Health Plan CEO Georganne Chapin believes managed care can evolve with universal coverage! I thought her money quote was pretty amusing.
So then, if Americans are interested in universal coverage, the industry supports it, and the money is already in the system, when will it happen? “In 1996, I said it would come in 10 years,” Chapin says. “We still have four more months.”
Of course she runs a non-profit Medicaid HMO, so her attitudes may not represent those of a typical AHIP member CEO!
Categories: Uncategorized
Barry, it is impossible to tell the difference between a stress test that was done because of legal concerns versus one that is done because it is profitable as hell. Even IF it were done to protect your hindside, it certainly doesn’t hurt that it is profitable as hell. There will never be a prosecution here because of overuse, because malpractice concerns will always be used as an excuse.
>> “Besides, since cardiac procedures are among the most well compensated under Medicare, CMS has not been able to control utilization very well among the Medicare population either.”
Medicare is not where these overcharges most often occur; it is usually on the private side.
>> “I think this is an area where improving information technology can be very helpful in flagging individual doctors and group practices that are ordering or performing significantly more services, tests and procedures than peers.”
If the majority are over-utilizing, whether mildly or wildly, the only thing they can do is flag the extreme examples and send a letter of warning. I think the analytical procedures you suggest would help; I’m just not sure if they have them.
I think there is a big difference between performing totally unnecessary surgery and, say, being too quick to order a stress test based on a defensive medicine mentality. The former should be treated as a crime and prosecuted to the full extent of the law.
Besides, since cardiac procedures are among the most well compensated under Medicare, CMS has not been able to control utilization very well among the Medicare population either.
I think this is an area where improving information technology can be very helpful in flagging individual doctors and group practices that are ordering or performing significantly more services, tests and procedures than peers. If the information technology and the auditing staff and capibility are up to the job, we should be able to materially increase the perceived probability that overutilizing providers will be identified, challenged, and, if appropriate, sanctioned. New York City in the early 1990’s showed that it is possible to drive crime down a lot by employing sophisticated analytical techniques paired with adequate law enforcement manpower. I think the same principles can be applied successfully to this aspect of healthcare.
I looked back on the Redding Medical Center comment, Barry, and if the doctors on this thread are willing to comment you will learn that it was NOT a rare event and indeed it occurs all too frequently. We had one cardiologist in our town that was investigated by the FBI after complaints from other physicians about his excesses and over-utilization, and why he did not end up behind bars is beyond me.
I haven’t read it yet Barry, but have it on order. I appreciate your comments and will look at it carefully.
I will probably view it differently, I suspect, because of my 35 years in the industry and first-hand knowledge of the shenanigans and abuses that I’ve witnessed. But I’ll report back after I’ve had a chance to read it. It has had good reviews elsewhere.
Jack,
I read her book a couple of months ago and am unpersuaded. The Redding Medical Center episode was an extreme, rare and newsworthy event but hardly typical or representative of the system.
The more I learn about this industry, the more convinced I am that the power of information from price and quality transparency to electronic medical records to home monitoring can lead to material improvements in care quality while controlling costs.
From a book review of: Maggie Mahar’s
Money-Driven Medicine
Excerpts:
…. Her book offers a guided tour to the medical landscape few patients like
to envision—the one where profit, not health, guides the actors.
Money-Driven Medicine is really an investigation into the ways the quest
for cash infects and distorts every level of the health-care system.
…. And did you know that your hospital is likely a private institution,
dedicated to improving its bottom line by lowering labor costs, which means
dangerously overstretching your anesthesiologists and surgeons? Or that senior
administrators in the FDA consider the pharmaceutical industry, rather than the
American people, their clients? Money, Mahar believes, is destroying the
quality, integrity, and efficiency of the American health-care system, leaving
it prey to all manner of incentives and imperatives decent people would be
repulsed by if they understood.
…. What Mahar excels at is finding the instances where that market failure
turned deadly in a routine way. We hear about plenty of corruption and evil, but
her innovation is to clearly lay out how the pursuit of profit, conducted in
ways that would be neutral and natural in any other industry, turns deadly when
transposed to medicine. One of her many examples concerns California’s Redding
Medical Center, one of the best cardiac-surgery centers in the state. At the
head of the Heart Institute was a pair of hotshot surgeons, Dr. Chae Hyun Moon
and Dr. Fidel Realyvasquez Jr., renowned in the field and respected by their
colleagues. At least until the FBI raided their offices, charging them with
forcing hundreds of unneeded surgeries upon unsuspecting patients.
About half of their operations were found to be unnecessary; a quarter were
performed on patients with no serious heart problems whatsoever.
