The Incredible and Wasteful Complexity of the US Healthcare System

During the health care reform debate, we wrote that most people’s attitudes to it were “confused, conflicted, clueless and cranky.”  A major reason was that the American health care “system” is fiendishly complicated and few people really understand it.   As a result hardly anyone knows much about what is actually in the reform bill (but that does not prevent them from having strong opinions about it).    Sadly, the reforms, whatever their merits, will make the system even more complicated, the administration more Byzantine and the regulatory burden more onerous.

System complexity.

The American healthcare system is already by far the most complex and bureaucratic in the world.  We were once asked to spend ninety minutes explaining American health care to a group of foreign health care executives.  Ninety minutes?  We probably needed a few weeks.  Most other countries have relatively simple systems, whether insurance coverage is provided by a government plan or by private insurance or some combination of these.  But in the United States insurance coverage, for those who have it, may be provided by Medicare Parts A, B, C, and D, 50 different state Medicaid programs (or MediCal in California), Medicare Advantage, Medigap plans, the Children’s Health Insurance Plan, the Women, Infants and Children Program, the Veterans Administration, the Federal Employees Health Benefits Program, the military, the hundreds of thousands of employer-provided plans and their insurance companies, or by the individual insurance market.  This insurance may be paid for by the federal or state governments, by employers, labor unions or individuals.  Some employers’ plans cover retirees, others do not. The result is that the system is pluralistic, mysterious, capricious and impossible for most patients and providers to understand.

Administrative complexity

The administrative complexity is amplified by the multiplicity of insurance plans.  About half of all Americans with private health insurance are covered by self-insured plans, each with its own plan design.  Employers customize their plan documents, led by consultants who make a good living designing their plans and tailoring their contracts. As one prominent consultant told us recently, if all the self-insured plan documents were piled on a table they would not just exceed the 2,700 pages of Obamacare, they would probably reach the moon. For the rest of the commercially insured population, health plans may be traditional indemnity plans, Preferred Provider Organizations or Health Maintenance Organizations.

The coverage provided by different plans varies dramatically.  They may or may not include large or small deductibles, co-pays or co-insurance.  Beneficiaries may pay a large, small or no part of their health insurance premiums.  Some plans cover dependent family members and children, others do not.  The Medicare Part D pharmaceutical benefit plan involves a “doughnut hole,” which will disappear as health reforms are implemented.  Surveys have found that few people fully understand their own insurance plans let alone the bigger picture.  While health reform takes some steps toward standardization of insurance offerings and improving transparency, overall it is likely to increase complexity.

Physicians may be paid by salary, fee-for-service, or capitation, with “pay for performance” bonuses based on complicated metrics.  In order to get paid, most doctors and hospitals have to use many thousands of codes to describe the care they have delivered.  Doctors can spend hours a day doing this; hospitals employ tens of thousands of coders; insurance companies and government programs spend a small fortune entering and checking this coding.  A substantial proportion of payment claims are disputed, further increasing administrative costs and the “hassle factor.”

Some insurance companies are for-profit, some are not-for-profit.  Hospitals may be for-profit, not-for-profit charities or be run by federal government agencies such as the VA or the DOD or by cities.

The administrative complexity exists in the private and public sectors and in both for-profit and non-profit organizations.  Medicare is relatively efficient because it has a simple criterion for eligibility – your age (although it also covers people with disabilities).   But for many of us administrative complexity is rampant because health insurance is a function of our jobs or our income (or lack of it). Our insurance changes often (because our employers change their plans, because we change jobs or because our income changes), far more often than it does in other countries.  As a result we have armies of people who sell insurance, keep track of who is eligible for what, chase, authorize or deny payments, and lob faxes, emails and assorted missives at us and each other. In Los Angeles County, 1,900 people work on nothing but MediCal  eligibility with a union-mandated productivity target of completing two forms a day.   There are an estimated 150,000 such eligibility workers across the country.  The health reform bill proposes to expand Medicaid by 16 million so the number and cost of these workers will surely increase.

Regulatory complexity

Different parts of the health care system are managed or regulated by dozens of Federal government and state agencies, including the Department of Health and Human Services, the Center for Medicare and Medicaid Services, the Centers for Disease Control, the Veterans Administration, the Food and Drug Administration, and the Agency for Healthcare Research and Quality.  One report claims that the health care reform bill will create 183 new agencies, including state insurance exchanges and a Medicare Independent Payment Advisory Board (IPAB) and the Center for Medicare and Medicaid Innovation.

And then there are the acronyms.  If you don’t know them you will not understand much of the health policy debate: PPACA, DHSS, FDA, CMS, VA, CDC, AHRQ, SRG, MLR, HMO, PPO, PBM, COBRA, P4P, CER, EMR, HIT, DRG, FEHBP, WIC, CHIP, DSH, MMA, and many more.

We believe that this complexity is a major reason why we have (and this is very well documented) the most expensive, inequitable, inefficient and unpopular health care system of any developed country, with poor to mediocre outcomes.  The problem is not the doctors or the hospitals but the system. Reimbursement, with its many thousands of points of public and private sector payment and the mindboggling payment rules, creates a bow wave of administrative costs and many perverse incentives.  And these costs are the incomes of powerful interests who fight to preserve them.

The American “system” is exponentially more complicated than the systems in other countries – and the reforms will make it even more complicated.  Unfortunately reform that would simplify the system is probably not politically feasible.  A benign dictator might scrap the system and start over with a much simpler system.   But in a democracy, with powerful interests and 17% of our economy involved, “you can’t get there from here.” We have to build on what we have, heaping complexity on complexity.

It is therefore no wonder that surveys find most people (including, it would appear, many members of Congress) understand very little about the health care system let alone health care reform.  A recent Harris poll asked people which of 18 items are or are not in the reform bill.  Modest majorities  were able to give the right answer for only 4 of the items.   And pluralities got the answer wrong on nine of the items.  For example pluralities believed that the bill includes higher income taxes for the middle class, new ways to ration care, a new government run health plan, cuts in Medicare benefits, increased payroll taxes and “death panels”.

Of course, many millions of people followed the reform debate with interest and passion, but because the issues were so complicated, very few of them understood them.  Which is why rhetoric often trumped substance, and misinformation often fuelled strong opinions. And why American health care is likely to be extraordinarily inefficient and expensive far into the future.

Humphrey Taylor is Chairman of the Harris Poll.
Ian Morrison is a healthcare consultant in Menlo Park, California.

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  5. I am running for President in the 2012 elections as an Independent candidate.

    These are my health care policies:

    He says Obama Care does not go far enough, and proposes a completely new healthcare plan he calls “Americare,” which will provide government healthcare for everyone from cradle to grave.

    “Americare will pay for the needs of all United States citizens and allow healthcare providers to be compensated according to their skill set. It will replace Medicare, Medicaid, and all private insurance. I believe that all private insurance companies are criminal organizations, because they make profits by delaying and denying care which could in many instances cause unnecessary deaths and suffering to people who rely on private insurance,” explained Abramson.

    Abramson wants the liquidation of all private insurance companies, moving their administrative workers into Americare jobs. He wants to offer forgiveness of all medical indebtedness for anyone with debts resulting from the previous healthcare system. He said the cost of Americare will be paid from the savings obtained through military budget cuts.

  6. Insurance was never meant to cure anyone. Before being bastardized it was meant to mitigate the risk of a large unforseen illness or accident. When it was reappropiated as a social tool and funding mechanism is when things started going wrong. Insurance actually started hundreds of years ago well before the idea of America even existed. Insurance has always been in america.

    Insurance at first didn’t cover doctors visits then it only reimbursed a set amount, back when an office visit was just an office visit, they didn’t measure it 10 ways and then some. The go betweens got involved when government got involved. The government promised far more in benefits then they could afford, once they had to start cutting cost without admiting they couldn’t live up their promise they had to start measuring everything so they could slice and dice. That is how we got CPTs DRG RBRVS and everything else. The more government needs to manage the more complex it gets. Gary or one of the other doctors correct me but the government is taking us from 10,000 CPT codes to 40,000+? Now it is going to take even more middle people to figure out this even more complex system.

  7. Nate Ogden is right on. The immediacy of a check and balance by the patient is a powerful audit and control mechanism. No one knows better than the patient when he is charged $100 for an aspirin

  8. Yes, Nate it would be nice to have a clearer idea of what is charged and who is paying for it. I hate it when Dr. ‘s suggest a procedure and when asked how much would this cost they say they have no idea. But one thing is sure, insurance never cured anyone.
    I think the industry started in Tx. because people couldn’t afford Dr. visits. Exactly how does hiring hundreds of thousands of people to be “go-betweens” for patients and Dr.’s decrease fees ?

  9. What about the rest of the equation chuck? What other parts of our lives do we walk in, expect to spend as much as we want, and have someone else pay the bill and not question our decision? In cases like this you need to look at the history. When insurance started you went to the doctor, received care, paid the bill, then submitted it yourself to insurance to get reimbursed. This worked pretty good for everyone, providers got paid right away, people knew what they were buying and exercised care, and insurance was protected from excessive treatment and wasteful spending.

    If you want to see the bill the same day your treated don’t assign your benefits. That simple. Oddly all the people complaining about the system don’t want to take the easy step of solving it.

  10. What other parts of our lives must you do, or have done (for basically fear of death) than “go to the doctor” ? And once there have a service preformed and then leave. 30 days later you get a bill/statement with the price. Basically, most of us go to the doctor and get services we need and find out 30 days later what it costs. Is there any other “industry” that works this way ?
    Would you buy a car (which you actually have a choice, not a fear of death) and take it home and wait to get the bill 30 days later ? Would you buy a house only to find out later that the bank thinks 10% is a good rate ?
    The system has built in enough time to guarentee a nice profit margin for all envolved.
    Time to change. . . please

  11. Here in Europe, Portugal, in the last few years the government made some reforms in the Public portuguese Healtcare system aiming to develop it.
    We spend a lot of money on it, but everybody, also turists and foreigns, have the right to Health!

    I hope this financial crise won´t destroy it.

    All the governments should provide Free Health treatments for their citizens! That is one of the reasons taxes exist for.


  12. Last Word: Either Pay the High Prices for Sub Standard Care and Greedy Insurance underwriters or Go Without and Die Quickly.

    This is the real choices of the Elitist Point of view. Either way Insurance and/or Provider can not be Held Accountable for any Negative Event . However, This does not apply to the intended target of their preditory and exploitive measures. Dead , Mangled,crippled, Medical Errors , Hospital Acquired Infections and longer stays from preventable events and gross negelgence. The Patient is expected to be accountable for services that end in their death.

    Sadly, their is no Honor in this industry that only views consumers as a profit margin. A statistic or a number without as much showing a frailities of being Human. The Industry has saturated their belief system through out Government. Acting as lobbiest and Legislators to protect their profit making enterprises.
    The industry has no shame in becoming 38th in Health Care among 40 industrialized Nations! Why? Profits are their primary focus and delivering statisfactory care has become a lesson of self protection;due to cuts in care givers and the absence of funds. Patients Suffer!
    Although, Hospitals shed much of their responsibilities for providing proper care measures in order to satisfy investors. Hospitals expect full assurances from the State Legislature. Holding them Harmless, No Matter what the outcomes of Gross negelgence,Medical Error, and Preventable Staph Infection and death.
    I do not know of any industry that has Mobb like Protections by our State Legislatures. The argument for greater and greater Profits have voices unmatched to the loss of Human Life. Which means our values have drifted away from core values of our founders. So , In order to keep these parisites from using you and charging your survivors . Is to die at home and overdose on drugs. If you find that objectionable ; Then you must realize what hospital staff are doing the same thing with Morphine. The hospitals are putting down people and Dieing quickly has nothing to do with the industry profiting from it. Save a survivor from Bankcruptcy:Die at Home!!!!!!!!!!!!!!!!

