Patients will demand prices...

When they bear the lion's share of the cost. The article by Wendy Ebner, "Patients Must Know the Costs of Medical Procedures," assumes that patients will alter their decisions if they are given accurate price information. Pretend for a minute that food insurance exists is the same way health insurance operates. At a restaurant, I face a $10 co-pay, but beyond that, shrouded in mystery and legal jargon, is essentially the fact that the insurer covers everything else. Am I going to ask the price of the filet mignon? No. I don't care. The fixed cost of entering the restaurant was the $10 co-pay. Beyond that, everything is free at point of service. Fortunately, the restaurant business has avoided third party payment schemes and food is getting cheaper every year relative to percentage of household income.

Healthcare has not been so fortunate. The third party system remains entrenched and will only get worse as more and more of Obamacare comes into operation. Only those patients that face paying the bill themselves will demand prices. Since they remain in the minority, healthcare providers will continue to be elusive with their prices.

Will the Supreme Court overturn Obamacare?

In San Francisco, they have a program called "Healthy San Francisco" which is really just another tax on business owners. It is disheartening that so many persist in the belief, even the religion, that workers have a right to healthcare from their employer. And, if their employer doesn't provide such healthcare, they are fined. This not only makes such businesses less able to compete, but it also means they will be much more likely to either lay-off people or not hire them at all. Dark though it may be, I look forward to the gnashing of teeth that will soon follow this folly as people lose both their job and their health insurance. Perhaps people will wake up to the reality that it is foolish to get your health insurance from your employer unless you think you will be working there the rest of your life.

However, I am concerned about the precedent the Supreme Court set by refusing to hear this case, which mainly was that such legislation violates ERISA. Certainly, the current lawsuit against the "Affordable Care Act" is very different. It is based on a constitutional challenge to the mandate as well as the differing treatment states will receive. Whereas the San Fran challenge is more of a state's rights issue which suggests that workers do have a right to health care, or at least that states may individually choose to impose such rights. Hopefully, the Supreme Court will see through the bad numbers and false promises and realize that this new health act is unconstitutional and will set a very bad precedent.

The first domino falls...

15000 doctors in Germany decided enough was enough and so decided to stage a protest. How long before doctors in America do the same thing to Medicare and Medicaid? I don't think we will have to wait long. Patients who have direct contracts with their physicians won't need to worry about it, but those who are dependent on the government (state or federal) to pay for their care should be very concerned.

Coming to a doctor's office near you: "Go home, I'm no longer seeing Patients because I can't afford it any longer."

A magician with no more tricks.

I continue to be impressed with Kaiser Health News. They keep publishing editorials by James Capretta that are by no means favorable to Obamacare. In his latest column, he points out the chaos created when you promise people something when they are already pretty content with what they have, and this includes their health insurance.

Smells fishy to me.

Oh, I see it is yet another biased report from the Commonwealth Fund. Supposedly, health care in the US languishes in last place when compared with Germany, Britain, Canada, Netherlands, New Zealand, and Australia.

First, I note that it is odd that France has been most obviously left out. Second, I note that the study fails to include such measures as cancer survival rates. Instead, the study looks at the following: "quality, efficiency, access to care, equity and the ability to lead long, healthy, productive lives." So far, every single one of those measures has been fairly subjective in studies. My definition of quality is different than Karen Davis', but that subjectivity is simply taken as fact in this article. Third, I find it very suspicious that Britain ranked first. Especially when Congress is busy trying to question Obama's pick for CMS director, Don Berwick, who is inclined to praise the British system of rationing. Anyone else find this suspect?

Three types of care

John Goodman had a great post on his policy blog describing the three types of care and how each should be insured differently (if at all). Check it out here.

This is related to my post defining what health insurance should really cover and why costs are going up so much. Not all health events are the same. A child getting a routine cold is different than a 50 year old female getting breast cancer. Both the response and the payment strategies should be different. If we use a one-size-fits-all approach, costs will continue to rise.

