More of Obama's slippery slope.

[IJ]

"Since the government-run plan will always be "too big to fail", it will bully its way into the market and be propped up by our tax dollars whenever it can't compete. That isn't true competition, and it won't foster either efficiency or good customer service."

For consistency, we should either accept a government plan, or eliminate medicare and medicaid. Those are government plans, people.

"Taxes will go up. A LOT. Check in any country that has government run healthcare."

I am ignorant of the rates in all countries with government healthcare, but its worth pointing out that in some of those countries with high tax rates, you also get free university, tons of mandated vacay, provisions to prevent firings, and so on. Part of the effect is what company it keeps.

"We all will end up being reduced to a lower average standard of healthcare."

Eh, maybe. Why will the Blues reduce their coverage? Educate me.

"Rationing will happen. The government will decide what is covered and what won't be."

This is a concern and ideally this would be left to nongovernment experts to decide. But it's also a tautology; in the government plan, the government runs the plan. Yeah. And I DO believe that medicare/caid ought to have caps on what they will pay for from a cost benefit standard. Anything goes = drowning in debt. People who don't want government deciding can pay on their own or trust Kaiser like they're doing now. FYI there is rationing now. It just has a different name. What we COULD do is enormously more expensive than what we SHOULD do or can PAY FOR, hence there will be rationing. And of course if we stopped screwing up all the time we could get more bang for the buck.

"There will be long queues for elective procedures."

True in Canada. Not true worldwide. Somewhat true in some aspects in USA already. Tried to get a derm appointment with good insurance recently? They'll see your acute rash in 3 months, thanks.

[Glenn]

This is the land of opportunity, and not the land of entitlement. Disparities serve to motivate the individual to produce.

I definitely agree with you here, up to a point. There should be more motivation than entitlement in most cases (and I include all conceptions of entitlement, such as class entitlement among the wealthy, not just aid to the low-income). But I do believe that there are a few necessities that are special cases, and health care is one of them. It's hard to take advantage of the land of opportunity when you are incapacitated by illness or injury, or swallowed in medical debt.

[Bill Glasheen]

For consistency, we should either accept a government plan, or eliminate medicare and medicaid. Those are government plans, people.

Ask the government how the Medicaid and Medicare budgets are doing. Ask the government what's going to happen when all those baby boomers retire.

Oh... and of course these will ALWAYS be too big to fail. And when they are in danger of failing, taxes will go up. Or... we'll just borrow more money from China and leverage the economic future of our kids.

And they want to add to this?

As Ian pointed out, we already have government covering the poor on the bottom end via Medicaid. And yet this isn't enough? What more do people want? Do they want the government offering coverage (to all) competitive with a BCBS or a Kaiser plan?

And in this competitive environment, we're going to allow private companies to fail, but tax/borrow more when the public plan begins to fail, right? This is competition? This is going to lower price?

Can you say death spiral?

-Bill

[Bill Glasheen]

"We all will end up being reduced to a lower average standard of healthcare."

Eh, maybe. Why will the Blues reduce their coverage? Educate me.

The intended consequence (or unintended consequence) of letting the government compete (on a non-level playing field) with private entities is to allow private companies to fail, but never let the government offering fail. As such, the trend will be eventually to have the government plan win out and destroy competition.

In healthcare, size matters. This is why private health insurance companies have been merging. Large health insurance entities can bargain hard (bully?) for good unit price (fee schedules) for MD services, hospital stays, and pharmaceuticals. Large entities can also cover their fixed costs easily, and can compete aggressively on the variable costs. In any market where there's little to no competition because some entity has all the patients, the large entity essentially gets to dictate price. Dr. Smith won't tell the big insurer in the area to take a hike if all the patients pay through that large insurer. Sooner or later, the large entity wins.

All kinds of checks and balances are in place in the market (as it exists today) to keep fair competition.

FWIW, the government already has the lowest fee schedules. If all business flees to a government plan, a health care provider's standard of living goes down the toilet. Then you'll no longer be getting the best and the brightest going into medicine. Instead they'll go to law school, and join the law offices of Dewey, Chetham, and Howe.

When I visited Russia in 1993, the average monthly salary for an MD was $35. Most MDs had second jobs driving taxi cabs. A majority were women. They lived in dorms when an intern because they couldn't afford proper housing.

Where do you think all the innovations for new treatments come from? Not in socialist countries. What funds that? (Hint - it happens in competitive markets where pharma can bargain for profit.)

FYI there is rationing now.

