Health Insurance 44

[tbonebanjo]

I was just wondering how many companies still have good insurance and how many have gone the way of Obamacare. I am in a small MEP firm in Maryland. Our health insurance just changed, our premiums went up and our coverage went way down. I have maximum out of pocket expenses of $12,500 per year, $4000 deductable per person, tnen start the copay schedules. Should I start looking for other employment or are all companies being affected this way?

 

[KENAT]

I think the rationing of doctors has previously been mentioned.

Lack of hospitals & medical facilities I'm skeptical of being a national issue but don't have data to hand.

As regard cost of education, commonalities with what?

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[IRstuff]

There's nothing in the statistics that suggests that the cost increase is due to a lack of doctors. If anything the number of doctors per 100,000 population has remained fairly constant, so the supply is keeping up with the total population growth.

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[beej67]

If you believe that only 5% of your healthcare system's cost is in the form of profit, there's no point in talking about this further.

If one of us refuses to acknowledge hard evidence, then yes, there is indeed no point in talking about this, or anything, further. The only way to reach logical consensus is to start with an agreement about the data, and then apply logic to that data. That goes for any discussion, of anything.

The data is out in the open. Google it. Insurance companies profit margins are around 5%, and have stayed that way, for a very long time. Insurance of all kinds is not a high margin business. They set their expectations of costs in a shared pool based on risk projections and apply a small markup. That's how insurance works. That's why it's as hard to become an actuary as it is to become an engineer. Very smart people project that risk, apply the small markup, and the insurance company moves on. That's the business model.

Profit margins are mythical...

I don't even know what to say. Do you work? Are you, in fact, an engineer, that works for an engineering firm, that does engineering, for, you know, profit? Are your firm's profits "mythical?" Can you let me know who you work for, so I don't apply for a job there?

For-profit company executives are not graded on just profit margin, but increased absolute profit, which requires increased absolute revenue. This is what their bonuses are based upon.

Noooo. Insurance is the very opposite of what you describe. If Insurance was raking a percentage of claims paid, then you'd be correct, but that's not at all what insurance is. Insurance gets paid up front, in premiums, and then strives to maximize profit by paying as few claims as possible. Every claim paid is lost profit. They have more incentive than anyone to not pay claims. In fact, my biggest gripe about insurance in general is that they are so stingy with paying claims.

The graph shows that our health system's performance is quite pathetic, so I'm not sure why anyone would even imagine that the current system can be "fixed."

That's what I'm getting at. Especially with such a ridiculously simple solution as "keep everything the same and bill Medicare," which is exactly what "single payer" is. If "single payer" alone would fix this, then doctors who worked purely off Medicare would be offering services at a third of the rates that private doctors are.

It looks like we're actually spending more than 3x what we should be spending to get the results that we have. Given that the government insurance plans cover less than 1/5th of the US population, with the remainder being either covered with private insurance or none at all, what possible reason is there for maintaining that the current system is even plausible?

There's none. There's also no possible reason to think that shifting the population entirely to the payment method already used by 20% of us would reduce costs by a factor of 3. The source of the money is a red herring. To fix it, we need to look at the actual problem.

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[beej67]

There's nothing in the statistics that suggests that the cost increase is due to a lack of doctors. If anything the number of doctors per 100,000 population has remained fairly constant, so the supply is keeping up with the total population growth.

The product is not the doctor, the product is the procedure. If the number, frequency, and cost of procedures per capita had stayed the same since the 1970s, you'd be correct.

It has not.

The number, frequency, and cost of procedures per capita in the US has skyrocketed, while the number of doctors per capita has stayed the same. That's the very core of the problem. Again, if you want to compare the US and UK, take a look at the relative number of procedures per capita. Data for back surgeries is posted above. I feel confident saying data for other surgeries is probably similar.

Just like my MRI example, when I go to a doctor in England for back pain, he sends me home with a hot pack, some advil, and instructions on how to do dead lifts. When I go to a doctor in the US for back pain, he jumps straight to the knife. Fix that somehow. Switching to "everyone gets Medicare" doesn't fix that.

