Health Care Summit thread

[Wrong Direction]

Nice thoughts, Predicto. I wanted to add a few responses.

First off, a huge number of us do not actually buy our health insurance. We get it from our employer. So the person using the product is not the person buying it. Pure competition doesn't work that way.

Don't be fooled by talking points, both parties want to slowly end employer-based insurance. The exchanges, taxes and lower fines are designed to softly get people out of employer plans. I actually support this, for what it's worth.

Third, the demand for the ultimate product (healthcare) is inelastic. People may not want to pay too much for insurance, but if they get really sick, they want the absolute maximum of healthcare. They expect the health insurer to spend fifty million dollars to keep them alive for one more day, because life is so precious to each of us. How do you reconcile those things?

Very true, and very tough to reconcile.

Fourth, the way that costs are incurred is messed up. Because we reimburse medical "procedures" and drugs rather than results, hospitals and medical device providers and pharmaceutical companies have every incentive to run up costs - and the person who is getting the service (me) has every incentive to let them (because we value our own lives when we are sick and don't care about the costs). We don't have the appropriate incentives to weigh price vs. product in that situation.

Slowly, reforms like ACOs are in the works. They're just a long ways away. Ironically, there's so much money in the current system for docs and hospitals that these reforms aren't very popular amongst providers. In a weird way, it's like war. Someone will surrender when the cost of this price war outweighs the benefits.

Fifth, health insurance is so complicated that it is almost impossible for the average consumer to understand enough to choose wisely.

Medicare Part D is making a lie out of this conventional wisdom. There are some very simple ways to allow people to compare health plans. For example, imagine a table with 5 columns representing plans, then rows would be:

Deductible:

Network PCP Physician copay:

Hospital copay:

Catostrophic limit:

% top 100 drugs:

% top 1000 drugs:

Does it cover my drugs?:

Are their generic alternatives to my drugs?

Overall Quality Rating:

Customer service rating:

Link to list of network providers:

Link to list of network pharmacies:

People can and do make intelligent decisions off of a tool like this. All proposals create this web system. It doesn't exist today.

But if you don't have health coverage, you die. Much more unfair. Or you go to the emergency room whenever you get a cold, forcing the hospital to spend money on you that it must recover elsewhere - like by charging every insured person 300 dollars for a bandaid. Not good either.

It's not true that you die in the vast majority of cases. It is true that you spend too much in a hospital. Hospital coverage of uncompensated care is a great example of why not to politicize healthcare. Basically, they're mandated to cover those folks by law and they largely get reimbursed through Medicare payment rates. I bet not many of you knew that. If they were allowed to turn people away, we'd be much better off. With more insured, they wouldn't have a problem like this anyway.

Seventh, some people have horrible, expensive preexisting conditions, and it is understandable that no insurance company would take such people. No form of competition solves that.

No. They need subsidies, one way or the other. R's actually support this, though they support different proposals than Obama.

My point is, there are so many complications and economic distortions in this area, it boggles the mind. Anyone who tries to say that there are simple solutions like "the free market" is nuts, or lying.

As long as you understand that people who say "the free market" may not have time to outline all of the solutions produced by the free market, I agree. Nothing's that simple, but this complex problem isn't as complex as most people want to make it out to be.

[alexey]

I think there is a role for Federal Government in Health Care. I just don't believe it is the role of managing it. I see the role of Government as protecting the people buy insuring safe and fair practice, based on sound regulation of measures designed to improve the product but not inhibit or dictate the usage or sale of it.

I am not sure what you mean by "managing"... it sounds like a lighter version of the "takeover" talking point... but other than that I agree.

[Predicto]

This only works if you allow independant state legislators to set standards. If your going to sell across state lines, the regulation of such entities will be a Federal Mandated Regulation Standard. This sort of thing can only happen if you allow it. If you have Federal Standards, then it doesn't matter where you are located, if your operating outside of those guidelines, you should be held to task.

That is what I've been saying all along. I have no problem with allowing companies to operate in multiple states - I have a huge problem with allowing all companies to be regulated by the standards of whatever state they choose. But that requires federal oversight, not state oversight.

[Wrong Direction]

A marketplace can be active in different ways. We want to make sure that competition is in value delivered to consumers, not in coming up with creative ways to screw consumers over.

This is done by setting up federal mandates for minimum coverage or, minimally, by setting up disclosure rules.

There should be a process by which this actually happens. I think people will continue to be taken advantage of unless there are proper consumer protections.

I agree that some federal rules makes sense. I know for a fact that ongoing federal mandates will result in less differentiation and higher costs. History proves it to be true.

[Predicto]

France also had an 18.5% fraud rate in healthcare as of last summer. Just sayin'.

