patrick.net

"Central planning doesn’t work. Free markets work. But as others observed above, we don’t have a free market. We have a hybrid where profits go to the private sector and costs go to the taxpayer. That won’t work. We have to get back to a true free market in health care, and that means eliminating government involvement except for the usual basic enforcement of contracts and so on."

What exactly does it mean to get back to a true free market in health care? When did we have a true free market in health care?

I completely agree with your description of privatization of profits, socialization of costs. But you seem to view this as a government takeover of health care. I view it as a health care takeover of government. The insurance companies, drug companies, hospitals, etc. are using the government as an instrument of plunder.

The cost graph Patrick has posted indicates the system is in a runaway condition. This is a positive feedback loop, i.e. the hotter it gets, the hotter it gets. As he extrapolated, it will quickly ratchet up to become unaffordable to everyone anyway.

repo4sale says

This is an example of why I “date women between 20-30″…. and why I refused to get married. 3 women in the past did not sign my Pre-Nuptial contract (very fortunate). I am looking for a “10 DNA surrogate”… $100-200k???? Must pass background & DNA analysis by my Dr. Present Net worth without Debt about $50-150m. 2020 goal is $1b. Need DNA child to transfer Estate to!

You just get increasingly odd - you do know that, right? I'm not surprised that you couldn't find anyone to sign your "contract." Have you tried Angela from "The Office?" She seems to be exactly what you're looking for.

Mikejay says

I wouldn’t be surprised if the health insurers were simply using Obama care as an excuse to raise rates. It’s win-win for them: people will be POed at Obama and vote Republican - the party arguably favored by insurance companies - and in the meantime, the insurers enjoy higher premiums.

Thing is, everyone’s getting these massive bills from the insurers, not from the government. Their costs have not gone up in the last year anything remotely like the increases they are imposing and anyone with half a brain can see that.
It’s another huge example of corporate lobbyists influencing the government to let the corporations rape us in the name of the “free market” while angry dimwit Republicans go along with it.
When the banana Republicans finally get their wish and we are left with nothing but a banana republic, a few ultra-wealthy people will own everything. Everyone else will be their permanent peons. Entrepreneurship in America is already lower than most other countries, and the lack of health care independent from your job is a huge reason why:
http://noapparentmotive.org/blog/2010/12/17/health-insurance-and-entrepreneurship/

Even the Mexicans are staying home now and many who have come "for a better life" have decided to pack up and go back to Mexico. Mexicans know what it's like to live in a 3rd. World Country. Americans are just starting to learn. Mexicans are smart enough not to get onto a sinking ship.

Soon Canada will be complaining about all of the immigrants coming from south of their border to work and seek out "a better life." Maybe they'll be kinder to us and refrain from the idiocy of building a fence in the middle of nowhere that keeps no one out.

michaelsch says

The reform actually reduces amount of health care existing facilities/personnel may provide by increasing huge administrative and regulatory overhead.

You’re saying additional insurance company paperwork costs are responsible for a 73% increase in my premium?
That’s just obviously not true, or like Troy says “I find this unsupportable foo-fah.”

It's not the insurance company paperwork. It's regulations compliance that creates that overhead.

The main problem with Obamacare is that the insurance companies blocked the public option.

No kidding. The bill was created by lobbyists from major insurances companies. They practically hijacked it. How would you expect public option?

Well, let me explain what I see myself. (BTW, I'm working for the biggest California Health Insurer and HMO.)

1. Health industry is an industry with finances similar to all other industries. Financing means getting loans and rolling over your debt.

2. The reform made available Government guarantees to large loans with extremely low interest rates. (much lower than inflation). Banks are still interesting in issuing these loans, since Government secures them, so banks create the whole amount out of thin air and get some interest for free. We talk about Billions, so even 1% interest is a lot of FREE money.

