The Audacity of Greed: Profiteering in American Medicine

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With the advancements in medical science and technology, why do Americans still suffer the brunt of an ineffective health care system? The patient is not the priority in today's medical world. The Doctor is not heeding the Hippocratic Oath --- but instead is motivated by money. Medical profiteering has driven medical costs to unsustainable levels while eroding the quality of care.

Russell Andrews' book Too Big to Succeed: Profiteering in American Medicine   provides an interesting analysy of this trend. He reveals the rotten core of health care system hidden from outsiders. Discover why health care costs are increasing while medical benefits are dwindling.

Problems arise when there is a mismatch between reality and our perception of reality. In the scientific world, there are paradigms that guide the pursuit of knowledge. Experiments are constructed based on rules (guidelines based on prior experiences) to further support or disprove those paradigms. Based on how ingrained a paradigm is (“Is it based on fact or on ideology?”), changing the paradigm can be very difficult. Examples of paradigm shifts from the scientific world include the shift from “the earth is flat” to “the earth is round” and the shift from “the earth is the center of the solar system” to “the sun is the center of the solar system.” People have paid dearly for their correct but unpopular point of view (e.g., Galileo was placed under house arrest for insisting that the sun, not the earth, was the center of the solar system). Scientific paradigms may not shift easily, as documented by Thomas Kuhn in The Structure of Scientific Revolutions.1

Similar problems arise in the socioeconomic world when there is a mismatch between reality and our perception of reality. Here there is not only ideology that may hinder acceptance of the mismatch, but also one’s perception of his or her own personal economic benefit. In the game of life, societal good rarely trumps personal gain (or, perhaps more accurately, one’s perception of personal gain). This appears The current health-care system in the United States has a significant mismatch between the reality of the health care provided to the populace as a whole and the perception of that reality—at least the perception in the minds of many people in this country.

Though we spend 50% more on health care per capita than other developed countries, a multitude of measures—such as life expectancy and infant mortality—indicate that we in the United States are not getting health-care value for our money. Yet many argue, often with religious fervor, against change in our health-care system. One must have “choice” (more accurately, perceived choice rather than actual choice) not “socialized medicine” (whatever “socialized medicine” means) at all costs—even if adequate health care becomes a dream for the majority of Americans because of the phenomenal personal expense. When an industiy constitutes upward of one-fifth

Medicine today in the United States is big business. To see how far it has deviated from its origins in the Western tradition, we do well to consider the Hippocratic Oath:

Understand how we can change the trend in doctor-patient relationships all over the country, where individuals can start to realize that great emphasis should be placed on “the healing art and science of medicine,” instead of on the profitability of the health care delivery system.

We need to learn how the profit has trumped the patient in American medicine, and fight back.  Profit is now the most imporant agent of change for real health care in America, which corrupts the whole system. We need to know the typical pitfalls and fight against them. In the US medical system the patient life is often depends on how well he/she understand the ropes. Yes, your life depends on it! It is very early to gat expensive and unnecessary surgery in the USA those days. Which can be deadly. The number of  cardiologists sentenced to jail in the USA is in dozens. And they are just the tip of the iceberg. Cardiatic stents are probably the most glaring example. But other "lucrative" areas, in such field as gastroenterology exists too.  Another huge area is pharmacology abuse ("big-pharma" corrupting influence).

Dave Zweifel, The Capital Times (Madison, WI)

Here's another one to remember when someone tells you that our "private" health care system works: The Wall Street Journal ran a front-page story last week with the headline that said it all: "As Patients, Doctors Feel Pinch, Insurer's CEO Makes a Billion." The story, datelined Minnetonka, Minn., was about William McGuire, a doctor who stopped practicing in 1986 to take a management job with UnitedHealth Group Inc., one of the largest HMOs in the country.

He's now the chief executive officer of the corporation, makes $8 million a year in salary plus bonus, has personal use of the company's private jet and has amassed what the Journal describes as "one of the largest stock options fortunes of all time." According to the newspaper, those options total $1.6 billion.

"Even celebrated CEOs such as General Electric Co.'s Jack Welch or International Business Machines Corp.'s Louis Gerstner never were granted so much during their time at the top," the WSJ story said.

But the gist of the story is that while McGuire and other UnitedHealth execs are raking in millions, their company is putting the squeeze on everyone else.

"Dr. McGuire's story shows how an elite group of companies is getting rich from the nation's fraying health care system," the bible of the business world reported. "Many of them aren't discovering drugs or treating patients. They're middlemen who process the paperwork, fill the pill bottles and otherwise connect the pieces of a $2 trillion industry."

The newspaper's research shows that UnitedHealth has particularly benefited in recent years as health care inflation eased somewhat.

Insurers still raised premiums at double-digit rates. At UnitedHealth, for example, its stock price tripled from January of 2003 to January of this year and its net income rose to $3.3 billion. Hence, the nice board-of-director-approved windfall for McGuire. (Interestingly, former UW-Madison Chancellor Donna Shalala is a member of UnitedHealth's board.)

"In Minnesota, such riches have infuriated some people," the story continued. "Joel Albers, a Minneapolis pharmacist, regularly impersonates Dr. McGuire at state fairs, donning a tuxedo, holding up an enlarged picture of Dr. McGuire on a stick and handing out leaflets denouncing corporate greed."

Of course, this is just one more anecdote that serves to describe our broken health care system, which leaves more than 40 million Americans without coverage and an embarrassment of riches for those who know how to milk that system.

On one hand we have Medicare, which provides universal single-payer coverage to all Americans over age 65 at about a 2 percent administrative cost. On the other hand we have a hodge-podge of plans with layer after administrative layer that gobbles up close to 20 percent in overhead costs (Dr. McGuire's just a piece of that) and leaves millions out in the cold.

How hard can it be to choose in which direction we need to go?

Dave Zweifel is editor of The Capital Times. E-mail: dzweifel@madison.com

Copyright 2006 The Capital Times

Source: The Capital Times (Madison, WI)
http://www.madison.com/tct/opinion/column/index.php?ntid=81491&ntpid=0

 

November 13, 2003 Home Doug Dowd Economic Historian by Doug Dowd

The HMOs and their managed care systems -- first supported in the Nixon years -- ballooned from a headache to a plague beginning about ten years ago. Their pitch was that they would end the inefficiencies of the past.  However, the period in which they have come to dominate the health care system is precisely that in which its costs -- and its inefficiency (unless you count mountains of paperwork something other than waste -- began the acceleration that continues.

Some of the rising costs were due to factors other than the HMOs, not least the gouging prices set by the pharmaceutical giants. OK, but all of them are part and parcel of the "for-profit health care system." Nonetheless, the HMOs have done at least their share in bringing about today's mountainous costs.

What started out as annual one-digit overall cost increases became two-digit as the 1980s ended, rising to 15.3 percent for 2002. Not good enough: In mid-2002 the NYT reported that "Health maintenance organizations are demanding rate increases of 22 percent in their ongoing negotiations with employers for 2003... which will be passed on to consumers." They were "passed on," and they continue to be.

As the tendency of always higher costs and prices continues, it needs repeating that the provision of health care to the average person has decreased both quantitatively and qualitatively. What's good for their profits is bad for our health.

What is it about the HMOs that such is the case? What was the system they presumed to replace with great savings to all, and profits to them as a reward? It was called the "fee-for-service" system: Other than those covered by Medicare and Medicaid, health insurance for those who had it was selected and paid by one's employer, which used to be so for about two-thirds of workers.

As the numbers of insured rose from the 1950s on, so did doctors' incomes: the insured could choose their own doctors and the doctors soon realized that the more treatments they gave the better off they -- but not necessarily their patients -- were. As Ellen Frank pointed out two years ago, "American doctors performed invasive tests and procedures at rates far exceeding international norms....Caesarean sections, surgerized ulcers, hysterectomies and tonsillectomies far above the rates in other countries, etc." (Dollars & Sense, 5/6, 2001)

Adding to that, past and present, is the friendly corruption between doctors and labs and drug companies. The pleasant consequence for doctors from 1960 to 1990 was that their incomes rose two to three times faster than the nation's, bringing them up to a lovely $200,000 annual average. So that's what the Hippocratic Oath was about!

One might think that such an evolution -- or, better, devolution -- would have led everyone but the doctors and labs and drug companies to open their minds to a national health service/single-payer system. But that overlooks certain large facts:

1) Employers as a whole tend to have a knee-jerk negative reaction against anything do with government (unless it is in the nature of a subsidy), and just as "instinctive" a response in favor of "private enterprise," which is what HMOs are;

2) the average citizen lives in the same society, and has been taught to think in much the same way, if not for the same reasons;

3) the major insurance companies have always been opposed to any form of social insurance -- beginning with their adamant fight against social security from 1935 to the present; and

4) this created a new industry for thousands of lobbyists. They have been very successful indeed in their efforts on behalf of the "Big Five" insurance companies (Aetna, Cigna, Metropolitan, Prudential and Travelers) and related managed care companies -- which, taken together, now "cover" 90+ percent of those receiving care. Here a lucid and crisp summary review of what brought us to our present state, and how it happened (as related by Ellen Frank):

The early 1990s saw a wave of mergers and acquisitions among health insurers that left large regions of the country with only two or three competing health plans. Their superior bargaining power allowed insurers to negotiate sharp reductions in fees, which were passed on to employers in the form of lower premiums. In 1994 the average health-insurance premium /paid by employers/ fell for the first time in years; premiums increased at or below the inflation rate for the rest of the 1990s.

Hospitals, facing lower reimbursement rates, cut staff and beds for traditional inpatient care while expanding facilities for expensive services like outpatient surgery. Still, hospitals throughout the country suffered operating losses. Large urban hospitals in low-income areas were especially hard-hit.../some like that of Los Angeles, closing entirely/. For-profit hospital chains moved in quickly, buying up scores of non-profit community hospitals.

So, with patients and providers (doctors, labs, and hospitals) getting the dirty end of the stick, that leaves the HMOs, drug companies, and top insurance companies getting the sweet end -- their owners, their CEOs and their countless lobbyists, that is.

Business being business, another rising tendency is that of HMOs dropping Medicare patients, more than 2.5 million 1998 to the present. Plus, "Medicare patients can expect 'major changes -- that is, reductions of -- benefits, even if they are still enrolled: cutbacks in drug coverage /already cruelly inadequate/, and increases in premiums and co-payments." (ibid.)

So there we are. Or are we? Although there is a rising tide of anger, frustration, and worry among our people at the costs of medical care in the USA, with some emerging movement toward universal coverage, most still see the U.S. system, though costly, as the best.

The best is none too good: "According to a recent study of the Institute of Medicine, medical errors in hospitals kill up to 98,000 patients yearly, while injuring perhaps a million more." (Washington Post, Editorial, "America's medical scandal," 12-10-02). Such deaths and injuries are called "iatrogenic"; that is, caused by the docs themselves.

That was a few years ago. Now, as the USA's entire health care system becomes always more privatized and always more expensive to those needing it, those years are coming to look like paradise lost; and we ain't seen nothin' yet.


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[Apr 06, 2017] The country will spend over $440 billion this year for drugs that would likely sell for less than $80 billion in a free market.

Apr 06, 2017 | economistsview.typepad.com
anne , April 06, 2017 at 05:31 AM
http://cepr.net/blogs/beat-the-press/robert-atkinson-pushes-pro-rich-protectionist-agenda-in-the-washington-post

April 6, 2017

Robert Atkinson Pushes Pro-Rich Protectionist Agenda in the Washington Post

The Washington Post is always open to plans for taking money from ordinary workers and giving it to the rich. For this reason it was not surprising to see a piece * by Robert Atkinson, the head of the industry funded Information Technology and Innovation Foundation, advocating for more protectionism in the form of stronger and longer patent and copyright monopolies.

These monopolies, legacies from the medieval guild system, can raise the price of the protected items by one or two orders of magnitudes making them equivalent to tariffs of several hundred or several thousand percent. They are especially important in the case of prescription drugs.

Life-saving drugs that would sell for $200 or $300 in a free market can sell for tens or even hundreds of thousands of dollars due to patent protection. The country will spend over $440 billion this year for drugs that would likely sell for less than $80 billion in a free market. The strengthening of these protections is an important cause of the upward redistribution of the last four decades. The difference comes to more than $2,700 a year for an average family. (This is discussed in "Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer," ** where I also lay out alternative mechanisms for financing innovation and creative work.)

Atkinson makes this argument in the context of the U.S. relationship with China. He also is explicitly prepared to have ordinary workers pay the price for this protectionism. He warns that not following his recommendation for a new approach to dealing with China, including forcing them to impose more protection for U.S. patents and copyrights, would lead to a lower valued dollar.

Of course a lower valued dollar will make U.S. goods and services more competitive internationally. That would mean a smaller trade deficit as we sell more manufactured goods elsewhere in the world and buy fewer imported goods in the United States. This could increase manufacturing employment by 1-2 million, putting upward pressure on the wages of non-college educated workers.

In short, not following Atkinson's path is likely to mean more money for less-educated workers, less money for the rich, and more overall growth, as the economy benefits from the lessening of protectionist barriers.

* https://www.washingtonpost.com/opinions/global-opinions/how-trump-can-stop-china-from-eating-our-lunch/2017/04/05/b83e4460-1953-11e7-bcc2-7d1a0973e7b2_story.html

** http://deanbaker.net/images/stories/documents/Rigged.pdf

-- Dean Baker

[Apr 06, 2017] Health Care Renewal Not Going to Take it Anymore - Doctors in the Pacific Northwest Unionize, Begin Collective Bargaining with Hospital Systems

Apr 06, 2017 | hcrenewal.blogspot.com
Managerialist Tactics: Outsourcing

The NYT article opened with

in the spring of 2014, when the administration announced it would seek bids to outsource its 36 hospitalists , the hospital doctors who supervise patients' care, to a management company that would become their employer.

The outsourcing of hospitalists became relatively common in the last decade, driven by a combination of factors. There is the obvious hunger for efficiency gains. But there is also growing pressure on hospitals to measure quality and keep people healthy after they are discharged. This can be a complicated data collection and management challenge that many hospitals, especially smaller ones, are not set up for and that some outsourcing companies excel in.

Outsourcing is a now familiar entry in the managerialists' playbook. It is seen more in manufacturing than in health care. Although touted as improving economic "efficiency," it also may reduce the accountability of the managers of the organization that does the outsourcing.

Pursuit of Economic Efficiency

In this case,

Outsourced hospitalists tend to make as much or more money than those that hospitals employ directly, typically in excess of $200,000 a year. But the catch is that their compensation is often tied more directly to the number of patients they see in a day - which the hospitalists at Sacred Heart worried could be as many as 18 or 20, versus the 15 that they and many other hospitalists contend should be the maximum.

It was the idea that they could end up seeing more patients that prompted outrage among the hospitalists at Sacred Heart, which has two facilities in the area, with a total of nearly 450 beds. 'We're doctors, we're professionals,' Dr. [Rajeev] Alexander said. 'Giving me a bonus for seeing two more patients - I'm not sure I should be doing that. It's not safe .' (A hospital representative said patient safety was 'inviolate.')


A constant theme of managerialism, and the neoliberalism that underlies it, is economic efficiency. The usual narrative is that efficiency means providing better goods and services at lower costs. Instead, managerialism and neliberalism may mean decontenting goods and services so as to lower costs to the organizations providing them, but not necessarily providing more value to consumers. In health care terms, managerialism and neliberalism may lead to less accessible, more mediocre health care that increase revenue to the organizations providing it, as implied by the physicians' comments above. Making the US the most commercialized, managerialist run, and arguably neoliberal health care system among the developed countries has not led to lower costs, better access, or better health care quality.


The backstory for the outsourcing emphasizes that managerialism, and the resulting economic efficiency was indeed the goal of PeaceHealth...

In 2012, Sacred Heart's parent, PeaceHealth, a nonprofit health care system, installed an executive named John Hill to adapt its Oregon hospitals to the latest trends in health care . Mr. Hill, in an effort to rein in the budget and improve the efficiency of a hospital that administrators said was lagging in key respects, including how long the typical patient stayed, eventually concluded that the hospitalists at Sacred Heart should be outsourced.

Centralization of Control

Furthermore,

The hospitalists also chafe at the way the administration has tried to centralize decisions they used to make for themselves. This might include hiring fellow doctors or the order in which they see patients on any day. They also complain of being loaded down with administrative tasks.

'We're trained to be leaders, but they treat us like assembly line workers ,' said Dr. Brittany Ellison, a hospitalist in the group. 'You need that time with the patient,...'


A major feature of managerialism is the concentration of power within (generic) management. To quote Komesaroff(1),

In the workplace, the authority of management is intensified, and behaviour that previously might have been regarded as bullying becomes accepted good practice. The autonomous discretion of the professional is undermined, and cuts in staff and increases in caseload occur without democratic consultation of staff. Loyal long-term staff are dismissed and often humiliated, and rigorous monitoring of the performance of the remaining employees focuses on narrowly defined criteria relating to attainment of financial targets, efficiency and effectiveness.

We're Only In It for the Money

Also, the negotiations that started once the PeaceHealth physicians formed their union demonstrated a central tenet of managerialism

Even starker than the divide over these questions are the differences in worldview represented on opposite sides of the table. During a bargaining session last fall, the administration proposed increasing the number of shifts a year. Hospitalists now earn about $223,000 a year for 173 shifts and are paid extra for working more. The hospital offered $260,000 for a mandatory 182 shifts, and up to $20,000 in bonus pay for hitting certain medical performance targets. The hospitalists work seven days on and seven days off, so this would have effectively eliminated any time off for sick days or vacation.

When the doctors pointed this out, the administration responded that if they missed a few days, it would make sure they got extra days to hit the required number of shifts for full pay.

The hospitalists assured the administration negotiators that their concern had nothing to do with money - that none of this had ever been about money. They preferred to work less and make less to avoid burnout, which was bad for them and worse for patients. At which point the administration responded that money was always the issue , according to several people in the room. (The hospital declined to comment.)

Suddenly it dawned on the doctors why they had failed to break through, Dr. Alexander said. 'Imagine Mr. Burns,' the cartoonishly evil capitalist from 'The Simpsons,' 'sitting across the table,' he said. 'There's no way we can say, 'This isn't what we're talking about. We're not trying to get the bonus.''


Again, managerialism is based on neoliberalism, and neoliberal view is that the market rules. The market is the arbiter of success, and money is the only outcome that matters. As Komesaroff put it(1),

The particular system of beliefs and practices defining the roles and powers of managers in our present context is what is referred to as managerialism. This is defined by two basic tenets: (i) that all social organisations must conform to a single structure; and (ii) that the sole regulatory principle is the market .

Mission-Hostile Management

Never mind that the centrality of money seems entirely inconsistent with the stated mission of PeaceHealth ,

We carry on the healing mission of Jesus Christ by promoting personal and community health, relieving pain and suffering, and treating each person in a loving and caring way.

Ostensibly, this is accompanied by core values, such as,

Stewardship We choose to serve the community and hold ourselves accountable to exercise ethical and responsible stewardship in the allocation and utilization of human, financial, and environmental resources. and,

Social Justice
We build and evaluate the structures of our organization and those of society to promote the just distribution of health care resources.


We have frequently discussed how leadership of contemporary health care organizations often seem to act contrary to the organizations' stated mission, that is, mission-hostile management .

Value Extraction

Finally, while managerialism is ostensibly concerned with economic efficiency, whose efficiency matters. When managers address physicians' efficiency, they seem to look at amount of work done divided by the cost to the hospital of paying physicians. However, they never seem to look at their own costs, the costs of management, as being a negative.

The PeaceHealth 2014 form 990 , the latest available, states that the then CEO, Mr Alan Yordy (whose highest academic degree was an MBA, according to his LinkedIn page ) had total compensation in 2013 of $1,366,742, and 11 other managers had total compensation greater than $250,000, with 9 having total compensation greater than $500,000. Those figures should be compared to the highest compensation offered the hospitalists, a maximum of $280,000 for 182 shifts a year, eliminating all vacation and sick leave. So if it is all about the money, the managers are making the most of it.

We have discussed ad nauseum the ridiculous compensation of the leaders of health care organization, even non-profit organizations. Value extraction by top management has become a central feature of the US and global economy (look here ).

The NYT article did not discuss whether the upset hospitalists knew about their bosses' compensation. I suspect they did.

Forming a Functioning Union at the University of Washington

The media coverage of the UW housestaff unionization was less detailed. It does appear, though, that a stimulus was the pursuit of economic efficiency by UW management through squeezing the pay of housestaff, as described in the December article in the Seattle Times . In it the house staff said,

they account for about one-fifth of King County's doctors and they want higher pay, new child-care benefits and free parking. Some UW residents and fellows earn so little that they qualify for welfare programs like Temporary Assistance for Needy Families and the Seattle City Light Utility Discount Program, according to the UWHA [University of Washington Housestaff Association.]

Another article in early January, 2016 in the Seattle Times added,

The association has proposed that residents and fellows earn at least the same salary as the UW's lowest-paid physician assistants . Because the doctors in training work very long hours, they sometimes earn less than Seattle's minimum hourly wage , the UWHA has said.

The council members, in their letter to Cauce, called the situation shocking. And based on information from the UWHA, they wrote that some residents and fellows qualify for welfare programs like Temporary Assistance for Needy Families (TANF).


The Seattle articles noted that the UW housestaff may earn from just over $53,000 to just under $70,000 a year. Keep in mind, however, that under current rules, house staff may work up to 80 hours a week. So $53,000 for someone working those hours translates into $13.25/ hour, under what many people now claim is the living wage. That could be considered exploitation of workers with doctoral degrees working in often highly stressful situations where lives may be on the line. Whether there were issues other than money (and the respect it implies) involved at UW was not apparent based on the minimal press coverage.

[Apr 05, 2017] Health Care Renewal managerialism

Apr 05, 2017 | hcrenewal.blogspot.com
John Stossel Discovers Health Care Dysfunction, Blames it on "Socialists" - Like Maurice Greenberg (AIG), John Thain (Merrill Lynch), Sanford Weill (Citigroup), and David H Koch? We have been ranting for a while about the dysfunctionality of the US health care system. Unfortunately, many people only realize how bad things are when they become patients, when they have bigger things to worry about than complaining. Furthermore, even if they complain, many patients may not feel they understand enough about what has gone wrong to suggest solutions.

Bad Customer Service at New York Presbyterian

This may not apply when media pundits, especially those with strong ideological views, become patients. So this week Fox News commentator and well known libertarian John Stossel disclosed his new illness, and vented his opinions about his hospital stay . Mr Stossel unfortunately developed lung cancer, although he was optimistic about his prognosis: "My doctors tell me my growth was caught early and I'll be fine. Soon I will barely notice that a fifth of my lung is gone."

However, he was not happy about his hospital's customer service:

But as a consumer reporter, I have to say, the hospital's customer service stinks . Doctors keep me waiting for hours, and no one bothers to call or email to say, 'I'm running late.' Few doctors give out their email address. Patients can't communicate using modern technology.

I get X-rays, EKG tests, echocardiograms, blood tests. Are all needed? I doubt it. But no one discusses that with me or mentions the cost .

Also,
I fill out long medical history forms by hand and, in the next office, do it again . Same wording: name, address, insurance, etc.
And,
In the intensive care unit, night after night, machines beep, but often no one responds . Nurses say things like 'old machines,' 'bad batteries,' 'we know it's not an emergency.'
Finally,
Some of my nurses were great -- concerned about my comfort and stress -- but other hospital workers were indifferent .
Unfortunately, long wait times, poor communications, excess paperwork, and misapplied technology are all too familiar problems to those in the health care system.

Moreover, this all was happening at one of the most highly rated US hospitals,

After all, I'm at New York-Presbyterian Hospital. U.S. News & World Report ranked it No. 1 in New York .
Were "Socialist Bureaucracies" Responsible?

Mr Stossel had his own ideas about the causes of these problems.

Customer service is sclerotic because hospitals are largely socialist bureaucracies. Instead of answering to consumers, which forces businesses to be nimble, hospitals report to government, lawyers and insurance companies.

Whenever there's a mistake, politicians impose new rules: the Health Insurance Portability and Accountability Act paperwork, patient rights regulations, new layers of bureaucracy...

Also,

Leftists say the solution to such problems is government health care. But did they not notice what happened at Veterans Affairs? Bureaucrats let veterans die, waiting for care. When the scandal was exposed, they didn't stop. USA Today reports that the abuse continues. Sometimes the VA's suicide hotline goes to voicemail.

Patients will have a better experience only when more of us spend our own money for care. That's what makes markets work.

A "Socialist Bureaucracy" with a VIP Penthouse?

I am sorry to hear Mr Stossel has lung cancer, and hope that his prognosis is indeed good. I am a bit surprised that a media celebrity who became a patient found big issues with "customer service" at such a prestigious hospital. After all, many big hospitals have programs to give special treatment to VIPs (for example, see these posts from 2007 and 2011 ).

In particular, back in 2012 we posted about the contrast between the VIP services specifically at New York - Presbyterian Hospital and how poor patients are treated there. Then we quoted from a 21 January, 2012 article from the New York Times focused on the ritzy comforts now provided for wealthy (but perhaps not very sick) patients at the renowned New York Presbyterian/ Weill Cornell Hospital. It opened,

The feverish patient had spent hours in a crowded emergency room. When she opened her eyes in her Manhattan hospital room last winter, she recalled later, she wondered if she could be hallucinating: 'This is like the Four Seasons - where am I?'

The bed linens were by Frette, Italian purveyors of high-thread-count sheets to popes and princes. The bathroom gleamed with polished marble . Huge windows displayed panoramic East River views. And in the hush of her $2,400 suite, a man in a black vest and tie proffered an elaborate menu and told her, 'I'll be your butler.'

It was Greenberg 14 South, the elite wing on the new penthouse floor of NewYork-Presbyterian/Weill Cornell hospital . Pampering and décor to rival a grand hotel, if not a Downton Abbey, have long been the hallmark of such 'amenities units,' often hidden behind closed doors at New York's premier hospitals. But the phenomenon is escalating here and around the country, health care design specialists say, part of an international competition for wealthy patients willing to pay extra, even as the federal government cuts back hospital reimbursement in pursuit of a more universal and affordable American medical system.

Additional amenities include:

A waterfall, a grand piano and the image of a giant orchid grace the soaring ninth floor atrium....
Also,
the visitors' lounge seems to hang over the East River in a glass prow and Ciao Bella gelato is available on demand....
An architect who specializes in designing such luxury facilities for hospitals noted:
'These kinds of patients, they're paying cash - they're the best kind of patient to have,' she added. 'Theoretically, it trickles down.'
It appears that someone failed to book Mr Stossel into the penthouse. Instead, he found out what service was like for the masses.

Perhaps this was why Mr Stossel railed at the "socialist bureaucracies" he perceived as running New York - Presbyterian Hospital. However, calling the hospital management "socialist" seems - not to put too fine a point on it - wrong.

A "Socialist Bureaucracy" Paying Millions to its CEOs?

First of all, New York Presbyterian is hardly a government agency. It is a private, non-profit corporation. Every year as such it files a form 990 with the dread US Internal Revenue Service. (The latest publicly available version is from 2013, here.) Obviously, US government agencies do not file with the IRS.

In fact, the New York Presbyterian system seems about as far from a federal government agency as one can imagine.

First, its top managers are paid like for-profit corporate executives. In 2014, we posted about the humongous compensation given to its previous, long-serving CEO, Dr Herbert Pardes, who received multi-million dollar compensation every year through his 2011 retirement, and then continued to receive several million a year from the system in his retirement. His successor, current CEO Dr Steven Corwin, received $3.6 million in 2012. (More recent compensation figures are not yet available.)

A "Socialist Bureaucracy" Dominated by Managers, with Stewardship by Top Financial Executives, and one of the Koch Brothers?

The current leadership of New York Presbyterian is dominated by businesspeople, not physicians, nurses, or other health care professionals. Only 10 of 33 listed senior leaders are health care professionals. The rest have administrative/ management or legal backgrounds and training. Many appear to be generic managers , that is, people with background and experience primarily in administration or management, but not in medicine, health care, public health, etc.

The hospital system's board of trustees was and is filled with some of the top business executives in the US, including some finance executives who have been cited as responsible for the global financial collapse/ great recession.

For example, we wrote about Mr Dick Fuld, a trustee until recently. Mr Fuld was the CEO who presided over the bankruptcy of Lehman Brothers, which heralded the beginning of the great financial crisis/ great recession of 2008 onward. Mr Fuld seemed to lack the sort of compassionate approach one might expect from someone charged with the stewardship of a big hospital system. He had once publicly said about those who sold Lehman Brother stock short: "what I really want to do is I want to reach in, rip out their heart, and eat it before they die ."

[Mar 23, 2017] A "good start" at the expence of sick people for Collectly a new medical debt collection startuo -- they now collect twise larger share of debt then before. The founder is a former CEO of a debt collection agency and collected over $100 million before

Notable quotes:
"... our intelligent algorithm using state of the art innovative techniques of automation innovation disruption innovation disruption automatically sends orders to police and judges to prepare and serve pay or stay warrants, making sure your debtor goes to jail for their crime! ..."
Mar 23, 2017 | www.nakedcapitalism.com

"All 51 startups that debuted at Y Combinator W17 Demo Day 2" [ TechCrunch ] ( day one ). This is a good one:

Collectly helps doctors collect 2x's more debt than they have before. It's a business with $280 billion sent to debt but the debt collectors only collect on average up to 20%. The founder is a former CEO of a debt collection agency and collected over $100 million before

The acerbic Pinboard comments:
D Pinboard * Follow

@Pinboard

YC so far: surreptitious recording of phone calls, bus tickets for
the starving, debt collection, go live in a box, cow collars,
chatbots

11:41 PM-21 Mar 2017

He's not wrong. (And any time you encounter an online company with a cute name that's also an adverb, like collectly , run a mile, because it's a startup that wants to harm you. Kidding! I think .)

cocomaan , March 22, 2017 at 4:03 pm

Collectly is some really depressing stuff. Wow. More from their website.

3. Transparent collection
Our intelligent software automatically reaches out to customers that didn't pay in time, so you will never need to manually chase them again. And you can see every action on every case.

Totaly fair.

Totaly fair? I had to read it twice. Is that a typo? Or does it mean something?

Next up: our intelligent algorithm using state of the art innovative techniques of automation innovation disruption innovation disruption automatically sends orders to police and judges to prepare and serve pay or stay warrants, making sure your debtor goes to jail for their crime!

Edit: Weird, this went in the wrong place. Oh well.

[Mar 23, 2017] Paradoxically, we appear to be seeing a coalescence and consolidation of insurers, we will end up being delightfully exceptional, again- effectively being single-payer, private sector, paying a monopoly an add-on cost of 35-40% to a parasitic industry whose executives and employees do not contribute to the CARE equation.

Notable quotes:
"... Why Steve Bannon Wants You to Believe in the Deep State" [Politico]. "Like the Death Star, the American Deep State does not, of course, exist. " ..."
Mar 23, 2017 | www.nakedcapitalism.com
djrichard , March 22, 2017 at 5:35 pm

Just a bit of a thought experiment, building on some thinking from a comment yesterday by jefemt

Paradoxically, we appear to be seeing a coalescence and consolidation of insurers, we will end up being delightfully exceptional, again- effectively being single-payer, private sector, paying a monopoly an add-on cost of 35-40% to a parasitic industry whose executives and employees do not contribute to the CARE equation.

Taking jefemt's thinking further, imagine the health insurance provider was not only monopolistic (owned the entire market), but was also a GSE (government sponsored enterprise). Now take it one more step and imagine it was an actual part of the government and not merely a GSE.

Conceivably, it wouldn't even have to live off appropriations from congress, assuming it was equally as extractive from the private sector as it is now (i.e. revenue model is the same). Talk about good living. Who knows, maybe they pocket their proceeds into some kind of surplus in Treasury dept.

But let's assume they had to give up on revenue models. [Afterall, it's easier to find partners in congress when you have an appropriations process that binds you to them.] Then they would be exposed. Somebody would get the bright idea that this agency doesn't need as much staffing since they are no longer revenue oriented. That indeed, they could have the same staffing profile as the agency responsible for medicare. Indeed they could be folded into medicare.

I was thinking of this too as a reponse to Why Steve Bannon Wants You to Believe in the Deep State" [Politico]. "Like the Death Star, the American Deep State does not, of course, exist. "

Indeed, I think of the insurance industry as being part of the deep state already. It seems that congress's preference is that this part of the deep state is outsourced. So that's it not a GSE, and not even a monopoly, but maintained as an oligopoly. And then, well hey whatever surplus it can hoover up is fair game. After all free-hand of the market and all that. [And heaven knows, we don't want to crowd that out.]

In contrast to other parts of the deep state that don't really have a revenue model. In which case, those parts need to be insourced by the Fed Gov.

human , March 22, 2017 at 7:46 pm

The CIA has a long history of drug trafficking. The FBI traffics in blackmail. The NSA in network surveillance. DIA, special ops. NRO, satelite throughput. 11 more in the US of A and countless more globally. They all have opaque resources outside of regular channels.

Ernesto Lyon , March 23, 2017 at 12:09 am

Great documentary about the 80's cocaine business in Miami called "Cocaine Cowboys." It's real life Scarface.

Guess who the Feds sent to get a handle on the cocaine smuggling?

See-eye-aye man George H.W. Bush. Coincidence?

[Mar 22, 2017] The Men Who Stole the World

Notable quotes:
"... History will look back at us with the same wonder that we look back on the mad excesses of certain nations founded in devotion to extreme, almost other-worldly, ideologies of the last century. ..."
"... Apparently the slashing of health benefits for the unfortunate is not severe enough in the proposed Trump/Ryan plan. Our GOP house neo-liberals are enthusiastic to unleash the wonders of the cure-all deregulated market on the American public, again. Like a dog returns to its vomit. ..."
Mar 22, 2017 | jessescrossroadscafe.blogspot.com
"The problem of the last three decades is not the 'vicissitudes of the marketplace,' but rather deliberate actions by the government to redistribute income from the rest of us to the one percent. This pattern of government action shows up in all areas of government policy."

Dean Baker

"When the modern corporation acquires power over markets, power in the community, power over the state and power over belief, it is a political instrument, different in degree but not in kind from the state itself. To hold otherwise - to deny the political character of the modern corporation - is not merely to avoid the reality.

It is to disguise the reality. The victims of that disguise are those we instruct in error."

John Kenneth Galbraith

And unfortunately the working class victims of that disguise are going to be receiving the consequences of their folly, and then some.

Secure in their monopolies and key positions with regard to reform and the law, the corporations are further acquiring access to the protections of the rights of individuals as well, it appears, at least according to Citizens United .

Maybe our leaders and their self-proclaimed technocrats will finally do the right thing. I personally doubt it, except that if they do it will probably be by accident.

More likely, the right thing will eventually come about the old-fashioned way- under the duress of a crisis, and the growing protests of the much neglected and long suffering.

History will look back at us with the same wonder that we look back on the mad excesses of certain nations founded in devotion to extreme, almost other-worldly, ideologies of the last century.

... ... ...

Apparently the slashing of health benefits for the unfortunate is not severe enough in the proposed Trump/Ryan plan. Our GOP house neo-liberals are enthusiastic to unleash the wonders of the cure-all deregulated market on the American public, again. Like a dog returns to its vomit.

Better if they start breaking up corporate health monopolies and embrace real reform at the sources of the soaring costs. The US pays far, far too much for drugs and healthcare, and deregulating the markets is not the solution. We do have the example of the rest of the developed world for what to do about this. It is called 'single payer.'

But players keep on playing. And politicians and their enablers in the professions will not see what their big money donors do not wish them to see. And that is one of their few bipartisan efforts.

Might one suggest that our political animals stop trying to do all the reforming and cost controls bottom up, while applying the stimulus top down? That approach they have been flogging to no avail for about thirty years is a recipe for a dying middle class.

Here is a short video from the Bernie Sanders WV town hall that shows The Face of American Desperation. By the way, the governor of West Virginia is a Democrat. He wasn't there.

...

[Mar 17, 2017] The Affordable Care Act came nowhere close to universal healthcare insurance coverage:

Mar 17, 2017 | economistsview.typepad.com
anne -> Fred C. Dobbs... March 16, 2017 at 06:41 AM , 2017 at 06:41 AM
The Affordable Care Act came nowhere close to universal healthcare insurance coverage:

https://www.census.gov/content/dam/Census/library/publications/2016/demo/p60-257.pdf

September 13, 2016

People Without Health Insurance Coverage, 2007-2015

(Thousands without insurance for entire year)

2007 ( 44,088)
2008 ( 44,780)
2009 ( 48,985) Obama

2010 ( 49,951) (Affordable Care Act)
2011 ( 48,613)
2012 ( 47,951)
2013 ( 41,795)
2014 ( 32,968)

2015 ( 28,966)

anne -> Fred C. Dobbs... , March 16, 2017 at 07:26 AM
https://www.census.gov/content/dam/Census/library/publications/2016/demo/p60-257.pdf

September 13, 2016

People Without Health Insurance Coverage, 2007-2015

(Percent without insurance for entire year)

2007 ( 14.7)
2008 ( 14.9)
2009 ( 16.1) Obama

2010 ( 16.3) (Affordable Care Act)
2011 ( 15.7)
2012 ( 15.4)
2013 ( 13.3)
2014 ( 10.4)

2015 ( 9.1)

[Mar 17, 2017] The difficulties that many families have paying for cancer treatments. The piece points out that even middle income families with good insurance may still face co-payments of tens of thousands of dollars a year

Mar 17, 2017 | economistsview.typepad.com
anne : March 16, 2017 at 06:19 AM

, 2017 at 06:19 AM
http://cepr.net/blogs/beat-the-press/government-granted-patent-monopolies-cause-people-to-skip-cancer-treatments

March 16, 2017

Government Granted Patent Monopolies Cause People to Skip Cancer Treatments

National Public Radio had an interesting segment * on the difficulties that many families have paying for cancer treatments. The piece points out that even middle income families with good insurance may still face co-payments of tens of thousands of dollars a year.

One item not mentioned in this piece is that the reason the prices of new cancer drugs is high is that the government grants companies patent monopolies. This is done as a way to finance research. In almost all cases these drugs would be available for less than a thousand dollars ** for a year's treatment if the drugs were sold in a free market.

While it is necessary to pay for research, there are more modern and efficient mechanisms than patent monopolies (see "Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer" *** ).

* http://www.npr.org/sections/health-shots/2017/03/15/520110742/as-drug-costs-soar-people-delay-or-skip-cancer-treatments

** http://www.thebodypro.com/content/78658/1000-fold-mark-up-for-drug-prices-in-high-income-c.html

*** http://deanbaker.net/images/stories/documents/Rigged.pdf

-- Dean Baker

anne -> anne... , March 16, 2017 at 06:20 AM
http://deanbaker.net/images/stories/documents/Rigged.pdf

October, 2016

Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer
By Dean Baker

The Old Technology and Inequality Scam: The Story of Patents and Copyrights

One of the amazing lines often repeated by people in policy debates is that, as a result of technology, we are seeing income redistributed from people who work for a living to the people who own the technology. While the redistribution part of the story may be mostly true, the problem is that the technology does not determine who "owns" the technology. The people who write the laws determine who owns the technology.

Specifically, patents and copyrights give their holders monopolies on technology or creative work for their duration. If we are concerned that money is going from ordinary workers to people who hold patents and copyrights, then one policy we may want to consider is shortening and weakening these monopolies. But policy has gone sharply in the opposite direction over the last four decades, as a wide variety of measures have been put into law that make these protections longer and stronger. Thus, the redistribution from people who work to people who own the technology should not be surprising - that was the purpose of the policy.

If stronger rules on patents and copyrights produced economic dividends in the form of more innovation and more creative output, then this upward redistribution might be justified. But the evidence doesn't indicate there has been any noticeable growth dividend associated with this upward redistribution. In fact, stronger patent protection seems to be associated with slower growth.

Before directly considering the case, it is worth thinking for a minute about what the world might look like if we had alternative mechanisms to patents and copyrights, so that the items now subject to these monopolies could be sold in a free market just like paper cups and shovels.

The biggest impact would be in prescription drugs. The breakthrough drugs for cancer, hepatitis C, and other diseases, which now sell for tens or hundreds of thousands of dollars annually, would instead sell for a few hundred dollars. No one would have to struggle to get their insurer to pay for drugs or scrape together the money from friends and family. Almost every drug would be well within an affordable price range for a middle-class family, and covering the cost for poorer families could be easily managed by governments and aid agencies.

The same would be the case with various medical tests and treatments. Doctors would not have to struggle with a decision about whether to prescribe an expensive scan, which might be the best way to detect a cancerous growth or other health issue, or to rely on cheaper but less reliable technology. In the absence of patent protection even the most cutting edge scans would be reasonably priced.

Health care is not the only area that would be transformed by a free market in technology and creative work. Imagine that all the textbooks needed by college students could be downloaded at no cost over the web and printed out for the price of the paper. Suppose that a vast amount of new books, recorded music, and movies was freely available on the web.

People or companies who create and innovate deserve to be compensated, but there is little reason to believe that the current system of patent and copyright monopolies is the best way to support their work. It's not surprising that the people who benefit from the current system are reluctant to have the efficiency of patents and copyrights become a topic for public debate, but those who are serious about inequality have no choice. These forms of property claims have been important drivers of inequality in the last four decades.

The explicit assumption behind the steps over the last four decades to increase the strength and duration of patent and copyright protection is that the higher prices resulting from increased protection will be more than offset by an increased incentive for innovation and creative work. Patent and copyright protection should be understood as being like very large tariffs. These protections can often the raise the price of protected items by several multiples of the free market price, making them comparable to tariffs of several hundred or even several thousand percent. The resulting economic distortions are comparable to what they would be if we imposed tariffs of this magnitude.

The justification for granting these monopoly protections is that the increased innovation and creative work that is produced as a result of these incentives exceeds the economic costs from patent and copyright monopolies. However, there is remarkably little evidence to support this assumption. While the cost of patent and copyright protection in higher prices is apparent, even if not well-measured, there is little evidence of a substantial payoff in the form of a more rapid pace of innovation or more and better creative work....

Tom aka Rusty said in reply to anne... , -1
I'm trying to imagine why anyone would write a 900 page textbook, plus add-ons (test bank, solutions manual) and then give it away.

I have refused to co-author several times because the work is agonizing, the revisions never ending, and only a few texts make anyone rich.

[Mar 14, 2017] No wonder the unemployed increasingly kill themselves, or others. The whole economy tells them, indirectly but unmistakably, that their human value does not exist.

Mar 14, 2017 | economistsview.typepad.com
Noni Mausa : March 13, 2017 at 04:13 PM

What the wealthy right wing has decided in the past 40 years is that they don't need citizens. At least, not as many citizens as are actually citizens. What they are comfortable with is a large population of free range people, like the longhorn cattle of the old west, who care for themselves as best they can, and are convenient to be used when the "ranchers" want them.

Of course, this is their approach to foreign workers, also, but for the purpose of maintaining a domestic society within which the domestic rich can comfortably live, only native born Americans really suit.

With the development of high productivity production, farming, and hands-off war technology the need for a large number of citizens is reduced. The wealthy can sit in their towers and arrange the world as suits them, and use the rest of the world as a "farm team" to supply skills and labour as needed.

Proof of this is the fact that they talk about the economy's need for certain skills, training, services and so on, but never about the inherent value of citizens independent of their utility to someone else.

No wonder the unemployed increasingly kill themselves, or others. The whole economy tells them, indirectly but unmistakably, that their human value does not exist. ken melvin : , March 13, 2017 at 04:48 PM

Can someone get me from $300 billion tax cut for the rich to getting the markets work for health care?
ken melvin : , March 13, 2017 at 04:54 PM
It isn't about 'markets', never is. It is about extraction of as much profit as possible using whatever means necessary. This is what the CEOs of insurance companies get payed to do. Insurance policies they don't pay out, the ones Ryan is referring to, are as good as any for scoring.
libezkova : , March 13, 2017 at 07:09 PM
"It isn't about 'markets', never is. It is about extraction of as much profit as possible using whatever means necessary. This is what the CEOs of insurance companies get payed to do."

What surprises me most in this discussion is how Obamacare suddenly changed from a dismal and expensive failure enriching private insurers to a "good deal".

Lesseevilism in action ;-)

ilsm : , March 13, 2017 at 01:41 PM
When the PPACA band-aid is pulled off the US health care mess the gusher will be blamed on "the Russians running the White House".

Cuba does better than the US despite being economically sanctioned for 55 years. Distribution of artificially scarce health care resources is utterly broken. This failed market is financed by a mix of 'for profit' insurance and medicare (which sublets a big part to 'for profit' insurance).

Coverage!!! PPACA added taxpayers' money to finance a bigger failed market. It did nothing to address the market fail!

Single payer would not address the market failure. Single payer would put the government financing most of the failed market.

Democrats have put band-aids on severe bleeds since Truman made the cold war more important than Americans.

At least we know what Trump stands for!

jeff fisher said in reply to ilsm... , March 13, 2017 at 01:58 PM
Cuba is the shining example of how doing the first 20% of healthcare well for everyone gets you 80% of the benefit cheap.

The US is the shining example of how refusing to do the first 20% of healthcare well for everyone only gets you 80% of the benefit no matter how much you spend.

jonny bakho : , March 13, 2017 at 12:09 PM
Mark's very nice argument does nothing to address The Official Trump Counter Argument:

[Shorter version: Obamacare is doomed, going to blow up. Any replacement is therefore better than Obamacare; Facts seldom win arguments against beliefs]

"During a listening session on healthcare at the White House on Monday, President Donald Trump said Republicans "are putting themselves in a very bad position by repealing Obamacare."

Trump said that his administration is "committed to repealing and replacing" Obamacare and that the House Obamacare replacement will lead to more choice at a lower cost. He further stated, "[T]he press is making Obamacare look so good all, of a sudden. I'm watching the news. It looks so good. They're showing these reports about this one gets so much, and this one gets so much. First of all, it covers very few people, and it's imploding. And '17 will be the worst year. And I said it once; I'll say it again: because Obama's gone."

He continued, "And the Republicans, frankly, are putting themselves in a very bad position - I tell this to Tom Price all the time - by repealing Obamacare. Because people aren't gonna see the truly devastating effects of Obamacare. They're not gonna see the devastation. In '17 and '18 and '19, it'll be gone by then. It'll - whether we do it or not, it'll be imploded off the map."

He added, "So, the press is making it look so wonderful, so that if we end it, everyone's going to say, 'Oh, remember how great Obamacare used to be? Remember how wonderful it used to be? It was so great.' It's a little bit like President Obama. When he left, people liked him. When he was here, people didn't like him so much. That's the way life goes. That's human nature."

Trump further stated that while letting Obamacare collapse on its own was the best thing to do politically, it wasn't the right thing to do for the country.

http://www.breitbart.com/video/2017/03/13/trump-republicans-putting-bad-position-repealing-obamacare/

[Mar 07, 2017] Americans' Challenges with Health Care Costs

Notable quotes:
"... Three in ten (29 percent) Americans report problems paying medical bills, and these problems come with real consequences for some. For example, among those reporting problems paying medical bills, seven in ten (73 percent) report cutting back spending on food, clothing, or basic household items. ..."
"... Challenges affording care also result in some Americans saying they have delayed or skipped care due to costs in the past year, including 27 percent who say they have put off or postponed getting health care they needed, 23 percent who say they have skipped a recommended medical test or treatment, and 21 percent who say they have not filled a prescription for a medicine. ..."
Mar 07, 2017 | economistsview.typepad.com
anne : March 06, 2017 at 11:40 AM , 2017 at 11:40 AM
http://kff.org/health-costs/poll-finding/data-note-americans-challenges-with-health-care-costs/

March 2, 2017

Americans' Challenges with Health Care Costs
By Bianca DiJulio, Ashley Kirzinger, Bryan Wu, and Mollyann Brodie

As lawmakers debate the future of the country's health care system and outline plans to repeal and replace the Affordable Care Act, much of the current debate surrounds how to change or eliminate the health insurance marketplaces developed under the ACA where individuals eligible for financial assistance could compare plans and purchase insurance. While this is an important source of coverage for some, the vast majority of Americans with insurance have coverage from other sources, such as an employer, Medicaid or Medicare, and the public's top priority for lawmakers is reducing what Americans pay for health care. Two recent Kaiser Health Tracking Polls take stock of the public's current experience with and worries about health care costs, including their ability to afford premiums and deductibles. For the most part, the majority of the public does not have difficulty paying for care, but significant minorities do, and even more worry about their ability to afford care in the future. Some of the key findings include:

Four in ten (43 percent) adults with health insurance say they have difficulty affording their deductible, and roughly a third say they have trouble affording their premiums and other cost sharing; all shares have increased since 2015.

