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September 30, 2009

Comments

I don't think Abstinence Only Miseducation can be killed. The political constituency is simply too strong. For the people who support it the ineffectiveness isn't relevant - it's about maintaining moral purity, and it's important enough to supporters that a vote to kill it could easily lead to electoral defeat for politicians in swing states. I thin AO sex ed is going to be one of those things like the War On Drugs that just sit there forever, eating up resources and hurting people.

If you were to lose your job today or tomorrow, who would pay for you and your families’ healthcare bills? The economy is in shambles and jobs are going under left and right, and that is precisely why we need healthcare reform now, so that if a person or family does happen to lose their job and healthcare, One would still be able to receive and/or obtain affordable healthcare. What is wrong with that?

We definitely need health reform. But trust Orrin Hatch to seize the opportunity to tack on some anti-woman, anti-science BS.

Could the Hon. Sinister Orifice Snatch tack on an amendment that allows me to abstain from getting cancer or having a heart attack?

Someone please explain again the enormous difference it makes to have a Democratic supermajority in the Senate.

But Ben, Everything Changed 11/04!

Could the Hon. Sinister Orifice Snatch tack on an amendment that allows me to abstain from getting cancer or having a heart attack?

No. but he might offer an amendment that would require schools teach only that you should abstain from cigarettes and fast food, that there is no safe use of alcohol, tobacco and other drugs, and that you should eat right and exercise.

jrudkis says: "No. but he might offer an amendment that would require schools teach only that you should abstain from cigarettes and fast food, that there is no safe use of alcohol, tobacco and other drugs, and that you should eat right and exercise."

In fact they passed a Baucus proposal yesterday to provide funding to various 'teen wellness programs' that address "contraception, HIV/AIDS, healthy relationships and financial literacy" ??

I don't know why 'financial literacy' was included in a health care bill -- maybe so those teens who decide abstinence is uncool can make a cost analysis of the best contraceptive devices to use while they're having sex in the high school gym.

Here is proof of the public "option" being a trojan horse to create a single payer system. Joey Panto calls advocacy groups and uses one of his many alter egos to pose as supporters of their statist causes, and draws out their hidden agendas without much prompting. Here he gets a prominent universal healthcare advocacy group's director (I wish he would reveal her name and her organization) to admit that their hidden agenda is a single payer system, elimination of fee for service, and public health benefits for illegal aliens.
http://02e56fa.netsolhost.com/blog1/index.php/2009/09/21/first-post-of-the-new-era-pickle-1-advoc

"I don't know why 'financial literacy' was included in a health care bill" It seems pretty obvious to me. Most people will barely be able to avoid bankruptcy if we don't do something more about health care than what this Congress is likely to give us -- and many more will fail to avoid it and get wiped out. So anything we can do to help them make better use of their limited financial resources will keep them a little further from being financially destroyed.

With any luck, the Repubs will force the Dems to delete everything from the bill except the part about education in personal finance. Of course, we wouldn't want them to overdo it. Consider, for example, the damage it would do to the economy if everyone could see through the banks' scams on loans and credit cards.

No, no bill this year of any sort. Wouldn't be prudent.

On this business of the public option being a stalking horse for single-payer: Of course some people want single-payer -- I'm one of them. But the simple truth is that as of now there's nowhere near a sufficient constituency to get it passed. Hell, it's beginning to look like the public option itself lacks a sufficient constituency (even though polling repeatedly reveals that more than half those polled want it), and I'm starting to wonder about whether anything useful will survive the congressional sausage machine.

This whole thing about moving from public option to single-payer is a slippery-slope argument, and like most such arguments it assumes that there's no way to keep the camel out of the tent once its nose is in. That's ridiculous. It's like the argument that if you let two gay people marry there will be an uprising that results in three- or four-person marriages, or marriages between a man and a goat, or God knows what else. That one is nothing short of crazy, but it's really not much crazier than the one that says the public option will lead inevitably to single-payer. Even those in Congress who admit to wanting single-payer know it can't be passed.

The implication of the slippery-slope argument is that the public option will prove so superior to what the for-profit companies are offering that it will lead inexorably to single-payer. I'm hardly the only person to argue that if single-payer proves that good, we ought to want it. Medicare for everyone, anoyone? Conversely, if the public option is adopted and proves a flop, single-payer will be dead in this country for decades. Why not at least run the test and see what happens?

I've long since given up on the hope that facts and logic will drive the legislative process on health care (and I'm not much more optimistic about other issues). But some arguments are so ridiculous that they really ought to be come with a sign that says "Warning -- ridiculous argument ahead."

" but it's really not much crazier than the one that says the public option will lead inevitably to single-payer. Even those in Congress who admit to wanting single-payer know it can't be passed."

