Budget Fight: Why Don't The Gop De-Fund Medicare / Social Security?

[chipwhich]

For what it's worth, plans are already rated on many measures of quality and those ratings are likely to be placed on these same website for comparison purposes. So, in addition to seeing what's covered, consumers can see how plans are rated across many categories, such as customer service.

 

This isn't in place because of the ACA, but it'll help the comparisons. In Medicare Advantage, plans are financially incented to receive 4 or 5 stars (out of 5) on ratings. It's a big financial incentive too.

 

What does quality mean?  For my wife it's seeing the doctors she wants.

 

I am interested to see how this plays out.  Keep in mind, insurance companies aren't out there to lose money.

 

Exchanges set up.

Year 1 rates look really nice.

Everyone with pre-existing conditions gets healthcare (you know the ones who couldn't get it before).

 

Every year after year 1 is where the fun begins.

Average age of membership will increase (we have another age bubble).

True cost to insure the pre-existing (uninsurable crowd) will be known based on claims.

Rates will be adjusted accordingly to pay for the uninsured and aging.

Prices will go up each year, I predict significantly and folks will be outraged.

[Tulane Skins Fan]

People should check this out:

 

http://www.escapefiremovie.com/

 

No, I'm not affiliated with it in any way.

[Wrong Direction]

What does quality mean?  For my wife it's seeing the doctors she wants.

 

I am interested to see how this plays out.  Keep in mind, insurance companies aren't out there to lose money.

 

Exchanges set up.

Year 1 rates look really nice.

Everyone with pre-existing conditions gets healthcare (you know the ones who couldn't get it before).

 

Every year after year 1 is where the fun begins.

Average age of membership will increase (we have another age bubble).

True cost to insure the pre-existing (uninsurable crowd) will be known based on claims.

Rates will be adjusted accordingly to pay for the uninsured and aging.

Prices will go up each year, I predict significantly and folks will be outraged.

 

Going from memory, quality is derived from customer satisifacation rates, things like average wait time on the phone, ability to handle appeals quickly, appeal overturn rates, access to common "important" services like HgA1C for diabetics, and generally a lot of things defined through HEDIS.

 

It's not perfect, but it's a pretty fair proxy for customer service and access to care.

 

I'm sort of opposite of you on pricing though. I think the baseline is too high as a result of mandates and geographic limitations on competition (and the other stuff I listed last night above), but I strongly believe that competiting plans will be able to hold the line on costs much better than single payer Medicare, for example.

 

While the ACA gives politicians too much say in benefits (bad, IMO), the best part is it takes politicians out of pricing. This will prevent every lobbyist from going to ever member of Congress and telling them that people will die if x, y or z payment cut is put in place. That's what happens in Medicare, and it's why Medicare is incapable of containing costs across the program over time.

[chipwhich]

I'm sort of opposite of you on pricing though. I think the baseline is too high as a result of mandates and geographic limitations on competition (and the other stuff I listed last night above), but I strongly believe that competiting plans will be able to hold the line on costs much better than single payer Medicare, for example.

 

I will admit I don't understand how base pricing happens.

 

I do know as a small business owner, I have competing plans year after year.  Pricing is tied to age and health of my company.

 

I have never had costs decrease, as my average age of company has increased.

 

But competition exists.

[Wrong Direction]

I will admit I don't understand how base pricing happens.

 

I do know as a small business owner, I have competing plans year after year.  Pricing is tied to age and health of my company.

 

I have never had costs decrease, as my average age of company has increased.

 

But competition exists.

 

There's a lot of reasons for this. Some are related to the entire system (e.g., access to specialists, thus no leverage in pricing negotiations), some to the cost of private contracting (brokers, admin fees of various kinds) and some are related to government pricing/mandates/audits/etc.

 

None of the entities have been uniformly successful in holding down costs over time, I'd argue. There are glimmers of hope everywhere.

[Larry]

Prices will go up each year, I predict significantly and folks will be outraged.

Of course they'll go up each year. They've probably gone up every year I've been alive.