Three in ten (29 percent) Americans report problems paying medical bills, and these problems come with real consequences for some. For example, among those reporting problems paying medical bills, seven in ten (73 percent) report cutting back spending on food, clothing, or basic household items.

Challenges affording care also result in some Americans saying they have delayed or skipped care due to costs in the past year, including 27 percent who say they have put off or postponed getting health care they needed, 23 percent who say they have skipped a recommended medical test or treatment, and 21 percent who say they have not filled a prescription for a medicine.

Even for those who may not have had difficulty affording care or paying medical bills, there is still a widespread worry about being able to afford needed health care services, with half of the public expressing worry about this.

Health care-related worries and problems paying for care are particularly prevalent among the uninsured, individuals with lower incomes, and those in poorer health; but women and members of racial minority groups are also more likely than their peers to report these issues....

Peter K. -> anne... , March 06, 2017 at 11:48 AM
"For example, among those reporting problems paying medical bills, seven in ten (73 percent) report cutting back spending on food, clothing, or basic household items."

That's what the neoliberals like our dear trolls kthomas and PGL want.

They're in the pocket of the lobbyists.

[Mar 07, 2017] Uncertainty and the Welfare Economics of Medical Care

Mar 07, 2017 | economistsview.typepad.com
anne -> anne... March 06, 2017 at 05:11 PM , 2017 at 05:11 PM
https://web.stanford.edu/~jay/health_class/Readings/Lecture01/arrow.pdf

December, 1963

Uncertainty and the Welfare Economics of Medical Care
By KENNETH J. ARROW

I. Introduction: Scope and Method

This paper is an exploratory and tentative study of the specific differentia of medical care as the object of normative economics. It is contended here, on the basis of comparison of obvious characteristics of the medical-care industry with the norms of welfare economics, that the special economic problems of medical care can be explained as adaptations to the existence of uncertainty in the incidence of disease and in the efficacy of treatment.

It should be noted that the subject is the medical-care industry, not health. The causal factors in health are many, and the provision of medical care is only one. Particularly at low levels of income, other commodities such as nutrition, shelter, clothing, and sanitation may be much more significant. It is the complex of services that center about the physician, private and group practice, hospitals, and public health, which I propose to discuss.

The focus of discussion will be on the way the operation of the medical-care industry and the efficacy with which it satisfies the needs of society differ from a norm, if at all. The "norm" that the economist usually uses for the purposes of such comparisons is the operation of a competitive model, that is, the flows of services that would be offered and purchased and the prices that would be paid for them if each individual in the market offered or purchased services at the going prices as if his decisions had no influence over them, and the going prices were such that the amounts of services which were available equalled the total amounts which other individuals were willing to purchase, with no imposed restrictions on supply or demand.

The interest in the competitive model stems partly from its presumed descriptive power and partly from its implications for economic efficiency. In particular, we can state the following well-known proposition (First Optimality Theorem)....

a

[Mar 07, 2017] Notes on US healthdoesntcare

Mar 07, 2017 | economistsview.typepad.com
libezkova : March 06, 2017 at 08:41 PM

The problems with US Healthdoesn'tcare started around 1980.

What we observe now (completely broken and corrupt to the core system) is the result of long term term slow deterioration.

Now the US Healthdoesn'tcare in many cases represent the completely opposite practice to healthcare -- health racket.

And they even created their specialized firms that help to extract maximum dollars for private providers.

An interesting example of how pervert the USA healthcare system became in the USA under neoliberalism is proliferation of private ambulance services which are technically are always "out of network" and after providing services (often non-essential and equal to the ride to ER, but mostly unavoidable as soon as 911 service or traffic police is involved, especially for those who are in this situation for the first time ) they bill an outrageous amount to lemmings who do not know how to fight the system.

Average private ambulance bill is probably around $5K in the USA. And that if this was just a ride to ER.

If you have insurance it will pay around the same as Medicare and your bill will be around ~$3.5K

This so called differential billing in now outlawed in a couple of states (CA, partially NY), but still is legal in most other states.

This industry also creates specialized collector agencies that deal almost exclusively with collecting ambulance bills like Revenue Guard - Ambulance Billing & Financial Management ( https://www.revenue-guard.com/). And look who is at the helm of this wonder of neoliberal health industry (pretty profitable -- currently bills over 120 million in revenue annually taking in probably lion share of that) -- James J. Loures, President & CEO

James began his career as a broker on Wall Street. In 1984 he left the financial world and founded MultiCare, which grew to be a largest private EMS operation in the Northeast operating 140 ambulances in the New Jersey, New York, and Philadelphia region.

Is not neoliberalism wonderful social system ?

So when somebody is taking about destruction of the US health care system by Trump one needs to understand that there is not much left to destruct. Most of the heavy lifting was done by previous administrations.

Including Obama with his coward method of betrayal of his voters and serving medical industrial complex.

Trump is bad, but to claim that because of that Obama was good is silly. He was just a perfect example of neoliberal "bait and switch" politician.

B.T. :
, March 06, 2017 at 07:51 PM
So it's like the ACA?

Or it's terrible?

Make up your minds neoliberals. Since you didn't want single payer.

libezkova -> B.T.... , March 06, 2017 at 09:12 PM
It's estimated that at least 3 percent of all health care spending – roughly $68 billion – is lost to fraud and billing errors annually. ( http://khn.org/morning-breakout/health-care-billing-errors/ )

"thousands of providers turned to more expensive Medicare billing codes, while spurning use of cheaper ones."

Private medical industry and insurance are symbiotic in their desire to milk patients out of their money in the most efficient way possible.

And while those "death panel" decisions are very difficult indeed, fraud is rampant and they are very successful in over-billing patients.

This symbiosis is very similar in nature to what we observe with body shops and car insurance.

[Mar 06, 2017] Something about the meaning of life under neoliberalism

Notable quotes:
"... Probably the most telling example on neoliberal transformation is transformation of healthcare. ..."
"... Mulligan's research shows how "market values come to displace competing notions of what is "good" or "right" in health care" (Mulligan 2010:308–309). She argues that quality in health care is not only a technical matter for evaluating the performance of systems, but, more importantly, it is a particular epistemology, a specific way of knowing. ..."
"... Managing for-profit health care systems successfully requires innovative mechanisms of population control (Abadía-Barrero et al. 2011), including people's acceptance of market principles. ..."
"... In this historical context, what is crucial is the understanding of the relationship between techniques of governance and the production of social inequality (i.e., an ideological domination reflected in people's support for political practices that are antithetical to their interests). ..."
"... James began his career as a broker on Wall Street. In 1984 he left the financial world and founded MultiCare, which grew to be a largest private EMS operation in the Northeast operating 140 ambulances in the New Jersey, New York, and Philadelphia region. ..."
Mar 03, 2017 | economistsview.typepad.com
libezkova : March 03, 2017 at 03:51 PM
Something about the "meaning of life" under neoliberalism

Probably the most telling example on neoliberal transformation is transformation of healthcare.

http://onlinelibrary.wiley.com/doi/10.1111/maq.12161/full

== quote ==

Several anthropologists have written about how "market ideology and corporate structures are shaping medicine and health care delivery" (Horton et al. 2014; Lamphere 2005; Rylko-Bauer and Farmer 2002:476).

Mulligan's research shows how "market values come to displace competing notions of what is "good" or "right" in health care" (Mulligan 2010:308–309). She argues that quality in health care is not only a technical matter for evaluating the performance of systems, but, more importantly, it is a particular epistemology, a specific way of knowing.

The information that is produced in technical public health policy terms, and, I would add, in technical legal terms, is "a knowledge-making practice that creates information about the health care system and for managing the system in new ways" (Mulligan 2010:309).

Managing for-profit health care systems successfully requires innovative mechanisms of population control (Abadía-Barrero et al. 2011), including people's acceptance of market principles.

In this historical context, what is crucial is the understanding of the relationship between techniques of governance and the production of social inequality (i.e., an ideological domination reflected in people's support for political practices that are antithetical to their interests).

According to Fassin (2009), Foucault's undeveloped concept of a Politics of Life can illuminate how in regulating populations and normalizing societies, moral ideas about the meaning of life and about how life is valued are enforced.

An understanding of moral definitions of human life must take into account how history becomes embodied, which then illuminates the political tensions that support differential values by which life is organized, represented, and responded to, for example through public policy (Fassin 2007).

== end of quote ==

See also

https://www.youtube.com/watch?v=TsoZeg6CDRY

An interesting example of how pervert the healthcare system became in the USA under neoliberalism is proliferation of private ambulance services which are technically always "out of network" and after providing services (often non-essential) bill outrageous amount to lemmings who do not know how to fight the system. Average private ambulance bill is probably around $5K in the USA. If you have insurance your bill will be around ~$3.5K

This so called differential billing in now outlawed in a couple of states, but still is legal in most states.

This industry also creates specialized collector agencies that deal almost exclusively with collecting ambulance bills like Revenue Guard - Ambulance Billing & Financial Management ( https://www.revenue-guard.com/)

== quote ==

Revenue Guard Executive Team

James J. Loures, President & CEO
James began his career as a broker on Wall Street. In 1984 he left the financial world and founded MultiCare, which grew to be a largest private EMS operation in the Northeast operating 140 ambulances in the New Jersey, New York, and Philadelphia region. After merging MultiCare with the publicly traded Rural-Metro in 2001, James then founded Revenue-Guard in 2004. The company has grown to be a premier provider of EMS revenue cycle and management services in the hospital marketplace, and currently bills over 120 million in revenue annually for their clients. James studied economics at Rutgers University .

Steven J. Loures, Co-Founder and Chief Operations Officer
Steven Loures has 30 years of experience in the Emergency Medical Services / Mobile Health Services field and is considered an expert in revenue cycle, compliance and improving ambulance service operating margins. His real-world revenue cycle knowledge combined with 20 years of managing ambulance operations uniquely differentiates himself with a comprehensive industry perspective. His leadership has provided client confidence to initiate targeted change knowing his proven track record. He is the point of contact for all new and existing clients.

Prior to his current role Steven was the New Jersey Division General Manager of Rural Metro Ambulance. Rural Metro is a large nationwide provider of Emergency Medical Services. He was responsible for oversight of 350 employees, 6 operating locations in three states including New Jersey, Pennsylvania and New York City. Additionally, Steven's responsibilities included all budgets, revenue cycle management, billing compliance, and Sarbanes Oxley financial controls.

Prior to Rural Metro Steven was a Commercial Lear Jet Pilot. The operation provided nationwide long distance critical care air ambulance services. Steven graduated from Embry-Riddle Aeronautical University, Daytona Beach Florida with his Federal Aviation Administration Commercial, Multi-Engine, and Instrument ratings. Early in his career path Steven was a certified NJ paramedic at age 21 and one of the youngest certified paramedics in New Jersey.

Stephanie Dall, Vice President of Finance
Stephanie joined Revenue-Guard in 2005 and is responsible for Finance, Administration, Compliance and client reporting. She has 20 years experience in finance and administration with Rural-Metro Inc. the leading EMS provider in the nation. Stephanie develops budgets and establish performance metrics for Revenue-Guard. Stephanie has a bachelors degree in accounting from Rutgers University.

Jennifer Aldana, Vice President of Revenue Cycle
Jennifer joined Revenue-Guard in 2007 to manage and run the billing services division. She manages a staff of 60 billing specialist processing over $120M in ambulance claims annually. Jennifer is a former revenue cycle manager at Rural-Metro The country's largest EMS service based in Scottsdale, Arizona. She handles all system customizations, ePCR integration and client support services. Jen studied at Pace University in New York City.

[Mar 03, 2017] U.S. Medical Coding System

Notable quotes:
"... Successful medical coders learn and follow coding guidelines and use them to their benefit. Often if a claim is denied incorrectly, medical coders and billers use coding guidelines as a way to appeal the denial and get the claim paid. ..."
"... Each diagnosis code has to be coded to the highest level of specificity , so the insurance company knows exactly what the patient's diagnosis was. ..."
"... I've helpfully underlined places where an "unusual opportunity for profit" might be spotted and amplified; after all, it's not the coder's job to set policy in borderline cases; that's for management. ..."
"... A pair of transposed digits in a medical identification number was the difference between insurance coverage for Mike Dziedzic and the seemingly never-ending hounding for payment by the hospitals that cared for his dying wife. The astute eye of a medical billing advocate who Dziedzic hired for help caught the innocuous mistake - the sole reason his insurance company had refused to pay more than $100,000 in claims that had piled up and why collectors were now at his doorstep. ..."
"... Had it remained unnoticed - as often happens to patients faced with daunting medical debt - Dziedzic said, he most surely would have lost his Rifle home, his way of life and had little choice but to live in bankruptcy. ..."
"... thousands of providers turned to more expensive Medicare billing codes, while spurning use of cheaper ones. They did so despite little evidence that Medicare patients as a whole are older or sicker than in past years, or that the amount of time doctors spent treating them on average was rising. ..."
"... More than 7,500 physicians billed the two top paying codes for three out of four office visits in 2008, a sharp rise from the numbers of doctors who did so at the start of the decade. Officials said such changes in billing can signal overcharges occurring on a broad scale. Medical groups deny that. ..."
"... The most lucrative codes are billed two to three times more often in some cities than in others, costly variations government officials said they could not explain or justify. In some instances, higher billing rates appear to be associated with the burgeoning use of electronic medical records and billing software. ..."
"... eight of 10 bills its members have audited from hospitals and health care providers contain errors. ..."
"... It's estimated that at least 3 percent of all health care spending – roughly $68 billion – is lost to fraud and billing errors annually. ..."
"... Accounts of medical billing errors vary widely. While the American Medical Association estimated that 7.1 percent of paid claims in 2013 contained an error, a 2014 NerdWallet study found mistakes in 49 percent of Medicare claims. Groups that review bills on patients' behalf, including Medical Billing Advocates of America and CoPatient, put the error rate closer to 75 or 80 percent. ..."
"... Most services don't get paid based on ICD, they get paid based on HCPCs/CPTs (healthcare procedure codes) which is what is shown in the nerdwallet image. Also revenue codes will be used for facility services (such as the room charge in image). ..."
"... ICD-Diaganosis codes just tell you what conditions the provider diagnosed you with. ICD-Procedure codes are sometimes used for payments but usually only on inpatient claims. ..."
Mar 03, 2017 | www.nakedcapitalism.com
From my review of Akerlof and Shiller's Phishing for Phools , November 25, 2015 :

As businesspeople choose what line of business to undertake - as well as where they expand, or contract, their existing business - they (like customers approaching checkout) pick off the best opportunities. This too creates an equilibrium. Any opportunities for unusual profits are quickly taken off the table, leading to a situation where such opportunities are hard to find. This principle, with the concept of equilibrium it entails, lies at the heart of economics.

The principle also applies to phishing for phools. That means that if we have some weakness or other - some way in which we can be phished for fools for more than the usual profit - in the phishing equilibrium someone will take advantage of it . Among all those business persons figuratively arriving at the checkout counter, looking around, and deciding where to spend their investment dollars, some will look to see if there are unusual profits from phishing us for phools. And if they see such an opportunity for profit, that will (again figuratively) be the "checkout lane" they choose.

And economies will have a "phishing equilibrium," in which every chance for profit more than the ordinary will be taken up.

We might summarize Akerlof and Shiller as "If a system enables fraud, fraud will happen," or, in stronger form, "If a system enables fraud, fraud will already have happened."[1] And as we shall see, plenty of "opportunities for unusual profits" exist in medical coding.

... ... ...

Here is the medical coding process, from the coders perspective, as described by MB-Guide, a site for aspiring medical coders :

Successful medical coders learn and follow coding guidelines and use them to their benefit. Often if a claim is denied incorrectly, medical coders and billers use coding guidelines as a way to appeal the denial and get the claim paid.

Hmm. "Their" benefit. Here are the guidelines:

I've helpfully underlined places where an "unusual opportunity for profit" might be spotted and amplified; after all, it's not the coder's job to set policy in borderline cases; that's for management. The Denver Post gives a horrific example:

Miscoding Fictions, frauds found to abound in medical bills

A pair of transposed digits in a medical identification number was the difference between insurance coverage for Mike Dziedzic and the seemingly never-ending hounding for payment by the hospitals that cared for his dying wife. The astute eye of a medical billing advocate who Dziedzic hired for help caught the innocuous mistake - the sole reason his insurance company had refused to pay more than $100,000 in claims that had piled up and why collectors were now at his doorstep.

Had it remained unnoticed - as often happens to patients faced with daunting medical debt - Dziedzic said, he most surely would have lost his Rifle home, his way of life and had little choice but to live in bankruptcy.

Finally, there's "upcoding," and if you are reminded of "upselling" you are exactly right. The Center for Public Integrity :

But the Center's analysis of Medicare claims from 2001 through 2010 shows that over time, thousands of providers turned to more expensive Medicare billing codes, while spurning use of cheaper ones. They did so despite little evidence that Medicare patients as a whole are older or sicker than in past years, or that the amount of time doctors spent treating them on average was rising.

More than 7,500 physicians billed the two top paying codes for three out of four office visits in 2008, a sharp rise from the numbers of doctors who did so at the start of the decade. Officials said such changes in billing can signal overcharges occurring on a broad scale. Medical groups deny that.

The most lucrative codes are billed two to three times more often in some cities than in others, costly variations government officials said they could not explain or justify. In some instances, higher billing rates appear to be associated with the burgeoning use of electronic medical records and billing software.

Now, I'll be the first to admit that I can't quantify the impedance mismatches, the miscoding, and the upcoding. Regardless, medical coding is the key dataflow in the healthcare system :

"Roughly $250 billion is moving through those codes," [says Steve Parente, professor of finance at the Carlson School of Management at the University of Minnesota]. On top of that, about 80% of medical bills contain errors, according to Christie Hudson, vice president of Medical Billing Advocates of America, making already-expensive bills higher. Today's complex medical-billing system, guided by hundreds of pages of procedure codes, allows fraud, abuse and human error to go undetected, Hudson says. "Until the fraud is detected in these bills the cost of health care is just going to increase. It's not accidental. We've been fighting these overcharges they continue to happen and we continue to get them removed from bills." These errors, which are hard to detect because medical bills are written in a mysterious code, can result in overcharges that run from a few dollars to tens of thousands.

That "mysterious code" is (now) ICD-10, and it's the mystery plus the profit motive that creates the phishing equilibrium. Kaiser Health News quotes the Denver Post :

Experts say there are tens of thousands more like Dziedzic across the country with strangling medical debts.

Medical Billing Advocates of America, a trade group in Salem, Va., says that eight of 10 bills its members have audited from hospitals and health care providers contain errors.

It's estimated that at least 3 percent of all health care spending – roughly $68 billion – is lost to fraud and billing errors annually. Some say new reform laws will only make things worse." Others say that errors occur largely because of "the complexity of deciphering bills and claims weighted down by complex codes."

Even if the "trade group" is talking it's book, it's still quite a book . NBC :

Accounts of medical billing errors vary widely. While the American Medical Association estimated that 7.1 percent of paid claims in 2013 contained an error, a 2014 NerdWallet study found mistakes in 49 percent of Medicare claims. Groups that review bills on patients' behalf, including Medical Billing Advocates of America and CoPatient, put the error rate closer to 75 or 80 percent.

Gee, I wonder if the errors are randomly distributed?

Neoliberal "Consumer"-Driven Solutions

My guts have started to gripe, so I won't go into detail about how you too, the citizen , can learn medical billing codes if you want to dispute your bill. See this cheery post from NerdWallet on "How to Read Your Medical Bill :

Once you have the itemized medical bill for your care, you're ready to analyze it for mistakes and overcharges.

Your medical bill is going to be chock-full of codes and words you may not understand, so the first step is gathering resources that will translate them into plain English.

Ivy , March 2, 2017 at 2:29 pm

One useful adjunct to the coding discussion concerns other billing details such as meds. There is wide variability in prices charged, and when you see $160 for a single pill (e.g., Hexabrix) or $26 for a single Tylenol, then something is not right. Of course, that does not include any allocation for nurses, pharmacy or other potential costs, since those are rolled into other line items to decipher. When hospital billing reps are asked about the reasonability and basis of their charges, they spout the canned line about being in line with their local competitors.

Why not have some program with mutual insurance companies, removing in theory some of the profit that is driving the typical health care insurers?

TheBellTolling , March 2, 2017 at 2:31 pm

Most services don't get paid based on ICD, they get paid based on HCPCs/CPTs (healthcare procedure codes) which is what is shown in the nerdwallet image. Also revenue codes will be used for facility services (such as the room charge in image).

ICD-Diaganosis codes just tell you what conditions the provider diagnosed you with. ICD-Procedure codes are sometimes used for payments but usually only on inpatient claims.

_________________________________

Additionaly, coding also affects "risk adjustment" in Medicare Advantage and ACA payments and this form of payment does use ICD codes. They use the codes on the claims to determine how "sick"(has conditions that will cost more) each member is and give insurers more or less money based on the average risk scores of their members. Since it relies on coding this system is also subject to gaming.

In Medicare Advantage this is done relative to non-Medicare Advantage population, so if the MA plans are upcoding they get more money from Federal government. In 2010 CMS was given the ability to use some adjustment factors to MA payments to address the issue but I don't really know how effective it is.

In ACA this is done relative to all the other insurers in the individual/small group market(so all the money is changing hands between the insurers). More established plans generally do better since they have more data on members from before ACA to make sure they get coded in addition to resources they probably built from Medicare Advantage. This ends up disadvantaging smaller and newer plans like co-ops.
_____________

[Mar 03, 2017] How to Read Your Medical Bill

Notable quotes:
"... That is not the bill you want. To know what you're actually being charged for, you'll want to call the clinic or hospital and ask for the complete, itemized bill for all services you received, with codes. It is your right to know what you're being charged for, but you will probably have to call and request the detailed charges. The body of that bill should look more like this: ..."
NerdWallet
Clerical errors are more likely than you might think, says Gross, who has seen small mistakes in names and addresses result in huge billing complications. Before you move on, make sure your name, address, insurance information and dates of care are correct on the top of the bill.

header

When you receive inpatient or outpatient care, the first statement you'll receive is most likely a summary bill. Often, but not always, health care providers will send only a summary of charges with a final charge at the end. The body of the bill has a few generic categories and no codes, looking something like this:

summarybill

That is not the bill you want. To know what you're actually being charged for, you'll want to call the clinic or hospital and ask for the complete, itemized bill for all services you received, with codes. It is your right to know what you're being charged for, but you will probably have to call and request the detailed charges. The body of that bill should look more like this:

detailed

Once you have the itemized medical bill for your care, you're ready to analyze it for mistakes and overcharges.

Next, know what the codes are for

Before we get into the nuts and bolts of reading your medical bill, it's worth noting that there's more than one type of code that may be listed on your bill.

svccode

HCPCS Level I, or CPT Codes, are universal, used by all providers in the U.S. and consist of five digits that identify procedures or tests. Often, they are listed as service codes.

svccode2

HCPCS Level II Codes identify supplies or products used during your visit. These codes often start with a letter, rather than a number, but are also referred to as service codes.

[Feb 27, 2017] Why Markets Can't Cure Healthcare

Feb 27, 2017 | economistsview.typepad.com
anne -> anne... February 26, 2017 at 02:07 PM , 2017 at 02:07 PM
http://krugman.blogs.nytimes.com/2009/07/25/why-markets-cant-cure-healthcare/

July 25, 2009

Why Markets Can't Cure Healthcare
By Paul Krugman

Judging both from comments on this blog and from some of my mail, a significant number of Americans believe that the answer to our health care problems - indeed, the only answer - is to rely on the free market. Quite a few seem to believe that this view reflects the lessons of economic theory.

Not so. One of the most influential economic papers of the postwar era was Kenneth Arrow's "Uncertainty and the Welfare Economics of Health Care," * which demonstrated - decisively, I and many others believe - that health care can't be marketed like bread or TVs. Let me offer my own version of Arrow's argument.

There are two strongly distinctive aspects of health care. One is that you don't know when or whether you'll need care - but if you do, the care can be extremely expensive. The big bucks are in triple coronary bypass surgery, not routine visits to the doctor's office; and very, very few people can afford to pay major medical costs out of pocket.

This tells you right away that health care can't be sold like bread. It must be largely paid for by some kind of insurance. And this in turn means that someone other than the patient ends up making decisions about what to buy. Consumer choice is nonsense when it comes to health care. And you can't just trust insurance companies either - they're not in business for their health, or yours.

This problem is made worse by the fact that actually paying for your health care is a loss from an insurers' point of view - they actually refer to it as "medical costs." This means both that insurers try to deny as many claims as possible, and that they try to avoid covering people who are actually likely to need care. Both of these strategies use a lot of resources, which is why private insurance has much higher administrative costs than single-payer systems. And since there's a widespread sense that our fellow citizens should get the care we need - not everyone agrees, but most do - this means that private insurance basically spends a lot of money on socially destructive activities.

The second thing about health care is that it's complicated, and you can't rely on experience or comparison shopping. ("I hear they've got a real deal on stents over at St. Mary's!") That's why doctors are supposed to follow an ethical code, why we expect more from them than from bakers or grocery store owners.

You could rely on a health maintenance organization to make the hard choices and do the cost management, and to some extent we do. But HMOs have been highly limited in their ability to achieve cost-effectiveness because people don't trust them - they're profit-making institutions, and your treatment is their cost.

Between those two factors, health care just doesn't work as a standard market story.

All of this doesn't necessarily mean that socialized medicine, or even single-payer, is the only way to go. There are a number of successful healthcare systems, at least as measured by pretty good care much cheaper than here, and they are quite different from each other. There are, however, no examples of successful health care based on the principles of the free market, for one simple reason: in health care, the free market just doesn't work. And people who say that the market is the answer are flying in the face of both theory and overwhelming evidence.

* https://web.stanford.edu/~jay/health_class/Readings/Lecture01/arrow.pdf

anne -> anne... , February 26, 2017 at 02:44 PM
Correcting again and continuing:

Though Krugman always praises the work of Arrow on healthcare markets, Krugman never seems much been influenced by the work.

Though praising Arrow on healthcare markets, Krugman seemingly has spent no time on or possibly has dismissed research affirming Arrow and has not supported the sorts of healthcare insurance systems that would follow from accepting the work of Arrow:

https://promarket.org/there-is-regulatory-capture-but-it-is-by-no-means-complete/
/
March 15, 2016

"There Is Regulatory Capture, But It Is By No Means Complete"
By Asher Schechter

Kenneth J. Arrow, one of the most influential economists of the 20th century, reflects on the benefits of a single payer health care system, the role of government and regulatory capture.

Mr. Bill : , February 26, 2017 at 03:32 PM
So Anne, what your saying is that "health care" is a monopolistic industry that makes more money by restricting care and charging more ? Allowing people that can't afford to live, too die?

Well. yes, I agree with your presumed hypothesis, and I admire your boldness for stepping out in front of this moving freight train, risking your beloved tenure.

To me ? Thanks for asking.

I think that the 3 % administrative costs of the existing single payer system are more pareto optimal than the 25 % that the monopolists' extract. What do I know. This is America. Dumb is not an option.

anne : , February 26, 2017 at 06:33 PM
Turning again to Kenneth Arrow and healthcare markets, assuming that Arrow was correct for all these years, and subsequent research repeatedly has confirmed Arrow, then a typical American market-based healthcare insurance system is going to prove unworkable. Why then has the work of Arrow which is at least superficially so broadly praised by economists not been more influential in forming policy?
libezkova -> anne... , February 26, 2017 at 07:12 PM
"It is difficult to get a man to understand something, when his salary depends on his not understanding it."

― Upton Sinclair, I, Candidate for Governor: And How I Got Licked

[Feb 26, 2017] Clowbacks to benefits manager is "It's like crack cocaine," said Susan Hayes, a consultant with Pharmacy Outcomes Specialists in Lake Zurich, Illinois. "They just can't get

Feb 26, 2017 | economistsview.typepad.com
im1dc : February 24, 2017 at 05:26 PM , 2017 at 05:26 PM
Real World Economics

"You're Overpaying for Drugs and Your Pharmacist Can't Tell You"

https://www.bloomberg.com/news/articles/2017-02-24/sworn-to-secrecy-drugstores-stay-silent-as-customers-overpay

"You're Overpaying for Drugs and Your Pharmacist Can't Tell You"

by Jared S Hopkins...February 24, 2017...9:52 AM EST

> Gag clauses stop pharmacists from pointing out a cheaper way

> Cigna, UnitedHealth and Humana face at least 16 lawsuits

"Eric Pusey has to bite his tongue when customers at his pharmacy cough up co-payments far higher than the cost of their low-cost generic drugs, thinking their insurance is getting them a good deal.

Pusey's contracts with drug-benefit managers at his Medicap Pharmacy in Olyphant, Pennsylvania, bar him from volunteering the fact that for many cheap, generic medicines, co-pays sometimes are more expensive than if patients simply pay out of pocket and bypass insurance. The extra money -- what the industry calls a clawback -- ends up with the benefit companies. Pusey tells customers only if they ask.

"Some of them get fired up," he said. "Some of them get angry at the whole system. Some of them don't even believe that what we're telling them is accurate."

Graphic

Clawbacks, which can be as little as $2 a prescription or as much as $30, may boost profits by hundreds of millions for benefit managers and have prompted at least 16 lawsuits since October. The legal cases as well dozens of receipts obtained by Bloomberg and interviews with more than a dozen pharmacists and industry consultants show the growing importance of the clawbacks.

"It's like crack cocaine," said Susan Hayes, a consultant with Pharmacy Outcomes Specialists in Lake Zurich, Illinois. "They just can't get enough."

The cases arrive at a critical juncture in the quarter-century debate over how to make health care more affordable in America. President Donald Trump is promising to lower drug costs, saying the government should get better prices and the pharmaceutical industry is "getting away with murder." The Pharmaceutical Care Management Association, a benefits-manager trade group, says it expects greater scrutiny over its role in the price of medicine and wants to make its case "vocally and effectively."
Racketeering Accusations

Suits have been filed against insurers UnitedHealth Group Inc., which owns manager OptumRx; Cigna Corp., which contracts with that manager; and Humana Inc., which runs its own. Among the accusations are defrauding patients through racketeering, breach of contract and violating insurance laws.

"Pharmacies should always charge our members the lowest amount outlined under their plan when filling prescriptions," UnitedHealthcare spokesman Matthew Wiggin said in a statement. "We believe these lawsuits are without merit and will vigorously defend ourselves."

Mark Mathis, a Humana spokesman, declined to comment. Matt Asensio, a Cigna spokesman, said the company doesn't comment on litigation.

"Patients should not have to pay more than a network drugstore's submitted charges to the health plan," Charles Cote, a spokesman for the Pharmaceutical Care Management Association, said in a statement.

Read more: Escalating U.S. drug prices -- a QuickTake explainer

Benefit managers are obscure but influential middlemen. They process prescriptions for insurers and large employers that back their own plans, determine which drugs are covered and negotiate with manufacturers on one end and pharmacies on the other. They have said their work keeps prices low, in part by pitting rival drugmakers against one other to get better deals.

The clawbacks work like this: A patient goes to a pharmacy and pays a co-pay amount -- perhaps $10 -- agreed to by the pharmacy benefits manager, or PBM, and the insurers who hire it. The pharmacist gets reimbursed for the price of the drug, say $2, and possibly a small profit. Then the benefits manager "claws back" the remainder. Most patients never realize there's a cheaper cash price.

"There's this whole industry that most people don't know about," said Connecticut lawyer Craig Raabe, who represents people accusing the companies of defrauding them. "The customers see that they go in, they are paying a $10 co-pay for amoxicillin, having no idea that the PBM and the pharmacy have agreed that the actual cost is less than a dollar, and they're still paying the $10 co-pay."

On Feb. 10, a customer at an Ohio pharmacy paid a $15 co-pay for 15 milligrams of generic stomach medicine pantoprazole that the pharmacist bought for $2.05, according to receipts obtained by Bloomberg. The pharmacist was repaid $7.22, giving him a profit of $5.17. The remaining $7.78 went back to the benefits manager.
Opaque Market

Clawbacks are possible because benefit managers take advantage of an opaque market, said Hayes, the Illinois consultant. Only they know who pays what.

In interviews, some pharmacists estimate clawbacks happen in 10 percent of their transactions. A survey by the more than 22,000-member National Community Pharmacists Association found 83 percent of 640 independent pharmacists had at least 10 a month.

"I've got three drugstores, so I see a lot of it," David Spence, a Houston pharmacist, said in an interview. "We look at it as theft -- another way for the PBMs to steal."

Lawsuits began in October in multiple states, and some have since been consolidated. Most cite an investigation by New Orleans television station Fox 8, which featured interviews with Louisiana pharmacists whose faces and voices were obscured.
Tight Restrictions

Many plans require pharmacies to collect payment when prescriptions are filled and prohibit them from waiving or reducing the amount. They can't even tell their customers about the clawbacks, according to the suits. Contracts obtained by Bloomberg prohibit pharmacists from publicly criticizing benefit managers or suggesting customers obtain the medication cheaper by paying out of pocket.

Pharmacists who contract with OptumRx in 2017 could be terminated for "actions detrimental to the provider network," doing anything that "disparages" it or trying to "steer" customers to other coverage or discounted plans, according to an agreement obtained by Bloomberg.

"They're usually take-it-or-leave-it contracts," said Mel Brodsky, who just retired as chief executive officer of Pennsylvania's Keystone Pharmacy Purchasing Alliance, which buys drugs on behalf of independent pharmacies.

OptumRx is among the three largest benefit managers that combine to process 80 percent of the prescriptions in the U.S. The other two, Express Scripts Holding Co. and CVS Caremark, haven't been accused of clawbacks. CVS doesn't use them, it said in a statement. Express Scripts is so opposed that it explains the practice on its website and promises customers will pay the lowest price available.
Potential Death Blow

Pharmacies fear getting removed from reimbursement networks, a potential death blow in smaller communities. But some pharmacists jump at opportunities to inform customers who question their co-pay amounts.

"Most don't understand," said Spence, who owns two pharmacies in Houston. "If their co-pay is high, then they care."

States are responding. Last year, Louisiana began allowing pharmacists to tell customers how to get the cheapest price for drugs, trumping contract gag clauses. In 2015, Arkansas prohibited benefit managers and pharmacies from charging customers more than the pharmacy will be paid.

"The consumers don't know what's going on," said Steve Nelson, a pharmacist in Okeechobee, Florida. "We try to educate them with regards to what goes into a prescription, OK? You've got to kind of tip-toe around things."

ilsm -> im1dc... , February 24, 2017 at 07:08 PM
pharma to USG

like drug cartel in Mexico

except no briefcases

im1dc -> ilsm... , February 24, 2017 at 07:47 PM
That's a valid observation.

[Feb 19, 2017] As Democrats stare down eight years of policies being wiped out within months, but those policies did virtually nothing for their electoral success at any level.

Notable quotes:
"... This point has been made before on Obamacare, but the tendency behind it, the tendency to muddle and mask benefits, has become endemic to center-left politics. Either Democrats complicate their initiatives enough to be inscrutable to anyone who doesn't love reading hours of explainers on public policy, or else they don't take credit for the few simple policies they do enact. Let's run through a few examples. ..."
"... missed the point the big winner is FIRE. ACA should have been everyone in medicare, and have medicare run Part B not FIRE. Obamcare is welfare for FIRE, who sabotage it with huge deductibles and raging rises in premium.. ..."
Feb 19, 2017 | economistsview.typepad.com
Peter K. -> Chris G ... , February 18, 2017 at 07:35 AM
via J.W. Mason (lots of F-bombs!):

http://democracyjournal.org/arguments/keep-it-simple-and-take-credit/

Keep It Simple and Take Credit

BY JACK MESERVE
FROM FEBRUARY 3, 2017, 5:42 PM

As Democrats stare down eight years of policies being wiped out within months, it's worth looking at why those policies did virtually nothing for their electoral success at any level. And, in the interest of supporting a united front between liberals and socialists, let me start this off with a rather long quote from Matt Christman of Chapo Trap House, on why Obamacare failed to gain more popularity:

There are parts to it that are unambiguously good - like, Medicaid expansion is good, and why? Because there's no f!@#ing strings attached. You don't have to go to a goddamned website and become a f@!#ing hacker to try to figure out how to pick the right plan, they just tell you "you're covered now." And that's it! That's all it ever should have been and that is why - [Jonathan Chait] is bemoaning why it's a political failure? Because modern neoliberal, left-neoliberal policy is all about making this shit invisible to people so that they don't know what they're getting out of it.

And as Rick Perlstein has talked about a lot, that's one of the reasons that Democrats end up f!@#$ing themselves over. The reason they held Congress for 40 years after enacting Social Security is because Social Security was right in your f!@ing face. They could say to you, "you didn't used to have money when you were old, now you do. Thank Democrats." And they f!@#ing did. Now it's, "you didn't used to be able to log on to a website and negotiate between 15 different providers to pick a platinum or gold or zinc plan and apply a f!@#$ing formula for a subsidy that's gonna change depending on your income so you might end up having to retroactively owe money or have a higher premium." Holy shit, thank you so much.

This point has been made before on Obamacare, but the tendency behind it, the tendency to muddle and mask benefits, has become endemic to center-left politics. Either Democrats complicate their initiatives enough to be inscrutable to anyone who doesn't love reading hours of explainers on public policy, or else they don't take credit for the few simple policies they do enact. Let's run through a few examples.

...

ilsm -> Peter K.... , February 18, 2017 at 12:47 PM
missed the point the big winner is FIRE. ACA should have been everyone in medicare, and have medicare run Part B not FIRE. Obamcare is welfare for FIRE, who sabotage it with huge deductibles and raging rises in premium..

[Jan 23, 2017] Consumer Guide to Health Care - Coping with Medical Bills and Debt Wisconsin Department of Health Services

Notable quotes:
"... Record the names and phone numbers of the people you are dealing with. ..."
"... Document the date, time, and results of your phone calls. ..."
"... Pay something - even a small amount - on each bill each month as a gesture of good faith. ..."
"... Be aware, though, that some services charge high fees and do nothing to really help reduce your debt. ..."
"... Don't ignore bills. Though tempting, this is not a good strategy. Hospitals and providers are more likely to negotiate with you if you contact them immediately. ..."
"... Don't transfer debt to a credit card. Most experts warn that this is a poor choice for paying off medical debt ..."
Jan 23, 2017 | dhs.wisconsin.gov
Unless you have successfully challenged your bill, you are responsible for paying all of your medical bills. If you cannot pay, here are some things to consider.
  1. Try to negotiate a payment plan. Your hospital or provider may be willing to accept smaller monthly payments. Keep in mind that your payments generally need to be reasonable and you must keep up with your payments. In its advice to parents of chronically ill children (link is external) , the American Academy of Family Physicians recommends the following:
    • Notify the appropriate offices quickly.
    • Keep in touch with your creditors.
    • Record the names and phone numbers of the people you are dealing with.
    • Document the date, time, and results of your phone calls.
    • Pay something - even a small amount - on each bill each month as a gesture of good faith.
  2. Get information on charity care in Wisconsin hospitals.
  3. Apply for Wisconsin Medicaid or BadgerCare Plus . If you are eligible, Medicaid may pay for some of your existing medical bills. Wisconsin Medicaid coverage can begin as early as the first day of the month, three months before the month you apply, if you would have been eligible in those months, so apply as soon as possible.
  4. Go for credit counseling. Be aware, though, that some services charge high fees and do nothing to really help reduce your debt. Make sure you are working with a credit counseling service (also known as an adjustment service agency) that is licensed by the Wisconsin Department of Financial Institutions.
  5. Be creative about finding help from outside sources. Charitable foundations, civic organizations and churches and community groups might be able to help. The Patient Pal (link is external) (PDF, 197 KB) from the Patient Advocate Foundation (link is external) includes some fundraising ideas for those with high medical bills.
  6. Don't ignore bills. Though tempting, this is not a good strategy. Hospitals and providers are more likely to negotiate with you if you contact them immediately.
  7. Don't transfer debt to a credit card. Most experts warn that this is a poor choice for paying off medical debt for two reasons:
    • The interest rates on your credit card will add significantly to your total payment.
    • Transferring medical debt to a credit card may affect your eligibility for Medicaid. Some medical costs can be deducted from gross income to determine your Medicaid eligibility. Medical debt on a credit card may no longer qualify as medical debt.
Dealing with collection agencies

If your hospital or other health care provider has turned your bill over to a collection agency, you are protected against harassment by the Fair Debt Collection Practices Act (FDCPA).

If you have questions about your rights or the conduct of a collection agency, contact the Department of Financial Institutions at (608) 264-7969, or 1-800-452-3328 (in Wisconsin only).

Bankruptcy The decision to file for bankruptcy should be last resort. More (PDF, 129 KB) information on how bankruptcy works and the different types (link is external) is available from the Wisconsin Department of Agriculture, Trade and Consumer Protection.

Legal help

If you find that you need legal help to deal with your medical debt, the Wisconsin State Bar Association's website provides general information on finding a lawyer (link is external) and information on finding a lawyer if you have a low income (link is external) .

The Legal Services Corporation (link is external) , a private, non-profit corporation established by Congress, provides a list of Wisconsin local legal aid programs (link is external) from its website.

[Jan 23, 2017] Medical Debt Collections –Unexpected Health Problems Costs

Jan 23, 2017 | www.debt.org

Medical debt collectors must abide by specific regulations, as set forth by the Fair Debt Collection Practices Act . Collectors cannot harass or lie to debtors, or perform any other practices deemed unfair.

[Jan 23, 2017] Medical Debt Collection

You can get a free Kindle version of "Debt Collection Answers" ebook on Amazon here .
Notable quotes:
"... We have heard from consumers who first hear about a medical bill from a collection agency. There is no federal law that protects you from this type of situation. ..."
Jan 23, 2017 | www.debtcollectionanswers.com
Having even a small medical debt reported as past due or in collections can seriously damage your credit history, you may be tempted to pay just to protect your credit.

Some medical providers may even try to pressure you into paying your debt owe by refusing to provide you (or one of your family members) with additional medical care until you do. Some of them may even refuse you future care while you are paying off your debt through an installment plan! Others may have a policy that as long as you owe them money, you must pay up-front for all future medical services they provide to you.

Warning: Aggressive medical providers can be a special problem for seniors living on fixed incomes when their spouses have been hospitalized or have accumulated a large outstanding bill with one or more of their doctors.


When Can I Be Sent to Collections On a Medical Bill?

If at all possible, you want to keep a medical bill out of collections. Once it is turned over to a collection agency, it will likely appear on your credit reports as a collection account and damage your credit rating.

Your medical debt may be turned over to collections:

How can you protect yourself from medical debt collection? Don't ignore medical bills. Talk to the medical provider. Get everything in writing, or follow up in writing yourself

... ... ...

If You Have Insurance and Your Insurer Refuses to Pay All or a Portion of Your Medical Bills

It's not unusual for health insurers to deny coverage for medical care. If that happens to you and you believe that the care should be covered, or if your insurer pays some but not all of your medical bill and you believe it should cover the entire bill, here's what we recommend:

[Jan 23, 2017] In debt and afraid: dealing with debt collectors

Notable quotes:
"... The CFPB says debt collection is a multi-billion dollar industry affecting 70 million consumers. People are most often contacted about medical and credit card debt. And more consumers complain to the CFPB about debt collection than any other financial product or service. ..."
"... Debt collectors can contact you by phone, letter, email or text message, as long as they follow the rules and disclose that they are debt collectors. It's against the law for a debt collector to pretend to be someone else to harass, threaten or deceive you. ..."
"... Collectors cannot lie to collect a debt, by falsely representing themselves or the amount you owe. And other than trying to obtain information about you, such as a telephone number or whereabouts, a debt collector generally is not permitted to discuss your debt with anyone other than you, your spouse, or your attorney. ..."
"... Also when you pay them off keep the document marked paid in full or zero balance or whatever else the send you on file including your financial proof (canceled check, money order, credit card receipt) keep it until you die! ..."
"... Debt industry buys billions of dollars of dead debt. 90% does end up as default judgement because scared debtors do not have the money to hire a attorney or do not know what to do. The other 10% of debtors who hire attorneys are off the hook. ..."
"... Consumer debts are self inflicted foolishness, medical debts aren't, but just goes to show the Empire is ran by business interests who refuse to allow any type of universal medical and have installed a system that allows them profits for illness and death ..."
Jan 23, 2017 | finance.yahoo.com
Sarah Skidmore Sell, AP Personal Finance Writer

It's a scary place to be - in debt and afraid.

A new Consumer Financial Protection Bureau report found that more than one in four consumers felt threatened when contacted by debt collectors. The first-ever national survey of consumer experiences with debt collectors found consumers often faced calls that came too often, at odd hours and contained warnings of jail time and other threats. Some were contacted for debts they didn't owe. And many said when they asked the collector to stop contacting them, the request was ignored.

CFPB Director Rich Cordray said the report casts a "troubling light" on the industry, and that the bureau is working to stop abuses. But what are your rights when facing off with a debt collector?

A few things to know:

YOU ARE NOT ALONE

The CFPB says debt collection is a multi-billion dollar industry affecting 70 million consumers. People are most often contacted about medical and credit card debt. And more consumers complain to the CFPB about debt collection than any other financial product or service.

The Federal Trade Commission, which enforces the Fair Debt Collection Practices Act, also said debt collectors generate more complaints to its offices than any other industry. While many debt collectors are careful to comply with consumer protection laws, some engage in illegal practices.

YOU ARE PROTECTED

The Fair Debt Collection Practices Act provides protection for those being pursued for personal debts, such as money owed on a credit card account, an auto loan or a mortgage. It doesn't cover debts incurred to run a business.

YOU HAVE RIGHTS

Debt collectors can contact you by phone, letter, email or text message, as long as they follow the rules and disclose that they are debt collectors. It's against the law for a debt collector to pretend to be someone else to harass, threaten or deceive you.

They may not contact you at inconvenient times or places, such as early in the morning or late at night. And they may not contact you at work if they're told not to.

Debt collectors may not harass, oppress, or abuse you, according to the FTC. That includes threats of violence or using obscene language. Federal law also limits the number of calls a debt collector can place.

Collectors cannot lie to collect a debt, by falsely representing themselves or the amount you owe. And other than trying to obtain information about you, such as a telephone number or whereabouts, a debt collector generally is not permitted to discuss your debt with anyone other than you, your spouse, or your attorney.

YOU CAN TAKE ACTION

Report any problems you have with a debt collector to your state Attorney General's office, the Federal Trade Commission and the Consumer Financial Protection Bureau. Many states have their own debt collection laws that vary from federal law, so contact your attorney general's office for help.

Gary G

They are debt collectors the lowest form of bottom feeding #$%$ on the planet.step one, NEVER tell them any personal information whatsoever.step two, get a phone number and case number so you can call them back.step three call them from a phone that can record the conversation (theres an app for that)step three, call them when you are really ready to talk to them Inform them the call is being recorded. let them know clearly what forms of contact are and are not acceptable.step four, get the pertinent information about the debt including the debtor any account numbers and any settlement offers they have. Still NEVER give away any personal information. once you have all the information you need end the call, if at any time during the call you feel you are being harassed or intimidated inform them it is not acceptable (remember you are recording the conversation) and terminate the call. call back later.Now you are in control and can make informed decisions.If at some point you want/need to work out a settlement NEVER finalize anything on the phone, GET IT IN WRITING. NEVER, agree to give them your credit card or banking information under any circumstances!!!once you make an arrangement keep the printed document with the arrangement on file for the rest of your life.

Also when you pay them off keep the document marked paid in full or zero balance or whatever else the send you on file including your financial proof (canceled check, money order, credit card receipt) keep it until you die!

steven

Based on personal experience, the worst debt collectors are of the medical variety. Two years of a fatal ovarian cancer case overwhelmed not only my finances, but jeopardized my mental health as well. The only thing that kept me going was the necessity of showing up for work, and the support of coworkers and (may I say this?) my managers as well.