3. However, those guarantees are not automatic. You need to pass lots of compliance tests like HIPAA, SOX, etc., etc. to qualify. Most of these compliance requirements are not applicable to most of equipment, processes, and software used in Healthcare, (they are like 0 cholesterol in bricks.) but you still need to pass them. Passing them is very expensive. Today this is the major overhead for large H-C organizations and the major reason/excuse for increase in Your premium. Government fully recognizes cost increases caused by its regulations and allows insurers to pass the cost to You. I suspect they hope that after compliance work is finished the higher premiums will cover expenses to insure those currently uninsured.

4. The worst thing is that after you are certified, you can't make ANY change. Change becomes the worst nightmare of HealthCare management. You can't change outdated equipment, switch to better reagents, change software, implement fixes, etc., etc., etc. Health Care systems are very interdependent, change in one part often causes changes in information flows in other parts, so it's a big NO-NO on any level. As the result, everything we do turns less and less efficient. One would be amazed how quickly this works in Health Care.

As the result of 4., be ready to more sharp increases in premium.

Troy says

michaelsch says

The reform actually reduces amount of health care existing facilities/personnel may provide by increasing huge administrative and regulatory overhead.

I find this unsupportable foo-fah.

Please, take a look at my explanation above.

michaelsch says

In no way they would accept a Federal Health Care System.

and neither would the American people, not in 1993 and not in 2010. We’re too easily bamboozled. Seniors have largely already got their reforms, and most of the electorate that matters doesn’t want government messing with what they have.

I think American people are really brainwashed about things like Government Health Care System. I would say that on the one hand it is not the solution, on the other hand purely private Health Care does not work either. IMO, the solution would be some kind of combination of the two. Government Health Care System actually works nice for basic, routine care, like immunizations and anything that can be provided in a cookie-cutter approach. It does not work and never will for non-standard cases. So, Government Health Care System would be ideal most of the time, as long as everyone would understand he needs to save plus keep a good credit rating plus have very devote, caring relatives for the case of a severe medical emergency.

Of course, there are some problems with this. For example, how would you convince good doctors to work with Government Health Care System? The only way I can see is to allow private payments by patients to them. Today accepting such a payment is felony in USA.

michaelsch says

I think American people are really brainwashed about things like Government Health Care System. I would say that on the one hand it is not the solution, on the other hand purely private Health Care does not work either. IMO, the solution would be some kind of combination of the two. Government Health Care System actually works nice for basic, routine care, like immunizations and anything that can be provided in a cookie-cutter approach. It does not work and never will for non-standard cases. So, Government Health Care System would be ideal most of the time, as long as everyone would understand he needs to save plus keep a good credit rating plus have very devote, caring relatives for the case of a severe medical emergency.

My Dad is pleased with his "Government Health Care System" (Tricare + Medicare). He figures he's received closing on a million dollars in medical treatment for angina, heart attack, multiple stents, an extremely rare liver cancer, lung problems, and various other indignities that come with getting to be 89 years old. Getting treatment at the Mayo Clinic which seems to have plenty of good doctors who "work with Government Health Care System".

michaelsch says

take a look at my explanation above.

Total health care costs are 20%+ of GDP. Regulations are not a major component of this.

I just read today that 60,000 general anesthesia procedures are done every day in this country, that's 20 million a year. Stupendous.

michaelsch says

how would you convince good doctors to work with Government Health Care System?

This is generally done by forcing doctors to choose between the government-supported system and private practice.

For doctors in Japan, they're kinda screwed because their language isolates them to the Japanese market and the government's domination over their practice.

For Canadian and UK doctors, they can escape to the US. My dermatologist is from Canada, practicing in nice & wealthy Los Altos.

oddhack says

michaelsch says

I think American people are really brainwashed about things like Government Health Care System. I would say that on the one hand it is not the solution, on the other hand purely private Health Care does not work either. IMO, the solution would be some kind of combination of the two. Government Health Care System actually works nice for basic, routine care, like immunizations and anything that can be provided in a cookie-cutter approach. It does not work and never will for non-standard cases. So, Government Health Care System would be ideal most of the time, as long as everyone would understand he needs to save plus keep a good credit rating plus have very devote, caring relatives for the case of a severe medical emergency.

