If someone had doubts over The Governator . . .

[Oleksandr]

. . . he is all for socialized medicine. Yay for California.

"The bottom line is that the plan is not without flaws," Schwarzenegger said during a news conference at a University of California, Davis cancer center in Sacramento. "But it is a good law. And it is the time for California to move ahead with it, thoughtfully and responsibly."

http://www.lacrossetribune.com/news/nat ... c1efa.html

[Kaelan]

Being in the UK and thus having the NHS, I'm not quite understanding how the american system works and what the arguments are about (both pros and cons)?

[Oleksandr]

Being in the UK and thus having the NHS, I'm not quite understanding how the american system works and what the arguments are about (both pros and cons)?

In essence, US is 90% NHS, while UK is 100%; and that one 10% of US that is semi-free but heavily regulated is keeping the whole thing afloat.

Thanks to Obama-care most of that 10% is going away with sure future amendments for a complete take over.

Pros for Obama-care were/are to cover more people who need healthcare. Cons has been the cost (duh), with few voices also saying that it takes away your liberty (Tea Parties, hopefully).

[musashi]

In essence, US is 90% NHS, while UK is 100%; and that one 10% of US that is semi-free but heavily regulated is keeping the whole thing afloat.

Actually knowing people who have died because they didn’t have health insurance kinda makes it feel like the 90% with medical coverage in the US might be a bit of an over statement. In the period before Obama care if you showed up at a hospital in a acute critical condition the hospital was obligated to treat you. Not acute forget about it - please leave. Not critical (without payment up front or health insurance coverage) you receive the absolute minimum care to get you back on the street, and sometimes that included a cab ride 20 miles away so that you’d become some other hospital’s problem. The socialized medicine was only provided to people without the means to pay.

Illegal aliens pass this means test very easily. If they happen to own any assets, they usually use an alias. But most illegal aliens are also quite poor.

The problem is and has been California’s for the last 60 years, until they created a more substantial barrier. And now Arizona where the fence ends is in the hot seat. Both states are right on the Mexican boarder. The numbers and proportions of illegal aliens are the highest in these two states of the US. California has a rather large economy and a large base of jobs suited for illegal aliens. California was better able to absorb the impact of these parasites, but the costs are staggering. The triple fence is now completed from the Pacific Ocean all the way to Tucson, AZ. Now the human traffic mainly goes through Tucson (it actually used to go through my home town San Diego). Arizona doesn’t have the bandwidth economically or the jobs base to cope with the invasion.

Just after Obama took office, the insurance companies spoke at a Senate hearing. They were asked

• Why are your premiums skyrocketing?
• Why are you taking people’s premium payments, and then rejecting them as clients when they get sick?
• Why are you placing lifetime caps (some as low as $500K per person per lifetime) on the benefits you provide? Yes the insurance company is saying your life is worth $500K. After that you can go crawl in a hole and die.

The insurance company’s explanation was unabsorbed costs. All the “free healthcare” the hospitals are required to provide has costs. The “free healthcare” is not at all good. The government sources of payment - Medicare and Medicaid are talented at telling the hospitals "there will be no or very little payment for patient X" (in fact Obamacare cut reembursements even more!) The hospitals must balance their books and make a profit, done by raising their fees to the insurance companies. The insurance companies say great! I’ll just mark those costs up and pass it along and we are all making more money.

The insurance companies told the Senate that if everyone was required to buy health insurance premiums could be spread over a larger base of people. The flawed assumption was that with greater overhead absorption individual costs would come down. The crux of Obamacare is a federal requirement that each individual buy healthcare insurance. I think this is kinda like Switzerland’s system. The socialism bit comes in that a greater number of people will receive a subsidy to purchase the insurance.

California has long suffered from this vicious cycle I’ve just described. The federal government has not done enough to prevent illegal immigration, nor enough to remove illegal immigrants. Immigration is clearly a federal issue, and yet individual States suffer as a result of poor federal policy. I understand the Govenator’s comments completely. And I understand the need for Arizona’s recent immigration law. All of it grows out of 60 years of flawed US and Mexican government federal policies and law enforcement.

