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Tuesday, March 20, 2012

The Complexities of Health Care


I’ve been concerned about the rising cost of Health Care for 10 years or more. One day our company sat us down and told us that our insurance company was merely an underwriter, and that they were paying the actual cost of our health care. Human Resources showed us examples of overcharging and mistakes on some employee's medical charges. They advised us to look over our detail billing and report any discrepancies. It really hit home when it became personal. About a year later, when I was thinking of retiring, Human Resources told us that existing retirees were the biggest drivers of our healthcare costs, and that they were considering increasing the cost of existing and future retiree’s premiums. I don't remember anyone complaining because we understood but lucky for us, they never followed through.

I am not an expert on health care but I am very interested on hearing varying opinions.I even have the entire Act on my iPad and several magazine articles on the subject.

Sunday night CNN's Fareed Zakaia hosted an excellent documentary about how other countries were dealing with their rising cost of health care. Fareed's guest was T.R. Reid, the author of " The Healing of America: a Global Quest for Better, Cheaper, and Fairer Healthcare." Mr. Reid found that government is more efficient at handling healthcare because their overhead is a low 5%, whereas private insurance companies hover around 20 to 25% because of advertising and other costs to satisfy their shareholders. He also said that healthcare is not an ideal product for the free- market because they cannot accurately forecast their costs for the next year. Later in the show, they showed how the free market could work, with conditions.

The fact is, 5% of the people in the United States account for 50% of our healthcare costs, so that information stuck out like a sore thumb. I saw an excellent example how one of the poorest cities in the nation, Camden, New Jersey, took that problem head on. They found out that 30% of the healthcare costs came from one area, so they concentrated on those people and now there are seeing their healthcare costs go down. They found that the average American will go to the doctor or hospital once or twice a year, but these people were averaging about 14 times a year, and one person went 435 times.

Unfortunately, politics wins over economics' in the fight for health care reform. For example, Switzerland had a problem similar to ours where people did not buy insurance and ended in emergency rooms; insurers were screening out people with preexisting conditions and their cost are raising fast. This conservative country barely passed an individual mandate and reformed their system to look like our current Affordable Health Act. Switzerland which has a population of 8 million, healthcare cost is 11% of GDP, and ours is 17% and rising. The country ranks higher than we do on the Heritage Foundation's Index of Economic Freedom. Their healthcare plans are not tied to employers, and their citizens can choose among endless companies and can change every year. The only drawback to that system is these citizens need to be aware of what they are buying.
By several measures, Taiwan has the best health care system in the world. About the time, the Clinton administration was trying to overhaul our healthcare care system. Taiwan sent their experts all over the world to study different plans. Taiwan is a strong free- market economy, but it decided to go with a single private insurer. It's basically a Medicare for all but with one private insurance company. They showed how a “smart card" allowed the insurance companies and government to see that actual cost in real time. Medicare takes about two years to reconcile their invoices with their payments, a reason fraud is prevalent Taiwan spends 7% of its GDP on health care and went from having 41% uninsured to just 8%.By comparison, their clinics stay open 11 hours a day and their doctors sees ~200 a day and gets paid $12 per patient, while their American counterparts get $100 per patient.

The Affordable Health Act is not perfect, but the fact remains we need to stop the rising cost of health care, and we need to insure as many people as possible. Conservatives say that regulations are an impediment in our efforts to compete globally, but they don't mention how companies spend tens of billions of dollars to provide health care to their employees and retirees, while Canada, Germany, Japan, and Great Britain spend next to nothing.

The Democrats lost the message war after they passed the Affordable Health Act, and they are still losing it. I just saw a poll where 52% thought that the Supreme Court had already struck down the individual mandate. The upcoming legal challenges against the individual mandate will be very interesting. Will the five Supreme Court judges appointed by Republican presidents make it partisan, thus angering the Democrats in an election year? Will the Supreme Court to go with the precedent and give broad powers to the “commerce clause" as they have in the past? It will be an interesting case because the Supreme Court might decide to split the issues and leave the Act in place.

I saw a Kaiser Poll yesterday that had 41% for the Affordable Health Act and 40% against and 19% not sure. I would like to know where you stand on the issue. Is it status quo,don’t know enough about the issue,whatever, or repeal the Act and why?

This is what I think. We won’t be able to go with one insurance company because that’s picking winners and losers, and we won’t go with a single- payer universal health care system, where it’s total government because the outcry of socialism will be so load we will all have to wear ear muffs. We won’t institute a system like the Cleveland and Mayo Clinic where the hospital gets a block grant for a procedure and then they divvy that up between the hospital,doctors and other employees.I do know this,we are a hybrid nation,so unless we get a complete domination by a party ,we are either going to have to improve the one we have or take a little from here and a little from there but we will still be saddled with rising costs.

