Several regulars have asked to have a thorough discussion of the
Healthcare discussions currently occurring in Washington - including
the political ramifications.
We have decided that since things are very quiet here, we would relax
the posting guidelines somewhat so that the issue can be discussed.
IMPORTANT: The rules on TRIMMING PREVIOUS POSTS, showing respect for
other posters, solicitations, and a ban on colorful language continue
to apply. Anyone breaking these rules will be hunt down and shot.
Other than that, have at it.
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.
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.
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.
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
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.
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.
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.
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
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
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
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
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
I looked at the Oct 29 version mostly and the Nov 7 (passage) version
has just been loaded to the web. The table-of-contents prints out
at 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
I saw something bor biofuels snuck in.
The bill add some taxes. People making over %500K will have a 5% tax
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
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,
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.
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.