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Subject: health insurance and genetic screening Posted by: biliruben - [3502218] Thu, Feb 08, 19:11 We are going to be facing a serious issue in the near future, and apparently, it is sooner than I thought: insurance firm admits using genetic screening I would have at least thought they would have waited until some of these tests had passed some level of scientific muster. First, I was wondering what others think the purpose of insurance is. I had always thought of it as hedge against catostrophic loss. Pay a little every month, in case the unthinkable happens (wreck your car, get hit by a car, car drives through your living room, car falls on your primary wage-earner's head, contract syphilis in the back seat of your car etc...). I realize that this is not the only way insurance is viewed, it's just the only way that seems to make sense to use it. Anyway, with that in mind, if genetic testing takes more and more of the guess work out of who is and isn't at risk for catostrophic disability or death, with those at high risk presumably becoming uninsurable or it becoming prohibitively expensive for them to obtain insurance, aren't we losing the original purpose for insurance? Personally, regarding health insurance, I think that we should all be in one giant pool. The insurers find a nice flat rate for all of us that provides them with a fair but non-userous return, and we are all provided with a minimum level of necessary care, with a level of protection for long-term catestrophic disability as well. If someone wants extra insurance to cover what is determined to be beyond the basic minimums of care (these minimums will not be easy to determine, btw - oregon gave in a shot with their 742 someodd things that the oregon health plan would cover, but I don't think it passed.), then they can purchase that at a premium. I view health care (both acute, chronic and preventative) as a basic human right. We should figure out how to provide that right in the most efficient, even and economical way possible. All other types of insurance, regarding objects (house, car, diamonds etc...) I feel can stay just like they are. Life insurance I haven't really thought to much about, but I think that currently works fine as well. Sorry for the ramble - just killing time. Opinions? | |||||||
| 67 | Madman ID: 230542010 Tue, Mar 14, 2006, 16:30 |
It's a strange argument because GM's problems stem from government insufficiently provision of the product that you want government to expand to the fully insured population. Regardless, division of costs into separate categories of labor v. healthcare is rather meaningless. We count that way because we can, not because it is meaningful. You could separately identify the massive quantity GM spends on housing, except that getting those statistics would be more difficult. | ||||||
| 68 | biliruben Leader ID: 589301110 Tue, Mar 14, 2006, 16:33 |
In a closed system you are correct. As it is, that healthcare costs are built into every bumper, steering wheel and airbag, and they are having to compete against automakers that have no such additional cost. The quality issue brings us right back to where I started: RAISE TAXES NOW. TA DA! On now for my next trick, I will cure cancer. | ||||||
| 69 | Madman ID: 114321413 Tue, Mar 14, 2006, 17:45 |
and they are having to compete against automakers that have no such additional cost. I can't disagree more fervently or eloquently than I have before. Last time. GM has costs associated with providing their workers a comfortable standard of living, relative to other firms. If they fail to provide that standard, workers will leave to other firms. You can put a line-item of $4,000 of accounting costs on every GM car due to health care. Fine. You could also put a line-item of $5,000 for housing. Or $6,000 for SUV payments. Or $10,000 for interest payments. Just because that first line-item is identifiable due to historical quirks doesn't make it any more or less real than the others. And, also note that you are conflating health care costs with health care consumption. Only a fraction of our problem is due to prices. A huge chunk of our problem is the level of utilization. We have medicalized virtually everything. A rich first-dollar benefit provided to GM may cost three times as much as similar product design in Canada. But if you go to the doctor three times as much, or consume more high tech services, or insist on buying your freaking brand-name drugs because you just KNOW the generic doesn't work as well ... those are all things that work the other way. People like Krugman can't seem to get it through their heads that there isn't a single product known as "health care" in this country. What we (insurance companies) provide is a *bundle* of separate services, many of which are non-necessary goods (to either the patient or doctor). That second digital mammogram because the doctor just isn't sure what the original mammogram said. That $75 office visit and $25 prescription drug because, although you figure you have the flu, you figured it was "better safe than sorry". Etc. We don't go around talking about "legal services", and talk about "legal service inflation" based upon measures of aggregate expenditures on those services. Muddled thinking pervades the health economic profession, and it in no small part contributes to many of the myths of health care funding that continue to plague our perception and prevent possibly valuable reform. | ||||||