Great. We can take what they did right, and fix what they did wrong, and we would have an even better system.

By the way, what was the fraud rate in the US last year? I doubt we can even measure it. I consider charging $300 for a bandaid to be fraud, myself.

[Wrong Direction]

Are you talking about a federal takeover of health care by allowing a government bureaucrat to make health insurance decisions for you?

Just for the record, my understanding is that current HC bill has insurance exchanges + federal mandates = allowing competition across state lines.

This is true, but it's also bureaucratic and limits options. The AHP model is like an exchange on steroids, IMO. More choices across the board.

[Predicto]

As long as you understand that people who say "the free market" may not have time to outline all of the solutions produced by the free market, I agree. Nothing's that simple, but this complex problem isn't as complex as most people want to make it out to be.

I think it is extraordinarily complex.

[alexey]

I agree that some federal rules makes sense. I know for a fact that ongoing federal mandates will result in less differentiation and higher costs. History proves it to be true.

Do you mean higher costs for similar products, or higher costs for better products?

I am having a hard time seeing how competition to provide products that adhere to federal mandates would drive up costs. Competition works. You may be talking about higher costs for more value.

[alexey]

This is true, but it's also bureaucratic and limits options. The AHP model is like an exchange on steroids, IMO. More choices across the board.

Limiting options is not necessarily a bad thing. I do not mind, for example, limiting options of people to buy cheap insurance and then end up driving down value of my house when they get sick and have to file for bankruptcy. Neither do I mind limiting people's ability to stay uninsured and then force me to pay for their emergency room visits.

[Wrong Direction]

But why do you assume that the R (lady from Tenn) is correct in her characterization, that quoting her ends the discussion?

Because I understand the issue.

As far as I can tell, there is nothing that prevents companies from operating in multiple states.

True, but they have to follow different rules in each state. The mandates in New Jersey, for example, are off the chart. The mandates in the southwest are much more limited. Thus, the insurance that's offered can be offered for less because it doesn't have to pay for as much. The last I heard, the people in the southwest aren't falling over dying every day because their insurance isn't good enough.

The real problem with across state lines is in provider networks and reimbursement rates. As long as companies are required to set up provider networks (the most basic mandate of all), that problem will go away.

By "competing across state lines," they mean "let us go to whatever state will let us screw over the consumer the most."

This is an incredibly jaded perspective. I wonder if you have any evidence in differences in customer satisfaction between North Dakota and New York, for example. Frankly, I think this is a basic talking point which is not supported by evidence.

And thus all of America will get health insurance under rules that favors the insurers over the consumer. This would be horrible, given how complicated health insurance is.

But if it's cheaper and satisfaction rates are comparable, why is it so horrible?

"Oh well, you should have realized that your policy didn't cover your kid's leukemia. It was hidden in a footnote on page 304 of your policy, written in Latin. Under South Dakota law, that's perfectly legal. Have a nice day."

As far as I can tell, that is all that is meant by "allow them to compete across state lines." If I'm wrong, please explain it to me.

You're really channeling mainstream fear here. As I said in another post, this risk *might* exist in the short term - in theory, though I'd love to see actual evidence that it does exist - but it would absolutely be exposed in a mature marketplace.

All of these plans report measures nationally. They're audited on those measures. Media will be on the lookout for this. The market will react.

With that being said, I've consistently said that some basic mandates are appropriate, and that I'm much more concerned about federal incrementalism in mandates and federal mandates limiting competitive ideas (e.g., HDHPs).

[Wrong Direction]

I think it is extraordinarily complex.

Only if you try to micromanage it. That's the kicker.

[ABQCOWBOY]

Exactly. Just saying "we favor competition, yay for America" doesn't solve the problem.

Actully creating a market where the insurers compete with each other is complicated. The French appear to have done it better than anyone else so far, but god forbid we should consider anything from France.

I actually love French Toast and French Fries. However, your point is well taken. Because it is Social Health Care in nature, does not mean we can't look at things and not try to adapte them if they can improve our own system. You would have to be a fool not to try and adopt improvements but I think it's important to determine that, in fact, they are improvements.

[Wrong Direction]

Do you mean higher costs for similar products, or higher costs for better products?

I am having a hard time seeing how competition to provide products that adhere to federal mandates would drive up costs. Competition works. You may be talking about higher costs for more value.

To understand this, you have to understand Medicare. In Medicare, Payment rates are set by formulas, and once coverage is determined it is seldomly reviewed. Also, payments for products are often bundled, which means that payment for a cheap product and payment for expensive products are averaged for a payment. The result is complex. Docs/hospitals push cheaper products because their spread is larger. Then the expensive product demands new payment rules, often gets them - your new coverage mandate - with the tacit approval of them as a better/different product. Then, the entire marketplace (large %) moves to that more expensive product because they're getting paid more and they can say they're taking better care of patients with the better product, regardless of whether it's needed. Coverage by Medicare is all that matters.

