Media Matter has done a nice job of rounding up and debunking 14 of the most common myths about healthcare reform here. You may find it useful when talking to friends and relatives.
Health Beat by Maggie Mahar
Media Matter has done a nice job of rounding up and debunking 14 of the most common myths about healthcare reform here. You may find it useful when talking to friends and relatives.
I thought Media Matter did a fine job refuting some of the circulating myths. Although I’m not aware of any of their statements that are not well documented, I do have a question about a couple of points they raised.
First, they quote Krugman as stating that Medicare costs have risen more slowly than healthcare spending in the private sector – Krugman noted, “since 1970 Medicare costs per beneficiary have risen at an annual rate of 8.8% — but insurance premiums have risen at an annual rate of 9.9%. The rise in Medicare costs is just part of the overall rise in health care spending. And in fact Medicare spending has lagged private spending:”
However, CMMS and CBO appear to say something different, concluding that Medicare and Medicaid spending have grown faster than private sector health care spending (even on a per enrollee or per capita basis if I read their data corretly) – http://www.concordcoalition.org/issue-briefs/2009/0521/long-range-forecasts-health-care-costs-ominous-and-maybe-even-optimistic
I would be interested in how those two statements can be reconciled.
They also make a point (myth 5) that proposed income surtaxes in HR3200 would affect only the very wealthy. On the other hand, a number of economists have pointed out that because health care costs are rising much faster than incomes, income taxes would be at best a very short term fix. Ultimately, healthcare cost containment might bring the two more in line, but that would require many years. In the meantime, they have suggested that the only taxable item that will keep pace with rising health care costs is the value of health insurance, and so it would make sense to tax that. One plan is to tax the very high end insurance plans. I’m not sure that would raise enough, though. The more effective (but politically unpopular) approach would be to tax employer-provided health insurance, and probably at income levels down into the middle class rather than exclusively the wealthy.
Maggie and others – your thoughts?
The comparison between growth in private and Medicare spending per enrollee is a lot more complicated than it looks. 1) Private health insurance spending includes supplemental Medicare coverage, meaning distortions in measures of expenditures and (even more so) enrollment 2) The benefits package for Medicare and Private health insurance (PHI) is very different (a critical issue is that until 2006 Medicare did not cover drugs, so that big contribution to growth was excluded). 3) The structure of coverage for PHI changes over time (particularly, out-of-pocket share shrinks, meaning that PHI per enrollee overstates the trend in total costs). There’s other stuff going on as well – there is not an obvious answer to the question.
Cordelia —
Your points are well taken. However, you don’t go far enough, because while you examine Medicare issues in detail, you ignore similar issues about private insurance.
It is true that some “Cadillac” private insurance plans provide much more complete coverage than Medicare, for a price, but many private insurance programs offer much worse coverage. Very high deductibles, very high co-pays, and relatively low caps are common. Drug benefits are not part of many programs, or feature very high co-pays and deductibles. Certain types of “routine” care, sometimes including routine physicals, routine preventative care like vaccinations and well baby care, and screening exams of various types are sometimes excluded. Limits for coverage like rehab are often much more restrictive than Medicare. Premiums are often much higher, especially when costs for employers are included or in the individual coverage market. Of course, there are all the usual issues of refusal to issue, cancellations, refusal of coverage, pre-existing conditions, and so on.
You are correct in saying the benefits package for private insurance and Medicare are often very different, but that difference favors Medicare as frequently as it favors private insurance. This is not because private insurance is evil. It is because private insurance offers a broad spectrum of programs designed to offer employers and clients choices that create stripped down coverage to match desires for lower premiums.
So while calculations for Medicare growth are not completely accurate, the calculations for growth of costs for private insurance growth are understated as well. In particular, the “Cadillac” plans have grown in cost much faster than average, while the “average” growth of private insurance costs includes many programs that are severely stripped down. In the last few years these stripped programs have become much more common. The reduced value of these policies is not calculated as part of the growth of costs, despite the fact that the loss of value is effectively a large increase in price.
