The Health Care Cartels

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flyingpylon
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The Health Care Cartels

Post by flyingpylon » Fri Sep 07, 2018 10:30 am

At one point the "Trump as Tragicomedy" thread wandered off into a discussion of health care. Rather than disrupt that thread again, I started this one.

Here's an example of cartel-like behavior by hospitals in Cedar Rapids, Iowa:

Iowa Eye Surgeon Wants to Open His Own Clinic. For 14 Years, His Competitors Have Stopped Him
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moda0306
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Re: The Health Care Cartels

Post by moda0306 » Wed Sep 12, 2018 8:56 am

Maddy wrote:
Wed Sep 12, 2018 8:02 am
Thanks for posting. This, and other types of anti-free-market behavior (aided and abetted by bought-and-paid-for legislators and regulators), appears to me to be THE reason for the skyrocketing health care costs that, we are told, make even more government intervention necessary. When I hear people clamoring for "single payor" or "Medicare for all," I completely tune it out. There can be no meaningful health care reform when nobody is willing to discuss the underlying issue of cost and the monopolistic practices that drive it.

Remember the definition of economic fascism: a system of corporate monopolies protected by government.
Isn't one of the driving arguments for "Single Payer" to have one large negotiator to keep down healthcare prices rather than a system of subsidized insurance that just pays whatever bill it is given?

If dozens of countries have adopted low-cost single-payer systems, why would we believe that our system would HAVE to be a giant giveaway. It seems like keeping costs down is the main BENEFIT of a single-payer system.

My "fears" of a single-payer system would be less around cost (overall cost, including my private insurance premium) and more around quality and lowered innovation medium/long-term, as well as just a sneaking resentment towards the idea that healthy people (I sort of fit in this group) subsidizing very unhealthy people.

To me, our current system is sort of the "worst of both worlds" (though I think that term is overused), where we pretty much cover everyone, but allow multiple layers of profiteering with little counter-negotiation. Even before Obamacare, via our employment system we were covering some of the most obese, unhealthy people through their employer plan.
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moda0306
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Re: The Health Care Cartels

Post by moda0306 » Wed Sep 12, 2018 11:18 am

Maddy wrote:
Wed Sep 12, 2018 10:55 am
moda0306 wrote:
Wed Sep 12, 2018 8:56 am
Isn't one of the driving arguments for "Single Payer" to have one large negotiator to keep down healthcare prices rather than a system of subsidized insurance that just pays whatever bill it is given?
When that "one large negotiator" is a government entity controlled by the same useless regulators who have created layer upon layer of costly bureaucracy and who have allowed the corporate monopoly to thrive, we're simply talking about a different form of the same thing. The only proven cost-attacking model of which I'm aware is the one adopted by the Surgical Center of Oklahoma. Complete price transparency and no cost shifting.
So you would reject the premise that there are many other countries with "proven cost-attacking models" that are essentially single-payer? Or are you just talking about inside the U.S.?
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Re: The Health Care Cartels

Post by sophie » Wed Sep 12, 2018 12:11 pm

It's hard to quantify how many health care dollars can be attributed to government-imposed overhead costs, but we certainly know that the private insurance system is far worse. Going to a Medicare for all plan, with people paying premiums to Medicare rather than to private insurance companies and assuming no change in reimbursements, would instantly save almost enough to wipe out the federal deficit - I posted some details about this some time back. In practice, Medicare reimbursements are lower than what private insurance companies pay, so there would be even more savings - at some cost to institutions & physicians who would see a large income reduction. Which hopefully would be balanced out by the reduction in overhead costs.

I think what Maddy is talking about is taking routine medical costs out of the insurance equation, by allowing free competition and enabling complete price transparency. I think this is a very realistic point of view as well. There is no reason why most people can't be expected to pay for routine office visits, low-cost generic medications, and simple blood tests. These costs are comparable to what people currently pay for things like haircuts, going to the movies, cell phone service etc, once you take out the inflated costs that result from involving insurance companies. Medicare would then be limited to stuff you really need insurance for: catastrophic conditions, very expensive treatments, hospitalizations.

