great article on healthcare
10-15-2009, 06:48 PM
#1
Gets Weekends Off
Thread Starter
Joined APC: Jun 2008
Position: USAF
Posts: 1,398
great article on healthcare
This is a non-political article with no political basis or bias that came via another forum. It is a great look at the differences between health insurance and health care. Imagine if people started using auto-insurance like they use health-insurance... using it to pay for gas and oil changes.
The title may seem a little weird... but stick with it... good look at our whole economic condition.
This is an article about the business/economic reasons around health insurance.
How American Health Care Killed My Father:
How American Health Care Killed My Father - The Atlantic (September 2009)
Almost two years ago, my father was killed by a hospital-borne infection in the intensive-care unit of a well-regarded nonprofit hospital in New York City. Dad had just turned 83, and he had a variety of the ailments common to men of his age. But he was still working on the day he walked into the hospital with pneumonia. Within 36 hours, he had developed sepsis. Over the next five weeks in the ICU, a wave of secondary infections, also acquired in the hospital, overwhelmed his defenses. My dad became a statistic—merely one of the roughly 100,000 Americans whose deaths are caused or influenced by infections picked up in hospitals. One hundred thousand deaths: more than double the number of people killed in car crashes, five times the number killed in homicides, 20 times the total number of our armed forces killed in Iraq and Afghanistan. Another victim in a building American tragedy.
About a week after my father’s death, The New Yorker ran an article by Atul Gawande profiling the efforts of Dr. Peter Pronovost to reduce the incidence of fatal hospital-borne infections. Pronovost’s solution? A simple checklist of ICU protocols governing physician hand-washing and other basic sterilization procedures. Hospitals implementing Pronovost’s checklist had enjoyed almost instantaneous success, reducing hospital-infection rates by two-thirds within the first three months of its adoption. But many physicians rejected the checklist as an unnecessary and belittling bureaucratic intrusion, and many hospital executives were reluctant to push it on them. The story chronicled Pronovost’s travels around the country as he struggled to persuade hospitals to embrace his reform.
It was a heroic story, but to me, it was also deeply unsettling. How was it possible that Pronovost needed to beg hospitals to adopt an essentially cost-free idea that saved so many lives? Here’s an industry that loudly protests the high cost of liability insurance and the injustice of our tort system and yet needs extensive lobbying to embrace a simple technique to save up to 100,000 people.
And what about us—the patients? How does a nation that might close down a business for a single illness from a suspicious hamburger tolerate the carnage inflicted by our hospitals? And not just those 100,000 deaths. In April, a Wall Street Journal story suggested that blood clots following surgery or illness, the leading cause of preventable hospital deaths in the U.S., may kill nearly 200,000 patients per year. How did Americans learn to accept hundreds of thousands of deaths from minor medical mistakes as an inevitability?
My survivor’s grief has taken the form of an obsession with our health-care system. For more than a year, I’ve been reading as much as I can get my hands on, talking to doctors and patients, and asking a lot of questions.
Keeping Dad company in the hospital for five weeks had left me befuddled. How can a facility featuring state-of-the-art diagnostic equipment use less-sophisticated information technology than my local sushi bar? How can the ICU stress the importance of sterility when its trash is picked up once daily, and only after flowing onto the floor of a patient’s room? Considering the importance of a patient’s frame of mind to recovery, why are the rooms so cheerless and uncomfortable? In whose interest is the bizarre scheduling of hospital shifts, so that a five-week stay brings an endless string of new personnel assigned to a patient’s care? Why, in other words, has this technologically advanced hospital missed out on the revolution in quality control and customer service that has swept all other consumer-facing industries in the past two generations?
I’m a businessman, and in no sense a health-care expert. But the persistence of bad industry practices—from long lines at the doctor’s office to ever-rising prices to astonishing numbers of preventable deaths—seems beyond all normal logic, and must have an underlying cause. There needs to be a business reason why an industry, year in and year out, would be able to get away with poor customer service, unaffordable prices, and uneven results—a reason my father and so many others are unnecessarily killed.
Like every grieving family member, I looked for someone to blame for my father’s death. But my dad’s doctors weren’t incompetent—on the contrary, his hospital physicians were smart, thoughtful, and hard-working. Nor is he dead because of indifferent nursing—without exception, his nurses were dedicated and compassionate. Nor from financial limitations—he was a Medicare patient, and the issue of expense was never once raised. There were no greedy pharmaceutical companies, evil health insurers, or other popular villains in his particular tragedy.
Indeed, I suspect that our collective search for villains—for someone to blame—has distracted us and our political leaders from addressing the fundamental causes of our nation’s health-care crisis. All of the actors in health care—from doctors to insurers to pharmaceutical companies—work in a heavily regulated, massively subsidized industry full of structural distortions. They all want to serve patients well. But they also all behave rationally in response to the economic incentives those distortions create. Accidentally, but relentlessly, America has built a health-care system with incentives that inexorably generate terrible and perverse results. Incentives that emphasize health care over any other aspect of health and well-being. That emphasize treatment over prevention. That disguise true costs. That favor complexity, and discourage transparent competition based on price or quality. That result in a generational pyramid scheme rather than sustainable financing. And that—most important—remove consumers from our irreplaceable role as the ultimate ensurer of value.