Does the GOP alternative of individual Health Saving Accounts,buying across state lines do the trick? Will you be willing to give up not being turned down for pre existing illnesses or having your children on your policy until age 26?

I'm convinced that  we will never do anything about the high rate of obesity or that we will come to grips that we are a older nation because we are a freedom loving people.  If 30% of the people get all upset because the first lady mentions eating more veggies, I can’t expect for anyone to do anything about contributing factors.


Sugar Magnolia said...

Mike, I just went to the doctor today myself, but after reading your blog I think I may have to go back. EXCEPT I CAN'T AFFORD A RETURN VISIT!

You know that you and I are on opposite ends of the spectrum on this subject, and you know I come to post on your blog with nothing but respect for your views, but when you said (and I realize these are not your words) that "government is more efficient at handling healthcare", I about became physically ill. Please make no mistake, but I can tell you because I have lived it for nearly 25 years, that's a QUARTER-CENTURY: HEALTCARE IS SO EXPENSIVE AND IN THE SHAPE IT'S IN NOW BECAUSE OF THE FEDERAL GOVERNMENT. I know you've heard me say this before, and I don't want to be a broken record, but we in the healthcare industry have been placed in a virtual stranglehold by governmental regulations. You could not imagine how it is to come to work every day and spend more time satisfying the government, making sure every "t" is crossed and every "i" dotted, or god forbid, they will deny payment, than I do actually running tests and providing patient care. Yes, that is the TRUTH. Let me repeat: more time spent on complying with governmental regulations than spent on actual patient care. They have taken some of the nation's most talented and dedicated scientists and healthcare providers and turned them into money-making automatons for the government.

You do know that I could go on at length here, but I won't bore everybody. My advice to you is to not get used to the AHA, as it will not survive scrutiny by the Supreme Court. It will be but a footnote in history of yet another nanny nation gone wrong.

Mike said...

Well ,I did not not say government(but I believe that)is more efficient than private insurance companies because I don't have the job description to say that...I stated "T.R. Reid, the author of " The Healing of America: a Global Quest for Better, Cheaper, and Fairer Healthcare found "found that government is more efficient at handling healthcare because their overhead is a low 5%, whereas private insurance companies hover around 20 to 25% because of advertising and other costs to satisfy their shareholders. He also said that healthcare is not an ideal product for the free- market because they cannot accurately forecast their costs for the next year. Later in the show, they showed how the free market could work, with conditions....That's a big difference,now later on in the blog,I mentioned that Medicare takes 2 years to reconcile the invoices and payments,that's a fertile ground for bureaucracy and fraud....The CBO also said that Medicare has less overhead than insurance companies.

I've also found that Medicare is more efficient for me personally than Aetna was and that's not disagreeing that bureaucracy is a big part of cost. I didn't have to meet a high deductible with Aetna but I do with Medicare but it's manageable.

What we have is private doctors and private insurance companies and the costs continue to rise,so instead of getting ill, is there something that's missing that could curb cost besides the billing bureaucracy?As I've said my doctor is now totally electronic in his record keeping,in fact I'm able to email and he gets back to me. This is your line of expertise. What were we doing wrong before ,because the rising cost of insurance was going up before 2009? I think years of neglect, an aging country, lack of preventative care or diagnoses, had more to do with the rising cost than the Affordable Health Act.

You might be right but I don't think one branch of government supersedes another because we have three co- equal branches of government. The administration could call the' individual mandate" a tax and we all know that Congress has the power to levy taxes. It will be interesting just to hear the arguments from both sides.

Again,my question and pretend you are speaking for 300,000,000 Americans, will they be able to give up pre existing conditions, keeping your dependents on policy and until age 26 and affordable insurance for women? The republicans don't have a viable plan and the insurance companies will not allow us to keep those features unless they can get more customers.

Mike said...

I have some questions. When you say the federal regulations is the biggest driving factor in the rising cost of insurance;are you talking about Medicare and Medicare or the private insurance? You did say it's been an ongoing problem for 25 years. If we remove all government regulations for the private sector in health care;will that remove the rising cost? I'm not disagreeing it won't help that I would like to know to what extent.

I didn't mention Great Britain but as everyone knows they have a cradle to grave system where the citizens don't pay a cent to doctors, pharmacists, or insurance companies. I believe their system is ranked higher then ours because their life expectancy and infant mortality rate is better and it's about 10% of GDP. Its total government controlled where the government owns the hospitals and pays the doctors. They do have a higher tax rate than we do because their top level tops out at 50% and and they pay a 25% VAT. They do have an average 18 week wait for non-emergency procedures and a board comprised of doctors, patients, and other medical professionals that decides what they will not cover. They are not a squeamish as we are about end of life issues.