Oh if we only ran the world, eh guys??
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Re: The Health Care Cartels

Post by Xan » Wed Sep 12, 2018 12:27 pm

Sophie, I think that was something along the lines of the "MediumTex care" proposal: everything over $50,000 would be covered by the government, and everything under that would be an almost completely unregulated free market. There's a lot to be said for that.
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Re: The Health Care Cartels

Post by moda0306 » Wed Sep 12, 2018 12:53 pm

Xan wrote:
Wed Sep 12, 2018 12:27 pm
Sophie, I think that was something along the lines of the "MediumTex care" proposal: everything over $50,000 would be covered by the government, and everything under that would be an almost completely unregulated free market. There's a lot to be said for that.
Is that per year or per procedure?
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Re: The Health Care Cartels

Post by moda0306 » Wed Sep 12, 2018 2:51 pm

moda0306 wrote:
Wed Sep 12, 2018 12:53 pm
Xan wrote:
Wed Sep 12, 2018 12:27 pm
Sophie, I think that was something along the lines of the "MediumTex care" proposal: everything over $50,000 would be covered by the government, and everything under that would be an almost completely unregulated free market. There's a lot to be said for that.
Is that per year or per procedure?
My bad I had the proposal upside down.
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Re: The Health Care Cartels

Post by Kriegsspiel » Wed Sep 12, 2018 6:48 pm

moda, I recall a Megan Mcardle article on Bloomberg where she discusses how other countries with socialized medicine aren't controlling their costs and will eventually get run down, but that they started from a much lower point which is why they've been able to keep it going. Sadly it's behind a paywall now.
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sophie
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Re: The Health Care Cartels

Post by sophie » Wed Sep 12, 2018 9:51 pm

Actually, I don't like the $50K deductible plan, because the huge expensive structure that drives up the cost of routine office visits, tests, and meds would all remain in place. I would like to see those things removed from the arena of insurance entirely, and made all self-pay. Third party billing, EHR/PQRI/all the other crazy documentation requirements etc would all disappear. For people truly too poor to self-pay, there can be Medicaid clinics staffed by residents at teaching hospitals, or volunteer-staffed free clinics - just exactly as they exist now. Insurance coverage should only be for hospitalizations and expensive outpatient treatments, such as cancer chemotherapy and dialysis.

Not to mention, if people are self-paying, a lot of non-compliant behavior and excessive testing, whether instigated by patients or physicians, would be instantly resolved. That stuff just wastes resources not to mention everybody's time.
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Re: The Health Care Cartels

Post by D1984 » Wed Sep 12, 2018 10:37 pm

sophie wrote:
Wed Sep 12, 2018 9:51 pm
Actually, I don't like the $50K deductible plan, because the huge expensive structure that drives up the cost of routine office visits, tests, and meds would all remain in place. I would like to see those things removed from the arena of insurance entirely, and made all self-pay. Third party billing, EHR/PQRI/all the other crazy documentation requirements etc would all disappear. For people truly too poor to self-pay, there can be Medicaid clinics staffed by residents at teaching hospitals, or volunteer-staffed free clinics - just exactly as they exist now. Insurance coverage should only be for hospitalizations and expensive outpatient treatments, such as cancer chemotherapy and dialysis.

Not to mention, if people are self-paying, a lot of non-compliant behavior and excessive testing, whether instigated by patients or physicians, would be instantly resolved. That stuff just wastes resources not to mention everybody's time.

What exactly would the cutoff in dollars be for what is considered "expensive hospitalization" and "expensive out patient treatment"? Unless said cutoff is income based (as a given percent of income) then you will have essentially made medical care unaffordable for millions of people; a $5000 procedure is nothing to a multimillionaire hedge fund manager, is barely a minor nuisance to a doctor or lawyer making $300K, is a major financial hit to a factory worker making $35K, and might as well be five billion dollars to someone making minimum wage because both amounts are so far beyond their ability to pay they will have to skip treatment the same either way. This is a non-starter unless massive expansions to Medicaid (and/or free clinics, etc) are funded, likely to the tune of several hundred billion $ a year (a rough estimate based on what is now spent on Medicaid and on the ACA to provide a even a bare minimum amount of coverage for poorer people) at a minimum.

