I’m always amused to see Ivy league professors with tenured appointments and gold-plated group health insurance explaining how the individual market for health insurance works pretty well for, well, quite a few of the well people in it. But this award is not for Mark Pauly.
Today there’s a long piece in the Wash. Post (essentially paid for and scripted by Kaiser Family Foundation—which may be the future model of health care journalism). In it, we see this paragraph:
Experts define the underinsured as those forced to spend at least 10 percent of their income on health care, excluding premiums. But the nonprofit Center for Studying Health System Change found recently that financial pressures on families increase sharply when out-of-pocket spending on medical bills exceeds 2.5 percent of family income. New York’s Commonwealth Fund has reported that 72 million adults under age 65 had problems paying medical bills or were paying off medical debt in 2007, up from 58 million in 2005. Many had insurance, and 39 percent said they had exhausted their savings paying for health care.
Yup, even people with insurance are in real trouble. Two days ago I met a woman in her early 20s who faces 3 more years paying off extra bills from emergency ankle surgery 2 years ago. And yes she had insurance–just not very good insurance.
And so we have around 25% of adults having problems paying medical debts. And of course that’s a 2007 number—in other words pre-recession. So in order to be “balanced,” they get a quote from a resident member of the loony right. And for our tone deaf git of the month award we select this wonderful piece of empathy.
Economist Thomas P. Miller of the American Enterprise Institute, a conservative Washington think tank, said he believes the problem of medical debt has been exaggerated and is a symptom of the broader economic crisis. The solution, he said, should not be "to kill people with kindness" by requiring an overly expansive and expensive benefits package that could "preempt the use of resources for other purposes."
In other words, screw you poor people, you’re on your own and the system works fine.
I just wonder what Tom Miller would think if, instead of being a highly paid pundit at a corporate tax dodge promoting front organization
conservative think-tank, he was instead a young person entering the
workforce while having to spend the next three years paying off medical
debt incurred through no fault of his own.
Would it per chance change his opinion? Or would he be
happy pulling himself up by his bootstraps encouraged that as he didn’t have an
"overly expansive and expensive benefits package", he’d cheerfully using
his "resources" for the "other purpose" of paying his credit card company for the next five
years.
In any event I’m feeling Olbermanish this morning, so he wins the first tone deaf git of the month award.
And yes, point of care fees that cause debt and hardship
(and bankruptcy) are the BIGGEST problem in American health care,
whether you have good, some or no insurance. The point of care is completely the wrong
place to charge people money for health care services and anyone with
half a brain who’s looked at the data realizes that….or if they
haven’t they should go talk to Bob Evans & Maurice Barer about the zombies.
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Some of the commenters here just plain live in la-la land.
I have insurance and my husband is a doc so I feel blessed to have insurance. But it’s really not a matter of virtue. It should, I believe, be a matter of necessity.
This scenario is typical of what I see all of the time in some permutation or other.
I just did a casual google for the price of an appendectomy. I didn’t work very hard at it but I found a cost that showed the range of cost of appendectomy in Tennessee in 2004. Looks like the range runs from 8,000 to a high of 67,000 with a lot of cases falling in the 10,000 to 18,000 range.
http://health.state.tn.us/statistics/PdfFiles/HDDS_DRG225.pdf
Let’s pretend that you are a worker who has no health insurance. Due to gas, food, etc it takes every penny you make. But lets say that you are very responsible and you decided that you would put $50 away a month for “in case”. That’s $600/year. Let’s say that you do this successfully for a couple of years and with interest, you’ve got $1,224 saved. Yee hah.
You know that seeking health care could be the kiss of death to your financial stability so you put it off, but finally that belly pain gets so bad you cannot ignore it any more. Bad news. You have a ruptured appendix, so you’re going to be a higher end case. Let’s use that average cost for a moderate case number–$16,614 for your surgery. Oh, but your job is based on your ability to do physical labor and your surgeon has said no heavy lifting for six weeks. Layer on 6-7 weeks of lost income. Now an appendectomy is pretty straightforward and you probably won’t have a need for rehab services or DME or medications after discharge. Thank GOD!
But you do have that nifty $1200 in the bank.
The hospital wants to be paid.
The doctor wants to be paid.
You aren’t working.
You need to make your apartment payment and other obligations that aren’t really too big of an issue when you’re bringing home money but now there is nothing.
Well, $1200 might make your rent payment for a month or two and maybe pay your utilities but, but, but….