Yes there is. However it's rationing negotiated beforehand. Medical policy for an insurance policy becomes a contract between the insurer and the insured, and not something dictated by a single-payer entity. You buy what you can afford. You get what you pay for.

- Bill

[cxt]

Bill

Thank you!

Helps clear some stuff up.

[Gene DeMambro]

I fail to see that rationing via insurance companies, negotiated beforehand with a medical policy for an insurance policy becomes a contract between the insurer and the insured is somehow okay with the same thing, via an option from the feds put together, under the same scenario, is bad. WHile I agree that companies deserve to make a principled profit, what continues to not be adressed are the scenarios that Glenn mentioned, namely that it's hard to take advantage of the land of opportunity when you are incapacitated by illness or injury, or swallowed in medical debt.

Gene

[Bill Glasheen]

I fail to see that rationing via insurance companies, negotiated beforehand with a medical policy for an insurance policy becomes a contract between the insurer and the insured is somehow okay with the same thing, via an option from the feds put together, under the same scenario, is bad.

Well go back and try re-reading what I wrote, Gene. It can't be stated in a single line. It's a complex scenario with a lot of history, and a lot of examples in different countries and different times.

You're either going to have a true free market with a level playing field of competition, or you're going to have a single-payer, government-run system. As I've tried to point out (please re-read), you can't have both.

A free market has its issues. A single-payer, government-run system has its own. Traditionally the United States has been about capitalism and a free market - PARTICULARLY when people are able-bodied and you can motivate individuals to get out of the home and earn a living (or starve themselves and their families). That's what makes this country run. We defeated Communism and the Soviet Union not by the sword, but by the free market. The Darwinian system won; the Central Planners lost.

The purpose of government in a capitalistic economy is to step in at the edges when the free market fails. This means that you have Medicaid when you are out of work, Emergency Room care if you're an illegal immigrant, and Medicare when you're too old to work. And even on that final one... If you're a smart Johnny and you save your pennies through life, you can get a BCBS supplemental policy on top of the government Medicare, and get even better medical care.

At the end of the day, the system rewards hard work. The system keeps you from death's door - if possible - if you have no place else to turn.

The system doesn't guarantee that you won't fail. Failure is an important element of capitalism. If there wasn't some fear of failure, then you wouldn't get out of bed in the morning to work, and couples wouldn't stay together to raise their progeny.

The current system of private insurance for the working is all about choice and reward. The harder you work and the better job you get, the better your health plan. If you choose not to get health benefits and instead choose to spend your money on cars, booze, and loose women, well good on you. If you're lucky and never get sick while your living foot loose and fancy free, well good on you.

But it's a risk.

Insurance is all about pooling risk. Insurance is all about preventing catastrophe. If you're smart and you invest in insurance, then you're (partially) covered if you're one of the few very unlucky.

This system doesn't protect people from their own lack of frugality and stupidity.

Are there flaws in the system? Yes, there are many. Does it need improvements? Let me count the ways....

Would letting the government enter as a competitor be a good idea to bring prices down? I've tried to lay out why you can't have it both ways.

You are given a choice of cars in the same class: a Honda, a Toyota, a Chrysler/Dodge, a GM car, and a Ford. Which would the average system rather buy? (Hint - it isn't the GM and the Chrysler. Read the year/year sales figure in yesterday's WSJ.) Which are built in this country? (Hint - It isn't necessarily the "American" cars.) Which needed to be bailed out, and have the most socialist policies (Union contracts, etc., etc.)? Which have the best quality and the highest customer satisfaction?

If the government enters the picture, the government isn't going to negotiate with large customers the way even a large BCBS plan must for its largest customers. And by the way, that would include state workers. Go figure... They must negotiate their contracts, and customize their medical policy for their very largest customers. If the customer doesn't get its way with one company (either by price, value, or customer service), they can walk and choose another vendor of healthcare services.

It's the individual and small group insurance market (today) where things are bad and the customer can't bargain as hard. But the Enthoven solution (purchasing cooperatives) is already known. It works in the German system. I should know; they (the entire German healthcare system) are a customer of our risk adjustment software.

The government doesn't negotiate in the free market; it dictates what you are going to get. The government isn't allowed to fail when they don't meet the needs of the customer or they can't meet their costs because they don't run efficiently enough. They just dictate the way it will be and find a way to rob Peter to pay Paul.

Remember Al Gore and his "lock box?" What did Al know?