For anyone making less than, say, 1.5X the poverty level expecting them to pay almost ANYTHING out of pocket is going to be a non-starter because they have to spend pretty much everything they make on food, shelter, payroll and income taxes, utilities, transportation, etc and thus have little or no discretionary income at that income level. If you wanted to keep a "self-pay" system for everyone you would (unless you provide the huge increases to Medicaid funding mentioned above) need to fund it with government HSA matching grants ranging from "free gratis money" to anyone under the poverty level to maybe 1:90 (for every cent the person kicks in up to a certain level/cap the government puts in 90 cents) for people at 150% of the poverty line and the matching grants would get much less generous as people moved up the income scale and would gradually disappear totally at or maybe a little above where ACA premium subsidies currently cut-off.

Oh, and while we are at it, do every single idea Dean Baker suggests (in his book Rigged....it's available free online as a PDF for anyone who wishes to read it) regarding having some actual competition in medical services, physician services, medical devices, pharmaceuticals, etc.

Even with all this you would probably still need to regulate prices if you want a system where cash-paying patients paying out of pocket can get truly affordable health care; if, say, an MRI (basic-no contrast imaging of head or abdomen) can be had in Japan for $98 or Switzerland for $140 there is NO WAY it should cost thousands of dollars here in the US; the same applies for drugs, doctor's office visits, surgeries, etc .... see https://www.vox.com/cards/health-prices ... are-prices and https://www.washingtonpost.com/news/won ... -ludicrous . How many nations have successfully kept medical prices low by "free markets" rather by directly or indirectly regulating prices (and/or by running the actual health system itself in addition to/in lieu of regulating prices)? As far as I am aware of....none.
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Re: The Health Care Cartels

Post by sophie » Sat Sep 15, 2018 8:26 am

The problem with concierge practices is that they still have to deal with the mountain of regulations that apply to documentation and billing. This is what is driving costs sky-high.

In an earlier post, I explained that if you remove these obstacles from the already low-margin world of outpatient medicine, the costs would drop to something that is congruent with other things that we all routinely pay for without a second thought: haircuts, movie tickets, grocery, cell phone, cable TV etc. The same people who are supposedly too poor to pay for outpatient visits all have cell phones, high speed internet, cable TV, and reasonably nice haircuts so I assume they go to salons. I think the barrier isn't so much "too poor" as "not wanting to go to see doctors, but they will if it's free." I personally think that's wrong-headed - if someone isn't motivated to go for care, they won't comply with the prescribed regimens and that just wastes time & resources.

I'd put all hospitalizations, outpatient procedures, some high-cost diagnostic studies, and high-cost medical treatments such as chemotherapy and dialysis, on the list of stuff to insure. No need for deductible or copays. For pharmaceutical coverage I was thinking a list of low cost drugs that are self-pay and the rest can be insured through a separate program with prices negotiated between Medicare and the pharm companies - because it's those costs that dwarf everything else in the world of outpatient medicine, and can be truly unaffordable for many. Practices will still need prior authorizations for these things, but a system of spot-checking would greatly lessen costs, compared to the current system of having to confirm every single such instance.
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Re: The Health Care Cartels

Post by Desert » Sat Sep 15, 2018 10:47 am

sophie wrote:
Sat Sep 15, 2018 8:26 am
The problem with concierge practices is that they still have to deal with the mountain of regulations that apply to documentation and billing. This is what is driving costs sky-high.

In an earlier post, I explained that if you remove these obstacles from the already low-margin world of outpatient medicine, the costs would drop to something that is congruent with other things that we all routinely pay for without a second thought: haircuts, movie tickets, grocery, cell phone, cable TV etc. The same people who are supposedly too poor to pay for outpatient visits all have cell phones, high speed internet, cable TV, and reasonably nice haircuts so I assume they go to salons. I think the barrier isn't so much "too poor" as "not wanting to go to see doctors, but they will if it's free." I personally think that's wrong-headed - if someone isn't motivated to go for care, they won't comply with the prescribed regimens and that just wastes time & resources.

I'd put all hospitalizations, outpatient procedures, some high-cost diagnostic studies, and high-cost medical treatments such as chemotherapy and dialysis, on the list of stuff to insure. No need for deductible or copays. For pharmaceutical coverage I was thinking a list of low cost drugs that are self-pay and the rest can be insured through a separate program with prices negotiated between Medicare and the pharm companies - because it's those costs that dwarf everything else in the world of outpatient medicine, and can be truly unaffordable for many. Practices will still need prior authorizations for these things, but a system of spot-checking would greatly lessen costs, compared to the current system of having to confirm every single such instance.
This sounds perfect, actually. I couldn't agree more with this entire post.
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