Obamacare vs. Anarchy-care

Exactly what did Obamacare try to accomplish?  It really only tried to widen access to affordable health care insurance.  It was a reform that was long past overdue despite the fact that it falls short of accomplishing what is actually needed, which is the control of health care costs.

I should know. After my wife's permanent layoff from her job at a large company, I needed to purchase health care insurance as a very small business owner for my family. Since my company had way fewer than 50 employees, the choices were not abundant despite living on Long Island, NY.  I had 3 insurance companies in  total to choose from.  All the policies were odious.

The first year, 2002 or 2003, the cost of insurance was a shock to the system after being covered for relatively little out of pocket cost under my spouse's coverage from her job. But it got worse - much worse.  By 2009, health care was costing before taxes $25,000 per year counting premiums, deductibles and co-pays.  Unbelievable!

Fortunately, in 2010, my wife found a job with good benefits but the damage was done - we had spent about $175,000 on health care over about 7 or 8 years even though we were relatively healthy.  Boy do we miss that $175,000!

The loss of this money to health care costs is particularly bothersome to me because I am all too well aware that our "system" of health care is so idiotic; it's the most expensive in the world and it's not close to being the best.  In Canada, our neighbor to the north, the costs are a fraction of ours, yet Canadians live longer than we do.  There is no way to justify what we do compared to what the Canadians do; they simply have it better.  Anecdotal stories aside, the fact remains that Canadians are not clamoring to change their "Medicare for All" system.  In fact, they probably would rebel if their system was changed into OUR system.  Who wouldn't rebel?  Our system is nothing more than anarchy.

Is that too strong a word?

Health and Human Services Secretary Kathleen Sebelius has released an enormous data file containing the secret "Chargemaster" price lists of hospitals from around the country revealing an almost completely random, arbitrary and capricious pricing of various hospital services that vary wildly from hospital to hospital.  Truly the prices are inexplicable!

Steven Brill, who wrote the masterful article "Bitter Pill" highlighted in an earlier blog post, wrote on 5/8/2013, "For example, the first line in the more than 163,072 lines of data in the CMS file released May 8 covers the treatment of “extra cranial procedures” (“without complications”) at the Southeast Alabama Medical Center in Dothan, Ala. When Medicare reviewed the list prices on bills it received for 91 patients getting that treatment at the Dothan hospital in 2011, the average Chargemaster bill claimed by the hospital was $32,963. Medicare paid only an average of $5,777...

Helpfully, Sebelius points out in her announcement that “average inpatient charges for services a hospital may provide in connection with a joint replacement range from a low of $5,300 at a hospital in Ada, Oklahoma, to a high of $223,000 at a hospital in Monterey Park, California. Even within the same geographic area,” she notes, “hospital charges for similar services can vary significantly. For example, average inpatient hospital charges for services that may be provided to treat heart failure range from a low of $21,000 to a high of $46,000 in Denver, Colorado, and from a low of $9,000 to a high of $51,000 in Jackson, Mississippi.”

"  Go to
http://swampland.time.com/2013/05/08/an-end-to-medical-billing-secrecy/ .

Please note that the hospital, which makes a profit at the payment level that Medicare pays, would try to charge the uncovered about 600% more than it charges Medicare.  Those persons would most likely be lower income persons.  Furthermore, the Chargemaster price lists are the basis for their negotiations with health care insurers, none of whom have anywhere near the bargaining power of Medicare which has a monopoly on older health care consumers.  It is Medicare's bargaining power that is the key to lowering health care costs.  The only times Medicare is ineffective in bargaining is when its hands are tied legislatively; Congress prevents it from bargaining fully with medical equipment companies and drug companies.  Why?  Because these companies are the biggest lobbyists in Washington DC and spend huge amounts supporting their political candidates.  What a shock!

Is this crazy or not?  Why would we all not want Medicare for all?  If you think your taxes would go up, think again - the money saved in insurance premiums, deductibles and co-pays would be far greater than any tax increase since the total cost of health care expenses would decrease - a lot!  That decrease ends up in our pockets and it comes out of the pockets of hospitals, medical equipment companies and Big Pharma.  Do not cry for them, they will not starve.  But if we do not adopt some form of Medicare for All, perhaps we, the American taxpayer and consumer, will starve.

Don't Take My Word For It: Cutting Medicare Does Not Save Money

My last blog post was on the topic of whether cutting Medicare benefits saves any money; the answer was it does not save money unless you do not mind getting sicker or dying outright.  At about the same time a highly publicized article was published by Time Magazine entitled, "Bitter Pill: Why Medical Bills Are Killing Us."  This outstanding article was written by Steven Brill and should be required reading for all Americans.  Here is the key nugget; Americans are paying about $750million more per year in health care costs than they would almost anywhere else but do not receive better health care for it.

In the article Mr. Brill takes 6 case studies of incredibly expensive and outrageous medical bills incurred by ordinary Americans, some with health care insurance, some without.  The analyses of these bills should make you livid.  You can and should read the article at: http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/.  

Mr. Brill does not go deeply into solutions; he does note where the major problems are, however.  First, hospitals and hospital chains, including non-profits, have pretty much cornered markets to the point where they can charge fees in incredible excess of their costs.  Since most people are not able to use just any hospital in the country because of distance and the limitations of their health insurance, there is no free market operating in this area.  For hospitals, its a seller's market, period.

Even large health insurance companies do not have enough clout, which means customers, to negotiate favorable rates.  Only one insurer does have enough clout to get a decent rate - the government, in the form of Medicare and Medicaid.

Yes, Medicare pays only a fraction of what private insurers pay, and they do it with less overhead as well.  It's simply a function of market share.  Since Medicare covers all older Americans they have enormous clout and can force hospitals to negotiate more reasonable deals on service costs.  Even though hospitals are paid only a fraction of what hospitals are paid  by private insurers or individuals, they still make money on Medicare patients.  In other words, Medicare is working.

The other area where we bleed money in health care is in drug costs.  Medicare is legally prevented by Congress from negotiating drug prices with drug companies.  Instead Medicare must pay 6% more than the average cost of any specific drug.  The rest of the world pays less, far less, than do Americans for many of the same drugs, yet drug companies are still making money on those other less excessive sales in foreign countries just the same.  With America's buying power, we should be paying the least of anyone in the world.  We can thank those in Congress who give lip service to a "free market" but either have no idea of what is going on in the real world, or if they actually do have an idea, have been corrupted by campaign contributions.

As I have written in the past, it is now time for us to catch up to numerous other countries and adopt a universal health care system that either controls health care costs via government regulations or is a single payer plan such as in a "Medicare for All" plan.  By simply instituting a "Medicare for All' system in this country, along with taming defense spending, we could go a long way towards solving our debt problems. 

Some would claim that such a system would be socialism or some form of tyranny.  The answer to these claims is this; the most free nations on earth have universal single payer or highly regulated systems.  Canada has not succumbed to tyranny because of their "Medicare for All" system.  Neither would we.