The Senate Bill Is Law
And it was the worst of the two bills rewarding the health insurance corporations.
A news flash for all those people who think that this bill stops insurance companies from canceling policies when a policy holder gets sick – the same language has been in effect for decades, and the companies use the “fraud” loophole to cancel policies now, so they’ll continue to do it. Nothing changed on rescission.
Under this bill people are required to buy insurance, but companies aren’t required to sell it. That isn’t a level playing field.
You can’t be excluded for pre-existing conditions, but there is no limit on what you can be charged, so you won’t be able to afford what is offered. You will get dumped in a high risk pool and pay a lot of money for insurance you won’t be able to use because you won’t have the money for the deductibles and co-pays. Congratulations, you’ll have insurance, but still won’t have health care.
This bill isn’t the foundation for anything. It can’t be fixed, it can only be replaced. It ignores all of the real savings that are available to reduce the cost of health care by eliminating all of the middle men who are costing the US between $300 and $500 billion per year.
For all of the A-listers who obviously don’t know: the American Medical Association is made up of the 30% of doctors who have paid off their college loans and are part of the investor class, and the AARP is an insurance broker. Of course they support this piece of garbage, it’s good for their bottom line.
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When I work the numbers I see a different story. Insurers are not the ones driving costs, providers are. Insurers are guilty of not cooperating in order to rein in the providers, and they’re guilty of doing some evil sick crap in order to try to rein in the providers, but private health insurance accounts for only 35% of health care spending in the USA and most insurers have a MLR above 80% — i.e., if they were perfectly efficient, you’d save *at most* 7% of healthcare costs. Which is no small amount in a $2.8T/year healthcare budget, but given that our major competitors provide better-quality health care for 30% or 40% less, clearly that’s not “the” answer.
Furthermore: a) While companies aren’t required to sell insurance, the bill eventually does require them to not use pre-existing conditions as a factor in making that decision and requires them to cover pre-existing conditions. Unfortunately that requirement doesn’t happen until 2014. b) failure to report pre-existing conditions will no longer be fraud once the bans come into play in 2014, thus rescission for that will no longer be a factor starting in 2014. c) the bill does set up an ombudsman who gets to overrule the insurer if the insurer cries fraud, starting in 2014.
Basically, starting in 2014, we’ll have something that looks like a strange conglomeration of Otto von Bismark’s original universal healthcare bill from the 19th century, and the Swiss system set up in the mid 1990’s. Nothing particularly incompatible with universal healthcare there — the Germans and Swiss make it work, after all — except that the Senate bill does have some real weaknesses when it comes to the subsidies side of things. If you are making below 400% poverty level the subsidies cover a percentage of your health insurance expenses, whereas in the House bill the subsidies kicked in whenever health insurance exceeded a specified percentage of your income. The problem is that in the Senate bill there is no cap. If you are making between 125% and 200% poverty level you get only 66% reimbursement, even though at average family insurance cost of $12,000 that would still leave you with $350/month in health insurance costs, which is going to be 20% of the takehome pay of someone at 125% poverty level. No way, no how is that affordable. But that *is* fixable.
The biggest problem with the bill, of course, is that it has no Medicare buy-in provisions. Personally I believe every American should have the option to buy in to existing government healthcare options — Medicare, Tricare, whatever pool the Congressmen use, you name it, if you can get it from the government as an employee or as a prune or as a former employee, you ought to be able to buy in to it (with the exception of the VA health system — veterans have special needs, and it’d not work to clog their system up with non-veterans). If it’s good enough for my Senator or for my mother, it’s good enough for me. But again, that’s fixable.
One thing that actually having a bill does for us is turn these from theoretical considerations into practical ones. Fixing problems in the bill is a lot easier if we’re actually running into those problems, rather than flinging theoretical poop around. Like the donut hole in the current Medicare drug plan, the problems are going to become quite obvious as soon as it goes into place, and then eventually get fixed — years later than it should have been fixed, but that’s the system of government we have, rather than the one we wish we had. Democracy in the USA simply doesn’t work well with hypotheticals… 50% of Americans are below average, and even the above-average ones have trouble with hypotheticals. But reality… ah yes. Even the majority of Republicans now, after 7 years of having it rubbed in their nose, admit that invading Iraq was a mistake. 7 years too late, sigh… but unlike invading Iraq, passing a healthcare plan is not an irreversible leap into a quagmire.