Let me give you an example where the government mucks up the free market. Why is it that "alternative energy sources" fail in today's free market? Have you thought about the fact that there is a MASSIVE hidden subsidy for gasoline? Why is gasoline so cheap, and so readily available? (Think, Gene. You know the answer here.) What would happen to our dependence on foreign oil and our production of greenhouse gases if Joe Sixpack had to pay the full and true price of gasoline at the pump instead of through higher taxes that don't directly reflect his personal consumption? How would that shape R&D in plug-in hybrids, electric cars, use of massive domestic sources of natural gas, clean coal, nuclear fusion, wind, solar power for our homes, etc., etc.?

And how is that "massive hidden subsidy" hurting our economy, feeding terrorists abroad, and mortgaging our kids' futures?

- Bill

[Valkenar]

Large health insurance entities can bargain hard (bully?) for good unit price (fee schedules) for MD services, hospital stays, and pharmaceuticals. Large entities can also cover their fixed costs easily, and can compete aggressively on the variable costs.
...
When I visited Russia in 1993, the average monthly salary for an MD was $35.

Well if you were to eliminate the health insurance industry you could always split those savings between doctors and patients. I think it's pretty disingenuous to imply that under government-run healthcare doctors are going to experience anything like Russa ca. 1993. There are plenty of countries in the world that have universal coverage and the doctors in those places are getting by just fine. Incidentally, many of those countries also provide excellent care.

[Gene DeMambro]

You're either going to have a true free market with a level playing field of competition, or you're going to have a single-payer, government-run system. As I've tried to point out (please re-read), you can't have both.

Too black and white for me.

The harder you work and the better job you get, the better your health plan

In addition to being founded on capitalism, our nation was founded on equality, This makes it sound like the doctor, lawyer, stockbroker, CEO (i.e the high earners) somehow deserve better medical care and third party coverage than the truck driver, landscaper or custodian. While I have no quibble with the wealthy, via their own earnings and assest, being able to afford better medical care, when talking about keeping people healthy we ought to be able to do what is reasonable and necessary for everyone, no matter where they fall on the bell curve of earnings. On this, Glenn's statement has yet to be addreses, anmely, that it is difficult to get ahead incapacitated by injury or illness. Also, you make it sound like the lower wage earners don't work hard.

The purpose of government in a capitalistic economy is to step in at the edges when the free market fails.

So design a health care system around that. The current one isn't working.

Gene

[Bill Glasheen]

I think it's pretty disingenuous to imply that under government-run healthcare doctors are going to experience anything like Russa ca. 1993. There are plenty of countries in the world that have universal coverage and the doctors in those places are getting by just fine. Incidentally, many of those countries also provide excellent care.

Yes, that's not true, and please name them.

I used the example of a big player bargaining hard for unit price to make a point. You may be interested to know that of all the players in the system today, the government pays the lowest unit price to providers. Some doctors in fact won't see Medicare or Medicaid patients for this reason. In order to meet their own costs (malpractice insurance, front office billing staff, nurses, etc., etc.), they have to go where the unit cost makes the most sense.

For instance.. MDs get paid by an RBRVS scale. It's a three dimensional scale that assigns a relative value unit or RVU to a specific service. The fee schedule then is a matter of the conversion factor, or dollars per RVU. The government conversion factor (to my knowledge) is ALWAYS lower than any private insurance company. Really good group practices - the hot shots that patients really want to see and health plans want in their network - can bargain hard with multiple insurance carriers and get a better deal. And why not? If you're better, the system should reward you. But the government pretty much dictates their own price. Don't like it? Too bad. In a single payer system, there is NO bargaining. You get what the government tells you you're going to get. Smart people know better than to put up with that.

You might like to know that I used to work with many Canadian MDs in the BCBS system who fled the Canadian system. What's up with that?

When you have limited competition, players can't bargain. In the single payer system of the Soviet Union, central planners decided that keeping up with Western military spending was more important than giving their doctors a comfortable standard. Hmm... Does that sound familiar to you, Justin? So yes, it can happen. Not only that, but it DID happen. So your argument seems rather self-defeating.

- Bill

[Bill Glasheen]

In addition to being founded on capitalism, our nation was founded on equality.

Equal OPPORTUNITY, Gene, and not equal BENEFITS. The former is the U.S. and capitalism; the latter is communism.

- Bill

[IJ]

I think we're missing the point. For example, Bill, you want equal opportunity, not equal benefits. There is nowhere near equal opportunity in the USA. Do some occasional people rise from nothing to become millionaires? Yes, it's the great American story. It's also an argument that the lottery is a valid system for defeating poverty because there are success stories. Fact is there are a lot more crummy jobs at walmart and mcdonalds these days that are never going to pay for the skyrocketing cost of healthcare, and neither private nor public insurance has a solution to that. And while we always want to incentivize education and better jobs and creating industry, there are other nonhealth incentives doing that which haven't provided the necessary stimulus, or can't for everyone, because there are only so many post college better jobs.

