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The Health Care Crisis and Why it Was Inevitable

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Since 1970, the health care industry has undergone a revolutionary change. Before that time people were overwhelmingly (about 70%) in traditional indemnity plans where patients pay a certain percentage of health care costs. With the passage of the Health Maintenance Organization Act written by Ted Kennedy (D-Mass), very quickly over 70% of Americans were covered by HMOs.

The structure of HMOs was also largely different than traditional indemnity plans. HMOs require primary care physicians to act as gatekeepers of advanced care and it empowered insurance companies to challenge the medical judgment of doctors. It restricted choice to those doctors and providers “in the network” and any care provided by outside providers, care that didn’t follow the right regulations or didn’t have the right referrals was simply not paid.

It is indisputable that we are currently in a health care crisis with skyrocketing costs and extreme customer dissatisfaction. It is never a good sign when medical providers have to market themselves on customer service. No other industry has to try to convince consumers that “we won’t abuse you” and that “you matter to us”. The current argument is that health care needs to be socialized because the free market hasn’t worked.

First, the central principle of the free market is that the individual parties of a transaction are able to negotiate the terms of that transaction themselves. For instance, if I want to buy a car, I can negotiate with the dealer the terms of the transaction and the dealer can do likewise. If neither of us wishes to proceed, we can move on. Without free choice on both the provider and consumer in deciding terms of the transaction, there is no free market. There is no free market without choice.

The health care system in this country, developed by Democrat Ted Kennedy who now campaigns against his own creation, all but eliminates choice in both doctors and patients.

Limiting the Choice of Patients

Let’s say you, Joe Consumer, want health insurance. Because of the structure of the tax system that enforces what is basically an historical accident, you will probably get this through your employer. Your employer is limited by tax law to only let you make decisions about your health insurance provider at certain times, basically when you are hired and once a year thereafter. You will likely get a few choices, an HMO with higher deductibles and lower premiums, an HMO with lower deductibles and higher premiums (from the same company), and a traditional indemnity plan. If your employer chooses Blue Cross Blue Shield, you’re only going to be able to choose Blue Cross Blue Shield.

Employers decided which insurance company to work with. Their motivation is clear, to save money. As a secondary objective, they want happy employees. However, the insurance company is selling insurance to your employer, not you. So they craft policies that are lucrative to your employer. Maybe 60% of employees are happy with what they get, but the other 40% are pretty much hosed. If they want a different insurance company they need to pay full price and the employer is not allowed to compensate the employee on what their portion might have been. End result: consumers do not choose their insurance company, their employer does. If they want to change their insurance, they can’t until the next benefit choice period dictated by the IRS.

Now you, Joe Consumer, want to go to the doctor. You take your handy dandy provider directory (or go online) and you select from the list of doctors your HMO allows you to go see. You may know you need an orthopedic doctor to deal with your knee problems but that’s too bad, you need to go to a primary care physician first (and pay for that useless appointment that you don’t need). This primary care physician’s job is to limit the amount of advanced care patients receive. In fact, in some cases, primary care physicians get a bonus based on how few referrals they give.

Let’s say you do get a referral. Then you go to where the HMO tells you to go to with even more limited choices in the provider directory. Let’s change the scenario, let’s say instead of knee problems you have cancer. You hear good things about the Mayo Clinic and you want to get care there. Too bad, you need to go where your HMO tells you to go to. You may have a better shot at survival at Mayo, it doesn’t matter.

You may wish to explore alternative treatments, however, your doctor who knows what your insurance company will and will not pay for better than you ever will, simply will limit you to those choices which your insurance company has already decided you will have. He knows that they won’t pay (and he probably won’t get paid) if his plan of care deviates from the dictates of the insurance company’s accountants. These people have never seen you, have no information about you but have near complete control over your health care decisions based on some sparse paperwork sent back and forth. The patient will never get the opportunity to talk to much less negotiate with these people.

Lastly, you want to choose a doctor among the choices that are provided to you in your provider directory. If you want to “price shop”, well, you aren’t provided pricing before hand. This may be difficult in some cases, but patients simply have no pricing information with which to judge before they’ve already committed themselves to care (some exceptions, not many).

The net balance of all of this is that in every single step of the health care system, the consumer is removed from the decision-making loop. The only health care decision the consumer gets to make is whether to have the insurance company pay or to do what they think is right and pay full price out-of-pocket and risk bankruptcy, even if it is the right decision.

