WHY health care needed reform

[Bfgrn]

WHY did health care need reform? Because Wall Street took complete control of the health care industry. Profit driven incentives create REAL death panels for Americans. Insurance corporations are incentivized to deny patient coverage and push more and more of the costs onto consumers.

For anyone who wants an insider's knowledge of this, I recommend investing a half hour of your time to listen to what this man has to say...

Wendell Potter is former Vice President of corporate communications at CIGNA, one of the United States' largest health insurance companies. In June 2009, he testified against the HMO industry in the U.S. Senate.

Looking back over his long career, Potter sees an industry corrupted by Wall Street expectations and greed. According to Potter, insurers have every incentive to deny coverage — every dollar they don't pay out to a claim is a dollar they can add to their profits, and Wall Street investors demand they pay out less every year. Under these conditions, Potter says, "You don't think about individual people. You think about the numbers, and whether or not you're going to meet Wall Street's expectations."


Profits before Patients - Wendell Potter

WATCH VIDEO
READ TRANSCRIPT

Following a 20-year career as a corporate public relations executive, Wendell left his position as head of communications for CIGNA, one of the nation’s largest health insurers, to help socially responsible organizations — including those advocating for meaningful health care reform — achieve their goals.

In widely covered testimony before the Senate Commerce, Science and Technology Committee in June of 2009, Wendell disclosed how insurance companies, as part of their efforts to boost profits, have engaged in practices that have resulted in millions of Americans being forced into the ranks of the uninsured. Wendell also described how the insurance industry has developed and implemented strategic communications plans, based on deceptive public relations, advertising and lobbying efforts, to defeat reform initiatives.

Since then Wendell has testified before two House committees, briefed several members of Congress and their staffs, appeared with members of Congress at several press conferences, spoken at more than 100 public forums, and has been the subject of numerous articles in the U.S. and foreign media.

At CIGNA, Wendell served in a variety of positions over 15 years, most recently as head of corporate communications and chief corporate spokesperson. Prior to joining CIGNA, Wendell headed communications at Humana Inc., another large for-profit health insurer. Before that he was director of public relations and advertising for the Baptist Health System of East Tennessee and a partner in an Atlanta public relations firm. He also serves as a consumer liaison representative for the National Association of Insurance Commissioners.

Wendell Potter's News Articles


“As one former insurance executive testified before Congress, insurance companies are not only encouraged to find reasons to drop the seriously ill; they are rewarded for it. All of this is in service of meeting what this former executive called, ‘Wall Street’s relentless profit expectations.’” — President Barack Obama, Remarks to Joint Session of Congress, September 9, 2009

It is the job of thinking people not to be on the side of the executioners.
Albert Camus

 

[AnnieInMexico]

WHY did health care need reform? Because Wall Street took complete control of the health care industry. Profit driven incentives create REAL death panels for Americans. Insurance corporations are incentivized to deny patient coverage and push more and more of the costs onto consumers.

For anyone who wants an insider's knowledge of this, I recommend investing a half hour of your time to listen to what this man has to say...

Wendell Potter is former Vice President of corporate communications at CIGNA, one of the United States' largest health insurance companies. In June 2009, he testified against the HMO industry in the U.S. Senate.

Looking back over his long career, Potter sees an industry corrupted by Wall Street expectations and greed. According to Potter, insurers have every incentive to deny coverage — every dollar they don't pay out to a claim is a dollar they can add to their profits, and Wall Street investors demand they pay out less every year. Under these conditions, Potter says, "You don't think about individual people. You think about the numbers, and whether or not you're going to meet Wall Street's expectations."


Profits before Patients - Wendell Potter

WATCH VIDEO
READ TRANSCRIPT

Following a 20-year career as a corporate public relations executive, Wendell left his position as head of communications for CIGNA, one of the nation’s largest health insurers, to help socially responsible organizations — including those advocating for meaningful health care reform — achieve their goals.

In widely covered testimony before the Senate Commerce, Science and Technology Committee in June of 2009, Wendell disclosed how insurance companies, as part of their efforts to boost profits, have engaged in practices that have resulted in millions of Americans being forced into the ranks of the uninsured. Wendell also described how the insurance industry has developed and implemented strategic communications plans, based on deceptive public relations, advertising and lobbying efforts, to defeat reform initiatives.

Since then Wendell has testified before two House committees, briefed several members of Congress and their staffs, appeared with members of Congress at several press conferences, spoken at more than 100 public forums, and has been the subject of numerous articles in the U.S. and foreign media.

At CIGNA, Wendell served in a variety of positions over 15 years, most recently as head of corporate communications and chief corporate spokesperson. Prior to joining CIGNA, Wendell headed communications at Humana Inc., another large for-profit health insurer. Before that he was director of public relations and advertising for the Baptist Health System of East Tennessee and a partner in an Atlanta public relations firm. He also serves as a consumer liaison representative for the National Association of Insurance Commissioners.

Wendell Potter's News Articles


“As one former insurance executive testified before Congress, insurance companies are not only encouraged to find reasons to drop the seriously ill; they are rewarded for it. All of this is in service of meeting what this former executive called, ‘Wall Street’s relentless profit expectations.’” — President Barack Obama, Remarks to Joint Session of Congress, September 9, 2009

It is the job of thinking people not to be on the side of the executioners.
Albert Camus

Wendell Potter from Cigna should know, his was one of the companies that denied the most claims. I'm quite sure he knows the system inside and out.