In the end, that is the reason why Medicare has a satisfaction rate among its clients that is significantly higher than private insurance. It offers better coverage at lower cost, even including supplements.
Fred –
First, you are right to say that the taxes proposed will not cover the expenses in the reform program indefinitely. Control of costs is not only critical for the reform program, it is critical for health care in general, since if costs are not contained, health care will become unaffordable for most Americans, including the working class and the middle class. The only choice is how to reduce costs, with the conservatives generally lining up on exclusionary techniques like high deductible and high co-pay programs, and Obama and friends focusing on programs aimed at reducing ineffective care and using quality control to eliminate costly complications of care. This is at least as important in the long run as access issues, since within a few years high costs will destroy access.
Second, the Concord data is a tossed salad of statistics, sometimes focusing on one approach, sometimes on others, in order to give an impression that is different from the underlying facts. MedCAP and Medicare data clearly show that in the time since the late 90’s growth rates for cost have been almost over 50% higher in the private market than in Medicare. The private market did have a period from about 1985 to 1995 when it did a better job of controlling costs, but that is now history. Of course, any data set that starts from the early years of Medicare will show rapid growth, since Medicare spending was increasing from zero.
Replacing a good idea of a public insurance option with a few non-profit co-operatives that would be expected to compete with a cartel of giant for-profit insurance companies is ludacris.
There is a tremendous consolidation in the health insurance industry over the past 15 years. A cartel of very large for-profit insurance companies dominates the industry.
One out of every three Americans is enrolled in some kind of plan offered by just seven of those large companies. And almost all metropolitan areas in the country and states that are more rural than urban are now dominated by just two or three insurers.
Health insurers take every opportunity to badmouth co-ops, saying they are a backdoor to socialized medicine. They would love to have a bill that creates co-ops that won’t work instead of a public option plan.
Don’t forget the Blue Cross/Blue Shield movement, sharing some of the characteristics of cooperatives, eventually became more and more like their for-profit competitors. Many of the largest Blue plans became for-profit and those that didn’t are largely indistinguishable from private, for-profit insurers; skyrocketing rates, high-deductibles and co-pay plans.
America has granted insurance companies the right to create bottlenecks in the financing of health care in order to extract profits out of the suffering of ordinary people, without providing any actual health care whatsoever.
Fred, Cordelia, Pat, Gregory
Krugman is close to right, though the wording is wrong. Since 1970, Medicare spending has risen by 8.7 percent a year, while private sector reimbursements to doctors, hostpials and patients (NOT private sector PREMIUMS) has risen by 9.7 percent a year.
You’ll notice that the Concord Coalition breaks up the comparison into different time frames (picking and choosing its beginning and ending points, which distorts the numbers). What it doesn’t do is give you a continous graph comparing health care spendign in the private sector to spending by Medicare.
You’ll find a graph that does that on p. 3 of my report on Medicare here:
http://www.tcf.org/Publications/Healthcare/Maggie%20Agenda.pdf
You’ll see that over some periods of time Medicare did a better job of reining in costs; over other periods of time private sectors insurers did better.
In the 1990s, private sector insurers were “managing care” and they controlled spending. Unfortuantely, too didn’t just refuse to cover ineffective care; too often they said “no” to effective care. They made their decisions based primarily on cost, without looking at comparative effectiveness research.
In 1999, private insurers gave up on managed care.
Since then, Medicare has done a better job of reining in spending.
Taxing employer based health insurance is a bad idea. Too many employers would decide “the benefit is no longer that valuable to my employees–and they would drop it.
That means more people would be uninsured. And if we tried to cover them all under universal coverage, a great many of them would need subsidies. Taxpayers could not afford to provide subsidies for so many people all at once.
Most of the savings to fund health care reform will come from eliminating waste.
One out of three healthcare dollars are wasted on ineffective treatment.