Limiting the Choice of Doctors

On the other side of the transaction we have doctors that also have their choices restricted and taken out of the equation. Before a doctor sees his first patient, before he gets an office or buys any equipment, he needs liability insurance. The premium he is charged will be identical to other providers with similar practices no matter what training, experience, qualifications or differences exist between them. A Saturday-night hack artist pays the same as a doctor who has won the Nobel Prize. In Illinois, the premium for an OB-GYN before they see their first patients is about $240,000. In surrounding states it is about one-fourth as much which is why Illinois in particular has a health care crisis. Providers are fleeing the state. Take a look near any state border and you will see a thriving health care practice just on the other side of the Illinois border with that state.

The terms of this insurance policy (in addition to the price) are non-negotiable and designed to do one thing, prevent lawsuits or make them easier to win. For OB-GYN’s the terms are the most notorious. For instance, a woman who has had 2 children already without complications, is having a third low-risk pregnancy needs to go through the same regimen of care as a first pregnancy. If you’ve had children you know how this works. Started second trimester or so, you go for bi-weekly checkups (that become weekly as you get closer to birth). You pee on a stick, you get weighed and they ask you if you have any questions. There’s an ultrasound in there and a couple of blood tests.

With my first child, after a few of these appointments, I began to wonder what was the point. We didn’t have questions. In, out, 15 minutes: that’s $50 (the copay in this case). Why do I bring up this story? Because if you, the patient, decide that these visits are superfluous, your provider is required to drop you as a patient. You may have no complications, you may have no questions and there may be absolutely no reason for these visits, but your provider is required to mandate that you go, regardless of medical need or you can’t be their patient anymore. By the way, you, the patient, pay for this decision made not by your doctor, but by some lawyers at a liability insurance company. The United States has the highest C-section rate in the developed world because liability insurance companies insist that if anything is “abnormal” a C-section must be performed. Not because of medical need, but because of “limiting liability”.

In addition to liability insurance companies dictating the terms of care, doctors then have to deal with health insurance companies (or even worse, Medicaid). About 30% of medical bills sent to private individuals (not insurance companies) are paid. Doctors know that they are being paid by the insurance companies, not the patient. They know that if the insurance company isn’t going to pay them, they probably won’t be paid. The only exception to this is patients who walk into an emergency room or doctor’s office with a Platinum American Express card. Providers know these people are paying cash and they get treated with far more respect than insurance carrying patients do.

Before the question of the “bonus checks” for limiting referrals even comes in to play, doctors know that the insurance company is calling the shots. They know they won’t get patients without joining a “network” of some providers in a given insurance company. The insurance company will then dictate what rates they can charge, what services they can provide, what drugs they can prescribe and in some cases how many patients they can see.

A doctor that practices without taking a major insurance policy will have a hard if not impossible time earning a living. A doctor that practices without a liability insurance policy (even in places where that’s legal to do and that isn’t many) can be considered certifiably insane.

Conclusion

Both doctors and patients have their choices and ability to negotiate their health care severely limited. There is some competition in a very limited sense where employers can choose from a small selection of HMO companies. Doctors can choose too and there is a small subset of liability insurance companies they can choose from as well. One of the major plans for “health care reform” is to simply have the government serve as the HMO instead of private companies. It is unfathomable to believe that taking away the trivial amount of choice in the health care system that is left will result in a better system that is more responsive to patients.

The solution to the health care system is to let those who are part of the transaction, doctors and patients, have the freedom and latitude to decide their own plan of care. Removing the patient from the decision-making loop has only created a health care system that thinks of the patient last. Let’s give the free-market and freedom of choice a chance.

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About John Bambenek

John Bambenek is a political activist and computer security expert. He has his own company Bambenek Consulting in Champaign, IL that specializes in digital forensics and computer security investigations.
  • Jonathan Scanlan

    You make a pretty solid case here. People really ought to make the choice for themselves, and have the wages to decide it with.

    Of course, that said, there needs to be a safety net for the poor and working poor. And how can you ensure that they will actually spend money on insurance? There in lay the challenge.

  • troll

    John – good description of the ‘situation’…why did congress agree to socialized medicine (hmos = government mandated limitations on choice) in the first place – ?

  • http://www.intersportswire.com alessandro

    It always comes down to choice. Remove the power of the individual to decide for themselves what’s best all in the interest of serving the collective good with socialist policies and you get one confused and inefficient problem.