I'm now paying five times what I was paying, 10 years ago, for the same coverage from the same company. (Although, granted, part of that's because I first bought health insurance 10 years ago, and it was a "come on" rate. My rates were doubled when I'd been a customer for one year.)

[chipwhich]

Of course they'll go up each year. They've probably gone up every year I've been alive.

I'm now paying five times what I was paying, 10 years ago, for the same coverage from the same company. (Although, granted, part of that's because I first bought health insurance 10 years ago, and it was a "come on" rate. My rates were doubled when I'd been a customer for one year.)

 

Yeah but your policies didn't allow every person with a pre existing condition to join.

 

We shall see after 1 year.

[Larry]

While the ACA gives politicians too much say in benefits (bad, IMO), the best part is it takes politicians out of pricing. This will prevent every lobbyist from going to ever member of Congress and telling them that people will die if x, y or z payment cut is put in place. That's what happens in Medicare, and it's why Medicare is incapable of containing costs across the program over time.

And yet, the impression I get is that Medicare is pretty much universally the second-lowest reimbursement of any insurance plan. (Medicaid is the lowest.)

That's why providers put limits on how many Medicare/Medicaid patients they'll accept. (Or simply refuse to accept them at all.)

Dunno where you get this idea that Blue Cross will hold down the price of an MRI better than Medicare does, when Medicare is already paying less them Blue Cross.

(Granted, that reimbursement information I've got is just an impression.)

----------

I do agree with you. One potential problem with "Medicare for all", so to speak, is that under such a system, everybody will be lobbying Congress to cover everything.  The providers, the insurance companies, the voters, all of them will want to extend and extend and extend. 

 

No way Congress resists that kind of unanimous pressure. 

[chipwhich]

Dunno where you get this idea that Blue Cross will hold down the price of an MRI better than Medicare does, when Medicare is already paying less them Blue Cross.

 

Larry, you hit the nail on the head. 

 

There is a reason why the price is held down by Medicare, that's because it's controlled by lawmakers and losses are funded by the government.

 

That's also the reason why doctors are refusing to accept Medicare.

Which leads to Obamacare....

 

Insurance or Coverage, that is the ultimate question.  Sure everyone will now have insurance, just hope there will be some doctors to provide the coverage.

 

I will admit I don't know how Obama is subsidizing the ACA, but questions linger.  Insurance or Coverage.

[Wrong Direction]

And yet, the impression I get is that Medicare is pretty much universally the second-lowest reimbursement of any insurance plan. (Medicaid is the lowest.)

That's why providers put limits on how many Medicare/Medicaid patients they'll accept. (Or simply refuse to accept them at all.)

Dunno where you get this idea that Blue Cross will hold down the price of an MRI better than Medicare does, when Medicare is already paying less them Blue Cross.

(Granted, that reimbursement information I've got is just an impression.)

----------

I do agree with you. One potential problem with "Medicare for all", so to speak, is that under such a system, everybody will be lobbying Congress to cover everything.  The providers, the insurance companies, the voters, all of them will want to extend and extend and extend. 

 

No way Congress resists that kind of unanimous pressure. 

 

This is the impression that many have, but it's incorrect, or at least not totally informed.

 

First of all, when the government decides to really price aggressively, it does end up making big changes. For example, part of the Part D law in 2003 started a process that resulted in a 72% price cut for diabetic test strips this year. Interestingly, 1) it took 9-10 years to get to this point (more like 15 if you talk about when the issue was first identified in major OIG reports and 2) you can still get test strips cheaper at many grocery stores. Nevertheless, the price cut is effective and results in pretty low costs. This is point #1: the best case scenario is 3-5 years for the government to implement lower pricing. This is years too slow.

 

Point #2: Medicare has such a large portion of every market that it ends up really hurting the competitive standing of insurance companies. When the many of the 50 million people most likely to use the medical system are under one payer, that's the payer of interest to providers. In other words, they can survive just fine if they only take the few best paying insurance payers in their area as long as they're getting Medicare volume. This really reduces the private company's leverage in negotiations. Consider Medicaid. They've cut prices to the point that providers just drop them and simply don't care. What that means is private payers aren't going to get great deals on pricing for anything (test strips, specialty care, whatever) because the massive government payer is inflating the marketplace and the supply of doctors is already too low to meet the full demand of patients.