Mark

Consumer Financial Protection Bureau will be gutted under the GOP agenda. So the next time some cable company, Wall Street bank, or some other huge corporation screws you over, you'll have no recourse and you'll be on your own.

pfk

I find tgheses stories and the ads on TV (If you owe $1000 to IRS..., If you have more than $5,00 credit card debt, Reduce $50,00 debt to $5000..., etc) to e morally contemptible. If you cannot afford something do not buy it; if you have a job, pay your IRS taxes, etc. I'm tired paying extra for everything I buy or do for these people who spend and expect someone else (me) to pay.

a

hogwash! To scare off a junk debt buyer attorney all you need to do is make one call to your attorney. Many of you collectors "start fake lawsuits" to coerce debtors to pay. With no filing numbers, court stamps, etc... Once the debtor's attorney files a 'notice of appearance' and asks for a real lawsuit/trial, what happens? The creditor never files the lawsuit. Why? Because the junk debt buyer has to PROVE IT. The JDB creditor has no original contract signed to prove the debt exists, no chain of assignment/invoice to show they have standing to sue (own the debt) nor the account statements to verify what is owed. They are hoping at best for default judgements.

Debt industry buys billions of dollars of dead debt. 90% does end up as default judgement because scared debtors do not have the money to hire a attorney or do not know what to do. The other 10% of debtors who hire attorneys are off the hook. You see Junk Debt Buyers buy debt with no contract signed by debtors, have no invoice they even own this particular debt in detail and no account statements to verify correct amount owed.

So debtors, beware, pay the few hundred dollars to your attorney to ask for a lawsuit and notice of appearance and see how fast that debt collector disappears. 99% of junk debt buyers/creditors buy unwarranted debt and CAN NOT PROVE IT IN COURT. There is a disclaimer on the debt stating there is no contract, invoice that it is sold nor account statements offered.

Just sue these junk debt buyers and they go away. If they sell the debt to another JDB again sue again and they drop the debt again. Resold debt has even less chance of winning in court because even less proof is available every time it is sold.

But DO NOT AVOID the fake lawsuit. If you do the creditor gets the default judgement and will garnish wages, lien your house, and will win. Now if the original creditor files the lawsuit you will most likely lose and owe (they have all the proof in their records). So in this case make a settlement offer of lump sum repay or payments you can afford.

Call me scum or whatever but I have used this strategy and it works. After a few decades of paying usurious interest rates I have some cash finally coming back; and no need to file bankruptcy. After 7 years it drops off your credit report and credit score goes way up. Make it anywhere to 4-7 years (depending on your state law timeframe) and the statute of limitations kicks in and money not legally owed any longer. Just do not make any payments on it to renew statute of limitations. No problems! Hell I gambled the money away anyway, how was I suppose to get it back -Ha, Ha. Joke was on the JDB in my case!

Gregory

Very poor article. Take it from some one who was being threatened for some one else's debt. A certified letter to the debt collector explaining you do not owe the debt means that once they receive the letter they can no longer contact you.

Violation of that law carries a 10,000 dollar fine. If the amount is in dispute the same tactic works, except they can contact you with the proof of what you owe. A lot times this involves too much work and they do not pursue it. So if they do not pursue it once the Statute of Limitations is over the debt can no longer be collected.

The limit varies by State Law and amount. Finally be aware that uncollected debts are often sold and the new "owner" of the debt may try to collect on it. Again a certified letter stops them as you have proof of notification that the debt is not owed. I hope this helps the victims out there.

Chub

Buying debt has become a large industry that attracts a lot of crooks. Companies buy debt for as little as a dime on the dollar! The original lender benefits because they are getting a little something out of a debt that they have no hope of collecting. The buyer of the debt benefits because the potential profit is very

Many of the people buying debt aren't your traditional debt collection agency. They are many times just an individual with a cell phone who could bend the rules because they can change their name and location as easy as you can report their activity. Many times you are just dealing with thugs with cellphones. If you owe them, don't be afraid to offer a lesser amount because they had bought the debt so cheap that they may still make a pretty good profit.

Chief_blamestormer

Realize that some debtors never borrowed a dime. It could be the result of a civil judgement. If you think all civil judgements are fair, then have a look at the cases in your local courthouse, or serve a couple rounds of jury duty.

W, 19 hours ago

Industry? There's nothing industrious about. Bill collectors are mostly thugs who can't get real jobs so they have to leverage their values off other people's misery. Consumer debts are self inflicted foolishness, medical debts aren't, but just goes to show the Empire is ran by business interests who refuse to allow any type of universal medical and have installed a system that allows them profits for illness and death , which is similar to a developing country, not a developed superpower.

[Jan 16, 2017] Trump said he will target pharmaceutical companies over drug prices and demand that they negotiate directly with Medicaid and Medicare.

Jan 16, 2017 | economistsview.typepad.com

pgl -> Fred C. Dobbs... , January 16, 2017 at 05:57 AM

If Trump is serious about what he said - expect a real battle with Speaker Ryan.
DeDude -> pgl... , January 16, 2017 at 06:57 AM
That may be exactly what Trump is counting on. Trump is a classic bully, he gets back at people (to make an example and reduce future "resistance"). It would be very difficult for the GOP to fight with Trump publicly in the first year. Question is what his specifics are. He may even be able to get bipartisan support and split the GOP, the way Bush did with his prescription drug plan for seniors.
reason -> DeDude... , January 16, 2017 at 07:35 AM
Trump doesn't do details. Details are for little people.
libezkova -> DeDude... , January 16, 2017 at 07:44 AM
Crushing Speaker Ryan is not bulling per se. This is a great service for the country.

He is definitely out of touch with reality.

Peter K. -> Fred C. Dobbs... , January 16, 2017 at 05:55 AM
"We're going to have insurance for everybody," Mr. Trump said. "There was a philosophy in some circles that if you can't pay for it, you don't get it. That's not going to happen with us."

In the interview, Mr. Trump provided no details about how his plan would work or what it would cost. He spoke in the same generalities that he used to describe his health care goals during the campaign - that it would be "great health care" that left people "beautifully covered."

Single payer!

ilsm -> Peter K.... , January 16, 2017 at 06:10 AM
Trump would have to sell it, but in the past he has praised European style single payer, but said it would be a hard sell in the US.

If Nixon could go to China.

MLK would observe "if US can pay to gut the world, it can afford a little for the home front".

Peter K. -> ilsm... , January 16, 2017 at 06:52 AM
"Beautifully covered."

Can't wait!

Fred C. Dobbs -> Fred C. Dobbs... , January 16, 2017 at 06:00 AM
The GOP's strategy for Obamacare? Repeal and run.
http://www.bostonglobe.com/opinion/2017/01/15/gop-strategy-for-aca-repeal-and-run/aCcjrJWQDjx4r4aRxkMCaL/story.html?event=event25 via @BostonGlobe
Elizabeth Warren - January 15, 2017

For eight years, Republicans in Congress have complained about health care in America, heaping most of the blame on President Obama. Meanwhile, they've hung out on the sidelines making doomsday predictions and cheering every stumble, but refusing to lift a finger to actually improve our health care system.

The GOP is about to control the White House, Senate, and House. So what's the first thing on their agenda? Are they working to bring down premiums and deductibles? Are they making fixes to expand the network of doctors and the number of plans people can choose from? Nope. The number one priority for congressional Republicans is repealing the Affordable Care Act and breaking up our health care system while offering zero solutions.

Their strategy? Repeal and run.

Many Massachusetts families are watching this play out, worried about what will happen - including thousands from across the Commonwealth that I joined at Faneuil Hall on Sunday to rally in support of the ACA. Hospitals and insurers are watching too, concerned that repealing the ACA will create chaos in the health insurance market and send costs spiraling out of control.

They are right to worry. Massachusetts has worked for years to provide high-quality, affordable health care for everyone. But there's no magic wand we can wave to simply snap back to our old system if congressional Republicans decide to rip up the Affordable Care Act and run away.

Health care reform in Massachusetts wasn't partisan. Democrats, Republicans, business leaders, hospitals, insurers, doctors, and consumers all came together behind a commitment that every single person in our Commonwealth deserves access to affordable, high-quality care. When Republican Governor Mitt Romney signed Massachusetts health reform into law in 2006, our state took huge strides toward offering universal health care coverage and financial security to millions of Bay State residents.

That law was a major step forward. Today, more than 97 percent of Bay Staters are covered - the highest rate of any state in the country.

But Massachusetts still has a lot to lose if the ACA is repealed. One big reason for our state's health care success is that we took advantage of the new opportunities offered under the ACA. In addition to making care more accessible and efficient, our state expanded Medicaid, using federal funds to help even more people. And we combined federal and state dollars to help reduce the cost of insurance on the Health Connector.

When the ACA passed, Massachusetts already had in place some of the best consumer protections in the nation. But the ACA still made a big difference. It strengthened protections for people in Massachusetts with pre-existing conditions, allowed for free preventive care visits, and - for the first time in our state - banned setting lifetime caps on benefits.

If the ACA is repealed, our health care system would hang in the balance. Half a million people in the Commonwealth would risk losing their coverage. People who now have an iron-clad guarantee that they can't be turned away due to their pre-existing conditions or discriminated against because of their gender could lose that security. Preventive health care, community health centers, and rural hospitals could lose crucial support. In short, the Massachusetts health care law is a big achievement and a national model, but it also depends on the ACA and a strong partnership with the federal government.

If the cost-sharing subsidies provided by the ACA are slashed to zero, Massachusetts will have a tough time keeping down the cost of plans on the Health Connector. The state can't make funds appear out of thin air to help families on the Medicaid expansion if Republicans yank away support. And our ability to address the opioid crisis will be severely hampered if people lose access to health insurance or if the federal funding provided through the Medicaid waiver disappears. Even in states with strong health care systems - states like Massachusetts - the ACA is critical.

The current system isn't perfect - not by a long shot. There are important steps Congress could take to lower deductibles and premiums, to expand the network of doctors people can see on their plans, and to increase the stability and predictability of the market. We should be working together to make health care better all across the country, just like we've tried to do here in Massachusetts.

This doesn't need to be a partisan fight. But if congressional Republicans continue to pursue repeal of the ACA with nothing more than vague assurances that they might - someday - think up a replacement plan, the millions of Americans who believe in guaranteeing people's access to affordable health care will fight back every step of the way.

Repeal and run is for cowards.

pgl -> Fred C. Dobbs... , January 16, 2017 at 06:00 AM
"Providing health insurance to everyone in the country is likely to be very costly, a fact that could diminish support from fiscal conservatives."

Herein lies the real issue. Of course we could reduce these costs by ending the doctor cartel, ending the oligopoly power of the health insurance giants, and pushing back on Big Pharma. Alas, Speaker Ryan is not interested in any of these things.

Fred C. Dobbs -> Fred C. Dobbs... , January 16, 2017 at 06:01 AM
Rand Paul says he's drafting
a measure to replace Obamacare http://www.bostonglobe.com/news/politics/2017/01/15/rand-paul-says-drafting-measure-replace-obamacare/y6wMEPKjbi1oEkj9TkekSO/story.html?event=event25 via @BostonGlobe
Miles Weiss - Bloomberg - January 15, 2017

Republican Senator Rand Paul said he's drafting legislation for a health-care insurance plan that could replace Obamacare, including a provision to ''legalize'' the sale of inexpensive insurance policies that provide abbreviated coverage.

''That means getting rid of the Obamacare mandates on what you can buy,'' Paul said in an interview on CNN's ''State of the Union'' on Sunday. Obamacare, which Republicans are moving to repeal, requires insurers to cover a number of procedures -- such as preventive care and pregnancy -- that Paul said drives up the cost.

The Kentucky Republican said he'll propose helping people pay for medical bills through tax credits and health savings accounts, which allow users to set aside money tax-free to pay for medical expenses. His bill would allow individuals and small businesses to form associations when buying insurance, giving them more leverage, he said.

''There's no reason why someone with four employees shouldn't be able to join with hundreds and hundreds of other businesses'' to negotiate better prices, Paul said. Becoming part of larger pools would help small companies secure coverage ''that guarantees the issue of the insurance even if you get sick.'' ...

Paul said his legislation is meant to address concern among Democrats and some Republicans that ending Obamacare would also end health-care coverage for many of the 20 million people who acquired insurance under the law. While Republicans move ahead with their plans to eradicate Obamacare, they have yet to outline an alternative.

''It's incredibly important that we do replacement on the same day as we do repeal,'' Paul said on CNN. ''Our goal,'' he added, is to ''give access to the most amount of people at the least amount of cost.''

Fred C. Dobbs -> Fred C. Dobbs... , January 16, 2017 at 07:28 AM
(I urge that Dr Paul's plan include
guv'mint-supplied snake bite kits
for all. That could save a bundle.)

[Jan 16, 2017] The Biggest Changes Obamacare Made, and Those That May Disappear

Jan 16, 2017 | economistsview.typepad.com
Fred C. Dobbs : January 15, 2017 at 08:37 AM , 2017 at 08:37 AM
The Biggest Changes Obamacare Made, and Those That
May Disappear https://nyti.ms/2itydsr via @UpshotNYT
NYT - Margot Sanger-Katz - January 13, 2017

It looks like the beginning of the end for Obamacare as we know it.

After years of vowing to repeal the Affordable Care Act, as it is formally known, Republican lawmakers in both chambers of Congress have now passed a bill that will make it easier to gut the law.

Because they are using a special budget process, Republicans won't be able to repeal all provisions of the health law. But it seems like a good time to look at the major changes Obamacare brought to health care, which of those changes may now disappear, and what might replace them.

An important note: We still don't know the details of a repeal bill, and passage is not guaranteed. But Republicans passed a similar package in 2015, vetoed by President Obama, that provides a rough template. Republicans have also said they hope to make further changes through additional legislation. We'll provide updates when new legislative language arrives, expected in several weeks.

1) Obamacare insured millions through new insurance markets.

The health law reduced the number of uninsured Americans by an estimated 20 million people from 2010 to 2016. One of the primary ways it did so was by creating online markets where people who didn't get insurance through work or the government could shop for a health plan from a private insurer. The law offered subsidies for Americans with lower incomes to help pay their premiums and deductibles.

What would happen? The Republican bill is expected to eliminate the subsidies. This would make insurance unaffordable for millions of Americans and sharply reduce the number who buy their own health coverage.

With many fewer people buying coverage, the insurance markets are likely to become increasingly unstable. Many insurers will stop offering policies, and the remaining customers are likely to be sicker than current Obamacare buyers, a reality that will drive up the cost of insurance for everyone who buys it, and force more people out of the markets. The Urban Institute estimates that the change would cause a total of 22.5 million people to lose their health insurance.

What might replace it? Separate legislation may include some new form of subsidy to help people afford insurance. Plans from House Speaker Paul Ryan and the budget committee chairman Tom Price, President-elect Donald J. Trump's pick to lead the Department of Health and Human Services, would both offer a flat tax credit to help buy insurance that varies by age. A proposal from the House Republican Study Committee would give all Americans a standard tax deduction to buy insurance.

2) Obamacare insured millions more by expanding Medicaid.

The health law provided federal funds for states to offer Medicaid coverage to anyone earning less than about $16,000 for a single person or $33,000 for a family of four. Not every state chose to expand, but most did.

What would happen? The Republican plan is expected to eliminate federal funding for the expansion. An estimated 12.9 million people would lose Medicaid coverage, according to the Urban Institute's projections.

What might replace it? Republican leaders have discussed reforming the remaining Medicaid program to give states more autonomy and to reduce future federal investment.

3) Obamacare established consumer protections for health insurance.

One of the law's signature features prevents insurance companies from denying coverage or charging a higher price to someone with a pre-existing health problem. The law included a host of other protections for all health plans: a ban on setting a lifetime limit on how much an insurer has to pay to cover someone; a requirement that insurers offer a minimum package of benefits; a guarantee that preventive health services be covered without a co-payment; a cap on insurance company profits; and limits on how much more insurers can charge older people than younger people. The law also required insurance plans to allow adult children to stay on their parents' policies until age 26.

What would happen? These rules can't be changed using the special budget process, so they would stay in place for now. But eliminating some of the other provisions, like the subsidies, and leaving the insurance rules could create turmoil in the insurance markets, since sick customers would have a much stronger incentive to stay covered when premiums rise. .

What might replace it? Mr. Trump has said that he'd like to keep the law's policies on pre-existing conditions and family coverage for young adults, but Senate Republicans recently voted against nonbinding resolutions to preserve those measures, suggesting they may be less committed. Some of the other provisions would probably be on the table if there were new legislation. Republicans in Congress would probably eliminate rules that require a minimum package of benefits for all insurance plans and allow states to determine what insurers would have to include. Mr. Trump has said he'd like to encourage the sale of insurance across state lines, a policy likely to make coverage more skimpy but less expensive for many customers. Republicans would also like to expand tax incentives for people to save money for health expenses.

Many of the Republican proposals would also establish so-called high-risk pools, which would provide subsidized insurance options for people with chronic health problems who wouldn't be able to buy insurance without rules forcing insurers to sell them coverage.

4) Obamacare required individuals to have health insurance and companies to offer it to their workers.

To ensure that enough healthy people entered insurance markets, the law included mandates to encourage broader coverage. Large employers that failed to offer affordable coverage, or individuals who failed to obtain insurance, could be charged a tax penalty.

What would happen? The bill is expected to eliminate the mandates. Some experts think that eliminating the individual mandate, in particular, could destabilize insurance markets by reducing incentives for healthy people to buy coverage. The mandate had less of an impact on the employers, which had already been offering coverage.

What might replace it? Some Republican plans would allow insurers to charge much higher rates to customers who allow their coverage to lapse than to those who renew their policies every year. Such a system might provide a different financial incentive for healthy people to stay insured.

5) Obamacare raised taxes related to high incomes, prescription drugs, medical devices and health insurance.

To help pay for the law's coverage expansion, it raised taxes on several players in the health industry and on high-income earners.

What would happen? The G.O.P. package may roll back those tax increases, though there is some disagreement among Republican lawmakers about the deficit impact of such changes.

What might replace it? Republicans have not discussed raising new taxes to replace those in the Affordable Care Act. But some of their plans would limit the tax benefits offered to people who get their health insurance through work. That change would increase tax revenues, but would increase the cost of health insurance for many people who get it through work.

6) Obamacare made major reforms to Medicare payments.

The law cut the annual pay raises Medicare gives hospitals and reduced the fees Medicare pays private insurance companies. It created new incentives for hospitals and doctors to improve quality. It also set up a special office to run experiments in how Medicare pays doctors and hospitals for health care services. Those experiments are now widespread and have begun changing the way medicine is practiced in some places.

What would happen? The new legislation is expected to leave these changes alone, even though many have come under criticism by Republicans in Congress over the years, including from Mr. Price, an orthopedic surgeon. Many of the experiments could be reshaped or eliminated through regulation or through a future budget process.

What might replace it? Republicans in Congress have long talked about even more ambitious changes to Medicare, intended to move more beneficiaries into private insurance coverage. Mr. Trump has said that he does not want to make major changes to Medicare, so it is unclear if such a proposal would move forward.

7) Obamacare made many smaller changes that will probably last.

Obamacare had a range of policies meant to improve health and health care, including requirements that drug companies report payments made to physicians, a provision written by the Iowa senator Chuck Grassley, a Republican; a requirement that chain restaurants publish calorie counts on their menus; and a rule that large employers must provide a space for women to express breast milk.

What would happen? When Republicans talk about repealing Obamacare, they tend to focus on the parts of the law that expanded insurance coverage and regulated health insurance products, not these ancillary parts. That means that portions of the Affordable Care Act that people don't associate with the word "Obamacare" are likely to endure.

Fred C. Dobbs -> Fred C. Dobbs... , January 15, 2017 at 08:42 AM
Perhaps the most horrendous loss
(to Big Healthcare) will be if ~20M
people lose coverage, even if it is
high-deductible 'catastrophic' coverage,
hospitals will lose billions in insurance
reimbursements for 'free care', which had
*much* to do with why/how Massachusetts
got the ball rolling in the first place.
im1dc -> Fred C. Dobbs... , January 15, 2017 at 11:32 AM
Every time I read an article about the Republicans 'Repeal of Obamacare' I remind myself that Trump has not said he would sign Repeal only.

Rather, he repeatedly has said and recently reiterated that he wants Repeal to coincide with Replace, hours, days, not weeks, months, or years.

That sets up an Executive Branch vs Legislative Branch conflict.

One of the party's pledges will have to give to the others, either Trump or the Speaker Ryan House Republican majority and or the Majority Leader McConnell's Republican majority Senate.

Today I'm guessing Trump gets his wish.

But that leads me to ask what are the Republicans going to substitute for PACA/Obamacare that is 'cheaper and provides more and better health care' that Donald Trump promised, repeatedly.

If it is exciting to watch a train wreck then it is exciting to watch this budding and self-inflicted catastrophe develop in Republican controlled D.C., although I would rather not.

DeDude -> im1dc... , January 15, 2017 at 12:49 PM
"what are the Republicans going to substitute for PACA/Obamacare that is 'cheaper and provides more and better health care' that Donald Trump promised"

Yes my guess is that TrumpCare will not be bigger and better. More likely it will be small - like his hands

DeDude -> Fred C. Dobbs... , January 15, 2017 at 01:02 PM
She missed the biggest and most important part. ACA reduced the size of the doughnut hole in Medicare part D. Indeed ObamaCare was going to make the doughnut hole go completely away by 2020. So if we go back to the old Bush part D there will suddenly be a $4000 gap of no coverage for prescription drugs for our seniors. What are the GOPsters going to do about that?
Fred C. Dobbs -> DeDude... , January 15, 2017 at 01:19 PM
Get rich(er), I'd guess.

[Jan 15, 2017] Doctors in the United States get paid on average more than $250,000 a year

Jan 15, 2017 | economistsview.typepad.com
libezkova -> anne... , January 14, 2017 at 10:45 PM
"Doctors in the United States get paid on average more than $250,000 a year,"

I am sure that this is a right estimate. Certain specialties probably yes (dentists, cardiologist, gastroenterologists, neurosurgeons, etc), but family doctors, probably no.

[Jan 15, 2017] The Congressional defeat, insured by Democrats, of the proposal by Bernie Sanders to allow the import of drugs from Canada to lower drug prices in the United States

Jan 15, 2017 | economistsview.typepad.com
JohnH -> anne... , January 14, 2017 at 08:00 AM
The Congressional defeat, insured by Democrats, of the proposal by Bernie Sanders to allow the import of drugs from Canada to lower drug prices in the United States.
'
This is only the beginning of Democrats' appeasement of Trump and Republicans...it will be stunning to watch how much damage Republicans can do during Trump's first 90 days with only a slim majority in the Senate. During the first 90 days under Obama, who had a true electoral mandate and big majorities in both houses, Democrats basically sat on their hands, blaming Republicans for their unwillingness to do much for the American people.
Observer -> anne... , January 14, 2017 at 08:50 AM
So if we matched Canada, we'd see a 30% decrease, of a segment which comprises 10% of health care spending, or 3% overall decrease.

"PwC's Health Research Institute projects the 2017 medical cost trend to be the same as the current year – a 6.5% growth rate."

So reaching Canadian spending levels would counter ~ 6 months of health care cost increases. Reaching OECD levels buys you another couple of months.

Put another way, reaching OECD levels for drug spending closes 10% of the US-OECD spending gap.

Not nothing, but "fixing" drug prices seems more like an emotional (i.e. political) talking point than a real silver bullet for health care costs.

http://www.pwc.com/us/en/health-industries/health-research-institute/behind-the-numbers.html

pgl -> Observer... , January 14, 2017 at 11:17 AM
Ever noticed that marketing costs are 30% of revenue? This is a by product of the monopoly power in this sector. Dean Baker has often noted we could have the government do the R&D and then have real competition in manufacturing.
libezkova -> Observer... , January 14, 2017 at 10:40 PM
Don't be a lobbyist for Big Farma.

You forgot that those researchers often produce useless or even dangerous drags, which are inferior to existing. Looks as scams practiced with hypertension drugs.

This rat race for blockbuster drugs is the same as corruption in financial industry.

http://www.alternet.org/story/148907/15_dangerous_drugs_big_pharma_shoves_down_our_throats

pgl -> anne... , January 14, 2017 at 11:16 AM
Actually the industry profile is very relevant but goes in a different direction - if US firms were compelled to charge market (not monopoly) prices, we would better compete with foreign firms.
pgl -> Observer... , January 14, 2017 at 11:14 AM
Any excuse to charge sky high prices for drugs that don't cost that much to manufacture? If these monopoly profits were not so high, we would buy more drugs and employ more people.
Observer -> pgl... , January 14, 2017 at 12:57 PM
Do you think we would really buy materially more drugs if prices were lower? Particularly enough more, at those (30-50%?) lower prices, to generate the funds to employ more people?

(If that actually generated at much or more funds, it would seem like the pharma companies, seeking to make as much money as possible, would have already set prices at that lower per unit level.)

In any case, that seems like a LOT more drugs.

Perhaps Anne has data on the number of scripts per person in the US vs OECD.

pgl -> Observer... , January 14, 2017 at 01:06 PM
There are lots of poor people who don't take drugs because they can't afford them. This will become especially true if the Republican repeal Obamacare.
anne -> Observer... , January 14, 2017 at 09:05 AM
The point of course is wildly exploiting ordinary people in need of healthcare in every possible way, or a reflection of what we have come to. Returning now to the market...

[Jan 14, 2017] Insurance overhead runs are probably the best argument for single payer

Jan 14, 2017 | economistsview.typepad.com
pgl -> Fred C. Dobbs... , January 13, 2017 at 06:14 AM
There are 3 ways we could reduce what we pay for health care:

(1) Ending the oligopoly power of the health insurance companies;

(2) Ending the doctor cartel;

(3) Reducing the monopoly power of Big Pharma.

Alas, the Republicans have no intention in doing any of this. So when they tell people they want to lower their costs, they are talking to rich people. The cost to the rest of us will go up if they have their way.

Observer -> pgl... , -1
From what I read, and recall from data Anne has posted a number of times, pharma costs are about 10% of total health care costs, and run about 2X EU average, or Canada, if we adopt that as a reference baseline. If we cut it in half, that would reduce our costs about 5%.

Doctors fees (physicians and clinical services in this reference) are about 20%. I think you have mentioned before we pay about 2X typical EU wages. So if we cut that in half, it reduces our costs about 10%.

Taken together, that's ~ 15% reduction. Not nothing, but in a few years of cost growth we are back to current cost levels.

Do you see that differently?

I don't have offhand figures for what insurance overhead runs. I think reducing that is probably the best argument for single payer, although comparisons to medicare overhead seem suspect (I'd expect much lower overhead percentages when much of your costs you are processing are $40K end of life hospital events vs. routine GP visits.) So one might zero out the profit, and reduce costs by having one IT/billing system. What's the scale of the opportunity here - another 15%?

https://www.cdc.gov/nchs/fastats/health-expenditures.htm

[Jan 13, 2017] Reducing the cost of healthcare

Jan 13, 2017 | economistsview.typepad.com
pgl -> Fred C. Dobbs... , January 13, 2017 at 06:14 AM
There are 3 ways we could reduce what we pay for health care:

(1) Ending the oligopoly power of the health insurance companies;

(2) Ending the doctor cartel;

(3) Reducing the monopoly power of Big Pharma.

Alas, the Republicans have no intention in doing any of this. So when they tell people they want to lower their costs, they are talking to rich people. The cost to the rest of us will go up if they have their way.

Observer -> pgl... , January 13, 2017 at 07:12 AM
From what I read, and recall from data Anne has posted a number of times, pharma costs are about 10% of total health care costs, and run about 2X EU average, or Canada, if we adopt that as a reference baseline. If we cut it in half, that would reduce our costs about 5%.

Doctors fees (physicians and clinical services in this reference) are about 20%. I think you have mentioned before we pay about 2X typical EU wages. So if we cut that in half, it reduces our costs about 10%.

Taken together, that's ~ 15% reduction. Not nothing, but in a few years of cost growth we are back to current cost levels.

Do you see that differently?

I don't have offhand figures for what insurance overhead runs. I think reducing that is probably the best argument for single payer, although comparisons to medicare overhead seem suspect (I'd expect much lower overhead percentages when much of your costs you are processing are $40K end of life hospital events vs. routine GP visits.) So one might zero out the profit, and reduce costs by having one IT/billing system. What's the scale of the opportunity here - another 15%?

https://www.cdc.gov/nchs/fastats/health-expenditures.htm

anne -> Observer... , January 13, 2017 at 07:37 AM
https://www.nytimes.com/2017/01/12/us/politics/health-care-congress-vote-a-rama.html

January 12, 2017

Senate Takes Major Step Toward Repealing Health Care Law
By THOMAS KAPLAN and ROBERT PEAR

In its lengthy series of votes, the Senate rejected amendments proposed by Democrats that were intended to allow imports of prescription drugs from Canada, protect rural hospitals and ensure continued access to coverage for people with pre-existing conditions, among other causes....

[Jan 13, 2017] What was at stake why Cory Booker joined Senate Republicans to kill a measure to import cheaper medicine

Jan 13, 2017 | economistsview.typepad.com
anne -> Observer... , January 13, 2017 at 07:39 AM
https://twitter.com/lhfang/status/819677587408568320

Lee Fang ‏@lhfang

What was at stake & why Cory Booker joined Senate Republicans to kill a measure to import cheaper medicine:

https://theintercept.com/2017/01/12/cory-booker-joins-senate-republicans-to-kill-measure-to-import-cheaper-medicine-from-canada/

BERNIE SANDERS INTRODUCED a very simple symbolic amendment Wednesday night, urging the federal government to allow Americans to purchase pharmaceutical drugs from Canada, where they are considerably cheaper.

2:49 PM - 12 Jan 2017

Peter K. -> anne... , January 13, 2017 at 09:33 AM
Cory Booker, another progressive neoliberal....
pgl -> Observer... , January 13, 2017 at 09:37 AM
Very good. On health insurance, they get 20% gross margins. I have argued many times we can cut this to 10%.

[Jan 12, 2017] Almost six in 10 Americans don't have enough savings to pay for a $500 car repair or a $1,000 emergency room bill

Jan 12, 2017 | www.nakedcapitalism.com
Class Warfare

"In a report from Bankrate.com, the firm found that almost six in 10 Americans don't have enough savings to pay for a $500 car repair or a $1,000 emergency room bill" [ 247 Wall Street ]. "While Millennials may be looked down on by older demographics, they are the most equipped generation to pay for an unexpected expense using their savings. It was found that 47% of those within the ages of 18 to 29 responded that they would use their savings to cover such a burden, up from 33% in 2014." I'd argue that's not virtue, but a rational response to the neoliberal destruction of universal benefits and government services generally.

Knifecatcher , January 12, 2017 at 2:12 pm

Re: Bankrate story – is there such thing as a $1k ER bill anymore? We paid nearly $3k for our unexpected trip, which involved 15 minutes with the doc, no tests or scans, and only a single dose of Childrens' Tylenol for consumables. (5 year old tried to poke his eye out with a stick and failed – but only just).

And of course our crapified insurance hadn't hit the deductible so we had to pay the whole bill out of pocket.

Vatch , January 12, 2017 at 2:31 pm

I'm lucky - I only have a $150 deductible, which is what I paid when I needed five stitches in my hand last year. The total bill was "only" about $1250, probably because I never saw an actual doctor. A nurse practitioner sewed me up. The explanation of benefits from the insurance company later showed that they only paid the hospital about one third of the billed price. I'm sorry that you had to pay the whole thing; I guess the insurance companies only enforce their standard payable fees when it's their money on the line.

optimader , January 12, 2017 at 2:58 pm

The kids I grew up with, that would have been crazy-glue/packaging-tape unless a finger articulation was compromised

http://morethanjustsurviving.com/stitches-bandages-or-super-glue/

btw..Animal bites should be left open and bandaged and treated w/ antibiotic so they heal from the inside out..

I remember in my misspent college youth an idiot scuba diver in Honduras (feeding a moray eel cheese wiz out of a can, guess what happened when she ran out?) who came to my friend's dad (a surgeon) insisting he sew her up.
He only bandaged her with butterfly bandages and gave her some kick-ass antibiotics. She was sure she was being undeserved (w/ gratis treatment) because he refused to sew her up, potentially trapping an infection.

ian , January 12, 2017 at 2:43 pm

I had a similar experience: 3 stitches on my sons finger. Treated by nurse (no doc), sutures and lidocaine was $1800. It got me wondering about how anyone could hope to reform health care when the accounting is so completely out of whack with reality.

[Jan 12, 2017] Cory Booker understands that a candidate cannot expect the Democratic nomination if he/she goes against the interests of BigPharma.

Jan 12, 2017 | www.nakedcapitalism.com
Benedict@Large , January 12, 2017 at 2:53 pm

Cory Booker understands that a candidate cannot expect the Democratic nomination if he/she goes against the interests of BigPharma.

RUKidding , January 12, 2017 at 3:26 pm

After spending day time hours publically going after Jeff Sessions (good), Booker uses the cover of darkness to reveal who he really works for.

Here's a clue: it isn't any of the 99%, whether in NJ or elsewhere.

Talk's cheap, but money walks – eh, Booker?

EndOfTheWorld , January 12, 2017 at 3:40 pm

Somewhere I saw that Bernie praised Trump taking on Big Pharma.

curlydan , January 12, 2017 at 3:33 pm

'specially if you're from Jersey. Kind of like Biden, Delaware, and credit cards. The strings on the puppets are awfully tight.

[Jan 12, 2017] 200PM Water Cooler 1-12-2017 naked capitalism

Jan 12, 2017 | www.nakedcapitalism.com
Class Warfare

"Hierarchies aren't natural phenomena within the human race. Outside of parenting, human beings aren't born with the inclination to be ruled, controlled, 'managed,' and 'supervised' by other human beings" [ The Hampton Institute ]. Hierarchies are artificial constructs designed to serve a purpose. They are a necessity within any society that boasts high degrees of wealth and power inequities. They are a necessity for maintaining these inequities and ensuring they are not challenged from below."

"In a report from Bankrate.com, the firm found that almost six in 10 Americans don't have enough savings to pay for a $500 car repair or a $1,000 emergency room bill" [ 247 Wall Street ]. "While Millennials may be looked down on by older demographics, they are the most equipped generation to pay for an unexpected expense using their savings. It was found that 47% of those within the ages of 18 to 29 responded that they would use their savings to cover such a burden, up from 33% in 2014." I'd argue that's not virtue, but a rational response to the neoliberal destruction of universal benefits and government services generally.

"[A] good deal of [Wallace] Stevens's poetic output conveyed a feeling of sehnsucht ("inconsolable longing"). For example, in 'Sad Strains of a Gay Waltz,' Stevens writes of American southerners (although the words just as easily apply to their author) as 'voices crying without knowing for what, / Except to be happy, without knowing how.' The object of Stevens's inconsolable longing changed over time. In his early professional days, when he first moved to New York City, it was his hometown of Reading, Pa. Writing to his future wife, Elsie, Stevens lamented that he 'lost a world' when he left there" [ The American Conservative ].

Knifecatcher , January 12, 2017 at 2:12 pm

Re: Bankrate story – is there such thing as a $1k ER bill anymore? We paid nearly $3k for our unexpected trip, which involved 15 minutes with the doc, no tests or scans, and only a single dose of Childrens' Tylenol for consumables. (5 year old tried to poke his eye out with a stick and failed – but only just).

And of course our crapified insurance hadn't hit the deductible so we had to pay the whole bill out of pocket.

Vatch , January 12, 2017 at 2:31 pm

I'm lucky - I only have a $150 deductible, which is what I paid when I needed five stitches in my hand last year. The total bill was "only" about $1250, probably because I never saw an actual doctor. A nurse practitioner sewed me up. The explanation of benefits from the insurance company later showed that they only paid the hospital about one third of the billed price. I'm sorry that you had to pay the whole thing; I guess the insurance companies only enforce their standard payable fees when it's their money on the line.

optimader , January 12, 2017 at 2:58 pm

The kids I grew up with, that would have been crazy-glue/packaging-tape unless a finger articulation was compromised

http://morethanjustsurviving.com/stitches-bandages-or-super-glue/

btw..Animal bites should be left open and bandaged and treated w/ antibiotic so they heal from the inside out..

I remember in my misspent college youth an idiot scuba diver in Honduras (feeding a moray eel cheese wiz out of a can, guess what happened when she ran out?) who came to my friend's dad (a surgeon) insisting he sew her up.
He only bandaged her with butterfly bandages and gave her some kick-ass antibiotics. She was sure she was being undeserved (w/ gratis treatment) because he refused to sew her up, potentially trapping an infection.

ian , January 12, 2017 at 2:43 pm

I had a similar experience: 3 stitches on my sons finger. Treated by nurse (no doc), sutures and lidocaine was $1800. It got me wondering about how anyone could hope to reform health care when the accounting is so completely out of whack with reality.

[Jan 11, 2017] the DEPRAVED nature of the American "Health Kare" system

Jan 11, 2017 | www.nakedcapitalism.com
clarky90 , January 10, 2017 at 6:12 pm

For me, often it is the "small crimes" that exemplify the DEPRAVED nature of the American "Health Kare" system. (See the right hand panel of The Last Judgment Bosch triptych) https://en.wikipedia.org/wiki/The_Last_Judgment_(Bosch_triptych)

US drugmaker charges 200 times UK price for common worm pill

A US drugmaker has put a price tag of more than $800 on a pinworm treatment - 200 times more expensive than the equivalent medicine on British pharmacy shelves, in the latest example of "price gouging" in the world's largest healthcare market.
Impax Laboratories (Bastards!) started selling mebendazole this year at an average wholesale price of $442 per pill, according to figures seen by the Financial Times, which were checked with several US pharmacy chains including Walgreens and CVS.

Most cases of pinworm, a parasitic infection also known as threadworm, require two pills, meaning a course of treatment costs about $884. The drug is available prescription-only in the US but can be bought over the counter in the UK, where Boots, a British chemist chain, charges £6.99 for a pack of four pills, or £1.75 each.

The pinworm parasite, which is common in children, affects 200m people a year worldwide and up to 40m in the US. It is recommended that family members are treated for the highly contagious infection at the same time, meaning a household of five's treatment costs more than $4,400.

https://www.ft.com/content/f0080fe4-c3ad-11e6-9bca-2b93a6856354

"Mebendazole came into use in 1971, after it was developed in Belgium.[4] It is included in the WHO Model List of Essential Medicines, the most important medications needed in a basic health system .[5] Mebendazole is available as a generic medication.[6] The wholesale cost in the developing world is between 0.004 and 0.04 USD per dose .[7] In the United States a single dose is about 884.00 USD as of 2016.[8]

https://en.wikipedia.org/wiki/Mebendazole

[Jan 02, 2017] U.S. Healthcare Is A Global Outlier (And Not In A Good Way)

Jan 02, 2017 | www.zerohedge.com

Historically, the United States has spent more money than any other country on healthcare.

In the late 1990s, for example, the U.S. spent roughly 13% of GDP on healthcare, compared to about a 9.5% average for all high income countries.

However, as Visual Capitalist's Jeff Desjardins notes, in recent years, the difference has become more stark . Last year, as Obamacare continued to roll out, costs in the U.S. reached an all-time high of 17.5% of GDP . That's over $3 trillion spent on healthcare annually, and the rate of spending is expected accelerate over the next decade .

HIGH COSTS, HIGH BENEFIT?

With all that money being poured into healthcare, surely the U.S. must be getting better care in contrast to other high income countries.

At least, that's what one would think.

Today's chart comes to us from economist Max Roser (h/t @NinjaEconomics ) and it shows the extreme divergence of the U.S. healthcare system using two simple stats: life expectancy vs. health expenditures per capita.

Courtesy of: Visual Capitalist

THE DIVERGENCE OF U.S. HEALTHCARE

As you can see, Americans are spending more money – but they are not receiving results using the most basic metric of life expectancy. The divergence starts just before 1980, and it widens all the way to 2014.

It's worth noting that the 2015 statistics are not plotted on this chart. However, given that healthcare spend was 17.5% of GDP in 2015, the divergence is likely to continue to widen. U.S. spending is now closing in on $10,000 per person.

Perhaps the most concerning revelation from this data?

Not only is U.S. healthcare spending wildly inefficient, but it's also relatively ineffective. It would be one thing to spend more money and get the same results, but according to the above data that is not true. In fact, Americans on average will have shorter lives people in other high income countries.

Life expectancy in the U.S. has nearly flatlined, and it hasn't yet crossed the 80 year threshold. Meanwhile, Chileans, Greeks, and Israelis are all outliving their American counterparts for a fraction of the associated costs. buckstopshere , Jan 1, 2017 10:02 PM

A shorter life expectancy makes Social Security look more solvent.

Cooking the books.

junction buckstopshere , Jan 1, 2017 10:08 PM
The chart shows that Monsanto and the New World Order are succeeding, that more glyphosate herbicide in the food, more toxic chemtrails and more unneccessary operations are having the desired effect, to cull the American population. Helped immeasurably by the cocaine and heroin flown into the USA by the Bush Crime Cartel on Air Force cargo planes.
cheka junction , Jan 1, 2017 10:10 PM
nyc runs US health care. that tells one all he needs to know.
Pinch Dog Will Hunt , Jan 2, 2017 12:58 AM
Republitards and Freedumb-lovers need to watch Michael Moore's movie about this called "Sicko"

https://www.youtube.com/watch?v=thkBLpRwdSM

You need MORE socialism, not less.

Tards.

Chief Wonder Bread balolalo , Jan 1, 2017 10:42 PM
Australia, Norway, Switzerland, Germany, South Korea, Japan, Italy, U.S.

Which of these countries is not like any of the others? Haha. Multiculturalism is such a fantastic deal. Some "cultures" just don't make good lifestyle decisions such as thinking that grape drank and swisher sweets are healthful choices.

philipat cheka , Jan 1, 2017 10:35 PM
It is, of course, in part a "Lifestyle" issue but the US system is grossly inefficient because there are adverse incentives built in (Adverse selection etc.). The US still uses a "Fee for service" model which has never been able to control costs anywhere in the world. On top of that, high pharmaceutical prices in the US account for up to 90% of total Big Pharma profits ane Medical Malpractise insurance not only directly adds large costs but indirectly forces the use of an unnecessary number of tests and the use of the newest drugs etc. Without any sensible controls at any point in the system it will only continue to get further out of control, as ACA has illustrated.
Ballin D philipat , Jan 1, 2017 10:41 PM
What's the alternative to "fee for service?" Seems pretty standard to charge for services rendered.
philipat Ballin D , Jan 1, 2017 11:47 PM
Except that more services = more fees = higher costs. Hence multiple tests, multiple procedures and multiple drugs = higher costs and higher fees = inefficiency bias and higher still costs. Physicians are human and the Healthcare providers have become experts at maximising costs to breaking point. There are many alternative models within which to control costs through negotiated standard procedures and fixed costs for each procedure and drug formularies (including the use of generic drugs) etc. Single payer is used by much of the developed world where the supplier agrees to supply at a negotiated price or doesn't get to participate, which focuses their attention nicely. The benefits of scale, in whatever system is used, should result in lower prices but don't in the US where USG is already the largest single provider of healthcare (Medicare/Medicaid etc).
Canoe Driver philipat , Jan 2, 2017 12:36 AM
A lot of people, certainly not just doctors, are making a lot of money from this dysfunctional medical system. That is the difference no one is talking about. The money is not disappearing down a rabbit hole. It is being pocketed by thousands of multi-millionaires. It is a profit-based system. Medicine is the one field where Capitalism has no hope of efficiency. Why? Because the demand is infinite and inelastic. A recipe for the financial rape of millions.
dogsandhoney2 junction , Jan 2, 2017 12:43 AM
yeah,
and it also shows the effect of a
30% increase in psychological stress since 1980.
stress = ^stress hormones = stressed immune system =
anxiety/depression/cardiovascular disease/hyper inflammatory response/etc..

all to be treated by those in the stressed-out health care system,
usually with hyper-cost pharmaceuticals.

it's well past due date for the u.s. to become civilized by starting
single payer medical plans.

health insurance corporations = the terror.

sinbad2 heresy101 , Jan 1, 2017 10:48 PM
I wouldn't count on it.

Private healthcare and insurance is very profitable 2 of the 3 trillion the US spends on healthcare would go to shareholders and management of healthcare companies.

Mr Trump is a businessman and a realist. The media would be calling him a commie if he tried to fix it.

sinbad2 , Jan 1, 2017 10:38 PM
Americans would not have it any other way.

The countries that have the most cost effective healthcare, are countries that provide government run health insurance.

Americans would never tolerate claiming helthcare costs back from a Government run health providor, like in Australia, or waisting taxpayers money building hospitals.

Americans have to pay for their belief that private for profit health insurance is cheaper and better than government provided insurance.

Xena fobe sinbad2 , Jan 1, 2017 11:41 PM
Americans would accept single payer. But insurance companies would not.
TheEndIsNear I Write Code , Jan 2, 2017 12:05 AM
250,000 deaths in 2015 were due to medical error, the third leading cause of death in the U.S.
http://www.hopkinsmedicine.org/news/media/releases/study_suggests_medica...

38,300 people were killed on U.S. roads in 2015.
http://www.newsweek.com/2015-brought-biggest-us-traffic-death-increase-5...

33,636 deaths due to "Injury by firearms" of which only 11,208 were homicides, 21,175 were self inflicted suicides, and the remainder were due to accidental/negligent discharge of a firearm or "undetermined intent".
https://en.wikipedia.org/wiki/Gun_violence_in_the_United_States

brooklinite8 , Jan 1, 2017 11:07 PM
When I was visiting India I saw few women administer a baby birth basically in few minutes with bare hands, water, oil and some sarees. Here in the US I believe the bill comes around 5-10k at the least. Did we ever ask the question as to why do we need insurance to afford health care? Did we ever ask how has it become so out of control? Why has healthcare become such a big business? Where are the morals of humanity?

In USA the welfare of the state takes precedence to the welfare of the people. Human beings are valued at no different rate in USA than India. Welcome to the Land of the Free, Home of the Brave. Good Old USA. We are outliers and Everything we do should be an outlier. If not we will revisit and make sure it becomes an outlier. Lol

Canoe Driver brooklinite8 , Jan 2, 2017 12:57 AM
The total cost per childbirth in the US is said to be $50-65k. This figure is so outrageous that it is impossible to correlate it with the cost of providing the services. It is simply a bunch of profiteers taking their cut. And the profit can be several hundred percent of the underlying cost, precisely because the "customer" has no choice at all. Capitalism, which works well in many contexts, fails miserably in medicine. Demand is infinite and inelastic in the medical field.
hairball48 , Jan 1, 2017 11:15 PM
A shitty diet of sugar laden, high carbohydrate fast food products is what contributes to most Americans' shorter life spans, not "poor health care".

Health care is expensive because it's run by a de facto "health care mafia". I worked in the technical field of health care for 28 years. Excessive regulation is but just one reason health care is so expensive in the USA. Barriers to entry are another. Try to establish a medical school. See how long it takes. Fewer docs, the higher the price of docs. ECO 101. Don't look for a change anytime soon.

hairball

Miffed Microbio... hairball48 , Jan 2, 2017 12:14 AM
When I was an intern for clinical microbiology they gave us $300/month as a stipend. Today an internship costs $24k. This is on top of the 4 years degree. Plus the mechanization of the lab is continuing every year to the point there will be fewer jobs in the future. Hate to say it but my field is fucked. Much of my time is spent meeting regulatory compliance and it gets worse every year.

Miffed

tyberious , Jan 1, 2017 11:52 PM
Me, 20 years in Healthcare BS, MSPH, , started in reference labs, then trauma center, biotech and now in healthcare insurance quality improvement (Medicare). 1st of all the money is in the government, we all know that!

But my main response to the article is that the America sheep are being sheared! The assault starts at birth with 21 vaccines by adulthood( infant mortality), hormones in the food (preteen secondary sex characteristics)(breast cancer)(prostate cancer) , HFC (diabetes, heart diseases, and other complications) GMO's, glycophosphates, glutens, and the multitude of useless pharmaceuticals.

My point is Americans are being poisoned, not so much intentionally, but through fascist business models.

