The devil we don’t know

The topic has been thoroughly thrashed over the last year. Health care reform, of course. Now it’s the law of the land. Or about to be.

I share the hope of those who supported it, but none of their confidence. And I share the fear of those who opposed it, for many of the same reasons.

But mostly I just have worries.

First, I have a tough time believing that such an enormous expense will somehow result in a decrease in the deficit. In my math-challenged mind, that just doesn’t make sense. And even if it somehow did, the numbers still are all projected figures, estimates, and guesstimates about countless variables that the government can’t possibly control. Talk about fuzzy math. I’d like to see you get a small business loan with math like that.

One of the scariest things for me is knowing that some of the so-called savings are supposed to come from cuts to Medicare Advantage. MA is sort of a supplemental policy for Medicare participants. It’s administered by private insurance companies that in most cases get government subsidies for doing so. It figures that if those subsidies are reduced or eliminated, the companies may decide it’s no longer worthwhile to sell the policies. My company, I think, does not take such subsidies and will not be affected by the cuts. But I’m not sure. And even if I’m not affected, millions of senior citizens will be. Like your parents or grandparents or dear old Mrs. Jones next door. You know … real people. In the age group with more health problems than any other.

Then there’s that doughnut hole you keep hearing about. Eliminating that would be a very, very good thing. But don’t fool yourself into thinking it disappears this year. It’s one of those phased-in parts of the bill. I think seniors just get a small rebate this year.

My biggest concern, as I’ve mentioned before, is that this bill effectively hands insurance cards to 32 million more people without doing anything to bolster the already seriously overburdened delivery system. Nobody’s building more clinics or medical schools or nursing schools. Nobody can force more medical graduates to choose primary care over the specialties.

And that reminds me of another problem. Medicare payments to a lot of doctors are going to be reduced. So why should those doctors keep seeing Medicare patients? It’s hard enough to find a good doctor these days; many aren’t taking new patients and some already refuse to take Medicare patients. Can you blame them?

There are some good things in the bill. No more annual or lifetime caps on insurance. A phasing out of preexisting conditions. Kids being covered longer under their parents’ insurance. I can’t argue with those. And I hope there’s more good stuff coming that I’m just not remembering right now.

I do wonder why, after the nasty experience with banks and the new credit card regs, the bill didn’t make all the new regs on insurance companies effective immediately. Instead, the companies have years to figure out new ways to gouge patients, limit payments, increase premiums, and find ingenious new ways to offset the losses they see coming. Maybe 32 million new customers will take care of that, but rest assured the insurance giants will be up late nights thinking of ways to save their profits.

And that little thing about requiring people to buy insurance … can they do that? What if I’m young and healthy and jolly well don’t want to buy it? How will you know I haven’t bought it? Will you send the Gestapo in the middle of the night to haul me off to jail for not buying it?

As for small businesses providing insurance for employees … hasn’t that always been a decision for the employers (free enterprise and all that)? An expense to incur or not, as their business sense dictates? And, in my own experience, hasn’t it always been up to the employee to shop for a job that has the desired benefits?

Lastly, no one has talked much about the incredible amount of new bureaucracy that will be needed to administer/enforce all these new measures. But I suppose that’s one way to reduce unemployment.

P.S. President Obama, best get back to Washington and tend to the country’s business. No need to be out there campaigning for a bill that’s already passed.

8 thoughts on “The devil we don’t know

  1. My biggest concern, as I’ve mentioned before, is that this bill effectively hands insurance cards to 32 million more people without doing anything to bolster the already seriously overburdened delivery system. Nobody’s building more clinics or medical schools or nursing schools. Nobody can force more medical graduates to choose primary care over the specialties.

    This has been a big concern of mine for quite some time too. We need more to promote family practice physicians and create incentives for people to enter those professions. Doctors go where the money is. You can increase the pay of GPs, or you can decrease the pay of specialists. You can also make it easier for GPs to complete school, but then quality may suffer. And you can certainly recruit from other countries, but we’ve already been doing that.

    This would have been a problem, though, with or without health care reform. The bill does nothing to address it, you’re quite correct. On the other hand, the “no bill” before it did nothing to address it either. Hopefully the bill will bring this issue into view more and force some attention to be paid to it.
    Generally doctors don’t work for the government, so I question how much the government can or should do to influence doctors’ choice of profession, specialty, or location. (There’s that free enterprise thing again.) Mess too much with their freedom of choice and they may just choose another profession altogether. Then where would we be?

    Sure, the bill is a start. But it puts the government’s thumb down hard on the patients’ side of the scale. Things could get seriously out of whack for all of us while we wait for the delivery side to get some love.

