The buckling costs of health care
Today before the Health Summit, President Obama addressed the need to address health care and said he would keep an open-mind in tackling the issue. He is seeking to listen to divergent views on the issue.
How should health care be reformed?
“Since Teddy Roosevelt first called for reform nearly a century ago, we have talked and tinkered,” said Obama before the Health Summit. “That is why we cannot delay this discussion any longer. And that is why today’s forum is so important. Because health care reform is no longer just a moral imperative, it is a fiscal imperative. If we want to create jobs and rebuild our economy, then we must address the crushing cost of health care this year, in this Administration. Making investments in reform now, investments that will dramatically lower costs, won’t add to our budget deficits in the long-term – rather, it is one of the best ways to reduce them.”
On February 26, Obama announced his plan to spend $634 billion to overhaul the U.S. health care system over the next decade. Most experts predict that the plan will eventually cost $1 trillion or more.
To pay for his health care reform, Obama plans to allow the Bush tax cuts on the wealthiest to expire, placing the burden on Americans earning more than $250,000 to help pay for his plan. Robert Pear of the New York Times reports that from 2000 to 2008, the average annual premium for family coverage nearly doubled. Today around 45 to 47 million Americans are uninsured.
What is the hurry? Let’s write a plan that more than three Republicans can edorse.
Actually, the GOP needs to write a plan which allows for choice, transparency, and free market principles. I truly hope our party loudly and quickly gets ahead of the curve.
I agree, we need to be proactive instead of reactive to these issues. We need to come up with something better. I think P. J. O’Rourke said it best: “If you think health care is expensive now, wait until you see what it costs when it’s free.”
Healthcare reform? Want to decrease costs? It’s easy, very easy After 35 years in the healthcare industry, I can tell you that first and foremost you need to get rid of “idiotic” regulatory agencies that do nothing but to increase costs of providing healthcare through useless regulations that serve no purpose whatsoever. The list of these is endless. Some of the money hospitals have to spend on “satisfying” these agencies is ludicrous, these costs make Al Gore’s (Mr. Freeze) $250 hammer look like a box of bubble gum for 1 cent. The money being wasted is incredible.
Neither Obama, or anyone in congress has a clue on what needs to be done. This includes both sides of the aisle, Republican as well as Democrats. In order to have real health reform we need individuals from different aspects of the medical field get together to “slice, dice, and purify” the system. We need to spend on what is necessary, and drop the other 90% of the things that are not. Lobbyists however, don’t want to hear anything about that.
Healthcare can be affordable to a certain degree, as far as insurance goes. There are many medical items, equipment, medications, etc. that “at cost” would be unaffordable to many. Hospitalization costs can be decreased dramatically. The best news is, Socialized care is definitely NOT the answer. Socialized medicine is bad medicine for all involved, both patients as well as caregivers. Our system can work, we just need to weed out the things that waste time, and do not benefit our patients, by doing so, we will eliminate a good 90% of costs that serve no purpose.
I see so many reasons that health care costs sky rocket. I have had 3 doctors loose their license to practice medicine. But when I look north to Canada I see patients who wait weeks for tests. First, a little tort reform is necessary and as has already been said removing some layers of red tape would be a vast improvement. I’ve spoken several times to my own doctor about this issue. She is Russian by birth and has told me she came here so she could really care for patients but feels that there are just so much waste that insurance costs are out of reach. She too agrees that socialized medicine is not the answer. She would know.
Louis (above) gave us a microcosm of “how” health care can be reformed…go to the sources who work it and live it every day, get them around a table (get mediators if need be), let them deconstruct the current reality, put it back together in a better way and then put the plan before Congress to vote on.
Because our current politicians have ignored the will of the people for so long they have become self-proclaimed experts on things that many know NOTHING (or little) about and this same method can be used with many other of our areas of struggle..
Just a note on the medical record database…WHY should a nurse in PA or someone at the CDC be able to look up MY personal medical records in CA? If I’m away from home my doctor can e-mail what needs to be sent in seconds. I do not want a president who won’t even share his own medical records be able to direct anyone he wants to access mine.
There is no “crisis” in healthcare. Anyone out there being denied treatment for anything? Anyone’s arm hanging? The dead piling up on anyone’s street? I didn’t think so.
The crisis is that the healthcare market is distorted, highly controlled by several hands mutually washing one another, and sold to consumers who are generally ignorant.
