Something Not So Terrific

The brand new President Barack Obama, whether wittingly or not, invested his entire political capital in reforming health care in America. He gambled and he lost, not because he had nefarious intentions, but because he left the gory details to a corrupt Congress and a shady cadre of lying and conniving technocrats, ending up with something vastly different from what he campaigned on. From everything I’m reading now, Mr. Trump is about to walk in Mr. Obama’s footsteps, and if he does, the results will be unsurprisingly identical.

On the campaign trail, Mr. Trump repeatedly stated that Bernie Sanders forfeited his place in history when he “made a deal with the devil” and embraced the corrupt Democratic Party establishment that fought his candidacy in most abject fashion. Guess what? Mr. Trump seems to be making the same deal with the red version of the same devil. Mr. Trump’s cabinet choices indicate that he is now embracing the ultra-conservative factions of the Republican Party, the same people who actively or passive-aggressively opposed his candidacy. Nowhere is this peculiar and completely unnecessary capitulation more evident than in the beleaguered health care sector.

Mr. Trump campaigned on repealing and replacing Obamacare with something “terrific”, because Obamacare premiums are “going through the roof”, and because deductibles are so high that you can’t actually use your Obamacare plan “unless you get hit by a truck”, and because people can’t keep doctors and plans they like. Mr. Trump also recognized that some Obamacare provisions are good and should be retained. One would therefore assume that whatever Mr. Trump proposes to replace Obamacare with, will lower premiums, lower deductibles and increase choice of plans and doctors. Although the details were rather fuzzy, two things were consistently mentioned during the campaign: selling insurance across state lines and utilization of health savings accounts (HSA). Both “ideas” can be summed up as essentially deregulation of the health insurance industry and the unleashing of free-markets. We’ve seen this movie before.

Déjà Vu

As late as 1978, interest rates on loans were governed by local state usury laws. Based on biblical moral and ethical considerations, these local regulations placed modest limits on interest rates charged by banks in a particular state. Just like our own advocates for selling health insurance across state lines, the national banks lobbied back then for the ability to lend across state lines, which means that the bank home state governs the interest rates in all other states. In 1978 the Supreme Court ruled in favor of the banks, and in 1980 Congress passed formal legislation to that effect. The result, as surprising as that may be, was not fierce competition between banks offering the lowest possible interest rates in all states. Instead, some states immediately removed all caps on usury in order to attract big banks, and high interest rates spread like wildfire, rendering state protections against usury irrelevant.

With a little more help from the Court, the same deregulation was applied to credit card late fees in 1996, with the same typical free-market results for citizens who watched their late fees quadruple. To create the appearance of efforts to counteract the disastrous effects of deregulation on interest rates, the Federal government created the Consumer Financial Protection Bureau, an agency with no power to do anything of consequence, and which is currently busy spending taxpayer money on a mega database containing “more information than most people can remember about themselves”, financial, personal and social. The parallels to health care should be self-evident.

And then of course there is the saga of the Glass-Steagall Act of 1933, which enforced the separation between banking, insurance and dealing in securities, because mixing these activities was seen as a conflict of interest and an increased risk to bank failures. Glass-Steagall was repealed in pieces, with the death blow delivered by the Financial Modernization Act of 1999. Financial institutions merged and integrated vertically and horizontally into gigantic experiment labs for innovative financial instruments with no oversight and no accountability. The results came home to roost in 2008, with millions of people kicked out of their homes while their taxes were diverted to feed the gargantuan players of free financial markets. We never had a Glass-Steagall in health care, but watching hospitals merging, gobbling physician practices and morphing into underwriters, while insurers are expanding in the opposite direction, is more than enough to trigger that spooky déjà vu feeling.


Health Savings Accounts (HSA) are another financial instrument beloved by free-market advocacy groups. The idea is to allow people to spend their own money as they see fit, instead of forcing them to buy government defined insurance benefits. To sweeten the deal, HSA moneys are not taxable. HSAs are usually paired with so called catastrophic health insurance to cover life’s major disasters. The theoretical logic favoring HSAs is impeccable. Why should you buy insurance for things you don’t need? Why should you buy insurance for routine services you know you will need and are able to budget for, just like you budget for oil changes on your car, haircuts, gutter cleaning and such? Just imagine how expensive all these things would become and how little choice you would have, if you paid for them with insurance. Fair enough.

There is one small problem though. According to a recent Fed report, “forty-six percent of adults say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money”. Another survey from GoBankingRates found that “nearly seven in 10 Americans (69%) had less than $1,000 in their savings account”. These are not “just” the traditionally poor people in inner cities, rural boonies, Appalachian trailer parks, or however your pampered mind imagines poverty in America. This is the middle class.  These are the “nice” people you see every day all around you. So how much funding do you think will be going into those spiffy HSA accounts? Not much.