Since I keep seeing this and no one actually discussing *why* it is a fear, I am going to give it a shot.

The worry is not that subsequent legislation, rules changes etc. will implement a single payer system. The challenge is that the public option creates a real cost transfer from the negotiation empowered public entity to those who pay full price for through insurance. This cost transfer is real and happens today, in many government areas. The government negotiates a best price available contract and companies (in this case healthcare providers) then raise prices elsewhere to even out their gross margins overall.

This creates a business model that is unsustainable for those companies trying to provide insurance, more important it makes private insurance unaffordable for small business and larger businesses. As these companies quit providing insurance the government pool gets bigger, the cost transfer greater and the flight to the single payer accelerates.

The end result of this is substantially smaller payments to providers, as the government rates become a higher percentage of their payments.

Hospitals today mostly run in the red, doctors do better and doctor corps do even better.

What is not clear is whether the much higher numbers of people in the government pool inevitably require general fund dollars to pay for the costs of coverage.

There is a perfectly rational reason to believe that, if not inevitable, it is likely a public option leads to single payer.

"No. but he might offer an amendment that would require schools teach only that you should abstain from cigarettes and fast food

Ok, Ill bite- in your analogy, what is 'advocating for sex ed that prevents pregnancy and STDs via the use of condoms and other birth control'?
It seems to me that the original program is demonstrably useless, but your analogy is useful and sensible. Yet, making the analogy doesn't make the original program either of those things, it just helps you avoid having the discussion afaict.

Here is proof of the public "option" being a trojan horse to create a single payer system. Joey Panto calls advocacy groups.... (I wish he would reveal her name and her organization) to admit that their hidden agenda is a single payer system....

That is proof indeed: proof that you need very, very little in the way of evidence to support your preconceptions. Proof that you mistakenly think, despite mountains of evidence, that liberal opinion is a monolithic block. Proof of your paranoia in that you find "hidden agendas" in what people freely and willingly discuss.
And that you "like" scare quotes.

Ok, Ill bite- in your analogy, what is 'advocating for sex ed that prevents pregnancy and STDs via the use of condoms and other birth control'?

That if you are going to use alcohol and other drugs, as well as eating fast food occassionally, that you should moderate your intake.

We know kids are going to drink and do drugs anyway, so we might as well teach them to do so sensibly.

That was the worst link etiquette I've ever seen! First, it goes to your own post on another platform, where at least you mention the name and source of your reporting, but then the link goes through some weird Healthnews Ladder?!? WTF?


I think that it is safe to assume that financial literacy goes with sex ed in regard to the cost of supporting oneself on the pay of an unskilled person as opposed tothe cost of supporting tow on that pay or as opposed to the marginally higher standard of living that is accessible to those who get some post high school training before having kids.

Quite a few teens are remarkable clueless about this.

"No, no bill this year of any sort. Wouldn't be prudent."

Exactly right. Work on fixing the economy first. Otherwise it's all going to come crashing down on our heads.

Jay Jerome hath slain irony

Bob L says: "Jay Jerome hath slain irony"

No irony intended -- this isn't the time for a major overhaul of health care...

That if you are going to use alcohol and other drugs, as well as eating fast food occassionally, that you should moderate your intake.
We know kids are going to drink and do drugs anyway, so we might as well teach them to do so sensibly.

Ok. And if that reduces addiction, ODs, and drunk driving accidents, would you be against it?

also, if that's your analogy, why say and that you should eat right and exercise. In your fantasy, not only does abstinence education work, but it also gets to be associated with other good habits.

one Jon Stewart, mentioned in your last post, absolutely annihilated the Senate Democrats with this comparison tonight. why is all the heavy lifting on this issue on cable television done by a show from Comedy Central?

Ok. And if that reduces addiction, ODs, and drunk driving accidents, would you be against it?

also, if that's your analogy, why say and that you should eat right and exercise. In your fantasy, not only does abstinence education work, but it also gets to be associated with other good habits.

I don't think abstinence education works, for drugs or sex. I just thought Thullen's example was wrong.

Marty says,

"The government negotiates a best price available contract and companies (in this case healthcare providers) then raise prices elsewhere to even out their gross margins overall."

I don't understand why these companies cant survive on negotiated contracts. Small businesses do so all the time. Negotiated contracts? This is the Socialist Boogeyman? I think your argument is pretty thin.

Work on fixing the economy first. Otherwise it's all going to come crashing down on our heads . . . this isn't the time for a major overhaul of health care...

Our broken health care system is a big part of what's wrong with the economy

Couldn't we just pay teenaged girls not to have sex. Require mothers to take them to doctors once or twice a month for an examination. If they are 'clean', give them a hundred bucks. It would be cheaper in the short run, and solve a lot of other problems related to welfare, disease control and population - the big part of what's wrong with the economy. I'm sure it would also have an impact on carbon footprints, global warming and a host of other ills. Uh Oh, it would have the effect of reducing liberal voters - bad idea, sorry I brought it up. Never mind.

