9 comments on “How the Current Senate Bill Will RAISE the Cost of Health Care

  1. Here's a copy of the letter I sent:Dear [Senator],Thank you for your service to our great [state/nation]. I appreciate the sacrifice you make on our behalf. I understand you have our best interests at heart and I appreciate that.To that end, I hope you'll consider voting AGAINST the health care bill currently being debated in the Senate. Here's why I make this request:1. Health care costs are high because consumers with insurance have no incentive to control their health care use or to seek the lowest cost, highest quality provider. Additionally, because health insurance pays 80% (in most cases), these consumers have very little incentive to control costs.2. The current Senate bill, by penalizing high-deductible health plans and further insulating all consumers from the cost of care, exacerbates this problem instead of fixing it.In other words, this bill will increase the cost of care for all citizens, especially those who can least afford it. And it will cost over $800 million to do it.Instead, please propose a plan that encourages high-deductible health plans and encourages providers to publish their prices before services are used. That way, consumers can compare prices and quality and have an incentive to do so.I appreciate your time.Thanks,Mark

  2. Note that underutilzation also overburdens the system — which seems to be where we're at now, with 40+ million people uninsured, 60% of personal bankruptcies caused by medical bills, and young people largely skipping insurance unless they're sick (and therefore ineligible). I'm not wild about the proposed health care bills, but I would live to see the U.S. adopt a philosophy of at least trying to solve problems, and then adjusting or reverting changes if the net effect isn't positive. Probably wishful thinking though, as both left and right have lost the ability to say "I'm not sure, let's try it and see what happens."

  3. I'm not sure how underutilization overburdens the system, could you explain that?I also would like to see everybody have health care. But the reason people can't afford insurance OR health care is because the cost of those services is high. Cut the costs and access increases.The reason I don't want a "try it and see" mentality in Congress is 1. Congress never gets it right, 2. at a cost of $1.2 trillion (potentially $2.5 trillion) and covering only 30MM people or so, that's a cost of $83,333 per person over 5 years, or $16,666 per year. You could just buy them an existing plan now and cut that cost in half.

  4. Underutilization can overburden the system because there's a curve whereby it costs more and consumes more resources to treat things later. So underutilization of preventive care, the doctor/patient touch points that can materially affect lifestyle and therefore health, and regular screenings to catch stuff at an early stage lead to an overburdening of the acute care system. You hear stories about how the uninsured clog up emergency rooms when stuff gets so bad they can't go on, and a friend who works in an ER tells me that's increasingly common. But that's probably a small percentage of the systemic problem, which also manifests in people only going to their PCP when sick rather than getting physicals.Flu shots are another good example — the production cost per shot is negligible. And society would be better off (as measured by productivity and GDP; I'm no bleeding heart) if the annual flu season were less disruptive. But lots of people skip them because of the retail cost. We'd have to look at the math, but I'd be surprised if a free universal flu shot subsidized by taxes wouldn't be a net gain after factoring in tax receipts from increased GDP due to less sick time and higher productivity. It'd be interesting to look at, anyway. I'm deeply suspicious of government involvement in health care. And I agree that congress tends to get it more wrong than right. But, hey, the current health care system was devised by congress as well. With health care consuming 16% of GDP and projected to rise to around 20% over the next ten years with the current system, and with 30% of the current costs being administrative, I'm at the point where I'm going to support any change at all because it makes the concept of change itself possible. We're already dangerously close to the point of just collectively giving up and deciding that it's impossible to do anything at all. So I think it's a fine plan to try a federalized system and allow states to opt out so we can compare outcomes between private/public and states that participate and those that opt out. We're headed for disaster on the current trajectory; if the new plan is dramatically worse it'll be easier to change the second time, and I'll be the first to argue for that change, too.

  5. Here’s a copy of the letter I sent:

    Dear [Senator],

    Thank you for your service to our great [state/nation]. I appreciate the sacrifice you make on our behalf. I understand you have our best interests at heart and I appreciate that.

    To that end, I hope you’ll consider voting AGAINST the health care bill currently being debated in the Senate. Here’s why I make this request:

    1. Health care costs are high because consumers with insurance have no incentive to control their health care use or to seek the lowest cost, highest quality provider. Additionally, because health insurance pays 80% (in most cases), these consumers have very little incentive to control costs.

    2. The current Senate bill, by penalizing high-deductible health plans and further insulating all consumers from the cost of care, exacerbates this problem instead of fixing it.

    In other words, this bill will increase the cost of care for all citizens, especially those who can least afford it. And it will cost over $800 million to do it.

    Instead, please propose a plan that encourages high-deductible health plans and encourages providers to publish their prices before services are used. That way, consumers can compare prices and quality and have an incentive to do so.

    I appreciate your time.

    Thanks,
    m

  6. I agree. Underutilization now does lead to over-(and unnecessary) utilization in the future. No question. That's one reason most health insurance companies are covering the swine flu shot free. It's also why most high-deductible plans include free preventative care (or at least are covered 80/20).I agree, the path we're on isn't sustainable, although I would argue that a given industry's share of GDP isn't a bad thing. Money spent on health care does get pushed back into the overall economy.But passing legislation that will make it LESS sustainable is simply unconscionable. Especially when it's so expensive. Even more especially, when actually fixing the problem would be nearly free.The idea of tax-advantaged high-deductible plans combined with requiring doctors to publish prices before service and requiring publishing of quality ratings of doctors would cut the immediate cost of health care (shift the curve down) and change the rate of increase (the slope). Access would improve, we would have more freedom to make the choices we want and cost of care and coverage would plummet.I strongly disagree that mistakes are easy to change, in terms of legislation. I think everybody not currently receiving Social Security would agree it's a mistake and a disaster. Just take your statement and calculate the rate of return based on your contributions. In many cases, it's NEGATIVE. But good luck changing (or getting rid) of the program. Same for Medicare and Medicaid.If this passes, I'm afraid we'll be saddled with this dog for 50 or 60 years, if not more. At a time when our deficit in 2017 is expected to be around $50 trillion, I hardly think this is wise.