Catastrophic Care

This week, President-elect Trump picked Rep. Tom Price, a former orthopedic surgeon, to be the next Secretary of Health and Human Services, and Dr. Price is a man with a plan. The plan is to replace Obamacare with age adjusted, tax credits and HSAs, while making the same model available to employers, Medicare and Medicaid too. People would use the tax credits to buy a catastrophic health plans across state lines, and deposit the difference in their HSAs to cover routine health care. Sounds good until you realize that the tax credits proposed by Dr. Price are ridiculously low and would cover less than half the cost of a catastrophic insurance plan. Now, it is possible, that once all Obamacare protections are removed, trashy little health plans, priced exactly the same as the tax credits, will return to the marketplace, but I seriously doubt that anything will be left over for HSA deposits. I’m willing to bet that the majority of employers will jump at the chance to extend the same parsimonious offer to their employees.

Once the Medicare modernization features of Dr. Price’s plan are also implemented and Medicaid gets cut and tossed into the lap of perpetually bankrupt states, America will finally achieve universal catastrophic health care. Let me dispel the bleakness for a brief moment though. Dr. Price’s plan has all sorts of great features for doctors. Malpractice insurance reform, freedom to provide cash services to Medicare beneficiaries, freedom to balance bill, some relief from regulatory burdens and a seat at the table for medical associations, are all included in the plan. It is also quite possible that physicians in non-catastrophic specialties will get to enjoy some well-deserved leisure time. I can’t imagine too many non-catastrophic customers, flush with non-existent HSA cash, banging on their doors. 

Augment and Replace

Mr. Trump has a mandate to replace Obamacare with something “terrific”. He has a mandate to defend Medicare, Medicaid and Social Security. Those are the things he campaigned on and this is the mandate that comes with his election, nothing more and nothing less either. The conservative apparatus that rode into power on his surprisingly long coattails has no independent mandate. Donald Trump was elected President of the United States by the people of these United States in spite of the Republican Party not because of it. We did not send Mr. Trump to the White House to help Speaker Ryan and his conservative posse of faux intellectuals to dismantle the big bad “welfare state”. I can only hope that the President-elect understands that the manufactured urgency of repealing Obamacare, while blowing up Medicare, is nothing but a shrewdly laid trap for him personally, for his presidency, and for the American people.

It may be helpful to remember that for each Obamacare frustrated person, there is at least one fairly content person, and many if not most of those content people are less affluent, mostly white, working families who either receive large subsidies or have become eligible for Medicaid. These are the forgotten workers Mr. Trump promised to speak for, fight for and win for. Yes, Obamacare needs to be replaced, and the best and safest way to replace it is not to repeal it, but to augment it. Try selling insurance across state lines if you must. Add options to pair catastrophic plans with HSAs. Heck, while you’re at it, might as well try an experimental public option. And sure, get all your anti-abortion stuff in there to keep the faux intellectuals happy. Let people choose what works best for them, because free people trump free-markets every single time, and that is truly terrific.

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70 replies »

  1. OMG! I am so him. Wow. What happened when he got the EHR system? Is he still independent today or did he have to sell out to the large hospital? Dr. Green and those of us like him, will always be the best system available no matter what the government comes up with.

  2. Thank you Paul. I never read Scott Atlas’s book and have relied upon the raw data, Eberstadt’s book, the few studies that exist etc., but I just bought the book on your suggestion. Too many people are making statements based upon ideology or op ed pieces that are ideologically based.

  3. Alan,
    Excellent points. Scott Atlas’s book In Excellent Health does a thorough analysis of international health system outcomes. Bottom line in category after category is that the US health system performs exceptionally well in terms of quality of care…..better than the developed European countries. Unfortunately facts and sound analysis don’t matter to those who want to centralize power in a single payor system….so they peddle the theme that our health system is terrible. We can do better, but it can only be done by reducing the control of bureaucrats (who gave us EHR mandates/Macra/driving out private practice etc etc) and give control back to docs and patients. Help is on the way….I think Price and Verma get it…though it will be challenging to unravel the mess.

  4. Peter, patients in my area have the local FQHC as a choice but as you can imagine, that is the one of last resort. There are family practice physicians (who come and go) at the large hospital group as a second option too. Like where you are, the one hospital has purchased almost every independent group except for three peds practices (we are all hanging on by a thread) that remain.

    Patients who pay cash do get a discount because it is less paperwork, overhead, and headaches. Someone like me has always been concerned about patient cost. When we used to have more patients paying cash, we would try to help keep costs down (much like DPC practices do now by negotiating) for all ancillary services too.