| 70 | Madman ID: 114321413 Tue, Mar 14, 2006, 17:47 | Correction to 69: I shouldn't have mentioned prescription drugs in comparison to Canada. Canada's single-payer doesn't provide coverage for them, although their legal system does tend to equalize the brand-generic cost difference, as we all are so famously aware (which decreases the cost of Canadian brands, and increases the costs of their generics). | ||||||
| 71 | Perm Dude Dude ID: 030792616 Tue, Mar 14, 2006, 17:52 | Prescription drug pricing in Canada is also drive by lower wholesale costs of drugs, nearly across the board. | ||||||
| 72 | biliruben Leader ID: 589301110 Tue, Mar 14, 2006, 18:18 |
I don't think your assumption that if government provided for healthcare for those workers, it would automatically mean that workers would demand that unspent $4000 (minus additional tax burden to support that healthcare plus the additional tax burden of the worker to support that healthcare) in other forms of compensation (such as cash). Maybe in a rational world it should work that way, but I don't think workers monetize benefits as well as you think they do. Whether their employer is paying for their healthcare or the government is paying for it, their cost of living vs. their income is staying roughly the same. What does change is that the car is now cheaper to make and therefore GM can be more competitive interenational. Perhaps I'm misunderstanding your argument. Note: I think I may be treading dangerously close to the "it's foolish to argue economics with an economist" line, but I'll press on perhaps for just the learning experience. | ||||||
| 73 | biliruben Leader ID: 589301110 Tue, Mar 14, 2006, 19:56 |
I don't like international comparisons much, but as an approximate measure of relative inefficiency, I like this table:
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| 74 | Madman ID: 114321413 Tue, Mar 14, 2006, 23:33 |
Whether their employer is paying for their healthcare or the government is paying for it, their cost of living vs. their income is staying roughly the same. What does change is that the car is now cheaper to make and therefore GM can be more competitive interenational. Well, GM can get around the international pressure simply by opening a shop in other countries. Don't feel sorry for GM there. And unless I'm misunderstanding you, you just offered two contradictory sentences. If the cost of living of workers is the same, and their net incomes are the same, then the cars (or at least products in general) can't be cheaper to make. Very simple. Now, GM specifically would be an exception because so much of their costs are legacy costs, ie costs to previous generations of workers. Going to single payer might offer them an escape to shift the burden of their retirees onto the private sector (these are the retirees who are unsatisfied with single-payer Medicare benefits currently). But ANY legal change that allows GM to escape from such a legacy burden would have a similar effect. I.e., a change in collective bargaining rules, or benefit liability calculations, etc. Kling has some stuff on this very topic buried somewhere over at econolog if you really are interested. As to the last chart, that doesn't necessary demonstrate inefficiency at all. Notice firstly that the public-sector burden for the US is greater, per capita, than ANY OTHER NATION. Why don't we get Medicare to be reasonably efficient first, before pretending that making everyone consumer a Medicare-like product will generate magical efficiency gains? The cost line on the first row isn't comparable, either. As I've said repeatedly in this thread, the US figure includes the opportunity cost of capital and a host of other items not counted as costs in other countries. Life expectancy and infant mortality is socio-economic specific. Japanese-Americans beat Japanese in life expectancy. White middle class and upper class have awesome life expectancy. Etc. I think we do have issues with the supply restrictions currently in place in the US for medical nurses and doctors. Single-payer would tend to make that even worse, however. And the US is reasonably alone in the standard of living expectations for physicians, just as they are reasonably alone in the expectation that the physicians are on call. Lastly, there are the cancer-survival rates, and cardiology procedure counts, in which our system cremates virtually all others. Demographically adjusted knee replacement data and other similar statistics are, IIRC, also quite good from our perspective. So we get quite a lot for our extra couple of thousand bucks. That's less than the interest on an extra $50k of home mortgage. | ||||||