There’s a lot of low-hanging fruit out there. See this post my former JAMA editor George Lundberg. http://74.125.93.132/search?q=cache:-GqEj3CPo18J:www.thehealthcareblog.com/the_health_care_blog/2009/08/how-to-rein-in-medical-costs-right-now.html+Lundberg&cd=2&hl=en&ct=clnk&gl=us
Former CBO director Peter ORszag (now White House budget director) understands this.
The current CBO director (Elmendorf) doesn’t. He may have an ideological bias– he was trained by the country’s best known ultra-conservative economist, And Elmendorf’s first taste of fame came when he helped kill the Clinton healthcare bill in the early 1990s. See this post on Elmendorf: https://healthbeatblog.com/2009/07/who-is-douglas-l-elmendorf-and-why-is-he-throwing-cold-water-on-reform-and-why-does-the-media-report.html
IF necessary, we can raise income taxes on the very wealthy a second time–perhpas in a year or so.
What the Democrats propose is simply raising taxes on the wealthiest 1.2% to the levels where they were in 1995– after President George Bush Sr. hiked taxes slightly.
See https://healthbeatblog.com/2009/07/taxing-the-wealthy-to-finance-healthcare-reform.html
At that point,taxes on the rich were still at Historically Low Levels–this is one reason why we have such enormous gaps between the very rich the upper-middle class and the middle-class in this country.
The other reason is that while the rich have gotten richer– much, much richer in the past 20 years, middle class income, after adjusting for wages, has remiained flat to down.
See also Pat’s comment addressed to you.
Codelia–
What is most important is to see how much both Medicare and private Sector insurers are paying out in reimbursements over time (see graph I refer to above.)That gives you the overview..
See also Pat’s comment addressed to you. As often as not, other comparisons favor Medicare.
Gregory– Yes co-ops vs.
big insurers would be David vs. Goliath
Fred, Cordelia, Pat, Gregory
Krugman is close to right, though the wording is wrong. Since 1970, Medicare spending has risen by 8.7 percent a year, while private sector reimbursements to doctors, hostpials and patients (NOT private sector PREMIUMS) has risen by 9.7 percent a year.
You’ll notice that the Concord Coalition breaks up the comparison into different time frames (picking and choosing its beginning and ending points, which distorts the numbers). What it doesn’t do is give you a continous graph comparing health care spendign in the private sector to spending by Medicare.
You’ll find a graph that does that on p. 3 of my report on Medicare here:
http://www.tcf.org/Publications/Healthcare/Maggie%20Agenda.pdf
You’ll see that over some periods of time Medicare did a better job of reining in costs; over other periods of time private sectors insurers did better.
In the 1990s, private sector insurers were “managing care” and they controlled spending. Unfortuantely, too didn’t just refuse to cover ineffective care; too often they said “no” to effective care. They made their decisions based primarily on cost, without looking at comparative effectiveness research.
In 1999, private insurers gave up on managed care.
Since then, Medicare has done a better job of reining in spending.
Taxing employer based health insurance is a bad idea. Too many employers would decide “the benefit is no longer that valuable to my employees–and they would drop it.
That means more people would be uninsured. And if we tried to cover them all under universal coverage, a great many of them would need subsidies. Taxpayers could not afford to provide subsidies for so many people all at once.
Most of the savings to fund health care reform will come from eliminating waste.
One out of three healthcare dollars are wasted on ineffective treatment.
There’s a lot of low-hanging fruit out there. See this post my former JAMA editor George Lundberg. http://74.125.93.132/search?q=cache:-GqEj3CPo18J:www.thehealthcareblog.com/the_health_care_blog/2009/08/how-to-rein-in-medical-costs-right-now.html+Lundberg&cd=2&hl=en&ct=clnk&gl=us
Former CBO director Peter ORszag (now White House budget director) understands this.
The current CBO director (Elmendorf) doesn’t. He may have an ideological bias– he was trained by the country’s best known ultra-conservative economist, And Elmendorf’s first taste of fame came when he helped kill the Clinton healthcare bill in the early 1990s. See this post on Elmendorf: https://healthbeatblog.com/2009/07/who-is-douglas-l-elmendorf-and-why-is-he-throwing-cold-water-on-reform-and-why-does-the-media-report.html
IF necessary, we can raise income taxes on the very wealthy a second time–perhpas in a year or so.
