health insurance + free market == rescission

[Bug]

Yeah for sure.

Or Tiny Tim's dad.

[Gary_Yngve]

Paying all those IT folks for their fancy, buggy software would be so cheap too. A no-brainer!

 

It wouldn't be buggy comparatively. I'm envisioning a cross between Amazon's supply chain and Salesforce's CRM service.

[Bug]

Paying all those IT folks for their fancy, buggy software would be so cheap too. A no-brainer!

 

It wouldn't be buggy comparatively. I'm envisioning a cross between Amazon's supply chain and Salesforce's CRM service.

So we could install it on Windows Vista?

[JayB]

Actually, Medicare has the lowest overhead costs when compared to every other insurance provider. Part of the reason is that there isn't a CEO taking millions out of the system every year for his/her paycheck like all of the private insurance companies.

 

If true, does this figure including the time private companies must spend filing government paperwork etc etc?

 

Doesn't account for the cost of generating revenues via the IRS,

[...]

 

Rightwing spin isn't supported by the evidence (some of it is nonsensical because most healthcare dollars are already paid by taxes):

 

"These administrative spending numbers have been challenged on the grounds that they exclude some aspects of Medicare’s administrative costs, such as the expenses of collecting Medicare premiums and payroll taxes, and because Medicare’s larger average claims because of its older enrollees make its administrative costs look smaller relative to private plan costs than they really are. However,the Congressional Budget Office (CBO) has found that administrative costs under the public Medicare plan are less than 2 percent of expenditures, compared with approximately 11 percent of spending by private plans under Medicare Advantage.16 This is a near perfect “apples to apples” comparison of administrative costs, because the public Medicare plan and Medicare Advantage plans are operating under similar rules and treating the same population.

(And even these numbers may unduly favor private plans: A recent General Accounting Office report found that in 2006 Medicare Advantage plans spent 83.3 percent of their revenue on medical expenses, with 10.1 percent going to non-medical expenses and 6.6 percent to profits—a 16.7 percent administrative share.)"

 

http://institute.ourfuture.org/files/Jacob_Hacker_Public_Plan_Choice.pdf

"My basic point was that expressing health administrative costs as a percentage of total program costs is silly, since the bulk of program costs are health care claims and administrative costs are mostly unrelated to the level of health care claims. (Medicare claims processing is only about 4% of administrative costs; the other 96% is unrelated to the level of claims). This is clear from a moment’s thought — if you insure a healthy 25-year-old who never goes to the doctor (or at least, not enough to exceed the deductible), a health plan’s cost for that person is 100%, no matter how efficient the administration is. Private insurance has a lot more people like that than Medicare does.

 

The appropriate measure is administrative cost per person, and by that standard Medicare is more expensive than private health plans. This point stands unrefuted, even with the additional quote from Jacob Hacker.

 

Hacker refers to a GAO report that says administrative costs (including profit) for Medicare Advantage plans (privately-run managed care plans for Medicare beneficiaries) total 16.7% of total program costs. Hacker claims that “This is a near perfect `apples to apples’ comparison of administrative costs, because the public Medicare plan and Medicare Advantage plans are operating under similar rules and treating the same population.”

 

This is simply not true. The Medicare Payment Advisory Commission (MedPAC) reports (page 62) that Medicare beneficiaries who report their health status as “excellent” or “very good” are twice as likely to enroll in Medicare Advantage as those who report their health status as “poor.” Any Medicare beneficiary can enroll in Medicare Advantage, but those who choose to do so are, on average, healthier than those who remain in the “traditional” Medicare program. In short, Medicare Advantage plans are not “treating the same population.” They are not “operating under similar rules” either; the Medicare Advantage plans have an entire set of regulations of their own, quite different from the rules of the traditional Medicare fee-for-service system.

 

Putting aside the factual errors and the fact that expressing administrative costs as a percentage of total costs is misleading, the GAO report doesn’t say what Hacker says it says. The administrative costs shown in the GAO report include major administrative functions not included in the figures are not comparable to those for reported by Hacker for the traditional Medicare. Since the bulk of Medicare Advantage plans are HMO plans, the 16.7% figure includes both functions of operating a health plan and functions that occur in doctors’ offices and health plans. In traditional Medicare, the fees paid to physicians and hospitals include an amount attributable to their internal administrative costs. For physicians, that amount averages 17.3% of their fees — this is administrative costs in addition to costs incurred at the Medicare program level, which Hacker says is 2% but is actually 3% or 6%, depending on whether you include just the cost of the Medicare bureaucracy, or that plus other the cost other government agencies incur in support of Medicare.

 

So even if we believe Hacker’s comparisons between Medicare Advantage and traditional Medicare, a true “apples-to-apples” comparison shows that traditional Medicare’s administrative cost are higher — even using a “percentage-of-costs” approach weighted in its favor."