| 75 | biliruben ID: 531202411 Wed, Mar 15, 2006, 09:41 |
I'm not sure if you're being purposely obtuse or I'm simply missing something. Their net incomes are the same, but GM's no longer paying for the health insurance portion of that "income," (but perhaps a bit more to compensate for the increased taxes for the worker) so the cost to make the car drops. Get it? Unless you are saying GM's taxes would increase a corresponding amount, which I don't think is true. Anyway, this was a tangent to my main point, and tossed in simply to make single payer more enticing to capitalists, scum that they are. I don't give two hoots. Your translation of the last table is truly a work of art. Ecologic comparisons like this are almost impossible to get anything irrefutable from, however (they usual generate more questions than they answer), so I'll just put a nice frame around it and see if we can get a grant from the NEA. | ||||||
| 76 | Madman ID: 114321413 Thu, Mar 16, 2006, 20:16 |
GM's no longer paying for the health insurance portion of that "income," (but perhaps a bit more to compensate for the increased taxes for the worker) so the cost to make the car drops. Get it? No, I don't get it. Let's take G, an average firm who hires Joe, an average worker, for $1000 in cash, and $500 in health benefits. Now, let's pass single-payer. Does G's cost of production drop to $1000? Well, there are two problems with that conclusion. Firstly, we don't have any tax revenue to pay for Joe's healthcare yet, and other companies are willing to hire Joe for $1500 (the original aggregate cost of hiring Joe, meaning that the company benefitted more than $1500 by having him). So, you can get that tax revenue two places: G or Joe. If you tax G, you're right back where you started from. Therefore, your only option is to tax Joe. If G only pays Joe $1000, then now you've cut Joe's standard of living by a third. Further, he has other employment opportunities. Clearly, G will have to raise his salary until he gets $1500, $500 of which go to taxes to pay his $500 of health benefits. Yippee. Now maybe you're arguing that having government mandate the benefits will save everyone money because government bureaucracies will be able to outsource bids to private firms more effectively than the private marketplace will be able to design new benefits. Without trimming Joe's benefits, however, it's hard to exactly see how this will happen. Firstly, Medicare is administered by private insurance companies. I know the crap the gov't makes us spend our money on in Medicare. You just aren't going to gain any direct administrative efficiency by having employees of private firms switch offices within the same company. Secondly, you've now designed a system attractive to polluting companies who don't care as much about the health of their employees; you've also designed a system attractive to companies with low-skill labor (if taxes are raised in a progressive system). Hard to see how either of those things are good. You'll have an accouting saving because the opportunity cost of capital used to finance benefits will now be spread throughout the economy rather than paid by the insurance company. Again, yippee. The only saving I can see is underwriting. And remember that underwriting costs less than the benefit to the healthy (or else it wouldn't occur). Therefore, what you are suggesting isn't so much a pareto-improvement so much as it is a system designed to take from the non-smoker and give to the smoker; take from the young and give to the old. In a welfare-destroying way, no less, since the welfare of the young gets reduced by more than the welfare of the old gets enhanced. And all of this comes at the potentially huge unstated cost that comes from ossifying benefits and services in an industry that SHOULD instead be encouraged to be dynamic and responsive. There just isn't a magic bullet here. | ||||||
| 77 | Stuck in the 60s Dude ID: 274132811 Thu, Mar 16, 2006, 21:22 |
I'd like to go back to the genetics angle. It seems reasonable to suppose that, over time, most diseases will be tied to specific genetic markers. At that point, the insurance companies will inform the policy holders about their particular risk and raise rates accordingly. Needless to say, the net effect will be more profit for the insurance company, that is using the genetic info to raise profits, rather than reduce risk. Don | ||||||