What the Democrats propose is simply raising taxes on the wealthiest 1.2% to the levels where they were in 1995– after President George Bush Sr. hiked taxes slightly.
See https://healthbeatblog.com/2009/07/taxing-the-wealthy-to-finance-healthcare-reform.html
At that point,taxes on the rich were still at Historically Low Levels–this is one reason why we have such enormous gaps between the very rich the upper-middle class and the middle-class in this country.
The other reason is that while the rich have gotten richer– much, much richer in the past 20 years, middle class income, after adjusting for wages, has remiained flat to down.
See also Pat’s comment addressed to you.
Codelia–
What is most important is to see how much both Medicare and private Sector insurers are paying out in reimbursements over time (see graph I refer to above.)That gives you the overview..
See also Pat’s comment addressed to you. As often as not, other comparisons favor Medicare.
Gregory– Yes co-ops vs.
big insurers would be David vs. Goliath
Maggie – Thanks for the details regarding the comparison between Medicare and private insurers.
Regarding your other points, one which still leaves me unconvinced is the statement that we can avoid taxing health insurance in order to restrain costs adequately. Income is rising far less rapidly than healthcare expenditures, and so income taxes would fall behind rising costs unless tax rates kept escalating, which seems at least as impracticable politically as taxing insurance.
Ultimately, cost control does involve curtailing duplicate or unnecessary facilities, tests, and procdedures, but I see that as proceeding over an interval of several decades, and would not be adequate to mitigate rising expenditures as a percentage of GDP over shorter intervals. Even the Lundberg recommendations would encounter fierce resistance, and would accomplish only a small part of what is required. His recommendations, in fact, include a number of elements that not every expert familiar with the specified procedures would necessarily agree with. I therefore see those recommendations as examples of what comparative effectiveness research would address, but not as items to be implemented based on the perspective of a single individual.
Until adequate control of healthcare costs is achieved, and while it is in progress, I expect that there will be no satisfactory alternative to taxing health insurance, including insurance for upper income members of the middle class, politically unpalatable as that may be.
Gregory:
Coops are not intended to be huge regional organizations, although they could be.
They are intended to be not-for-profit insurers, run by their members, in which any excess earnings go directly to the members in proportion to their contributions.
To fully earm their tax-exempt status, not for profit insurers, such as 501(c)(12)s and 501(c)(9)s are supposed to compete in areas which commercial insurers do not excel.
One area would be in providing affordable long-term protection to loyal, long-time customers.
This is where legitimate tax-exempt insurers should be competing, not on paying providers lower rates than commercial insurers.
We need to be calling coops as 501(c)(12) insurers, to emphasize the importance of operating distinctly different from their commercial competitors.
Don Levit
Establishing co-ops is an idea that’s doomed to failure and, for that reason, the Big Insurance companies are certain to love it.
The belief that any newly-created, public-backed co-ops can compete with Big Insurance anywhere at any time is frankly ridiculous. It’s like suggesting that a small co-op fruitstand will make the market more competitive by opening across the street from a Sam’s Club/Wal-Mart mega-complex. It simply won’t succeed.
Initially, it’s reasonable to assume that Big Insurance would oppose co-ops for the same reasons they oppose the public option. But if co-ops really cannot succeed, and if it shifts the focus away from what they’re doing, the Big Insurance carriers will support it hammer and tong. Especially if it become labeled as a negative approach, the carriers are still going to love it.
In the past 20 years, Big Insurance has found a way to turn every seemingly negative approach (e.g. CDH, high-deductible plans, etc.) into profits by diverting employers’ attention away from the real causes of skyrocketing health plan costs. The same will hold true of co-ops.
And Cigna, Blue Cross, Aetna, United, and others will find a way to support the idea of co-ops as it becomes increasingly evident that they won’t work. What’s more, they’ll pay lots of lip-service because co-ops will divert attention away from their “business-as-usual” efforts to dominate the markets those co-ops are meant to serve.