 

Really, the biggest difference is the delta between individual pricing and total patient cost. In time, you'll see that per member per month costs for private Medicare (Medicare Advantage) are lower than that for fee for service Medicare. That's because private Medicare manages benefits much better than public. In private Medicare, they pay more for MRIs but direct you to the most appropriate image much better than FFS Medicare. In the end, they pay for more units of less expensive imaging and less of unnecessary expensive imaging. This benefit management goes across the spectrum and it's really picking up pace in the private sector in new payment areas. FFS Medicare pays Home Health, Skilled Nursing and Inpatient Rehab facilities differently. However, many of the same patients can pick (or be directed to) whatever place they want for the same treatment. So, while FFS might pay the IRF lower than private entities, they'll have less people going there and the patients will stay there for shorter stays. I could give 10 other examples like this if I wanted to write another 1,000 words.

 

In my opinion, FFS Medicare will have to go this direction over the next 5-15 years to survive. It's been obvious for years, but they can't do it because providers make a mint off of over and inappropriate utilization, so they've effectively lobbied Congress (remember, there's more healthcare lobbying than any other lobbying, by far. They're in every legislative district in America, state and local, bar none). Private companies are saving massive amounts of money just by making sure patients get the care they need as opposed to the care that many providers and suppliers want to over charge for. Moreover, the "quality" from private payers is in place because the only way they're allowed to manage benefits like this is if they rely on published clinical guidelines by unaffiliated medical societies...so they have full cover.

 

Note: another good result of the ACA is this competition between plans is increasing, so insurers are increasingly looking to identify places where they can save by better benefit management while still maintaining high customer satisfaction and the same or better clinical outcomes for patients.

 

So, you already see private companies saving massive amounts of money even when being crowded out of some of the pricing marketplace by the government. These savings will help keep premiums lower over time. Beyond that, if the government dropped their role in pricing tomorrow, you'd see prices for tons of commodities (like surgical screws) drop immensely over about 2-3 years, prices for specialists and legit ER/inpatient care would go up (because unnecessary ER visits would be non-covered or paid at much lower rates), overall utilization would drop, but more appropriate care would be given.

 

Here's the funny part that politicians won't tell you. Democrats and Republicans on the hill are seeing this right now. The only question I have is whether the D's will give traditional Medicare the tools to make these necessary innovations before the private plans are able to really ramp up in the ways that they're doing now, and thus really show that you can cover Medicare much more cheaply while maintaining the same or even better outcomes. If the politicians can't give Medicare these tools, the light will shine and the political fallout for Medicare will be huge. If politicians do give Medicare these tools, they'll significantly strengthen the case for single-payer coverage.

[Larry]

Point #2: Medicare has such a large portion of every market that it ends up really hurting the competitive standing of insurance companies. When the many of the 50 million people most likely to use the medical system are under one payer, that's the payer of interest to providers. In other words, they can survive just fine if they only take the few best paying insurance payers in their area as long as they're getting Medicare volume. This really reduces the private company's leverage in negotiations. Consider Medicaid. They've cut prices to the point that providers just drop them and simply don't care. What that means is private payers aren't going to get great deals on pricing for anything (test strips, specialty care, whatever) because the massive government payer is inflating the marketplace and the supply of doctors is already too low to meet the full demand of patients.

So your point is that when a really big business demands that it be charged lower prices than everybody else, then not-as-big customers wind up paying more, because they don't have the power to bully as much as really big businesses do?

As a guy who used to get really, really tired of watching Wal Mart sell HP printers for 15-20% below my cost, (and I'm not talking about total cost, with overhead and everything. I'm saying they're selling things for 15-20% below the price that my wholesaler charges me.),(and that's before you even get into things like, in order to sell that printer, I had to have certified technicians working in the store, but Wal Mart is exempt from those requirements), I'd support a law mandating that all customers for a product or service pay the same price. Big business, small business, individual consumer.

Don't think Big Business would go for it, though.

[gbear]

Wrong Direction, why/how do you think private insurers will be able to keep costs down?  