    Between Canada and the U.S. it’s too bad we can’t come up with better systems. Or at least smart solutions to existing problems.

    So. Did Ted blame Dubya for his creation?

    John, explain me something: is this problem where socialist policy meets corporate greed? Did Kennedy’s plan make it worse?

  • Doug Hunter

    The problem with the free market of healthcare is that often when you’re in a situation requiring treatment you’re in no capacity to make wise, efficient market choices. In an emergency you’re taking the first damn ambulance and ER you can find, period. They’ll charge you whatever outrageous fee they want, and you’ll gladly pay it.

    Same goes for advanced treatments, etc. When you’re life is at stake you’ll pay any amount of money for a shot at being well again. The healthcare system takes advantage of this and makes a killing.

    When you need that extreme state of the art care be glad you live here, if you just need to go to the ER to reset a broken arm, you’re fucked, take out a second mortgage.

    The demand on healthcare is completely inflexible, the answer is increased supply. Regulations should protect providers from quarter million $$$ insurance premiums. The walmart type clinics idea for colds, flu, perhaps x-rays or even minor stitching is at least an innovative attempt to increase supply. Another way would be to allow these minor procedures/basic diagnosis to be performed by someone with less stringent training that a full on doctor.

    Allow nurse lvl specialists to perform annual physicals, set bones, stitch people up, and hand out cold medicine. There’s no way that could happen now as doctors would see a significant hit to their profits and the liability to anyone performing these healthcare services would be extreme.

  • Maurice

    John,

    it is rare that I read all 3 pages of an article like this. Well written and well thought out. One thought about the 3rd pregnancy; I view those annoying visits as a chance for the doctor to catch any anomaly that might otherwise be overlooked.

    I work for Micron in Boise Idaho. We have insurance through the company but also have a Health Center on site that employees and their immediate families can go to for minor health issues. This is a great savings for all 3 parties involved.

  • Clavos

    I have a top drawer group health policy through my wife’s employer.

    It is a PPO, not an HMO, and thus allows a wide choice of doctors, tests, treatments, etc. We are never subjected to any kind of insurance-dictated rationing, etc.

    It DOES work, and works well. As many of you know, my wife is very sick and we are HUGE medical consumers. Her primary medical carrier is Medicare (a whole other BC article unto itself), and the group health policy serves very well to pick up what Medicare doesn’t cover, as well as covering my medical expenses.

    But, the premium is $850 a month; $10,200 a year, entirely from our pocket.

  • http://www.parttimepundit.com John Bambenek

    Re: PPOs

    I love them also, but the problem is the premiums. I have been known to switch to a PPO when I expect to need out-of-network care from providers I trust for special cases, and then go back to HMOs when all I expect is routine care. But having to wait only for benefit choice periods suck.

    Re: Socialism and corporate greed

    Well, businesses are going to be motivated by profit, that will never change. Capitalism is far from perfect, but it’s better than the alternatives we know of so far. The trick is making what is “profitable” also map closely to what is good societally. In the case of health care, insurance companies are out to make money. However, by taking the consumer out of the driver seat, they have less and less motivation to respond to the needs and wants of patients. They get paid by employers, they’ll meet *their* needs. Putting the consumer firmly in the driver seat will force businesses to adapt to consumer wants. Not perfect, but a whole lot better.

  • http://drdreadful.blogspot.com Dr Dreadful

    Good article but, as you do acknowledge in the comments, it deals with HMOs only and PPOs are a whole nother topic.

    I’m from Britain originally (as I believe I may have mentioned on occasion) and I hate – hate – HATE the healthcare system over here. We have national insurance in Britain, which covers health and several other services, and most of us regard healthcare as a right, not a privilege. As such, the way things are done in the US seems to us ridiculous and at times, callous.

    Doug is spot on when he points out that there are many situations in which the patient is in no position to make an informed choice regarding their care.

    I’ve no complaints with American healthcare itself, but it’s utterly ludicrous that even with insurance coverage – especially with insurance coverage – even a simple office visit generates a tsunami of multiply-redundant paperwork and mail. It’s as if the electric company were to send you one statement itemizing your usage, another billing you for the meter reader’s time and yet another billing you for the electricity itself.

