Interesting healthcare alternative

[MU82]

This guy, president of the Charleston School of Law, suggests a fix I had not read about before. Maybe it has been out there, but I hadn't seen or heard it.

http://www.charlotteobserver.com/opinion/op-ed/article170495982.html

The basics (from the op/ed piece):

Instead of continuing to argue, let’s work together to fix the system by shifting the most expensive illnesses to Medicare. That will lower the risks to health insurers who then can cut premiums by as much as 40 percent.

This idea can be the ultimate fix that makes health care affordable for most Americans.

Almost half of health care premiums are for catastrophic illnesses – the most expensive illnesses people experience. Two systems have developed to deal with these illnesses – the Medicare system for people 65 and older, and the system for everybody else.

People under 65 often are charged more than actual health costs because medical providers often take advantage of enhanced billing to recoup some of the costs they incur for treating people without insurance. These “cost-shifts” are variable costs that are hard to control, which leads insurers to charge a lot for premiums of people under 65.

But if you are covered by Medicare, the program pays actual costs to a medical provider. Because Medicare only pays actual costs, the overall cost of treatment for the Medicare patient is much less than for the patient under 65.

The difference in costs is amazing, according to research by the Charleston School of Law. Consider a patient under 65 who has an average catastrophic medical bill of $1.6 million. The cost for a Medicare patient with the same illness: about $320,000, or 80 percent less. That’s a savings of more than $1 million.

Imagine if we could get those savings hundreds of thousands of times. This proposal would remove the costs associated with catastrophic illnesses out of the cost for insurance premiums of Americans under 65. In turn, all of the costs for catastrophic illnesses would be protected under Medicare.

It's an interesting thesis. As you read the whole thing, he doesn't go into any possible negatives but there must be some.

Would this drive up the price of Medicare, necessitating higher payroll taxes? Would it be a non-starter because the insurance lobby is too powerful?

Maybe I'm missing something else, but this sure sounds like something at least worth considering.

Scoopers, this does not have to be a political discussion.

For my part, I will not make it political; I won't even respond to those who do.

[brewcity77]

Intriguing option. For healthcare providers, there's a definite drawback that Medicare doesn't pay as well (as the article indicates) so this would likely hurt profit margins. I do also think it could raise Medicare premiums and tax requirements.

Still, an interesting proposal. I would argue a lack of universal healthcare in this country shows that we're closer to the third world than the first in terms of healthcare, and the longer we avoid single payer the worse off we are as a nation. But this might be worth a shot.

My biggest worry is that this won't fix the "ER as primary care" problem that is rampant in our society. Especially as people that currently rely on Medicare for their primary insurance may lose that option and not go to the private companies. This may help the markets, but hurt the hospitals.

[mu03eng]

This guy, president of the Charleston School of Law, suggests a fix I had not read about before. Maybe it has been out there, but I hadn't seen or heard it.

http://www.charlotteobserver.com/opinion/op-ed/article170495982.html

The basics (from the op/ed piece):

Instead of continuing to argue, let’s work together to fix the system by shifting the most expensive illnesses to Medicare. That will lower the risks to health insurers who then can cut premiums by as much as 40 percent.

This idea can be the ultimate fix that makes health care affordable for most Americans.

Almost half of health care premiums are for catastrophic illnesses – the most expensive illnesses people experience. Two systems have developed to deal with these illnesses – the Medicare system for people 65 and older, and the system for everybody else.

People under 65 often are charged more than actual health costs because medical providers often take advantage of enhanced billing to recoup some of the costs they incur for treating people without insurance. These “cost-shifts” are variable costs that are hard to control, which leads insurers to charge a lot for premiums of people under 65.

But if you are covered by Medicare, the program pays actual costs to a medical provider. Because Medicare only pays actual costs, the overall cost of treatment for the Medicare patient is much less than for the patient under 65.

The difference in costs is amazing, according to research by the Charleston School of Law. Consider a patient under 65 who has an average catastrophic medical bill of $1.6 million. The cost for a Medicare patient with the same illness: about $320,000, or 80 percent less. That’s a savings of more than $1 million.

Imagine if we could get those savings hundreds of thousands of times. This proposal would remove the costs associated with catastrophic illnesses out of the cost for insurance premiums of Americans under 65. In turn, all of the costs for catastrophic illnesses would be protected under Medicare.

It's an interesting thesis. As you read the whole thing, he doesn't go into any possible negatives but there must be some.

Would this drive up the price of Medicare, necessitating higher payroll taxes? Would it be a non-starter because the insurance lobby is too powerful?

Maybe I'm missing something else, but this sure sounds like something at least worth considering.

