Saturday, March 25, 2017

The real issue in healthcare reform is neither Obamacare nor Trumpcare


Amid all the shouting and tumult over the defeat of "Trumpcare" in Congress, it's worth remembering that this is basically all political posturing.  Both sides of the debate are ignoring the real issue.

As Karl Denninger has pointed out:

Last fiscal year the Federal Government spent $1.417 trillion on Medicare and Medicaid, 9.3% more than the $1.297 trillion it spent the previous year. Last year was not an aberration; it was in fact very close to the historical expansion rate from the 1990s forward.  Spending has almost quadrupled on these programs since FY 1998.  Total outlays in 1998 were $1.651 trillion of which Medicare and Medicaid comprised 23%. Last fiscal year 37% of all fiscal expenditures were made on these two programs.  The ACA (Obamacare), for all of its warts, only managed to dampen that rate of expansion in spending for two years, after which it returned to trend.  At this rate of spending expansion within the next four years the government will attempt to spend $2.02 trillion on these two programs combined which will blow an approximately $600 billion additional hole, per year, in the deficit.  That will not be able to be financed since if you ignore this issue it will be clear that within 10 years the government would try to spend $3.4 trillion per year on the same two programs -- an utter impossibility under any rational expectation for economic expansion.  The impact on private health spending has been even larger on a percentage-of-increase basis due to the blatant cost-shifting that is well-documented in myriad reports and is responsible for a large portion of the stunting of economic progress in America that has occurred over the previous two decades.

. . .

We either admit to what we've been doing and stop the scam or it will overtake the economy and our ability to pay -- both in the government and otherwise, within the next 4-5 years.

We either stop it now or it destroys the economy, asset prices and the nation.

This isn't politics.  It's math.

The facts are what they are.  Demonstrating them is easy and irrefutable.

There's more at the link.

I'm unmoved by assertions of ideological purity.  I note with cynicism that the chairman of the so-called "Freedom Caucus", Rep. Mark Meadows, derived much of his election-year support from the health care industry, so he's hardly a disinterested party.

The health care industry is in this to make as much money as it can out of the pockets of ordinary Americans.  That's the only reason the current mess exists.  As many commentators have pointed out, Obamacare "enriches only the health insurance giants and their shareholders".  Its official name, the 'Affordable' Care Act, is a joke.  (As an interesting exercise, look at how much input the health care industry had when the act was being written.  The link leads to a very left-wing, progressive-oriented article, by the way - it's hardly conservative fear-mongering.)

I'm glad so-called "Trumpcare" did not pass.  It would have done nothing to fix this problem.  It would merely have stuck a few more fingers into a massively leaking dike.  Obamacare is a catastrophe.  It needs to go away - regardless of screams of outrage that it will leave this, or that, or the other many millions of Americans without healthcare coverage.  If those Americans stay with Obamacare, or Medicaid, or any other bureaucratically and politically approved form of coverage, they're going to find it worthless anyway, because this country will be so bankrupt it won't be able to afford to pay for it.

Obamacare is an abomination.  Trumpcare would have been the same.  Let's get rid of both of them, and return to sanity in healthcare - fiscal and otherwise.  We're already going broke as a nation.  If it isn't fixed, healthcare will merely bankrupt us faster.

Peter

13 comments:

B said...

The biggest issue with healthcare is that is is assumed it is the responsibility of the federal government to provide health insurance for Americans who don’t have employer-provided coverage.



dave said...

B said exactly what I was going to say, about 30 seconds faster. Let's not forget that even employer-sponsored coverage is a result of federal meddling in the labor market.

Get the government out of my living room, out of my bedroom, out of my labor market, and out of my doctor's office.

Divemedic said...

Ive said for years that we as a nation are doomed. It is obvious to anyone who can run a calculator

Hllbillygirl G said...

Too late. What do you think the mandate for nationwide electronic health records was about? It wasn't about healthcare. The ACA/Obamacare may go away, but they have succeeded in creating yet another efficient surveillance monster. Decline to vaccinate? Homeschool? Keep firearms in the house? Disagree with 'experts'?: have your kids taken away. There is no 'move-to-another-county' option. Treated for depression? : be denied a job, firearms permit, etc. How soon before those of us who didn't have our clitoridectomy get rounded up? Incidentally, the 'Privacy Rule' actually *increased* the number of people who can get electronic access to your medical records, as if the NSA doesn't already have them. Oh, and guess what? not only are ID cards with your complete med rec on them being kicked around, but so are RFIDs. The chips fit into 'vaccination' needles. It's promoted as a way to improve public health.

Hansjörg Demand said...