  13. Some states have a plan u can buy into…which isn’t cheap, but isn’t expensive either. For example, I had insurance through my employer. Got laid off, insurance ran out. Had to buy private insurance ar 112 bucks a month…not an option for just anyone but since I was insured before, I didn’t have to disclose pre existing conditions. Chiropractor Dunwoody GA

  14. Easily the best book on how to reform the health care system is by Harvard Business School Professor Clay Christensen – The Innovator’s Prescription. http://davisliumd.blogspot.com/2010/12/best-book-on-healthcare-reform-or.html

    Despite the complexity and challenges of the US health care system, Professor Christensen illustrates examples of why we should be optimistic that transformational change can occur and yet rightly cautions that too much regulation will stifle innovation and maintain the status quo. Let’s hope for the former and less of the latter.

  15. Margalit –

    I think we’re talking past each other. The point of QALY is NOT to determine who gets what. It’s to determine what we cover and pay for and what we don’t cover and pay for. This is what the UK’s NICE attempts to do. If they decide to cover a service test, procedure or drug based on QALY metrics, they don’t care if the particular patient who gets it is young or old, rich or poor, disabled or healthy. Of course, they may also ration certain procedures like organ transplants based on age, among other factors, as well. We do that for organ transplants too. If insurers want to cover services for a higher price that adequately compensates them for the estimated additional cost that the basic plan doesn’t, they can. Anyone who wants to and can afford to buy such polices, they can. Or, they can self-pay.

    The end of life care issue is a whole separate discussion. With appropriate tort reform, the default protocol in the absence of a living will or advance directive could change from “do everything” to apply common sense depending on circumstances. If we paid for palliative care and hospice counseling so patients and their families understood the options available to them, they could make informed choices regarding their end of life treatment preferences. Those preferences could then be stored on a registry so they are available to providers anywhere when needed. Right now, far too many patients have not indicated such preferences, so their families often don’t know what they would have wanted because the patient can no longer communicate at all or is not mentally competent. Doctors then feel that they have no choice but to do everything unless the healthcare proxy, if any, agrees on his or her own to do less than everything. This is an area where the conservative death panel crap does a disservice to us all.

  16. So you attach some sort of average utility measure to a therapy and decide how to tier it based on that. It could be QALY, but I am not sure that QALY is really, relevant since I thought the entire point of QALY was to prioritize who gets what. So for that statin example, a previously healthy 40 year old would get 1 QALY for the $50K, but a disabled person with other ailments would get maybe 0.5 QALY out of the same investment. I guess that is why, when you got to the terminally ill person, or very old person, the formula stopped working, because the real QALY math needs to be applied there (in lieu of common sense, which we seem to lack).
    So now, I have another question. Regardless on how you make the tier decisions, how is this different than Nate’s lifetime maximum? And how do we apply a true lifetime maximum when we don’t have one payer, or a universal accounting, solution?

  17. Margalit –

    Let me try again using a specific example. Suppose the lowest tier (cheapest) insurance policy under my scenario would cover every service, test, procedure or drug that the experts determine would cost less than $150K per QALY when given to a population with the condition or the risk profile that the treatment is appropriate for. Specifically, let’s say a statin drug like the generic, Simvistatin, would cost $50K per QALY when given to people with CAD, high cholesterol or other appropriate risk factors. The drug is covered under this policy tier whether the individual patient is a billionaire or a poor person and the price that a given insurer negotiated for the drug is the same for every patient covered by the plan. At the same time, if the patient is dying of late stage cancer, advanced Alzheimer’s or dementia, or ESRD, etc. it probably would not make sense to prescribe the drug under those circumstances and the patient or the family may not even want it even though it’s deemed cost effective at the population level. By the way, a $150K per QALY threshold, combined with life expectancy of roundly 80 years, implicitly values a life at $12 million (80 years x $150K) which I think is more than reasonable in a real world of finite resources.

  18. I apologize for the misquote, Barry. But if we make tiers based on QALY, the question becomes whose QALY are we talking about.
    For example, if treatment Z is shown to provide 2 QALY for person A, but only 0.5 QALY for person B, would it be priced at X based on a person A profile, or at 3X based on a person B profile, or tiered based on the person?

  19. Barry-
    “The administrative complexity of our system is not entirely a bad thing because it gives people choices as opposed to what they would have under a monolithic one size fits all system.”

    I agree , the prospect of a one-size fits all approach is frightening. However, the choices that do exist are not true to free market system that allows for the principles of competition to regulate both quality and cost. As I typically identify with libertarian ideals, I am starting to think these ideal cannot apply to healthcare. This massive industry is, one the one hand, a business. On the other hand, however, it is an need that must be met. Toying with cost and availability of services in this industry has far greater implications than in, say, the auto industry. People’s lives are literally at stake. What is so sad is you all who are so concerned with when you will get paid. Is that why you selected medicine as your profession? Isn’t the propose of this blog not to whine over dollars and cents, but to seek out solutions to these complex issues?

    “If we’re really interested in bending the medical cost growth curve, we would have payers stop paying for services, tests, procedures and drugs that are not cost-effective or are no better than less expensive alternatives. Disclosure of actual contract reimbursement rates, substantive tort reform and more high deductible plans would also be helpful.”

    Thank you, Barry. I agree with this.

  20. Nate I agree with your comment and was trying to cover that by suggesting we need much more oversight on what we are doing presently. That would involve proving you have better control when you test more than for instance 4 times a day, a distinct minority. So you are supporting the Washington State attempts to control costs, I applaud you.

  21. Margalit –

    I think you know better. First, I didn’t say “One size fits all.” I said “One size fits all Medicare probably couldn’t and wouldn’t do that” – offer policies with different QALY limits at different prices.

    Second, if coverage decisions were ever based on QALY metrics or some other cost vs. benefits criteria, the judgment would be based on a population of people. So, if, say, a new cancer treatment were deemed cost-effective by Medicare and/or Medicaid, it would be available to you, We wouldn’t say to a poor, disabled alcoholic, your remaining life years are only worth 0.5 QALY each so you don’t get the treatment. On the other hand, many people facing end of life situations, if they had all of their options honestly explained to them, may not want the treatment anyway.

    Obviously, the wealthy person could afford a policy with the higher limits and a poor person couldn’t. As long as the coverage available to the broad population is widely perceived as good enough, it doesn’t matter. You’re never going to achieve perfect equality as the wealthy will always be able to buy up. In Germany, for example, about 10% of the population opts out of the public health insurance system and nobody has a problem with it.

  22. “Or, we might see insurance offerings that cover services, tests, procedures and drugs that cost up to X per QALY at one price, 2X per QALY at a higher price, and 3X per QALY for a still higher price. One size fits all ”

    Does it? If you are poor, disabled and addicted to alcohol, your QALY is going to plummet through the floor. How is this particular form of discrimination any better than the current forms of care denial experienced by Medicaid “beneficiaries”?

  23. Steve –

    I don’t think it’s easy for Medicare to alter the status quo except when faced with a crisis. The program was around for 41 years before it even offered a prescription drug benefit which private insurers had for decades. Private insurers developed tiered formularies which encouraged the use of lower cost generics. Private insurers are now experimenting with tiered networks to encourage patients and referring doctors to use the most cost-effective providers. There has been tremendous pressure from those who benefit from the status quo to preclude Medicare from using competitive bidding for durable medical equipment. Doctors resist allowing NP’s to practice at the top of their license including letting them write prescriptions without supervision. Radiologists were OK with remote reading of images during hard to staff nights and weekends but, somehow, to allow the same thing during the weekday risks compromising patient safety. A single payer system would make it easier to preserve the status quo for established interests and resist disruptive innovation that could reduce costs for the system and for payers. There is also far more fraud in the Medicare and Medicaid systems than private insurance.

    Regarding new treatments, I’m quite confident they would have developed at a similar pace without Medicare. Currently, however, Congress specifically prohibits Medicare from taking cost into account in making its coverage and payment decisions. If a drug or device wins FDA approval, it’s generally covered no matter how much it costs even if the benefits are only marginal at best. I don’t think that’s a good thing. We might see private insurers start to push back on this before Medicare does. Or, we might see insurance offerings that cover services, tests, procedures and drugs that cost up to X per QALY at one price, 2X per QALY at a higher price, and 3X per QALY for a still higher price. One size fits all Medicare couldn’t and wouldn’t do that in all likelihood.

    For an excellent and thorough review of this general topic, I recommend the 2009 book titled “The Innovator’s Prescription” by Clayton Christensen of Harvard Business School.

  24. “More importantly, it leaves room for innovation in both new medical therapies and in payment approaches that would be largely stifled under a single payer system.”

    I believe that was the McArdle argument a while back, but I dont see it. Innovators dont care who pays them, just that they get paid. Maybe it is just a coincidence, but we have had our big increase in medical advances since Medicare came along. Was it financially feasible to develop therapies like CABG procedures, stentings, etc. because people knew that they would actually get paid?


  25. Berkshire Hathaway’s decision to buy stock in UnitedHealth Group and Wellpoint during 2009-2010 may have been made by Lou Simpson and not Buffett. However, even if Buffett made the decision, his intent was to make money in the stock, not to invest float. By contrast, when he made the decision to acquire General Re, the rest of GEICO that he didn’t already own and, much earlier, National Indemnity, he viewed them as fundamentally decent businesses where his people could control the premium setting process and he could personally make the capital allocation decisions that determined how to invest the insurance float.

    In the health insurance business, individuals and small groups with full risk coverage probably pay their premiums either monthly or quarterly and thevast majority of premiums are paid out within the year they are earned. Moreover, more than half of people with employer provided health insurance are in self-insured plans. The employer controls the float on those, not the insurer. The insurer is paid a fee to administer the plan under an ASO contract.

    The administrative complexity of our system is not entirely a bad thing because it gives people choices as opposed to what they would have under a monolithic one size fits all system. More importantly, it leaves room for innovation in both new medical therapies and in payment approaches that would be largely stifled under a single payer system. If we’re really interested in bending the medical cost growth curve, we would have payers stop paying for services, tests, procedures and drugs that are not cost-effective or are no better than less expensive alternatives. Disclosure of actual contract reimbursement rates, substantive tort reform and more high deductible plans would also be helpful.

    • I totally agree with your conclusions that transparency in reimbursement (“disclosure of actual contract reimbursement rates”), tort reform and “more high deductible plans” are the way forward. As deductibles rise, primary care is leaving the domain of insurance. When deductibles are commonly $1,500 or higher, most of primary care will be in cash medicine. This more direct relationship between patients and physicians can help reduce unnecessary costs and will reduce the complexity of the primary care portion of healthcare.

  26. It is disappointing that a blog discussing the shortfalls of a complex and inefficient health delivery system leads to argument of third party payment/ float.
    Perhaps an examination of conscience and motivation may be in order here. Are you all providers to receive the 0.02 percent interest the insurance company may make off of your delayed payment or are you a provider that seeks to serve your patients?

    • Aren’t insurers required by law to pay claims within 45 days? Frankly, it usually takes me longer to pay bills from my “providers” for what the insurance doesn’t cover than it takes the insurance to pay for what it covers. And in this I don’t seem to be much different than everyone I know.

  27. “Claims are paid in 7-14 days by most major insurers and most pay electronically now so you lose the float from the mailman. Lets be generous, and keep the math simple, and say they get 30 days float.”

    B*llsh*t! I wish that were true. As president of our corporation for many years and looking at bills for many years this may be a goal, but it is categorically untrue in Pennsylvania. Clean claims are denied less frequently, that has improved markedly.


  28. Hu,

    “. I would support letting someone test as often as they feel necessary ”

    This is the problem with people that don’t understand the system and how things actually work. You naively support providing people all the testing supplies they want unaware of all the fraud that is already going on. If you open a weekly or other small newspapers you will see adds from companies paying cash for diabetic supplies. So the insured fills orders for more then they need, pay nothing or next to nothing then sell the excess for cash.

  29. Oh after reading the Wall Street Journal, just lying about attempting to limit diabetic testing from twice a day to 8 times a day. I would support letting someone test as often as they feel necessary or having a pump but again it requires monitoring to be sure the patients are indeed benefitting and not being pushed by equipment companies.

