Rationing and Econ 101

[maxiep]

http://www.realclearpolitics.com/articles/2009/08/19/obamacares_inevitable_logic_97937.html

Stossel is no flamethrower. He simply points out the obvious.

 

[deception]

your current system experiences tremendous levels of rationing by price. if u work for goldman sachs and have a $40, 000 plan your better off than the gas station attendant or small business worker who has the bare minimum. i doubt the bare minimum covers many elective procedures and we already know they cut costs by using pre-existing conditions against the client.

 

[bluefrog]

I think this is one of the weaker articles you've posted.

This is his most valid point:

Medical care doesn't grow on trees. It must be produced by human and physical capital, and those resources are limited. Therefore, if demand for health care services increases -- which is Obama's point in extending health insurance -- prices must go up. But somehow Obama also promises, "I won't sign a bill that doesn't reduce health care inflation".

This is magical thinking. Obama, talented as he is, can't repeal the laws of supply and demand. Costs are real. If they are incurred, someone has to pay them. But as economist Thomas Sowell points out, politicians can control costs -- by refusing to pay for the services.

It's called rationing.

I think he has an opportunity here to suggest a solution but then he just digresses to fear mongering:

Ordinarily, the doctor is the agent of the patient. But when government signs the checks and orders doctors to reduce spending, it is not crazy to think that this won't influence their "advance care planning consultation".

He equates "advance care planning consultation" to "death panels". So essentially doctors will be forced to kill patients to meet the bottom line.

It's not a strong argument or even productive in the debate over health care reform.

 

[bluefrog]

your current system experiences tremendous levels of rationing by price.

good point

 

[maxiep]

your current system experiences tremendous levels of rationing by price. if u work for goldman sachs and have a $40, 000 plan your better off than the gas station attendant or small business worker who has the bare minimum. i doubt the bare minimum covers many elective procedures and we already know they cut costs by using pre-existing conditions against the client.

Our system absolutely does not ration by price. Hospitals treat people without payment on a regular basis. When someone can't pay, they work out a payment schedule. Insurance companies supply drugs and treatment to people all the time who aren't covered either for free or at a significant discount. Bottom line, if you need health care in this country, you get it.

As for what you call the "bare minimum" health insurance, it's called catastropic insurance. Usually, those plans have a $2K-$5K deductable, with a 10%-20% co-pay until $20K at which coverage goes to 100% until a pre-set limit, usually in the mid-six-figures. Hospitals and insurance companies are also willing to work out payment plans.

Also, you must know that pre-existing conditions only exist for one year when joining a new plan, right?

Thanks for playing, but Canada has much bigger problems with its own health care system.
http://www.basketballforum.com/political-economy/430963-canada-having-health-care-problems-well.html

 

[maxiep]

I think this is one of the weaker articles you've posted.

Thank you for your opinion.

This is his most valid point:

I think he has an opportunity here to suggest a solution but then he just digresses to fear mongering:

Oh, I'm pretty sure his solution would look an awful lot like the Whole Foods CEO's proposal. The problem with those on the Left is you all seem to believe that if those of us who believe in free markets don't come up with an alternate proposal based on the government we're just being obstructionist. The solution is to lower regulations and bring true competition into health care, rather than handing the whole thing over to the State.

He equates "advance care planning consultation" to "death panels". So essentially doctors will be forced to kill patients to meet the bottom line.

It's not a strong argument or even productive in the debate over health care reform.

Once again you're engaging in demagoguery. Stossel goes to great pains to say that it's unconstructive to talk about "death panels". However, when the government refuses to pay for care, it's rationing care. And under this plan, whose care will be rationed first?

 

[deception]

Our system absolutely does not ration by price. Hospitals treat people without payment on a regular basis. When someone can't pay, they work out a payment schedule. Insurance companies supply drugs and treatment to people all the time who aren't covered either for free or at a significant discount. Bottom line, if you need health care in this country, you get it.

As for what you call the "bare minimum" health insurance, it's called catastropic insurance. Usually, those plans have a $2K-$5K deductable, with a 10%-20% co-pay until $20K at which coverage goes to 100% until a pre-set limit, usually in the mid-six-figures. Hospitals and insurance companies are also willing to work out payment plans.

Also, you must know that pre-existing conditions only exist for one year when joining a new plan, right?

Thanks for playing, but Canada has much bigger problems with its own health care system.
http://www.basketballforum.com/political-economy/430963-canada-having-health-care-problems-well.html

u refer me to a basketball forum for your source. u should have referred me to the WHO which ranks canada ahead of u guys and slots u in 37th place. i never said hospital ration by price, i said insurance companies do. and obviously your not going to undergo an elective procedure if your going to be saddled by healthcare bills afterwards, no u will live with the pain in the richest nation in the world. and lets no forget that the biggest cause of personal bankruptcies in america are healthcare bills. fyi- many corporations like walmart are signing off on this as well because the cost of providing insurance to their employees is too onerous.

and we have no deductibles in the rest of the industrialized world. as for our system- poll after poll suggests that over 90% of canadians are satisfied with our system.

