Incompatible goals...

[Larry Gude (Premo)]

Has anyone asked this of a lefty, yet?

"If you get the 'public option' and start to cut into the profits of insurance companies, what happens to the people they fire when they start to cut costs to deal with the loss of income?"

I mean, the issue to independents, to most people, actually, is jobs, jobs, jobs. Socialized medicine designed to cut costs WILL cost jobs. It just will.

[kwillia]

On a side note, I received an EOB from my insurance company for routine lab work done during a physical. The lab charged $205.00 total. The insurance company paid the "agreed to" amount for each line item which ended up totaling $48 and some odd change. The EOB said "patient was not responsible to cover the difference".

Now here's the deal... if I didn't have insurance, I'd be completely responsible for paying the full $205. If the lab can afford to do it for "$48" as they agreed they could with the insurance company, then why the hell are they charging uninsured Joe-Schmo $205 for the same work?

[SamSpade]

I have, and they skip right over that point, because "insurance companies are the enemy". One liberal friend suggested they adopt a non-profit approach to remain in business.

For the life of me, I keep looking at this issue, and fundamentally, insurance companies are not the cause of the problem. At least not in the sense that health care itself does not follow at all the normal model on which we base "insurance". I've said that in many ways, blaming the insurance companies for the high cost of health care is like blaming the pizza delivery guy for the high cost of pizza. He's not the culprit, although insurance companies contribute to the problem because of the way insurance works.

You know, I keep looking at this problem, and I keep seeing the same sensible solution - if it weren't for the fact that SOME medical procedures are just prohibitively expensive, the BEST way to keep costs down would be to pay out of pocket. There's just no way in hell I ever pay as much for medical care in a year as I pay for insurance - easily 90% of what I pay goes to someone whose costs are huge. If I paid out of pocket, I could a) shop around and b) lower my yearly costs.

The ONLY problem is that when I need surgery or need a hospital stay, I'd have to sell the kids and some body parts to afford it. Hence, the need for insurance. Still, there's very little likelihood that in my lifetime, I will ever need as much medical care as I am paying for with insurance.

So to my mind, the best solution would be to :
1) pay insurance for high cost care, with high deductibles;
2) have or require medical savings accounts
3) have some kind of safety net for extremely expensive care

Any government interference with health care should be explicitly to cut costs and not to run things, because the government has no track record whatsoever of doing things efficiently or inexpensively.

One thing they could do is allow patents on drugs to expire early, to allow faster introduction of generics. They could finally enact meaningful tort reform. They could remove obstacles that allow virtual monopolies for insurance companies.

And if they are involved at all, it could be as the safety net for those with pre-existing conditions. It would be a shame if a person without sufficient medical coverage should die of something curable, because they haven't got enough medical savings to cover it.

This, by the way, is where "health insurance" fails the insurance model. If you buy a house in a flood zone, expect to pay for flood insurance, and to pay a lot for it. That's the cost of the risk. You don't have to buy a house there. If you speed and smash cars, expect to pay more for auto insurance - or not to be able to get any at all. Those consequences are entirely within your hands. But if you wake up one day with colon cancer or a brain tumor, or find you are going blind or deaf through something you couldn't control, it's not your fault - but the normal approach of dealing with such things through insurance is to say, sorry but we're not taking you aboard now that you suddenly discovered you need us.

This is the only instance where the public option makes any sense at all - coverage for extreme care.

[kwillia]

Originally Posted by kwillia

On a side note, I received an EOB from my insurance company for routine lab work done during a physical. The lab charged $205.00 total. The insurance company paid the "agreed to" amount for each line item which ended up totaling $48 and some odd change. The EOB said "patient was not responsible to cover the difference".

Now here's the deal... if I didn't have insurance, I'd be completely responsible for paying the full $205. If the lab can afford to do it for "$48" as they agreed they could with the insurance company, then why the hell are they charging uninsured Joe-Schmo $205 for the same work?

Originally Posted by SamSpade

the BEST way to keep costs down would be to pay out of pocket. There's just no way in hell I ever pay as much for medical care in a year as I pay for insurance - easily 90% of what I pay goes to someone whose costs are huge. If I paid out of pocket, I could a) shop around and b) lower my yearly costs.

