Why More Competition Won’t Fix Healthcare

Hogwash!

This article was utter biased nonsense trying to convince readers that the government (i.e. same entity that can't get medicare, medicaid, or social secuity solvent) can finally manage something right and reduce costs. Laughable. The only thing it will do is increase the overall cost while reducing services and care.

The free market will work but is not being allowed in play at all. Last few times I was at a doctor's office and asked "how much will that cost" I was looked at like I was an idiot. No one asks what the cost is or shops around because someone else is paying in their mind. And rightfully so, they think that they paid for their insurance so they should get something out of it. The HSAs are the answer. Tax free health savings accounts that are lifetime portable accounts. If we had those when I was younger, I would have amassed a fortune to cover health care deductibles with this tax free money because for the 1st 20 years of my working career, I used virtually no health care and could have saved the funds and earned tax free interest on them. It is capped with catestropic insurance taking over once a high deductible ($12,000 in my case) is met in a year. The key thing it makes you do, however, is want to know how much things cost and consider if say that $300 air cast at the hospital is really necessary instead of just taking it. It also makes you shop around for the lowest price and lets the free market work, driving down costs and driving innovation.

When I asked the doc which of the three labs he mentioned for my blood to get drawn would be the cheapest, he said he had no idea and had never been asked that before. That is insane! The choice of which lab to use should have been as any other shopping choice which drives the labs to compete and innovate to get costs down. This isn't happening because the free market is not allowed to work.

Insurace companies aren't even allowed to compete across state lines. That is rediculus!!!!

Smartguy of OH @ Nov 10, 2009 20:02:03 PM

Dig deeper

This article comes with biases. All of the reasons given in this article for the healthcare market having a different set of rules have some factual basis.

Of course there is another side. For there to be any hope of the healthcare marketplace not dragging down the entire economy, cost must be dramatically reduced and expenditures must give maximum return. This will require the reshaping of the delivery model.

• The example of the high percentage of healthcare dollars being spent in “end of life” and intensive care environments is a good place to start. The multiple consults by the highest paid specialists represent a significant portion of these costs. The movement towards “hospitalists” that can manage the entire spectrum of care for these patients with limited need for consults is a step in the right direction.

• For imaging studies like MRI and CT Scans a much more efficient model can be developed where there are 20 machines in an offsite facility where all ambulatory patients can be serviced in a high throughput, high service and high quality environment.

Existing hospital based equipment can be used for in-house patients.

• All non-emergent care should be moved out of emergency departments and into highly efficient clinics where much of the care can be provided by advanced practice nurses and physicians assistants.

• Health screening should be available for very low cost in every community to address problems earlier.

• Insurance companies should be required to spend 90% of premium on healthcare thereby forcing reductions in their overhead much of which is misspent.

PA of CT @ Nov 10, 2009 13:12:28 PM

when competition isn't

There is a whole area not explored by this article: In-office testing. Doctors who own a CT scanner or MRI purport to be offering "competition", but in reality they are comitting what once was illegal: self referral.

There is no competition when they have a captive audience. Show me a patient, who after waiting 6 weeks to see their doctor, would be willing to say "no thanks" to a recommended in-office CT and go down the street to a competitor. It is now well documented that doctors who purchase imaging equipment increase the number of exams they order. This is the single fastest growing medical expense for Medicare.

People may have heard of the Stark law prohibiting self-referral, however, the in-office exemption has eviscerated this legislation.

Dan of NC @ Nov 10, 2009 10:48:26 AM

We will be taxed to poverty to pay for this plan

Patrick Creed is right. Employers will go with the cheaper route - pay the government penalties because they are cheaper than actually providing health insurance. Then, the current healthcare companies will not be able to compete with the government plan. The government doesn't have a history of successfully running anything. This is why most Americans don't want our government to have too much control. That's why our country was founded here in the first place.

As far as people who think other countries are so successful in this area - Not one is completely successful in this area. Not one is being used as a real model for this rushed plan. Other countries aren't managing their money so well - they are taxing their people to pay for this. In Canada it's a long wait for few doctors, limited equipment and services and especially getting approval (government restrictions) to get the care in the first place. The government officials and people with money get on the top of the list for care and surgeries.

Also - Do you really want to have the government taking 50-70% of your current income away? That's what other countries charge their citizens to pay for being "taken care of". We have more unemployment now than we have had in 23 years! We are already going to be paying (taxed) for the stimulus plans and bills that are increasing our deficit by leaps and bounds. Any talk of this plan already paying for itself can't be true.

My state provides care to children under 18. Other states have other healthcare plans. Congress and the president need to work on fixing the problem one area at a time and stop throwing everything out and starting over. What's the big rush? This is just more government powerplay. We will pay for this, not Congress.

dee of MO @ Nov 07, 2009 22:36:58 PM

User Disconnected from Costs

The user of heath-care services is not always the payer or at least the payer of the majority of the health-care service. In the case of Medicare, I pay a flat $100 per month which is a trifle compared to the vast array of health-care services I have available to me. This article missed this point.

I was on a board of directors of a small company of about 600 people. I was also CEO of a company that employed 150 people. I remarked to the CEO of the 600 that his health insurance costs per employee were double ours. We made our employees pay 25% of the insurance premium and had fair size deductibles and co-pays. The CEO of the 600 wanted to be a generous employer and paid 100% of everything. His company was losing money.