Thirty-eight-year-old rancher Steven Hunt made the mistake of setting foot into
their unit in late 2001. He was opened up for a bypass operation two days later.
Not long after, the incision developed a hernia, and his upper-body strength
deteriorated, ending his work as a rancher. The tragedy of it all was that Hunt
suffered from nothing more than high blood pressure, easily controllable through
medication and diet. When you buy an unnecessary widget, you risk your garage
space. When you receive an unnecessary heart surgery, you risk your life and
livelihood. But what Moon and Realyvasquez were doing—increasing their volume by
aggressively pushing their product—is the most natural method of increasing
profits around. The problem, as Mahar explains, is that though it’s easy enough
for a customer to pass on the widget, it’s far harder to argue with a trained
medical professional warning that any delay on the implementation of his
solemnly intoned recommendations could mean death.
Mahar also adds a level of macroanalysis too often absent in this sort of tome.
She smoothly lays out how each level of the system has ceased operating in the
checks-and-balances style in which it was conceived, and has instead fallen prey
to capitalism’s irresistible push towards aggregation and reinforcement. As an
example, you’d expect, possibly, that the hospitals and doctors would be kept in
check by the insurers in a sort of countervailing powers arrangement, as it’s in
the insurer’s interest to limit the treatments offered to its members. But, as
Mahar explains, the insurers make their money before the treatments are
delivered, by denying insurance to those likely to need it. Unable to really
fight at the point of care, insurers have grown adept at passing on the costs,
squeezing employers and individuals with double-digit premium hikes at the same
time the insurance industry enjoys double-digit profit growth.
… The question, of course, is why this goes on. Conservatives, enmeshed in
their current push for so-called consumer-driven medicine, would have you
believe that patients are to blame—they demand the surgeries, excited as all
get-out to spend a couple weeks on a luxurious hospital cot. Under this
analysis, all the system needs is more patient vulnerability. As Arkansas
governor and likely 2008 presidential candidate Mike Huckabee puts it, “One of
the reasons we have a health-care crisis is because, as a consumer, I don’t have
that much skin in the game. A lot of us feel there needs to be a transformation
from a third-party [insurance] system to more [financial] participation by the
[patient].”
Mahar neatly dispenses with that excuse, reminding readers that patients don’t
actually know what they want. The doctor-patient relationship, indeed, is built
on a trust akin to deification—we rely on their extreme training and vast
knowledge to navigate an organism that we inhabit but don’t understand, and we
take their recommendations as the unswerving expressions of their education and
oath. Forgotten in this analysis is that medicine is a business like any other,
and profit matters. Even the motto of non-profit hospitals has become “No
margin, no mission,” to express the reality that their capital comes from bond
investors, and if the investors aren’t happy, there won’t be a hospital left to
treat either the poor or the rich.
But that, of course, is the way of things in a system where the richest
stakeholders have created a poor healthcare system but an excellent business
model that generates massive profits, a certain portion of which are funneled to
legislators across the country in order to convince them that the preservation
of our free-market system is of the utmost importance.
Jack,
It always amazes me how people who disagree on an issue can view the same set of facts so differently. Simple semantics also can get people arguing past each other.
With respect to the Massachusetts plan, what you see as nibbling around the edges, the powers that be in Massachusetts view it as a significant effort that can make a considerable difference in sharply reducing the number of people in the state without health insurance, and, at the same time, cutting the number of free riders that drive up costs for everyone else and pay for it by more prudently spending the money already in the system, including federal Medicaid dollars. The biggest disappointment in the plan is that they were not able to eliminate many of the expensive mandates except for the population between 19 and 26 years old. For example, expensive invitro fertilization is still a mandated benefit, which strikes me as ludicrous. The most important single objective of any health insurance plan should be to cover catastrophic events so families will not be bankrupted by high medical bills.
The concept of choice is another interesting topic. You seem to think that the only thing that matters is provider choice, though, even here, more and more people are finding it harder to find doctors who will accept new Medicare patients, especially when those people move to a new geography and leave behind all of their established medical relationships. To me, choice also includes plan design choice — differences in deductibles, co-pays, out of pocket maximums, scope of coverage, network access and customer service. One size does not fit all.
Even existing Medicare’s plan design is far from ideal. It has an unnecessarily low deducible of $125 for Part B services and then pays 80% of covered charges WITH NO OUT OF POCKET MAXIMUM. Most people, as a result, find it necessary to buy a Medi-gap policy at considerable expense where a higher deductible of, say, $1,000 and a reasonable out of pocket maximum of $2,000-$2,500 might serve them better. Seniors could still buy a Medi-gap policy, but I suspect many would opt to absorb the higher deductible themselves.