    My wife and I always used to always go for the HMO option offered by my employer, on the grounds that it was cheap and being in good health I rarely used medical services. But we’ve learned through experience that for the same reason, we might as well go for the better choice offered with a PPO – the out-of-pocket expenses are steeper but rare enough for us to absorb them. Neither our doctor nor our dentist takes HMOs: we found them through recommendation and consider it well worthwhile using their services rather than those of some mediocre medic we didn’t have a say in selecting.

    But we are lucky. We are not poor. The low-income clients I work with on a daily basis do not, by and large, have that luxury.

    (Clavos, #6: Ouch!)

  • http://www.republicofdave.com Dave Nalle

    I’ll add my praise for this article. So good and relatively unbiased that I was surprised when I remembered it was a JB article. So non cranky and well-thought out. Refreshing.

    Sadly, I’m not sure the article really does much to address the problems we face. How do we reintroduce competition and also take care of those who can’t or won’t insure themselves?

    Dave

  • http://www.parttimepundit.com John Bambenek

    Re: Dreadful

    Part of the problem with the European view of the American health care system is that “right” means something different to Americans than it does to Europeans.

    To Americans, rights are something you have inherent in nature. If you want to use the Declaration of Independence language, you have them endowed by the Creator. Rights in this country is something you inherently have that government does not have the authority to get in the way of.

    Europeans, on the other hand, developed under the social contract theory where rights are something that the government gives you in return for you being under their jurisdiction and paying taxes. A right to health care makes sense in the European context because rights are things the government gives you. To Americans, this idea is absurd. The right of free speech means the government can’t get in the way of your own autonomous action. It doesn’t make sense to put in an “affirmative” right to health care to us without drastically changing the underlying political foundation on which we were founded.

    Re: Dave

    Already clocking in at over 1800 words, I didn’t think I’d be able to slide in “the fix”… :) As far as cranky, well, I just don’t care enough about politics anymore to get upset by it. :)

  • Doug Hunter

    “How do we reintroduce competition and also take care of those who can’t or won’t insure themselves?”

    1) End the government run system medicare/medicaid and remove all current medical deductions and credits from the tax code.

    2) Give everyone who buys insurance a flat tax credit

    3) Give anyone who can’t afford insurance with the credit a credit voucher redeemable for insurance at a qualifying provider.

    4) Provide monetary penalties for not doing either 2 or 3. (no one’s going to jail for not getting insurance)

    5) Provide a pool for reinsurance of the high medical consumption pool.

    Everyone would be insured, competition would be intact, corporations would still rake in the healthcare dough. The only problems would be the massive shockwaves set off by such a monumental shift in everyones budget. Base taxes would have to increase but be offset by healthcare credits. Employers former healthcare costs would need to be passed to employees as increased pay in order to allow them to purchase the insurance. Those things take time to work themselves out.

    That’s just the first plan that comes to mind, I’m certain someone smart could come up with an even better solution.

  • http://drdreadful.blogspot.com Dr Dreadful

    John: Europeans, on the other hand, developed under the social contract theory where rights are something that the government gives you in return for you being under their jurisdiction and paying taxes. A right to health care makes sense in the European context because rights are things the government gives you.

    That’s not entirely accurate. Americans derive their notion of rights and liberties from British ideas. We tend to have a slightly different outlook than the rest of Europe, which, remember, got thoroughly Napoleonized and has never quite recovered.

    The Welfare State was a British idea, later imitated across the continent. We have a very personalized idea of our ‘rights’, which may be why we complain so much!

  • STM

    Nice to see Bamby giving a nod to the notion that the founding fathers just grabbed all their ideas out of thin air. Once again, and I’m sick of saying it over and over again for the benefit of those Americans who are too ignorant to make the effort to understand this stuff, all of us in the English-speaking countries have near-identical rights that as Bamby rightly says, we were born with rather have had bestowed on us by government.

    The ideas of the founding fathers come largely from the Magna Carta (the idea of due process comes from a statute of Edward III added to the Magna Carta, and the wording’s almost identical to that of the US constitution but predates it by 400), and the unwritten (in the sense that it combines many laws both written and taken to have existed) constitution of Britain that includes such documents as the English Bill of Rights and a zillion judgements made at common law. Even US law is based largely on Blackstone’s treatises on English law.