My Dad is pleased with his “Government Health Care System” (Tricare + Medicare). He figures he’s received closing on a million dollars in medical treatment for angina, heart attack, multiple stents, an extremely rare liver cancer, lung problems, and various other indignities that come with getting to be 89 years old. Getting treatment at the Mayo Clinic which seems to have plenty of good doctors who “work with Government Health Care System”.

Good for your Dad.

I'm glad to learn that Government System may be able to cover much bigger part of Health Care than I thought.

This is an example of why I “date women between 20-30″…. and why I refused to get married. 3 women in the past did not sign my Pre-Nuptial contract (very fortunate). I am looking for a “10 DNA surrogate”… $100-200k???? Must pass background & DNA analysis by my Dr. Present Net worth without Debt about $50-150m. 2020 goal is $1b. Need DNA child to transfer Estate to!

Why post such a ugly response. This is a discussion about health care not about you trying to find some trophy baby momma for you to procreate with. Please be respectful.

Mikejay says

I wouldn’t be surprised if the health insurers were simply using Obama care as an excuse to raise rates

Bingo.

When the banana Republicans finally get their wish and we are left with nothing but a banana republic, a few ultra-wealthy people will own everything.

Exactly. Unfortunately, this country is chock full of banana Republicans. You know, the type that thinks that if only they didn't have to pay taxes they would all be rich.

justme says

You know, the type that thinks that if only they didn’t have to pay taxes they would all be rich

well, I'm half a tea-party type. We don't seem to be getting much value for our $6.7T/yr government.

It's not that I don't think we need all the services it provides, but in subsidizing so much it does also subsidize rent-seeking.

The government spent $3T more than it taxed over the past 2 years. That is about $1000/mo per household. Something is out of whack here and I don't see any return to equilibrium coming. Not without Soylent Green-style riots somewhere in the process.

UHC bumped ours by 25% - we are a childless couple in our 30s with no prior record of serious illnesses

^ they go by age not by previous health costs. Prior to ACA they could discriminate on sex, too, but that's now not permitted.

Troy says

well, I’m half a tea-party type. We don’t seem to be getting much value for our $6.7T/yr government.

I'd agree that we are not getting much value out of defense spending. Just endless war and killing.

As for Social Security and Medicare, we seem to be getting very good value, much better than through the private alternatives, 401k/WallSt and private health insurance.

Perhaps we can say the tea cup is half full.

One major problem: subsidies increase demand, not supply!

The government should be increasing supply of doctors, hospitals, machinery. Not increasing the number of dollars chasing a fixed amount of all that.

But if they were to increase supply, the medical industry would hate them for forcing healthcare prices down.

Troy says

michaelsch says

how would you convince good doctors to work with Government Health Care System?

This is generally done by forcing doctors to choose between the government-supported system and private practice.
For doctors in Japan, they’re kinda screwed because their language isolates them to the Japanese market and the government’s domination over their practice.
For Canadian and UK doctors, they can escape to the US. My dermatologist is from Canada, practicing in nice & wealthy Los Altos.

Bs. Most (not all) of the public health care systems around the world are a combination of public and private. The government public health system takes care of basic health care and people who can't afford private insurance. Everyone who wants to is free to purchase private insurance and see doctors in the private sector. The doctors work for the public system and run their private practices in addition. Why would someone use the same doctor as a private instead of public? Shorter waits, procedures not covered in the public sector, use of a private hospital for a start.

bob2356 says

The doctors work for the public system and run their private practices in addition

AFAIK the debate in Canada is allowing a parallel private *insurance* system. All Canadian practices are private, but the insurance is single-payer.

http://medicare.ca/main/the-facts/the-myth-of-the-european-model

mn_mark says

Going to an all-government health care system would just be jumping out of the frying pan and into the fire. Think about it: if it was actually more efficient for the government to run the nation’s healthcare as a centralized bureaucracy, then it would be more efficient for the government to manage all of the goods and services society needs: food, shelter, clothing, transportation, entertainment, education, everything.

mn_mark says

Socialist health care systems are already collapsing around the world. Look at the problems with Britain’s. We do not need to go that route…it will be worse than what we have now and will cost even more - the cost will simply be hidden in your taxes and interest rates rather than coming as a premium bill from an insurer. We need to get back to a real free market in health care.