Scoopers, this does not have to be a political discussion.

For my part, I will not make it political; I won't even respond to those who do.

It's not feasible because the premise that Medicare covers only cost is wrong. In some instances Medicare pays less then cost of treatments, the providers then pass that cost on to private insurance. So you are taking all the areas of experimental experimental treatments and high cost and putting it in one non-profitable place.

[jesmu84]

As I've been a healthcare provider for almost 2 years now, I've done a lot of reading on the topic. I've come to agree with a few things.

1. I don't believe it's the costs of healthcare that are a problem. It's the charges.

2. Health insurance is the biggest barrier to good healthcare in this country. After that is costs from pharma, medical devices

De-couple health insurance from employment. Make people/families buy individually from companies (similar to auto insurance). Tell health insurance companies they can compete freely across state lines. Make the free market work for the consumer and watch finances (eventually) be much more reasonable.

Government assistance (at the state and federal level) will still be needed.

[MU82]

As I've been a healthcare provider for almost 2 years now, I've done a lot of reading on the topic. I've come to agree with a few things.

1. I don't believe it's the costs of healthcare that are a problem. It's the charges.

2. Health insurance is the biggest barrier to good healthcare in this country. After that is costs from pharma, medical devices

De-couple health insurance from employment. Make people/families buy individually from companies (similar to auto insurance). Tell health insurance companies they can compete freely across state lines. Make the free market work for the consumer and watch finances (eventually) be much more reasonable.

Government assistance (at the state and federal level) will still be needed.

Interesting. Certainly would be painful at first, but might work.n You're elected!

Some people fail to understand the system was broken way longer than 10 years ago. It has only gotten worse with the patchwork plan put in place this decade.

[Lennys Tap]

As I've been a healthcare provider for almost 2 years now, I've done a lot of reading on the topic. I've come to agree with a few things.

1. I don't believe it's the costs of healthcare that are a problem. It's the charges.

2. Health insurance is the biggest barrier to good healthcare in this country. After that is costs from pharma, medical devices

De-couple health insurance from employment. Make people/families buy individually from companies (similar to auto insurance). Tell health insurance companies they can compete freely across state lines. Make the free market work for the consumer and watch finances (eventually) be much more reasonable.

Government assistance (at the state and federal level) will still be needed.

I agree with this analysis.

[GooooMarquette]

It's not feasible because the premise that Medicare covers only cost is wrong. In some instances Medicare pays less then cost of treatments, the providers then pass that cost on to private insurance. So you are taking all the areas of experimental experimental treatments and high cost and putting it in one non-profitable place.

Correct.

If people who need high-cost services were all shifted to Medicare, the cost-shift to private insurers would have to be even greater.

[mu03eng]

As I've been a healthcare provider for almost 2 years now, I've done a lot of reading on the topic. I've come to agree with a few things.

1. I don't believe it's the costs of healthcare that are a problem. It's the charges.

2. Health insurance is the biggest barrier to good healthcare in this country. After that is costs from pharma, medical devices

De-couple health insurance from employment. Make people/families buy individually from companies (similar to auto insurance). Tell health insurance companies they can compete freely across state lines. Make the free market work for the consumer and watch finances (eventually) be much more reasonable.
Government assistance (at the state and federal level) will still be needed.

This is 100% correct

[GooooMarquette]

2. Health insurance is the biggest barrier to good healthcare in this country. After that is costs from pharma, medical devices

Actually, it's the reverse.

And if you make it a free market where people just buy what they want and can afford, we'll go back to the pre-Medicare days.  Wealthy people will get great care; poor people will get none.

[rocket surgeon]

Actually, it's the reverse.

And if you make it a free market where people just buy what they want and can afford, we'll go back to the pre-Medicare days.  Wealthy people will get great care; poor people will get none.

you're kidding, right?  "none"?? 

[GooooMarquette]

you're kidding, right?  "none"??

History is your friend.  Before Medicare and Medicaid (when it was a free market), many poor people simply could not afford care.

So yeah - none.

[Golden Avalanche]

As I've been a healthcare provider for almost 2 years now, I've done a lot of reading on the topic. I've come to agree with a few things.

1. I don't believe it's the costs of healthcare that are a problem. It's the charges.

2. Health insurance is the biggest barrier to good healthcare in this country. After that is costs from pharma, medical devices

De-couple health insurance from employment. Make people/families buy individually from companies (similar to auto insurance). Tell health insurance companies they can compete freely across state lines. Make the free market work for the consumer and watch finances (eventually) be much more reasonable.

Government assistance (at the state and federal level) will still be needed.