 

I ask because I keep thinking about the Bitter Pill article (http://content.time.com/time/magazine/article/0,9171,2136864,00.html) a couple of months ago on how the insurance companies are billed by the providers and how they negotiate price.  I thought the general practice was to start with the medicare or medicaid price schedule and try to negotiate from that starting point knowing they will have to pay more.  If you take that benchmark away, won't the providers simply force a higher benchmark to even begin the negotiations? 

 

I think of the hospital chains in CA and even in the Baltimore area with Hopkins.  Who else but the government has had the market share to "bend the curve" and in your predictions does this change?

[Wrong Direction]

This is why politicians can't set pricing. Every mom and pop shop that's supplying product X complains that they can't get the same deals from manufacturers/wholesalers as the big guys. So, politicians protect mom and pop, manufacturers make a mint on top of a mint, and the program goes bankrupt.

 

This is exactly how you end up with a 72% price reduction on diabetic test strips, and it's not enough.

 

Medicare isn't going broke. It is broke. It's going in debt in the tens of trillions of dollars.

 

As an aside, I get the greater economic argument. It's not only the economic argument of our times, it's the economic argument of the future. I don't think a lot of people have an answer for how to manufacture and sell products in America based on our wages and costs either in terms of big versus small business or in terms of domestic versus international manufacturing. I do know this: Medicare can't afford to pay above market rates in this fiscal environment.

[Larry]

This is why politicians can't set pricing. Every mom and pop shop that's supplying product X complains that they can't get the same deals from manufacturers/wholesalers as the big guys. So, politicians protect mom and pop, manufacturers make a mint on top of a mint, and the program goes bankrupt.

You keep making this claim. (I do not think it means what you think it means).

That private companies can force prices down, but government can't.

Despite the fact that said private companies, right now, pay more, for exactly the same products or services, than the government does.

Really tough to claim that Blue Cross can force the price of MRIs down, but the government can't, when Medicare is paying $88 for an MRI, and BC is paying $92. (Yes, I'm completely making those numbers up. They're illustrations only.)

[Wrong Direction]

Wrong Direction, why/how do you think private insurers will be able to keep costs down?

 

I ask because I keep thinking about the Bitter Pill article (http://content.time.com/time/magazine/article/0,9171,2136864,00.html) a couple of months ago on how the insurance companies are billed by the providers and how they negotiate price. I thought the general practice was to start with the medicare or medicaid price schedule and try to negotiate from that starting point knowing they will have to pay more. If you take that benchmark away, won't the providers simply force a higher benchmark to even begin the negotiations?

 

I think of the hospital chains in CA and even in the Baltimore area with Hopkins. Who else but the government has had the market share to "bend the curve" and in your predictions does this change?

 

Hospitals are a great example of a payment system developed and maintained by government. They've done a fair job of keeping the payments, as defined by government, relatively stable (though always growing). What they haven't done is incent innovative solutions to segregate types of care in a hospital. The result is a government construct driven by massive hospital lobbies, not one driven by a combination of market forces and patient needs. In reality, we're paying massive facility overhead prices for every patient going to a Dr. that has any affiliation with a hospital (even if care isn't provided in a hospital). The alternative would be to pay for the patient, not for the facility.

 

Private plans can try this, but they don't own hospitals (unless you're talking about Kaiser, for example). Now, tell me how much leverage a private plan has over a place like a major hospital to change pricing schemes. It's very low because the patients want access to hospitals in their provider networks (for obvious reasons).

 

Now imagine a world where hospitals aren't propped up by government contracting. You *might* find much more innovative models where things like off-schedule care are more readily available at greater margins for providers and entities like hospitals have smaller footprints and focus much more specifically on emergent and specialized care.

 

It's really hard to compare how private plans operate in today's marketplace. With Medicare and Medicaid spending over $1 trillion annually, a private plan's ability to drive innovation in pricing is limited. Really, the American construct of care is terribly broken. Between removing the patient from pricing (90% of Medicare patients have supplemental coverage, meaning most have little or no cost sharing, and most Medicaid patients have little or no cost sharing) and the federal affect on "innovation," you have very little incentive for plans to be more than sophisticated actuaries as opposed to drivers of efficiency.

