Archive for the ‘costly medical services’ Category

I don’t understand GovCare Part 2

image credit: Paul Narvaez via flickr (cc)

image credit: Paul Narvaez via flickr (cc)

Over at New City, Tony Fitzpatrick tells us how he survived a heart attack.  The good news, of course, is that he did, and it seems to have been due to an aware spouse, responsive ambulance, and nearby hospital with skilled and dedicated staff.  Except for the first, those are advantages of living in a more-or-less functional and prosperous city, with pretty decent emergency services, all of which is reflected in the cost of land.

But somehow, because before “ObamaCare” Tony’s pre-existing condition prevented him from getting insurance for medical expenses, he credits O’Care with his survival.  As if, five years ago, there were no ambulances, no hospitals, or no medical staff. In 2010 an ambulance still would have come, he still would have been taken to the closest available hospital, and the staff still would have done their best for him.  The only difference is that, afterwards, he would have gotten a big bill, even bigger than the bill he probably did (or will) get.  He might have paid the bill, or worked out some payment plan, or had to sign up for some kind of public assistance.  And very possibly the hospital would have written off part of the bill.  (Either way, before or after O’Care, the hospital would have a considerable staff who spent their time negotiating payments, filling out forms, etc.)

It wasn’t Obamacare, Tony.  It was living in a city with helpful people and pretty good medical services. Either way, we’re all paying for it.

And, yeah, somebody ought to make this comment on Tony’s article, but I can’t seem to get thru New City’s spam protection.  Maybe someone else can.

I don’t understand govcare part 1

credit: Colin Dunn via flickr (cc)

credit: Colin Dunn via flickr (cc)

I am not going to call it “Obamacare” since most of it existed long before we’d heard of that guy, and I am not going to call it “health insurance” since it only applies to medical costs, which have just an approximate relationship to health, and it is not insurance since it is intended to pay routine costs rather than help pay for catastrophes. I suppose I might call it “diversion of productive people’s income to lobbyists and their clients” (which we might pronounce “DOPPILC”), but I’ll just call it “govcare” since it certainly involves the government and has something to do with care.

I really don’t understand it at all.  Do we, the People of the United States, wish to pay whatever is necessary in order that all of us may have whatever medical treatment a group of licensed professionals assert is necessary? If so, why do we think it will not absorb 100% of our production beyond subsistence?  If not, how do we decide priorities and set limits, when inevitably any limit is going to find someone  very sick and very sympathy-arousing unable to afford some treatment which really would be helpful? (The answer probably has something to do with us the People of the United States behaving like adults, but if I was the very sick person in question I might have a different attitude.)

The subject is simply too big for me to comprehend, so I will just nibble around the edges.  Today’s nibble is a message I received from the “health insurance” company who take a large part of my income.

Copayments do not apply to deductible or out of pocket.

Or, to put it a different way, if you purchase any considerable amount of medical treatment, what comes out of your pocket is likely to exceed the “out of pocket limit” that “your” “insurance” company proclaims.  (This is in addition, of course, to the amount they already took from you to provide what they call “coverage.”

Another successful politician endorses land value tax

Nick Boles

image from Financial Times

Nick Boles

MP for Grantham and Stamford. New-intake MP and a key moderniser. Former Policy Exchange director and one of the Notting Hill set. Deemed close to the leadership. Tipped for bigger things

I assume this means he’s successful, British political terminology being rather unfamiliar to me. What’s really important is that

Nick Boles, The MP for Grantham and Stamford says a Land Value Tax should be introduced and use the proceeds to cut National Insurance – permanently.

He doesn’t want to do it exactly how I would want to do it, because he seems to want to exclude owner-occupied residential land and farmland, without limitation.  But the important thing is, he’s a successful politician, he gets elected, and he appears to want to move toward a sound economy. I’m just some guy with a blog.

I also don’t know how all this relates to the British custom of building homes on rented land far more commonly than Americans do. But it seems to be his top priority.

Source: FT via GN

How to cut your medical costs 75%

Last month a couple of my dependents went to the local hospital for routine blood tests.  The hospital sent me a routine bill for an outrageous amount, saying “don’t worry about this, we have asked your insurance company to pay, and you are responsible only for the portion they don’t pay.”

A few weeks later, the “insurance” company, popularly known as “Blue Thieves,” sent me a statement, and the hospital sent a revised bill.  These show that the insurance company paid exactly zero, but muscled the hospital’s fee down by 75%.  Both parties expect me to pay the difference.  In other words, if you are a normal retail customer, the hospital marks up your bill 300%. In my previous experience, lab costs are typically marked up this much or more; for other services the markup is often less.