    Maybe other docs would not pass on the savings, but I believe many of us would. The real question is when are the insurance CEO’s going to pass on their savings. I make less than 100K, they make between 20-100 MILLION per year. There is a lot that could trickle down if we forced them to do it. Think of all the regulations placed on physicians. Maybe it is time to place them on insurance CEO’s?

  5. Thanks Allan, but I am no more a hero than the people who help me out when I need it too. Patients pick me up and fix my car when it breaks down, they keep my kids supplied with clothes, and they offer to babysit when I am in a bind. It truly takes a village, but my point is the village does not have to involve so many regulations and oversight. Let me run my office so it suits me and my patients, let someone else do it their way if that works for them as long as patients are content and mortality rates are not above normal. It is not rocket science. 🙂

  6. Peter, it seems you do not understand what a free marketplace is. A seller doesn’t negotiate with himself. His competitor undercuts the price to gain market share. That makes the first seller improve his product or lower it so that he doesn’t lose customers. Sometimes to gain market share the entity will have special rates for certain people or at certain times (like a sale). The only reason healthcare isn’t more competitive is that physicians aren’t generally setting the prices. Look up north at the Canadian border where Canadians get healthcare in the US. Prices are competitive and very transparent because the Canadians are paying cash.

    Skin in the game: I referred my self pay patients to specific centers. They would give them a good deal often collecting less than they did from an insurer.

  7. Niran, when I gave charity care, sometimes costing me a lot of money in expenses, I would always charge even if it were $5. I feel every patient deserves the same respect and that $5 says they pay their bills. I have had people come in and pay several hundred dollars only to return it to them and keep only $10 because I knew that was money necessary for the kids and family. As government became more intrusive and costly I had to curtail many of those activities.

    On occasion I would let the senior keep the Medicare payment and pay me back later after the spouse died because they had run out of money trying to care for their loved one. I almost never was stiffed by the patient though if the patient died the children frequently would not pay.

    It’s nice to give a little back especially when i t doesn’t hurt too much. In your case it seems you give a lot back and it hurts a lot. You are a hero.

  8. “translates to not having to ration”

    We ration all the time.

    Margalite, I agree with your contention that there is a lot of waste caused by those feeding off of healthcare.

    We agree society has been robbed by a few bad actors, but what can one expect when the federal government has trillions of dollars to spend (more than it needs)? That is why the lobbyists spend so much money. They want a chunk of all that money and they get a large portion of every dollar the government collects from the taxpayer.

    It appears that people are better able to watch over their own money than the government can do for them. The waste, fraud and misallocation of funds in our single payer healthcare system, Medicare, is astounding.

    Take note, it was Obama who dealt with the largest corporations where the two fed one another. Take note it was Hillary who earned tens of millions in pay for play. So far it is Trump who is succeeding for the little guys and perhaps for the minorities. I hope that continues for our nation is only strong when everyone who wants a job has one available and when everyone in our country is considered a necessary part.

    All that being said I don’t worry about income inequality unless it carries on for generations. We have income mobility. That is being depressed by government not aided.

  9. “Its really not the best ”

    PJ, when one subsegments the groups in such comparisons we really don’t have much evidence one way or the other. Care is better for the affluent, but that is true in other countries as well. The best I can do is compare Canada with the US, the insured and uninsured. All Canadians are insured but compare the care provided to a person from Quebec or elsewhere in Canada to the care provided to the Inuits of Canada. The Inuits don’t have the same care and die much earlier etc.

    Compare the US to Canada with regard to mammograms and pap smears which has been done. Americans have a higher percentage receiving these preventative tests than the insured in Canada. The strange thing is that the uninsured American had an equal amount of such testing as the insured Canadian.

    I am not providing this as information saying American care is better because of those tests rather demonstrating a comparison that has been done.

    In the CONCORD cancer study of common cancers the US was either number 1 or number 2 in outcomes. There is a breakdown of racial groups the US. that you can look at. I didn’t bother at the time though in argument I did learn that even our minorities did better in at least some instances (maybe many more instances) than those that had universal insurance.

    I would like to see proof in respected studies of outcomes where the US groups failed due to our healthcare system. I am not saying anything one way or the other simply because I don’t think adequate proof exists.

    You bring up maternal mortality which looks bad for the US just like infant mortality did years ago before the claim was debunked. Is maternal mortality due to our healthcare system or due to socio economic problems such as drug addiction? We should not confuse socio economic problems with our healthcare system. If we do we can waste a lot of money treating the wrong ‘diagnosis’.