 

 

Even if a methodologically sound accounting of all of Medicare's administrative costs are lower, which hasn't been done, that would do nothing to advance the larger claim that lower administrative costs necessarily translate into more efficient use of resources or better value for money. Much less that a centrally administered rationing and price-fixing scheme will do a better job of coordinating supply and demand, fostering new efficiencies through innovation, etc.

 

Now that we've covered administrative costs, life-expectancy, and infant mortality - I hope that someone will dredge up the "X number of people are dying each year because they lack insurance" canard. Nothing makes more sense than taking demographic cohorts with vast differences in income, employment, education level, fitness, marital status, alchohol/tobacco consumption et...cetera and chalking the net differences in mortality up to a single variable.

 

[prole]

Even if a methodologically sound accounting of all of Medicare's administrative costs are lower, which hasn't been done, that would do nothing to advance the larger claim that lower administrative costs necessarily translate into more efficient use of resources or better value for money. Much less that a centrally administered rationing and price-fixing scheme will do a better job of coordinating supply and demand, fostering new efficiencies through innovation, etc.

 

Break Glass, Repeat Catechism

 

[j_b]

 

Ok JayB, try to spin this. Make sure your arguments are properly referenced. Merely asserting an opinion or that of the Heritage Foundation won't do.

 

The new england journal of medicine

n engl j med

349;8

 

Costs of Health Care Administration in the United States and Canada

Steffie Woolhandler, M.D., M.P.H., Terry Campbell, M.H.A., and David U. Himmelstein, M.D.

From the Department of Medicine, Cambridge Hospital and Harvard Medical School, Cambridge, Mass. (S.W., D.U.H.); and the Canadian Institute for Health Information, Ottawa, Ont., Canada (T.C.).

N Engl J Med 2003;349:768-75.

Copyright © 2003 Massachusetts Medical Society.

 

background

A decade ago, the administrative costs of health care in the United States greatly exceeded those in Canada. We investigated whether the ascendancy of computerization, managed care, and the adoption of more businesslike approaches to health care have decreased administrative costs.

 

methods

For the United States and Canada, we calculated the administrative costs of health insurers,employers’ health benefit programs, hospitals, practitioners’ offices, nursing homes, and home care agencies in 1999. We analyzed published data, surveys of physicians,employment data, and detailed cost reports filed by hospitals, nursing homes,and home care agencies. In calculating the administrative share of health care spending, we excluded retail pharmacy sales and a few other categories for which data on administrative costs were unavailable. We used census surveys to explore trends over time in administrative employment in health care settings. Costs are reported in U.S. dollars.

 

results

In 1999, health administration costs totaled at least $294.3 billion in the United States, or $1,059 per capita, as compared with $307 per capita in Canada. After exclusions, administration accounted for 31.0 percent of health care expenditures in the United States and 16.7 percent of health care expenditures in Canada. Canada’s national health insurance program had overhead of 1.3 percent; the overhead among Canada’s private insurerswas higher than that in the United States (13.2 percent vs. 11.7 percent). Providers’administrative costs were far lower in Canada.

Between 1969 and 1999, the share of the U.S. health care labor force accounted for by administrative workers grew from 18.2 percent to 27.3 percent. In Canada, it grew from 16.0 percent in 1971 to 19.1 percent in 1996. (Both nations’ figures exclude insurance-industry personnel.)

 

conclusions

The gap between U.S. and Canadian spending on health care administration has grown to $752 per capita. A large sum might be saved in the United States if administrative costs could be trimmed by implementing a Canadian-style health care system.

 

Complete paper here: http://www.pnhp.org/publications/nejmadmin.pdf

[JayB]

Yea - looks like Canada has lower administrative costs than the US does.

 

Ergo - what, exactly?

 

 

 

 

 

 

 

 

 

 

 

 

[billcoe]

Yea - looks like Canada has lower administrative costs than the US does.

Ergo - what, exactly?

 

I just re-read the last paragraph before the word "Compare" and I think that's the Ergo - what, point. Starting with the word "Conclusion"

 

"The gap between U.S. and Canadian spending on health care administration has grown to $752 per capita. A large sum might be saved in the United States if administrative costs could be trimmed by implementing a Canadian-style health care system."

 

 

Well spoken JB. Nice find, thanks for sharing it.

[pink]

don't canadiens just come to the US if they need bitchin health care if they need it?

[olyclimber]

sure..if they're loaded with $$$. the doctors are happy to take their money.

[pink]

and they might not have that option for long... wonder how health care in canada will look if they can't do that anymore.

 

Edited August 3, 2009 by pink

[KaskadskyjKozak]

and they might not have that option for long... wonder how health care in canada will look if they can't do that anymore.

 

If B-HO fucks it up enough, rich Americans, might be going to Canada.

[Hugh Conway]

Yea - looks like Canada has lower administrative costs than the US does.

 

Ergo - what, exactly?

 

Hark! It appears the earth is round.

 

So why don't you think it isn't flat cretin!!!!!