These are the impersonal forces, I’ve come to believe, that explain why things have gone so badly wrong in health care, producing the national dilemma of runaway costs and poorly covered millions. The problems I’ve explored in the past year hardly count as breakthrough discoveries—health-care experts undoubtedly view all of them as old news. But some experts, it seems, have come to see many of these problems as inevitable in any health-care system—as conditions to be patched up, papered over, or worked around, but not problems to be solved.
That’s the premise behind today’s incremental approach to health-care reform. Though details of the legislation are still being negotiated, its principles are a reprise of previous reforms—addressing access to health care by expanding government aid to those without adequate insurance, while attempting to control rising costs through centrally administered initiatives. Some of the ideas now on the table may well be sensible in the context of our current system. But fundamentally, the “comprehensive” reform being contemplated merely cements in place the current system—insurance-based, employment-centered, administratively complex. It addresses the underlying causes of our health-care crisis only obliquely, if at all; indeed, by extending the current system to more people, it will likely increase the ultimate cost of true reform.
I’m a Democrat, and have long been concerned about America’s lack of a health safety net. But based on my own work experience, I also believe that unless we fix the problems at the foundation of our health system—largely problems of incentives—our reforms won’t do much good, and may do harm. To achieve maximum coverage at acceptable cost with acceptable quality, health care will need to become subject to the same forces that have boosted efficiency and value throughout the economy. We will need to reduce, rather than expand, the role of insurance; focus the government’s role exclusively on things that only government can do (protect the poor, cover us against true catastrophe, enforce safety standards, and ensure provider competition); overcome our addiction to Ponzi-scheme financing, hidden subsidies, manipulated prices, and undisclosed results; and rely more on ourselves, the consumers, as the ultimate guarantors of good service, reasonable prices, and sensible trade-offs between health-care spending and spending on all the other good things money can buy.
These ideas stand well outside the emerging political consensus about reform. So before exploring alternative policies, let’s reexamine our basic assumptions about health care—what it actually is, how it’s financed, its accountability to patients, and finally its relationship to the eternal laws of supply and demand. Everyone I know has at least one personal story about how screwed up our health-care system is; before spending (another) $1trillion or so on reform, we need a much clearer understanding of the causes of the problems we all experience.
“Money is honey,” my grandmother used to tell me, “but health is wealth.” She said “health,” not “health care.” Listening to debates over health-care reform, it is sometimes difficult to remember that there is a difference.
Medical care, of course, is merely one component of our overall health. Nutrition, exercise, education, emotional security, our natural environment, and public safety may now be more important than care in producing further advances in longevity and quality of life. (In 2005, almost half of all deaths in the U.S. resulted from heart disease, diabetes, lung cancer, homicide, suicide, and accidents—all of which are arguably influenced as much by lifestyle choices and living environment as by health care.) And of course even health itself is only one aspect of personal fulfillment, alongside family and friends, travel, recreation, the pursuit of knowledge and experience, and more.
Yet spending on health care, by families and by the government, is crowding out spending on almost everything else. As a nation, we now spend almost 18 percent of our GDP on health care. In 1966, Medicare and Medicaid made up 1 percent of total government spending; now that figure is 20 percent, and quickly rising. Already, the federal government spends eight times as much on health care as it does on education, 12 times what it spends on food aid to children and families, 30 times what it spends on law enforcement, 78 times what it spends on land management and conservation, 87 times the spending on water supply, and 830 times the spending on energy conservation. Education, public safety, environment, infrastructure—all other public priorities are being slowly devoured by the health-care beast.
The title may seem a little weird... but stick with it... good look at our whole economic condition.
This is an article about the business/economic reasons around health insurance.
How American Health Care Killed My Father:
How American Health Care Killed My Father - The Atlantic (September 2009)
Almost two years ago, my father was killed by a hospital-borne infection in the intensive-care unit of a well-regarded nonprofit hospital in New York City. Dad had just turned 83, and he had a variety of the ailments common to men of his age. But he was still working on the day he walked into the hospital with pneumonia. Within 36 hours, he had developed sepsis. Over the next five weeks in the ICU, a wave of secondary infections, also acquired in the hospital, overwhelmed his defenses. My dad became a statistic—merely one of the roughly 100,000 Americans whose deaths are caused or influenced by infections picked up in hospitals. One hundred thousand deaths: more than double the number of people killed in car crashes, five times the number killed in homicides, 20 times the total number of our armed forces killed in Iraq and Afghanistan. Another victim in a building American tragedy.
About a week after my father’s death, The New Yorker ran an article by Atul Gawande profiling the efforts of Dr. Peter Pronovost to reduce the incidence of fatal hospital-borne infections. Pronovost’s solution? A simple checklist of ICU protocols governing physician hand-washing and other basic sterilization procedures. Hospitals implementing Pronovost’s checklist had enjoyed almost instantaneous success, reducing hospital-infection rates by two-thirds within the first three months of its adoption. But many physicians rejected the checklist as an unnecessary and belittling bureaucratic intrusion, and many hospital executives were reluctant to push it on them. The story chronicled Pronovost’s travels around the country as he struggled to persuade hospitals to embrace his reform.