On Part D, most insurers have been amazed at how good a job seniors have done in figuring out what the best deal is for them. At the same time, program costs are coming in below expectations. Choice is a good thing, and satisfaction rates are now high after some initial start-up problems. It is a top priority at CMS to make comparing plans easier by the next open enrollment period. I also point out that Medicare itself had plenty of startup problems when it was first launched in 1965.
The most frustrating aspect of the current healthcare system to me is that it has never been allowed to function like a true market because of the absence of price and quality transparency. That is finally starting to change. Before long, Wellpoint, for example, hopes to be able to offer its insureds a package price for a total episode of care including hospital, surgeon, anesthesiology, rehab, drug fees, etc. That would be a huge leap forward if they can make it happen.
Barry, Massachusetts is an example of trying to trim around the edges without
cutting into the meat. Here’s a piece on it by
Robert Kuttner. In time it may become workable but will it be better than
Medicare-for-all (which, contrary to Glasscock’s view, already has lots of
physician and hospital choices). That’s the kind of choices the public wants, not
the mish-mash of plans we have today and most certainly not the 45 Medicare drug
plans. Ask Glasscock’s public what they want and give them a choice of Medicare for all
and they’ll jump at the option.
But I can see that HE would not like that, because he makes money on higher
administrative costs.
I’m surprised that Dr. William Mcguire, the CEO of United HealthGroup, even
showed up. Did he mention his $1.6 billion stock package?
But that he thinks we should require that everyone has at least bare bones
catastrophic coverage is interesting. Who will pay for it? Will it keep them out
of bankruptcy court? Is it any better than something that works (Medicare)?
Jack,
At a healthcare sector investor conference I attended over the last two days, the luncheon keynoter today was Governor Romney who gave a very polished and articulate presentation about the Massachusetts healthcare reform plan. One interesting point that he made is that once the plan is implemented on October 1st, we will probably find that we made some mistakes that we will address and fix as best we can. He also commented that neither he nor his legislature got everything they wanted even though the combined vote in the Massachusetts House and Senate was 198-2! How’s that for bipartisanship?
Karen Ignagni, the lobbyist for America’s Health Insurance Plans, commented in her presentation that probably 18-20 states will look carefully at the Massachusetts plan and may adopt parts of it. Nobody will adopt all of it. One clever idea that they came up with is something called The Connector, which basically allows an individual to buy health insurance with pretax dollars by running the money through an employer’s payroll deduction apparatus. Ms. Ignagni also commented that Massachusetts started from an advantageous position with only 7% of its population uninsured (vs 15% nationally) and a well above average median income making it possible for more people to afford insurance.
I asked the CEO of Wellpoint, Larry Glasscock, about the possibility of Medicare or Medicare Advantage for all over the next five years. He insisted that our culture demands lots of choice and, thus, prefers a hybrid system (public and private) even though it means somewhat higher administrative costs.
Dr. William Mcguire, the CEO of United HealthGroup, thinks we should require that everyone has at least bare bones catastrophic coverage and find a way to provide that, especially for the one-third of the currently uninsured that make too much to qualify for Medicaid by not enough (<$50K) to afford health insuance.
There are lots of ideas floating around, but nobody will get everything they want. The key is to find common ground that will move us toward universal coverage and slow the rate of cost growth.
It makes no sense for us to get pissed at each other, but we must also realize that we are not going to solve this here. It’s a good debate, and without disagreement we have no debate anyway; just a discussion. As a member of the Wisconsin Health Coalition my efforts are being put into getting something pushed through at the state level. The stakes are lower (only $1.4 million in industry campaign contributions to battle).
Jack,
I’m glad Dr. Jekyll is back, I like him much better.
“you wouldn’t like working for me and I wouldn’t like working for you.”
Maybe, but don’t be too quick to conclude that we couldn’t work together. (BTW, I have held more senior positions than you may think – I got into benefits management at the end of my career, after two prior retirements, because I had the opportunity at a huge non-profit organization in New York whose name you would instantly recognize. I was a consultant before that – surely a thinker’s role not a doer’s role.) Here are some points to consider:
First, doers and thinkers need one another. Both will fail to achieve all they can without the other’s help. Every Steve Jobs needs an administrative whiz, so he does not have to worry about details – but he needs to listen to his administrative whiz. Every administrative whiz needs a Steve Jobs because that’s where the big ideas come from. The administrative whiz makes ideas work with the backing of the entrepreneur. No question, pairing the two types in a constructive relationship is a huge business asset – provided each is willing to listen to what the other brings to the table.
