They're Stealing Your Money
Apr. 16th, 2004 04:55 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
kirisutogomenThere's a bill in the Massachusetts legislature to create a state-wide single-payer medical insurance system. This is idiocy rampant. You want to know why? We've got a great example of the single-payer system right here in America. Half our health care spending is under a single-payer system, called Medicare.
The Medicare trustees have recently announced that they're going to go bankrupt in 2019 (that's in fifteen years for those of you keeping score at home). More importantly, due to the mostly mythical nature of the trust funds, they're going to start paying out more than they collect as soon as this year. The present value of the unfunded liabilities for Medicare is $27.7 trillion. That's approximately equal to the total value of all publicly traded companies in the world. 2.5x our GDP. That's the money we would have to dump in Right Now so that after investment growth there would be just barely enough to pay for the medical benefits we've promised people. Medicare is $280 billion per year right now (over $1000 for every man, woman, and child in the country), and rising fast. That's without paying for prescription medication.
Raising the retirement age won't fix this; health care costs are heavily loaded towards the end of your life.
Cutting benefits is a terrible plan, and no one would ever go for it. We'd have people dying while sitting on waiting lists for necessary procedures.
Part of the problem is the drug benefit Congress passed last year. Helpfully, the Democrats actually wanted a more expensive version.
Most of the problem is hospital costs. A staggering proportion of spending is on patients in the final six to nine months of their lives.
More fundamentally, the people making the decisions about what kind of care to receive (or provide) or where to get it have no clue what anything costs, or at least have no incentive to care. The doctors seem to think money is filthy and profane (up until they get their paycheck). They don't want to allow questions of cost to affect their Higher Calling. Well, get a grip. Cost-benefit trade-offs are being made whether you like it or not. The question is whether you're going to make them based on sensible criteria or not. How does it make sense that we've been paying for massively expensive procedures of dubious benefit, like cardiac bypass surgery, but until recently there wasn't a dime for cholesterol-lowering medications that cost pennies on the dollar? Why isn't there a way someone could decide to provide funding for smoking cessation programs, or exercise and diet regimens? Why is catastrophic health care insurance illegal? Why aren't more people aware of Medical Savings Accounts?
If you watch TV without a TiVo, you already know that there are thousands of commercials for diabetes testing supplies. That's because diabetics with Medicare get that stuff for free, and the providers bill Medicare directly. Why are there so many commercials for the diabetic supplies and none for other stuff Medicare also pays for? Because Medicare's prices set for the diabetes stuff are way too high -- lots of people are piling into that business because the profits are artificially enormous. If you live in Massachusetts you've seen the same thing for auto glass. The state-mandated auto glass insurance costs next to nothing to the consumer, and overpays the glass replacement companies, so they conduct a massive advertising blitz to try to grab as much of your grossly subsidized business as they can.
One tired argument that constantly gets advanced for single-p;ayer systems is that administrative costs for HMOs eat up 30% or more of the spending on health care, while Medicare spends less than 2% on administrative costs. Well, sure, Medicare saves on administrative costs. That's what you get if you don't bother to make more than a cursory effort to detect, prevent, or prosecute fraud. Fraudulent Medicare billing is attaining some really staggering numbers. Pretty soon billing Medicare for fictional procedures is likely to become a bigger industry than piddling stuff like making cars or growing food.
I admit that the masses of pointless paperwork associated with health care are terribly wasteful. But that would all change if the insurance companies were subjected to a legitimate competitive arena. If one HMO had fluid, painless referrals and a coherent, non-psychotic billing procedure, right now it wouldn't do them much good. HMOs are competing to be selected by employers, who really don't care how well they provide their services.
Speaking of which, corporations shouldn't be in the business of providing health insurance. Or pensions. Those aren't areas of expertise for them, and linking health care and pensions to employment just perpetuates the problem of the millions of uninsured and indigent in our society. But that's a topic for another day.
Old people need reasons to care about how much their medical care costs. There need to be good reasons for them to consider private insurance options, and the insurance carriers need to be allowed the flexibility to offer a wide variety of different forms of coverage, instead of the cookie-cutter one-size-fits-all package they're currently permitted to offer.
The Medicare trustees have recently announced that they're going to go bankrupt in 2019 (that's in fifteen years for those of you keeping score at home). More importantly, due to the mostly mythical nature of the trust funds, they're going to start paying out more than they collect as soon as this year. The present value of the unfunded liabilities for Medicare is $27.7 trillion. That's approximately equal to the total value of all publicly traded companies in the world. 2.5x our GDP. That's the money we would have to dump in Right Now so that after investment growth there would be just barely enough to pay for the medical benefits we've promised people. Medicare is $280 billion per year right now (over $1000 for every man, woman, and child in the country), and rising fast. That's without paying for prescription medication.