  10. You’re probably in the minority Niran, but I don’t know what choses your patients have for alternate care.

    But this discussion arouse because docs here were saying that if the patient has skin in the game they will make better health decisions – i.e. lower cost in a “marketplace”. But it seems that marketplace does not extend to lower cost docs – of which there are almost nil, unless the patient has a hardship case, which means they’d have to belittle their pride (if there’s any left) and ask for help. Further PCPs employed through the local hospital don’t get much, if any leeway. In my area the two big hospitals have been buying up the competition.

    When I was self insured and paid cash I always asked for a discount, in my area that did not go far, even though it meant reduced overhead and collections. One time I brought it up at the front desk, with the doc and the administrator – they all looked at me as if I were from another planet.

    Docs are not concerned about patient costs, and are not the ones to fix our cost problem. I wonder if docs get all the things from Niran’s wish list if they will pass the savings on?

  11. I agree with all your points, Allan. I mostly agree that we have more than enough money in the system, which translates to not having to ration, at least in my opinion. I find it somewhat amusing that the biggest advocates for rationing (or “financial stewardship”, or “choosing wisely”, or “parsimonious care”) are precisely those people who add costs to the system and produce nothing in the way of patient care. I also estimate around 30% or so loses to administrative waste, and 50% is also possible if you add the billing circus.
    As I said in a previous post here, small practices like Niran’s are the best value for the buck and there should be huge ROI in breaking the big systems and reinvigorating private practice and independent hospitals.
    The problem is that decision makers are part of the waste (health system executives, think tanks, consultants, etc.) and insurance companies profit more when prices are higher, so unless that swamp is indeed drained, nothing will change.

    I guess the only difference we may have is around inequality and mostly because I did not express myself accurately. The way I see it society is being robbed right now by a few bad actors. It is not the first time in history and it won’t be the last. One could argue that this has always been the case, but in recent times, society has made significant progress in spreading wealth, education, health and freedom to more people than ever. I don’t like watching that trend reversed by financial institution and more recently global computer technology, with the latter being the greatest danger we are facing, in my view. We need to fix that, and I was hoping that we can fix it peacefully, but history indicates otherwise…

  12. Comparing what physicians can do here in a highly technologically advanced country to what we can do in a third-world nation is interesting. You can see scads of patients in a third world clinic with minimal tools and paperwork, however, your ability to treat may be limited due to availability of certain meds or technological tools.
    In this country, we have all the bells and whistles, but our interaction with the patient is stifled by computer and coding mandates.

  13. “The problem I see here is that prices of medical services far far exceeds what most people can afford.”

    Margalit, I am sorry, but I believe that is not true. Removing Medicare (just for convenience) leaves us with a population where the vast majority have very low medical costs, a small fraction of the premiums they are paying today. Even the bulk of the Medicare population can afford their costs.

    I’m retired, but I actively treated many on Medicare and a large portion of my patient population had low level incomes and were among the sickest in the area. As an Internist I saw how money was spent because they would go from my office and then return giving me a very clear picture of costs.

    I won’t get into income inequality because that argument is more political than real though I recognize we have a very rich class of people. (You recognize they don’t keep that money under the mattress so it is invested in business, jobs, R&D etc. Jobs or better said, careers is what we need to deal with, not income inequality)

    The science of medicine will continue upwards in cost because the incentives are aligned in a way that pushes prices up. They would not be rising so fast, but for the massive intervention leading to third party payer situations.

    “until we can fix society”

    Those that have intended to fix society have been among the worst killers the world has ever seen. We don’t fix society. Society itself creates conventions of how society interacts. Those conventions develop over centuries and trying to break those conventions down to replace them with new ideas leads to catastrophic events. Hammurabi didn’t write new law and social contracts, he codified the existing ones, some that existed for millennia.

    As a side issue just as an example, my overhead of roughly 1/3 doubled from the start of my career to the end of my career. Most of that cost was totally unnecessary. Virtually all of that was caused by government mandate. There is plenty of money in the system. In fact there is too much money and that is causing tremendous problems.

    Niran provides medical care. The only extra expenses she has are the things that help her function at a high level. All the rest of the expenses are wasted money. If we were to move in the right direction, without reducing the quality of healthcare, we could probably rather rapidly lower the costs of healthcare by 30 to 50%. Not only would we have the benefit of lower expenses, but we would be moving in a direction away from medicalizing the entire population.

  14. How quickly most of you forgot what was posted just a week ago by Dr. Nortin Hadler https://thehealthcareblog.com/blog/2016/11/25/american-healthcare-rackets-monopolies-oligopolies-cartels-and-kindred-plunderbunds/ American Medicine is morally bankrupt and it costs so much in large part because of unnecessary excessive- often dangerous- overuse for many leaving little or none for others.Trump’s election will just hasten the inevitable march toward American Medicine finally retaking the moral high ground. Count me as a proud “Charter Hadlerian”.

