Cost of Health Insurance

[aquaswim47]

There are four things that need to change in healthcare in the US. Unlike Canada, we shouldn't have socialized medicine; it doesn't allow those to pay to get ahead in line (that's if you don't have an appointment). Also, it forces those who don't want health coverage to pay taxes for it. The real reason for having socialized medicine is to make sure that everyone is treated equally regardless of health (or long-term care) status. Unfortunately, it doesn't allow the free market to provide health coverage. I think that socialized medicine is only more satisfactory than Medicaid recipients (unless the person is only poor and has no other health or long-term care issues). Medicaid is socialized medicine, but only for certain individuals, but anything provided by the government (with the exception of the US post office) is inefficient. Thus, Medicaid should be eradicated.

1) We need to fix malpractice cases, not simply cap it. Most malpractice cases are small dollar amounts, thus capping it will not fix it. However, by eliminating some cases that win awards solely due to emotion and not due to doctor negligence should not be awarded any damages. These involve high risk-procedures, such as premature babies. At the very least, no punitive damages should be awarded since in many cases, these individuals didn't even survive 50 years ago.

Malpractice insurance shall be group-provided with a deductible no less than $1 million; they shouldn't be individual policies. This holds doctors accountable that have a lot of claims. The hospital or group provider should choose to have high-risk and/or low risk procedures. Those with high-risk procedures will charge their customers higher rates because of better service. No coverage will be provided unless the aggregate annual or per case amount exceeds $1 million; the latter would have a much reduced premium. Because hospitals are paying for malpractice insurance, they will likely terminate any employee that has a high number of claims unless that doctor is in demand. I think this would drastically lower premiums that doctors pay and raise their net salaries. Of course, like in the airline industry, there should be a restructuring of doctor salaries if the marketplace becomes competitive.

2) Prices should be listed of common procedures and common complications. Also, customers should be able to find out the amount that Medicare/Medicaid and HMOs pay. All of these rates should be listed on the company website and listed in a regional or state circular. This way a person can choose a hospital that meets their cost and care needs. Off course, prices wouldn't be known in the case of emergencies. It is my hope that this would significantly lower costs. The only way to lower costs is to increase competition in the market. With HMOs, patients have lost any conception of cost as the insurance pays for the entire cost. Fee-for-service plans have a co-insurance provision, while high-deductible health plans have a stop-loss provision (such as $5,000). These plans always had helped the patient understand costs.

3) Health insurance should be paid for by the individual. Most individuals should carry a high-deductible health plan. Some individuals should choose to remain uninsured as the average individual will pay $1 million for comprehensive coverage over their working career or $250,000 to $300,000 for the average high-deductible health plan assuming an 8% rate of return. For an extra $30 per month, individuals should receive a comprehensive LTC policy (higher for people who have children under 6) or as they get older.

Those that have insurance should be compelled to buy non-cancellable coverage and they should be able to convert from one high deductible health plan to another or one comprehensive coverage to another without evidence of insurability (provided the health benefits are the same). Those who always have been uninsurable should have a subsidized premium, while those who were uninsured should have to pay all the costs they incurred and a maximum of 40-60% of the subsidy, for the increase in premium should apply. Only those who are uninsurable should have their health insurance provided by the government with a high-rated premium. There should only be a 100% subsidy for health status if the problem was congenital (since birth). The subsidy should be reduced only by a small percentage (10 to 20 cents) for each dollar of income.

4) All medical records should be compiled by technology such that records can be viewed from any physician. This would lower the cost of record-keeping.

[WallStGolfer31]

I can not fully agree.

In general, competition in industry results in lower prices. Although, as seen empirically, this is not always the case.

When looking at the situation using the tools of game theory, we seen this equilibrium results towards favoring the majority of firms for providing health care. Health care is relatively an ogliopoly industry, an would usually find it's equilibrium with a cournot equilibrium. This is not the case since production of policies can not exceed demand, but exactly matches it (you can't "over produce" policies).

Thus we have a situation where the equilibrium price is no longer beneficial to the consumer relative to possible choices, and competition fails.


The solution? Make entry into the industry easier for smaller firms.

[aquaswim47]

I think that hospitals have gotten so large that they operate with diseconomies of scale. Operations Management was such a great class. I do agree with what you say, for the most part. I especially agree that it operates in an oligopoly-like manner.

[gijoe9]

Which part of the constitution guaranties the freedom to sue? Medicine is not an exact science and the assumption that a doctor is infalible is idiotic the retalitory and superfluos litigations in the US are a real contributor to the cost of medicine in the US. The net effect is that health care professionals tend to do what is safe as opposed to what is right.