I worked for Cigna and could only hack it for three months before I had to quit. Same with the county hospital in Phoenix. That's when I decided to out it on my own and I provide far better care as a nurse than I ever could working for those places.

Mayo is the exception to the rule of medical care.

 

[Bfgrn]

WHY did health care need reform? Because Wall Street took complete control of the health care industry. Profit driven incentives create REAL death panels for Americans. Insurance corporations are incentivized to deny patient coverage and push more and more of the costs onto consumers.

For anyone who wants an insider's knowledge of this, I recommend investing a half hour of your time to listen to what this man has to say...

Wendell Potter is former Vice President of corporate communications at CIGNA, one of the United States' largest health insurance companies. In June 2009, he testified against the HMO industry in the U.S. Senate.

Looking back over his long career, Potter sees an industry corrupted by Wall Street expectations and greed. According to Potter, insurers have every incentive to deny coverage — every dollar they don't pay out to a claim is a dollar they can add to their profits, and Wall Street investors demand they pay out less every year. Under these conditions, Potter says, "You don't think about individual people. You think about the numbers, and whether or not you're going to meet Wall Street's expectations."


Profits before Patients - Wendell Potter

WATCH VIDEO
READ TRANSCRIPT

Following a 20-year career as a corporate public relations executive, Wendell left his position as head of communications for CIGNA, one of the nation’s largest health insurers, to help socially responsible organizations — including those advocating for meaningful health care reform — achieve their goals.

In widely covered testimony before the Senate Commerce, Science and Technology Committee in June of 2009, Wendell disclosed how insurance companies, as part of their efforts to boost profits, have engaged in practices that have resulted in millions of Americans being forced into the ranks of the uninsured. Wendell also described how the insurance industry has developed and implemented strategic communications plans, based on deceptive public relations, advertising and lobbying efforts, to defeat reform initiatives.

Since then Wendell has testified before two House committees, briefed several members of Congress and their staffs, appeared with members of Congress at several press conferences, spoken at more than 100 public forums, and has been the subject of numerous articles in the U.S. and foreign media.

At CIGNA, Wendell served in a variety of positions over 15 years, most recently as head of corporate communications and chief corporate spokesperson. Prior to joining CIGNA, Wendell headed communications at Humana Inc., another large for-profit health insurer. Before that he was director of public relations and advertising for the Baptist Health System of East Tennessee and a partner in an Atlanta public relations firm. He also serves as a consumer liaison representative for the National Association of Insurance Commissioners.

Wendell Potter's News Articles


“As one former insurance executive testified before Congress, insurance companies are not only encouraged to find reasons to drop the seriously ill; they are rewarded for it. All of this is in service of meeting what this former executive called, ‘Wall Street’s relentless profit expectations.’” — President Barack Obama, Remarks to Joint Session of Congress, September 9, 2009

It is the job of thinking people not to be on the side of the executioners.
Albert Camus

Wendell Potter from Cigna should know, his was one of the companies that denied the most claims. I'm quite sure he knows the system inside and out.

I worked for Cigna and could only hack it for three months before I had to quit. Same with the county hospital in Phoenix. That's when I decided to out it on my own and I provide far better care as a nurse than I ever could working for those places.

Mayo is the exception to the rule of medical care.

Good for you AnnieInMexico.

Wendell Potter's story is interesting; what made him decide to walk away from a very lucrative position to become an advocate for the people. He explains that in the half hour interview with Bill Moyers and how Wall Street has complete control of the industry and punishes companies the pay out too much in benefits and treatments.

Whenever a separation is made between liberty and justice, neither, in my opinion, is safe.
Edmund Burke

 

[Bern80]

Very few people would disagree that our health care system needed to be reformed. But doing something.....anything is not always an improvement. The 'how' it is being reformed via Obamacare is the problem.

 

[Bfgrn]

Very few people would disagree that our health care system needed to be reformed. But doing something.....anything is not always an improvement. The 'how' it is being reformed via Obamacare is the problem.

The Affordable Healthcare Act is almost a carbon copy of the "Health Equity and Access Reform Today Act of 1993"...proposed by Republicans when Clinton tried to pass reform.

Including the BIG Republican idea...the INDIVIDUAL MANDATE.

 

[Greenbeard]

Very few people would disagree that our health care system needed to be reformed. But doing something.....anything is not always an improvement. The 'how' it is being reformed via Obamacare is the problem.

The point of the OP and the subsequent posts in this thread is that the incentives in the health insurance market are perverse, or at the very least lead to undesirable outcomes. If the "how" you prefer is simply to further deregulate health insurance markets and find ways to undermine regulations in those states where they exist (as it generally is when someone makes a statement like yours), that doesn't really address the point here.

 

[Bern80]

Very few people would disagree that our health care system needed to be reformed. But doing something.....anything is not always an improvement. The 'how' it is being reformed via Obamacare is the problem.

The Affordable Healthcare Act is almost a carbon copy of the "Health Equity and Access Reform Today Act of 1993"...proposed by Republicans when Clinton tried to pass reform.