So recap: Chronic preventable illnesses, extensive bureaucracy, poor food choices (# 1 in my book), and a government that cares zero fucks about you!

chosen , Jan 2, 2017 12:18 AM
Doctors are way overpaid. Hospitals charge ridiculous prices that have no relation to reality. Insurance companies screw us even more.

The US medical system is worse than the university system. Both are scams whose main goal is to make the providers more and more money, and the users poorer and poorer. It is sick.

Canoe Driver chosen , Jan 2, 2017 1:12 AM
Basically, you are right. The idea is that the price is all the funds the "customer" has in the world, every time there is significant illness. This is because the demand for healthcare is essentially infinite and inelastic. If you want to live, pay us everything you have, then declare bankruptcy. That is what happens naturally in a for-profit medical system.

[Dec 30, 2016] Payment for Emergency Ambulance Services.

Dec 30, 2016 | dfs.ny.gov
The Office of General Counsel issued the following opinion on June 7, 2006, representing the position of the New York State Insurance Department.

Payment for Emergency Ambulance Services.

Re: Payment for Emergency Ambulance Services.

Questions Presented:

1. Pursuant to the New York Insurance Law, may a medical provider, such as an ambulance company issued a certificate to operate under N.Y. Pub. Health Law § 3005, bill a patient directly for prehospital emergency ambulance services where a New York authorized insurer or health maintenance organization ("HMO") has made partial payment of a bill?

2. Pursuant to the New York Insurance Law, may a medical provider, such as an ambulance company issued a certificate to operate under N.Y. Pub. Health Law § 3005, bill a patient directly for prehospital emergency ambulance services where a New York authorized insurer or health maintenance organization has denied payment entirely?

Conclusions:

1. Pursuant to N.Y. Ins. Law §§ 3216(h)(24), 3221(l)(15) and 4303(aa) (McKinney Supp. 2006), the ambulance company may not bill a patient directly for prehospital emergency ambulance services where a New York authorized insurer or HMO has made partial payment of a bill under an insurance contract that provides major medical or similar comprehensive-type coverage. However, if such a contract is not involved, these provisions do not apply and there is no prohibition in the Insurance Law against the ambulance company billing the patient directly for the balance of the bill.

2. Yes. The ambulance company may bill a patient directly for prehospital emergency ambulance services where a New York authorized insurer or HMO has denied payment entirely, subject to the remedies available to the patient.

Facts:

This inquiry is general in nature.

Analysis:

N. Y. Ins. Law § 4303 (McKinney Supp. 2006) applies to non-profit health plans and HMO's. Although HMO's are primarily regulated by the New York Health Department, their subscriber contracts are regulated by the Insurance Department as if they were subscriber contracts of non-profit health insurers. See N.Y. Public Health Law § 4406(1) (McKinney 2002).

N.Y. Ins. Law § 4303(aa) (McKinney Supp. 2006) provides, in relevant part, as follows:

(aa)(1) Every contract issued by a hospital service company or health service corporation which provides major medical or similar comprehensive-type coverage shall include coverage for prehospital emergency medical services for the treatment of an emergency condition when such services are provided by an ambulance service issued a certificate to operate pursuant to section three thousand five of the public health law.

(2) Payment by an insurer pursuant to this section shall be payment in full for the services provided. An ambulance service reimbursed pursuant to this section shall not charge or seek any reimbursement from, or have any recourse against an insured for the services provided pursuant to this subsection, except for the collection of copayments, coinsurance or deductibles for which the insured is responsible for under the terms of the policy.

(3) An insurer shall provide reimbursement for those services prescribed by this section at rates negotiated between the insurer and the provider of such services. In the absence of agreed upon rates, an insurer shall pay for such services at the usual and customary charge, which shall not be excessive or unreasonable.

(4) The provisions of this subsection shall have no application to transfers of patients between hospitals or health care facilities by an ambulance service as described in paragraph one of this subsection. . . .

N.Y. Ins. Law § 3221(l)(15) (McKinney Supp. 2006), which applies to group or blanket accident and health insurance policies issued by commercial insurers and N.Y. Ins. Law § 3216(h)(24) (McKinney Supp. 2006), which applies to individual accident and health insurance policies issued by commercial insurers contain identical provisions.

In accordance with the above, if the insurance contract provides major medical or similar comprehensive-type coverage, it must include coverage for prehospital emergency medical services for the treatment of an emergency condition when such services are provided by an ambulance service issued a certificate to operate pursuant to section three thousand five of the public health law. The insurer must provide coverage for emergency ambulance services based upon the rates negotiated between the insurer and the provider of such services. If no participating provider contract exists, the insurer must pay for the services at the usual and customary charge, which shall not be excessive or unreasonable.

Once the insurer makes payment at the usual and customary charge, the provider must accept such payment as payment in full. The provider may not bill the patient directly for emergency ambulance services for the balance of a bill, except for the collection of copayments, coinsurance or deductibles that the insured is responsible for under the terms of the insurance contract.

Please note that N.Y. Ins. Law §§ 3216(h)(24), 3221(l)(15) and 4303(aa) (McKinney Supp. 2006) are applicable only to insurance contracts that provide major medical or similar comprehensive-type coverage. Thus, if such a contract is not involved, these provisions do not apply and there is no prohibition in the Insurance Law against the ambulance company billing the insured directly. In addition, these provisions do not address a situation in which a New York authorized insurer or HMO has denied payment entirely for emergency ambulance services (i.e. where the insurer or HMO states that coverage was not in effect or that treatment was not medically necessary). In such cases, the ambulance company may bill the patient directly, subject to the remedies available to the patient.

If the ambulance company or patient disputes a payment made by the insurer or HMO as not constituting the usual and customary charge or disputes the fact that no payment was made, the ambulance company or patient may raise the issue with the insurer or HMO and/or file a complaint with the Department's Consumer Services Bureau.

Lastly, the New York Attorney General's Office has conducted an investigation on balance billing by ambulance companies. For further information, the inquirer was directed to contact the Attorney General's Office at (518)474-7330 or access their web site which is located at http://www.oag.state.ny.us.

This opinion does not provide an analysis of the No-Fault Insurance Law, which would result in a different analysis and conclusion, since the inquirer already had OGC Opinions on this subject. 1 Please note also that this opinion is limited to an interpretation of the New York Insurance Law. No opinion is rendered on any other laws.

For further information you may contact Associate Attorney Pascale Jean-Baptiste at the New York City Office.


1 See OGC Opinion No. 03-02-18, dated Feb. 18, 2003 and OGC Opinion No. 03-04-36, dated April 30, 2003; see also OGC Opinion No. 05-05-29, dated May 28, 2005.

[Dec 30, 2016] 20 things to know about balance billing

Notable quotes:
"... Balance billing is on the rise nationally. In 2011, around 8 percent of privately insured individuals used out-of-network care, 40 percent of which resulted in unanticipated medical costs due to balance billing, reports Health Services Research . ..."
"... Balance billing complaints are up 1,000 percent in Texas . ..."
"... The rise in balance billing is partially attributable to a lack of network transparency with patients. ..."
"... The New York Times ..."
"... Kaiser Health News ..."
"... In 2014 Aetna sued a physician at Monmouth Medical Center in Long Branch, N.J., a hospital within Aetna's network, who did not notify a patient he would not accept Aetna's discounted reimbursement rate, according to the lawsuit. The physician charged Aetna $31,939 to treat abdominal pain in the patient. After Aetna paid the amount it deemed reasonable - $2,811, based on Medicare rates - the physician balance billed the patient for an additional $10,635. ..."
"... Montana Public Radio ..."
"... Sunshine State News ..."
"... The New York Times ..."
"... The New York Times ..."
Dec 30, 2016 | www.beckershospitalreview.com

Patients, caught in the financial crosshairs, often feel powerless to negotiate costs. Consumer advocacy groups and federal and state legislators are turning their attention to balance billing practices this year with renewed vigor, forcing payers and providers to find other ways to settle financial disagreements.

Here are 20 things to know about balance billing.

1. Balance billing is on the rise nationally. In 2011, around 8 percent of privately insured individuals used out-of-network care, 40 percent of which resulted in unanticipated medical costs due to balance billing, reports Health Services Research . In 2015, a nationwide study from Consumers Union found nearly one third of privately insured Americans received an unanticipated bill when their health plan paid less than expected for medical services within the past two years.

2. Balance billing complaints are up 1,000 percent in Texas . According to the Texas Department of Insurance , balance billing complaints rose from 112 in 2012 to 1,334 in 2015, an increase of 1,000 percent.

3. Lack of provider, network transparency. The rise in balance billing is partially attributable to a lack of network transparency with patients. In many cases patients are unaware they have received out-of-network care until they receive a balance bill in the mail. Nearly 70 percent of individuals with unaffordable out-of-network medical bills did not know the healthcare provider was not in their plan's network at the time of care, according to a survey conducted by Kaiser Family Foundation and The New York Times .

4. Emergency room services to blame, in part. A Health Services Research survey found in 2011, 68 percent of inpatient involuntary contact with out-of-network physicians was related to emergency care. These kinds of unanticipated medical bills may arise when a hospital participates in an insurer's network but its employed emergency physicians do not. For example, more than half of the hospitals in some Texas insurers' networks did not have a single physician on staff covered by the insurer, according to a 2015 study from the Centers for Public Policy Priorities in Austin.

5. Balance billing and contracted physicians. Many hospitals use physician outsourcing firms for anesthesiologists, emergency physicians, pathologists and radiologists, or will bring in an outside assistant surgeon to help with procedures. In many cases, these physicians do not participate in the same network as the hospital, unbeknownst to the patient. When physician groups and insurers are unable to resolve reimbursement disputes, patients can be served with much higher out-of-network charges. In Texas, for example, the specialty services most likely to submit balance bills are anesthesiologists, lab services, surgery and radiology, reports the Texas Department of Insurance .

6. Payers will fight out-of-network physicians with lower reimbursement rates. Last year, health insurance giant UnitedHealthcare said it would scale back how much it pays out-of-network physicians who practice at in-network hospitals, accusing physicians of demanding excessively high reimbursement levels, according to Kaiser Health News . During a billing dispute with out-of-network Bayonne (N.J.) Medical Center, the insurer accused the hospital of charging out-of-network rates 10 to 12 times higher for a medical service than area hospitals participating in United'snetwork. If a payer refuses to match physician reimbursement rates, the financial burden is passed on to the patient. In the aforementioned dispute between Bayonne and UnitedHealthcare, the patient was balance billed $1,170 for a total of five stitches.

7. Insurers are narrowing networks in an effort to reduce costs. As insurance companies have narrowed provider networks to keep premiums down, the number of patients who inadvertently received out-of-network care has jumped at hospitals, particularly with regard to contracted physicians.

8. Payers have sued providers for 'excessive' out-of-network fees. Aetna has sued a half dozen out-of-network physicians in recent years, alleging gross over charging for medical services. In 2014 Aetna sued a physician at Monmouth Medical Center in Long Branch, N.J., a hospital within Aetna's network, who did not notify a patient he would not accept Aetna's discounted reimbursement rate, according to the lawsuit. The physician charged Aetna $31,939 to treat abdominal pain in the patient. After Aetna paid the amount it deemed reasonable - $2,811, based on Medicare rates - the physician balance billed the patient for an additional $10,635.

9. Balance billing can occur even when a payer adjusts out-of-network emergency bills to in-network rates for patients. A patient recently accused Duke University Medical Center in Durham, N.C., of balance billing his account for an out-of-network rate after the patient submitted in-network payment rates to Blue Cross Blue Shield. Owing to the medical emergency of his situation, Matthew Aitken said he received an in-network rate from Blue Cross Blue Shield of North Carolina. However, Mr. Aitken alleged Duke proceeded to charge him for the remainder of the bill at the higher out-of-network rate, resulting in a bill nearly double that of Mr. Aitken's out-of-pocket limit.

10. Air ambulance billing disputes, complaints on the rise. In rural areas of the U.S. the high price for life-saving air ambulance flights has grabbed media attention as rural residents, faced with excessive balance billing, have turned to state and federal auditors for intervention. Those in rural areas often must rely on air ambulance flights in life-or-death situations in lieu of feasible ground transportation. Reimbursement rate disputes between payers and medical air transport companies have strapped patients with devastating medical bills. When Amy Thomson's newborn daughter was in heart failure, Ms. Thomson had to use an air ambulance service in rural Montana for transport to a more capable facility. At the time her insurance company, PacificSource, did not have an in-network air ambulance company near her family, reports Montana Public Radio . Ms. Thomson received a $43,000 balance bill from Airlift Northwest after PacificSource contributed a policy cap of $13,000.

11. Provider-based billing practices. Consumers have been increasingly vocal about surprise medical bills derived from provider-based billing practices. Provider-based billing allows a healthcare organization to bill patients for physician care in addition to a service charge for the patient's use of hospital facilities and equipment. In some cases, a patient may be responsible for the service bill if their insurance declines to pay or if the patient has a high deductible health plan. Large hospitals like Cleveland Clinic have faced increased scrutiny for provider-based billing practices. After paying a $30 copayment for in-network care with a Cleveland Clinic chiropractor, Julie Beinhardt reported receiving a balance bill of $3,000 for provider-based service fees her insurance plan refused to cover.

12. President Barack Obama signed legislation against provider-based billing. Last year, President Obama signed legislation outlawing provider-based billing at off-campus outpatient facilities. The legislation does not apply to existing outpatient centers that already engage in the practice, however.

13. The president's 2017 budget proposal includes a provision to eliminate surprise medical bills. Although details are minimal, the president's 2017 budget proposal includes a provision to eliminate balance billing privately insured patients. The administration would address the issue by requiring physicians who regularly provide services in hospitals to accept in-network rates for service reimbursement, even if they aren't in the insurer's network.

14. About a quarter of U.S. states have laws that protect consumers from out-of-network medical bills incurred by emergency care. According to a study from Kaiser Family Foundation , 24 states have implemented laws that restrict providers from balance billing in emergency care situations, including California, Delaware, New Jersey, New York and Pennsylvania, among others.

15. More states are proposing independent dispute resolution between payers and providers in balance billing cases. Independent dispute resolution establishes a legal space in which providers and health insurers can settle disagreements regarding balance billing without involving the patient. The states of Illinois and New Yorkhave arbitration methods in place, and Florida , Washington and Pennsylvania are currently considering a similar resolution methods.

16. New York has some of the strongest consumer protection laws. Under New York law , consumers are generally protected from owing more than their in-network copayment, coinsurance or deductible on bills they receive for out-of-network emergency services. Patients can complete an assignment of benefits form that absolves them of financial responsibility and allows the provider to pursue payment from the health plan in balance billing disputes.

17. Florida state legislature is currently embroiled in a fight to pass balance billing laws. Legislation to outlaw balance billing in Florida has continued to creep through the state legislature since last fall. Introduced in both the house and senate, the bills have sparked conflicting and outspoken opinions from patients, payers, hospitals and physicians. Hospitals have largely denounced the bill, blaming balance billing disputes on payers that demand allegedly unsustainable reimbursement rates, reports Sunshine State News .

18. The "End Surprise Billing Act". Federal lawmakers are making moves to outlaw balance billing nationally. Co-sponsored by 25 lawmakers, the End Surprise Billing Act would protect patients from balance billing who went to in-network facilities for emergency services, reports Consumerist . In non-emergency cases, it would require providers to notify patients within 24 hours if an out-of-network specialist will be involved in an episode of care.

19. Consumers don't know how to navigate the legal waters. According to a Consumer Union report, 57 percent of patients who encountered balance billing from contracted physicians within the last two years paid in full because they didn't know their rights to fight the bills. An overwhelming majority (87 percent) did not know which agency or department in their state government is tasked with handling complaints about health insurance. "So many times, people just give up [in surprise billing disputes]," Elisabeth Benjamin, vice president of health initiatives with Community Service Society of New York, told NPR .

20. The New York Times dedicated a series to consumer encounters with surprise healthcare bills. Elisabeth Rosenthal's series in The New York Times entitled Paying Til it Hurts examined the personal and financial implications of excessive, unexpected medical costs on Americans, their families and their healthcare consumption. Ms. Rosenthal's installments often feature individuals with unaffordable balance bills like Peter Drier , who was served a $117,000 balance bill for an out-of-network physician's assistant he never knew was present during surgery.

[Dec 26, 2016] Are Psychiatric Medications Hurting More Patients Than They Help?

Notable quotes:
"... Scientific American ..."
Dec 26, 2016 | science.slashdot.org
(scientificamerican.com) 431

Posted by EditorDavid on Sunday December 18, 2016 @01:34PM from the depressing-anti-depressant-news dept.

An anonymous reader quotes Scientific American 's Cross-Check blog :

Two new posts on this website have me contemplating, once again, the terrible possibility that psychiatry is hurting more people than it helps. Reporter Sarah G. Miller notes in "1 in 6 Americans Takes a Psychiatric Drug" that prescriptions for mental illness keep surging. As of 2013, almost 17 percent of Americans were taking at least one psychiatric drug , up from 10 percent in 2011, according to a new study. "Antidepressants were the most common type of psychiatric drug in the survey, with 12 percent of adults reporting that they filled prescriptions for these drugs..."

This increase in medications must be boosting our mental health, right? Wrong. In "Is Mental Health Declining in the U.S.?," Edmund S. Higgins, professor of psychiatry at the Medical University of South Carolina, acknowledges the "inconvenient truth" that Americans' mental health has, according to some measures, deteriorated ...

It's all more evidence of something their blogger wrote in 2012. "American psychiatry, in collusion with the pharmaceutical industry, may be perpetrating the biggest case of iatrogenesis -- harmful medical treatment -- in history ."

[Dec 26, 2016] 5 Ways to Lower Your Medical Bills Personal Finance

Notable quotes:
"... "One should know what the cost of the procedure is, and that is something that is just impossible to figure out before or after the procedure," Luthra says. "I had no way of knowing beforehand there were going to be these six different types of providers . . . sending me bills." ..."
Nov 29, 2007 | US News

Insurance companies aren't the only ones who can negotiate a lower price -- you can, too. Here's how.

By U.S. News & World Report

Sanjiv Luthra of Los Altos, Calif., suffered from the pain and fatigue of rapid-onset arthritis so severe that he couldn't walk 10 feet until he underwent double knee-replacement surgery in 2006. Now, two years later, he can walk and run, but he still suffers the fallout from another ailment: medical bills.

Six hours in an operating room, two knee replacements, medications and a five-day hospital stay added up to a bill of $80,000, Luthra estimates. That's not counting bills for an anesthesiologist, physical therapy, additional medicines and special exercise equipment to help him recover.

"One should know what the cost of the procedure is, and that is something that is just impossible to figure out before or after the procedure," Luthra says. "I had no way of knowing beforehand there were going to be these six different types of providers . . . sending me bills."

Luthra's insurance company was able to negotiate with the hospital so that it paid about $20,000, and he parted with about $5,000, including expenses outside the hospital.

But individual patients can haggle for lower medical bills, too. Here are tips on how to go about it.

Work up the courage to ask. It's not just insurance companies that can negotiate.

"The typical insurer gets about a 60% discount," says Gerard Anderson, the director of the Johns Hopkins Center for Hospital Finance and Management. "If you go into the hospital and ask the chief financial officer , you may get a 30% discount, but you have to ask for it. It's totally up to the discretion of the CFO how much they or the person in the billing office are willing to give you."

Although it's common to negotiate with a real-estate agent or car salesperson you probably never will see again, it's much more difficult to negotiate with a doctor you trust to make you well and to provide continuing care for your family. Only 31% of Americans have tried to negotiate the price of medical bills, a survey by Consumer Reports National Research Center indicated. But of those who tried, 93% have been successful at least once, and more than a third saved more than $100.

Explore low-cost treatments. Many doctors incurred large loans to finance medical school and probably understand the need to get a fair price as well as you do.

But even though almost 80% of physicians will prescribe a generic medication over a brand-name drug to save patients money, far fewer consider patient costs when recommending diagnostic tests (51%) or choosing between hospitalization and outpatient treatment (40%), according to a survey of physicians by the Center for Health System Change and the University of Chicago

If money is an issue, you need to ask your doctor if cheaper, medically sound options are available. The trick is to keep it friendly and ask nicely. For minor health ailments such as ear infections and pinkeye, drugstore clinics list reasonable prices upfront, with no negotiating required.

Find the correct person. Although they are heavily involved in treatment decisions, doctors may not be directly involved in other billing issues, so you need to find a person with the ability to adjust your bill.

"I would suggest the consumer go to the office manager," says Timothy Cahill, a health-care consultant in Louisville, Ky., who has negotiated hospital bills on behalf of patients. The office manager should be able to direct you to the person in charge of billing.

Offer cash payments. This could be a mutually beneficial solution for you and the medical establishment.

"Paying cash is worth a lot to a doctor in terms of time and trouble, and it is a lot less complex for the hospital to deal with," says Shankar Srinivasan. He is a co-founder and the chief technology officer of Vimo.com, a company that uses public records to figure out what prices insurers negotiate with hospitals. Cash, he says, saves hospitals the trouble of negotiating financing terms, paying credit card transaction fees and sending collection agencies after patients who fail to pay.

Scrutinize the bill and your insurance. If you don't have the cash to pay a large medical bill, you need to educate yourself about what your insurance should cover and try to negotiate a discount off the sticker price.

"As a consumer, just like a detective, you have to really understand the specifics of your insurance benefit plan, take the initiative of setting up conference calls (including yourself, the hospital and your insurance company) proactively, and you have to document everything," says Luthra, who is chief operating officer of the health-care-consulting company Benu. "You don't just pay the bill as is."

This article was reported and written by Emily Brandon for U.S. News & World Report.

[Dec 26, 2016] How to avoid and handle surprise medical bills

Notable quotes:
"... The average balance billed to patients was $622.55 , though the study reported bills as high as $19,603.30. But, ERs are not the only source of surprise bills. ..."
"... Even when a patient goes to a hospital for routine surgery, and takes care to choose an in-network hospital and in-network surgeon, the anesthesiologist, radiologist or pathologist assigned to the case may be out of network, and follow up with a surprise bill. ..."
"... If you have a serious medical emergency, your nearest hospital may not be in-network and all your treatment may result in out-of-pocket expense for high surprise bills. But, even if you visit an in-network ER, you have little control over the choice of doctor: By definition, you are facing an emergency, and must take whoever is available. ..."
"... Check with your state insurance regulator to see if your state has any consumer protections against surprise bills. ..."
"... At present, California, Colorado, Connecticut, Florida and New York do have such protections against unexpected balance bills - either for out-of-network ER situations alone or for additional types of surprise bills. ..."
"... If your state does not offer protection against surprise bills, check first to make sure the provider is really not in your network. Back offices and billing companies deal with many plans and sometimes make mistakes. Providers who are in your network have to accept the insurer's contracted rate. ..."
"... If the provider is out of network, do some research on an independent website, such as fairhealthconsumer.org , to estimate what the procedure typically costs in your locality. ..."
"... If neither the insurer nor the provider is willing to budge, do not be afraid to seek help. If you get your insurance through your employer, your human resources department may be able to intervene. Call your state representative or your local consumer protection office. With the right assistance, you might be able to reduce the bill, if not make it go away entirely. ..."
thehill.com
Surprise bills are never a welcome surprise. Typically, they arrive after you arranged care from a doctor and a hospital that were both in your health plan's network, but then you were unexpectedly treated by one or more other providers who, unbeknownst to you, were outside that network.

When these out-of-network providers send you a bill for their services, you may have to pay the full amount out of pocket or, if your health plan covers out-of-network care, to pay the balance of the bill that your insurance fails to cover. And the balance bill generally requires you to pay more than the out-of-pocket amount you would have owed if you had been treated by an in-network provider.

Emergency rooms are one of the most common locations where healthcare results in surprise bills.

As detailed recently in an article by two Yale scholars in the New England Journal of Medicine, in more than one in five cases nationwide, ER visits to an in-network facility involved out-of-network physicians. The average balance billed to patients was $622.55, though the study reported bills as high as $19,603.30. But, ERs are not the only source of surprise bills.

Even when a patient goes to a hospital for routine surgery, and takes care to choose an in-network hospital and in-network surgeon, the anesthesiologist, radiologist or pathologist assigned to the case may be out of network, and follow up with a surprise bill.

Several states have already enacted laws to protect consumers against surprise bills, although some of the statutes protect patients only in the case of balance bills for out-of-network ER services for a serious medical emergency. Currently, the issue is being discussed in a number of statehouses. In the meantime, here are steps you can take to protect yourself from such surprises.

Prevent surprise bills

The best defense against a surprise bill is prevention. If you have a serious medical emergency, your nearest hospital may not be in-network and all your treatment may result in out-of-pocket expense for high surprise bills. But, even if you visit an in-network ER, you have little control over the choice of doctor: By definition, you are facing an emergency, and must take whoever is available.

However, for a planned surgery or other procedure, you probably have time to speak up. Make sure that your doctor and hospital are in your plan's network. Check with them and with your plan. Ask your physician and your hospital in advance if they can arrange to have only in-network providers treat you.

Some hospitals may have no in-network specialist for care you might require. Find out if another hospital in your area can provide all your necessary services on an in-network basis. In some areas, there may be no in-network specialists available of the type you need. In that case, inform your plan that its network lacks necessary services and find out if the terms of the plan or state law provide you protection from large balance bills in such circumstances.

Always refer to your plan by its exact official name. Often insurers have multiple plans with similar names but different networks. If you use the wrong plan name when inquiring about a plan's network, you may get a wrong and costly answer. Make your inquiries and requests in writing so you have documentation. Ask for the names of the providers who will be involved in your care, and check with your insurer and with the providers themselves to see if they are all in your plan's network.

Check if your state protects consumers

If you do get a surprise bill, take action. Check with your state insurance regulator to see if your state has any consumer protections against surprise bills. Many states have laws that require HMOs to protect consumers from surprise bills, especially with respect to necessary ER services. Fewer states have similar protections for other types of health plans, such as PPOs and EPOs.

At present, California, Colorado, Connecticut, Florida and New York do have such protections against unexpected balance bills - either for out-of-network ER situations alone or for additional types of surprise bills. Generally, these laws provide that the consumer is required to pay only the amount he or she would owe for the services if provided in-network. States have different mechanisms for settling the balance, but they generally involve the insurer and the provider, not the patient.

If your state does not provide protection

If your state does not offer protection against surprise bills, check first to make sure the provider is really not in your network. Back offices and billing companies deal with many plans and sometimes make mistakes. Providers who are in your network have to accept the insurer's contracted rate.

If the provider is out of network, do some research on an independent website, such as fairhealthconsumer.org, to estimate what the procedure typically costs in your locality. If your plan's reimbursement is based on an amount that is less than the typical charge, you can use this information to ask the plan to pay the provider on the basis of at least the typical rate. If the out-of-network provider's charge is higher than the typical rate, you might be able to negotiate with the provider to reduce your costs. You can try to persuade the provider to reduce the charge, or to discount an excessive balance bill, by showing the provider that his or her charge is above the typical market rate.

If neither the insurer nor the provider is willing to budge, do not be afraid to seek help. If you get your insurance through your employer, your human resources department may be able to intervene. Call your state representative or your local consumer protection office. With the right assistance, you might be able to reduce the bill, if not make it go away entirely.

Robin Gelburd, JD, is the president of FAIR Health, a national, independent nonprofit with the mission of bringing transparency to healthcare costs and insurance reimbursement. FAIR Health oversees the nation's largest repository of private healthcare claims data, comprising over 21 billion billed medical and dental charges that reflect the claims experience of over 150 million privately insured Americans. Follow on twitter @FAIRHealth

[Dec 25, 2016] How to Fight Back Against Outrageous E.R. Bills

Two excellent resources-Healthcare Blue Book and FAIR Health-can give you estimates of how much health care services should cost in your area. Plus, your insurer's website may also provide a tool that will allow you to compare costs.
Notable quotes:
"... But the bill did come-all $9,000 of it. The ambulance company charged $6,500, including a $300 fee for the linens and a $30 charge for aspirin. The E.R. billed the remaining $2,500. "My mouth literally dropped open when I saw the cost," she says. ..."
"... "I've always heard emergency room visits were costly, but $9,000 for nothing more than a conversation that lasted one minute? That's robbery," she says. ..."
"... "Employers often try to stay away from filing a claim under worker's compensation, so it does not impact their experience rating or trigger an [occupational safety and health administration] review, but it would save her money." ..."
"... This piece is by Drew Anne Scarantino ..."
www.thefiscaltimes.com

It's no secret that hospital bills in the U.S.-especially ones from the E.R.-can often hit astronomical proportions.

According to a recent cost study conducted by researchers at Stanford University, the University of Minnesota, the University of California, San Francisco and the Ecologic Institute, the median charge for an emergency room trip in the U.S. comes in at $1,233. But where it really gets interesting is when you look at the specific reasons for those E.R. visits: The researchers found that the treatment price for a headache could range from $15 to a whopping $17,797. As for a sprained ankle, it could set someone back a paltry $4 or up to $24,110!

So what gives with these wildly fluctuating price points?

For starters, most emergency room prices are inflated based on the rates at which insurance companies will reimburse the hospital on a patient's behalf. That's why a single aspirin can cost $30 per pill in the E.R., which is more than six times the price for a bottle of them at the drug store.

On the flip side, patients will often contact the hospital or surgeon's billing office to ask for a cost reduction, further adding to the inconsistency in pricing. It's a practice that often works in a patient's favor, says billing advocacy specialist Sharon Salters of Medical Cost Advocatea professional medical bill negotiation service.

And then there's also the fact that most hospitals offer discounts to self-paying individuals-especially if there's a risk that they might not pay at all.

So to help shed some light on the complexities of hospital medical billing for the average consumer, we asked three people to share their craziest emergency room stories, the even crazier bills that followed-and the steps they took to remedy them.

... ... ...

The Emergency: Head Injury
The Bill: $9,000

A few months ago, Amanda Harris, 27, of Morristown, N.J., fainted at work, hitting her head in the process. Due to liability concerns, her production company required Harris to take an ambulance to the emergency room, despite her refusal. "I didn't even have a cut on my head, just a slight bump. No headache, no nausea, no confusion, nothing," she says.

Harris waited for over an hour in the E.R. before her husband told the nurse that they were leaving. Minutes later, a doctor spoke to Harris for under a minute, confirming that she was fine to go. "He didn't do any tests-no light in my eyes, no blood pressure," says Harris. "I left thinking I wouldn't even get a bill."

But the bill did come-all $9,000 of it. The ambulance company charged $6,500, including a $300 fee for the linens and a $30 charge for aspirin. The E.R. billed the remaining $2,500. "My mouth literally dropped open when I saw the cost," she says.

RELATED: Hospital Costs Explode: Between $127 and $151 Billion

What This Patient Did: Harris called her insurer and fought the bill. Luckily, her insurance covered all but a $3,000 deductible-but she was too exhausted to push for more. "I've always heard emergency room visits were costly, but $9,000 for nothing more than a conversation that lasted one minute? That's robbery," she says.

What the Expert Says: Even though Harris didn't want to take an ambulance, Salters says that her company's suggestion was well-advised. "However, she should consider working with her employer to file the claim with her company's worker's compensation carrier," says Salters. "Employers often try to stay away from filing a claim under worker's compensation, so it does not impact their experience rating or trigger an [occupational safety and health administration] review, but it would save her money."

How You Can Avoid Outrageous E.R. Bills (Really!)

When it comes to a trip to the E.R., the reality is that there's usually no time to shop around and compare prices in advance. But if you do some research before an emergency happens, you could potentially keep costs significantly down.

The negotiation can seem like a lot of extra work, but the payoff can be tens of thousands of dollars in savings shaved off a potentially outrageous E.R. bill.

This piece is by Drew Anne Scarantino.

[Nov 23, 2016] 7 Tips For Fighting And Paying A Big Hospital Bill

Notable quotes:
"... Also consider using Medicare rates as a guide; the federal health system for people 65 and older typically has the lowest reimbursement rate for hospitals and medical providers. Your hospital may not agree to charge you its Medicare fee, but this figure is a good starting point for any negotiation. ..."
"... don't hesitate to appeal its decisions. You'd be surprised how often carriers overturn their earlier rejections. ..."
Sep 17, 2013 | www.forbes.com

Conversely, you may be able to wrangle a cash discount for agreeing to pay your entire cost at once.

You may also be able to successfully bargain down the particular dollar amounts you've been charged.

Tell the billing department that if your insurance requires, say, a 20% co-payment to the hospital, you'll pay only 20% of the insurer's negotiated rate with that hospital. That's usually far less than the initial rate quoted - the figure charged to uninsured patients.

Go online to check the rates other local hospitals charge for the procedure you had. Then, if you find your bill was way out of line, use this data as ammunition to try to get your fees lowered. You can get this type of information at such sites as Clear Health Costs, Healthcare Blue Book and FAIR Health.

Also consider using Medicare rates as a guide; the federal health system for people 65 and older typically has the lowest reimbursement rate for hospitals and medical providers. Your hospital may not agree to charge you its Medicare fee, but this figure is a good starting point for any negotiation.

2. Vigilantly review the bills. "It's very common for hospital bills to contain errors and overcharges, so make sure you've actually received the services they said you did," Detweiler says.

Candice Butcher, vice president of Medical Billing Advocates of America, says if you're discharged in the morning (as most patients are), protest if you're socked with a full daily-room rate for the date you left the hospital.

And if you brought your medications with you, make sure you weren't charged for them by the hospital. "This frequently happens," Butcher says.

Also, dispute any additional fees on the bill for routine supplies, like gowns, gloves or sheets. These items should be factored into the hospital daily-room charge, because, Butcher says, they are "considered the cost of doing business."

3. Challenge your health insurer's decisions, when warranted. Keep track of any hospital bills the company rejects on grounds that the procedure or drug isn't covered by your policy. If you believe the insurer should be paying more, don't hesitate to appeal its decisions. You'd be surprised how often carriers overturn their earlier rejections.

4. Negotiate bills once you know how much you'll have to pay out of pocket. If you just want extra time to send the money, Dale says, "it is relatively easy to speak with hospital or clinic business office staff to arrange a payment plan."

Conversely, you may be able to wrangle a cash discount for agreeing to pay your entire cost at once.

You may also be able to successfully bargain down the particular dollar amounts you've been charged.

Tell the billing department that if your insurance requires, say, a 20% co-payment to the hospital, you'll pay only 20% of the insurer's negotiated rate with that hospital. That's usually far less than the initial rate quoted - the figure charged to uninsured patients.

Go online to check the rates other local hospitals charge for the procedure you had. Then, if you find your bill was way out of line, use this data as ammunition to try to get your fees lowered. You can get this type of information at such sites as Clear Health Costs, Healthcare Blue Book and FAIR Health.

Also consider using Medicare rates as a guide; the federal health system for people 65 and older typically has the lowest reimbursement rate for hospitals and medical providers. Your hospital may not agree to charge you its Medicare fee, but this figure is a good starting point for any negotiation.

5. Consider hiring a pro. Since hospital bills are hairy, messy beasts, it may be worth your while to bring in a patient- or medical-billing advocate (Detweiler recommends the advocacy firm Copatient.com, which charges 30% of what it saves you) or an attorney. "It's like hiring a CPA to do your taxes," Dale says.

Be sure you won't be required to pay this expert any fees upfront. Patient advocates typically charge 20 to 30% of your savings; some put a cap on their fees. Karis' firm, for example, charges no more than $3,000. Attorneys often charge 30% of the savings they achieve.

... ... ...

Caroline Mayer is a consumer reporter who spent 25 years working for The Washington Post. Follow her on Twitter TWTR -0.69% @consumermayer.

[Nov 22, 2016] Negotiating can cut hundreds off your medical bills

Notable quotes:
"... There are also companies who claim they have a network of physicians throughout the state who offer medical services for 50 percent off or more. ..."
13 WTHR Indianapolis
But you can fight back against skyrocketing medical costs.

"I've heard discounts up in the area of 30 percent sometimes, which can be pretty significant," said Cathryn Perron, director of program development with Consumer Credit Counseling.

She says it's possible to negotiate down your medical bills - everything from ambulance rides to surgery. She says you can also bargain with your dentist, the lab that does your blood tests, the eye doctor - even the company that makes you prescription medication.

"Each company has a specific number you can call to fill out an application and many times, you'll get a discount, or you'll get the product free through the drug companies, if you qualify financially," Perron said.

All you have to do, with or without insurance, is make a call. Each case is handled differently. In most cases, everyone wants to pay the bill, but they're afraid to contact their doctor or hospital. They'll work with you to make sure the cost is paid.

So how do you pay less?

There are a number of options:

  • Offer to pay in cash - You may get an up-front discount of 10 percent or more.
  • Ask about a payment plan - They're usually interest-free and determined by your budget.
  • If you don't have insurance - Some hospitals will give you a discount that is equal to what it may have given the insurance company.

Charity care - Bills are forgiven, based on your income and expenses, but you'll have to fill out hardship paperwork.

"You'll most likely have to provide proof of income, they'll ask about your monthly living expenses and your other bills that you have to pay every month," said Perron.

Sholar called Indianapolis EMS.

"He says, 'Sir, you got to pay for the ambulance, all the stuff in the ambulance, the two people who drive the ambulance. That's just the way it is'," he said.

But he didn't give up.

"This bill says $1,300. She said, 'Yeah, that sounds about right.' I said, 'Let me talk to a supervisor'," Sholar said. "The supervisor's name is John. John wasn't too happy."

Mike put on the pressure and the bill was reduced by $532. The wounds to his buttocks are healed, but the other injury he got that night, on his thumb, is a constant reminder of the cost of healthcare.

"I don't need no X-rays, I don't need no other stuff. Just give me the stitches and I still haven't received a bill for that," he said.

But he's ready to negotiate and he says, in the future, he'll also weigh the costs before calling 911.

"I would have put a rag over it and got a ride here," he said.

Tips to Negotiate Your Medical Costs

Consumer Credit Counseling and Apprisen offer tips to get your medical bills reduced:

First and foremost be informed. Understand what type of medical insurance coverage you have and what your co-pays or financial responsibilities are. Some insurance companies have contracts with certain medical providers to offer a discount if you receive treatment from a "preferred provider." We encourage individuals to meet with their Human Resource department or contact their insurance company to speak with a representative about their coverage and benefits prior to receiving medical treatment. This could reduce your financial responsibility significantly.

Apprisen recommends for you to review your itemized statement from your medical provider. If you feel there are discrepancies or charges in question, contact your medical provider to meet with their Patient Account Specialist to discuss your questions or discrepancies. Communication is a vital part of resolving your issues. Simply ignoring communication from your medical provider will not resolve the issue and could potentially lead to a negative impact on your credit rating if resolution is not reached.

Whether you have insurance or not, you are encouraged to contact your medical provider prior to treatment (if possible) to discuss costs associated with your treatment and to work out the possibility of negotiating those costs down. Many medical providers will consider giving discounts to individuals who are willing to pay the balance in full upon services rendered or within a short period of time after receiving treatment. If you find yourself in a position where you are not able to pay the balance in full, consider negotiating with your medical provider for a monthly repayment plan interest free. You are encourage to analyze your personal budget to insure you are able to make the financial commitment to your medical provider. Negotiating your medical bill then failing to follow through with the financial payment arrangement could negate your hard effort to reduce your medical bill.

If you are uninsured, you are encouraged to meet with a Patient Account Specialist or a "decision maker" to see if you qualify for any financial hardship programs. Most hardship programs require you to provide evidence of your financial situation and the award is based on financial need. Be prepared to give a full budget disclosure in order to be considered for the hardship program.

Apprisen's mission is "To help people improve their financial well-being through counseling, community outreach and financial education."

You can call Apprisen at 1-800-355-2227 or visit apprisen.com.

There are also companies who claim they have a network of physicians throughout the state who offer medical services for 50 percent off or more. You can find out more about those companies at objectivedx.com.

[Nov 22, 2016] Hiring a Guide to the Medical Bill Maze

Notable quotes:
"... As part of her husband's benefits package, Isaac had access to a medical billing assistance company called Health Advocate . It negotiated with the physician's health-care group to reduce her bill to $7,000. ..."
Apr 29, 2013 | Bloomberg

When Annrose Isaac's twins were born prematurely, she thought her insurer would cover their stay in the neonatal intensive care unit. "The hospital was in our network, but it turned out the physician in the NICU who saw our daughters didn't participate with our insurer," says the Westwood (New Jersey)-based financial planner. "All of a sudden we were getting bills for over $30,000."

As part of her husband's benefits package, Isaac had access to a medical billing assistance company called Health Advocate. It negotiated with the physician's health-care group to reduce her bill to $7,000.

More than 60 percent of all U.S. personal bankruptcies are linked to illness and unpaid medical bills, according to a 2009 Harvard University study, even though 78 percent of those filing for bankruptcy because of illness have some form of health insurance. So hiring a medical billing advocate can be an essential part of the cure to financial ills.

Yet finding the right advocate can be tough, and those in the direst situations can ill afford the typical $75- to $130-an-hour rate. "This business is painfully slow-growing," says Becky Stephenson, co-president of the Alliance of Claims Assistance Professionals (ACAP), an advocate trade group. "There are a lot of people with problems but not a lot of people willing to pay you to help them." Despite long experience, Stephenson herself has trouble making a good living purely from advocacy, so she supplements her income by serving as an expert witness in medical lawsuits.

Employees working at sizable companies may already have access to a health advocate. Just over half of U.S. companies with more than 500 employees offer it as a benefit, according to Steven Noeldner, a senior consultant for Mercer's Total Health Management practice. Many employees don't know the benefit exists, he says, and the services generally aren't as customized as those of an independent billing advocate.

Credential Check

Unlike with more established professions such as accounting or law, there is no standard credential to look for when seeking a qualified advocate. At the most basic level you should ask if an advocate has certifications in medical bill coding from either the American Academy of Professional Coders or the American Health Information Management Association.

Many people with those designations aren't advocates, however, working instead for hospitals or insurers. And understanding the codes is only half the battle. Because of the complexity of our health-care system, you'll need someone who specializes in your specific kind of billing problem.

A good place to start is Claims.org, ACAP's website. It lets you search for experienced advocates by state. In a case like Isaac's, you'd need someone who specializes in hospital bills. Other advocates specialize in Medicare appeals, long-term care insurance, workers' compensation and insurance for special needs children.

Privacy Issues

The best way to find the right specialist is to ask the advocate for a resume and references. This can be tricky, because laws about disclosing private medical information are so strict that some advocates have difficulty providing references. In order to do so, their clients must agree to discuss their medical history.

Stephenson specializes in hospital bill audits. She studies itemized bills line by line, identifies padding and mistakes and negotiates lower rates. Prior to starting her Austin (Texas)-based advocacy firm VersaClaim in 2002, she ran an organization that helped doctors affiliated with hospitals set up their practices. That included all aspects of hospital billing.

A registered nurse for 12 years, Stephenson has an intimate knowledge of medical terminology and hospital procedures. "I ask questions like, Are there dosages of medications that are not compatible with my medical experience in real life?" she says. "Do the charges look realistic, or is there an $85 Tylenol?"

Location Matters

Another important factor to consider is an advocate's location. State laws vary in how they regulate insurers and hospitals. For Katalin Goencz, an advocate in Stamford, Connecticut, location is often irrelevant because she specializes in Medicare appeals: "The rules for Medicare are federal and pretty much universal, so the client's location doesn't really matter."

For a patient negotiating a lower bill directly with a local hospital or private insurer, having an advocate who knows the specific state regulations helps. State rules for advocates can also vary dramatically. Florida has some of the strictest. "Due to the large senior population in our state, we have a strong urge to make sure our people adjusting medical claims are licensed, competent and held to a high standard," says Matthew Guy, a spokesman for Florida's Division of Agent and Agency Services, which licenses and regulates advocates.

The state's Public Adjuster license for advocates requires licensees to be fingerprinted, have a criminal background check and hold a $50,000 surety bond. "If there's any wrongdoing by the adjuster, we can take the bond amount and use that towards restitution for the consumer," Guy says. Adjusters must pass an exam and take 24 hours of continuing education classes every two years.

Contingency Basis

A handful of advocates will work on contingency if they think you have a negotiable claim. Most will impose strict conditions to ensure they get paid if they win. "When I started my practice, I did everything on contingency but learned very quickly that a lot of consumers who want you to take their case on contingency in the end don't want to pay you," says Sheri Samotin, a billing advocate at Life Bridge Solutions in Naples, Florida.

Now Samotin requires a credit-card authorization up front for an amount sufficient to cover what her estimated contingency fee will be if her work succeeds. If the client doesn't pay within 10 days of a settlement being reached, she charges the card. Her fee is 35 percent of the client's medical bill savings.

Samotin is unusual in the advocacy world as she is more of a generalist, taking on all kinds of medical billing problems, including those of the uninsured. She has 25 years of experience in the health-care industry, so she has the knowledge to handle different kinds of problems, Samotin says. For a monthly $285 fee she will manage her clients' entire billing life -- a common need for seniors who have lost their capacity or desire to manage daily finances.

Instead of being a member of ACAP, Samotin is a member of the American Association of Daily Money Managers, a trade group for generalists. Only a handful of the AADMM's 700-plus members have the skills to also handle medical billing advocacy, Samotin says. Nor does she expect rapid growth in the field.

"Because this is a disorganized profession, people entering the field have to be entrepreneurs," she says. "They have to hang out their shingle and go out and get clients. In my experience, the majority of people who are good medical analysts and advocates are not necessarily good business getters."

So until the profession matures, finding a good advocate will remain difficult, no matter how vital the service is.

(Lewis Braham is a freelance writer based in Pittsburgh.)

To contact the editor responsible for this story: Suzanne Woolley at swoolley2@bloomberg.net

[Nov 07, 2016] The Cigna CEO took home $49 million in total comp last year – and wasn't the highest paid Cigna executive

www.nakedcapitalism.com

Knifecatcher November 7, 2016 at 2:59 pm

Today our HR department revealed the "new and improved" 2017 benefits package… and it's massively crapified. But good news! The "High Deductible Health Plan" is now a "Consumer Driven Health Plan" thanks to our good friends at Cigna, who kindly reminded us that we just haven't been doing our part as active health care consumers to help reduce health care costs. Because the real problem with health care today is obviously branding.

Knifecatcher November 7, 2016 at 3:27 pm

The consultant they brought in to dump this on us actually said "most people spend more time shopping for the best price on shoes than they spend shopping for the most cost-effective health care."

I had the temerity to point out what I've learned from firsthand experience – that there is NO WAY TO KNOW what a provider will charge for a particular procedure beforehand. The response was that they'd follow up with me later. :)

Apropos of nothing, the Cigna CEO took home $49 million in total comp last year – and wasn't the highest paid Cigna executive.

Waldenpond November 7, 2016 at 5:26 pm

Have you seen the commercial where a female basketball player is goofing off for her child in the house… falls and injures herself. Later she's in a sling and grabbing a small trampoline and in response the 'husband' is on the phone. I guess the inference is he's calling the insurance company but I think it makes more sense to be calling for a price check.

The next time you have a compound fracture, remember to stay calm, and get the best price.

Tvc15 November 7, 2016 at 3:28 pm

And my company is offering a new 2017 "benefit"; Critical Illness Insurance to provide financial protection for an illness such as cancer, stroke or heart attack.

Uh, okay, I thought that is why I pay $6,000 / yr for my high deductible medical plan, not including company subsidy, dental or vision.

Maybe they should have asked marketing to help with the branding.

jrs November 7, 2016 at 3:38 pm

I think it's not actually for medical costs in most cases. It's for the cost of say not being able to work due to cancer and so on. Or that's what I've seen out there, obviously I don't know about your particular plan.

Waldenpond November 7, 2016 at 5:33 pm

Check the policy. Some policies are very specific in that they will include specific cancers and exclude others. The additional can cover illnesses not covered by the initial contract, lost wages, support, and unemployment in case your employer fires you. It may apply to Cobra costs in case of job loss so a person can maintain continuity of care.

Knifecatcher November 7, 2016 at 4:03 pm

We got that too, along with a number of other optional programs. My assumption is that once you get past medical, dental, and vision all those other post-tax "benefits" (pre-paid legal, long term care insurance, etc) are just profit centers, and that the provider gives the employer a kickback for allowing them access to a captive customer base – with payments automatically deducted from each paycheck! I don't know that for sure, but it's the only explanation I can see as to why HR pushes those so hard.