[BRAVEONAWARPATH]

Presidents' Obama and Clinton explaining the ACA yesterday (9/2413)

 

It's about an hour long.

 

 

http://www.youtube.com/watch?v=JSiTlwg64lU

[Wrong Direction]

You keep making this claim. (I do not think it means what you think it means).

That private companies can force prices down, but government can't.

Despite the fact that said private companies, right now, pay more, for exactly the same products or services, than the government does.

Really tough to claim that Blue Cross can force the price of MRIs down, but the government can't, when Medicare is paying $88 for an MRI, and BC is paying $92. (Yes, I'm completely making those numbers up. They're illustrations only.)

 

There are so many technical problems in coding. I don't even know where to begin. Google Misvalued codes. I assume it'll come up with initiatives where the government is considering pricing for various codes that are mischaracterized and thus placed in the wrong part of the payment system.

 

There are sooo many examples like that which take years and years to be corrected. There's only so much pricing work the government can do. Meanwhile, this over-pricing and guaranteed payment for many codes totally screws with incentives to innovate. There's so much money in inefficient care that it doesn't make financial incentive for better care (or products).

 

I really have a hard time discussing the intersection of price and cost, because they're so drastically different. Here's one more example. I have no idea what the difference between the price for a basic office visit between a plan and the government. I do know that the government has many categories of office visit from basic to high based on time, specialty, etc. I can pretty much guarantee you that the government is seeing more code creep in that area (e.g., doctors billing for higher categories of visit) than private plans. The difference is private plans manage benefits better, so they won't pay for as many high dollar visits. The government simply pays the claim. The price from the government is lower, but the cost is much higher and the same patients are still getting the same office visit.

 

Gotta run. I'll try to engage later (like way after work later, have 3 hours of meetings now).

[Elessar78]

Not trolling at all, just being brutally honest.  Why are people who don't want insurance being forced into it or pay a penalty?

Because it affects the rest of the tax paying public (i.e. you, me, and everyone) when the uninsured have to go to the emergency room as their first line of medical care—because it causes all of us more in the long run. When it affects other people, it stops being your personal right.

 

Which is amusing, because ACA is about reining in the out of control cost of health care. Let the free market take care of it? The free market has had 70 years to keep it under control and they've done nothing/been unable to. 

 

The First Amendment right to free speech does not give you the right to yell "Fire" in a crowded movie theater. 

 

I think it's myopic the way many look at ACA. Healthcare tethers most people to jobs—universal healthcare gives people more opportunity to be entrepreneurs. Businesses complain about being forced into this, but I guarantee that health care costs represents the second biggest outlay for most businesses after wages AND there is no control over it. A business will never see a 30% spike in electricity or other forms of overhead (rarely), but these jumps are pretty common in healthcare. If a business can rein in their health care costs or make it more predictable, isn't that better for everyone? 

[Elessar78]

There's so much money in inefficient care that it doesn't make financial incentive for better care (or products).

This right here is why gov't must step in to improve health maintenance and health care. Because there is NO financial incentive to provide better care. More expensive care, sure. Better care? Not so much.

[Tulane Skins Fan]

This is why politicians can't set pricing. Every mom and pop shop that's supplying product X complains that they can't get the same deals from manufacturers/wholesalers as the big guys. So, politicians protect mom and pop, manufacturers make a mint on top of a mint, and the program goes bankrupt.

 

This is exactly how you end up with a 72% price reduction on diabetic test strips, and it's not enough.

 

Medicare isn't going broke. It is broke. It's going in debt in the tens of trillions of dollars.

 

As an aside, I get the greater economic argument. It's not only the economic argument of our times, it's the economic argument of the future. I don't think a lot of people have an answer for how to manufacture and sell products in America based on our wages and costs either in terms of big versus small business or in terms of domestic versus international manufacturing. I do know this: Medicare can't afford to pay above market rates in this fiscal environment.

 

There's basically nothing relevant in this post.

 

Politicians don't set any prices for healthcare.  Not now, not with Obamacare.  Not in the foreseeable future.  