Including the BIG Republican idea...the INDIVIDUAL MANDATE.

I wasn't aware of the act of 1993, but I guess my question is what is your point in telling me? That I'm going to change my opinion based on what side of the political aisle proposed the policy. Wrong is wrong Bf. It doesn't matter to me if the opposition came up with something similar before. I don't know how long it will take the board regulars to get this but, I'm not a Republican. I'm a libertarian which means I dislike the bulk of the Republican part nearly as much as I dislike Democrats.

 

[Bern80]

Very few people would disagree that our health care system needed to be reformed. But doing something.....anything is not always an improvement. The 'how' it is being reformed via Obamacare is the problem.

The point of the OP and the subsequent posts in this thread is that the incentives in the health insurance market are perverse, or at the very least lead to undesirable outcomes. If the "how" you prefer is simply to further deregulate health insurance markets and find ways to undermine regulations in those states where they exist (as it generally is when someone makes a statement like yours), that doesn't really address the point here.

As I have said in another thread, what business doesn't have an incentive to keep its expenses down? Your insurance plan is a contract. It does not stipulate that your insurance company pays for your health care. It stipulates that under x circumstances they will cover x health care expenses. So does an insurance company have an incentive to not pay for what it is not contractually obligated to pay for? Ummmmm, YES.

I still get the impression that their is a pretty good chunk of people that admittedly or not think health care is a service that people should not have to pay for. So that's question one in determining how best to reform the system. Should health care be 'free' (as in payed for by taxes) and provided as a right by government, or is it a service that medical professionals deserve to be compensated for by those obtaining service from them?

If you're answer is it should be 'free' well then we're kinda fucked because that's an entirely different debate where we have to determine what the most efficient means of delivering service is based on that funding model. Basic economics says it won't be efficient at all, but feel free to prove me otherwise.

If it's the latter than that is something we can more easily talk about. It's interesting in touched on the concept of incentives. Because that concept is a huge part of the issue, you're just wrong on who it's the bigger issue for. The problem is the incentive (or lack of in this case) of the consumer. They have little incentive to understand their plan because they have little choice in plans and because it is an insurance model they have little incentive to understand what the costs of services really are because they don't have to deal with them. These are basic economic concepts that determine what the cost of service will be and yet people like yourself and Bf are dumbfounded by the costs of medical care. And also, sorry to take a jab here, but because you are liberals and the very last person you will hold accountable for way the things are is yourself.

How do you fix it? It really isn't that hard.
Addressing your concern first of insurance companies propensity to deny claims; First the consumer needs to be responsible enough to understand what there plan really covers. There are certainly things that can be done to incentivize people to do that which we can talk about in a minute. But one regulation I would be for is stricter legal regulation in terms of making the specifics of your plan legally binding. Create a penalty system that makes it unthinkable to to insurance companies to deny claims they know they should cover.

Secondly, if the insurance industry is so awful maybe we should consider not depending on them so heavily. Here's a crazy idea, how about you the consumer just pay for the services he provides you? Again part of why costs are what they are is because the actual consumer of the product currently has little to no incentive to find out who offers the best deal on the service they need. I know this going to be a tough exercise for a lot of you, but humor and start thinking of 'repairing' your body like repairing your car and I promise you you will see prices fall.

Thirdly, you can't argue with basic laws of economics. The more competiveness there is for a good or service the lower the cost of that good or service is going to be. That applies to both insurance plans and actual services. This is where deregulating various things comes in. Instead of mandating that employers above a certain size must provide a health care plan, take the money they would spend per individual on a plan and just give them the money instead and let them shop for the health care plan they want. Having choice is a key mechanism in keeping costs down to consumers. Look at all of the choice government has removed from the market. They have removed the choice of how an employer wants to provide the health care benefit to its employees and they have removed coverage options of the insurer. They have told employers you must provide this benefit and they have told the insurance companies what they must cover. And you really wonder why costs are as high as they are?

 

[Bfgrn]

Very few people would disagree that our health care system needed to be reformed. But doing something.....anything is not always an improvement. The 'how' it is being reformed via Obamacare is the problem.

The Affordable Healthcare Act is almost a carbon copy of the "Health Equity and Access Reform Today Act of 1993"...proposed by Republicans when Clinton tried to pass reform.

Including the BIG Republican idea...the INDIVIDUAL MANDATE.

I wasn't aware of the act of 1993, but I guess my question is what is your point in telling me? That I'm going to change my opinion based on what side of the political aisle proposed the policy. Wrong is wrong Bf. It doesn't matter to me if the opposition came up with something similar before. I don't know how long it will take the board regulars to get this but, I'm not a Republican. I'm a libertarian which means I dislike the bulk of the Republican part nearly as much as I dislike Democrats.

Do yourself a favor, invest a half hour of your time and listen to the interview with Wendell Potter. It is enlightening.

Watch the video

 

[Bern80]

The Affordable Healthcare Act is almost a carbon copy of the "Health Equity and Access Reform Today Act of 1993"...proposed by Republicans when Clinton tried to pass reform.

Including the BIG Republican idea...the INDIVIDUAL MANDATE.