YOu know this equation isn’t going to work out and you’re in despair.
But at least you do not have a chronic illness like diabetes, or rheumatoid arthritis or hypertension where the need is ongoing and will probably totally decimate any ability you might have to even put back $50 a month.
The working poor are really suffering right now and things have not gotten near as bad as they are going to.
Deron, if you think healthcare reform is tough just try cultural reform. I’d like to get lower cost healthcare IN MY LIFETIME. Cultural contributors to bad health are more easily dealt with through taxes to pay for bad habits. Do you think if we avoided cigaratte taxes to control consumption and pay for health problems and instead focused on changing attitudes we’d be in the same position with smoking rates, especially with all the counter ads by cigarette manufacturers? We can also change our tax code to subsidize fresh fruits and vegetables from corn (also cattle feed) and wheat. You’d be surprized how much I’m conservative/personal responsibility opposed to liberal. But let’s require personal responsibility of Republicans, the wealthy, and corporations before we try to impose it on the poor. Seeing all the bailout money going to Wall Street crooks and liars it appears personal responsibility is only for the politically unconnected.
Obesity and teen pregnancy are only two measures. My point is they are not only contributing to our high costs, but they also shine a light on deeper societal issues that we must address.
You come across as a liberal and I probably come across as a conservative. However we probably want the same result, a lower cost, higher quality healthcare system. You often reference our economic crisis and address issues such as greed. That’s a core issue needing addressed. Bailouts in that sector and single payer in the healthcare realm are workarounds that allow us to avoid deeper issues such as greed, social irresponsibility, and myopic thinking.
Why settle for workarounds? Eventually, there will come a generation that will have no choice but to address the root causes, because the alternative would be the collapse of one of the most important societies in modern times. When you’re 80, would you like to be able to say you won some arguments on THCB, or would you rather say that you contributed to getting the greatest and most revolutionary society back on track?
So your saying equalizing obesity and teen pregnancy rates would cut U.S. healthcare costs in half? I guess to argue that you’d have to show both were half U.S. rates. As for teen pregnancy I guess you’ll have to get the religious fundamentalists to allow actual sex education with condom use demonstrations and not just the delusional abstinence dogma.
Peter – My point about comparing the rates of obesity, etc. between the U.S. and your comparison countries is that single payer is not the reason they have lower per capita spending than we do. You have not controlled some very important variables in your assessment of that issue. Not only do the obesity and teen pregnancy rates add direct cost to the system, they paint a picture of a society that is very different than that of the “other industrialized countries” that are often mentioned.
It would be irresponsible and lazy to simply hand over the keys to CMS without looking at the impact our deeper societal issues are having on our healthcare costs.
Since Reagan presidency of de-regulation ideology we’ve had 12 massive bailouts not including the latest or Enrons robbery of de-regulated energy markets (Cheney’s Friend). Dems spineless accomodation of this failed policy is because electorate only could see low taxes, not future costs. I’m no friend of Barney Frank, but (I’m assuming) your hero (at least for 4 years) George Bush, could have used his “political capital to spend” to enact regulations – but he also was an anti regulator. TARP funds administered secretly by Paulson (a Republican) and Wall Street buddy. Barney Frank being gay is not the issue but does show your ignorance.
Barney Frank is a Republican? I seem to remember watching a Video of Democrats refusing to regualte Fannie and the mortgage companies. I believe it was mostly liberals who got the friends of Tony? mortgage deals. Who was Barney Franks lover and what deal did he get.
WHo just voted to release TARP money? It wasn’t the republicans.
You got your parties and your facts mixed up Peter.
“Peter – Your homework assignment is to compare the teen pregnancy and obesity rates of the U.S. and Canada. If that doesn’t work for you, compare the U.S. and France.”
What’s your point and what does it matter?
Nate, I guess with all those false poor people that’s why food banks have seen doubling of users. Better come to NC and visit all those owner owned homes that have been passed down to children who can’t afford repairs, or insurance, many even without indoor plumbing. Somethings wrong with your definition of poor unless it’s an African living in a refugee camp. I guess that’s how Republicans who brought us the no regulated financial market meltdown slept at night and who now want my tax dollars to restore their worthless portfolios.
to drive a stake through the claim our poor our suffering so bad;
Understanding Poverty in America
by Robert E. Rector and Kirk A. Johnson, Ph.D.
Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
Seventy-three percent own microwave ovens, more than half have a stereo, and a third have an automatic dishwasher.