Can people fail, in a Darwinian sense? Sure they can, but apparently this country is unwilling to say, "Ok immigrant, ok inner city blight victim, you failed, and you don't get medical care. Ok, you tried to start a restaurant and it went under so the guy who succeeded gets chemo and you don't." We don't do that; it's as if we were going to save the earth from CO2 by stopping fossil fuel use when india and china will not. We have EMTALA and we give chemo and surgery to people who can't afford them and we (and I can attest to this daily) tolerate the expensive daily hospitalization of people who are dying at the natural end of their lives from ten things because we let families and patients determine that it's an ok plan for someone to live in the hospital and suffer on a daily basis with a death plan of "I want to go down fighting with every therapy."

We have to fix all THAT first before this natural selection benefit really kicks in. Someone has to start denying care. If that's not possible, then heck, let's be honest and start insuring illegals or doing whatever will be cheaper than waiting for then to show up in the ED. Are we gonna dialyze em? Let's either provide it or not, but this garbage where we line them up and dialyze a bunch of times then send them out with instructions to return in 10-14 days (instead of 2)--bogus.

And we have to stop wasting our healthcare dollars. The culture of medicine here is the largest problem. I strongly encourage everyone to read this:

http://www.newyorker.com/reporting/2009 ... ct_gawande

[Jason Rees]

There are plenty of docs who won't see tricare patients in the civilian world. Tricare (the US military's insurance company) won't pay them spit.

And I may have said it before... but I've talked to plenty of docs who will go find a different job if we go to government-run healthcare. There are other ways for them to feed their families without being chained to a low-paying job. For anyone who thinks less of these men and women for their attitude, feel free to pour good money after bad for years and years of schooling to barely break even.

Waiting lines won't be long just because everybody can go see a doc for 'free' (which is a nightmare in and of itself). Lines will be long because the incentive to become a doctor (or remain one) will vanish.

[cxt]

Val

Honestly not trying to be a pain----but how many nations:

A-Have the population of the USA

B-The size of the USA

C-Similar health problems--such as obesity.

D-Report health conditions the same---at least one European nation does not count a "live birth" until the child is "X" days old.
Some nations report deaths very differently as well.

Besides in a very real way lifestyle choices have serious impact upon one overall health and lifespan----someone whom lives in a ashram and spends their days meditatiing and eating "right", getting plenty of exercise etc is likely to be "healther" than a stressed out overworked businessman that does not work out and eats fast food.
A hard partying snowboarder might get plenty of exercise yet still not be "healthy".
Point being simply putting a number to lifespan and health might not give you a real picture of of what their life might be like........is it the "healthcare system" or the "lifestyle" of a given nation that significantly impacts the overall numbers?
My guess is both.

I'd also ask you to define "getting by just fine"

Just like anybody else that can afford it---dignitaries, rulers, potentates, presidents etc all come to the USA when they need serious treatment.

Please note "getting by just fine" is a rather different thing than "how expensive care might be"

Not an accident that the USA has won or shared the Nobel Prize for medicine for the last 45 or so years.

Lot of room for improvement of course.

BTW--according to the last polling numbers I read upwards of 80% of people in the USA were "satisfied" with their health care---my guess is that would seem to in the neiborhood of the "getting by just fine" you mentioned.

Going out of town for the Labor day weekend----I'll try to get back ASAP.

[cxt]

IJ

Again, not trying to be a pain...seriously.

But if we "have to stop wasting our healthcare dollars"---which I agree with....and their is only some much money to go around.
Then why not save where we can and strictly enforce our immigration laws and deport illegals that are a drain on the system?

That "45-47 million people without health insurence" number is:

A-Probably grossly inflated----but for the sake of argument lets use it

B-Some people have estimated that upwards of "20%" of that number are illegals.....that is a lot of people and a lot of money.

If hard choices have to be made---and few people are saying that they don't
Then why not save the cash/healthcare dollars for those that are here legally?....those that stood in line.....waited patiently?
Why essentially reward those that broke the law, cut in line and are acting as a drain on limited resources?

You and I spoke at great length not so long ago about an illegal from Central America that needs expensive (kindney treatments???? I think) that she could not afford and were very difficult to get in her own nation.
You quite rightly pointed out that it was the same as killing her to deport her.

That money could be used to pay for the treatment of a legal citizen.

I think the ethics in such a situation get really murky and complex really, really quickly.......a situation I hope STAYS , for the most part, hypothetical.