  30. wow reading all your responses reinforces how impossible it is for the public to understand health care reform. What a great arguement for universal single payor supported only by a national value added tax. Cover everyone, tax everyone and don’t worry if they are legal or illegal, they still pay the tax. Meanwhile I advocate my transparency where is the money going publish on internet cost per patient per provider for all public, ie my taxes money.
    Where is the defense of WashingtonState that is at least trying to control costs like all states who are being extolled by the right for cutting education and public services. Everyone supports that health care is breaking the budget without making or supporting any positive solutions.

  31. As of the end of 2010, Berkshire Hathaway had roundly $60 billion of insurance float. Guess how much relates to health insurance. Answer: NONE. Reason: it’s not a very attractive business from a return on capital standpoint and will be even less attractive under health reform mainly because of the minimum MLR rules.

    • Did you know that Berkshire Hathaway invested its float capital in millions of shares of the common stocks of United Healthcare and Wellpoint up until around 2009-2010 when Mr. Buffet unloaded his stake? http://buswk.co/cOcDCC

      I think that Mr. Buffett saw that healthcare reform bill provisions would crunch float profitability and sold the shares. But nonetheless, the master of float investing was definitively invested in healthcare insurers.

  32. Wow- these comments are getting heated. Perhaps we can bring it back to the issue.
    Taylor and Morrison identify the crux of the problem with our health care system. The layers upon layers of regulation, eligibility, and claims distances consumer and provider. It creates insurmountable obstacles to receipt of quality care and, while some interests do benefit greatly, the country itself suffers.
    Perhaps providers can go out on a limb, or rather, take a step back and charge on a fee-for-service basis. . . no insurance required. What if providers advocated for catastrophic type insurance plans rather than complete coverage?
    Certainly this will not work for all, but for the masses of healthy individuals shelling out thousands each year only to be seen once or twice by a provider it makes sense. This would require some changes within offices. Billing specialists would be unnecessary and costs of office visits would need to be decreased.
    Now that many health Americans are taken out of the equation, those who do experience chronic or even transient, sever illness prior to being Medicare eligible may purchase coverage that appears similar to what the state-mediated exchanges are intended. Finally, those who cannot purchase coverage may be eligible for the same benefits as Medicare.
    I am interested in simplifying the system as it restores what is lost on all of this complex parry of which we are all part. . .the patient-provider relationship that results in quality care.
    Perhaps these ideas are not entirely possibly, but I believe them to be worthy of being explored. In particular, moving toward fee-for-service practices allows providers the freedom to determine necessary treatment not bound by what will or will not be covered.

  33. Nate, take us to 100 comments here (irrespective of whether they will provide anything of constructive utility). C’mon, bro’, Illuminate for us. Tell us exactly how “page count” is instructive.

    • I suppose if the bill was only 2 pages long because it didn’t spell anything out, then there would be no complaints that there was so much “hidden agenda” or that “nobody knows what was in it”. The CBO managed to publish plenty of analyses on the various iterations of the Bill between fall of 2009 and March of 2010 when it was passed.

      ” I didn’t have time to do my homework, therefore I feel it shouldn’t count” never went very far when/where I went to school.

  34. http://www.mbnlaw.com/our-thoughts/tag/ppaca

    The key provisions of the new laws include insurance coverage reforms, individual health plan mandates, and employer “play or pay” mandates. The two bills total over 2,300 pages and the regulations that will be issued to govern enforcement of the laws will likely be voluminous.

  35. The PPACA, as amended, spans 2,409 pages. Approximately 1,000 of these pages apply to Medicare, Medicaid, transparency or program integrity. The number of pages created during the regulatory process now beginning will easily expand to ten times this amount.

    BobbyG I think the Democrats in the Senate would be the last people to count on to know.

  36. Have you tired posting as text instead of a hyperlink? I think/hope we all know how to cut and paste

  37. “And to Bobby G, to spew your repetitious link of the Pelosi sound bite”

    Just correcting you. Deal with it. You misquoted her. I corrected you. End of debate.


    And, no, to correct you yet again, I am on record as not being a fan of the corporate welfare + outright welfare that largely comprises the PPACA. Unlike YOU, I am personally traceable, as are my writings

  38. I tried to read the thread for the past 24 plus hours and have come to again realize that people who just pontificate and regurgitate the same rhetoric in 30 separate statements are not interested in debate, but just decapitate. The pro PPACA speakers are ingrained in their legislative zeal to demand we all capitulate to this purely partisan agenda, while the equally overzealous and intolerant right that now runs the House are just focused on the status quo, except their status quo is that of the 1950s, so us in the middle who are living in 2011 and wanting to work on a middle ground to reel in health care expenses and interventions just get blasted and trampled.

    You all suck! And to Bobby G, to spew your repetitious link of the Pelosi sound bite and then tell me you don’t favor the Democrats and the legislation is so hypocritical, but whatever reality you live in, I am glad I am not there with you.

    There will be no efficacious resolution to this crisis that is health care and it’s real puny efforts for relief and control of costs ,as offered by corrupt and uncaring politicians, as long as the current leadership and extremist followers, or more realistically the covert operatives who control the alleged leadership of both parties, just pontificate and gesticulate away. And we read their sound bites here every freakin’ day!

    When both parties address Social Security and Medicare entitlements, and that is what they both are, then we will see some chance of change for the better. Face it, you want to extend the lifespans of people beyond what is the natural order of our species, and expect the young to literally sacrifice for this unnatural extension of life, the costs are multifactorial.

    And don’t look for the majority of boomers to think differently and redirect the nation’s outlook. They are, and unfortunately I am in this pathetic generation, as selfish, narrow minded, and so devoid and blantant examples of lack of vision, it will probably destroy what is the society of the U.S.

    But, what do I know, having listened to this lame B.S. dialogue for the past 30 years as an adult, US citizen, doctor, and reader of current events.

    Hey, at the end of the day, we’ll just keep having to learn what is in the bill so we can all appreciate the lack of vision and concern for the public’s well being, solely brought to you by Democrats, the most recent example of power without balance that shows you corruption does not bias by party, gender, or age!

      • This a response from someone who alleges to work with physicians and claims to be interested in the welfare of the public, who only defends in the end the agenda of PPACA and attacks anyone who deters from his agenda.

        Yes, I am a physician, and I think you suck! Gee, you think doctors can’t have harsh feelings about those who are focused on ruining health care?

        That is how you come across to me. Your retort, sir?

    • “There will be no efficacious resolution to this crisis that is health care and it’s real puny efforts for relief and control of costs ,as offered by corrupt and uncaring politicians, as long as the current leadership and extremist followers, or more realistically the covert operatives who control the alleged leadership of both parties, just pontificate and gesticulate away.”

      Actually, there will be no efficacious resolution to the crisis in health care costs as long as
      1) the average age of the population continues to rise
      2) older people have more ailments than younger people
      3) medicine continues to make advances converting quickly fatal diseases to chronic ones (e.g. diabetes, HIV infection, etc.)
      4) people who have such diseases prefer to survive rather than die
      5) big mutual funds etc. who invest in drug companies and medical equipment companies demand a healthy profit every quarter
      6) people who have their retirement money in big mutual funds demand a healthy profit every quarter

  39. Well, Nate, maybe not much longer for this thing to be settled. Virginia has petitioned the US Supreme Court to look at their case before it goes to appeal, and it seems that the Court will be reviewing that request on April 15.

    I have the same problem as Peter so I cannot post the links, but it’s Case No. 10-1014, so you can search the docket and see the last entry on March 23.

  40. Peter, if Obama told you in order to stop global warming we are all going to trade our cars for Unicorns you would be the first in line wouldn’t you?

    26 states are suing to repeal the bill, if Obama wants to work with them he can start by repealing it.

    None of what your posting has anything to do with the mistakes you made anyways.

  41. Yanga, MD I hope you know more about medicine then you do insurance. Where do you doctors come up with this crazy BS?

    “. It behooves an insurance company to make a complex system so that claims are not billed efficiently ”

    Claims are paid in 7-14 days by most major insurers and most pay electronically now so you lose the float from the mailman. Lets be generous, and keep the math simple, and say they get 30 days float. These days carriers aren’t making anywhere close to 6% but it keeps the math simple. On a monthly basis they might make .005% interest. If the average claim is $200 that means they are making $1. In reality your probably closer to a quarter if that. Every time you deny a claim by law you have to send an EOB, that’s $0.40 to $0.50 alone. I’ll be generous and say the doctor gets their responce electronically and pretend that doesn’t cost anything. Then when the claim is processed a second time they need to mail another EOB so they just lost money.

    Then what happens if a doctor or member calls to discuss the denied claim, you can’t answer a call for under a $1. There is no money to be made by delaying payment of claims. In fact it is common knowledge in the industry paying claims promplty saves money. Once claims get close to 30 days doctors start to bill, people call for status. Its very expensive to have a back log or deny claims.

    • The NYSE processes billions of transactions on a daily basis. I would use that market place as a better model of efficiency. If insurers wanted to become more efficient, they could give all their patients debit cards that can clear in 1 day. Then we can skip all mail carriers and phone personnel costs. There is a reason this does not happen.

      Float is not simple pass-through money with only bank interest being accrued. United Healthcare (this is from their latest 10K, pg 49) had $14.9 billion in cash sources from their 2010 operations. They used $7.8 billion to buy new investments (typically high grade debt securities – not sitting in the bank), $2.3 billion for acquisitions (new business investment), $2.5 billion in stock repurchases (equity investment), $1.58 billion in retiring corporate debt, $878 million in property, equipment and software (real estate and asset investment), and $449 in dividends to shareholders. They use float to expand their business, fund investment, buy real estate and buy equity. After these activities, UNH continues to hold $25.7 billion in cash and cash equivalents (and will like get another $10 billion this year to invest while maintaining these reserves). There is a reason their stock is up 12% annualized over the last 15 years. It’s not from being the most efficient payer of claims. (BTW, this is better than Berkshire Hathaway’s 15 year return of 9% annualized.)

      I appreciate peer-review. My numbers are from UNH’s 10-K and Morningstar’s total return for UNH and BRK.A. If you have better actual numbers to explain United Healthcare’s float or the float from another major insurer like Aetna or Wellpoint, I would like to review your work and understanding on the subject.

      • “The NYSE processes billions of transactions on a daily basis. I would use that market place as a better model of efficiency.”

        Any idea how big of a data set a stock trade is compared to an 837? With a stock trade you also have two interested parties making sure it is right. With 837 only the provider and insurer cares, so the insurer needs to collect enough additional information to validate the legitimacy. If it was just transactions between patients with their own money and the provider it would work, i.e. HSA accounts.

        “If insurers wanted to become more efficient, they could give all their patients debit cards that can clear in 1 day.”

        We are currently suffering a small problem with fraud. It’s already running around 100 billion a year. You’re proposing we do away with all fraud prevention and auditing so doctors can get paid in 24 hours instead of 10 days. What exactly do you think is going to happen with the rate of fraud if providers can swipe a card, collect the money, and be out of country before the payor even knows about the charge? People are more protective of their own money then the insurance companies. If they had debit cards that would just pay for everything in 24 hours you would bankrupt the system in a year or two. You really need to consider the real would response to such a change and the consequences.

        Are you aware United Health sells more than just health insurance? Health Insurance has a much shorter hold time then other insurance. For example, life insurance you need to reserve for and invest the premium for decades. LTD is long term. STD is medium. Annuities are also long term investments. After you build your regulatory reserves your not holding health insurance premium for even a year. The portion allocated to large claims might sit for a few months but that’s it.

        If you wanted to make a killing on float you would not be in first dollar health coverage. The reinsurance market use to be very sensitive to market returns. Their where carriers targeting 90%+ loss ratios in the late 90s because they could make enough money on the float until the large claim was paid to be profitable. Its been over a decade since we have seen that. Life insurance is obviously a market when you get to sit on large sums of cash for long periods of time. The other is P&C risk like home owners or some environmental liabilities.