Sugar Magnolia said...

I know you personally didn't say that, Mike, and should have made that clearer than I did.

You're still not understanding what I am saying. I am not blaming the AHA for anything here; we are smothered by the government due to other regulations; HIPAA, CLIA, JCAHO, Medicare, Medicaid, etc. that dictate what we in hospitals must do for compliance. The increased cost for health care comes in large part because of these regulations. For example, to comply with CLIA, labs must run calibrators/controls on a certain schedule; proficiency testing must be performed; I could continue on and on. This COSTS A LOT OF MONEY - YOUR money. And MY money. EMR is a wonderful thing, and most hospitals are getting on board. But do you think the equipment/training is free? Do you think all the disposable equipment we use is free? And believe me, everything is disposable these days. This stuff is more expensive than you could dream. Why do we do all this, when in years before, we didn't have to? Because now, the government says we have to. The rising costs of medical care is directly linked to the rising costs to healthcare facilities in meeting compliance standards that the government has set forth. It is as simple as that; I don't know how I can make it any plainer. Why did it cost a nominal amount to go into the hospital to have a tonisllectomy/appendectomy/childbirth so many years ago? Why was the hospital bill so simple, less than a page long, and why did families not have to hock their future just in order to buy a prescription or pay for a procedure? Because, before Medicare, Medicaid, and regulatory agencies, physicians, their staff, and their facilities were not beholden to the G*DAMN FEDS! Why can't docs make house calls anymore? Because the feds say they can't. Why can't I, as a manager, decide what works best for my lab, even boost productivity? Because the feds say I can't.

Again, I could go on, but I do hope you understand what I'm saying. So......government MORE EFFICIENT? Have you known the government to be more efficient at anything they take over? REALLY? It may seem efficient to you as a recipient of services, but don't think for a minute that those services are far less efficient than in the past, and so much more expensive than any service has a right to be in a free nation.

You did say "I don't think one branch of government supersedes another because we have three co- equal branches of government." What? This issue is coming before the Supreme Court later this month, and the entire Act can, and will likely be, struck down. Of course, then the other branches can pass laws, mandates, whatever, but THIS act in particular will be ruled upon. The issue at hand is not even whether it is a "good mandate" or a "bad mandate", but rather the AHA falls within the Constitutional authority of Congress. The Supreme Court, as in any other case, will simply be ruling on the constitutionality of the Act. And it is very unlikely this act will withstand challenge.

I have to break this into two parts, sorry.

Sugar Magnolia said...

The answer to your last three questions is not, "will they be able to". The question is, how do we as a nation undo the damage that the government has done? Age 26? Affordable care for women? Both women and those over age 26 should be out in the workforce, contributing to society, and buying into their own healthcare insurance. I know, of course, not all CAN, but can we as a nation keep supporting those able-bodied workers who are living off the government teat. I know the answer to that. WE CANNOT AFFORD TO KEEP LETTING THE GOVERNMENT SUPPORT US AS A PEOPLE.

Now, I'm getting off on a tangent I don't want to go on, so I won't. Respectfully, Mike, my answer, and I cannot speak for 300,000,000 Americans, only myself is just this: YES. I WILL GIVE THIS UP, AS I NEVER USED IT IN THE FIRST PLACE BECAUSE I DO NOT EXPECT THE GOVERNMENT TO TAKE CARE OF ME.

Thank you for the civil discussion, Mike. I do keep in mind that we are worlds apart on this, but I understand your viewpoint. I wish I had answers. If I did, I would bottle them and solve the world's problems. I just know from experience that government is not the solution here, it IS the problem.

Mike said...

I think we went straight to the left/right issues. That's the route our politicians take. I went at from an economic position not a social one. For instance:

1. The more people we insure the less expensive insurance will become.

2. Government is not a separate entity (it's we the people; funded by our tax dollars) and although it is currently dysfunctional, it not a cure- all but most people want an efficient government. I didn't mean literally speak for 300 million but I was asking for a solution that could pass the 218 votes in the house and 60votes in the senate. A compromise.....After all,10,000 people are going into Medicare everyday and our relatives, friends and neighbors are on Social Security and Medicare and you will eventually be part of that system.

3. Working at low end jobs (we still have a high unemployment rate) where the company does not offer insurance and doesn't pay the employee enough for them to be able to afford insurance is not the answer. It’s a continuance of the same.