Ninety-seven percent of poor households have a color television; over half own two or more color televisions.
The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
Seventy-six percent of poor households have air conditioning. By contrast, 30 years ago, only 36 percent of the entire U.S. population enjoyed air conditioning.
Forty-six percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.
In good economic times or bad, the typical poor family with children is supported by only 800 hours of work during a year: That amounts to 16 hours of work per week.
No wonder they have a TV, DVD player, and cable, with all that free time they need something to do.
This is where the pure evil of democrats is shown. They rather enslave a voting block them watch people rise out of poverty. So you have a group of people that only work 16 hours a week, what do you do with them? If your a liberal you gather them all up and stick them in crowded projects or high rises. You then give them enough food to subsist so they can keep voting for you and enough money to stay alive. Then pat each other on the back for your show of humanity.
At the same time you say we can’t afford more crossing guards, to sort recycling, or do any of the other million little things that would make life better for all because we can’t afford it.
You further when times are bad pay people to not work for 13 week stretches. If times get worse you pay them to not work longer.
Never accrued to you idiots that instead of paying unemployment or welfare and food stamps to hire these people to be crossing guards, or sort recyclables. Instead of paying them to produce goods or service you rather pay them to do nothing or produce future generations of voting slaves. Talk about “spew venom and vitriol and continue to stick to a rigid position on an issue largely because of an ideological dogma regardless of the shortcoming(s) of that position” When will you admit your mistakes with welfare and public housing and the generations of lives you destroyed. You need to clean up after your own DOGma before you worry about anyone elses.
MG, you make this to easy, here I complain about people like you just making stuff up and you disprove me by making stuff up.
“Just go to any basic financial website and look at the annual report of publicly-traded managed care company (Wellpoint, Aetna, Cigna, etc). For the past several years (2008 withstanding), managed care companies have indeed done very well from a profit perspective”
Industry Current 3.06%
Sector Current -1.04
Aetna Current 5.4% 2007 6.63% 2006 6.2& 2005 7.2%
United Health Current 4.36% 2007 6.17%
CIGNA Current 4.06% 2007 6.36%
WellPoint Current 4.89% 2007 5.47%
I challenge you to find any major carrier that has had a 15% profit margin in the past 10 years. Did you look at any financial site, if you had you would know insurance carriers profit margins average about 6%, far below the 15% most reformist claim, it’s not even into double digits. Where are all the profits you claim?
“Besides being a comment that is pretty distasteful and reeks of something more vile, what evidence do you have to support such a ridiculous and absurd claim?”
Would you like me to take pictures and post them? What proof would you like? Have you never been to the hood, don’t know what a rim shop look like? Never been in Wal Mart at 3 am? The way you talk I wonder if you have ever even been in section 8 housing? Want a dozen names of people I work with that live in section 8, they can tell you what they got for Christmas. In my free time I’m involved in the local hip hop scene, I can name three guys off the top of my head that have full studios in subsidized housing. You only have to be around it to see what I said is true. What evidence do you have to show they don’t waste any money? Just to make sure everyone sees how much of an idiot you are allow me;
http://www.washingtonpost.com/wp-dyn/content/article/2007/09/29/AR2007092901614.html
Hundreds of families living in housing subsidized by Fairfax County taxpayers exceed income caps… One household getting help makes more than $216,000 a year; another, $184,000. Dozens of others — making $60,000, $70,000, $90,000
http://www.ncpa.org/pub/st/st300/st300b.html
But in the case of tobacco, lower-income individuals are more likely to be smokers than those with higher incomes.(How can they afford to smoke if they are so poor?) Almost 29 percent of adults with incomes of less than $15,000 are smokers; by contrast, only 17.2 percent of people with incomes higher than $50,000 smoke.
http://www.madison.com/tct/top5/index.php?ntid=298163
Low-income people spend a larger percentage of their incomes on lottery tickets than wealthier people, and a new Carnegie Mellon University study suggests why.(So my tax dollars are going to buy poor people lottery tickets!) Yet a report by the Commission on Thrift found that American households with incomes less than $12,400 spend an average of $645 on lotteries,
http://www.econ.brown.edu/econ/events/SSRN-id1140634%5B1%5D.pdf
Poor families around the world spend a large fraction of their income on consumption
of goods that appear to be useless in alleviating poverty, while saving at very low rates
and neglecting investment in health and education. a recent finding that is consistent with our main mechanism
regarding this trade-off is described by Charles, Hurst, and Roussanov (2007) who show that college educated individuals spend about 13 percent less than their high school educated counterparts on ‘visible goods,’ controlling for current and permanent income. Moreover, this approach fails to account for the
evidence surveyed above, which suggests that the poor could in fact do better to improve their situation over time if only they saved more and spent less on the consumption of goods we view as conspicuous.