        I can guarantee you payors don’t deny or delay claims chasing extra float, the numbers don’t work.

  42. “oh…thats right, we can’t look at the rules becuase they don’t exist ANYWHERE but in the Obama Administration.”

    Since I can’t post a link without get a “waiting for moderation” notice I’ll have to post the contents of the link for you Nate, if you bother to read it, as I can see you didn’t read the above “Waiver Criteria”.


    Statement by
    Steven B. Larsen, J.D.,
    Deputy Administrator and Director
    Center for Consumer Information and Insurance Oversight
    Centers For Medicare and Medicaid Services

    Obamacare: Why the need for Waivers? (Annual Limits Bridge Program)

    U. S. House Committee on Oversight & Government Reform
    Subcommittee on Health Care, District of Columbia, Census, and The National Archives
    U.S. House of Representatives

    Tuesday, March 15, 2011

    “Chairman Gowdy, Ranking Member Davis, and Members of the Subcommittee, thank you for the opportunity to discuss the Department of Health and Human Services’ work implementing the Affordable Care Act. I serve as Deputy Administrator and Director of the Center for Consumer Information & Insurance Oversight (CCIIO) within the Centers for Medicare & Medicaid Services (CMS). Since taking on this role, I have been involved in CCIIO’s implementation of many of the provisions of the Affordable Care Act, including overseeing private health insurance reforms, assisting States to implement Health Insurance Exchanges (Exchanges), and ensuring that consumers have access to information about their rights and coverage options. Prior to becoming the Director of CCIIO, I served as the Director of the Office of Oversight within CCIIO, which is charged with working with the States to ensure compliance with the new insurance market rules, such as the prohibitions on rescissions and pre-existing condition exclusions for children, as well as ensuring consumer value for premium payments through the medical loss ratio standards and the enforcement of the new restrictions on annual dollar limits on benefits.

    As a former State Insurance Commissioner, I understand the key role that States play in the regulation of insurance and insurance markets. I have seen first-hand the importance of holding insurance companies accountable, and understand the need to make quality, affordable coverage more accessible to all health care consumers. I have also served as an executive in a for-profit, publicly-traded managed care company, and understand the need for competitive and robust markets as well reasonable regulations. The Affordable Care Act appropriately balances these objectives.

    At this time last year, Congress passed and the President signed into law the Affordable Care Act, which expands access to affordable, quality coverage to over 30 million Americans and strengthens consumer protections to ensure individuals have coverage when they need it most. Immediate reforms include a critical foundation of patients’ rights in the private health insurance market that help put Americans in charge of their own health care. Over the past year, we have already implemented historic private market reforms including eliminating pre-existing condition exclusions of children, prohibiting insurance companies from rescinding coverage absent fraud or intentional misrepresentation of material fact and from imposing lifetime dollar limits on coverage, and enabling many dependent young adult children to stay on their parent’s insurance plan up to age 26. The Affordable Care Act also established new programs to expand and support coverage options, including the Pre-Existing Condition Insurance Plan (PCIP) and the Early Retiree Reinsurance Program (ERRP).

    Beginning in 2014, State-based health insurance Exchanges will improve access to affordable, quality insurance options for Americans who previously had no health insurance coverage or inadequate coverage. The Exchanges will make purchasing private health insurance coverage easier by providing individuals, families, and small businesses with “one-stop shopping” on a single, easy-to-use website. On the website, American consumers, businesses, and other organizations will be able to compare a range of plans. Eligible individuals will also have new premium tax credits and cost-sharing reductions available to them to make coverage more affordable. By increasing competition between insurance companies and allowing individuals and small businesses to band together to purchase insurance, Exchanges will help to lower health care costs for consumers.

    Today, millions of Americans are already benefiting from the Affordable Care Act. Many parents across the country are able to protect their dependent young adult children by allowing them to stay on a parent’s plan until they are 26 years old. We estimate that, in 2011, more than 1.2 million young adults will be able to maintain insurance coverage through their parent’s health plans because of this new policy. This is an important protection for these young adults and a huge relief for their parents.

    We estimate that more than 31 million Americans will benefit from the preventive services provision of the Affordable Care Act, which requires that important early detection services like mammograms and colonoscopies be available to Americans enrolling in new plans without expensive co-pays or deductibles. Furthermore, insurers are no longer permitted to rescind insurance policies simply because a consumer made an inadvertent error on a form. These changes are putting consumers back in charge of their health care and getting insurers out from between patients and their doctors.

    Consumers can also use an important new tool to gain access to an unprecedented amount of information about insurance options and public programs available to them by zip code. In eight months, http://www.HealthCare.gov has had more than 4 million visitors and the number of insurance options listed continues to grow rapidly. Visitors can get information in plain English – and Spanish – about the coverage options available to them, their protections, and their rights as health care consumers.

    As mentioned previously, States play a crucial role in the implementation of the Affordable Care Act. Since enactment, we have worked actively with the Governors, insurance commissioners, Medicaid directors, and other stakeholders to implement programs that are helping consumers and businesses with coverage. It has been our priority to work collaboratively with our State partners as the provisions of the Affordable Care Act go into effect.

    States were critical to our efforts to write regulations implementing the new medical loss ratio provisions of the Act. The National Association of Insurance Commissioners (NAIC) worked for nearly six months to develop uniform definitions and methodologies for calculating MLR. Their process included significant input from the public, States, and other key stakeholders, and was approved unanimously by the NAIC Commissioners. HHS certified and adopted the NAIC recommendations and the reaction from consumers and insurers has been very positive. Starting this year, insurers must spend at least 80 or 85 percent of premium dollars, depending on the market, on health care and quality improvement efforts instead of CEO bonuses, profits, or marketing. And those that do not meet this standard will be required to reduce their rates or provide rebates to their customers. In addition, the Department recognizes State flexibility. The law allows for a temporary adjustment to the individual market MLR standard if the State requests it and demonstrates that the 80 percent MLR standard may destabilize their individual insurance market.

    This MLR provision ensures consumers receive value for their premium dollars and encourages insurers to invest in the health of their policyholders, while maintaining insurance market stability. There are signs that this provision has already helped to moderate premium increases.

    Rising insurance costs have made it difficult for American employers to provide quality, affordable coverage for their workers and retirees while also remaining competitive in the global economy. The Early Retiree Reinsurance Program serves as one bridge to the new Exchanges that will become available in 2014. Many Americans who retire before they are eligible for Medicare and without employer-sponsored insurance see their life savings disappear because of the high cost of insurance in the individual market. Millions more see their insurance disappear, leaving them vulnerable to high costs and poor quality care. The ERRP provides much-needed financial relief for employers so early retirees and their families can continue to have quality, affordable insurance. More than 5,000 employers – including many State and local governments – have been accepted into the program from all 50 States and the District of Columbia.

    The Pre-Existing Condition Insurance Plan program is another bridge to 2014, when all Americans, regardless of health status, will have access to affordable coverage. PCIP provides a lifeline to uninsured Americans who private insurers have refused to insure because of a pre-existing condition. These Americans can now receive health coverage without limitation on benefits or higher premiums because of their condition. Thousands of Americans who were locked out of accessible private insurance coverage before the passage of the law now have this valuable and needed coverage. I’m pleased that enrollment has increased by 50 percent in the last few months, and we expect it to grow. The Department is actively working with States, consumer groups, chronic disease organizations, health care providers, social workers, other Federal agencies, and the insurance industry to promote the program, including holding meetings with State officials, consumer groups, and others.

    Finally, for Americans who receive insurance in the individual and small group markets, the Affordable Care Act should result in more protections from unreasonable rate increases. The law provides $250 million to strengthen States and Territories’ ability to review proposals by private health insurance companies to raise their rates for small businesses, individuals, and families. Since enactment, $45 million has been distributed to 44 States and the District of Columbia, and, in February, $205 million in additional funding was made available to States, the District of Columbia, and Territories to continue such efforts. We are committed to working with States, the District of Columbia, and Territories, who are the primary regulator of insurance rates and solvency.

    The Bridge to 2014

    As Director of CCIIO, I am committed to continued improvement of the health insurance system so that it works for consumers both now and with the additional reforms that start in 2014. It is essential that we make sure that Americans who have insurance today – even if that insurance is highly limited – can keep that coverage until reforms take effect that will increase their ability to choose among comprehensive, affordable insurance options in 2014.

    As part of our package of consumer protections called the Patient’s Bill of Rights, we began implementing the Affordable Care Act’s phase-out of limited benefit insurance products – a subject area that you have asked me to discuss. When consumers are covered under health plans with limited benefits, consumers do not always have access to coverage when they need it. In some cases, policies have “lifetime” dollar limits on benefits, and in some cases, insurers have “annual” limits or dollar-amount caps on what the policies will pay during a single year for the benefits that they cover. In 2009, over 100 million Americans were in private health insurance plans with a lifetime limit, and roughly 18 million Americans were enrolled in a plan with an annual limit.

    The Affordable Care Act prohibits lifetime limits in all health insurance plans starting in new plan years on or after September 23, 2010. It also provides that, as of January 1, 2014, no group health plan or any individual market plan that is not a “grandfathered” plan may have annual limits on coverage. However, Congress recognized that there should be a transition period between now and 2014, when the Exchanges will be up and running, during which annual limits would be phased out. Section 2711 of the Public Health Service Act provides that group health plans and issuers may continue to impose a “restricted” annual limit with respect to essential health benefits until the consumer protections take effect in 2014. More importantly, the statute directs the Secretary to define “restricted annual limit” during the interim period in a way that will “ensure that access to needed services is made available with a minimal impact on premiums.” This statutory directive recognizes that, for some health plans, an immediate transition to high or no annual limits could significantly raise premiums or reduce coverage with adverse consequences. Therefore, the Secretary must address this concern in implementing the provision during the transition years between passage of the Affordable Care Act and the availability of new quality, affordable options in 2014.

    In June of last year, we issued regulations providing that the “restricted annual limit” is $750,000 for group and non-grandfathered individual plans with plan and policy years starting between September 23, 2010 and September 22, 2011. In other words, plans must provide at least $750,000 in coverage for essential benefits such as hospital, physician and pharmacy benefits. The limit will be $1.25 million for plan and policy years starting between September 23, 2011 and September 22, 2012, and $2 million for plan and policy years starting between September 23, 2012 and December 31, 2013. The rising restricted annual limits will increasingly ensure that consumers have coverage when they really need it.

    Most group health plans either already exceeded the new restricted annual limits or could comply with the new restricted annual limits with a negligible or minimal impact on premiums or coverage. However, a very small percentage of the market provides coverage below the new annual limits. It is this small percentage of policies in particular that, without an accommodation, would sustain more than a “minimal” impact on premiums or coverage if they were required to provide coverage at or above the annual limits provided for in the regulation.

    To be sure, limited benefit plans (also known as “mini-med” plans) can leave consumers with unexpected medical bills in the event of hospitalization or chronic disease. Unfortunately they are the only option that some employers offer to their employees and some individuals can afford in some States. In order to protect coverage for these workers, pursuant to the statutory requirement, CCIIO established a process whereby those plans with annual limits below $750,000 could apply for a one-year waiver from the restricted annual limits. The waiver process, which is grounded in our regulation and fleshed out in subsequent guidance, allows employers and insurers to continue offering limited coverage if they can show that complying with the regulation would cause their enrollees to experience a significant increase in premiums or decrease in access to benefits.

    The waiver procedure is administered fairly based on each application’s merits without regard to the type of applicant or size of business, with the goal of minimizing market disruption and maintaining coverage. Guidance on how to apply for a waiver was posted on our website on September 3, 2010. Applicants must submit: 1) the terms of the plan; 2) the number of enrollees; 3) a description of the annual limits; 4) a narrative describing how compliance would lead to a significant increase in premiums or a significant decrease in access to benefits; and 5) an attestation of the facts of the application by the CEO or plan administrator.

