Healthcare Spend at Historic Low

Healthcare Spend at Historic Low

67
SHARE

In a rare bit of good news for the Obama administration and budget policymakers,  health care costs increased last year at their slowest pace since the advent of Medicare and Medicaid in the mid 1960s.

The new analysis, released on July 25 by officials at the Centers for Medicare and Medicaid Services, the agency that administers the two programs, showed health care spending grew last year at a “historic” low  3.9 percent rate, which is slightly below 2009’s record-setting low of 4.0 percent. Health care spending as a share of the economy remained stuck at 17.6 percent, a welcome change from most years when it increases its share of total economic activity.

At a time when the White House and congressional leaders are worried about rampant long term growth of the government’s major health care  insurance programs for seniors and the poor, the new data will allow government actuaries to project growth in  Medicare and Medicaid over the next decade will be less than previously feared. This could potentially ease the task of the Obama administration and congressional leaders somewhat when they finally negotiate an agreement for slowing the growth of entitlement programs to help reduce the deficit.

Moreover, CMS actuaries are now saying the cost of insuring 30 million previously uninsured Americans under the president’s signature health care reform bill will add only a sliver to overall spending, and that increase is about half the projected growth rate of a year ago.

Looking ahead through 2020, CMS says health care spending will grow by 5.8 percent a year on average, which is about 1.1 percent faster than the rest of the economy. But only 0.1 percentage points of that growth will be due to the health care reform law. A year ago, CMS was projecting reform would raise health care spending an additional 0.2 percent a year.

Since nothing of substance has changed in the reform legislation, its lower projected cost is largely a byproduct of the overall reduction in health care spending, which health care economists said is being driven by a number of factors, including changes in consumers’ practices and more aggressive government oversight. “It’s too early to say that the Affordable Care Act will have a small effect on costs overall despite the coverage gains, but this is an optimistic sign,” said Alan Garber, an economist and physician at Stanford University.

Garber cited a number of factors beyond the recession that is lowering the average American’s propensity to consume fewer health care services. About one in seven privately insured Americans now belong to high co-pay, high-deductible plans, which force them to think twice about non-emergency care. “It makes people more aware,” Garber said. “It’s not play money. It’s your money. That may be having an effect.”

There have also been highly publicized crackdowns on Medicare fraud in areas of the country like Florida where costs and utilization rates are high. CMS is now projecting health spending on the elderly will only grow to $636 billion in 2014 from $525 billion in 2010.

That’s $35 billion less than what had been projected for 2014 a year ago. Moreover, CMS’s projection for Medicare spending in 2020 is $922 billion, whereas a year ago the actuaries were anticipating spending of $978 billion in 2019.

The actuaries cast cold water on the idea that delivery system reforms included in the new health care insurance legislation were driving the changes. “There is hope that research into innovative ways of delivering care will lead to slower growth,” said Richard Foster, CMS’s chief actuary, “but until those kinds of innovations have been designed and tested, we won’t have a sense of how large those savings will be.”

CMS’s projections for Medicare – last year or this year – do not include the so-called “doc fix.” Every year, Congress appropriates enough money to avoid a scheduled cut in pay for physicians who treat the elderly.

“If, as is far more likely, the 29.4 percent cut is avoided and the out-year cuts are eased, then spending levels and growth rates will increase significantly,” said Joseph Antos, a senior fellow at the American Enterprise Institute. “Under these more realistic assumptions, NHE [national health expenditures] will easily exceed 20 percent of GDP in 2020, and perhaps even earlier.” CMS currently projects health care spending will reach 19.8 percent of  the Gross Domestic Product by 2020.

Antos also pointed out that there will be a one-time spike in health care spending in 2014 as the 30 million newly insured Americans purchase drugs and physician services that they previously did without, and those costs will become embedded in overall costs.

But Garber, who has chaired a Medicare advisory committee that makes coverage recommendations, said that could actually lower costs. “There’s new research that says Medicare Part D (the prescription drug benefit) by making drugs more affordable is lowering costs elsewhere in the system,” he said. Lowering blood pressure with affordable generic drugs is a lot cheaper than paying for treating heart attacks.

A growth rate that falls to just 1.1 percent faster than the rest of the economy grows has its own implications for the health care  reform legislation, which created an Independent Payments Advisory Board to make recommendations for Medicare cuts whenever its growth exceeds GDP plus 1 percent. If the projections pan out, IPAB’s task will be much easier, and its recommendations to future Congresses and the elderly easier to swallow.