To be absolutely clear, if the government offered a "everyone gets medicare" program that was optional, and paid for with taxes, and verified to be revenue neutral, and then they absolved individuals and businesses of all these unconstitutional insurance mandates, then I'd love it. I sure as heck wouldn't use it, but I'd love it. It would make businesses more lean, and remove one of the barriers to startups. But don't kid yourself that it would make a hill of beans difference in cost per capita. And cost per capita is the actual problem.


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[moltenmetal]

There is profit taken at least TWICE on every single transaction, and profit is calculated after all expenses! You're taking a fact- that insurance is a low margin, high volume business- and over-generalizing it to conclude that profit is a small fraction of the cost difference between the two systems. Insurance company profit definitely is not the only thing making your system cost vastly more than ours- nobody here said that!

Profit calculations are also very easily manipulated. As an example, apparently the Tolkien family were presented with statements which made out that the Lord of the Rings films, with a combined take of over a billion dollars, didn't actually make any money...There's a whole sub-class of parasites whose job it is to make companies appear to be poor- on paper- to the right people, generally the tax man.

The 30% of my friends' business spent to seek payment by their ~ 2,000 payors is a very real cost to your system that doesn't exist in a single payor system. And then on the side of the 2,000 payors, you have a similar infrastructure for processing those forms and paying those billings, or hopefully denying the payment of as many of them as possible. Then there's the legal costs associated with the arguments between people and their insurers, the costs to businesses in paying the insurers themselves, the cost on the part of all parties to lobby government etc....all those costs are added to your system BEFORE profit is taken. All are absent from our system.

The data that matters are there in front of your face: the costs of the Canadian system and your system are both there. The outcomes are similar. The difference is absolutely undeniably a result of two things: reduced costs to the single payor system as a result of the elimination of duplication and improvement in efficiency resulting from an elimination of the profit motive, and a complete elimination of profit. If there is a rationing of services that results in further savings, it is a rationing that doesn't result in a measurable decline in outcomes. And Canada isn't brought forward as a paragon of efficiency- merely as the closest possible comparison to your own system.

I'd argue that you're coming at this not from a data-based approach but from an ideological one, that makes you deny the logical explanation because it doesn't fit your world view. You can argue the same for me, but I have the data on my side on this one. And my point of view is simply this: government can be more efficient at delivering services we need rather than merely want. Goods and services we can choose to consume, or not? The private sector and the (regulated) free market are much better at providing those sorts of things.

 

[SPDL310]

The number, frequency, and cost of procedures per capita in the US has skyrocketed, while the number of doctors per capita has stayed the same. That's the very core of the problem. Again, if you want to compare the US and UK, take a look at the relative number of procedures per capita. Data for back surgeries is posted above. I feel confident saying data for other surgeries is probably similar.

That does not take in to account a few factors that unique to the US. Obesity rates are higher in the US. Being overweight is a significant factor in accelerating and exacerbating back injuries and pain. Another reason for high rates of back surgery in the US is the financial incentive it grants in a law suit. It is considered proof of an injury and can lead to higher financial rewards in accident and workplace injury cases. It is also likely to grant disability status to those looking for workman's comp claims.

 

[IRstuff]

"Are your firm's profits "mythical?" "

The reported profits mythical. How else do companies like GE get away with paying little or no taxes? There are gigantic tax law loopholes for companies and 1-percenters to shield hide the true profits. There are lots of "expenses" that would have been profits, if not for loopholes. How is it that executives get large salaries and bonuses, if only to generate 5% profit? Aren't their bonuses actually profits? It's why actors with sway get percentage of gross, rather than percentage of profit, since there's almost never any film profits to report, and part of the reason is that the true profits are already skimmed off, so the reported profits are either nil or negative. And yet, the studios don't go bankrupt, mostly.

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[IRstuff]

If hospitals only have 5% profits, how do they expand and gobble up other hospitals? St. Jude in Fullerton had a major expansion in the last few years, sloughing off older, decrepit buildings for shiny new state of the art facilities. Those are reported as expenses, but come out of the gross profits. The net profits, as reported, are essentially meaningless with no context.

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[glass99]

5% insurance company profit is actually quite lucrative for the insurance co's - they have huge volumes of predictable pass through expenses. They only pay out 80% of claims, with 15% administrative expenses and 5% profit. Its like a general contractor, 20% on the subs for OH&P. Does an insurance company add as much value as a general contractor does to a building project? I don't see any insurances site supers hanging out full time in a trailer at my local hospital.