    One major guiding train of thought behind the American Revolution was the train of thought behind the ideals that blossomed in Britain in the 17th century and led to the Golden Revolution. It is why the British, probably rightly, saw themselves as the defenders of real democracy and civilisation in that period through to the mid-19th century against the bogus claims of the French Revolution, and dare I say it, the American revolution which was essentially a mockery and a sham that while offering “rights, freedom and liberty”, kept one group of people in virtual penal servitude simply because of their colour.

    The reality of the US Bill of Rights didn’t catch up with its well-intentioned promise until the mid-1960s. This is something all Americans should be cognisant of before they open their traps in regard to rights taken to exist rather than bestowed. As for the French, well … the guillotine got a fair work out and if that’s liberty and freedom, I’ll eat my hat.

    The founding fathers didn’t exist in a vacuum (unlike many modern Americans, including those who can lay claim to a decent education but who still haven’t a clue).

    Just because these things haven’t been written down in a constitition doesn’t mean they don’t exist as rights every bit as powerful and protected at law as those enjoyed by Americans.

    When discussing the deluded and fancy notions in regard to rights that so many Americans seem unable to rid themselves, it’s important to have an understandg as Doc does and I do in far off Australia of why they AREN’T different.

    They might be different in France, Germany and Spain, but they are essentially the same in all the countries that inherited their legal systems from England.

    However, on health care: while I like the right to pay a gap insurance that means I’m never out of pocket, it’s also nice to have had a right added should things go belly up … that’s the right to get sick without going bankrupt, and the right to quality healthcare for everyone no matter what social strata they occupy.

    I put it in the same league as, say, having the right to catch a bus to work without a lunatic taking pot shots at me with an AK47. I say that right overrides the right for all citizens to bear arms.

    So yes, government can bestow some rights in addition to those we have, or at least can enumerate them.

  • http://www.intersportswire.com alessandro

    Doc, technically the Chinese came up with it. Then Bismarck’s Germany. Germany (Britain’s pal) is considered to be the first welfare state.

    So am I to understand Americans choose their health providers like they do mutual funds?

  • http://handyfilm.blogspot.com/ handyguy

    John doesn’t really address the illogical connection of employers to health care. Why should employers be the main source for so many? And he doesn’t really address the many millions of Americans without coverage. Some are poor; some are not. Some have employers who don’t offer care.

    I understand the hesitancy about a government-run system. But we let the government finance and run schools and police forces. For some of us, this analogy isn’t so far out. And it’s just not morally acceptable to allow so many people to be shut out of the system.

    The key, whether we end up with a single-payer system or not, is to somehow give incentive to insurance companies to pay for care. Now their incentive is to deny care.

  • http://handyfilm.blogspot.com/ handyguy

    It is also, forgive the overused word, disingenuous for John to give Ted Kennedy sole responsibility for the HMO Act of 1973, which was the result of studies and committees developed by the Nixon White House. And Nixon welcomed the bill and signed it gladly.

    [Michael Moore in Sicko claims that Nixon was so enthusiastic because Ehrlichman or Haldeman told him it would help insurers make more money, since they could deny care that cost too much or was outside the rules of the system. I’ll leave it to others to decide whether MM was overreaching here.]

  • Clavos

    “And he doesn’t really address the many millions of Americans without coverage. Some are poor; some are not. Some have employers who don’t offer care.”

    The only uninsured Americans deserving of concern are those who can’t afford insurance, or those denied insurance because of a “pre-existing condition”.

    The fact that your employer doesn’t offer it is literally irrelevant, because insurance is available for the vast majority of the population, provided they can pay for it, regardless of whether or not it is offered by an employer.

    There are literally millions of self-employed people who are buying insurance on their own.

    Rather than try to set up a government-paid insurance program which would, inevitably, end up as corrupt and wasteful as Medicare, I think we should seek solutions whereby the poor and those who have been denied insurance are able to get it. We should do this without attempting to completely tear down and re-build the medical industry.

    As bad as our government is at doing anything right, the last entity in the world we want controlling our entire health care infrastructure is the people who build bridges in Minnesota using $600 hammers.

  • bliffle

    #15 — February 19, 2008 @ 23:43PM — handyguy

    The key, whether we end up with a single-payer system or not, is to somehow give incentive to insurance companies to pay for care. Now their incentive is to deny care.

    There’s NO way to incentivize an InsCo to pay for a million dollar operation on a 30k auto mechanic, so eventually the InsCo bureaucrat MUST deny the operation and condemn the guy to death.