If such co-ops are formed and try to compete with the Big Boys, it’ll play right into the hands of the carriers. When the doomed co-op fails to work in a big market currently dominated by a couple of carriers (like Blue Cross and Aetna in Philadelphia), maybe Cigna will find a way to ride in on a white horse with some cockamamie plan to save the day, or, at very least, split spoils with BC and Aetna. In the end, no matter what the outcome, Big Insurance will still win.
I remember the days in the 1980’s when independent staff-model and group HMOs were failing. Carriers waltzed in with PPOs and built their (now indomitable) position by acquiring those HMOs and selling providers on participating in their so-call “less restrictive” networks. The Big Carriers found a way to turn the fear and angst most employers and providers felt toward managed care at that time into a system of healthcare delivery and finance from which few have every been able to escape.
What do they call that psychological condition when hostages fall in love with their abductors? In my 30 years in this business, I’ve seen medical providers and employers taken hostage by Big Insurance. As suffering, long-term hostages, they’re truly scared to death to leave their abductors because the managed care companies have so completely brain-washed them that they cannot live without the Big Insurance business model.
So co-ops will only solidify Big Insurance’s strangle-hold of American healthcare. If it’s tried, it’s bound to fail. And, sadly, all those hostages who glimpsed the co-op approach and held a brief glimmer of hope for freedom from captivity, will have to sink back into hopelessness. Never fear, though, their insurance carriers will reassure them: “Don’t worry, things will get better.”
A.J.
With your 30 years of experience, do you have any suggestions of ways to compete with the big boys, that is not government funded?
Coops are intended to be member owned and member run (the government is not supposed to be a member).
They also are intended to be the David that changed Goliath’s way of doing business.
Don Levit
Don,
The best way to compete is one that’s worked for major clients of mine for the past 15 years: Eliminate the managed care middleman and contract directly with medical providers.
This approach, not co-ops, is the real David vs. Goliath. It calls for exceptionally bold and confident CEOs (who’ve historically stayed uninvolved in matters related to health benefits within their own companies) to leave their big carrier and contract directly with doctors and hospitals.
If you go to my corporate website ajlester. com, you’ll find case studies of companies that have successfully developed their own direct networks. In doing so, they’ve regained the control over their health care plan operations and finances that most employers have relinquished to managed care companies.
For self-insured employers (the majority of larger companies are self-insured), medical claims are paid by the insurance company using the employer’s funds according to the contracted terms and and reimbursements of the managed care network’s provider agreements. The employer has zero input or control over these agreements, and little, if any influence over how the claims are paid. Blue Cross, United, Aetna, Cigna, and others never release details of their agreements with providers, so it’s impossible for employers to know whether they’re fair or the actual amount of the middleman “skim.” All the employer knows is that plan costs keep rising every year.
In the direct contracting model, claims are paid from the employer’s funds, but they’re processed by independent Third Party Administrators (TPAs) according to the contractual terms and reimbursements negotiated directly between the employer and the medical providers. This pure “buyer-seller” relationship is unencumbered by the managed care middleman’s profit motives and need for total control.
The idea behind co-ops is a good one, but unless the largest employers, who are now clients of and held hostage by the Big Insurance carriers, are willing to leave those carriers and get behind the co-ops, the whole idea will fail.
The giant managed care companies have been so effective as middlemen that most employers and providers believe there’s no really credible alternative. The middlemen have created a fallacy that passes as a virtually unassailable form of conventional wisdom among employers. It goes something like this: “If Blue Cross (or United, Aetna, etc.) with their size and millions of members can’t handle this, no one can.” Consequently, otherwise business-savvy employers and medical providers summarily dismiss the idea of directly contracting with each other. They remain hostages of Big Insurance.
My concern, Don, is that this prevailing belief will carry over into any consideration of co-ops as a viable alternative. In any given market, co-ops will have to go in and compete with a middleman-created business model that’s brainwashed employers and providers into thinking there’s no other way to do business.