Second, nothing can be sustained that isn’t practical to begin with. I applaud your disdain for money in health care politics. You describe this as a threshhold problem. I think it may not be a threshhold problem at all. My opinion? The influence of money is not a problem that can be “solved” but is instead an intractable fact of life that must be lived with and managed as best as one can.
Third, and related to the second, human nature is a huge factor in health care, and human nature has not changed in recorded history. Human nature is self-serving. That would have to change before political chicanery or greed or the influence of money on health care decisions could be suppressed. My opinion? It ain’t gonna happen. Human nature is a fact of life that must be accepted and worked with. T.S. Eliot once said “It is folly to dream of creating a system so perfect that no one needs to be good”. That’s wise advice.
Finally, it’s my belief that a choice between a quick fix now vs. a gradual transition over the next 20 years is a false choice as regards our health care system, er, industry. I think the more practical path is an evolutionary one, in which decisions are made in the presence of firm knowledge – even if slower – rather than made more quickly in the absence of knowledge.
It must also be kept in mind in mind that there may actually be no “solution” to the “problem” of health care costs, as “solutions” are often framed. In fact, it may be that the U.S. public actually prefers medicine delivered and structured the way it is, if only their access to it could be guaranteed. I believe that it is always unwise to force a solution on a majority of unwilling adults, whatever the issue.
Regards,
John, we may see in our lifetime a heath care system that works for the public. It may be your way with less government or my way with more government. I don’t trust for-profit CEOs and you seem to. But I am mad as hell and don’t want to wait the 20 years I think it is going to take if we do it your way.
Sometimes I jump when taking it slowly is wiser, but I usually get there, and get there faster than others. Clearly I am a doer and you are a thinker. You don’t like my aggressive approach and I don’t like your cautious approach. I want it fixed overnight and you are satisfied with a time-tested approach. We differ in opinion. No, you wouldn’t like working for me and I wouldn’t like working for you. The bottom line is that neither of us will win this on this blog!
You ask what I think is the solution, and frankly, it has nothing at all to do with health care. It has to do with our moneyed political system. Get the money out of politics and we’ll see politicians working on behalf of the voters instead of their campaign contributors. Get the $100 million in campaign contributions out of the picture and we’ll see the health care system fixed overnight.
The sad part is that this affects all issues, not just health care. If I had an employee that was taking money on the side in exchange for company assets, I’d have him jailed. In our political system we just re-elect them, because cash-on-the-side has been made legal. Follow the money and you’ll see exactly why GATT, NAFTA, CAFTA and the WTO are a part of our daily lives.
I don’t care what the issue, even ones I agree with, I don’t want my US or state representative’s vote sold to the highest bidder. I prefer public funding of campaigns like they have in Arizona and Maine. With a Congress funded by the public we would have seen a solution to this problem (and most others) virtually overnight. For $10 per taxpayer per year it’d be a bargain at 200 times the price.
I’m sure we disagree here too, because it is a government solution. And though I am a fiscally conservative Republican I see this as the only way to balance budgets, reduce taxes and fix our health care system.
But I’ve seen what privatization of our political system has achieved, and it is not a pretty sight. There are certain things the “free market” can solve, but neither funding the political system nor running our health care system fall into that category.
Thank you John.
So Jack, your true nature emerges. Doctor Jekyll vanished like – what is the phrase? – a fart in the wind. Welcome, Mr. Hyde.
I did not realize that radical change to 17% of the U.S. economy is the equivalent of starting some private small business somewhere. I did not realize, as a big-time CEO of course would, that having the big idea is sufficient and planning is not required from the guy who has the big idea. My apologies to you sir. You probably taught the management courses I had to study for.
But I do not mock you because I dislike you. I’ve mocked some of your comments because I think they are richly deserving of mockery. You show scant interest in proof of concept – except for repeating the equivalent of “aw, Ma, all the guys are doing it”. You show little curiosity toward implications of your ideas that you consider boring – for example, ignoring the question I posed about comparing over-65 populations in U.S. vs. other countries. Your very first statement on this thread was
“The truth is, universal health care is being blocked by the for-profit health care interests . . . our government is bought and paid for by the highest bidder.”
But you suggest no solution for those problems, rather go on and on as though Medicare-for-all will not be blocked by these same interests. Sure vested interests are worth fighting. But how do you propose to defeat them? Leaders don’t just point – they know the way. I don’t think you know the way any better than anyone else, which leaves us right where I said we are:
“There is no shortage of intelligence or knowledge. There is no shortage of ideas. There is no shortage of debate and differences of opinion. Everyone who has an idea about what the elephant really looks like advocates their idea and finds fault with other ideas. Almost no one admits to changing their mind. What specifically does this illustrate? That one of the main obstacles to resolving our “crisis” in health care is the presence of so many rival constituencies, which has assured a majority to oppose any suggested solution. I don’t see that changing, do you?”