This is a great case study for how the free markets functions. The free market has had a positive and negative impact in this case. It seems that the seed of the problem stems from humanitarian aid. Could be a fun topic to kick around.

[Oleksandr]

In essence, US is 90% NHS, while UK is 100%; and that one 10% of US that is semi-free but heavily regulated is keeping the whole thing afloat.

Actually knowing people who have died because they didn’t have health insurance kinda makes it feel like the 90% with medical coverage in the US might be a bit of an over statement.

You'll need to re-read my post.

I said 90% regulated and controled, not 90% covered.

[Kaelan]

The UK system is somewhat different - there is no "insurance" company to pay. The NHS is funded thru a national tax called "National Insurance" which is in effect another income tax on top of "income tax". Hence the "free at the point of service" statement that is often made.

You can go private if you wish - benifits being no waiting list (it can take up to 2 months to see a specialist on the NHS) and a nicer looking hospital. The real fun starts when somebody goes private for some health treatment and their private doctor botches the job. At this point the NHS smiles and says that it won't help as it wasn't their work and that you can go to another private hospital to get it put right without their help.

This is probably where most of the complaints abroad about the NHS come from. Because the system is a national health service with hospitals & staff run and paid for by the goverment direct they have what they call "effective treatment" cut of points. In otherwords if you have a serious cancer or ailment that will kill you in 6 months and their is an expensive drug that will give you a further 3 months the NHS won't provide it. They only have finite funds and have to priortise their treatments accordingly. It is actually a case of 3 months for an old adult, or a treatment for a baby.

As most people tend to want that extra 3 months they find that they have to go private, and then complain when they find out how much treatment actually costs. They even get more upset when the NHS tells them to choose between their 6 months or total private care, hence the bad press.

From what I've seen in the US the problem looks as though you're trying to do a NHS 'lite' thru the insurance companies, as opposed to having goverment run programs from the ground up bypassing these companies altogether.

[musashi]

From what I've seen in the US the problem looks as though you're trying to do a NHS 'lite' thru the insurance companies, as opposed to having government run programs from the ground up bypassing these companies altogether.

Sort of an NHS Lite at this point. Obama care also took away the preexisting conditions and life time caps that insurance companies were using. So now with a bigger customer base (potentially reduced prices) and reduced caps on the cost for treatment or a mechanism for insurance companies to break their promise(increased prices) no one is really sure where prices will go. I expect upward, but I think the standard of care should remain at current levels or improve, at least until tort reform is enacted. Once the right to sue under Obama's private insurance scheme is taken away the whole system will quickly begin to look a lot like NHS Lite – with the Lite bit being lite on government administration of the system.

I said 90% regulated and controlled, not 90% covered.

Actually the US has the premier medical regulatory system in the world. The backbone is our federal code of regulations. But interestingly enough the courts probably play the biggest role. Every day complaints are considered between physicians and patients. And the effect of these cases over time has resolved and defined a very high standard of care.

In Europe the regulation is somewhat uneven. And as such the lack of regulation sort of makes Europe the minor leagues of medicine. I'll give you an example from my field: medical devices. It is very difficult to obtain authorization to sell a new type of device in the US (PMA process). The process takes time and money, the FDA can set very stringent performance and outcome expectations and often requires large clinical studies.

Most companies obtain CE marking years before US authorization. Why because to sell in Europe all you need do is pay a private third party (a Competent Authority) to register your product as safe and conforming to the MDD (mostly labeling requirements). I've had products over this hurdle in under a month for as little as $10K. Once you have CE, each of the EU states can still place added restrictions. Generally the countries less adherent to regulations Spain, Portugal, Italy, France etc. become an entry point. Once effectiveness is shown in Europe (via actual sales vs. a clinical study as in the US) the tougher markets UK, Germany become accessible.