4. Just worked on this case today. Based in Southern Ohio, 8 employees 3 single 5 family. Anthem Blue Access Option 8 Rx Option H $750 Ded 3 times family, $2000 OOP, $30 office visit co-pay. Rx 10/25/40. Premium is $8,100.36 per month. Anthem Lumenos E12 5K Deductible then 100% Premium is $4,354.70 that’s a 47% savings. I write a couple of these every month. Again the difference between real world live it knowledge and what you read or hear second hand. Our mature plans usually pay back 20-50% of the savings in claims to fund back down to the plan they had. Net savings to offer identical benefits 10-30%. Have entire block of business to prove it.
Who cares about the Republican party, they are crooked politicians to, just not as crooked as the democrats, and why do you project them into this? Stick to the facts, you made a handful of baseless claims and I disproved everyone of them. Like I said you are completely unable to admit you where wrong or worse got caught lying. Just like expected when caught you want to pretend you never said anything or deny the truth then start making some blanket associations. This wasn’t about the Republican Party, this was specifically about you claiming evidence doesn’t support my claims about the poor and the problems they create for themselves, your comment about carrier profits, and love affair with studies over facts.
Then you wanted to broaden it with savings discussions and ability to maintain savings into future plan years, an argument I would again slaughter your assumptions on. Where did you get so much wrong information in life?
Why is it impossible to have an honest discussion with facts?
Nate – Give respect? Your kidding. With the derogatory insults you give.
Besides your personal insights or experiences, where are facts/evidence to back up some of your more outlandish claims including:
1. “Having such a large base of self funded employers free to try just about anything they want leads to a ton on innovation and trial.”
Where is the large-scale savings are you taking about because I am willing to bet Helen Darling and the folks at the NBCH in DC would love to find out what they are and how they can be implemented by every one of their member companies to radically reduce their health care premiums over the next several years.
2. “Every HC blog I read I see people claiming insurance companies have 15% profits”
Just go to any basic financial website and look at the annual report of publicly-traded managed care company (Wellpoint, Aetna, Cigna, etc). For the past several years (2008 withstanding), managed care companies have indeed done very well from a profit perspective and this was reflected in their stock prices which until 2008 rose quite nicely and outpaced a number of benchmark indicators including the DJIA and S&P 500.
3. “There is no way MG can even begin to claim poor people don’t waste a large portion of their income on frivolous goods. I live between 3 section 8 communities and see the cars, hear the stereos, see how they are dressed. Guarantee you not one of them is paying for their own health insurance.”
Besides being a comment that is pretty distasteful and reeks of something more vile, what evidence do you have to support such a ridiculous and absurd claim?
4. “that’s why I make my living moving companies away from insurance companies or showing employers how HDHP will cut their premium 20-50%.”
I have seen alot of “real-world” numbers and I would love to see where you are getting your “20-50% premium savings” even with a full replacement scenario for an employer. Doesn’t mesh with what I have seen/heard from any of the HR consultants out there (Watson Wyatt, Mercer, Hewitt, etc).
The only way I could see that being the case is if the employer went from a pretty traditional benefits package with a rich benefits package to a full replacement high-deductible product and contributed little/none of the savings to their employees. Also, I would love to hear you mention about the ability to demonstrate continued savings after the one-time savings because the numbers I have seen are pretty mixed.
One of the reasons I have become so disillusioned with the Republican Party the past several year is because of posters like Nate who spew venom and vitriol and continue to stick to a rigid position on an issue largely because of an ideological dogma regardless of the shortcoming(s) of that position (e.g., access to care, delayed care, patient satisfaction). It is intellectual dishonesty at best. Luckily, I have seen some signs of change from the likes of Bobby Jindal and others at the RNC.
I respect MG’s point about the randomized trials because I rely on outside research for things all the time. I don’t know what I would do without my subscription to Health Affairs. With that said, there is no substitute for actually living this stuff on a daily basis. My position is centrally located, in that I deal with nearly every stakeholder on a daily basis (physicians, hospitals, insurance companies/MCOs, patients, Medicare, and Medicaid) I am being 100% truthful and free from ideology or bias when I say that I can’t see any of those stakeholders playing a greater role in our healthcare woes than the others. When are we going to stop shifting blame and start acknowledging that we are all playing a role in this?
