Wednesday, November 04, 2009

GOP Health Care

The Republican Party put forward an alternative health care plan. The 219 page bill is a bit easier to read than the 1990 page Pelosi bill. Their site has a nice set of bullet points pdf.

However, I feel the program is still headed in the wrong direction. Too much effort is aimed at trying to save insurance when, IMHO, the insurance industry itself lays at the heart of our health care woes.

The only way to restore the pricing mechanism is to create a system where there is more direct negotiation between doctor and patient.

The bill includes some minor changes in the accounting of Health Savings Accounts, but does not seem to do enough to position health savings as a viable alternative to insurance. (NOTE, as pointed out in past posts, various parts of the Democratic proposals seemed directly aimed at eliminating Health Savings Accounts and penalizing people for self-financing their health care. Minor improvements here is better than the total elimination of health savings accounts.)

The Republican plan comes off as a bad bill in contrast with the worse bills before

The engine for the unfettered growth of big government is that Democrats would come up with awful bills (like these health care proposals). The Republicans would come up with an alternative scaled down bill with a slightly better chance of success. Unfortuately, this process still has a single direction of greater government control an less individual liberty.

People vote for the bad, fearing the worse. As we saw in the 2008 election, when the cumulative effect of the bad finally tears down the economy, the worst is there to take total control.

I wish we could find a way around this idiocy where politics is the choice between bad and worse.


Dee said...

"People vote for the bad, fearing the worse."

Where do you come up with this crap?

y-intercept said...

The premise that one must vote for something bad to avoid something worse is the foundation of the negative campaign.

One need simply come in contact with media during an election cycle to realize that negative campaigning exists.

I did not come up with the concept of the negative campaign out of the blue. There are scores of scholarly works on the topic. I simply prefer to state the premise behind negative campaigns as it shows why such campaingns eventually lead a group to ruin.

RD said...

CBO ripped this bill a new one, this bill covers only 1/12 as many people as the house democrat bill, causes a deficit, makes it so states can't regulate the insurance market in their state(ok so this is good and bad).

The Republican's made a bill so bad it makes the democrat bill look good.

The only real solution of course is a single payer system, not the Canadian model but the French model that welcomes private industry for supplemental insurance and has correctly balanced incentives for doctors. Of course ether way is better then what we have now.

y-intercept said...

RD, I am glad the CBO ripped the plan to pieces. What I read came off as sloganeering and not substantive.

I reject the absolute statement that single payer is the only way.

Yes, progressives have invested 80 plus years in structuring the market so that single payer appears to be the answer. There is a better way.

If people seriously debated the nature of health and care for health, they would realize that self-financed care works better than all alternatives.

The better way is to create a structure like the Medical Savings and Loan that aids people in self-financing their care.

Like Medicare, the French system is bankrupt.

When I was in France, I met French citizens of ethnic minorities who were pretty much left to die with minimal care.

RD said...

Single payer is not the only system that can work, Its the only system that will work given American politics are involved.(note some of this respond is for the benefit of the readers of your blog and not necessary useful to you).

Any regulatory approach to reform has the flaw that it can't remove the huge administrative cost problem of the system, also regulations can easily be taken away no matter how essential to the basic function of the market they are.(example, Glass–Steagall Act repealed in 1999 by republican congress)

Regulatory approach include insurance company as utility style systems, Germany, Sweden, Denmark are examples of this.

Their of course is the self-finance model that you advocate. This system having the problem of leaving out the young, the chronic condition individuals, and is woefully incapable of handling the costs of treatment for many things. And no loaning sick people money won't work, it would bankrupt the government and banking system.

Their is the National Health System model. This is a top to bottom total take over of the health care, from hospital to doctors office to insurance the whole shabang. This of course has the lowest administrative costs of all the systems. This system's flaw however are huge as well, tends to create waiting lines, not cover certain to expensive treatments, **insert socialist argument here**, etc.