  15. What a kind gesture! The only way I would consider would be if your practice is close to 137th and Lexington.

  16. Its really not the best since it is so “unevenly” available and “unpredictably” accessible. It could “easily” be the best if we could solve the problem of equity and justice. 1500 years ago, someone said “In the absence of justice, what is sovereignty but organized robbery?” Hmmmmm! I wonder if there is anyone, tuned in, who recalls the person known to have written that observation. The last WHO/UN report listed the USA as 38th among the 45 world-wide developed nations for its maternal mortality ratio. More importantly, we would need to reduce it by 75% to rank in the best 10 nations. And, finally, there is a very high degree of correlation between a state’s maternal mortality ratio and the state’s longevity past age 65. The correlation means that the better the maternal mortality ratio, the longer a states longevity past age 65. This high degree of correlation (negative, to be exact) exists with two separate data sets.

  17. Almost every medical tx paid with funds from an HSA DO count towards your deductible. There are a few things you can use your HSA to pay for that don’t: eye glasses, dental tx, over the counter meds….. Minor.

  18. I am in primary care, my fees are not only published on a sheet in the front office, they are on my website and every patient signs the fee schedule which is updated annually. This is for covered fees as well as non-covered fees, such as no-shows, records, and others.

  19. Peter, I am going to jump in again, but do not want to fight. I will answer your question. Sometimes people call and say “I don’t want to pay for you removing earwax from my child’s ear even if its necessary to diagnose an infection.” My answer is that if I do it, I am obligated to code and charge for it. Most patients say “in the future, I would like to know if there will be an extra charge ahead of time, so I can decide .” I invariable say, “no problem, thanks for communicating about this. I am more than happy to discuss charges of any kind from now on.”
    Here is what’s interesting, if I volunteer this information without being asked, every parent has said, “I don’t mind, please do what you have to do.” So I do not routinely discuss charges up front, but if a patient brings it up, it is their right to expect transparency and I have no problem providing that.

  20. Barry, I can answer this. About 5%, although I rarely see them completely for free. I have charged as little as $10 for an office visit. We do deep discounts and to be honest, people often reciprocate (unsolicited) in their own way by fixing a broken plug here or there, changing out a fluorescent lightbulb we can’t reach, or bringing pies (my favorite), cakes, homemade jams and jellies. Sometimes fresh eggs from their farm, fruits and vegetables, or even elk meat during a lucky year (another favorite of mine.)
    Oh, people bring me lots and lots of clothes in great condition after their kids have outgrown them too. With four kids, I can always put that stuff to good use. The lock on the trunk of my old Subaru was broken for years, so boxes of clothes would just show up in the back of my car and I did not always know who to thank. 🙂 Quirks of living and practicing in a small town I guess.

  21. Margalit, Allan is right about the rationing. I agree with you both that I cannot stand to see poor people go without care, so we must find another way. The reason the cost is so high is because we have to pay numerous staff to help us keep up with requirements that are unnecessary. I can do my work with one medical assistant if I am paid cash for visits or procedures or whatever. I could drop prices considerably. For instance, a few days ago a teenager needed a procedure to remove a bad piercing gone wrong. Total cost (they had high deductible insurance) $250 out of pocket. That took me 2 seconds to quote, included my time, injection of lidocaine, culture, necessary supplies, procedure, prescription for antibiotics and follow up care. I called the ER billing department (out of curiosity) to get a comparative charge…. $6500! Can you imagine. This family’s deductible is $6000. This is one of so many things wrong with healthcare. You are right — preserving respect for ALL human life is what matters.

  22. Any chance you are interested in a locums job once a year for a week? We need someone like you when my dad and I take our annual family location. You would LOVE it!

  23. Oh there will be lots of crappy plans…. really, really soon…. 🙂

  24. Thanks. Was so tempting to be a smart-as# and say I told you so. But, it is too early. Maybe they will come up with something good, but so far it looks bad. Brings back an old saying from internship. They can always hurt you worse. Trump was the change candidate, so I understand people voting for him, but the odds favored change for the worse.

  25. The problem I see here is that prices of medical services far far exceeds what most people can afford. So we are not talking about a few less fortunate folks that can be helped by a church or something. We are talking about at least half the country and growing. I think two things need to happen. First, income inequality needs to be addressed because as health care costs take larger and larger portions of GDP, all but the top 20% or so are taking home a smaller and smaller part of that GDP. Second, the science of medicine has advanced to a point where it is probably most expensive, and this will continue upwards for a while, before prices drop like a rock. We just need to get through the next century or so… There will be much turmoil until we can fix society and until normal scientific advancements do their thing. I would like to cross this difficult stretch of time in a way that preserves respect for human life, all human life.