A person entering an emergency room in Canada and the US with the same complaint and the same health care insurance level would see a huge difference in the bills. The Canadian doctor will do what is needed and right the US doctor will do what is safe with extra tests to cover his butt. The Canadian doctor will determine what is wrong treat it then boot your ass to the curb or whatever is needed to treat you. If you are a poor homeless person and looking for a warm dry place the doctor asks someone like me to see you to the edge of the property. If you are a rich person looking for attention and nothing wrong he will ask me to see you to the curb. That last part is what bothers most people from south of the border doctors here are relatively safe from retribution from rich and poor alike. Is the Canadian health care system better than the one in the US? Maybe but that will be subjective depending on where you fall on the economic scale.

I think Churchill said that socialism is shared misery. My conservative nature agrees with him there however some things are utilities by nature and I feel that mass health care is that. The rsources of the many pooled to provide the basic health care needs of the many. This should not preclude free enterprise but free enterprise should not be pursued at the expense of the many in this case. I think we need a very brillant group of people to design a health care system that will work in both countries is fair to the rich and the poor.


Wow sorry for the long winded comentary just kind of went off. I know this is one of those ones that gets people talking here but oddly enough the US and Canadian comments are similar "well at least we don't have the system they have in Canada/US!"

[aquaswim47]

I like what you indicate and agree that we do too many tests because that's what's safe. Also, doctors don't perform necessary surgeries on elderly people fearing lawsuits; my grandfather didn't have a necessary surgery for his prostate cancer because he was 80 years old. It isn't evaluated on a patient-by-patient basis; he was an extremely strong individual who could have handled the surgery. Lawsuits are out of control!

In the US, we have begun to have Minute-Clinics in CVS so that we can go in without an appointment and pay $60. This is a critical service to the uninsured. Also, you can go to university medical centers for $130 or doctor offices for $200. The HSA plans proposed by the president is an excellent idea as you have to pay for the first $2,000 of your care and you don't have to pay more than $5,000; you have to pay 20% of the bill up to $17,000 (the next $15,000) equaling $5,000 (2,000 + 3,000 in which 3,000 = 15,000 x 20%). I love them since the cost around $75 per month and cover any catastrophic needs. Regular health insurance costs around $300 per month, which is why it will reach $1 million at an extremely conservative 6.91% rate of return. The $700 per month COBRA total amount means you will pay $3.25 million in salary reductions over your working career (assuming an 8% rate of return). This is the net costs of both the employer and the employee. You pay a lot more if the average age of your colleagues (employees) are older and a lot less if they are younger. Imagine if this could be put in someone's retirement account; it would pay $50,000 per year in retirement. Most likely, as long as health-care costs reduce to the level of inflation, you'll easily be able to pay out of pocket (self-insure) for pretty much anything. That's my utopia; either having an optional health insurance or a mandatory savings account, but whereby you can choose the mandatory savings account.

For the most part, I like that you kick the person to the curb. However, if a person doesn't have an appointment, they need to go to the hospital and wait. Getting the presidential treatment costs about $2,500 per year plus standard costs; it's like the retainer that used to be paid to an attorney (Clark Howard).

If uninsured people were put on a payment plan and allowed to negotiate their costs, than the costs to the taxpayer and to health-care services would be minimal as they wouldn't end up in the hospital for a cold. This should also apply to hospital care. This would be achieved by indicating the price you will pay for a certain procedure and what insurers pay for that procedure; there's a major problem of disclosure if you want capitalism to succeed. Than competition would drive the price down and firm prices would be issued; price estimates currently are terribly inaccurate.

I think you have a lot of good points; tests are very expensive. A MD doctor goes to school for 11-18 years and they know what is right; it is surprising that they have to perform so many different tests. Administrative costs dramatically increase costs and that is way overlooked; there's always a person or staff to collect from insurance companies. Lastly, I think doctor hygiene is a surprising problem and there are a lot of staff infections that hospitals aren't held accountable for. All it takes is proper hand-washing and then infections go down at least 80% (Wall Street Journal). I think they should be responsible to pay for their own mistakes, but that lawsuits because a baby is born 2 months prematurely is ludicrous. Doctors do take an oath to do know harm; that should also include to someone's wallet.

Good work. I really like your viewpoints. I don't think insurance is the answer because of how much it siphons away from our retirement accounts and hurts the employer.

In the US, we've been suing since we landed with the MayFlower. However, it really didn't increase until the late 1990s. I think people understood that medical care was risky and now they believe that they are entitled to damages because the best outcome wasn't the result. Anyone can file a suit for any reason which costs the defendant a lot of money even if it is totally frivolous. Canada and much of the world is wise to indicate that the loser pays. That substantially reduces the amount of lawsuits. However, if a $30,000 knee operation turns into $100,000, I think the person should be awarded triple damages as that is a very routine operation. I think that infections should be minimized and that can only occur if the hospital is required to take that $70,000 as an expense. The problem is that because the medical system is not competitive, the hospital (hospitals) will probably pass that additional costs onto others that have no problems from the knee surgery instead of correcting their hygiene problems.

[Re-mark]

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[proson]

Originally Posted by Re-mark

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