Republicans have charged the IPAB will lead to government rationing of health care, and have attacked the idea of the board, which hasn’t been appointed as of yet–a central talking point it their efforts to repeal reform.

In a rare bit of good news for the Obama administration and budget policymakers,  health care costs increased last year at their slowest pace since the advent of Medicare and Medicaid in the mid 1960s.

The new analysis, released early Thursday by officials at the Centers for Medicare and Medicaid Services, the agency that administers the two programs, showed health care spending grew last year at a “historic” low  3.9 percent rate, which is slightly below 2009’s record-setting low of 4.0 percent. Health care spending as a share of the economy remained stuck at 17.6 percent, a welcome change from most years when it increases its share of total economic activity.

At a time when the White House and congressional leaders are worried about rampant long term growth of the government’s major health care  insurance programs for seniors and the poor, the new data will allow government actuaries to project growth in  Medicare and Medicaid over the next decade will be less than previously feared. This could potentially ease the task of the Obama administration and congressional leaders somewhat when they finally negotiate an agreement for slowing the growth of entitlement programs to help reduce the deficit.

Moreover, CMS actuaries are now saying the cost of insuring 30 million previously uninsured Americans under the president’s signature health care reform bill will add only a sliver to overall spending, and that increase is about half the projected growth rate of a year ago.

Looking ahead through 2020, CMS says health care spending will grow by 5.8 percent a year on average, which is about 1.1 percent faster than the rest of the economy. But only 0.1 percentage points of that growth will be due to the health care reform law. A year ago, CMS was projecting reform would raise health care spending an additional 0.2 percent a year.

Since nothing of substance has changed in the reform legislation, its lower projected cost is largely a byproduct of the overall reduction in health care spending, which health care economists said is being driven by a number of factors, including changes in consumers’ practices and more aggressive government oversight. “It’s too early to say that the Affordable Care Act will have a small effect on costs overall despite the coverage gains, but this is an optimistic sign,” said Alan Garber, an economist and physician at Stanford University.

Garber cited a number of factors beyond the recession that is lowering the average American’s propensity to consume fewer health care services. About one in seven privately insured Americans now belong to high co-pay, high-deductible plans, which force them to think twice about non-emergency care. “It makes people more aware,” Garber said. “It’s not play money. It’s your money. That may be having an effect.”

There have also been highly publicized crackdowns on Medicare fraud in areas of the country like Florida where costs and utilization rates are high. CMS is now projecting health spending on the elderly will only grow to $636 billion in 2014 from $525 billion in 2010.

That’s $35 billion less than what had been projected for 2014 a year ago. Moreover, CMS’s projection for Medicare spending in 2020 is $922 billion, whereas a year ago the actuaries were anticipating spending of $978 billion in 2019.

The actuaries cast cold water on the idea that delivery system reforms included in the new health care insurance legislation were driving the changes. “There is hope that research into innovative ways of delivering care will lead to slower growth,” said Richard Foster, CMS’s chief actuary, “but until those kinds of innovations have been designed and tested, we won’t have a sense of how large those savings will be.”

CMS’s projections for Medicare – last year or this year – do not include the so-called “doc fix.” Every year, Congress appropriates enough money to avoid a scheduled cut in pay for physicians who treat the elderly.

“If, as is far more likely, the 29.4 percent cut is avoided and the out-year cuts are eased, then spending levels and growth rates will increase significantly,” said Joseph Antos, a senior fellow at the American Enterprise Institute. “Under these more realistic assumptions, NHE [national health expenditures] will easily exceed 20 percent of GDP in 2020, and perhaps even earlier.” CMS currently projects health care spending will reach 19.8 percent of  the Gross Domestic Product by 2020.

Antos also pointed out that there will be a one-time spike in health care spending in 2014 as the 30 million newly insured Americans purchase drugs and physician services that they previously did without, and those costs will become embedded in overall costs.

But Garber, who has chaired a Medicare advisory committee that makes coverage recommendations, said that could actually lower costs. “There’s new research that says Medicare Part D (the prescription drug benefit) by making drugs more affordable is lowering costs elsewhere in the system,” he said. Lowering blood pressure with affordable generic drugs is a lot cheaper than paying for treating heart attacks.

A growth rate that falls to just 1.1 percent faster than the rest of the economy grows has its own implications for the health care  reform legislation, which created an Independent Payments Advisory Board to make recommendations for Medicare cuts whenever its growth exceeds GDP plus 1 percent. If the projections pan out, IPAB’s task will be much easier, and its recommendations to future Congresses and the elderly easier to swallow.

