less trauma to the patient and shorter recovery with less physical therapy. Better outcomes save money.

-- Ron

Even if better outcomes do not save money better outcomes are a legitimate goal in itself. What should the goal be?

1) Provide the lowest cost care possible.

2) Provede the best outcomes possible with the resources that we decide to devote to healthcare?

I disagree; with the notable exception of most vaccination programs, better outcomes are more cost effective, but they do not save money. That is to say, money for preventive medicine is money well spent, e.g. breast cancer screening, but in most cases the cost over all patients (including those who will never get cancer) is typically higher than the total of treatments. An individual might save money, but not the healthcare system itself.

-Will

will dot trice at comcast dot net

Government goals should be to a) keep people able to work as long as possible b) keep people out of assisted living or nursing homes as long as possible

-- Ron

Also, there have been many persuasive studies espousing the theory that seeking better outcomes, as you propose, although they may not be the lowest cost to the healthcare system are the lowest cost to the economy as a whole.

snip stuff for brevity, especially stuff on breast cancer prevention

Breast cancer screening has become highly controversial, because too often it yields a wrong diagnosis, and so in fact is not screening at all, leading to unnecessary invasive procedures. I think one has to remember that some doctors profit from the equipment and clinics involved in mammograms. From my reading, it is overprescribed (in particular, among younger women), and the overprescription does not change outcomes.

Safeway chair and CEO Steve Burd has been experimenting with health care reform within Safeway, in particular giving Safeway employees incentive to practice preventive medicine. According to him, the dollars Safeway loses to providing incentive are more than made up by the dollars Safeway saves in health costs.

This is not the point I took from reading at

0183531&ft=1&f57 . Here is the quotation that seems to sum things up, by formerassistant surgeon general Douglas Kamerow: "Preventive services are worth it if they improve health at a relatively low cost. The way we control health care spending is by moving our money from expensive low-value services - both treatment and prevention - to more cost-effective, but not cost-saving, high- value interventions. That means fewer expensive drugs that extend life a week or a month. More proven early interventions that can extend life for years or decades.

Yes, prevention does not save money, but effective preventive care, like effective treatments is a crucial part of a reformed health care system."

ISTM Kamerow is stating the obvious: Do not waste money on preventative care not shown to be preventative.

One of the minor annoyances I find in much of the discussion about healthcare is the fact that, as you are indicating here, what folks talk about is health care -- but they keep using the words "health insurance". Our system has some aspects of insurance, still -- in that if you have one of those 1 in 1000 events, the amount that you have to pay out of pocket is generally capped. But it's also, as you are saying, become a system of prepaid medical care wherein folks have prepaid (or, more commonly, their employers have prepaid) for a bunch of basic medical care at a prenegotiated discount. And since the end user never actually sees many of the bills or costs (and worse, there's often no marginal cost for services at all), nobody should be surprised at an overuse and cost spiral.

In a more traditional approach, insurance is purchased to protect against unlikely events which, if they do happen, would cause major problems. (Well, permanent life insurance is the traditional exception, inasmuch as everyone dies, but even that is really built out of a pair of things, one more of a savings and the other the actual insurance part).

The push for HSAs with HDHPs is something of a return to the traditional role for insurance, and studies have shown that they do lower folks spending as they make them much more conscious of the costs.

In the larger societal sense, there's a place for some sort of backstop on folks catastrophic costs. Just like we have bankruptcy protections because at some point, there's just no geting out from some situations, similarly, at some point, it's just not realistic to expect folks to be able to pay for catastrophic care out of pocket. Whether that backstop is fully private or provided by the government (and paid for via broad taxes, hopefully, rather than by forcing employers to foot the bill), that backstop needs to be there. Nobody should be bankrupted due to medical costs -- if they are, there is really no large societal savings, since they then become dependent on the rest of us anyway (and they fall into the welfare and medicaid system).

Sure. But we've already made a commitment that at some point, when folks are in catastrophic circumstances, we are going to take care of them. We don't want folks dying in the streets, or even living on them or starving. The trick is to make sure that they bear the burden and take responsibility as much as possible, but not more than possible.

Not that the House bill really addresses this distinction all that much as far as I can tell. And not only doesn't it do anything about the entanglement of employers and employment, but actually makes that problem (and it is a huge part of the problem here) worse.

And, as I stated, that most preventative medicine does not save money, "Here's the dirty little secret: most prevention doesn't save money any more than treatment saves money." (from your link).

Thanks for posting the link - Kamerow that was the dude's name!

Amen to that. And I think the tax code adds yet another layer of opacity. Or, at the very least, it makes it hard to perform an apples- to-apples comparison. Suppose you get your health insurance through your employer and you think you're paying too much for it. There are two major obstacles to shopping around for health insurance.

First and foremost, there's the employer contribution. If you opt out of your employer's health insurance, your employer isn't likely to just fork over their contribution. My employer adopted a "cash-in- lieu" plan this year. If I opt out of their insurance plan, they'll pay me $100 per month. That's about 1/5 of what they actually pay for my insurance.

The other obstacle is the tax code. Any money you and your employer put toward your employer-provided health insurance is pre-tax. If you opt out of your employer's insurance and (somehow) receive that money in your paycheck, you'll pay taxes on it. Assuming you're in the 25% federal bracket, below the Social Security wage base, and 5.75% state income tax, you'll lose 25% + 5.75% + 15.3% = 46.05% of that money. You can deduct your premiums from your federal and state taxes, but only if you itemize and only the amount that exceeds 7.5% of your AGI. Not exactly a level playing field.

--Bill