  26. Why is it that few are concerned burdening 1 physician with paperwork for 2000 patients but is so worried about the paperwork burden of one patient?

  27. Overall, the best healthcare is probably in the US. It is true that many of our western friends use non capitalist means, but whose economy is the strongest? Whose economy generates wealth all over the world? How many of those nations are as pleuralistic as the US?

    It’s a hard thing to say, but the cost of healthcare goes up unless there is some type of rationing. The most efficient type so happens to be market based. However, you and I cannot stand to see poor people unable to afford care so we intervene. Intervention causes dollars to be lost by the intervention so only a portion of those dollars make it to the intended persons. That portion making it diminshes over time.

    Therefore, if we wish to help those less fortuante people we have offer them aid outside of the marketplace. That means charity, susidies and a whole slew of different types of care. We at least save that portion of the money that is lost when non marketplace means are used for the general population.

    We have to remember wealth invested means more money for society and more money for those in need. Today the government is in control of too many dollars and that is inhibiting our growth.

  28. Margalit,
    As it stands today, due to state and federal mandates there are no crappy plans….only Mercedes plans. Hopefully in the future people will be able to choose a plan that meets their needs….as they see them…..not as some bureaucrat sees them. I’d take a Ford plan.

  29. It’s likely that the cost of our nation’s health care will continue to increase faster than the growth of our nation’s economy: a la Parkinson’s Law. It is also likely that the economic mandate for Complex Healthcare Needs will continue to neglect the social mandate for Basic Healthcare Needs. In the same mold, it is likely that we will continue to fund post-graduate medical education based on the size of the medical research activity from state to state. And, finally, we will continue to ignore the problems caused by the lack of uniformly available and accessible Primary Healthcare, community by community. No single strategy for the funding of our nation’s healthcare will approach the ideal without first fixing the basics. Two things to remember clearly. The excess cost of our nation’s healthcare (as compared to all of the other developed nations) that is paid by CMS now represents 50% of our nation’s annual deficit. And second, our nation’s maternal mortality ratio continues to worsen at the level of 700 deaths annually, representing at least 400 deaths solely because they lived in the wrong NATION.
    Albert Einstein is quoted, albeit weakly attributable, as saying “We cannot solve problems using the same kind of thinking we used when we created them.” Furthermore, Sir Winston Churchill is well known to have said “We shape our buildings, and afterwards our buildings shape us.” I believe we have the finest healthcare in the world, having just retired with my associates after 41 years as a Primary Physician. Living in a city with two medical schools and a mid-west location, the quality of Complex Healthcare that was just a phone call away was spectacular. But, with the retirement of my associates as well, I watched as the patients from our group practice struggled to locate responsive and engaging Primary Healthcare.

  30. Sure, but we know two more things 🙂
    There can be good and bad government intervention.
    Everywhere in the world where capitalism has increased standards of living, health care is delivered by non-capitalist means…

  31. Only things that are “covered” by the plan count towards the deductible and only the contracted amount counts. If you have a crappy plan that covers few things, and if you use your HSA to get stuff the plan doesn’t cover, it will not count.

  32. We know two things about healthcare. Government intervention has increased on a continuous basis. We also know that the cost of healthcare has increased as a percentage of GDP almost every year.

    We know the economics of socialism and capitalism.

    Capitalism has increased the standard of living for the entire world.

  33. Anish, I like you, think Seema Verma’s ideas are intriguing and am interested to see what she comes up with.

  34. From the United Healthcare website: ” As you pay for out-of-pocket medical expenses, these expenses may apply to the deductible. This can include payments using your HSA”. I have had HSA high deductible plans linked to catastrophic health care for years and I have always had HSA paid medical expenses count towards my deductible. Yes, there are few things that don’t count as qualified medical expenses toward the deductible like eye glasses and over the counter meds…..but these are minor items.

  35. Finally got an HSA plan started for our group as an option. Corporation made a big contribution to the HSA and we (the corporation) still saved money. What we saw, much as one would predict, is that the young, healthy people w/o kids took the HSA option. Older people, those with pre-existing illnesses and those with kids chose conventional insurance.

    When you look at how health care money is spent, it makes sense. 5% of people account for about half of our spending. About half of the population account for 3% of spending. I think HSAs are largely aimed at the 50% of people spending doing 3% of the spending. With a major illness or significant chronic illness (especially) you are going right through the HSA money, and that assumes you are in a plan where the company puts money in. If you are in a plan where the company makes no donation, you need to earn enough money to save, which as Margalit has pointed out, is a problem for the lower portion of income earners.