 

[maxiep]

u refer me to a basketball forum for your source.

Actually, I referred you to the article in the root post.

u should have referred me to the WHO which ranks canada ahead of u guys and slots u in 37th place.

I guess that's why there are hospitals in places like Bellingham, Plattsburgh, Niagara Falls and Burlington dedicated to serving Canadians who come across the border to have procedures done that your government can't seem to get to.

i never said hospital ration by price, i said insurance companies do. and obviously your not going to undergo an elective procedure if your going to be saddled by healthcare bills afterwards, no u will live with the pain in the richest nation in the world.

Nope. You'll have the procedure, not pay the hospital and fight the insurance company to pay for it. You'll have your physician and your surgeon petitioning the insurance company on your behalf. You have the threat of taking them to court. These are all alternatives that will be gone if we go to a public option.

and lets no forget that the biggest cause of personal bankruptcies in america are healthcare bills. fyi- many corporations like walmart are signing off on this as well because the cost of providing insurance to their employees is too onerous.

Because bankruptcy is the easy way out for people who have overextended themselves. You could live within your means and have some savings rather than buying a huge house and filling it full of consumer items.

and we have no deductibles in the rest of the industrialized world. as for our system- poll after poll suggests that over 90% of canadians are satisfied with our system.

Yep, that's why there are US hospitals in on our northern border filled with Canadians who can't even get those "elective" surgeries in their home country. Of course, when the government tells you that you can't have the surgery it's okay. When the government tells you that you're now on a waiting list for that elective surgery, it's okay. If an insurance company says the same thing, they're EVIL...

 

[BrianFromWA]

I ask again....what is the ranking of the care given in Veteran's Hospitals? Higher or lower than 37th? Shouldn't we take a look at what our already-existing government health care looks like before jumping in on a wave of "change"?

 

[maxiep]

Yeah, our healthcare system is so bad that Silvio Berlusconi left Italy (who ranks #2 on that health care ranking) to have surgery in the country who ranked #37. Our healthcare system is so bad that there is an entire industry on this planet that offers insurance that will send you to the US to be treated.

 

[deception]

i actually agree with a lot of what u have to say maxiep especially in relation to waiting lists on elective procedures. nevertheless, i cant think of a person who died waiting for an elective procedure and they will eventually get the procedure done because everything is paid for in our system. and there have been several commissions whose recommendations have been implemented and we're seeing an increasingly more efficient system. as for healthcare tourism- it happens with americans as well. check out the article i posted in off topic about americans going to india for procedures.

here's my personal experience: a couple years ago- a bunch of us were playing football on canada day, its been a tradition for the many years and that particular year one of my buddies sprained his ankle real bad. i drove him to the emergency room because it was a stat holiday- a nurse checked him out to determine the severity of his injury and then instructed us to wait. there were reports on the news about extraordinary wait times in emergency rooms so i expected to spend the afternoon with my buddy. but to 20 minutes later we were called and 15 minutes after that i was driving him home.

 

[deception]

Yeah, our healthcare system is so bad that Silvio Berlusconi left Italy (who ranks #2 on that health care ranking) to have surgery in the country who ranked #37. Our healthcare system is so bad that there is an entire industry on this planet that offers insurance that will send you to the US to be treated.

if you're outrageously wealthy- go to the states but most ppl arent so u need a system that covers the rest of us. the public option wont eliminate what the rich have- it merely gives the have-nots an option when they had no such option previously. and u were bitching about paying for ppl on the subsidized public option- well under the current arrangement u were paying for ppl when they were going to the emergency rooms with a cold and no insurance as well. under obamacare u would be paying less.

 

[maxiep]

if you're outrageously wealthy- go to the states but most ppl arent so u need a system that covers the rest of us. the public option wont eliminate what the rich have- it merely gives the have-nots an option when they had no such option previously. and u were bitching about paying for ppl on the subsidized public option- well under the current arrangement u were paying for ppl when they were going to the emergency rooms with a cold and no insurance as well. under obamacare u would be paying less.

Any public option kills private insurance. It's especially true the way it's set up in the bill. There are so many forced opt-ins and so many incentives for employers to only offer the public option that private insurance would die and die quickly. And hello Single Payer.

The goal is to stop the have/have not divide. Socialized medicine creates the exact opposite situation. The wealthy can always opt-out. I know I'm willing to pay whatever it takes to see the physician I want and get the treatment I want when I want it. I'm not particularly wealthy, but I'm well off enough to have that choice. Scores of my friends aren't so fortunate. They'll get the healthcare the government tells them they can have. The only problem is they'll be less healthcare for more patients, so it will be rationed.