– Badtux the More-optimistic Penguin
it’s not just the overhead that private insurers take in for themselves, it’s the additional overhead they cost the providers who have to deal with them. we have far more administrative personnel in our health care system than other countries have in theirs, mostly on the provider side.
the classic anecdotes on this are uwe reinhardt’s we have 900 billing clerks in our [900 bed] hospital; i’m not even sure we have that many nurses and [i forget who told this one] a massachusetts hospital hospital [i forget which one] with ~350 beds has ~300 billing clerks, but a similar-size hospital in toronto [serving a similar population] has only a handful of billing clerks [5 or 6 iirc].
doctors’ offices are in the same boat, having to hire small armies of clerks to deal with the gazillion and ever-changing insurance plans. go to france or japan, and you may never see a clerk or receptionist, simply because many drs don’t even need to hire one. meanwhile, we’ve spawned a whole new industry here: denial management, where drs and hospitals hire consultants and/or buy software to fight on their behalf with the insurance companies [this is on top of the extra clerical personnel they already employ to fight with the insurance companies].
then there are the pharmacy benefit managers. this industry is an offshoot of the insurance industry, originally designed to negotiate the best prices on drugs for insurance companies’ drug plans. but now pbms are buying their own pharmacy chains, and even their own orphan drug companies [and jacking up those prices 5x, 10x] so they’ve become a hybrid beast whose inefficiencies and piracy sometimes get counted as insurance spending and sometimes get counted as drug spending.
yes, there are greedy drs, greedy hospitals, and greedy device and drug manufacturers too, and yes they need serious reining in, but the presence of the for-profit insurance industry has introduced a lot of costs that don’t get chalked up to insurance in most analyses.
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As soon as the area is clear of the construction I will explain in detail why you 35% figure is not accurate in accessing the situation, and why the savings are so much higher than that figure would suggest.
The basic reason is that much of the government spending is for health insurance through the private companies, and not for health care, as is the case for Medicare, Tricare, the VA, and the military health care systems.
BTW, in 2007 the US spent $7290/person, the Swiss $4417, and the French $3601. We are wasting money hand over fist.
Let me start on the answer.
Hipparchia is right about the costs of the providers to accept the insurance companies as providers. Several local doctors I know are paying 50% of their fees for “management”. Management is the billing department of a group practice. Single payer would reduce costs to providers by a huge amount of money.
Now about the government spending.
Three-fourths of the states provide Medicaide the same way corporations provide health insurance – a group policy with a health insurer. That means that the administrative overhead and profit of the insurance company is coming out of those government funds, unlike the way that Medicare works. The same thing is true of the health insurance for the government’s civilian work force – health insurance companies.
The groups with the best cost controls are those, like a few states, who are self-insured. They negotiate for pricing from the providers and drug companies, and can control costs. Unlike the insurance companies, they don’t pay huge salaries to executives and aren’t required to show a profit.
The savings for the system have been calculated multiple times by multiple different groups, and they all show the range of $350 to $500 billion in savings for a single payer system.
The insurance companies can shift to AARP territory and market “gap” insurance, which is highly regulated, or boutique insurance for the ultra wealthy. Their employees can process claims for Medicare, as many of them already do.
Our system is wasteful and inefficient. It isn’t providing the same level of results as the rest of the industrial nations and we pay twice as much for it. Canadians buy medical evacuation insurance when they visit the US so they won’t get stuck here. The US system is broken.
Thing is, the providers you’re talking about who are spending half their income on medical management — the family doctors, the individual practitioners — account for a fairly small amount of U.S. medical spending. Half of all medical spending in the U.S. is end-of-life spending — i.e., somebody has a fatal disease, goes to all the specialists, gets all the treatments, ends up dying anyhow. Most of this is by surgeons and heart and cancer specialists, most of whom make more money than your average Wall Street banker.