Rubbish. We have and always will have a socialized system that pays for a huge percentage of the most expensive care. This is medicare and medicaid. These should be tweaked and expanded to replace private health insurance.

Think about it, the government pays for the really expensive stuff, the end of life care (or at least most of it) and for "coverage" of all the people who probably will need very little health care we go the insurance route. So let's see, that means that a significant part of the relatively fixed costs of a national system for payment to providers is already in place. And yet we have all of these little entities tripping over themselves complicating things for everyone and gouging the consumer in the process.

As Patrick said, it is corruption, plain and simple. Your argument simply doesn't fly. You can't deny all the countries that get it right.

michaelsch says

how would you convince good doctors to work with Government Health Care System?

How many heart specialists don't accept Medicare ? Virtually all doctors would have to go with 'Medicare for all' if we had it.

oddhack says

My Dad is pleased with his “Government Health Care System” (Tricare + Medicare). He figures he’s received closing on a million dollars in medical treatment for angina, heart attack, multiple stents, an extremely rare liver cancer, lung problems, and various other indignities that come with getting to be 89 years old. Getting treatment at the Mayo Clinic which seems to have plenty of good doctors who “work with Government Health Care System”.

Exactly.

There is one problem that I never hear people talking about, and that is our economy. If health care is 16% of GDP and we "fix" our system cutting the cost say by 50% (for the sake of the example), doesn't that mean that our GDP takes an 8% hit ?

Given how things already are, maybe we can't handle fixing our health care system. You could think of our health care system as a permanent built in "stimulus" to our service oriented economy. Dang, I knew I should have gone in to health care.

marcus says

“fix” our system cutting the cost say by 50% (for the sake of the example), doesn’t that mean that our GDP takes an 8% hit

Yes, GDP is income and if health professionals and their suppliers are making half what they do now there will be less income in the national account.

However, this lost income to them becomes more discretionary income for everyone else. The extra money we'd have would start chasing other life expenses (foremost, higher rents and land values of course).

To avoid just having home prices rise in response we would have to raise taxes, like reverse the 2% cut to FICA (stupidest thing we've done EVER).

The USGOV has spent $3T more than it took in over the past two years. This is a very curious development and I don't really have any idea what's going to happen in response, to either us continuing this rate of borrowing, increasing it, or throttling it down. It all seems bad.

Also, medicine is largely wealth preservation not creation. There is an element of the http://en.wikipedia.org/wiki/Parable_of_the_broken_window to it.

marcus says

There is one problem that I never hear people talking about, and that is our economy. If health care is 16% of GDP and we “fix” our system cutting the cost say by 50% (for the sake of the example), doesn’t that mean that our GDP takes an 8% hit ?

GDP aside, my take is that it's politically impossible to shrink the amount we spend on health care by 50% because doing so would throw 8% of the population out of work by (for all intents and purposes) eliminating the health insurance industry. Not going to happen short of a revolution that eliminates far more than that, that's easily enough people to guarantee losing elections for anyone who supports it.

bobcat says

The insurance companies, drug companies, hospitals, etc. are using the government as an instrument of plunder.

Ding Ding, It couldn't be explained any better.

oddhack says

GDP aside, my take is that it’s politically impossible to shrink the amount we spend on health care by 50% because doing so would throw 8% of the population out of work

Well that 8% and their spouses are only 16%, the other 84% aren't interested in supporting their 6 figure salaries, while we operate in the hole paying more on Obamacare than we do in rent or mortgage.

Tenouncetrout says

bobcat says

The insurance companies, drug companies, hospitals, etc. are using the government as an instrument of plunder.

Ding Ding, It couldn’t be explained any better.

Yes, but now what? The government has clearly been corrupted from the top down by corporate interests. It is not representing the people's interest. Well, OK, it represents the interests of some billionaires.

As the Declaration of Independence says: "That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government"

Have we arrived at the point yet when another revolution is necessary to remove corporations from government?

