Off-topic: Government healthcare proposals

On Nov 10, 6:25 am, "HW \"Skip\" Weldon" wrote: Who should pay for health care for people who don't pay for their own?

If being able to get medical care isn't enough motivation to get a job do these people deserve free medical care? The "truly deserving" are never more than 10% of the "I can game the system" beneficiaries.

Perhaps each union worker should pay for one additional non-payer. Maybe each Kaiser patient should pay for another person. Obviously closed systems like Kaiser can offer cheaper medical care than open systems that are forced by law to take anyone. As to means-tested government healthcare, only hardworking, productive savers are excluded. Are "self employed" people going to be forced to pay any amount for required healthcare "because they can afford it"? Governments are very good at exploiting individuals rather than organized masses of voters, even if their only organization is being in an entitlement group. High school drop out crack heads go to the front of the line for free medical care. Is this really how society is supposed to work?

Let's hear from everyone who wants to pay for others healthcare. I sure the local hospitals can set up a fund for these people.

I'll weigh in (a little lengthy)

Re Public Option/ Insurance pools/Assigned Risk plans

My alternative would be to allow individuals or employers join the largest pool of insured Americans - the people who work for the Federal government. Federal employees have the choice of a number of plans each with slightly different coverage, premiums, deductibles and copays. After an open enrollment period of 6 months or so outsiders would have to sign up within say 60 days of losing or quitting their existing health insurance plans or pay a penalty. Premiums would be the governments cost plus say a 2% (from COBRA) fee for admin costs. (probably about $400/mo for the 60-65 crowd) Who would lose - insurance agents who get commissions from selling health insurance.

OR

They could sign up with Medicare. Persons without a work history (e.g elderly immigrants can buy Medicare Part A (Hospitalization) for $460 /mo and can buy Part B (physicians and outpatient) for $96.40 (for the lowest income tier). Since S96.40 only covers about 25% of Part B costs a full share of cost would be overt $800/mo (pricey isn't it).

Assigned risk plans are fairly pricey - California's plan (MRMIP) has monthly premiums of over $800/mo for a high deductible 70/30 PPO plan.

Re: Co-ordination of care etc

If co-ordination of care etc was that effective in reducing costs then Kaiser (a non profit HMO) would have significantly lower premiums than conventional HMOs or PPOs. Guess what - there isn't much difference.

Cost reduction

No one really knows how much care is "defensive" care against malpractice lawsuits and how much is just racking up the meter. When I had really good insurance from work I always wondered whether that second doctor's visit to see if the meds worked wasn't just racking up the meter. After my employer switched to an HMO I wondered if I was missing something by not going back. I think we need some defined "standard of care" and if the doctor thought that more care was needed he would have to justify it.

When we reduce fees to the provider, the provider has to hustle more patients through the office and we will get less face time with the provider and more with physician's assistant. We will find "clerical types" in white coats taking our blood pressure etc. Lower payments far enough and we will have Russian style medicine

We need to think more about "end of life care". We might be better off in a hospice than undergoing another round of complex surgery so that we can squeeze another couple of weeks hooked up to machines. I hope that when my time comes to go into a nursing home I have the strength to reach down and unplug the machines.

Other thoughts

How much of one's income should one have to pay for health insurance. Should you be forced to give up cable TV or pricey cell phones?

Should you be able to buy a lower level of care with the understanding that you are on your own and would be forced into MediAid if you can pay

Under the current system those who do not have insurance, for whatever reason, and need healthcare pay for the healthcare of many others. If you do not have insurance your local hospital will typically charge you three to seven times the Medicare reimbursement rate or the insurance contract rate for any service.

Ever need care at an emergency room? If you do you will learn that there are two ways in. You can walk in the front door and wait hours before you are seen by a triage nurse who will decide when and if you get to see a physician. The other route in the door is to call 911 and have the paramedics bring you in. In that case you will be seen by a physician within five minutes of arrival. Why? Because we have an idiotic law that says that any hospital that operates an emergency room must treat anyone who walks in the door, whether they can pay or not. So where does the money come from to pay for care for those who cannot or will not? See paragraph one above.

Medical tort reform. What could we do with the hundreds of billions of dollars wasted on frivolous healthcare litigation every year? One of the most fascinating statistics I have read is that the U.S. has 5% of the world's population and almost 75% of the world's lawyers. There is more litigation in the U.S. than in the rest of the world combined. Perhaps what we have could accurately be described as government of the people, by the legal profession and for the legal profession.

The federal government already operates two large healthcare programs; Medicare and the VA healthcare system. Medicare pays three to five times more for everything than the VA in spite of the fact that the VA is a much smaller operation. Why? Because Medicare is barred by law from purchasing by competitive bid. I am a veteran and get some of my healthcare from the VA and and my experience is that the VA provides very good care at a far lower cost than any other organization in the U.S. Almost all of the veterans I know feel the same way. Since we have a working model that is very cost efficient why are we not using it as a model for Medicare instead of operating Medicare in the most cost inefficient manor imaginable.