[Oct 15, 2016] The Breakaway insurance plan amounted to a reverse Ponzi scheme where unsuspecting employers expecting to buy affordable policies instead bought costly reinsurance requiring them to cover each others losses

Notable quotes:
"... Breakaway, with about 300 employees, accused Berkshire and Applied of "siphoning" premiums through a web of illegal shell companies, with diverted premiums going to unlicensed out-of-state insurers, the wire agency said. ..."
"... The plan amounted to a "reverse Ponzi scheme" where unsuspecting employers expecting to buy affordable policies instead bought costly "reinsurance" requiring them to cover each other's losses, leaving taxpayers on the hook for shortfalls when too many workers are injured on the job, Breakaway said. ..."
Oct 15, 2016 | www.nakedcapitalism.com

Cry Shop September 13, 2016 at 1:11 am

Class Warfare:
http://www.ejinsight.com/20160913-buffett-flagship-sued-over-workers-compensation-siphoning/

Breakaway, with about 300 employees, accused Berkshire and Applied of "siphoning" premiums through a web of illegal shell companies, with diverted premiums going to unlicensed out-of-state insurers, the wire agency said.

The plan amounted to a "reverse Ponzi scheme" where unsuspecting employers expecting to buy affordable policies instead bought costly "reinsurance" requiring them to cover each other's losses, leaving taxpayers on the hook for shortfalls when too many workers are injured on the job, Breakaway said.

[Oct 09, 2016] What is Insurance Fraud

Notable quotes:
"... Medical provider knowingly submits false medical bills by billing for services not rendered, billing for wrong procedure codes or billing for procedures of a medical necessity when procedures may have been elective or cosmetic in nature and not covered by health insurance. ..."
Oct 09, 2016 | insurance.ca.gov
Medical Medical

Inflated Billing - Inflated billing by any medical facility, doctor, chiropractor, laboratory, etc.

Healthcare

Billing Fraud - Medical provider knowingly submits false medical bills by billing for services not rendered, billing for wrong procedure codes or billing for procedures of a medical necessity when procedures may have been elective or cosmetic in nature and not covered by health insurance.

[Aug 29, 2016] Audits Of Some Medicare Advantage Plans Reveal Pervasive Overcharging

Aug 29, 2016 | www.npr.org

…The Center for Public Integrity recently obtained, through a Freedom of Information Act lawsuit, the federal audits of 37 Medicare Advantage programs. These audits have never before been made public, and though they reveal overpayments from 2007 - money that has since been paid back - many plans are still appealing the findings.

Medicare Advantage is a privately run alternative to standard Medicare; it has been growing in popularity and now enrolls more than 17 million seniors. In 2014, Medicare paid the health plans more than $160 billion.

But there's growing controversy over the accuracy of billings, which are based on a formula called a risk score; it is designed to pay Medicare Advantage plans higher rates for sicker patients and less for people in good health. In a series of articles published in 2014, the Center for Public Integrity reported that overspending tied to inflated risk scores has cost taxpayers tens of billions of dollars in recent years. …

[Aug 29, 2016] Patriotically, your higher costs of health care are added to America's anemic GDP figures

Notable quotes:
"... New ways to prepare your ramen. Rice in 50 pound sacks. Beans galore. ..."
Aug 29, 2016 | www.nakedcapitalism.com
OpenThePodBayDoorsHAL , August 29, 2016 at 3:50 pm

Ah yes, but think patriotically, your higher costs of health care are added to America's anemic GDP figures, everybody needs to do their bit. Forward Soviet!

RabidGandhi , August 29, 2016 at 3:53 pm

For $1500 you could have flown to Argentina and been treated for free, and still have another $500 left over for Evita t-shirts .

fresno dan , August 29, 2016 at 4:06 pm

allan
August 29, 2016 at 3:33 pm

You have the common, but naive idea that health insurance pays for health related services and/or materials. Yes, that is how it used to be, but actually the medical insurance complex follows the Mickey Mouse (i.e., Disneyland model). This is much more efficient and synergistic at leveraging resources to separate you from all your money.

What is the Disneyland model? Health insurance lets you SEE (and I mean this literally) your doctor, just like a ticket lets you into Disneyland, and you can see all you want.
Now if you want to ride or enter an attraction, or eat something, that is separate.
Now you can see a doctor. Asking him/her a question is a separate charge. The answer is a separate charge. A correct answer requires a specialist…..

cwaltz , August 29, 2016 at 5:14 pm

Isn't it fun?

You get told by the insurance company that it's the hospital/providers fault because of how they coded something and then you get told by the hospital that it's the insurance company's fault.

Meanwhile all you care about is why you are being charged the amount you are being charged and it appears to get more and more complicated as you find yourself charged more than once for a lab or procedure. It's gotten to the point where I've been billed by a doctor for READING a test that they ordered(uh I'm pretty sure there is no point in ordering a test if it isn't going to be read.) That's in addition to now being billed for the lab tech drawing the blood and the lab that has the technicians that read and record the values. And even more maddening, it isn't consistent. Some places bill me for the doctor's time for reading my labs, others do not and good luck figuring out which places are which short of trial and error.

Tom , August 29, 2016 at 7:27 pm

How does it feel to be an unpaid worker in the health insurance industry? I kid, because my wife and I spend a lot of time ourselves straightening out screwed-up bills almost every time one of us sees a doctor. And I mean that. Almost every single time there's an error - either on the doctor's part, the doctor's office staff, the doctor's billing company or the insurer. And god help us if there is a hospital or clinic involved! We are at the point now where we go in knowing the various procedure codes for what we want done and going over them with everybody involved, repeatedly. It helps, although things still get screwed up. Ya gotta love our 'system!'

Bob , August 29, 2016 at 3:32 pm

'We need fundamental changes': US doctors call for universal healthcare
https://www.theguardian.com/us-news/2016/may/05/us-doctors-calling-universal-healthcare-system-affordable-care-act

fresno dan , August 29, 2016 at 4:17 pm

Pat
August 29, 2016 at 2:34 pm

Health Care
UPDATE Here's a handy chart [Wall Street Journal, "Burden of Health-Care Costs Moves to the Middle Class"].

===========================================
I was looking at that, and it seemed it so contradicted all sorts of sources I had read about inflation in items like education as well as health care, energy, food, etcetera. As I have frequently noted, flat screen TV are super cheap, but non edible….unless your very, very hungry.
And than I realized I was reading something into the chart that the chart wasn't addressing at all – it wasn't talking about inflation – it is talking about expenditures.
If medical care is going way up, well than of course other expenditures, especially if salaries are stagnant, HAVE TO GO DOWN.

cwaltz , August 29, 2016 at 5:18 pm

You silly! That's what Care Credit and the rest of the credit vultures are for. They will be more than happy to finance that necessary crown or essential surgery you need.

Left in Wisconsin , August 29, 2016 at 5:48 pm

Yes, that chart is way more shocking than simple inflation. Health care costs are eating the economy. Although I'm sure Krugman will tell us it's because consumer preferences have changed – the middle class apparently just isn't as interested in food or housing as it used to be.

trent , August 29, 2016 at 2:45 pm

with regards to the wall street stating we are only paying more for healthcare

http://menus.nypl.org/menu_pages/24283/explore menu from brooklyn place in 2005-7

https://www.yelp.com/menu/diner-brooklyn current day menu for same place

Look at the price of a burger, eating out is so much more cheaper!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

trent , August 29, 2016 at 2:49 pm

if you're too lazy to click on the links

a cheeseburger from 2005-2007 era was $9.50

now a cheeseburger is $16

nooooooooooooooooooo inflation

John k , August 29, 2016 at 8:22 pm

Go to CA, stop at in-n-out, pay 3.45 for double double, a great burger.
Worth the trip.

nippersmom , August 29, 2016 at 2:50 pm

Actually, they didn't say eating out was cheaper, just that people are spending less of their income on it. I read that as eating out less often or at different types of establishments.

trent , August 29, 2016 at 2:54 pm

haha yes you got me, but i'm still angry about the price of burgers. I'll gladly pay you tuesday for a burger today

MyLessThanPrimeBeef , August 29, 2016 at 4:33 pm

How are you going to compete with energy-efficient, eco-friendly (to ensure a beautiful green world in the future) solar-powered robots when you need to eat cheeseburgers often (or less often)?

Enquiring Mind , August 29, 2016 at 3:00 pm

Income optimization techniques for the modern serf.

New ways to prepare your ramen.
Rice in 50 pound sacks.
Beans galore.

Don't forget your vitamins.

Jeremy Grimm , August 29, 2016 at 3:30 pm

Thanks for reminding me! I need to start up another batch of beans.

But I still buy my rice in 25 pound sacks. I splurge on perfume rice and sometimes I'll have an occasional meal with Korean brown rice although I buy it in 5 pound bags - its a little pricey. Next trip to the store I'll buy a big sack of parboiled rice to make my other rice last longer. I'm still learning how to grow potatoes and I need to build up the soil in my postage stamp garden space.

AnEducatedFool , August 29, 2016 at 4:10 pm

I am a vegetarian on SNAP. I do not know how meat eaters are able to eat a healthy diet on anything less that 750-1000 a month for a family of 3. Even at 1000 a month you are forced to eat a lot of food that is essentially poison.

I recently ran out of my 25 lb Lunderberg brown rice but no one sells that around here. I moved onto quinoa for now. I found a great deal on two 4 lb bags. Once that is gone I'll move onto whatever organic grain is cheapest per serving. I have not seen a lot of organic brown rice recently.

I buy organic beans to avoid Round Up which is used on beans and grains once they are finished growing. Apparently round up decreases the drying time so you get to eat a higher quantity of round up thanks to this process. I avoid it in my house so I only buy organic grains and flours.

If you make your own bread a good food processor makes it an easier and faster process. A few good recipes are found in How to Cook Everything: Vegetarian. My old Kitchen Aid stand mixer is great for ciabatta (Paul Hollywood recipe) but I do not use it all that often now.

If you can afford it buy cedar wood to frame a raised bed that is 3 x 10. 10 ft is ideal since that is the length of electrical conduit to make a quick and easy trellis. 3 feet is ideal because you do not want to step into your bed ever. One of my favorite books on back yard gardening is called Mini Farming: Self Sufficiency on 1/4 acre.

inode_buddha , August 29, 2016 at 5:13 pm

I imagine it depends on where you live: in my part of N.Y. you can eat like a king on 200 a month in food stamps. I know, because I did just that in 2011 or thereabouts. About 25% meat by volume in my diet.

AnEducatedFool , August 29, 2016 at 6:52 pm

200 for a single person is not bad. I spent about that while I was in college while a meat eater and that would work around here for a single person.

3 people make things harder. Due to allergens we need to skip eggs and avoid most conventional food due to stomach issues which I personally lean towards glyphosate causing stomach problems. Avoiding round up is only possible by purchasing organic produce which is primarily frozen for us or out of my garden. We use the dirty dozen and the clean list to purchase produce that is not organic.

A lot of our food needs to be produced by me due to necessity and loaf of organic bread costs between 3.40 and 5.50+ but the price per oz is similar. I make french baguettes and ciabatta bread at least once a week each which brings down food costs as well.

One of the worst moments of the past 6 months was when I had to explain to my son that he could not have cherry tomatoes from the store. I usually tell him know but its rarely over money but we were too low on money at the time and we couldn't justify the expense. He eats about a pint of cherry tomatoes out of my garden per day now.

But the term "eat like a king" needs updating. If you are the king then you can buy local organic produce, grass fed beef, free range chicken/fowl and afford to head out to high end restaurants. That far surpasses 200 a month and is closer to 2000 a month if you actually eat 3 meals a day plus 2 or 3 snacks.

I am outside of Philadelphia.

nippersdad , August 29, 2016 at 7:10 pm

That would depend upon what kind of meat eater you are talking about. Steaks every day or bits of one steak for eight meals over a few months? We buy large chunks of whatever on sale, have it ground up and/or sliced, freeze it and then live on it for years. Literally. We still have most of last year's Thanksgiving turkey ($7.00) frozen in its' own stock, for example. One freezer bag of that should make all the soup we could possibly want to eat, two or three meals worth, and then we freeze what's left for later. You can make a gallon or two of potato soup using little bits of ham and stock for a couple of bucks.

Soups, stews, stir fries, chili; you would be surprised at how far you can make, say, thirty dollars go. If you do the same thing with veggies, buy corn on sale (10 ears for two dollars, say) and cream sacks of it, for example, you can bring down the veggie bill as well. We have gotten to the point where planting a garden is more expensive than just buying the stuff.

And carbs are cheap; rice, potatoes, pasta…as are teabags.

It seems to me that it is largely a matter of time or money. The more time you put into your cooking (making stocks, for example) the less you will ultimately have to spend…..to eat at home, anyway. My habit is to never to make anything that one cannot freeze more than half of, and it seems to work out pretty well.

Carla, August 29, 2016 at 7:38 pm

Educated? For sure. A Fool? Not so much.

One of my favorite ways to turn cold, leftover vegetables into an elegant meal? A generous dollop of curried mayonnaise.

JTMcPhee , August 29, 2016 at 5:37 pm

This is how we get "Chained CPI" shoved in through the back door… http://www.huffingtonpost.com/news/chained-cpi/

[Aug 29, 2016] UN insurance companies as the Department of Denial

www.nakedcapitalism.com
Pat

Looking at that rather stunning graph above, I wonder if all the pundits and so-called experts who keep wondering why the consumer economy is stalled could finally get that it was hijacked by government for the private insurance companies, with a little bit for drug companies and health care providers.

No wait, that would be too sensible, realistic and yes not what they are paid to notice.

Arizona Slim

Private health insurance companies need to go away. Period.

Pat

That would be the logical conclusion of anyone looking at health care as provided, and the costs of providing that health care to the public in other first world countries. The very clear rent extraction that provides little value overall would be rapidly clear.

But unfortunately the people who profit from that…

allan

I just received an Explanation of Benefits [sic] from my insurance, explaining [sic] why they don't want to pay over $1500 in charges from months ago. How much time am I going to spend talking with my provider's front office and the insurance company to try to get this reversed, and who's going to pay me for my time [sic]?

hunkerdown

Worse, who's going to pay your provider for the time? Who's going to pay your insurer to push back at you? You, of course. It's sicker than anything the industry purports to cure.

Roger Smith

They will direct you to their new consumer affairs to voice your concerns.

Best of luck

JTMcPhee

As a nurse, spending hundreds of hours trying to gain authorization for medications and procedures for patients who demonstrably needed and were entitled to them, from the various intermediary and "utilization managment" bits of the private UNsurance thingie, it finally occurred to me that I was being connected to the "Department of Denial," where the cheery or sullen human I finally was able to reach, after persisting and hacking my way through the thorns of the phone tree thicket, would in effect say, "Department of Denial! How may I not help you?"

[Jan 30, 2016] Thoughts on the Cadillac Tax part of the ACA

Notable quotes:
"... Now, suppose we move to single payer. Employer is off the hook for insurance. Will my employer shift that $14k discount to my gross pay and then tax it at the rate necessary to make single payer work (i.e. 40% 10k family)? I doubt it, I think the employer will grab the money (they never gave it to me in the first place). But, this is not a flaw of single payer or the tax required to fund it, its rather my lack of bargaining power with my employer. Under the insurance system, I have virtually no bargaining power with insurers or providers (other than opting out, to which they respond Its your funeral. ). ..."
"... However, you noted that the price of insurance companies pay is not what it costs them. So if they do raise wages, as I believe will happen eventually, it will be at their net cost. In addition, Sanders counts new taxes on that increase of income on employees at the level of what the employees pay insurance companies(without thinking of the tax break) in order to make his numbers make sense(and even with that they dont). ..."
economistsview.typepad.com

EMichael : January 26, 2016 at 09:30 AM

I asked Sarah above what what her thoughts on the Cadillac Tax part of the ACA.

I'd like to have everyone in here(well, not John H) state their opinion on it.

And yes, there is somewhat of a "trap" here. But it is not meant to be mean and/or a "gotcha" kind of thing.

lower middle class said in reply to EMichael...
I vote yes to progressive redistribution with top marginal rate of 40% in excess of 10,400 (27,500 family). Insurers that offer prices below the threshold can use it to compete.
lower middle class said in reply to lower middle class...
How many Health Points do I lose for triggering the trap? Will it affect any of my stats STR, CON, VIT, SPD, INT, END? Is there any loot to add to my pack?
Syaloch -> lower middle class...
You made a successful save vs. Rescission so you're only stunned for six rounds.

When you recover you find that the opened trap contains a Green Lantern of Infinite Griping and a pile of gold coins.

(However upon closer inspection you find that the coins are only novelty Bitcoins and therefore worthless.)

cawley -> EMichael...
I am against the Cadillac tax.

I understand the economic argument but I believe it is just another example of a race to the bottom, especially if it moves people out of plans that cover good utilization into HD plans that put more of the cost on the consumer and discourage good, preventive, early diagnostic utilization.

I would prefer to see measures that strengthen the connection between patients and good primary care.

mulp -> cawley...
In other words, you think Sanders is dead wrong in his claim that better coverage can be provided for 75% or even 50% of the trigger point for the caddy tax? You are arguing that US health care spending is too low.
cawley -> mulp ...
I didn't say any of that.

Costs are too high. Outcomes are not good enough.

I don't know that "Cadillac Plans" are a significant driver of those costs or results. I'm not convinced that driving people out of "Cadillac Plans" will significantly reduce costs, let alone improve outcomes. I think that depends a great deal on the benefit design of the products they wind up in and systemic reform of the delivery network.

So, while I did say that I understand the economic argument, what I didn't say clearly enough is that I have serious reservations about the validity of the economic argument.

Syaloch :
[Class Wars Episode VI: Return of the Occupiers]

http://www.nytimes.com/2011/10/07/opinion/krugman-confronting-the-malefactors.html

Confronting the Malefactors

By Paul Krugman | Oct. 6, 2011

There's something happening here. What it is ain't exactly clear, but we may, at long last, be seeing the rise of a popular movement that, unlike the Tea Party, is angry at the right people.

When the Occupy Wall Street protests began three weeks ago, most news organizations were derisive if they deigned to mention the events at all. For example, nine days into the protests, National Public Radio had provided no coverage whatsoever.

It is, therefore, a testament to the passion of those involved that the protests not only continued but grew, eventually becoming too big to ignore. With unions and a growing number of Democrats now expressing at least qualified support for the protesters, Occupy Wall Street is starting to look like an important event that might even eventually be seen as a turning point.

What can we say about the protests? First things first: The protesters' indictment of Wall Street as a destructive force, economically and politically, is completely right.

A weary cynicism, a belief that justice will never get served, has taken over much of our political debate - and, yes, I myself have sometimes succumbed. In the process, it has been easy to forget just how outrageous the story of our economic woes really is. So, in case you've forgotten, it was a play in three acts.

In the first act, bankers took advantage of deregulation to run wild (and pay themselves princely sums), inflating huge bubbles through reckless lending. In the second act, the bubbles burst - but bankers were bailed out by taxpayers, with remarkably few strings attached, even as ordinary workers continued to suffer the consequences of the bankers' sins. And, in the third act, bankers showed their gratitude by turning on the people who had saved them, throwing their support - and the wealth they still possessed thanks to the bailouts - behind politicians who promised to keep their taxes low and dismantle the mild regulations erected in the aftermath of the crisis.

Now, it's true that some of the protesters are oddly dressed or have silly-sounding slogans, which is inevitable given the open character of the events. But so what? I, at least, am a lot more offended by the sight of exquisitely tailored plutocrats, who owe their continued wealth to government guarantees, whining that President Obama has said mean things about them than I am by the sight of ragtag young people denouncing consumerism.

Bear in mind, too, that experience has made it painfully clear that men in suits not only don't have any monopoly on wisdom, they have very little wisdom to offer. When talking heads on, say, CNBC mock the protesters as unserious, remember how many serious people assured us that there was no housing bubble, that Alan Greenspan was an oracle and that budget deficits would send interest rates soaring.

A better critique of the protests is the absence of specific policy demands. It would probably be helpful if protesters could agree on at least a few main policy changes they would like to see enacted. But we shouldn't make too much of the lack of specifics. It's clear what kinds of things the Occupy Wall Street demonstrators want, and it's really the job of policy intellectuals and politicians to fill in the details.

Rich Yeselson, a veteran organizer and historian of social movements, has suggested that debt relief for working Americans become a central plank of the protests. I'll second that, because such relief, in addition to serving economic justice, could do a lot to help the economy recover. I'd suggest that protesters also demand infrastructure investment - not more tax cuts - to help create jobs. Neither proposal is going to become law in the current political climate, but the whole point of the protests is to change that political climate.

And there are real political opportunities here. Not, of course, for today's Republicans, who instinctively side with those Theodore Roosevelt-dubbed "malefactors of great wealth." Mitt Romney, for example - who, by the way, probably pays less of his income in taxes than many middle-class Americans - was quick to condemn the protests as "class warfare."

But Democrats are being given what amounts to a second chance. The Obama administration squandered a lot of potential good will early on by adopting banker-friendly policies that failed to deliver economic recovery even as bankers repaid the favor by turning on the president. Now, however, Mr. Obama's party has a chance for a do-over. All it has to do is take these protests as seriously as they deserve to be taken.

And if the protests goad some politicians into doing what they should have been doing all along, Occupy Wall Street will have been a smashing success.

Julio -> Syaloch...
Excellent! Thanks for digging this up.
mulp -> Syaloch...
I've never figured out how Krugman and Sanders did not favor responses in 2008-2008-2010 that would not have screwed me a bank customer.

And how can Sanders not be promising to screw me, a bank customer of BofA by four acquisitions that Sanders failed to block by convincing his peers in Congress to prohibit. Now he's promising to force me to get my money from the bank and put it in a new bank and then figure out the dozens or so institutions who need to be told and then checked to change the account number they use to credit or debit. You can't break up big banks without closing a hundred million bank accounts.

Michael :
Democratic socialists don't necessarily believe in state ownership, but democratically means of ownership (e.g. think of worker cooperatives or Mondragon). Bernie has been a strong advocate of worker cooperatives.
http://www.berniesandersvideo.com/3-creating-worker-co-ops.html

Outside of single payer, I have not heard of Bernie advocating government take-over of industries.

But Bernie is doing himself a disservice by using the 'socialist' label. It just creates confusion and not necessarily an accurate label. He is basically a liberal who never took a right turn during the Reagan Revolution.

As you can see, in this speech, Sanders is basically a New Deal liberal.
http://www.motherjones.com/politics/2015/11/bernie-sanders-socialism-speech-georgetown

The revolution Sanders is talking about is about changing hearts and minds, not just about policy. Both Hillary and Sanders will have an uphill battle with a Republican Congress when it comes to enacting policy. However, Sanders is pushing for another Reagan Revolution - influence well beyond policy that he can personally enact.

For example, Obama turned out to be a transformative President on the policy level (healthcare reform, financial reform, civil rights, etc.), but his influence will end once he leave office. Reagan's influence though can still be felt today (Wisconsin, Kansas, every single Republican tax plan, a hatred or distrust of the government, deregulating industries, attacking unions, etc.). Three-four decades we are steal dealing with the Reagan Revolution.

It was a time when "liberal" became a dirty word and people started to run away from it. Instead, people were proud "conservatives", but often in name only. Once you wipe the vague generalities of small government, guns, traditional values, most Americans are liberal, even when it comes to crime and welfare (See Table 1).
http://matthewg.org/ideologicalrepublicans.pdf

One of Bernie's goal is turn the tides and have Americans become more accepting of New Deal liberalism. In way, he is already accomplishing this (for example, today Hillary is a progressive, not a moderate or a Goldwater Girl).

As for electability, Sanders holds up as well, if not better than Hillary in a general match up against Republicans. However, there is more risk/variance associated with Sanders. Hillary is pretty much well-known. People's opinions and views will not change during the general election. There is more risk/variance with Sanders People are still learning about Sanders and working around the confusion of the "socialist" label.

EMichael -> Michael...
"As for electability, Sanders holds up as well, if not better than Hillary in a general match up against Republicans."

Yeah, before he campaigns against Republicans.

Worthless polls until that happens.

Michael -> EMichael...
Worthless projection on your part until (or if it) happens.

If you have an actual point, don't be afraid to make it.

EMichael -> Michael...
I have made it a hundred times in here.

Has Hillary called Sanders a dirty commie?

Of course not.

Ya' think the Reps will not do so?

EMichael :
Well, no answers on the Cadillac Tax and tee time is at 12:30, so I will spell it out.

We have dealt with the "hippy punching" of Sanders by various liberals regarding his healthcare and financial reform platforms. And it seems to me that very little has been said about his healthcare plan, thus my question.

If you opposed the Cadillac Tax, then you should oppose Sanders plan.

https://berniesanders.com/wp-content/uploads/2016/01/Medicare-for-All.pdf

Maybe not totally, but at least in terms of the loss of income the vast majority of insured Americans would see, because it eliminates employer provided insurance when it uses the tax expenditures savings to help pay for his reform(and the numbers still do not work out with that $310 billion).

Now many have been attacked for their commentary on Sanders' plans, yet somehow there has been almost no conversation on what those plans do, and how they do it.

Campaigns are about dreams and goals, but if numbers and details are provided, they should be discussed without the authors of those discussions being attacked.

Julio -> EMichael...
I happen to think that prioritizing the changeover to single payer is a mistake, much like the timing of the ACA was. Too many people are reasonably comfortable with what they have, and we have other, more urgent fights.

Sanders need to focus on the stuff that gets people to the rallies and on the streets. He is doing a good job with inequality. But there is a reason why there was an Occupy Wall Street but no Occupy Blue Cross.

EMichael -> Julio ...
Yep.

But Sanders could not run just on attacking Wall Street and inequality.

lower middle class said in reply to EMichael...
Anecdata below:

My employer claims to spend $19k for family insurance. They sell it to me at a $14k discount and add the discount to my Total Compensation Statement. I don't know the actual price they pay, it may be 100% of what I pay to my employer via pre-tax deductions, or it may be less, who knows.

Now, suppose we move to single payer. Employer is off the hook for insurance. Will my employer shift that $14k discount to my gross pay and then tax it at the rate necessary to make single payer work (i.e. 40% > 10k family)? I doubt it, I think the employer will grab the money (they never gave it to me in the first place). But, this is not a flaw of single payer or the tax required to fund it, it's rather my lack of bargaining power with my employer. Under the insurance system, I have virtually no bargaining power with insurers or providers (other than opting out, to which they respond "It's your funeral.").

Michael -> lower middle class...
It is a strong consensus among economists that the employee bears the burden of payroll taxes and benefits, through lower wages.

Here is a nice graph showing this. The faster healthcare cost rise, the slower wage growth.
http://voices.washingtonpost.com/ezra-klein/2009/10/will_lower_health-care_costs_m.html

If the literature is correct, then moving to a single payer system would increase wages as workers capture some of the previously paid benefits by employers.

Julio -> Michael...
Yes. The question is whether employees will capture those gains.
cawley -> Julio ...
Considering the direction labor share of income has been moving, I think it is a highly dubious proposition that labor will capture a significant portion of reduced employer health care costs in increased wages.

If the labor market were tighter, unions more powerful or regulations more effective, maybe. But not in the current circumstance.

EMichael -> lower middle class...
And I think that compensation is fungible. But Sanders has taken all the cash from employer provided insurance and used it to gain revenue for his plan.

However, you noted that the price of insurance companies pay is not what it costs them. So if they do raise wages, as I believe will happen eventually, it will be at their net cost. In addition, Sanders counts new taxes on that increase of income on employees at the level of what the employees pay insurance companies(without thinking of the tax break) in order to make his numbers make sense(and even with that they don't).

Meanwhile, Obama and the ACA were attacked as killing unions with the Cadillac tax. Yet Sanders' plan is a much more expensive attack on those plans while insuring they receive less health insurance benefits.

Yet, I am missing the attack on Sanders for killing unions.

Strange, huh?

Dan Kervick :
I think the revolution he is talking about is based on the idea that, win or lose, he is going to keep his coalition mobilized and build on it. The goal is a permanent transformation of the American political and ideological landscape, and probably also a drive to recapture the Democratic Party from the "New Democrat" group who took it over in the 90's, and return the party to something more like the more traditional economic left politics exhibited before that takeover.

I think he's going to win; but even if I am wrong, remember that Reagan ran a strong primary campaign in 1976 against Ford before taking over the party in 1980. This move to the left going to happen eventually, because the neoliberal capitalism of 2016 is stagnant, dysfunctional, grossly inegalitarian, oppressive and unpopular. The Clintons represent an old politics that is dying. It might give up the ghost this time, as I think it will, or hang on for one more cycle. But it's not going to last.

I agree that it doesn't make a whole lot of difference whether you call it Democratic Socialism or New Deal Liberalism or something else. Whatever you call it, the program is the broader socialization of health, education and retirement; a "trust-busting" assault on Big Capital, and a variety of moves to empower workers and dramatically compress the income gap.

mulp -> Dan Kervick ...
Sanders was never a Democrat, so he has zero reason to complain about Democrats evolving rightward with voters who bought the free lunch economics of conservatives who shifted Republicans about three times further right.

The conservative policies are free lunch because their tax cuts will never cut the free stuff you expect from government, the getting government out of your life means others won't get a free pass to kill you or harm you or take your stuff, and enforcing morality will never result in your being a rested and convinced for believing in (the wrong) god. Citizen run health care insuranxe means repealing Obamacare so you can cut your rates and increase your benefits (by insuring yourself).

And conservatives have proven TANSTAAFL but even progressives join with conservatives in blaming Democrats and Obama for failed Republican laws.

If Sanders wins the White House with Republicans controlling the House and Senate, my bet is Bernie blames Democrats for failing to pass his laws through Congress.

Dan Kervick -> mulp ...
It has nothing to do with Bernie Sanders or any personal gripes he does or doesn't have the right to have with Democrats. Clearly he is doing so well in Iowa and New Hampshire and elsewhere because millions of *Democrats* prefer the Sanders direction for their party.

I went to a State Democratic Party event here in New Hampshire four or five years ago, where Sanders was the (sole) invited speaker. He didn't crash the gate; he was invited because lots of Democrats love him. The (very big) progressive wing of the Democrats recruited Sanders for this run.

Julio :
With due respect to our host, I'm sick and tired of the "unelectable" argument, especially at this stage in the campaign.

Part of the argument seems to be that if we nominate Sanders, we risk ending up with the eminently electable... Trump! Wasn't he an unelectable joke not so long ago?

lower middle class said in reply to Julio ...
Jeb! leading the Red Team Endorsement Primary. Slytherin - 51 Points!

http://projects.fivethirtyeight.com/2016-endorsement-primary/

Now, look at Clinton's staggering lead. Hufflepuff! (but don't inhale)

lower middle class said in reply to lower middle class...
http://www.theatlantic.com/entertainment/archive/2015/09/hufflepuff-rules/405937/

In Defense of Hufflepuff
The much-maligned house of the Harry Potter series doesn't get nearly enough attention or praise for its egalitarian ethos.

EMichael -> Julio ...
Sarah fen Palin got close to the White House.
Julio :
After reading today's comments, I am more convinced than ever that socio-anarcho-demo-progressivism will not triumph until we sweep demo-anarcho-progressive-socialism to the dustbin of history.
RGC :
Semantics:

democratic socialist vs social democrat

how about

democratic capitalist vs capital democrat

  • capital - the economy is directed by those with the most capital (one dollar=one vote / planning by plutocrats)
  • social - the economy is directed by those able to garner popular support (one person=one vote / planning by bureaucrats)

The reality is that capitalism and socialism are both extremes. If you have government you have a mixed economy. Public vs private is an alternate dichotomy.

Most people who have a lot of money think you should be able to make money from money ( Marx's m -> m'/ Marx thought it should be M-> c -> m') ( c being a product or service). But this eventually arrives at Piketty's dilemma of inequality.

So, to the degree we have capitalism, we should be aware of the danger of m -> m'. IOW, if we don't severely limit the FIRE sector, we will proceed to Dickensian England.

Lafayette :
STAND AND DEFEND

{MT: He has qualified his statements to make it clear that he is a democratic socialist, but that term fails to convey what he really has in mind, or at least I think it does. ...}

Social Democracy is explained here*: http://en.wikipedia.org/wiki/Social_democracy. Succintly, it is the implementation of Social Justice, which is also explained here: http://en.wikipedia.org/wiki/Social_justice

And if that is not enough, let's just say that the principal vector of a Social Democracy is to "level the economic playing field".

How to do it is the key debate. And to my mind, excuse my repetition of the formula employed in this forum. The prime attributes of a Social Democracy, in terms of tangible Public Services are the following:
*Prepare individuals for their roles as both workers and citizens by means of a primary, secondary and tertiary education that is free, gratis and for nothing.
*Institute a National Health Service that covers all citizens of the country at a modest annual cost, and implement it for both curative and preventive purposes.

The rest of what Social Democracy is can be found on the web-site of Congressional Progressive Cause (which presently constitutes 15% of the HofR, and only one Senator - a guy by the name of Bernie Sanders.)

The CPC Progressive Promise that resumés very succinctly its goals can be found here*: http://cpc.grijalva.house.gov/the-progressive-promise/

Now, who thinks all that is just a load of BS ... ?

Lafayette -> Lafayette ...
Frankly, I think that's a pretty good platform to run on. However many elections it takes to teach Americans what Social Democracy really means.

And get a progressive representation in (at least) the HofR to implement progressive legislation.

But, first, we have to make illegal the long-standing election process (since the 1830s) of "gerrymandering". Which is an artificial way of arranging voting districts so that either party "owns the seat".

THEN, AND ONLY THEN, WILL REAL "SOCIAL JUSTICE" BE ALLOWED TO STAND IN THE UNITED STATES.

Bud Meyers :
It doesn't matter if Bernie is a socialist, a democratic socialist, a social democrat, a Marxist or a communist - unless he also had a majority of like-minded people in congress. If your are in doubt about Bernie, you'd only have to fear him as a dictator. Neither Bernie nor Hillary can do much with a GOP dominated congress. At least Bernie moves the Overton window back to the left (true center), whereas the "moderate" Hillary keeps the status quo. Here are two recent posts on this subject.

The Future of the Democratic Party

http://baselinescenario.com/2016/01/26/the-future-of-the-democratic-party/

Hillary Clinton's Lobbyist Fundraisers Want Baby Steps: America Needs a Political Revolution

http://wallstreetonparade.com/2016/01/hillary-clintons-lobbyist-fundraisers-want-baby-steps-america-needs-a-political-revolution/

www.facebook.com/profile.php?id=560338458 :
Universal health insurance, elections that are not bought, the end of the prison state, free college tuition, expanded social security, and a concerted, breaking up the big banks, a clear and practical plan to combat climate change... Surely you can see something socialist in that. The social institutions that have been eviscerated by current establishment politics revitalized.

Incremental won't do it. Impractical is the current trajectory. Revolution means revolution. He cannot get it done alone, that is clear. Doesn't mean we can't get it done together.

[Jan 12, 2016] ObamaCare's Neoliberal Intellectual Foundations Continue to Crumble

Obama is a neoliberal who campaigned as a leftist but has governed as a right-winger.
Notable quotes:
"... By Lambert Strether of Corrente . ..."
"... ObamaCare is a Bad Deal (for Many) ..."
"... they do not comparison shop. ..."
"... very ..."
"... Obama was never in favor of single payer, ever. Wash your mouth out for even suggesting that ..."
"... He had health care lobbyists draft the legislation ..."
"... He's got a history of being a fake leftist going back to his days in Chicago. Obama, Michelle, and Valerie Jarrett were the black faces that legitimated the plan by the Pritzkers and local finance interests to gentrify near South Chicago and push the black community 3 miles further south while giving them nothing. ..."
"... And he's never been a real prof. This constitutional law talk is a crock. No one can remember him teaching any courses (he appears to have taught a couple but made no impression). This was a resume-burnishing post and he did the bare minimum. ..."
"... After he had had told the story of sitting with his dying mother on her death bed, surrounded by paperwork, trying to sort out the restrictions of her employer-based insurance policy and there wasn't a dry eye in the gymnasium, everyone THOUGHT he said, "When I am President, I will fight tooth and nail for single payer for every single American." ..."
"... Nevertheless, as a former Obot who worked tirelessly to get him elected on almost the sole basis of the genuine emotion he exhibited when he told this awful story and how he promised to rectify the situation in the future, I felt the dagger of betrayal when the first thing he said during the health care debate was, "I'm taking single payer of the table." ..."
"... Now, it's the "let's turn everything into a market" game. Don't want to play? Screw you–we'll make it mandatory, and, of course, punitive. This goes way beyond Obamacare into every facet of our lives. Public utilities? Hell no–give them "choice"! Community schools? No way–can't have the races and the classes and the ability levels mixing in such a promiscuous manner–let's go charter "academies", or vouchers. It's a normative takeover under the guise of "rational" "scientific" "efficiency". ..."
"... thatworddoesnotmeanthat ..."
"... Were the architects of RomneyCare (and it's national extension Obamacare) attempting to recreate a golden age, of 11th century free peasants– happily enjoying the abundant commons of medical care, in the carefree forests and dales, before they slipped under the Norman Yoke of feudal exploitation? ..."
"... The record is irrefutable–the ACA was written by the insurance companies with a wink and a nod to Big Pharma and the HMOs. Unless you are going to seriously entertain the notion that these are "communist" institutions, or give a rats ass about anything but making money, you can't really believe what you wrote. You are just angry about something and projecting your fears onto this travesty. ..."
"... As Martin Shkreli put it, he has the perfect "price inelastic" product. Patients are a captive market that's easy to exploit. Either they get what they need or they die. You can charge what you want. ..."
"... Let's not forget why politicians love the sickcare complex. The more an industry turns into a cartel, the easier it is to raise both economic and political rents from it. Let's be honest here and call a spade a spade. Politicians like this system because it easily feeds campaign dollars into the system. It may not be efficient for treating patients, but it's quite efficient for extracting political re ..."
"... It's nearly impossible to "comparison shop" if you're part of an HMO these days. The only choice one really has is to select their PCP. After that the PCP pretty much forces you to see docs and get tests within the hospital system – presumably for "coordinated care". And this for nearly $1000/mo for a single person not receiving much in the way of "healthcare". That which can't continue, won't…. ..."
"... However, for those in that 55-65 age bracket, there is an estate clawback provision that effectively acts as a lien on your estate: once you die your assets will be seized by the state to satisfy all medicaid provided healthcare expenses. ..."
"... When Obama was inaugurated he had more political capital in his pocket than any president in recent memory. The repubs were on the ropes. ..."
"... The United States National Health Care Act, HR 676 ..."
January 12, 2016

By Lambert Strether of Corrente .

ObamaCare is, of course, a neoliberal "market-based" "solution." ObamaCare's intellectual foundations were expressed most clearly in layperson's language by none other than the greatest orator of our time, Obama, himself ( 2013 ):

If you don't have health insurance, then starting on October 1st, private plans will actually compete for your business, and you'll be able to comparison-shop online.There will be a marketplace online, just like you'd buy a flat-screen TV or plane tickets or anything else you're doing online, and you'll be able to buy an insurance package that fits your budget and is right for you.

Let's leave aside the possibility that private plans are phishing for your business, by exploiting informational asymmetries, rather than "competing" for it. Obama gives an operational definition of a functioning market that assumes two things: (1) That health insurance, as a product, is like flat-screen TVs, and (2) as when buying flat-screen TVs, people will comparison shop for health insurance, and that will drive health insurers to compete to satisfy them. As it turns out, scholars have been studying both assumptions, and both assumptions are false. "The dog won't eat the dog food," as marketers say. This will be a short post; we've already seen that the first assumption is false - only 20%-ers who have their insurance purchased for them by an institution could be so foolish as to make it - and a new study shows that the second assumption is false, as well.

ObamaCare's Product Is Not Like a Flat-Screen TV

Here's the key assumptoin that Obama (and most economists) make about heatlth insurance: That it's a commodity, like flat screen TVs, or airline tickets, and that therefore , there exists a "a product that suits your budget and is right for you" because markets. Unfortunately, experience backed up by studies has shown that this is not true. From ObamaCare is a Bad Deal (for Many) . From Mark Pauly, Adam Leive, Scott Harrington, all of the Wharton School, NBER Working Paper No. 21565 ( quoted at NC in October 2015 ):

This paper estimates the change in net (of subsidy) financial burden ("the price of responsibility") and in welfare that would be experienced by a large nationally representative sample of the "non-poor" uninsured if they were to purchase Silver or Bronze plans on the ACA exchanges. The sample is the set of full-year uninsured persons represented in the Current Population Survey for the pre-ACA period with incomes above 138 percent of the federal poverty level. The estimated change in financial burden compares out-of-pocket payments by income stratum in the pre-ACA period with the sum of premiums (net of subsidy) and expected cost sharing (net of subsidy) for benchmark Silver and Bronze plans, under various assumptions about the extent of increased spending associated with obtaining coverage. In addition to changes in the financial burden, our welfare estimates incorporate the value of additional care consumed and the change in risk premiums for changes in exposure to out-of-pocket payments associated with coverage, under various assumptions about risk aversion. We find that the average financial burden will increase for all income levels once insured. Subsidy-eligible persons with incomes below 250 percent of the poverty threshold likely experience welfare improvements that offset the higher financial burden, depending on assumptions about risk aversion and the value of additional consumption of medical care. However, even under the most optimistic assumptions, close to half of the formerly uninsured (especially those with higher incomes) experience both higher financial burden and lower estimated welfare ; indicating a positive "price of responsibility" for complying with the individual mandate. The percentage of the sample with estimated welfare increases is close to matching observed take-up rates by the previously uninsured in the exchanges.

So, for approximately half the "formerly uninsured," ObamaCare is a losing proposition; I don't know what an analogy for flat-screen TVs is; maybe having to send the manufacturer money every time you turn it on, in addition to the money you paid to buy it? That's most definitely not a "package that fits your budget and is right for you," unless you're a masochist or a phool. Second, the portion of those eligible that does the math probably won't buy the product if they're rational actors (and Obamaare needs to double its penetration of the eligible to avoid a death spiral ). That again is not like the market for flat-screen TVs; the magic of the ObamaCare marketplace has not operated to produce a product at every price point (or a substitute).[1] Bad marketplace! Bad! Bad!

Health Care "Consumers" Tend not to Comparison Shop

We turn now to a second NBER study that places even more dynamite at ObamaCare's foundations. From Zarek C. Brot-Goldberg, Amitabh Chandra, Benjamin R. Handel, and Jonathan T. Kolstad, of Berkelely and Harvard, "What Does a Deductible Do? The Impact of Cost-Sharing on Health Care Prices, Quantities, and Spending Dynamics" NBER Working Paper No. 21632 ( PDF ), the abstract:

Measuring consumer responsiveness to medical care prices is a central issue in health economics and a key ingredient in the optimal design and regulation of health insurance markets. We study consumer responsiveness to medical care prices, leveraging a natural experiment that occurred at a large self-insured firm which required all of its employees to switch from an insurance plan that provided free health care to a non-linear, high deductible plan[2]. The switch caused a spending reduction between 11.79%-13.80% of total firm-wide health spending. We decompose this spending reduction into the components of (i) consumer price shopping (ii) quantity reductions and (iii) quantity substitutions, finding that spending reductions are entirely due to outright reductions in quantity. We find no evidence of consumers learning to price shop after two years in high-deductible coverage. Consumers reduce quantities across the spectrum of health care services, including potentially valuable care (e.g. preventive services) and potentially wasteful care (e.g. imaging services). We then leverage the unique data environment to study how consumers respond to the complex structure of the high-deductible contract. We find that consumers respond heavily to spot prices at the time of care, and reduce their spending by 42% when under the deductible, conditional on their true expected end-of-year shadow price and their prior year end-of-year marginal price. In the first-year post plan change, 90% of all spending reductions occur in months that consumers began under the deductible, with 49% of all reductions coming for the ex ante sickest half of consumers under the deductible, despite the fact that these consumers have quite low shadow prices. There is no evidence of learning to respond to the true shadow price in the second year post-switch.

So, empirically, these "consumers" just don't act the way that good neoliberal Obama says they should; they do not comparison shop. That alone is enough to undermine the intellectual basis of ObamaCare. If there's no comparison shopping going on, there's no competitive pressure for health insurers to improve their product (assuming good faith, which I don't).

(We can leave aside the issue of motivation, but to speculate, I've found that when I talk to people about health care and health insurance; they're very defensive and proprietary about whatever random solution they've been able to cobble together; and if you'd been sold an exploding flat-screen TV, and had somehow been able to use duct tape and a well-timed fist to the housing to get it work, most of the time, wouldn't you be rather unwilling to go back to the same store and buy another? So there is evidence of "learning"; the lesson learned is once you've got something that seems to works, don't on any account change it, and we "bear those ills we have," rather "than fly to others that we know not of.")

Moreover, the population studied has more ability to comparison shop than ObamaCare's. From page 4 of the study :

Employees at the firm [in the study] are relatively high income ( median income $125,000-$150,000 ), an important fact to keep in mind when interpreting our analysis

The top income for a family of four eligible for ObamaCare is around $95K (and not eligible for subsidy). Do people think this ObamaCare-eligible population has more ability to comparison shop, compared to a population with a $125K median income for individuals, or less ability? To put this more tendentiously, if a population that can afford accountants or at least financial planners doesn't comparison shop, how likely is it that a population that cannot afford those personal services will do so?

Even worse, the population studied reduces costs, not by comparison shopping, but by self-denial of care. From page 6 of the study :

In our setting consumers were provided a comprehensive price shopping tool that allowed them to search for doctors providing particular services by price as well as other features (e.g. location).

So, just like the ObamaCare "marketplace online" front end (at least after they got it working). And what happened?

We find no evidence of price shopping in the first year post switch . The effect is near zero and looks similar for the t -1 - t 0 year pair (moving from pre- to post-change) as it does for earlier year pairs from t 4 to t 1 . Second, we find no evidence of an increase in price shopping in the second year post-switch; consumers are not learning to shop based on price. Third, we find that essentially all spending reductions between t 1 and t 0 are achieved through outright quantity reductions whereby consumers receive less medical care . From t 1 to t 0 consumers reduce service quantities by 17.9%. Fourth, there is limited evidence that consumers substitute across types of procedures (substitution leads to a 2.2% spending reduction from t 1 - t 0 ). Finally, fifth, we find that these quantity reductions persist in the second-year post switch, as the increase in quantities between t 0 and t 1 is only 0.7%, much lower than the pre-period trend in quantity growth. These results occur in the context of consistent (and low) provider price changes over the whole sample period.

Now, it could be that the study population is reducing items like cosmetic surgery and not items like dental care (assuming they've got dental); the Healthcare Economist summary of this study says no. In fact, says the study, some of the foregone services were "likely of high value in terms of health and potential to avoid future costs." And it could be that the lower-income ObamaCare-eligible are smarter shoppers (dubious: Shopping is a tax on time a lot of working people can't pay). That said, it looks like ObamaCare has replaced a system where insurance companies deny people needed care with a system where people deny themselves needed care; which is genius, in a way. However, if any doctors or medical personnel continue to support ObamaCare politically, they should consider closely whether they're violating the principle of non-maleficence - "First, do no harm" - and halt their support, if so. Bad marketplace! Bad, bad!

Conclusion

Shopping for health insurance under ObamaCare is nothing at all like shopping for a flat-screen TV. First, there's a sizeable population who, if they are rational actors, just won't buy health insurance at all; the ObamaCare "marketplace" is not capable of adjusting prices to get such "consumers" to enter the market. Second, people don't comparison shop; they reduce needed care. (To flog the flat-screen TV metaphor even further, if the screen is so defective it's painful to watch, people don't reduce the pain by comparison shopping for a better TV; they reduce the pain by watching less, and keep the TV they have.)

So, with ObamaCare, and thanks to the dogmas of neoliberalism, we have a "marketplace" that repels "consumers" from entering it, and repels people from shopping if they do enter. Perhaps there's a better solution out there?

NOTES

[1] It may be that the ever-increasing mandate penalties will force enough people into the marketplace to make ObamaCare actuarially stable ; needless to say, we don't see Federal agents forcing people into Best Buy to buy TVs, although the social pressure of Black Friday comes close.