I don't understand why these companies cant survive on negotiated contracts.

I guess I have the same question.

There are a lot of sectors in the economy where public and private efforts coexist, and the private actors make money.

Why would this not be true for health care?

And, if folks move to the public offering because it gives better value, why is that bad?

MArty's comment makes sense to a point. The problem is that, first, every public option offered that is tied to Medicare rates is a Medicare plus type of reimbursement. The most common I have seen is 105% of Medicare, which, believe it or not, is what a lot of contracts with insurance companies call for.

Secondly, the biggest reason for inflated prices in health care services is to cover for the services provided for which there is no or little reimbursement. WEmergency room physicians, which have the highest level of unreimbursed charges typically bill at 3 times what Medicare reimburses.

If there were a higher level of covered patients, more of the care would be reimbursed and the charges would lower.

Hospitals do mostly run in the red, primarily due to low Medicaid reimbursement, and non-payment of bills. This is actually increasing as insurance companies have required higher co-pays from the insureds, which they are unable to pay. So actually, insurance reimbursement is decreasing, the insureds have to pay more, can't do so and hospitals run in the red.

The same rationale applies regarding increased coverage. More people covered, more money coming in, less debt. I will say that Medicare reimbursement to hospitals is not great and could be improved. At the same time, Medicare has instituted a special recovery program which has found a lot of inappropriate charges and overcharges made by hospitals.

Finally, another reason for higher health care service costs is the hoops that insurance companies make providers jump through. A lot has been made of administrative cost differences between Medicare and private insurance. There is also a major difference in administrative cost on the provider side in terms of providing care to Medicare patients versus private insurance patients.

Many doctors actually prefer Medicare (even though they would like higher reimbursement) because they don't have to jump through as many hoops, administrative costs are down, and Medicare tends to pay the claims much quicker than private insurance does.

"And, if folks move to the public offering because it gives better value, why is that bad?"

Russell,

The market dynamics of dealing with government contracting limit the number of vendors that can work with them. Barriers to entry are high, the military industrial complex is a complex because only the largest companies can really compete for those contracts. However, even at that, they don't compare to an industry where we are providing fixed cost reimbursement in direct competition to private payers. We don't typically have a choice to buy our food from either a private company or the government. The closest example is education where the subsidies for public education are substantial and the costs go up even faster than healthcare.

It is not a value decision. The cost transfers create a situation where the only affordable (in the short term)alternative becomes the public option, not because it provides more value but because it becomes the only choice available.

The missing link, I suppose, is that once the private market has been sufficiently stifled then there will be no place to transfer the costs and the public option costs will have to go up to real cost rates reducing that "value" even more.

It seems the (public) cost models being discussed don't recognize that if costs go up 10 dollars and the government only pays 8 of them the private actors get charged the 10 plus whatever portion of the 2 the government doesn't pay.

Currently, that 2 dollars gets spread across all of the private actors so it is some number less than 2. Right now we are only talking about Medicare so that 2 dollars is spread across a pretty large set of private payers. But it accounts for the difference in the rate at which private healthcare goes up faster than Medicare does.

When actual costs go up, Medicare pays only 80% of the increase, private payers pay 100% of the increase plus their share of Medicares 20% it didn't pay.

So when people point out that Medicare costs have gone up slower, well that will always happen as long as there is someplace to transfer the costs.

There is a perfectly rational argument that this accelerates with the public option, reducing choice and value.

Big insurance by refusing care to patients and reimbursement to doctors over typos has ticked everyone off. They have a monopoly over the whole process a hugely well financed lobby team and representatives on both sides of the isle.

A friend of mine recently laid off without children is paying $2,500.00 dollars a month for his COBRA that is outrageous. Health insurance costs more than his mortgage - unbelievable.

The economic impact of getting sick to the individual is catastrophic and that effects the whole market system because lots of people get sick.

When Bush implored people to go out and spend - well that's kind of hard to do when you are buried in health care bills, filling and refilling out forms and in foreclosure because you made a typo.

The system is broke and well heavily stacked in the insurance industry's favor - with no incentive except global economic melt down to fix it.

Oh wait a minuter didn't that just happen....

Paul Burke
Author - Journey Home

Marty, Thanks for the only rational discusssion I've heard about why the "Public Option" means the end of private insurance. I'm really trying to understand if there's a real economic argument here.

You say if government only pays 80% of the increase in costs. Is there a good basis for assuming that government, and only government, would only pay 80%? How do (would) they (the government) get away with that? Wouldn't the insurance companies just walk away? Either government is a valued customer or its not. How can it be so good that it runs everyone out of business, yet so bad that it doesn't even pay the cost of doing business with it?