Healthcare is always rationed because there is always nearly infinite demand and limited resources. In this country we have elected to ration healthcare based on ability to pay. Most industrialized nations have made a concious decision as to whether medical care should be a business, a social service or some hybrid combination and have then made an effort to implement the system they selected in an orderly organized way. The U.S. has not made that decision and the result is that we have a for profit free market healthcare system that strangled by thousands of pages of government regulations that have no common goal and have created a dysfunctional incredibly expensive mess. We spend more per capita on health care than any other developed nation and anyone who believes we get the best healthcare simply has not bothered to look at other countries.

The problem with current proposals for change is that they do not go far enough.

That rant should start some discussion.

Actually, the reason that for-profit hospitals charge the uninsured higher rates is so that they can write off larger amounts of bad debt, thus reducing their taxable income and their income taxes.

Dave

That is interesting and certainly plausible. Thanks for pointing it out.

Now that's the oddest accounting I've ever heard of. Maybe a real accountant can jump in, but my understanding is that you can only write off a bad debt after you've taken it as income sometime before.

For example, bill a customer (patient) $10,000 and don't get paid. You take the $10,000 as income (accrual basis) and the bad debt as a $10,000 write off. Net effect $0. Do the same for $20,000, the net effect is still $0.

The hospital can still write off the actual expense of providing the service, but it doesn't matter how they bill the customer.

-- Doug

negotiable that I think it is very hard to say whether the uninsured pay more or less than the insured. I suspect there is little uniformity in charges, even within the same health care facility.

I think I am on-topic when I say that I am keeping an eye peeled on the legislation being considered, since it appears I will be required to purchase insurance, and this will affect my financial planning. (I currently am "self-indemnified," a delusional rationalization.) One thing I found interesting is that government subsidies for payment of health insurance so far seem likely for those with low enough income. So far, assets will not be considered for such subsidies. Rather, Form

1040 AGI (or MAGI) will be the determining factor. The IRS is supposed to assist as needed.

Unless you have a "special rate" (e.g. friend of the doctor) the bill is the bill. What you pay is negotiable. Some doctors will negotiate, others just send the bill to collections.

What percentage of the uninsured would you estimate have the skills to negotiate effectively with a hospital? Just curious.

That sounds like a nice win-win scenario where Uncle Sam (i.e. you and I) pick up the tab but if and only if the patient is indigent. When you consider the case of a person who has a job and has some assets and cannot get insurance due to a pre-existing condition it is a bit different because the hospital sues to collect the debt and can easily force the patient into bankruptcy.

There was a case several years ago where I live of a man taken to the emergency room who required surgery to save his life. If I remember the numbers correctly the Medicare reimbursement would have been $40K, the average insurance contract reimbursement would have been a little under $60K and the hospital billed and sued for over $250k. A tax write-off was not the motivation in that case and that is not an uncommon occurrence.

I have a relatively small circle of friends and out of that group I know two who could afford medical insurance even if they had to pay double the normal premium yet they can not get it at any price.

Something very few people realize is several states already run insurance plans for the uninsurable but due to budget limitations there is frequently a waiting list that is years long to get coverage. So, we are already paying to subsidize coverage for some of the uninsurable who can afford to pay for coverage. Why not simply make all health insurance plans guaranteed issue? Even if we allow insurers to charge higher premiums (within reason) for those with pre-exiting conditions we, as a whole, would be much better off economically than we are with our current system which adds the cost of litigation, bankruptcy and the fallout costs of that foolishness to the cost of healthcare.

I would estimate the number to be about the same as the percentage of bills to the uninsured that goes to collections. Then by my understanding the collections people and process automatically involve negotiating. This is in no small part because collections reps understands that the fees are designed to be negotiable. Just an impression.

Avrum, I see your point as a distinction without a difference, given how common the knowledge is that a medical bill is highly malleable.

Please be assured that I do not mean this comment to be offensive in any way but I think are suffering from the mirror effect. In other words, you tend to view other people as having the same knowledge, attitudes, skills, etc. that you have. The fact that you are here on this forum means that you are far above the average person in this country in education and financial and business acumen. The next time you get a chance to talk to the person behind the counter in a gas station, a bank teller, a farm worker, a machinist in a small manuafacturing facility or any one in a similar occupation ask them if they think medical bills are negotialble and how they would go about negotiating them.

Collection agents are paid a percentage of _the amount they actually collect_. The very last thing any collection agent will do is negotiate the amount because it costs them money.

If you are going to negotiate your chance of getting a significant reduction is much greater if you do it before the bill goes to a collection agency. If you are dealing with a hospital where the amount is fairly significant, say a couple of thousand dollars or more, the single most effective technique I have heard of is a credible threat of going to the press with a human interest story about how Maxi Mega Hospital is screwing this poor uninsured person by charging five times the Medicare reimbusement rate. I know of a couple of cases where that has worked very well.

It seems to me that a lot of the advice given by experts falls into the same category. For example, in the area of financial planning, you often hear someone say: "Do your homework" or "Do your research before you invest." That advice appears sensible at first glance. But, realistically, how many farm workers, machinists, etc., are able to go to the library or use the internet to find out all about the past performance or the future prospects about a particular company's stock or a mutual fund? And another thing that is relevant to a person's financial health: How many of those farm workers realize that it is possible to negotiate with banks, mortgage brokers, real estate agents, lawyers, etc. about the cost of various fees and services involved in financial planning?