Sound thinking. However, public opinion is moving toward a single payer system. How do we reconcile the impending momentum toward a system borne out of government with a halcyon viewpoint that the free market can work well for the consumer?

[jesmu84]

Actually, it's the reverse.

And if you make it a free market where people just buy what they want and can afford, we'll go back to the pre-Medicare days.  Wealthy people will get great care; poor people will get none.

Note that I said government assistance will still be needed. How to reconcile.that is difficult, admittedly

[jesmu84]

Sound thinking. However, public opinion is moving toward a single payer system. How do we reconcile the impending momentum toward a system borne out of government with a halcyon viewpoint that the free market can work well for the consumer?

Good question. I don't know how you do that. I don't have all the answers. Getting rid of insurance companies would be the most ideal. Beyond that, you've gotta diminish their power considerably to decrease costs and increase access.

[Jockey]

As I've been a healthcare provider for almost 2 years now, I've done a lot of reading on the topic. I've come to agree with a few things.

1. I don't believe it's the costs of healthcare that are a problem. It's the charges.

2. Health insurance is the biggest barrier to good healthcare in this country. After that is costs from pharma, medical devices

De-couple health insurance from employment. Make people/families buy individually from companies (similar to auto insurance). Tell health insurance companies they can compete freely across state lines. Make the free market work for the consumer and watch finances (eventually) be much more reasonable.

Government assistance (at the state and federal level) will still be needed.

Good analysis except maybe the selling across state lines. While it sounds like a great concept, it would only work in isolated cases, because hospitals, for the most part, aren't franchised. My wife's insurance covers the Racine hospitals and Froedert. That would be worthless to anyone not living in SE Wisconsin other than the few who live right across the border. It wouldn't do any good for her to buy insurance that was 50% cheaper if it was based somewhere in Ohio.

So, while it could help in a few areas, for the most part it wouldn't be relevant.

[forgetful]

As I've been a healthcare provider for almost 2 years now, I've done a lot of reading on the topic. I've come to agree with a few things.

1. I don't believe it's the costs of healthcare that are a problem. It's the charges.

2. Health insurance is the biggest barrier to good healthcare in this country. After that is costs from pharma, medical devices

De-couple health insurance from employment. Make people/families buy individually from companies (similar to auto insurance). Tell health insurance companies they can compete freely across state lines. Make the free market work for the consumer and watch finances (eventually) be much more reasonable.

Government assistance (at the state and federal level) will still be needed.

I'm not an expert in this field at all, but what evidence do you have that the free market would make health care more affordable to the average american? 

Health-care is a need.  There is limited access, high demand and one cannot simply go without.  Those scenarios do not bode well for the consumer.

[rocket surgeon]

History is your friend.  Before Medicare and Medicaid (when it was a free market), many poor people simply could not afford care.

So yeah - none.

you are right-BEFORE m-care/m-caid, poor people could not afford health care. medicare goes back to the early 1900's and medicare to 1965.  health insurance companies started out as more of an accident coverage against steamboat and railway incidents and evolved from there around 1890's or so.  but you've got to keep this in perspective as our healthcare system wasn't near what it is today-research, diagnostics, facilities, pharmaceuticals, lawyers, etc. history has shown that people have RARELY been denied healthcare as needed

    our gubmint will NEVER, EVER allow those 2 single payer plans to go away.  they are more than the 3rd rail of politics.  if you ever want to really see pitch forks and torches descend upon capital hill...

interesting you mention history and i don't mean putting words in your mouth, but your alluding to it repeating itself.  hmmmmm-wishing others would apply this same line of thinking to everything else swirling like a turd ferguson down the proverbial drain as opposed to going all "al queda" on it

[rocket surgeon]

I'm not an expert in this field at all, but what evidence do you have that the free market would make health care more affordable to the average american? 

Health-care is a need.  There is limited access, high demand and one cannot simply go without.  Those scenarios do not bode well for the consumer.

never saw the day i'd be defending jesmu, but he was right on

      "De-couple health insurance from employment. Make people/families buy individually from companies (similar to auto insurance). Tell health insurance companies they can compete freely across state lines. Make the free market work for the consumer and watch finances (eventually) be much more reasonable. "

  in order for the free market to have a chance, the government must get out of the way; not completely as we still should require licensure requirements of it's docs and insurance oversight.  add tort reform to the mix-especially the class actions-have you ever suffered from fill-in-the-blank side effect from fill-in-the-blank medication blah blah blah.  they(attorneys) win, you get a coupon

[GooooMarquette]

Note that I said government assistance will still be needed. How to reconcile.that is difficult, admittedly

So Obamacare, with the tweak that insurers can sell across state lines.