I wasn't aware of the act of 1993, but I guess my question is what is your point in telling me? That I'm going to change my opinion based on what side of the political aisle proposed the policy. Wrong is wrong Bf. It doesn't matter to me if the opposition came up with something similar before. I don't know how long it will take the board regulars to get this but, I'm not a Republican. I'm a libertarian which means I dislike the bulk of the Republican part nearly as much as I dislike Democrats.

Do yourself a favor, invest a half hour of your time and listen to the interview with Wendell Potter. It is enlightening.

Watch the video

I can't say that anything in there really shocks me. Another 'regulation' if you will that I left out, and a statement by Obama that intitally disagreed with but would, is that contributing to politicians should not be considered a form of free speech. Crony capitalism as it's called needs to end.

But I was right about one thing I said prior to watching that; we are far far far too dependent on the insurance model for paying our healthcare. The two big themes of that piece were the crookedness of the insurance companies and how struck Potter was by people not having an insurance. The last part I just don't get. As if not having an insurance plan is the end game. The notion that if you don't have one you're basically dead. That totally misses the picture in my opinion. If you don't like the problems insurance companies have created why are we trying to come up with solutions that play by insurance company rules? It doesn't strike you as odd to malign insurance companies, but at the same time try to enact law that gets everyone on one of their plans? The goal should not the ability of people to afford health care insurance. The goal needs to be the ability for people to afford health care.

 

[Greenbeard]

Addressing your concern first of insurance companies propensity to deny claims;

The larger issue here isn't claims denials or rescissions, it's medical underwriting in general. A great many folks feel that people who behave responsibly shouldn't be unduly punished for on factors like medical history or gender. That's why most people are largely shielded from medical underwriting by HIPAA.

Secondly, if the insurance industry is so awful maybe we should consider not depending on them so heavily. Here's a crazy idea, how about you the consumer just pay for the services he provides you?

The answer here shouldn't be mysterious. We rely on the structure we do because health spending is extremely concentrated: half the population incurs virtually none of the nation's health costs (and thus is associated with almost none of its expenditures), while a mere one percent of it incurs almost a quarter of the costs (accounting for a hugely disproportionate share of national health spending). It's a wonderful thought that we should forgo health insurance and pay all expenses out of pocket. Wonderful until you happen to slip into that top 50% of spenders, or the top 15%, or--heaven forbid--the top 1%. If that happens, you'd better have a damn big piggy bank. Most folks don't, nor is it necessarily a good idea to give up that much disposable income just in case. Hence the insurance model.

Again part of why costs are what they are is because the actual consumer of the product currently has little to no incentive to find out who offers the best deal on the service they need. I know this going to be a tough exercise for a lot of you, but humor and start thinking of 'repairing' your body like repairing your car and I promise you you will see prices fall.

It should be well-known that the market for health care isn't just like the market for any commodity in an econ textbook. Arrow laid out some of the key special characteristics of health care markets in his classic 1963 paper: the nature of demand for health services, the expected behavior of physicians, product uncertainty (and in here he rolls the vast information asymmetries between patients and physicians), supply conditions, and pricing practices.

You won't find a bigger proponent for pursuing value (health outcomes achieved per dollar spent) than me. But it's not as simple as deregulating the insurance markets and leaving the consumer to face providers blind. It requires building the capacity to capture the data/information needed to measure and target improvements at quality, transparent pricing (which, I suspect, will require all-payer rates), and a steadily growing evidence base on which to base medical decisions and guide clinical processes. There's nothing wrong with using cost-sharing to incentivize high-value decisions from consumers, and there's certainly nothing wrong with modifying reimbursements to providers to reflect the value of the services they offer. I favor both approaches.

I've said it before and I'm sure I'll say it again: If we want to shift toward something like consumer-driven payment, we need to make changes to the way we do business first. We need to start pricing health as an output good, we need transparent indicators (like reliable and accurate quality reporting) to aid shoppers, and we need readily available information on clinical effectiveness to better inform doctor and patient-as-customer alike when it comes to making medical decisions. That said, the insurance model isn't going to disappear because the distribution of health spending strongly advocates for it. Hybridization is the reality here, and the clear path forward is to find and refine the best models for payment and service delivery within those confines.

Thirdly, you can't argue with basic laws of economics. The more competiveness there is for a good or service the lower the cost of that good or service is going to be. That applies to both insurance plans and actual services. This is where deregulating various things comes in.

Unless you're denying that 1) premiums do in some significant way reflect the price of care providers charge, or 2) that a more competitive insurance market does not reduce provider prices, deregulation doesn't lower the cost of services. The appeal of deregulation (if you indeed find this appealing) is that it allows insurers more flexibility to choose the risk profiles of their pools: that is, jettison the sick or deny them entry.

That isn't lowering the cost of medical services (it's not even clear that lowers national spending), and it's precisely what this thread was created to oppose.

Instead of mandating that employers above a certain size must provide a health care plan, take the money they would spend per individual on a plan and just give them the money instead and let them shop for the health care plan they want. Having choice is a key mechanism in keeping costs down to consumers.

This is being done. It's part of those reforms you don't like. Exchanges can allow for employers to make some fixed health contribution to their employees and release their employees into the exchange to choose any plan they please (paying the difference, if any, between the price of the plan of their choice and their employer's contribution out of their own pocket).