You have become hostile when pressed even a little bit. But then again, you are the big-time CEO, and I’m just me. I’m sure all the people who agree with you think you are brilliant as far as you know.
A long time ago you picked your poison, and you picked government poison. You may get your wish. But it won’t be because you just wished for it.
Best of luck to you.
Regards,
Gee, John, no mention that my sarcasm was right out of your post to me on Sep 6, 2006 7:03:26 PM? What a shame. You did that one so well.
But your stonewalling is not productive. You sound like the kind of guy that needs to create a committee to move the water cooler. It is silly to continue discussion with someone intent on delaying the successful overturn of a flawed system. What in the hell makes you think Americans are so different than Canadians? If I started my company 28 years ago with your posture of investigating every nook and cranny I never would have opened the business. We can start the ball rolling with Medicare for all and actually – get this John – innovate and make corrections as needed! Perhaps foreign to you, but that’s what successful CEOs actually do.
Jack, I admire your discipline in avoiding the hard questions.
A consultant from Laputa would have at least as much practical advice as you offer. (And, I’m pretty sure, could be much more easily located than panels of nonconflicted physicians, economists and industry experts in the field that are neither in practice, receive funds from the industry, or are part of any political party. Oh, hell, a unicorn would be easier to locate than that.)
So after all, you are unpersuasive, because you suggest no practical ideas to implement the grand scheme you advocate. Oddly enough, you are airily unconcerned. And all along I thought you were a serious man.
Regards,
Yeah sure right whatever you say John. Maybe we need that consultant from Laputa.
Jack,
“Did I not answer that when I quoted the Johns Hopkins study? “”
No you did not.
My question pertains to the over-65 population, not the entire population. You answered with data for entire populations in which the over-65 segment is not separately identifiable. Medicare is a single-payer arrangement for the Medicare population. How does the actual experience for the Medicare population compare with the experience for the over-65 populations in other single-payer systems?
I think a lot of work remains to be done to demonstrate the suitability of a Medicare-for-all scheme. Practical tests in the states represent part of that work. So is knowing in advance how per capita costs for the Medicare population compare with the per capita costs for a similar (i.e., over age 65) population in other single-payer system. Understanding the effect of single-payer vs other factors is highly relevant to Medicare-for-all. It seems to me we should be looking at this data.
I do not agree Medicare is perfect, even for patients. It is expensive, not only as to its premiums, but as to its direct cost-sharing in the form of copays, deductibles, and coinsurance. It is bureaucratic and cumbersome. It is arbitrary. It has not controlled fraud. To point out that private systems display most of these characteristics is not an argument for Medicare.
On the other hand, you say Medicare is perfect for patients. Thus our difference.
There may be many people who agree with you, and I know there are many people who agree with me. That is another reason that practical testing of Medicare-for-all in the states is necessary: it will replace many assumptions with facts, will generate information in place of theory, and will allow people a better chance to base conclusions on what is known rather than what is not known but theorized to be true. Testing is the rational way to go – in my opinion.
You want to test in Wisconsin, fine; and let’s have more than one test. And no, this is not testing “Medicare” it is testing Medicare-for-all.
“As a physician I would want the reimbursements set more fairly and consistent.”
Who can be against fairness and consistency? But when it comes to details of how to achieve these desireable outcomes, you seem uninterested. I would like to know before Medicare-for-all becomes law, who will decide what is fair and consistent? Panels of nonconflicted physicians, economists and industry experts in the field that are neither in practice, receive funds from the industry, or are part of any political party? Once Medicare becomes Medicare-for-all, politicians will have a significant say in coverage policy decisions and in reimbursement decisions. That is the way it works in other single-payer systems. It would not be different here – regardless of the incumbent political party.
And exactly how will such decisions translate into dollar copays and coverage of provider charges? I can assure you that many companies who presently pay the bills for their benefit plans feel that provider charges are too high. I think Uwe Reinhardt recently concluded “It’s the prices, stupid”. So will it be more fair if government administers Medicare-for-all and pays docs more-for-all?
Higher provider reimbursements increase health care costs. With Medicare-for-all, even assuming Medicare is perfect-as-is, there will be a large cost-shift onto the backs of insured people under 65 because of the high Medicare copays, deductibles and coinsurance. Is that fair?