The second-most-expensive medical market in the United States is McAllen, Texas. Virtually all of that spending is Medicare and Medicaid spending — *not* private insurance spending — and it’s not tort or defensive medicine related either, because Texas pretty much outlaws lawsuits against doctors. Rather, it’s because doctors in McAllen game the system by prescribing unnecessary surgeries, referring patients to diagnostic testing centers and hospitals that they own, etc.
So yes, insurers are evil, and yes, we’d be better off with something akin to Medicare For All. But that is primarily because then we could use the monopsony power of a single payer to get that $350 to $500B in savings. That savings would not be primarily because of lower administrative costs — that’d be about a $100B savings — but, rather, would be because the system could squeeze the expensive specialists more easily and could more easily detect people gaming the system (and if they go over the line, it becomes a Federal crime, not something that private insurers have trouble getting cops to listen to). There’s no reason why being a heart surgeon should make you an automatic millionaire. That’s not true in the other countries you mention — specialists make good money there, but they’re not millionaires — it’s only here in America that you have millionaire doctors. That money didn’t fall from trees…
That said, other countries do make a multi-payer system work. They generally, however, have some sort of price or cost controls and a central clearing house for claims that is capable of capping doctor salaries past a certain point. The current bill doesn’t go anywhere far enough. But: the Swiss were here only 15 years ago, they had a system similar to what just got passed. The Swiss healthcare system is still expensive, but they kept tweaking it until it got those cost controls and clearing house. It’s not the system I’d choose because it’s still more expensive than single-payer while giving no better outcomes, but it does work. Which is better than what currently qualifies as a “health care system” here in the USA.
half of all medical spending in the us is for end-of-life care? you got a cite for that?
– 10-12% of us medical spending occurs in the last year of life; 27% of medicare spending is for people in their last year of life [a percentage that has been stable for many years btw].
– almost 1/3 of medicare costs got to chronically ill patients in their last 2 years of life
– up to 1/4 of us medical care spending is for end of life
of course, people with diseases that are ultimately terminal, like many cancers, can live 3, 4, 5, 10 years before dying, and organ transplant patients are expensive and may or may not live for very long after they get their new organs, so i guess you could count all the money spent on them as end-of-life, but it probably helps the discussion if you define your terms more precisely.
about mcallen
and it’s not the 2nd most expensive health care market in the us, it’s the
area where the medicare spending per medicare patient is 2nd highest in
the nation, for various reasons.
for comparison:
dallas —
el paso —
atul gawande is a popular and intelligent media figure, with an engaging
writing style, whose research into his articles appears to be less than
stellar.
[Note: Posted from e-mail by the administrator]
Badtux, except in special cases like Kaiser-Permanente and the Mayo Clinic, doctors are all independent businesses, no matter what their specialty, and they all have to file the insurance paperwork to get paid.
My Mother’s primary care physician is the only only one of her doctors who isn’t now in a group practice because of the cost of billing.
If you go to a standard hospital emergency room you will get a bill from the hospital and the emergency room physician at a minimum. There will be separate bills for tests. The only people who work in hospitals any more are the business office, and some of the nurses. In most the housekeeping staff is outsourced, and many use outsourced nurses.
Doctors pay to have admitting privileges, and are responsible for their own billing.
There is no system, only a collection of independent businesses, all of them paying for billing staffs.
The cost of billing is a huge part of the cost of health care that would be significantly reduced by single payer.
thanks for posting that for me. along with your spaminator hating on me, it looks like email broke some of the links too.
dallas
el paso
.-= last blog ..Run, ntodd, run! =-.
But that is primarily because then we could use the monopsony power of a single payer to get that $350 to $500B in savings. That savings would not be primarily because of lower administrative costs — that’d be about a $100B savings —
well, i suppose it all depends on which experts you prefer to listen to. pnhp says we could save $400 billion per year just on administrative expenses. the monopsony buying power would add savings on top of that.
.-= last blog ..Run, ntodd, run! =-.