Quick…how much does a simple appendectomy cost? Anyone? Bueller? I’ll bet no one here knows because the answer depends on who is paying…the government, an individual, an insurance company…it’s all negotiable. Insured patients aren’t even curious becasue the carrier pays the bills - the price doesn’t matter.
We already have “socialized medicine” - via insurance companies (plus Medicaid and Medicare). Medical bureaucrats, private and public alike, decide what they’re willing to pay for your procedures based on a number of factors…just like Tom Daschele was going to do. You take what they’ll pay for, or you’ll pay for the difference. Insurance companies really have little incentive to worry about costs. Raising premiums is NBD. Consumers hope it’s just not double digits each year. Carriers are just a pass-thru skimming their take.
Here’s the bare truth - for 95% of Americans, the most expensive medical bill is their insurance premiums. Most medical expenses arrive in the last year of one’s life, and the average American lifespan is about 85 years.
Exactly where’s the crisis?
Government inserts itself in health care (without a constitutional mandate).
Government realizes it’s spending too much on health care.
Government decides that the answer is to go the rest of the way and take over all health care, deny doctors and patients occupational and personal choice, and to embark on a program of trying to cut down costs via negative eugenics, euthanasia and cost-benefit analysis when treating the elderly.
Am I missing anything?
I have an idea for health care reform: Create an environment again where we can have true business competition by simplifying and repealing large portions of the law at Federal, State and local levels (all law, period) and by lowering State, Federal and local government budgets so Americans have more money to care for themselves.
How’s that for a plan?
Yes, the ability to have choice, to have it not run by the government, and for it to be as high a quality and higher than what we have today. NO EXCEPTIONS.
Steven,
I don’t have any recommendations for sweeping health care reform policy, but I have a strategy that if each family implemented, would dramatically lower the burden of health care coverage in America.
Not too long ago, a friend was expressing his concern about the costs of health care insurance for his family. My friend was covered by an employer-provided policy, but his wife and two daughters were added to the insurance at his own expense. My friend and his wife are young, in their late twenties, and both they and their kids were in excellent health. So imagine my surprise (shock, really) when he told me his monthly premium was over $800. No wonder he was troubled!
I had to drill down into the situation to fully understand why his costs were so high. I’m actually a few years older, with a wife and two kids and my monthly premiums are around $118. Here’s what I learned; my friend and his family were over insured.
Most of us expect our insurance to completely cover our office visits; dental, vision, and health. Insurance companies are in business to make money. Don’t hate them for turning a profit; otherwise they couldn’t be in business. We don’t buy home owners insurance to cover the costs of painting and lawn care, do we? Our car insurance doesn’t fill up our tanks, does it? So, why pay extra in health insurance every month to save money on doctor’s visits a couple times a year?
Well, you might think seeing the doctor is just too expensive. Let’s compare. A regular visit to the pediatrician costs $85. Let’s assume my two kids each go three times—or six total visits a year. My wife’s annual doctor visit is around $200. I never go to the doctor, but if I did it’d cost around $100.
What about other costs? Our semi-annual dental cleaning is $100 a person. My wife’s vision care costs nearly $200 and her contacts are $140 for a year’s supply. Add all that up, and it comes to $1,550. Yikes! That’s on top of our monthly premium. The grand total for our health care and insurance is $2966 a year.
Let’s compare that to my poor friend from above. Assuming he doesn’t have co-pays (unlikely) and every bill is 100% covered (again, unlikely), his annual cost just for insurance totals $9600! Even after paying for so many out-of-pocket expenses, I still save $6634 more than my friend.
So, how do I get health insurance so cheap? Here’s how:
1. Buy high deductible, low premium insurance
High deductible plans don’t cover routine care; it’s only there for emergencies. That’s why their more affordable. But really, aren’t emergencies the reason for having insurance? Shop online and compare prices and coverage. Be aware of the rules and restrictions of each policy before you buy. Then get only the insurance you need and put your savings in the bank.
2. Keep the deductible amount in savings
I’ll admit, our deductible is high; $7,500 a person or $15,000 a family. That’s probably higher than you’re willing to risk. But this means that I’m saving more than $6,600 a year; that’s money I’m keeping and not paying the insurance company. I’ll have that deductible saved up in a little more than a year.
Do your research, find a plan that only covers emergency care, and then take your savings and put them in the bank. This plan doesn’t work if you can’t afford to pay the deductible.