  36. My 46 year old daughter sat on our couch last night in the family room huffing and cursing as she tried (without success) to enroll in coverage via the “Covered California” website. She called out one to me that had premiums of about $500 a month with a $6,300 deductible. She’s the ED of the non-profit Stepping Stones Project based in Richmond, with a gross salary in the low $60k’s (which puts her out of the ACA tax subsidy range, and is not exactly big dough here in the Bay Area). Single woman, no covered dependents (her 22 yr old son, our grandson Keenan, gets his through his job at Enterprise).

    That is just obscene. She’s unlikely to ever get close to her deductible cap. But the “insuror” will certainly make big bank off people like her.

    The per capita NHE is recently reported as crossing $10,000 this year (and nearly $26k for a family of 4). It seems like the “risk pool” is now to be of uniform depth.

  37. Stick around…. FWIW, you are a valued member and contributor to this community!

  38. I don’t have that wonderful of a heart. If I was really good, I would seek out the underserved and the poor. But as peter likes to highlight, Mother Theresa I am not. It makes up a small percentage of my practice. There are folks who don’t have insurance who I’m asked through a friend of a friend to see. More commonly it’s folks in hospitals who had an acute problem who then need follow up. Somebody who has acute heart failure for instance who needs follow up to try to see if they can be kept out of the hospital. 1/50 or so patients in the outpt office, and 1/10 in the hospital i’m asked to see that don’t have insurance.

  39. In my past corporate sponsored HSA plan spending paid by my H.S.A. DID count toward meeting the deductible. In my wife’s current plan spending paid by her HSA account DOES count towards meeting the deductible. A couple posts in this thread suggest payment out of HSA’s do not count toward meeting the deductible. I think they are wrong. Am I missing something?

    It is likely the reform plan will incorporate catastrophic plans linked to HSA accounts funded by government taxpayer funds for the poor….a better way than paying subsidies to insurance companies as in the ACA. Let the people control the money and keep what they save by prudent medical service consumption…..a game changer.

  40. I don’t doubt your numbers example above (although I don’t know if the same analysis holds for 30-59 year olds, or whatever other group that isn’t 64 and male).

    This is just anecdotal for me, but I would think many have this experience:
    Every time I sign up for my employer health plan for our family, they give at least 3 options. the highest monthly premium is always the lowest deductible. The monthly premium is usually substantially less if we choose the high deductible plan. (we’re talking 3 figure differences). If this is the case for many, then put that difference in an HSA and give people control over it.
    (Of course, HSA spending should count toward the deductible, I don’t know why that’s not the case now. )

  41. “This week, President-elect Trump picked Rep. Tom Price, a former orthopedic surgeon, to be the next Secretary of Health and Human Services, and Dr. Price is a man with a plan. The plan is to replace Obamacare with age adjusted, tax credits and HSAs, while making the same model available to employers, Medicare and Medicaid too.”

    From my current post:

    “Why anyone — particularly Medicare benes — would want to do that escapes me. Unless the forthcoming legislative provisions will be so onerous as to eviscerate Medicare to the point where it’s really just one more penurious, care-obstructive “welfare” program. House Speaker Paul Ryan has long made no secret of his wish to turn the big federal civilian entitlement programs (Medicare and Social Security) into means-tested spend-down-to-penury welfare programs (which may still be a bridge too far politically, in light of the 3rd-rail mega-wattage of the huge 65+ cohort).”


  42. Well the health care “marketplace” is certainly working well for providers drug companies and device makers.

    Care to publish your fees in the front office?

  43. In our practice we have worked with our hospital (we are the one on the wrong side of the tracks) to set income levels at which we either charge people nothing or reduced fees. Of course, we just don’t take their word for it. The guy who said our fees were too high and he wanted to negotiate so he could better afford his country club fees (true story) did not get a lot of sympathy and backed off when we wanted proof of low income.


  44. Sure, except there will be no “savings”. Dr. Price suggests $3,000 tax credit for the oldest individuals. Do this: log into healthcare.gov and see how much a Bronze plan with over $6,000 deductible (totally catastrophic) would cost for a 64 years old male. Maybe 3 months of coverage. Let’s further assume that we can pare down more stuff from the Bronze plan, and let’s even assume that competition will actually have an effect (it won’t with 3 national carriers), the final price is not going to come anywhere close to $250 per month.
    There will be nothing left to put in an HSA. Nothing at all.

  45. I warned you that I’m a bit left of socialism… 🙂 I’ll watch the video tonight, but I don’t believe in “skin-in-the-game” stuff exclusively for people with widespread 3rd degree burns caused by greedy arsonist psychopaths, and I don’t believe in voluntary private charity as a substitute for social fairness.

    This is not to minimize your wonderful heart Anish, but on the other side of the phone there is a person robbed of dignity.

