Nurse Gives Rectal Exam to Sicko

[softwareNerd]

I remember reading that the U.S. government -- via Medicare, Medicaid and VA -- directly controls about 50% of the country's medical expenses.

Even though private employees are typically covered by private insurance, the key governmental interference here has been has been in allowing employer-paid health premiums to be excluded from personal income tax. While the health system is excellent, this has caused costs to rise.

Administrative costs: It has created a system where health insurance is not insurance alone. Instead, it is a complicated third-party administered bureaucracy. Consider the small and routine expenses, like a few doctors visits and drugs every year. The equivalent would be if your auto-insurance company paid for oil-changes, new tires, tire-rotation, and so on. What ends up happening is that a huge bureaucracy is created to administer and control these routine expenses: "sorry Mr. Nerd, we're denying your oil-change reimbursement because it was only due a week from today".

No cost-control incentive: In this type of system, the individual has little incentive to save. Since, the premiums cover all the routine expenses, this works like a buffet: you've paid, now it's all-you-can-eat. If your tires will last another month, but insurance will pay for new ones today, you have a string incentive to get new tires.

Pre-tax allows one to spend more: Spending pre-tax dollars costs employees less, so -- ceteris paribus -- they spend more on the tax-favored items. Imagine a system where the government allowed employee-cars and their maintenance to be a pre-tax perk. Clearly, in such a situation, the money spent on cars and their maintenance would rise because when you're spending pre-tax dollars, things are that much cheaper. This does not happen directly, because companies make the decision. However, if companies gave people the cash that they now spend on health care, and let the employees decide, chance are that employees will -- on average -- choose cheaper plans with less bells and whistles.

Egalitarianism: Most companies offer fairly uniform plan-options to all covered employees. Some bottom-heavy ones, like Wal*Mart, cannot afford to do so, and I'm not sure how far the tax-rules enforce the egalitarianism. [i know that in 401-K plans, the egalitarianism is enforced by law.] The tendency is for companies to offer plans that have more coverage than an employee would rationally buy, if buying individually. The whole ideology that has been bought by the public is that health-costs are something that people should share For instance, when one has a baby, the costs start around $10,000 and go up from there. The base (say $10,000) cannot be thought of as insurance. It was not something unexpected at all. So, the unmarried guy in one cubicle pays part of the cost for the three babies of the married guy in the next. It's a little bit of Starnesville.

HMOs etc: HMOs have got pretty bad press, but they arose as an attempt to reduce costs, while keeping the bad principles of egalitarianism unchanged. Taking the auto-example, it's as if the insurance company opened their own auto-repair shops and would do repairs there, and at their discretion. The problem is that while the previous system had incentives for individuals to spend more, the HMO-type system had just the opposite incentive: for HMOs to provide as little care as they needed to. [both these incentive operate "on the margin", but that's detail I'm leaving out.]

Lower provider incentives: The "third-party administered" situation also reduces incentives for good doctors. Imagine a private system where there are two doctors: one charges $50 for an office visit and is very slap-dash; patients often have to wait because he overbooks time-slots, his office is a little out of the way. Another doctor charges $70 for an office visit, but he does not overbook, he spends more time exploring things a patient may have forgotten to mention, and so on. In a nutshell, the second doctors is somehow giving some type of extra value to his patients. Now, in a third-party system, the insurance company will not pay a different rate to the second doctor. (Today, some are trying to add some measures of quality... but it's still a small component, and it's some third-party judging the quality.) So, the "good" doctor has to accept the $50 insurance payment. The "good" doctor has one less economic incentive to deliver higher-quality service. Many doctors stayed out of HMOs -- in my experience, the HMOs have the worse doctors. Some confident ones have still stayed out of the PPOs, because they have loyal patients who will pay them over and above what the insurance pays. However, the HMO/PPO system is becoming more pervasive and the economic incentives do not favor such doctors.

Summary: The key change the government needs to make in private healthcare is to give exactly equivalent tax-treatment to employee health-care costs paid for by the employer, as it does to those paid for directly by individuals.

Other problems: There are other problems to the current U.S. system. A quick survey:

• The huge spending on Medicaid/Medicare
  
• Litigation rules, that raise costs
  
• FDA rules and drug-effect litigation that withhold options and raise costs
  
• Licensing rules that disallow cheaper treatment options
  
• Immigration rules that prevent many doctors from coming to the U.S.
  

