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  1. Hank wrote: The phenomenon of office co-pays and rx cards is relatively new, and is quite out of step with the underlying principles of insurance, which is about managing risk, not paying for the small stuff. By way of analogy, one wouldn’t expect one’s auto insurance to pay for a new horn, or windshield wipers.

  2. Tom, First Class Price Discrimination exists because it is a way for the hospitals to gouge those people with the least power. They have a contract with the insurers and they have price controls with Medicare. So what group do they have the most price monopoly power with – the uninsured.
    My rather dramatic reference to the flood victims on roof tops is actually a symbol of a much deeper system problem. For example it shows not only the ineptitude of the local, state, and federal governments but also government enacted wealth distribution by those with lobby/money influence. For decades corporations in “Cancer Alley” have been given billions of dollars in tax rebates, concessions, and giveaways. This money went to Exxon, Shell, International Paper, etc. This money loss particularily hurts local districts and school boards. As well these hurricane states have enacted low wage/low tax legislation where its own residents do not have the resources to pay for any medical insurance or medical care – No margin, No way. Louisiana in particular has had a long history of government corruption and cronyism that takes tax money and redistributes it to their connected friends. So you do have government control and income redistribution now – just not the “altruistic” kind. I am not advocating the government determine what is produced, only that in healthcare, where the buyer has no choice, what is a fair price, including fair margins, and who pays what. When I did my little price investigation on cataract surgery I got two retail quotes, $8500 per eye from UNCH and $15000 per eye from Duke Medical. Now who was calculating actual costs more accurately? Would Duke think Medicare/Medicade reimbursements were not providing good margins more than UNCH? Everyone has their own interpretation as to costs and with the system we have now those costs and margins are not honest or transparent.
    But at least we have something to agree on that tinkering with a broke system will not change the system. Is a government run(managed) system the last word, no. Everything is transitional, but where it is being used it is providing lower cost with the same or better outcomes. If the private sector can come up with a better plan let’s see it. But right now the private sector is able to squeeze more money from this system. This will continue until the “blood from a stone” point is reached. I don’t think this fractionalized overly competitive present system will do anything until forced into crisis. But it will be a crisis of patients and insured, not industry margins.

  3. > On entering hospital the patient would get an
    > immediate credit and insurance check. If they
    > don’t qualify they are wheeled back onto the
    > street to cope any way they can. That would be
    > the purest free market model.
    Peter, you confuse “freedom” and “free market” with “inhumanity”. There might be some hospitals that behaved this way, and they would be free (in the eyes of the law) to do so under a laissez-faire regime. Most hospitals have not behaved this way in the past, and there is no particular reason to think most (or even many) would begin behaving this way in the future. Plus, we have never had a laissez-faire regime.
    Believe it or not, there exists altruism and there are people who work very hard in order to obtain the resources to be altruistic. They excercise their freedoms in order to obtain the resources, and further excercise them in their altruism.
    This had been the model and implicit contract with the government with respect to the Medical Guild’s government-protected monopoly on services. The Guild would be allowed monopoly pricing power, and in return would “take care of” the poor. Ideally this was accomplished through an approximation of First Class Price Discrimination. (This article could be better, but it isn’t wrong.)
    This model has broken down — the government wants to pay no more than the minimum the best managed healthcare services are willing to accept, and has the clout to impose this pricing on everyone. This has set the pricing expectations in the market, and everyone wants to pay what the government pays, or less! Increasing consolidation on the payer/purchaser side has made this trend pervasive. This eventuality had been anticipated by doctors early in the last century.
    The maxim “No Margin, No Mission” applies as always — without resources there can be no altruism. It is hard to fault anyone for not spending what they do not have.
    It may be argued with a straight face that it has been the refusal of the government to negotiate prices that has caused this breakdown. Instead, there has been a “take it or leave it” approach that greatly reduces the costs to the government of administering its programs, but has produced a disaster. It can also be argued with a straight face that even the best-intentioned organizations have been wasteful of resources, and that not everyone is so well-intentioned.
    I know you want complete central control. I and apparently most Americans do not. But we agree that the half-measures being taken right now are causing human suffering and inordinately high costs. It may be that central control at least in the short term would be better on these measures than the half-measures. But these are not the only measures.

  4. Tom…please stop getting the point correct before I’ve had a chance to write it up! See my article above…

  5. > The study found that in 2004, the most recent year for
    > which full data are available, hospitals in Washington
    > State charged an additional $738 million — or 14.3
    > percent of their revenue — to private payers to make
    > up for Medicare and Medicaid underpayments.
    What a load of nonsense! This presumes there is a “correct” price for medical services, and there just isn’t. Underpayments? Compared to what? Are we to understand that hospitals would bill less to commercial payers if only the guv’mut would pay more? Please!
    Hospitals are complaining that Medicare and Medicaid have the clout to pay less than the average cost of care at their facilities but presumably at least the marginal cost of care. They’re trying to enlist other parts of Corporate America™ to help lobby Congress for more money. If there’s an implicit offer to pay for these lobbying services, I am sure all manner of laws are being broken.

  6. Do you advocate more of the same to solve the problem? The best free market solution to this would be to NOT treat those that cannot pay. On entering hospital the patient would get an immediate credit and insurance check. If they don’t qualify they are wheeled back onto the street to cope any way they can. That would be the purest free market model. Maybe the scenes of people on roof tops during Katrina is the scene you want for healthcare in the U.S.
    Limiting access to primary care by using price, then having those same people show up at the hospital for massive intervention they cannot afford does not sound cost effective. Charging the uninsured 4-5 times the rate of the insured, then complain they aren’t paying so you write off the gouged bill to make your bottom line look even more out of wack, yea that’s working. Not having a system where everyone pays at least something while system wide cost controls are non-existant is not a system of success either. Not taxing and not regulating poor and destructive life style choices and non-choices is not a system that’s working either. Countries using the universal access/single pay model are doing a better job at managing the healthcare needs of their citizens at lower cost with higher outcomes. The fiddling with the edges of this system is going to fail if it’s not already. We may be in too deep now (too many politically connected stakeholders)for any real fix other than one due to massive crisis. If the MA plan is just to force citizens to pay into the existing system so that bottom lines can look better then it too will fail.

  7. With both Medicare and Medicaid costs exploding out of control, hospitals complaining that they can’t make ends meet on those meager reimbursement rates, and the private sector complaining about unsustainable cost shifting, tell me again how a single payer Medicare for all system is supposed to fix this — even after those greedy private insurers have their profits and wasteful administrative costs removed from the system.