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January 12, 2010
Health Care Q & A for the Open Minded
People have a lot of questions and comments regarding opposition to or support of, a government make-over of the health care system. I’ve compiled the most common of these and posted some articles and thoughts on them.
Comment: “Insurers are just greedy companies”, “Insurers charge too much for coverage”.
Answer: Last year insurance companies posted profits of 2.2%, but generally profits average about 6%. Network equipment manufacturers, railways, Tupperware and Molson beer posted higher profits. Health insurance ranked #35 on Forbes’ list of top industries. Drugs and medical supplies both ranked in Forbes’ Top Ten.
(Source: http://apnews.myway.com/article/20091025/D9BI4D6O1.html )
Comment: “Insurance companies only care about profits and so they deny people treatments they need”.
Answer: Medicare is the largest denier of claims in the medical system at 6.85%. Aetna is a close second with 6.8%. The next highest was BCBS Anthem with 4.62%. The remaining companies all averaged under 4%, with the lowest being United Healthcare at 2.68%, according to the AMA, which supports Obama’s health care plan.
(Source: http://www.ama-assn.org/ama1/pub/upload/mm/368/reportcard.pdf )
Followup: “But Medicare has a lot of subscribers”
Reply: True, but this a percent. Medicare denies a higher percentage of their subscribers than private companies. United Healthcare, which had the second most subscribers, has the lowest rate.
Comment: “According to the studies, other countries who have single payer systems have better healthcare”, “Regular checkups guaranteed by a single payer government run system means people get diagnosed earlier because they can go to a doctor whenever they want”.
Answer: It depends on what you use to rank healthcare. The WHO study focused on a handful of criteria, including ‘responsiveness’ (the US ranked #1). The criteria did not focus on survival rates and favoured single payer systems because it included factors such a government contributions to health care.
Lancet, the renowned journal of medicine, used different metrics. American women have a 63% chance of surviving 5 years after a cancer diagnosis, where European women have a 56% chance. For men the numbers are more stark; in America you have a 68% chance of surviving 5 years after a diagnosis compared with Europe’s 47%. Patients have a better chance of surviving 13 of 16 of the most common forms of cancer if they are treated in the United States as opposed to anywhere else in the world. For 5 cancers, survival rates top 90% in the United States; Europe has one (testicular), which hits 90% survival.
‘Guaranteed’ health care doesn’t appear to translate to quicker diagnosis and more successful treatment. In the United States, 84% of women aged 50-64 get mammograms regularly, which is higher than Australia, Canada, New Zealand and Britain.
According to the Annals of Oncology, the countries with the best access to drugs are Switzerland, Austria, France and the United States.
(Sources: http://www.washingtonpolicy.org/Centers/healthcare/opinioneditorials/WhatsNotWrongwithHealthCare.html
http://www.ncpa.org/pub/ba596
http://www.greenwichtime.com/ci_13247035?source=most_viewed )
Comment: “Overall care for everyone is better under a single payer system”, “Under a single payer system treatment is just as good as under private insurance”.
Answer: See the statistics above. Single payer systems, where supposed baseline treatment is ‘guaranteed’ does not increase survival rates or guarantee that preventative care (such as screenings), will be accessible in a timely manner to everyone.
Comment: “This bill will make health care cheaper for everyone”, “This bill is deficit neutral”, “This bill will reduce our deficit”.
Answer: The current Senate bill relies on huge cuts to Medicare, a large tax increase (including an increase in the Medicare tax), fines, and a lack of Medicare payout adjustment for doctors (which is anticipated to be in a second bill, thus negating it’s negative deficit impact), in order to get the ‘deficit neutral’ or ‘cutting the deficit by 100 billion’ numbers (depends on which version of what Congressional bill you cite). Let’s examine this in detail.
According to the CBOs own breakdown of the ‘manager’s amendment’ (the non-legislative outline on the bill) in the Senate, the ‘deficit reduction number’ is achieved through taxation of people with current plans, fines for non-adherence, and “…$108 billion in net savings from other sources”. It is unclear how these ‘savings’ are achieved when you are ostensibly adding millions to the rolls, because in addition to the current medical infrastructure, a new government agency will have to be created and maintained. New enrollees who would be entitled to participate in Medicaid would have 100% of the costs paid by the government for two years and afterwards at a rate of 90%. (Currently the Federal government pays 57% of the cost of Medicaid benefits).
From the CBO, “…Beginning in 2013, insurance policies with relatively high total premiums would be subject to a 40 percent excise tax on the amount by which the premiums exceeded a specified threshold. That threshold would be set initially at $8,500 for single policies and $23,000 for family policies (with certain exceptions); after 2013, those amounts would be indexed to overall inflation plus 1 percentage point.” In other words, if the family policy that you have has a yearly premium of $30,000 that your company pays (not difficult to imagine… that’s $2500 a month for a family), you will be taxed at a rate of 40% of the difference, which would result in $2800 of additional taxes per year. Currently medical costs outstrip inflation, so the built in adjustment (inflation + 1%), doesn’t seem realistic. Unless we spend more money than we are now, we cannot both insure more people and guarantee them the same great medical care people receive now. So we can either insure ‘everyone’ (even this bill doesn’t do that), and there is rationing or reduced services, or we can try to maintain the same standard of care, and the deficit will go up. So most of the main selling features – that the bill isn’t detrimental to the economy or deficit and won’t impact the middle class or hurt small business – is incorrect. Many people have what are considered ‘Cadillac’ plans. Most labour union members (some unions have managed to get an exemption from this health care plan tax provision), and people working for large companies (most of whom are middle class), would be dramatically affected adversely by this bill.