    1. One thing I’ve noted in regards to GPs is that they’re only generally useful in pointing out the obvious (at least this has been the case with me). Great for getting the pills I could have asked for myself if I were allowed to do so, but since all my medications require a prescription… They’re like the gateway I have to go through to get to a specialist. Recently, I’ve noticed, however, that my insurance company doesn’t care if I go to a GP or a specialist, so long as they’re in-network.

      If these guys are only going to serve as gateways to specialists, (which is true in a lot of cases, but not all) then perhaps what they really need is a diagnostics expert – a sort of Nurse Practitioner who does nothing but triage and passes off patients to the appropriate Specialist. Until we get more GPs, this may be a solution to overloading the current group of GPs, and getting patients into the hands of the specialists they should be seeing anyway.
      My insurance is set up the same way. I don’t need a referral to see an in-network specialist, supposedly, although the specialists might insist on a referral before seeing me.

      GPs, FPs, nurse practitioners, urgent care clinics, emergency rooms … it adds up to a band-aid approach with no continuity of care. And that continuity can be critical in understanding and accurately assessing a problem.

      Sigh. By the time I get used to today’s health care system (if I ever do), it will be tomorrow.

  2. I believe your worries are well founded. In order to accept all the claims (no pun intended) being made about the benefits of this new direction, we have to suspend our disbelief in physics, math and rational thought. I have worries too. Some of the things we have to accept are:

    Insurance companies are being run by people with philosophies that take no account of the business practices that insure long term success – and government bureaucrats will do a better job. In order to operate a successful business, you have to make a profit in some way that doesn’t take unfair advantage of customers, suppliers and employees, but the basis of the new law depends on government being able to do all those things better than institutions which have a personal stake in success. Amtrak is a previous example of that effort. Look at the schedules and prices of an Amtrak trip from New Orleans to Chicago and compare it with the same trip using any of the major air carriers. Look at cost and travel time. If it costs more and is slower, how does it help the disadvantaged? Or even the advantaged?

    We have to believe that we should be able to wait till our house is burning before we decide we need fire insurance. We have to believe that there is no financial reason why being insured against the continuation of a preexisting condition shouldn’t be more expensive than being insured against the onset of a new condition. All you have to do is suspend your disbelief in fantasy.

    We have to believe that allocation of resources is best made by central planners rather than rapidly and constantly changing market incentives. There’s a 6000 year history here to rely on. Suspend your disbelief.

    The U. S. Constitution is irrelevant. Common practice lately. The federal government has a limited list of enumerated powers. This isn’t on the list.

    Even though automobile insurance is compulsory (by constitutional STATE laws), I’ve read that 15 percent of drivers have none. Compulsory health insurance will result in better compliance. If, once again, we suspend our disbelief.

    I understand that hospitals are required to treat indigents who present themselves for treatment. I know this is true in Texas (where I live), but I’ve read that other (maybe all) states have similar requirements. The argument against this status quo is that those of us who have insurance suffer higher policy premiums in order to offset the hospital losses incurred by those who recieve free care. If we are to believe the new plan rectifies this situation, where is the money going to come from that pays for those who don’t have insurance now? The only real difference is that we’re adding a new middleman who is certain to rake off a substantial commission. A net loss, not a net gain. Unless you suspend your disbelief.

    We have to imagine another reason why medical practices and procedures that aren’t covered by Medicare and most private insurance companies are rapidly improving in quality and at the same time lowering costs. Lasik eye surgery, elective plastic surgery, routine dental work and veterinary medicine uniformly depend on direct customer to practitioner transactions.

    You have to believe that the current market meltdown was caused by greedy, free market loan sharks and unscrupulous bankers… alone. Tinkering with market incentives… not mandating as the current health care plan does, but merely tinkering began the waterfall of events in my view. When bankers denied loan applicants who wanted to purchase properties in locations that were “red lined”, they were doing so because of the established history of losses incurred when they made loans for properties in those areas. In a well intentioned effort to create new home owners the Community Redevelopment Act was passed. This REQUIRED that banks keep records which verified that they were no longer denying loans for previously red lined properties out of hand. As time passed, and the results were less than anticipated, the requirements were stiffened to the point where banks were forced to make loans to applicants with no jobs, no down payments, and no prospects. To compensate for their extended risk, government sponsored enterprises like Fannie Mae, Freddie Mac and the FDIC promised to insure them against what they believed were inevitable losses. At the same time, the FED held interest rates well below what a rational market would have demanded. This, plus the completely legal concept of Fractional Reserve Banking created new money out of thin air that could be used by lending and borrowing institutions. Naturally (to me), the boom began. Property values inflated to unsustainable heights. Finally the insuring institutions began to notice failure rates were also unsustainable. So the FED printed even more money. And here we are today creating even more money out of thin air in order to fund an imaginary fiction called universal health care.