Super-summary: Every problem with U.S. healthcare can be traced back to government controls.

Edited July 13, 2007 by softwareNerd

[K-Mac]

I heard an interesting story on talk radio a few years ago in Houston. It was the story of a Beaumont doctor and his son, who practiced together, and they refused to file insurance on behalf of their patients. (If patients wanted to file a claim with their insurer, they certainly could do so on their own.) The result was that their services cost far less than the services of doctors who had to employ a small army of people just to handle insurance claims. For example, the Beaumont doctors would set a broken arm in a cast for $90 while their competitor had to charge $300 or more for the same procedure to cover all the insurance claim/paperwork/staff-related expenses. Granted, the Beaumont doctor's patients had to pay up front, then wait for reimbursement by the insurance company, but with savings like that, wouldn't it be worth it?

[FeatherFall]

...The ambulance even asked me what hospital I wanted to go to. (Being in excruciated pain, I chose the closest, but I was surprised to hear that I had options.)...

They do this because they are not allowed to decide for you (if you are unconscious they will, presumably). I fell off of a cliff when I was 19 and they asked me where I wanted to go. I asked them where I should go and they said they couldn't say. I then told them I wanted to go to St. Vincent. I then asked them about closer hospitals, and changed my mind when I found out one was closer. The bad news is that insurance covered 10% less at the hospital I went to. St. Vincent was a better trauma center, too. Boo!

I suspect that previous litigation is the reason they couldn't make a suggestion.

*Edit* I think I'll be changing my avatar soon

Edited July 13, 2007 by FeatherFall

[K-Mac]

Super-summary: Every problem with U.S. healthcare can be traced back to government controls.

Agreed!

(From http://pewresearch.org/pubs/543/florida-is...icaid-overhaul)

"Florida's new, nationally acclaimed Medicaid pilot program is supposed to put patients like 60-year-old Marie Antoine in charge of their own health care to save money. Instead, she landed in the hospital.

Antoine, who is legally blind and suffers from high blood pressure caused by diabetes, was admitted for a day in February because she couldn't refill her blood-pressure medicine quickly enough under the new system, said her daughter, Betty Antoine."

[Abstractionreaction]

So I just watched this movie several days ago and felt prompted enough to take notes as I watched.

Aside from the majority of things all ready mentioned(thank you Antonio and Softwarenerd) there was a particular part of the movie that I didn't really understand why it was included until I got to this phrase uttered by a former member of British parliament " Well if you go back it all began with democracy. Before we had the vote, all the power was in the hand of the rich people. If you had money you could get health care, education, look after yourself when you were old, and what democracy did was to give the poor the vote. And it moved power from the marketplace to the police station. From the wallet to the ballot."

That right there was very key to me. Not only is it a clear demonstration of a failure to grasp the difference between political and economic power but it is (by his tone) a complete moral sanction. Or perhaps more frighteningly he does recognize such a distinction and regards it as improper to have a free-market system.

[gags]

That right there was very key to me. Not only is it a clear demonstration of a failure to grasp the difference between political and economic power but it is (by his tone) a complete moral sanction. Or perhaps more frighteningly he does recognize such a distinction and regards it as improper to have a free-market system.

I read something today that provides a similarly revealing glimpse into the philosophy behind the statism that dominates American politics today. This quote is from a hypothetical acceptance speech written by Ted Sorensen (the man who collaborated with John Kennedy on his actual acceptance speech) for the next Democratic nominee for president:

"Nor will I shrink from calling myself a liberal, in the same sense that Franklin and Theodore Roosevelt, John and Robert Kennedy, and Harry Truman were liberals—liberals who proved that government is not a necessary evil, but rather the best means of creating a healthier, more educated, and more prosperous America."

http://www.washingtonmonthly.com/features/...7.Sorensen.html

Apparently government is the answer to all of our problems. Given government's extensive record of failure thus far, one has to wonder what it is that these people are smoking.

[softwareNerd]

Richard Ralston has an op-end about Sicko published in the OC Register. Definitely worth a read. (HT: HBL)

[K-Mac]

http://www.upi.com/NewsTrack/Entertainment...en_served/8497/

1.) I find it very hard to believe that emergency workers in NYC, particularly those that belong to unions, do not have good health care plans.

2.) Is he suggesting that we not provide adequate care for the detainees? Because I thought the US was criticized for that too?

This man is such an idiot.