It was a heroic story, but to me, it was also deeply unsettling. How was it possible that Pronovost needed to beg hospitals to adopt an essentially cost-free idea that saved so many lives? Here’s an industry that loudly protests the high cost of liability insurance and the injustice of our tort system and yet needs extensive lobbying to embrace a simple technique to save up to 100,000 people.
And what about us—the patients? How does a nation that might close down a business for a single illness from a suspicious hamburger tolerate the carnage inflicted by our hospitals? And not just those 100,000 deaths. In April, a Wall Street Journal story suggested that blood clots following surgery or illness, the leading cause of preventable hospital deaths in the U.S., may kill nearly 200,000 patients per year. How did Americans learn to accept hundreds of thousands of deaths from minor medical mistakes as an inevitability?
My survivor’s grief has taken the form of an obsession with our health-care system. For more than a year, I’ve been reading as much as I can get my hands on, talking to doctors and patients, and asking a lot of questions.
Keeping Dad company in the hospital for five weeks had left me befuddled. How can a facility featuring state-of-the-art diagnostic equipment use less-sophisticated information technology than my local sushi bar? How can the ICU stress the importance of sterility when its trash is picked up once daily, and only after flowing onto the floor of a patient’s room? Considering the importance of a patient’s frame of mind to recovery, why are the rooms so cheerless and uncomfortable? In whose interest is the bizarre scheduling of hospital shifts, so that a five-week stay brings an endless string of new personnel assigned to a patient’s care? Why, in other words, has this technologically advanced hospital missed out on the revolution in quality control and customer service that has swept all other consumer-facing industries in the past two generations?
I’m a businessman, and in no sense a health-care expert. But the persistence of bad industry practices—from long lines at the doctor’s office to ever-rising prices to astonishing numbers of preventable deaths—seems beyond all normal logic, and must have an underlying cause. There needs to be a business reason why an industry, year in and year out, would be able to get away with poor customer service, unaffordable prices, and uneven results—a reason my father and so many others are unnecessarily killed.
Like every grieving family member, I looked for someone to blame for my father’s death. But my dad’s doctors weren’t incompetent—on the contrary, his hospital physicians were smart, thoughtful, and hard-working. Nor is he dead because of indifferent nursing—without exception, his nurses were dedicated and compassionate. Nor from financial limitations—he was a Medicare patient, and the issue of expense was never once raised. There were no greedy pharmaceutical companies, evil health insurers, or other popular villains in his particular tragedy.
Indeed, I suspect that our collective search for villains—for someone to blame—has distracted us and our political leaders from addressing the fundamental causes of our nation’s health-care crisis. All of the actors in health care—from doctors to insurers to pharmaceutical companies—work in a heavily regulated, massively subsidized industry full of structural distortions. They all want to serve patients well. But they also all behave rationally in response to the economic incentives those distortions create. Accidentally, but relentlessly, America has built a health-care system with incentives that inexorably generate terrible and perverse results. Incentives that emphasize health care over any other aspect of health and well-being. That emphasize treatment over prevention. That disguise true costs. That favor complexity, and discourage transparent competition based on price or quality. That result in a generational pyramid scheme rather than sustainable financing. And that—most important—remove consumers from our irreplaceable role as the ultimate ensurer of value.
These are the impersonal forces, I’ve come to believe, that explain why things have gone so badly wrong in health care, producing the national dilemma of runaway costs and poorly covered millions. The problems I’ve explored in the past year hardly count as breakthrough discoveries—health-care experts undoubtedly view all of them as old news. But some experts, it seems, have come to see many of these problems as inevitable in any health-care system—as conditions to be patched up, papered over, or worked around, but not problems to be solved.
That’s the premise behind today’s incremental approach to health-care reform. Though details of the legislation are still being negotiated, its principles are a reprise of previous reforms—addressing access to health care by expanding government aid to those without adequate insurance, while attempting to control rising costs through centrally administered initiatives. Some of the ideas now on the table may well be sensible in the context of our current system. But fundamentally, the “comprehensive” reform being contemplated merely cements in place the current system—insurance-based, employment-centered, administratively complex. It addresses the underlying causes of our health-care crisis only obliquely, if at all; indeed, by extending the current system to more people, it will likely increase the ultimate cost of true reform.
I’m a Democrat, and have long been concerned about America’s lack of a health safety net. But based on my own work experience, I also believe that unless we fix the problems at the foundation of our health system—largely problems of incentives—our reforms won’t do much good, and may do harm. To achieve maximum coverage at acceptable cost with acceptable quality, health care will need to become subject to the same forces that have boosted efficiency and value throughout the economy. We will need to reduce, rather than expand, the role of insurance; focus the government’s role exclusively on things that only government can do (protect the poor, cover us against true catastrophe, enforce safety standards, and ensure provider competition); overcome our addiction to Ponzi-scheme financing, hidden subsidies, manipulated prices, and undisclosed results; and rely more on ourselves, the consumers, as the ultimate guarantors of good service, reasonable prices, and sensible trade-offs between health-care spending and spending on all the other good things money can buy.