Peter – Your homework assignment is to compare the teen pregnancy and obesity rates of the U.S. and Canada. If that doesn’t work for you, compare the U.S. and France.
“It has been proven beyond doubt that increased co-pays change consumer behavior.”
Sure it does, it forces them to forgo treatment or when treatment can’t be avoided forces them off the insurance roles because they can’t pay the deductible. And you’re critical of the Canadian System because of perceived wait-times, which you say show the “failure” of the system because people can’t access care exactly when they want it, even if they don’t need it at that time? Who is actually advocating rationing?
Rob,
Blog comments are not conducive to showing the math but as someone that works with these every day a $2500 deductible is more affordable for everyone but a small sliver of the population with perpetually medium claims.
If you are healthy 4 out of 5 years like most people then the premium savings more then covers the cost the one year you are sick or have claims.
If you are unhealthy the lower OOP in HDHPs saves you money when combined with the premium savings. In fact those that are unhealthy save the most with high deductible health plans.
Unless you are one of the few people that have exactly 1500-2500 in claims every year you would save money with a HDHP.
You sound like a healthy person that lives pay check to paycheck, let me ask you a question; If you have a serious aliment and can’t work your screwed right? Even if you have a great insurance plan with a low deductible and co-pays if you can’t work for 6 months what good did it do you? Wouldn’t you be better served by a HDHP with lower premiums and a disability policy? If you have large claims just about every hospital I have ever worked with will write off a deductible if you can’t afford it and they bill insurance for the remainder of your care. It happens every day. I also see hospitals pay patients COBRA premium. You’re a victim of the politics, you allowed people that know nothing about insurance or risk to brainwash you into thinking you need a first dollar healthplan. I could show you a million ways to juggle your risk in life that would be more advantageous to you then a low deductible health plan.
Peter,
You don’t grasp risk nor the words I typed. I gave a very specific example of the misaligned priorities of which I spoke, if you wish to make and beat strawmen so be it but don’t attribute them to me. Further jobs don’t provide healthcare they provide insurance.
MG,
Randomized trial…ever heard the saying those that can’t do teach? How did we get to the point in this country that we will ignore empirical facts for the dogma of academics? To be honest I, and the industry don’t need trials because we have done it. We don’t need some quack to validate what 10 years of actually doing it has shown. There are thousands of health plans in the country that modified their benefit plans in these manners and saw results so they kept the changes. Other health plans saw the positive effects and implemented the changes as well. This is one of the benefits of our current system all the politicians, reformist, and propagandist ignore. Having such a large base of self funded employers free to try just about anything they want leads to a ton on innovation and trial. Not wonkers in their ivory tower “interrupting” data, but real world trial and error. It has been proven beyond doubt that increased co-pays change consumer behavior. It has also shown that preventive care has been a major bust as a cost savior. This is the difference between reform, doomed for failure, based on studies and theory, and real world experience. Instead of nurturing a fragmented system that allows these experiments the know it alls in power want to force everyone into single payor plans, or Medicare for all, or minimum approved benefits.
I have no use for randomized trials I already know the results. What’s ironic is you want to collect my data so you could study it and tell me what it says. My interruption of the data I generated and work with every day is somehow not valid until an academic on grant for a couple months with minimal to no insurance experience tells me what it shows.
“supporting evidence that largely does not support his conclusion.”
Really, you want to go there, what is the budget shortfall to insure all American’s and the supposed underinsured? Now how much was spent on Cigarettes, Alcohol, Illegal Drugs, and Hookers alone last year? The cost of anyone of those habits would usually buy an individual insurance policy, assuming of course you didn’t have that problem. What’s more important your child to have health insurance or a new play station? Yet how many uninsured kids have them? How many people without insurance are driving SUVs? The extra cost of gas would buy a policy.