 

[beej67]

The data that matters are there in front of your face: the costs of the Canadian system and your system are both there. The outcomes are similar. The difference is absolutely undeniably a result of two things: reduced costs to the single payor system as a result of the elimination of duplication and improvement in efficiency resulting from an elimination of the profit motive, and a complete elimination of profit.

No, Moltenmetal. That's simply not true. Canadian doctors recommend fewer and less expensive procedures. That is the lions share of the difference. Medicare is a non-profit payer. Medicare doesn't spend kabillions of dollars on skyscrapers and on fancy accounting. If what you're saying was true, and the difference between our per-capita cost and the rest of the world's per-capita cost was the profit motive of the payer, then Medicare would be 3 times cheaper than insurance, and doctors working off of Medicare only patients would be able to provide healthcare three times cheaper.

That's. Just. Not. True.

It's a Blue talking point. It's not true. The source of the cost difference is not the payer. The source of the cost difference is that people in the USA are ten times more likely to have back surgery than most of the rest of the first world, and changing the source of the cost sharing pool doesn't fix that problem. The same sorts of trends apply to all surgeries. Don't get me started on C-Sections. In the USA, surgery is the preferred baby delivery method. Nowhere else in the world. And delivering a baby via surgery costs four or five times as much. How does switching to "everybody-gets-Medicare" fix that?

That does not take in to account a few factors that unique to the US. Obesity rates are higher in the US. Being overweight is a significant factor in accelerating and exacerbating back injuries and pain

Australia is as obese as we are, yet their medical costs are much lower per capita, as are their rates of back surgery. Americans are fat, and some kind of anti-fat program would do the country some good, but you can't blame our triple-per-capita rates entirely on fatness.


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[KENAT]

beej67 the issue is multi factorial, at least some of the single payer systems around the world do one way or another reduce the litigious aspects that impact US system so much.

Focusing on, or ignoring any single significant aspect leads to misleading conclusions.

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[SPDL310]

True but, no other legal system in the world incentivizes back surgery like ours does. I am not saying that these surgeries are necessary. They clearly aren't. What I am trying to say is that the legal system rewards and incentivizes unnecessary back procedures by awarding significantly larger verdicts to plaintiffs who undergo them. My point is that if you want to talk about the US medical system as a whole you need to choose a procedure that is not influenced significantly by other factors.

 

[IRstuff]

"How does switching to "everybody-gets-Medicare" fix that?"

Medicare limits lots of things, so C-sections would become an elective, non-reimbursable, operation, unless the life of the mother or baby is threatened. If the parents can afford to pay for the C-section, out of pocket, then everything is simple. This is, of course, unacceptable per Red talking points. So, what is the Red solution for this? How are they going to ration care without calling it rationing?

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[cranky108]

The whole issue is like comparing the US postal service to UPS. Both do something right, and some things wrong. But because we have a choice, we get better rates from both.

And if medical treatment is less expencive in other countries, why does US insurance carriers refuse to pay for treatment in other countries?

The answer is goverment control. People in the goverment are attempting to choke the medical system to push people into demandig a govermentrun medical system. So stop whining because what ever the outcome the cost will go down afterwards.

Heads they win. Tails we loose.

 

[glass99]

IRStuff: Having lived in both Australia with a single payer and the US without, I can tell you that public health is very big on rationing. The classic thing when I lived in Australia in the 90's was so called "Elective Surgery". If for example you have a debilitating but not life threatening ailment like a bad knee, the government had very limited resources available. Wait times were measured in years, which is a long time to wait if you can't walk.

 

[KENAT]

The US is big on rationing too, but it's more financially based.

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[rconnor]

Beej67,

The Graph – What’s the difference between the US and other western healthcare systems? The US works under a for-profit, private insurance healthcare system. The others work under a non-profit, universal healthcare system. The US costs are twice as high as the other western healthcare systems. So you wish to move further away from a universal healthcare system and further towards a for-profit, private, unregulated, insurance-based healthcare system. Smart.

Profits are “5%” – What molten said. Also, what IRstuff said. Also, this is the reported profit of insurance companies only. You have to tag on the profit of hospitals and inflated, unregulated rates of “specialists” as well. All of these profit streams are eliminated or minimized in a universal healthcare system. All of these profit streams are less regulated and have less over-sight in a “free-market” system. Furthermore, and to address your point about revenues, salaries are highly inflated in the US versus regulated salaries in universal healthcare systems.

