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Free Market Health Care Reform

by | 4:10 pm, August 12, 2009 | 4 Comments

#tcot #hhrs #redco #
As usual, those in government who want to fix the problems, helped create them just like the Housing Crisis.

Laws that impede competition hurt the market...and costs are passed down to consumers and a crisis is used to take drastic action, that as with most government solutions will not work.

John Mackey today posted some great alternatives using Whole Foods Store's employee plan as a model. Most ALL these ideas have been put forward by conservatives in Congress, but ignored for a long time and so need to be stated again. It is a lie that Republicans are just saying NO...they've been saying we need reform for some time, but the lobbyists in DC hold sway over decisions being made...especially the trial lawyer's lobby.

Here are some excerpts;

• Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs). The combination of high-deductible health insurance and HSAs is one solution that could solve many of our health-care problems.

• Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits.

• Repeal all state laws which prevent insurance companies from competing across state lines.

• Repeal government mandates regarding what insurance companies must cover. These mandates have increased the cost of health insurance by billions of dollars. What is insured and what is not insured should be determined by individual customer preferences and not through special-interest lobbying.

• Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year.

• Make costs transparent so that consumers understand what health-care treatments cost.

• Enact Medicare reform. We need to face up to the actuarial fact that Medicare is heading towards bankruptcy..

• Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren't covered by Medicare, Medicaid or the State Children's Health Insurance Program.

Click to READ THE ENTIRE ARTICLE AT THE WSJ
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Comments

  1.   Beth Williamson
      August 12th, 2009 @ 6:35 pm

    You have made the statement that single-payer is complete socialized medicine. No it is not. It is health care delivered privately but payed for publicly. The government is not a profit-motive organization like the private insurance companies. The amount saved would be 27% of administrative costs. 3% administrative costs of Medicare and Veterans Health Care vs.30% of private insurance administrative costs. These are the facts to date.

  2.   Leslie
      August 12th, 2009 @ 6:43 pm

    This is a good list to see, but it doesn’t address one of the biggest reasons people support government involvement in the healthcare system.

    What is the free market solution to the problem of pre-existing conditions? Currently people who lose their jobs (and insurance) after being diagnosed with a major illness will not be accepted by a new insurer.

    How do we reform so that these people can get the help they need in the worst of times?

  3.   Rossputin
      August 13th, 2009 @ 7:44 am

    Beth,

    You need to get your facts straight. First of all, administrative costs at private companies are generally estimated around 18% (plus or minus a few percent), not 30%. More importantly, that 3% number for Medicare is partly a myth and completely misleading.

    On a per-insured person basis, Medicare’s administrative costs are HIGHER than private insurance.

    The Heritage Foundation lays out the argument very well at http://www.heritage.org/Research/HealthCare/wm2505.cfm

    To save you the reading, here’s a summary: Describing administrative costs as a percentage of total health care spending is extremely misleading because Medicare covers older people, i.e. people whose health care costs are much higher on average than the rest of the population.

    Here’s an analogy from Heritage: “Imagine, for a moment, that Fred and Jane each have a credit card from a different bank. Fred charges $5,000 a month, and Jane charges $1,000 a month. Suppose it costs each bank $5 to produce and send a plastic credit card when the account is opened. That $5 “administrative cost” is a much lower percentage of Fred’s monthly charges than it is of Jane’s, but that does not mean Fred’s bank is more efficient. It is purely a mathematical artifact of Fred’s charging pattern, and it would be silly to compare the efficiency of bank operations on that basis. Yet that is how many analysts compare Medicare with private insurance.”

    There are other problems with your argument. For example, other parts of government are used to support Medicare, i.e. the Treasury to collect taxes. If you add in the costs of these functions, the apparent administrative cost of Medicare doubles.

    When you compare apples-to-apples, i.e. on a per-person basis, you get this result:

    “When administrative costs are compared on a per-person basis, the picture changes. In 2005, Medicare’s administrative costs were $509 per primary beneficiary, compared to private-sector administrative costs of $453. In the years from 2000 to 2005, Medicare’s administrative costs per beneficiary were consistently higher than that for private insurance, ranging from 5 to 48 percent higher, depending on the year (see Table 1). This is despite the fact that private-sector “administrative” costs include state health insurance premium taxes of up to 4 percent (averaging around 2 percent, depending on the state)–an expense from which Medicare is exempt–as well as the cost of non-claim health care expenses, such as disease management and on-call nurse consultation services.”

    http://www.heritage.org/Research/HealthCare/images/wm2505_table1.gif

    “It is worth noting that some of the additional private-insurance costs cited by pubic plan advocates, such as marketing and profit, are included in the above figures for private-insurance administrative costs. Directly provided health services and state health insurance premium taxes are also included.

    Even without these costs, Medicare administrative spending is still higher–suggesting that Medicare’s administration is even more inefficient compared to private insurance than is suggested by its higher per-beneficiary administrative costs.”

    Furthermore, those who want to argue for Medicare’s efficiency based on “administrative” spending (even though Medicare is NOT more efficient in that or any other area) neglect to recognize the massive cost of fraud and abuse (which are generally in fraudulent claims so they don’t show up as administrative spending.)

    Medicare fraud is ENORMOUS and expensive. Private companies spend a lot of administrative money preventing fraud and abuse whereas Medicare is unable to stop fraud and abuse. Just another reason that it’s all the more remarkable that private insurance is actually more efficient in the administrative area than Medicare is.

    According to ABC News, fraudsters take $68 billion a YEAR from Medicare: http://abcnews.go.com/print?id=7508614

    According to the American Association of Physicians and Surgeons, “Medicare fraud is estimated at 10% of total dollars spent, and can be expected to increase as the “baby boomers” reach Medicare-eligible age.”
    http://www.aapsonline.org/fraud/medfraud.htm

    If that cost were accounted for in the same way that you implicitly penalize private firms for stopping such abuse by criticizing their administrative costs, you would find that Medicare’s costs are not just higher than private companies’ on a per-person basis, but MUCH higher.

    Here’s more on Medicare fraud:
    http://www.nytimes.com/2008/08/21/business/21medicare.html
    http://www.msnbc.msn.com/id/22184921

    So, Beth, you are simply parroting more of the left’s talking points (aka lies) in support of a government takeover of medicine. Why don’t you think about Barack Obama’s apparent slip of the tongue when he compared the Post Office to FedEx and UPS. The Post Office is going to lose $7 billion this year even after regularly raising rates faster than inflation over recent years. Even during this brutal recession, however, FedEx is (slightly) profitable. Do you really want to have the Post Office of health care systems?

  4.   Rossputin
      August 13th, 2009 @ 7:55 am

    One more thing: And, as if they were reading my mind, just after I wrote this note I received notification of a new study by congressional staff entitled “Medicare Experience Suggests Americans Should Expect Massive Fraud with Nationalized Health Care” which you can read at http://republicans.oversight.house.gov/media/pdfs/20090813MedicareFraudReport.pdf

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