These ideas stand well outside the emerging political consensus about reform. So before exploring alternative policies, let’s reexamine our basic assumptions about health care—what it actually is, how it’s financed, its accountability to patients, and finally its relationship to the eternal laws of supply and demand. Everyone I know has at least one personal story about how screwed up our health-care system is; before spending (another) $1trillion or so on reform, we need a much clearer understanding of the causes of the problems we all experience.
“Money is honey,” my grandmother used to tell me, “but health is wealth.” She said “health,” not “health care.” Listening to debates over health-care reform, it is sometimes difficult to remember that there is a difference.
Medical care, of course, is merely one component of our overall health. Nutrition, exercise, education, emotional security, our natural environment, and public safety may now be more important than care in producing further advances in longevity and quality of life. (In 2005, almost half of all deaths in the U.S. resulted from heart disease, diabetes, lung cancer, homicide, suicide, and accidents—all of which are arguably influenced as much by lifestyle choices and living environment as by health care.) And of course even health itself is only one aspect of personal fulfillment, alongside family and friends, travel, recreation, the pursuit of knowledge and experience, and more.
Yet spending on health care, by families and by the government, is crowding out spending on almost everything else. As a nation, we now spend almost 18 percent of our GDP on health care. In 1966, Medicare and Medicaid made up 1 percent of total government spending; now that figure is 20 percent, and quickly rising. Already, the federal government spends eight times as much on health care as it does on education, 12 times what it spends on food aid to children and families, 30 times what it spends on law enforcement, 78 times what it spends on land management and conservation, 87 times the spending on water supply, and 830 times the spending on energy conservation. Education, public safety, environment, infrastructure—all other public priorities are being slowly devoured by the health-care beast.
10-15-2009, 06:50 PM
#2
Gets Weekends Off
Thread Starter
Joined APC: Jun 2008
Position: USAF
Posts: 1,398
continued
........It’s no different for families. From 2000 to 2008, the U.S. economy grew by $4.4 trillion; of that growth, roughly one out of every four dollars was spent on health care. Household expenditures on health care already exceed those on housing. And health care’s share is growing.
By what mechanism does society determine that an extra, say, $100 billion for health care will make us healthier than even $10 billion for cleaner air or water, or $25 billion for better nutrition, or $5 billion for parks, or $10 billion for recreation, or $50 billion in additional vacation time—or all of those alternatives combined?
The answer is, no mechanism at all. Health care simply keeps gobbling up national resources, seemingly without regard to other societal needs; it’s treated as an island that doesn’t touch or affect the rest of the economy. As new tests and treatments are developed, they are, for the most part, added to our Medicare or commercial insurance policies, no matter what they cost. But of course the money must come from somewhere. If the amount we spend on care had grown only at the general rate of inflation since 1970, annual health-care costs now would be roughly $5,000 less per American—that’s about 10 percent of today’s median income, to invest for the future or to spend on all the other things that contribute to our well-being. To be sure, our society has become wealthier over the years, and we’d naturally want to spend some of this new wealth on more and better health care; but how did we choose to spend this much?
The housing bubble offers some important lessons for health-care policy. The claim that something—whether housing or health care—is an undersupplied social good is commonly used to justify government intervention, and policy makers have long striven to make housing more affordable. But by making housing investments eligible for special tax benefits and subsidized borrowing rates, the government has stimulated not only the construction of more houses but also the willingness of people to borrow and spend more on houses than they otherwise would have. The result is now tragically clear.
As with housing, directing so much of society’s resources to health care is stimulating the provision of vastly more care. Along the way, it’s also distorting demand, raising prices, and making us all poorer by crowding out other, possibly more beneficial, uses for the resources now air-dropped onto the island of health care. Why do we view health care as disconnected from everything else? Why do we spend so much on it? And why, ultimately, do we get such inconsistent results? Any discussion of the ills within the system must begin with a hard look at the tax-advantaged comprehensive-insurance industry at its center.
How often have you heard a politician say that millions of Americans “have no health care,” when he or she meant they have no health insurance? How has a method of financing health care become synonymous with care itself?
The reason for financing at least some of our health care with an insurance system is obvious. We all worry that a serious illness or an accident might one day require urgent, extensive care, imposing an extreme financial burden on us. In this sense, health-care insurance is just like all other forms of insurance—life, property, liability—where the many who face a risk share the cost incurred by the few who actually suffer a loss.
But health insurance is different from every other type of insurance. Health insurance is the primary payment mechanism not just for expenses that are unexpected and large, but for nearly all health-care expenses. We’ve become so used to health insurance that we don’t realize how absurd that is. We can’t imagine paying for gas with our auto-insurance policy, or for our electric bills with our homeowners insurance, but we all assume that our regular checkups and dental cleanings will be covered at least partially by insurance. Most pregnancies are planned, and deliveries are predictable many months in advance, yet they’re financed the same way we finance fixing a car after a wreck—through an insurance claim.
