President Obama and other proponents of the recently passed health care law argue that the legislation was desperately needed to improve the nation’s health system for both today’s citizens as well as future generations.
But there are many reasons to be concerned that this new law will instead deliver both a lower quality health system and more costly and burdensome government for those paying taxes in future years.
It is unlikely to be repealed.
http://www.cnn.com/2011/OPINION/01/19/carroll.health.reform.repeal/
What all these financial analyses fail to consider is that — one way or the other — the 30,000,000+ uninsured get injured/get sick and need medical care. Hospitals are MANDATED to provide emergency services and they are MANDATED not to abandon patients. The cost of providing care for uninsured people ends up being more than it should, because diagnoses are delayed and treatment of more advanced problems becomes more expensive.
So the cost of private insurance goes up, to pay for the uninsured.
The individual health care market (e.g. where self-employed people have to turn for insurance) is a complete disaster. Blue Cross of CA tried raising rates 39% one year ago, when ObamaCare was dead in the water. This, in fact, resurrected ObamaCare from the dead (look it up; it’s true). I wrote at the time (on this blog), what was Blue Cross thinking? All they had to do was to wait two months, until ObamaCare was certifiably dead, and then raise the rates more incrementally, over, let’s say 12 months. The only explanation is that Blue Cross WANTED ObamaCare passed. This is consistent with the CNN opinion piece I linked above.
The GOP is in the pocket of the insurance industry and in the pocket of Big Pharma — both of which do NOT want to see ObamaCare repealed. As the op-ed says, if there were any chance that the current repeal effort could actually succeed, the insurance/big pharma lobbyists would promptly kill off the repeal efforts. So the little Kabuki play going on this week will be completed; the GOP will have its symbolic vote, and there will be a few more little pieces of Congressional theater, but nothing is going to happen.
Getting back to cost. Probably costs to government will go up. I don’t disagree. But, overall, costs won’t go up as much (meaning less pressure than otherwise on the self-insured and less pressure on corporations which pay for most of the the health insurance today).
The real payoff of ObamaCare will be a gradual transition to paying for OUTCOMES, as opposed to paying (as it is, today) for SERVICES. That’s the fatal flaw with private sector medicine as exists today. The sellers (doctors) make all the important purchase decisions of the buyers (patients).
Example: California. Recession hits. Hundreds of thousands lose their health insurance. Fewer doctor visits. What happens? Are the doctors losing income? No. Why not? They have fewer patients; so they start providing more services per patient, to preserve their incomes.
Imagine that the Sheriff’s department were not a public utility but was operated as a private company, on a fee for service basis. All of its income came from what it billed people for services and what it collected as a percentage of fines. Let’s say that crime started to go down and people started obeying traffic laws. Income starts to drop. What would happen? To make this more analogous, let’s say that the Sheriff had the ability to bill for each service (e.g. response to emergency call; crime scene investigation, etc.) as “brief,” “intermediate,” “extensive,” and “complex”). This is how medical consultations are billed. Do you think that there would be an upward migration from “brief” to “intermediate,” and from “intermediate” to “extensive,” etc.?
Capitalism works because it relies on human nature. But human nature is to exploit every situation within the confines of legality to maximize personal gain. That’s why people go to such lengths to exploit the tax code.
All you have to do is to look (with open eyes and a clear head) at how the private health care system works, and you’ll see why the current private health care system will never work and why health care needs to be funded more along the lines of law enforcement.
With “socialized” law enforcement, I’m still capable of using my own resources to improve my own safety. I can purchase state of the art security systems, buy state of the art firearms, hire private security guards, hire private investigators, etc. Even in countries with truly socialized health care systems (basically the UK, where most doctors are literally government employees) there is a parallel system of true private health care, exactly analogous to private security. Same thing in Sweden, France, Australia, etc.
Anyway, the current system was entirely unsustainable; it created all sorts of market distortions (e.g. people staying in jobs which they would otherwise leave for more suitable jobs in more suitable locations, because of not wishing to lose insurance coverage; people taking suboptimal jobs simply for insurance coverage, etc.), it inflated overall health care costs (problem of uninsured not seeking attention until their health problems deteriorated; using ERs in lieu of primary care physicians, etc.), and it causes 40,000 extra deaths per year in the uninsured, which disturbs me, as it is a yearly loss rate approaching the mortality figures observed over the course of World War II.