[2] Again, much like ObamaCare plans, which are increasingly high-deductible.

Health care , Market inefficiencies on January 12, 2016 by Lambert Strether .

About Lambert Strether

Lambert Strether has been blogging, managing online communities, and doing system administration 24/7 since 2003, in Drupal and WordPress. Besides political economy and the political scene, he blogs about rhetoric, software engineering, permaculture, history, literature, local politics, international travel, food, and fixing stuff around the house. The nom de plume "Lambert Strether" comes from Henry James's The Ambassadors: "Live all you can. It's a mistake not to." You can follow him on Twitter at @lambertstrether. http://www.correntewire.com

View all posts by Lambert Strether →

brian t , January 12, 2016 at 3:23 am

The author seems to have forgotten that the kludge called "Obamacare" is not the single payer solution that this Obama wanted. What you have is what was able to get past a Congress after intense lobbying by HMOs and insurers. I see little evidence of ideology in the result, "neoliberal" or otherwise. It does nothing to address the insane-and-rising cost of healthcare, because the vested interests are OK with that.

Yves Smith , January 12, 2016 at 5:12 am

Let me clue you in: the readers here are way WAY too clued in to buy your Big Lie.

1. Obama was never in favor of single payer, ever. Wash your mouth out for even suggesting that

2. He had health care lobbyists draft the legislation

3. He used the "public option" as a bright shiny toy. He was so uncommitted to it he didn't even trade it away. He gave it up as a free concession. A basic principle in negotiating is you NEVER make a free concession. The fact that he just threw it away is proof he never meant it as anything more than a talking point

I hope you are paid to dispense this blather. I really feel sorry for you if you actually believe it. Obama is a neoliberal who campaigned as a leftist but has governed as a right-winger. His apologists have regularly used the meanie Republicans as excuses for his selllouts, when Obama gets what he wants when he wants it, and there's no evidence that his center-right results are at all at odds with what he intended to achieve.

Yves Smith , January 12, 2016 at 4:31 pm

Huh? Obama has proven to be an extremely skilled political infighter when he wants something done. And as to him being center-right, all you have to do is look at his staff, most important his economics team.

He's got a history of being a fake leftist going back to his days in Chicago. Obama, Michelle, and Valerie Jarrett were the black faces that legitimated the plan by the Pritzkers and local finance interests to gentrify near South Chicago and push the black community 3 miles further south while giving them nothing. See here for details:

http://www.nakedcapitalism.com/2012/05/exclusive-how-obamas-early-career-succes-was-built-on-fronting-for-chicago-real-estate-and-finance.html

And he's never been a real prof. This constitutional law talk is a crock. No one can remember him teaching any courses (he appears to have taught a couple but made no impression). This was a resume-burnishing post and he did the bare minimum.

Hayek's Heelbiter , January 12, 2016 at 12:55 pm

Beg to slightly differ regarding Obama and single payer (if the transcripts of his campaign rally speech in Jersey City before he was nominated hadn't been scrubbed from the Internet, I'd have the exact wording).

After he had had told the story of sitting with his dying mother on her death bed, surrounded by paperwork, trying to sort out the restrictions of her employer-based insurance policy and there wasn't a dry eye in the gymnasium, everyone THOUGHT he said, "When I am President, I will fight tooth and nail for single payer for every single American."

And the gymnasium absolutely erupted in applause. Apparently, he said something very CLOSE to that, but when the sentence is carefully parsed, did not mean that all.

Nevertheless, as a former Obot who worked tirelessly to get him elected on almost the sole basis of the genuine emotion he exhibited when he told this awful story and how he promised to rectify the situation in the future, I felt the dagger of betrayal when the first thing he said during the health care debate was, "I'm taking single payer of the table."

Lambert Strether Post author , January 12, 2016 at 1:58 pm

I hate to say this, but a lot of us at Corrente did try to keep track in 2008, and I can't remember any reporting on this at the time, and we were also strongly for single payer, which we also kept track of. Not to say that we couldn't have missed something, but a link to something contemporaneous would be helpful.

Michael Hudson , January 12, 2016 at 2:32 pm

I know that I've said this on NC before, but Yves is absolutely right - and THEN some. When Dennis Kucinich tried to introduce EVEN A DISCUSSION of single payer in Congress, the Democratic Party leadership blocked him from even bringing it up. Pelosi et al. were absolutely committed to the Republican neoliberal policy.

This led us to discuss whether the only way to get progressive health care policy was to start a new party, now that the Democrats have become the Wall Street wing of the Republican Party's natural resource monopolists.

Hayek's Heelbiter , January 12, 2016 at 3:37 pm

If you could locate a transcript, I would dearly love to read what he ACTUALLY said.

Cameras and recording devices were strictly forbidden, and this was in the days before everyone had cellphones that could record anything.

meeps , January 12, 2016 at 6:44 pm

I don't know the date of this speech (the upload predates the 2010 debacle), but Obama stated, "I happen to be a proponent of single payer health care…"

That said, we got hosed. Each of us must now decide whether to roll over and take the corn, or, to demand single payer and the re-regulation of industry (the pharmaceutical industry and others that affect health tangentially).

meeps , January 12, 2016 at 7:38 pm

I've not been able to resolve the technical reason behind my missing links. You'll find the 53 second clip on youtube channel 6y2o12la titled: Obama on single payer health insurance.

sierra7 , January 12, 2016 at 1:57 pm

Oh, My! My!
Thank you Yves!!!!!!!!
You go to (as you are now) the head of the class!

nigelk , January 12, 2016 at 2:33 pm

One imagines Yves with a large staff and flowing robe…

"O-bots…YOU…SHALL…NOT…PASS!"

barutanseijin , January 12, 2016 at 5:28 am

You mean vested interests as represented by Obama and the Democrats.

Paul P , January 12, 2016 at 5:40 am

"the single payer solution that this Obama wanted"

Obama kept single payer off the table from the start. He would have had to decide to fight the industry and take the fight to the country. Medicare for All is a simple idea. He could have done a 50 state whistle stop tour. He could have saturated any Congressional district opposing Medicare for All with the same message. That wasn't his plan.

I attended one of his community meetings on health care, held around the country prior to him adopting Romney Care as his proposal. One of the organizers of the meeting starts off by complaining to the group about not just telling Obama we want single payer.

cwaltz , January 12, 2016 at 9:09 am

One of the first things Obama did was make the GOP party point men on health care(Olympia Snowe anyone?)

And it was Nancy Pelosi who called it impractical and took it off the table, heck she even went so far as to have some of the activists committed to being heard arrested for being disruptive. She then promptly gave a minority Blue Dog group the opportunity to co opt the debate to grandstand on abortion.

It's positively revisionism to blame the health care mess on GOP. It was Democrats who screwed it up from start to finish.

Paper Mac , January 12, 2016 at 6:11 am

The first step is admitting you have a problem, brian.

Myron Perlman , January 12, 2016 at 8:58 am

"Obama wanted'? Single payer was ruled out from the beginning. Advocates for that position were not permitted to be part of the discussion. Who knows what Obama wanted? Look at his actions on this and other issues to make a better judgment. My take is that it was a presidency of symbolism not substance when it came to policies.

Lambert Strether Post author , January 12, 2016 at 11:47 am

Not to pile on or anything, but I think a review of the bidding is in order:

I suggest the real constraints came from three sources, as indicated by their behavior from 2009, when battle for health reform was joined: (1) The Democratic nomenklatura , which censored single payer stories and banned single payer advocates from its sites , and refused even to cover single payer advances in Congress , while simultaneously running a "bait and switch" operation with the so-called "public option," thereby sucking all the oxygen away from single payer; 1 (2) Democratic office holders like Max Baucus, the putative author of ObamaCare - Liz Fowler, a Wellpoint VP, was the actual author - who refused to include single payer advocates in hearings and had protesters arrested and charged ; (3) and Obama himself , who set the tone for the entire Democratic food chain by openly mocking single payer advocates ( "got the little single payer advocates up here" ), and whose White House operation blocked email from single payer advocates , and went so far as to suppress a single payer advocate's question from the White House live blog of a "Forum on Health Care." (Granted, the forums were all kayfabe, but even so.) As Jane Hamsher wrote, summing of the debacle: "The problems in the current health care debate became apparent early on, when single payer advocates were excluded [note, again, lack of agency] from participation."

In short, if single payer was "politically infeasible" - the catchphrase of that time - that's because Democrats set out to make it so, and succeeded.

Brian, could you ask your boss to send us smarter trolls?

nigelk , January 12, 2016 at 2:52 pm

I appreciate that such takedowns are always link-filled and impeccably sourced, and though combativeness in the comments is not the prevailing tone of this website (happily), damn if I don't pump my fist when I read a troll getting cut down thusly.

Fake leftist trolls are the worst.

GlobalMisanthrope , January 12, 2016 at 12:48 pm

Maybe you're not an incredibly lame troll. Maybe you're just a poor beginner who unwittingly wandered onto the Varsity field. But if you "see little evidence of ideology in the result," you may want to look up the definitions of "evidence," "ideology" and "result."

James Levy , January 12, 2016 at 6:17 am

Educated elites with a modicum of leisure always love to play these games. It took them decades and the most draconian policies imaginable to break the habit of workers early in the industrial revolution of trading off pay for leisure time. The basic notion of every capitalist scold throughout the ages has been that this is irrational laziness, even if your job is a physically exhausting and soul-crushing exercise–you must work more, or you are a bad person who should be punished.

Now, it's the "let's turn everything into a market" game. Don't want to play? Screw you–we'll make it mandatory, and, of course, punitive. This goes way beyond Obamacare into every facet of our lives. Public utilities? Hell no–give them "choice"! Community schools? No way–can't have the races and the classes and the ability levels mixing in such a promiscuous manner–let's go charter "academies", or vouchers. It's a normative takeover under the guise of "rational" "scientific" "efficiency".

Jim , January 12, 2016 at 8:54 am

Wow, this is so right!

JustAnObserver , January 12, 2016 at 2:14 pm

Minor correction:

Public utilities? Hell no–give them Lead!

ilporcupine , January 12, 2016 at 6:06 pm

So true. Ask them about their golf game. It is only YOUR leisure time at issue, not theirs. Don't you wish you could count as "work" blathering your stream of conciousness on CNBC day after day?

ambrit , January 12, 2016 at 6:57 am

I remember that one of the 'talking points' in favour of Heritage Foundation Care (HFC) was that "pre-existing" conditions were not to be allowed to deny anyone coverage. Using that logic, it can be asserted that 'Poverty', absolute or relative, a pre-existing condition if there ever was one, denies 'patients' useful medical care.

The system as administered is internally contradictory. Taken one step farther, the HFC can be defined as a "Faith Based Service Provider." This would be an insult to actual traditional Faith based providers. Most "real" FBPs are governed, at least in theory, by ideologies that counsel 'compassion' when dealing with the less fortunate. As has been demonstrated, the HFC program counsels exploitation when dealing with the less fortunate. A case in point; this week a local religious charity opened a 'Free Clinic' in our town of 45,000 or so souls. The local paper put this on the front page. Buried in the body of the article was the mention that this clinic was fully booked up for the first, and probably second month. All this before public mention of it's existence. There's your 'Marketplace' in action. As I discovered when I looked into signing up for the Mississippi Medicaid program for myself, a family cannot have over 2,500 USD in 'assets.' There is an ongoing dispute as to whether or not an automobile classifies as an item counted toward this limit. Thus, those in our state who do qualify for Medicaid are poor indeed.

Carolinian , January 12, 2016 at 9:21 am

Using that logic, it can be asserted that 'Poverty', absolute or relative, a pre-existing condition if there ever was one

Great point. In the US we have a health care system that saves people's lives while–in many cases–taking away their means of living it. The Hippocratic Oath should be modified to read: first do no harm to Capitalism.

Ulysses , January 12, 2016 at 2:58 pm

Yes, it is an intriguing suggestion. Does commenter thatworddoesnotmeanthat care to elaborate? Were the architects of RomneyCare (and it's national extension Obamacare) attempting to recreate a golden age, of 11th century free peasants– happily enjoying the abundant commons of medical care, in the carefree forests and dales, before they slipped under the Norman Yoke of feudal exploitation?

Or, is the reference to some non-Western communist society that flourished in the mid-11th century? Perhaps thatworddoesnotmeanthat has studied early communist cultures in South Asia, America, or Africa that distributed healthcare in a way that eerily foreshadows what Romneycare did in Massachusetts?

James Levy , January 12, 2016 at 1:36 pm

The record is irrefutable–the ACA was written by the insurance companies with a wink and a nod to Big Pharma and the HMOs. Unless you are going to seriously entertain the notion that these are "communist" institutions, or give a rats ass about anything but making money, you can't really believe what you wrote. You are just angry about something and projecting your fears onto this travesty.

Disturbed Voter , January 12, 2016 at 7:37 am

The subsidies of Obamacare, if you qualify for them, requires the IRS to get intimately involved with your checkbook. Just like middle class folks want recipients of SNAP to be regulated with every food and drink purchase … matching what the bourgeoisie thinks matches their own moral rectitude.

I prefer not to make the IRS my intimate partner … helping me to define what is an asset and what is income to the last penny.

Wade Riddick , January 12, 2016 at 8:12 am

The idea behind high deductibles is that you'll force consumers to economize. It's kind of like telling science, "Hey. This patient needs ten pills to live? Let's give him eight and see what happens."

Medical treatment is a science issue. A treatment's either effective or it's not. You can negotiate the cost – *with the supplier* – but you can't bully a disease or injury into behaving the way you want. You certainly can't bully the sick person and they're in no position to negotiate with the supplier. They have none of the necessary experience or health. That's exactly the wrong time to try to educate someone about their "options."

But then that's the whole point. The medical market is intentionally littered with opacity. There is nothing transparent about insurance, much less drugs or surgeries. Medicine is increasingly dominated by complex bureaucratic cartels for exactly that reason – so you *won't* find out how things work. They don't want you comparison shopping for drugs, surgeries, therapists. Everything about the modern medical system is precisely about robbing "customers" of human agency.

The whole idea of shopping for health insurance itself is absurd. It requires you figuring out exactly how sick you'll be in the next year and then inventing a time machine to travel back so you can pick the Pareto optimal policy with exactly the best deductible – which really won't matter because then they'll find a way to make sure your E.R. wasn't in network nor your anesthesiologist and the only drug to keep you alive won't be "covered" and then you'll wish it was only an Arnold Schwarzenegger skin-wearing android sent to kill you 'cause that would be way easier.

They're removing choice left and right and destroying scientific information through lobbying. The people responsible for creating diseases aren't being held responsible for them but the victims suffering from them are.

When multiple sclerosis organizations are run by drug companies selling $50K+ a year drugs, do you think they want those customers finding out that deworming society is what created the risk for M.S. in the first place?

As Martin Shkreli put it, he has the perfect "price inelastic" product. Patients are a captive market that's easy to exploit. Either they get what they need or they die. You can charge what you want.

Do you think lazy executives looking to bump up next quarter's earnings are going to invest heavily over the long haul in scientific models of effective disease prevention and treatment or are they simply going to squeeze people a little more and a little more?

Let's not forget why politicians love the sickcare complex. The more an industry turns into a cartel, the easier it is to raise both economic and political rents from it. Let's be honest here and call a spade a spade. Politicians like this system because it easily feeds campaign dollars into the system. It may not be efficient for treating patients, but it's quite efficient for extracting political re

Crazy Horse , January 12, 2016 at 12:48 pm

Comparison shop for medical care in the USA? You've got to be kidding.

Case in point. My doctor recommended a cardiovascular "stress test" for diagnosis of heartburn symptoms to make sure that it wasn't cardiovascular in nature. I traveled to a regional heart specialist center for the test, but based upon previous experience refused to undergo the test until they put the bill for the procedure in writing including my deductible cost. The intake administrator acted shocked by such a request, and it took 30 minutes of increasingly strongly worded demands on my part before they finally produced a verbal quotation – which I recorded for future use if they decided to bill $12,000 for 10 minutes on a treadmill.

The world's most expensive health care extortion system at work.

Jim Haygood , January 12, 2016 at 1:49 pm

NBER: 'There is no evidence of learning.'

As Barry O. likes to joke, mimicking George W. Bush's drawl, "Is our consumers learning? Ha ha ha!"

Wade Riddick , January 12, 2016 at 8:15 am

political rents. (Got cut off for some reason. Arnold got me, I think.)

Winston , January 12, 2016 at 8:44 am

It's nearly impossible to "comparison shop" if you're part of an HMO these days. The only choice one really has is to select their PCP. After that the PCP pretty much forces you to see docs and get tests within the hospital system – presumably for "coordinated care". And this for nearly $1000/mo for a single person not receiving much in the way of "healthcare". That which can't continue, won't….

Jim in SC , January 12, 2016 at 8:49 am

One of the things that distinguishes the US from other countries is our high level of tax compliance. I'm concerned that these Obamacare penalties will lead to diminished compliance, both because people resent the penalties, and because it is such an intellectually frustrating exercise to try and estimate future income.

HotFlash , January 12, 2016 at 11:44 am

Perhaps not so ? Can you give me a link? TIA.

Jim in SC , January 12, 2016 at 10:08 pm

http://www.pappastax.com/american-tax-compliance-rates-highest-in-civilized-world/

allan , January 12, 2016 at 9:39 am

More like a flat screen TV, rented from Samsung, that functions like one of those old British hotel radiators that you have to feed with pence $60 copays every 10 minutes in order for Time Warner not to interrupt the streaming.
And then you get balance billing from Disney for the content.

Chromex , January 12, 2016 at 9:42 am

My experience is that there IS no "competition" in any product field that involves actuarial calculations. I get a subsidy and I am 63. There were about 50 plans offered in my area. A few were OVERpriced, yes, but the vast majority offered very similar premium prices, and identical elephantine deductibles, which means that except for aspects of the annual physical, it will "cover" ( assuming cover means pay for) jack. "Coverage" is not care, it is nothing to brag about. I am "covered" for expenses beyond my deductible as a form of catastrophic insurance but the plan will never pay for anything else and actuarially, it is easy to calculate a premium that guarantees that companies will make lotsa money while paying out less. Needless to say the "product" is outrageously overpriced for what it covers and puts people like me _- close to medicare but limited income and owns own house free and clear in a far far worse position than before the law. ( eg medicaid asset recovery if I dare to state a lower income etc etc). So I'm "covered" , so what. I have far less actual care. And that , it appears to me , is deliberate.
Even if it were "competitive" there is not much point in comparison shopping for flat screen tvs.. for a flat screen tv with X features made by brand "A" the price difference for a tv with the same features ( and longevitiy) of brand "B: will in the vast majority of online offerings, be so close as to not be worth the effort. This is even more true with insurance.

Like most politicians, Obama wanted to "do something" and a have a bill he could hold up in front of Everybody and say "see this is mine". My experience with such legislators/administrators is that they have a lot of hubris and grees for the bill to pass and do not subject potential downsides to any critical analysis so that advisers get the message "construct something that will pass" .The fact that he was dumb enough not to see this coming suggests that his "ideology" was driven by his advisers- who are definitely neocons IMO not neoliberals unless the term "liberal" is used in its classic economic sense.

And while we are on the subject, "Health care" is not really subject to "market" principles. Start with the fact that most people in this country have less than 1K savings, which means that they cannot cover the ginormous deductibles most "silver" plans offer or the premiums of better plans. Then add in the fact that these people cannot predict how much care will be needed in a given year or what the final cost of that care will be. What's the "market " for that? Under these two facts mandatory "insurance"with high deductibles and narrow networks simply functions as a wealth transfer from strapped lower-middle and middle class adults to Insurance company shareholders and CEOs.

Even assuming that Obama "wanted" single payer- an assumption that has been ably refuted in this string already, had he given "what can get passed" a moment's critical analysis, he might have realized that he- with his insistence on change for change's sake- was making it worse for so many Americans. I for one , could care less that pre-existing conditions are now "covered" if I can't actually use the coverage- pre existing survives, its now called high deducitlbes and narrow networks.

macman2 , January 12, 2016 at 9:59 am

Actually, as Winston Churchill famously noted, "Americans manage do the right thing after they have exhausted all of the wrong choices firs"t. So it is that had we gone right to single payer without this "market based" attempt, we would have heard howls of capitalistic remorse, etc.

So I am glad that Obamacare was attempted and that it is failing predictably. It is pretty clear to even the free marketers that high deductibles only impoverish Americans, that "skin in the game" does not make people better shoppers for the highly technical world of medicine, that price transparency is essentially worthless if nobody is comparison shopping while they are bleeding out from every orifice, etc.

Medicare for All is arguably catching on. Bernie Sanders poll numbers have not taken a dive with this promise and the sputtering Obamacare is only putting more fuel to this fire. Hillary's tax scare attempt will turn flat on its face. People know bad value when they see it, and the current market based health reform is failing into the predictable death spiral. View Bernie's ascendency as evidence that the American people think health care is a right and it is time to fund it that way.

marym , January 12, 2016 at 12:26 pm

Is the argument here that it was necessary for millions of people to suffer from lack of access to affordable healthcare, and tens of thousands to die, to teach us a lesson, because designing, advocating for, and rapidly deploying a simple, effective single payer system that would bring both immediate and long-term benefits that would silence even its would-be detractors is impossible even to imagine? This is why Democratic Party and Obama cheerleaders have no credibility anymore.

http://www.pnhp.org/news/2015/july/medicare-turns-50-and-we-have-much-to-celebrate

Also, while it's great that Sanders is bringing attention to this topic, it's not surprising that people are responding favorably People have been polling in favor of a Medicare-type single payer program for decades.

http://pnhp.org/blog/2009/12/09/two-thirds-support-3/

James Levy , January 12, 2016 at 1:44 pm

Americans have not and will not "do the right thing" on this issue because the entrenched interests that are making money off of the current atrocity that passes for a healthcare system are too strong to displace. Europe got single payer after WWII because the only institution in society left with access to money was the State, so doctors and hospitals after the war were going to sign on for socialized medicine because societies at large were destitute. Whatever the government will pay is better than grandpa's watch (if some conquering army hadn't stolen it) or a chicken (ditto). Until this situation comes into being here in the USA we're not going to see single payer tax-based healthcare.

Ulysses , January 12, 2016 at 3:13 pm

Your argument would make sense if Canada, which, like the U.S., never suffered the same WWII devastation as Europe, hadn't managed to build a national single-payer health system.

sleepy , January 12, 2016 at 10:16 am

And let's not forget the medicaid clawback provisions for those between 55-65. If you apply for Obamacare, and your income level is below a certain threshhold, you are not eligible for subsidies. You are placed into medicaid.

However, for those in that 55-65 age bracket, there is an estate clawback provision that effectively acts as a lien on your estate: once you die your assets will be seized by the state to satisfy all medicaid provided healthcare expenses.

Prior to Obamacare, in order to qualify for medicaid, not only was there an income requirement, but your assets also had to be below a certain, very low, amount. With Obamacare however, the asset requirement is waived for those in that age bracket.

What happens? Many who now are eligible for medicaid via Obamacare will now own a house as their primary asset of any significance. But once enrolled, that house will be sold on the insured's death to pay medicaid. I would assume that in states that have privatized medicaid, these sums will also include all premiums paid by medicaid on the insured's behalf-even if no claims are ever filed.

If that's not bad enough, under Obamacare to satisfy the law, the consumer is forced into this by the mandate. There is no choice. Beyond that, if the insured had an income level a few dollars higher, he/she would be eligible for subsidies which, of course, need not be paid back on the insured's death.

Clawback provisions, though with many exceptions particularly for those under age 55 have always been required under medicaid, but now medicaid enrollment will be required by law with actual assets available.

Medicaid is essentially a reverse mortgage.

sleepy , January 12, 2016 at 10:31 am

In terms of the assets issue, my comment is applicable to those states that have adopted the expanded medicaid features of Obamacare. As mentioned by a poster in Mississippi, states that have not, still have the old rules on having virtually no assets in order to qualify.

Spring Texan , January 12, 2016 at 11:56 am

Thanks, your comments are accurate; and this is something that is too little discussed.

ilporcupine , January 12, 2016 at 5:49 pm

I have seen this stated here on many occasions, over the course of the OCare debate. While the law seems to give authorization to clawback, in my state it only seems to have been used for nursing home and other long term care. I can state from my experience, I was never queried about assets, and was qualified only on income. I just lost the person with whom I have shared my life for 30 years, and her assets, went to her daughter without any claim from the state. Hers was an expensive battle with cancer, and did rack up a pile of charges. ( In my state, Medicaid is paying a private insurer to cover Medicaid patients). I have been reading here for a long time, rarely posting, I tend to agree mostly with the view here, but this seems to be widely different between states. I have no issue with Yves or Lambert on this, they have done yeoman work trying to get to the bottom of these issues. Just felt I needed to weigh in for the sake of completeness. Yves and Lambert you have my email if you want to discuss my experience, it is all to fresh a wound to discuss in this public forum.

Rob Lewis , January 12, 2016 at 10:39 am

No argument that Obamacare has some serious problems. But placing ALL the blame on the President seems excessive. Even if he had come out strongly for single payer, there are more than enough DINOs in Congress in thrall to Health Care, Inc. to have prevented its passage. And the Republicans would have dialed up their anti-reform propaganda to new levels of hysteria (Remember the anti-Hillarycare saturation media campaign? I'll bet Obama does.)

sleepy , January 12, 2016 at 10:55 am

When Obama was inaugurated he had more political capital in his pocket than any president in recent memory. The repubs were on the ropes.

Sure, the repubs could have gone all out in opposition, but as another poster mentioned Obama could have gone all out as well and blitzed the country. And in the first few months of his presidency, my bet would have been on him more than on the repubs.

Of course he did nothing. And to say he did nothing because of fear of the repubs at that point is silly. He empowered the repubs. He didn't even pretend.

HotFlash , January 12, 2016 at 11:33 am

Even if he had come out strongly for single payer…

Oh, but he didn't! If pigs had wings, perhaps they could fly? He could have, he didn't even pretend (like he did with closing Gitmo). Oh, concerned about his legacy? No problem, $peaking fees from insurance companies, pharmacos, $eat on bds of directors, his future will be golden!

Hello. "Leaders", elected or otherwise, sell out locals to corps = banana republic.

Have a banana.

Lambert Strether Post author , January 12, 2016 at 11:48 am

"placing ALL the blame on the President"

Match for that straw?

fb , January 12, 2016 at 4:43 pm

"All health insurance plans purchased through Covered California must cover certain services called essential health benefits. These include doctor visits, hospital stays, emergency care, maternity care, pediatric care, prescriptions, medical tests and mental health care. Health insurance plans also must cover preventative care services like mammograms and colonoscopies. Health insurance companies cannot charge copayments, coinsurance or deductibles for such services."

Yves Smith , January 12, 2016 at 7:05 pm

By taking that out of context, you've considerably overstated what Covered California covers.

Just as in the rest of the US, the "metal levels" have the same meaning. For instance:

Bronze: On average, your health plan pays 60 percent of your medical expenses, and you pay 40 percent.

This is the language from their "Essential Health Benefits" section:

Essential Health Benefits

All health insurance plans now share some common characteristics. The Affordable Care Act requires that all health insurance plans offered in the individual and small-group markets must provide a comprehensive package of items and services, known as essential health benefits.

These benefits fit into the following 10 categories:

Ambulatory patient services.
Emergency services.
Hospitalization.
Maternity and newborn care.
Mental health and substance use disorder services, including behavioral health treatment.
Prescription drugs. For more information about prescription drug benefits, visit the page Prescription Drugs.
Rehabilitative and habilitative services and devices.
Laboratory services.
Preventive and wellness services and chronic disease management. For more information about preventive services with no cost sharing, click here.
Pediatric services, including dental and vision care. Dental insurance for children will be included in the price of all health plans purchased in the exchange for 2015.
The requirement for insurance plans to offer essential health benefits is just one of many changes in health coverage that began in 2014.

So this is just ACA boilerplate. I do recall reading that Covered CA does require some services be provided irrespective of the deductibles (beyond the ACA-mandated preventive care items like mammograms, which separately are a bad test), but after 10 minutes of poking around the Covered CA site and other Googling, I can't find any evidence of what those other services might be. I thought it was at least a doctor visit or two, but I can't even find that.

And 75% of Covered CA plans have narrow networks, compared to 41% for the US as a whole, which among other things means you might not be able to get a specialist you need:

http://touch.latimes.com/#section/-1/article/p2p-84275268/

The site and web service are also terrible, see the long horror stories at Yelp:

http://www.yelp.com/biz/covered-california-sacramento

And see this from Kaiser News:

Most Insurance Exchanges Just Got Bigger. Covered California Is Getting Smaller.

http://khn.org/news/california-healthline-fewer-insurers-on-online-marketplace/

RUKidding , January 12, 2016 at 11:52 am

Obama NEVER tried one iota to go for Single Payer. Nada, Zip, Nothing.

Ergo, I place ALL the blame on Obama. IF he had tried even a teeny tiny bit, I could perhaps place some blame elsewhere. But factual reality refutes that.

I also do recall the POTUS taking Dennis Kucinich up in Air Force One, and when they landed, suddenly Kucinich had changed his mind and was (reluctantly in my viewpoint) giving an thumbs up on ObamaCare. Kucinich was the longest hold out advocating for Single Payer. Obama basically took him to school and forced him in some way to STFU and say Obamacare was the best.

Baloney. Obama sold us all to BigInsurance, BigPharma, BigHospital, BigMedDevice, and I'm sure he was handsomely rewarded.

This one, imo, is all on Obama. It was what he wanted, and it's what he now touts as being this very great thing, which it's not.

so , January 12, 2016 at 12:38 pm

No amount of dem. or repb. BS will ever persuade me to participate in national politics again.
obamas handling of the ongoing financial and health care crisis finished it for me.
It's so clear to me where were at. The corruption is sickining. EVERY DAY the stories. I keep thinking…."all the kings horses and all the kings men couldn't put Humpty back together again." Read The Archdruid Report for some insight. Everybody wakes up sooner or later.
In this life or the next

tegnost , January 12, 2016 at 11:30 am

Yes, definitely better to give up without a fight. Have you noticed that in spite of what is essentially a media blackout Bernie is likely leading in the polls? As to your opening statement "No argument that Obamacare has some serious problems" you admit to ACA shortcomings, maybe you would like to offer up some of what you see as good aspects of the ACA? Further, "there are more than enough DINOs in Congress in thrall to Health Care, Inc. to have prevented its passage. " there was and is a DINO in the oval office "in thrall to Health Care, Inc." who made no other option impossible. So much for the vaunted "free market" The ACA was designed and implemented as socialism for the 20% (h/t Lambert and others who have noted the upper class and their minions occupy the top quintile) whose medical care was getting too expensive, and whose medical (device, pharma patents, and insurance co.) investments were not being supported by demand, so the ACA created demand for them. Medicare for all, and get rid of the clawbacks, I personally would rather chromex's heirs get his assets rather than Blackstone, thank you.

Ulysses , January 12, 2016 at 3:25 pm

You jest, but in many late medieval and early modern Italian city-states there were ruthlessly enforced minimum consumption levels for salt. Prior to refrigeration salt was more of a food preservation necessity, but the huge consumption taxes placed on salt made them a fiscal necessity as well. Our word salary derives from the fact that so many government officials were paid from the revenues collected through salt taxes.

The much-hated gabelle in pre-Revolutionary France was a salt tax!

http://www.academia.edu/18012323/_Un_popolo_che_non_vorrebbe_sentire_nominare_dazi_esenzioni_privilegi_e_traffici_illeciti_tra_Brescia_Cremona_e_Mantova_nel_Settecento_versione_provvisoria_

Lord Koos , January 12, 2016 at 3:53 pm

No, a better solution would be forcing everyone to go in debt to own a large SUV… hybrids don't qualify.

tegnost , January 12, 2016 at 11:45 am

this was meant as a reply to rob lewis' post at 10:39

Rob Lewis , January 12, 2016 at 2:03 pm

I doubt you're really interested in a discussion, but here are a few very good things about Obamacare:
1. Elimination of pre-existing conditions as a reason for being refused coverage
2. Requirement that insurers spend at least 80% of their revenue actually paying benefits
3. Preventive care must be free
4. Expansion of Medicaid (where permitted by states) brings coverage to millions of previously uninsured
5. Standardization of plans makes is possible (if not easy) to compare them

And this is my opinion, but I don't think it would have been possible to get Medicare for All through Congress, even with Democrats nominally in control, for the reasons already stated.

Anyway, my whole point is that Obama doesn't deserve ALL the blame. Are you arguing that the public and Congress were ready and willing to enact single-payer, and Obama somehow prevented it?

Katiebird , January 12, 2016 at 3:44 pm

1. Pre-existing condition with the caveat that you must live in an area served by a medical establishment that specializes in your possibly rare illness.

2. 80% Yay! It's almost like Christmas! …. Cold comfort to those who must cough up $10,000 or more before getting any benefit from trom their policy at all.

3. Preventative care must be free. OK. So the $10,000 get's them a colonoscopy and a glucose meter.

4. Expanded Medicaid … In the states where it happened, anyone over 55 years old subject to an undisclosed clawback of benefits from estates. Wow.

5. I cannot imagine how you come up with the comparison justification. People have to sign up for plans without final commitments of which doctors or hospitals are included. And even then they are subject to change!

"Democrats nominally in control" … This is a pure deception. They had overwhelming majorities and wildly popular President. Do you seriously think that if faced with Obama's shaking finger and an enticing promise, that any Democrat would have defied him during those first 100 days. I laugh at the thought. He could ave gotten Expanded Medicare for All passed in those first 100 days with one hand tied behind his back.

bob , January 12, 2016 at 3:46 pm

Are you arguing that any single one of your bullet points is true?

For instance #1- covered? Covered by what? You can be covered and still not be able to afford the deductibles, or even the premiums.

The rest is talking point BS, tiny little grain of some sort of truth wrapped in ponies.

tegnost , January 12, 2016 at 9:55 pm

Thanks for responding. Yes it's good that pre-existing conditions no longer can be refused coverage,but one still needs to be able to afford coverage, so not being refused is not the same as receiving care, no? Your second point also has some merit as it appears intended to contain profiteering, but as one can see from martin shrkeli there's nothing stopping the greater healthcare marketplace from increasing costs, so the 80% becomes ambiguously beneficial. I did not know preventative care is free, but if that means as implied by another comment colonoscopies and other rather invasive procedures that might be seen as a cash cow with once again ambiguous benefits to consumers, really they are actually insureds, not consumers, as the prices are beyond peoples ability to pay, only insurers can ably do that, so the consumer is consuming insurance not care, I'm arguing for a gov't insurance and appreciate your opinion that it couldn't have been pulled off, as I think you are aware that my opinion is that they not only didn't try, indeed the executive branch stood between private sector healthcare industries and reform in the same way it stood between the banksters and those pitchfork wielding crazy people. Whatever your feelings about all that saving the economy stuff, it was largely and in many aspects a giveaway to people who were on the brink of disaster, a little more give and take would have been appropriate and the hope and change mandate provided the executive with considerable clout. Also, the medicaid expansion is a wolf in sheep's clothing as the clawback is regressive and punishes low income people as well as some probably good sized portion of people who will find themselves unceremoniously dumped into medicaid when their insurance and other medical bills drive them into financial distress. Lastly, the standardization of plans was in fact useful for me to figure out i couldn't afford it without taking to much time. I'll dilute my criticism of the president to be more inclusively the executive branch and their collective agenda, but basically the O man is the CEO so gets to be the hero, or the goat…

Adrienne Adams , January 12, 2016 at 11:35 am

As Chromex notes, Obamacare "coverage" is high-deductible catastrophic, so all day-to-day "care" is paid for out of pocket. But just try finding out how much a procedure costs… I needed an MRI on my knee, and it took three phone calls to find out how much I would be paying for the procedure. First you need to know the exact billing code for the procedure, which means you need to find the person in the doctor's office who is anointed in the mystical realm of billing codes; then you need to call the insurance company customer service rep, who is initially mystified that you are actually trying to find out how much something costs; then you (hopefully) transferred to someone in the billing department (who has never spoken to an actual patient before); and finally, if you are lucky, in two or three weeks you will revive a letter from another anointed person giving the actual out of pocket cost of the procedure-which will probably be different after the fact as "adjustments" are made between provider and insurer.

If we had to buy anything else in this fashion, we'd all be naked, starving, and out-of-doors.

craazyboy , January 12, 2016 at 11:50 am

It's a market.

nowhere , January 12, 2016 at 2:06 pm

Did you misspell racket?

ProNewerDeal , January 12, 2016 at 1:34 pm

I recall seeing a stat that the median adult net worth of USians was only US$37K, whereas in Canada it is US$80K. I wondered if the primary reason for the huge difference, is the presence of Canada-style MedicareForAll in Canada. It appears the US health system bankrupts you rapidly as in literal medical bankruptcy as per indivduals' examples in the "Sicko" documentary"' or bankrupts you slowly, as in these crapified ACA policies that charge ~$12K/yr before paying for anything besides the annual physical exam even within your "narrow network".

Yves, are you aware of any economist study which estimates the differential in financial net worth between barbaric USA & civilized Canada?

sleepy , January 12, 2016 at 3:16 pm

Apparently what the masters of Canada can't extract through healthcare debt, they do it through astronomically high real estate prices, exceeding our bubble high of 2007. Though there are signs of deflation, tiny 2 bedroom bungalows in Winnipeg–depressed Canadian flyover country–go for $300K. The same dump in Minneapolis is yours for $175K. And that's comparing economically challenged Winnipeg with relatively prosperous Minneapolis.

Yes, not paying $1200/month in health insurance premiums can go to that overpriced Canadian mortgage, but that's sort of my point.

And to ward off some comments–I am in no way stating that Canada's national health program causes high housing costs.

Crazy Horse , January 12, 2016 at 4:40 pm

And the median net worth in Australia and Italy, among other countries is well over 100k. Makes you wonder about American Exceptionalism.

ProNewerDeal , January 12, 2016 at 11:24 pm

America is exceptionally wack & Crapified (c) Yves, as far as life for the 99%ers probably in the lowest quintile within the OECD, even when including the don't-really-belong members like Mexico & Turkey. Meanwhile Murica, from everyday people to the elites, drink Murican Exceptionalist Kool-aid on how Murica is Always The Best, no need to ever learn from any other nations on anything.

ProNewerDeal , January 12, 2016 at 1:46 pm

I wonder if the "net present value" of money/time/stress cost of emigrating to a civilized nation like Canada for those USians fortunate enough to have a chance of doing so, is likely to be much less than the equivalent money/time/stress cost of living an entire life in the US & having to deal with the US Sickcare Mafia.

hemeantwell , January 12, 2016 at 3:03 pm

Lambert said:

I've found that when I talk to people about health care and health insurance; they're very defensive and proprietary about whatever random solution they've been able to cobble together

In my limited conversations I've noticed that, too. I've been left wondering if it is hard to for them to give a clear answer since they've had to engage in guessy speculation about what they, and their families, might come down with, and they end up having to imagine awful stuff and then discount the possibility of it occurring, so too bad for little Susie if awful occurs. Trudy Lieberman has given emphasis to the absurdity of asking people to bet on their health, and I'm guessing it's not just a matter of feeling embarrassed about weak actuarial skills.

Shilo , January 12, 2016 at 6:46 pm

Talking about how you coped with Obamacare gives a clear insight into your personal finances, something a lot of people are hesitant to discuss.

When I was young I was taught never to ask a rancher how many head of cattle he ran, because it's no different that saying, "Hey, How much money are you worth?"

jonf , January 12, 2016 at 4:21 pm

So where do we go from here? Help the republicans repeal it? Fix it? Frankly I don't know. We don't have a congress to fix or replace it -even if Sanders wins. I think it helps some people, mostly those on Medicaid. So repealing it doesn't make sense unless it can be replaced. Even saying this is a marketplace is an outright lie. These bastards are just stealing from us all. Rock and a hard place. Sanders is the only hope and that at times seems vanishingly small.

nihil obstet , January 12, 2016 at 5:16 pm

When Obama took office, The United States National Health Care Act, HR 676 , for a single-payer system of expanded Medicare for All, was in the House of Representatives. If I remember correctly, it had over 100 Democratic Congresspeople co-sponsoring it. Part of the Obama administration's efforts on its own health insurance bill were aimed at getting the bill withdrawn.

afreeman , January 12, 2016 at 8:31 pm

Thanks for that reminder. Reading the recent book, American President (from Teddy to Bill) helps one's recall considerably-telling contrasts between Presidents who knew how to pass legislation and the flukes (if assassination can be called a fluke, i.e. Devil's Chessboard) that brought them our way against those who didn't. For instance, LBJ compared with JFK, who had enough legislative service to learn a thing or two if he were interested, that is.

Too bad the book's so damn thick-well written and lively though it may be. Voters not likely to read it. Should though.

Malcolm MacLeod, MD , January 12, 2016 at 9:21 pm

Lots of arguing and different thoughts, but one primary fact remains. Obama was a bald-faced
lier from the get-go, and has remained true to that principle. He hasn't really tried hard to
question that. The amount of damage done to this nation during his tenure amounts to that
amount perpetrated by a traitor. Just being bad was "W"; this is actually far worse.

Malcolm MacLeod, MD , January 12, 2016 at 9:34 pm

Lots of arguing and different thoughts, but one primary fact persists. Obama has been a
bald-faced liar from the get-go, and has remained true to that principle. He really hasn't
tried hard to dispute that. The amount of damage done to this nation during his tenure
amounts to that amount perpetrated by a traitor. "W" was just bad; This is far worse.

ewmayer , January 12, 2016 at 9:41 pm

Related: Kentucky governor to dismantle state's health insurance exchange: newspaper | Reuters

Now, Kentucky being Kentucky, the motives here may be such that it is difficult for critics of the ACA to claim as any kind of 'win' – would any of our Kentuckian readers care to comment?

[Sep 06, 2015] ObamaCare to Crapify Health Insurance at 26% of Employers with Cadillac Tax

"...Btw a healthcare plan that impoverishes the middle class (who mostly do have employer provided insurance) to subsidize the poor (though Medicaid or lousy subsidized ACA plans) is a perfect way to divide and conquer most of the country, to set them against each other: "poor people and their ACA stole my health insurance!". While the hospitals and health insurers and PHARMA make off like bandits. Now you could have a health plan that is more likely to unite people than divide them but they didn't. Funny that."
.
"...The best plan is single payer. The big loser is insurance plans. Fairness doesn't result in insurance company skyscrapers and multimillion dollar salaries."
.
"...the HSA is its own kind of scam, with all sorts of mysterious fees and an inducement to put this money into suspiciously high-fee mutual funds… the privilege for which is yet another monthly fee."
.
"...Another thing about the job market is those full time jobs are becoming rarefied things, contract work is increasing. But even with one of those lucky full time jobs, the provisional with no benefits thing for 3 months is bound to cause problems."
.
"... Insurers are also tempted with the growth of the individual market instead of employer or government based Healthcare because an individual has no power."
Sep 05, 2015 | Economist's View
Sep 04, 2015 | naked capitalism
Praedor September 4, 2015 at 12:50 pm

Hell, even without the "cadillac tax" in effect, just plain old ACA, my healthcare has already been crapified. Before Obamacare, the wife and I had health insurance from our university that we both liked. It worked. It was based on the co-pay system and the co-pay was never onerous. Since ACA, however, the healthcare plans at the university have gone to shit. To keep health insurance that was at all similar to what it was pre-ACA would cost us an arm and a leg, and no, our wages are not high (by a LONG shot). Instead, we've been stuck with a deductible shitpile with a deductible high enough to really hurt ($3000) PLUS shitty coverage on top of that. Last year I thought that since I'd gone through my deductible for some back injury treatments, that a subsequent procedure would be rather cheap (to me). HAH! Got hit with THOUSANDS of dollars in bills leaving me to wonder just what the FUCK is the deductible for! Can't WAIT to see what happens after the cadillac tax goes into effect. Will the shit I've got now hit that threshold? What knock-on effects will there be? What will be the neoliberal trickle down?

Our pay will NOT be going up in any case. It has been YEARS since anyone but some useless administrators got any kind of pay increase. Pay increases, such as they are, for the real staff have been in line with the interest you can make on a savings account at a bank. Whooopie!

reslez September 4, 2015 at 5:15 pm

My employer offered a co-pay style plan until 2 years ago (ACA hello!) and now exclusively offers a high-deductible plan with a Health Savings Account. And yes, the deductible only applies to some charges, there are actually multiple deductibles, so you end up forking over a slice of your paycheck for potential access to care, but the insurer never pays a single thing, they only negotiate what you pay. And yet the threat of medical catastrophe and being driven into bankruptcy for a single incident (a vehicle accident, for example) looms over all of us. The neo-liberal world sheds no tears, it only counts money.

And the HSA is its own kind of scam, with all sorts of mysterious fees and an inducement to put this money into suspiciously high-fee mutual funds… the privilege for which is yet another monthly fee.

NotTimothyGeithner September 4, 2015 at 6:39 pm

The Obots will blame you for not clapping, not Obama or anyone who conned them. The one thing people hate more than con men is being conned themselves. The bright, wonderful people who snicker at Palin can't be had. They are just sports fans for the most part except for a sport even more harmful than the NFL.

If they hit rock bottom, they might recognize the connection.

Sean September 4, 2015 at 1:03 pm

I love the fact when I don't have a job (like now), I get penalized for not buying a product I actually can't buy because the "marketplace" closes in March.

Also, how am I going to pay these premiums without income? How do I pay my taxes without a job?

Neoliberalism has to die. Somehow. Or else it will kill us all.

jrs, September 5, 2015 at 9:13 pm

Something I have noticed about the job market, more and more employers for full time jobs won't pay for health insurance until your about 3 months into the job. So what are people supposed to do for those 3 months? Live without health insurance? Risky, but more importantly what about the penalties? Could those kick in if you don't have healthcare for 3 months? Does the ACA require continuous coverage to avoid penalty? Use Cobra from a prior job? It's insanely expensive. Private marketplace outside the exchanges? Might work depending.

Another thing about the job market is those full time jobs are becoming rarefied things, contract work is increasing. But even with one of those lucky full time jobs, the provisional with no benefits thing for 3 months is bound to cause problems.

oho , September 4, 2015 at 1:23 pm

perhaps in 2016 the nearly-always-thrown-under-the-bus Democratic foot soldiers finally wake up to the mistreatment that they've suffered at the hands of the Progressive Policy Institute/DLC/corporatist crowd .

OIFVet, September 5, 2015 at 5:34 pm

now they're holding up the bad parts they insisted on, ignoring the good ones, like access to health care for chronic conditions and previous flaws in health

What "access"? Take the narrow networks and the very high deductibles that are the mainstay of the "exchange", and what you call "access" is no better than what came before Obamacare. Many people still can't afford to go see a doctor because of that $6k annual deductible plan, the only one they could afford, and if they do have a serious health event they can't even know ahead of time if all of their medical team is in their plan, or will they end up paying for out-of-network providers. So you can easily throw another thing Obamacare failed to fix: bankruptsies due to medical costs.

Confirmation bias my a$$, I spent literally days of my life (the "time tax" Lambert talks about) trying to find the least awful plan my mother could actually afford, on a malfunctioning "exchange" offering very little useful info on the various plans' provider networks.

It's an overpriced PPO plan that I found. It has a 6,500 deductible, but it has one semi-decent feature: large provider network. Everything else about it is awful, so it is simply a catastrophic plan, at best. For some chronic conditions my mother does have it is useless, she refuses to go see a doctor because she can't afford the out-of-pocket costs and refuses to allow me to pick up any of her costs. You call that access? You are a bloody Obot apologist, and that makes you an awful person. Yet here you are blaming me and others here for having the gall to point out the load of crapiness that is Obamacare. Go eff your righteous self.

jrs, September 5, 2015 at 9:06 pm

FWIW those who have talked about personally experiencing increased access in my experience have mostly been those with expanded Medicaid who are not actually dealing with the exchanges. Medicaid is a mixed bag and often partly privatized as well, but I don't think it has the huge deductibles (there are clawbacks but not everyone cares). Of course they could have just expanded Medicaid without even bothering with the entire rest of the ACA and it would just be straight expansion of an existing government program.