Shortly after the initial CBO announcement, they altered their statement and added that there had been a double-count, which made the bill appear to be deficit negative or neutral when in fact it is not and either Medicare services will be substantially impacted or Medicare will stay as is and the deficit will spike.
(Sources: http://www.cbo.gov/ftpdocs/108xx/doc10868/12-19-Reid_Letter_Managers.pdf
http://cboblog.cbo.gov/?p=448
http://www.c-spanvideo.org/program/ID/217331 )
Comment: “People go broke and lose everything because of paying for health care!”
Answer: Some of the studies citing this have been controversial, because of allegations that if ‘medical bills’ is listed by the debtor as one of the reasons for filing bankruptcy, they are counted as a medical bankruptcy. In truth, among people filing for bankruptcy who cite ‘medical bills’ as a contributing factor, the medical bills account for between 12% and 13% of the debt they owe. In an article in Health Affairs magazine, researchers state that a more thorough examination of a 2005 study regarding this exposes that in bankruptcy, medical costs play a part in only 17% of cases (and predominantly affect the poor), a far cry from the 50% - 62% figure many studies have touted.
(Sources:
http://content.healthaffairs.org/cgi/content/short/25/2/w74
http://www.american.com/archive/2009/august/the-medical-bankruptcy-myth )
Comment: “There is no alternative”, “The other side doesn’t have any solutions”.
Answer: That’s not accurate. John Mackey, CEO of Whole Foods, wrote an op-ed for the Wall Street Journal about fixing health care and then followed it up with an extensive interview with Reason (Whole Foods offers a terrific plan for its employees; Mackey practices what he calls ‘conscious capitalism’).
In 1977, the Heritage Foundation published a study that examines in detail the factors that drive up cost and what effect government intervention has on inflating the cost of health care (see link below). The notion that ‘the right’ hasn’t thought about health care until the Democrats brought it up is fallacious.
More recently, at a 2007 symposium, Grace-Marie Turner – an advocate for free market solutions to health care– discussed President Bush’s health reform initiative, which would have given tax credits in order to make health care insurance more affordable, (a family without insurance would see their taxes lowered by $3350), while allowing people more input into their treatment. Suggestions by ‘the other side’ generally focus on competition, tort reform and reduction of administration cost by removing expensive compliance requirements.
Competition keeps prices lower. Case in point… federal employees have access to over 280 plans from across the country to choose from; average Americans should have that kind of choice. While health care costs for private sector workers rose in 2006 by 7.7%, 63% of federal employees enrolled in FEHBP saw no increase in costs, while the remainder saw an average increase of 1.8%.
In the 1970’s, malpractice insurance had increased in cost by 600% over 3 or 4 years, and it has continued to play a huge factor in expenses doctors incur. While some claim that other, non-physician factors (such as the bottom line of an insurance company and anticipation of future claims), contribute to this increased cost and there is some evidence for that, there is no doubt that a huge factor is the risk insurers feel they incur when they cover a physician. The St. Paul insurance company stopped offering physician malpractice insurance because they could no longer afford to. An indirect result of the disproportionate increase of malpractice insurance for some specialties (such as Ob-Gyn), has resulted in fewer doctors specialising in that field.
The lack of variety within and competition between plans, mandates that require minimum coverage for medical costs (even so-called ‘catastrophic plans’ aren’t allowed to cover just dire medical emergencies, in other words), regulation/litigation and government social programmes that cover tens of millions of Americans have conspired to give us a quasi-privatised insurance system with varying rates of reimbursement and coverage, higher costs, disparate levels of quality and a lack of portability. Far from reducing costs, the new health plan, which guarantees insurance regardless of pre-existing conditions, will not bring in the much-needed low-risk subscribers (who would reduce the cost of insurance rates in general), because the bill would allow you as one expert put it, ‘…to sign up in the ambulance on the way to the hospital’, while fines for not having health insurance begin very low compared to the cost of signing up for a plan. The proposals are really a panacea, and when examined, fail to solve the very issues that are claimed to be at the heart of the health care insurance ‘problem’, while introducing more regulation, which always increases costs.
Free-market proponents, including some Republican members of Congress, have seen difficulties with business as usual in healthcare, yet the easy-to-implement solutions they proffered were rebuffed in the past despite the fact that the process and debate surrounding them enjoyed a great deal more transparency than the current bills being considered in Congress. The greatest risk isn’t of inaction, but of doing something that is both monumental and wrong, and not easily rectified. We can ill afford to institute a costly programme that won’t fundamentally solve what ails the system.
(Sources:
http://online.wsj.com/article/SB10001424052970204251404574342170072865070.html
http://reason.com/archives/2009/12/15/whole-foods-health-care
http://reason.com/archives/2009/07/30/the-myth-of-free-market-health
http://www.heritage.org/Research/SocialSecurity/bg11.cfm
http://www.heritage.org/Research/HealthCare/hl1019.cfm
http://www.heritage.org/Press/Commentary/ed101206c.cfm
http://www.heritage.org/Research/HealthCare/bg2239.cfm
http://www.cbo.gov/doc.cfm?index=4968&type=0
http://findarticles.com/p/articles/mi_m0843/is_2_28/ai_84236557/ )
Posted by hanyap at January 12, 2010 2:43 PM