– Larry Weisenthal/Huntington Beach, CA
I wonder though, why don’t you simply advocate for torte reform, medical savings accounts and high deductable major medical plans that can compete across state lines? Those reforms could actually reduce costs enough to fix the problem without a government takeover of the health insurance system. Of course than half of our health care dollar wouldn’t be going into the pockets of lawyers.
@wondering: Tort reform is certainly a good idea. It could easily have been included in ObamaCare. If only a couple of GOP Senators had demanded Tort reform as a condition for voting in favor, I’m sure it would have been included — such was their power in January, 2010, when Scott Brown won in MA.
Anyway, we’ve had tort reform in CA for 30 years. A model for Texas (which passed similar reform several years ago) and a future model for the nation. $250K limit on pain and suffering; no punitive. No one is proposing anything more draconian than this (you have to pay for actual damages; no one says otherwise). Actual damages can easily exceed $1M per case, however. This is more than enough inducement for doctors to practice just as much defensive medicine, as they continue to do in both CA and Texas. There is no evidence whatsoever that tort reform reduced either defensive medicine or health care costs in either state, although it probably has reduced malpractice premiums, to a modest degree. Worth doing, but minimal impact.
Medical saving accounts we already have. I have one, myself. I like HSAs. My wife and I have an $8,000 annual deductible policy. We pay the first $8K every year, out of pocket, before insurance kicks in, helped out by the HSA (which basically gives us a tax deduction for money we put into the account to pay for our out of pocket expenses). But this is not a program which is going to make a difference for the great unwashed masses and it’s doing a lousy job of controlling costs; being self-employed, my costs continue to skyrocket.
Insurance across state lines? Have you read the 100 pages of your health insurance policy? Do you really understand the limitations? Now, what happens when employers can purchase the cheapest policies possible? Are they going to purchase cheaper plans, with more loopholes? Some states have better regulation of insurance companies. They have better consumer protection agencies. Stronger insurance commissioners. In California, the State Insurance Commissioner is a statewide, elected office holder. Voters like tough people in this job, who look after their interests. So health insurance policies in California are pretty good, as are the government watchdog functions. There are good appeals procedures, for denied claims, cancelled policies, etc.
What will happen with insurance across state lines is the old race to the bottom. With insurance, as with everything else, you get what you pay for. Individuals have limited input into what types of insurance plans are provided by their employers.
In any event, the impact of all these GOP proposals has been modeled and it has really modest effects on cost and negligible effects on increasing insurance coverage for the uninsured. And it sure doesn’t address the fatal flaw dynamics of the current health care system, which is paying for services as opposed to paying for outcomes, in a system where the sellers (doctors) make the purchase decisions for the buyers (patients).
– Larry Weisenthal/Huntington Beach, CA
Larry wrote
Larry is understating the level of establishment support for Obamacare. The hospitals also like it (especially the insurance coverage mandates) because the 30 million people who are now uninsured will, in the future, seek care while possessing insurance. This will benefit the for-profit, non-profit, and public hospitals alike. So in my state of Ohio, we may have a GOPer con attorney general suing to overturn Obamacare’s insurance mandate, but the head of Ohio State University Hospital surely hopes the AG fails. Why? Because the uncompensated care will fall on OSU Hospital’s back and hit its bottom line and we KNOW that the Governor will not pony up any money to compensate for that. (Larry — watch what happens when the state funded hospital’s, their trustees and their CEOs file amicus briefs in support of Obamacare’s constitutionality . . . con heads will explode!)
Employers who get the subsidy will also support Obamacare, as do the unions and larger employers. Why? Well the unions and larger employers support it because, unlike non-union employers, practically all unionized employers provide medical benefits directly, or through contributions to a welfare fund. They are the ones getting stuck with rising insurance premiums from uncompensated care . . . an issue that mandated insurance coverage would greatly alleviate.
When all is said and done, the GOPer cons actions prove one thing — they have no actual intention of repealing Obamacare. There are too many parts of it (like nine of the 11 elements of the bill) that are really popular and one of the two unpopular elements (the mandate) is strongly supported by the insurance companies, unions, hospitals, and large employers. Uh, yeah . . . just go and piss off those politically active, well-funded special interest groups whose interests align! If cons REALLY wanted to repeal even those unpopular elements, they could have spun those off and voted them out, probably with bi-partisan support. But in order NOT to achieve that end, they add the poison pill of repealing all the other more popular parts of Obamacare, knowing that few Dems will support a total repeal (mainly because it would be very stupid). And more proof? Cons have not even tried to explain how they would close the $230 billion hole in the deficit that repeal would rend; instead, they simply claim it does not exist. Clever, that.