I apologize if the above remarks are off-topic. (Perhaps this is a case of something that is off-topic of an off-topic issue being on-topic of the original topic.)

I don't think your remarks are off topic regarding the healthcare debate. The single most important factor in designing any system designed to serve people, whether it is a government program or a commercial offering, is will the target audience be able to understand, use and derive maximum benefit from the system. When the designers have masters or doctoral degrees or equivalent and the users of the system are the average worker there is a huge risk that the designers will view the target audience as a mirror image of themselves and get the design very very wrong. A healthcare system has to work for all Americans, not just the people represented by the participants on this forum.

I actually read some of the house bill.

looked at the Oct 29 version mostly and the Nov 7 (passage) versionhas just been loaded to the web. The table-of-contents prints outat 15 pages. You then can follow links to the deep text. About a quarter of the bill deals with topics discussed in the press. The remaining parts deal will micromanaging costs such as medicare, physician training and indian affairs.

I was looking for sections that could facilitate early retirement, say age 50-65 before medicare kicks in. The bill specifically says that companies have to honor retirement medical promises. But its unclear how they can enforce this. Alternatively the public option looks promising. But that doesnt phase in until 2013, four years from now.

I also poked around for pork, especially of the last-minute kind. I did not see a whole lot, unlike the stimulus bill. Some "pet" diseases like autism are specifically funded. I also saw funding for a class of drugs called biosimilars which probably benefts a few companies. I saw something bor biofuels snuck in.

The bill add some taxes. People making over %500K will have a 5% tax surcharge. There is a 2.5% additional tax on medical equipment. People not signing up for health insurance will have 2.5% tax penalty.

It's hard to know where to start on a topic like this. Still, that won't prevent me from writing. I'll limit myself to 3 issues.

I think my biggest concern with the current efforts to overhaul the health care system is the unspoken requirement to maintain the current employer-based system. Why is that so important? Doesn't the employer-based system suck? Isn't that what got us where we are, today? If we constrain ourselves to leave the employer-based health care system mostly in tact, we severely limit the scope of any potential reform.

At the same time, that's the appeal of maintaining the employer-based system. It makes healthcare reform more politically palatable. If roughly 60% of the population isn't directly affected by healthcare reform, they might find it easier to swallow. Of course, that's just a political ruse. Directly or indirectly, everyone will be affected by healthcare reform.

My second concern is the notion of "controlling costs" (they really mean lowering costs; I don't know why they don't just come out and say that). There is no mechanism for lowering costs. The government can shift costs, but that's not lowering costs. This is true at every level of the health care industry. If you show up in the emergency room, they have to treat you. If you can't afford it, the cost is shifted to everyone else. Medicare and Medicaid are often hailed as champions of cost control. Their method of controlling costs is paying providers less than cost. You're deluding yourself if you think providers just eat that loss. Of course they pass those costs along to everyone else.

The best example of failed cost control is prescription drugs. We look at other industrialized nations and wonder why they pay so much less for their prescription drugs than we do. Obviously, their policies have been extremely effective at controlling the cost of prescription drugs, right? No. They haven't controlled costs at all. All they've succeeded in doing is shifting the cost of prescription drugs. And to whom have they shifted the cost? To us, of course.

In fact, simple supply and demand dictate that the current health care reform proposals will actually raise costs. The proposals all focus on increasing access (i.e. demand) for health care. Is anyone addressing increasing the supply of health care? We already have a doctor shortage in the United States, which is predicted to get worse in the future. If demand goes up but supply remains the same, costs go up. Every economics 101 student can tell you that.

Honestly, I would much prefer nationalized health care to the current batch of proposals. And I say that as a pretty hard-core libertarian. Sure, we would have to essentially double taxes and we'd have the whole host of problems that every other country with nationalized health care has. At least with nationalized health care, everyone would know where they stand. There wouldn't be separate rules for seniors, large employers, small employers, self-employers, unemployeds, families, singles...

I believe real leadership is being able to craft one set of rules that applies to everyone, not repeatedly subdividing the population until you can orthogonally pander to each group. That's just American-style politics at its finest.

--Bill

I routinely quote how less than 30% of the age-eligible population has a bachelor's degree. So I am well aware of how uninformed the general population is. To elaborate on my meaning above, my understanding is medical bill collectors are prepared to ask the client about their income and assets and adjust the bill accordingly. You may want to counter that then the client is not actually negotiating with skill. But the effect I originally cited is nonetheless in place.

My reading indicates that medical bill collectors seek to get something rather than nothing from the client.

I am not splitting hairs over collection agencies vs. medical clinic billing departments, by the way. My point is that medical bills are bogus, and many reports are that those doing the billing are well prepared to reduce the bill.

As I said, reducing the amount is the last thing they try.

Agreed. It is just a lousy and unfair system that tends to penalize those least able to afford the penalty.