 

[Bern80]

Addressing your concern first of insurance companies propensity to deny claims;

The larger issue here isn't claims denials or rescissions, it's medical underwriting in general. A great many folks feel that people who behave responsibly shouldn't be unduly punished for on factors like medical history or gender. That's why most people are largely shielded from medical underwriting by HIPAA.

Why not? Those who incur risk ought to be compensated for it. And those who incur greater risk than others should be compensated better than others. Why is it fair for you to get to pay the same thing I pay if your genetics show that you are predisposed to heart disease when I'm not? Why should you get to pay the same thing I do when it is more likely that you are going to require more medical resources than I am?

The answer here shouldn't be mysterious. We rely on the structure we do because health spending is extremely concentrated: half the population incurs virtually none of the nation's health costs (and thus is associated with almost none of its expenditures), while a mere one percent of it incurs almost a quarter of the costs (accounting for a hugely disproportionate share of national health spending). It's a wonderful thought that we should forgo health insurance and pay all expenses out of pocket. Wonderful until you happen to slip into that top 50% of spenders, or the top 15%, or--heaven forbid--the top 1%. If that happens, you'd better have a damn big piggy bank. Most folks don't, nor is it necessarily a good idea to give up that much disposable income just in case. Hence the insurance model.

I'm not saying we forgo insurance all together. I'm saying consider it more akin to your auto insurance policy. Right now pretty much any type of service you need medically will have some portion of it covered by insurance. You don't expect your auto insurer to cover your oil changes do you? Why is it so terribly unreasonable that YOU cover your yearly physical? Instead of the state regulating that insurance companies cover everything under the sun, you deregulate the market so that it can better meet the specific needs of individuals. Allow that 90% to purchase plans that maybe only cover catastrophic illness. Allow those with chronic health issues to purchase insurance that is better suited to their condition

It should be well-known that the market for health care isn't just like the market for any commodity in an econ textbook. Arrow laid out some of the key special characteristics of health care markets in his classic 1963 paper: the nature of demand for health services, the expected behavior of physicians, product uncertainty (and in here he rolls the vast information asymmetries between patients and physicians), supply conditions, and pricing practices.

And just maybe he's wrong. I hate to beat a dead horse, but maintaining your health is virtually no different than maintaining your car. Both require routine maintenance to ensure their respective longevity. That certain types of cars are more likely to be in accidents (i.e. people who drive sports cars) thus are insured at higher rates is akin to a genetic condition and in both cases certainly unforseen major expenditures could be incurred. The only difference I can come up with is that people value their lives more than their cars, which ironically means yes, your health insurance should cost more than your auto insurance.

You won't find a bigger proponent for pursuing value (health outcomes achieved per dollar spent) than me. But it's not as simple as deregulating the insurance markets and leaving the consumer to face providers blind. It requires building the capacity to capture the data/information needed to measure and target improvements at quality, transparent pricing (which, I suspect, will require all-payer rates), and a steadily growing evidence base on which to base medical decisions and guide clinical processes. There's nothing wrong with using cost-sharing to incentivize high-value decisions from consumers, and there's certainly nothing wrong with modifying reimbursements to providers to reflect the value of the services they offer. I favor both approaches.

Why must they go into it blind? Why is it so go damn outrageous to you whiners that people take a modicum of responsibility and research the product they are buying? Why is it so unfathomable to you that a person would find whether what they're buying is going to meet their needs. This is what frustrates me about you liberals to no end. You expect NOTHING of the consumer and have the nerve to wonder why they get screwed and their costs are going through the roof.

I've said it before and I'm sure I'll say it again: If we want to shift toward something like consumer-driven payment, we need to make changes to the way we do business first. We need to start pricing health as an output good, we need transparent indicators (like reliable and accurate quality reporting) to aid shoppers, and we need readily available information on clinical effectiveness to better inform doctor and patient-as-customer alike when it comes to making medical decisions. That said, the insurance model isn't going to disappear because the distribution of health spending strongly advocates for it. Hybridization is the reality here, and the clear path forward is to find and refine the best models for payment and service delivery within those confines.

The fact that you obviously like to use big words doesn't mean this is a complicated situation. If we move to consumer driven payment then the service providers will react like any other commodity. As direct competitiveness enters the equation certain hospitals and doctors will develop reputations like any other commodity. They will adjust their quality and their pricing structure accordingly.

Thirdly, you can't argue with basic laws of economics. The more competiveness there is for a good or service the lower the cost of that good or service is going to be. That applies to both insurance plans and actual services. This is where deregulating various things comes in.

Unless you're denying that 1) premiums do in some significant way reflect the price of care providers charge,

Yes they do and that is the problem. In most any other commodity the person directly consuming it is the person who directly pays for it. Not so with health care. Is some form of insurance based model probably necessary? yes. But along with that you have to accept that in exchange for coverage for those who would otherwise not be able to pay the cost of those services is going to be greater than it would if there were no such thing as health insurance.

or 2) that a more competitive insurance market does not reduce provider prices, deregulation doesn't lower the cost of services.

I don't deny that. What I'm saying is direct competition from the consumer instead of through an insurance intermediary, would.

The appeal of deregulation (if you indeed find this appealing) is that it allows insurers more flexibility to choose the risk profiles of their pools: that is, jettison the sick or deny them entry.