Republicans have charged the IPAB will lead to government rationing of health care, and have attacked the idea of the board, which hasn’t been appointed as of yet–a central talking point it their efforts to repeal reform.

Merrill Goozner has been writing about economics and health care for many years. The former chief economics correspondent for the Chicago Tribune, Merrill has written for a long list of publications including the New York Times, The American Prospect, The Washington Post and Financial Times. You can read more pieces by him at GoozNews, where this post first appeared.

Leave a Reply

67 Comments on "Healthcare Spend at Historic Low"


Guest

You’re so interesting! I do not suppose I’ve read a single thing like that before.

So nice to discover somebody with original thoughts on this topic.
Seriously.. many thanks for starting this up. This website is something that is needed on the internet, someone with a little originality!

Guest
Oct 13, 2011

NqabRK mwenzvqsvmzp

Guest
Oct 12, 2011

You’ve really caturped all the essentials in this subject area, haven’t you?

Guest
Barry Carol
Aug 15, 2011

Doc Brown –

I hear what you’re trying to say. Some suggest that more and better primary care, coupled with universal coverage, could keep people healthier for a longer time period. However, there are a number of things I wonder about.

First, there is plenty of illness that strikes even people that lead healthy and disciplined lives. Cancer is the biggest killer of the under 65 population in the U.S., for example, though heart disease is the biggest killer overall. We lose a sizeable number of people in car accidents and other accidents. Firearms kill 25,000-30,000 people per year. Diseases of old age like Alzheimer’s and dementia can last for years as patients die slowly and need lots of care, including nursing home care in the interim.

My bigger concern about your thesis, though, is differences between the U.S. and other countries around lifestyle choices (high obesity rates in the U.S.), unreasonable patient expectations and a litigation environment that, when coupled with patient expectations, can drive lots of overtreatment due to a combination of defensive medicine, attempts to satisfy patients, and the fact that the evolution of practice patterns incorporate these realities which don’t exist, at least to anywhere near the same degree, in other developed countries. Our approach to end of life care also tends to be more aggressive than elsewhere due to a combination of patient expectations and the litigation environment but that seems to be changing slowly as more people choose hospice and/or palliative care when the end is near. Regarding the lifestyle choices, people don’t need a PCP to tell them that smoking is bad for their health or that they need to lose weight if they have a BMI of much above 25. People know this but it’s easier said than done.

Changes in payment approaches, including bundled payments for surgical procedures and capitation for primary care instead of fee for service could make a difference and so could price and quality transparency tools that would make it easier for referring doctors to steer patients toward the more cost-effective providers. My bottom line conclusion though is that given the totality of circumstances that doctors face in the U.S., especially patient expectations and the litigation environment resulting in more aggressive practice patterns, the idea that preventive care can save meaningful amounts of money is way oversold and probably wrong. While Nate can speak for himself, I think this is basically where he is coming from on this issue and I agree with him.

Guest
Barry Carol
Aug 11, 2011

Margalit –

I think many ER’s are already establishing urgent care clinics either on the hospital campus or very close by so triage nurses can divert non-emergency cases to those facilities and free up ER physician time for more urgent cases.

There is a lot more we could do to encourage people to execute living wills and advance directives. It could be part of the standard procedure upon admission to a nursing home. It should be addressed very early on for patients diagnosed with cancer, Alzheimer’s, dementia, CHF and ESRD among other conditions. As a failsafe, my personal preference would be to change the default protocol from do everything to apply common sense depending on circumstances without having to worry about being sued for not doing everything. Even when patients have executed these documents, they need to be readily available to doctors and hospitals when needed which they often are not. That’s why the information should be stored on a registry.

For hospital inpatients, I believe 69% of all hospitals with 200 or more beds now have palliative care programs vs. roughly half as many ten years ago. That’s also a step in the right direction.

Guest
Barry Carol
Aug 11, 2011

Margalit –

It’s not just the worried well demanding an MRI for a headache that’s driving our healthcare costs skyward. There is plenty of overtreatment being given to the 20% of patients who drive 80% of costs as well. Part of this is due to the litigation environment. I’ll offer the following three examples that are somewhat different from the traditional notions of defensive medicine:

1. A patient calls his PCP with a problem and seeks an appointment but the PCP can’t see him until the next day. There is a very small chance that it could be something serious. Just to be safe, the PCP encourages the patient to go to the nearest ER.