    I think the 1%, the big corporations, and the global money cartels need to understand that adding insult to injury will not be an acceptable strategy. Enough is enough. If we can’t affect these changes at the ballot box, there are more “traditional” ways to achieve the same.

  46. I’m pretty sure there will be bi-partisan support from the DC millionaire club, a.k.a. Congress, particularly for the notion that Medicaid for all is good enough for the bottom 4 quintiles.

  47. HSAs are irrelevant unless they are progressively funded by someone else and ALL utilization of HSAs counts towards deductibles.Since this is not the case, and since nobody except the wealthy has money to “save” nowadays, I have no idea why we are even taking about this stuff. I have no objections to letting rich people enjoy a tax cut, if they have no objection to funding decent medical care for the masses who make their wealth possible.

  48. Anish — I’m curious what percentage of your patients are seen either for free or at a deeply discounted rate and is this typical for most of your colleagues as well? I know there are plenty of low income and working class people in Philadelphia who can’t afford full fees and may either lack insurance or have a high deductible exchange or employer plan.

  49. Not at all. I was perfectly aware of who I was voting for. I also voted for President Obama twice and spent 8 lovely years criticizing his health care reforms. I fully expect to do the same for President Trump. I will continue to complain until we have traditional Medicare for all, or I drop dead, whichever comes first… 🙂

  50. Margalit, What about Seema Verma’s approach to this in indiana? Seems interesting and seems like an approach to subsidizing the deductibles so they are affordable for the poor? This is an interesting video from Meg Edison. Its not an either/or approach right? We can still provide for the very destitute and disabled, but have different options for the working poor, right?


    And peter, even now negotiations take place. I sometimes see patients for free who don’t have health insurance and simply don’t have money but need to be seen – that conversation is a negotiation right? If a patient calls our office to tell us that they can’t afford something, we attempt to adjust to work with the patients..

  51. I’m not sure who you’re arguing with.
    It’s perfectly consistent with “the marketplace” for someone to set a fee for their services and let those participating in “the marketplace” decide if that fee is worth it to them or not. If someone wanted to negotiate regularly as a part of that, I suppose they could, but that’s not a necessary component of having “the marketplace” work well.

  52. I see, so you yourself would not negotiate your fees. Do you know of any doc that would – except maybe a hardship case?

    See in all this, “let the marketplace decide” fantasy, no provider will actually participate in a marketplace (it’s beneath them), but they promote it as a distraction for real price reform trying to hoodwink patients into thinking this could actually work.

  53. as I said,

    “maybe there would be a conversation with the patient about how the fees are set, and that they are felt to be reasonable

    And maybe some patients would decide that they want to look for lower cost options elsewhere, which could be a reasonable response for some people.”

  54. No, we’re not talking about hardship, just that free market negotiation you believe in and want to lower costs. What would be your response be realdoctor?

  55. I don’t know. It depends.

    maybe a clinic would have a plan for financial hardships, discounted rates, etc.
    maybe there would be a certain percentage of free care given
    maybe there would be vouchers or public assistance of some sort to help with fees for those under certain income levels
    maybe there would be a conversation with the patient about how the fees are set, and that they are felt to be reasonable

    And maybe some patients would decide that they want to look for lower cost options elsewhere, which could be a reasonable response for some people.

  56. Scenario: “Doc, your prices are too high, if you don’t lower them I’ll have to go to someone else.”

    Tell me what the doc’s response would be?

  57. what if we took the money saved in monthly premiums by moving most people to high deductible plans and put it instead into HSAs? It seems we could find good ways to divert money into these accounts without spending more, then let the “impeccable logic” of HSAs help us move in a more rational direction re: spending and incentives.

  58. “Senator (and doctor) Bill Cassidy has proposed it.”

    Another in a stream of doctors telling us what our health care should look like.

  59. Buyer’s remorse Margalit?

    Also given the stream of “insiders” (from the swamp), not “populists “, and including the Wall Street barons he accused Hillary of conspiring with, which includes, from that bastion of “ethical banking”, Goldman Sacks, the foxes are guarding the hen house.

    Rep.Tom Price, the “peoples” HHS Secretary.

  60. Margalit,
    So you are not completely against expanded access to Health Savings Accounts paired with catastrophic care?……you just want more options than that? HSA’s paired with catastrophic plans are the best studied option that actually work (Rand 2011…a large sample multi state study).
    Fyi, the 12/1/2016 Wall Street Journal has an excellent op ed by Capretta and Gottlieb of AEI. Four principles:
    1. Provide a path to Catastrophic plans for all.
    2. Accommodate pre-existing conditions.
    3. Allow broad access to Health Savings Accounts.
    4. Deregulate the market for health services.
    The link is here, but I believe it requires a subscription to read.