So, the ultimate futility of repealing Obamacare having been achieved, the GOPer cons, by voting to repeal knowing that there is no actual chance of a repeal, will have satisfied the teabagger insistence that they oppose and challenge Obamacare, without actually doing anything to upset Obamacare.
Next up — monkeying around the edges of funding for Obamacare, where Obama asks for $10 billion to implement (knowing he really needs only $7 bill.), with the cons insisting on $0, but agreeing on “saving $3 billion” by giving Obama the $7 billion that he really needed in the first place. Obama gets his money, the cons get to take credit for saving $3 billion, and everyone wins . . . .
On tort reform, the GOPer con obsession with it is entirely misplaced. For starters, it is a state law issue, not a federal issue. Each state could, if they wanted, establish quite strict recovery rules. Or, kinda like Ohio’s workers’ compensation program, they could establish separate state funded pools to pay for malpractice injuries. But I have yet to see any actual proposal for how tort reform would be done at a federal level. In addition, would it trump California’s successful tort reform measures, or Ohio’s? They don’t say. I also question the constitutionality of federalizing what is now a strictly state-by-state legal regime.
There is one sure way to eliminate large punitive or non-economic pain and suffering damages awards: change the tax code to establish a 100% tax rate on them. No attorney would seek them because the client would recover nothing.
Sometimes you crack me up………
Californians brace for 59% premium hike
@DrJohn: (#6): I was, of course, well aware of the proposed Blue Shield 59% rate hike. My own policy is with California Blue Shield, and it’s an individual policy, and it’s going to be hit with whatever rate hike is finally approved.
Here’s the background, though, and here’s what’s really going on, and here’s why those of us in the individual insurance market desperately need reform along the lines of ObamaCare.
Recall, one year ago, California Blue Cross announced the famous 39% rate hike. This was following massive rate hikes the previous year. This, again, was when ObamaCare was dead in the water. The reasons for the rate hike had nothing to do with ObamaCare. This raised national alarm and gave the Dems the political courage to find a way to close the deal. The Blue Cross proposed rate hike did, indeed, resurrect ObamaCare from the dead.
http://articles.latimes.com/2010/feb/04/business/la-fi-insure-anthem5-2010feb05
The hue and cry over the proposed Blue Cross rate hike was deafening. Blue Cross, of course, was forced to back down. Instead, they proceeded with a more “modest” assortment of rate hikes averaging about 20%. But this was just the old “shock them with your opening offer” bargaining tool. They ended up getting what they wanted, and it had nothing to do with ObamaCare.
The rest of the insurance companies are now proceeding to follow suit. There is obviously an incremental cost to the insurance companies attributable to the ObamaCare reforms in place right now. Someone has to pay for an end to caps on lifetime benefits. Someone has to pay for now being able to kick people off of policies for intercurrent illness. Someone has to pay for lessened ability to deny payment for claims based on “gotcha” omissions on the patient’s initial insurance application questions. But the sum total, net cost of all the ObamaCare patient protections is a very modest drop in the bucket — on the order of 1 to 2%, according to an analyst I heard on KPCC’s (local/Pasadena public radio affiliate).
http://www.californiahealthline.org/articles/2011/1/18/blue-shield-to-proceed-with-rate-hike-hire-independent-actuary.aspx#ixzz1BazhNHEm
From the article you linked:
http://money.cnn.com/2011/01/07/news/companies/California_blue_shield_rate_hike/index.htm
If you average Blue Shield’s currently proposed hikes with those of the past couple of years, these hikes are in line with those announced by Blue Cross, before ObamaCare. Although, in the littany of reasons offered to justify rate hikes in various interviews. Blue Shield has tacked on ObamaCare to the end of the laundry list, in some interviews and/or statements, ObamaCare is a tiny portion of the total. And it’s worth every penny, to have the previously unavailable consumer protections (end to lifetime coverage limits, which are the cause of many medical bankruptcies, withdrawal of coverage for intercurrent illness, etc. I looked long and hard for such provisions/protections in the private insurance market, and I was unable to find such protections at any cost, before ObamaCare).