    Borrowing and spending imaginary money got us in to this mess, but we have to believe that more of the same will surely pump the market back up. You have just got to suspend your disbelief in fantasy. This works when you want to enjoy a movie like Avitar, but I’m a little worried about how it works in the real world.

    I wish I could believe. I just can’t.
    Hmm, your outlook is a lot gloomier than mine. I disagree with your thinking on the insurance companies. They are for-profit companies run by businessmen who care only about their bottom lines. There’s none of that annoying altruism that afflicts a lot of the medical profession. It’s some of those nastier profit-driven activities that the government wants to stop, but I’ve heard nothing about the government wanting to take over and run those companies.

    Medical procedures are improving because research and development is an ongoing profitable, private enterprise and doctors who employ the procedures are private practitioners and entrepreneurs, not government employees.

    Your graph on banking — I’m afraid at this late hour I don’t get the relevance.

    Oh, and while Amtrak may have been a disaster, I speak from experience in saying Medicare works pretty well and is a bit more relevant. But without the public option, I don’t see the government getting into the insurance business.

    It’s late. Hope all this makes sense in the morning.

    1. It’s past morning here and I think I understand what you wrote. Whether it makes sense is going to be a subjective opinion that we can unilaterally enjoy or despise. I choose to enjoy.

      I don’t disagree that business is all about profit. I think we probably differ in believing that business owners and share holders don’t understand that their products and services are under constant scrutiny by their customers, suppliers and employees… and that in order for them to STAY in business those entities must maintain at least a perception of fairness. The bottom profit line represents the best analysis of bringing all the components of success into a long term strategy.

      The relevance of the banking fiasco is the commonality of government central planning of what is essentially an individual decision that occurs between the constituents of every transaction. It has never worked because the reason I buy or sell something and the value I place on it are not predictable by anyone else. The argument that the aggregate of all transactions can be summarized by analyzing market and monetary factors is what got us where we find ourselves today… don’t you think?

      If we believe in free lunches, we can make a case for insurance companies and medical care flourishing under centrally planned aspects of the economy. Medicare appears to work because the FED is printing money that becomes worth less and less, but if that system were a free market service, it would be in bankruptcy court right now. I’ve read that all the other federal bailout oriented agencies and government sponsored enterprises are also bankrupt. That’s not hard to believe with over 60 trillion dollars worth of unfunded liabilities staring our grand children in the face.

      Where is that money going to come from?

      What other cause can we attribute to the increased value and reduced cost of medical care that isn’t covered by insurance?

      I’m really, really old and I remember when the only insurance you could buy (afford) paid no more than 80% and an optional policy that was called “major medical” insurance which had a substantial deductible and a finite limit. I had to fork over cash *up front* to hospitals and doctors when my children were born in the 60’s. In addition to paying about $20 per prenatal doctor office visits, I prepaid a deductible of something like $350 to the hospital for the first one in 1962. This is about the time when I got my first real credit card. Shopping around for affordable, competent services back then was something everyone did. Now that Medicare determines what doctors get paid instead of me… what do I care how much they charge or how much they are paid? It no longer matters what I think or do.

      I don’t think there is an easy solution that involves more central planning. At the same time, I don’t think there’s an easy solution that doesn’t either. My disbelief in the free lunch thing just won’t go away.
      My son was born in the ’60s too, so I’m quite familiar with those good ol’ days. [Yes, we’re old. But “really, really old”?] Also, my dad was a doctor, so I grew up seeing things from his point of view.

      One of the biggest oversights with HCR, I think, is that Congress did not remove the insurance companies’ anti-trust exemption and make them compete with each other across state lines. Back in those good ol’ days, doctors and patients made decisions about treatment and payment, and the insurance companies were definitely third parties. Today, we have the tail wagging the dog; the insurance companies (by saying what they will or won’t pay for) are calling the shots, determining what treatments and procedures are and are not approved, and even telling you how often you can or cannot see your doctor. My insurance company constantly reminds me that this or that is reported to them so THEY can determine the best treatment for me! Sorry, those decisions are up to my doctor and me. I’ll pay out of pocket if I have to, but they aren’t telling me what to do.

      Oh, and I agree, there’s no such thing as a free lunch. Ever.

      1. My oldest son is something of an expert micro-brewer of some of the finest beers I’ve ever tasted. I always have some on tap. Over such a refreshment in the cool of a Spring evening on the patio, I can imagine a stimulating conversation. And… I always have fresh coffee to satisfy that addiction.
        My son’s a programmer/developer, so no free beer. But the conversation is always stimulating; he’s very intelligent — and very Republican.

  3. On the plus side, Rush Limbaugh should be packing right about now. After all, he did say he’d leave the country if health reform passed.
    To Costa Rica, as I recall. Buh bye, Rush! And good riddance.

... and that's my two cents