| 78 | Perm Dude Dude ID: 030792616 Thu, Mar 16, 2006, 22:12 | I don't think it will necessarily raise profits so much as to tie them to statistics better (i.e., ensuring them). | ||||||
| 79 | sarge33rd ID: 2511422414 Thu, Mar 16, 2006, 22:51 |
and create a larger pool of people without insurance, by virtue of not being able to pay the uprated premium because of their "genetic markers". | ||||||
| 80 | Perm Dude Dude ID: 030792616 Thu, Mar 16, 2006, 22:55 |
Maybe. We certainly have groups of those people now, those that are easier to identify. I think the next step isn't going to necessarily try to force out people who have these genetic markers per se, but those who might be engaging in activities which bring on things which cost insurance companies (and therefore other policy holders) money. Since it's virtually certain that the insurance company won't lose money, those that smoke (as one example) are apt to cost other policyholders a lot more money down the line and so their premiums and deductibles will rise. | ||||||
| 81 | Stuck in the 60s Dude ID: 274132811 Fri, Mar 17, 2006, 00:36 |
Left to their own purposes, the insurance companies will maximize profits and minimize coverage. Since it is inhuman to refuse medical care because of financial difficulty, and since emergency rooms simply cannot be used as waiting rooms for the uninsured, medical care must be extended to everyone. If we can spend 9 billion on a pointless war, and without asking the consent of the governed, we can damned sure provide medical care. Don | ||||||
| 82 | Boxman ID: 56218155 Fri, Mar 17, 2006, 07:15 |
Sarge and I seemingly agree on this. If there are any groups in this country that don't need anymore power right now, it is our government, Big Energy, and the insurance companies. I don't cry a river for people who build homes in floodplaines, cities below sea level, tornado alleys, hurricane zones, or forrest fire areas. That's part of the territory and if AllState wants to charge them a "Brazilian" dollars in premiums I can understand why. If you move into these areas and you are surprised that one of these events happens, quite frankly you're an idiot. My own medical history should belong to myself and my doctor. Perm Dude: "Maybe. We certainly have groups of those people now, those that are easier to identify. I think the next step isn't going to necessarily try to force out people who have these genetic markers per se, but those who might be engaging in activities which bring on things which cost insurance companies (and therefore other policy holders) money." When have insurance companies not shown themselves to be money grubbing whores? Stuck: "If we can spend 9 billion on a pointless war, and without asking the consent of the governed, we can damned sure provide medical care." At when has our government ever operated with any level of efficiency or at least faked inteligence to the point of trusting them with our money let alone more of it? Cut spending and create a tax credit program instead in addition to the existing deduction for medical costs that exceed 6.5%(guesstimate) of AGI. Let people choose which insurance company they want. | ||||||
| 83 | Stuck in the 60s Dude ID: 274132811 Fri, Mar 17, 2006, 07:48 |
Let's imagine the unimaginable - life without insurance companies. Suppose, if I had cancer, I went to the oncologist without --- perish the thought --- a referral. Let's further suppose that my family history of cancer and my 20-year smoking habit makes me fairly certain that my cancer-like symptoms are actually cancer. Granted, life wouldn't be easy for this oncologist. First, he'd have to adjust to the idea that sentient beings don't revert to drooling incompetence the moment they walk into his office - a concept that would invalidate most current medical procedure. Second,his function would change a bit. He'd order up whatever tests he needs, which would either support a diagnosis or not. In either case, the oncologist provides advice about pharmaceuticals. The patient proceeds to the drug store, where he takes from the shelf the medication he wants or needs. There is no pharmacist. Just eliminating the costs associated with regulating pharmacies and doctors would save enough money, I'd think, to seriously impact the ability of the system to deliver meaningful, ongoing health care. I believe that many, even most, of the costs associated with health care are the result of layers of bureaucracy placed there by government regulators whose sole purpose is to prevent people thinking for themselves. What, in the name of reason, is the argument for regulating the bejesus out of drugs? Sure, some