One hospital charges $8,000 — another, $38,000
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The best reform I can think of would be a combination of individually purchased (vs. employer) HSAs, where poor people get grants of up to the the full deductible per year in some kind of special account IFF they sign up for HSAs, and price transparency. Employers who currency pay for your entire insurance could give you an equivalent amount (plus deductible) which goes into your Health Savings Account.
You're then effectively paying an army of 300 million to constantly search for the best prices (or rather, to find third party organizations to search for the best prices for them). $3-5k/person is actually not that unreasonable for the poorest 30mm people and those covered by medicare/va/medicare-for-kids/etc.
I'm confident this could drop the prices of procedures by >10x, comparable to other countries. Americans are really good at driving down costs when they know the costs and are paying them out of pocket; look at how much cheaper it is to buy an iPhone in the USA vs. where it's made.
Before market-based healthcare will work, either 1) employer-provided health insurance benefits must be taxed as income or 2) individual healthcare purchases must be tax-free.
1) is an obvious political non-starter. 2) is a huge new loophole in the tax code and an accounting nightmare.
I don't see why it would be a huge burden to make individual health insurance tax deductible.
In contrast, corporations always write off employee healthcare premiums on their taxes. The issue isn't just the fairness of who pay taxes when, it's also about the distortions in healthcare markets caused by these policies.
All that being said, I think my original point about employer-provided insurance incentives distorting the healthcare market stands empirically. It just costs more if you buy your own health insurance. If taxes aren't the reason, what is? And what should be done about that, if anything?
No, HSAs no longer have caps (at least policies signed after a certain date, or in some states; I think pretty soon they'll have no annual or lifetime maximums at all); they're essentially "you're at risk based on your deductible for non-preventive services up to the out of pocket maximum, but excellent essentially-free care for the rest of the year once you hit that cap"). (there are some weird edge cases, like Rx drugs outside the hospital, potentially non-covered services, etc., but essentially a $500k hospital bill for some serious trauma would all be covered after you've paid the $5-7k out of pocket maximum (probably met on the way to the hospital or within seconds of entering the ER, if it's a serious trauma)
You can solve the "poor have no use for tax deductions" by giving them the out of pocket maximum into the HSA; it's free money in a personal allocated account. Or by making some deductions refundable or credits (similar to the EIC, which is most of why Puerto Rico wants to become a state now...most citizens would earn a federal tax rebate!)
The quick fix is probably to make personal purchases of health insurance also deductible, rather than removing employer health insurance deductibility. And push people into HSAs, with some people getting HSA account filling by the government. No one should be against this (except I guess "any tax decreases are bad, since we're already operating at a deficit")
I'm glad we agree. That's what I said a few comments ago. Though once you make insurance deductible, you might as well close all healthcare purchase loopholes.
I also said it amounts to a huge tax break, and I don't see a revenue-neutral way of getting that passed. And I don't see Congress hiking up the national deficit that much right now.
The only states I know are WA and CA. In WA, I like Regence Blue Shield; plans seem to be in the $100-150/mo range now.
In CA, there are also a lot of HDHPs in the $100-150/mo range. I'd specifically avoid Kaiser as an employer giving coverage, as some people really dislike Kaiser since you must use a Kaiser doctor, hospital, or other facility, but if you're an individual and like a Kaiser doctor, it might be a good choice. Otherwise a lot of people I know use Health Net, Anthem, etc.
I'm not a lawyer nor am I a licensed insurance agent so I'm hesitant to recommend specific plans.
I think these rates are low due to being HDHPs and the "best" patient group; 26-35 year old single male. Those are exactly the people who don't get individual insurance unless they're cautious people who join AAA, change oil on time, buy fire extinguishers, look both ways before crossing the street, etc. (and thus exceptionally good risks), and even then seek to minimize contact with doctors. I suspect the unhealthy ones are particularly likely to take jobs with insurance, or be on medicaid/prison/etc., in that bracket, or are so irresponsible as to have no insurance (because hey, even $120/mo is better spent on beer).