Deron, this is why my tone is harsh and I am jaded. The utter ignorance and dishonesty of people advocating reform is unbearable. I use to be able to discuss these issues in a pleasant and friendly manner but quickly realized it’s not about the issue or fixing the problem. These people are advocating political outcomes guised as solutions. They have all the same dishonesty as supporters of the Kyoto Treaty, which any honest person that read it knew was all about transferring wealth and nothing to do with lower CO2 emissions, as proven by the complete failure of the signatures to reach the goals. There is no way MG can even begin to claim poor people don’t waste a large portion of their income on frivolous goods. I live between 3 section 8 communities and see the cars, hear the stereos, see how they are dressed. Guarantee you not one of them is paying for their own health insurance. Don’t even try to argue with me that every American is poor and needs a handout. Up until last year restaurants where packed, technology was flying off the shelf. People like MG deserve no respect because they give none. Politely pointing out the errors in their argument NEVER leads to them admitting their error. Instead they need to be intellectually decapitated. Everyone reading their comments need to see the fallacy of their argument and realize what they say can’t be trusted. Every HC blog I read I see people claiming insurance companies have 15% profits and 30% administrative expense. This is what happens when lies and the liars that tell then are left unchecked. Try convincing any “reformist” that Medicare does not have a 3% administrative cost and it’s a dishonest comparison to start with, the lie has been told so many times its fact.
Insurance companies are terrible and deserve a ton of blame, that’s why I make my living moving companies away from insurance companies or showing employers how HDHP will cut their premium 20-50%. There is no reason for insurance companies to have the power and influence they do today. This is a problem created by regulation and politicians, something few people will admit let alone discuss. Legislatures have driven the market to the carrier now want to save us from what they did, I personally don’t trust them.
“It’s not a crisis that requires my tax dollars when the odds catch up to an irresponsible neighbor that had misaligned priorities.”
Which odds would those be, cancer? Maybe working at a job that doesn’t provide healthcare? Maybe having no job at all because of all the crooks on Wall Street? I guess your solution would be to buy an even higher deductible policy so that monthly premiums would be affordable. Yea, “efficiency of insurance”, that’s the part where companies collect premiums on policies that don’t give the insured a hope in hell of ever being able to use the policy.
“I have encouraged our employees to put away some of those premium savings to fund the higher deductible, if needed. Of course many don’t do it. They buy cheeseburgers instead.”
You claim poor people, rather than putting away their (non-existent) weekly surpluses are *gasp* buying a cheeseburger? This is a flippant and mean-spirited remark.
I work for a health care facility. It does not pay well for my industry. I work here because it’s the best employer in the area, and I happen to love my work. Because of state cutbacks, there’s a chance that we’re going to close. We’re the only emergent care facility for 40 miles.
I can’t afford a $2500 deductible. I simply have no “extra” money. I live in a rental house in a neighborhood where there has been one shooting and one housefire within three months. I make a reasonable living for the area, but it’s 1/2 my market in another place. I eat whole foods, usually whatever’s on sale, cooked myself. I don’t eat out. I own two pairs of pants, carefully cleaned. My car is a 1992 Volvo 240 with 253,000 miles on it. I bought it four years ago for $700. I have no debt. I do not scarf bags of potato chips. I don’t have TV. I do not eat chocolate, or peanut butter, or popcorn. I do not sip lattes. I don’t take vacations. In fact, I don’t have a life. I am in my mid 40s and know I’ll never see a higher standard of living because the preceeding generation ate all the cookies. I’m ok with that.
I am, I promise, NOT living high on any hog. Between energy bills and other rising costs, I never, ever have a chance to save because, being relatively poor, I’m always catching up with the next emergency. If I break my leg, it will bankrupt me. Literally. And nowadays, thanks to bankruptcy “reform,” that just means paying for something forever AFTER you’ve lost everything you own.
Yet it’s ok to callously sneer at under-paid people as simply too “lazy” to put money into a system designed to cheat them.
I have to wonder who’s really impoverished here.
The reason why we have copays and deductibles is largely due to the RAND Health Insurance experiment ran in the 70s. While many conclusions have been made and implemented this study, it is the only randomized trial we have ever had of health insurance in the US.
Pretty absurd to state that high-deductibles will automatically cure the woes of health care inflation and utilization without evidence from a randomized trial. Now there is plenty of evidence from observational studies that support higher deductibles but there are also plenty that point to plenty of issues with access and patients delaying care due to cost.
One thing that does aggravate me is Nate’s comments that it is the “fault of Americans borrowing and saving” that is a large cause of American’s ability to afford health insurance.
It is someone trying to trump an ideological argument/stance over the supporting evidence that largely does not support his conclusion. It is the same line of reasoning we saw from some Republicans in Congress who stated that the financial system mess was “largely the fault of consumers who were greedy” without placing any blame on the huge regulatory failures and multiple enablers of the current crisis over the past 15+ years.
Nate says:
> The intelligent question is why doesn’t every
> healthplan have a high deductible.