Raising the retirement age won't fix this; health care costs are heavily loaded towards the end of your life.
Cutting benefits is a terrible plan, and no one would ever go for it. We'd have people dying while sitting on waiting lists for necessary procedures.
Part of the problem is the drug benefit Congress passed last year. Helpfully, the Democrats actually wanted a more expensive version.
Most of the problem is hospital costs. A staggering proportion of spending is on patients in the final six to nine months of their lives.
More fundamentally, the people making the decisions about what kind of care to receive (or provide) or where to get it have no clue what anything costs, or at least have no incentive to care. The doctors seem to think money is filthy and profane (up until they get their paycheck). They don't want to allow questions of cost to affect their Higher Calling. Well, get a grip. Cost-benefit trade-offs are being made whether you like it or not. The question is whether you're going to make them based on sensible criteria or not. How does it make sense that we've been paying for massively expensive procedures of dubious benefit, like cardiac bypass surgery, but until recently there wasn't a dime for cholesterol-lowering medications that cost pennies on the dollar? Why isn't there a way someone could decide to provide funding for smoking cessation programs, or exercise and diet regimens? Why is catastrophic health care insurance illegal? Why aren't more people aware of Medical Savings Accounts?
If you watch TV without a TiVo, you already know that there are thousands of commercials for diabetes testing supplies. That's because diabetics with Medicare get that stuff for free, and the providers bill Medicare directly. Why are there so many commercials for the diabetic supplies and none for other stuff Medicare also pays for? Because Medicare's prices set for the diabetes stuff are way too high -- lots of people are piling into that business because the profits are artificially enormous. If you live in Massachusetts you've seen the same thing for auto glass. The state-mandated auto glass insurance costs next to nothing to the consumer, and overpays the glass replacement companies, so they conduct a massive advertising blitz to try to grab as much of your grossly subsidized business as they can.
One tired argument that constantly gets advanced for single-p;ayer systems is that administrative costs for HMOs eat up 30% or more of the spending on health care, while Medicare spends less than 2% on administrative costs. Well, sure, Medicare saves on administrative costs. That's what you get if you don't bother to make more than a cursory effort to detect, prevent, or prosecute fraud. Fraudulent Medicare billing is attaining some really staggering numbers. Pretty soon billing Medicare for fictional procedures is likely to become a bigger industry than piddling stuff like making cars or growing food.
I admit that the masses of pointless paperwork associated with health care are terribly wasteful. But that would all change if the insurance companies were subjected to a legitimate competitive arena. If one HMO had fluid, painless referrals and a coherent, non-psychotic billing procedure, right now it wouldn't do them much good. HMOs are competing to be selected by employers, who really don't care how well they provide their services.
Speaking of which, corporations shouldn't be in the business of providing health insurance. Or pensions. Those aren't areas of expertise for them, and linking health care and pensions to employment just perpetuates the problem of the millions of uninsured and indigent in our society. But that's a topic for another day.
Old people need reasons to care about how much their medical care costs. There need to be good reasons for them to consider private insurance options, and the insurance carriers need to be allowed the flexibility to offer a wide variety of different forms of coverage, instead of the cookie-cutter one-size-fits-all package they're currently permitted to offer.
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Are you getting reasonable in your old age, or am I?
Date: 2004-04-16 08:31 pm (UTC)Kerry is such a disappointment. Bush is unbelievably bad, and Kerry would be a lot better if elected. But I remember how disappointed I was when he first announced that he was going to tap the strategic oil reserves and pressure OPEC to produce more. That's crap. How about a real subsidy program to help encourage and develop alternative renewable energy sources? How about encouraging people to drive more fuel efficient vehicles --- a gas tax increase is a good start. How about pointing out that with pebble reactors, modern nuclear power is safe and waste disposal isn't really a problem.
The Democrats might've wanted a more expensive version of the drug benefit, in the sense that they wanted to provide more to seniors, but at least their version didn't forbid the states for negotiating to get the cheapest drugs possible. That's the most ludicrous part --- that the pharmaceuticals win so big with this plan.
Re: Are you getting reasonable in your old age, or am I?
Date: 2004-04-20 12:05 pm (UTC)I'm still probably going to vote for Bush, but it won't make me happy. Plus, in Massachusetts I might as well vote for Turkmenbashi; there's not a whole lot of edge-of-your-seat gripping suspense about the results here.