I have spent most of my professional life in the health care sector. I am also a libertarian. Everybody knows that in a free market prices should be regulated by supply and demand. This should be guaranteed by free competition.
So, let me ask you guys a few questions:
Why in blazes is American healthcare twice as expensive than German Healthcare??? Although there are a lot of people who even have no insurance coverage? Without any overall benefit for the citizens?
Could it be that there is no such thing as free enterprise or free competition in the U.S. healthcare market?
Could it be that lobbyists had killed the free market long ago for the benefit of Big Pharma, hospital operators and doctors?
How can you let them get away with that?
Didn't the Trumpster promise to drain the swamp in D.C.?
Wake up, guys!

bruce said...

stop litigation for malpractice, 1/2 of medical costs disappears. Disband the AMA's lock on doctor training/ population. More doctors less cost, no malpractice insurance less cost. Make drug testing efficient and ASAP.
Accept the fact that accidents happen, apply lifetime health care for the unlucky, but there is no punitive damages or loss of wages.
At the very least this could be done to those who accept "other payer health care".
BTW, there are those who made plans based on medicare, I'd say it was unfair to drop them, if you want to kill the plan it has to be for future population.

Uncle Lar said...

When our gubmint imposed wage controls during WWII companies had to find other ways to keep good employees and attract better ones so they used health insurance as a way to augment a payroll package. Thus something that was once a means to offset risk became a mechanism to pay for regular health care. More fingers in the pie, more involved parties between doctor and patient, and more hands out for their rake of the total funds involved.
The AMA has done everything possible, in the name of safety of course, to see that becoming a practicing physician is an incredibly expensive and tortureous process. Drug companies price medicines at levels to recoup the massive costs incurred to bring them to market through all the FDA hoops and wickets, then sell their surplus to other countries at market price.
National debt, unfunded entitlements, soaring health care costs, and a socialist counterculture that would rather see the nation fall than surrender control. Each is a spinning plate on a flexing pole, and each is an eye blink from falling and crashing to the ground.

Roy said...

The biggest problem with our healthcare and why it is so disproportionately expensive, is because the consumers of healthcare have been disconnected from the cost of healthcare.

Our so-called health insurance is not really insurance. It's a service contract. (Does your auto insurance pay for brake jobs and oil changes?) Because of this, when you go to the doctor or a hospital for a procedure, you are not the customer, the insurance company is. Obamacare was a boon to the health insurance industry. Who else would like for the Federal government to mandate that you purchase their product.

Anonymous said...

Peter, stop being rational - it will drive you crazy.

David Lang said...

To expand on what Roy says,

The biggest problem is that Insurance companies are involved with everything, there is no real "list price" for services.

In what other industry does the question "how much will this cost" (when you haven't met your deductable, so you will be paying out of pocket) be answered with "what insurance do you have"

Insurance company negotiators want to feel like they got a good deal, so the service providers offer them huge "discounts" by raising their list prices.

It's common for the payments that service providers actually get to be 90% lower than the "price" they say they will charge.

I've said for years that if I could pay the prices that they charge the insurance companies, I wouldn't need insurance (a HSA is nice in that I can pay with pre-tax dollars, but that's not _that_ huge a difference)

The biggest thing that they could do to "fix healthcare" (as opposed to fix healthcare "insurance") would be to mandate that there be a real list price and limit or eliminate discounts to insurance companies.[1]

that would mean that you would not longer have to worry about 'in network' vs 'out of network', you could shop for the service provider you like at the cost you are willing to pay.

Then people could choose between having a Health Plan that charged them a fixed monthly rate and covered some of their expenses, or having a high deductable one that covered nothing for normal care and only kicked in if things went really bad.

Companies could also offer 'health maintinance' plans to their employees to encourage them to do the simple stuff. One company I worked for had two overlapping health plans, the first covered 100% of the first $1000 of expenses every year, the second paid nothing until you hit $2500 in expenses for the year, and then kicked in with it's partial payments. This covered the routine stuff (annual checkups and minor stuff) while the second covered major issues. Unfortunately, ObamaCare eliminated this approach.

David Lang

[1] The HMO model where you get all service from the one company would still be allowed, They are still charging a fixed rate, it just covers all services for a monthly rate instead of per service charges

Quartermaster said...

Meadows wanted Obamacare repealed. If meadows got the majority of his support from the healthcare industry, then he has represented them well. Obamacare is a disaster fro the healthcare industry, but a boon for the insurance companies.

Judy said...

For what it's worth, doctors have always played the 'insurance game'. In 1951 my mother had a miscarriage. The doctor charged Mom-n-Dad $15.00 because they didn't have insurance at that time. Out of curiosity, Mom ask what the charges would have been if they had had insurance. The doctor said the insurance would have been billed $45.00.

grendel said...

It wouldn't be "Fair" to end Medicare because people planned based on it being available? That's like saying it wouldn't be fair to interfere with a robbery because the thief planned on having that money. Prior generations voted in medicare benefits that are totally unsustainable based on the miniscule lifetime contribution, and then spent their life savings on RVs and cruises instead of on end of life care, having left the bill to future taxpayers. End Medicare today. I'll keep my money and see to my own Grandma's needs and the government can butt out.