Comprehensive health insurance is such an ingrained element of our thinking, we forget that its rise to dominance is relatively recent. Modern group health insurance was introduced in 1929, and employer-based insurance began to blossom during World War II, when wage freezes prompted employers to expand other benefits as a way of attracting workers. Still, as late as 1954, only a minority of Americans had health insurance. That’s when Congress passed a law making employer contributions to employee health plans tax-deductible without making the resulting benefits taxable to employees. This seemingly minor tax benefit not only encouraged the spread of catastrophic insurance, but had the accidental effect of making employer-funded health insurance the most affordable option (after taxes) for financing pretty much any type of health care. There was nothing natural or inevitable about the way our system developed: employer-based, comprehensive insurance crowded out alternative methods of paying for health-care expenses only because of a poorly considered tax benefit passed half a century ago.
In designing Medicare and Medicaid in 1965, the government essentially adopted this comprehensive-insurance model for its own spending, and by the next year had enrolled nearly 12 percent of the population. And it is no coinci*dence that the great inflation in health-care costs began soon after. We all believe we need comprehensive health insurance because the cost of care—even routine care—appears too high to bear on our own. But the use of insurance to fund virtually all care is itself a major cause of health care’s high expense.
Insurance is probably the most complex, costly, and distortional method of financing any activity; that’s why it is otherwise used to fund only rare, unexpected, and large costs. Imagine sending your weekly grocery bill to an insurance clerk for review, and having the grocer reimbursed by the insurer to whom you’ve paid your share. An expensive and wasteful absurdity, no?
Is this really a big problem for our health-care system? Well, for every two doctors in the U.S., there is now one health-insurance employee—more than 470,000 in total. In 2006, it cost almost $500 per person just to administer health insurance. Much of this enormous cost would simply disappear if we paid routine and predictable health-care expenditures the way we pay for everything else—by ourselves.
By what mechanism does society determine that an extra, say, $100 billion for health care will make us healthier than even $10 billion for cleaner air or water, or $25 billion for better nutrition, or $5 billion for parks, or $10 billion for recreation, or $50 billion in additional vacation time—or all of those alternatives combined?
The answer is, no mechanism at all. Health care simply keeps gobbling up national resources, seemingly without regard to other societal needs; it’s treated as an island that doesn’t touch or affect the rest of the economy. As new tests and treatments are developed, they are, for the most part, added to our Medicare or commercial insurance policies, no matter what they cost. But of course the money must come from somewhere. If the amount we spend on care had grown only at the general rate of inflation since 1970, annual health-care costs now would be roughly $5,000 less per American—that’s about 10 percent of today’s median income, to invest for the future or to spend on all the other things that contribute to our well-being. To be sure, our society has become wealthier over the years, and we’d naturally want to spend some of this new wealth on more and better health care; but how did we choose to spend this much?
The housing bubble offers some important lessons for health-care policy. The claim that something—whether housing or health care—is an undersupplied social good is commonly used to justify government intervention, and policy makers have long striven to make housing more affordable. But by making housing investments eligible for special tax benefits and subsidized borrowing rates, the government has stimulated not only the construction of more houses but also the willingness of people to borrow and spend more on houses than they otherwise would have. The result is now tragically clear.
As with housing, directing so much of society’s resources to health care is stimulating the provision of vastly more care. Along the way, it’s also distorting demand, raising prices, and making us all poorer by crowding out other, possibly more beneficial, uses for the resources now air-dropped onto the island of health care. Why do we view health care as disconnected from everything else? Why do we spend so much on it? And why, ultimately, do we get such inconsistent results? Any discussion of the ills within the system must begin with a hard look at the tax-advantaged comprehensive-insurance industry at its center.
How often have you heard a politician say that millions of Americans “have no health care,” when he or she meant they have no health insurance? How has a method of financing health care become synonymous with care itself?
The reason for financing at least some of our health care with an insurance system is obvious. We all worry that a serious illness or an accident might one day require urgent, extensive care, imposing an extreme financial burden on us. In this sense, health-care insurance is just like all other forms of insurance—life, property, liability—where the many who face a risk share the cost incurred by the few who actually suffer a loss.
But health insurance is different from every other type of insurance. Health insurance is the primary payment mechanism not just for expenses that are unexpected and large, but for nearly all health-care expenses. We’ve become so used to health insurance that we don’t realize how absurd that is. We can’t imagine paying for gas with our auto-insurance policy, or for our electric bills with our homeowners insurance, but we all assume that our regular checkups and dental cleanings will be covered at least partially by insurance. Most pregnancies are planned, and deliveries are predictable many months in advance, yet they’re financed the same way we finance fixing a car after a wreck—through an insurance claim.
Comprehensive health insurance is such an ingrained element of our thinking, we forget that its rise to dominance is relatively recent. Modern group health insurance was introduced in 1929, and employer-based insurance began to blossom during World War II, when wage freezes prompted employers to expand other benefits as a way of attracting workers. Still, as late as 1954, only a minority of Americans had health insurance. That’s when Congress passed a law making employer contributions to employee health plans tax-deductible without making the resulting benefits taxable to employees. This seemingly minor tax benefit not only encouraged the spread of catastrophic insurance, but had the accidental effect of making employer-funded health insurance the most affordable option (after taxes) for financing pretty much any type of health care. There was nothing natural or inevitable about the way our system developed: employer-based, comprehensive insurance crowded out alternative methods of paying for health-care expenses only because of a poorly considered tax benefit passed half a century ago.