So how `bout an answer, man?
Let’s try this on:
0) Half of have, by definition, below-average natural gifts. This ain’t Lake Woebegone.
1) Risk is uncertainty, and most people are quite uncertain about the level and cost of the medical services they may need even in the short term. The $500 you ask about is the insurance premium they are prepared to pay an insurer to measure and take on that risk for them.
2) If people got a proper salary that paid day to day living expenses plus the 20% of average per-capita income per dependent that is the average risk of serious illness or injury today, AND had income security at these levels after they became ill, health insurance could work more like other sorts of casualty insurance. But many don’t and haven’t.
3) People respond to the situation they’re in. And the situation for most of us is that it is much, much cheaper to get term health insurance through our employers. There are at least three reasons for this. a) tax code preferences b) marketing expense for the plans, which includes avoidance of adverse selection c) employers want to use medical insurance as a retention tool — they don’t offer a higher salary in lieu of insurance even if it might be legal for them to do it.
4) It is not clear that economic efficiency should be the goal of medical services financing. And therefore
5) it is not clear that a casualty insurance model is the model we should want for medical insurance at all.
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“The reason we have $2500 deductibles is because they are a more efficient form of insurance.”
Yes, but not a more efficient form of healthcare. Get rid of insurance companies first, then fix healthcare.
“Nice how they project Canadian utilization on the US population and assume it’s accurate, this is amateur hour, these quacks even educated in science and how to conduct it? Compare per capita office visits, Rx, and diagnostic test in the US and Canada to see how foolish that was.”
Whatever, seems the Canucks can do it for about half the cost. It basically says patient abuses are probably less than doc abuses.
Nate – Your delivery is a bit harsh and confrontational, but I like the fact that are willing to point out some of the issues that often get danced around.
Instead of worrying about why someone can’t afford that $20 copay or how they got the condition that lead them to the doctor in the first place, the focus is usually placed on the evil insurance company. My group has started offering a $2,000 deductible plan. The premiums are much lower than the other plan we offer. I have encouraged our employees to put away some of those premium savings to fund the higher deductible, if needed. Of course many don’t do it. They buy cheeseburgers instead. Now if they pick up diabetes down the road, not only have they brought it on themselves, they’ve put nothing back to save for the treatment. Damn those insurance companies!
Make no mistake, insurance companies and other MCOs are not free from blame. Aside from you, I probably deal with them more than most here and the relationship between medical groups and health plans and patients needs a lot of work. However, making them the focus and the scapegoat is not a productive way of approaching reform.
The reason we have $2500 deductibles is because they are a more efficient form of insurance. It shows the lacking education that the same person who complains about the “mark up” on insurance companies pans high deductible plans. If you know or expect you are going to have $2500 in healthcare why would you pay 20% mark up in premium to have your insurance company pay the bill? Instead of paying $2500 in provider bills you pay $3000 in insurance premium. If you are healthy and don’t expect to have bills why would you pay extra for a policy that pays bills you won’t have? 2-3 years of saving that extra premium would pay the $2500 of bills if you do have them. The intelligent question is why doesn’t every healthplan have a high deductible.
Bob Evans & Maurice Barer piece is great junk science showing why nerds in lab coats shouldn’t hypothesize on matters they have no understanding of.
“By far the largest proportion of health care spending–hospital admissions, specialist referral, diagnostic tests and other procedures, and prescription drugs–depends upon the decisions of physicians and other providers. Only a small share of health care expenditures is accounted for by patient-initiated visits.”
Lets start with Rx, every benefit consultant and actuary with a measurable IQ knows increased cost sharing between Brand/Generic and Formulary/Non leads patients to ask their doctor for the cheaper alternative. Without the increased cost they would never prompt their provider to consider an alternative and thus always be prescribed the more expensive drug de’jour.
Again it takes minimal intelligence to see the impact increasing the ER co-pay to 2-3 times that of Urgent care had steering millions of ER visits into much cheaper Urgent Care visits. Higher co-pays where common for specialist versus PCP. Diagnostic testing also had separate co-pays and deductibles implemented to affect consumer decisions with great success.
It’s like these people never experienced the US healthcare system, instead they just wrote about it based on some numbers someone handed them.
“Rough estimates for medical expenditures in Canada on patient-initiated abuse are in the range of 1 to 2% of total health care spending.21 Policies aimed at modifying patient demands are chasing the wrong target.”