Obviously, I'm not an expert in economics. Can you explain in simple terms why private companies can't compete and, at the same time, the government plan can't even pay its own costs? This seems like a huge contradiction to me. Thanks.

"You say if government only pays 80% of the increase in costs. Is there a good basis for assuming that government, and only government, would only pay 80%? How do (would) they (the government) get away with that? Wouldn't the insurance companies just walk away?"

Meducare pays 80% of market rates by definition, not to insurance comapnies, to providers.

There is little reason to believe that the public option would negotiate any rates with providers greater than that, one proposaql is to tie them to Medicare rates for the first two years.

The cost charged for services through private insurance are the prices that cover the cost transfers. The insurers would have to pay those rates, some negotiation is possible but the providers have to draw the line somewhere to pay their costs, and they make money also.

Government is not a buyer of insurance, it is a buyer of the underlying services. It can run everyone else out of business because it has the power to pay 80% of market to providers simply because it is a huge revenue stream, some providers do walk away, others run really lean Medicare only businesses.

In the end it runs insurance companies out of business because the purchasers (mostly businesses) can't afford the widening cost gap, then has to deal with rising costs from not having the more expensive places to transfer the costs.

Just one thing Marty. Market rates does not equal cost. And, as I pointed out above, the cost to the providers of doing business increases when they are dealing with private insurers.

Actually, the lowest tied to Medicare provision in any of the bills is 105% of current Medicare. Personally I would like to see it at 110%, which would be an increase in income for many providers, but so would 105%.

Secondly, it should be noted that many insurance companies are doing very well by supplying supplemental insurance to Medicare recipients that cover the co-pays that the patients have.

There are others who provide coverage for services that Medicare doesn't cover.

Even if a public option did somehow morph into a single payer system, the insurance companies would still do quite well, thank you very much.

There is a perfectly rational argument that this accelerates with the public option, reducing choice and value.

I don't think this argument is invalid in terms of giving a rational reason for fear of losing choice (even if choice at the moment is somewhat illusory), but I'm more skeptical about the value part. If the train of logic you outline follows that course, as private companies (where the "lost" 20% of costs were recovered) withered and died, the public option's pool of insured would grow. This would allow the costs (and cost increases) to be spread across a larger pool... are you willing to argue that (per this line of reasoning defacto single-payer) government insurance would not be able to spread costs widely enough to mitigate the presumed increased expense rate?

(Non-rhetorical question, mind you.)

"This would allow the costs (and cost increases) to be spread across a larger pool... are you willing to argue that (per this line of reasoning defacto single-payer) government insurance would not be able to spread costs widely enough to mitigate the presumed increased expense rate?"

I think the current increases in Medicare costs, while less than private insurers, shows that the cost can't be spread enough to overcome the lack of cost transfers.

However, even if that were true and the single payer system were so efficient that the cost structure made sense, we would still have moved to single payer through the public option. My point was that it was not crazy or ludicrous (two words I have heard to describe it) or that there was no rational reason to believe that public option would lead to single payer.

So, to justify the public option you should have to recognize single payer is one of the reasonable outcomes that could happen.


(now I am switching to politics)
I think the Democrats probably understand these economics. So,in my opinion, they are being less than honest when they tell the American people that it is absurd to link the two. It also makes me believe that a great number of them really think that they can achieve single payer through the "back door" and never have to admit it was their goal all along.

"Actually, the lowest tied to Medicare provision in any of the bills is 105% of current Medicare."

I don't have all the tables available but maximum Medicare reimbursements are often 80% of the non Medicare charges.

And costs actually have gone up faster than market rates for services, if you believe the providers. Particularly the hospitals that are now mostly running at a loss.

I don't have all the tables available but maximum Medicare reimbursements are often 80% of the non Medicare charges.

And costs actually have gone up faster than market rates for services, if you believe the providers. Particularly the hospitals that are now mostly running at a loss.

Marty wins the thread hands down. (As he almost always does). Public option is a single payer wolf in sheep's clothing.

Marty, you are avoiding an issue. One is that the reason many provider's charges are going up is because of not collecting payment from insured's. Even when people do have insurance, only 50% of the co-pays are being collected. And for a doctor that is out of a patient's network or for a self pay patient, they are collecting only 20% of what is owed. They are charging more to cover those losses.

Secondly, and this is a major factor, the administrative costs of dealing with insurance companies are extremely high. Hospitals of medium size have 6 full time staff on average just dealing with getting approvals, not to count the cost of keepting track of different reimbursement policies for each insurer, which then differ within plans. Most doctor's offices have one or two people solely dedicated to this same thing.