3. Pay cash for your health, dental, and vision visits and expenses
Many offices will give you some sort of discount if you pay with cash or check, since it saves them the credit card fee or the lower reimbursement they’d get from the insurance company. Ask them. If they don’t, shop around. There are lots of doctors around. It might hurt to pay $100 for your next health exam, but it’s better than paying an extra $100 every month to the insurance company!
@Dustin…excellent points about using catastrophic coverage insurance where applicable. I found with a surgery several years ago when I had such coverage that the hospital was happy to make a payment arrangement on the $5K deductible as long as the bigger portion was covered.
The healthcare/insurance situation becomes even more urgent as we look down the barrel of the first wave of boomers getting nearer to assisted living and longterm care territory.
@Louis…so true on your points on illegals breaking our system. A client we’ve had for six years burst into tears yesterday when I asked her how things were going…her 18-year-old daughter was driving her car (liability coverage only according to law and what she could afford) on President’s Day. An illegal ran into her. Totalled her car. Neither was critical but both had to be taken to the ER.
This young woman has been working since she was 13 in order to help keep her in a private school where she had a better chance at a scholastic scholarship for college (which is coming through for her). She has been an honor roll student the entire time.
On the day of the accident it was determined that the illegal was illegal and uninsured. As soon as they were done treating him he disappeared out into the community. Of course, all attempts to track him have been fruitless because any identifying information he gave was falsified but in order to settle things up they had to show attempts to contact.
So, the state or feds pay for him. The county picks up the tab to tow away his car and related expenses. Her liability insurance doesn’t do anything. Her mother’s health insurance will settle most of her medical expenses.
However, the daughter is now out a car, out days of work and school. When the mother went to see if there was some kind of program for the daughter to get a car loan she was told that the state or county could only help her daughter if she was a single teenager with a baby.
The mother told me she shouted across the counter: “I am an AMERICAN and just because I am of Mexican descent does NOT mean my daughter is a single, teenaged mother! But since illegals, lazy asses and addicts seem to be the only ones to qualify for help no wonder CA is bankrupt and working people are leaving faster than they can get the census forms out!”
Louis truly is being conservative when he gives an example of how many times per week this happens. We haven’t addressed yet the cost of bi-lingual staff/forms, etc. because apparently we no longer take learning English as a source of pride in America.
And the real joke on us comes in the form of how many Americans of all descents are now going to Mexico for their prescriptions, medical and dental care because it’s so much cheaper! We have at least three dozen of our clients and their families who do this! As well, two medical office clients told me recently they are now farming out dictation of physicians notes to PAKISTAN!
Democrats and Republicans need to DROP the Ds and Rs and get shirts with BIG RED As on them IF they’re really for AMERICA!
1. Require employees who are given the benefit of employer health care coverage to take it.
2. Have the government subsidize COBRA if a person is between jobs in order to continue coverage.
3. Simplify the medical pricing codes so that everyone can understand them.
4. Require all medical facilities to publish those new simplified pricing codes so we can shop for health care based on apples to apples comparisons and quality.
5. Give tax credits to companies that implement corporate wellness programs which encourage healthy choices, and annual preventive health screenings.
6. Require all insurance companies to offer minimal plans free of mandates so that there will be affordable plans available.
7. Restructure our tax system and implement a flat tax (which has been proven to work in other parts of the world) instead of taxing the wealthy every time the government needs more money.
Maybe i’m wrong, but it appears
Our present, broken system has 4 components:
1) Consumers of health care
2) Providers of health care
3) Drug Companies
4) Insurance
-Perhaps we could save money by eliminating the 4th part of this mix. There are some areas where profit motives run counter to the needs of sound public policy.
“…..the $660 Billion dollar annual burden of obscene corporate profits, grotesque CEO salaries and the administrative nightmare caused by the existence of over 1200 competing insurance company systems.”
http://www.hr676.org/
Insurance companies provide what? An administrative function that insures hospital, doctors, and other health care providers get their cut. Consumers of health care must pay them AND the high cost of the insurance companies.
A tax(….yes a bad word, but compare a tax to obscene insurance premiums and it begins to look a whole lot better)
shared by all based on their ability to pay, paid by all will make health care affordable to all, AND take a huge burden off our businesses-making them more competitive in the world economy.
