Rooting for Failure

[Rogar]

Read
Steven Brill, Time Magazine, Bitter Pill: Why Medical Bills are Killing Us.
http://content.time.com/time/magazin...136864,00.html

Seems you can't view this whole article without paying/getting a pass of some kind, but it's worth it if you want solid and robust investigative reporting on exactly what you're asking.

According to the Washington Post, this article can be summed up in one sentence:

You know, I've been pondering this article since it came out. The overall impression I got is that the medical industry is soaking us with high charges and thereby making a hefty profit. As I understand basic accounting and economics, profit comes down to the bottom line on the income statement where it can then be reinvested in the company or paid to the stockholders as dividends. In either case, a growing company or a company paying good dividends would be considered a good investment for a stockholder. I am not seeing that in the stock prices of the health insurance or other medical industries, like hospitals. While big pharma might charge a large amount for drugs, they have to meet rigorous FDA guidelines and have high R+D expenses.

So, if these guys were making big profits, one could become wealthy by investing in their stocks. At least on a relative scale to other industries, that just isn't happening. Back in the day when I invested in individual stocks, I owned one of the big pharma stocks and one of a large hospital corporation. They were both pretty much dogs and I sold them. Insurance companies are basically considered conservative investments and typically known for slow but steady growth.

No doubt there are CEOs with huge salaries, but that is typical for private sector companies. I am still digesting some of this, but I think the article, as well as some general public perceptions, are mislaid and that they are not making undue income. Off course there are other valid reasons for high medical expenses, but I think they are more in the realm of bureaucratic inefficiencies. Least that's where I'm at now.

[catherine]

Rogar, it's been a while since I read that article, but to me the take-away was not all the profit they were or were not racking up, but the lack of transparency with regard to completely capricious pricing. We can go on the internet and enter "KitchenAid mixer" and immediately get tons of competitive prices at our fingertips. And if a vendor sees he is being outsold because his prices are higher, he can do a better job at meeting the market demand.

That's not possible in healthcare. Because there are so many hands in the soup--doctor, payer, purchasing group, hospital administration, insurance company, etc. etc., the vested interest in competitive pricing is diluted. You'll notice I didn't even put patient in the mix--because we just assume it's going to be one colossal PIA to track down every charge, so we give up and let it filter through all the channels and then our copayment isn't that bad so we live with it and don't challenge.

Now, if we go to the supermarket and the cashier rings up $25 for an apple, you can be sure we'll raise holy hell, but we swallow that $25 aspirin without thinking about it.

And, to your point, because of the complexities of this crazy, messed up system, inefficiencies abound. How can it be efficient? By design it's inefficient.

The fact that every cost is almost completely random and no one bothers to care just defies any rule of free enterprise and market economics--so there's where your profitability measure falls down.

[Valley]

Yes!

[Spartana]

I personally don't want to see the law repealed or killed off. I'd like to see it fixed. Lots of things I dislike about it that can be changed for the better (and easily repaired imho). But first the administration has to acknowledge that things aren't working as planned - i.e. leaving the millions of working poor in non-Medicaid expanded states without affordable health insurance while those with much higher incomes can get almost full subsidies just by putting some of their earnings into tax-deferred investments to name just one of many problems with the ACA. The administration seems to be more focused on fixing the problems with the website than fixing the problems with the ACA. Fix and change don't repeal.

ETA: as one of those people who doesn't qualify for subsidies (only Medicaid) and who had their private insurance policy cancelled, and who is a state (Calif) that will not allow an extention even if the feds allow for one, I am having a difficult time finding affordable insurance myself. I do have a low cost alternative (the VA) though so am luckier than most.

[gimmethesimplelife]

at this point 33% probably favor replace with single payer. Even single payer probably wouldn't be effective unless you broke the current medical cartel (ie held down pharma costs like they do in other countries, tightly controlled for-profit insurance etc.), but probably no form of healthcare reform would be unless you do that anyway.



I'm annoyed I pay so much for health insurance and that it will likely only go up and up, and it's only a bit over $300 a month plus the occasional copay (but I have not seen the next years plans and I haven't needed serious care) and that's with the employer paying some. Is anyone getting raises keeping up with even the employee part of the increase in premiums? Can't say I am. If not we're ALL at this point getting poorer just to keep up with medical inflation, some of us have a long long way in the "getting poorer" to go before we hit poverty, but nontheless our standard of living seems to continue to decline each year just to keep up with the medical inflation beast.