Rates don't seem that much worse for women (which is weird, since I'd assume most women get enough extra covered services covered now by an HSA to destroy the actuarial model for a $100/mo plan). The rates 4x once you add children, though. I tried also plugging in numbers for people born in 1969, 1959, 1950, and rates do go up, but only maybe 4x, too. So the prices are generally within a 10x range per insured, at least for healthy people or in places where there is no medical underwriting, tops, and under ACA, that will converge to 4x (although I'm sure by raising the low end by 50-150% and only lowering the top end by a trivial amount.) I always assumed all insurance was $500+/mo/insured, since that's what the group rates for small businesses seem to be, but that's due to adverse selection and inefficiency I think.
The real problem seems to be if you're unhealthy when looking for insurance, or have children (particularly with high medical costs), or have an acute high-cost event, or are poor enough that $100-200/mo is a hardship (even though I think $100-200/mo for health insurance, whether paid by the individual or the government, is pretty reasonable), or are, worst case, so unhealthy that you're also poor and thus doubly screwed.
Last year I had a PPO insurance plan at work that cost $216 per month for a family plan and had very tiny out of pocket expenses. This year my employer dropped the PPO as being unaffordable and switched to a HDHP that costs the same $216 per month for my family plan. Now the plan pays literally nothing for the first $3,000. And then 80/20 up to the first $7,000.
The ACA benefited a lot of people. If you're an older student living at home. If you have a pre-existing condition. If you develop a catastrophic illness. But if you're not in one of those benefited groups then you are paying for those benefited groups.
This guy's company sounds like they changed providers, pushed almost all the cost to the employee (under the mask that it costs the employee the same), is saving a ton of money, but tells the employees to blame the ACA.
While I work for a decent company, they even tried to blame some crap on the ACA trying to explain why the premiums went up this year. Except, they went up the same amount the year before, and the one before that also.
You can argue that those are beneficial steps, but they certainly distort the economics of making healthcare decisions.
Diabetes is expensive and has a bunch of complications, yet obesity and excess sugar consumption is a serious problem that doesn't get much help.
Some mental health problems respond much better to early intervention. Leaving them means the person drifts along, not thriving, sometimes leaving work or staying at minimum wage. (Or, in England, on disability benefits). Getting treatment early (which can be as little as 14 sessions of 1 hour per week of talking therapy) can effectively cure some people, and provides remission and resilience for others. But, again, this kind of stuff isn't as widespread as it needs to be.
Note this isn't any kind of human rights argument for better healthcare. It's firmly financial benefit.
EDIT: One way to do it nationwide would be to ask people to send in their bills (anonymized).
Not sure if it would make money, but I bet a lot of people would like it and benefit from it.
Anybody up for it?
Does it already exist?
As an anecdote, I was treated for cancer several years ago; trying to wade through the morass of bills, statements, treatments, third/fourth/fifth levels of providers, was simply unfeasible.
And hospitals naturally have a desire for this type of billing info to remain opaque since it dissuades any criticism of fee schedules.
That's not my specific take, but I bet the majority of Americans would take that argument.
Imagine taking all of the health premiums Google pays for its employees, and instead of feeding it in to a broken system, you build a world class health facility in Mountain View that's free to employees.
Whereas an insurance facility has incentive to try not to pay, because Kaiser is integrated, they incentive not to provide the service at all.
Each time you get a referral to a different department the sequence is 2-3 days to schedule the appointment. The first appointment has to be a consult, the next available being in 1-2 weeks. Then the treatment they want to try (if any), being 2-4 weeks out.
http://www.fiercehealthcare.com/story/cleveland-clinic-wal-m...
Says Walmart, Boeing, and Lowes have this for certain things (heart care, which is expensive and fairly predictable demand and common enough to be worthwhile)
http://www.employerdirecthealthcare.com/solutions/employers seems to be one model -- for employers that self-insure, they have negotiated cheaper case rates for common planned procedures.
Many large corporations are the health insurance provider for their employees, and then contract the administration of the insurance to one of the known brands like AETNA or Blue Cross or whatever.
So, they are one step ahead of you. Not exactly what you meant, but a more profitable version.