of them can hurt you if you don't take them in the way they're intented. This also holds true for salt, shotgun pellets and axel grease. Surely, we're all aware of relatively open access to drugs in countries around the world. There are no horror stories (or at least none that manage to penetrate the shroud of the Natalee HOlloway-MIchael Jackson-gay marriage-driven farce that passes for news covereage these days. This system doesn't have to be as bloated as it is. It's bloated because we allowed it to get that way -- and because, somewhere along the way, we picked up an absolutely paranoid fear of anything that can make you feel good. I'm convinced that the reason controlled substances are controlled has nothing to do with potential fatal effects --- those can be had with hundreds of different across-the-counter products. The urge to control these substances comes from the same puritanical impulse that led our forebears to outlaw dancing. Anything that makes you feel good must be evil. Now, of course, if we can manage to find a good enough REASON to feel good - if someone else, say a doctor, validates it,then that's OK. But only in small amounts. And oh,by the way, be careful. You could get addicted to feeling good. And if you do -- well, we at the bureau of prisons can help with that, too. Don | ||||||
| 84 | Myboyjack Dude ID: 014826271 Fri, Mar 17, 2006, 08:09 | Good post, Don. I'm afraid that too many people like the security blanket of having the FDA waste time and money with their overtly politicized testing and approval process. | ||||||
| 85 | Perm Dude Dude ID: 030792616 Fri, Mar 17, 2006, 09:16 |
You might be surprised, Don, at how stupid many doctors are about drugs. Pharmacists fill a much greater need than just part of regulating the drugs. Most of them know far more about drugs than the doctors who prescribe them. To say nothing, of course, with the advice pharmacists can offer to consumers on the thousands of over-the-counter items on their shelves. I can certainly agree with you on a lot but getting rid of pharmacists (and therefore, putting the role of drug advice onto doctors which, in real life, would put them onto nurses) is just bad advice. | ||||||
| 86 | Myboyjack ID: 27651610 Fri, Mar 17, 2006, 09:25 | Deregulating drugs would not mean that we "got rid" of pharmacists. It would allow people a choice in using their services. | ||||||
| 87 | Perm Dude Dude ID: 030792616 Fri, Mar 17, 2006, 09:43 |
There is no pharmacist. Must have misread that, then. | ||||||
| 88 | Boxman ID: 56218155 Fri, Mar 17, 2006, 09:59 |
Don: Question about your post, "This system doesn't have to be as bloated as it is. It's bloated because we allowed it to get that way -- and because, somewhere along the way, we picked up an absolutely paranoid fear of anything that can make you feel good." What were you specifically referring to, the government, insurance companies, hospitals, Walgreens? Perm Dude: "You might be surprised, Don, at how stupid many doctors are about drugs. Pharmacists fill a much greater need than just part of regulating the drugs. Most of them know far more about drugs than the doctors who prescribe them." So true. From the over prescribing of ADD meds to children of all people, to not even knowing which medications work best for what. I have gotten better advice from my local pharmacist than I ever have from a doctor. In fact, when somebody gets the sniffles I don't even waste time calling my doctor's office to sit on hold for 10 minutes then they tell me they can see me in 4 days to treat a 48 hour flu. I go to Walgreens (no preference just the local guy) ask the guy behind the counter what works and I'm done. If we reformed the entire medical complex of this country, the pharmacist would be dead last on my list of people that need to go. | ||||||
| 89 | Stuck in the 60s Dude ID: 274132811 Fri, Mar 17, 2006, 10:55 |
I think you're right. I was supposing, perhaps inaccurately as you guys point out, that the doctor could be relied on for good drug info. OK, so we keep the pharmacist, but still end our dependence on the prescription-driven regulation that just HAS to be driving up the cost of health care. Don | ||||||
| 90 | Perm Dude Dude ID: 030792616 Fri, Mar 17, 2006, 11:04 | Well, I think you're right. The system has the assumption that people are essentially stupid and can't make good choices. While that may be true for some (and we should have minimal guides in place for those people) it has to be a drag on the system that we assume everyone is a bag of rocks. | ||||||
| 91 | biliruben ID: 531202411 Fri, Mar 17, 2006, 11:05 |
Mmmm... Morphine. Part of this is a public health issue. Over-precription of antibiotics has created strains of drug-resistent diseases faster than the drug industry can create new antibiotics. This may reach crisis level soon. | ||||||