At least now there's a competitive option for those people through their insurance company. They can shop around and find the best plan for them. The public option will lead to Single Payer. And Single Payer will be one-size fits all.

Regardless of the economic issues, there's a philosophical one for me. As an American, I believe in individual freedom. With a Single Payer system, the government now has control over my body. They get to tell me what health care I can and cannot have. That concept is about as un-American as I can imagine.

 

[deception]

we have private hospitals here in soviet canuckistan as well as private insurers. so no, the public option will not kill private insurers unless of course they choose not to compete. the insurance companies have long run oligopolies, its time for them to compete in the marketplace just like every other industry. plus, isnt the private sphere much more efficient than the fat arse govt?

 

[blazerboy30]

we have private hospitals here in soviet canuckistan as well as private insurers. so no, the public option will not kill private insurers unless of course they choose not to compete. the insurance companies have long run oligopolies, its time for them to compete in the marketplace just like every other industry. plus, isnt the private sphere much more efficient than the fat arse govt?

The government isn't held to running a "business" and making profit. They can run at a loss, and just keep raising our taxes to pay for it. The private sector doesn't have that luxury.

 

[bluefrog]

The solution is to lower regulations and bring true competition into health care, rather than handing the whole thing over to the State.

I don't think deregulation is the solution. That didn't work too well with the loan and banking industry. I think in a true free market people will start to cut corners and the quality of health care with suffer for those who can't afford better care.

Any public option kills private insurance. It's especially true the way it's set up in the bill. There are so many forced opt-ins and so many incentives for employers to only offer the public option that private insurance would die and die quickly. And hello Single Payer.

The goal is to stop the have/have not divide. Socialized medicine creates the exact opposite situation. The wealthy can always opt-out. I know I'm willing to pay whatever it takes to see the physician I want and get the treatment I want when I want it. I'm not particularly wealthy, but I'm well off enough to have that choice. Scores of my friends aren't so fortunate. They'll get the healthcare the government tells them they can have. The only problem is they'll be less healthcare for more patients, so it will be rationed.

I lived in Japan for 7 years and they had government health care as well as private health care and their taxes are lower than the U.S. Public and private insurers can exist side by side. The postal service and Fedex do it.

Regardless of the economic issues, there's a philosophical one for me. As an American, I believe in individual freedom. With a Single Payer system, the government now has control over my body. They get to tell me what health care I can and cannot have. That concept is about as un-American as I can imagine.

I agree 100% here with you philosophically. Would you agree that limits on abortion are a form of the government controlling people's bodies? ( I know this is opening a can of worms but it is related philosophically)

 

[maxiep]

I don't think deregulation is the solution. That didn't work too well with the loan and banking industry. I think in a true free market people will start to cut corners and the quality of health care with suffer for those who can't afford better care.

It is an economic truth (one of the few) that in a perfectly competitive environment, in the long run all profits go to zero. It's a nice red herring with the loan and banking industry, but the problem there was Congress dictating who to loan to and then sloughing off the problem to the secondary market. This happens to be my industry, so if you'd like to have a discussion about it, I'll be happy to educate you.

Insurance is a different animal altogether. It is a risk-based business based on actuarial tables. They offer a set of services, each with a price, and then try to maximize their profits (revenues from premiums minus outlays for health care expenditures and overhead). Sure, you'd like to charge a ton, but the lowest cost provider will take the lion's share of the business. The more players, the higher the competition, the less likely a cartel will be organized informally. It means that you try to undercut your competitors why still maintaining a profit. You squeeze your office expenses and negotiate with health care providers. That cost is passed through to the consumer. If the quality of healthcare suffers under one plan, you move to another one. It's amazing how the Invisible Hand finds value in the market.

I lived in Japan for 7 years and they had government health care as well as private health care and their taxes are lower than the U.S. Public and private insurers can exist side by side. The postal service and Fedex do it.

I lived in Spain and Scandinavia. Both have government health care. Both have thriving insurance businesses where the wealthy buy insurance that sends them to the US for any serious injury. Both are running into real health care issues because there aren't enough people getting into medicine.

As for Japan's taxes being lower, boy I just don't know

http://www.worldwide-tax.com/japan/japan_tax.asp

30% Corporate
5-50% Personal
5% Consumption (aka VAT)

http://www.worldwide-tax.com/us/us_taxes.asp

15-35% Corporate
15-35% Personal
No Consumption/VAT tax

I agree 100% here with you philosophically. Would you agree that limits on abortion are a form of the government controlling people's bodies? ( I know this is opening a can of worms but it is related philosophically)

I happen to be pro-choice; I guess you expect me to be pro-life. Where I draw the line on limiting abortion is when the fetus can survive with medical assistance outside the womb. At that point, IMO, the fetus has a right to life itself.