A good first step short of revolution would be to revoke the legal personhood of all corporations. Corporations are not human. They have no inherent right to anything. Only individual human beings have rights.

A second step would be to make corporate lobbying a serious crime with manadatory hard time or death for anyone involved in it. Corporate lobbying corrupts our laws from the inside. Corporations are literally writing our laws and handing them to Congressmen who don't read them before voting to approve them.

The right wing and the left wing have the same interest here: ending corporate power. The right should end it to create truly free markets rather than socialism for large corporations. The left should end it to protect the working man from de facto slavery.

But with corporations in control of Congress, the chance of democracy working to make these changes seems small.

Patrick,
Forgive me if I am getting this wrong, but it sounds as though you are carrying an individual policy. If you are planning to continue being self-employed, it might be worthwhile to look as the insurance picture from the point of view of an S corporation. In California, any two-person corporation can get corporate health insurance. Kaiser is willing to assign a family plan to the two employees of the corporation, if they happen to be married partners. Other insurers may require that each employee have an individual plan, and that can be a little more expensive. Regardless, you might find that your corporation has better options than you do as an individual, even though you will pay the state of California $800 per year for the privilege of being incorporated. For instance, corporate health insurance plans run under a yearly contract, so rates are predictable for a full year at a time. My experience was that rates were a little better, too.

Incorporation takes a few months. Getting health insurance takes a few months after that. But none of it is actually difficult.

Troy says

bob2356 says

The doctors work for the public system and run their private practices in addition

AFAIK the debate in Canada is allowing a parallel private *insurance* system. All Canadian practices are private, but the insurance is single-payer.
http://medicare.ca/main/the-facts/the-myth-of-the-european-model

That's why I said MOST rather than going through the list of 60 something countries that have public health care systems one by one. There are obviously many different models out there for public health care. The real question is why the US congress keeps dreaming up changes to the US healthcare system without studying any other countries systems to see if there are any better ideas out there. They don't even bother to look at the different models that exist within the US. Places like the Cleveland clinic and Mayo clinic are delivering quality health care at very reasonable cost. You would think the first thing congress would do would be to see what these places are doing and how they are doing it then use it as a model for reform. Na that would simply be too logical. There's no lobbying money in it either.

My insurance rate with Time Insurance went up about 50% last year and another 40% this year to $1,150 per month. ($5,000 deductable per family member and it doesn't cover much of anything until you hit the deductable) I called them to ask why. They said because of the new Health care bill requiring no limits for any serious condition they had to raise their rates to cover this.

THANKS ALOT OBAMA!!

It's not Obama's fault. It's the insurance company lobbyists, who prevented:

1. caps on premiums
2. the public option

Obama was definitely for a public option, and they killed it so that you would be forced to pay them, no matter what they charge.

Eliza says

In California, any two-person corporation can get corporate health insurance.

Thanks! That's a great idea and I want to try it.

Any idea where I should look for corporate premium rates? There's probably some website that collects them.

It’s the insurance company lobbyists, who prevented:

It's not their fault either, it's our fault for not demonstrating sufficient support.

The odd thing is that the filibuster belongs more in the House than the Senate. Lieberman is up for election in 2014, so his threat of filibuster was immensely anti-democratic (but very republican, in the sense of a government ruling over the people in their name but not being responsive to their wishes).

The lobbyists ginned up sufficient numbers of protestors to sabotage the town hall jazz that was going on in the Summer of 2009, while the left failed to counter-protest FOR such things as the public option.

It's easier for rich people to do their demonstration than the working poor, of course. The poor just get shat on, until something like the LA '92 events happens.

as for

1. caps on premiums

There are caps on premiums -- the MLRs of 85% for group plans and 80% for individual. The problem is that this is highly beneficial for KP and other insurers who own the billing side too.

Troy says

There are caps on premiums — the MLRs of 85% for group plans and 80% for individual. The problem is that this is highly beneficial for KP and other insurers who own the billing side too.

It just does not compute. There is no way that they're paying out 73% more this year than last year.

How is it beneficial for insurers who own the billing side? You must mean that they can bill very high, and then raise premiums and say they are complying with the 80% law? Yes, that's true. So they have no incentive to lower costs at all, either as an insurer or as a medical provider.