Why are health care expenses going up? Because capitalism doesn’t work in health care like it works everywhere else. In health care, the sellers (doctors) make the purchase decisions for the buyers (patients). Doctors are the technology gatekeepers (often the technology gate destroyers). I could give you so many examples in my own field, alone (cancer).
Health insurance costs are crushing the self employed and true small businesses. They are distorting the entire economy in negative ways. We desperately need to move from paying for services to paying for outcomes, and ObamaCare includes 10 billion dollars to explore ways to do just that. Plus, ObamaCare is going to secure coverage for tens of millions of uninsured, which will save tens of thousands of lives. Plus, it will put a virtual end to medical bankruptcies, end pre-existing condition exclusions, keep people from being removed from coverage unfairly, and many other very positive things.
It’s certainly not perfect and never will be, but it’s a huge step in the right direction.
– Larry Weisenthal/Huntington Beach, CA
I guess you might buy into this, but I do not.
This is nonsense. Health care is about the 85th most profitable industry and you make it sounds like it’s #1. Health insurance costs are up because of usage. Eliminating copays and deductibles is utter stupidity. Copays and deductibles discourage excessive use.
And I have a real problem with the pre-existing conditions thing. Companies didn’t exactly deny these people. They asked them to put some money in before making claims. Flamer liberals who want people to be able to wait until you get sick and then buy make me sick.
Next thing you know poverty will become a pre-existing condition and those deemed “poor” will be able to open bank accounts and help themselves to your money.
It’s no different.
And it’s crap. You ought to be spending a little more time on personal responsibility.
@DrJohn:
It’s the doctors who determine the “usage,” that’s what you don’t understand. There is a negligible cost to the health care system for just going to see a doctor. It’s what the doctor then proceeds to have you spend, on your behalf, which is what determines the real cost. And co-pays/deductibles have negligible effect on this. If your doctor tells you that you need an MRI, you are going to get that MRI, 95% of the time, whether you have a co-pay or not. Again, this is why capitalism doesn’t work nearly as well in health care as everywhere else.
What does “85th most ‘profitable’ industry” have to do with anything? You may not have noticed, but the GOP has been complaining to all who listen that Obama has “taken over 1/6 of the American economy.” It’s currently over 17% of GDP. By 2019, it’s going to be 20% (1/5th) of GDP.
And health care costs are, indeed, killing the self-employed and small businesses. When heath care costs rise 20% per year, as they are now doing, it’s the number one biggest job killer there is, dwarfing anything the Democrats have done or proposed to do since the 2008 elections.
I’ve seen a lot of personally responsible people thrown into virtual (or real) bankruptcy by catastrophic illness (cancer), including a number of physicians. I know this, because of having to write off their unpaid bills. These people, for the most part, thought that they had good health insurance. Until they got sick, that is.
Until ObamaCare, the only insurance which wouldn’t run out on you or which wouldn’t kick you off was Medicare, which remains the best health insurance in the USA.
P.S. You say:
No, actually they don’t want you to be able to wait until you get sick. That’s the whole purpose of the mandate, which the GOP is trying to kill.
– Larry Weisenthal/Huntington Beach, CA
I believe the only mandate we ought to have is for catastrophic insurance.
The survival data speaks for itself. Everyone wants the best chance. And throughout this exchange, I notice that “tort reform” has not been mentioned. A lot of medicine is defensive. Obama has a review board to determine efficacy of treatment inluding Dr. Death himself, but without tort reform all that will do is increase physician vulnerability.
Hi ScaredyBob! Still waiting on your answers to my questions.
But you are still avoiding them…
Torte reform is an effective tool to assist in bringing down medical costs from CYA medicine. Texas has had great success with it.
Will torte reform alone make medicine affordable? No, much like saying that you are going to lose weight by not eating that Snicker’s bar you have everyday after lunch; torte reform must be utilized in a multi pronged attack on the financial problems associated with our health care system.
@anticsrocks:
It looks like those questions will remain unanswered.
ParaLegal Man has been shown the door.
Not that he had the stonz to answer your questions or those of anyone else when the going got tough for him.
Woot! Scaredy Bob is no more.
I looked forward to smokin’ him in a debate, but you are right, he would never dared to debate anything honestly. Kinda like James Cameron slinking off into the darkness with his tail tucked between his legs.