Not sure how you fix it, maybe by temporarily making it illegal to allow a company to provide health benefits through insurers to fix this. Employers should only be allowed to give you the money for an individual plan (most startups sometimes do this instead). Employers don't pay your auto insurance, home insurance or other insurance. Maybe a one time convert of employer groups to individual groups managed for risk, then, for privacy, for business, for better health care the individual has that (also probably a back up plan for those in need).
Why should employers know about your health? This is ancient thinking where you stayed with a company forever. It's also a privacy thing. I think it would also combat ageism. It will also make starting companies and competing much easier with less friction. It would also allow employees to more easily go from job to job, when you have an employer plan it is a scary predicament sometimes.
Cost can only be competitive if they are seen, they will be seen if it is moved away from employer provided.
What about the police department? Or the fire department? Or the post office?
Any government is, at its core, socialist. Rather than everyone funding their own private army, the state socialises the cost and provides national defence.
For other parts of society, it may also make sense to have everyone pay in to provide service which is to the public good. Police, fire, postal services are canonical examples.
In most countries, health care is also socialised. As is garbage collection, libraries, and road building.
The question - for most reasonable people - is where do you draw the line? Buses are socialised - what about taxis? Doctors are socialised - what about Lawyers, or accountants?
Private healthcare is still perfectly legal and fine, as is private health insurance, if you deem the state services are not suitable for you.
Hospitals should be helping people, not ripping them off >.<
you mean you can't afford to not _have_ the service? you can certainly be unable to pay!
The story I've heard is that at some point (WW2-ish?) there was some sort of government-induced cap on wages, so employers couldn't compete for employees merely on a cash salary.
So, as an unintended consequence to the original government action, employers started offering health insurance as a non-cash benefit.
(Please correct me if I'm wrong, I am admittedly going on hearsay.)
Here is some history regarding health insurance in the US that backs up that story: http://www.ebri.org/publications/facts/index.cfm?fa=0302fact
I understand the theory: People buy insurance; the insurance companies 'police' medical providers and regulate (through the market) the pricing of services.
From the outside it doesn't look like that works. From the outside it looks like very many more (often unneeded) tests are conducted. And it looks like the insurance companies are not squeezing the providers of health care, but are squeezing the patients.
They get paid by employers, but they'd make more profit if the health care they buy is cheaper. Since I regularly hear that prices are cheaper if you negotiate with the doctors it seems that insurance companies are not doing that negotiation.
So, given that they appear to be losing out on some profit, why? Why aren't they pushing the costs down?
Insurance companies figure out what stuff should actually cost, then enter into contracts with providers that says "Hey I know you're still making a decent profit if I only pay you $100 instead of $150, so take $100 and you'll make it up on volume when you become one of my preferred providers."
( (gross_revenue + interest_on_capital) - cost_of_care ) = profit
Hey no, I want to go to Hospital B.
Take bill home and sumbit to insurance if you are lucky enough to have insurance.
You just saved the system at least 75% of the cost.
This is one of the many sad points about the health system. Luck should have absolutely NO relation to whether you can afford reasonable health care. Reasonable health care should be available to Joe Blow who is earning minimum wage at your local city council and to Mr. Burns who is earning 20x more than Joe Blow.
In a few years it will literally be a crime to not have insurance. So cannot afford it? Not their problem - YOUR problem.
Yay 'murica.
Can't afford insurance? Well, here is a subsidy, or why not just go on medicaid? Can't afford insurance and make $60K a year; well, maybe individual plans should be more affordable...single payer is looking more desirable. Oh, you make $100K a year and STILL can't afford insurance (let's say no family is involved). Well how the f*ck are you spending your money? Oh, you just don't want to buy it because you are young and invincible? That's not how insurance works.
Yeh for America; they are finally catching up with the rest of the developed world!
Basically they didn't solve health care costs, they just dumped the cost onto the entire taxpayer base, the same way walmart keeps low prices by keeping their employees on food stamps.
The republicans fought tooth and nail against this because they know that viable solutions to problem (B) are very narrow, and Americans aren't going to want to go back to the have/have not insurance previous state.
But ya, it sucks to have all this political intrigue and drawn-out plans, but that's what happens when the country is so divided on the issue.