But younger, healthier people like me have to pay more so older less healthy people can have coverage? You know if everyone really was protected (including *me* if I fell through the cracks and needed it!) that particular bitter pill would still be no party but just a little bit easier to swallow - but no we still have a healthcare system where the cracks are big enough for 50 story buildings to fall through, even people with insurance especially those on the lower end of the *wealth* scale (ie don't have say 6k just sitting around for a deductible should they get a serious illness) but not qualifying for medicaid are going to have deductibles too high for them to use their plans, plus hospitals that don't take their plans. Well in their case walking away from medical debt is still an option (it's not yet student loans).

But anyway employer coverage looks more attractive NOW, a few years down the line I think it WON'T. Because I think it's very much part of the plan for Obamacare for employer coverage to get junkier and junkier. For one thing they have a penalty on Cadillac plans only the definition of Cadillac is based purely on what it costs, not on what it covers (what if an employer has a lot of sick employees - then basic plans become Cadillac). Plus the amount to qualify as Cadillac increases every year by inflation (some form of the CPI), but as we all know medical inflation is running multiples of this with no break. So the result of graphing such a thing if current trends continue is eventually all PPOs are Cadillac. I would not be happy about this, I've tried hard to keep my PPOs and not have to go with HMOs (when HR tells you that yes the HMO is a much better deal cost wise as long as your willing to fight with the HMO to get care, it's not a good sign). Now maybe insurance companies deliberately try not to go over the Cadillac limit so that bulk buyers (corporations) will continue to use them, but though they're easy to hate they aren't the only cost driver of medical inflation!

So it's possible self-employment might start to look attractive in a few years just due to the sheer junkiness of *everyone*'s policies! If you have @#$# coverage if you work for others, might as well have @#$# coverage working for yourself! Really. If it gets to the point both options have 20k out of pocket, what can you do? And this is self-employment not as good choice among good choices, but as nothing left to lose (I do happen to know entrepreneurs who started that way because they simply could not find work. It contradicts so with the narrative of winners and losers I know ...). But anyway if @#$# sandwiches are the only thing on the menu in terms of healthcare, you stop waiting for filet minon to show up. Better a @#$# sandwich on my terms! (self-employment) Never mind that I hear the menu in Canada actually consists of real food and not just @#$# sandwiches all the time ..... oh those lucky people.

APN, I love your last paragraph. And I can see your point that self employment is going to look more and more attractive if employer based health plans cover less and less and less. If you have a skill to peddle, WHY NOT go out on your own if one of the big perks of working for someone else becomes less and less of a perk? I think you are dead on in this assessment. Rob

[rodeosweetheart]

I personally don't want to see the law repealed or killed off. I'd like to see it fixed. Lots of things I dislike about it that can be changed for the better (and easily repaired imho). But first the administration has to acknowledge that things aren't working as planned - i.e. leaving the millions of working poor in non-Medicaid expanded states without affordable health insurance while those with much higher incomes can get almost full subsidies just by putting some of their earnings into tax-deferred investments to name just one of many problems with the ACA. The administration seems to be more focused on fixing the problems with the website than fixing the problems with the ACA. Fix and change don't repeal.

ETA: as one of those people who doesn't qualify for subsidies (only Medicaid) and who had their private insurance policy cancelled, and who is a state (Calif) that will not allow an extention even if the feds allow for one, I am having a difficult time finding affordable insurance myself. I do have a low cost alternative (the VA) though so am luckier than most.

Hang in there, Spartana, and i always get a lot of good info from your posts, lots of good critical thinking and you always teach me something.

Frankly, it really makes me angry that you, a vet, are getting jacked around with respect to health insurance. I am glad there is the VA but I hope another plan comes along for you, and soon.
You are an optimistic inspiration to me--you are always a positive spirit, and you think things through and you figure things out for yourself.

[Spartana]

Hang in there, Spartana, and i always get a lot of good info from your posts, lots of good critical thinking and you always teach me something.

Frankly, it really makes me angry that you, a vet, are getting jacked around with respect to health insurance. I am glad there is the VA but I hope another plan comes along for you, and soon.
You are an optimistic inspiration to me--you are always a positive spirit, and you think things through and you figure things out for yourself.

Thanks!! That is very nice of you to say. Well there are health insurance plans out there that I can buy that are not on the state exchange (can get them straight from the insurance agencies) and they really aren't that expensive overall - but they are still 3 times higher than what I was paying for before for my Blue Cross catastrophic plan and have much higher out-of-pocket so it's kind of a sticker shock thing for me. But I am one of the fortunate ones in that I can afford to pay the price increase by tapping into some of my retirement savings (and will probably do that), or just use the VA for very low cost, or even apply for the states Medicaid program if I want (I don't and won't). But I feel for those people who don't have those other options like I do. Those were the people I had really hoped the ACA would help and it seems that they are the ones that are falling between the cracks.