Then their is flat single payer. Basically the government runs a single insurance company and all claims are paid by the government and private insurance is effectively made illegal by a ban on selling insurance that duplicates the coverage offered by the government plan. This system does have great advantages in the administrative cost end of things. Through the use of Bulk Payment for services, Global budgets, vast paper work simplification, national negotiated rates for drugs, medical devices and services, simplified billing though the income tax system(this actually saves a lot). Doctors offices, hospitals and other treatment facility's are left in the private market, or as non-profit entity's. This system has problems with wait times(altho no where near republican claims), and coverage of some treatments. Canada follows this model.

Then their is Single Payer with private Opt-out. This gains the same benefits as flat single payer but adds a bit of administrative cost but allows private plans to replace the government plan. The private plans pay the government for system utilization rather then directly to doctors and hospitals, Or this can come in the form of supplemental insurance, Or a form of "above utilization" insurance where the hospital is paid the government amount and an additional amount by the private insurance company this feature used for expedited treatment/test etc(note this could be in the form of a MSA). It should be noted that this system avoids the wait line, and coverage limits of a NHS or flat single payer system. The French and Japanese systems use this model of single payer with private out-out style system.

I would advocate for the single payer with private opt-out system.

And for completeness,

Bulk Payment, a payment method where rather then a claim being filed for each doctor visit rendered the doctor simply reports the number of visits performed and is payed a single bulk amount for the services rendered. Fraud checking is simple and effective, and this saves huge amounts due to the elimination of the claims process.

Global Budgets, A treatment facility or hospital, annual costs for facility operations for calculated and paid as a single amount annually such that claims for things like hospital beds, ICU, emergency room, common tests. typically major surgeries and some expensive tests and other services and excluded from this and handled as claims separate from the global budget amount.

y-intercept said...


The medical savings and loan has people negotiating with their doctor and paying their bills directly.

It is like a veteranarian. We talk over services with the vet. The vet does the services. We pay the bill as negotiated.

I get much better service from a vet than I have ever received from a doctor. For that matter, I get really good service from a dentist or optometrist when I pay the bill directly.

Fifty years ago, when it was common to negotiate with the doc and pay direct, people would stare blankly at the long paragraphs you wrote.

The current failed paradigm of employer based insurance was very carefully crafted.

You remember in the 2008 campaign when Obama said that the public option was a step to single payer.

I was in meetings two decades ago with progressives were saying that socialism couldn't happen over night and that promoting employer based health care was a step to establishing the public option.

The bulk payment system you mention only works if Marx is correct and health care is a commodity ... it assumes that an artificial heart is a interchangeable commodity that can be installed by a service technician in any patient's chest by any given technician.

If health is not a commodity, but is the state of being of a human bearing a soul, then the Marxist model is wrong, and direct negotiations between doctor and patient are a necessary part of quality health care.

BTW, using the logic you stated, there is not a single area of the economy that should be left to individual choice. All decisions must be made by the highest level of government.

RD said...

Veterinarians also provide Euthanasia services, for when a pets ailment is to expensive to cure. To compare animal care options to human care options is laughable at best, and downright evil at worst.

MS&L is a great idea if the only thing needing coverage was basic doctor office visits. If you age 26 and have cancer their is absolutely no way you are going to have enough money saved for the surgeries, kemo, and hospital stays required for treatment. If you income is low enough you will be unlikely to save enough to pay for such services at any point in your life time.

People still pay for doctor visits all the time, I have no insurance and as such go to a $60 per visit cash only clinic. If I get cancer or some other expensive ailment the only option I have is decide which ditch to die in, my situation would not be different under the MS&L where I haven't had enough years to build an account up and the death rate for cancer makes loans a non option due to the lack luster repayment rates of dead people, and lack luster repayment rates of poor/middle income living people.

Bulk payment is what the free market does to lower its costs, Retailers buy 100 TV's together for a economics of scale cost benefit instead of 1 TV 100 times. Bulk payment is little more then a very efficient payment system developed by capitalists.

It has the side benefit of allowing the doctor to well you know doctor instead of hunting down insurance claims paper work and fighting for every last payment. I do suppose that MS&L could obtain similar benefits to bulk payment in the regards of paper work simplification and fraud prevention.