2. A nursing home patient falls but is not injured as far as the staff can tell. Just to be safe, the patient is sent, most likely by ambulance, to the local hospital to be checked out.

3. A patient facing an end of life situation is unable to communicate, has no living will and no family member, relative or friend authorized to act as his healthcare proxy. The default protocol is to “do everything” because providers are afraid they may be sued if they don’t.

While I certainly don’t know for sure, I suspect practice patterns in Switzerland and other developed countries would be more conservative (less aggressive and intense) in all three of these circumstances. This is another reason why I think that our litigation environment and culture drive a lot more of our healthcare costs than liberals believe.

Guest
Aug 11, 2011

Barry,

The interesting thing is that at least for #1 and #2 there could be “an American solution consistent with American values and culture.”
We have 24 hour gas stations, banks, grocery stores and pharmacies. Why can’t we have 24 hours urgent primary care clinics? The endless minute clinics and urgent cares opening everywhere, all close late afternoon. An urgent primary care office (across the street from the ER) would go a long way to reduce ER utilization. Where are the entrepreneurs?

As to #3, honestly, and I think this may sound odd, but it is very American, why not ask about advanced directives at the same time we ask for organ donation, at the DMV? Just a simple 5 questions or so form should do.

Guest
Nate Ogden
Aug 10, 2011

Margalit read this again, then go through history;

From the conservative point of view, liberals often tend to see an injustice or inequity in the world, pass a law to fix the inequity, and move on to the next problem. Conservatives think of themselves as approaching the same policy problems with pessimism and skepticism, because they are trying to look two moves ahead: what incentives will the new law distort? What new injustices or inequities will be triggered by these reforms?

This is not to say that liberals don’t try to think about the long-term consequences of their proposed reforms. They do. But it is to say that conservatives worry much more about this problem—the problem of what laws will be written in the future to address the unanticipated problems of laws written in the present. Liberals tend to be much less concerned about unintended consequences, and are more confident in their abilities to promulgate effective government action.

Let me try to explain another way: there is a policy problem A. Activists seek to pass a law, B, to solve injustice / policy problem A. But law B doesn’t completely solve problem A, and creates unanticipated new problems of its own. So a new law is passed, law C, to solve the problems outstanding from problem A, and the new problems caused by B. Unfortunately, law C only partially fixes the outstanding problems of A, and the new problems caused by B, and creates new problems of its own. So, now, there are calls for a new law, D, that will finally solve all the outstanding problems.

The above scenario is almost always what happens with complex new legislation, especially when that legislation substantially expands the role of government, in an unprecedented fashion, in what was previously private economic activity. In the case of Medicare, for example, official projections about the long-term costs of the program were off by a factor of 10, and various attempts to solve that problem (e.g. price controls) have created new ones (fraud).

WHy are we here, not in the grand big bang sense but healthcare.

Democrats passed Medicare to solve problem Law A

Medicare cost criminally underestimated so we pass Law B

Law B starts the cost shifting and market manipulation but doesn’t do anything to get cost on sustainable path so we pass Law C

I need to hit the road but will finish this later. I just don’t get how anyone can be so naive with our recent history to support more government reform. How clearer of a history do you need to see it never works like they tell us it will and always cost 10 times as much

Guest
Craig "Quack" Vickstrom, M.D.
Aug 11, 2011

Nate,

I think your critique of liberalism is mostly spot on. Liberals do tend to see a government solution to everything. They also don’t look ahead to the law of unintended consequences. We really fall down on this one.

That said, conservatives tend not to see problems. Period. Slavery. Child labor. Corruption. Segregation. Environmental degradation. Work place injuries and safety. Gender inequality. Minority persecution. You get the point. These things were OK back in the day, because we’ve always done it that way.

Conservatism by its very nature sees the status quo as acceptable. Liberalism does not and attempts, through mostly governmental means, to solve the problem. This is ultimately why liberalism was and still is, more appealing to me.

Now neo-liberaism, a la Clinton and Obama, attempts to use private enterprise to achieve solutions to some problems. Being a classic liberal, I strongly disagree.

Now, to my civil libertarian mind, this is a big mistake, as we want the Big Three Oppressors (government, religion, and private enterprise) fighting each other so they are too weak to trample on we the people. But, your mileage may vary.