In the US it does. It will be much more cost-effective for healthy people to pay the penalty each year than to buy insurance. When they need care, they can buy insurance at the normal rate, since it will be illegal to deny them coverage based on a pre-existing condition. This is more than a little bit like shopping for fire insurance after your house has burned down. The primary difference is that politicians have not spent great amounts of effort telling me that I should be entitled to place bets on past events relating to burning houses.
This kind of system works very well in Switzerland, but the swiss system is much more mature and they've figured out all the kinks (the people are also responsible enough to vote for it directly).
Clearly he is undercompensated.
One of the weird things going on right now is that Doxycycline (a common antibiotic) has gone up in price 10-20x in the past couple months. A bottle which used to cost me $12 generic is now...$350! (due to a crazy FDA recertification process for the manufacturers)
My local pharmacist laid in a huge supply at the old price, and when I told him I was on an HSA (and where he saw my insurance deductible of around $250), he sold me the prescription for cash for $30.
Still covered for anything serious (essentially any ER visit, cancer, serious illness, imaging, etc.), but for anything else, I'm highly incented to negotiate like I would for any other product. Best of both worlds.
(and, with an HSA, if I spend less than $3-5k/yr, I get to put that money pre-tax into a Roth IRA equivalent retirement account. I generally spend $200-1000/yr on medical care, so this tends to work out well for me; I don't think I've ever spent more than $1500 in a year. A lot of employers will just give you that money (and pay your premium) if you pick an HSA plan vs. a PPO plan, since it saves them approximately that much in premium)
I'd be willing to pay some premium to cover everyone in the country vs. just myself, and to ensure I would have full coverage regardless of income. I don't think I'd want to pay a flat 10% on all of my income without limit for that, on top of taxes, though. (although, between medicare and 3.8% obamacare surcharge on income and capital gains, it's already nearly 10% up to 100k)
In addition to HSA, what I'd really like is truly universal minimum standard of care -- not quite where the NHS is, but maybe 20% of that -- to cover preventive and "very cost effective" treatments. The problem is while the NHS is able to use QALYs in making decisions, I don't think the US government would be so rational; we'd end up over-covering dramatic diseases and under-covering less dramatic diseases. I don't believe a $500k intervention for an indigent old person with limited benefit should be paid by taxes, since that same $500k could cover childhood immunizations or preventive care for 5-10k people.
You're not comparing like with like. Comparing a figure (presumably) calculated by taking the GP's effective tax contributions and multiplying by the proportion of UK public spending that goes to health (~19%)[1], with a figure of the direct cost of insurance, is not an accurate way of comparing healthcare costs between countries.
Most actual comparisons I can find between effective cost of healthcare between the US and UK, e.g. [2], seem to conclude that the US pays just over twice as much as the UK per capita (~$7k vs ~3k).
(Also, it's not a "flat 10% on all your income", you misunderstand the GP. Our income tax system is progressive, just like the US's. The NHS is funded from general taxation (including NI payments)).
[1] http://www.guardian.co.uk/news/datablog/2013/mar/20/budget-2...
[2] http://www.forbes.com/sites/toddhixon/2012/03/01/why-are-u-s...
Apparently the variation across regions in the US (controlled for all other factors like race, income, etc.) almost half as much as the variation between the US and UK, even though the entire US has the same financial structure.
Except in Scotland, Northern Ireland and Wales where since 2011 it is always exactly £0
Certainly your thought is a common one, the idea that individuals can be incentivized to cut costs was the motivation behind high-deductible plans. High-deductible plans were initially priced much lower than they are now, because the insurance companies thought that individuals on those plans would control their costs much better. However, that was not observed, and the insurance companies have raised rates faster than with other plan types, and HDHPs are now not nearly as good deal as they once were. (At least in my area.)
It seems like an underlying problem is that whenever a "cover somewhat less, save money, charge a huge amount less" plan is put in place, there are incentives in individual cases (through lobbying or whatever) to add coverage, killing the cost savings.
Hospitals charge uninsured people a ridiculous amount, then mark it down anywhere from 50-98% (Yes, I had a bill that was adjusted 98%) based on negotiations with insurance companies.
Uninsured people get hit with the full, absurd inflated costs as bills. They then have the privilege of begging the hospital for a markdown or a payment plan (turned down completely in my case as an unemployed graduate student because I couldn't afford my own place and lived with parents).
