Massive expansions of gov't health care spending

[Tilted]

One of the things that the PPACA will do is provide health care benefits (i.e. through insurance subsidies and an expanded Medicaid program), to people perceived as needing the assistance, at the expense of the American taxpayer. That last aspect is one of the major points of criticism from opponents. 'Obamacare', as some like to call it, represents an expansion of healthcare welfare. Some consider that a good thing, others don't. Some feel it's the right thing to do, others disagree - so much so that they want it repealed (though, for most, surely not for that reason alone). This expansion of healthcare welfare was very controversial, narrowly won passage in Congress and was signed by President Obama in 2010.

But, how does it compare to another recent expansion of healthcare welfare? I'm referring to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, which narrowly won passage in Congress and was signed by President Bush in 2003. Specifically, I'm referring to Medicare Part D, which was included in that law.

What do you know about the latter? How much will it cost American taxpayers in future years? How does that cost compare to the costs of the PPACA's expansions of healthcare welfare (i.e. how much they will actually cost, not offsetting that cost by the tax increases and supposed savings also implemented by the PPACA)? How do you feel about Medicare part D relative to how you feel about the PPACA's subsidies and Medicaid expansion? Are your opinions of them fundamentally different? If so, do those differences result from a perception that you'll benefit from one but not the other?

I'll leave specifics out for now - but we can discuss them if anyone wants and/or if they are seen as vital to the discussion - but, the general reality is that both of these programs will be very costly going forward. Both of them represent making some people pay to provide health care to others. Both of them relate to a perceived need of some to have health care coverage or better health care coverage. Should we repeal both of them? Should we repeal one but not the other? Do you now want the PPACA's expansions repealed? Did you, at the time, want the Medicare Part D expansion repealed?

Is all politics really primarily about whose ox happens to be getting gored, or pleasured as the case may be?

 

[jrt_ms1995]

Repeal them all; Medicaid, Medicare, Obamacare, Social Security, welfare, etc. Self-reliance, family, charity, in that order, are the right ways to address these "needs"; not legitimate concerns of our Federal government.

 

[Vince]

Repeal them all; Medicaid, Medicare, Obamacare, Social Security, welfare, etc. Self-reliance, family, charity, in that order, are the right ways to address these "needs"; not legitimate concerns of our Federal government.

Sure, now give me all the money I've put into them with my taxes since I started working and I'll take care of myself. :shrug: But don't sit back on your azz and take away Social Security, etc. when I reach retirement age and say "sorry, there's no money for you."

 

[SamSpade]

If there is any rational intelligent way to make medical costs lower - we can eliminate all need for insurance and people can pay for their healthcare the same way they pay for mortgage and cars and everything else.

Try to imagine if doctor's visits actually DID cost twenty bucks - not just the copay. If the tests he ordered cost 5-10 bucks instead of hundreds. If prescriptions cost 10-15 bucks instead of hundreds. If your yearly doctor bill came to an amount you could easily pay from an HSA without insurance. You'd never buy insurance again.

Unless - you had to have surgery. Or a serious illness. Or prolonged care. If you had a heart attack. Or cancer.

For that, you'd need insurance. It's one thing to save for a rainy day, but for those kinds of things, you need to have been saving long before you were born.

How would you get costs down so low?

I really don't know. We expect stellar quality care in this country, and that don't come cheap.

I do know that in some countries, doctors just don't fetch enormous salaries despite years of training and education. That seeing the doctor doesn't mean going to some massive facility where he has staff and assistants and insurance staff and tons of paperwork and a small IT staff - he has a small practice and he knows your name.

Somehow we have to address what KEEPS medical costs high, and I am convinced that at least ONE thing contributes to it - health care plans and insurance. There's simply no market incentive to drive down costs. What manufacturer will invent a means to run tests cheaper, when they can just as easily make something that will test MORE items?

Ok. I'm beginning to ramble. But I just don't know how to turn the tide back and lower costs. We have a monster which, like government, is expanding. It now takes tons of people to process one person so that the doctor can see you for five minutes. Why does he need to see dozens of patients a day? To pay for a dozen staff.

 

[Larry Gude]

One of the things that the PPACA will do is provide health care benefits (i.e. through insurance subsidies and an expanded Medicaid program), to people perceived as needing the assistance, at the expense of the American taxpayer. That last aspect is one of the major points of criticism from opponents. 'Obamacare', as some like to call it, represents an expansion of healthcare welfare. Some consider that a good thing, others don't. Some feel it's the right thing to do, others disagree - so much so that they want it repealed (though, for most, surely not for that reason alone). This expansion of healthcare welfare was very controversial, narrowly won passage in Congress and was signed by President Obama in 2010.