This is nonsensical. Obviously there is a market for insurance for people that are ill or have preexisting conditions. There would most certainly arise markets for such plans, but this is also again where maybe some added regulation in contract enforcement would be called for as well as some responsibility on the part of the consumer. Why exactly would you agree to purchase a health care plan that allows your insurer to dump if you get sick? It would make no sense for you to buy such a plan thus it makes no sense for an insurance company to sell one. I don't know what the issue is here to be honest. I would think an insurance plan that agrees to cover x costs for x conditions for x premium would be legally binding like any other contract. If they deny coverage for what their contract says they cover, you take 'em to court.

This is being done. It's part of those reforms you don't like. Exchanges can allow for employers to make some fixed health contribution to their employees and release their employees into the exchange to choose any plan they please (paying the difference, if any, between the price of the plan of their choice and their employer's contribution out of their own pocket).

Then would that not be a form of deregulation which you claim is bad?

 

[Greenbeard]

Some basic points:

1) The question of whether factors beyond your control, like genetics and gender, should be used against you is philosophical, your answer will depend on your particular brand of ethics. In this case, I prefer to use the veil of ignorance approach to think about health insurance rating. However, the implication that genetics is equivalent to your choice of a car is, of course, absurd, unless we're living in Gattaca now. The real equivalent would be rating on health behaviors; rating variations based on tobacco use are still allowed, even under the modified community rating rules (as are financial incentives for various wellness programs).

2) Contrary to popular belief, infinitely customizable insurance packages are not the hallmark of a well-functioning insurance market. To quote Austin Frakt:

The whole point of a market-based system is to harness the power of consumer choice. But consumers can’t send meaningful signals if the market has an incomprehensible structure. One of the conditions for a competitive market is fully informed participants. The notion that seniors–or anyone–can meaningfully shop in a market with an unlimited number of plans that vary in all possible ways is ludicrous. (There is already evidence that beneficiaries don’t optimally select among the scores of Part D plans available now and that reducing the number of available plans would increase welfare.) The Medicare supplement (Medigap) market is a good model of competition within standardization. Making products more similar encourages competition. Allowing them to vary along a small number of dimensions helps consumers make sensible comparisons consistent with individual preference. Isn’t that the point?

3)

Why must they go into it blind? Why is it so go damn outrageous to you whiners that people take a modicum of responsibility and research the product they are buying? Why is it so unfathomable to you that a person would find whether what they're buying is going to meet their needs. This is what frustrates me about you liberals to no end. You expect NOTHING of the consumer and have the nerve to wonder why they get screwed and their costs are going through the roof.

Did I not explain exactly why they would be blind interacting with the provider market today? Consumers need reliable quality indicators (which means 1) development and refinement of better outcomes measures, and 2) public reporting by providers), they need transparent pricing information, and they and physicians alike both need better information on comparative clinical effectiveness of treatment options, for starters. Identifying and rewarding value isn't easy even now, it requires building new and improving on existing infrastructure to make it work. But it's absolutely a prerequisite for effective shopping. Putting people on the hook financially is only half of the story. This is the other half. And by "half" I mean "this is the other 90 percent."

I've never said people shouldn't be involved in their care. In fact, I spent a significant chunk of that last post describing to you ways to achieve a health care market in which consumers can legitimately act like consumers. But beyond that, in terms of care delivery I've frequently advocated for more patient-centeredness in our system. That is, I expect significantly more of people that simply choosing the doctor to whom they're most comfortable delegating autonomy. But that requires some shifts, too, and not only (or even primarily) on the patient side. How you can even conceive of consumer-driven payment models without first achieving much greater patient-centeredness in actual care delivery I have no idea.

Now, I get it. I'm wrong, Arrow's wrong, and every health econ textbook ever written is wrong because recognizing the factors that make the market for health care unique interferes with your Mickey Mouse conception of the world. It's just like buying a car, the only problem is that we as a nation are spending too much on, er, "oil changes." Okay, stick with that. I'm not going to draw you up a syllabus and teach you a course, and I certainly can't argue with what intuitively feels right in your gut. Economic analyses and studies of how care is actually sought and delivered in the real world are rarely a match for the appeal of conclusions drawn from simple analogies based on superficial similarities.

4)

Then would that not be a form of deregulation which you claim is bad?

If you want to call the ACA deregulation, knock yourself out. My point is it does exactly what you suggested: allow employers to define some set sum as part of the employee compensation package, then give it to the employees to put toward the plan of their choice selected in a competitive market.

 

[Bern80]

2) Contrary to popular belief, infinitely customizable insurance packages are not the hallmark of a well-functioning insurance market. To quote Austin Frakt:

The whole point of a market-based system is to harness the power of consumer choice. But consumers can’t send meaningful signals if the market has an incomprehensible structure. One of the conditions for a competitive market is fully informed participants. The notion that seniors–or anyone–can meaningfully shop in a market with an unlimited number of plans that vary in all possible ways is ludicrous. (There is already evidence that beneficiaries don’t optimally select among the scores of Part D plans available now and that reducing the number of available plans would increase welfare.) The Medicare supplement (Medigap) market is a good model of competition within standardization. Making products more similar encourages competition. Allowing them to vary along a small number of dimensions helps consumers make sensible comparisons consistent with individual preference. Isn’t that the point?