| 92 | biliruben ID: 531202411 Fri, Mar 17, 2006, 11:07 |
That, and potentially worse: people don't complete their prescription when they do use them. Super-strep: the movie. (sorry, I just finished howling at my wife for this, and she's a vet and should know better). Some people actually are stupid. | ||||||
| 93 | Perm Dude Dude ID: 030792616 Fri, Mar 17, 2006, 11:07 |
Heh. Class II drugs would be treated the same, I'd imagine. Interesting point about antibiotics. There's an educational component that many doctors just aren't following, and making the process more consumer driven might make the problem worse. | ||||||
| 94 | Stuck in the 60s Dude ID: 274132811 Fri, Mar 17, 2006, 11:34 |
It is not the job of the government to explain risks to consumers. That's the job of the people who make the stuff. To the extent they don't do it, or do it badly, they will suffer the consequences they fear most --- their cash cows will remain unmilked. What they want, of course, is for government to protect them against the legal consequences of greed - too few trials rushing too many drugs to market way too soon to discover long-term effects. Also, is there a way - with any degree of mathematical certainty - for even a Cray to figure out how 17 different med (the number my Mom now takes) interact each with the other? Don | ||||||
| 95 | Perm Dude Dude ID: 030792616 Fri, Mar 17, 2006, 11:49 |
Most risks are explained as a result of government regulations, Stuck. I don't think there is any real difference in government explaining risk and government requiring the makers of the product to explain risk. And, to take it a step further, I'm of the mind that if they weren't required to explain the risks, most would not. | ||||||
| 96 | Boxman ID: 56218155 Fri, Mar 17, 2006, 14:43 |
Perm Dude: "And, to take it a step further, I'm of the mind that if they weren't required to explain the risks, most would not." Agreed. I begrudgingly compliment the government on this; either that or I applaud them much in the same way someone in the Special Olympics gets applauded. Manners and positive re-enforcing reasons only. The list of side effects in drug commercials are about 1/4 of the commercial. I doubt that the RX companies would list all the many ways their product could kill you versus the one way it saves you if they didn't have to. Bad for business you see. | ||||||
| 97 | Madman ID: 230542010 Fri, Mar 17, 2006, 14:43 | An amazingly reasonable Kinsley column about Krugman's opinions. | ||||||
| 98 | Madman ID: 230542010 Fri, Mar 17, 2006, 14:49 |
There's an educational component that many doctors just aren't following, and making the process more consumer driven might make the problem worse. Yeah, it might. Creation and enforcement of professional standards would help, also. And this is an area where insurance companies have been stepping into the breach on occassion. I know of one Blue that instituted a P4P profiling tool measuring the use of first-line antibiotics versus zithromax, for one example. Amazingly, after going public with their results, doctors suddenly started changing their behavior. (not that there's anything productive going on in insurance companies) My perspective is that if you don't put money on the line, you don't get behavioral changes. And I'd rather have hundreds of insurance companies experimenting with different mechanisms for putting money on the line than one giant government dictating a solution. | ||||||
| 99 | biliruben Leader ID: 589301110 Fri, Mar 17, 2006, 15:13 |
The good thing about the Kinsley article is that he shines light on the uncomfortable truths. The bad thing is that he isn't really clear about his proposed solution and how that addresses those truths. My perspective is that if you don't put money on the line, you don't get behavioral changes. The other tack, is that when you do put insurer's money on the line, you get a system that maximizes their take, and only maximizes health secondarily. | ||||||
| 100 | Madman ID: 114321413 Fri, Mar 17, 2006, 21:34 |
I told you about a real case: Excellus in NY. Many are doing it. I know doctors don't like to have their dirty laundry aired, but I don't see how you can argue that airing it hurts health. And to this claptrap about insurance company profits ... (a) profits represent required return on capital, (b) they drive innovation and consumer welfare, (c) they just aren't terribly big when you add up all phases of the undewriting cycle. Remember, Medicare is free-riding on the private sector today, and Medicare itself is the most expensive health care financer in the world. By far. We spend more on the health care of our elderly than virtually any other nation spends on *its entire people*. If that thought doesn't give you pause, I don't know what will. Before you argue for a single payer system to be implemented in this country, you might want to find an attractive model that works first. | ||||||