I agree that many hospitals are running in the red, and I agree that Medicare should pay more. Technically, for small rural hospitals Medicare is supposed to reimburse at 101% of cost. However, there are certain items that a hospital figures into the cost that Medicare may not. So usually, Medicare patients are reimbursed at 95% of cost. Medicaid is even worse. but that is primarily due to states being very financially strapped.

And believe me, Medicare is not figured at 80% of prevailing charges, although it may be at 80% of what might be considered usual and customary. Medicare reimbursement is a very complex thing. It is geographically based and takes into account time used for a specific code, cost of equipment, office space, etc. and cost of malpractice insurance.

Anyway, you keep talking about 80% of cost, then you say 80% of prevailing charges. Make up your mind. Doctor's do not charge at cost.

I don't quite understand whose side Marty is on. Specifically, there are three "sides" here:

* The People (who pay insurance premiums and taxes)
* Insurance Companies (of which the government is the biggest)
* Doctors and Hospitals (and other medical providers)
In the macro view, those are the players.

By and large, money flows down this list: from The People to The Doctors. The Insurance Companies, like all middlemen, take a cut for themselves.

If you think Doctors and Hospitals ought to get more money, you can do one of two things:

* Collect more money from The People; or
* Reduce the Insurance Companies' vigorish.
It's elementary arithmetic. There's no other choices.

If you think The People ought to pay less, you can do one of two things:

* Pay Doctors and Hospitals less; or
* Reduce the Insurance Companies' vigorish.
Again, there's no other choice.

If you think Insurance Companies must not suffer the indignity of losing any portion of their vigorish, then your choices are:

*Collect more money from The People; or
*Pay less money to Doctors and Hospitals.
Whatever miracles you imagine that "the free market" can perform, making 1-x greater than 1 is not among them.

So, what's your choice, Marty? Which of the three goals do you wish to serve? Whose side are you on?

--TP

Tony P.,

Good analysis, but vigorish? What are you some kind of loan shark?

Chris,

Not a loan shark. More like chum :)

--TP

No irony intended -- this isn't the time for a major overhaul of health care...

It never is, not when you can sit back and let 40,000 Americans "die quickly".

Tony's old school, which is why we like him.

Yeah, I've lurked here for awhile and I always liked Tony. Speaking of commenters I liked, what happened to Gary Fraber? I used to love that guy.

Marty, as much as I would like to, I just can't see that you're actually saying anything either sensible or concrete on the subject. You seem to be pulling from a mixed-bag of fear-mongering, hyperbole, and sleigh-of-hand. I guess your high-brow train of thought is too much for my poor 185 IQ.

Tony: bravo, bud - and well-done.

Pericles: nope, and nope. Sorry.

what happened to Gary Fraber?

In the true spirit of Gary, I'll first note that his last name is spelled F-a-r-b-e-r.

That done, I'll direct you to his blog, Amygdala. You'll find a link to it in the blogroll on the left of this page.

(Chris),

Gary comes and goes. Sometimes he goes away for long stretches, but he usually comes back. I hope he does so again, but I fear the loss of Hilzoy might lead to the loss of other regulars here (I don't think I've seen OCSteve lately, for one)

You can always go to Gary's http://amygdalagf.blogspot.com/>blog and ask him to come back. If nothing else, he'll appreciate the visit.

Well, I am in the airport so I just have few moments.

Sorry about tthe cost confusion, my point was based on the cost to payers, such the translation to market rates is fine with me.

chmood and Tony,

I would say I am disappointed as usual that a reasonable discussion of reality degenrated into name calling. T am for trying to get a bill that provides coverage for the uninsured, provides the American people choices (even if you wouldn't make them) and not bankrupt the country.

I DISAGREE that I said anything, period, that was "a mixed-bag of fear-mongering, hyperbole, and sleigh-of-hand".

MArty, I apologise for my miscommunication. I didnot mean to suggest that was what you were offering: I meant to suggest that such a mixed bag provided your source material. The take-home from me was that your post(s) did not resolve into an argument I could make sense of, despite my usual success at such.

I had intended to encourage you to try again, and perhaps do better. I did not intend to call you names. In fact, I'm pretty sure I did no name-calling at all. I welcome your clarification, and offer my apologies for the names you think I called you.

Also, Marty, I would appreciate it if you would respond to Tony's very clear post. I found his remarks cogent, on-point, and worthy of response, not dismissal (apologies for "dismissal" if your response to him is still pending).

John Miller: "Anyway, you keep talking about 80% of cost, then you say 80% of prevailing charges. Make up your mind. Doctor's do not charge at cost."

The 80% number is the approximate national average of the gap between what Medicaid and Medicare pays for patient services and what it costs to provide them.

The percentage varies from state to state. There's lots of data out there to confirm the spread -- and it's been a recurring topic in the Baucus hearings, because it's crucial to the budgetary marks they're trying to set.