But to make his case he has to first assume that it is not possible for people to know or learn what they are purchasing. He's essentially saying that the ability to choose from various boxes of stuff is irrelevent if you can't see what's in the box. Heres a tip to the two of you: OPEN THE GOD DAMN BOX! You keep proving my point Green. You expect nothing of the consumer. Probably the most important service they will require in their life is the one you feel they should be the least responsible for understanding. Great plan!

In my pie in the sky health insurance market place. There would be numerous isnurance companies that sell directly to consumers (rather than via employers). You tell them what kind of coverage you want, they show you what they offer and what it costs. You sit down and comapre them and you make a decision. Might that be time consuming for the consumer? Probably, but if there is one thing a person buys that they may want to spend a little extra time researching and understanding I would say how your health care is going to be paid for might be it. Please explain to me why this is so completely unrealistic to you.

Did I not explain exactly why they would be blind interacting with the provider market today? Consumers need reliable quality indicators (which means 1) development and refinement of better outcomes measures, and 2) public reporting by providers), they need transparent pricing information, and they and physicians alike both need better information on comparative clinical effectiveness of treatment options, for starters. Identifying and rewarding value isn't easy even now, it requires building new and improving on existing infrastructure to make it work. But it's absolutely a prerequisite for effective shopping. Putting people on the hook financially is only half of the story. This is the other half. And by "half" I mean "this is the other 90 percent."

Again Green stop talking about this as if it's some complex puzzle. It isn't. Quality indicators and outcome measurements and transparent pricing are all needed. Why aren't they there now? BECAUSE THERE IS NOT INCENTIVE FOR THEM TO DO SO. In a market place those things are not prerequisistes for a consumer, they are a market REACTION to the demands of consumers. A market for and good or service will not provide what a consumer does not demand. Why is there little information concerning the quality of care various hospitals and physicians provide? Because the consumer doesn't have a choice in who they see. Why is there little information as to what an x-ray will cost from hosptial to another? Because the consumer isn't directly paying for it.

Now, I get it. I'm wrong, Arrow's wrong, and every health econ textbook ever written is wrong because recognizing the factors that make the market for health care unique interferes with your Mickey Mouse conception of the world. It's just like buying a car, the only problem is that we as a nation are spending too much on, er, "oil changes." Okay, stick with that. I'm not going to draw you up a syllabus and teach you a course, and I certainly can't argue with what intuitively feels right in your gut. Economic analyses and studies of how care is actually sought and delivered in the real world are rarely a match for the appeal of conclusions drawn from simple analogies based on superficial similarities.

The problem is as difficult as you choose to make it. The reason it is so complex and convoluted now is because you believe government simply must play a major role in this particular market while you remain blind to the fact that that's where this mess came from in the first place. You are going to have to explan to me why my analogy is superficial and can't pass greater scrutiny. You are going to have to explain to me why your yearly tune up on your car simply can not be looked at the same was as your yearly physical.

 

[bill5]

does an insurance company have an incentive to not pay for what it is not contractually obligated to pay for? Ummmmm, YES.

But that is a huge oversimplification as what they are "contractually obligated to pay for" is not always clear and so open to interpretation - THEIR interpretation. Gee I wonder which way they'll typically swing.

question one in determining how best to reform the system. Should health care be 'free' (as in payed for by taxes) and provided as a right by government, or is it a service that medical professionals deserve to be compensated for by those obtaining service from them?

"Yes" is the short answer. We need a mix of both, though IMO far leaning to the latter. "Free" care really means someone else pays for it.

If you're answer is it should be 'free' well then we're kinda fucked because that's an entirely different debate where we have to determine what the most efficient means of delivering service is based on that funding model.

No, we'd be screwed because that means the govt is running it and it would cost so much in taxes as to be unworkable. It also would only further promote the welfare mentality which is already rampant and causing too many problems in this country.

If it's the latter than that is something we can more easily talk about. It's interesting in touched on the concept of incentives. Because that concept is a huge part of the issue, you're just wrong on who it's the bigger issue for. The problem is the incentive (or lack of in this case) of the consumer. They have little incentive to understand their plan because they have little choice in plans

I call BS. There are many diff kinds of plans out there. I know having just gone through this. You don't HAVE to choose your employer's option and it is increasingly wise to go it on your own anyway IMO, as they are providing less and less financially advantageous options.

Saying one shouldn't understand their own plans is ridiculous on a variety of fronts. Knowledge is power and ignorance is inexcusable.

and because it is an insurance model they have little incentive to understand what the costs of services really are because they don't have to deal with them.

That's ridiculous. How do you get "they don't have to deal with them?"

How do you fix it? It really isn't that hard.

On he contrary, it's extremely hard, because it's a complex issue and because there are billions at stake. A drawback of the capitalistic system, I'm afraid (not that I advocate any other).

Create a penalty system that makes it unthinkable to insurance companies to deny claims they know they should cover.

Sounds good but again you run into a vague/subjective issue of "claims they know they should cover."

Secondly, if the insurance industry is so awful maybe we should consider not depending on them so heavily. Here's a crazy idea, how about you the consumer just pay for the services he provides you?

?? Because most people can't.

Thirdly, you can't argue with basic laws of economics. The more competiveness there is for a good or service the lower the cost of that good or service is going to be. That applies to both insurance plans and actual services.