| 101 | sarge33rd ID: 2511422414 Fri, Mar 17, 2006, 22:32 | required return on capital? As in dealership profits represent what? Odd, profit in my industry you and others deem as virtual thievery on our part. In yours though, its "required return". Care to enlighten me as to the difference? | ||||||
| 102 | Stuck in the 60s Dude ID: 274132811 Sat, Mar 18, 2006, 06:44 |
The difference, Sarge, is that you're not the capitalist. Their tone would change considerably if you sat on the board at General Motors. Don | ||||||
| 103 | Madman ID: 114321413 Sat, Mar 18, 2006, 09:41 |
Care to enlighten me as to the difference? There is no difference. Customers bid for the lowest prices/rates, others supply those products and expect to earn a profit. Two parties with conflicting goals, but with the potential for mutually beneficial exchange. | ||||||
| 104 | Perm Dude Dude ID: 030792616 Sat, Mar 18, 2006, 09:51 | If only we lived in such a world... | ||||||
| 105 | Madman ID: 114321413 Sat, Mar 18, 2006, 11:40 |
At its root, that *is* the world we live in. There are always extraneous considerations, but you can't get those confused with the fundamentals that drive transactions. I presume, for example, that sarge is complaining about government regulations that require many insurers to price their products at profitable rates (in general, anti-trust laws work to require this across most industries, but there are special restrictions on insurers to make sure they don't offer premiums that are too attractive ... the well-founded fear is that lower premiums today increase the likelihood of future insolvency, leaving gov't or future policy holders at risk). Mandatory insurance purchase also gives suppliers more power. The tradeoff for these elements, however, is that insurance companies are subject to rate approvals, intrusive corporate examinations, frequently responsible for absorbing coverages from insolvent firms (generally necessary because state governments don't have the expertise to track long-term financial obligations), etc. In the case of some Blues, their capital surplus is also -- for any practical purpose -- viewed as a state government reserve. In net, the highly regulated atmosphere in insurance in general, and health insurance in particular, likely reduces competition and gives suppliers greater market power. But the fundamentals of the transaction are unchanged. Consumers complain about rates. Larger employers have a slew of options, everything from not purchasing the product, to buying from a dirt-cheap TPA, to buying a self-insured contract arrangements in which they can circumvent certain state mandates that force the cost of insurance upward or allow for creative benefit designs, etc. Small groups have less choice, but the entire market there is heavily regulated to compensate. The bottom line is that the forces described in my post 103 still trump, although they obviously gets distorted through very complicated and detailed government regulation. | ||||||
| 106 | Perm Dude Dude ID: 030792616 Sat, Mar 18, 2006, 13:15 |
They also get trumped by employers who restict choice. In fact, because of the way most health care is paid for (through employee plans) it's difficult to even pin down what entity is actually the "consumer." I'm not denying the ability of insurance companies to tamp down prices, nor in forcing doctors to consider price as one of many factors in their evaluation of possible responses to a particular health-care situation. I'm simply saying that the choices you presented aren't actually happening, in part because of the current disconnect between patient and choices. | ||||||
| 107 | Madman ID: 114321413 Sat, Mar 18, 2006, 16:17 |
I'm simply saying that the choices you presented aren't actually happening, in part because of the current disconnect between patient and choices. What choices are required in my 103? Not many. Employers bargain for lower rates. Employees disgrunted with employer plans *are* switching to individual products in some cases, demanding multi-choice plans from employers in other cases, etc. Regardless, the logic in 103 stands: there are purchasers and sellers with differing goals, and it is the result of that combo which creates profits, in health insurance just like all most other industries. This is a multi-stage problem. Employers negotiate with insurance companies, employees then negotiate with employers. The fact it is multistage doesn't alter the logic; many (if not all) goods which are consumed are the result of multiple negotiations/transactions. | ||||||
| 108 | Perm Dude Dude ID: 030792616 Sat, Mar 18, 2006, 17:12 |