Over the years, I’ve found some success at overcoming that brainwashing whenever we’ve approached providers with the idea of contracting directly with employers in their own community. If the employer is committed to the approach, most providers jump at the opportunity for a direct agreement. Although it’s almost always perceived as a good business decision for providers to make, sometimes its biggest attraction is that it is NOT a conventional commercial PPO network agreement. At those times, in that situation, the direct employer/provider agreement is the only respite from the managed care “hostage” situation that most employers or providers will ever experience.
A.J.
I like a lot of the characteristics of your program.
It seems like these agreements are more transparent than commercial carriers’ agreements.
In addition, one would think the employer has less reason to delay payments than the insurer.
The self-insured employer is not really in the for-profit insurance business.
I am surprised more employers have not taken advantage of this option, being that self-insurance has replaced commercial insurance for the large employers.
Where I think the not-for-profit insurer can also excel, is not only in a program like yours, but also a long-term arrangement.
An arrangement where former employees can stay on the same plan.
An arrangement where loyal, long-term customers are retained because they can afford the insurance through flexible pricing.
An arrangement where selling to the public is not in the cards, but selling to those with a common reason for joining is just as important.
This common bond will help retain the loyalty, so that public solicitation is not even necessary to keep the insurer healthy.
Now, that’s another way to attack Goliath!
Don Levit
Don,
Thanks for your feedback. You’re right, the direct contracts are completely transparent. With no middleman interests to obfuscate the process, full disclosure of all contractual and financial terms to both parties is possible.
You’re also correct about the claim payment timeframe. My two largest clients’ average turnaround on paying clean physician and hospital claims is less than 10 days. Compare that to the interminable delays suffered at the hands of managed care companies. I guess when you’re Big Insurance and control tens of billions in payable claim dollars, every day of delay is golden.
As for why more companies don’t embrace this business model, I’ve lamented that point since the early 90’s. Even my clients, who sit on various healthcare boards and coalitions, to whom they present the results of direct contracting, are miffed by the lack of more interest. Along with these clients, we’ve come up with several plausible reasons direct contracting is not in wider use:
1. The initial advice about the approach is not sought from companies for whom it works, but rather from the carriers themselves. I’ve seen countless HR executives over the years go to “clear the idea” with their current carrier. The idea of direct contracting gets cleared alright, right off the table.
2. The concept of direct contracting has to have the highest level stakeholders to succeed. That is, CEO and CFO-level executives, who, perhaps, better appreciate the age-old business concept of cutting out the middleman, have to drive the corporate initiative. HR VPs and even Sr. VPs are simply too vested in the status quo of conventional commercial managed care to propose or support anything outside that box. A big change for them is not trying a different business model, but rather switching carriers when costs go too high or service drops too low. The companies that have succeeded with direct contracting are those whose CEOs and CFOs realize that “changing deck-chairs on the Titanic” is not the way to go.
3. Finally, with virtually all doctors and hospitals under contract with one or (mostly)many manged care networks, medical providers have made themselves accessible nearly exclusively through these networks. Employers believe, and carriers encourage the belief, that the only way to do business with the providers is through the managed care network. In turn, providers believe their only access to employers is through the insurance company. Countless times over the years, my approach of a medical group, hospital, or healthcare system on behalf of a direct employer is the very first time they’ve contracted directly. Medical providers must let employers in their communities know that they’re available for direct contracting or commercial networks will remain the only option for both parties. The irony is, providers are generally prohibited from doing so by clauses in their PPO and HMO agreements that forbid them from soliciting business from the very employers who are represented by the managed care company.
The ideas you suggest for a long-term arrangement are well-stated and are certainly achievable under a system where employers have more input over where and how their health plan dollars are being spent than they do under current managed care arrangements. To that end, why not have a system whereby a certain percentage of every claim dollar is put aside into an account for the purposes of paying for the initiatives you suggest. The only hitch to it I see is the same one that beleaguered employers have suffered with all along…the insurance companies will still control the financing and operation of the initiatives. I’m afraid that will be the case for any new initiatives that come along until employers are willing to take a more active role in the process and stop relinquishing control to Big Insurance.