The bills don't show up for anywhere from three weeks to three months, and there is no indication of what is owed until they end; Nobody's able to tell you on command what things cost before 'coding' things at their leisure. One hospital visit that does any nontrivial diagnostic work may incur dozens of separately billed "services" running through different providers and individual doctors. That begging the hospital for a markdown only applies to them, three-quarters of the others won't accept anything short of the full amount.
I thought this system was a bad compromise, but then I got sick. The system is absolutely ridiculous, the victim is given an open-ended debt("If we think of anything else you owe us we'll call you", & "No, we can't give you an itemized bill for 'services'") in dozens of segments with little room for argument or inspection, and threatened monthly with destruction of his financial livelihood.
Don't support single payer healthcare? Try a major acute illness on for size and see if your opinions change. This system of "insurance", whatever it was supposed to solve, is utterly broken unless you happen to be healthy.
PS: My state is apparently recognized as one of the best in the nation on this topic, I can only imagine what it's like in North Dakota. A lot of people's lives have been ruined by a medical system that makes it downright impossible for the average person to tolerate getting sick.
PPS: I think of hospitals as somewhat predatorial now because this will fall worst on an honest, ignorant, unemployed person who attempts to pay his debts - the way one is advised by financial experts to deal with it is to either declare bankruptcy, or make small monthly payments, an option which appears nowhere on your bills (which demand payment immediately), and which the hospital will not either volunteer or agree to when requested. Token payments above some undefined percentage of the debt will prevent them from sending the bill to the collections agency. So if you know this, a major illness might be roughly equivalent to an unexpected student loan, but with the stress of destroying one's health and future health insurance. If you don't, or if you acquire a chronic illness which requires extended care, you acquire a permanent black cloud raining down acid on your financial future.
Once you think of it as compensation, you can see why the benefits are tied to the employer. "Join us; we have good healthcare."
(There's also the risk-pooling aspect; an employer can get a group rate with guaranteed issuance because it's assumed they will be selecting employees for moderate to good health (or else they'd be disabled vs. working), or at worst randomly, with only random-in-population odds of high-cost dependents. There's an adverse selection with voluntary individual insurance; healthy people would rationally not get insurance if it were really expensive relative to their expected utilization, whereas someone with a chronic condition or high risk actually would get insurance even at a relatively high cost. Which in turn drives up the costs per insured, which drives up the rate...eventually becoming uneconomic. In practice, a lot of people with chronic conditions in their families actually do seek out stable jobs with big employers with good insurance to cover it, vs. doing startups or whatever, which imposes a loss on the economy if they would otherwise have been the next Elon Musk.)
The Republicans in 2008 (McCain?) were actually arguing for making medical insurance non-deductible for employers and I think deductible for individuals, which was then seized upon as "taking away your health insurance". Ironically that position of moving insurance away from employers seems to be a long-term goal of the ACA/ObamaCare.
There's certainly ways to save money on the lowest price, but the spread is far more interesting - given that you should get a solid treatment in each of the hospitals, why does one manage to offer you a fifth of the highest price?
may be because those higher charges are more bureaucracy than actual value adding?
Isn't that the same with the doctors? Isn't that the same with the equipment?
Isn't that the same with the medication?
Who cares if they can kill you on the cheap? The point is to save lives no matter what the cost.
This is not a free market. Making these prices public isn't going to make it a free market. No problems have been fixed. Only new and novel problems have been introduced.
If hospitals can charge rates set seemingly at random, and the "customer" has little or no opportunity to understand what the cost of their choices are, or even make a choice of where to go, then the system will likely continue to spiral out of control. And it is out of control.
My company, with 50 employees, will paying in excess of $500k for healthcare benefits this year. That doesn't even include the contribution required from the employees. That cost has risen ~12% every year. You are deluded if you see recent attempts to control these costs as only introducing new problems. Something has to be done.
In effect I will continue to go to the nice hospital for elective surgery because its nice there, ya so what they charge someone else 300% more for the same stuff, the food is better and I get free TV in my room.
https://www.google.com/fusiontables/DataSource?docid=1VlO_qd...