Generally speaking, yes. But again, this is a very complex issue. There are numerous insurance companies out there yet costs remain high.

This is where deregulating various things comes in. Instead of mandating that employers above a certain size must provide a health care plan, take the money they would spend per individual on a plan and just give them the money instead and let them shop for the health care plan they want.

?? That already exists. In fact I chose such an option with my last employer. (PS side note: "CORBA" is a joke; hideously expensive)

Having choice is a key mechanism in keeping costs down to consumers. Look at all of the choice government has removed from the market. They have removed the choice of how an employer wants to provide the health care benefit to its employees and they have removed coverage options of the insurer.

Where you are getting this data? Or do things just work very differently in your field? I had various options with most if not all of the policies my company "provided."

 

[bill5]

The goal should not the ability of people to afford health care insurance. The goal needs to be the ability for people to afford health care.

That is a totally unrealistic and unworkable goal. Price out a 1-week stay in the hospital sometime, or the cost of a CT scan or 3.

 

[Bern80]

The goal should not the ability of people to afford health care insurance. The goal needs to be the ability for people to afford health care.

That is a totally unrealistic and unworkable goal. Price out a 1-week stay in the hospital sometime, or the cost of a CT scan or 3.

It is the extreme narrow mindedness of people like yourself who think those variables are not changeable, that is holding health care reform back. Are you getting the central theme here? The consumer needs to start plugging in, in order to solve this problem. They have to be responsible for knowing what their plan covers and responsible for know what the real cost of services are. Yes there are lots of insurance companies and yes prices are still high. That is because consumers of the product are having to go out and actually shop for a plan. Despite the number of competitors the incentive still isn't there for them compete directly for consumers via price. Start an HSA or something. I know care is expensive, better than most. It not an unrealistic goal and greater patient involvement is essential to bring down the cost things like you mention.

 

[Valerie]

The goal should not the ability of people to afford health care insurance. The goal needs to be the ability for people to afford health care.

That is a totally unrealistic and unworkable goal. Price out a 1-week stay in the hospital sometime, or the cost of a CT scan or 3.

Ask yourself WHY it has come to cost so much...? The natural fee-for-service scale has gone way off the charts because of unnatural market forces! Health insurance has become a racket but don't worry we will have created soooo many new jobs with all the "overhead" reams of paperwork involved!

 

[California Girl]

Very few people would disagree that our health care system needed to be reformed. But doing something.....anything is not always an improvement. The 'how' it is being reformed via Obamacare is the problem.

The Affordable Healthcare Act is almost a carbon copy of the "Health Equity and Access Reform Today Act of 1993"...proposed by Republicans when Clinton tried to pass reform.

Including the BIG Republican idea...the INDIVIDUAL MANDATE.

I don't give a fuck which party proposed it. It's a clusterfuck.

 

[Greenbeard]

Having choice is a key mechanism in keeping costs down to consumers. Look at all of the choice government has removed from the market. They have removed the choice of how an employer wants to provide the health care benefit to its employees and they have removed coverage options of the insurer.

Where you are getting this data? Or do things just work very differently in your field? I had various options with most if not all of the policies my company "provided."

This is the everything-but-the-kitchen-sink approach. Not so much about developing a coherent or consistent story but more about venting against all that irks you.

1) Benefit mandates are the problem. Except the reality is that most people with private insurance are in plans that aren't subject to state or federal benefit mandates.

2) Having insurance is the problem. Except, as noted above, the distribution of health expenditures makes an insurance model not only prudent but necessary.

3) No, insurance is fine but should be tailored to the low-spending tiers. If we let in the higher spending cohorts, just make them pull their weight. There's no reason the most expensive cohort shouldn't pay premiums 55 times what the least expensive cohort pays!

4) People need to better understand their insurance policies. But, of course, any effort to make health insurance policies more intelligible and choices in insurance markets more meaningful is condescending and anathema to truth, justice, and the American way.

5) The problem is that people are getting too many "oil changes" (which, apparently, refers to physicals?) or, alternatively, not finding a good enough deal on them. So insurance is fine but shouldn't contribute at all to oil changes. This is key, because a significant chunk of our two and a half trillions dollars in national health expenditures is on...physicals. The five percent of folks responsible for half of our national spending must be getting quite a few physicals!

This could go on but the primary difficulty I'm seeing here is a very large lack of appreciation for the links between payment and service delivery. In its place is a blind faith that certain misapplied maxims will produce good outcomes. Instead of pursing the current trend toward tightly-knit, integrated care with coordinated team-based approaches (the sort of approach that has simultaneously led to lower costs and some of the highest quality care in the United States where implemented), we're now faced with this push for fragmented, episodic care modeled after the approach to getting your Chevy serviced. Despite the evidence in favor of coordinated care and the importance of smooth care transitions, what we really need is a more adversarial, territorial, and competitive relationship between practitioners--more MBA physicians might just be the missing piece of the puzzle.

The good thing is that everyone here seems to agreed that 1) consumers should have a meaningful choice of health insurance products and employers (particularly small businesses) should be flexibility in how they assist employees with finding coverage, and 2) value should be sought, identified, and paid for. Both of these are in the process of coming to fruition as they never have before--a happy circumstance.