  7. Likewise, I enjoy talking about stuff and thinking it through, and as a genuinely nonpartisan type, I've got no dog in this fight, so I'm not at all attached to any of these opinions, and I'm not particularly enamored with or opposed to any of the personalities involved. So thanks much for your also well thought out positions.Your swine flu shot example is interesting — do you think insurance companies would be offering it at no cost if health care weren't currently under such scrutiny and if they weren't faced with the potential for such huge regulatory changes? My cynical side says that it's a PR move more than a genuine change in business practices.As for odeductibles and preventive care — people making $50k/year and up are fine. It's the people making $25k/year, and there are plenty of them, for whom even a $25 physical copay is a strong disincentive to actually see a doctor regularly. I'm very skeptical that keeping those people out of the doctor's office is beneficial to society in the long run (again, from a productivity and GDP standpoint).With regards to legislative change, I think the issue is that we've turned pretty much everything into such a knock-down-drag-out fight that there's no room for experimentation and evolutionary improvement. If health care reform fails now, I doubt we'll see any changes at all for at least 20 years — by which time health care will account for more than 20% of GDP.And I do see that as an issue. It's true that money flows through the rest of the economy, but the way I see it, health care should be ancillary to the core economy, not the central focus of it. We may differ on percentages, but I'm sure there's a point where you'd say "whoa, too much"… say, if healthcare hits 50% of GDP? Especially given that other countries have higher quality of care at lower costs.I'm not sure Social Security is that germane. Nevermind that I don't see it as an unmitigated disaster (just a serious mistake), the real issue with Social Security is that the government collects the funds and the temptation to raid them was too great. Healthcare, though, doesn't present the same incentives for abuse by legislators. And to the extent there's potential for abuse, I think the populace in general will be much more engaged when their health benefits next month are messed with than when their retirement funds for twenty / thirty / fifty years out are messed with.On the projection front, I think that if you want to take the CBO's deficit projection of $50T in 2017, you probably also have to take their projection that the House healthcare bill will reduce deficits by $130B over the first 10 years. A drop in the bucket, and the projection is very debatable, but they do use the same models.Anyways, very complex subjects here. I guess my bottom line is that I think it's likely that Republicans will recover political clout in 2016, and that a 6-7 year experiment with health care will give everyone more info to make better decisions in that timeframe. And I'm hopeful that culture might shift a bit towards constant revision of programs rather than letting them be set in stone for 50 years at a time. And given the results of the 35 year old healthcare system we have now, even if things do get locked down for a while, I'm not convinced it could be that much worse.

  8. Your cynical side reminds me of…my cynical side! :) However, there's no altruism here. Preventing the flu is definitely in an insurance companies financial interests and they recognize that. They can price in the annual flu but H1N1 wasn't expected so the cheapest way to deal with it is pay for the shot for all members.I agree with what you say about the people who make, say, $25K/year. Again, in most HDHPs preventative care is covered at 80-100%.I also agree with your point about legislation being a fight more than a problem-solving issue. However, you say if we don't do anything, health care costs will be 20% of GDP. If these bills pass, costs will be much MORE than 20% of GDP much FASTER. Look, you can't tell insurance companies not to cap annual and lifetime payouts, guarantee insurance for everybody and not have a tough penalty for not buying insurance and expect prices to be the same. All the while, the actual cost of medical services will continue to rise.I disagree that the share of GDP that health care costs make up is an issue. First, there is a point beyond which it can't go. It can never be 100% because the medical professionals spend money in other industries just to sustain life (food, clothing, cars, etc). Plus, GDP is not a zero-sum game. Wealth can be created and if innovation is happening in the health care sector (new technology accounts for over 30% of the annual increase in health care costs), wealth is being created in that sector and GDP expands.And why is it bad that health care is a big part of GDP? Tech is a big part of GDP and nobody whines about that. Advertising is a big part of GDP and nobody's protesting their industry.You say we have higher costs for lower quality. Again, I disagree. The studies that have shown that have been deeply flawed. For example, we always get reamed on infant mortality. Here's why: other countries don't count babies who die within 24 hours of birth as having been born so they don't count in their infant mortality rates. The US does count those, so our rate is higher. Similar situations apply for most measures. When accounted for, the US is usually in the top 2.I agree that health care is a more immediate issue than Social Security, although, again, I think this legislation will have disastrous near and long-term effects.Regarding the CBO deficit projections. This is an interesting thing. The health care benefits in this bill don't actually start until 2013. However, the taxes increase in 2010. So, they're balancing 5 years of costs with 8 years of revenue and saying it reduces the deficit. I'm telling you, we're having a dog of a bill shoved down our throat.Your note about the Republicans does not make me feel better. They have shown no ability to understand this issue any better than the Democrats and, frankly, on most issues, I don't see a dime's worth of difference between the two. Neither is willing to shrink the size of government (for obvious reasons).And, if you want an experiment, look at MA, which has basically done a lot of the things this bill will do. It's cost way more than they thought, covered fewer people and has resulted in tax increases that weren't planned. In short, a disaster. A disaster created by a Republican governor and a Democratic Senate.Which is why I think government should stay out of it, except to encourage more personal responsibility and more price transparency.

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