Guest
Nate Ogden
Aug 11, 2011

That said, conservatives tend not to see problems. Period. Slavery.

Who ended slavery?

I think your also confusing republicans, a very small set at that, with conservatives. There is no bigger protectors of the enviroment then conservatives. Hunters, fishers, and such do 10 times more then liberals sitting in their ivory towers to actually help the enviroment.

I think your also giving the liberals far more credit for doing something when something was actually harmful. Sometimes doing nothing is more humane then doing something for the sake of doing something.

Would you argue the poor are better off after housing projects?

How about welfare?

Just two examples of poorly done solutions causing 10 times the harm of doing nothing.

Medicare has spent trillions and more seniors need assistance now then before.

Where do you live that you assigned corruption as a conservative issue, I assume you were joking with that one or thought I wouldn’t notice. Liberals own that hands down.

Gender inequality, do you want to discuss how liberals treated Palin? Malkin? The left embraces the cause but never the issue. Conservatives are far more respectiful of women and women rights then Liberals. Liberals just rally around the cuase to deflect critism of their actions.

Talk to some Tea Party believers and you will find people that actually believe and pratice what the liberals claim but fail to.

Guest
Aug 11, 2011

The Republican party in President Lincoln’s times has nothing in common with the Republican party today and same is true for what was referred to as Democrats back then.

Welfare? Do you mean feeding stray animals, as Andre Bauer (R) put it very succinctly?

Democrats treated Palin the way they did not because of her gender.

More seniors need assistance today not because of Medicare, but because medical care today is much more expensive than it was in 1965 and because big business prevented most people from improving their financial situation during the last few decades.

Without Medicare and Medicaid to mitigate these issues you would have had people literally dying in the streets, both from disease and from violence. That may still be coming, because in spite of Tea Party’s own Paul Broun’s advice, people have no country club memberships to cancel. And there is no plentiful cake out there either.

I don’t have an issue with people holding different social-financial-political views. I do have a problem with people being overtly discriminatory and I have a problem with people subscribing to the notion that a democratically elected President will not be allowed to govern as a Democrat, and I have a problem with people being perfectly willing to throw the country overboard along with the tea bags to that end. And I have a problem with stupidity and suicide bomber mentality in general.

Guest
Nate Ogden
Aug 11, 2011

“The rabble should be content with canned beans and if they work hard an old truck and a good rifle and maybe even a couple of gold coins sewn in their hunting jacket.”

which is far more then you have done for inner city poor, or as you like to see them votes, makes it easier to use them if you dehumanize them.

Don’t worry we know the kind hearted liberals would never allow them to have guns, or gold coins, or a job to work, they might get the wrong idea

Guest
Aug 11, 2011

“… a democratically elected President will not be allowed to govern as a Democrat”

Oh no, I cannot take credit for that idea. It comes straight from your conservative boy wonder Grover Norquist.
It seems that the Neo-Republican philosophy is to talk as many people as possible out of voting, and if that doesn’t work, just threaten to blow up the country (and mean it) unless the Democrats do what they’re told.
Democracy is overrated anyway…. It’s all about capitalism and the rights of propertied gents. The more property, the more rights. The rabble should be content with canned beans and if they work hard an old truck and a good rifle and maybe even a couple of gold coins sewn in their hunting jacket.

Guest
Nate Ogden
Aug 11, 2011

no i mean paying people to have more babies, a system that incentivies people not to marry and live together. A system that gives people just enough so they can get by but never enough to get out.

“Democrats treated Palin the way they did not because of her gender.”

Yet any time you critique Obama its racist? Or speak of welfar its racist, or disagree with NOW your sexist. The left is famous for this double standard.

“because medical care today is much more expensive than it was in 1965″

Why is Medical care much more expensive? Becuase of Medicare. Any time the government starts to subsidize something the price increases. Education… housing…. food

“Without Medicare and Medicaid to mitigate these issues you would have had people literally dying in the streets,”

Readers need to keep in mind when a liberal says dieing in the streets it doesn’t mean dieing in the streets like the rest of us think. If we pass welfare reform people will die in the streets is another example. When a liberal claims someone will die in the streets if you pass this or don’t pass that they really mean their dogma and creditablity will die.

“and from violence”

Violence like that found in public housing projects?

“I do have a problem with people being overtly discriminatory”

Like our media? Like our education system? Like hollywood? like the mobs that have been attacking people all summer? Like the NAACP? Like Now?