 

 

 

pink- last I checked there's tons of places with cheap healthcare. I can think of several with great US winter climbing

[RJRiha]

Nobody is "owed" or "deserves" anything in this life. If you think you are, you have not fully grown up yet. I get by with good health, a first aid kit, and disaster health insurance. Perhaps I will get a better plan down the road when I can afford it.

 

Government cannot even run itself, how the hell can it manage my health care? Lastly, I am so thankful that Obama will let me "keep" my current plan, it is so gracious for him to let me keep what I am already earned.

 

The big problem that I see, though, is that health insurance companies don't profit by providing you a service. They profit by not providing the service that you've already paid for.

[prole]

But the beauty of the market is that you're free not to use the service. Oh, wait...FUCK!

 

Errr, at least you're free to seek the service elsewhere. Oh, wait, fuck...pre-existing condition.

[j_b]

don't canadiens just come to the US if they need bitchin health care if they need it?

 

That's propaganda. Most canadians that get care in the US are travelers.

[j_b]

Yea - looks like Canada has lower administrative costs than the US does.

 

Ergo - what, exactly?

 

Ergo what? For days you have been waving your hands trying to tell us that for profit healthcare doesn't have greater administrative costs and I provided you with yet another example of not for profit healthcare that is considerably cheaper than the one you defend so enthusiastically.

[billcoe]

JB, I had you covered 10 posts up (quoted post below). Thank you for the great posts lately on multiple threads - some great quality information. I reposted your conclusion as it was a perfect summation. I suppose I could have bolded the text and added an exclamation point for Jayb but he's a real sharp guy and I figured your post stood well on its own.

 

Good stuff dude, thank you.

 

 

 

 

 

Yea - looks like Canada has lower administrative costs than the US does.

Ergo - what, exactly?

I just re-read the last paragraph before the word "Compare" and I think that's the Ergo - what, point. Starting with the word "Conclusion"

 

"The gap between U.S. and Canadian spending on health care administration has grown to $752 per capita. A large sum might be saved in the United States if administrative costs could be trimmed by implementing a Canadian-style health care system."

 

 

Well spoken JB. Nice find, thanks for sharing it.

[prole]

JB, I had you covered 10 posts up (quoted post below). Thank you for the great posts lately on multiple threads - some great quality information. I reposted your conclusion as it was a perfect summation. I suppose I could have bolded the text and added an exclamation point for Jayb but he's a real sharp guy and I figured your post stood well on its own.

 

Good stuff dude, thank you.

 

 

MODS! NSFW!!!

[billcoe]

MODS! NSFW!!!

 

Huh? That lil waving character thing is naked? WTF! LOLZ

[Peter_Puget]

Various random thoughts on this thread:

 

(1)

A House oversight subcommittee took a close look at a particularly shameful practice known as “rescission,” in which insurance companies cancel coverage for some sick policyholders rather than pay an expensive claim. The companies contend that rescissions are rare. But Congressional investigators found that three big insurers canceled about 20,000 individual policies over a five-year period — allowing them to avoid paying more than $300 million in medical claims.

Source: http://www.nytimes.com/2009/06/29/opinion/29mon1.html?_r=1

 

In 2008, U.S. health spending was about $2.4 trillion; 2004-2008 spending would be roughly $10 trillion. So even if these three big insurers held just 1% of the market each and their behavior were typical, we're talking we're about .1% of total spending. If companies were really targeting big claims, the fraction of affected individuals would be much smaller. ($300,000,000/20,000= $15,000 per claim)

 

(2)

 

Big Pharma! I think total Pharm expense is roughly 10% of healthcare expeditures. Given the current inflation rate of healthce in the US if God covered all our drug expense going forward we'd have some immediate savings however we'd only be about a year back. (total exp 100- phamr costs 10= costs after god gift 90 90 * 1.1 (10% inflation rate) = year two expense 99)

 

 

(3)

 

Here’s an interesting link:

 

http://www.jstor.org/pss/2138695

 

 

Hre is a free version of the article:

click me

 

(4)

Costs of Health Care Administration in the United States and Canada

Steffie Woolhandler, M.D., M.P.H., Terry Campbell, M.H.A., and David U. Himmelstein, M.D.

 

Hmm I wonder how many MDs would go to a gastroenterologist with an orthopedic problem. Why would anyone go to an MD or MHA for an economic analysis? As to the depth and quality of this article consider how often he topic of cross subsidies comes up. Consider their methodology calculating Canadian healthcare administrative costs. Finally consider how they accounted for the marginal deadweight of each dollar taxed. The article is pretty darn poor in terms of quality. On a related if there exists important scale economies in administration, why do we not observe a long-term decline in the number of insurers accompanied by an increase in their average size? Your BS detectors should be maxed when anyone offers you a free lunch even if it is quite meager.

 

(5)

 

This isn’t a real full blown paper but it does contain some thought provoking ideas:

http://hanson.gmu.edu/showcare.pdf

 

(6)

 

Healthcare in the US is most certainly not "free market" by any stretch of the imagination.

Edited August 5, 2009 by Peter_Puget