 

Now Medicare actually is broke.  We've moved on from scaring people that its going to be broke in thirty years, to its actually broke now.

 

Medicare doesn't pay above market rates.  They pay below market rates.  Hospitals hate it, but they agree to take it because the won't get anything from huge portions of their "consumers" who will be deemed uninsurable by private insurance companies whose sole and unapologetic goal is to make money for the company.

[Larry]

Oh, I think there are some hints of valid points in there.

I've said for some time that one fear I have, should we go to single payer, is that it will result in everybody pressuring the government to cover everything. (And I don't think there's any way the government could turn down all those special interests all pulling in the same direction).

[chipwhich]

Because it affects the rest of the tax paying public (i.e. you, me, and everyone) when the uninsured have to go to the emergency room as their first line of medical care—because it causes all of us more in the long run. When it affects other people, it stops being your personal right.

 

Who do you think is going to pay those bills in the ACA???  YOU.

 

Insurance companies don't lose money, they pass those costs off to the consumer.

 

It's amazing how this isn't understood.

[Tulane Skins Fan]

Who do you think is going to pay those bills in the ACA???  YOU.

 

Insurance companies don't lose money, they pass those costs off to the consumer.

 

It's amazing how this isn't understood.

 

Its amazing how you don't understand how insurance companies make money, and what is in the aca.

 

First, most of an insurance company's profits are made not off premiums, but off investments.  

 

Second, the ACA mandates rebates to consumers if they don't spend a percentage of total premiums on healthcare each year.  So, there is much more to it than that.  Also, the purpose of the exchanges is to create competition, so that the can't just jack up the prices.  Competition drives pricing, not profits and losses.

 

Healthcare cannot be summed up in two sentences, in one post, or in 4 pages of posts on this site.  None of us understand all the moving parts.  To say that Obamacare is destined to fail or succeed beyond our wildest dreams is ignorant.  

 

The intelligent approach at this point would be to watch it get implemented, diagnose its shortcomings, and try to fix those.  Which does not mean repeal.  Because the old system was woefully inadequate.

[Predicto]

Who do you think is going to pay those bills in the ACA???  YOU.

 

Insurance companies don't lose money, they pass those costs off to the consumer.

 

It's amazing how this isn't understood.

 

Umm...  if people had primary care insurance, they wouldn't be going to the incredibly expensive emergency room everytime they they get a boil on their azz.   Nor would they end up there because an untreated cut that they couldn't afford to do anything about for months has become an enormous abscess that could kill them.  

 

Preventive care saves society money in the long run, but you can't get preventive care if you don't have insurance.

[chipwhich]

Its amazing how you don't understand how insurance companies make money, and what is in the aca.

 

First, most of an insurance company's profits are made not off premiums, but off investments.  

 

Second, the ACA mandates rebates to consumers if they don't spend a percentage of total premiums on healthcare each year.  So, there is much more to it than that.  Also, the purpose of the exchanges is to create competition, so that the can't just jack up the prices.  Competition drives pricing, not profits and losses.

 

Healthcare cannot be summed up in two sentences, in one post, or in 4 pages of posts on this site.  None of us understand all the moving parts.  To say that Obamacare is destined to fail or succeed beyond our wildest dreams is ignorant.  

 

The intelligent approach at this point would be to watch it get implemented, diagnose its shortcomings, and try to fix those.  Which does not mean repeal.  Because the old system was woefully inadequate.

 

I never said repeal.

 

And you will pay the costs, just through premiums :-)

Umm...  if people had primary care insurance, they wouldn't be going to the incredibly expensive emergency room everytime they they get a boil on their azz.   Nor would they end up there because an untreated cut that they couldn't afford to do anything about for months has become an enormous abscess that could kill them.  

 

Preventive care saves society money in the long run, but you can't get preventive care if you don't have insurance.

 

Preventative  care means one free doctors appointment a year.

Emergency room costs aren't from people running in there with a boil on their azz.  And the people that can't pay for their emergency room costs now are the same people that can't pay for their insurance plus emergency room and or doctor visit costs later.  We are just massaging the poop, we aren't cleaning it up.