So actually I think the US medical system is far more regulated than the socialized systems like NHS in the UK. And if we extend our definition of controlled beyond simple influence of the government inspector, our legal and judicial system being part of the “control”. I'd say the US system has more controls too.

[Raaz Satik]

Actually the US has the premier medical regulatory system in the world. The backbone is our federal code of regulations. But interestingly enough the courts probably play the biggest role. Every day complaints are considered between physicians and patients. And the effect of these cases over time has resolved and defined a very high standard of care.

Litigation (actual legal costs) or the threat of litigation (Dr's over diagnosing explatory tests) is a main driver of US medical costs.

For what its worth my insurance premiums went up 17% this year. I'd love somebody to explain where that 17% went. Treatment isn't getting better. As somebody already mentioned Dr reimbursements are actually going down not up.

[Oleksandr]

Litigation (actual legal costs) or the threat of litigation (Dr's over diagnosing explatory tests) is a main driver of US medical costs.

Has there been an actual study of the many, many gov. regulations that all cause the constant rise in prices, and which one is more significant?

I've heard of various numbers but just for an instance, it is hard to tell which one causes higher price increase: litigation/defensive medicine OR forcing insurance companies to package lots of coverage that the buyer doesn't actually want (i.e. including rare diseases).

[musashi]

I've heard of various numbers but just for an instance, it is hard to tell which one causes higher price increase: litigation/defensive medicine OR forcing insurance companies to package lots of coverage that the buyer doesn't actually want (i.e. including rare diseases).

I bet Raaz’s 17% goes substantially into both of those buckets. The care providers probably pocketed a very small part of that extra money.

But wait on the criticism of litigation for a moment. The litigation has served to define a US standard of care that is very high. With each new case, a judge and/or jury decides if the care provided in a specific circumstance was sufficient. At its heart this medical litigation situation is very similar to ideas we’ve tossed around at length. In more than one thread the concept of objective standards and an empowered judiciary has been a promoted solution to many social problems. How is litigation in medical cases any different?

I’ll use an example from a field that I have some experience with – Type 1 diabetes. Prior to 1970 people with diabetes used to estimate their blood sugar by pissing on a strip of paper that qualitatively measured protein. Cheap test, great for medical costs. Problem is urine strips are not a very accurate or sensitive test to measure blood sugar.

Then came single point blood glucose measurement(1970 to 2000). The test is more accurate and sensitive measuring blood sugar than urine strips, but also more expensive. But blood sugar levels have dramatic oscillations, and the single point measurement can’t practically describe changes in blood sugar.

Now we have continuous blood glucose monitors (2000 & on). The systems alarm if the user is about to fall in to a stupor or blood sugar spikes. These are life saving systems, but again these systems are more expensive than the single point measurement.

I’ve listed three standards for care. Insurance companies are driven by a profit motive. There are no regulations that require insurers pay for one technology over another. It is in the insurance companies operating interests to drive wards towards the cheapest treatment alternative.

Some low cost insurers are currently attempting to define a standard of care that urine strips are good enough to manage diabetes. People will be eventually be harmed by the policy. And litigation is the mechanism to persuade insurance companies of an appropriate standard of care.

Ultimately the cost of litigation serves and a counter force within the insurance company’s business model to define a standard of care. The simplified formula might look like a see saw with standard of care as the fulcrum.

Operational costs............standard of care...............Litigation cost

I always assumed whenever we arrived at the "let the judge sort it out" solution, that each of those situations would mirror the US healthcare care system. You don’t like this type of arrangement?

What should we do differently?

[redhotrebel]

Then came single point blood glucose measurement(1970 to 2000). The test is more accurate and sensitive measuring blood sugar than urine strips, but also more expensive. But blood sugar levels have dramatic oscillations, and the single point measurement can’t practically describe changes in blood sugar.