Six months later, he had cut his health-care cost in half. He had gone to an insurance plan like mine. The employee paying 25% of the premium does not fully explain the 50% reduction in costs. The CEO of the 600 stated that the employees were abusing their health-care benefit since it was free to them and now that there was a co-pay, the abuse stopped.

If this experience is representative of human nature regarding health-care, then I am afraid that a government-funded system of any type in which the user is disconnected from the payment will cause the existing healt-care providers to be overwhelmed. If the government payments do not fully cover the actual costs, which is what was going on with Medicare a few years ago, then the health-care providers will resort to cost-shifting again. Cost-shifting is where the health-care provider charges the other non-Medicare patients more than normal to make up the difference.

As for technology driving costs up, that could be in some areas such as knee replacements which were not available 30 years ago, but in other areas such procedures as arthroscopy, angioplasty, and minimally-invasive surgery are driving the overall costs down through much reduced hospital stays.

Louis E. Sims of OH @ Nov 05, 2009 08:09:07 AM

National healthcare:learn from other industrialized democracies

The problem with runaway cost is less and less insured are paying for the more and more medically indigent. That is why 'asperin cost $5.' These are attempts to recoup some of the cost.

There has to be discusions between patient and Dr about what the Patient wants at end of life. Now when a family member says "do everything you can", the hospital has to, no matter what the Patient wanted. $$$$ We must undersatnd and talk about how the individual would like to be treated. Death is part of life. And the provider should be payed for that discusion

Then the high cost of Dr's malpractice insurance. Those lawyers that chase ambulances. It should come down since now the injured are not suing for the healthcare and the now new pre-existing conditions after the accident.

The cost of BECOMING a Dr. (the german government pays for the education) And of course the notion that there has to be a PROFIT. Dr's are wined and dined. Millions are spent on TV ads to get you to ask your Dr about this medication or that treatment. Why do cardiac Drs make millions and general practitioners far far less??

I work at a hospital that has valet parking. What does that have to do with healthcare?

Providers now have to tailor the healthcare according to the ability to pay. That is goofy. The working poor catch the poopy end of the stick.

There is MUCH to learn from the successes and errors of other industrialized democracies. We should not reinvent the wheel. But I do love that this is FINALLY on the table and the work has just begun.

felix of CO @ Nov 04, 2009 00:17:46 AM

Healthcare

..If you want meaningful change revoke the healthcare of the politicians - to give them the incentive to write something affordable.....

..Beyond the fact they have the world's best healthcare funded and paid for by the taxpayers they are supposed to be representing.

..Washington politicians no longer represent, nor are they representative of the people..

...LOBBYISTS

....SPECIAL INTERESTS

......Where the next golf junket ?.? Where is the all expenses paid investigative trip ?.?

William Bednarz of NJ @ Oct 31, 2009 19:58:10 PM

Why Does it Work Elsewhere But Not Here? We need Price Transparency.

The problem with this article, like so many other articles is that it sounds good until one stops to realize that there are places around the world where healthcare is both cheaper and better. This article fails to consider that there are places outside the US that have already tried and proved some of the ideas that this article attempts to dispel.

A lot of the logic this article relies on goes something like this, "healthcare is too complex to understand, therefore these simple notions will not work on it." While healthcare is complex, there are places where competition does work. In places like Singapore the prices of different operations at different locations are transparent and available to consumers before the procedure. In the U.S. this would be a radical change, but over there it is common practice.

Here in the U.S. an analogy economists have used is that going to a doctor is like visiting an auto mechanic. You walk into the shop and ask, "whats wrong?" the mechanic looks at you, sizes up how fat your wallet is and says, "well, I don't know yet. Lets start operating and I will tell you." When he/she's done they hand you a bill for $3,500 dollars in repairs and try to explain how changing a muffler cost $2,500. Or midway through the procedure they will say, "we found something its going to cost $1,500 to repair but your car won't work if we don't fix it." In spite of the fact that you remember driving up to the mechanic's shop with a working car you are likely to say, "okay. just do it."

If all hospitals charged relatively standard prices for standard types of procedures competition would help. Just as one muffler change is similar to another muffler change so to one appendectomy is similar to another. While they are not identical, we can have standard prices for certain things. An individual aspirin costs perhaps $.05. Yet a hospital will charge $5.00. Clearly a lack of price transparency has allowed medical facilities to charge what they want because they know someone has to pay.

Just as a mechanic knows once he/she gets under that car and opens everything up that you are going to have to pay what they want you to pay if you want your car back in recognizable condition, hospitals use that same leveraging power of putting you, or a loved one, on your back and in a very vulnerable position before they begin to tell you what the total bill is going to be.

The problem with healthcare is that hospitals have been given a blank check for too long. Its time to introduce some measures of fairness to combat skyrocketing costs. Nothing helps consumers decide so well as listing the price of something next to its relative differences between the next competitor. If the U.S. could make it so consumers, insurers, and everybody else could do that this would no longer be a significant issue.

Erin of VA @ Oct 31, 2009 13:43:09 PM