@David
Free market, not taxing everyone, is the solution. Car insurance isn’t killing family budgets. We need true competition rather than this semi-socialized system that we have.
Theophilus….
<<Car insurance isn’t killing family budgets>>
-You’re comparing apples and oranges…..both kinda fruity, yet each a separate entity.
Insurance companies are not in business to provide a service so much as to generate a profit. Costs that have NOTHING to do with my care or my doctor’s fee or my hospital’s costs are figured into my insurance payment……
-The CEO’s salary (…..i won’t mention the salaries of the workers due to the fact that there will still be a need for administrative costs)
-Insurance overhead costs(….like advertisement….)
-Payments to shareholders
……These are just 3 things that figure into everyone’s costs that add an additional layer to what we pay to have health coverage.
So there are some things a free market system do not provide for efficiently. Perhaps we should have competing fire departments instead of “inefficient” government run entities that protect a communities citizens.
All 3 of your points apply to both your “apples” and “oranges.” Where is the difference?
Don’t bring this medicine across the pond.
http://www.ibdeditorials.com/IBDArticles.aspx?id=321237613527130
I want to first applaud all of your comments. Its so refreshing to read through such an intelligent conversation, and debate.
I worked at WellPoint for a number of years, which is the company behind Blue Cross and Blue Shield insurance in the USA. My occupation is finance. I can tell you the average profit for a healthcare insurance company is 15%. Thats pretty much the average for most businesses in America. No one is ‘cheating’ or ‘bilking’ or taking advantage’ of anyone in the healthcare industry. My collegues and I worked long hours so that cost were as low as possible and premiums did not have to be raised.
Another point is that currently all Medicaid and MediCare claims are processed by PRIVATE companies. When your grandpa has his teeth checked or hip replaced the paperwork, billing, and disbursment of funds is coordinated and maintained by PRIVATE healthcare insurance companies. The government does nothing. It gets a report at the end of the year. The insurance companies make 1/27 of a penny profit on processing this claim. Its worth it because when you do billions of these a year, it adds to the bottom line, fixed costs, etc. But if people think the govenment can reform healthcare without the collaboration, and leadership of the private sectors you can point to this example. Just picture the government being in charge of processing the review, approval, claim, billing, and distribution of funds to your grandpa. Now you know why people in the UK and Canada wait a year for their hip replacement surgery.
Let’s not forget two of the largest components that drive up our insurance costs:
1. Frivolous litigation and ensuing settlements for millions of dollars, often for people who plain don’t want to take responsibility for their choices.
2. The fact that we are taking care of MANY blocks of uninsured…
Why do I care if a CEO of a SUCCESSFUL Insurance Company makes $10M? Celebrities and Pro Athletes turn over that kind of money all the time without having the well-being of thousands of people in their hands.
I DO care that some idiot who puts a steaming cup of coffee between her legs while driving gets millions for getting burned when it spills and burns her inner thighs.
I DO care that MY tax money contributes to Family Planning and “consumers” who choose abortion as a form of birth control.
I DO care that a client whom I’ve seen lift, bend and twist gets nearly $2K a month of supplemental “partial” disability insurance for his back problems.
I DO care about the illegal issue that has already been put on the table.
I DO care that another client just settled with SDI for a lump sum enough to pay cash for a new SUV and continued monthly benefits that include cash, mental and dental care and mental health counseling because she chose to use meth and created a (big shock) mental health crisis for herself!
And I DO care that a niece (one of twelve nieces and nephews) chose to get pregnant twice out of wedlock and refuses to follow the rules set down by her family in order to receive their help. Rather, she depends on the state…she and her two children are completely insured for all medical and dental (she uses the ER like we would responsibly use our doctors or health clinics) and has the nerve to complain about the paperwork.
It’s easy to attack “Wall Street” but until we stop bailing people out, including UNsuccessful CEOs, and insist on accountability on all levels we will continue to spin our wheels in this muck!
THANKS for the opportunity to have a great dialogue on the issues that matter!
Fantastic post Karen. I once argued that tort reform was needed to help keep viable, cost efficient health care. While I know this to be true anectdotally, I couldn’t prove my point. Can you help?
Mperek–Same question.
@Theophilus…Thank you so much! I will ask my doctor if she has any stats on the frivolous litigation and also an HR Exec. I know. If I get something I’ll get it to you through Steven.