To survive, doctors and hospitals and other providers 'shift' the Medicare loss to other patients, in turn driving up their insurance premiums.

Here's one of many examples of the problem from a quick google of medicare payment % shortfalls.

John Miller says: Many doctors actually prefer Medicare (even though they would like higher reimbursement) because they don't have to jump through as many hoops, administrative costs are down, and Medicare tends to pay the claims much quicker than private insurance does.

But on the flip side, many doctors wont take Medicaid patients:

In states like Michigan the proportion of doctors who will see Medicaid patients has fallen from 88 percent in 1999 to 64 percent in 2005, even though enrollment in the state’s Medicaid program has risen by more than 50 percent over this period. In Texas, more than 60 percent of Texas doctors refuse to accept new Medicaid patients. Last year in Illinois, two clinics engaged in a messy legal battle with the state’s Attorney General to defend their right to refuse long-term care to Medicaid patients.

More HERE

Tony P says: "If you think Doctors and Hospitals ought to get more money, you can do one of two things:
* Collect more money from The People; or
* Reduce the Insurance Companies' vigorish."

I'm assuming the vig you mean is their profit percentage. If so, and with a magic wand we turned all the insurance companies into non-profits, how much lower would insurance premiums be?

A whole lot? Or a whole little?

JJ

chmood said, to marty: "In fact, I'm pretty sure I did no name-calling at all."

You're right, you didn't call him any names; you just insulted his integrity, telling him he wasn't 'saying anything either sensible or concrete' and that he was engaging in 'fear-mongering, hyperbole, and sleigh(t)-of-hand' and that he was being intellectually condescending to you with his 'high-brow train of thought.'

And I apologize to you in advance if you think I mis-characterized any of the above.

I'm assuming the vig you mean is their profit percentage

That would actually be a bad metric for the "vig".

Medicare operates at about 5% total overhead cost. That means 95% of every dollar spent through Medicare goes to actual patient care.

Non-profit private insurers operate with overhead in the teens. For-profit are at about 20% and up.

The difference in overhead cost is partially due to profit, but is also due to costs like executive compensation, marketing expenses, and other operational costs that the public providers do not incur.

You've raised the point that private insurer's profit margins are not large a few times. Profit alone doesn't account for the total difference between the public and private sectors in percent of revenue spent on actual care.

But on the flip side, many doctors wont take Medicaid patients

Medicare and Medicaid are two different things.

Jeff says: "It never is, not when you can sit back and let 40,000 Americans "die quickly".

For the umpteenth time: I'm in favor of extending health care to as many of the uninsured as possible. But I'm not in favor of signing onto a system that's going to hurt more people then it helps if it's not structured or financed properly.

And for your own clarification, 40,000 Americans aren't going to 'die quickly' with or without a new health care law. Those in jeopardy are so because of the cumulative lack of preventative detection for medical problems, like not regularly having blood tests and chest xrays, and screening tests for cancer and other chronic diseases.

Even if universal coverage was initiated tomorrow, it would take a decade before those numbers changed significantly. But even after universal health care is available, there will be an equally significant number of people who won't bother to sign-up for the new programs (estimates of up to 12 million, according to CBO figures quoted this week at the Baucus hearings) or won't bother to go in for the required diagnostic tests, even if they are available (almost all the tests indicated above are available free, at thousands of clinics around the nation) because some people just don't take care of themselves properly.

JJ - since my message to Marty was that I couldn't see his line of argument, despite a mostly-functional brain, I accept your apology. Thank you.

(almost all the tests indicated above are available free, at thousands of clinics around the nation)

The point's been made before, but free-cost is not the same as freely available. If one cannot afford to take off work to go wait in line for several hours, or cannot easily get to said clinic, it may as well be unavailable. While broadening availability of such things isn't going to make these sort of problems go away, not having to go to specific, high-contention providers would certainly help.

JJ,

What Russell said.

There's an old joke: "We're a non-profit company. Not on purpose; it just worked out that way." Any company can make its "profit" zero, simply by paying its workers (or executives) all the cash it generates. So the "vigorish" I was talking about is not the "profit", as you assumed; it's the "overhead", as Russell said.

As for your desire to "extend health care to as many of the uninsured as possible," nothing could be simpler. What's not simple is doing it at zero cost to anybody else. If you (one of The People) oppose paying a dime more than you're already paying, that's fine. You might get outvoted, since you are not the entire People, but there's nothing illogical about your stance.

But if that is your stance, then you have to choose which of the other two bear the cost: the Insurance Companies, or the Doctors and Hospitals? Pick one.

--TP

"If so, and with a magic wand we turned all the insurance companies into non-profits, how much lower would insurance premiums be?"