A.J.
I am curious if your organization is tax-exempt?
If so, on what basis did you earn that designation?
If not, in my opinion, it could be tax exempt under a couple of scenarios:
1. The services and benefits are not available commercially (it seems like there are few organizations like yours)
2. Your services are similar to insurers, but for a substantial reduction in cost (the charitable designation).
Don Levit
Don,
My firm, A.J. Lester & Associates, Inc., is not tax-exempt nor a charitable organization. We are a consulting firm whose fees are paid by the clients we represent in the negotiation of the direct agreements.
For example, a major employer will engage our services to negotiate direct agreements with doctors and hospitals in a particular area in lieu of using a commercial PPO network. We are never a party to the actual agreement but simply facilitate the process of direct contracting between the employer and the medical provider. Once duly signed, the agreement is directly between the employer and provider. At that point, the employer generally uses a third party administrator (TPA) to process the claims according to the contractual and reimbursement terms of the agreement. My firm’s ongoing involvement is to maintain the network agreements and handle any matters related to those contracts. We also function as a quasi-provider relations contact for the employer, handling inquiries from providers related to their participation in the direct network, etc.
While my firm represents the employers’ interests in the negotiation of the direct provider agreements, we’re respectful of provider needs and wants. Unlike commercial PPOs that seek unfair advantage of providers whenever/wherever possible, we seek to implement “win-win” agreements between the employer and the providers. The longevity, stability, and strong employer/provider relationship inherent in all the direct networks we’ve developed are proof-positive that “win-win” agreements work. The fact that our clients’ annual medical costs per employee are far below the national average is further evidence that employers needn’t shortchange doctors with unfair agreements to achieve cost savings.
Your questions and comments suggest further discussion. If you will visit my website ajlester. com, I invite you to contact me by phone or email.
Fred-
We’re going to begin to see Medicare cutting way back on unnecessary treatments next year.
Medicare officials have already said they plan to cut payments for many cardiac procedures.
When they do that, doctors will find them less lucrative and do fewer of them. (We’ve already seen this with diagnostic testing, adn you can expect more cuts in fees–and, I would guess, higher co-pays there.)
Yes, there will be protests. but we can’t wait to do this over a period of years. Medicare is getting close to running out of money.
Moreover, this unnecessary treatments are doing harm.
This is why ouotcomes are worse for heart patients in places like Manhattan (where we do many more angioplasties and bypasses) than for patients in Iowa, or patients treated at Intermoutnain in Utah, or Geisinger.
We do many more surgeries than most countries–and outcomes are often worse.
Private insurers have said that they will follow Medicare’s lead in this area.
We will all be better off, but it is going to take some adjustment.
As for taxing insurance: a) it would mean more employers would drop insurance and we cannot afford to let that happen. (Big employers usually pay 75% of their employees’ premiums–if they drop insurance they won’t pay as much into a pool to help subsidize insurance for everyone)
and b) we would wind up taxing middle-class and upper-middle class people in the middle of a recession. (Trust me: the recession/depression is not over. )
If we need more tax money,we’ll raise taxes further on the top 1 1/2 percent–even with the proposed surcharge, the taxes they pay are still historically low.
Since 1980, we’ve been redistributing income in the wrong directiom–up the ladder toward the rich, and as the rich got richer, huge gaps opened up between the wealthy, the upper-middle class, the middle-class, the working poor and the poor.
Those gaps have undermined the society-and the economy.
There are people in this admnistration who understand that we need economic policies that begin redistributing income in the other direction.
Don & A.J.–
If you gentlemen would like to do business with each other, that’s fine.
But maybe you could take your discussion off the blog?
Up to a point, readers may be interested in A.J’s business model–but only up to a point. The fact that others are not commenting suggests that you’ve taken over the thread . . .