I simply don’t think you have thought your ideas thru below some very high level. You wish to set policy and leave details to others. Very well. But details will make or break the plan. That’s yet another reason for testing variations in the States.
“I have no problem with disclosing your profession and biases.”
I have no problem with people knowing my profession. However, you wish also to assign “biases” and I do have a problem with that.
See, Jack, sarcasm is one thing – it either hits the mark, or it does not. But asserting that others are biased is another thing. It is a means to dismiss others’ points of view without having to deal with their point of view; it’s a less-than-honest tactic, and that’s my honest opinion.
Regards,
Barry, This is a completely fair assessment of where we want to move our system. The trick is, of course, finding a way to accomplish it, given the political system we are stuck with. I contend that we need a major turnover in congress, and that may just happen in November. I speak as a (generally) Republican voter, the current crop has to go.
Correction: Seven major areas, not four.
Jack,
In any healthcare reform model, everyone agrees that we want to acheive universal coverage at a cost the society can afford. The four major areas that could be impacted in significant but uncertain ways are:
1. Adminstrative costs.
2. Utilization.
3. Fraud.
4. Competition and Choice
5. Innovation (useful new drugs, devices, etc.)
6. Rationing and Wait Times
7. Affordability and Cost-effectiveness
#1 and #3 need to be minimized, #2 balanced, #4 and #5 maximized, and #6 the society needs to reach a connsensus as to what is acceptable and reasonable in order to achieve #7.
Personally, I would be willing to accept somewhat higher administrative costs in order to insure that we do the best possible job on #4 and #5 which will require maintaining a strong role for the private sector even with full taxpayer funding. Medicare Advantage for all could work depending on the reimbursement rates and assuming the option to buy private insurance for those who want it and can afford it were also available. This would be the equivalent to paying to send your kids to private school even though you are also already paying for the public school system.
None on this thread seem to recognize or care about the direction of the dominoes as they are now falling. Both physicians are patients are sitting ducks, and the guys with the trigger are the employers. He who has the cash, rules.
Employers are banding together to work out a solution, and it’s only a matter of time before they start buying and owning their own physicians and hospitals. And then physicians will start getting reimbursed what the profit-making CEO wants to pay them versus a government that typically pays more than the private sector.
Even today they are outsourcing cardiac surgery to India, and companies that are self-insured are splitting the savings with the patients. Soon they will be doing that in their own facilities.
Wake up, Guys!
John-
>> "How do Medicare per capita costs compare vs single-payer plans for a similar
population? This question focuses on the over-65 populations in the U.S. vs.
single-payer countries. Please advise if you know where relevant comparative
data can be found."
>> "I say again, there should be real-world testing of Medicare-for-all
schemes to see how they will actually work in the under-65 populations, and how
different variations of Medicare actually perform in the real world. I think the
states are perfect laboratories for this. "
>> Is it necessary to try different variations? Yes. Unless, that is,
Medicare is perfect as-is. Jack do you believe Medicare is perfect as-is?"
>> "Do you believe it’s possible to control utilization while not deterring
people from utilizing the plan? ….. please advise what copay dollar amounts
are necessary, in your opinion, to achieve the desired balance between
utilization and utilization control."
>> "To what expenses do you recommend the copays be applied? If not all,
which would be excluded?"
>> "I think you should trust your own argument more, and refrain from
denigrating those who may disagree with you.
Barry, Medicare bases its reimbursement on a cost formula with a regional
multiplier to offset cost of living variances. Whether Reinhardt’s estimate of
10%-12% of income (on top of existing taxes) is correct I don’t know, but I do
know that employer costs for health care represents about 15% of wages, and I do
know that these costs are passed to the consumers anyway in their product
prices. So I’d rather see us eliminate the middleman and pay them up front at
lower rates,
Whether the co-pay is $10 or $20 for doctor’s visits, or $100, is not the real
issue. There are some who argue that any co-pay at all simply deters people from
getting care until the disease has worsened, and in fact co-pays cost more to
administer than they save. Though I lean toward them, this is not an issue that
I would battle.
>> "That’s why we need real world experience. There are plenty of people who
will go to the doctor for very minor issues"
>> "With respect to doctors who only take cash and not Medicare, I don’t
think this adds any administrative complexity to speak of."
>> "I don’t see where fraud has anything to do with a doc who chooses to
operate outside of Medicare."
>> "I think we would be well served if everyone’s medical ID card contained
both a picture and a fingerprint."
>> "Regarding end of life care, many people already have living wills"
>> "I noticed in your take on taxes that you did not indicate what percentage
of income the flat tax should be that you would apply to the $25K – $150K income
group or how much we should confiscate from upper income people under your
progressive approach."