This is the kicker. Mandates exist to unbelievable levels of granularity. Politicians effect payment of specific products, payment levels for hospitals, limits on days in hospitals, and on an on.

Read that again. POLITICIANS effect these changes. Unlike a marketplace, there aren't two competing business interests negotiating payment rates. There's no way a hospital would charge big money for people with a cold. That's a result of federal mandates. Change their payment system and they might actually still cover those people for *gasp* standard community rates.

The point is that government has created this complex mess. I'd probably need a book to clearly articulate this.

[Predicto]

Because I understand the issue.

No, but you THINK you do. You have a body of information, and you may have tunnel vision in how you view it. Or not. :pfft:

This is an incredibly jaded perspective. I wonder if you have any evidence in differences in customer satisfaction between North Dakota and New York, for example. Frankly, I think this is a basic talking point which is not supported by evidence.

This is a meaningless thing to say.

There is little difference in CURRENT customer satisfaction between states because each state currently regulates the companies that operate in their state. There has not yet been the "regulatory race to the bottom" that would happen if you allowed insurers to choose what state to regulate them, no matter where the customer was. If you did, things would change, fast. South Dakota would deregulate to get health insurance jobs into the state, and every company would go there.

It is hardly a talking point. Look at the back of your credit card. Unless its an Amex, it's going to say South Dakota on it. Why do yo think that is? Because of the financial expertise of the Pierre marketplace?

But if it's cheaper and satisfaction rates are comparable, why is it so horrible?

It wouldn't be cheaper and satisfaction rates wouldn't be comparable. Why compete at all, if South Dakota regulates all of you and South Dakota regulators don't investigate collusion?

You're really channeling mainstream fear here. As I said in another post, this risk *might* exist in the short term - in theory, though I'd love to see actual evidence that it does exist - but it would absolutely be exposed in a mature marketplace.

You have to create an actual marketplace, taking into account all of the economic distortions inherent in the provision of healthcare. You can't just pretend that a mature marketplace is just going to pop up if you "let them go across state lines" - because in that situation there is every incentive for it not to.

Please don't accuse me of spouting taking points or empty fears. I really am not doing that.

[drtdrums]

Great. We can take what they did right, and fix what they did wrong, and we would have an even better system.

By the way, what was the fraud rate in the US last year? I doubt we can even measure it. I consider charging $300 for a bandaid to be fraud, myself.

Medicare/Medicaid was 13% IIRC. Private insurers had a fraud rate much lower than 1%. I can't remember for sure, so I don't want this to be taken as gospel, but I seem to remember it being below 0.3%.

[Wrong Direction]

South Dakota would deregulate to get health insurance jobs into the state, and every company would go there.

It is hardly a talking point. Look at the back of your credit card. Unless its an Amex, it's going to say South Dakota on it. Why do yo think that is? Because of the financial expertise of the Pierre marketplace?

I'm trying to understand your position better. If you're saying that state oversight of insurance plans could be terrible, I suppose I see how that could be true. As I've said in several posts, some basic mandates are necessary and I'd support them. I'm just worried about incrementalism in those mandates. Micromanaging by politicians, if you will.

For example, standard reporting and auditing from Plans should be required. Public dissemination of complaints rates and even things like medical loss ratio, would inform advocates and the marketplace. Shine the light of day on these people for all to see, just don't expect politicians to decide what should and shouldn't be covered, at what rate.

You have to create an actual marketplace, taking into account all of the economic distortions inherent in the provision of healthcare. You can't just pretend that a mature marketplace is just going to pop up if you "let them go across state lines" - because in that situation there is every incentive for it not to.

I'm not sure I follow, but I could offer a hybrid solution to the "across state lines" line of thinking. In the past, R's have countered the "race to the bottom" with provisions related to which states are eligible for the program. For example, if you're from the most expensive state in the nation, you'd be able to purchase across state lines. If you're right at the 50th percentile, you wouldn't be eligible. Also, if your state doesn't allow for HDHPs, you could buy one in other states. There are other variations which should be considered to account for your potentially legit concerns. In other words, it would exist as a consumer protection from the theoretically overly mandated states. Other compromises make sense as well.

Please don't accuse me of spouting taking points or empty fears. I really am not doing that.

Didn't mean to offend you. My apologies.

[Predicto]

Medicare/Medicaid was 13% IIRC. Private insurers had a fraud rate much lower than 1%. I can't remember for sure, so I don't want this to be taken as gospel, but I seem to remember it being below 0.3%.