But, how does it compare to another recent expansion of healthcare welfare? I'm referring to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, which narrowly won passage in Congress and was signed by President Bush in 2003. Specifically, I'm referring to Medicare Part D, which was included in that law.

What do you know about the latter? How much will it cost American taxpayers in future years? How does that cost compare to the costs of the PPACA's expansions of healthcare welfare (i.e. how much they will actually cost, not offsetting that cost by the tax increases and supposed savings also implemented by the PPACA)? How do you feel about Medicare part D relative to how you feel about the PPACA's subsidies and Medicaid expansion? Are your opinions of them fundamentally different? If so, do those differences result from a perception that you'll benefit from one but not the other?

I'll leave specifics out for now - but we can discuss them if anyone wants and/or if they are seen as vital to the discussion - but, the general reality is that both of these programs will be very costly going forward. Both of them represent making some people pay to provide health care to others. Both of them relate to a perceived need of some to have health care coverage or better health care coverage. Should we repeal both of them? Should we repeal one but not the other? Do you now want the PPACA's expansions repealed? Did you, at the time, want the Medicare Part D expansion repealed?

Is all politics really primarily about whose ox happens to be getting gored, or pleasured as the case may be?

There is a HUGE difference, pal.

George Walker Bush did med part D. He is a compassionate conservative, fee market kinda guy. That makes his socialism OK.

Barrack Hussein Obama is a pinko, commie socialist. Obama care is socialism, plain and simple. No compassionate conservatism, no free market stuff like Dubbya's plan.

See?

 

[jrt_ms1995]

Sure, now give me all the money I've put into them with my taxes since I started working and I'll take care of myself. :shrug: But don't sit back on your azz and take away Social Security, etc. when I reach retirement age and say "sorry, there's no money for you."

What's that line from Animal House, "you f'ed up, man, you trusted us"? Sooner or later, it's all going to fall apart, and that's what we're all going to hear.

 

[This_person]

If there is any rational intelligent way to make medical costs lower - we can eliminate all need for insurance and people can pay for their healthcare the same way they pay for mortgage and cars and everything else.

Try to imagine if doctor's visits actually DID cost twenty bucks - not just the copay. If the tests he ordered cost 5-10 bucks instead of hundreds. If prescriptions cost 10-15 bucks instead of hundreds. If your yearly doctor bill came to an amount you could easily pay from an HSA without insurance. You'd never buy insurance again.

Unless - you had to have surgery. Or a serious illness. Or prolonged care. If you had a heart attack. Or cancer.

For that, you'd need insurance. It's one thing to save for a rainy day, but for those kinds of things, you need to have been saving long before you were born.

How would you get costs down so low?

I really don't know. We expect stellar quality care in this country, and that don't come cheap.

I do know that in some countries, doctors just don't fetch enormous salaries despite years of training and education. That seeing the doctor doesn't mean going to some massive facility where he has staff and assistants and insurance staff and tons of paperwork and a small IT staff - he has a small practice and he knows your name.

Somehow we have to address what KEEPS medical costs high, and I am convinced that at least ONE thing contributes to it - health care plans and insurance. There's simply no market incentive to drive down costs. What manufacturer will invent a means to run tests cheaper, when they can just as easily make something that will test MORE items?

Ok. I'm beginning to ramble. But I just don't know how to turn the tide back and lower costs. We have a monster which, like government, is expanding. It now takes tons of people to process one person so that the doctor can see you for five minutes. Why does he need to see dozens of patients a day? To pay for a dozen staff.

What you are saying is what I've asked all along - why are the costs so high? Insurance companies - the few that are not non-profit in the area of health care - make around 3% profit. That's a very small profit - one that is great as a long term stock investment, but not one that costs money.

So, insurance is out as a cause (direct) of the high costs.

Doctors need to earn a significant buck to keep good doctors wanting to be doctors. So, that's out as a source of inappropriate costs in health care.

As you say, tests are grossly expensive. Doctors pay exhorbitant amounts of money to insurance - for malpractice. Medical devices are insanely expensive. Prescription costs are tens if not hundreds of times the cost of manufacture due to liability insurance.

Regulation and liability costs are the two main drivers, it seems, of the high cost of medical care.

What does Obamacare do about those things?

 

[Lenny]

First, you must define your vision for American healthcare. Do you want care for all no matter what the cost? How about lower cost no matter what the risk? Maybe our vision should be care for those who can afford it without external help? Or we allow care if someone else charitably want to help with the cost? It's a really big elephant to try to eat but it needs to be addressed in a systematic way.