4. Several of the 26 year olds on their parents insurance are college students on their way to becoming productive citizens. Many cannot find a job.

5.I've heard that insurance policies for women are higher...That shouldn't be.

6. Government is taking care of all us by repairing infrastructure,trade agreements,defense,FDA,EPA,FBI,CIA,FEMA and yes with the social net for the less fortunate...Just imagine the scenario, if on September 15,2008 (financial crash) if the government did not have Medicare, Social Security, and Medicare or unemployment compensation..Soup lines, hate and angry mobs, or a replication of the 1929 Depression.

Thanks for the discussion;it gave a chance to state more points..:-)

Have a good one..take care

Sugar Magnolia said...

Glad to you more fuel for your fire, Mike. Except that I gave you my perspective as a healthcare industry worker, which is neither left nor right for me, it is just a human being issue. I can tell you what DOES NOT work. Years of experience have bourne that out.

Inasmuch as we will have to agree to disagree here, I will wish you a good one, too. Thank you for the discussion.

Sugar Magnolia said...
This comment has been removed by the author.
Legion said...

Off topic,

Sugar, I have been trying to remember what they are called and couldn't, the machines that sterilize medical instruments and such.

They way things are today, a museum is probably the only place to find one.

Mike said...

Sorry Sugar, I didn't see the part 1 of 2.

I’ll look into the costly regulations you submitted because I haven't heard those complaints before, as being part of the problem. I'm sure they are.
I've read and heard through several accounts that the VA (totally controlled by the government) is the most efficient health care system we have. The Government came out shining in the GM bailout.

I started the blog by stating that my company was complaining about the inefficiency of our local hospitals and told us to be on the lookout. When I talk to my friends, the only complaining that we do is about our doctors sending us to needless procedures because that's how they make their money. The Sunday show I wrote about said we had 70 million CAT scans and that's out a population of ~ 310 million. I think there are waste, fraud, abuse and inefficiency in the private and public sector. I don't think for a minute that insurance companies always have our best interests at heart. I think a fair minded person in would take that into consideration. I don't think health care became 17% of GDP because of government by itself. I'll have to see the facts.

Remember we're talking about 50 states.

I know very well that this issue will come before the Supreme Court and I will be glued to the television. Remember three of the lower courts have already said that the individual mandate was not unconstitutional. This administration wanted this issue to come before the SCOTUS because they have a lot of confidence. I've heard constitutional lawyers and professors argue both ways; I remain optimistic but I still think it'll be one of the most interesting cases of our lifetime.

Mike said...

Are they called autoclaves?

Anonymous said...

The Government more efficient running healthcare. You are kidding aren't you.

I was trying to think of something they run that's not in the black, or heavily subsidized.

SM is in the health care business, it appears your opinions are not fact based from experience, as opposed to hers.

I hope they deep six the bill.

Mike said...

Until the early 1990s, care at VA hospitals was so substandard that Congress considered shutting down the entire system and giving ex-G.I.s vouchers for treatment at private facilities. Today it's a very different story. The VA runs the largest integrated health-care system in the country, with more than 1,400 hospitals, clinics and nursing homes employing 14,800 doctors and 61,000 nurses. And by a number of measures, this government-managed health-care program--socialized medicine on a small scale--is beating the marketplace. For the sixth year in a row, VA hospitals last year scored higher than private facilities on the University of Michigan's American Customer Satisfaction Index, based on patient surveys on the quality of care received. The VA scored 83 out of 100; private institutions, 71. Males 65 years and older receiving VA care had about a 40% lower risk of death than those enrolled in Medicare Advantage, whose care is provided through private health plans or HMOs, according to a study published in the April edition of Medical Care. Harvard University just gave the VA its Innovations in American Government Award for the agency's work

Read more:,9171,1376238,00.html#ixzz1phGdKEiD

Sugar Magnolia said...

Yes, they are called autoclaves. Actually, there are still sterilizable instruments used in ORs (but not very many) and most hospitals I've worked in have them still. Just not used near as much in the old days.

Also, some universities still use autoclaves for certain lab equipment; that is, for the equipment the poor little lab students aren't made to wash (test tubes, beakers, etc.) :)

Mike said...

It looks like I wrote another blog where I failed to accomplish my goal of asking questions like ;if not this Act,then what?
I really appreciate the input from Sugar because I 've had not heard that government regs were a major part of the problem and I hope to find out why. The blog was never intended to pick winners and losers in a debate. It's still early.

I never hear the solutions the other side has although I'm very familiar with the GOP proposals. You see I was always taught that discussions weed out fact from fiction or at the very least put things into focus.