    The whole system of “incentives” has to be demolished in order to reveal the real costs of maintaining a facade of “free markets” and “private enterprise”.

  • Lumpy

    The problem is that there are operations that cost a million dollars. That’s unjustifiable on any basis. Fix that and u fix the system.

  • STM

    If the dems get in, you guys are going to get a form of universal health care. I know that Hillary was in Australia looking at our system on a visit with Bill, so if you get something like ours it probably won’t be so bad, because it combines optional private hospital cover with public cover. The good thing about it is that with Medicare, even as a private patient, with no waiting lists and doctors and hospital accomodation of your choice, a lot of stuff is free.

    That keeps the cost down for the individual.

    A lot of people were sceptical when we first got our system, but it’s been honed nicely over 3 decades, has led to a lot of work in the health sector, and is world-class.

    Perhaps you can learn from the mistakes made by others and step in just at the right point.

    One thing I am certain of though is that once you get and you realise how good it is, you’ll be kicking yourselves and wondering why you haven’t had it since the year dot.

    People on both sides of the political spectrum here love it, which is always a REAL measure of how good something is.

    It is really nice to know that if you get sick, and ultimately you can’t keep working, you have care that is world-class and isn’t going to cost you a cent.

    It’s not perfect, obviously, but it’s still pretty damn good.

    This is the kind of stuff governments should use your taxpayer dollar for, not spending billions on aircraft carriers and fleets of bombers that are sitting around rusting away because, dang, there just ain’t no more superpowers in the same league.

    A happy country is a good country.

  • Clavos

    Without questioning the validity of what you say, SS, I do have to point out that I can’t recall anyone from another country with socialized medicine being as enthusiastic about their system as you are about yours.

    Australia’s system apparently is much better than most.

  • http://drdreadful.blogspot.com Dr Dreadful

    Well, Clav, from his description it does seem that Australia has managed to strike a happy balance between universal access to free health care and providing top-quality health services.

    I’m sure the system must have its critics, and one of these days I’ll read up on it a bit. But to be frank, Australia’s health service could be on a par with rural Burkina Faso and I’d still want to live there. Now remind me why haven’t I bought my plane ticket yet, again?

  • STM

    It isn’t perfect, though, I have to say.

    But it works. How it might translate from a country with a population of 20 million to one with 400 million, however, might be the acid test.

    I suspect that a big bureaucracy would be needed, although that DOES create work.

    Remember: you have nothing to fear but fear itself :)

  • http://www.parttimepundit.com John Bambenek

    Well, we have Medicaid now that’s supposed to cover all the poor people… yet we still have 50M insured supposedly. That, and at least in Illinois it takes 180 days for a provider to get their first denial letter from medicaid for payment. Then the cycle of sending more information begins. Medicaid has forced providers to operate on a Net 450 for those patients!

    No insurance company is anywhere as bad as medicaid with screwing doctors. Do we want to put everyone under their care?

  • bliffle

    Bamby misses the point, as usual:

    “No insurance company is anywhere as bad as medicaid with screwing doctors. Do we want to put everyone under their care?”

    A healthcare system exists for the benefit of peoples health and not primarily for the enrichment of providers and insurers.

    We have to remove Insurance companies as gatekeepers and restrict their roles. The first step is to repeal the odious McCarran-Ferguson act of 1945 which enables the insurance company oligopoly.

  • Daniel X. Wray

    The health care system in the United States has been crippled by the Federal Government. For people between the ages of 18 and 55 the average health care annual expenditure is about $600(with the exception of childbirth related expenses). Even crisis intervention for critical life threating issues is extremely low for this segment of the population. Death rates from medical related conditions are on the order of 3 in 100,000. If those three people require $500,000 in care the cost for the rest of the 100,000 people is $15 each.

    So if the cost of health care for the 18-55 year olds is $600-700/ year, why does health insurance cost $8500?

    The answer is that the Federal Government decreed that the folks on medi-care get really cheap Health Care. While that is both literally and figurative the cost to subsidize this care comes from your insurance. Right now it is estimated that 80% of all your health care costs are incurred in the last two months of your life.

    Your $8500 insurance bill is another transfer payment to the older folks because the Congress of the United States has already spent all of the money.

    Why are there 47,000,000 uninsured? Because they are not stupid enough to pay for the other guy.

  • STM

    “Golden revolution” … sorry, typo. Make that Glorious revolution.