” I have a problem with people subscribing to the notion that a democratically elected President will not be allowed to govern as a Democrat,”

But blocking Bush was Patriotic? May 2001

WASHINGTON— The incoming Senate majority leader made it clear Sunday that Democrats planned to use their new control of that chamber to block some key Bush policy initiatives, from early deployment of a missile-defense system to oil-drilling in the Alaska wilderness and increased use of nuclear power.

As Democrats prepared to take control of the Senate after a Republican senator from Vermont, James Jeffords, said he was leaving his party, the comments of Senator Tom Daschle were the clearest indication yet that parts of the Bush legislative agenda were in serious trouble.

At least you were honest and upfront about it;

“not be allowed to govern as a Democrat”

As long as they govern as a Dem you have different rules.

Guest
Barry Carol
Aug 10, 2011

“I think I understand the Swiss system and I am fine with it.”

Since virtually everything else in Switzerland is much more expensive that it is in the U.S., especially since the currency is up almost 35% vs. the dollar over the last year, there are several aspects of the system that I would like to understand better including the following since healthcare is cheaper at least as a percentage of GDP:

1. How does the government define what will be in the basic benefit package and later, as new drugs, devices and techniques or developed, determine whether or not to cover and pay for them?

2. To what extent, if any, does medical practice differ from here in the U.S., especially as it relates to end of life care and defensive medicine?

3. What differences, if any, are there in patient expectations from imaging for a headache to end of life care?

While we may disagree on whether or not QALY metrics are the best way to determine whether or not to pay for a new drug, device or technique, at the very least, Congress needs to specifically authorize CMS to take cost into account in making that determination. Right now, it’s not allowed to.

Guest
Aug 10, 2011

Barry,
I would assume that government defines the basic benefit in a way similar to how CMS defines the Medicare benefits. I do agree that CMS needs to take cost into account, but not based on individual circumstances.
For example, CMS can decide if they will pay, or not pay, for a drug that has been shown to extend life by two weeks. CMS should not decide that for patient A, the drug will be paid for, but for patient B it will not. This type of judgement looks very slippery to me.

I also don’t know what people in Switzerland expect in the way of imaging, but I am having trouble with the notion that all of us, or most of us, are abusing the system and demanding MRIs for headaches, because it doesn’t square with the numbers that show that 80% of people use less than 20% of resources. Maybe there are some MRI junkies in that 20%, but most Americans don’t behave like that, and there isn’t much to be squeezed out from the overwhelming majority.

Guest
Nate Ogden
Aug 10, 2011

just becuase 80% only use 20% doesn’t mean that 20% isn’t still a very big number that could be smaller. Using really rough numbers

60 million people average $26,666.67
240 million people average $1,666

Even if we assumed the 240 million used healthcare optimally that leaves 60 million people making terrible decisions and getting their MRI fix weekly

Guest
Aug 10, 2011

Nate, you have claims and I assume you have a computer. Why don’t you check what percent of your insureds had an MRI this year and what percent had one every week and let us know.

Guest

Barry,

I would oppose a QALY based system. I would oppose rationing by circumstances and by ability to pay. I am perfectly willing to shoulder a higher tax burden to prevent these inequities because of the same reasons Nate is opposing government financed health care – unintended consequences.

I think I understand the Swiss system and I am fine with it. So my question to Nate, one more time, would you support universal care Swiss style Nate?

Guest
Nate Ogden
Aug 10, 2011

My answer to Margaliut one more time;

“Nope, nothing in the constitution allows the federal government to sponsor healthcare and they have failed miserably at it so far”

” I am perfectly willing to shoulder a higher tax burden to prevent these inequities”

And your liberal short comming raise their head once again. No matter how many times history hands it back to you why do liberals never learn? Just because you pass a bill called the Affordable Care Act doesn’t mean care will be affordable. You say your willing to shoulder higher taxes for an inequality free system. Are you willing to shoulder higher taxes for an inewuality free system that doesn’t do anything to prevent inequality and actually codifies them?

in 1965 millions of clueless liberals were willing to shoulder higher taxes so grandma wouldn’t lose the shirt off her back. They got their higher taxes all right, instead of 13% of grandmas losing their shirt 19% do.

Your mind thinks in liberals ways, you will just never understand consiquences apparently. No matter how many times history repeats itself.

Guest
Barry Carol
Aug 9, 2011

“I take it that he would support a tax financed health care system similar to the Swiss one. I would too. Would you, Nate?”