It needs to be addressed by physicians, politicians, patients, payors, et al. It needs to recognize that not everybody will get Cadillac care and some won't get the care they are used to.

Everybody will need to participate and that means redistribution of the money to nontraditional areas of the healthcare system. I'm up for the discussion but someone else is gonna have to organize a place and resources to get this done. Let me know when and where.

 

[BOP]

Socialized medicine

Universal Healthcare is wonderful, ergo Obamacare is more wonderful! If you don't think so, then you're a racist tea-bagger. So there.

Oh, and by the way, in the Universal Healthcare is wonderful department:
FoxNews.com - Canadian Family Fights to Keep Boy's Breathing Tube in Place

The Canadian family of a 13-month-old boy teetering on life support has defied a court order to remove the boy’s breathing tube and now are looking to an American hospital for what experts say would be a miracle recovery.

The boy, Joseph Maraachli, has been in a vegetative state at a hospital in London, Ontario, since last fall. He’s been treated for a neurodegenerative disease that doctors ruled leaves no hope for the boy.

A Superior Court judge, in turn, ordered that Maraachli’s breathing tube be removed on Monday. But his family refused, insisting that the boy be released to his family’s care, according to CBC News. The family says removing the ventilator would promise an agonizing death for the boy. They asked that doctors at least perform a tracheotomy that would allow Joseph to die at home, but the Canadian hospital has refused.

The parents now are trying to move their son to a Detroit hospital. The Children's Hospital of Michigan agreed to look at Joseph's lengthy medical record and determine whether he's a candidate for transfer.

 

[SamSpade]

So, insurance is out as a cause (direct) of the high costs.

Not seeing that. Insurance company profit has little bearing on their ability to keep costs high.

There's no market incentive for a doctor to charge 80 bucks for a doctor visit if the insurance company will pay 125. There's no pressure on a doctor to skip unnecessary tests if they will all be covered by insurance. The guarantee of income once insurance coverage is established by a patient keeps costs high.

What makes prices competitive is the likelihood that someone will NOT pay for a service or product if the price is too high. Insurance eliminates that (mostly).

 

[philibusters]

What you are saying is what I've asked all along - why are the costs so high? Insurance companies - the few that are not non-profit in the area of health care - make around 3% profit. That's a very small profit - one that is great as a long term stock investment, but not one that costs money.

So, insurance is out as a cause (direct) of the high costs.

Doctors need to earn a significant buck to keep good doctors wanting to be doctors. So, that's out as a source of inappropriate costs in health care.

As you say, tests are grossly expensive. Doctors pay exhorbitant amounts of money to insurance - for malpractice. Medical devices are insanely expensive. Prescription costs are tens if not hundreds of times the cost of manufacture due to liability insurance.

Regulation and liability costs are the two main drivers, it seems, of the high cost of medical care.

What does Obamacare do about those things?

What does it mean to make 3% profit?

 

[Larry Gude]

What does it mean to make 3% profit?

That is known as a 'windfall'. Remember when Exxon made 4% and Obama wanted them in jail for having made the largest profits since Attila?

Our medical/industrial complex is a series of state and regional monopolies where 1/2 or more of their money comes from government. Their profits are, in essence, guaranteed. I'd be more than happy to make 3% on 1/6th of our GDP.

So, let's see, $14 tril times .03...carry the billion...that's about...$420 billion a year in net profits. I bet if they had some competition, that 1/6th would become about 1/12th and profits would go from 3% to around 20% or so.

However, that is not how it works in the age of 'Too Big to Fail'.

 

[philibusters]

I was being serious, I really not sure what it means to have a 3% profit. Does that mean a health insurance's company net income after all liabilities and operating expenses are paid are about 3% of all premiums collected? What does 3% profit mean?

 

[Larry Gude]

I was being serious, I really not sure what it means to have a 3% profit. Does that mean a health insurance's company net income after all liabilities and operating expenses are paid are about 3% of all premiums collected? What does 3% profit mean?

That is probably their next profit after all expenses and deductions, ie, the number they pay taxes on.

 

[Gilligan]

What does it mean to make 3% profit?

It means, quite simply, that you are operating on the thinnest of profit margins...some of the lowest of the low. Compare that 3%, for example, with the 14-15% profit margins made by medical device and supply manufacturers..or pharmaceutical companies.

Interestingly 'big oil' companies operate with similar crappy single-digit profit levels.

My own company profits hover in the 10-15% range..a fairly typical one.

 

[Larry Gude]

It means, quite simply, that you are operating on the thinnest of profit margins...

That is subjective. If you are making, basically, guaranteed 3% on some really big numbers, this is fine and dandy.