In designing Medicare and Medicaid in 1965, the government essentially adopted this comprehensive-insurance model for its own spending, and by the next year had enrolled nearly 12 percent of the population. And it is no coinci*dence that the great inflation in health-care costs began soon after. We all believe we need comprehensive health insurance because the cost of care—even routine care—appears too high to bear on our own. But the use of insurance to fund virtually all care is itself a major cause of health care’s high expense.
Insurance is probably the most complex, costly, and distortional method of financing any activity; that’s why it is otherwise used to fund only rare, unexpected, and large costs. Imagine sending your weekly grocery bill to an insurance clerk for review, and having the grocer reimbursed by the insurer to whom you’ve paid your share. An expensive and wasteful absurdity, no?
Is this really a big problem for our health-care system? Well, for every two doctors in the U.S., there is now one health-insurance employee—more than 470,000 in total. In 2006, it cost almost $500 per person just to administer health insurance. Much of this enormous cost would simply disappear if we paid routine and predictable health-care expenditures the way we pay for everything else—by ourselves.
10-15-2009, 06:53 PM
#3
Gets Weekends Off
Thread Starter
Joined APC: Jun 2008
Position: USAF
Posts: 1,398
The article... although lengthy... is continued here:
How American Health Care Killed My Father - The Atlantic (September 2009)
How American Health Care Killed My Father - The Atlantic (September 2009)
10-16-2009, 10:32 PM
#4
Gets Weekends Off
Joined APC: Jun 2007
Position: Legacy FO
Posts: 4,096
This thread closes in 3....2....1....
If the current legislation passes, private healthcare companies die. Why? Here's why.
The people who are on the government plan pay less and as such do not have the same options or benefits as the people who can afford the more expensive private plans. Suddenly, when they are denied a procedure or certain level of care not provided by the government, they then go to a private healthcare company and demand to be covered. Remember, it is now against the law to deny coverage based on existing conditions.
So now, we have a system where people can free loaf off the government plan, but when it doesn't work for them, they demand something from the private companies that they never paid for. Can you say bankruptcy?
ryan1234, I've been to many countries, developed and undeveloped. If I had to choose a place to get sick, it would be in the U.S.A.
If the current legislation passes, private healthcare companies die. Why? Here's why.
The people who are on the government plan pay less and as such do not have the same options or benefits as the people who can afford the more expensive private plans. Suddenly, when they are denied a procedure or certain level of care not provided by the government, they then go to a private healthcare company and demand to be covered. Remember, it is now against the law to deny coverage based on existing conditions.
So now, we have a system where people can free loaf off the government plan, but when it doesn't work for them, they demand something from the private companies that they never paid for. Can you say bankruptcy?
ryan1234, I've been to many countries, developed and undeveloped. If I had to choose a place to get sick, it would be in the U.S.A.
10-16-2009, 10:34 PM
#5
Gets Weekends Off
Joined APC: Jun 2007
Position: Legacy FO
Posts: 4,096
Addtionally,heathcare insurance is not the same as auto insurance.
I buy auto insurance for the unlikely event that my vehicle might be in an accident or experience some other type of damage.
I buy health insurance for the LIKELY event that I some day get sick. Therefore, this really violates the term insurance. You get what you pay for.
I buy auto insurance for the unlikely event that my vehicle might be in an accident or experience some other type of damage.
I buy health insurance for the LIKELY event that I some day get sick. Therefore, this really violates the term insurance. You get what you pay for.
10-17-2009, 06:04 PM
#6
Gets Weekends Off
Thread Starter
Joined APC: Jun 2008
Position: USAF
Posts: 1,398
Originally Posted by KC10 FATboy
This thread closes in 3....2....1....
If the current legislation passes, private healthcare companies die. Why? Here's why.
The people who are on the government plan pay less and as such do not have the same options or benefits as the people who can afford the more expensive private plans. Suddenly, when they are denied a procedure or certain level of care not provided by the government, they then go to a private healthcare company and demand to be covered. Remember, it is now against the law to deny coverage based on existing conditions.
So now, we have a system where people can free loaf off the government plan, but when it doesn't work for them, they demand something from the private companies that they never paid for. Can you say bankruptcy?
ryan1234, I've been to many countries, developed and undeveloped. If I had to choose a place to get sick, it would be in the U.S.A.
If the current legislation passes, private healthcare companies die. Why? Here's why.
The people who are on the government plan pay less and as such do not have the same options or benefits as the people who can afford the more expensive private plans. Suddenly, when they are denied a procedure or certain level of care not provided by the government, they then go to a private healthcare company and demand to be covered. Remember, it is now against the law to deny coverage based on existing conditions.
So now, we have a system where people can free loaf off the government plan, but when it doesn't work for them, they demand something from the private companies that they never paid for. Can you say bankruptcy?
ryan1234, I've been to many countries, developed and undeveloped. If I had to choose a place to get sick, it would be in the U.S.A.