    For more clues on the origin of the US constitution and the declaration of independence, see John Locke.

  • Alec

    John – Very good article. A nicely reasoned analysis of some of the key issues regarding health care.

    However, I think that some employer-based plans, especially some PPO’s were not just creatures of politics and the tax code, but initially reasonable attempts by employers to offer plans which would help their employees. The original elements of the Kaiser Health plans come to mind, as do the various health care plans offered by aerospace companies in California during the Golden State’s boom years.

    RE: Let’s give the free-market and freedom of choice a chance.

    Has this worked anywhere recently without some form of government intervention?

  • Baronius

    Handy is right to compare health care and education. Both sectors are experiencing enormous inflation. The more government gets involved in them, the higher the prices go, and the less say the consumer has.

    If I want to go to college, the payments are essentially a deal between a loan officer and a registrar’s office. If I want to go to the hospital, an insurance company works out a price with a hospital administrator. Everyone makes bookkeeping entries, but no money changes hands. I have no say, because I’m not paying. The doctor has as little input as I do.

    Every year, the government promises to pay a little more of the exchange. So the payments increase proportionately. The actual payments (from me, to the doctor) are on the margins.

    Fortunately, in the medical field, technology is progressing so quickly that it’s able to sustain this pyramid scheme. In the academic world, the overbooking of college is sustained by the continual lowering of standards (grade inflation). The fracture point in the medical field is the supply of doctors. We’re creating new layers of techs, doctor’s and nurse’s assistants, et cetera, just to keep the system running.

    Both political parties are committed to government expansion in health care and education. But we know that’s only going to drive up prices further. As P.J. O’Rourkes says, if you think health care is expensive now, wait till it’s free.

  • bliffle

    The Federal Government, as well as the weak system of state governments, has been successfully manipulated and suborned by the Insurance companies to ensure their iron grip on the finances of the US health system (do you ever hear a mention of health care financing without reference to “the need to secure Health Insurance”?).

    It is always so, with monopolies and oligopolies, just as the other abusive corporations in the USA use their power and deep purses to bludgeon elected officials into conformity with their objectives, which are set by the top executives, and, conveniently enough, serve mostly to enrich those same execs.

  • Clavos

    O, those evil executives!

    We should make it a capital crime to be a businessman and execute them all forthwith.

    Scum…

  • REMF

    “Without questioning the validity of what you say, SS, I do have to point out that I can’t recall anyone from another country with socialized medicine being as enthusiastic about their system as you are about yours.”

    I disagree. Being close to the border, I know plenty of Canadians who are more than happy with their system.

  • troll

    *O, those evil executives!*

    executives aren’t evil (necessarily) – they serve many useful functions in our economy and deserve a good $25/hr…maybe even $30/hr depending on experience

  • Doug Hunter

    “Why are there 47,000,000 uninsured? Because they are not stupid enough to pay for the other guy.”

    One of the best arguments for some sort of forced or universal care. Lots of healthy people aren’t covered, yet they know in a medical emergency they get de facto coverage and within a period of months with a debilitating disease they could adjust their income enough to qualify for free healthcare anyway. In a way we almost have universal healthcare already, we just don’t have universal sharing in the cost.

    As a far right winger I’m usually against most programs pandering to the poor, but in this case the poor are already covered. This is one democratic idea that might actually remove some stress from the middle class. How to implement it is anyones guess, but I like tax credits for coverage except for those with no income who should get coverage vouchers.

    Why do I make this possible exception to my right wing views? Simple. Everyone receives de facto health coverage, therefore everyone should have to pay for that priviledge.

  • bliffle

    “Why are there 47,000,000 uninsured? Because they are not stupid enough to pay for the other guy.”

    Also, because there’s no assurance that after you pay premiums for several years that the insurance company will actually pay for your healthcare when the time comes. They’re experts at wriggling out of their responsibilities.

  • Clavos

    “Also, because there’s no assurance that after you pay premiums for several years that the insurance company will actually pay for your healthcare when the time comes. They’re experts at wriggling out of their responsibilities.”

    Never had one do that yet, and my wife is hitting them for more than $50K a year (the amount not covered by Medicare) on a premium of $10K a year.

    Occasional initial denials, which invariably are paid when we object, usually because their clerks have made an error.

  • Baronius

    Bliffle, insurance isn’t an oligopoly, but it will be if we lose our right to opt out of it.