Nice how they project Canadian utilization on the US population and assume it’s accurate, this is amateur hour, these quacks even educated in science and how to conduct it? Compare per capita office visits, Rx, and diagnostic test in the US and Canada to see how foolish that was.
The expenditure ceiling or MDE was set at 5, 10, or 15% of family income, up to a maximum of $1,000. Wow talk about having skin in the game, even by late 70s early 80s $1,000 for a family is nothing. That means family incomes from $6,666 to $20,000 doesn’t it?
When having a debate I always love to see the interjection of SOB stories with supporting information for the reader to determine the merit of the SOBery. Like the Frost who chose not to work, owned investment property, had nice vehicles and still chose not to insure their kids. The reader is never told any of that less they not fell the desired pity.
“But the nonprofit Center for Studying Health System Change found recently that financial pressures on families increase sharply when out-of-pocket spending on medical bills exceeds 2.5 percent of family income.”
This is not a sign that we have an insurance problem, this is proof that we have a savings and budgeting problem. If your household finances are so tight 2.5% expenditure on HC causes strain then you have other issues. Before you go claiming every American is poor and living paycheck to paycheck and it’s not their fault justify the percentage of Americans with multiple cell phones, cable TV, that smoke, that drink, and drive SUVs. American’s have the money they CHOOSE to spend it elsewhere. It’s not a crisis that requires my tax dollars when the odds catch up to an irresponsible neighbor that had misaligned priorities.
What insurance did your new acquaintance have? Why didn’t she buy better insurance before the emergency surgery? What was the emergency? How do you expect anyone to care if you don’t give them anything to care about?
Women with terrible shopping habit forgoes employer provided insurance because she was young and didn’t need it, instead just bought a cheap accident policy just in case. Shopping at some uber chic closeout store she spots the must have fendi bag for only $400 across the store, as she sprints over to get it she trips over a rack breaking her ankle in 3 places requiring surgery.
Yes lets all mourn the poor fortune of the women who made a series of bad mistakes leading to a tragic ending of her own making. The FACT is most people if they made better financial decisions wouldn’t have financial problems. i.e. how many uninsured smokers are there when the cost of a pack a day habit will buy insurance? In addition to showing proof of ID to buy cigarettes why must you not also show proof of health insurance? You need a license to drive a car why not one to ruin your health?
I think I accidentally stepped on the other half of your brain, if you didn’t leave that out you might not come to such silly conclusions.
Peter – I never said a $2,500 deductible was good, but I am confident is saying that a $0 deductible is definitely not good. When people are insulated from the costs of care, they will not shop based on value. It would be silly to dispute that. Exactly why does shopping for healthcare have to be so different from shopping for a car? I have explained why they should be similar, but you haven’t explained why they are so different.
If someone forgoes care because they cannot afford a $20 copay, I think there are more serious concerns than the design of their health plan.
You also need to stop throwing the “any other industrialzed country” argument around without a little more substance. About the only similarity we have with France et al is the fact that we are “industrialized”. The societies are far more different than they are similar.
“Do you feel that patients shouldn’t have any out of pocket costs when they use healthcare services?”
Yes, unless you’re trying to limit access. So tell me the reasoning behind say, a $2500 deductible and a 20% co-pay?
“If that’s what you’re suggesting, then how can we expect them to seek the best value?”
Go to any other industrialized country but this one for the best value. Or I guess, value is defined as, who’s the most lenient creditor I can go bankrupt with.
Really Deron, do you think shopping for healthcare is like buying a car? Heathcare doesn’t even come with a warranty.
For “About the Zombies” try this – http://www.chspr.ubc.ca/files/publications/1998/hpru98-05D.pdf
All you need to know about Thomas Miller is the words “economist for the American Enterprise Institute.” That alone is a major hit to his credibility.
As for AEI, their “policy work” hasn’t had much success lately except for Kagan and his the troop surge in Iraq. On the domestic front, the AEI economists have been wrong on nearly everything the past 18 months or so.
Just to clarify: Thomas Miller is not among the “Ivy league professors with tenured appointments and gold-plated group health insurance”. He is only a pretend academic – a shill – so it’s not so much that he’s oblivious; rather, he’s paid to be disingenuous on the subject.
Also, the last link – “about the zombies” – seems to be broken.
Are you doing some writing for Olbermann on the side?
Just to make sure I understand what you’re saying: Do you feel that patients shouldn’t have any out of pocket costs when they use healthcare services?
If that’s what you’re suggesting, then how can we expect them to seek the best value?