Define insurance

At least in most dictionaries, insurance is something that risk-averse people purchase in case of getting a "bad state of the world". For example, this could include fire insurance in the the event your house burns down. Auto liability insurance is required in most states in the event you cause an accident with your car. It won't cover your car, but it will cover the damages sustained by the other car. If you hit a Lexus, the cost of those damages can be high and would be hard for many people to pay out of pocket by themselves. You can purchase insurance to cover your car as well, but it will be more expensive. In my case, with an old 1998 Toyota Corolla, the insurance on my car would cost more than the value of the car, so I choose only to protect myself from the liability of smashing into a Lexus.

Health insurance should be no different. I am risk averse to such high cost events like cancer, trauma, and freakishly weird birth disorders that present at birth. Therefore, I would like to purchase insurance against such events. However, I anticipate a yearly visit to the gyn doc. If I had kids, I would anticipate at least 3 visits a year (assuming a healthy child--obviously a less than healthy child will need more), with at least one of those visits being the ER. All together, that probably puts my yearly expected costs around $2,000-$5,000. Because these costs are highly expected and low cost, it would be both silly and expensive to insure against them. That is akin to insuring against having to buy groceries every week. Rather than simply budgeting for the expense, I pay an insurer to pay the doc. If I have the insurer cover it, I add an unnecessary transaction to the cost.

Bloomberg Business had an article discussing the rising costs of care, which are in turn reflected in the rising premiums. They also included the average out of pocket spending by individuals with high deductible plans at $1700, which is a decent reflection of the costs you would anticipate if you budgeted for what are low cost and highly expected events. If people have insurance against these low cost, high expectation events, they will exhibit something economists call moral hazard. IE, they will probably go see their doctor more often than they need to because they aren't footing the entire bill every time they go in. This raises costs (and therefore premiums) for everyone in the pool. This is just one of the reasons individuals should not have insurance for low cost and high expectation events.

Insurance is not dropping by 3000%

Insurance, especially on the individual market, will see a steep rise in premiums. As pointed out by Reuters, individual policies are already going up by 20%. Not quite the intentions of the new health care act, but that's what happens when you have zero cost containment strategies and loads of newly mandated benefits.

It's a bird, it's a plane, no, it's a tax!

Hotair does a smashing job of hammering Obama over his hypocritical statements. When asked nine months ago, the individual mandate was definitely not a tax. But, when Obama needs to challenge the mandate lawsuits in the courts, where the judges are clearly capable of reading a dictionary, now the mandate is just another tax. Go figure. Obama is a shameless liar, possibly even a pathological one. Truth is just another tool for Obama to manipulate to suit his needs.

Drive Consumers, Drive that train!

Market based initiatives, such as health savings accounts, actually provide consumers with greater choice and freedom to choose their own doctors and the care they need compared with traditional plans. 10 million Americans signed up for HSA compatible plans in 2009. And not just 10 million uber healthy and young people either. Those aged 40+ made up over 50% of the enrollment.

More importantly, as Grace-Marie Turner points out, these plans are being threatened by the new health act. The bureaucrats in Washington prefer one-size-fits all solution and their solution is ill-suited for consumers who like to be in control of their dollars.

Employer Sponsored Insurance needs to END.

I thought I was one of a few who understood that the development of employees obtaining health insurance from their employers is a terrible "unintended" consequence of using taxes to favor such provision of health insurance. Gay Burke does a nice sum up of the situation.

Walmart's IT system

Is probably complex. Walmart has to manage millions of products on thousands of shelves in each one of their many Walmarts across the US. Do I know how their back-end IT system works? No. Do I care to know? No. Do I care that when I go to Walmart to get a Betty Crocker Yellow Cake Mix that it is there waiting for me at one low price? Yes. I care.