The experience of other rich nations should also make us skeptical. Whatever their histories, nearly all developed countries are now struggling with rapidly rising health-care costs, including those with single-payer systems. From 2000 to 2005, per capita health-care spending in Canada grew by 33 percent, in France by 37 percent, in the U.K. by 47 percent—all comparable to the 40 percent growth experienced by the U.S. in that period. Cost control by way of bureaucratic price controls has its limits.
Hospitals are indeed required to provide emergency care to any walk-in patient, and this obligation is a meaningful public service. But how do we know whether the charitable benefit from this requirement justifies the social cost of expensive hospital care and poor quality? We don’t know. Our system of health-care law and regulation has so distorted the functioning of the market that it’s impossible to measure the social costs and benefits of maintaining hospitals’ prominence. And again, the distortions caused by a reluctance to pay directly for health care—in this case, emergency medicine for the poor—are in large part to blame.
But my father was not the customer; Medicare was. And although Medicare has experimented with new reimbursement approaches to drive better results, no centralized reimbursement system can be supple enough to address the many variables affecting the patient experience. Certainly, Medicare wasn’t paying for the quality of service during my dad’s hospital stay. And it wasn’t really paying for the quality of his care, either; indeed, because my dad got sepsis in the hospital, and had to spend weeks there before his death, the hospital was able to charge a lot more for his care than if it had successfully treated his pneumonia and sent him home in days.
In fact, as a result of our fraying insurance system, you can already see some nascent features of a consumer-centered system. Since 2006, Wal-Mart has offered $4 prescriptions for a month’s supply of common generic medications. It has also been slowly rolling out retail clinics for routine care such as physicals, blood work, and treatment for common ailments like strep throat. Prices for each service are easily obtained; most are in the neighborhood of $50 to $80. Likewise, “concierge care,” or the “boutique” style of medical practice—in which physicians provide unlimited services and fast appointments in return for a fixed monthly or annual fee—is beginning to spread from the rich to the middle class. Qliance Medical Group, for instance, now operates clinics serving some 3,000 patients in the Seattle and Tacoma, Washington, areas, charging $49 to $79 a month for unlimited primary care, defined expansively.
Ten days after my father’s death, the hospital sent my mother a copy of the bill for his five-week stay: $636,687.75. He was charged $11,590 per night for his ICU room; $7,407 per night for a semiprivate room before he was moved to the ICU; $145,432 for drugs; $41,696 for respiratory services. Even the most casual effort to compare these prices to marginal costs or to the costs of off-the-shelf components demonstrates the absurdity of these numbers, but why should my mother care? Her share of the bill was only $992; the balance, undoubtedly at some huge discount, was paid by Medicare.
Wasn’t this an extraordinary benefit, a windfall return on American citizenship? Or at least some small relief for a distraught widow?
Not really. You can feel grateful for the protection currently offered by Medicare (or by private insurance) only if you don’t realize how much you truly spend to fund this system over your lifetime, and if you believe you’re getting good care in return.
Wasn’t this an extraordinary benefit, a windfall return on American citizenship? Or at least some small relief for a distraught widow?
Not really. You can feel grateful for the protection currently offered by Medicare (or by private insurance) only if you don’t realize how much you truly spend to fund this system over your lifetime, and if you believe you’re getting good care in return.
The current reform will likely expand our government’s already massive role in health-care decision-making—all just to continue the illusion that someone else is paying for our care......Do you really believe that the hospital—forced to face the victim of its poor-quality service, forced to collect the bill from the real customer—wouldn’t have figured out how to make its doctors wash their hands?
10-18-2009, 04:49 PM
#7
Gets Weekends Off
Joined APC: Jun 2008
Posts: 357
OK I expect this thread to be closed in about 10 seconds, but here's the way out of the healthcare problem.
Pay cash for your medical services. Then you may actually pay attention to what kind of service and the quality of the service you receive. It's called medical savings accounts.
Then for the 1% who get a major illness before they have saved enough to pay for it, you have catastrophic health insurance with a very large deductable to discurage it's use as a day to day account.
If you want competition for this insurance allow all 2,000 insurances companies in the US to compete nation wide. You don't need the government to create another company just to compete with the 2,000 that already exists.
The solution is simple that's why it will not be implemented. Because this is not about a health care crises it's about a government takeover of every aspect of your life. If they control your health, by definition they control your life.
Pay cash for your medical services. Then you may actually pay attention to what kind of service and the quality of the service you receive. It's called medical savings accounts.
Then for the 1% who get a major illness before they have saved enough to pay for it, you have catastrophic health insurance with a very large deductable to discurage it's use as a day to day account.
If you want competition for this insurance allow all 2,000 insurances companies in the US to compete nation wide. You don't need the government to create another company just to compete with the 2,000 that already exists.
The solution is simple that's why it will not be implemented. Because this is not about a health care crises it's about a government takeover of every aspect of your life. If they control your health, by definition they control your life.