To judge by Switzerland, maybe a quarter to a third lower, in addition to lower out-of-pocket costs and co-pays.

Marty,
I think the Democrats probably understand these economics. So,in my opinion, they are being less than honest when they tell the American people that it is absurd to link the two. It also makes me believe that a great number of them really think that they can achieve single payer through the "back door" and never have to admit it was their goal all along.

I think you're making interesting arguments (although I also think your analysis is avoiding some things eg as mentioned, reducing the number of uninsured should reduce unpaid ER costs, which are also pushed into the cost of private care).
But to think that your analysis is the only possible way to look at things, and then from that infer all manner of dishonesty in other people- I think this is a mistake.

(Of course, it's exactly the sort of thing that I do, but at least I can see it when other people do it. :) )

Russell says: "That would actually be a bad metric for the "vig".

Medicare operates at about 5% total overhead cost. That means 95% of every dollar spent through Medicare goes to actual patient care."

First, Russelll (I'm adding an extra 'l' to make up for the one I inadvertently left out of your name last time) my 'vig' question was in response to the profits of insurance companies selling private insurance, not Medicare, so that's not the metric I was addressing.

Second, 95% of every dollar spent through Medicare doesn't go to actual patient care -- doctors, hospitals, and other Medicare providers spend part of that money for their own Medicare related billing and administrative costs for each Medicare patient they treat -- costs the have to eat, along with the spread, but then pass along to other patients who end up paying more. Those combined billing and administrative costs at the provider's end can be as high as 25% in acute care settings.

Third, the quoted 5% total Medicare overhead cost number isn't reflective of the true overhead because, unlike private insurance companies which have to pay them, numerous other Medicare administrative costs are hidden, and excluded from the real overhead calculations.

Here's some examples:

-The money to fund Medicare is collected from employers and the self-employed by the IRS, and those collection administrative costs don't show in Medicare.
-The Social Security Administration collects 25% of the Part B programs from seniors' Social Security checks, also ignored in the administrative cost estimates.
-The salaries of professionals at the Centers for Medicare and Medicaid Services are excluded from Medicare's administrative cost estimates.
-If fraud cases or other suspicious problems occur, Medicare turns them over to the Inspector General in the Dept. of Health and Human Services for investigation, more costs that don't appear in the admin costs.
-All congressional and administrative staff time and effort devoted to creating, debating, promoting, opposing and changing or passing Medicare laws, like this month's long public debate now in progress to launch new health care initiatives, and any future health care or Medicare initiatives, are 'managerial' expenses not included in administrative costs.

There's probably other hidden costs, but you get the idea.

Suppose JJ (and others who make the same point) is right. Suppose that Medicare's overhead costs are partly paid by other agencies like IRS, SSA, HHS, and so on. Hell, let's go really wild and suppose that Medicare's overhead is THE SAME AS the vigorish of the greediest and most profitable private insurance company in the country.

So blanking what? Does JJ want to reduce the vig of The Insurance Companies (of which Medicare is one), or doesn't he?

--TP

Does JJ want to reduce the vig of The Insurance Companies (of which Medicare is one), or doesn't he?

I've come to the conclusion that Jay wants attention, and that's pretty much it.

I guess your high-brow train of thought is too much for my poor 185 IQ.

Too much for your twelve inch cock too. That has to be the biggest doucebag comment I've ever seen. Is this Chmood character a troll or what?

my 'vig' question was in response to the profits of insurance companies selling private insurance, not Medicare, so that's not the metric I was addressing.

Yes, I understood that perfectly.

And my response was that your 'vig' question was not to the point, because it failed to account for the full range of factors that cause private health insurance to be, net/net, less effective than public insurance in turning a dollar of revenue into a dollar of care.

It might be interesting to pursue this further, but you seem to be incapable of responding to anything without wrapping your reply in what you appear to consider to be clever smartassery.

I don't really have the patience for that in general, and the actual information and arguments you bring to the table aren't really worth the effort to make an exception.

So I'm done talking with you. Enjoy the sound of your own voice.

Tony P says: So blanking what? Does JJ want to reduce the vig of The Insurance Companies (of which Medicare is one), or doesn't he?

So blanking yes, JJ wants to blanking reduce the blanking vig of the blanking insurance companies... and blanking waste in other segments of the health care system.

But even if you eliminated for-profit insurance companies from the health care landscape it would only slightly lower overall health care costs, and it wouldn't do much to slow the rising rate of health care premiums.

Most of the costs and increases are generated by the providers, who are responding to forces beyond their control: more expensive infrastructure; expanding repertoires of treatments and technologies for diseases; and an increasing larger population of older patients, who require more care.