And before that they would sip the urine to determine glucose levels. Not really relevant but a gross history lesson. "Thomas Willis added the word mellitus, from the Latin meaning "honey", a reference to the sweet taste of the urine."

Some low cost insurers are currently attempting to define a standard of care that urine strips are good enough to manage diabetes. People will be eventually be harmed by the policy. And litigation is the mechanism to persuade insurance companies of an appropriate standard of care.

I disagree Musashi, it's in the best interest of the insurance companies to provide accurate and efficient testing methods to prevent hospitalization of a client that may suffer secondary problems from complications of uncontrolled DM. By the way as a side note: many pharmaceutical companies donate "samples" of medications and supplies to the "under privileged". This helps them advertise to doctors/hospitals/clinics for their product.

In reality the free market solves the problem. If an insurance company doesn't offer the treatment/coverage a person requires said person will go to a different company the same way the consumer chooses any goods/services.

The original article isn’t linkable anymore but I assume it has to do with UHC and cost increases. I’ve done medical billing before so maybe I can shed some light on the situation for those who are unfamiliar with cost.

1) Medicare (federal coverage) and medicaid (state coverages individually named depending on what state you live in) do not reimburse hospitals for the full cost of expenses, approx. 30%-60% of actual cost incurred by that patient. It is also a VERY complex system to request reimbursement. TARs etc... and if any information is missing/incomplete/or the auditor just doesn’t like your hand writing it is returned to be refilled out by the hospital. Then it takes 3-12 months for actual reimbursement. So how does the hospital/clinic make up for the costs? They increase the cost on private pay and insurance paying consumers.
Hospitals cannot turn away repeat non-paying customers. Even if they come in daily with a stubbed toe or a runny nose. They have to be seen, and determined to be non-critical. This still cost time and resources that are not reimbursed. Once again those costs are written off if possible but overall costs on other consumers is increased.

2) People use hospitals and ER’s more than is necessary. I.e. one goes to the ER for an ear ache and spends $500 when they could have received the same treatment at a clinic for $40. The emergency room is for emergencies. You are paying to see a highly trained physician that is equipped to deal with more than a kid with pink eye. It’s like going to the Ritz and expecting to pay McDonald’s prices, it ain’t happening.

3) There is a LARGE tax levied on medical supply companies by the federal government. This is why a catheter that is essentially $2 to make cost the consumer $87 (not counting the fee’s to place the catheter).

4) FDA increases the cost on prescriptions by regulating them to the point that it’s almost impossible to make a profit on their new drugs. When a company finds a new drug to produce they have 12 years to create/test/retest/get approved and market that drug before a generic brand can be made. So on drugs that take 10 years to become “shelf ready” the pharmaceutical company has to increase costs to a point to reattain costs accrued during R & D. THEN if the drug works for something other than intended (i.e. viagra was created for angina but ended up not working for chest pain and had a different desired side effect) the pharmaceutical company has to go through all the hoops yet again without having the 12 years extended/restarted.

5) Insurance companies now have to increase premiums on healthy young people since they cannot increase premiums on the elderly or ill. So now person A who is a 20 y/o non smoker with no genetic predispositions must pay more because person B is a 97 y/o a smoker with a history of genetic issues, cancer, DM, heart disease etc... etc... Which makes coverage LESS accessible to person A than it was before.

Overall the free market is the best alternative to all of healthcare. It is logical that doctors and drug companies and insurance companies want to keep their customers alive for as long as possible because they are paying them. Sorry but you still can’t get money from a corpse. The more people that you keep alive means more people to send a monthly bill to for coverage.

For those that argue that “poor people” die every year blah blah blah that is a bunch of crap. Everyone dies, get over it. If you can’t stand the thought of innocent people dying because they are poor, become a doctor and offer free medical services or donate your money to them. Collectivism/socialism whatever you want to call it doesn’t work. Especially in medicine. UHC will NOT increase quality of care for the poor, all it will do is reduce the quality of care everyone else has to that level. You will see rationing for everyone rather than a small percentage of people that are currently on subsidized medical programs.