Margalit –

It’s not tax financed the way Medicare is. All of Medicare Part A is taxpayer financed as are 75% of Parts B and D. The Swiss who can afford to are expected to purchase a health insurance policy on their own and deductibles can range up to 2,300 CHF or about $3,175 at the recent exchange rate. About 30%-40% of the population qualifies for a taxpayer financed subsidy to help lower income people purchase a policy. General revenues also cover some of the cost of operating the hospitals. The Swiss population pays for about 30% of healthcare costs out of pocket, about 35% is covered by health insurance premiums paid by individuals themselves and the rest is covered by insurance paid for by the taxpayer financed subsidies plus the taxpayer contribution to hospital operating costs. As I mentioned in previous comments, there is no public option even for the elderly.

Guest
Barry Carol
Aug 9, 2011

I think the British made a societal decision a long time ago to spend less as a percentage of GDP on healthcare than other countries are willing to. I also think it’s outrageous to deny people the right to spend their own money for services that the NHS won’t pay for without losing access to the coverage it will pay for.

That said, I think the QALY is a logical way to make judgments about what will and won’t be paid for. No society can afford to pay for everything and anything that a doctor thinks might be at least marginally beneficial for a patient no matter how expensive. Personally, I think it would simplify matters to offer the following approach to health insurance. There could be several different schedules of benefits with various combinations of deductibles, co-pays and OOP’s within each. Policy A might cover all services, tests, procedures and drugs up to $125K per QALY for premium amount X. Policy B would cover everything up to $250K per QALY for premium amount Y and Policy C might cover anything you are willing to tolerate having done to or for you for premium amount Z. There could be exclusions for lifestyle treatments like massages, ED drugs and maybe IVF. Long term custodial care in a nursing home would also have to be dealt with separately and probably means tested as it is now.

In the end, if explicit rationing ultimately becomes necessary, I think it’s more reasonable to ration care to the elderly who have already lived a normal lifespan as opposed to children, young adults or middle age people. People who object to that approach, I think, have an obligation to offer a viable alternative or explicitly agree to shoulder a significantly higher tax burden than we currently pay.

Guest
Barry Carol
Aug 9, 2011

“Everyone dies in the end. The question is do you die today or do you die next week after spending an additional $300,000. The question to you and those that think like you is how much of your kids and grandkids future do you want to blow for that extra week? Is that extra week in a hospital bed worth your grandkids suffering under a 50% tax burden instead of 35%?”

This is really the key point. I know I sound like a broken record when I keep saying that resources are finite and we can’t afford to give everything to everyone. What galls me is that people who wouldn’t dream of spending their own money on futile end of life care even if they could afford to think nothing of spending someone else’s. Indeed, they feel entitled to do so. Self-payers with means who are so inclined can, of course, spend as much of their own money on futile care as they like

People in other developed countries are more accepting of death when their time comes. They don’t spend nearly as much on futile or marginally useful care as we do. In fact, I wouldn’t be surprised if doctors didn’t even offer such care as an available option in many cases. They are probably more likely to say there’s nothing more that we can do other than keep you comfortable.

Guest
Nate Ogden
Aug 9, 2011

Margalit your looking at it all wrong. Health Insurance has nothing to do with health. At least it shouldn’t.

No an unlimited cap is not going to change the number of ill people, no one ever argues that. What it does effect it hospital and provider charges and billing. If hospitals can get paid more they will charge more. If Pharma can get someone to pay $90,000 for a drug they will sell a $90,000 drug. Now I would imagine they would start selling individually targeted treatments based on ones DNA at some price we never imagined possible before.

“Or do they just go home and die?”

Everyone dies in the end. The question is do you die today or do you die next week after spending an additional $300,000. The question to you and those that think like you is how much of your kids and grandkids future do you want to blow for that extra week? Is that extra week in a hospital bed worth your grandkids suffering under a 50% tax burden instead of 35%?

Guest

I don’t want to spend anything for an extra week in a hospital bed. Actually I am willing to pay for avoiding an extra week in a hospital bed, or month, or year…..

The problem here Nate is that when PPACA suggested that we at the very least ask patients if they want that extra week, and most probably don’t even if it’s “free”, a whole bunch of people started screaming about death panels.
If consulting with patients on this subject is death panels, then how do you classify caps on what insurance will pay? Death without panels?

Guest
Nate Ogden
Aug 9, 2011

“PPACA suggested that we at the very least ask patients if they want that extra week, and most probably don’t even if it’s “free”, a whole bunch of people started screaming about death panels.”