What about what I posted... those paying out of pocket are paying triple what the insurance company has to pay for the same things.

[SamSpade]

Originally Posted by kwillia

then why the hell are they charging uninsured Joe-Schmo $205 for the same work?

I still think THIS is where a lot of needless overhead comes into play. If I totalled all of the totals of lab work done for my family, it would easily come close to the amount I pay per year. And that's because the doctor can order ten tests to be done, checking for any possibility.

And I have a hard time believing that lab work is that damned expensive.

(Of course, I also have a hard time believing that mechanics can charge so much for diagnostic work on a car. For pete's sake, it's pushing a few buttons!)

[SamSpade]

Originally Posted by kwillia

What about what I posted... those paying out of pocket are paying triple what the insurance company has to pay for the same things.

True, but if everyone paid out of pocket, it would go down. Insurance companies are able to do that, for the same reason BJ's can sell you a big box of diapers for half price, or that Wal-Mart can beat out McKay's - volume.

[kwillia]

Originally Posted by SamSpade

True, but if everyone paid out of pocket, it would go down. Insurance companies are able to do that, for the same reason BJ's can sell you a big box of diapers for half price, or that Wal-Mart can beat out McKay's - volume.

See... I disagree that the prices in the medical industry will go down. If everyone was paying out of pocket, there would be less demand for services. The only industry I see that lowers prices to drum up business is retail. And they only lower key products in order to draw the consumer... raising prices of other products to compensate knowing that once the consumer is in their store, they are most likely do all their purchasing at one time.

I do not have faith that the medical industry would lower prices. There are only a certain number of blood labs in this country. I see them agreeing to "fixed pricing" amongst themselves and then the consumer would be SOL and there would be no one to negotiate a better price.

[ylexot (Premo)]

Originally Posted by kwillia

What about what I posted... those paying out of pocket are paying triple what the insurance company has to pay for the same things.

I'm not sure that is true. Sure your insurance company didn't pay that much, but maybe that's because of your particular insurance company (HMOs get discount rates at doctors in their network...that's how they work). Other insurance companies may pay the full $205. And an individual (if they ask/say they are paying cash) may get the discounted rate that your insurance company paid. The individual may pay even less. And I stress MAY. Really, there are many possibilities, none of which are supported nor discounted based on the information you have.

[ylexot (Premo)]

Originally Posted by kwillia

See... I disagree that the prices in the medical industry will go down. If everyone was paying out of pocket, there would be less demand for services. The only industry I see that lowers prices to drum up business is retail. And they only lower key products in order to draw the consumer... raising prices of other products to compensate knowing that once the consumer is in their store, they are most likely do all their purchasing at one time.

Supply stays the same, demand goes down = prices come down.

Originally Posted by kwillia

I do not have faith that the medical industry would lower prices. There are only a certain number of blood labs in this country. I see them agreeing to "fixed pricing" amongst themselves and then the consumer would be SOL and there would be no one to negotiate a better price.

Until someone opens a new lab with much lower rates and takes all the business. Welcome to the free market. It doesn't like price fixing.

[kwillia]

Originally Posted by ylexot

Supply stays the same, demand goes down = prices come down.

I liken it to the oil industry where the recent spike in oil prices have now raised the bar as to what they are now willing to accept as their "happy minimum". Prior to the hike fiasco, they were estatic to see $50 a barrel! Now they are saying they can't "afford" less than $70 a barrel.

Until someone opens a new lab with much lower rates and takes all the business. Welcome to the free market. It doesn't like price fixing.

I do see your point... kinda like what is going on with the credit card industry now that the new legislation has been put in place. Some credit cards want to raise the cost of using their line of credit in order to protect their profit margins, but they are leary to do so because other creditr card companies have vowed not to do that in order to draw the masses.

I'm just a doubting Thomas because the medical industry has successfully lobbied political protection for so long. I see the gov't stepping in and forcing "fixed pricing" like they do at gas stations.