As for "immigration" that would not be a problem in the least if we stopped giving out free stuff. If there weren't any safety nets for anyone, then would we really be concerned if people moved here? The only thing they could "get" is a job, which is perfectly fine with me.

[Oleksandr]

Sigh, another rationalization for using force to make selfish people behave well.

All hail regulation! \o/

[musashi]

Overall the free market is the best alternative to all of healthcare. It is logical that doctors and drug companies and insurance companies want to keep their customers alive for as long as possible because they are paying them.

Red you did a great job defining some of the market pressures. But I want to open the hood on this statement. I think its fair to say the doctors want to keep their patients alive as long as possible. And probably drug and device companies would too, I can think of some exceptions. But I’m a bit curious about the broad statement that insurance companies want to keep their customers alive as long as possible. Perhaps some do hold this philosophy, but is it fair to assume that some don’t?

The "pay me now for preventive care vs pay me later for critical care" is a solid point. But what if the preventive care sums up to a greater expense than premature death from some critical complication? Does an insurance make more money by withholding preventative or early care if they are lucky enough to have ward die quickly and cheaply? This conversation happens all the time around the treatment of cancer. And I believe the lifetime benefit caps were the result of this thinking.

Most US health insurance works on a principal of capitation. Under this system a fixed fee is paid for each patient. The hospital makes a profit on those patients that do not receive service, and looses money when services are provided. Do you think that there is an incentive to kill off that proportion of patients consuming the largest amounts of services? One great way to achieve this would be to reduce the standard of care and provoke premature death. Another would be to delay critical care and provoke premature death. Either way no one makes a profit on sick people, they make a profit on people that do not seek medical care. So we use the “Tantalus” system of rationing, "You can have all the healthcare you want, as long as you don’t use any healthcare".

“Pass the trash” is another line of thinking for insurance companies and medical groups. The companies know that their wards will not be with them forever. Job changes and annual coverage changes are continuously re-shuffling the base of wards within any given portfolio. So likely a problem that you create today via inadequate preventative and early care becomes another company’s problem tomorrow. So in the long term it is likely that that insurance companies that DO invest in preventative care will see a substantial amount of their investment walk out the door, and new patients might end up costing you anyway.

Finally I’d like to consider this concept of “customer”. I don’t consider the people receiving the care as customers, that’s why I’ve been calling them wards. To me the customer is the payer, the entity that writes the check and decides who to buy from – in the US typically a company. And wouldn’t most customers seek comparable service at the lowest possible cost? If denial and delay generates a lower operating cost for an insurance company, thus allowing them to charge a lower price, isn’t it fair to presume that customers would buy? And buy regardless of the outcome for the ward?

BTW there really are several insurance companies attempting to stop covering the expense of single point blood glucose strips for DM patients (particularly type-2 patients).

[Benjamin Brieg]

We can boil this all down to a single statement; money equals life.

You rent your life to gain money and you spend money to continue living.

Any system that tries to ignore this reality is doomed to fail.

[musashi]

We can boil this all down to a single statement; money equals life.

You rent your life to gain money and you spend money to continue living.

Any system that tries to ignore this reality is doomed to fail.

I really like these statements! Very concise and broadly applicable. It rings a lot like the ideas of Thomas Sowell.

I can't deny the importance of the individual in this issue. But how do you gain redress if you spend money to continue living and end up dying because its more profitable for an insurance company or social payor like the State to take your money and not provide services? Obviously when your number is up – its up. But swindles have been a common practice since the origins of the practice of medicine. Whether its a doctor selling snake oil from the back of a caravan, or a medical expert paid by an insurance company to deny treatments. The current system of insurance where you spend money to continue living requires an active legal constraint to keep it fair and honest.

[Oleksandr]

The current system of insurance where you spend money to continue living requires an active legal constraint to keep it fair and honest.

That is what courts are for.

Regulation is based on Original Sin, that is everybody is guilty.