I found arguments (that I agree with) to the documentary that disagreed that Medicare was more efficient than it's counterpart but you have to look at it from an economic viewpoint not a political one. I didn't include the part where Taiwan only used one insurance company but they had to stay on them because they were always trying to drop people. In 10 years,Taiwan has only raised their premiums twice due to costs. I know we couldn't do that here because that would be picking winners and losers.

..I also know that one side does not have all the answers and if they think they do,then they are extremists.

Health care is not an emotional issue for me and Sunday night I was able to appreciate an answer from someone who supported using Health Savings Accounts...He was right ,if we had to buy our own insurance and pay for our medical cost,the rates would drop. I like it where I no longer have to go through network to find a specialist as I did with Aetna. I like having to pay a high deductible because I see the actual costs...The problem with the unpopular HSA..... is disposable income for health care and I've heard that doctors like insurance instead of cash. I've heard nothing but complaints from people who have them.

Oh, well I tried.....You fail,you get up again and try again.
I love constructive criticism and an opposing view that proves me wrong but I won't make it easy..:-)

Legion said...

Mike, I wrote a blog on my site comparing medical costs in Victoria to Houston.

You mentioned your former employer saying to check billing, another Mutual of Omaha, moms all encompassing plan F provider, sent a statement yesterday.

Detar double billed for moms ER visit to both Medicare and Mutual of Omaha. The ER doctor charged $600 for his viewing of X-rays and visiting with mom for THREE minutes, the nurse and PA did everything else, they also submitted charges.

The local Orthopedic surgeon that originally billed her as a cash patient, with a cash discount, refiled with Medicare and MOO, surprise, his cash discount was exactly the same amount Medicare payed.

AND it amazing me that Detar had the nerve to submit charges to Medicare and MOO of over $60,000 for TWO DAYS, mom wasn't in ICU. The most drastic procedure she had was a catheter.

SOMETHING needs to be done to stop this insanity, if the AHA is a start, it is a lot better than not doing anything.

The individual mandate, IMO, is the sticking point on the AHA. It's like a half step to single payer. It might have been better to just go all the way and see how the scutus rules.

Legion said...

Oops scotus... one other thing, if health insurance is not a money maker for insurance companies, why all the competition by company s to change plans?

Think about it, if health insurance cost insurers more than they make, no matter their overhead, why do they offer it at all?

Mike said...

Bingo!?..My mother should have been in Hospice on her last visit to Citizens 6 months before she died..The leeches were there to collect,her doctor never saw her in her last month  but he got in on the billing...A RN sat me down one day and told me that my mother had an open wound on her back which would never close...The death was listed on the death certificate as stomach cancer...I was the executor of her will and I had go to a couple of doctors and prove to them that Medicare paid them in full,I'm sure I could have disputed some hospital charges but their bill was an endless stack of paper and they said Medicare would pay in full...I'm sure they did. 

The individual mandate does not bother me but I will understand if it gets overturned.

I think I agree with your logic because I think the spineless Dems should have proposed Medicare for all on an up or down vote...Medicare could have been explained by those who are on it and it's fairly easy to understand...Instead ,some ran away from it and still lost;the 80 or so Dems that did not run away from the ACT,all won....I don't think Obama would have supported it because he didn't support the public option. 

Thanks Sugar and Legion,I learned a couple of things tonight.

Mike said...

I found this interesting nugget:

The U.S. Supreme Court could affirm the entire Obama health care reform law or strike it down entirely, but there are at least four other possible outcomes to the case, Mark Sherman and Ricardo Alonso-Zaldivar of the Associated Press report.

Options include if the court:

1.Upholds the law and finds Congress was within its authority to require most people to have health insurance or pay a penalty.
2.Strikes down the entire law.
3.Strikes down the individual insurance requirement, but leaves the rest of the Affordable Care Act in place.
4.Strikes down the mandate, and invalidates the parts of the law that require insurance companies to cover people regardless of medical problems and limit what they can charge older people.
5.Throws out only the expansion of the Medicaid program.
6.Decides that the constitutional challenge is premature.

Number 6 is interesting because no has been hit with the penalty because enforcement won't take place until the year 2014....

Mike said...

Liberals are hold out for one republican vote none other than conservative Anton Scalia

"In Raich, Scalia’s concurring opinion declared that “where Congress has authority to enact a regulation of interstate commerce, it possesses every power needed to make that regulation effective.” Liberals who hold out hope for winning Scalia’s vote point to that opinion. It’s an opinion that worries small-government libertarians because requiring the purchase of health insurance is a means of regulating interstate commerce, in part to prevent uninsured people from passing their medical costs on to taxpayers.