10-18-2009, 06:28 PM
#8
Gets Weekends Off
Joined APC: Aug 2007
Posts: 1,014
Why should this thread be closed? I think it is an interesting article. My company is in the process of switching from PPO/HMO to a "Consumer Driven Health Plan," where the employee pays lower premiums, deposits money into a Health Savings Account, and has to pay for medical services out of the account until a pretty high deductible is met. Whatever money isn't spent rolls over to the next year. It seems like CDHPs will encourage consumers to pay more attention to the actual cost of health care. I'm not sure if I'm a fan of them personally, but maybe they are a step in the right direction?
10-24-2009, 08:22 AM
#9
Gets Weekends Off
Joined APC: Jan 2008
Posts: 1,383
Originally Posted by MD10PLT
OK I expect this thread to be closed in about 10 seconds, but here's the way out of the healthcare problem.
Pay cash for your medical services. Then you may actually pay attention to what kind of service and the quality of the service you receive. It's called medical savings accounts.
Then for the 1% who get a major illness before they have saved enough to pay for it, you have catastrophic health insurance with a very large deductable to discurage it's use as a day to day account.
If you want competition for this insurance allow all 2,000 insurances companies in the US to compete nation wide. You don't need the government to create another company just to compete with the 2,000 that already exists.
The solution is simple that's why it will not be implemented. Because this is not about a health care crises it's about a government takeover of every aspect of your life. If they control your health, by definition they control your life.
Pay cash for your medical services. Then you may actually pay attention to what kind of service and the quality of the service you receive. It's called medical savings accounts.
Then for the 1% who get a major illness before they have saved enough to pay for it, you have catastrophic health insurance with a very large deductable to discurage it's use as a day to day account.
If you want competition for this insurance allow all 2,000 insurances companies in the US to compete nation wide. You don't need the government to create another company just to compete with the 2,000 that already exists.
The solution is simple that's why it will not be implemented. Because this is not about a health care crises it's about a government takeover of every aspect of your life. If they control your health, by definition they control your life.
11-01-2009, 05:26 AM
#10
Gets Weekends Off
Joined APC: Oct 2006
Position: Center seat, doing loops to music
Posts: 825
Problem with the cash option is, the system is an extortion racket. Costs are out-of control.
Wife went into a clinic to deal with a fever and verify whether or not it was H1N1 so we could isolate her as applicable. We thought "yea a clinic is much more sensible than an ER, as she's not dying and we could probably save money". Well, goes in, gets a nose swab, one blood draw and gets told she doesn't have H1N1 but a generic virus. Gets some Tylenol and a Rx for antibiotics (unnecessary but whatever) and sent home.
Bill arrives 3 weeks later. $400. ***. There is no reason that visit should cost that much. They settle with my insurance provider (tricare) and the bill gets settled to $116. ***. Tricare subrogates $20 out of pocket to me, YET assigns none of it towards the yearly deductible, and the facility was in-network. Had it been out of network, the difference between 116 and 400 would have been added as out of pocket. ***.
As you can see, it's not about plans or HSAs, it's about outright costs and rent-seeking (doctors, nurses, administrators and insurance industry) in the healthcare industry. I consider tricare to be an alright option for insurance, but the moral of the story is that if the freggin' facility had billed me $116 instead of $400 I wouldn't need insurance in the first place!!!! This is the crux of this whole debate. I could have covered this visit with one month premium, which would put me ahead of the curve at the end of the year. As it stands, these plans are de facto catastrophic plans, and they pick and choose what is catastrophic expenses and what are yearly deductible expenses, at their convenience, ergo it's a racket.
Again, I say this recognizing tricare is not a bad option available, and I am content with having govt subsidized insurance, but for the millions of folks getting reamed with worse private plans this is just another illustration of our broken system.
Wife went into a clinic to deal with a fever and verify whether or not it was H1N1 so we could isolate her as applicable. We thought "yea a clinic is much more sensible than an ER, as she's not dying and we could probably save money". Well, goes in, gets a nose swab, one blood draw and gets told she doesn't have H1N1 but a generic virus. Gets some Tylenol and a Rx for antibiotics (unnecessary but whatever) and sent home.
Bill arrives 3 weeks later. $400. ***. There is no reason that visit should cost that much. They settle with my insurance provider (tricare) and the bill gets settled to $116. ***. Tricare subrogates $20 out of pocket to me, YET assigns none of it towards the yearly deductible, and the facility was in-network. Had it been out of network, the difference between 116 and 400 would have been added as out of pocket. ***.
As you can see, it's not about plans or HSAs, it's about outright costs and rent-seeking (doctors, nurses, administrators and insurance industry) in the healthcare industry. I consider tricare to be an alright option for insurance, but the moral of the story is that if the freggin' facility had billed me $116 instead of $400 I wouldn't need insurance in the first place!!!! This is the crux of this whole debate. I could have covered this visit with one month premium, which would put me ahead of the curve at the end of the year. As it stands, these plans are de facto catastrophic plans, and they pick and choose what is catastrophic expenses and what are yearly deductible expenses, at their convenience, ergo it's a racket.
Again, I say this recognizing tricare is not a bad option available, and I am content with having govt subsidized insurance, but for the millions of folks getting reamed with worse private plans this is just another illustration of our broken system.
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