OIFVet, September 5, 2015 at 9:46 pm

Right, Medicaid. For those who actually work there is no Medicaid, just some subsidies for lower middle incomes and no subsidies at all for some with higher income (in Chicagoland, the cutoff for subsidies based on the second lowest Silver plan premium is just under $40k, which is hardly "high income".

For them, crappy plans are the norm. Then there is the shrinking pool of providers who will accept Medicaid patients, and the clawbacks that can become an issue for some later on. Some may benefit, but those are mostly the ones with comfortable incomes and preexisting conditions. For the rest, "access" is a theoretical concept at best.

I take this very personally because of my prior family history. My father died at the ripe old age of 62 for lack of access. For him it was a choice between paying the mortgage or paying a high medical bill (preexisting condition). He could have never have afforded to pay the Obamacare premiums and their high deductibles, and he wouldn't have qualified for the expanded Medicaid. What would one do, give up his income to qualify for Medicaid and lose his home in the process?

Obamacare does absolutely nothing for those hard working lower middle class incomes, but here is this bloody Obot talking out of his a$$ about stuff he has no experience dealing with. So eff him and his effing hobby horse he rode in on. People like that are part of the effing problem, but he has the gall to lecture us about this travesty. Eff him, it's been years since my dad passed but it still hurts given the circumstances and what they reveal about the priorities of our elites. I simply couldn't let this douchebag spout his damned nonsense about the great "access" our oh-so-benevolent Barry has so graciously provided for a few people.

Praedor, September 4, 2015 at 4:14 pm

The biggest flaw with ACA or any other scheme ALLOWED to be considered by the Dems or GOP is that they always start with the question, "What's good for business?" instead of, "What's good for patients?" Starting off with the conceit that any healthcare setup MUST be good for business, first and foremost, automatically creates crap. The ONLY question that should be considered with designing or changing the healthcare system is, "What's good for patients?"

What will see people, regardless of economic class, receiving the healthcare they need to lead happy and healthy lives? It is totally irrelevant if a healthcare system design hurts insurance companies, private hospitals, etc. Healthcare isn't there to provide profits for CEOs and shareholders, it is there to provide HEALTHCARE. The poorest poor should receive the exact same level of care as the richest crook. The poorest poor should receive equal cancer treatments to the richest hedge fund looter, should receive knee replacement surgery equal to that of George Soros. Period. Any doctor that wants to be a doctor to get rich should lose his/her license to practice medicine. The Hippocratic Oath says nothing about getting rich, driving the finist Mercedes, or living in the Hamptons.

Oregoncharles, September 4, 2015 at 5:11 pm

Since you didn't get to the politics, a quick review:

The ACA passed WITHOUT ONE SINGLE REPUBLICAN VOTE. The big, bad Rethugs were irrelevant, and had been all along. This is absolutely something the Democrats did, all by themselves, complete with botches and knives in the back for their supporters – who in some cases still support them.

greensachs, September 4, 2015 at 6:19 pm

—the barriers to care will rise for an increasing number of Americans who won't be able to pay the high out-of-pocket expenses required.——- And when they develop major medical problems for which care is essential, they will face the difficult choice of paying for the needed care and having to default on their mortgages and other financial obligations, or not obtaining the medical treatments required.—

There is a reality that is altogether being omitted from the above truthful, yet pathetic narrative.

Many, are altogether avoiding treatment or trying DIY remedies. Even if there's an effort for partial diagnosis and/or treatment, again, many cancel or no-show the follow ups. Together, all of these, make U.S. "healthcare" a word with very little meaning. Hope, becomes your default coverage.

Welcome to the Neo (new) liberalism…the "free" (manipulated, fixed & phony) markets.

…the market based Hopium, which the last two administration have prescribed so unconditionally, is stamping out and forcing downward our humanity.

LAS, September 5, 2015 at 10:59 am

Economically, this kind of insurance transitioning was happening well BEFORE ACA (Obamacare). Expensive health insurance plans were going out of existence due to adverse selection anyway. Adverse selection was driving them out of existence before ACA (Obamacare). Read "Paying for Health Insurance: The Trade-Off Between Competition and Adverse Selection" by Cutler and Reber.

I think you attribute to ACA changes that are really due to healthcare economics. The ACA makes a nice target but it is not the root of what's happening.

tegnost, September 5, 2015 at 11:10 am

Au contraire! The ACA was designed to save those insurance companies whose business model was failing.

jrs, September 5, 2015 at 4:51 pm

If it's happening anyway why literally penalize employers that offer good insurance? No, I'm not buying it. While I agree it may have already been a trend to some extent this simply has to have an effect and magnify it, 40% tax hits do change employer behavior.

Ormond Otvos, September 5, 2015 at 4:55 pm

The best plan is single payer. The big loser is insurance plans. Fairness doesn't result in insurance company skyscrapers and multimillion dollar salaries.

Ormond Otvos, September 5, 2015 at 4:58 pm

In the absence of such studies of medical bankruptcies, one would be advised to have a tentative opinion, labeled as a guess.

And the confounding factor, thank you Mr Biden, is the rewritten bankruptcy laws immediately preceding the ACA.


jrs, September 5, 2015 at 2:22 pm

Btw a healthcare plan that impoverishes the middle class (who mostly do have employer provided insurance) to subsidize the poor (though Medicaid or lousy subsidized ACA plans) is a perfect way to divide and conquer most of the country, to set them against each other: "poor people and their ACA stole my health insurance!". While the hospitals and health insurers and PHARMA make off like bandits. Now you could have a health plan that is more likely to unite people than divide them but they didn't. Funny that.

Ormond Otvos, September 5, 2015 at 5:00 pm

A very insightful comment. Politics is run by lobbies who are paid by corporations. No one likes to admit that we, the voters, enable all this crapification by having little knowledge or interest until the financial pain finally hits.

Too late, then. Vote for Bernie.

Davidt, September 5, 2015 at 8:00 pm

There is and has been a trend to shift more of health care costs away from "insurance" or "government" (Social Security) onto having the individual pay more out of pocket.

Insurance companies have reduced payments to doctors, hospitals and we can be sure the drug companies. The drug companies have responded by raising the "list" price of drugs. This may be one of the reasons for the rapid rise of drug prices. Cost shifting from insurance companies to individuals. The question is where is that reflected in the price of insurance. Are the books of the insurance companies audited? Why the shift to individuals for increased medical costs. Most medical costs are not optional, they are controlled by the ordering physician. Hospital costs are worse. There is no way for an individual to control or influence most hospital costs.

Why not only measure outcomes for doctors but also costs of medicines?
My doctor claims he does not know the prices. This is a big problem.

Who benefits, what started this, and why is this taking place?

NotTimothyGeithner, September 5, 2015 at 8:46 pm

Ted Kennedy was the primary sponsor of the HMO Act of 1973 which ended the ban on for profit medicine. Even Dick Nixon thought the legislation sounded fishy. The health care system in this country was largely built by non-profit operators and small time independent agents (doctors). They would have been the primary distributor of pharmaceuticals and wouldn't have had incentive to collude for fear of prison.

Even now, I would contend insurers are a bit of a red herring compared to Big Pharma and the HMOs. They aren't seeing honest bills either. Insurers are also tempted with the growth of the individual market instead of employer or government based Healthcare because an individual has no power. If an employee where my father was an attorney had a health insurance issue, he would call the relevant regulators who would take his call because there was a working relationship. If there was guff, they would sue anyone and everyone. They would act, but the woman who sells tea cozies at the community market doesn't have a team of lawyers on hand in a private market place. Small companies had problems with insurance for similar reasons. If I recall, 93 Hillary care was very concerned with creating pools for the small operators.

The doctors and nurses ideally learned about medicine. Accountants and actuaries handled the other side and still do, but now everyone works for share holders not non-profit boards. The guy with his name on the building will be well cared for, but the hospital didn't exist to enrich him beyond advertising.

[Apr 05, 2013] How to handle medical bill problems

Notable quotes:
"... Most states have laws saying that patients are entitled to an itemized medical bill that details what services and supplies are included in their charges. ..."
"... In 2006, California passed a law to prevent hospitals from collecting more money from uninsured patients than what Medicare or other public programs would pay for the same service. ..."
"... "Once a patient contacts the hospital and shows evidence of their financial situation, state law requires us to offer a discount based on Medicare rates," says Jan Emerson-Shea, vice president of external affairs for the California Hospital Assn. ..."
"... All communications with a provider should be in writing, experts say. Insist that your account be placed on hold until the dispute is resolved to avoid having the bill sent to collections. ..."
"... If you meet with resistance, don't waste time by calling back the customer service line or billing department. Go straight to the top. ..."
"... filing a complaint with your state's department of insurance. ..."
Apr 05, 2013 | http://articles.latimes.com/2013/apr/05

For those with confusing or huge hospital bills, experts advise knowing rights, getting written explanations, turning to the right places for help and filing complaints if necessary.

When Keith Yaskin and his wife, Loren, rushed their 2-year-old son to the hospital with a dangerous infection in his neck, they weren't thinking about how much his care would cost. After his three-day inpatient stay with nonstop intravenous antibiotics, they were hit with $8,900 in charges.

But the toughest lesson for the Scottsdale, Ariz., couple came a month or so later when they began to sort out the hospital bills. Their insurance policy had a $10,000 deductible. So they scrutinized every item, made some calls and had a few surprises.

When, for instance, they asked a medical group they had never heard of why it was charging them $839.25, they said they got no clear answers, just threats if they failed to pay.

After 21/2 months of calls and a complaint to their state attorney general, the Yaskins finally learned that a pediatrician affiliated with the group had treated their son in the hospital. The medical group eventually cut the bill in half.

None of this surprises Pat Palmer, the founder of Medical Billing Advocates of America. "We get feedback from consumers saying that providers are telling them 'We can't give you an itemized statement' or 'You should have asked for it before you left the hospital.'"

The idea is to discourage patients from asking for the details behind the charges, she said.

Experts offer a range of suggestions for dealing with medical billing problems.

Know your rights. Most states have laws saying that patients are entitled to an itemized medical bill that details what services and supplies are included in their charges.

"You can't be billed if they can't tell you what they are charging for," Palmer says.

Contact the billing department at either the hospital or medical group where you received services, she said. Let them know that you want an itemized bill, and tell them you are aware of your legal right to have it.

Also, a few states have laws limiting how much hospitals can charge patients who pay for care on their own. In 2006, California passed a law to prevent hospitals from collecting more money from uninsured patients than what Medicare or other public programs would pay for the same service.

"Once a patient contacts the hospital and shows evidence of their financial situation, state law requires us to offer a discount based on Medicare rates," says Jan Emerson-Shea, vice president of external affairs for the California Hospital Assn.

Get explanations in writing and take protests to the top. All communications with a provider should be in writing, experts say. Insist that your account be placed on hold until the dispute is resolved to avoid having the bill sent to collections.

If you meet with resistance, don't waste time by calling back the customer service line or billing department. Go straight to the top.

Address a certified letter to the chief executive or chief financial officer of the hospital or medical group explaining that you have tried to resolve billing issues but have hit a brick wall. "The CEO and CFO will take it very seriously," Palmer says.

Get help from your insurer. In the Yaskins' case, both the hospital and the medical group were in their insurer's network and had contracts to provide services at a negotiated discount.

"If you are in network - and this is one of the good reasons to stay in network - you can go to your insurer for help. It has a responsibility to some degree to what happens between you and a contracted physician," says Susan Pisano, spokeswoman for the trade group America's Health Insurance Plans.

Also, ask to make sure you're getting the rate your insurer has negotiated with in-network providers, says Lynn Quincy, senior health policy analyst for Consumers Union, the policy arm of Consumer Reports. Insurers often pass claims through without processing them at the reduced rate. Ask your insurer to re-process the claim if the discount wasn't applied.

Seek help and file complaints. If your bill is large or you're having a hard time making headway, patient advocates can help sort things out. For either a flat fee or a share of the money you save, organizations such as Medical Billing Advocates of America (www.billadvocates.com) and Health Proponent (www.healthproponent.com) can help you fight charges or lower your bill.

If you're being stonewalled by your healthcare provider, and your insurer hasn't helped, Quincy of Consumers Union suggests filing a complaint with your state's department of insurance. In California, patients with HMO coverage can file a complaint with the California Department of Managed Health Care by calling (888) 466-2219 or visiting healthhelp.ca.gov. Californians with PPO coverage should try the Department of Insurance at (800) 927-HELP (4357) or visit http://www.insurance.ca.gov. If your provider isn't contracted with your insurer, your state's attorney general's office is a place to turn for help.

The Yaskins ultimately enlisted the services of an advocate to help them sort through all their billing questions.

[Oct 12, 2009] The Audacity of Greed How Private Health Insurers Just Blew Their Cover

Robert Reich's Blog

The health-insurance industry has finally revealed itself for what it is.

Background: The industry hates the idea that's emerged from the Senate Finance Committee of lowering penalties on younger and healthier people who don't buy insurance. Relying on an analysis by PricewaterhouseCoopers, insurers say this means new enrollees will be older and less healthy -- which will drive up costs. And, says the industry, these costs will be passed on to consumers in the form of higher premiums. Proposed taxes on high-priced "Cadillac" policies will also be passed on to consumers. As a result, premiums will rise faster and higher than the government projects.

It's an eleventh-hour bombshell.

But the bomb went off under the insurers. The only reason these costs can be passed on to consumers in the form of higher premiums is because there's not enough competition among private insurers to force them to absorb the costs by becoming more efficient. Get it? Health insurers have just made the best argument yet about why a public insurance option is necessary.

Right now they run their markets and set their prices, and pass on any increased costs directly to consumers. That's what they're threatening to do if the legislation attempts to squeeze, even slightly, the colossal profits they plan to make off of thirty million new paying customers.

They want every penny of those profits. They demand every cent. And if the government dares raise their costs a tad higher than they expected when they first signed on to support the bill, they'll pass those costs on to consumers in the form of higher premiums. They can carry out their threat only because they have unaccountable, untrammeled market power.

But they've now hoisted themselves on their own insured petard. They've exposed themselves. If they had to compete with a public insurance plan, they couldn't get away with this threat. They couldn't pass on the extra costs. They'd have to compete with a public insurance option that forced them to give consumers the best deals possible.

Now's the time for Congress and the White House to say to the insurance industry: You want to play hardball? Okay. We'll play it, too. You didn't want a public insurance option. That was one of your conditions for supporting the bill. You wanted gigantic profits from having thirty million new paying customers and the market to yourself. The Senate Finance Committee and the White House agreed because they wanted your support and were afraid of the negative ads and hurricane of opposition you could finance. But you're even greedier than we imagined. And now you've demonstrated that greed to the American people. They don't want to turn over even more of their hard-earned money to you. So, insurance companies, we've got news for you. We're going to make sure Americans have the freedom to choose a public insurance option that's cheaper and better, and you're going to have to work hard to keep them your customers.

Unconscionable Math

July 28, 2009 by Taunter

The House hearings on rescission – the retroactive cancellation of individual health insurance policies – were over a month ago, but after its initial run through Daily Kos it seems to have waited a bit before popping up on Baseline and Slate. James Kwak at Baseline described the practice as rare, affecting only 0.5% of the population. The faint light bulb above my head began to flicker: could that be true…that’s not rare – that is amazingly common.

It is. In fact, from Don Hamm’s (CEO of Assurant) prepared testimony, with the company logo nicely on the front of it in the original:

Rescission is rare. It affects less than one-half of one percent of people we cover. Yet, it is one of many protections supporting the affordability and viability of individual health insurance in the United States under our current system.

What tangled webs we weave…

To understand why 0.5% of the people Assurant covers is a lot of people – a jarring, terrifying, probably criminal lot – you need to understand a little bit of math. You need to understand just enough math to understand what Don and his legal team are not telling you. You need to understand conditional probability. And the folks at Assurant are counting on the fact that you don’t.

A typical job interview question for aspiring finance folks is the Monty Hall Question. As typically phrased, you go on a game show and are asked to pick one of three doors. Behind two of the doors are goats. Behind one is a shiny new car. You pick a door. The host ceremoniously opens a door that you did not pick, and behind it is a goat. He turns to you while the audience giggles at the goat. Do you want to change your pick?

As I have pointed out on the Idea Locker comments, this typical phrasing is a bit unfair. If you haven’t seen the show, you might think the choice of what door the host opened was random, unrelated to the door you picked. Since there is no correlation, you don’t see why you should change your pick. If someone asked you to call the third of three coin tosses in a row, you wouldn’t change your pick if the first two were heads, would you?

But the nuance of the game is that the door is not random. The door that is opened will always meet two conditions:

  • It is not the door you picked originally (or else what would be the point of carrying on)
  • It is not the door with the car (that would certainly bring things to a close)

You had a 1/3 chance of being right in your initial pick. That means there was a 2/3 chance the car was behind “not your pick”. Well, if you change your pick now, you cover the entire “not your pick” set – you have seen one of the two doors, know that it’s empty, and now have the payoff from the other. You should change your pick.

Here’s the health care nuance (2005 HHS report based on 2002 data):

Bar graph shows percent of total expenditure by percent of population: Top 1% (greater than or equal to $35,543), 22%; Top 5% (greater than or equal to $11,487), 49%; Top 10% (greater than or equal to $6,444), 64%; Top 20% (greater than or equal to $3,219), 80%; Top 50% (greater than or equal to $664), 97%; Bottom 50% (less than $664), 3%.

Half of the insured population uses virtually no health care at all. The 80th percentile uses only $3,000 (2002 dollars, adjust a bit up for today). You have to hit the 95th percentile to get anywhere interesting, and even there you have only $11,487 in costs. It’s the 99th percentile, the people with over $35,000 of medical costs, who represent fully 22% of the entire nation’s medical costs. These people have chronic, expensive conditions. They are, to use a technical term, sick.

An individual adult insurance plan is roughly $7,000 (varies dramatically by age and somewhat by sex and location).

It should be fairly clear that the people who do not file insurance claims do not face rescission. The insurance companies will happily deposit their checks. Indeed, even for someone in the 95th percentile, it doesn’t make a lot of sense for the insurance company to take the nuclear option of blowing up the policy. $11,487 in claims is less than two years’ premium; less than one if the individual has family coverage in the $12,000 price range. But that top one percent, the folks responsible for more than $35,000 of costs – sometimes far, far more – well there, ladies and gentlemen, is where the money comes in. Once an insurance company knows that Sally has breast cancer, it has already seen the goat; it knows it wants nothing to do with Sally.

If the top 5% is the absolute largest population for whom rescission would make sense, the probability of having your policy cancelled given that you have filed a claim is fully 10% (0.5% rescission/5.0% of the population). If you take the LA Times estimate that $300mm was saved by abrogating 20,000 policies in California ($15,000/policy), you are somewhere in the 15% zone, depending on the convexity of the top section of population. If, as I suspect, rescission is targeted toward the truly bankrupting cases – the top 1%, the folks with over $35,000 of annual claims who could never be profitable for the carrier – then the probability of having your policy torn up given a massively expensive condition is pushing 50%. One in two. You have three times better odds playing Russian Roulette.

People lie on their insurance forms, of course, and that is a serious problem. But let’s not forget that the very nature of the forms is designed to create inaccuracies, and it doesn’t matter in the slightest how minor the error may be once the company comes looking to get out of its policy. Back to Don Hamm:

I mentioned a story in my comment on the Baseline article, and it’s a favorite of mine, so I’ll repeat it here: Years ago I was walking a casino floor with a casino executive. It was an incredibly detailed tour, and we got to talking about pretty much everything that came to mind about crowds and gaming. Now, a clever observer might notice that even the tolerant people of Nevada will not allow alcohol in vending machines – wouldn’t want the little ones to be able to get a Bud Light without a human being verifying their ID. But there we were in the middle of acres of blinking lights, with absolutely no one making sure that underage kids weren’t walking up to a slot machine. Indeed, they don’t card for the table games.

The executive told me you are free to play if you are underage, you just aren’t free to win. You can sit down and pump your money into the slots, and if you look presentable you can drop some chips on blackjack or craps. However, if you should happen to start winning, the pit boss or security team will come over and check your ID. The house edge is 100%.

Conditional probability is tough for the human brain. We tend to think of things as either completely correlated (once the market tanked, McCain had to lose) or completely uncorrelated (coin tosses). To a certain extent, we make the calculations in everyday speech: when someone says that pancreatic cancer is exceptionally lethal, he doesn’t mean that it is likely to kill an enormous number of people; he means it will kill an enormous percentage of the people who contract pancreatic cancer. Get a bit more tangential and even very smart people with Nobel Prizes miss things; one of the reasons Long Term Capital Management melted down was that once they started sustaining heavy losses, people bet against LTCM’s other holdings – LTCM itself was the correlation. Low frequency, high severity events are also difficult for us to process – look at how much we invest fighting air piracy versus the sacrifices we are unwilling to make on drunk driving or domestic firearm violence.

Put them together and the guys with the actuaries working for them have a nearly insurmountable advantage. I tend to think of traditional banking and traditional insurance as mirror images: when you take out a mortgage, you get a lump sum and make a series of payments; when you get life insurance, you make a series of payments and get a lump sum. Health insurance is somewhat similar to life insurance, except the payout happens sometime during the payment stream instead of at the end.

When a person intentionally defaults on consumer credit, he is called a “ruthless defaulter” and the system, to the extent that it operates with any sort of efficiency, is designed to try to flush him out of the credit market in the future. Society can tolerate taking the risk of inadvertent defaults – the people who through some sort of misfortune are unable to make good their promised payments. The folks who do it on purpose…do it enough and the FBI might step in.

The insurance industry has a bit of a historical difference, in that pretty much everything in health insurance is similar to a liar loan. I tell the company if I have been sick, just like stating an income on a mortgage application. For a host of administrative and medical privacy reasons, the insurance industry has not historically wanted a comprehensive inventory of medical records before taking a client. Few people could probably deliver such a record even with the best of intentions. There is a problem with liar loans, and it was well described by Tanta (Calculated Risk’s late writing partner) here:

Well, with Number 1 [a liar loan that has gone bad], it’s “clearly” the borrower’s fault. He or she lied, and we can pursue a deficiency judgment or other measures with a clear conscience, because we were defrauded here. We can show the examiners and auditors how it’s just not our fault. The big bonus, if it’s a brokered or correspondent loan, is that we can put it back to someone else, even if we actually made the underwriting determination. No rep and warranty relief from fraud, you know.

It is in the health insurer’s interest to have application fraud, not only because it saves time and expense on the front end, but also because it lets them get out of any policy that isn’t going well for them. If the health insurer had to verify the information – if, in essence the insurance company had to behave as an accredited investor with adequate expertise to make a decision without reliance – it wouldn’t have the opportunity to bail out. It would catch more genuine liars, but many of these liars would have turned out to be healthy, profitable customers, and what the carrier really wants is a population devoid of expensive claims, not devoid of liars.

Years ago, the shameful business was the tobacco industry. There was a certain roguish charm to them; they had great ads and were fun outgoing people, and of course they made a product that if used as directed would kill you.

Say this for the tobacco folks: they printed the dangers right there on the pack. Few people who took up smoking after World War II did so with ignorance of the health consequences. Society wants tobacco, it might as well be produced in clean factories and wrapped in cellophane as opposed to sold on street corners. I hope we legalize marijuana and let Altria and RJR make joints and put the Mexican cartels out of business.

No, the health insurance companies sneak around. They have nice facades, they speak in the bureaucratic language of statistics few understand, and they make the eminently reasonable argument that they just need to protect themselves. They promise great coverage, and when many years later it comes time to pay out and the petitioner is sick and unable to function, sorry, wish we could do better, but there was an error and rules are rules. We’re keeping the premiums. It’s actually far more like this guy:

Bernard%20Madoff%20large.jpg

Bernie Madoff made people promises, and people believed them, because was it really possible that the former chairman of the NASD was running a scam? Come on. But he was, and his reputation was no more a shield to the defrauded than the huge balance sheets of the health insurance companies mean an individual claimant is going to get covered. The minute he began transferring money from one account to another and then raising external capital to try to square the numbers, he knew exactly where this was going. The insurance companies know too; they just know well enough to avoid outrunning the law.

I don’t know if this case is going to be the lever the Democrats need to get meaningful healthcare reform. The Democrats don’t even seem to be able to line up on the same side, which is probably a necessary precursor to getting something passed. The Taunter Drug Plan for lower prescription drug costs doesn’t seem to have taken the Internet by storm, so I give this post low odds of breaking through. But I will make this simple point in the hope some speechwriter pressed for a deadline picks it up: if a bank manager went to half of his highest net worth clients and said “sorry, you misspelled your address when you opened your account, I’m confiscating your balance,” he would be lucky to get himself assigned to minimum security.


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Posted in Corruption, Health Care, Labor Policy, Meltdown, Movies | 122 Comments

122 Responses

  1. on July 28, 2009 at 5:10 am | Reply anne

    I wish your rescission percentages got more play. It is unconscionable that 10 percent of seriously ill people get dumped from their plan because they actually need it.

    The pre-existing condition thing has always bugged me – people need insurance precisely because they are ill – they shouldn’t be prevented from getting it because of their illness.

    Love that you’re comparing insurance execs to Madoff…. it is a scam, pure and simple, to take money from people and cut them off of what you’ve promised, precisely at the moment they need it most.


    • on July 28, 2009 at 10:12 am | Reply Taunter

      Best way to get people to notice is to talk about it…

      Funny thing is that I am generally sympathetic to the pre-existing condition argument. It would be unfair to allow people to sit out of the pool for years and then jump in only when they develop a chronic condition; it’s a bit like taking out fire insurance when the hoses arrive. That’s why I support mandates and a public product, so people actually have the opportunity to maintain continuous coverage. But the companies have no desire to make this a general fraud prevention thing. If it were, they would verify all incoming customers’ medical histories.

      There is one key difference between the insurance companies and Madoff: Madoff’s investors were accredited investors; in the case of Fairfield Greenwich, it was a hedge fund paid massive fees with precisely one investment. They made the affirmative statement that they were qualified to analyze investment funds. An overwhelming majority of any health insurer’s clients are neither doctors nor actuaries, and have a difficult time understanding what is going on. Furthermore, at the time the carrier decides to renege on its obligations, the client is sick. I can barely think when I have a cold; it’s asking an awful lot to expect someone with cancer or ALS to be a robust advocate of his rights.


      • on July 31, 2009 at 8:19 am TomK

        The other continuous care benefit is reduced employee abuse. I know a guy who has been passed over for raises every year since he had an autistic son. What’s he gonna do, leave? He’s uninsurable anywhere else, so the insurance system has put him in chains to his employer.


      • on August 3, 2009 at 11:44 am Timmay

        I think health insurance is a scam all around. If we could pay doctors cash for the services they provide, we wouldn’t need health insurance. Here’s an example: my fiance had to get an MRI. The price you had to pay for that scan if you were uninsured was $4,000. The doctors were paid $400 for that scan by the insurance company.

        So, what’s better for me, the consumer? To pay $400 every few years when I need the service, or to pay $400 to the insurance company every month, just in case I need the service? They have rigged the system so that you CANNOT afford health coverage without them.

        If you ask me, the whole debate of the “rising health care costs in America” is simply the Insurance companies moaning about their shrinking profits because their customers are getting old and are starting to actually use the service.

        I think the whole crisis could be solved by eliminating today’s typical health insurance companies and allowing the free market to set fair prices at hospitals (we already know approximately what those prices are because we see on our EOB’s what the doctors accept from the insurance co.). Catastrophic coverage should still be available for the companies & people willing to gamble on who will lose that game, and declaration of relevant pre-existing conditions would be a fair part of setting up that business relationship.


    • on August 5, 2009 at 6:54 am | Reply Fred

      >The pre-existing condition thing has always bugged me – people need insurance precisely because they are ill – they shouldn’t be prevented from getting it because of their illness.

      What!? That’s like saying it’s OK to wreck your car, then go out and buy collision insurance, make one payment, and demand that they give you a new car.

      That’s ridiculous. It’s *insurance*, not some magical “pay a low price, get unlimited medical care” scheme.


      • on August 5, 2009 at 8:36 am Chris Taylor

        Your not getting it! YOUR RIGHT ITS REDICULOUS

        but that is EXACTLY what they put it FORWARD AS. pay us this monthly fee for life and your covered for life.

        THAT IS HOW THEY SELL IT so why in the world would you think it insane that people think THAT IS WHAT IT IS?

        It did not always cost LITERALLY a fortune to see a doctor. I am only 32 years old and I remember when it was AFFORDABLE to see a doctor for something normal like a check up or shots or basic dental work.

        The Pharma/Insurance industry has EXPLODED this field into this YOUR FRAKING LIFE IS OVER expense to FORCE people to buy what was originally OPTIONAL insurance for that just in case life altering event (cancer heart failure massive accident etc..)

        Now its backfiring on them.

        People are USING IT AS ADVERTISED and they are going OH SHIT this artificially inflated market WE CREATED is now BURNING US.

        so now instead of eating there medicine they are making US EAT IT with recission and socialised care.

        oh trust me they WANT socialized health care.

        it means unlimited funding because it goes from being an OPTIONAL pay out of pocket plan (part of which is HIDDEN by the employer paid out half and you get LESS PAY as a result)

        to a MANDATORY TAX whether I want it or not.

        since when it is SANE for a “bill” to come to more dollars than some people make in there ENTIRE LIFE TIME.

        sorry for the language but this entire structure needs a good old bitch slap across the face.

        I went to the dentist a few years ago. I take decent care of my teeth. clean x-ray fill a tiny cavity (so small no Novocaine was needed)

        Its also the last time I will ever go to the dentist again without insurance (that means a long time) for that bill came to $700

        $700 to sit in his chair for 30 minutes (if that)

        You so much as LOOK at an emergency room and your bill STARTS AT $10,000 and up.

        only on THIS insane planet is there any logic in that.


      • on August 5, 2009 at 10:07 am Barbara

        The “pre-existing condition” problem is a serious issue, and the people most affected by it, unfairly, are the very ones who have been paying for health insurance for years, get dumped by their providers (or lose their insurance for some other reason) and have to find new insurance. Good Luck. They are pretty much screwed.


  2. on July 28, 2009 at 12:53 pm | Reply Stephen Dodson

    Well articulated explanation of a truly atrocious practice. To me, it was surprising that Assurant CEO Don Hamm is so open about their rescission process. My first reaction was that he’s a pretty stupid guy to admit that they go out of their way to drop individual subscribers.

    Yet, your question “If someone asked you to call the third of three coin tosses in a row, you wouldn’t change your pick if the first two were heads, would you?” reminded me of something that I witnessed quite recently. An otherwise intelligent finance guy wanted to bet against the Yankees even though he was a Yankees fan. Why? They had won seven in a row. What were the changes they would win eight in a row?

    Maybe Don Hamm’s understanding of the common man and common Congressman is exceptional, and I’m the one who’s stupid.


    • on July 28, 2009 at 1:27 pm | Reply Taunter

      I take it your friend is not one of this nation’s more successful sports gamblers.

      There is a curiously persistent misunderstanding of the concept of mean reversion. Many people seem to believe that sequences of events are self-correcting: if I have flipped ten heads in a row, and I know that the expected value for thirty flips is fifteen heads, surely I should expect more than ten tails in the next twenty flips to bring me back to the mean. They even receive reinforcement for this belief every time they play cards with their buddies – get a disproportionately high number of face cards early, expect fewer face cards later.

      This is a confusion between determined and undetermined outcomes. A deck of cards, once shuffled, will only play out one specific permutation (a major reason for the house to use a “large” number of decks and stop playing before the number of cards remaining ceases to be large – they want so many cards of each type in the deck that probability on each draw is similar to the probability for the first card out of 52). In the case of coin tosses, however, the next toss does not exist when the first toss has happened. The coin will fly with no conception of previous events. A running tally will “revert” to the mean only to the extent that future 50/50 results overwhelm the determined history.


  3. on July 28, 2009 at 5:13 pm | Reply More on Rescissions « The Baseline Scenario

    [...] Taunter wrote an insightful post about rescission, expanding on a comment he left on this blog. He drives home a point I thought I made in my [...]


  4. on July 28, 2009 at 6:15 pm | Reply Bond Girl

    Brilliant post, Taunter.

    I actually did manage to get kicked out of a casino once when I was underage, however – even before I won anything :)


  5. on July 28, 2009 at 6:45 pm | Reply Manshu

    One of the most insightful posts I have read for a while. Thank you.


  6. on July 28, 2009 at 9:00 pm | Reply Ben

    Fantastic post. I’ll leave it at that.

  7. on July 28, 2009 at 9:45 pm | Reply Stephen Dodson

    Maybe something about health care and gambling make math idiots of everyone? Or maybe some are idiots to being with: http://mediamatters.org/mmtv/200907270052 (via Krugman).


  8. on July 28, 2009 at 11:01 pm | Reply Jackybird

    Wonderful post.

    I paid for individual insurance for most of twenty years until it became prohibitively expensive. All that time, I always had the sneaking suspicion it was a scam but I was told it was the responisible thing to do. Now I know it was a scam.

    The other day Krugman referred to young people who don’t buy insurance as “gaming” the system, or something to that effect. But is it gaming the system to decline to buy into a Ponzi scheme? If you think that the insurance won’t be there when you need it why buy it in the first place?

    I feel almost certain that without a public option mandates will be a disaster.


    • on July 28, 2009 at 11:59 pm | Reply Taunter

      I think Krugman’s perspective is in the context of a public option and mandates.

      Because health costs vary enormously by individual, with a few individuals accounting for enormous amounts of cost, a system that aims to provide broad coverage needs a large amount of people whose premiums exceed their cost usage. For every person paying $10,000/year and consuming $50,000/year, you need four people who pay $10,000/year and consume nothing. If the people who consume nothing know that they will consume nothing (or think that they will consume nothing), they will be tempted to opt out of the system and only join later, when they think the expected value of their costs is equal to or greater than $10,000. If all four healthy people opt out, however, the sick person needs to be charged $50,000 to keep the system in balance – which defeats much of the pooling benefit.

      I doubt Krugman supports rescission in cases where the applicant has not intentionally defrauded the carrier. Even the Republicans are repulsed by the practice, and I think they would be far more horrified if they knew how widespread the practice is among very sick individual insurance clients


  9. on July 29, 2009 at 7:52 am | Reply StatsGuy

    The same light bulb went off when I read the 0.5%, but I could not have explained it _nearly_ as well. Very nice post.

    I still wonder, though, whether it might be slightly worse than even this picture.

    1) I believe your data is for the US population as a whole. (If I’m wrong, then this comment is meaningless – apologies.) But, in fact, much of the sickest part of the population receives health care via Medicare because older people are (to use your technical term) sicker.

    So the % of people in the top tier AMONG PEOPLE NOT ON MEDICARE is much lower, which means that the conditional probability of suffering recission given that you need treatment is much higher. Roughly, if the % of people among under-65 (and not on Medicaid) in the top bracket was half of what it is for the entire population, then the probability of suffering recission given that you have a large claim is double even your current estimates.

    2) The probability of losing the policy given that you really need it may be X% in any given year. But there’s a cumulative effect – over time, you build up a reservoir of uninsurable who lost insurance due to recission, and now cannot get it back because they have a chronic condition.


    • on July 29, 2009 at 10:03 am | Reply Taunter

      You are absolutely correct about #1, and this is a huge error factor. 10% of Medicare costs take place in the last month of life alone, and Medicare is roughly 45% of the national health care spend. So all of those patients are clogging up the top end of national distribution and not on private insurance in the first place. Unfortunately, I can’t find a private-only, or individual-pay-only distribution, and of course if I did find an individual-pay-only distribution it would be skewed on the top with denied claims (some people should be spending a lot, but actually spend much less, because their policy was pulled). The Reuters article says Medicare spends 30% of its outlay on the top 5% of its population, which means it has a flatter curve than non-Medicare (I would assume, without evidence, that fewer Medicare beneficiaries have negligible health expenses). This implies non-Medicare spending is even more highly concentrated with a few very high spenders.

      On #2, I’m a little less confident, and it was one of the reasons I may have misunderstood James’ original post. There is a cumulative effect, but that effect is blunted to some degree by the fact that the people who account for the very high medical expenditures do not necessarily change much from year-to-year (with the obvious exception of the end-of-life expenses typically borne by Medicare). In fact, one of the reasons I suspect rescission became such a powerful phenomenon is that if Sally has breast cancer at a young age, she is going to be in the 99th percentile several times; the carrier is weighing years of such expenses against her premium. So it might not be the case that in a forty year career an average person has a 33% chance of ending up at some point in the top percentile (1-(.99^40)); it is probably the case that most people have a tiny chance of ever getting an expensive chronic condition (or at least an expensive, chronic condition before turning 65), and some people have a large chance of repeatedly being in the top percent.


      • on August 4, 2009 at 8:20 am DataBob

        Fascinating – and horrifying – insight, Taunter.

        While the odds you show are bad enough, I wonder if there is another factor to make them worse:

        The insurance executive used 0.5% as the recission rate, but that is for ALL insureds.

        Shouldn’t the insureds who are covered under an employer’s ‘forced insurance’ policy be excluded from the potential pool of ‘recission candidates’?

        I have no idea what percentage of people covered under an employer’s plan are not subject to potential recission, but whatever the number, they would make the potential pool of recission candidates even smaller.


  10. on July 29, 2009 at 12:21 pm | Reply Vinnie

    As Mark Twain once said, “Figures don’t lie, but liars figure.”

    Excellent post.


  11. on July 29, 2009 at 9:28 pm | Reply jenn

    What a terrific explanation of the unfairness of rescission!

    I do understand what Krugman says about young people “gaming” the system, an in theory I can see how mandates would fix that. But, in Massachussetts, it seems to me that they still have a problem with this. I presume this is because the penalty for failing to buy health insurance (on the order of $1000 in taxes, or less) is much lower than the cost of purchasing health insurance (at least $3000, up to $12000).

    It seems to me that a solution would be to make a law that insurance companies cannot drop or raise rates on anyone who has been continuously covered by insurance for x years (let’s say, 5 years or so). This would incentivise young people to contribute to the insurance pool during the years when they don’t need expensive care.

    In theory, if the federal government manages to enact some kind of Obamacare, the problem of the non-contributing youth would disappear as we would all be mandated to buy insurance. But, I suspect nothing will be enacted.

    At the very least, the government should restrict insurance companies from predatory practices such as rescission. Without such legislation, companies that don’t use rescission would be outcompeted by companies that DO use rescission. Anti-rescission legislation would just take that factor off the table altogether and level the playing field.


    • on July 29, 2009 at 9:41 pm | Reply Taunter

      You are right, the penalty needs to create the incentive to sign up.

      Rescission could easily be stopped by imposing an affirmative obligation on the insurance company to verify its information. So in the Taunter world, there would be a standstill period (30-60 days) from inception of a policy during which time each side could review and verify health information and break the policy if it didn’t work. Beyond the standstill, the carrier would be on the hook. Once admitted to a pool (eg women born in 1960 living in Boston), individual rates could not change – change one rate, change the entire pool.

      The flaw with my plan (apart from the politics) concerns actions the client takes that increase his risk. If he begins smoking, for example, or decides to become an ice road trucker. But I would think customer-initiated change could be recognized as a policy reset without affecting the system overall.


  12. on July 30, 2009 at 7:05 am | Reply Thursday Links « Rortybomb

    [...] Posted in Uncategorized by Mike on July 30, 2009 I follow up on Taunter’s excellent post on rescission over at The Atlantic. It’s a ramble that I had fun with, about zombies and end [...]


  13. on July 30, 2009 at 10:40 am | Reply ngbstl

    This is whack. Why don’t they simply pass an “incontestability” rule/law/statute? In LIFE insurance, there is a clear-cut 2-year incontestability rule that says policies cannot be rescinded after that 2-year period, and evern further that if insured dies due to something adverse omitted in the application, the insurer cannot contest the death benefit if this occurs after 2 years from policy start. Wouldn’t that resolve this in health insurance too?…


    • on July 30, 2009 at 10:53 am | Reply ngbstl

      …also, I forgot to address this too: I’ve read that it would be “impractical” for insurer’s to comprehensively investigate applicants, so they only spend $ to do this if/when big claims arise that they wanna get out of. Not totally accurate, as insurers (life/health/disability/long-term-care) DO spend a decent chunk of change underwriting applicants, with paramedical exams, APS (medical records review), the new (and spooky) filled-Rx records check, etc…in addition to applications that rest on applicants honesty. Granted not everything will show up thru this underwriting, but most will get caught; insurers are well aware of ‘adverse selection’. Issue is symptom of macro problem w/ our system. Finding a (politically do-able) way to have EVERYone be covered and in the pool (+ incontestability rules or what jenn said, rules based on continous coverage) would go a long way towards fixing it.


      • on August 5, 2009 at 4:43 am godspiral

        the underwriting screening process may be done to gather information for a later recision rather than to disqualify applicants, and refuse their premiums.


    • on August 4, 2009 at 1:52 pm | Reply David Klein

      They do have this. In California it is Insurance Code section 10350.2.


  14. on July 30, 2009 at 4:57 pm | Reply Patrick C

    I’m totally with you on rescissions. In general, I’m in favor of a strong health care reform with a serious public option.

    But I thought I’d point out a consequence of making rescissions illegal. Either #1, it becomes the Insurer’s responsibility to identify preexisting conditions.(although denial of a new policy for pre-existing conditions might become illegal, as well). or #2 Health insurance coverage becomes mandatory.

    #2 is probably a necessary consequence of making rescission illegal. But enforcing mandatory health insurance is actually quite tricky. Assumedly, the government would track people’s insurance(or lack thereof) and a fine would be issued.

    Therein lies the rub. If the fine is lower than the insurance premium, it is in by interests to not get insurance, pay the fine, and then sign up for a policy when I get sick.

    But selecting the appropriate fine is tricky business, in some senses, it is equivalent to insurance underwriting. At the same time, legislators are under pressure to make the fine as small as possible, to prevent alienating their constituents. Moreover, the tendency of government, is to specify the fines in the legislation itself. This means that an appropriate fine at the time of passage, even if it is initially significantly larger than the cost of an insurance premium at the time, will eventually become less valuable than the premium due to dollar inflation and health cost inflation.

    I don’t mean to imply this is a bad idea. In fact, if we’re lucky, the legislation is written poorly, it kills health insurers, and we end up with the public option. But I just think it is important to understand how making practical legislation to make rescission illegal, is actually quite tricky.


  15. on July 30, 2009 at 8:10 pm | Reply Business101

    After paying $550 per month for health insurance, they’d better not recission me!


  16. on July 30, 2009 at 8:19 pm | Reply Morgan Dy

    Very nicely written article… but I can’t help but wonder about your bias towards a national healthcare. Let’s just take a couple of examples.

    First, you liken rescission’s statistic to an underage person playing in a casino. True, the house advantage is 100%–but this is only because the underage person IS BREAKING THE RULES. Likewise, companies should be able to disqualify people if they lie on the insurance form.

    Ok, so secondly, you assert that “…the very nature of the forms is designed to create inaccuracies…” Are you serious? Far more people are covered under group insurance plans than individual insurance plans… and HIPAA has explicit language that prohibits discrimination against employees and their dependent family members based on any health factors they may have–including prior medical conditions, previous claims experience, etc. So your numbers MUST be faulty because the only people who could be rescissed are those who happen to have been diagnosed, quit/lose their job, and chose not to go with COBRA before finding another job and lying on the form. And even if you somehow got excluded for a preexisting condition, that exclusion can only apply for 12 months (18 if you enroll late).

    So I have to doubt the veracity of your article. Very well written though.


    • on July 30, 2009 at 9:05 pm | Reply Taunter

      No need to wonder about my bias – I advocate a single payer system for basic and catastrophic health care and a private system for supplemental coverage. Call it the French or the Swiss systems.

      The key point I hoped to make is that the casino doesn’t care about underage gamblers, they care about gamblers who win, and when there is an intersection of the sets (underage gamblers) and (winners) they act. If they really cared about underage gamblers they would universally card for the games, as they do for the bars.

      On your second point, the entire post concerns individual health insurance. Assurant, not Taunter, provided the population estimate for rescissions. If you think the pool of candidates is even smaller – filing deadlines, excluded clauses, etc – you are arguing for a higher percentage of rescissions within the suspect class. It is the same point Stats Guy made above, and would argue even more strongly for insurer bad faith when presented with large claims.


      • on July 30, 2009 at 11:24 pm Morgan Dy

        You and I have the same desires for a national health care system–having just returned from my stay in Europe (and having had to partake of an ambulance call and emergency health care), I know I do not want to see what Congress is planning ever come to fruition; in Europe, if you’re not a citizen, you must sign a paper to acknowledge that you agree to reimburse the cost. The American proposal–to officially legislate to pay the health care for non-Citizens is ludicrous.

        Back to the article: my point is that the article makes the implication that people who lie on their forms and perpetrate that lie by paying premiums should be allowed to have health care; the HIPAA explanation I provided was to illustrate reasons that honest, rule-obeying folk don’t need to lie because in most cases by law they cannot be excluded; and if they are, they cannot be excluded indefinitely.

        If someone were to hop over your fence and lay $5 bills on your doorstep every morning… would you complain? Now how about if the guy starts taking the cars that you parked in the driveway for joyrides? Are you trying to tell me that just because you overlooked his trespass when he was laying money down on your doormat you are willing to let them get away with taking your car?

        People who lie on their insurance forms are committing fraud. It sounds to me like the article is whining that it isn’t fair that high cost patients can’t get away with fraud like low cost patients can, doesn’t it?


      • on August 3, 2009 at 4:42 pm Miguel Lacruz

        … in Europe, if you’re not a citizen, you must sign a paper to acknowledge that you agree to reimburse the cost …

        This is definitely not so in Spain, where you have the constitutional right to free health care just because you are stepping on its territory, regardless of your citizenship, even if you are an illegal alien. What country in Europe do you refer to?


      • on August 4, 2009 at 8:55 pm Jack K

        If you’re not a citizen in certain European countries you have to agree to reimburse the cost? That seems a bit unfair for legal non-citizen residents of that country who work and pay taxes.


  17. on July 30, 2009 at 8:22 pm | Reply Noel Clark

    Patrick C, I agree healthcare insurance has to be mandatory, otherwise the funding base becomes too narrow. But there are better ways to go than fines. Here in Oz we have universal healthcare supported by a taxation levy. This guarantees treatment in the public system of hospitals. But the government would prefer people used the parallel private hospital system instead, to reduce the call on the public system. There is a tax break that encourages people to take out private health insurance that covers private hospitals. This means high income earners take out private health insurance to use private hospitals and cover some of the additional cost by reducing their tax bill. Admittedly, there are downsides to this system, as with all parallel systems; one will inevitably be better funded. But I’ve never heard of rescission in Australia…


  18. on July 30, 2009 at 8:43 pm | Reply Rob Steele

    I used to think I was getting ripped off by insurance unless I was filing claims but then I had a wreck. Now I happily throw money down that rat hole and devoutly hope to never see it again. The only real solution I see is to accumulate enough wealth that you can self-insure. In the meantime save an emergency fund and carry high deductibles so you only file when it’s a big deal.


  19. on July 30, 2009 at 9:16 pm | Reply skipjim

    I guess my family got lucky last year when we had our twin daughters 12 weeks early. Between my former employer’s health insurance and medicaid we didn’t pay anything for their 3 months of neonatal care.

    We were definitely in the the top 1% bracket, I think the final bill came out to be $750,000 for the two of them, not including the delivery. I can pay health insurance premiums for the rest of my life and not hit that number.


    • on August 3, 2009 at 11:56 am | Reply Timmay

      Is $750K the amount that you would have been charged if you did not have health insurance, or the total amount the insurance company actually paid to the hospital?


    • on August 5, 2009 at 6:01 am | Reply Kevin Camp

      “We were definitely in the the top 1% bracket, I think the final bill came out to be $750,000 for the two of them, not including the delivery. I can pay health insurance premiums for the rest of my life and not hit that number.”

      You think so?

      First, let’s factor in what the insurance company actually paid out. Most people here seem to think it would have been about 75k. To be on the safe side, we’ll double that to 150K.

      Second, let’s figure out what you actually pay in premiums. Between your premiums and what your company pays for you, money that they could be paying you if they weren’t paying for your insurance, it’s costing you probably 2000-2500 a month. Again, to be safe, we’ll take about half that and call it $1200.

      Now, let’s say you invested that $1200 a month and got a below average return on 8% and guess how long it would take you to hit that 150K number?