[GooooMarquette]

interesting you mention history and i don't mean putting words in your mouth, but your alluding to it repeating itself.  hmmmmm-wishing others would apply this same line of thinking to everything else swirling like a turd ferguson down the proverbial drain as opposed to going all "al queda" on it

I wasn't alluding to it repeating itself.  I was saying it won't...

[forgetful]

never saw the day i'd be defending jesmu, but he was right on

      "De-couple health insurance from employment. Make people/families buy individually from companies (similar to auto insurance). Tell health insurance companies they can compete freely across state lines. Make the free market work for the consumer and watch finances (eventually) be much more reasonable. "

  in order for the free market to have a chance, the government must get out of the way; not completely as we still should require licensure requirements of it's docs and insurance oversight.  add tort reform to the mix-especially the class actions-have you ever suffered from fill-in-the-blank side effect from fill-in-the-blank medication blah blah blah.  they(attorneys) win, you get a coupon

You do highlight some of the problems though.  It will never be a free market because of license requirements etc., so supply will always be fixed.  Tort reform has been shown to have nearly zero effect on costs as it is a drop in the bucket compared to the overall cost of medicine. 

I just don't see how changing how competition works on the insurance side, will affect costs for actual medical care.  That is like saying if we allowed the sale of car insurance across state lines we'd decrease the cost of car repairs.  It may be incorrect, but I certainly don't get it. 

[reinko]

Someone give me an example of free market healthcare system in the history of planet Earth that has these amazing benefits everyone keeps cheering.

[rocket surgeon]

  "I just don't see how changing how competition works on the insurance side, will affect costs for actual medical care.  That is like saying if we allowed the sale of car insurance across state lines we'd decrease the cost of car repairs.  It may be incorrect, but I certainly don't get it. "

  i look at it this way-like a cat chasing it's tail-insurance companies raising rates to keep up with increasing medical costs and medical (and dental for that matter) continue to raise costs because insurance companies continue to take MORE than their fair share, in our humble opinions

  i am better off charging my patients 20-30%(sometimes 40%) less and eliminating the insurance companies altogether.  no paper work, no write-offs or write-downs, less work for front office.  the patient saves on the premiums, the waiting time for pre-authorizations, and have the freedom to pay for what they want, when they want, including no yearly maximum allowable benefit$$ 
  eliminating the yearly max can save money as the patient can attend to the issues sooner before they become bigger, more costly issues.  most patients, when they hit their yearly max, regardless if all of there diagnosed treatment is completed-stop.  more offices are creating their own "in-house" options for the un-insured and under-insured as well as those who just do not like their existing plans.  they cannot double dip however-we cannot offer our plans either before or after they have their own insurance coverage applied 

[muwarrior69]

I am on medicare. I go every other month for a vitamin B12 shot because I am B12 deficient. At that 15 minute office visit I have all my vitals checked in addition to the shot. My doctor charges medicare 15 dollars for the visit., which I believe is reasonable. When I get these this is not a bill statements from CMS I see medicare allows only a 45 cents payment to the physician which they pay only 36 cents while my co-insurer pay the other 9 cents. How are doctors suppose manage a practice with those reimbursements? If he pays the nurse 20 buck an hour that visit already costs him 5 bucks. Single payer or medicare for all may sound like a great idea, but we won't have any doctors who will accept it at those rates.

[GooooMarquette]

I am on medicare. I go every other month for a vitamin B12 shot because I am B12 deficient. At that 15 minute office visit I have all my vitals checked in addition to the shot. My doctor charges medicare 15 dollars for the visit., which I believe is reasonable. When I get these this is not a bill statements from CMS I see medicare allows only a 45 cents payment to the physician which they pay only 36 cents while my co-insurer pay the other 9 cents. How are doctors suppose manage a practice with those reimbursements? If he pays the nurse 20 buck an hour that visit already costs him 5 bucks. Single payer or medicare for all may sound like a great idea, but we won't have any doctors who will accept it at those rates.

Medicare and especially Medicaid come nowhere close to covering the actual cost of treatment. That's why private insurance subsidizes the difference. The only way a single payer system could work would be if they established rates somewhere between the rates paid by Medicare/Medicaid and private insurers.

Another piece of the puzzle (unfortunately a long ways down the road) is to replace fee-for-service payments with value-based payments.  The current system incentivizes providers to provide more service, but not necessarily better outcomes. Some providers have long been advocating for this new methodology, but the devil is in the detail so it will still be quite a while before that becomes the predominant payment methodology.