    We have posted additional guidance detailing the criteria CCIIO uses to determine if the premium increase or access decrease would be significant. Further guidance also lays out specific disclosure requirements that approved applicants must meet. Approved applicants must notify enrollees and potential enrollees of the plan’s annual limits and the fact that the plan does not meet the standards of most plans covered by the Affordable Care Act. This notice is designed to ensure that consumers are aware that their coverage may be inadequate in the event of a catastrophic event or chronic disease.

    The annual limit waiver process has been carried out in a way that reflects a commitment to transparency and responsible implementation. CCIIO regularly posts a list of approved annual limit waivers. The list includes the name of the company, the date their application was received, the plan effective date, the number of enrollees covered, the date the application was completed, and the date the waiver was approved.

    After we initiated the process in September, applications were received at a relatively steady rate. However, we experienced an expected increase in applications in December, due to the fact that employers and insurers must submit their applications 30 days before the start of their plan year. Many plan years begin on January 1; for that reason we received a large number of applications at the beginning of December. CCIIO worked very hard to ensure that we could process those applications and make timely decisions with respect to these applicants.

    As of late February, CCIIO has approved 94 percent of waiver applications received from employers, insurers, and other applicants. The vast majority of waivers, more than 95 percent, were granted to health plans that are job-related. These include self-insured employer health plans, health reimbursement arrangements, collectively-bargained multiemployer plans, and health plans sold by issuers to fully-insured employers.

    It is important to note that these limited benefit plans that have received waivers cover an extremely small proportion of the people covered by private health plans in the United States. Since setting up this program, CCIIO has granted waivers to plans covering approximately 2.6 million people, out of the 160 million people who have employer-sponsored health coverage.[1] This figure is less than 2 percent of all covered lives in the private insurance market.

    Moving Forward

    Until now, very little data were available about these limited benefit plans. We are now analyzing the data we have received through the waiver process and have begun determining what approach we should take for plan years beginning September 23, 2011 and beyond to 2014. We will continue to work in a manner that minimizes market disruption and ensures Americans have health coverage. The overriding purpose of this waiver program is to ensure that Americans do not lose their health coverage before better health insurance options become available in 2014.

    As we lay the groundwork for 2014, it is our intention to continue implementing vital consumer protections while offering enough flexibility to ensure that the market is not disrupted. We are proud of all that we have accomplished over the past year and look forward to 2014 when Americans will have access to more affordable, comprehensive health insurance plans without annual limits that cap their benefits. When the insurance market reforms in the Affordable Care Act are fully implemented, limited benefit plans will be a thing of the past.

    In the meantime, I look forward to continuing to work on our bridge toward 2014, year after year, strengthening CCIIO’s partnership with Congress, the States, consumers, and other stakeholders across the country. Thank you for the opportunity to discuss the work that CCIIO has been doing to implement the Affordable Care Act.”

    You see Nate, the administration is working with states (at their request) and companies, (at their request) to implement this law. As stated before (it seems in your old age you have impaired short term memory) If the administration was rigid you’d be flailing away at them for that. Take a pill Nate.

  43. Just wanted to add a perspective to the mix. Complexity is a symptom, not a diagnosis. The diagnosis as to why we have so much complexity can be found in the insurance concept of “float.” Investing float (monies held by the insurance company that is not paid out immediately) is how an insurance company makes its profits. It behooves an insurance company to make a complex system so that claims are not billed efficiently (how many coding errors are made in billing?) or paid efficiently. The government does a different variant of this by spending today’s healthcare tax dollars into other immediate priorities (like creating loopholes so that GE does not have to pay any corporate taxes) and deferring payments for healthcare (by accruing more debt, raising the debt ceiling, etc).

    Investors know and utilize the concept of float very well. It’s why Warren Buffett is one of the richest men in the world (Berkshire Hathaway owns GEICO. Mr. Buffett has the privilege of investing billions of dollars of float). Automatic Data Processing (ADP) makes it’s money off of investing the float from their HR operations. The point is that insurance companies will make money for the advantage of their shareholders; complexity will reign because it allows them to make more money. The government will also use healthcare tax dollars for their own political purposes and complexity allows them to fund their projects instead of efficiently paying claims; they also cannot be trusted with float.

    To reduce complexity in the system, float has to be controlled and limited. The only long-term solution to reduce healthcare complexity is for patients and providers to have a more direct financial relationship that limits the ability for third parties to control larger and larger sums of money (float).

  44. comic relief can be of great value and service. There could be someone right now having an epiphany, made possible by the clear mind of a good laugh. They won’t give you or I any credit of course but we will know.

    In regards to the quote do you believe it holds true more often then not? It does pretty well sum up most religious and popular movements. I would be much harder to come up with leaders who countered the argument then those that did. I don’t know when it was written but Pol Pot, Moa, Hitler, Stalin all had millions die under their….ideology? or what ever you want to refer to it.

    Besides mid evil heros riding back and forth on their horses in movies who ever has asked for sacrafice and given it?

  45. “You cannot. You are just the village flame-thrower here.”

    First what is a village flame thrower? Where these common at some point in history? Second do you not see the connection between you making attacks like this and then them comming back at you?

    Let me try to defer to your suggested etiquette, when referred to a village flame thrower in the course of civil debate what is acceptable retort? May I refer to you as a flame lighter? Or thrower enabler? Calling you a flame catcher seems demeaning so I won’t use that. It appears you want to lob these attacks but expect, no demand, that I won’t respond likewise?

    • OK, nate, our escalating little scrap is not adding any value to the topic here pertaining to the egregiously suboptimal complexity of the U.S. health care industry.


  46. “You are on a hair-trigger to take offense.”

    Quit the contrary you would be very hard pressed to offend me. I can’t recall ever being offended by something someone said to me on THCB, I think they frequently offend common sense and truth on here all the time but personally it doesn’t bother me.

    ” It’s because you reflexively dish out attacks on others here. ”

    After being attacked. Your displaying that liberal, “OMG the person I just said mean things about just responded back with a mean comment” shock again. Conservatives and people on the right are denegrated constantly, for years we were polite and didn’t stup to your level, now we give it back and you break down crying like a toddler.

    ” That was a general point aimed at the Ayn Rand crowd ”

    That argument is very suspect with your inclusion of my leeches references. I haven’t read Ayn Rand so I don’t know if she frequently referenced leeches, if so your timing was terrible. I hear she was a great writer do you suggest reading her books?

    “the most extreme of whom indeed advocate indifference to the plights of others.”

    Is this unique to the Ayn Rand crowd? I can think of many many liberals that also fit this bill. In words and even more in pratice.

    • I have her execrable books, and have read them. Hack pieces meant to purvey her lifelong Dr, Phil and Oprah issues railing against any wafts of “socialism.”

      “It only stands to reason that where there’s sacrifice, there’s someone collecting the sacrificial offerings. Where there’s service, there is someone being served. The man who speaks to you of sacrifice is speaking of slaves and masters, and intends to be the master.”

      Well, there goes parenting.

  47. “That is an absurd, juvenile, and useless low blow.”

    But this is not?

    ““to someone whose “values” dictate that “leeches,” having not provided sufficiently for themselves, ought die at the ER curbside worst case”

    If your going to guess at someone’s values then attack those assumed values should you really cry when you get it back? Your taking a page out of the Huffington Post playbook, one set of rules for your self and those you agree with and a much higher standard you hold everyone else to. Please note my comment was in direct responce to yours.

    How personal of a level meets your qualification? Obviously as a male I have never had one but I have had the terrible experience of taking a friend to one and home after. Not something I would ever want to do again or see anyone I cared about have to go through.

    If you wish to avoid anymore offensive caricatures I would suggest not using them. That whole glass house and throwing stones thing.

    FYI it was a NHS reference not abortion. As part of their uber efficient, better then ours, healthcare system they don’t recusitate babies under 22 weeks, they don’t consider then viable. Personally I rather a drug addict die of an overdose then a baby not be given every chance at life.

    • You are on a hair-trigger to take offense. It’s because you reflexively dish out attacks on others here. That was a general point aimed at the Ayn Rand crowd, the most extreme of whom indeed advocate indifference to the plights of others.

      • And, again, find for me where I ever once referred to you as a “monster.”

        You cannot. You are just the village flame-thrower here.

  48. “Obviously we can all see why you prefer to call it charity instead of what it really is.”

    Oh no, Nate. I don’t want to call it charity and I don’t want it to be charity. Nobody in this country should be reduced to begging you to give them $10 to eat or see the doctor, while the government is pouring trillions of dollars into making life better (or so it says) for other unfortunate folks around the world and the top 1% of folks back at home are getting richer every day, and corporations, including health care systems, are posting record profits in a recession, which seems to be limited to the working class.

    I don’t have a problem calling it wealth redistribution, because wealth is currently, and has been for quite some time, accruing in a very lopsided fashion to only one small sector, and that sector does not include your “hard working” citizens. It is government’s job to step in whenever the Barons are getting carried away, and the time has arrived, again.

    I am not interested in a system that requires character checks before benefits of citizenship, constitutional rights and human rights are applied. Those particular regimes have been tried and they all failed.
    Just like the firefighter showing up at your burning mansion is not supposed to verify your non-smoking, drug-free, alcohol-free status before he turns on the hose, you have no business inquiring into poor people’s morals and habits before allowing them to receive medical care.

  49. Peter you don’t seem to know what the word temporary means. What is temporary about the state waivers originally scheduled for 2017 now potentially being moved up to 2014?

    “paint this as willy-nilly no rules”

    Well lets look at the rules and see who is right…..oh…thats right, we can’t look at the rules becuase they don’t exist ANYWHERE but in the Obama Administration. No one outside the Administration knows the guidelines and rules to qualify for these waivers, we just have vague standards that leave the administration tons of room to accept or reject an application. Good thing we aren’t dealing with 1/6th of the economy or anything.

    Lets discuss reason. Why write a provision to a bill outlawing annual limits if you turn around and give 20% of the people waivers? Your argument is your just giving them time till promised better options become available in 2014. Excuse me for using common sense then why not just leave out the entire requirement until 2014? Why create the entire waiver process and put everyone through all the extra work in the first place? I’m not sure you have a grasp on reason so this most likly makes no sense to you at all.

    ” There are also temporary waivers for companies who have special circumstances”

    LOL you sound like Margalit here, if everyone has circumstances are they really special? Over 2 million people already covered by these special circumstances, out of a total 5-10? million.

  50. “We have waivers coming and going for as long as this bill is in place, the whole bill is nothing but smoke and mirrors.”

    No Nate, your mind is nothing but smoke and mirrors who tries to paint this as willy-nilly no rules, no reasons. If the feds did not grant waivers (temporary) you’d be screaming about their inflexibility. You have already said you think the states should handle health care reform, so the feds are giving them an opportunity to do that and in the transition there are temporary waivers with rules. There are also temporary waivers for companies who have special circumstances and need time to adjust to the law. Would you be happy with federal inflexibility?

  51. “Nate, do you even read anything except your own prejudicial ramblings?”

    Yes Peter I read you say;

    “The waivers only apply to one provision of the law – the provisions phasing out annual limits”

    This was incorrect, one waiver already granted applied to MLR. Then you link 5 other itmes waiver will/can apply to.

    Not sure I understand your point?

  52. Nate, do you even read anything except your own prejudicial ramblings?

    “Maine has received a waiver from the new Patient Protection and Affordable Care Act (PPACA) minimum medical loss ratio (MLR) provisions.”

    “Maine’s insurance superintendent Mila Kofman requested the waiver last year after Megalife, one of just three health insurance companies that sell individual, nongroup coverage in Maine indicated it might leave the fragile individual market here if the new medical loss ratio were implemented. That would have left some 14,000 Mainers looking for new, and likely more expensive, coverage. The two other companies that sell individual coverage are Anthem Blue Cross and Blue Shield of Maine and the nonprofit Harvard Pilgrim company that administers the subsidized DirigoChoice program.

    In an 18-page letter announcing its decision Tuesday, DHHS administrator Steven Larson reflected on volumes of financial data submitted with Kofman’s waiver application. He granted the 65 percent modification through the end of 2013, pending the submission of updated actuarial data in 2012.”