>> "How much more do you think we can take from them before we destroy their
incentive to work, invest and take risks?"
>> "I cannot think of a single government entitlement program dating back to
Social Security’s passage in 1935 that turned out to cost less than the
so-called experts estimated it would."
Jack you asked
“If it is missing why don’t you simply repost the question?”
Here it is:
How do Medicare per capita costs compare vs single-payer plans for a similar population?
This question focuses on the over-65 populations in the U.S. vs. single-payer countries. Please advise if you know where relevant comparative data can be found.
“How many years would you like to retry Medicare before you are satisfied that it works?”
You misrepresent my position by stating that I want to “retry Medicare”. Medicare now applies only to the Medicare population. I say again, there should be real-world testing of Medicare-for-all schemes to see how they will actually work in the under-65 populations, and how different variations of Medicare actually perform in the real world. I think the states are perfect laboratories for this.
Is it necessary to try different variations? Yes. Unless, that is, Medicare is perfect as-is. Jack do you believe Medicare is perfect as-is?
I agree with Barry Carol and, I am sure, others, that cost control won’t be achieved with your idea to “control utilization with co-pays that are not so high it deters usage in the early days of an illness”. What is one to make of that statement? Do you believe it’s possible to control utilization while not deterring people from utilizing the plan? Please clarify. Also, please advise what copay dollar amounts are necessary, in your opinion, to achieve the desired balance between utilization and utilization control. To what expenses do you recommend the copays be applied? If not all, which would be excluded?
For what it may be worth, the present cost of Medicare, to the enrolled individual, is as follows:
For most Medicare participants, the monthly premium for Part A – hospital expenses – is $0 and the premium for Part B – ambulatory expenses – is about $90. A retired individual and spouse thus pay almost $180 per month for Medicare A and B. For this premium, the participants get a benefit plan with several different kinds of copays. For Medicare Part A the copay is almost $1,000 per admission. For Part B there is a deductible of $125 per year, after which Part B pays 80% of “allowable charges” where the “allowable” amount is based on data collected in the second prior year. (that is, the premium for 1 January 2007 will be based on 2005 utilization experience). Part D – pharmacy expense – is horribly complex, but for a person whose covered drug expenses amount to $2,500 per year, Part D will reimburse just under $1,700; that leaves $800+ in unreimbursed out-of-pocket expenses not even counting the monthly Part D premium.
Medicare is expensive because the Medicare population are high-utilizers. The same Medicare benefits for the non-Medicare population would cost less than Medicare because the non-Medicare population are lower utilizers. Beyond that, if the Medicare benefits were adopted for the non-Medicare population, everyone should recognize that some significant additional reduction in cost would occur because the Medicare benefits are more restrictive on average than the typical private plan. Reducing the benefits always reduces cost, but it’s not easy to do because it becomes a political issue. That is no less true in the private sector than it is in the public sector.
“Of course you will have to change careers under a Medicare-for-all plan.”
“But maybe by then, when you need it, we’ll get your support.”
These are the kinds of insinuations I mean. You insinuate that I hold the opinions I do because of my job, and that I oppose what you want, because I don’t need it.
Piffle, sir.
As it happens, I retired at the end of June. My opinions did not suddenly change, because they were honest opinions to begin with. That may astonish you, but it’s true nevertheless. Here’s another honest opinion: I think you should trust your own argument more, and refrain from denigrating those who may disagree with you. You would not get away with that in a social setting, and you know it.
Jack,
Any universal system would, presumably, base premiums on a community rating model, so the young and healthy would pay the same as the old and sick. I believe I remember reading that several years ago, Princeton’s Uwe Reinhardt estimated that it would probably cost approximately 10%-12% of income (on top of existing taxes) to provide Kaiser-like healthcare to the entire population. That estimate may have to be revised upward somewhat to reflect the last several years of experience.
If you think utilization could be controlled by a modest $10 or $20 co-pay for doctor’s visits, I think you will be disappointed, but, of course, I can’t prove it. That’s why we need real world experience. There are plenty of people who will go to the doctor for very minor issues, and they may be even more inclined to go if they feel that they are already paying for healthcare through taxes as opposed to premiums.
With respect to doctors who only take cash and not Medicare, I don’t think this adds any administrative complexity to speak of. Either they take Medicare or they don’t, and if they are shifting costs to anyone, it is the patient who volunteers to spend his or her own money (above Medicare rates) by seeing them. Suppose there is a lengthy wait to see a doc who takes the insurance but I could see on who takes cash (at a higher rate) much more quickly. If I see enough value added in that to want to spend my own money, why shouldn’t I be allowed to do so?