I'll take 3% on a billion in revenue and call it good.

 

[Tilted]

If there is any rational intelligent way to make medical costs lower - we can eliminate all need for insurance and people can pay for their healthcare the same way they pay for mortgage and cars and everything else.

Try to imagine if doctor's visits actually DID cost twenty bucks - not just the copay. If the tests he ordered cost 5-10 bucks instead of hundreds. If prescriptions cost 10-15 bucks instead of hundreds. If your yearly doctor bill came to an amount you could easily pay from an HSA without insurance. You'd never buy insurance again.

Unless - you had to have surgery. Or a serious illness. Or prolonged care. If you had a heart attack. Or cancer.

For that, you'd need insurance. It's one thing to save for a rainy day, but for those kinds of things, you need to have been saving long before you were born.

How would you get costs down so low?

I really don't know. We expect stellar quality care in this country, and that don't come cheap.

I do know that in some countries, doctors just don't fetch enormous salaries despite years of training and education. That seeing the doctor doesn't mean going to some massive facility where he has staff and assistants and insurance staff and tons of paperwork and a small IT staff - he has a small practice and he knows your name.

Somehow we have to address what KEEPS medical costs high, and I am convinced that at least ONE thing contributes to it - health care plans and insurance. There's simply no market incentive to drive down costs. What manufacturer will invent a means to run tests cheaper, when they can just as easily make something that will test MORE items?

Ok. I'm beginning to ramble. But I just don't know how to turn the tide back and lower costs. We have a monster which, like government, is expanding. It now takes tons of people to process one person so that the doctor can see you for five minutes. Why does he need to see dozens of patients a day? To pay for a dozen staff.

At the very least, we should stop subsidizing the health coverage industry, and by extension the health care industry, by making so much of the money paid to it exempt from federal income tax. There is (i.e. would be) plenty of demand for health care, and even health insurance, even without this subsidization. What would be the effect on auto prices (and, more to the point, total money spent on autos) of people being able to pay for their personal vehicles with pre-tax dollars? What about TVs? Breast implants?

If we are going to tax people's income, we should tax their income. We shouldn't let businesses pay employees in 'health care benefits' (or oranges, or cars, or TVs), rather than in cash, and in so doing get out of paying tax on that income. Doing that funnels money into the health coverage and health care industries. We create artificial demand and artificially inflate pricing and total resources allocated.

 

[Tilted]

What you are saying is what I've asked all along - why are the costs so high? Insurance companies - the few that are not non-profit in the area of health care - make around 3% profit. That's a very small profit - one that is great as a long term stock investment, but not one that costs money.

In the aggregate, their profit margin is actually more like 5%. It was down around 3% for 2008, but it has rebounded closer to historic levels now.

So, insurance is out as a cause (direct) of the high costs.

The profit taken by health coverage providers is out - but the effect of the coverage dynamic most certainly is not. It is one of the primary problems. The way we pay for our health care is inflative of costs - total money spent on health care. If, by and large, we actually had health insurance, rather than bulk health coverage plans, that wouldn't be true to the extent that it is.

If the way we paid for cereal was to enter into cereal plans with 3rd party companies, where we paid them a certain amount a year and were then free (with some limitations, of course) to get and eat whatever cereal we wanted (without paying for it, or paying only a small amount for it), we'd spend a lot more money on cereal and we'd eat a lot more of it.

Doctors need to earn a significant buck to keep good doctors wanting to be doctors. So, that's out as a source of inappropriate costs in health care.

As you say, tests are grossly expensive. Doctors pay exhorbitant amounts of money to insurance - for malpractice. Medical devices are insanely expensive. Prescription costs are tens if not hundreds of times the cost of manufacture due to liability insurance.

Regulation and liability costs are the two main drivers, it seems, of the high cost of medical care.

What does Obamacare do about those things?

...

 

[Tilted]

What does it mean to make 3% profit?

Basically, this.

The overall profit margin for health care providers is back up around 5% now though.

 

[Tilted]

It means, quite simply, that you are operating on the thinnest of profit margins...some of the lowest of the low. Compare that 3%, for example, with the 14-15% profit margins made by medical device and supply manufacturers..or pharmaceutical companies.

Interestingly 'big oil' companies operate with similar crappy single-digit profit levels.

My own company profits hover in the 10-15% range..a fairly typical one.

The 'big oil' companies' (e.g. Exxon, Chevron) profits are generally higher, but still in single digits (now) as you indicate. They dropped down to around 6 or 7 percent in 2009, but will probably be back up to 8% or so for 2010. IIRC, prior to 2009, they had been closer to 10%.