    “North Dakota has joined a handful of states in asking the Obama administration for relief from a provision of the landmark healthcare law enacted almost a year ago.

    The state’s insurance commissioner late Friday filed for a temporary waiver from a new healthcare reform regulation that limits the amount insurers can spend on overhead.

    The so-called “medical loss ratio” rule requires insurers to spend at least 80 percent (85 percent in the large group market) of premium dollars on care or provide a rebate to customers for the difference.

    North Dakota’s insurance market would be “destabilized” if insurers didn’t have time to adjust to the new regulation, state insurance commissioner Adam Hamm wrote to Health and Human Services Secretary Kathleen Sebelius. Hamm advocates for a gradual phase-in of the new insurance regulation, according to the waiver request obtained by The Hill.

    “Given that several of the companies selling individual policies in the state are relatively small and new to our market, the need for sufficient adjustment time is even more critical,” Hamm wrote.

    North Dakota currently applies a 55 percent medical loss ratio standard. Hamm wants to the state to gradually meet the federal target, with 65 percent in 2011, 70 percent in 2012, 75 percent in 2013 and 80 percent in 2014.”

    “In order to qualify for a waiver, a state’s proposal must be able to demonstrate that resulting coverage will be at least as comprehensive as coverage through a state health insurance exchange. Benefits must be as generous as those provided by qualified health plans through an exchange, and premiums and cost sharing must make coverage at least as affordable as that provided under the ACA. Furthermore, the state’s plan must be budget-neutral and must assure that a comparable number of residents will be covered.”

    “Waiver Criteria

    In order to apply for a waiver, states must enact a law and comply with federal regulations that ensure appropriate public notice and transparency. States also must demonstrate that, if the waiver is approved, the state’s plan will provide coverage that:

    * is at least as comprehensive as the coverage that would have been provided under the ACA;
    * is at least as affordable as the coverage and cost sharing protections under the ACA;
    * covers at least as many residents as would have otherwise been covered under the ACA; and
    * will not increase the federal deficit.

    Public Notice, Application Content

    Consistent with what is required by the law, the proposed rule says that an application must include the following:

    The provisions of law that the state seeks to waive:

    * the provisions of the law that the state seeks to waive;
    * an explanation of how the proposed waiver will meet the goals related to coverage expansion, affordability, comprehensiveness of coverage, and costs;
    * a budget plan that does not increase the federal deficit, with supporting information;
    * actuarial certifications and economic analysis to support the state’s estimates that the proposed waiver will comply with the comprehensive coverage requirement, the affordability requirement, and the scope of coverage requirement; and
    * analyses of the waiver’s potential impact on provisions that are not waived, access to health care services when residents leave the state, and deterring waste, fraud, and abuse.

    Under the proposed rule, states with waivers submit quarterly and annual reports. They track measures in the four key areas: affordability, comprehensiveness of coverage, the number of people covered, and impact on the federal deficit.”

  53. “Or is it irrelevant because charity should only be given to the deserving virtuous, who don’t smoke, don’t drink, don’t engage in promiscuous sex”

    If you have $10 to smoke and drink then you shouldn’t be begging me for $10 to eat. When you redirect money like you want to Margalit, away from those that earn it and to those that waste it, then you’re no longer practicing charity, your engaging in wealth redistribution and vote buying. Obviously we can all see why you prefer to call it charity instead of what it really is. The fact that your version of “charity” is actually hurting the people you brag about helping makes it all the more evil.

    “No one anticipated that costs would rise as much as they did.”

    1981: The Omnibus Budget Reconciliation Act of 1981 (OBRA 1981) included provisions to slow the growth in Medicare spending, including a change that resulted in an increase in the inpatient hospital deductible.

    1982: The Tax Equity and Fiscal Responsibility Act (TEFRA) increased the Part B premium to cover 25% of program costs as part of policies designed to slow the growth of Medicare spending.

    1983: The Social Security amendments of 1983 established an inpatient hospital prospective payment system (PPS) for the Medicare program. The PPS is based on diagnosis-related groups, or DRGs, a pre-determined payment for treating a specific condition. The system was adopted to replace cost-based payments.

    1984: The Deficit Reduction Act of 1984 (DEFRA) froze physician fees, established the Participating Physicians’ Program, and established fee schedules for laboratory services, all of which were intended to slow the growth of Medicare’s spending and constrain the federal deficit.

    1985: The Emergency Extension Act of 1985 froze PPS payment rates for inpatient hospital care and continued physician payment freezes to slow the growth of Medicare spending.

    You’re so right Steve, if only someone had seen this problem coming 30 years ago we could have done something. 5-6 years after it started it was clear to everyone it was blowing past its budget, it has never been a surprise regarding the financial woes of Medicare, people choose to ignore it and leave it to the dishonest grandkids Margalit believes should have to suffer for prior generations willful ignorance.

    “It has risen even faster for private insurance.”

    Actually no it hasn’t Steve. Your comparing apples and oranges. In 30 years private insurance has gone from hospital only and scheduled benefit reimbursement that only covered 50% of individuals healthcare expenses to $0 out of pocket preventive benefit laden cover everything plans. Medicare benefits have changed a fraction of what private insurance did, it was 2006 before they even covered Rx. Once you control for the dramatic increase in benefits of private insurance it has performed far better than Medicare.

    “It is then up to the courts to decide what reasonable means. “

    If Congress doesn’t understand the matter well enough to write a clear law then should they be writing the law? Do you think that is how healthcare is managed on other countries? People wonder why healthcare cost more in America, you can start with laws that aren’t written until people are sued. Take COBRA for example, poorly written law by Democrats that didn’t know what they were doing and employers got nailed with billions in lawsuits and some driven out of business.

    “to someone whose “values” dictate that “leeches,” having not provided sufficiently for themselves, ought die at the ER curbside worst case, no aggregation of logic and utilitarian evidence will suffice to trump the a priori position.”

    Compared to BobbyG who rather see 22 week gestation babies left to die in their mothers’ arms so scarce resources can be better spent on lifelong drug addicts kept alive for their votes.

    Fun game isn’t it BobbyG? If I am a monster for preferring innocent babies over drug addicts and people that rather get drunk and smoke then care for themselves then so be it.

    “Brian, do some Googling on “heath care waivers and you’ll find the truth that Fox News won’t tell you.”

    Can Peter stay banned till he learns to do basic research?
    Maine has received a waiver from the new Patient Protection and Affordable Care Act (PPACA) minimum medical loss ratio (MLR) provisions.

    I thought it was only one provision of the law Peter? Maybe you need to watch a little more fox news and be a little better informed? You keep talking about employers and insurance companies, what about the four states that also have waivers, you heard about those right Peter?

    You don’t seem to know about the 2017 waivers Peter, if you watched Fox more you would;

    On February 28, President Obama stated his belief that States should have the power and flexibility to innovate and find the health care solutions that work best for them and announced his support for accelerating State Innovation Waivers and allowing states to apply for them starting in 2014.

    We have waivers coming and going for as long as this bill is in place, the whole bill is nothing but smoke and mirrors. If your connected and play along then you get waivers, if they want to punish you then no waiver for you.

  54. “Nate, they forgot to inform Joe Plumber that his contribution is falling short and they neglected to ask Joe for a larger contribution when he was gainfully employed and most likely able to pay it.”

    Margalit, if only it were so politically easy to do that, but it would require honesty and backbone from our political leaders. Raising FICA is not what most workers want to see, even though it would benefit them in the long run. Medicare cost problems and SS short funding would have been solved a long time ago if contributors saw a relation to entitlement costs and net pay.

    Spineless Obama even “negotiated” away reduced FICA with Republicans which will only delay hard decisions. But we know that Republicans see solution as privatization give-away to Wall Street for SS and health insurers for Medicare – I just wish they’d run on their secret agenda.

  55. Since my last attempt to post was yet again given the death designation, “Your comment is awaiting moderation” I will attempt to make my point another way. Seems posting links to web pages is guaranteed “moderation” censorship. Matthew, can’t you give me a clean poster/non-spam waiver?

    “The more I learn about these waivers, the less I like them…”

    Brian, do some Googling on “heath care waivers and you’ll find the truth that Fox News won’t tell you.

    “To ensure that we protect the coverage that these workers have today until better options are available for them in 2014, the law allows HHS, in extreme cases, to issue temporary waivers from the phase out of annual limits. There are some important facts to remember about these temporary waivers:

    * The waivers only apply to one provision of the law – the provisions phasing out annual limits. Insurance companies and employers that receive waivers must comply with all other parts of the Affordable Care Act.

    * The waivers last one year. Insurance companies must reapply for the waivers each year between now and 2014 when annual limits on coverage will be completely prohibited and individuals will have more affordable and better private insurance choices in the competitive Exchange markets.

    * All employers and insurers that offer mini-med plans may apply for a waiver if they demonstrate that there will be large increases in premiums or a significant decrease in access to coverage without a waiver. You can read a list of employers and insurers that have received waivers”

    “Steve Larsen, a director in the HHS Office of Consumer Information and Insurance Oversight, said the waivers were intended to act as a temporary solution until 2014, when employers will have more opportunities to secure affordable coverage through state-based insurance exchanges that are part of the law. The Obama administration doesn’t want employers dropping coverage on account of the law, a potential outcome if firms were forced to enrich their benefits substantially.”

  56. Wow ~ this was an interesting thread. And we didn’t even start discussing all those waivers yet. Why is it that my brother doesn’t get see the benefits of the law that 98% of the rest of the country does? Because his employer had the political connections to avoid the cost? The more I learn about these waivers, the less I like them…

  57. We need positive suggestions on how we can achieve universal affordable healthcare. Alternatively we can cancel the congressional mandate that all hospitals must provide equal care for everyone who appears in their emergency room. Every week we admit patients with diabetes, renal failure and heart disease that have no insurance and at least claim to be to poor to pay for ongoing outpatient care, do not follow up or take their prescriptions and are back within a month. Thirty percent of people in Harris County Texas have no health insurance and another ten percent at least are on Medicaid which with budget cuts cost more to be seen than most physicians are paid. Meanwhile we have six free standing MRIs in our town of 60,000 owned by physicians or companies that live in upscale neighborhoods in Houston and make millions a year. We already spend twice as much per person as any other country in the world for health care and need a better accounting of where this money is going. I believe we cut legs off and stent hearts rather than pay for diabetic medicine and teaching.

  58. “Government typically underestimates the cost of entitlement programs…”

    Does Government have a better track-record estimating budgets for incidental wars and miscellaneous police actions?

  59. In 1966, the Medicare program cost $3 billion per year. The House Ways and Means Committee at the time estimated that it would cost $12 billion annually by 1990 including an allowance for inflation. The actual cost in 1990: $107 billion. Oops. The current cost is more than $500 billion annually. Government typically underestimates the cost of entitlement programs because when you give people something for nothing or require them to pay far less than it costs to provide, demand is likely to far exceed expectations.

    In any case, it’s only Medicare Part A that is financed by payroll taxes – currently 1.45% paid by the employee and a comparable amount matched by the employer on all wages with no cap. Part B services are financed 25% by beneficiary premiums and 75% from general tax revenues. The same formula applies to the Part D drug benefit. Medicaid is financed jointly by the federal and state governments, completely with general tax revenues. No matter what these programs cost, beneficiaries, as a group, don’t pay anything close to the actual cost of providing the services even if the ultimate costs were not wildly underestimated.

    • Barry, you are right.

      But, then, AIG and everyone else on Wall Street (and, relatedly, the AHIP crowd) egregiously underestimated their risks. Consequent to which we “socialized” the upshot of their venality and incompetence.

      Going forward, we can be assured that government will see to it that the favored classes will not be unduly burdened by financial sacrifice. My 89 yr old mother, on the other hand, Living Large on her $938/mo SS check (out of which comes Parts B and D), must learn do Do With Less.

      • Your mother and me and the rest of our generation that worked hard as did our parents. We didnt have all the new immigrants the last couple of years here then getting free health care like now.Why are be blamed for increase health costs and then bring others in to demand care for nothing.