We might have a problem if what you said was even remotely true.

PPACA didn’t just ask patients if they want an extra week. Did you forget about the government panels making coverage decisions. Somehow when people complained about government panels possibly turning into death panels you missed that entire argument. But when someone talks about pallative care consultations you take the unrelated panel concern and just apply it there. Are you being dishonest or forgetful Margalit?

Actually there is a third option, you were betrayed by your liberal news providers and have no idea what your talking about. For a good explanation of Death Panels and why informed individuals are concerned read this

http://www.nationalreview.com/agenda/244934/non-demagogic-disquisition-death-panels-avik-roy#

after you have been enlightened to the whole argument come back and let me know what you think.

Guest

OK, I read Avik Roy’s post, and some of his replies to comments.

I think the crux of the matter is that there is an implied assumption in the conservative argument, that if government finances health care through taxes, then government will assume the right to prevent people from buying additional services. While this may be true in the NHS, it is not true in other “universal care” systems.

I don’t know why conservatives feel compelled to compare universal health care with, of all things, the NHS. The NHS is an integrated delivery system, where the government owns the delivery system as well as being the payer (like Kaiser). I’m sure that some liberals here advocate for such a system in the US. I most certainly do not.

For a non-NHS system, the rationing issue is a bogus one. Every payer in this country, private ones included, has a list of “benefits” that are to be paid to members. Medicare, our public system, which has been around for almost half a century, has the most comprehensive list of such benefits, but neither Medicare, nor you, are willing to pay for everything a member could desire. This is not rationing. It’s product definition.

Since you have no problem with private insurance not handing me a blank check in return for my premium (quite the opposite, I believe), why are you having an issue with the government doing the same thing? Either way, I can go and buy more if I have the money and the inclination.

We don’t need to go looking at the NHS, we have a pretty solid public precedent right here, a bit younger than the NHS, but 50 years is good enough for experience based conclusions.

One more thing, in one of his replies to comments Avik Roy concludes “This is how it works in Switzerland, and it works well.”
I take it that he would support a tax financed health care system similar to the Swiss one. I would too. Would you, Nate?

Guest
Nate Ogden
Aug 9, 2011

” if government finances health care through taxes, then government will assume the right to prevent people from buying additional services. While this may be true in the NHS, it is not true in other “universal care” systems.”

Medicare already does it as does the VA and Medicaid. NHS also has one of the older systems, give these other systems another 5-10 years and they will be to.

“I’m sure that some liberals here advocate for such a system in the US.”

Some? The polls I read say most, the lack of a single payor option was their biggest complaint of liberals in regard to PPACA.

“The NHS is an integrated delivery system, where the government owns the delivery system as well as being the payer (like Kaiser).”

Government already owns 20% of US hospitals. And does ownership matter if your the only payor? If you control the purse strings and make the laws who cares who paid for it.

“Medicare, our public system, which has been around for almost half a century, has the most comprehensive list of such benefits,”

LOL, Margalit, please think about what you just said. Are you serious? Medicare that just started covering Rx? Medicare that doesn’t include any dental or vision? You really have no clue what your talking about. No matter your views are so screwed up.

“Either way, I can go and buy more if I have the money and the inclination.”

If I am rich can I drop Medicare with no consiquence? Exactly. And what guarantee do we have Medicare won’t follow the NHS if they got rid of everyone else. Remember for the 100th time, Medicare by law paid providers billed charges till it was not convienant so they changed the law. Why do you ignore history?

Nope, nothing in the constitution allows the federal government to sponsor healthcare and they have failed miserably at it so far

Guest
Barry Carol
Aug 9, 2011

For many years, my self-funded employer’s health insurance plan had a $1 million lifetime benefit cap. A few years ago, it raised the cap to $5 million. The only reason that there is a cap at all is cost. This is a generous employer that operates in a highly competitive and very cyclical industry with plenty of years that are not profitable. We don’t have unlimited resources and must factor that fact into the cost of benefits we can provide. It would be enormously helpful if government were more sensitive to that reality as well.

Guest

Barry,
What is the realistic effect of these caps on cost? How many people ever reach these caps? Does the number of severely ill people change because the caps are, or are not, there? And what happens when they do reach the cap? Who pays for subsequent care? The government? Or do they just go home and die?

Guest
Aug 8, 2011

“an American solution consistent with American values and culture.”
___

Yeah, they’re on such stellar display these days.