But yeah, squeeze every dime in savings from the Insurance Industry as you can, and for every dime you save, a dollar of new costs will still creep into the system, and the only way to slow that increase, is to RATION the services provided (no Grandma, you can't go in for bedsore treatments this week, just roll over grit your teeth).

Russell:
It might be interesting to pursue this further, but you seem to be incapable of responding to anything without wrapping your reply in what you appear to consider to be clever smartassery.

You're right, It's difficult for me to respond to a lot of what I read on this blog in measured tones of civility... And I apologize if I've injured your delicate feelings.

But isn't it a little hypocritical for you to complain about my smartassery for contesting your posted comments, but OK for you to defend a wind-bag like Grayson in a direct response to my criticism of him, and slur people like me, who pointed out his obnoxious statements as "squirrely sycophantic weasels." ??

And, by the way, does your squirrely sycophantic weasel accusation apply to Obama, and to Robert Gibbs, his press secretary, who when asked what the president thought of Grayson's remarks, indicted those kinds of disparaging comments about other people were detrimental to the legislative process, and would make health care reform more difficult.

So, do you want to retract your squirrely sycophantic weasels slur, or can I take by your silence you're standing by that dumbassery statement?

I'll reply just to set the record straight.

I stand by my dumbassery statement.

Been nice talking to you, I'll see you in the funny papers.

You're right, It's difficult for me to respond to a lot of what I read on this blog in measured tones of civility...

Just a suggestion, but maybe you should hang out at a blog more suited to your own particular...idiom?

Shorter Jay Jerome yet again:

I mean, I thought Bellmore was bad with the tu quoques, but this dude practices some next-level ball.

Et Tu Quoque, Philly?

And thanks for the photo, you even got my eye color right!

Sigh. I do miss this place, but getting into it day by day is harmful to my health. I mean that literally.

I have been lurking. russell – you are the master. As always, calm but devastating replies. I wish I could do that.

LJ – Great arguments and stamina, over multiple threads. You gave me a lot to think about. Turb – give him a break? He is on your side, after all…

John M – I miss our conversations.

Hell, I miss all the regulars. Even you Jes. ;) It’s amazing that you can build up such a rich online life. It leaves a hole when you give it up,,,

Thullen – you seem to be getting a lot darker. You are still the *best* blog commenter eVeh – but dude – things seem to be not good and it’s spilling out here. Are you OK?

And where the hell is Gary? It ain’t ObWi without Gary…

JJ – Hmmm. Well… Uhmm… OK – nothing good to say so I’ll shut up…

I miss you all.

Back to lurking or avoiding the web altogether…

Take care.

Steve

"And where the hell is Gary? It ain’t ObWi without Gary…"

Delurking to say I've been wondering that as well. He's posting at his own blog, but I wish he was here.

I think Gary has been commenting at Roger Ebert's blog. Unfortunately, I don't think you can search the comments, you have to open individual threads.

Gary has also gotten back on Facebook and has been active there lately.

Hey OCSteve - thanks for the comment over at TiO, I replied there.

Take care.

Donald Johnson, above:

"And where the hell is Gary? It ain’t ObWi without Gary…"

Delurking to say I've been wondering that as well. He's posting at his own blog, but I wish he was here.

Gary, in August:

...For a long time I've been neglecting my own blog in favor of commenting here, because I appreciate the interaction, but in both cases, the relatively low profile is starting to wear me down. For a very long time I'm investing a huge amount of time in what boils down to doing research for other people that mostly disappears down the memory hole, and is read by only a small fraction of the number of people who read front page posts at more prominent blogs than my own.

I'm strongly thinking about trying to find some group blog with a higher profile, since it's clear that in the contemporary blogging environment, a one-person non-niche blog such as my own is immensely unlikely to ever develop the kind of larger regular readership that, frankly, I'd like to find. If I can find one that's congenial, it'll probably mean cutting back my participation here. Of course, it's an open question if anyone will have me.

(Theoretically I could go back to Winds of Change, where they once invited me to be the house liberal, but I eventually found the context too frustrating, and desire to find a group blog where I'd be a better fit.)

Posted by: Gary Farber | August 20, 2009 at 08:28 PM

I think he meant it.

OCSteve: Hell, I miss all the regulars. Even you Jes. ;)

Thanks. Hope you're feeling better for taking leave of absence from the Internet.

Et Tu Quoque, Philly?

You don't know me well enough to call me by a nickname, youngster. I strongly suggest you don't ever try it in person.

Phil, I thought Jay should have had more of a hispanic tint to his skin. It's clear he has that fiery Mediterranean temper is his blood...

The comment posted on October 03, 2009 at 01:37 PM is not by me.

Hey OC cool to hear from you. Hope your well, man!

This was posted by the real russell. It contains no porn URLs, but if you click through my name you'll see a cool picture of Essex Bay in MA.

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