  60. “? really 40 trillion is a rounding error? They only missed by a few trillion they should be commended? They should be dragged to the street and shot for what they did.”

    No one anticipated that costs would rise as much as they did. It has risen even faster for private insurance. No one anticipated that either. Still, it is difficult to predict 30 years in the future, which is why laws and programs need to be modified.

    Also, just to add to what Booby G said, many if not most bills come out without it being clear exactly what they will do or mean. If you read the legal blogs (let me recommend Volokh’s), many laws refer to what a “reasonable man” would do. It is then up to the courts to decide what reasonable means.


    • A lawyer of my acquaintance once wryly observed that “we spend $100,000 to go to law school for three years to try to learn the meaning of the word ‘reasonable’.”

      “Reason” rightly incorporates three core components: deductive logic (relatively rare, a luxury), inductive inference (fraught with empirical/methodological difficulty at every turn), and “values” (the latter of which comprise the most difficult — the “ought” pieces which extend beyond the “logical/evidentiary” “is/is not” pieces.

      Productive “rational” reasoning in general hinges on honest reasoning going to likely FUTURE outcomes (see, e.g., “Fallacy of Sunk Costs,” Argument to Tradition, ad Populum Fallacy etc).

      But, legislative and jurisprudential reasoning (“construction”) is typically burdened by deference to PAST precedents and, well, “values.”

      You have “legislative construction” (going to deference to the discernable, proper intent of a legislature) and “jurisprudential construction” (“construction” is really just a fancy-schmancy term of art meaning “interpretation” i.e., how do you CONSTRUE some issue with respect to its “meaning” and consequent permissible policy implications). A “strict constructivist” is someone who takes the narrowest possible view, one that comports with his/her interpretation of precedent (Scalia The “Textualist” is the extremist here).

      Apropos of health law policy; to someone whose “values” dictate that “leeches,” having not provided sufficiently for themselves, ought die at the ER curbside worst case, no aggregation of logic and utilitarian evidence will suffice to trump the a priori position.

  61. Nate, they forgot to inform Joe Plumber that his contribution is falling short and they neglected to ask Joe for a larger contribution when he was gainfully employed and most likely able to pay it. Government’s accountants lack of planning should not constitute an emergency for honest tax payers, and most definitely should not be an occasion for calling them leaches.

    So Medicaid folks smoke more than non Medicaid folks. I bet they also have less memberships to gyms and Harry & David’s fruit of the month club.
    I missed the comparable number for non-Medicaid folks who had “a glass of wine with dinner” in the last 30 days. Any idea what that number would be? Or is it irrelevant because charity should only be given to the deserving virtuous, who don’t smoke, don’t drink, don’t engage in promiscuous sex, go to church every day and twice on Sunday and show humility, gratitude and respect to their benefactors?

  62. “These people worked for many years and were lead to believe that they are contributing their fair share”

    Margalit this is not accurate at all, Medicare has been under funded since it started and within 7 years of passage I beleive they were already talking about how it blew past its budget. It has never been a mystery that contributions where no where close to cost.

    “Government should have been slightly better at math,”

    ? really 40 trillion is a rounding error? They only missed by a few trillion they should be commended? They should be dragged to the street and shot for what they did.

    “unrepresentative oddball examples here and there.”

    “as 36 percent of Medicaid enrollees smoke (compared to 23% in the general population).”

    “Thirty-seven percent of working Medicaid recipients reported drinking in the last 30 days.”

    Really Margalit, odd case here and their? Exactly what percentage does it need to hit before you no longer consider it the exception?

  63. “I was in Canada last weekend and their front page headline was Canadian Healthcare Needs Reform.”

    Headline where, what paper, what province, what reform? Throwing out quote from no where about nothing means nothing. Canadians are always discussing their health care system and it’s always changing and adapting – a lot faster than U.S. “system”.

  64. “How do Medicaid and Medicare leaches feel the pain? ”

    As you would expect, I take issue with this choice of words.

    Medicare – It is not the elderly folks’ fault that the Feds miscalculated the required contributions. These people worked for many years and were lead to believe that they are contributing their fair share so they will have medical care in their old age. These are not Nobel Prize winning economists. Government should have been slightly better at math, and it would have helped if they managed finances a little better too.

    Medicaid – You may have an issue with providing for the poor on a national scale, but that doesn’t mean that the poor and needy are collectively deserving of name calling, even if you can come up with unrepresentative oddball examples here and there.

    If you want to talk about leeches, I would suggest a quick scan of the other end of the financial class spectrum.

    • Medicare – It is not the elderly folks’ fault that the Feds miscalculated the required contributions. These people worked for many years and were lead to believe that they are contributing their fair share so they will have medical care in their old age. These are not Nobel Prize winning economists. Government should have been slightly better at math, and it would have helped if they managed finances a little better too.

      Medicaid – You may have an issue with providing for the poor on a national scale, but that doesn’t mean that the poor and needy are collectively deserving of name calling, even if you can come up with unrepresentative oddball examples here and there.

      If you want to talk about leeches, I would suggest a quick scan of the other end of the financial class spectrum.

      Well written

  65. “Yes, THANKS to this bill. If health care costs are is to be controlled and reduced then everyone needs to feel the pain of waste. ”

    How do Medicaid and Medicare leaches feel the pain? There seems to be large blocks of people, oddly the most expensive, that aren’t feeling anything relative to what they contribute.

    “. It was in fact angrily debated, lobbied, and litigated (all of which will continue, too)”

    No not really, health insurance reform was debated and a health insurance reform bill passed, Healthcare reform was barely discussed at all and I don’t see any signifianct changes to healthcare care, which is what drives the cost of health insurance

    • “healthcare care”

      Did you filch that from the CMS Department of Redundancy Department?

      Oddly, I agree with you re: “Healthcare reform was barely discussed at all”

      About which I’ve written at book length on my policy blog.

      Imagine. You and me carrying on a relatively civil point/counterpoint discussion.

      Best regards –


      • is this what the public wants, compromise and civility? Not sure what they see in it. I do suddenly see the usefullness of sock puppetry though, I could create a polite and intellectual alter-ego to engage in such civil point/counterpoint without ruining my hard earned conservative reputation. Think if I posted under Ogden Nate people would miss the connection? Better yet I should let Margalit or Peter choose it.

  66. “In America, we hardly even talk about it.”

    OK, I have seriously missed something here. We hardly even talk about it? WHAT? LOL. I studied the lengthy fight every step of the way. In fact I first started studying the health care issues debates back in 1993. None of this is exactly news, nor has it been off the public radar.

    Just because YOU don’t like the outcome of the most recent legislation doesn’t mean it was not debated. It was in fact angrily debated, lobbied, and litigated (all of which will continue, too).

    “what in God’s name are we getting ourselves into with Obama care.”

    Well, we got a hyper-complex re-jiggering of the insurance industry Titanic deck chairs, mostly. Had you paid any attention, you’d know that,

  67. What is the answer? Does the U.S need healthcare reform? Or Insurance reform? Our current system is definitely screwed up. However, what in God’s name are we getting ourselves into with Obama care. I was in Canada last weekend and their front page headline was Canadian Healthcare Needs Reform. Well duh! Furthermore, the entire paper was filled with healthcare issues that plague their country. In America, we hardly even talk about it. There is hardly any dialog. It is like this thing was shoved down our throat and instead of fighting it we just gave up and accepted it. This is not the America I know.

  68. “So, there are both probable benefit cuts for those with MA plans and payroll tax increases for high income taxpayers thanks to this bill.”

    Yes, THANKS to this bill. If health care costs are is to be controlled and reduced then everyone needs to feel the pain of waste. Simply printing money to shield the reality will not lead to cost controls.

  69. Medicare Advantage insurers will see their payments gradually shrink over the next several years vs. prior law. Beneficiaries will see benefit cuts, premium increases or both as a result. Also, starting in 2013, high income people will pay a 3.8% payroll tax on so-called passive or investment income. So, there are both probable benefit cuts for those with MA plans and payroll tax increases for high income taxpayers thanks to this bill.

  70. Doesn’t term reconcilliation alone show there was two very different bills that had to be reconcilled? What was it that was reconciled in March with the bill passed in December?

    “Members of the Senate have just voted 56-43 to pass H.R. 4872, the Patient Protection and Affordable Care Act “fixer bill,” and the House is getting ready to re-vote on the bill. ”

    Senate passed this bill 3/25 how can you claim nothing changed when the bill didn’t even exist in December?

    • “Doesn’t term reconcilliation alone show there was two very different bills that had to be reconcilled?”

      No, it does not. In fact it means almost precisely the opposite.

      “Reconciliation is a legislative process of the United States Senate intended to allow consideration of a contentious budget bill with debate limited to twenty hours under Senate Rules.”

      There were changes made to the language of PPACA that had passed the Senate, but these weren’t voluminous and some of them removed the more egregious examples of sausage making such as the Cornhusker kickback.

    • Due to the use of the Reconciliation process, the bill that passed on December 24, 2009 was subject to very little change before the final version was signed on March 23, 2010.

    • Well, since neither you nor I have closely followed every draft of every piece of major federal legislation, you’re simply just speculating. I’ve only seriously scrutinized tracked two others across that past decade, really, the MCA and FISA (and other stuff related to the “war on terror”).

      And, again, not that I’m in any way an apologist for the backroom log-rolling that comprises much of the legislative process (not to mention the even more inscrutable, mind-numbing CFRs that ensue post-passage).

  71. for example how would the public know if they supported or diagreed with the MLR piece when just now we are finding out what MLR means?

    Just now we are finding out what the preventive benefit requirements are.

    We still have no idea what one has to do to qualify for an exemption.

    This bill has still not been completly written and we are 12 months post passage. How can you support or oppose something that doesn’t exist?

  72. The final bill was not available for the public or even congress to read before it was passed. Entire sections where pasted in after the fact and entire sections were written so vaguly to be left up to departments to write they were meaningless.

    The final bill also had little to no resemeblence to earlier drafts.

  73. ” And pluralities got the answer wrong on nine of the items. For example pluralities believed that the bill includes higher income taxes for the middle class,”

    FYI Humphrey and Ian it does. Cap on Section 125 contributions and elimination of OTC will cause 100s of thousands of middle class citizens to pay higher taxes. I guess your right people don’t understand it.

    Bobby G why do they need to pass the before before the public sees what is in it? At that point if the public doesn’t like what is in it then it is still to late. Congress rushed through a bill no one knew what it contained or what was being done becuase they knew the public would not support it.

    • Nate, the iterative legislative drafts were available for anyone with an internet connection to see all through the process. That people (including the press) don’t take the trouble to stay up with legislative developments is not my problem. And, the bill was not exactly “rushed’ through. Had they delayed a final vote another full year would likely not have increased public awareness by any appreciable amount.

      Not that I’m any big fan of the congressional process.

  74. The lowest administrative cost system would probably be a VA-type system, where there would not only be a single payor but also the providers are on (government-grade) pay and generally work in large hospital or clinic systems. Easy to explain, low cost to administer, but I’m not sure that’s really what most American’s would prefer (and by no means am I knocking the good work the VA does for Vet’s).

    The truly incredibly wasteful aspect of our health care system — and virtually every other nation’s system — is that we pay for care that we often don’t really know works and to providers we’re not sure are providing it well.

    Certainly we can & should make the system more effective administratively, but let’s remember where the vast majority of the money is going and how little we really understand what we’re getting for that.

  75. There is an emerging new area in healthcare that deserves consideration as an alternative to the complexity of our current system, A new product called “WellCard Health” offers patients a medical discount program with no monthly fee. This creates complete engagment by the consumer and demonstrates that there are many affordable ways to obtain healthcare. Major medical products can be layered on top of this kind of program to protect the individual from catostrophic medical events. This type of concept allow payors and individuals to shift risk dollars to higher cost healthcare expenses where it is probably more appropriate. Given the march of technology and our aging population, these type of strategies may be our best solution to create access, affordability and market based solutions that will stand the test of time.