How it works in the US
[ul][li]The doctor makes much more money than in a regulated, universal healthcare system.[/li]
[li]The hospital has to pay doctors more money, so they charge more money and encourage unnecessary tests and take profit off the top of that.[/li]
[li]The insurance company has to pay the hospital for their services and take a profit off the top of that, so they increase rates or deny coverage. The existence of insurance companies adds another level of paper work and administrative costs. Some reports indicate doctors spend ~25% of their time dealing with insurance paper work, which inherently does not exist in a universal system.[/li]
[li]The people have to pay through the nose for higher rates and fight tooth and nail to be approved for care they paid to be insured for. Many aren’t covered/can’t afford routine and preventative care, so small things develop into big emergencies, increasing the cost of the system.[/li][/ul]

How it works in universal healthcare
[ul][li]The doctors rates are regulated to the point they still have highly competent doctors (which they do – UK was 1st in quality of care, the US was 5th)[/li]
[li]The hospital pays the doctor a decent wage and they charge a decent rate. No need for unnecessary tests or inflated charges because they are non-profit and regulated closely.[/li]
[li]The government pays the hospital bill and is highly motivated to ensure they keep costs low while provide good quality care (UK was 1st in quality and 40% the cost of the US)[/li]
[li]The people just show their healthcare and receive care. Because it’s free and available, they have primary care doctors which can properly diagnose and treat minor things during routine check-ups without the need for emergency visits. This decreases the cost of the system.[/li][/ul]

How it works in a “free-market” system
[ul][li]Free-market would have little to no regulation on the rates that doctors charge. Little would change from the current US system.[/li]
[li]Free-market would encourage private, for-profit hospitals. As in a free-market, there would be little regulation over the quality of care and they’d likely cut as many corners on cost as possible. However, being for-profit, they would still attempt to charge as much as possible to maximize profit. Little would change from the current US system and likely less regulation (as per a “free-market”) would decrease the assurance of fair and quality care.[/li]
[li]Private, for-profit insurance companies would still exist in a “free-market” system. They would still skim profits off the top. They would still be encouraged to get around the higher costs from the hospitals by increasing rates or denying coverage. Not much would changed.[/li]
[li]The people would be left with the same broken, expensive system, except now with less regulation and oversight on insurance companies and hospitals. Disenfranchised people would be flat out screwed and receive little to no care outside of emergencies (which would then become an increased burden on the cost of the system). Middle class people would have to be in a constant search and struggle for a lower/better plan (adding more strain and stress). Routine and preventative care would be a luxury and so many would skip it, allowing minor ailments to turn into emergencies. Upper class people would likely be able to find more deluxe care (more of the “supersized” treatments you spoke of) and would be very happy. [/li][/ul]

So how are rates lower in a non-insurance based, universal healthcare system:
[ul][li]Doctors rates are regulated and lower[/li]
[li]Legal liability of doctors is regulated and lower, so insurance is lower[/li]
[li]Legal liability of doctors is regulated and lower, so overzealous testing is less (however, the quality of care still remains higher than the US)[/li]
[li]Hospitals are non-profit and so don’t need to charge more to skim profit of the top[/li]
[li]Hospitals are non-profit and so they have no incentive to perform unnecessary tests (again, quality of care is higher than the US)[/li]
[li]Private, for-profit insurance companies do not exist for basic healthcare because basic healthcare is free[/li]
[li]The lack of private, for-profit insurance companies means no added overhead/administrative costs, much less paper work for doctors, no increase cost due to profit skimming, less legal battles regarding coverage, etc[/li]
[li]Free basic healthcare means that routine and preventative care is available to all citizens. This means less unnecessary trips to the emergency room and healthier lives.[/li]
[li]Oh ya and everyone gets free basic healthcare. You don’t have 45,000 people die a year in the “richest, most powerful country” because a lack of healthcare coverage. But apparently this mean absolutely nothing to you, as you only want to discuss costs.[/li][/ul]

That’s why every other modernized western nation has universal healthcare. That’s why every other modernized western nation has cheaper healthcare than the US. That’s why every other modernized western nation has more available, equitable healthcare than the US. That’s why every other modernized western nation laughs at the US when they argue against universal healthcare systems. That’s why every shred of real world evidence supports the benefits of a universal healthcare system.