If we are still a democracy, it seems to me we should be able to obtain a better HC system. It would probably take an extremely big grass roots movement (probably utilizing internet) to get the money together to fight the powers that be.

Before that can happen, we (the government) would also probably need to make some really tough budgetary decisions.

http://www.healthcare.gov/foryou/individuals/index.html

There is no way that they’re paying out 73% more this year than last year.

Well, you did hit the age 45 zone, right? My new benefits chart shows the premiums go up from $210 to $285/mo between early 40s (40-44) and late 40s (45-49). That's almost 40% right there.

Then there's the removal of gender-specific ratings, which add another 20% to men apparently. We don't have women bits, but we have to join their risk pool now thanks to ACA. Good for women, bad for men!

There's also the 2011 changes mandated by ACA -- elimination of lifetime limits, no more rescission for anybody, no more pre-existing exclusion for kids, and young adults under 26 can stay on parents' plan.

Only the rescission change and lifetime limit applies to me, and I figured if I needed more than $5M in benefits I'd have bigger problems than running out of insurance . : ( Oh well. I didn't support ACA for what it'd do for me, I supported it for what it do for the millions of Americans excluded from the system.

(Which did in fact include me in the 2002-2005 timeframe, I applied to BCBS in 2004 for the same sort of policy I have now, but they refused due to me having visited a orthopedic surgeon in late 2003 for a knee pain issue. Under the mandate, in 2014 or whenever BCBS will no longer be able to exclude people like that)

ou must mean that they can bill very high, and then raise premiums and say they are complying with the 80% law?

yes, that is my naive understanding of the advantage integrated HMOs have over pure-insurers like BCBS.

marcus says

It would probably take an extremely big grass roots movement (probably utilizing internet) to get the money together to fight the powers that be.

The way I see it, WE THE PEOPLE are the true enemy of ourselves. "Government takeover of healthcare!", "Death Panels!" etc can bamboozle waay too many voters.

The American people didn't really know it, but November's election was also a referendum on the implementation of health care 2011-2012. The Democrats really failed to frame the election this way, but that's going to be the cold hard reality of the thing.

It takes top-down leadership to form a progressive agenda, fight for it, and ram it through.

Bottom-up is a pipe dream.

Troy says

Bottom-up is a pipe dream

The republicans seem to be able to do both, albeit with a lot of corporate money.

marcus says

The republicans seem to be able to do both, albeit with a lot of corporate money.

There is an Establishment that exists that is beyond money, really. It has Interests, which involve securing and preserving its profitable access to the world's resources of natural wealth.

The boardroom scene in Network was IMHO pretty f----ing close to the truth.

http://www.youtube.com/watch?v=zI5hrcwU7Dk

"The world . . . is a business, Mr Beale."

FOXNEWS, along with the rest of the VRWC propaganda mills feeding it, provide a critical defense of the conservative Establishment we have today. This healthcare battle wasn't about healthcare, it was about creating Obama's Waterloo and stopping any progressive momentum that we had won in 2006-2008 thereby.

There existed a collection of Powers in the Establishment that had sufficient pull to play the right cards to screw things up for us, largely the same coalition that got together in 1993 to torpedo HillaryCare.

Obama's advisors had to bend a bit to coopt enough players in the System to get what they could through the process. It was a close-run thing as it was.

The battles of this decade are going to be about this Establishment's campaign to roll back the surviving welfare state programs of the New Deal and Great Society.

The Establishment sees what the Eurosocialists have won, and do not want that to happen to the good ol' United States of America, the land of opportunity to get and remain rich. They like the current tax rates, TYVM, and want to see them moved lower and not higher like how the rest of the world taxes them.

Money only has influence in politics because voters are too stupid to be immune to the bullshit. We've been living in a bubble of trickle-down and borrowed-money good times since 1980 or so, but We The People may be becoming more exposed to the harsh realities of what the Establishment has in store for us should we continue to surrender our political power that the Founders wisely -- if hesititantly -- gave us.