  76. “Is there one goal, and more important should there be one goal.??”

    Of course there is, or more accurately, should be a goal. Proper medical care should be available, accessible and affordable for every person in this country. It should be an integral part of societal infrastructure.

    What is the point of having roads, bridges, electricity, broadband, and shuttles to the moon, if folks can’t get appropriate treatment for a tooth ache?
    If we can find the trillions needed to defend “life, liberty and the pursuit of happiness” in foreign lands, is it too much to ask that we do the same for those living in this land?


      “The discoveries of healing science must be the inheritance of all. That is clear. Disease must be attacked, whether it occurs in the poorest or the richest man or woman simply on the ground that it is the enemy; and it must be attacked just in the same way as the fire brigade will give its full assistance to the humblest cottage as readily as to the most important mansion. Our policy is to create a national health service in order to ensure that everybody in the country, irrespective of means, age, sex, or occupation, shall have equal opportunities to benefit from the best and most up-to-date medical and allied services available.”

      – Prime Minister Winston Churchill, March 1944, arguing for the establishment of a British National Health Service.

  77. “hardly anyone knows much about what is actually in the reform bill (but that does not prevent them from having strong opinions about it).”

    I closely followed EVERY draft along the way. And I have a PDF copy of the final passed bill right here on my iMac.

    Which, btw, is 906 pages (HR3590), not “2,700”.

  78. You can’t beat the old masters (both of whom, FD, are former bosses of mine). But it’s true, and it’s the reason we can’t get there from here…

    ….and it’s the reason that Humphrey, Ian and THCB will be around forever…

  79. Taylor and Morrison describe The Incredible and Wasteful Complexity of the US Healthcare System
    The statement mirrors the structure of our society, economically,politically, h gegraphy, and climate, all of which bears upon care of the sick.

    During the health care reform debate, we wrote that most people’s attitudes to it were “confused, conflicted, clueless and cranky.”
    This statement bears up well as I read the commentary between several participants here.

    Most physicians who practice in the United States find that treating the illness is the most straight-forward part of the encounter….Most like me spent a considerable fortune and time to become the best we could be, and find our resources, yours and mine and the taxpayer are forced to waste a considerable amount of time and money catering to ‘wannabees’ and bureaucrats.

    Mr HHS, “Tear down this Wall ! “ seems appropriate at times. Our very shaky ‘foundation’ is not the place to erect the reform that ‘Obamacare’ legislates. In reality this legislation was formulated in the 1970s through the early 1990s, reorganized and patched together for it’ s final denoument.
    I do not have an answer…just more observations….I don’t even know where or what questions to pose. Is there one goal, and more important should there be one goal.??

    • I would recommend the considerable works of Joe Flower and J.D. Kleinke, just to cite two (the latter of whom has a great series of YouTubes of his 2004 Medco presentations available online).

      Joe’s “Five Frameworks” papers are among the best I’ve ever read regarding practicable health care reform.

      I’m also a fan of the many published observations of Mark Smith MD, MBA, President and CEO of the California Healthcare Foundation. He is all over it.

  80. “Hmmm, if this system in France is so wonderful and has been prevalent for so many years, as the author of this link alleges, then why hasn’t this system gotten so much positive press and acknowledgement to win over the majority of readers to press for it’s application here?”

    There is a lot written in the health care literature, but most people do not follow it. Few people know that much about how health care is provided in the rest of the world. I tend to look at data, so you miss how the health systems of various countries actually affect people. When you talk with people who use systems elsewhere, it is often striking how much more they like their system better than ours. Some of that is just familiarity, but if you ask for details, like what Welch experienced, you begin to see why others really like their systems. While I would not want us to go to a Canadian system, when we vacation there I am struck by how popular it is. I think a lot of that is just the simplicity and knowing you always have insurance.

    “And, the author admits he has had little of real health care concerns in his life”

    He also notes that he was unable to obtain any insurance for three years, even though mostly healthy. My wife and I are both physicians and when her brother lost his job, we could not get him health insurance at any cost. That is just how our system works. Even when you do have insurance, not many know how it works. My practice administrator spends a lot of time answering questions on health care coverage. Private insurance plans are too complicated. Every now and then I have to tell an employee that they really do have to pay a very large bill because they accidentally went out of network.


  81. per the AHA report for 2009,hospitals had expenditures of 726 billion..If you add a margin of 5% you have 760 billion in net revenue..Hospitals spend around 5% of their total expenses on the revenue cycle(verifying insurance,biling etc)..this metric is called the cost to collect..we have had on the books since 1997 e-commerce transactions that are not fully used by providers and payers..in addition hospitals have not used this data intelligently to reduce costs..there is 38 billion that is in play..let’s start paying attention to what we can do versus what would be nice to do..

  82. None of the docs or nurses in my practice really understand our health plan. Of course, we change it every other year to avoid large premium increases. Our individual plans are complex. The entire system is complex. Libertarian writer Matt Welch wrote about what happens when you actually get to experience health care in the rest of the world. Makes even hardcore libertarians have second thoughts.



    • Hmmm, if this system in France is so wonderful and has been prevalent for so many years, as the author of this link alleges, then why hasn’t this system gotten so much positive press and acknowledgement to win over the majority of readers to press for it’s application here? Yeah, that little comment about what amounts to entitlement seems to be minimized by said author, eh. They riot in the streets every time the political system tries to bring reality of finite costs to the public’s attention, so, is the U.S. ready for real rioting? Oh wait, we saw a preview of coming attractions in Wisconsin recently, eh!?!?

      And, the author admits he has had little of real health care concerns in his life, so, if the reality of socialized medicine really knocked on his door and kept knocking for a bit when real prevalent and disruptive illness occurred, would we read the same piece? Highly doubtful, true?

      Sure, the profiteering done by the insurance industry here is nothing less than disgusting, if not criminal, but, is replacing an impaired system with an equally and opposite impaired system the answer to strive for now? Ok, the stove was hot, you burned your hand, so putting it in ice water is really gonna do responsible healing?

      Say goodbye to F-O-R in the profit focus in health care. It is that simple, because if the system builds into itself that excess monies go back to improve the system and not just a minute minority’s pockets, you will drive away the addicts and disrupters to the process. Yeah, it won’t happen overnight, but what realistic and effective change does happen overnight?

      This is a process that will take time. Time that politicians and other people who really will not be impacted by alleged efforts to change do not want to wait for, nor want you to know will take such time to occur. The process that is Obamacare, what I call Obaminationcare, that is PPACA, will not benefit this country for the many.

      Face it, a partisan passed legislation does not take in the needs of the many when being created and passed. Don’t believe me, go back and review history when alleged important laws and acts were rammed down the publics’ throats by special interests and one party focus. Life didn’t pan out too well when the truth was fully exposed.

      And there is your cue to this latest folly: “pass the bill and we’ll find out what’s in it.” Do you have to wait for someone to yell fire when the room is filled with smoke and there is this bright light and strong heat coming from the same area!?!?

      • ‘And there is your cue to this latest folly: “pass the bill and we’ll find out what’s in it.” ‘

        Misstated. Deliberately?

        Pelosi, verbatim: “[W]e have to pass the bill so that you can find out what is in it, away from the fog of the controversy.”

        Of course, the wingnut press all spun this as her saying Congress needed to pass the bill so THEY could find out what was in it.”

        It take all of about 3-4 seconds to find a YouTube clip of her exact statement in front of cameras.

        • You say we should ignore each other, and then you follow me with your lame comments that really do not defend the indefensible.

          Face it, she basically said pass legislation that no one in her party even superficially tried to claim did read, and defend that, you apologetic gas bag for the democrats. Frankly, Mr G, you are an attack dog, and any reader who has an ounce of inpartiality and objectiveness sees through your very thin skinned rebuttals. As far as I am concerned hereon, go self coital yourself. The readers can figure out what I want to say in less letters!

          God, this is what partisan cow dung has degraded to, just repeat the lies and shout down opponents so people in the audience can’t hear the two sides to an argument. Your legislation is not gleaming in the sun anymore, ’cause we are finding out what’s in it, and it stinks more than pleasures! And I don’t expect the Republicans to do a better job, but please, spare me that Democrats care about the people. Pelosi is just a female impersonator of Boehner, and Reid, well, his son is doing a wonderful job of exemplifying the adage of “the apple does not fall far from the tree”, not that his dad lives by example anyway.

          Hey readers, if this legislation is so great, why do about half the public say they don’t like it? If you listen to this defender above me and his ilk, if you don’t, you’re an idiot and don’t deserve to vote.

          Hey, isnt’ that the leadership rhetoric you want representing you!?!?

          • Just fact-checking you. Call it “shouting you down” if you like.


            FOR THE RECORD. I am no Democrat and neither am I a fan of the PPACA. Who is the thin-skinned one here? LOL.

      • “Hmmm, if this system in France is so wonderful and has been prevalent for so many years, as the author of this link alleges, then why hasn’t this system gotten so much positive press and acknowledgement to win over the majority of readers to press for it’s application here?”

        Because the media here is controlled by big business. Do you have a tough question? And a little rioting here would do a world of good.

  83. Did I miss something, from the blog, I was sure the authors were name Rube and Goldberg. And if we diagrammed American health care, Escher would definitely have the commission.

  84. I think a critical moment in the American healthcare picture was when insurance companies shifted from being health insurers to being raisers of investment capital. At that point their primary work was not to shoulder responsibility for people’s health, but to avoid those responsibilities. Then it became a priority to devise mechanisms to avoid covering procedures and paying bills.

  85. I agree the path toward a single payer system is very complicated because the system the government is trying to establish is too fragmented and too complicated. It looks like there are still many unanswered questions.

  86. Mr’s Taylor and Morrison, how is any self respecting provider to make a decent living with a simple, honest, transparent, and patient centered health care system?

  87. “All the crap is killing healthcare.”

    Yes, we all long for the time when docs took chickens and pigs as payment and lived in modest housing with horse and buggy as transportation.

  88. I guess that gives new meaning to the phrase, “what a load of crap!”

    How interesting how so much of the crap comes from non providers. And we as physicians somehow foolishly and cluelessly try to legitimize, rationalize, and validate much of it. As I have said before, should doctors decide to go on strike to put the crap where it truly belongs, I give society 5 days max before they put the screws on the politicians to resolve the crisis responsibly.

    Oh yeah, I forgot, the politicians are mostly lawyers, so what, they will jail us all under this delusional premise we are violating antitrust laws?

    Well, at least people in the correctional system will get better health care then. Let all those “equivalent” non-MDs come in and save the day, make us irrelevant, and cure the nation of all its’ ills.

    Careful what you wish for, antiphysicians!

  89. A patient walked into the office one day.

    All of this other crap followed him in and began telling only me what I could do, what I had to do, what I could not do, what I better not do, what I could charge, what I could collect, what I could not collect, what I must record, whom I may tell, whom I may not tell.

    Furthermore all the crap told the patient what they would pay for and what they would not pay for, what he could pay for and what he simply could not have at any price, where he could have tests done and where he could not have them done. They told him what medicines he could have and what medicines required physician certification.

    All the crap is killing healthcare. Only the crap is the broken part of the healthcare system. It is costing a fortune to carry the crap on the balance sheet.

    That did not take 90 minutes.

    Nurse, will you bring in the next patient. And cut the crap.

  90. Yes Thanks!- We need what I call “radical simplification”.

    I would start by closing down 1/3rd of US Law Schools over the next 5 years.

    I would lmit the size of hospitals by law since bigness inevitably leads to bureaucracy and complexity

    Dr. Rick Lipin

  91. In the first of a series of posts I began nearly two years ago, I observed:

    “…I will by no means be the first to note that our medical industry is not really a “system,” nor is it predominantly about “health care.” It is more aptly described as a patchwork post-hoc disease and injury management and remediation enterprise, one that is more or less “systematic” in any true sense only at the clinical level. Beyond that it comprises a confounding perplex of endlessly contending for-profit and not-for-profit entities acting far too often at ruinously expensive cross-purposes…”


    Nothing material has changed.

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