Subsidies are bad. Bad bad bad. They may not be so terrible in theory, but in practice we just pay giant agribusiness companies zillions of dollar to make their hooch out of maize. And as long as all our big empty flyover states are so ridiculously over-represented in the Senate, that's how it's going to stay.
Pebble reactors are all good and stuff, but it's never going to happen. People fear invisible deadly things too much.
It is inevitable that if you provide a bunch of extra money for a product, the producers of that product will make more money. You can't just dump all that money in and not expect demand to go up (especially when the incentive to care about how much the drugs cost is being deliberately removed from the actual consumers). So there's no way to have a drug benefit that doesn't have drug companies winning big.
States negotiating for lower prices sounds pretty harmless. But what if the states start colluding? You can't very well sue them for anti-trust. Regardless of any possible cartels, drug prices will be artificially low for some of the population, and to compensate, prices will be artificially higher for everyone else.
no subject
Date: 2004-04-20 03:57 pm (UTC)Energy: We currently give large subsidies to the fossil fuel industry. Even the elimination of these subsidies would have the effect of promoting research into alternative energy sources. Perhaps we can at least agree to the elimination of these current subsidies, in our armchair world? Back in the real "what will happen" world, as far as invisible and deadly, people are accepting things like GMO and irradiation. I won't be surprised if they come around to pebble reactors.
Medical: I was going to argue again for a single-payer system, but the more I think about it, the less sure I am what a reasonable solution is. Fundamentally, my intuition is that as a society, we are rich enough that we ought to provide a substantial level of healthcare to all, including the poor. Clearly, it is not feasible to extend this to arbitrarily expensive procedures to slightly prolong the lives of the elderly, clearly we need to emphasize relatively inexpensive ideas like education and prevention, and clearly we need to do cost/benefit analysis to pick the most valuable procedures inside the budget we have. Maybe we means-test the benefit, although of course income taxes are already a form of means-testing, and we already do have some healthcare for the poor in the US. Do you disagree with my basic conception of what is reasonable? What's your concept? How would you achieve it, assuming you could set the policies how you wanted?
single-conflater systems
Date: 2004-04-21 09:31 am (UTC)Subsidies to the fossil fuel industry are generally speaking a Bad Thing. There's actually a cool website http://www.greenscissors.org full of ways to "cut wasteful and environmentally harmful spending".
We are the richest society ever, but that doesn't mean we should provide stuff to everyone. Nobody's advocating that we pay for everyone's food, despite the fact that it's probably a more fundamental right than cutting-edge health care. We'll give poor people help to buy food, but there's no reason to buy Warren Buffett a bunch of frozen pizzas.
The government is lousy at doing cost/benefit analyses. They're necessary for a lot of what we ask them to do, but we shouldn't make them do it unless we absolutely have to. The whole idea of HMOs was that they would figure out the health vs. cost tradeoffs. Unfortunately we have legislated them to death, to the point where they aren't likely to make better decisions than brain-damaged lemurs.
My solution. Well, I can't actually claim to be an expert. But Medical Savings Accounts seem like an outstanding idea. People who can afford to save money for future medical expenses ought to be able to get along without any insurance beyond a catastrophic-type plan. Unfortunately, MSAs are very poorly known, and catastrophic medical insurance is illegal. The President made a brilliant proposal in a State of the Union speech, I think in 2003, to unify IRAs, Education IRAs, MSAs, etc. That would rock. Everyone ignored it and the administraion quietly dropped it without a fight. But it would have allowed the unpoor to save a pile of money tax free, and use it to pay for medical expenses. Then you get the individuals choosing cheaper prevention over expensive avoidable procedures. General prices would come down as people started caring how much stuff cost. And a high-deductible catastrophic insurance plan would be a lot cheaper than full coverage is now.
The poor could get a tax credit for their premiums for an insurance plan. Spend the same amount on the credits as we currently spend on Medicaid, and they'd get superior coverage.
More radical change. Well, detaching health insurance from employment would be a start. Your average employer has no more expertise in how to effectively provide for health care than does your bowling league. Association Health Plans, where any agglomeration of people can negotiate for group coverage, would be nice, if they were legal.
And litigation is a giant disaster. The costs imposed by litigation are disgusting. Really, really good doctors are getting crushed. My mother had breast cancer, and her oncologist is outstandingly skilled. He lost a stupid, baseless lawsuit, and now he is quitting breast cancer treatment because it's just too damned expensive to practice.