The more stages, the less the whole thing holds. In fact, I think you and I are in agreement that part of the problem (might even be the biggest problem) with health care costs is the disconnect between the real costs and the costs to the patient. The fact that this is a multistage process demonstrates that the logic doesn't hold true for it as much as a more direct process. There's just too much slippage for it to hold true down the line. Most employees are not offered choices, and certainly not enough to drive efficiency. | ||||||
| 109 | Madman ID: 230542010 Mon, Mar 20, 2006, 15:12 |
Most employees are not offered choices, and certainly not enough to drive efficiency. Well, you always have the choice where to work. Regardless, I will also note that the market as it exists today almost certainly isn't as it will exist 10 years from now, barring gov't intervention to prevent change, of course. Defined contribution choice plans are a distinct possibility; HSAs offer de-facto choice for the below-deductible region, etc. If and when costs become a real problem, there are ideas and designs out there. Right now, however, we are doing an awful lot of complaining, but when push comes to shove, we still want to buy the full boat. | ||||||
| 110 | Perm Dude Dude ID: 030792616 Mon, Mar 20, 2006, 15:16 |
barring gov't intervention to prevent change And barring government intervention to force change, of course. And no, one doesn't always have the choice of where to work. | ||||||
| 111 | Madman ID: 230542010 Mon, Mar 20, 2006, 15:26 |
And barring government intervention to force change, of course. I'm not aware of any government proposals to force substantive design changes. Have I forgotten something? | ||||||
| 112 | Perm Dude Dude ID: 030792616 Mon, Mar 20, 2006, 15:44 |
Hilarygate? :) The money-sucking programs that Medicare and other programs will become will force government to look (again) at health care, and if a Democrat wins the White House in 2006 it'll be on the front burner, particularly if there are gains in the House and Senate by the Dems. The Administration is busy putting together poorly-thought through proposals for current programs, putting off some of the tough choices. There's no doubt in my mind that insurance companies better be squirreling away a lot of money to be used on lobbyists in the next few years. | ||||||
| 113 | Toral ID: 541029611 Mon, Mar 20, 2006, 16:00 |
Madman 109 No one has a choice where to work. That's a (false) libertarian/economic conservative mantra that should be challenged whenever repeated, as an example of the false consciousness created and encouraged by liberal capitalism. You have the power to solicit offers of employment, and the power to accept them. Even George W. Bush doesn't have the choice where to work. He might want to choose to work in a place where he would not be wanted. Toral | ||||||
| 114 | sarge33rd ID: 2511422414 Mon, Mar 20, 2006, 20:46 | for my money, has HAS chosen to work in a position where he is not wanted. | ||||||
| 115 | Madman ID: 230542010 Tue, Mar 21, 2006, 09:05 |
PD -- IIRC, Hillary-gate benefits were just repeating the hot topic within the insurance industry of the day -- managed care. She didn't propose a change in terms of the benefits traditionally received by the bulk of the fully insured group business (except to enrich them in many cases). She proposed to freeze the hot idea into place. Since then, of course, people have abandoned managed care like rats from the Titanic. Gov't gets its ideas from the private sector. Right now, there is a wide-ranging array of possible benefit plans offered in the marketplace. There are some ideas, however, that haven't taken root. And those were my proposed solutions in previous posts (just a quick recap of a few ... abandonment of the hospital-care model, deregulation of the power of prescription, removing de facto price controls on technology that can be operated without substantive risk and allowing basic services to be run and operated through low-overhead clinics or other venues, broadening license accessibility for a variety of other labor-intensive procedures like colonoscopies, etc. ... the idea is to boost supply of willing providers of actual healthcare and foster competition, the reverse of the convention wisdom promoted by healthcare academics / "experts"). Toral 113 -- You have the power to solicit offers of employment, and the power to accept them. This is the power necessary to defend my previous argument. "Choice" perhaps isn't the right word. The key is that the worker is empowered. And this goes is true for a wide-range of socio-economic positions. Just look at the way disability rates fluctuate with the labor market if you don't believe me. | ||||||
| 116 | biliruben ID: 17502215 Tue, Oct 02, 2007, 12:04 |
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