I don’t see where fraud has anything to do with a doc who chooses to operate outside of Medicare. If we do ever go to a taxpayer funded universal coverage model, however, I think we would be well served if everyone’s medical ID card contained both a picture and a fingerprint. I think this would be very helpful in deterring fraud in all government entitlement programs. Besides, even the 9/11 Commission recommended a national ID card program, but the civil liberterians are very uncomfortable with it.
Regarding end of life care, many people already have living wills and advance directives that declare that they don’t want certain care under end of life circumstances. Numerous others opt for hospice care or palliation rather than a do everything possible to keep me alive as long as possible no matter what the cost, which will be paid by someone else anyway approach.
On funding this or any other government program, I noticed in your take on taxes that you did not indicate what percentage of income the flat tax should be that you would apply to the $25K – $150K income group or how much we should confiscate from upper income people under your progressive approach. I know many high income people in New York City who are already paying more than 50% of gross income in combined federal, state and local taxes. How much more do you think we can take from them before we destroy their incentive to work, invest and take risks?
Finally, regarding trying to estimate the cost of entitlement programs, I cannot think of a single government entitlement program dating back to Social Security’s passage in 1935 that turned out to cost less than the so-called experts estimated it would. Given this history, please forgive me if I’m a bit skeptical about how much money we can save under a Medicare (or Medicare Advantage) for all system.
Never mind John, I see where your dog is in the race:
Fembup: “I’m a benefits manager, my organization contracts with several insurance companies and I definitely want them competing with one another on the administrative, claims, and risk-management services they provide. I’ll contract with those that are most competitive regarding the cost/benefit of their services for my situation.” Source: http://www.signalhealth.com/node/492
Of course you will have to change careers under a Medicare-for-all plan. Why would corporations need your services if they are no longer providing insurance to employees?
But corporations should not now nor ever should have been required to be in the business of providing insurance for employees. It is driving manufacturing and jobs off shore. And if corporations do stay in the business of providing insurance, it will soon be an HMO-for-all system.
Barry, my concern with a mixed bag rather than a one size fits all approach,
is that the sick and elderly will cost more and the young and healthy will cost
less, until they too become sick and elderly (unless we are only talking about
reasonable co-pays). But if we had a Medicare-for-all system the individual
wouldn’t have to even worry about opting out for a lower premium elsewhere. I’d
rather see the total costs spread over the entire population and control
utilization with co-pays that are not so high it deters usage in the early days
of an illness. But the decisions are surely out of our control. The real issue
is how to protect physicians and hospitals with fair but not exorbitant revenue.
>> "To the extent that there are doctors and other providers who do not want
to accept Medicare in favor of an all cash model (at higher rates), I would like
the opportunity to go to one of them and be reimbursed by Medicare at Medicare
rates, assuming I have already met my deductible."
>> "There should be an option to consciously opt for a more restrictive set
of services in an end of life situation in exchange for a lower premium."
>> "Premiums paid by beneficiaries (as opposed to revenue from broad based
taxes) should cover approximately 25% of total program costs as is currently the
case for Medicare Part B. We could provide subsidies for low income people and,
perhaps, cap the premium at some reasonable percentage of income."
Trust me, Barry, advocacy groups like AARP influence politicians with votes,
not money. They don’t have the latter or you can bet your bottom dollar they
would be giving cash instead. They know that that is what gets the attention of
politicians. Money buys votes (via TV time and fostered by lazy voters who won’t
or can’t research political votes and are left only with rhetoric to judge
politicians). The rich can vote only once, but their cash can buy gobs of other
votes this way.
John,
>> "If by any chance you know where data exist that are responsive to the
question, please clue us in."
>> "Trying in the states first is being careful"
>> "Why aren’t you eager for more states to experiment with the single-payer
concept you advocate, to demonstrate that your theories do, in real life, work
as you say they will? What are you afraid of? Another TennCare? Beats me."
>> "you will not succeed by insinuating that anyone who disagrees with you is
unintelligent, dishonest, and obstructionist."
Jack,
I think it is absolutely essential that any Medicare or Medicare Advantage for all system be tested at the state level first. It is a virtual certainty that there will be surprises in how the program actually works in the real world. Versus expectations, there are likely to be differences in cost, utilization, supply/demand imbalances, etc. I strongly believe that you are making a fundamental analytical error in assuming that a Medicare for all system will work the same way as the current Medicare for some system, and to implement this without real world testing at the state level as a substitute for the current healthcare system that currently consumes 16% of our GDP would be irresponsible, in my view. If we do test it at the state level, it will not take long (perhaps a