As well, via http://www.congress.org, last night I sent this (in response to their question) to my Representative, Senators and the President:
Americans should NOT spend more so that every American has universal health care because we should FIRST…deal with illegal immigration; SECOND…deal with waste and fraud…THIRD…deal with frivolous litigation…FOURTH…deal with social programs that encourage people to stay on the dole and THEN see IF there are problems left to deal with at all!!
Yes the truth is always harsh, cacophony for sure, but misinformation? I don’t think so. A lot of the points made in this thread are very real, but that is only the tip of the iceberg. It’s like the Ginsu Knife commercial… “But wait there’s more!”
Healthcare needs to be looked at from the eyes of necessity, NOT fads, politically motivated BS, and red tape that does NOTHING but to increase health care costs. A good basic rule is that if a test or procedure is not going to change the way you treat the patient, or the outcome, WE SHOULDN’T BE DOING IT. Just because someone or some agency, somewhere says we should.
Basically hospitals need to learn to say “NO, it’s a waste of money and it isn’t necessary.” Once that starts to happen, the regulatory agencies controlled by outside interests will begin to get the message. Publicity and the sharing of this information with the public, will put this in check right away. Especially during these times where bailouts using OUR $$$ is in vogue, or shall I say, the newest trend, fad, etc.
I have been in healthcare for quite some time, I know the ins and outs. I also know that you can’t put the fox in charge of the hen house. First and foremost we need to get the fox out of the picture, then we can proceed to the essential and realistically necessary changes that must take place, which will facilitate the elimination of a good portion of all the wasteful spending. This needs to be done by healthcare specialists that understand the different processes as well as the different medical specialties. Everyone, doctors, nurses, respiratory therapists, physical therapists, etc. must be included in the decision making process. The lobbyists and special interest groups need to be completely 100% excluded. Insurance companies need to get on the band wagon as well, they are paying out the claims.
Personally I think that frivolous law suits are not that plentiful anymore. If you notice most of the attorney ads on TV seem to focus on class action law suits. Hospitals law suits are not that easy anymore. The public has a good understanding of the games played to get $$$ settlements. Those days of un-informed juries, and outrageous settlements are for the most part, over. Unless there was severe gross negligence, such as the cutting off of the wrong leg, which required the rightly deserved compensation. In the last 10 years I have been called to testify twice, where prior to that, I must have gone to at least 25 or more depositions. It seems that prior to 10 years ago, attorneys were very eager to file hospital law suits, today, we just don’t see the quantities we used to. Unless I am seeing a regional difference for some reason, I wouldn’t spend too much time on the attorney/law suit issue.
BTW, despite all the rules, regulations, and red tape placed upon hospitals, NONE of those have ever prevented gross negligence. So while the developers and co-conspirators (lobbyists) of these “rules” get paid plenty for their development, as well as implementation, and profits, they haven’t done much for patient safety, but they sure as hell have produced some hefty profits for some, and the “some” don’t include the providers!
Bottom line, those of us in healthcare want our patients to be safe, so we are forever vigilant on issues that can adversely affect patient care. In addition we don’t want to be liable for negligence, who does? The regulations I speak of haven’t done much in this area, which is why they were developed in the first place. The road to hell is paved with good intentions, we just need to re-evaluate, and re-engineer what we are doing.
Again, I must tell you that socialization, is not the answer. Socialization of anything, is an excuse, not a viable solution. That will get us nowhere, and forever ruin our medical care here in the US.
Theo,
I am a respiratory therapist and hyperbaric technologist. Currently I am teaching at a local college. Got out of the hospital end about a year ago, the working of holidays and weekends finally got to me, now I only work Mon through Thursdays, which is much more mentally healthy (satisfying). After 35 years working nights, holidays, and missing special occassions, along with the weekend thing, I decided to start teaching again, I LOVE it. Teaching is my favorite part of my profession, I enjoy it very much.
steven. the problem with you question is the keyword reform. true reform can be decided in the market. the answer is to get the gov’t out of the way of forming or reforming healthcare.
talking about republican healthcare reform leaves you appearing and sounding no different than democrats. unless of course one thinks that ‘bipartisanship’ [read: centralization] is the answer.
who best should decide healthcare needs and therefore cost?
the consumer. not republicans or democrats.
<a href="http://www.lewrockwell.com/podcast/?p=episode&name=2008-11-24_073_the_medical_mess.mp3">The Medical Mess>Leave a comment!
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