Likewise, in health care we make much hullabaloo about health IT systems. We ask patients (ie, consumers of health care) how they feel about these systems and whether or not they know and care if their doctor uses such a system. These questions continue to make me laugh. Just like my feelings about Walmart's IT, I have the same feelings about my doctor's IT system. Do I care that they have one? No. Do I care to know the complexities of their system? No. Do I care that I am provided with top-notch quality care, convenient service, short waiting times, and a follow-up? Yes. I care. Will I find the doctors that provide me with that type of service? Yes, I will. I shop my doctors, not their IT systems.

Political poker

Unlike gambling in the casinos of Vegas where you have to pay out for losing bets, congressional gamblers have all the fun. They don't have to pay out of their own pocket for policies that will dredge the wallets of Americans. If a policy goes south, none of the Congressmen are held responsible. So when it turns up that the critics of Obamacare were absolutely right, that citizens will indeed lose the coverage they have now, that Obamacare will raise premiums for everyone, and that it will do little to stem the rising cost of care, such Congressmen aren't personally held liable. Hopefully, November will eliminate some of them.

The Thing that wouldn't Die.

Employer-sponsored insurance (ESI) needs to go the way of the dodo bird. In a world where employment is temporary (2-5 years), especially for the young and healthy, it makes no sense to tie something as critical as health insurance to your employment. Health insurance, just like fire, auto, and life insurance, should be owned by the employee. It's fine if the employer wants to contribute $$$ to the policy via a Health Savings Account, but they should have zero ownership and zero meddling authority. That way, when someone is fired or needs to leave work, they aren't faced with a major discontinuity of coverage.

My poker face....

Yet another bluff. Obama pushed hard the mantra, "if you like your insurance/doctors, you can keep them." It was probably one of the main bluffs that won over Congress. And many fell for it, enough to pass the bill and get it signed into law. But, guess what! Most insurance will change. It will be more restricted, more expensive, and less consumer friendly. Thanks Obama!

Not perfect, but closer than most

Humans are risk averse. Hence, we like the idea of insuring--read: pooling risk--against the unknown and catastrophic. However, when we forget about the pool and use our insurance as a personal piggy bank, we tend to want more and more services covered. We want our regular check-ups, vaccinations, and health screenings to be paid for by the nameless, faceless members of the pool. Such a system will quickly lead to abuse when there are no limits. Do you think of your fellow employees when you have a catastrophic event? No.

Enter faith-based insurance, like Samaritan Ministries International. They provide coverage for their regular attendees. They protect the general pool by refusing to cover obese individuals and tobacco users, though some faith based groups will cover obese individuals if they work with a health coach. For complete basic, catastrophic, and car accident coverage, family premiums run about $4500/year. Any large health events are covered by funds each family is required to set aside every year, which they will then send, along with get-well cards, to the individual with the health event. Each member of the pool is made aware that they are in the pool together. Monthly newsletters keep everyone informed and connected.

This system isn't perfect. I would argue that the pool will be solvent longer if they assigned premiums more accurately based on individual risk rather than an arbitrary average. However, the pool does keep members connected and cognizant of the fact that their choices will affect the pool. People will still abuse it, but they will have to answer to people they know rather than some insurance agent whose name they didn't bother to write down.

More importantly, faith-based insurance members will be exempted from the new health insurance mandate. Given that the mandate will make most, if not all, policies prohibitively expensive, faith-based policies will be a great choice for many people. I feel a religion revival coming on.

What's behind curtain number 2?

Why yes, it looks like another tax! The "Affordable Health Care Law" is now 2 - 0 with new taxes and cutting costs. We'll continue to see more of the former and nada of the latter. As Grafton Willey points out, "There is much more to this new law and more to come as various government agencies begin to publish regulations and interpretations." So we've got blatant taxes in the form of the insurance mandate and the increase in the Medicare tax rate, but new ones will appear out of thin air as the bureaucrats get to work "interpreting." Who knows what else they will read between the 2700 lines, but we know it won't be good.