AND FOR THE LAST TIME, UNIVERSAL HEALTHCARE IS NOT SIMPLY SWITCHING EVERYONE TO MEDICARE. You need to scrap the whole insurance based system for basic care. You need to introduce regulations that limit liability of doctors. You need to introduce regulations on the quality and cost of care. You need to shift focus to primary care. That’s what makes universal healthcare successful everywhere else on the planet.

 

[jguer005]

So how are rates lower in a non-insurance based, universal healthcare system:
Doctors rates are regulated and lower
Legal liability of doctors is regulated and lower, so insurance is lower
Legal liability of doctors is regulated and lower, so overzealous testing is less (however, the quality of care still remains higher than the US)
Hospitals are non-profit and so don’t need to charge more to skim profit of the top
Hospitals are non-profit and so they have no incentive to perform unnecessary tests (again, quality of care is higher than the US)
Private, for-profit insurance companies do not exist for basic healthcare because basic healthcare is free
The lack of private, for-profit insurance companies means no added overhead/administrative costs, much less paper work for doctors, no increase cost due to profit skimming, less legal battles regarding coverage, etc
Free basic healthcare means that routine and preventative care is available to all citizens. This means less unnecessary trips to the emergency room and healthier lives.
Oh ya and everyone gets free basic healthcare. You don’t have 45,000 people die a year in the “richest, most powerful country” because a lack of healthcare coverage. But apparently this mean absolutely nothing to you, as you only want to discuss costs.

1) If doctors rates are regulated and lower, then what is their incentive to stay in the healthcare industry...the goodness of their heart? I'm not insinuating that doctors are heartless toward their patients, but just as we have entered the engineering industry for a career, for profit, so to have they.
2) Two words: Tort reform
3) I would rather a doctor be overzealous to figure out what is ailing me, then to be apathetic because he won't actually gain anything from helping me
4) The majority of US hospitals are already non-profit. There are actually more gov't operated hospitals in the US than for-profit hospitals.
5) Even though most US hospitals are already non-profit, again I would rather they be overzealous in finding a correct diagnosis than to be apathetic.
6 and the rest) BASIC HEALTHCARE IS NOT FREE...NO SERVICE IS FREE...PERIOD >>> Who then pays for this "free" health care, why you and me of course.

 

[glass99]

For a private system to be made to work, patients (a.k.a. customers) need to push back on the cost at the time that treatment decisions are being made with the doctor. If this can't be built into the structure, costs will continue to rise. In a public system, the government has the power to impose whatever cost structure the tax payers are willing to pay for without worrying about making a profit or getting sued.

 

[rconnor]

jguer005,

1) Right, that’s why all universal healthcare systems have no good doctors and the quality of care is poor…and then there’s reality. Quality of Care Rank: US – 5th out of 11, UK – 1st. (source)
2) And? Every nation that has universal healthcare went from non-universal to universal. Most of these transitions included limitations on liability. Difficult and impossible are two different things.
3) Right, that’s why all universal healthcare systems have poor quality of care…and then there’s reality (see above). (bonus points for using “apathetic” to describe universal healthcare while arguing for a system that lets millions go uninsured or underinsured for basic healthcare needs and ~45,000 die due to a lack of coverage.)
4) And? Are you saying it could be worse (all for-profit hospitals)? Ok. But that’s not an argument against universal healthcare. Furthermore, a true “free-market” system would have all private, for-profit hospitals. So it WOULD BE worse according to this argument.
5) Right,…never mind….just see 1 and 3 again. (and more bonus points!)
6) Right, that’s why all universal healthcare systems cost so much more than the US system…and then there’s reality. With a good portion of the medical system being paid out-of-pocket by the people (through insurance premiums or directly), the healthcare system still costs Americans much, much more than any other western nation with universal healthcare. Percentage of GDP that goes to healthcare: US – 17.7%, Canada – 11.2%, UK – 9.4%. And the per capita expenditures are even worse for the US (US - $8,508, Canada - $4,522, UK - $3,405). (source)

Ya know, facts and such.