      Less than 8 years. And yours is pretty much a worst case scenario.


  20. on July 30, 2009 at 9:51 pm | Reply David Sickmiller

    Very interesting article.

    The $7,000 you cited for an individual adult insurance plan is incorrect. The source you linked to explains that this number is the 2005 “Estimated Average Total Medical Expenditures for Low-Income Medicaid Beneficiaries, If They Were Covered Instead by Private Insurance”. The main problem there is that it’s total expenditures by the insurer, not premiums paid by the person.

    Instead, consider using $4,704, the 2008 average annual premiums for employer-sponsored health insurance for single coverage. http://ehbs.kff.org/images/abstract/7791.pdf

    Alternatively, it was $2,613 for non-employer-sponsored single coverage in 2006-2007. http://www.ahipresearch.org/pdfs/Individual_Market_Survey_December_2007.pdf


    • on July 30, 2009 at 10:04 pm | Reply Taunter

      That’s a fair point, but the challenge with using the overall average for non-sponsored coverage is that many of these plans are stripped-down policies for people who believe themselves to be in particularly excellent health. I was trying to find a population that is large and contains people who might develop chronic conditions and are not being pruned.

      If you believe my estimate of policy revenue is too high, use a different intersection point of revenue and medical loss. I think you will still find that the power series of medical loss puts extensive pressure on insurers to look carefully at a small segment of the population. Skipjim’s comment above that his premature daughters ran an insurance company and the government $750,000 shows what one client can do to a carrier.


      • on August 1, 2009 at 2:48 pm anne

        Dave – I’m a freelancer who knows quite a few self-insured freelancers – We talk A LOT about health insurance and its costs.

        If you’re 21 and just out of school and have NO pre-existing health conditions – never saw a therapist for depression, don’t have allergies, no asthma or ADHD – you probably can find a policy for $2600 a year. Once you marry and have a family, costs for insurance grow exponentially. Or once you start aging but remain single, your costs grow exponentially. Just how it works with the for-profit market.

        The PDF you link to is provided courtesy of America Health Insurance Plans – a group devoted to the interests of health insurance companies, not consumers. Show me where I can get a $2600/year policy that provides the same coverage our Senators get, and I’ll stop advocating for health care reform now.

        Unfortunately, such a policy is not readily available to people who actually need it.


  21. on July 31, 2009 at 2:13 am | Reply Understanding the ‘rare’ practice of recission « Becky’s Weblog

    [...] Source:http://tauntermedia.com/2009/07/28/unconscionable-math/ Tags: assurant, cancellation, ceo, hamm, health insurance, health insurance policies, individual health insurance, individual health insurance policies, insurance, medical care, population [...]


  22. on July 31, 2009 at 5:48 am | Reply Understanding the ‘rare’ practice of recission « Diychica’s Blog

    [...] Source:http://tauntermedia.com/2009/07/28/unconscionable-math/ Tags: assurant, cancellation, ceo, hamm, health insurance, health insurance policies, individual health insurance, individual health insurance policies, insurance, medical care, population [...]


  23. on July 31, 2009 at 8:10 am | Reply Mike O.

    A well-reasoned article. You lost me, though, with the Monte Hall excerpt. Once you have been shown door X has the non-prize, doors Y and Z immediately assume 50% probabilities. If you had picked door Y in the beginning, door Z does not assume the 2/3 probability that X and Z had pre-knowledge of X.

    I don’t know what they are teaching in Finance courses these days, but it doesn’t match what I used to teach in Psych Stats.


    • on July 31, 2009 at 9:28 am | Reply Stephen Dodson

      Mike O., the odds are indeed 2/3 and 1/3. It was a famous problem that a lot of math professors and PhDs got wrong (and apparently former Psych Stats instructors).

      http://en.wikipedia.org/wiki/Monty_Hall_problem


      • on July 31, 2009 at 11:22 am Mike O.

        Thanks, Stephen (you too Andy), I stand corrected. The wiki entry was unclear until I read this:

        “Why the probability is not 1/2
        This difference can be demonstrated by contrasting the original problem with a variation that appeared in vos Savant’s column in November 2006. In this version, Monty Hall forgets which door hides the car. He opens one of the doors at random and is relieved when a goat is revealed. Asked whether the contestant should switch, vos Savant correctly replied, “If the host is clueless, it makes no difference whether you stay or switch. If he knows, switch” (vos Savant, 2006).

        [edit] Increasing the number of doors
        It may be easier to appreciate the solution by considering the same problem with 1,000,000 doors instead of just three (vos Savant 1990). In this case there are 999,999 doors with goats behind them and one door with a prize. The player picks a door. The game host then opens 999,998 of the other doors revealing 999,998 goats—imagine the host starting with the first door and going down a line of 1,000,000 doors, opening each one, skipping over only the player’s door and one other door. The host then offers the player the chance to switch to the only other unopened door. On average, in 999,999 out of 1,000,000 times the other door will contain the prize, as 999,999 out of 1,000,000 times the player first picked a door with a goat. A rational player should switch. Intuitively speaking, the player should ask how likely is it, that given a million doors, he or she managed to pick the right one. The example can be used to show how the likelihood of success by switching is equal to (1 minus the likelihood of picking correctly the first time) for any given number of doors.”

        I’m suprised this is the first time I’ve encountered this problem (though the teaching I did was back in the 70s).


    • on July 31, 2009 at 10:49 am | Reply Andy Mail

      The best way I’ve explained it is this:

      Pick one of three doors. I open one of the doors you didn’t pick and show that it’s a loser. You are now left to decide between the one you’ve already picked and the one I have left. Would you change your pick?

      Compare that to:

      Pick a card out of a deck, but don’t look at it. The goal is to pick the ten of hearts. I then look at all the rest of the cards and throw 50 away. Again, you are now left to decide between the one you’ve already picked and the one I have left. Now would you change your pick?


  24. on July 31, 2009 at 9:24 am | Reply Clearly New Mexico » Recission Roulette and Inside the Baucus Caucus (with Senator Bingaman)

    [...] is not rare. The odds are shockingly high that you’ll get the axe if you get seriously ill. Taunter breaks down the [...]


  25. on July 31, 2009 at 12:27 pm | Reply Austin Barry

    One issue – it is not just one health insurance company, but many! One cannot count on all private insurers to have an even sample of the population. I’m sure I could improve my odds by buying into an “more healthy” plan (and I’m sure that info is very hard to come by). Also, I’m unlikely to stick with the same insurance plan my entire life (due to job change, location change, ETC) so if I change plans, the money I’ve been paying to some other company doesn’t help my net profitability in the slightest.

    Luckily I don’t have to worry about this for a few months – thanks in part to a flat tire. You see – I got a flat tire the day that I was supposed to be laid off. This happened to be the last day of the month. I found a spare can of fix-a-flat and came in anyhow, but since I had called in and said I’d work from home (and I needed to be there for the formalities) the paperwork was dated a day later so I got an extra month of coverage.


  26. on August 1, 2009 at 12:04 am | Reply Merci « Taunter Media

    [...] time to comment recently. Only eight of my posts have even broken the hundred view mark; to have one just shy of ten thousand is rather surprising. I suppose Malcom Gladwell was onto something when [...]


  27. on August 1, 2009 at 12:04 am | Reply Interesting Reads 1st August 2009

    [...] week I read a lot of great stuff. The best post by far was this post about rescissions. It’s a very good read and if there is just one link you read from this collection, read this [...]


  28. on August 1, 2009 at 3:52 am | Reply mary b palin

    Three words, Single Payer System anything else is unconscionable.


  29. on August 2, 2009 at 4:17 am | Reply More about Health Insurance « The StoopidNoodle

    [...] a policy after a claim has been filed on said claim. Over at Taunter Media Taunter has a great piece about how both decisions are informed by the same logic: conditional [...]


  30. on August 2, 2009 at 6:56 pm | Reply EvilCON » Checking the Math on Health Insurance

    [...] This is a really good article on the misleading math health insurance companies are quoting when it …. While canceling the policy of 0.5% of the population is indeed a relatively small number, given the chain of events that lead to the cancellation, the chances of losing your coverage when bad things happen are a lot worse. It turns out that if you have an expensive condition, the probability of you losing coverage is around 50%! Why? Because insurance companies won’t cancel the vast majority of people who don’t claim enough in a year to make them lose money. So that leaves only the really sick people. If 1% of the population is really sick and insurance companies only cancel policies on really sick people, then 0.5% of the total population means half of the really sick people are going to lose their coverage. Insurance is there to cover losses we can’t handle individual. If a misfortune hits and you lose your coverage because of that, what is the point of the insurance? Unlike things like car insurance, health problems often times involve more than one payment. Furthermore, insurance companies make it easier for them to cancel your coverage by purposely leaving the application vague and error-prone. That gives them an excuse to cancel your coverage when you really need it the most by claiming that you’ve lied on your application. As the article mentions, casinos don’t card when you play but will when you cash in. So someone under 18 can lose all they want but when they go to take their winnings, the house will lay down the law. No comments yet [...]


  31. on August 3, 2009 at 3:09 am | Reply Harry

    Here’s another question- for those who don’t want to be forced to pay for an insurance policy:

    If you take your $7k a year for premiums, and instead of giving it to your insurance company, you give it to your mortgage company to pay off your 5% mortgage interest.

    In 20 years (so I’m still young and probably healthy) I have a nest egg of about $230k. That is a whole lot more than I can expect from an insurance company to pay out, and chances are it’s more like 40 years before I get to pay out for a large medical bill.

    Now, you might say that’s not fair, it only works for the rich. The $7k annual health insurance costs and mortgage rate has nothing to do with the rich. Even the working poor has to pay rent, which is usually higher than the mortgage payment for the same property.

    If employers can be forced to pay for the health insurance, they can also be forced to offer a “cash on the table” equivalent of the the health insurance.

    A plan like this could cure the housing market collapse and keep the insurance companies (or government) from taking this money and using it for other things (private profit, no bid government contracts)


    • on August 4, 2009 at 4:59 pm | Reply Barbara Saunders

      That is a gamble, though. Of my family members had the body go haywire in the early 30s. This is why I always worked health insurance into my budget when I was in my 20s and making 10 bucks an hour!


  32. on August 3, 2009 at 4:30 am | Reply David Merkel

    Don Hamm is an honest guy. Assurant is one of the few health companies not using “bait-and-switch” tactics in pricing. They don’t automatically raise rates each year because they underpriced in year 1 to tease people in.

    How can Assurant do it? By making sure that there are few cheaters in the pool. You need to redo your analysis and look at what percentage of a claim costs arise in year one from an uninsured population. Then, compare that to an insured population. The insured population will be higher because some are sicker, and not revealing that on the application. Recission eliminates cheaters (and a few honest players as well), but keeps costs down for the healthy, and those who have unexpected negative changes in health.

    Those who are sick and don’t reveal it should not be rewarded for their deception to insurance companies. It’s a form of fraud.

    FD: long AIZ


    • on August 3, 2009 at 10:23 am | Reply Taunter

      If you believe that health insurance rescission is limited to those who intentionally made material misrepresentations on their insurance applications, we have a significant difference of opinion.

      There’s an easy fix, which was proposed in the House hearings: limit rescission to cases where there is intent. You will note that it was the honest health insurers who declined to make this change.


  33. on August 3, 2009 at 4:54 am | Reply lambert strether

    Surely the public option will prevent neither “gaming the system” nor a Son of Rescission? The bill is 1000-pages long, and the system is complex and unproven. To the insurance companies, it must be screaming “Game me!” (And to the consultants who are busily scouring the 1000 pages for loopholes, too.)

    Medicare for All (single payer), with its “Everybody in, nobody out” policy, eliminates both problems by definition.


  34. on August 3, 2009 at 5:17 am | Reply eric anderson

    While I may agree that health insurance companies are the devil, it does not necessarily follow that I want to hand over control to the government, which is equally a devil in disguise.

    With people like Nancy Pelosi selling the House health care plan with statements like, health care reform means “a cap on your costs, but no cap on your benefit,” I want someone to tell me why these liars are preferable to the liars who sell insurance. We’ve got Democrats trying to sell the people on some sort of economic perpetual motion. Benefits will automatically continue, but costs won’t rise.

    I think we get more truth from folks like Rahm Emanuel’s brother Ezekiel, who implies your heath coverage may be based on how many tax dollars you are worth to the government. Treatment priority will be weighted toward the young person who can recover, work, and feed the system. Old folks? Well, we can’t waste too much resources on them. What are they worth, in dollar terms?

    He believes in a form of communitarianism, where health care for the chronically ill or elderly will be weighted with regard to the impact on the whole society.

    If I am not mistaken, this dude is an advisor to Obama on health care.

    Maybe the devil we know is preferable. The new health care legislation would not allow high-decutible policies, according to an article on the CNN’s money site. But I think that is the direction to move. Let folks bear more ordinary costs, and only insure against the catastrophic. Also, make insurance companies live up to their contracts when something catastrophic does happen.

    But please, keep idiots like Pelosi and communitarians like Emanuel out of my health care. Please.


  35. on August 3, 2009 at 5:56 am | Reply With Obamacare, it will be time to short private insurance stocks | The Swamp Report

    [...] insurance industry should be properly regulated to prevent abuse such as the rescission game, but to argue that private insurance should be driven out of existence because of such [...]


  36. on August 3, 2009 at 6:44 am | Reply Dave Lentz

    So when the CEO of Assurant testified that “Rescission is rare. It affects less than one-half of one percent of people we cover.”, why did not any of the congress-buffoons respond with the obvious rejoinder: “Yes, and exactly what per cent of the people you cover actually file claims?”

    That would have put the matter into crystal-clear clarity. In fact, they could recall the CEO and ask him this question even now.

    But they will not, because the Congress is in on the scam, as well as the administration. Changing the rules of the health insurance game/scam is the last thing they have in mind.


  37. on August 3, 2009 at 7:12 am | Reply Loren Pechtel

    There’s a big problem here: You are arguing on simple percentages without looking at whether the patient lied or not. You seem to be showing that about 10% of policies with high claims are rescissed. It says nothing about what percentage of these people perfectly well knew they had expensive problems and lied on the application.

    Mistakes certainly are made but it doesn’t mean that it’s the right thing to do to push welfare costs off onto insurance companies and probably destroy the industry in the process.

    As for the casinos–I’ve seen them card those who appear young plenty of times. It’s just there is normally no human interaction when sitting down at a slot machine so they very well might gamble for a bit without being carded.


    • on August 3, 2009 at 10:44 am | Reply Greg

      Why do you care about the health insurance industry? They do NOTHING socially useful. They take $11+ dollars from you tp pay a $10 bill. THAT is all they do. Name another function they serve and tell me any innovation they have come up with that improves my life.


  38. on August 3, 2009 at 7:30 am | Reply Will catastrophic only health insurance be rescinded in the end? | Bear Market Investments

    [...] Taunter explains how the .5% rescission rate figure discussed in the hearings on health insurance premiums and coverage is used to dismiss Congressional concerns as inconsequential and actually is a good business practice that will not change. It is worth going to the post to accurately follow the train of thought. Taunter concludes that the chances for rescission for a serious illness is: If the top 5% is the absolute largest population for whom rescission would make sense, the probability of having your policy cancelled given that you have filed a claim is fully 10% (0.5% rescission/5.0% of the population). If you take the LA Times estimate that $300mm was saved by abrogating 20,000 policies in California ($15,000/policy), you are somewhere in the 15% zone, depending on the convexity of the top section of population. If, as I suspect, rescission is targeted toward the truly bankrupting cases – the top 1%, the folks with over $35,000 of annual claims who could never be profitable for the carrier – then the probability of having your policy torn up given a massively expensive condition is pushing 50%. One in two. [...]


  39. on August 3, 2009 at 8:22 am | Reply Required Reading - Just Throw It on the Pile Over There

    [...] is an absolute must-read regarding the workings (or not-working) of health insurance in the U.S. The 'Nuclear Option' in the Health Insurance Industry More importantly the abuse of statistics in logic/reasoning. There is nothing like statistics, and [...]


  40. on August 3, 2009 at 9:32 am | Reply Greg

    Back to the Monty Hall problem for a second.

    One poster suggested that if Monty didnt know which door held the prize and when opening the other door just luckily opened the one with the goat that you should not switch. That seems absurd, Montys knowledge does not affect the odds, the only thing that does is your original choice and whether or not the door that gets shown does NOT have the car.


  41. on August 3, 2009 at 11:02 am | Reply Recission: death by a thousand paper cuts.

    [...] illuminating blog post by blogger Taunter shows us exactly how the healthcare industry extracts it’s profits from it’s customers. [...]


  42. on August 3, 2009 at 11:13 am | Reply attitude_check

    Great article, but your probability example from Let’s Make a Deal is flawed.

    It is true that at first the prob of your choice being right is 1/3 and being wrong is 2/3’s.

    First when Monte opens a door with the goat – it is not random. Monte knows where the car and goats are, and no matter which door you pick, there is always a door with a goat that Monte can pick. After he opens the goat door, all that has happened is the odds have shifted to 1/2 and 1/2 – NOT 1/3, 2/3.

    Even if Monte doesn’t know, and opens a door at random, it still is prob 1/2, 1/2. Once the open door event occurs, the prob that it is a goat is one. The issue with gampbling that gets people is trouble is the belief that “dice have a memory”. Effectively a new “game” is initiated once more information is added (e.g. we know what is behind one of the doors, but still not the other two). Each door is now 1/2 and 1.2, and your odds don’t change no matter which you pick.


    • on August 3, 2009 at 1:32 pm | Reply Stephen Dodson

      attitude_check,

      The odds are indeed 2/3 and 1/3. It was a famous problem that a lot of math professors and PhDs got wrong. Your “gampbling” analogy is also off. Yes, dice don’t have memory. Each roll is a discrete event. But Monty specifically selecting the door with the goat (it can’t be the door with the car or the door you originally picked) is a continuation of the same game.

      http://en.wikipedia.org/wiki/Monty_Hall_problem

      But let’s not get distracted from the main message of this post.


  43. on August 3, 2009 at 12:46 pm | Reply Joshua Zader

    The article assumes that any cancellations must be unjust, and then uses math to show that there are more cancellations than one might suspect. But if the cancellations aren’t unjust in the first place, then the article is all smoke and no fire.

    News flash – If you include fraudulent information on your insurance application, your insurance company may cancel your coverage when you need it most. Of course, if you filled out your application in good faith and they try to cancel it for frivolous reasons, you can take them to court and you’ll probably win. What exactly is the problem here?

    Most of the urgency in his article comes from comparing fraudulent insurance applications to game show contestants and underage gamblers. Using these kinds of analogies obscures the more fundamental fact that insurance companies can only legally cancel your policy when you have supplied demonstrably fraudulent information.

    That hardly seems like a scandal, or anything that warrants additional government regulation in what is already an incredibly heavily regulated industry.


    • on August 4, 2009 at 9:33 pm | Reply rox0r

      News flash – If you include fraudulent information on your insurance application, your insurance company may cancel your coverage when you need it most. Of course, if you filled out your application in good faith and they try to cancel it for frivolous reasons, you can take them to court and you’ll probably win. What exactly is the problem here?

      ======

      Does dying before you win your court case because you were denied a transplant count as a problem?

      http://articles.latimes.com/2009/jun/17/business/fi-rescind17
      “The committee investigation uncovered several rescission practices that one lawmaker called egregious, including targeting every policyholder diagnosed with leukemia, breast cancer and 1,400 other serious illnesses. Such investigations involve scouring the policyholder’s original application and years’ worth of medical and pharmacy records in search of any discrepancies.”

      Why don’t you wait until you have chemo, radiation, and a cold, and see how well you hold up trying to defend yourself?


      • on August 4, 2009 at 10:21 pm rox0r

        Actually here is the a link to the woman who had breast cancer: http://www.cnn.com/2009/POLITICS/06/16/health.care.hearing/index.html

        What’s the problem?

        “Beaton turned to Texas Rep. Joe Barton for help. Barton said his staff went to work, but the insurance company, he said, was “unyielding.” Barton appealed to the company’s president, who promised to investigate personally. The president called Barton back within four hours and said the coverage would be reinstated.

        Beaton underwent surgery in October, but by then her tumor had grown from two to three centimeters to seven. She had to have all the lymph nodes removed in her arm”


  44. on August 3, 2009 at 1:48 pm | Reply slg

    Attitude check:

    Your analysis is the usual naive one, and it’s wrong. There are three cases: (1) you’ve chosen goat A; (2) you’ve chosen goat B; (3) you’ve chosen the car. In cases (1) and (2)–2/3rds of the total–Monty has only _one_ choice of door to show the other goat. In that 2/3rds of the cases, the other door _must_ be the car. Hence you _do_ improve your odds by changing your choice.

    The analysis has nothing to do with the “dice-having-a-memory” fallacy. It has _everything_ to do with contingent probabilities resulting from new information.

    Don’t believe me? Better run some simulations before you apply for that finance job.


  45. on August 3, 2009 at 1:49 pm | Reply Colin K

    Your analysis seems to assume that fraud is effectively nonexistent. Otherwise the injustice argument here falls flat pretty fast.

    In any case, a single-payer system will simply shift us from rescission to rationing. If we don’t practice rationing then costs will continue to rise and we will get it taken from us in taxes that rise every year instead of premiums that rise every year.

    As an alternative, I would like to see a system more like life insurance, where individuals buy a contract that provides a defined benefit at a defined cost for a defined number of years (or life). People would have a strong incentive to buy young and it would be up to you to decide whether to spend your money on a treatment. If your odds of rescission hit 50% at some level, then this type of defined-benefit option could hardly be a worse gamble.


    • on August 4, 2009 at 9:50 pm | Reply rox0r

      Your analysis seems to assume that fraud is effectively nonexistent. Otherwise the injustice argument here falls flat pretty fast.
      ======

      How do you figure? 10% fraud is really high. What kind of fraud numbers are you thinking about?

      If fraud is high then the companies are making out even better, because they are taking in loads of money from people that they will NEVER pay out to.


  46. on August 3, 2009 at 5:18 pm | Reply More statistics abuse: Rescission is rare, unless your sick « Skepoet At Crossroads of Critical Thinking and the Humanities.

    [...] wrote how the claims that rescission is rare is a claim that should be taken with a grain of salt. Taunter Media breaks down the math: To understand why 0.5% of the people Assurant covers is a lot of people – a jarring, terrifying, [...]


  47. on August 3, 2009 at 7:28 pm | Reply Gordon Pasha

    When he claimed 0.5% was that 0.5% every year? If that is the case, and one is insured say, on average, 30 years, then the chance of getting rescinded is really high, isn’t it? At least here, they claim the figure is per year,
    http://baselinescenario.com/2009/07/27/health-insurance-innovation/

    Regards

    Gordon


  48. on August 3, 2009 at 8:10 pm | Reply 3 August 09 (pm) « blueollie

    [...] Care and Statistics: Check out this post at Unconscionable Math: The House hearings on rescission – the retroactive cancellation of individual health insurance [...]


  49. on August 4, 2009 at 12:39 am | Reply Chris Taylor

    the monty puzzle seems to have a flaw to me.

    it assumes 3 solutions because there are 3 choices and that is how they come up with 2/3 1/3

    but this is false.

    there are FOUR solution.

    pick car open goat change to goat

    pick car open other goat change to goat

    pick goat open goat change to car

    pick other goat open goat change to car

    2 chances to lose and 2 chances to win

    the odds are 50/50 it seems to me.

    they “distort” the odds by displaying but IGNORING that initially selecting the car has TWO probable outcomes NOT ONE.

    so its NOT a 1/3 2/3 problem.

    its a 1 in 4 problem BECAUSE of the host interference.

    at least thats how my brain munges it though I am tired at 0436 in the morning :-)

    when you base the odds NOT on initial choice but on potential outcome paths its clearly 50/50 to me.

    BUT I have run the experiment to test with the cards and experimentally the results are correct you DO win more often by changing.

    my brain hurts. I still think the odds are 50/50

    by having the host interfere your not changing the odds your IGNORING THEM since now its no longer odds its “acting” on inside information (host opening a goat door)


    • on August 4, 2009 at 9:57 am | Reply amanasleep

      You are correct that there are 4 possible outcomes instead of 3, and have hit upon the crux of the misconception of this problem: these outcomes do not have an equal probability of occurring.

      That is, the first two options each have a 1/6 chance of occurring (Pick Car Open Goat 1 Change Goat 2 and Pick Car Open Goat 2 Change Goat 1), because the probability of the original choice (Pick Car) is itself 1/3.

      The probability of each of the remaining choices (Pick Goat 1 Open Goat 2 Change Car and Pick Goat 2 Open Goat 1 Change Car) is 1/3 (a total of 2/3 when combined).

      That means that the total chance of winning the car when switching is 2/3.

      In common sense terms:

      1. Everyone will agree that you had a bigger chance of initially picking a goat, ie 2/3.

      2. Therefore in 2/3 of the cases, the initial pick is wrong.

      3. Your chance of initially picking a Car is 1/3, and you can only get a goat on a switch if you pick a car. In fact if you pick a Car and switch you will always get a Goat! But since everybody agrees that your chance of initially picking a car is exactly 1/3 and your chance of getting a goat is 100% if you switch from the car, then your overall chance of getting a Goat by switching is also 1/3.

      4. Likewise, everyone can agree that your initial chance of picking a Goat is 2/3. Similarly, you can only switch to a Car if your initial choice was a goat (either one, since the host ALWAYS reveals the other one). In fact, your chance of switching to a car if you initially chose a goat is 100%! Therefore your overall chance of getting the car if you switch MUST be 2/3.


    • on August 4, 2009 at 10:10 am | Reply Shawn Crahan

      Hey Chris,

      You’re right, there are four scenarios, but they aren’t weighted equally.

      Two scenarios, pick car and Monty opens Goat, or Monty opens other Goat, only occur in 1/3 of the circumstances, because of the initial conditions. No matter what Monty does, you still only had a 1/3 likelihood of picking the car.

      Now if you were to follow the likelihood of all the situations occuring, Monty picking either Goat A or Goat B when you chose the Car initially will occur 1/6 of the time each, or any individual Goat is selected for 1/2 of the time for that 1/3. Then with the 1/3 likelihood that you chose Goat A, monty 1/1 of the time will choose Goat B. And for the Final 1/3, when you chose Goat B, Monty will 1/1 of the time chose Goat A. All together the (1/3)2 + (1/3)/2 + (1/3)/1 + (1/3)/1 equals 1, or the full set of possible scenarios.

      Make more sense this way?


  50. on August 4, 2009 at 2:18 am | Reply David Herr

    As an attorney, I agree that some recission stories are horrifying. But some regulatory tweaks will suffice to address the problem: allowing recission only if the undisclosed or erroneous information is medically relevant to the eventual insured event; requiring that it be an actual recission, in which premiums, with interest, are repaid, in the event the insurer successfully shows that the insured failed to disclose a relevant factor.

    The democrats portray the preexisting conditions rules as insurers looking out for their own profits, and there is always that in any business, but they are also looking out for me, their insured. If people with preexisting conditions who have not been contributing to the pool jump in at the last minute once they need money for medical care, insurance companies will not have enough money to pay out claims when they arise for those like me, who have been paying in since age 18.

    Indeed, I am now 38, and pay $180/mo for a Blue Cross policy. Nowhere near $7000. By design, I keep my premiums low, by maxing out the deductible and co-pay. My out of pocket limit is $7500 per year. As a 38 year old, I can pay that if need be. In healthy years, which, thankfully, all of them have been, save for a $1500/5 stitch finger cut this past Thanksgiving, I set aside some money, so that when the time comes that I do get sick or have a major injury, I can meet the out of pocket limit for several years.

    The total of premiums and saving for health care (NOT in an HSA — just plain old saving) are far less than $7000 per year.

    Ideally, health insurance would be reduced to a much simpler financial proposition, with flat payouts to insureds upon verification of various diagnoses. Then, people could choose how much coverage to buy, and then if anything happened they would get cash with which to pay bills. That $1500 finger cut would have been instantly bargained down to $750 or less, if I had lied and told the emergency room intake clerk that I had no insurance. Similarly, people who need a coronary bypass can bargain with the hospital if they are going to pay cash. In this, health insurance would become more like life insurance or house insurance. I can even see combined life and health policies, which would give the insurance company a lot of reasons to quickly pay out for medical events, if their failure to do so would cause a pay-out for death.

    Lastly, my advice to people is to pay a bit more in premiums, for a large company insurance policy that does not re-underwrite at the end of each annual period. I have had continuous coverage for 20 years, and have no preexisting conditions. I do not want what I have going for myself, and for which I have paid, to be taken away.

    Because make no mistake, requiring individual insurers to take all comers will raise my premiums. The most similar Blue Cross policy to mine in New Jersey is over 4 times as much per month. Please, don’t raise my insurance premiums!


  51. on August 4, 2009 at 4:05 am | Reply Mr. Ant-Insurance

    These health insurances are the main protaginist in the mess the healthcare system is in. These insurances should be eliminated because they are after one thing……profit.

    Once the medical insurances are diminished, the doctor-to-patient relationship will be fully implemented and efficiency and proper treatment will take effect.

    Google PAINSCOURT for more info.


  52. on August 4, 2009 at 7:05 am | Reply Will catastrophic only health insurance be rescinded in the end? | ETF Fool

    [...] Taunter explains how the .5% rescission rate figure discussed in the hearings on health insurance premiums and coverage is used to dismiss Congressional concerns as inconsequential and actually is a good business practice that will not change. It is worth going to the post to accurately follow the train of thought. Taunter concludes that the chances for rescission for a serious illness is: If the top 5% is the absolute largest population for whom rescission would make sense, the probability of having your policy cancelled given that you have filed a claim is fully 10% (0.5% rescission/5.0% of the population). If you take the LA Times estimate that $300mm was saved by abrogating 20,000 policies in California ($15,000/policy), you are somewhere in the 15% zone, depending on the convexity of the top section of population. If, as I suspect, rescission is targeted toward the truly bankrupting cases – the top 1%, the folks with over $35,000 of annual claims who could never be profitable for the carrier – then the probability of having your policy torn up given a massively expensive condition is pushing 50%. One in two. [...]


  53. on August 4, 2009 at 7:31 am | Reply PetrieDish

    Incredibly interesting discussion!

    On the subject of rescissions: I assume the term refers to policies that are specifically terminated by the insurance company in response to a review of the application. But in this country, we have a system in which medical insurance is employer provided. If an individual becomes too sick to work for an extended period of time and loses his job, he also loses the insurance. While this seems logical, is it not also a form of rescission in response to excessive utilization? This seems similar to the gambling analogy: you can play but you can’t win.

    On the subject of pre-existing conditions: Any time a claim is made on a medical insurance policy one is, by definition, creating a possible pre-existing condition. A vague definition of “pre-existing” can be used as an “effective rescission” without actual policy termination.


  54. on August 4, 2009 at 7:36 am | Reply Insurers only pull your coverage when it hurts - Paul Krugman Blog - NYTimes.com

    [...] Yves Smith, an important piece on “rescissions”: cases in which insurance companies retroactively cancel your health [...]


  55. on August 4, 2009 at 9:28 am | Reply econoblog.info » Very Excellent Post on Health Insurance Recisions

    [...] Taunter explains the link between Monte Hall and Health Insurance. Brilliant. [...]


  56. on August 4, 2009 at 9:52 am | Reply Rescission: Why For-Profit Health Insurance is a Fraud « One Utah

    [...] of policies. It’s a rare occurrence, they say. Rare, that is, unless you get sick. Blogger Taunter does the math (emphasis added): Half of the insured population uses virtually no health care at all. The 80th [...]


  57. on August 4, 2009 at 12:03 pm | Reply Janna

    This seems to be a bit confusing though-how many people are actually covered by individual health policies? Health insurance companies can’t rescind group health coverage. If you have continuous coverage, you aren’t subject to a pre-existing denial of benefits either (so the guy with the autistic son can leave on employer health plan for another employer health plan without losing coverage at all). And if you do have a pre-existing condition that you were treated for in the 12 months before you get group coverage (or if you have a break in coverage of 63 or more days) then the coverage for everything isn’t denied-only for the condition you were treated for, and only for 12 months. This rule was one that came into effect in the 1997 HIPAA (the P is for Portability) regulation.

    I think to determine who might actually be at risk for rescission, or at least the actual number of people, you have to take only those people with individual health policies, then look at the top 5% of that.

    That being said, it’s a horrendous practice. While those of us covered by group health plans have considerably more protection, as another poster said, if we are very sick, we lose our jobs and our coverage.


  58. on August 4, 2009 at 1:44 pm | Reply sTiVo

    I don’t think I’m stupid but I don’t get your Monty Hall logic.
    You made a choice. You had one chance in three of being right. Monty showed you one wrong answer. The other wrong answer is either the one you chose or the other one you didn’t choose. Now, with this new data your original guess has one chance in two of being right. I see no compelling case for switching or not switching – the odds are equal. Monty Hall would have done the same thing had your first guess been right or wrong.

    Why is the above not correct?

    That said, I understand your point about recission very well, and thanks for it.


    • on August 4, 2009 at 11:33 pm | Reply josephdietrich

      sTiVo,

      Think of it as not as a 1 in 3 chance of being right, but a 2 in 3 chance of being wrong.

      That is, you are unlikely to be right. It is likely that the car is behind one of the other two doors. So when Monty eliminates one of the other two doors, he shows you which door the car is most likely behind.


      • on August 5, 2009 at 4:20 am sTiVo

        josephdietrich:

        Not buyin it. This thread is supposed to enhance mathematical understanding? It doesn’t do that, it obfuscates it.

        Looking at it your way, okay, you had a 2/3 chance of being wrong. Monty now provides you with more information. Based on this new information, the odds on your original pick having been wrong are reduced to 1 in 2. The original 2 in 3 odds are no longer relevant. Should you switch? Based on this new information, it’s a wash.

        And you haven’t considered a point I made in my original posting: would Monty Hall have done anything differently had your original pick been right or wrong?

        This is a lousy example of conditional probability.


      • on August 5, 2009 at 8:02 am sTiVo

        josephdietrich:
        To elaborate further:
        >> That is, you are unlikely to be right. It is likely that the car is behind one of the other two doors.

        But which one? and is either of them any more likely to be right than the one you originally chose?

        >> So when Monty eliminates one of the other two doors, he shows you which door the car is most likely behind.

        Bad logic. Yes, the right answer is more likely to be ONE OF the doors you didn’t choose, but that doesn’t mean that your answer has NO probability of being right. It had some and it still has some. Your logic makes the leap that because the right answer is more likely to have been one of the group you didn’t choose than the one you did, therefore the probability that your original guess was right can be discarded. That logical leap is faulty.


  59. on August 4, 2009 at 1:47 pm | Reply sTiVo

    For-profit health insurance has, no, IS an intractable conflict of interest that cannot be eliminated within itself.


  60. on August 4, 2009 at 1:58 pm | Reply Winter’s Haven » Recission

    [...] an important bulletin on “rescission” (the retroactive cancellation of individual health insurance policies) [...]


  61. on August 4, 2009 at 5:58 pm | Reply BTMOM

    David Herr,

    If no health care reform is passed, you can be sure your premium will go up, because it will be a green light to the private insurers that their lobbying power and flooding of the right-wing media with disinformation has yet again deflected any effort to keep them honest. Many employers pay a higher per-employee rate than you pay. It boils down to where you are located, age, health history, and a multitude of other factors. When an insurer dumps an insured based on recission – fraud based or not – the public ends up carrying the cost, because that person will end up in an emergency room over and over again. They will undoubtedly suffer more, and probably die sooner, than if they had insurance, but their unpaid health care costs will be passed along to the rest of us. Emergency room care is the most expensive care available.

    A public option makes a rational plan of care possible for people without other coverage options. We are the only major industrialized nation that does not provide some public health care option. The private insurers will be just fine, and if they can’t compete, then maybe they will have to make themselves competitive, won’t they?


  62. on August 4, 2009 at 7:16 pm | Reply ALawyer

    As the retired CEO of a unit of one of the nation’s largest insurance companies I commend you on having written one of the best articles outlining the problem with rescission I have ever seen.

    I heard Assurant’s CEO testify that rescission occurs in less than 0.5% of all cases, and another CEO talk about less than 1%, and was outraged.

    Companies design insurance applications and their underwriting processes to accomplish multiple purposes.

    The most laudable is to be able to quickly reject those folks who are honest enough to acknowledge medical or health conditions that make them sub-par risks which are likely to cost more in benefits than they will pay by way of premium (or in some cases to justify charging them a significantly higher premium for their coverage in light of the higher risk). The companies weed out the bad risks, enabling them to hold down expected claims and the premium costs.

    While its great for the companies and the insureds who are in good health and qualify, the problem for society is these people still will have medical problems (sometimes more severe ones than if they had insurance and could be treated earlier in the process) and will still have to be cared for, resulting in financial strain for those with money and cost shifting for those without.

    Companies also often design their processes to make it easy for people to do business with them. Yet while that sounds like a commendable purpose often the motivation is perverse. Companies can make it very simple to complete the application and get a policy — using the easy application and lack of any meaningful underwriting process as a competitive advantage in attracting agents, customers and making sales.

    Those of us with industry experience know that agents often steer customers to those companies that pay higher commissions and/or are far more likely to issue a policy. Companies attract agents by making it fast and easy for their clients to complete the application and become approved. In that way the company can collect the premium and the agent can collect the commission. Light underwriting is also far less expensive upfront (except for the sales commissions) for the insurer.

    As people balk at long complicated applications (which often can uncover medical and health conditions likely to lead to more frequent or more severe claims) make them short. Don’t ask specific questions which often would result in the application being denied. Instead, ask vague questions with lots of boxes people will not fill out so you can later claim failure to disclose. (The agent will not encourage you to be honest — s/he does not collect a sales commission if the application is rejected.) Agents quickly learn that submitting an application to company X will lead to a placed policy with a quick commission while applying to company Y that conducts rigid underwriting inevitably leads to delay and often to a rejection of the applicant or increased rates the applicant can not afford, and a lost client.

    Health insurance companies know that if they obtained a complete detailed application and conducted full underwriting — as life insurance companies do on high face value policies, usually with a medical or para-medic examination, blood tests, a request for and review of medical records — it would be expensive up-front, and regarded as unfriendly by the applicants and the agents. The trade off for loose underwriting is worse claims experience — it’s just like turning the dial.

    The companies’ ace in the hole is that if a big claim comes in — because the application was so simple and there was so little underwriting — they can use rescission as a weapon. Now the simplicity and vagueness of the application comes back to haunt the person who thinks s/he is insured.


  63. on August 4, 2009 at 7:51 pm | Reply Mike

    It is such a balancing act, between motivations to help people and turn enough profit to make it worth the effort to make the sacrifices many in the medical field make, although – from what I have seen, the pay is pretty good.


  64. on August 4, 2009 at 8:20 pm | Reply Conrad

    I’ll speak up right here. I have diabetes2 for about two years and hold an individual policy from a major health insurer, the same company for about twelve years. Over the years they increased my premium annually about 10%. The latest increase was 20%. When I asked them to justify the double increase, they wrote that the reason was the part of New Mexico I live in. HMMMM….about 50 miles from Los Alamos National Lab. But why would that justify the sudden increase in premium hikes? I’ve lived in the same place for 15 years. When my agent offered a better deal through the same company – a new plan – he told me I wasn’t eligible when I informed him of my pre-existing condition. So I am trapped. My current insurer won’t admit me to a new, less expensive plan. My agent told me any other insurer will offer only an exorbitant premium. The American health care system offers me NO OPTIONS. For this reason, I completely favor a strong public option that covers pre-existing conditions at a reasonable premium. I hope the millions of Americans victimized by health insurers support a robust public option. It’s the only way we’ll get a fair deal.


  65. on August 4, 2009 at 8:38 pm | Reply brianbreed

    this infuriates me. i thank you for sharing.


  66. on August 4, 2009 at 8:51 pm | Reply Mary Saunders

    Another interesting phenomenon is that recovery money is being put into free clinics. I like free and low-cost clinics. The professionals running them are often doing it because they like people and want to see them get better. I don’t suspect them of wanting to take something out or off because they want the fee. If we required everyone to carry catastrophic at a reasonable price, the difference from what we have now is that healthy people would be paying a premium for the care they would get anyway if they are hit by a bus, have no coverage, and become disabled. Make a public option with reasonable fees, and you go in and give them a baseline of your health and pay for the exam. They are responsible for assessing you, as if you were an as-is house where the buyer has to do his due diligence. At the same time, allow people to self-insure for little stuff, at their credit union. Let them use their set-aside funds for gym fees, yoga, tai chi or acupuncture or other other stuff not covered by catastrophic but that has research showing it is low side-effect and contributes to health. If what we want to do is increase health, what we have now doesn’t do that. We need to let companies who are sure you will want to buy their health product if you try it, offer rewards to people for increasing their health, something like that. The present system makes everybody irritable, and that isn’t good for health. Patch Adams has pitched for an endowed system. If everybody knows it’s good and honest, people will volunteer in it and donate to it, and you can have fundraisers with musicians and artists. It’s just that we have got to trust it, and that is the really hard part.


  67. on August 4, 2009 at 9:56 pm | Reply Stan Milgram

    Regarding your point about Las Vegas slots, it’s worse than you think. When I was 20 years old, I played some slots at Las Vegas. When i got a big win, they asked for ID. I showed it and they informed me the legal gambling age in 21 and confiscated all my winnings. I protested and they said if I said another word they would call the police and have me arrested and I would face up to 10 years in Nevada State Prison for illegal gambling.

    I was not underage, I was an adult. There are no signs anywhere that say the age for gambling is 21 and not 18.


  68. on August 4, 2009 at 11:21 pm | Reply Asumu Takikawa (takikawa) 's status on Wednesday, 05-Aug-09 07:21:37 UTC - Identi.ca

    [...] http://tauntermedia.com/2009/07/28/unconscionable-math/ [...]


  69. on August 5, 2009 at 3:30 am | Reply Jennifer

    I agree with the reader who recommended the Swiss healthcare system as a model for the US. As a recent college graduate, I have been working here for a pharma company for 8 months now. Before the company would “officially” hire me, I had to show proof of my private health insurance, which is mandatory for anyone living and/or working here. At the not-unreasonable fee of 250 swiss francs (approx. $225) per month for a healthy 23 year old female, I am covered for all basic medical procedures and emergencies. Had I wished for more comprehensive coverage that allowed for more choice in doctors/specialty clinics and a private hospital room, my fees would have doubled. As I am only here for a temporary time period, I opted out of the extra fees and, therefore, better coverage. By requiring residents of Switzerland to be accountable for their own insurance, the healthcare system here has maintained extremely high standards as well as reasonable costs that need not be subsidized by the government or private citizens. Whether or not this would work in our much larger and more diverse country is debatable, particularly since many people would rather just have the wealthy subsidize their costs through higher taxes.


  70. on August 5, 2009 at 4:47 am | Reply Doc Rox All

    Ok…here’s the thing…would you rather have healthcare funded by (behind door #1) those seeking a profit, or (behind door #2) those seeking power over your lifestyle, or, (behind door #3) not at all, I’d rather pay cash. Now, I’ll let you choose any 2 of the three without knowing what’s behind the doors…same deal here. I understand that statistics, and how there’s “lies, damn lies, and statistics”, but let me point out that we aren’t given “infinite possibilities” in solving problems, we’re given “options”. So, back to our three doors. If you choose the door with profits, oh, you’ll get screwed, potentially, if you hit the special combination of conditions/triggers that actuaries at the insurance company have set up, to assure they are profitable. Yes, these folks exist. They pool loss numbers together and put together what’s called “underwriting policy” that decide whether or not you get covered, and what your premium will be. Hey, you chose door #1, and its about profit. Sorry, if you trigger a premium increase, or loss of coverage, you lose.

    Ok…so you chose door #2…nice for you…the not-for-profit-but-for-bureacratic-control-of-your-life is there. Nice. Now, you are overweight, because you work at an IT job for an insurance company (wait, that’s me), and you sit on your butt all day, and you have arthritis, which dramatically limits your physical activity (not the weenie kind, the kind where you have your knees replaced at age 50 because you can’t stand to stand up for more than 5 mins because of the pain). Wait a minute…YOURE FAT! GASP. You are putting the government healthcare plan at risk with all your type II Diabetic meds and your knee replacements and your generally poor health. You are EFFECTING NATIONAL SECURITY by being a FAT SLOB. Oh, and wait, YOU make alot of money at that IT job…why, you’re a RICH FAT SLOB. Oh…you don’t think your premiums will go up to ridiculous levels? Wait…you hit 70, and some GOVERNMENT actuary has decided you are within 2 years of your mortality date? Hmmm, here’s some pain pills, here’s a nice “end-of-life-counselor”, Soylent Green is people! How nice that you are still innocent, how convenient for the government run health care lobbyists. We appreciate your vote.

    Ok…behind door #3 and, lucky you, YOU get to pay cash for your medical coverage. Now, this one is a complete pipe dream, because, see, the government already controls 60% of the health care in America (Medicare and Medicaid). Now, let’s not forget the fact that THEY control the pricing of EVERYTHING health oriented in America. They do…the GOVERNMENT sets the prices of every procedure in America…I’m sorry, its a fact. So…unfortunately, you can’t GET health care for a modest profit over what the provider pays. You can’t, because the government sets the prices, and see, part of that price is TAXES they get paid on that procedure…but let’s just say, in this fantasy world of “Let Make a Health-Care Deal” that the government butts out through some miracle. And…prices drop to demand. Now, you have a life-threatening condition. Oh…lots of people have that…its in high demand. High demand = high prices, oh, wait, you don’t have the money? How about a second mortgage on the house? Oh, right, the economy is in the pisser…sorry, well, so sad, you die.

    So, there you have it folks, 3 doors, you choose any one of them, and someone, somewhere, loses. I prefer my current plan, where I don’t lose most of the time, versus, where I lose ALL of the time, my freedom. I choose to have freedom, and I choose to let those who are covered by the government now, in a losing scheme, called Medicare and Medicaid, to continue. Heck, expand it to cover ALL American’s, fine, and prove to me that its worth me going on it…and I’ll jump. Right now, mine looks better. Oh, and those folks that are dropped and can’t get back on to a “for-profit” scheme…they can go there too.

    So here’s my question…if Medicare and Medicaid exist (door #2 by default)…WHY does the government need to control 100% of healthcare? Why? It works for me! I don’t need it. Medicare and Medicaid are there? Where’s the SCAM here?

    Regards,

    Doc Rox All


  71. on August 5, 2009 at 5:38 am | Reply Baerton

    medical costs… and perhaps those of the seriously afflicted.
    …the “Unconscionable Math” here is in the heavy use of the term “insurance” without care as to its mathematical meaning or basis.

    Actuarial insurance can only be based upon mathematical/statistical probabilities of risks. Actuaries are mathematicians who put a price tag on future risks. But not all risks can be calculated, priced, nor fairly “insured”.

    In stark contrast to normal actuarial-insurance, discussions of “health insurance” quickly toss away any
    objective concepts of insurance — we all just want ’somebody else’ to pay our
    An actuarial insurance system can NOT possibly provide health-care to everyone.

    “Health-Care” is an undefined, open-ended, and non-insurable risk for a national population. The trivial focus on rescission here… entirely misses the big-picture.


  72. on August 5, 2009 at 7:52 am | Reply Why Reasoned Debate is Difficult « blueollie

    [...] (see here) [...]


  73. on August 5, 2009 at 8:02 am | Reply Political Irony › What if a bank told half their highest net worth clients ’sorry, you misspelled your address when you opened your account, we’re confiscating your balance’

    [...] the much bigger lie is carefully documented in a brilliant article in Taunter Media, which points out that calling rescission rare is, shall we say, misleading at best. Yes, the [...]


  74. on August 5, 2009 at 9:19 am | Reply We Canadians REALLY don’t get the U.S. health insurance debate | Rambling Dave Scharf

    [...] For the whole blog, CLICK HERE. [...]


  75. on August 5, 2009 at 9:28 am | Reply How the U.S. health care system doesn’t work – The Blogs at HowStuffWorks

    [...] Unconscionable Math [...]


  76. on August 5, 2009 at 10:30 am | Reply Wednesday Linkage | The Big Picture

    [...] The Unconscionable Math of Health Insurance Rescission (Taunter [...]

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