To reduce your medical costs, then, just tell the hospital that you’ll pay what Blue Thieves pay, 25% of retail.

I put “insurance” in quotes because what they sell is mainly not insurance, in the sense of taking on some of your risk, but protection, in the sense of “we will impose extra difficulties on you if you do not pay us.”

If pain and suffering don’t matter…

…we could reduce medical costs by 2.4%. That’s the finding of a new Harvard study as reported in today’s Tribune.

The analysis included payments made to plaintiffs, administrative costs such as attorney fees and the costs of doctors’ lost work time. It also included the costs of “defensive medicine,” in which doctors perform or order extra tests and procedures to protect themselves legally.

I don’t know about you, but my medical insurance costs go up by more than 2.4% every year.  I am happy to pay an extra 2.4% to give medical staff some incentive not to screw up, and so that if they do screw up I have some possibility of receiving compensation.

Those who really want to cut the cost of medical care will look at monopoly interests such as licensing and patents, and the way that government subsidies increase costs.  They’ll find many multiples of a 2.4% savings.

Getting it right on medical costs

Turns out that back in February, Kevin Carson wrote the article that needs to be written, analyzing how government regulation and protection makes medical services far more expensive (and less effective) than they could be.  With a link to another article that more broadly exemplifies how government makes it impossible for the poor to support themselves.

Gov’t screwing up medical care

Mostly by subsidizing it heavily while failing to enforce anti-trust. This one isn’t about insurance,  patents, or even unions; it concerns hospitals, suppliers, sole-source contracts and kick-backs.  Like most medical stuff, there’s too much money and power involved to expect a good result.

via Naked Capitalism

America Speaks “National Town Meeting”

Anyone who’s been paying attention is aware that the Federal budget is out of control, unsustainable, and politicians dare not display any consensus on what to do about it.  So several wealthy foundations are funding the “America Speaks” project, which seems to have focused on a fleet of 19 “town meetings” (plus a few dozen less-connected gatherings) held today.  I attended Chicago’s, at Navy Pier.

The concept is at least a little bit promising.  I guess we had about 600 people, assigned to tables of a dozen or so each, and we talked about how the Federal financial situation might be improved.  But first we had a very loud presentation from Philadelphia. (Philadelphia is apparently standing in for Washington and New York, so we won’t suspect that political professionals and Wall Street are involved in the effort.) We were told that, yes, the deficit is a big deal(as described in this pdf). And before talking about the options for reform, we were directed to determine our values.  The “values” are listed below (and on worksheet #3 of this document), along with the reasons that they make no sense at all. (more…)

If our rulers wanted to reduce medical costs…

…there are two things they would do.

First, they’d eliminate taxation on income earned by persons who are providers or consumers of medical services. No income tax, no payroll tax, no tax on buildings, no sales tax, nothing (pdf).  Huge drop in medical costs, along with an increased income available to pay them.  Of course this change would increase land rents, as all enterprises would suddenly be much more productive.  These rents, or the analogous land values, would be taxed instead, to provide whatever governmental revenue is needed.

Second thing they would do is to reduce patent protection on medical drugs and appliances.  I don’t know that it needs to be eliminated, but probably the 20-year term should be shortened to, say 10 years. Preferably this should apply to existing patents, but at a minimum future patents would be restricted.  This would reduce drug and equipment prices, as more generics could become available. Many analysts believe patents are more of an obstacle than an encouragement to innovation.  Even if that is incorrect,  it seems that most new drugs are hardly essential, and are profitable only because so many consumers have no choice about paying for them.  Is there one person who would have died if some new expensive patented drug didn’t exist?  Of course, but there are many people who die because they can’t afford adequate medical services.

Of course, even if the above two actions reduce medical costs 90%, there will still be someone with a rare and serious illness, costing $2 million to treat.  Reducing the cost to $200,000 is great progress, but not everyone has $200,000.  So, once taxes on productive activity are abolished and patents are reformed, I  have no problem with government using some of the revenue from collecting the land rent to fund treatment which if privately paid would lead to financial catastrophe.

Tort reform and medical costs

Just noting for myself that there have been some apparently competent studies of the effect “tort reform” could have on medical costs.

The direct cost of malpractice insurance premiums and court verdicts, plus the cost of defensive medicine, together account for less than 2 percent of overall health-care spending.