Then I suspect that what the French are calling "fraud" may be different than what you are calling fraud, or the figures are inaccurate.

Every system has some fraud, but I see nothing about the French system that condones fraud any more than does our system. Total costs are certainly much lower there, and satisfaction is higher.

[Predicto]

I wish I could discuss this more - but work calls and I've spent too much Tailgate time today.

Thanks for the civil discussion.

[drtdrums]

I wish I could discuss this more - but work calls and I've spent too much Tailgate time today.

Thanks for the civil discussion.

One thing that spikes the French fraud rate is that they don't exactly require a lot of ID from patients. Many bordering countries have folks that cross into France for treatment because of their lax requirements.

Also, fraud in the US between private and Medicare/Medicaid is defined the same. I realize that it seems a bit...er...suspicious. However, the private numbers could be off by a factor of 10 and still be over 400% better than government insurance if I'm remembering the numbers correctly.

As I said before, please don't take my numbers for gospel...I honestly can't remember for certain. But I *do* remember being shocked at the difference in fraud rates.

[ABQCOWBOY]

I am not sure what you mean by "managing"... it sounds like a lighter version of the "takeover" talking point... but other than that I agree.

By "Managing", I mean the Federal Government managing Health Care. I just don't think that this is the best methodology. I don't want Health Care to become an entitlement program. Anytime you have that, the numbers that become entitled invariably grow and the burden on tax payers builds. I just don't think that's the best way to go on this issue. Protect Americans from usury practices on behalf of the Insurance Companies and the Health Care Institutions, provide oversight and accountability based on guidelines and best practices but don't be involved in the actual business of Health Care.

[twa]

http://blogs.abcnews.com/thenote/2010/02/a-health-care-summit-fact-check.html

Health Care Summit Fact Check: Will Premiums Go Up?

President Obama and Republican Sen. Lamar Alexander made competing claims about how the Democratic plan would affect premiums. Sen. Alexander says premiums for those in the individual insurance (non-employer) market will go up an average of 10 to 13 percent. The president says it would only go up for those choosing better coverage and that “The costs for families for the same type of coverage that they're currently receiving would go down 14 percent to 20 percent.”

Both cite a Congressional Budget Office (CBO) analysis of the Senate bill done at the request of Senator Evan Bayh.

Who is right?

[Wrong Direction]

http://blogs.abcnews.com/thenote/2010/02/a-health-care-summit-fact-check.html

Health Care Summit Fact Check: Will Premiums Go Up?

President Obama and Republican Sen. Lamar Alexander made competing claims about how the Democratic plan would affect premiums. Sen. Alexander says premiums for those in the individual insurance (non-employer) market will go up an average of 10 to 13 percent. The president says it would only go up for those choosing better coverage and that “The costs for families for the same type of coverage that they're currently receiving would go down 14 percent to 20 percent.”

Both cite a Congressional Budget Office (CBO) analysis of the Senate bill done at the request of Senator Evan Bayh.

Who is right?

Well, they're both speaking to aggregate numbers, not ones which necessarily apply directly to you. For example, if you buy insurance as an individual, you're costs will go way down. If you buy as a member of a large group, they'll go up.

The guaranteed issue will drive costs up. Mandating that everyone purchase a plan will drive costs down (forcing healthier people to buy lowers average risk).

For that specific debate, I honestly didn't pick up the difference between the numbers they were citing. I thought I had until I started writing it up.

[Edit: stupid me, I just read your link.]

[Duncan]

This is one of many reasons why this bill is a travesty. Why should every plan have to cover maternity and mental health?

"Premiums would be 27-30% higher because coverage would be better. The law, for example, requires that all policies cover maternity care, prescription drugs, mental health & substance abuse and no denial of coverage for pre-existing conditions."

[alexey]

This is one of many reasons why this bill is a travesty. Why should every plan have to cover maternity and mental health?

Probably for the same reason it has to cover a number of other medical conditions.

[ABQCOWBOY]

This is one of many reasons why this bill is a travesty. Why should every plan have to cover maternity and mental health?

"Premiums would be 27-30% higher because coverage would be better. The law, for example, requires that all policies cover maternity care, prescription drugs, mental health & substance abuse and no denial of coverage for pre-existing conditions."

I agree. This, IMO, is why we need compatition in the industry, regulated of course. If your a male, you don't need Maternity Insurance. If you have no history of substance abuse, I think you should have some latitude in your plan. If your 40 years old and you don't do crack, your probably not going to start. I don't know, maybe it's just me.

Some of you out there are probably saying to yourself, "I think ABQ's on Crack!"